South Korean Lawmaker in Crypto Scandal Survives Expulsion Vote

https://www.financemagnates.com/cryptocurrency/south-korean-lawmaker-in-crypto-scandal-survives-expulsion-vote/

Rep. Kim
Nam-kuk, the independent South Korean lawmaker facing scrutiny over his crypto
holdings, has retained his seat in the country’s National Assembly. A
parliamentary ethics subcommittee’s bipartisan vote to expel the first-time legislator ended in a
3-3 decision, Yonhap News
Agency
reported earlier today (Wednesday).

No Boot
for Embattled South Korean Lawmaker?

The ruling
People’s Power Party (PPP) and the opposition Democratic Party (DP) hold an equal number of seats on the subcommittee, the outlet
said. The group needed a majority support to
dismiss the lawmaker, who is a former member of the opposition party.

Finance Magnates reported in May that South Korean prosecutors made an effort to probe
Kim
after
receiving information from the South Korean Financial Services Commission’s
Financial Intelligence Unit (FIU) about suspicious crypto transactions
reportedly made by the lawmaker. Kim reportedly had about 800,000 WEMIX coins in
his crypto wallet between January and February 2022. The coins were said to be worth six billion won (or $4.5 million) at the time.

The legislator was accused of withdrawing all the coins before South Korea implemented the Financial
Action Task Force’s (FATF) travel rule on March 25 last year. FATF is
a global money laundering
Money Laundering

Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund

Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund
Read this Term
and terrorist financing watchdog.

To implement the travel
rule, South Korea mandated domestic crypto exchanges to reveal the
identities of entities and transactions exceeding one million won. However, Kim
previously clarified that he neither withdrew his digital assets nor violated any law.

As part of
an investigation into the allegations, prosecutors recently raided three local
crypto exchanges
, including Upbit. In addition, PPP recently
sent a team to WeMade, the company behind the WEMIX
token, with the hope of shedding light on the case.

In the wake of the scandal, Kim in May gave up his membership of the DP and
became an independent legislator. Last week, Kim announced that he will not
seek re-election in the upcoming general elections, according to Yonhap News
Agency
. The declaration is widely interpreted as an attempt by the lawmaker to get a
milder penalty from the parliamentary ethics committee.

With the
vote conducted on Wednesday ending in a stalemate, the parliamentary ethics
committee can either start a new session to re-raise the expulsion motion, or
it can conduct a new vote within the subcommittee to impose
a less harsh
disciplinary action against Kim, the local media further reported.

Lawmakers to Declare Digital Asset Holdings

Meanwhile,
while South Korea’s Public Service Ethics Act require top government officials
to disclose their traditional assets to the public, the law does not include
cryptocurrencies
Cryptocurrencies

By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw

By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw
Read this Term
within its ambit. To change this, the parliament has
introduced a new bill that will require legislators to declare their digital asset holdings.

In May, the
People’s Power Party sought to move up the
enforcement date
for the regulation. The bill was expected to come into force in December, Finance
Magnates
reported. However, Yun Jae-ok, the Floor Leader of the ruling party, said the date “is too
distant”.

SEC charges Citigroup; FMA and FCA warn against clone websites; read today’s news nuggets.

Rep. Kim
Nam-kuk, the independent South Korean lawmaker facing scrutiny over his crypto
holdings, has retained his seat in the country’s National Assembly. A
parliamentary ethics subcommittee’s bipartisan vote to expel the first-time legislator ended in a
3-3 decision, Yonhap News
Agency
reported earlier today (Wednesday).

No Boot
for Embattled South Korean Lawmaker?

The ruling
People’s Power Party (PPP) and the opposition Democratic Party (DP) hold an equal number of seats on the subcommittee, the outlet
said. The group needed a majority support to
dismiss the lawmaker, who is a former member of the opposition party.

Finance Magnates reported in May that South Korean prosecutors made an effort to probe
Kim
after
receiving information from the South Korean Financial Services Commission’s
Financial Intelligence Unit (FIU) about suspicious crypto transactions
reportedly made by the lawmaker. Kim reportedly had about 800,000 WEMIX coins in
his crypto wallet between January and February 2022. The coins were said to be worth six billion won (or $4.5 million) at the time.

The legislator was accused of withdrawing all the coins before South Korea implemented the Financial
Action Task Force’s (FATF) travel rule on March 25 last year. FATF is
a global money laundering
Money Laundering

Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund

Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund
Read this Term
and terrorist financing watchdog.

To implement the travel
rule, South Korea mandated domestic crypto exchanges to reveal the
identities of entities and transactions exceeding one million won. However, Kim
previously clarified that he neither withdrew his digital assets nor violated any law.

As part of
an investigation into the allegations, prosecutors recently raided three local
crypto exchanges
, including Upbit. In addition, PPP recently
sent a team to WeMade, the company behind the WEMIX
token, with the hope of shedding light on the case.

In the wake of the scandal, Kim in May gave up his membership of the DP and
became an independent legislator. Last week, Kim announced that he will not
seek re-election in the upcoming general elections, according to Yonhap News
Agency
. The declaration is widely interpreted as an attempt by the lawmaker to get a
milder penalty from the parliamentary ethics committee.

With the
vote conducted on Wednesday ending in a stalemate, the parliamentary ethics
committee can either start a new session to re-raise the expulsion motion, or
it can conduct a new vote within the subcommittee to impose
a less harsh
disciplinary action against Kim, the local media further reported.

Lawmakers to Declare Digital Asset Holdings

Meanwhile,
while South Korea’s Public Service Ethics Act require top government officials
to disclose their traditional assets to the public, the law does not include
cryptocurrencies
Cryptocurrencies

By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw

By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw
Read this Term
within its ambit. To change this, the parliament has
introduced a new bill that will require legislators to declare their digital asset holdings.

In May, the
People’s Power Party sought to move up the
enforcement date
for the regulation. The bill was expected to come into force in December, Finance
Magnates
reported. However, Yun Jae-ok, the Floor Leader of the ruling party, said the date “is too
distant”.

SEC charges Citigroup; FMA and FCA warn against clone websites; read today’s news nuggets.

DCG’s Settlement Deal on Shaky Ground as Genesis Lender Group Objects

https://www.financemagnates.com/cryptocurrency/dcgs-settlement-deal-on-shaky-ground-as-genesis-lender-group-objects/

The Ad Hoc
Group, a group of creditors claiming approximately $2.4 billion against
bankrupt digital asset lender, Genesis, has opposed the in-principle agreement reached between Digital
Currency Group (DCG) and the Committee of Unsecured Creditors (UCC).

Genesis Lender Group Opposes DCG Deal

A court
document filed yesterday (Tuesday) shows that DCG, the parent company of
Genesis, agreed to pay $275
million
before
Genesis’ Chapter 11 bankruptcy plan becomes effective. The blockchain-focused
venture capital company also tentatively agreed to pay approximately $328.8 million in
“first-lien” debt two years after the plan
receives the court’s go-ahead.

Furthermore,
DCG proposed to make a payment of around $830 million seven years after the
plan was kicked off. This
payment is to comprise 55% in US dollars and 45% in Bitcoin and Ethereum, two of the world’s foremost digital currencies. The long-term commitment comes
with an interest rate of 6%.

However, in
a separate court filing also entered yesterday, the Ad
Hoc Group described the proposed amounts as “wholly insufficient”. They also
criticized the item in the in-principle agreement that grants
“non-consensual third-party releases” to DGC. This proposed clause
means that DCG will be exempted from any claims or liabilities that could be
brought against it by creditors such as the Ad Hoc Group.

Background

In January,
Genesis filed for
bankruptcy protection
in New York after the collapse of crypto hedge
fund, Three Arrows Capital
(3AC)
, and
cryptocurrency exchange, FTX, threw its business into a liquidation
crisis
, Finance Magnates reported.

According to the Ad Hoc Group, Genesis had a $2.3 billion exposure to 3AC. However, after liquidating
collateral in its possession, the crypto lender reduced
the 3AC-related
losses to $1.2 billion.

Despite
these losses, Genesis allegedly continued to solicit hundreds of millions in
additional loans from creditors, including many members of the Ad Hoc Group.
Furthermore, DCG reportedly issued a promissory note of $1.1 billion payable to
Genesis only in 2032 at an annual interest rate of 1%. However, the Genesis
parent company allegedly framed this written promise as a “near-term
receivable”.

As a result
of Genesis’ losses, DCG is supposed to pay approximately $630 million in
May 2023 to Genesis’ creditors. However, it has allegedly failed to do
so, the Ad Hoc Group claimed in the court filing.

With the in-principle agreement,
DCG is now proposing
to pay $604 million to the creditors in two
years’ time instead of
$630 million, the Ad Group further asserted. In addition, instead of releasing $1.1
billion as pledged in the promissory note, DCG is now proposing to pay $830
million in seven years at “sub-market interest rates,” the Ad Hoc Group further
contended.

“At its
essence, [the DCG
in-principle deal] demonstrates that [Genesis] and UCC are unwilling to comply
with their fiduciary obligations to maximize creditor recoveries, and are
instead focused on putting this case behind them,” the Ad Hoc Group noted. “However,
the Ad Hoc Group, which includes dozens of creditors for whom these assets are
critical, does not have such luxury and cannot support the proposed terms of
the Plan Update which permit DCG to walk away untouched and, in fact, paying
less than already committed.”

If the
suggested agreement is finalized in official documents and a Chapter 11 plan is
put forward, the Ad Hoc Group plans to object to Genesis’
reorganization.

SEC charges Citigroup; FMA and FCA warn against clone websites; read today’s news nuggets.

The Ad Hoc
Group, a group of creditors claiming approximately $2.4 billion against
bankrupt digital asset lender, Genesis, has opposed the in-principle agreement reached between Digital
Currency Group (DCG) and the Committee of Unsecured Creditors (UCC).

Genesis Lender Group Opposes DCG Deal

A court
document filed yesterday (Tuesday) shows that DCG, the parent company of
Genesis, agreed to pay $275
million
before
Genesis’ Chapter 11 bankruptcy plan becomes effective. The blockchain-focused
venture capital company also tentatively agreed to pay approximately $328.8 million in
“first-lien” debt two years after the plan
receives the court’s go-ahead.

Furthermore,
DCG proposed to make a payment of around $830 million seven years after the
plan was kicked off. This
payment is to comprise 55% in US dollars and 45% in Bitcoin and Ethereum, two of the world’s foremost digital currencies. The long-term commitment comes
with an interest rate of 6%.

However, in
a separate court filing also entered yesterday, the Ad
Hoc Group described the proposed amounts as “wholly insufficient”. They also
criticized the item in the in-principle agreement that grants
“non-consensual third-party releases” to DGC. This proposed clause
means that DCG will be exempted from any claims or liabilities that could be
brought against it by creditors such as the Ad Hoc Group.

Background

In January,
Genesis filed for
bankruptcy protection
in New York after the collapse of crypto hedge
fund, Three Arrows Capital
(3AC)
, and
cryptocurrency exchange, FTX, threw its business into a liquidation
crisis
, Finance Magnates reported.

According to the Ad Hoc Group, Genesis had a $2.3 billion exposure to 3AC. However, after liquidating
collateral in its possession, the crypto lender reduced
the 3AC-related
losses to $1.2 billion.

Despite
these losses, Genesis allegedly continued to solicit hundreds of millions in
additional loans from creditors, including many members of the Ad Hoc Group.
Furthermore, DCG reportedly issued a promissory note of $1.1 billion payable to
Genesis only in 2032 at an annual interest rate of 1%. However, the Genesis
parent company allegedly framed this written promise as a “near-term
receivable”.

As a result
of Genesis’ losses, DCG is supposed to pay approximately $630 million in
May 2023 to Genesis’ creditors. However, it has allegedly failed to do
so, the Ad Hoc Group claimed in the court filing.

With the in-principle agreement,
DCG is now proposing
to pay $604 million to the creditors in two
years’ time instead of
$630 million, the Ad Group further asserted. In addition, instead of releasing $1.1
billion as pledged in the promissory note, DCG is now proposing to pay $830
million in seven years at “sub-market interest rates,” the Ad Hoc Group further
contended.

“At its
essence, [the DCG
in-principle deal] demonstrates that [Genesis] and UCC are unwilling to comply
with their fiduciary obligations to maximize creditor recoveries, and are
instead focused on putting this case behind them,” the Ad Hoc Group noted. “However,
the Ad Hoc Group, which includes dozens of creditors for whom these assets are
critical, does not have such luxury and cannot support the proposed terms of
the Plan Update which permit DCG to walk away untouched and, in fact, paying
less than already committed.”

If the
suggested agreement is finalized in official documents and a Chapter 11 plan is
put forward, the Ad Hoc Group plans to object to Genesis’
reorganization.

SEC charges Citigroup; FMA and FCA warn against clone websites; read today’s news nuggets.

US DOJ Opposes Sam Bankman-Fried’s Claims on Potential Evidence

https://www.financemagnates.com/cryptocurrency/us-doj-opposes-sam-bankman-frieds-claims-on-potential-evidence/

The US
Department of Justice has responded to claims by FTX Founder Sam
Bankman-Fried’s lawyers that prosecutors are dumping “millions of pages” of
discovery materials or potential evidence on the embattled crypto entrepreneur
less than six weeks before his criminal trial billed for October 3. In a letter sent on Friday to Judge Lewis
Kaplan, who is presiding over the case, Bankman’s legal team had claimed that
prosecutors produced “an additional 4 million pages of discovery” without plans
to make them available to the former FTX CEO for review.

DOJ Slams
Bankman-Fried’s Claims

In another
letter sent yesterday (Monday), the lawyers further claimed that US prosecutors
also produced another 3.7 million pages of discovery. They noted that producing
these materials while Bankman-Fried is currently under detention at the
Metropolitan Detention Centre in Brooklyn, “is plainly inadequate” and violates
the former FTX boss’ right to participate in preparing for his defence. They,
therefore, urged the court to stop prosecutors from using evidence produced
after July 1 during Bankman-Fried’s trial.

However, in
a new letter addressed to Judge Kaplan on Monday, Damian Williams, the US
Attorney for the Southern District of New York, urged the court to dismiss the
request, noting that the potential evidence was gathered from Bankman-Fried’s
Google accounts and he and his legal team have had access to them for
months.

“The
defendant’s representations are distorted to the point of being misleading,”
William said. “The 4 million pages referenced in the defendant’s August 25,
2023 letter are materials that the government obtained from Google in response
to a search warrant for the defendant’s own Google accounts.”

To buttress
this point, Williams noted that Bankman-Fried shared details from the Google
accounts with the New York Times when he exposed personal details about
Caroline Elision, his former romantic partners and the ex-CEO of FTX’s sister
trading firm, Alameda Research. The Attorney the 3.7 million pages of evidence
claimed to have been produced by the prosecuting team “constitutes a
duplicative subset of prior productions.” He added that Bankman-Fried’s legal
team “is literally double counting to inflate the amount of discovery the Government
has produced.”

“[Sam
Bankman-Fried] cannot plausibly claim to be prejudiced by the Government’s
production of these materials, as he had months prior to being detained to mine
them for materials relevant to his defence,” Williams added.’

Bankman-Fried Challenges Jail Decision

Finance
Magnates
reported that Judge Kaplan ordered Bankman-Fried to be jailed ahead of his
trial
earlier
this month. The judge agreed with prosecutors that the FTX Founder twice
attempted to tamper with witnesses in the case, including by sharing Elison’s
details
with The
New York Times.

Bankman’s
lawyers have argued that the imprisonment of the former crypto billion is
stalling his trial reparation. This week, they sought the “temporary”
release
of the
former FTX CEO and are also challenging the judge’s
decision
to jail
Bankman-Fried at the 2nd US Circuit Court of Appeals.

Meanwhile,
Sam Bankman-Fried last week pleaded not guilty in response to a revised
indictment that includes seven counts of charges. The disgraced entrepreneur
has been accused of fraud and money laundering, among others, in connection to the downfall of his
cryptocurrency business
.

New Match-Trader head; TradingView charts on MultiHODL; read today’s news nuggets.

The US
Department of Justice has responded to claims by FTX Founder Sam
Bankman-Fried’s lawyers that prosecutors are dumping “millions of pages” of
discovery materials or potential evidence on the embattled crypto entrepreneur
less than six weeks before his criminal trial billed for October 3. In a letter sent on Friday to Judge Lewis
Kaplan, who is presiding over the case, Bankman’s legal team had claimed that
prosecutors produced “an additional 4 million pages of discovery” without plans
to make them available to the former FTX CEO for review.

DOJ Slams
Bankman-Fried’s Claims

In another
letter sent yesterday (Monday), the lawyers further claimed that US prosecutors
also produced another 3.7 million pages of discovery. They noted that producing
these materials while Bankman-Fried is currently under detention at the
Metropolitan Detention Centre in Brooklyn, “is plainly inadequate” and violates
the former FTX boss’ right to participate in preparing for his defence. They,
therefore, urged the court to stop prosecutors from using evidence produced
after July 1 during Bankman-Fried’s trial.

However, in
a new letter addressed to Judge Kaplan on Monday, Damian Williams, the US
Attorney for the Southern District of New York, urged the court to dismiss the
request, noting that the potential evidence was gathered from Bankman-Fried’s
Google accounts and he and his legal team have had access to them for
months.

“The
defendant’s representations are distorted to the point of being misleading,”
William said. “The 4 million pages referenced in the defendant’s August 25,
2023 letter are materials that the government obtained from Google in response
to a search warrant for the defendant’s own Google accounts.”

To buttress
this point, Williams noted that Bankman-Fried shared details from the Google
accounts with the New York Times when he exposed personal details about
Caroline Elision, his former romantic partners and the ex-CEO of FTX’s sister
trading firm, Alameda Research. The Attorney the 3.7 million pages of evidence
claimed to have been produced by the prosecuting team “constitutes a
duplicative subset of prior productions.” He added that Bankman-Fried’s legal
team “is literally double counting to inflate the amount of discovery the Government
has produced.”

“[Sam
Bankman-Fried] cannot plausibly claim to be prejudiced by the Government’s
production of these materials, as he had months prior to being detained to mine
them for materials relevant to his defence,” Williams added.’

Bankman-Fried Challenges Jail Decision

Finance
Magnates
reported that Judge Kaplan ordered Bankman-Fried to be jailed ahead of his
trial
earlier
this month. The judge agreed with prosecutors that the FTX Founder twice
attempted to tamper with witnesses in the case, including by sharing Elison’s
details
with The
New York Times.

Bankman’s
lawyers have argued that the imprisonment of the former crypto billion is
stalling his trial reparation. This week, they sought the “temporary”
release
of the
former FTX CEO and are also challenging the judge’s
decision
to jail
Bankman-Fried at the 2nd US Circuit Court of Appeals.

Meanwhile,
Sam Bankman-Fried last week pleaded not guilty in response to a revised
indictment that includes seven counts of charges. The disgraced entrepreneur
has been accused of fraud and money laundering, among others, in connection to the downfall of his
cryptocurrency business
.

New Match-Trader head; TradingView charts on MultiHODL; read today’s news nuggets.

Is the First Spot BTC ETF Coming? Grayscale Triumphs over SEC in Court

https://www.financemagnates.com/cryptocurrency/is-the-first-spot-btc-etf-coming-grayscale-triumphs-over-sec-in-court/

Grayscale
Investment, the Connecticut-based crypto asset manager, has scored a legal
victory over the US Securities and Exchange Commission (SEC). Today (Tuesday),
the US Court of Appeals for the District of Columbia Circuit ruled that the
SEC’s rejection of the company’s proposal to
convert its Grayscale Bitcoin Trust (GBTC)into a spot Bitcoin (BTC)
exchange-traded fund (ETF) was “arbitrary and capricious”.

Grayscale
Wins Legal Challenge

A spot BTC EFT tracks the current market price of Bitcoin, the pioneer
and largest cryptocurrency in the world. The instrument enables investors to get
indirect exposure to BTC.

In October
2021, Grayscale, a subsidiary of the Digital Currency Group, applied with the
SEC to list its ETF on the stock exchange, NYSE Acra. However, in June last year, the
securities regulator denied the application, noting that the proposed ETF
“was not designed to prevent fraudulent and manipulative acts and practices.” Grayscale subsequently launched a legal challenge against the regulator.

SEC turned
down Grayscale’s proposal despite approving two
Bitcoin futures ETFs
, Teucrium Bitcoin Futures Fund and Valkyrie XBTO Bitcoin Futures Fund,
in April and May 2022, respectively. Furthermore, the securities watchdog accepted the issuing companies’
surveillance-sharing agreement with the Chicago Mercantile
Exchange (CME) as
satisfactory.

However,
Grayscale’s proposal was denied despite the fact that NYSE Arca has the same
surveillance-sharing agreement with the CME. Instead, the SEC concluded
there was a risk that trading in Grayscale’s ETF would have a “predominant
influence on prices” in the CME bitcoin futures market.

In a decision reached on Tuesday, a panel
of judges at the appellate court criticized the SEC for failing to explain
why it offers “different
treatments” to similar
products. The court, therefore, ordered the regulator to “vacate” its order
against Grayscale.

“NYSE Arca
presented substantial evidence that Grayscale is similar, across the relevant
regulatory factors, to bitcoin futures ETPs,” Circuit Judge Neomi Rao explained
in a court filing. “The
Commission failed to adequately explain why it approved the listing of two
bitcoin futures ETPs but not Grayscale’s proposed bitcoin ETP.”

Rao added:
“In the absence of a coherent explanation, this, unlike the regulatory
treatment of like products, is unlawful. We therefore grant Grayscale’s
petition for review and vacate the Commission’s order.”

Commenting
on the court ruling, Michael Sonnenshein, CEO of Grayscale, in a post on X
(formerly Twitter), noted that the firm’s legal team is “actively reviewing” the
court’s ruling. Similarly, a spokesperson
for the SEC told Reuters that the regulatory authority
is evaluating
the court’s stance to
determine its next move.

Is the First Spot
BTC ETF Coming?

Over the
last years, several firms have applied for a spot on BTC ETF with the SEC.
However, the regulator rejected all the applications, citing fraud
concerns.

Despite
this, the crypto industry in recent months has been hopeful that trading in the
instrument will be approved. In June, an application for the
ETF by BlackRock
, the world’s largest asset manager, sparked a wave of similar submissions from
other companies in the sector, Finance Magnates reported.

With the
new order from the appellate court, the United States may be about to get its
first spot BTC EFT. However, it is important to point out that the order only
instructs the SEC to review its decision on the proposed EFT. It is possible
the regulator will find another fault with Grayscale’s application.

New Match-Trader head; TradingView charts on MultiHODL; read today’s news nuggets.

Grayscale
Investment, the Connecticut-based crypto asset manager, has scored a legal
victory over the US Securities and Exchange Commission (SEC). Today (Tuesday),
the US Court of Appeals for the District of Columbia Circuit ruled that the
SEC’s rejection of the company’s proposal to
convert its Grayscale Bitcoin Trust (GBTC)into a spot Bitcoin (BTC)
exchange-traded fund (ETF) was “arbitrary and capricious”.

Grayscale
Wins Legal Challenge

A spot BTC EFT tracks the current market price of Bitcoin, the pioneer
and largest cryptocurrency in the world. The instrument enables investors to get
indirect exposure to BTC.

In October
2021, Grayscale, a subsidiary of the Digital Currency Group, applied with the
SEC to list its ETF on the stock exchange, NYSE Acra. However, in June last year, the
securities regulator denied the application, noting that the proposed ETF
“was not designed to prevent fraudulent and manipulative acts and practices.” Grayscale subsequently launched a legal challenge against the regulator.

SEC turned
down Grayscale’s proposal despite approving two
Bitcoin futures ETFs
, Teucrium Bitcoin Futures Fund and Valkyrie XBTO Bitcoin Futures Fund,
in April and May 2022, respectively. Furthermore, the securities watchdog accepted the issuing companies’
surveillance-sharing agreement with the Chicago Mercantile
Exchange (CME) as
satisfactory.

However,
Grayscale’s proposal was denied despite the fact that NYSE Arca has the same
surveillance-sharing agreement with the CME. Instead, the SEC concluded
there was a risk that trading in Grayscale’s ETF would have a “predominant
influence on prices” in the CME bitcoin futures market.

In a decision reached on Tuesday, a panel
of judges at the appellate court criticized the SEC for failing to explain
why it offers “different
treatments” to similar
products. The court, therefore, ordered the regulator to “vacate” its order
against Grayscale.

“NYSE Arca
presented substantial evidence that Grayscale is similar, across the relevant
regulatory factors, to bitcoin futures ETPs,” Circuit Judge Neomi Rao explained
in a court filing. “The
Commission failed to adequately explain why it approved the listing of two
bitcoin futures ETPs but not Grayscale’s proposed bitcoin ETP.”

Rao added:
“In the absence of a coherent explanation, this, unlike the regulatory
treatment of like products, is unlawful. We therefore grant Grayscale’s
petition for review and vacate the Commission’s order.”

Commenting
on the court ruling, Michael Sonnenshein, CEO of Grayscale, in a post on X
(formerly Twitter), noted that the firm’s legal team is “actively reviewing” the
court’s ruling. Similarly, a spokesperson
for the SEC told Reuters that the regulatory authority
is evaluating
the court’s stance to
determine its next move.

Is the First Spot
BTC ETF Coming?

Over the
last years, several firms have applied for a spot on BTC ETF with the SEC.
However, the regulator rejected all the applications, citing fraud
concerns.

Despite
this, the crypto industry in recent months has been hopeful that trading in the
instrument will be approved. In June, an application for the
ETF by BlackRock
, the world’s largest asset manager, sparked a wave of similar submissions from
other companies in the sector, Finance Magnates reported.

With the
new order from the appellate court, the United States may be about to get its
first spot BTC EFT. However, it is important to point out that the order only
instructs the SEC to review its decision on the proposed EFT. It is possible
the regulator will find another fault with Grayscale’s application.

New Match-Trader head; TradingView charts on MultiHODL; read today’s news nuggets.

Bankman-Fried Appeals Judge’s Jail Decision as October Trial Looms

https://www.financemagnates.com/cryptocurrency/bankman-fried-appeals-judges-jail-decision-as-october-trial-looms/

Sam
Bankman-Fried, the Founder of the insolvent cryptocurrency exchange, FTX, is
finally challenging the decision of Judge Lewis Kaplan to jail him ahead of his
trial billed to start on October 3rd, according to Reuters. Earlier this month,
Judge Kaplan ordered Bankman-Fried to be imprisoned for attempting twice to tamper
with witnesses in the lawsuit. The case was initiated against him by the
United States over the collapse of FTX in November last year.

Bankman-Fried Appeals Pre-Trial Jail Sentence

According
to a court filing seen by Reuters, the former crypto billionaire’s lawyers
entered the appeal at the 2nd US Circuit Court of Appeals. In revoking
Bankman-Fried’s bail
, Judge Kaplan of the US District Court of the Southern
District of New York agreed with US prosecutors that Bankman-Fried violated the
terms of his bail
granted on a $250 million bond
in December.

Specifically,
the prosecutors contended that the FTX Founder sought to intimidate Caroline
Ellison, this former ally and romantic partner, by sharing
her personal details with the New York Times
. However, in the appeal,
Bankman-Fried’s lawyers asserted that the former FTX CEO simply exercised his
First Amendment right through the action.

The First
Amendment is the first of ten amendments to the US Constitution that are
collectively known as the Bill of Rights. The amendment guarantees the freedom of
religion, speech, press and assembly, among others.

In their
argument, Bankman-Fried’s lawyers wondered how Bankman-Fried’s action could be
considered a threat to Ellison when the details shared with the New York Times were her “own statements”. The
article published by the media establishment described details contained in the documents
it obtained as “personal and raw”, adding that the documents
illustrate the complexity of the relationship between Bankman-Fried and
Ellison.

Currently,
Bankman-Fried is under detention at the Metropolitan Detention Centre in
Brooklyn. In the appeal, the crypto entrepreneur’s legal counsel said the FTX Founder is being handicapped from analysing discovery materials
from prosecutors and properly preparing for his trial.

The lawyers
have repeatedly criticised as inadequate the time the former FTX CEO is permitted to spend with his legal team. In a separate document filed on Friday before the US District Court for the Southern
District of New York, the lawyers continued to raise concern, calling for Bankman-Fried’s
temporary release.

Specifically,
they argued that “extraordinary accommodations” permitted by the court still
fell short of what is needed for Bankman-Fried to adequately prepare for his
upcoming criminal trial. Furthermore, they pointed out that prosecutors last
Thursday generated about four million pages of documents and a significant
portion of them still needs to be cross-checked by Bankman-Fried.

Finance Magnates reported last week that the court permitted the embattled crypto entrepreneur’s
lawyers to conduct “unlimited” prison visits to Bankman-Fried, according to a court order
seen by CoinDesk. The court also granted the FTX Founder “frequent access” to a
computer, with certain “selected materials” only viewable using a hard drive

The
decision came after the lawyers said meeting Bankman-Fried only twice a week
was completely inadequate. Furthermore, the legal team previously
claimed that the former FTX boss was being denied a vegan meal
plan
and “is
literally now subsisting on bread and water.”

Meanwhile, Bankman-Fried
last week also pleaded not guilty to an updated indictment
containing seven counts of charges. He is to be tried separately on five counts
of charges in March next year.

ASIC
ASIC

The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the

The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the
Read this Term
suspends AFS license; FCA warns against 5 fraudulent firms; read today’s news nuggets.

Sam
Bankman-Fried, the Founder of the insolvent cryptocurrency exchange, FTX, is
finally challenging the decision of Judge Lewis Kaplan to jail him ahead of his
trial billed to start on October 3rd, according to Reuters. Earlier this month,
Judge Kaplan ordered Bankman-Fried to be imprisoned for attempting twice to tamper
with witnesses in the lawsuit. The case was initiated against him by the
United States over the collapse of FTX in November last year.

Bankman-Fried Appeals Pre-Trial Jail Sentence

According
to a court filing seen by Reuters, the former crypto billionaire’s lawyers
entered the appeal at the 2nd US Circuit Court of Appeals. In revoking
Bankman-Fried’s bail
, Judge Kaplan of the US District Court of the Southern
District of New York agreed with US prosecutors that Bankman-Fried violated the
terms of his bail
granted on a $250 million bond
in December.

Specifically,
the prosecutors contended that the FTX Founder sought to intimidate Caroline
Ellison, this former ally and romantic partner, by sharing
her personal details with the New York Times
. However, in the appeal,
Bankman-Fried’s lawyers asserted that the former FTX CEO simply exercised his
First Amendment right through the action.

The First
Amendment is the first of ten amendments to the US Constitution that are
collectively known as the Bill of Rights. The amendment guarantees the freedom of
religion, speech, press and assembly, among others.

In their
argument, Bankman-Fried’s lawyers wondered how Bankman-Fried’s action could be
considered a threat to Ellison when the details shared with the New York Times were her “own statements”. The
article published by the media establishment described details contained in the documents
it obtained as “personal and raw”, adding that the documents
illustrate the complexity of the relationship between Bankman-Fried and
Ellison.

Currently,
Bankman-Fried is under detention at the Metropolitan Detention Centre in
Brooklyn. In the appeal, the crypto entrepreneur’s legal counsel said the FTX Founder is being handicapped from analysing discovery materials
from prosecutors and properly preparing for his trial.

The lawyers
have repeatedly criticised as inadequate the time the former FTX CEO is permitted to spend with his legal team. In a separate document filed on Friday before the US District Court for the Southern
District of New York, the lawyers continued to raise concern, calling for Bankman-Fried’s
temporary release.

Specifically,
they argued that “extraordinary accommodations” permitted by the court still
fell short of what is needed for Bankman-Fried to adequately prepare for his
upcoming criminal trial. Furthermore, they pointed out that prosecutors last
Thursday generated about four million pages of documents and a significant
portion of them still needs to be cross-checked by Bankman-Fried.

Finance Magnates reported last week that the court permitted the embattled crypto entrepreneur’s
lawyers to conduct “unlimited” prison visits to Bankman-Fried, according to a court order
seen by CoinDesk. The court also granted the FTX Founder “frequent access” to a
computer, with certain “selected materials” only viewable using a hard drive

The
decision came after the lawyers said meeting Bankman-Fried only twice a week
was completely inadequate. Furthermore, the legal team previously
claimed that the former FTX boss was being denied a vegan meal
plan
and “is
literally now subsisting on bread and water.”

Meanwhile, Bankman-Fried
last week also pleaded not guilty to an updated indictment
containing seven counts of charges. He is to be tried separately on five counts
of charges in March next year.

ASIC
ASIC

The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the

The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the
Read this Term
suspends AFS license; FCA warns against 5 fraudulent firms; read today’s news nuggets.

SEC Goes After NFTs: Podcaster to Shell Out $6.1M over “Securities” Offerings

https://www.financemagnates.com/cryptocurrency/sec-goes-after-nfts-podcaster-to-shell-out-61m-over-securities-offerings/

The US Securities
and Exchange Commission (SEC) has taken its first enforcement action targeting
the non-fungible token (NFT) industry. Today (Monday), the securities regulator
announced that it has charged Impact Theory, a Los Angeles-based media and
entertainment company popular for its podcast, with raising about $30 million
from hundreds of investors, including those in the United States, through its
“unregistered” offering of crypto asset “securities”.

SEC Charges Impact Theory over NFT Securities Sales

In a
statement, the said it has ordered the company to pay a grand total of
$6.1 million to settle the charges. The grand figure includes a civil monetary
penalty and return of illicit profits plus interest.

Outside the
NFT industry, since December 2020, the SEC has been in a legal tussle with Ripple, a blockchain-based payments
network, over its XRP token which it claims is a securities token. However, in
recent months, the securities regulator has also turned its attention to crypto
exchanges, dragging Binance and Coinbase to court over their crypto
asset “securities” offered on “unregistered” trading platforms.

However, it
appears the NFT industry is next in line. In the statement released on Monday,
the regulator noted that its findings show that NFTs offered by Impact Theory
were investment contracts and therefore securities.

In previous
cases, the regulator argued that tokens listed on crypto exchanges were
“securities” by citing the Howey Test. The Test is a technique used to
determine when a financial transaction qualifies as an “investment contract”
and should be regulated as a security dealing by the SEC. The regulator has
severally contended that transactions are securities when they seek to generate
returns for investors.

Are NFT ‘Securities’ When Sold?

In the new
case against Impact Theory, SEC alleged that the media company between October
and December 2021, marketed and sold three levels of NFTs termed as “Founder’s
Keys.” These tokens were reportedly categorized as “Legendary,”
“Heroic,” and “Relentless.”

“The order
finds that Impact Theory encouraged potential investors to view the purchase of
a Founder’s Key as an investment into the business, stating that investors
would profit from their purchases if Impact Theory was successful in its
efforts,” SEC further explained. “Among other things, Impact Theory emphasized
that it was ‘trying to build the next Disney,’ and, if successful, it would
deliver ‘tremendous value’ to Founder’s Key purchasers.”

However,
Impact Theory neither admitted to nor denied the findings, according to the
SEC’s statement. Nonetheless, the media company agreed to the regulatory agency’s
cease-and-desist order.

Furthermore,
the firm has agreed to get rid of all “Founder’s Keys” in its possession. It
will also publish a notice about the SEC’s order on its website and social
media platforms and eliminate any royalty that it might otherwise receive from
future secondary market transactions involving the NFTs”

Additionally,
the SEC said it ordered Impact Theory to create a “Fair Fund” so as to refund
investors who purchased NFTs during the period it marketed the tokens.

“Absent a
valid exemption, offerings of securities, in whatever form, must be
registered,” commented Antonia Apps, Director of the SEC’s New York Regional
Office. “Without registration, investors of all types are deprived of the
protections afforded them by the robust disclosures and other safeguards long
provided by our securities laws.”

ASIC suspends AFS license; FCA warns against 5 fraudulent firms; read today’s news nuggets.

The US Securities
and Exchange Commission (SEC) has taken its first enforcement action targeting
the non-fungible token (NFT) industry. Today (Monday), the securities regulator
announced that it has charged Impact Theory, a Los Angeles-based media and
entertainment company popular for its podcast, with raising about $30 million
from hundreds of investors, including those in the United States, through its
“unregistered” offering of crypto asset “securities”.

SEC Charges Impact Theory over NFT Securities Sales

In a
statement, the said it has ordered the company to pay a grand total of
$6.1 million to settle the charges. The grand figure includes a civil monetary
penalty and return of illicit profits plus interest.

Outside the
NFT industry, since December 2020, the SEC has been in a legal tussle with Ripple, a blockchain-based payments
network, over its XRP token which it claims is a securities token. However, in
recent months, the securities regulator has also turned its attention to crypto
exchanges, dragging Binance and Coinbase to court over their crypto
asset “securities” offered on “unregistered” trading platforms.

However, it
appears the NFT industry is next in line. In the statement released on Monday,
the regulator noted that its findings show that NFTs offered by Impact Theory
were investment contracts and therefore securities.

In previous
cases, the regulator argued that tokens listed on crypto exchanges were
“securities” by citing the Howey Test. The Test is a technique used to
determine when a financial transaction qualifies as an “investment contract”
and should be regulated as a security dealing by the SEC. The regulator has
severally contended that transactions are securities when they seek to generate
returns for investors.

Are NFT ‘Securities’ When Sold?

In the new
case against Impact Theory, SEC alleged that the media company between October
and December 2021, marketed and sold three levels of NFTs termed as “Founder’s
Keys.” These tokens were reportedly categorized as “Legendary,”
“Heroic,” and “Relentless.”

“The order
finds that Impact Theory encouraged potential investors to view the purchase of
a Founder’s Key as an investment into the business, stating that investors
would profit from their purchases if Impact Theory was successful in its
efforts,” SEC further explained. “Among other things, Impact Theory emphasized
that it was ‘trying to build the next Disney,’ and, if successful, it would
deliver ‘tremendous value’ to Founder’s Key purchasers.”

However,
Impact Theory neither admitted to nor denied the findings, according to the
SEC’s statement. Nonetheless, the media company agreed to the regulatory agency’s
cease-and-desist order.

Furthermore,
the firm has agreed to get rid of all “Founder’s Keys” in its possession. It
will also publish a notice about the SEC’s order on its website and social
media platforms and eliminate any royalty that it might otherwise receive from
future secondary market transactions involving the NFTs”

Additionally,
the SEC said it ordered Impact Theory to create a “Fair Fund” so as to refund
investors who purchased NFTs during the period it marketed the tokens.

“Absent a
valid exemption, offerings of securities, in whatever form, must be
registered,” commented Antonia Apps, Director of the SEC’s New York Regional
Office. “Without registration, investors of all types are deprived of the
protections afforded them by the robust disclosures and other safeguards long
provided by our securities laws.”

ASIC suspends AFS license; FCA warns against 5 fraudulent firms; read today’s news nuggets.

Binance Dodges Regulatory Bullet in Belgium, Redirects Users to Poland

https://www.financemagnates.com/cryptocurrency/binance-dodges-regulatory-bullet-in-belgium-redirects-users-to-poland/

Binance,
the world’s largest cryptocurrency exchange by trading volume, has opted to migrate its users in Belgium to its Polish subsidiary rather than quit the Western
European country. In late
June, the Belgian financial markets watchdog ordered the exchange to immediately shut down its crypto exchange and custody
services in the country as it was serving Belgian users from
outside the European Economic Area (EEA).

Binance
Brings Belgian Users under Polish Branch

In the order, the Financial
Services and Markets Authority (FSMA) identified 27 companies or ‘Binance
operators’
it said were helping to prop the exchange’s services in Belgium by offering
technical and operational support. However, Binance was not
able to demonstrate, despite multiple
queries, that 19 of these so-called operators are actually located within the
EEA and have domestic legal backing to provide such services in Belgium.

As a
result, FSMA ordered Binance to return all customers’ crypto holdings and keys.
However, the regulator gave the exchange the option of transferring its Belgian users to entities
regulated under the law of an EEA member state. It pointed out that such firms
must be authorized by domestic laws in their countries to carry out crypto
exchange and custody services, including within Belgium.

Today (Monday), Binance announced that it will continue to serve Belgian users by migrating them to
Binance Poland sp. z o.o. The move enables the business to meet its local regulatory
requirements in Belgium, Binance said, adding that
the Polish subsidiary
is registered as a virtual assets service provider in Poland and can, therefore, provide crypto exchange and
custodian services.

“Belgian
users can continue using the Binance platform by accepting the Terms of Use of
Binance Poland for Belgian users,’ the exchange stated in a blog post. “We may also ask users to
resubmit some of the required know-your-customer (KYC) documentation in order
to comply with Polish regulatory requirements (details to be provided to
affected users).”

FSMA
Responds to Binance

In a separate statement released on Monday, FSMA
acknowledged Binance’s decision to begin to serve its Belgian customers through
its Polish entity. However, the regular noted that only users who agree to work
with Binance Poland must be onboarded. Others, if they
agree, can be
transferred to another authorized subsidiary within the EEA.

Moreover,
the Belgian watchdog pointed out that while Europe awaits the implementation of
the Markets in Crypto-Asset (MiCA) recently
passed by the European Union
, the crypto industry remains unregulated in
the continent, with oversight limited to the prevention of money laundering and
terrorist financing.

“Binance
Poland is not subject to any obligation other than those arising from the 5th
Anti-Money Laundering Directive,” FSMA explained. “In application of that
Directive, Binance Poland is registered with the Polish Ministry of Finance.
The registration is not, as in many other EEA countries, subject to prudential
requirements or an examination of the fitness or propriety of the directors or
senior managers of the entities applying for registration.”

Tough Time in Europe

Binance’s
effort to comply with Belgium’s regulator’s requirements comes as the exchange is facing
a rough patch in Europe
.
In July, the exchange dropped its license
application in Germany
the watchdog was reportedly unwilling to grant the license.

Additionally,
the exchange quit the Netherlands in
July
after it failed to obtain a virtual asset
service provider license in the country. However, it transferred its Dutch customers to a local rival, Commerce.

Similarly,
Binance applied for
deregistration in Cyprus
in June. However, a spokesperson for the exchange
said the company decided on the move in order to focus on “fewer
regulated entities in the EU.”

ASIC suspends AFS license; FCA warns against 5 fraudulent firms; read today’s news nuggets.

Binance,
the world’s largest cryptocurrency exchange by trading volume, has opted to migrate its users in Belgium to its Polish subsidiary rather than quit the Western
European country. In late
June, the Belgian financial markets watchdog ordered the exchange to immediately shut down its crypto exchange and custody
services in the country as it was serving Belgian users from
outside the European Economic Area (EEA).

Binance
Brings Belgian Users under Polish Branch

In the order, the Financial
Services and Markets Authority (FSMA) identified 27 companies or ‘Binance
operators’
it said were helping to prop the exchange’s services in Belgium by offering
technical and operational support. However, Binance was not
able to demonstrate, despite multiple
queries, that 19 of these so-called operators are actually located within the
EEA and have domestic legal backing to provide such services in Belgium.

As a
result, FSMA ordered Binance to return all customers’ crypto holdings and keys.
However, the regulator gave the exchange the option of transferring its Belgian users to entities
regulated under the law of an EEA member state. It pointed out that such firms
must be authorized by domestic laws in their countries to carry out crypto
exchange and custody services, including within Belgium.

Today (Monday), Binance announced that it will continue to serve Belgian users by migrating them to
Binance Poland sp. z o.o. The move enables the business to meet its local regulatory
requirements in Belgium, Binance said, adding that
the Polish subsidiary
is registered as a virtual assets service provider in Poland and can, therefore, provide crypto exchange and
custodian services.

“Belgian
users can continue using the Binance platform by accepting the Terms of Use of
Binance Poland for Belgian users,’ the exchange stated in a blog post. “We may also ask users to
resubmit some of the required know-your-customer (KYC) documentation in order
to comply with Polish regulatory requirements (details to be provided to
affected users).”

FSMA
Responds to Binance

In a separate statement released on Monday, FSMA
acknowledged Binance’s decision to begin to serve its Belgian customers through
its Polish entity. However, the regular noted that only users who agree to work
with Binance Poland must be onboarded. Others, if they
agree, can be
transferred to another authorized subsidiary within the EEA.

Moreover,
the Belgian watchdog pointed out that while Europe awaits the implementation of
the Markets in Crypto-Asset (MiCA) recently
passed by the European Union
, the crypto industry remains unregulated in
the continent, with oversight limited to the prevention of money laundering and
terrorist financing.

“Binance
Poland is not subject to any obligation other than those arising from the 5th
Anti-Money Laundering Directive,” FSMA explained. “In application of that
Directive, Binance Poland is registered with the Polish Ministry of Finance.
The registration is not, as in many other EEA countries, subject to prudential
requirements or an examination of the fitness or propriety of the directors or
senior managers of the entities applying for registration.”

Tough Time in Europe

Binance’s
effort to comply with Belgium’s regulator’s requirements comes as the exchange is facing
a rough patch in Europe
.
In July, the exchange dropped its license
application in Germany
the watchdog was reportedly unwilling to grant the license.

Additionally,
the exchange quit the Netherlands in
July
after it failed to obtain a virtual asset
service provider license in the country. However, it transferred its Dutch customers to a local rival, Commerce.

Similarly,
Binance applied for
deregistration in Cyprus
in June. However, a spokesperson for the exchange
said the company decided on the move in order to focus on “fewer
regulated entities in the EU.”

ASIC suspends AFS license; FCA warns against 5 fraudulent firms; read today’s news nuggets.

US Wants “Brokers” to Man Taxpayers’ Crypto Reporting Burden

https://www.financemagnates.com/cryptocurrency/us-wants-brokers-to-man-taxpayers-crypto-reporting-burden/

The US
Department of Treasury alongside the Internal Revenue Service (IRS) today
(Friday) announced new proposed rules for “brokers” such as crypto trading
platforms, crypto payment processors and digital asset wallet providers. The
agency noted that the proposed regulation will require these “brokers” to
report certain crypto sales and exchange transactions.

US Aims at Tax Cheats

In a statement, the Treasury Department noted
that the new regulation is part of efforts to implement President Joe Biden’s
administration’s Infrastructure Investment and Jobs Act. The goal
of the legislation, which has been signed into law and is sometimes called the
Bipartisan Infrastructure Law, is to improve the United States’ infrastructure and
create jobs.

Specifically,
the 282-page-long proposed regulation is targeted at combating tax
evasion while helping compliant taxpayers determine how much they owe on their digital asset sale or
exchange transactions.

“Under
current law, taxpayers owe tax on gains and may be entitled to deduct losses on
digital assets when sold, but for many taxpayers, it is difficult and costly to
calculate their gains,” Treasury explained. “These proposed rules require
brokers to provide a new Form 1099-DA to help taxpayers determine if they owe
taxes, and would help taxpayers avoid having to make complicated calculations
or pay digital asset tax preparation services in order to file their tax
returns.”

Furthermore,
the Treasury explained that the new regulations will help
to subject crypto brokers to the same tax reporting rules followed by those that deal in securities
and other financial instruments. These rules also “align tax reporting on
digital assets with tax reporting on other assets, and, as a result, avoid
preferential treatment between different types of assets,” the agency said.

However, the proposed rules are not expected to come into force until 2016 when crypto brokers
will be required to answer for transactions from the prior year. To continue work on the rules, the Treasury Department and IRS are accepting public comments on them until October 30, 2023.

Regulation
Meets Resistance

However,
the new rules have attracted criticism from both the political class and
industry actors. In a statement released on Friday, Patric
McHenry, the Chairman of the US House of Representatives’ Financial
Services Committee, picked holes in the proposal, calling it “another front in
the Biden administration’s
ongoing attack on the digital asset ecosystem.”

“The Biden
Administration must end its effort to kill the digital asset ecosystem in the
US and work with Congress to finally deliver clear rules of the road for this
industry,” McHenry, who took over the Committee from Maxine Waters in January,
stated.

“I look
forward to advancing my bipartisan solution—the Keep Innovation in America
Act—to fix these misguided reporting requirements, protect the privacy of
market participants, and ensure the digital asset ecosystem can flourish here
in the US,” the Chairman added.

In a post
on X (formerly Twitter), Miller Whitehouse-Levine, the CEO of DeFi Education,
described the proposal as “confusing” and “self-refuting”. He added that
the rules “strains to find non-existent financial intermediaries in crypto.”

Additionally, Kristin
Smith, the CEO of Blockchain Association, in a
comment also published on X emphasized that it is “important to remember that the
crypto ecosystem is very different from that of traditional assets, so the
rules must be tailored accordingly and not capture ecosystem participants that
don’t have a pathway to compliance.”

The US
Department of Treasury alongside the Internal Revenue Service (IRS) today
(Friday) announced new proposed rules for “brokers” such as crypto trading
platforms, crypto payment processors and digital asset wallet providers. The
agency noted that the proposed regulation will require these “brokers” to
report certain crypto sales and exchange transactions.

US Aims at Tax Cheats

In a statement, the Treasury Department noted
that the new regulation is part of efforts to implement President Joe Biden’s
administration’s Infrastructure Investment and Jobs Act. The goal
of the legislation, which has been signed into law and is sometimes called the
Bipartisan Infrastructure Law, is to improve the United States’ infrastructure and
create jobs.

Specifically,
the 282-page-long proposed regulation is targeted at combating tax
evasion while helping compliant taxpayers determine how much they owe on their digital asset sale or
exchange transactions.

“Under
current law, taxpayers owe tax on gains and may be entitled to deduct losses on
digital assets when sold, but for many taxpayers, it is difficult and costly to
calculate their gains,” Treasury explained. “These proposed rules require
brokers to provide a new Form 1099-DA to help taxpayers determine if they owe
taxes, and would help taxpayers avoid having to make complicated calculations
or pay digital asset tax preparation services in order to file their tax
returns.”

Furthermore,
the Treasury explained that the new regulations will help
to subject crypto brokers to the same tax reporting rules followed by those that deal in securities
and other financial instruments. These rules also “align tax reporting on
digital assets with tax reporting on other assets, and, as a result, avoid
preferential treatment between different types of assets,” the agency said.

However, the proposed rules are not expected to come into force until 2016 when crypto brokers
will be required to answer for transactions from the prior year. To continue work on the rules, the Treasury Department and IRS are accepting public comments on them until October 30, 2023.

Regulation
Meets Resistance

However,
the new rules have attracted criticism from both the political class and
industry actors. In a statement released on Friday, Patric
McHenry, the Chairman of the US House of Representatives’ Financial
Services Committee, picked holes in the proposal, calling it “another front in
the Biden administration’s
ongoing attack on the digital asset ecosystem.”

“The Biden
Administration must end its effort to kill the digital asset ecosystem in the
US and work with Congress to finally deliver clear rules of the road for this
industry,” McHenry, who took over the Committee from Maxine Waters in January,
stated.

“I look
forward to advancing my bipartisan solution—the Keep Innovation in America
Act—to fix these misguided reporting requirements, protect the privacy of
market participants, and ensure the digital asset ecosystem can flourish here
in the US,” the Chairman added.

In a post
on X (formerly Twitter), Miller Whitehouse-Levine, the CEO of DeFi Education,
described the proposal as “confusing” and “self-refuting”. He added that
the rules “strains to find non-existent financial intermediaries in crypto.”

Additionally, Kristin
Smith, the CEO of Blockchain Association, in a
comment also published on X emphasized that it is “important to remember that the
crypto ecosystem is very different from that of traditional assets, so the
rules must be tailored accordingly and not capture ecosystem participants that
don’t have a pathway to compliance.”

FTX, BlockFI and Genesis’ Customer Data Exposed in “SIM Swapping Attack”

https://www.financemagnates.com/cryptocurrency/ftx-blockfi-and-genesis-customer-data-exposed-in-sim-swapping-attack/

Customer
data of bankrupt crypto exchange, FTX, and insolvent digital asset lenders
BlockFi and Genesis, were exposed earlier this month, Kroll, the vendor responsible
for overseeing creditor claims for the insolvent businesses, confirmed
today (Friday).

FTX,
BlockFi, Genesis Hit by Data Leak

In a
statement, Kroll explained that the hack was the result of a “highly
sophisticated SIM swapping attack” targeted at the T-Mobile US account of one
of its employees. T-Mobile is a mobile network operator.

A SIM
swapping attack is a type of phone fraud in which a hacker deceives a mobile
service provider into redirecting their target’s phone number to a SIM card
they control. This grants the hacker access to the victim’s incoming text
messages and calls, including those used for two-factor authentication (2FA).

“As a
result [of the attack], it appears the threat actor gained access to certain
files containing personal information of bankruptcy claimants in the matters of
BlockFi, FTX and Genesis,” Kroll stated in the statement, adding that it acted
immediately “to secure the three affected accounts.”

The bankruptcy
claims vendor added that it had informed affected customers of
the attack via email. In addition, the firm, which is also a prominent risk and
financial advisory solutions provider, said it is cooperating with the US
Federal Bureau of Investigation (FBI) and “a full investigation is underway.”

“We have no
evidence to suggest other Kroll systems or accounts were impacted,” Kroll
added.

FTX and
BlockFi Respond

In
different posts on social media platform X (formerly known as Twitter), FTX and
BlockFi also confirmed the attack. However, FTX noted that the
information comprised was “non-sensitive” customer data of certain
claimants in its pending
bankruptcy case.

“FTX
account passwords were not maintained by Kroll, and FTX’s own systems were not
affected,” the cryptocurrency exchange said, adding that it is “closely
monitoring the situation.” Furthermore, FTX urged its customers to
“remain on high alert for attempted fraud and scam emails impersonating parties
in the bankruptcy.”

The incident comes over
a month after Finance Magnates reported that several users of FTX could
be facing a phishing attack
. The users at the time were receiving suspicious
password reset emails from the exchange’s official customer support email,
support@ftx.com.

Meanwhile, in its post on X,
BlockFi emphasized that its “internal systems and client funds were not
impacted” by the SIM swapping attack. “We can also confirm that BlockFi account
passwords were never stored on Kroll’s platform,” the firm
added.

“In the
following weeks, you should expect an uptick in phishing attempts and spam
phone calls,” BlockFi further said. “BlockFi and Kroll will never
call, email, or text you to ask you for your personal information.”

FTX, one of
the entities in Sam Bankman-Fried’s crypto empire, tumbled in November last year following a bank run triggered in part by concerns
about the solvency of the exchange’s affiliated trading firm, Alameda Research.
FTX filed for bankruptcy
protection
in the
same month.

In the wake of FTX’s collapse, BlockFi
and Genesis
are among the crypto companies that similarly fell apart. Both businesses have also sought bankruptcy protection to restructure their operations.

Customer
data of bankrupt crypto exchange, FTX, and insolvent digital asset lenders
BlockFi and Genesis, were exposed earlier this month, Kroll, the vendor responsible
for overseeing creditor claims for the insolvent businesses, confirmed
today (Friday).

FTX,
BlockFi, Genesis Hit by Data Leak

In a
statement, Kroll explained that the hack was the result of a “highly
sophisticated SIM swapping attack” targeted at the T-Mobile US account of one
of its employees. T-Mobile is a mobile network operator.

A SIM
swapping attack is a type of phone fraud in which a hacker deceives a mobile
service provider into redirecting their target’s phone number to a SIM card
they control. This grants the hacker access to the victim’s incoming text
messages and calls, including those used for two-factor authentication (2FA).

“As a
result [of the attack], it appears the threat actor gained access to certain
files containing personal information of bankruptcy claimants in the matters of
BlockFi, FTX and Genesis,” Kroll stated in the statement, adding that it acted
immediately “to secure the three affected accounts.”

The bankruptcy
claims vendor added that it had informed affected customers of
the attack via email. In addition, the firm, which is also a prominent risk and
financial advisory solutions provider, said it is cooperating with the US
Federal Bureau of Investigation (FBI) and “a full investigation is underway.”

“We have no
evidence to suggest other Kroll systems or accounts were impacted,” Kroll
added.

FTX and
BlockFi Respond

In
different posts on social media platform X (formerly known as Twitter), FTX and
BlockFi also confirmed the attack. However, FTX noted that the
information comprised was “non-sensitive” customer data of certain
claimants in its pending
bankruptcy case.

“FTX
account passwords were not maintained by Kroll, and FTX’s own systems were not
affected,” the cryptocurrency exchange said, adding that it is “closely
monitoring the situation.” Furthermore, FTX urged its customers to
“remain on high alert for attempted fraud and scam emails impersonating parties
in the bankruptcy.”

The incident comes over
a month after Finance Magnates reported that several users of FTX could
be facing a phishing attack
. The users at the time were receiving suspicious
password reset emails from the exchange’s official customer support email,
support@ftx.com.

Meanwhile, in its post on X,
BlockFi emphasized that its “internal systems and client funds were not
impacted” by the SIM swapping attack. “We can also confirm that BlockFi account
passwords were never stored on Kroll’s platform,” the firm
added.

“In the
following weeks, you should expect an uptick in phishing attempts and spam
phone calls,” BlockFi further said. “BlockFi and Kroll will never
call, email, or text you to ask you for your personal information.”

FTX, one of
the entities in Sam Bankman-Fried’s crypto empire, tumbled in November last year following a bank run triggered in part by concerns
about the solvency of the exchange’s affiliated trading firm, Alameda Research.
FTX filed for bankruptcy
protection
in the
same month.

In the wake of FTX’s collapse, BlockFi
and Genesis
are among the crypto companies that similarly fell apart. Both businesses have also sought bankruptcy protection to restructure their operations.

A Volume-Boosting Tactic? Binance Contacts Lesser-Known Crypto Projects

https://www.financemagnates.com/cryptocurrency/a-volume-boosting-tactic-binance-contactslesser-known-crypto-projects/

Binance,
the largest cryptocurrency exchange in the world by trading volume, in the past
week has been reaching out to digital asset projects on its
platform with
smaller market capitalization and low-liquidity tokens.

According
to The Block, which first reported the news, the exchange has been asking about
the market makers associated with these projects. Binance is also asking if the
projects would be open to allocating up to 5% of their circulating tokens into
its savings pools in exchange for interest earnings.

A Race for More Volume?

While the
move appears to be targeted at boosting trading volumes on Binance, a
spokesperson from the exchange told CoinDesk the move is part of the exchange’s
“ongoing risk management initiative.” “These projects have relatively lower
market liquidity trading pairs and/or a smaller market capitalization, which
potentially exposes users to risk, including potential market manipulation,”
the spokesperson said.

In other words, Binance
sees the move as a way for the crypto projects “to enhance their liquidity
protection.” Furthermore, the
spokesperson emphasized that the call for participation in its saving
pool is optional, The Block reported.

Unverified
screenshots of what appears to be the line of communication between Binance’s agents and
the smaller crypto projects have also emerged on social media.

Lower Volatility Hits
Crypto

Binance’s
recent efforts come to light as the crypto spot and derivatives market share of
the exchange fell for the fifth
consecutive month in July
to 40.4%, according to data from CCData, a digital
assets data provider. On the contrary, exchanges such as Huobi, DigiFinex
and KuCoin, have seen their market
share grow
by 6%, 3.5%
and 1.3%, respectively, since January 2023.

In July,
the crypto industry continued to suffer a
lack of volatility
, with spot and derivatives trading volumes going down by 10.5% and
12.7% to $515 billion and $1.85 trillion, respectively. In addition, the
total volumes of crypto spot and derivatives traded on centralized exchanges such as Binance and Coinbase declined by 12% in July, hitting $2.36 trillion. This marked the lowest
monthly trading activity, year to date.

With $208
billion in total spot trading volume, Binance remains the biggest crypto
exchange in the world. However, Upbit, a South Korea-based crypto, last month beat top exchanges such
as OKX and Coinbase
to emerge as the second-largest exchange by trading volume after
Binance.

Specifically, Upbit’s
spot trading volume in July jumped by 42.3% to $29.8 billion. On the contrary,
OKX and Coinbase saw their volumes descend to $28.6 billion and $29
billion, respectively, Finance Magnates reported.

The fall in
Binance’s market share has persisted in recent months as the cryptocurrency
exchange faces ongoing regulatory challenges
in multiple regions
, notably in the United States where federal authorities are considering filing
criminal charges
against the platform. Already, Binance is contending
with civil lawsuits initiated by the Securities and
Exchange Commission (SEC)
and the Commodity Futures
Trading Commission (CFTC)
.

Binance,
the largest cryptocurrency exchange in the world by trading volume, in the past
week has been reaching out to digital asset projects on its
platform with
smaller market capitalization and low-liquidity tokens.

According
to The Block, which first reported the news, the exchange has been asking about
the market makers associated with these projects. Binance is also asking if the
projects would be open to allocating up to 5% of their circulating tokens into
its savings pools in exchange for interest earnings.

A Race for More Volume?

While the
move appears to be targeted at boosting trading volumes on Binance, a
spokesperson from the exchange told CoinDesk the move is part of the exchange’s
“ongoing risk management initiative.” “These projects have relatively lower
market liquidity trading pairs and/or a smaller market capitalization, which
potentially exposes users to risk, including potential market manipulation,”
the spokesperson said.

In other words, Binance
sees the move as a way for the crypto projects “to enhance their liquidity
protection.” Furthermore, the
spokesperson emphasized that the call for participation in its saving
pool is optional, The Block reported.

Unverified
screenshots of what appears to be the line of communication between Binance’s agents and
the smaller crypto projects have also emerged on social media.

Lower Volatility Hits
Crypto

Binance’s
recent efforts come to light as the crypto spot and derivatives market share of
the exchange fell for the fifth
consecutive month in July
to 40.4%, according to data from CCData, a digital
assets data provider. On the contrary, exchanges such as Huobi, DigiFinex
and KuCoin, have seen their market
share grow
by 6%, 3.5%
and 1.3%, respectively, since January 2023.

In July,
the crypto industry continued to suffer a
lack of volatility
, with spot and derivatives trading volumes going down by 10.5% and
12.7% to $515 billion and $1.85 trillion, respectively. In addition, the
total volumes of crypto spot and derivatives traded on centralized exchanges such as Binance and Coinbase declined by 12% in July, hitting $2.36 trillion. This marked the lowest
monthly trading activity, year to date.

With $208
billion in total spot trading volume, Binance remains the biggest crypto
exchange in the world. However, Upbit, a South Korea-based crypto, last month beat top exchanges such
as OKX and Coinbase
to emerge as the second-largest exchange by trading volume after
Binance.

Specifically, Upbit’s
spot trading volume in July jumped by 42.3% to $29.8 billion. On the contrary,
OKX and Coinbase saw their volumes descend to $28.6 billion and $29
billion, respectively, Finance Magnates reported.

The fall in
Binance’s market share has persisted in recent months as the cryptocurrency
exchange faces ongoing regulatory challenges
in multiple regions
, notably in the United States where federal authorities are considering filing
criminal charges
against the platform. Already, Binance is contending
with civil lawsuits initiated by the Securities and
Exchange Commission (SEC)
and the Commodity Futures
Trading Commission (CFTC)
.

Court Permits “Unlimted” Access to Jailed Bankman-Fried for Trial Preparation

https://www.financemagnates.com/cryptocurrency/court-approves-unlimited-access-to-jailed-bankman-fried-for-trial-prep/

Lawyers
defending Sam Bankman-Fried have been granted permission to conduct “unlimited”
prison visits to the embattled Founder of bankrupt crypto exchange, FTX, who
was jailed earlier this month, according to a court order seen by CoinDesk. The
court authorization is to enable them to work with their client ahead of his
criminal trial scheduled to start on October 3.

Court Order
Falls Short of Lawyers’ Request

The new
order follows last week’s criticism by Bankman-Fried’s legal counsel that
permitting them to meet the embattled crypto entrepreneur, who is currently
under detention at the Metropolitan Detention Centre in Brooklyn, is “entirely
inadequate”. In a letter to US District Judge Lewis Kaplan in Manhattan, the
lawyers also argued that allowing Bankman-Fried to meet his lawyers without a
dedicated computer violates his rights under the Sixth Amendment of the US
Constitution

In the new
order, the court granted the FTX Founder “frequent access” to a computer, with
certain “selected materials” only viewable using a hard drive. The court said
the limited permission would enable the former crypto billionaire to examine
discovery materials exchange in the case.

Lewis
Kaplan, the judge presiding over the case between the United States and Sam
Bankman-Fried, revoked the former FTX
CEO’s bail
after
prosecutors successfully argued that Bank-man-Fried tried to tamper with
witnesses in the case at least twice. In particular, they claimed that Bank-man-Fried shared
personal details of Caroline Ellison
with the New York Times, in order to initiate his
former ally and romantic partner who has pleaded guilty to
federal charges
and is set to testify against him.

Furthermore,
prosecutors contended that the action violated the terms of his bail. The
crypto entrepreneur, who was arrested in the Bahamas last year and subsequently
extradited to the United States, had been previously released on a hefty
$250 million bond
.

From
Bankruptcy to Strategy

Bankman-Fried’s
crypto empire collapsed in November 2022, following a liquidation crisis and
the revelation that the Founder used FTX’s customers’ assets to fund the
exchange’s trading arm, Alameda Research. Subsequently, the Founder was accused
of receiving over $2.2
billion
in loans
and payments from the exchange and its affiliated entities, mainly Alameda
Research.

Earlier
this week, Bankman-Fried, who previously faced 13 counts of criminal charges, pleaded not guilty to an updated indictment
containing seven counts of charges. This includes the accusation that he misappropriated $100 million of FTX customers’ funds for
political donations.

Meanwhile,
while Bankman-Fried awaits his trial, FTX’s bankruptcy estate is working to reboot the exchange
business offshore
. In the latest development, the estate has disclosed plans to seek guidance and
expert advice
from
crypto investment firm, Galaxy Investment Partners, on how to optimize the
value of the FTX Group’s substantial crypto holdings. Galaxy was founded by
Mike Novogratz, a former Partner at Goldman Sachs.

Equiti enters Qatar; Swiss Finance Corp adds LumeFX; read today’s news nuggets.

Lawyers
defending Sam Bankman-Fried have been granted permission to conduct “unlimited”
prison visits to the embattled Founder of bankrupt crypto exchange, FTX, who
was jailed earlier this month, according to a court order seen by CoinDesk. The
court authorization is to enable them to work with their client ahead of his
criminal trial scheduled to start on October 3.

Court Order
Falls Short of Lawyers’ Request

The new
order follows last week’s criticism by Bankman-Fried’s legal counsel that
permitting them to meet the embattled crypto entrepreneur, who is currently
under detention at the Metropolitan Detention Centre in Brooklyn, is “entirely
inadequate”. In a letter to US District Judge Lewis Kaplan in Manhattan, the
lawyers also argued that allowing Bankman-Fried to meet his lawyers without a
dedicated computer violates his rights under the Sixth Amendment of the US
Constitution

In the new
order, the court granted the FTX Founder “frequent access” to a computer, with
certain “selected materials” only viewable using a hard drive. The court said
the limited permission would enable the former crypto billionaire to examine
discovery materials exchange in the case.

Lewis
Kaplan, the judge presiding over the case between the United States and Sam
Bankman-Fried, revoked the former FTX
CEO’s bail
after
prosecutors successfully argued that Bank-man-Fried tried to tamper with
witnesses in the case at least twice. In particular, they claimed that Bank-man-Fried shared
personal details of Caroline Ellison
with the New York Times, in order to initiate his
former ally and romantic partner who has pleaded guilty to
federal charges
and is set to testify against him.

Furthermore,
prosecutors contended that the action violated the terms of his bail. The
crypto entrepreneur, who was arrested in the Bahamas last year and subsequently
extradited to the United States, had been previously released on a hefty
$250 million bond
.

From
Bankruptcy to Strategy

Bankman-Fried’s
crypto empire collapsed in November 2022, following a liquidation crisis and
the revelation that the Founder used FTX’s customers’ assets to fund the
exchange’s trading arm, Alameda Research. Subsequently, the Founder was accused
of receiving over $2.2
billion
in loans
and payments from the exchange and its affiliated entities, mainly Alameda
Research.

Earlier
this week, Bankman-Fried, who previously faced 13 counts of criminal charges, pleaded not guilty to an updated indictment
containing seven counts of charges. This includes the accusation that he misappropriated $100 million of FTX customers’ funds for
political donations.

Meanwhile,
while Bankman-Fried awaits his trial, FTX’s bankruptcy estate is working to reboot the exchange
business offshore
. In the latest development, the estate has disclosed plans to seek guidance and
expert advice
from
crypto investment firm, Galaxy Investment Partners, on how to optimize the
value of the FTX Group’s substantial crypto holdings. Galaxy was founded by
Mike Novogratz, a former Partner at Goldman Sachs.

Equiti enters Qatar; Swiss Finance Corp adds LumeFX; read today’s news nuggets.

Tornado Cash Founders Face US Charges for Handling $1B in Dirty Money

https://www.financemagnates.com/cryptocurrency/tornado-cash-founders-face-us-charges-for-handling-1b-in-dirty-money/

Roman
Semenov and Roman Storm, the Founders of Tornado Cash, a cryptocurrency mixer,
have been charged with helping criminals, including hackers linked to North
Korea-linked Lazarus Group, to launder over $1 billion in illicit funds. Storm
was arrested today (Wednesday) in Washington by the Federal Bureau of
Investigation (FBI).

US Goes
After Tornado Cash Founders

A
cryptocurrency mixer, also known as a tumbler, is a service utilized by digital asset holders to maintain the anonymity of their cryptocurrency transactions. These
tumblers blend potentially traceable crypto assets with large amounts of
other funds.

The US
Department of Justice in a statement released on Wednesday noted that it charged Semenov
and Storm with conspiracy to commit money laundering, sanctions violations, and to operate an
unlicensed money-transmitting business. According to the law enforcement
agency, the executives received complaints and calls for help from victims of
cybercrimes but deliberately avoided implementing any controls to stop using criminals from using its platform to launder illicitly obtained cryptocurrencies.

Furthermore,
the Founders through
their platforms allegedly helped Lazarus Group “to launder hundreds of millions
of dollars in hacking proceeds,” despite the fact that the hacking group had
been sanctioned by the US Department of the Treasury’s Office of Foreign Assets
Control (OFAC) as blocked property.

“Storm and
Semenov allegedly knew that the Tornado Cash service they were operating was
engaging in these sanctions-violating transactions,” US prosecutors explained.
“They implemented a change in the service so they could make a public
announcement that they were compliant with sanctions, but in their private
chats they agreed that this change would be ineffective.”

US Hits Roman
Semenov with Sanctions
Designation

Separately,
OFCA on Wednesday issued a sanctions
designation
against
Semenov, thereby following up on a similar sanction placed on Tornado Cash last year.

The
designation means that Semenov’s assets in the United States are blocked, and
he is considered detrimental to the country’s security. The label also bars US-based
and foreign organizations from engaging in financial transactions with the Co-Founder.

Last year,
OFCA issued its first sanctions against
a cryptocurrency mixer
. The financial intelligence agency accused
Blender.io, another crypto tumbler, of laundering over $20.5 million in criminal
proceeds for the Lazarus Group.

Furthermore, the agency 2019 imposed similar sanctions on the Lazarus Group
after it accused the North Korea-linked hacking group of using Tornado Cash to
obscure the transfer of more than $455 million pilfered during the March 2022 breach of Axie
Infinity’s Ronin Network
. It noted that the hack remains the most significant crypto
heist so far.

“The
Lazarus Group subsequently used Tornado Cash to launder more than $96 million
of funds derived from the June 24, 2022, cyber-enabled heist on Harmony’s
Horizon bridge, and at least $7.8 million from the August 2, 2022, Nomad
heist,” OFAC explained. “This revenue provides the Democratic
People’s Republic of Korea with resources that it uses to support its unlawful ballistic missile
and nuclear weapons programs.”

Meanwhile,
the FBI has attributed over $40 million worth
of Bitcoin (BTC) stolen this week
to Lazarus Group, Finance Magnates reported earlier today. The
security agency also said the hackers were responsible for major cyberattacks recorded in June 2023: the heist
of $60 million in digital assets from Alphapo, the $37 million stolen from
CoinsPaid, and a $100 million theft from Atomic Wallet.

MetaQuotes caps product activation; Swissquote’s portfolios; read today’s news nuggets.

Roman
Semenov and Roman Storm, the Founders of Tornado Cash, a cryptocurrency mixer,
have been charged with helping criminals, including hackers linked to North
Korea-linked Lazarus Group, to launder over $1 billion in illicit funds. Storm
was arrested today (Wednesday) in Washington by the Federal Bureau of
Investigation (FBI).

US Goes
After Tornado Cash Founders

A
cryptocurrency mixer, also known as a tumbler, is a service utilized by digital asset holders to maintain the anonymity of their cryptocurrency transactions. These
tumblers blend potentially traceable crypto assets with large amounts of
other funds.

The US
Department of Justice in a statement released on Wednesday noted that it charged Semenov
and Storm with conspiracy to commit money laundering, sanctions violations, and to operate an
unlicensed money-transmitting business. According to the law enforcement
agency, the executives received complaints and calls for help from victims of
cybercrimes but deliberately avoided implementing any controls to stop using criminals from using its platform to launder illicitly obtained cryptocurrencies.

Furthermore,
the Founders through
their platforms allegedly helped Lazarus Group “to launder hundreds of millions
of dollars in hacking proceeds,” despite the fact that the hacking group had
been sanctioned by the US Department of the Treasury’s Office of Foreign Assets
Control (OFAC) as blocked property.

“Storm and
Semenov allegedly knew that the Tornado Cash service they were operating was
engaging in these sanctions-violating transactions,” US prosecutors explained.
“They implemented a change in the service so they could make a public
announcement that they were compliant with sanctions, but in their private
chats they agreed that this change would be ineffective.”

US Hits Roman
Semenov with Sanctions
Designation

Separately,
OFCA on Wednesday issued a sanctions
designation
against
Semenov, thereby following up on a similar sanction placed on Tornado Cash last year.

The
designation means that Semenov’s assets in the United States are blocked, and
he is considered detrimental to the country’s security. The label also bars US-based
and foreign organizations from engaging in financial transactions with the Co-Founder.

Last year,
OFCA issued its first sanctions against
a cryptocurrency mixer
. The financial intelligence agency accused
Blender.io, another crypto tumbler, of laundering over $20.5 million in criminal
proceeds for the Lazarus Group.

Furthermore, the agency 2019 imposed similar sanctions on the Lazarus Group
after it accused the North Korea-linked hacking group of using Tornado Cash to
obscure the transfer of more than $455 million pilfered during the March 2022 breach of Axie
Infinity’s Ronin Network
. It noted that the hack remains the most significant crypto
heist so far.

“The
Lazarus Group subsequently used Tornado Cash to launder more than $96 million
of funds derived from the June 24, 2022, cyber-enabled heist on Harmony’s
Horizon bridge, and at least $7.8 million from the August 2, 2022, Nomad
heist,” OFAC explained. “This revenue provides the Democratic
People’s Republic of Korea with resources that it uses to support its unlawful ballistic missile
and nuclear weapons programs.”

Meanwhile,
the FBI has attributed over $40 million worth
of Bitcoin (BTC) stolen this week
to Lazarus Group, Finance Magnates reported earlier today. The
security agency also said the hackers were responsible for major cyberattacks recorded in June 2023: the heist
of $60 million in digital assets from Alphapo, the $37 million stolen from
CoinsPaid, and a $100 million theft from Atomic Wallet.

MetaQuotes caps product activation; Swissquote’s portfolios; read today’s news nuggets.

FBI Traces $40M in Stolen BTC to North Korea-Linked Lazarus Group

https://www.financemagnates.com/cryptocurrency/fbi-traces-40m-in-stolen-btc-to-north-korea-linked-lazarus-group/

The Federal
Bureau of Investigation (FBI) has traced over $40 million worth of
Bitcoin (BTC) stolen this week to Lazarus Group, a hacking group linked to the North
Korean government. The group, which uses malicious applications to target
cryptocurrency companies and individuals, is also known as Trader-Traitor.

Lazarus Implicated in $40 Million Bitcoin Theft

In a
statement released yesterday (Tuesday), the FBI noted that approximately 1,580
BTCs were stolen and are currently being held in six BTC addresses. The US domestic
intelligence and security service added that the group may attempt to cash out
the stolen digital asset.

Furthermore, the agency pointed out that hackers from the group are behind several significant crypto thefts recorded in recent
months. These include the heist of $60 million in digital assets from Alphapo,
the $37 million stolen from CoinsPaid, and a $100 million theft from Atomic
Wallet, all of which were carried out in June this year.

“The FBI
previously provided information on their attacks against Harmony’s Horizon
bridge and Sky Mavis’ Ronin Bridge, and provided a Cybersecurity Advisory on
TraderTraitor,” the FBI added.

In the
statement, the intelligence agency also called on blockchain companies to
scrutinize the blockchain records of the BTC addresses. It further urged
private companies to exercise caution in order to avoid transactions that are
directly or indirectly linked to the addresses.

“The FBI
will continue to expose and combat the DPRK’s use of illicit
activities—including cybercrime and virtual currency theft—to generate revenue
for the regime,” the FBI added.

The Federal
Bureau of Investigation (FBI) has traced over $40 million worth of
Bitcoin (BTC) stolen this week to Lazarus Group, a hacking group linked to the North
Korean government. The group, which uses malicious applications to target
cryptocurrency companies and individuals, is also known as Trader-Traitor.

Lazarus Implicated in $40 Million Bitcoin Theft

In a
statement released yesterday (Tuesday), the FBI noted that approximately 1,580
BTCs were stolen and are currently being held in six BTC addresses. The US domestic
intelligence and security service added that the group may attempt to cash out
the stolen digital asset.

Furthermore, the agency pointed out that hackers from the group are behind several significant crypto thefts recorded in recent
months. These include the heist of $60 million in digital assets from Alphapo,
the $37 million stolen from CoinsPaid, and a $100 million theft from Atomic
Wallet, all of which were carried out in June this year.

“The FBI
previously provided information on their attacks against Harmony’s Horizon
bridge and Sky Mavis’ Ronin Bridge, and provided a Cybersecurity Advisory on
TraderTraitor,” the FBI added.

In the
statement, the intelligence agency also called on blockchain companies to
scrutinize the blockchain records of the BTC addresses. It further urged
private companies to exercise caution in order to avoid transactions that are
directly or indirectly linked to the addresses.

“The FBI
will continue to expose and combat the DPRK’s use of illicit
activities—including cybercrime and virtual currency theft—to generate revenue
for the regime,” the FBI added.

Binance Allegedly Used Sanctioned Banks for P2P Crypto Transfers in Russia

https://www.financemagnates.com/cryptocurrency/binance-allegedly-used-sanctioned-banks-for-p2p-crypto-transfers-in-russia/

Binance
aided peer-to-peer (P2P) crypto transfers among Russians using at least
five banks sanctioned by Western governments after Russia launched a full-scale
invasion of Ukraine last year, the Wall Street Journal reported today (Tuesday). Citing the apex monetary authority in Russia, the
outlet said Russians traded about $428
million in P2P transactions within five months.

Binance
Denies Cutting Corners in Russia

Last year,
several top countries, including the UK, announced sanctions
against Russian banks
and high-net-worth individuals in response to
Russia’s war on Ukraine. During this period, Binance announced restrictions on its services in the
country.

In the report,
the Journal claimed that Binance volunteers informed users on Telegram
that the crypto exchange was not imposing trading restrictions on Russians. Earlier in the year, Finance Magnates also reported that Binance quietly lifted its restrictions on Russian users. The users were able to deposit Russian rubles, euros, British pounds, and other currencies using bank cards issued in the country. Additionally, the exchange removed the limits on balances of more than EUR 10,000 on Russia-linked accounts, according to a report by Forklog.

However, Binance has rejected the claims in the Journal report. A
spokesperson from the
exchange told Fortune that the leading digital asset company has no
affiliation with any banks, whether in Russia or any other location, in
connection with its P2P programme.

Binance
Faces Increase Scrutiny

Meanwhile,
the report emerges as Binance faces legal battles on
multiple fronts
, particularly in the United States. In March, the Commodity Futures
Trading Commission (CFTC), which has
been investigating Binance
since at least 2021, initiated legal action
against the exchange
, alleging that the firm was operating as an illegal crypto derivatives
exchange in the country.

Among other
allegations, CFTC claimed that Binance starting from July 2019 guided US customers on
how to circumvent the exchange’s compliance measures despite claiming to have
prohibited them from its platform. However,
Binance rejected
the allegations
and is now seeking
their dismissal
.

In the
following month, the US Securities and Exchange Commission also sued Binance, accusing Binance and
Founder/CEO Zhao of operating illegal trading platforms, offering unregistered
crypto asset securities and commingling customers’ funds. The case is still ongoing at a federal court in the United
States.

DMALINK partners with Danske; SoftBank’s arm targets mega IPO; read today’s news nuggets.

Binance
aided peer-to-peer (P2P) crypto transfers among Russians using at least
five banks sanctioned by Western governments after Russia launched a full-scale
invasion of Ukraine last year, the Wall Street Journal reported today (Tuesday). Citing the apex monetary authority in Russia, the
outlet said Russians traded about $428
million in P2P transactions within five months.

Binance
Denies Cutting Corners in Russia

Last year,
several top countries, including the UK, announced sanctions
against Russian banks
and high-net-worth individuals in response to
Russia’s war on Ukraine. During this period, Binance announced restrictions on its services in the
country.

In the report,
the Journal claimed that Binance volunteers informed users on Telegram
that the crypto exchange was not imposing trading restrictions on Russians. Earlier in the year, Finance Magnates also reported that Binance quietly lifted its restrictions on Russian users. The users were able to deposit Russian rubles, euros, British pounds, and other currencies using bank cards issued in the country. Additionally, the exchange removed the limits on balances of more than EUR 10,000 on Russia-linked accounts, according to a report by Forklog.

However, Binance has rejected the claims in the Journal report. A
spokesperson from the
exchange told Fortune that the leading digital asset company has no
affiliation with any banks, whether in Russia or any other location, in
connection with its P2P programme.

Binance
Faces Increase Scrutiny

Meanwhile,
the report emerges as Binance faces legal battles on
multiple fronts
, particularly in the United States. In March, the Commodity Futures
Trading Commission (CFTC), which has
been investigating Binance
since at least 2021, initiated legal action
against the exchange
, alleging that the firm was operating as an illegal crypto derivatives
exchange in the country.

Among other
allegations, CFTC claimed that Binance starting from July 2019 guided US customers on
how to circumvent the exchange’s compliance measures despite claiming to have
prohibited them from its platform. However,
Binance rejected
the allegations
and is now seeking
their dismissal
.

In the
following month, the US Securities and Exchange Commission also sued Binance, accusing Binance and
Founder/CEO Zhao of operating illegal trading platforms, offering unregistered
crypto asset securities and commingling customers’ funds. The case is still ongoing at a federal court in the United
States.

DMALINK partners with Danske; SoftBank’s arm targets mega IPO; read today’s news nuggets.

Sam Bankman-Fried Pleads Not Guilty to New Indictment

https://www.financemagnates.com/cryptocurrency/sam-bankman-fried-pleads-not-guilty-to-new-indictment/

Sam
Bankman-Fried, the Founder of the FTX who was jailed earlier in the month, has
pleaded not guilty to allegations of fraud and money laundering contained in an
updated indictment unveiled by US prosecutors, according to media reports. On Tuesday, he maintained
his innocence before US Magistrate Judge Sarah Netburn in the first
court appearance since his bail was revoked on August 11.

Bankman-Fried
Rejects Latest Indictment

In January,
the former crypto billionaire had similarly pledged “not
guilty”
to eight
counts of criminal charges, including conspiracy to commit wire and securities
fraud, money laundering and conspiracy to violate campaign finance rules. In March,
prosecutors expanded the charges to 13, including allegations that
Bank-man-Fried violated the anti-bribery provisions of the United States by bribing Chinese
officials in late 2021
.

However,
the revised indictment contains only seven counts of charges related to the
collapse of FTX, Reuters reported on Tuesday. In the new indictment,
prosecutors incorporated allegations related to
campaign finance law violation
, as an extradition treaty with the Bahamas prevents them from
making direct allegations
in that regard, according
to CoinDesk.

Meanwhile,
during Bankman-Fried’s court appearance on Tuesday, Bankman-Fried’s lawyers
claimed that the FTX’s Founder is being denied access to his depression and
deficit hyperactive disorder medicine at the Metropolitan Detention Centre in Brooklyn where he
is being jailed. Furthermore, they saidBankman-Fried is being denied of a vegan
meal plan and “is literally now subsisting on bread and water.”

Last week,
Bankman-man’s lawyers in a letter to US District Judge Lewis Kaplan in
Manhattan complained that allowing the former FTX CEO to only meet
with his legal counsel twice a week to prepare for his October trial is
“entirely inadequate”. They added that permitting the embattled crypto entrepreneur to meet his lawyer without a dedicated computer violates his rights
under the Sixth Amendment of the US Constitution.

On Tuesday,
the legal team raised the issue gain, noting that Bankman-Fried requires access
to a laptop with internet connectivity in order to be able to examine the
“millions” of documents obtained during the discovery process. Previously, requested that the court permit the former billionaire to meet his lawyers during all weekdays.

Bankman-Fried’scrypto empire collapsed last year, following a liquidation crisis and the revelation that FTX’s
customers’ funds were being used to prop Alameda Research, Finance Magnates reported.

DMALINK partners with Danske; SoftBank’s arm targets mega IPO; read today’s news nuggets.

Sam
Bankman-Fried, the Founder of the FTX who was jailed earlier in the month, has
pleaded not guilty to allegations of fraud and money laundering contained in an
updated indictment unveiled by US prosecutors, according to media reports. On Tuesday, he maintained
his innocence before US Magistrate Judge Sarah Netburn in the first
court appearance since his bail was revoked on August 11.

Bankman-Fried
Rejects Latest Indictment

In January,
the former crypto billionaire had similarly pledged “not
guilty”
to eight
counts of criminal charges, including conspiracy to commit wire and securities
fraud, money laundering and conspiracy to violate campaign finance rules. In March,
prosecutors expanded the charges to 13, including allegations that
Bank-man-Fried violated the anti-bribery provisions of the United States by bribing Chinese
officials in late 2021
.

However,
the revised indictment contains only seven counts of charges related to the
collapse of FTX, Reuters reported on Tuesday. In the new indictment,
prosecutors incorporated allegations related to
campaign finance law violation
, as an extradition treaty with the Bahamas prevents them from
making direct allegations
in that regard, according
to CoinDesk.

Meanwhile,
during Bankman-Fried’s court appearance on Tuesday, Bankman-Fried’s lawyers
claimed that the FTX’s Founder is being denied access to his depression and
deficit hyperactive disorder medicine at the Metropolitan Detention Centre in Brooklyn where he
is being jailed. Furthermore, they saidBankman-Fried is being denied of a vegan
meal plan and “is literally now subsisting on bread and water.”

Last week,
Bankman-man’s lawyers in a letter to US District Judge Lewis Kaplan in
Manhattan complained that allowing the former FTX CEO to only meet
with his legal counsel twice a week to prepare for his October trial is
“entirely inadequate”. They added that permitting the embattled crypto entrepreneur to meet his lawyer without a dedicated computer violates his rights
under the Sixth Amendment of the US Constitution.

On Tuesday,
the legal team raised the issue gain, noting that Bankman-Fried requires access
to a laptop with internet connectivity in order to be able to examine the
“millions” of documents obtained during the discovery process. Previously, requested that the court permit the former billionaire to meet his lawyers during all weekdays.

Bankman-Fried’scrypto empire collapsed last year, following a liquidation crisis and the revelation that FTX’s
customers’ funds were being used to prop Alameda Research, Finance Magnates reported.

DMALINK partners with Danske; SoftBank’s arm targets mega IPO; read today’s news nuggets.

FTX Updates $175M Settlement Terms after US Trustee Disapproval

https://www.financemagnates.com/cryptocurrency/ftx-updates-175m-settlement-terms-after-us-trustee-disapproval/

Bankrupt
crypto exchange, FTX, and its debtors have suggested reducing the maximum settled value in
their proposed settlement with insolvent digital asset lender, Genesis, from $10
million to $7 million. The change followed opposition by the US Trustee to the $175 million
settlement agreement reached by both crypto firms.

FTX and Genesis Agree to $175M Settlement

Last week,
FTX filed a motion, seeking court approval for Genesis
to pay the settlement amount
to Alameda Research, its affiliated but
equally bankrupt crypto hedge fund. The agreement represents a big compromise
for FTX which had earlier sought to recover nearly $4
billion in
transfers it allegedly made to the crypto lending firm between August 13 and November
11, 2022.

The deal
was supported by FTX’s Official Committee of Unsecured Creditors which explained that the settlement strikes an
appropriate balance between what may have been obtained through successful
litigation and the inherent risks and costs of proceeding (in an already
expensive case) with such litigation, and results in a net benefit for the FTX
Debtors’ estates.”

However,
FTX and its debtors in a court document filed on Sunday noted that the
US Trustee, which is the office in the US Department of Justice that oversees
the administration of bankruptcy cases, criticized the move. They argued
that the objection should be overruled and the motion granted.

“The US
Trustee—the sole objector to the Motion—seeks to inject itself into a
routine settlement process that is already adequately safeguarded by two
different creditor committees,” FTX explained.

Meanwhile,
in addition to the adjustment made to the maximum settled value, FTX and its
debtors in a bid to address the issues raised by the US Trustee in its
objection have proposed filing
monthly reports of executed settlements. They also want
to include US Trustee
as a third “noticed party” in the arrangement.

Finance
Magnates
reported that FTX
and Genesis
before filing for bankruptcy protection in the US last year engaged in “a large
number of complex transactions” involving fiat and
cryptocurrencies between
February 2019, and November 2022. According to Genesis,
these transactions left FTX’s bankruptcy estate with a debt exceeding $350
million to its business. The amount includes customer, avoidance and
loan claims, the bankrupt crypto lender claimed.

ThinkMarkets adds Taiwanese index; Bitget mandates KYC; read today’s news nuggets.

Bankrupt
crypto exchange, FTX, and its debtors have suggested reducing the maximum settled value in
their proposed settlement with insolvent digital asset lender, Genesis, from $10
million to $7 million. The change followed opposition by the US Trustee to the $175 million
settlement agreement reached by both crypto firms.

FTX and Genesis Agree to $175M Settlement

Last week,
FTX filed a motion, seeking court approval for Genesis
to pay the settlement amount
to Alameda Research, its affiliated but
equally bankrupt crypto hedge fund. The agreement represents a big compromise
for FTX which had earlier sought to recover nearly $4
billion in
transfers it allegedly made to the crypto lending firm between August 13 and November
11, 2022.

The deal
was supported by FTX’s Official Committee of Unsecured Creditors which explained that the settlement strikes an
appropriate balance between what may have been obtained through successful
litigation and the inherent risks and costs of proceeding (in an already
expensive case) with such litigation, and results in a net benefit for the FTX
Debtors’ estates.”

However,
FTX and its debtors in a court document filed on Sunday noted that the
US Trustee, which is the office in the US Department of Justice that oversees
the administration of bankruptcy cases, criticized the move. They argued
that the objection should be overruled and the motion granted.

“The US
Trustee—the sole objector to the Motion—seeks to inject itself into a
routine settlement process that is already adequately safeguarded by two
different creditor committees,” FTX explained.

Meanwhile,
in addition to the adjustment made to the maximum settled value, FTX and its
debtors in a bid to address the issues raised by the US Trustee in its
objection have proposed filing
monthly reports of executed settlements. They also want
to include US Trustee
as a third “noticed party” in the arrangement.

Finance
Magnates
reported that FTX
and Genesis
before filing for bankruptcy protection in the US last year engaged in “a large
number of complex transactions” involving fiat and
cryptocurrencies between
February 2019, and November 2022. According to Genesis,
these transactions left FTX’s bankruptcy estate with a debt exceeding $350
million to its business. The amount includes customer, avoidance and
loan claims, the bankrupt crypto lender claimed.

ThinkMarkets adds Taiwanese index; Bitget mandates KYC; read today’s news nuggets.

SEC Gets Judge’s Nod to Argue for Appeal against Landmark Ripple Ruling

https://www.financemagnates.com/cryptocurrency/sec-gets-judges-nod-to-argue-for-appeal-in-landmark-ripple-ruling/

The US
Securities and Exchange Commission (SEC) has crossed the first step in its effort to
appeal a trial court’s ruling that crypto firm Ripple’s XRP token sale on digital asset exchanges is not a
security offering. Judge Analisa Torres has granted the securities
watchdog’s request to file a motion that will enable it to further argue for
permission to put forward an interlocutory appeal in the case, CoinDesk
reported today (Thursday).

SEC Moves
to Seek Appeal

An
interlocutory appeal involves challenging a decision made by a lower court
before the case concludes. Not all such appeals are permitted, and the
appealing party must demonstrate that the decision could greatly influence the
case’s final outcome.

According
to CoinDesk, the SEC must file the permitted
motion by August 18th (tomorrow) and Ripple will have until September 1st to respond. Subsequently, the SEC can provide a counter-argument by September 8th.

In a ruling delivered mid-last month, the court concluded, in what the crypto industry considered a “partial
victory” for Ripple, that the crypto firm’s sale of XRP only violates federal
securities law
when sold to sophisticated investors. However, the SEC in a
recent court filing
disclosed that it was seeking permission to file a motion
that will move it a step close towards getting approval to appeal the
case.

“Specifically,
the SEC seeks to certify the court’s holding that Defendants’ ‘programmatic’
offers and sales to XRP buyers over crypto asset trading platforms and Ripple’s
‘other distributions’ in exchange for labour and services did not involve the
offer or sale of securities under [the Howey Test],” the SEC elaborated in the
filing.

The Howey
Test is a technique used to determine when a financial transaction qualifies as
an ‘investment contract’ and should be regulated as a security dealing.

Is the Appeal Approval Feasible?

In stating
its interest in appealing the case, the SEC argued that the case deserved an “interlocutory review”
because the issues the agency raised “involve controlling questions of law on
which there is substantial ground for different of opinions…”

“Timely
appellate review is particularly warranted given the number of actions
currently pending that may be affected by how the Court of Appeals resolves
these issues,” SEC further argued.

However,
Stuart Alderoty, the Chief Legal Officer of Ripple, in a post published
yesterday on the social media platform, X (formerly known as Twitter), contended
that the SEC lack the basis for such a move.

“We oppose
the SEC’s request for an interlocutory appeal,” Alderoty wrote. “There is no
extraordinary circumstance here that would justify departing from the rule
requiring all issues as to all parties to be resolved before an appeal.”

Brad
Garlinghouse, the Chief Executive Office at Ripple, also believes that the
SEC’s appeal will not count for much.

Fortex integrates with Haame CRM; Colt Partners with AsiaNext; read today’s news nuggets.

The US
Securities and Exchange Commission (SEC) has crossed the first step in its effort to
appeal a trial court’s ruling that crypto firm Ripple’s XRP token sale on digital asset exchanges is not a
security offering. Judge Analisa Torres has granted the securities
watchdog’s request to file a motion that will enable it to further argue for
permission to put forward an interlocutory appeal in the case, CoinDesk
reported today (Thursday).

SEC Moves
to Seek Appeal

An
interlocutory appeal involves challenging a decision made by a lower court
before the case concludes. Not all such appeals are permitted, and the
appealing party must demonstrate that the decision could greatly influence the
case’s final outcome.

According
to CoinDesk, the SEC must file the permitted
motion by August 18th (tomorrow) and Ripple will have until September 1st to respond. Subsequently, the SEC can provide a counter-argument by September 8th.

In a ruling delivered mid-last month, the court concluded, in what the crypto industry considered a “partial
victory” for Ripple, that the crypto firm’s sale of XRP only violates federal
securities law
when sold to sophisticated investors. However, the SEC in a
recent court filing
disclosed that it was seeking permission to file a motion
that will move it a step close towards getting approval to appeal the
case.

“Specifically,
the SEC seeks to certify the court’s holding that Defendants’ ‘programmatic’
offers and sales to XRP buyers over crypto asset trading platforms and Ripple’s
‘other distributions’ in exchange for labour and services did not involve the
offer or sale of securities under [the Howey Test],” the SEC elaborated in the
filing.

The Howey
Test is a technique used to determine when a financial transaction qualifies as
an ‘investment contract’ and should be regulated as a security dealing.

Is the Appeal Approval Feasible?

In stating
its interest in appealing the case, the SEC argued that the case deserved an “interlocutory review”
because the issues the agency raised “involve controlling questions of law on
which there is substantial ground for different of opinions…”

“Timely
appellate review is particularly warranted given the number of actions
currently pending that may be affected by how the Court of Appeals resolves
these issues,” SEC further argued.

However,
Stuart Alderoty, the Chief Legal Officer of Ripple, in a post published
yesterday on the social media platform, X (formerly known as Twitter), contended
that the SEC lack the basis for such a move.

“We oppose
the SEC’s request for an interlocutory appeal,” Alderoty wrote. “There is no
extraordinary circumstance here that would justify departing from the rule
requiring all issues as to all parties to be resolved before an appeal.”

Brad
Garlinghouse, the Chief Executive Office at Ripple, also believes that the
SEC’s appeal will not count for much.

Fortex integrates with Haame CRM; Colt Partners with AsiaNext; read today’s news nuggets.

Bankrupt BlockFi Gets Court’s Backing, Enables Withdrawal for US Customers

https://www.financemagnates.com/cryptocurrency/bankrupt-blockfi-gets-courts-backing-enableswithdrawal-for-us-customers/

BlockFi,
the cryptocurrency lending firm that declared bankruptcy in November last year,
has secured the bankruptcy court’s approval to permit its users to withdraw
their digital assets. Earlier today (Thursday), BlockFi
opened the
withdrawal service nine months after blocking the feature on its platform.
However, the service is only currently available to customers in the United
States.

BlockFi
Secures Court’s Approval
for Withdrawal

BlockFi
disclosed the opening of crypto withdrawals in a post published on X, noting
that the move “is an important step forward toward our goal of returning funds
to clients.”

“We
encourage all clients to check their email or BlockFi app to see if they are
eligible at this time,” the firm stated in the post. “We expect
more clients, including international clients, to become eligible to withdraw
digital assets from their wallet accounts as we move
forward in the court process.”

Some
customers of the bankruptcy
Bankruptcy

Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co

Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co
Read this Term
digital asset lender also took to Twitter to
express delight at being able to withdraw their funds. However, others
expressed frustration at being unable to do so.

In the court order granted to BlockFi, Michael
Kaplan, the US Judge
handling the crypto lender’s bankruptcy proceedings, noted that the firm may enable withdrawal for
wallet accounts that received transfers from other non-wallet BlockFi accounts
during the 90 days before the firm filed for bankruptcy. However, accounts that
received funds in excess of $7,575 during the period are to be exempted.

BlockFi and Exposure to FTX

BlockFi is
one of the crypto firms that tumbled after Sam Bankman-Fried’s crypto empire,
including the once-leading cryptocurrency exchange
Cryptocurrency Exchange

A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f

A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f
Read this Term
, FTX, crumbled in November
last year. Other such firms are digital asset lenders, Genesis, Celsius
Network and Voyager Digital.

BlockFi’s
troubles began in mid-2022 due to its exposure to the collapsed crypto-focused
hedge fund, Three Arrows Capital. However, the situation
worsened in November as BlockFi halted withdrawal on its platform, citing a “lack of clarity” on
FTX’s situation.

Although
FTX provided a $400 million revolving credit facility to the firm as part of a
rescue plan, the crypto lender ultimately filed for bankruptcy
protection
in New Jersey, United States, in late
November. The move came days after troubled FTX also
declared insolvency
.

Moreover, uncensored
financial information uploaded by BlockFi in January showed that the crypto
lending firm had a $1.2 billion
exposure
to both
FTX and its sister crypto trading firm, Alameda Research, Finance Magnates reported.

Fortex integrates with Haame CRM; Colt Partners with AsiaNext; read today’s news nuggets.

BlockFi,
the cryptocurrency lending firm that declared bankruptcy in November last year,
has secured the bankruptcy court’s approval to permit its users to withdraw
their digital assets. Earlier today (Thursday), BlockFi
opened the
withdrawal service nine months after blocking the feature on its platform.
However, the service is only currently available to customers in the United
States.

BlockFi
Secures Court’s Approval
for Withdrawal

BlockFi
disclosed the opening of crypto withdrawals in a post published on X, noting
that the move “is an important step forward toward our goal of returning funds
to clients.”

“We
encourage all clients to check their email or BlockFi app to see if they are
eligible at this time,” the firm stated in the post. “We expect
more clients, including international clients, to become eligible to withdraw
digital assets from their wallet accounts as we move
forward in the court process.”

Some
customers of the bankruptcy
Bankruptcy

Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co

Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co
Read this Term
digital asset lender also took to Twitter to
express delight at being able to withdraw their funds. However, others
expressed frustration at being unable to do so.

In the court order granted to BlockFi, Michael
Kaplan, the US Judge
handling the crypto lender’s bankruptcy proceedings, noted that the firm may enable withdrawal for
wallet accounts that received transfers from other non-wallet BlockFi accounts
during the 90 days before the firm filed for bankruptcy. However, accounts that
received funds in excess of $7,575 during the period are to be exempted.

BlockFi and Exposure to FTX

BlockFi is
one of the crypto firms that tumbled after Sam Bankman-Fried’s crypto empire,
including the once-leading cryptocurrency exchange
Cryptocurrency Exchange

A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f

A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f
Read this Term
, FTX, crumbled in November
last year. Other such firms are digital asset lenders, Genesis, Celsius
Network and Voyager Digital.

BlockFi’s
troubles began in mid-2022 due to its exposure to the collapsed crypto-focused
hedge fund, Three Arrows Capital. However, the situation
worsened in November as BlockFi halted withdrawal on its platform, citing a “lack of clarity” on
FTX’s situation.

Although
FTX provided a $400 million revolving credit facility to the firm as part of a
rescue plan, the crypto lender ultimately filed for bankruptcy
protection
in New Jersey, United States, in late
November. The move came days after troubled FTX also
declared insolvency
.

Moreover, uncensored
financial information uploaded by BlockFi in January showed that the crypto
lending firm had a $1.2 billion
exposure
to both
FTX and its sister crypto trading firm, Alameda Research, Finance Magnates reported.

Fortex integrates with Haame CRM; Colt Partners with AsiaNext; read today’s news nuggets.

FTX Softens $4B Demand, Strikes $175M Settlement with Genesis

https://www.financemagnates.com/cryptocurrency/ftx-softens-4b-demand-strikes-175m-settlement-with-genesis/

Bankrupt
cryptocurrency exchange, FTX, has agreed to settle its claims dispute with
equally bankrupt digital asset lender, Genesis, by accepting a payment of $175
million to Alameda Research, its affiliated insolvent crypto hedge fund.
Earlier in May, FTX had sought court permission to recover approximately $3.673
billion in alleged transfers it made to Genesis between August 13 and November
11, 2022.

FTX’s $4B
Claim Ends in $175M Settlement

Genesis
disclosed the settlement agreement yesterday (Wednesday) in a court document it filed to seek the approval
of the United States Bankruptcy Court for the Southern District of New York
for the deal. According to the crypto lender,
which declared bankruptcy in
January
, both
parties reached the deal “in principle” on or around July 20.

The
agreement trailed several weeks of back and forth between both parties to determine what is owed. In a motion filed on June 1, Genesis “sought to
estimate the FTX claims at $0,” a move that was opposed by FTX. In one of the court sittings on the matter, the bankruptcy court ordered that the case “be continued to a later
hearing.”

Finance
Magnates reported that FTX crumbled last year following a bank run on the
crypto exchange and the revelation that the firm was using customers’ assets to
prop Alameda Research’s balance sheets. FTX subsequently filed for bankruptcy
protection
in
November.

However,
before FTX’s fall, the exchange engaged in “a large number of complex transactions”
involving fiat currency and digital assets with Genesis
between February
6, 2019, and
November 11, 2022. Owing to these transactions, FTX’s bankruptcy estate owes over
$350 million in customer, avoidance and loan claims to
Genesis, the defunct crypto lender claimed.

Terms of the Agreement

Meanwhile, if the settlement is approved by the
court, both parties have resolved to let go of all claims they made against each other. They also agreed not to object to each business’s
reorganization efforts at the bankruptcy court.

“The
settlement will, among other things, significantly smooth the path to
confirmation of the Genesis Debtors’ chapter 11 plan of reorganization (the ‘Genesis
Plan’), as well
as eliminating the risks, expenses, and uncertainty associated with protracted
litigation among the FTX Debtors, the Genesis Debtors, and GGCI,” Genesis’s
lawyers explained in the court filing.

Fortex integrates with Haame CRM; Colt Partners with AsiaNext; read today’s news nuggets.

Bankrupt
cryptocurrency exchange, FTX, has agreed to settle its claims dispute with
equally bankrupt digital asset lender, Genesis, by accepting a payment of $175
million to Alameda Research, its affiliated insolvent crypto hedge fund.
Earlier in May, FTX had sought court permission to recover approximately $3.673
billion in alleged transfers it made to Genesis between August 13 and November
11, 2022.

FTX’s $4B
Claim Ends in $175M Settlement

Genesis
disclosed the settlement agreement yesterday (Wednesday) in a court document it filed to seek the approval
of the United States Bankruptcy Court for the Southern District of New York
for the deal. According to the crypto lender,
which declared bankruptcy in
January
, both
parties reached the deal “in principle” on or around July 20.

The
agreement trailed several weeks of back and forth between both parties to determine what is owed. In a motion filed on June 1, Genesis “sought to
estimate the FTX claims at $0,” a move that was opposed by FTX. In one of the court sittings on the matter, the bankruptcy court ordered that the case “be continued to a later
hearing.”

Finance
Magnates reported that FTX crumbled last year following a bank run on the
crypto exchange and the revelation that the firm was using customers’ assets to
prop Alameda Research’s balance sheets. FTX subsequently filed for bankruptcy
protection
in
November.

However,
before FTX’s fall, the exchange engaged in “a large number of complex transactions”
involving fiat currency and digital assets with Genesis
between February
6, 2019, and
November 11, 2022. Owing to these transactions, FTX’s bankruptcy estate owes over
$350 million in customer, avoidance and loan claims to
Genesis, the defunct crypto lender claimed.

Terms of the Agreement

Meanwhile, if the settlement is approved by the
court, both parties have resolved to let go of all claims they made against each other. They also agreed not to object to each business’s
reorganization efforts at the bankruptcy court.

“The
settlement will, among other things, significantly smooth the path to
confirmation of the Genesis Debtors’ chapter 11 plan of reorganization (the ‘Genesis
Plan’), as well
as eliminating the risks, expenses, and uncertainty associated with protracted
litigation among the FTX Debtors, the Genesis Debtors, and GGCI,” Genesis’s
lawyers explained in the court filing.

Fortex integrates with Haame CRM; Colt Partners with AsiaNext; read today’s news nuggets.

Binance’s Crypto Payment Wing Shuts Doors after One and a Half Years

https://www.financemagnates.com/cryptocurrency/binances-crypto-payment-wing-shuts-doors-after-one-and-a-half-years/

Binance
Connect, the fiat-to-cryptocurrency payments
Payments

One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl

One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl
Read this Term
service launched by Binancein March last year, will cease
operations tomorrow (Wednesday). A Binance spokesperson confirmed the development to
Cointelegraph.

Binance Connect
Ends Journey

According
to the spokesperson,
the decision to shut down the services provided by Binance
Connect was taken as part of Binance’s periodic review of its products
and services. The exchange continually adjusts its business strategy to align
with evolving market demands and user preferences, the spokesperson
told Cointelegraph.

However, in
an announcement posted on X on Tuesday, Biswap, a decentralized exchange that
runs on the Binance Smart Chain, noted that Binance made the “difficult
decision” to disable Binance Connect today “due to its provider closing the
supporting card payments service.”

“This
change aligns with the strategic efforts of Binance to focus on its core
business,” Biswap said, adding that it will turn off Binance Connect on
its website today at 01:00 PM UTC.

Binance
Connect, previously known as
Bifinity
, enables
businesses to facilitate crypto payments through application programming
interfaces (APIs). At launch in 2022, the platform facilitated
payment in over 50 digital currencies around the world. It also accepted
payment through major payment routes such as Visa and
Mastercard, Finance Magnates reported.

“As
the crypto and the Web3 economy continue to grow, we see greater demand to
build improved fiat-to-crypto on-ramps to bridge
Bridge

The bridge or liquidity bridge is an essential component for brokers that are enabling their clients to trade at interbank rates directly via a Prime Broker or a Prime-of-Prime (PoP). While market makers do not require a bridge in order to service its clients, brokers which are sending through orders to a liquidity provider or an electronic execution venue need a bridge to connect their trading platform to the interbank market.Bridges are used extensively in forex trading, specifically for Metat

The bridge or liquidity bridge is an essential component for brokers that are enabling their clients to trade at interbank rates directly via a Prime Broker or a Prime-of-Prime (PoP). While market makers do not require a bridge in order to service its clients, brokers which are sending through orders to a liquidity provider or an electronic execution venue need a bridge to connect their trading platform to the interbank market.Bridges are used extensively in forex trading, specifically for Metat
Read this Term
the gap between traditional
finance and the decentralized and centralized crypto economy,” Helen Hai, the President of
Binance Connect, said at the time. “At Binance,
the vision is to increase the freedom of money globally.”

Devexperts updates DXcharts; FCA warns against seven companies; read today’s news nuggets.

Binance
Connect, the fiat-to-cryptocurrency payments
Payments

One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl

One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl
Read this Term
service launched by Binancein March last year, will cease
operations tomorrow (Wednesday). A Binance spokesperson confirmed the development to
Cointelegraph.

Binance Connect
Ends Journey

According
to the spokesperson,
the decision to shut down the services provided by Binance
Connect was taken as part of Binance’s periodic review of its products
and services. The exchange continually adjusts its business strategy to align
with evolving market demands and user preferences, the spokesperson
told Cointelegraph.

However, in
an announcement posted on X on Tuesday, Biswap, a decentralized exchange that
runs on the Binance Smart Chain, noted that Binance made the “difficult
decision” to disable Binance Connect today “due to its provider closing the
supporting card payments service.”

“This
change aligns with the strategic efforts of Binance to focus on its core
business,” Biswap said, adding that it will turn off Binance Connect on
its website today at 01:00 PM UTC.

Binance
Connect, previously known as
Bifinity
, enables
businesses to facilitate crypto payments through application programming
interfaces (APIs). At launch in 2022, the platform facilitated
payment in over 50 digital currencies around the world. It also accepted
payment through major payment routes such as Visa and
Mastercard, Finance Magnates reported.

“As
the crypto and the Web3 economy continue to grow, we see greater demand to
build improved fiat-to-crypto on-ramps to bridge
Bridge

The bridge or liquidity bridge is an essential component for brokers that are enabling their clients to trade at interbank rates directly via a Prime Broker or a Prime-of-Prime (PoP). While market makers do not require a bridge in order to service its clients, brokers which are sending through orders to a liquidity provider or an electronic execution venue need a bridge to connect their trading platform to the interbank market.Bridges are used extensively in forex trading, specifically for Metat

The bridge or liquidity bridge is an essential component for brokers that are enabling their clients to trade at interbank rates directly via a Prime Broker or a Prime-of-Prime (PoP). While market makers do not require a bridge in order to service its clients, brokers which are sending through orders to a liquidity provider or an electronic execution venue need a bridge to connect their trading platform to the interbank market.Bridges are used extensively in forex trading, specifically for Metat
Read this Term
the gap between traditional
finance and the decentralized and centralized crypto economy,” Helen Hai, the President of
Binance Connect, said at the time. “At Binance,
the vision is to increase the freedom of money globally.”

Devexperts updates DXcharts; FCA warns against seven companies; read today’s news nuggets.

Binance Irked by SEC’s Move to Query CEO of US Affiliate

https://www.financemagnates.com/cryptocurrency/binance-irked-by-secs-move-to-query-ceo-of-us-affiliate/

Binance has
criticised the US Securities and Exchange Commission (SEC)for reportedly
making“incredibly overbroad” and “unreasonable”
demands for information over the past 45 days. The regulator’s discovery
requests include demands that the Chief Executive Officer (CEO) and the
Chief Financial Officer (CFO) of BAM Trading, the crypto exchange’s
US affiliate, alongside at least four other senior
executives, be
made available for depositions or pre-trial testimony.

SEC Is Conducting
‘Fishing Expedition’: Binance

According
to Binance, which filed for a protective
order
against
the SEC yesterday (Monday), the consent order given to the SEC by the district
court in Columbia in mid-June, only provides for “limited expedited discovery”
related to the affiliate’s possession, custody and control of customer
assets.

To fulfil
this order, the crypto exchange said it gave the
regulator the option of interviewing or deposing Sara Sisenwein, BAM’s Senior Director of Treasury
Operations, and/or Erik Kellogg, BAM’s Chief Information Security Officer. It noted
that both executives, who have “extensive firsthand knowledge” about US customers’ assets, submitted detailed declarations related to the assets to
the securities agency.

However,
instead of taking advantage of the exchange’s proposal, the SEC is reportedly
demanding that Binance provide at least six senior executives of BAM Trading
for the pre-trial testimony. Responding, Binanceclaimed that the CEO and CFO
of the crypto exchange’s local unit in the US do not have “unique firsthand
knowledge” about customer assets.

Furthermore, the exchange disclosed that the SEC is demanding that BAM produce ‘all communications’
concerning dozens of subjects dating as far back as November 2022. The
exchange said many of the topics “have nothing to do with customer assets.”

“BAM has
worked in good faith, but the SEC has been steadfast in its belief that the
consent order gives it carte blanche to investigate every aspect of BAM’s
asset custody practices without any discernible limitation whatsoever,” Binance
wrote in the court
filing
.

“At the bottom,
the SEC is conducting a fishing expedition instead of seeking the narrow and
‘limited’ discovery authorized by the consent order to ensure customer assets
are presently secure and available,” the digital
asset exchange
added, noting that the regulator is yet to identity “the slightest evidence”
that digital assets belonging to US customers “have been misused or mishandled
in any way.”

Binance has
criticised the US Securities and Exchange Commission (SEC)for reportedly
making“incredibly overbroad” and “unreasonable”
demands for information over the past 45 days. The regulator’s discovery
requests include demands that the Chief Executive Officer (CEO) and the
Chief Financial Officer (CFO) of BAM Trading, the crypto exchange’s
US affiliate, alongside at least four other senior
executives, be
made available for depositions or pre-trial testimony.

SEC Is Conducting
‘Fishing Expedition’: Binance

According
to Binance, which filed for a protective
order
against
the SEC yesterday (Monday), the consent order given to the SEC by the district
court in Columbia in mid-June, only provides for “limited expedited discovery”
related to the affiliate’s possession, custody and control of customer
assets.

To fulfil
this order, the crypto exchange said it gave the
regulator the option of interviewing or deposing Sara Sisenwein, BAM’s Senior Director of Treasury
Operations, and/or Erik Kellogg, BAM’s Chief Information Security Officer. It noted
that both executives, who have “extensive firsthand knowledge” about US customers’ assets, submitted detailed declarations related to the assets to
the securities agency.

However,
instead of taking advantage of the exchange’s proposal, the SEC is reportedly
demanding that Binance provide at least six senior executives of BAM Trading
for the pre-trial testimony. Responding, Binanceclaimed that the CEO and CFO
of the crypto exchange’s local unit in the US do not have “unique firsthand
knowledge” about customer assets.

Furthermore, the exchange disclosed that the SEC is demanding that BAM produce ‘all communications’
concerning dozens of subjects dating as far back as November 2022. The
exchange said many of the topics “have nothing to do with customer assets.”

“BAM has
worked in good faith, but the SEC has been steadfast in its belief that the
consent order gives it carte blanche to investigate every aspect of BAM’s
asset custody practices without any discernible limitation whatsoever,” Binance
wrote in the court
filing
.

“At the bottom,
the SEC is conducting a fishing expedition instead of seeking the narrow and
‘limited’ discovery authorized by the consent order to ensure customer assets
are presently secure and available,” the digital
asset exchange
added, noting that the regulator is yet to identity “the slightest evidence”
that digital assets belonging to US customers “have been misused or mishandled
in any way.”

300 Crypto Firms Jostled; Only 13% Clear UK FCA’s Registration Hurdle

https://www.financemagnates.com/cryptocurrency/300-crypto-firms-jostled-only-13-clear-uk-fcas-registration-hurdle/

The UK’s
financial watchdog continues to maintain strict supervision of the emerging crypto
industry in the country. Since January 10, 2020, 291 crypto asset businesses in
the country have applied for registration under the 5th Anti-Money Laundering
Directive (5MLD). However, the Financial Conduct Authority (FCA) has approved
only 38 firms or 13% of received applications.

Strict
Crypto Regime

The FCA disclosed these on Friday in its
response
to a Freedom of Information request. Despite
approving only 38 applications, the regulator said it does not decline firms.
It, however, further pointed out that it has so far refused five applications and rejected 22.

5MLD is a
set of rules introduced in January 2020 to bolster the European
country’s anti-money
and counter-terrorist financing regime. The regulation is the revised version
of the 4th Anti-Money Laundering Directive
(4MLD) created in 2015.

Additionally, the FCA clarified
that it refused certain applications because the applicants did not meet the
conditions for registration under the Money Laundering, Terrorist Financing and
Transfer of Funds Regulations 2017 (MLRs). MLRs are a set of rules in the UK
that outline the steps that business organizations must take to prevent money
laundering and terrorist financing.

“Firms are
required to provide the minimum information set out under regulation 57 of the
MLRs; any firm
that has not provided the required information will have their application
rejected,” FCA noted.

Moreover, the
financial markets supervisor noted that 155 crypto businesses withdrew their registration applications during the period. The
applications were cancelled for a number of reasons, including
not meeting the benchmark for registration as a digital asset exchange and
crypto custody wallet provider.

The UK’s
financial watchdog continues to maintain strict supervision of the emerging crypto
industry in the country. Since January 10, 2020, 291 crypto asset businesses in
the country have applied for registration under the 5th Anti-Money Laundering
Directive (5MLD). However, the Financial Conduct Authority (FCA) has approved
only 38 firms or 13% of received applications.

Strict
Crypto Regime

The FCA disclosed these on Friday in its
response
to a Freedom of Information request. Despite
approving only 38 applications, the regulator said it does not decline firms.
It, however, further pointed out that it has so far refused five applications and rejected 22.

5MLD is a
set of rules introduced in January 2020 to bolster the European
country’s anti-money
and counter-terrorist financing regime. The regulation is the revised version
of the 4th Anti-Money Laundering Directive
(4MLD) created in 2015.

Additionally, the FCA clarified
that it refused certain applications because the applicants did not meet the
conditions for registration under the Money Laundering, Terrorist Financing and
Transfer of Funds Regulations 2017 (MLRs). MLRs are a set of rules in the UK
that outline the steps that business organizations must take to prevent money
laundering and terrorist financing.

“Firms are
required to provide the minimum information set out under regulation 57 of the
MLRs; any firm
that has not provided the required information will have their application
rejected,” FCA noted.

Moreover, the
financial markets supervisor noted that 155 crypto businesses withdrew their registration applications during the period. The
applications were cancelled for a number of reasons, including
not meeting the benchmark for registration as a digital asset exchange and
crypto custody wallet provider.

Sam Bankman-Fried Lands in Jail Ahead of Criminal Trial

https://www.financemagnates.com/cryptocurrency/sam-bankman-fried-lands-in-jail-ahead-of-criminal-trial/

Lewis
Kaplan, the judge presiding over the case between the United States and Sam
Bankman-Fried, has sent the Founder of the FTX cryptocurrency exchange to jail
ahead of his criminal trial billed for October 2, 2023. The follows successful
argument by US prosecutors that Bank-man-Fried tried to tamper with witnesses
in the case at least twice.

Bankman-Fried
Remanded in Prison over
Witness Tampering

Bankman-Fried,
who was arrested in the Bahamas last year in connection with the collapse of
FTX and several of its affiliates, was released
on a hefty $250 million
bond
in December,
following his extradition to the United States.

However,
after Bankman-Fried shared the personal
details of Caroline Ellison
, his former ally and romantic partner, with the
New York Times, he was accused of witness tampering by federal prosecutors. The US government also argued that
the FTX Founder through the action violated the terms of his bail.

Ellison,
who is the former CEO of FTX’s sister trading firm, Alameda Research, pleaded guilty to
criminal charges
in December alongside two former senior executives of FTX, Gary Wang
and Nishad Singh. She has been cooperating with the public investigation into
FTX’s collapse since then and is expected to be a star witness in
Bankman-Fried’s upcoming trial.

Judge
Kaplan previously restricted Bankman-Fried from communicating publicly and considered jailing him over the allegations of witness
tampering. This is even as Bankman-Fried
initially agreed to a gag order, requesting that the same
restriction be applied to John Ray III, the bankruptcy specialist who is
currently the CEO of FTX and has previously criticized
the management of FTX
under the ex-crypto billionaire.

However, on
Friday, Judge Kaplan
decided on jailing Bankman-Fried despite objection by his counsel that such a
move will hamper his preparation for his upcoming trial. The lawyers argued
that a lot of discovery documents in the case required a computer and internet
access.

However, in
support of incarceration, US prosecutors demanded that Bankman-Fried be taken
into custody at Putnam jail rather than being imprisoned
at MDC.
According to the prosecutors, the first facility can provide him with a laptop
with internet access to prepare for the trial while the other offers limited
internet facilities access to prisoners.

Bankman-Fried Faces $1B Lawsuit

Bankman-Fried,
who has failed to successfully
dismiss the allegations against him
, is facing several criminal charges, including
conspiracy to commit wire, securities and commodities fraud. The crypto
entrepreneur’s crypto empire crumbled last year, following a liquidation crisis
and the revelation that FTX’s customers’ funds were being used to prop Alameda
Research.

Meanwhile,
FTX’s new management recently launched a lawsuit against Bankman-Fried, Ellison,
Wang and Singh, seeking to recover $1 billion. The sum is part of a larger amount of money allegedly misappropriated before the collapse of
the once-leading crypto exchange, Finance Magnates reported.

Lewis
Kaplan, the judge presiding over the case between the United States and Sam
Bankman-Fried, has sent the Founder of the FTX cryptocurrency exchange to jail
ahead of his criminal trial billed for October 2, 2023. The follows successful
argument by US prosecutors that Bank-man-Fried tried to tamper with witnesses
in the case at least twice.

Bankman-Fried
Remanded in Prison over
Witness Tampering

Bankman-Fried,
who was arrested in the Bahamas last year in connection with the collapse of
FTX and several of its affiliates, was released
on a hefty $250 million
bond
in December,
following his extradition to the United States.

However,
after Bankman-Fried shared the personal
details of Caroline Ellison
, his former ally and romantic partner, with the
New York Times, he was accused of witness tampering by federal prosecutors. The US government also argued that
the FTX Founder through the action violated the terms of his bail.

Ellison,
who is the former CEO of FTX’s sister trading firm, Alameda Research, pleaded guilty to
criminal charges
in December alongside two former senior executives of FTX, Gary Wang
and Nishad Singh. She has been cooperating with the public investigation into
FTX’s collapse since then and is expected to be a star witness in
Bankman-Fried’s upcoming trial.

Judge
Kaplan previously restricted Bankman-Fried from communicating publicly and considered jailing him over the allegations of witness
tampering. This is even as Bankman-Fried
initially agreed to a gag order, requesting that the same
restriction be applied to John Ray III, the bankruptcy specialist who is
currently the CEO of FTX and has previously criticized
the management of FTX
under the ex-crypto billionaire.

However, on
Friday, Judge Kaplan
decided on jailing Bankman-Fried despite objection by his counsel that such a
move will hamper his preparation for his upcoming trial. The lawyers argued
that a lot of discovery documents in the case required a computer and internet
access.

However, in
support of incarceration, US prosecutors demanded that Bankman-Fried be taken
into custody at Putnam jail rather than being imprisoned
at MDC.
According to the prosecutors, the first facility can provide him with a laptop
with internet access to prepare for the trial while the other offers limited
internet facilities access to prisoners.

Bankman-Fried Faces $1B Lawsuit

Bankman-Fried,
who has failed to successfully
dismiss the allegations against him
, is facing several criminal charges, including
conspiracy to commit wire, securities and commodities fraud. The crypto
entrepreneur’s crypto empire crumbled last year, following a liquidation crisis
and the revelation that FTX’s customers’ funds were being used to prop Alameda
Research.

Meanwhile,
FTX’s new management recently launched a lawsuit against Bankman-Fried, Ellison,
Wang and Singh, seeking to recover $1 billion. The sum is part of a larger amount of money allegedly misappropriated before the collapse of
the once-leading crypto exchange, Finance Magnates reported.

Troubled Crypto Custodian Prime Trust Might Cut 75% of Jobs: Report

https://www.financemagnates.com/cryptocurrency/troubled-crypto-custodian-prime-trust-might-cut-75-of-jobs-report/

Prime
Trust, the beleaguered cryptocurrency custodian, might be on the brink of
significant job cuts, CoinDesk
revealed today (Friday), quoting ex-employees. Anonymous sources suggest that
up to 75% of positions might be at risk, based on insider information.

Layoffs on
the Horizon?

The news of
the possible massive downsizing comes as the crypto custodian was recently placed in receivership on the order
of the Eighth District Court of Nevada. The action trailed the filing by the Nevada Financial Institutions Division (NFID) to freeze
the custodian’s assets and take over the business.

Earlier,
the state regulator issued a cease-and-desist
order
against
Prime Trust, alleging that the company had a “shortfall in customer funds” and
was using its customers’ funds to meet withdrawal requests. Furthermore, NFID,
which is a division of the Nevada Department of Business and Industry, claimed
that Prime Trust was in an “unsafe or unsound” condition to carry out business as its
overall financial condition had worsened to a “critically deficient
level.”

Specifically,
the state regulator claimed that the custodian owned clients about $85 million
in fiat currency and $69.5 million in crypto while holding about $3 million in
fiat currency and $68.6 million in crypto. Additionally, NFID said the firm’s
stockholders’ equity position stood at a negative $12 million as of March 2023,
indicating that the company was “operating a substantial deficit.”

In its
filing, Nevada’s financial supervisory authority noted that the shortfall in
funds was related to the custodian’s inability to access certain “legacy
wallets”. However, Fireblocks, with whom Prime Trust completed a crypto asset
management agreement in 2020, told CoinDesk that the
digital asset custodian solely controlled the legacy
wallets, and no funds under Fireblocks’ care were unaccounted for.

In June,
rival crypto custodian,
BitGo, jettisoned its plan to acquire Prime
Trust.
The decision came amidst
speculation about Prime Trust’s financial health, Finance Magnates reported.

In January,
the firm halted its operations in Texas after previously withdrawing its
application for a Texas Money Transmitter License (MTL). In the same month, the
company significantly reduced its headcount, freeing
up one-third of job positions.

Similarly,
Banq, a Prime Trust subsidiary that provided mobile software
solutions, filed for bankruptcy in Nevada, declaring $17.72 million in assets
and $5.4 million in liabilities.

Prime
Trust, the beleaguered cryptocurrency custodian, might be on the brink of
significant job cuts, CoinDesk
revealed today (Friday), quoting ex-employees. Anonymous sources suggest that
up to 75% of positions might be at risk, based on insider information.

Layoffs on
the Horizon?

The news of
the possible massive downsizing comes as the crypto custodian was recently placed in receivership on the order
of the Eighth District Court of Nevada. The action trailed the filing by the Nevada Financial Institutions Division (NFID) to freeze
the custodian’s assets and take over the business.

Earlier,
the state regulator issued a cease-and-desist
order
against
Prime Trust, alleging that the company had a “shortfall in customer funds” and
was using its customers’ funds to meet withdrawal requests. Furthermore, NFID,
which is a division of the Nevada Department of Business and Industry, claimed
that Prime Trust was in an “unsafe or unsound” condition to carry out business as its
overall financial condition had worsened to a “critically deficient
level.”

Specifically,
the state regulator claimed that the custodian owned clients about $85 million
in fiat currency and $69.5 million in crypto while holding about $3 million in
fiat currency and $68.6 million in crypto. Additionally, NFID said the firm’s
stockholders’ equity position stood at a negative $12 million as of March 2023,
indicating that the company was “operating a substantial deficit.”

In its
filing, Nevada’s financial supervisory authority noted that the shortfall in
funds was related to the custodian’s inability to access certain “legacy
wallets”. However, Fireblocks, with whom Prime Trust completed a crypto asset
management agreement in 2020, told CoinDesk that the
digital asset custodian solely controlled the legacy
wallets, and no funds under Fireblocks’ care were unaccounted for.

In June,
rival crypto custodian,
BitGo, jettisoned its plan to acquire Prime
Trust.
The decision came amidst
speculation about Prime Trust’s financial health, Finance Magnates reported.

In January,
the firm halted its operations in Texas after previously withdrawing its
application for a Texas Money Transmitter License (MTL). In the same month, the
company significantly reduced its headcount, freeing
up one-third of job positions.

Similarly,
Banq, a Prime Trust subsidiary that provided mobile software
solutions, filed for bankruptcy in Nevada, declaring $17.72 million in assets
and $5.4 million in liabilities.

Coinbase Launches Blockchain, Edges Closer to Goal of Reaching 1B People

https://www.financemagnates.com/cryptocurrency/coinbase-launches-blockchain-edges-closer-to-goal-of-reaching-1b-people/

Base, a
layer 2 blockchain created by Coinbase, the biggest cryptocurrency exchange
in the United States, went live for public access today (Wednesday).

The move
comes as the publicly traded company, which is one of the largest digital asset
exchanges in the world, aims to reach 1 billion
people
through
decentralised applications (DApps) built on blockchains.

Base Goes
Live for Public Use

With the
launch of the network, which will enable users to move Ether between the
Ethereum mainnet
Mainnet

A mainnnet is a term to describe the primary blockchain network that a cryptocurrency project will operate. The mainnet reflects the final product or stage of a cryptocurrency project that can be accessed and used by the general public. This means that cryptocurrency transactions are being broadcasted, verified, and recorded on blockchain.In contrast to mainnet networks exists testnets, which describe the state during which a blockchain protocol or network is not yet up and running on its full c

A mainnnet is a term to describe the primary blockchain network that a cryptocurrency project will operate. The mainnet reflects the final product or stage of a cryptocurrency project that can be accessed and used by the general public. This means that cryptocurrency transactions are being broadcasted, verified, and recorded on blockchain.In contrast to mainnet networks exists testnets, which describe the state during which a blockchain protocol or network is not yet up and running on its full c
Read this Term
and Base, Coinbase joins the likes of public firms such as IBM
and Microsoft, that have launched their blockchain
Blockchain

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe
Read this Term
networks. The new venture
will enable Coinbase to earn revenues from DApps built on the network.

“Base is an
investment in innovation, not to earn a bunch of profits,” Jesse Polak, creator
of Base and the Head of Protocols at Coinbase, told CoinDesk in an interview, explaining
that more uses of
cryptocurrencies create opportunity for monetization.

Already,
Base has over $140 million in total value locked (TVL), according toL2Beat, a crypto analytics and research
website. This is even as the platform
went live for developers earlier in July, enabling them to test DApps in the
network.

The TVL
makes Base the fifth layer 2 blockchain, behind dYdX, zkSync Era and OP
Mainnet, according to the data. Arbitrum One leads the pack with over $6
billion in TVL, L2Beat data shows.

As part of the Base launch, Coinbase today launched ‘Onchain Summer’, which it
describes as a multi-week celebration of art, culture, gaming and community. The event will host several top brands, including Coca-Cola.

Coinbase’s
Financial Standing

Meanwhile,
the public launch of Base is parallel with the cryptocurrency exchange’s
efforts to narrow its losses as trading volumes decline. During
the second quarter of this year, Coinbase’s net loss went down from $1.1
billion to $97 million, Finance Magnates reported.

The crypto
exchange is also repurchasing a portion
of its $1 billion bond
expiring in September 2031. The buyback, to be
handled by Citigroup’s brokerage arm, will enable the Nasdaq-listed firm to
reduce its interest expenses.

GO Markets expands into Asia; BaFin investigates Worldcoin; read today’s nuggets.

Base, a
layer 2 blockchain created by Coinbase, the biggest cryptocurrency exchange
in the United States, went live for public access today (Wednesday).

The move
comes as the publicly traded company, which is one of the largest digital asset
exchanges in the world, aims to reach 1 billion
people
through
decentralised applications (DApps) built on blockchains.

Base Goes
Live for Public Use

With the
launch of the network, which will enable users to move Ether between the
Ethereum mainnet
Mainnet

A mainnnet is a term to describe the primary blockchain network that a cryptocurrency project will operate. The mainnet reflects the final product or stage of a cryptocurrency project that can be accessed and used by the general public. This means that cryptocurrency transactions are being broadcasted, verified, and recorded on blockchain.In contrast to mainnet networks exists testnets, which describe the state during which a blockchain protocol or network is not yet up and running on its full c

A mainnnet is a term to describe the primary blockchain network that a cryptocurrency project will operate. The mainnet reflects the final product or stage of a cryptocurrency project that can be accessed and used by the general public. This means that cryptocurrency transactions are being broadcasted, verified, and recorded on blockchain.In contrast to mainnet networks exists testnets, which describe the state during which a blockchain protocol or network is not yet up and running on its full c
Read this Term
and Base, Coinbase joins the likes of public firms such as IBM
and Microsoft, that have launched their blockchain
Blockchain

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe

Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe
Read this Term
networks. The new venture
will enable Coinbase to earn revenues from DApps built on the network.

“Base is an
investment in innovation, not to earn a bunch of profits,” Jesse Polak, creator
of Base and the Head of Protocols at Coinbase, told CoinDesk in an interview, explaining
that more uses of
cryptocurrencies create opportunity for monetization.

Already,
Base has over $140 million in total value locked (TVL), according toL2Beat, a crypto analytics and research
website. This is even as the platform
went live for developers earlier in July, enabling them to test DApps in the
network.

The TVL
makes Base the fifth layer 2 blockchain, behind dYdX, zkSync Era and OP
Mainnet, according to the data. Arbitrum One leads the pack with over $6
billion in TVL, L2Beat data shows.

As part of the Base launch, Coinbase today launched ‘Onchain Summer’, which it
describes as a multi-week celebration of art, culture, gaming and community. The event will host several top brands, including Coca-Cola.

Coinbase’s
Financial Standing

Meanwhile,
the public launch of Base is parallel with the cryptocurrency exchange’s
efforts to narrow its losses as trading volumes decline. During
the second quarter of this year, Coinbase’s net loss went down from $1.1
billion to $97 million, Finance Magnates reported.

The crypto
exchange is also repurchasing a portion
of its $1 billion bond
expiring in September 2031. The buyback, to be
handled by Citigroup’s brokerage arm, will enable the Nasdaq-listed firm to
reduce its interest expenses.

GO Markets expands into Asia; BaFin investigates Worldcoin; read today’s nuggets.

Revolut Ends Crypto Services in US, Blames Regulatory Uncertainty

https://www.financemagnates.com/cryptocurrency/revolut-ends-crypto-services-in-us-blames-regulatory-uncertainty/

Revolut, a
London-based neobank, plans to wrap up its crypto trading offering to users in
the United States by October 3, CoinDesk reported today (Friday). Users have until September 2 to purchase digital assets on the platform, and another one month to sell their crypto holdings.

Revolut to
Quit US Crypto Market

According
to CoinDesk, the challenger bank blamed the “difficult decision” on the
“evolving regulatory environment” in the United States. In recent months, the
Securities and Exchange Commission (SEC) has intensified its crackdown on
“crypto-asset securities” offered by “unregistered” trading platforms such as Binance and Coinbase.

In the lawsuit against
Binance
filed in
early June, the SEC listed 13 tokens, including Cardano’s ADA, Polygon’s MATIC,
and Solana’s SOL, as unregistered securities. The move forced several platforms including Revolut, Robinhood and eToro, to move towards delisting some of the tokens from their platforms.

Revolut, which suspended the purchase of ADA, MATIC and SOL on its platform, initially gave its US users until September 18 to sell their holdings. With the deadline several weeks away, Revolut has decided to instead shut down its entire crypto services in the country.

However,
Revolut in a statement shared with CoinDesk noted that its users from other regions are not affected by
the decision. It emphasized that the move will impact less than 1% of
its crypto customers across the world.

“This
decision has not been taken lightly, and we understand the disappointment this
may cause,” Revolut stated.

Revolut, a
London-based neobank, plans to wrap up its crypto trading offering to users in
the United States by October 3, CoinDesk reported today (Friday). Users have until September 2 to purchase digital assets on the platform, and another one month to sell their crypto holdings.

Revolut to
Quit US Crypto Market

According
to CoinDesk, the challenger bank blamed the “difficult decision” on the
“evolving regulatory environment” in the United States. In recent months, the
Securities and Exchange Commission (SEC) has intensified its crackdown on
“crypto-asset securities” offered by “unregistered” trading platforms such as Binance and Coinbase.

In the lawsuit against
Binance
filed in
early June, the SEC listed 13 tokens, including Cardano’s ADA, Polygon’s MATIC,
and Solana’s SOL, as unregistered securities. The move forced several platforms including Revolut, Robinhood and eToro, to move towards delisting some of the tokens from their platforms.

Revolut, which suspended the purchase of ADA, MATIC and SOL on its platform, initially gave its US users until September 18 to sell their holdings. With the deadline several weeks away, Revolut has decided to instead shut down its entire crypto services in the country.

However,
Revolut in a statement shared with CoinDesk noted that its users from other regions are not affected by
the decision. It emphasized that the move will impact less than 1% of
its crypto customers across the world.

“This
decision has not been taken lightly, and we understand the disappointment this
may cause,” Revolut stated.

Kenya Says Registration of Sam Altman’s Worldcoin in April Not Endorsement

https://www.financemagnates.com/cryptocurrency/kenya-says-registration-of-sam-altmans-worldcoin-in-april-not-endorsement/

Kenya’s
interior and information ministries in a joint statement addressed to the
country’s National Assembly said the data controller registration certificate
issued to Worldcoin on April 18, 2023, is not a valid license for the project to operate
in the country. The country has, therefore, kicked off “criminal
investigations” to establish “the authenticity and legality” of Worldcoin’s operations
in the East African country.

Kenya
Starts Criminal Investigation

According
to details contained in the statement, a copy of which was posted on
Facebook today (Thursday) by the Kenyan Ministry of Interior and National
Administration, Worldcoin is “not registered as a legal entity in Kenya.” The
statement is signed by the cabinet secretaries of the two ministries.

“An
application for a certificate of registration only signifies that the entity has
complied with sections 18 and 19 of the Data Protection
Act, 2019
, and does
not endorse an entity’s compliance with the Act or its subsidiary regulations,
nor is it a valid license for an organisation to operate in Kenya or authorize
the operations of an entity,” the cabinet secretaries explained.

The
information emerges a day after the interior ministry raised concerns about the
activities of Worldcoin in Kenya and ordered the suspension of the project in the
country. Worldcoin was created by Sam Altman, the CEO of OpenAI, and requires
users to scan their irises in exchange for free cryptocurrency. The project
claims it wants to boost the adoption of cryptocurrencies by creating a global
identity network.

Meanwhile,
Worldcoin, according to the statement, first set up registration
booths
across Kenya in April last year ahead of the launch of its cryptocurrency which
went live on Binancelate
last month. The country’s data
regulator, the Office of the Data Protection Commissioner (ODPC) ordered the initial suspension of Worldcoin’s
operations in May 2022 in order to investigate the case.

In May this year, ODPC, again “directed immediate cessation of processing of
sensitive personal data,” according to the statement. This suspension was not lifted, the cabinet secretaries noted.

“The
government has commenced investigations to ensure that Worldcoin complies with
the data collection, storage and sharing principles,” the cabinet secretaries noted on the latest investigation. “Immediate mitigation steps being undertaken are
the constitution of a multi-agency team comprising of security, financial
services and data protection agencies [that] have commenced inquiries and
investigations to establish the legality of the activities of Worldcoin, the
safety and the protection of data collected with the aim to safeguard personal data and mitigate
against any adverse practices.”

Meanwhile, while speaking with NTV, a local Kenyan station,
earlier on Wednesday, Elid Owalo, the Cabinet Secretary for the Ministry of Information,
Communications and the Digital Economy, noted that Worldcoin’s activity
did not violate any law but raised security and regulatory concerns.

“Information
available to the Data Commissioner is that within the existing legal framework
today, there is no provision in the law that the organization [Worldcoin] had
negated. There has been correspondence between the Office of the Data
Commissioner and the entity,” Owalo told the station.

“As far as
the Data Act 2019 is concerned, they were acting within the law,” the minister further
noted, adding that the government was approaching the issue from “a
multi-faceted approach.”

Meanwhile, Finance Magnates reported that data and privacy
regulators in France and the UK previously stated plans to also query Worldcoin.

Acuity unveils ‘NewsIQ’; Spectrum Markets appoints compliance head; read today’s news nuggets.

Kenya’s
interior and information ministries in a joint statement addressed to the
country’s National Assembly said the data controller registration certificate
issued to Worldcoin on April 18, 2023, is not a valid license for the project to operate
in the country. The country has, therefore, kicked off “criminal
investigations” to establish “the authenticity and legality” of Worldcoin’s operations
in the East African country.

Kenya
Starts Criminal Investigation

According
to details contained in the statement, a copy of which was posted on
Facebook today (Thursday) by the Kenyan Ministry of Interior and National
Administration, Worldcoin is “not registered as a legal entity in Kenya.” The
statement is signed by the cabinet secretaries of the two ministries.

“An
application for a certificate of registration only signifies that the entity has
complied with sections 18 and 19 of the Data Protection
Act, 2019
, and does
not endorse an entity’s compliance with the Act or its subsidiary regulations,
nor is it a valid license for an organisation to operate in Kenya or authorize
the operations of an entity,” the cabinet secretaries explained.

The
information emerges a day after the interior ministry raised concerns about the
activities of Worldcoin in Kenya and ordered the suspension of the project in the
country. Worldcoin was created by Sam Altman, the CEO of OpenAI, and requires
users to scan their irises in exchange for free cryptocurrency. The project
claims it wants to boost the adoption of cryptocurrencies by creating a global
identity network.

Meanwhile,
Worldcoin, according to the statement, first set up registration
booths
across Kenya in April last year ahead of the launch of its cryptocurrency which
went live on Binancelate
last month. The country’s data
regulator, the Office of the Data Protection Commissioner (ODPC) ordered the initial suspension of Worldcoin’s
operations in May 2022 in order to investigate the case.

In May this year, ODPC, again “directed immediate cessation of processing of
sensitive personal data,” according to the statement. This suspension was not lifted, the cabinet secretaries noted.

“The
government has commenced investigations to ensure that Worldcoin complies with
the data collection, storage and sharing principles,” the cabinet secretaries noted on the latest investigation. “Immediate mitigation steps being undertaken are
the constitution of a multi-agency team comprising of security, financial
services and data protection agencies [that] have commenced inquiries and
investigations to establish the legality of the activities of Worldcoin, the
safety and the protection of data collected with the aim to safeguard personal data and mitigate
against any adverse practices.”

Meanwhile, while speaking with NTV, a local Kenyan station,
earlier on Wednesday, Elid Owalo, the Cabinet Secretary for the Ministry of Information,
Communications and the Digital Economy, noted that Worldcoin’s activity
did not violate any law but raised security and regulatory concerns.

“Information
available to the Data Commissioner is that within the existing legal framework
today, there is no provision in the law that the organization [Worldcoin] had
negated. There has been correspondence between the Office of the Data
Commissioner and the entity,” Owalo told the station.

“As far as
the Data Act 2019 is concerned, they were acting within the law,” the minister further
noted, adding that the government was approaching the issue from “a
multi-faceted approach.”

Meanwhile, Finance Magnates reported that data and privacy
regulators in France and the UK previously stated plans to also query Worldcoin.

Acuity unveils ‘NewsIQ’; Spectrum Markets appoints compliance head; read today’s news nuggets.

Combined Crypto Spot and Derivative Exchange Volumes Sink to Yearly Low

https://www.financemagnates.com/cryptocurrency/combined-crypto-spot-and-derivative-exchange-volumes-sink-to-yearly-low/

The total
volumes generated from spot and derivatives trading activities on centralized
exchanges (CEXs) slumped by 12% to $2.36 trillion in July, hitting the lowest
monthly trading volume recorded this year, so far. The figures are based on the latest exchange review report by CCData, a digital assets data provider.

Trading
Suffers Lack of Volatility

Specifically,
spot trading volume sank by 10.5% to $515 billion, the second-lowest
volume generated since March 2019. Similarly, crypto exchanges generated the second-lowest
derivatives volumes posted since December 2020. This is even as the value of trading activities went down by 12.7%
to $1.85 trillion.

In June, aggregate volumes
from both activities jumped by 14.2% for the first time in three
months, hitting $2.71 trillion. The bullish trend came amidst a new wave of
applications
for spot
Bitcoin exchange-traded funds by institutional investors, Finance Magnates reported.

However,
volumes slowed down again in July, returning to record lows seen in the past
few months. CCData attributed the decline to insufficient volatility in the crypto market.

“The
decrease in trading volumes can be attributed to the lack of volatility
Volatility

In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders

In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders
Read this Term
in the
price action of major crypto assets, with Bitcoin and Ethereum
Ethereum

Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language,

Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language,
Read this Term
trading in a
narrow range throughout July,” CCData explained.

Upbit Outtrades
OKX and Coinbase

Meanwhile,
in July, the market share of Binance continued to shrink, falling for the fifth
consecutive month to 40.4%. The decline persists as the crypto exchange
continues to battle regulatory opposition in several
jurisdictions
,
particularly in the United States where federal prosecutors are now contemplating hitting
the exchange with criminal
charges.

However,
with $208 billion in total spot trading volume, Binance remains the biggest
crypto exchange in the world. In fact, the exchange Chinese users recently traded more than $90
billion in a single month
, defying the ban on crypto
trading in the Asian country.

On the other hand, South Korea-based crypto exchange, Upbit, pulled off an upset last month,
beating top exchanges such as OKX and Coinbase to claim the position of
second-largest exchange by trading volume after Binance. While Upbit’s spot
trading volume surged by 42.3% to $29.8 billion in July, OKX and Coinbase saw
their volumes plummet by 11.6% and 5.75% to $28.6 billion and $29 billion,
respectively.

“Compared
to last month, Upbit saw the largest increase in market share, with the
exchange now accounting for 5.78% of the trading volumes on centralised
exchanges,” CCData elaborated. “Huobi Global and Kucoin also increased their
market share by trading volume, rising 1.92% and 0.47% to 3.84% and 2.21%
respectively.”

Acuity unveils ‘NewsIQ’; Spectrum Markets appoints compliance head; read today’s news nuggets.

The total
volumes generated from spot and derivatives trading activities on centralized
exchanges (CEXs) slumped by 12% to $2.36 trillion in July, hitting the lowest
monthly trading volume recorded this year, so far. The figures are based on the latest exchange review report by CCData, a digital assets data provider.

Trading
Suffers Lack of Volatility

Specifically,
spot trading volume sank by 10.5% to $515 billion, the second-lowest
volume generated since March 2019. Similarly, crypto exchanges generated the second-lowest
derivatives volumes posted since December 2020. This is even as the value of trading activities went down by 12.7%
to $1.85 trillion.

In June, aggregate volumes
from both activities jumped by 14.2% for the first time in three
months, hitting $2.71 trillion. The bullish trend came amidst a new wave of
applications
for spot
Bitcoin exchange-traded funds by institutional investors, Finance Magnates reported.

However,
volumes slowed down again in July, returning to record lows seen in the past
few months. CCData attributed the decline to insufficient volatility in the crypto market.

“The
decrease in trading volumes can be attributed to the lack of volatility
Volatility

In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders

In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders
Read this Term
in the
price action of major crypto assets, with Bitcoin and Ethereum
Ethereum

Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language,

Ethereum is an open source, blockchain-based distributed computing platform and operating system featuring smart contract functionality. Created in 2014, Ethereum now stands as the second largest cryptocurrency by market cap at the time of writing.As a decentralized cryptocurrency network and software platform, Ethereum represents the most prominent altcoin. Ethereum also enables the creation Distributed Applications, or dapps. Understanding EthereumEthereum boasts its own programming language,
Read this Term
trading in a
narrow range throughout July,” CCData explained.

Upbit Outtrades
OKX and Coinbase

Meanwhile,
in July, the market share of Binance continued to shrink, falling for the fifth
consecutive month to 40.4%. The decline persists as the crypto exchange
continues to battle regulatory opposition in several
jurisdictions
,
particularly in the United States where federal prosecutors are now contemplating hitting
the exchange with criminal
charges.

However,
with $208 billion in total spot trading volume, Binance remains the biggest
crypto exchange in the world. In fact, the exchange Chinese users recently traded more than $90
billion in a single month
, defying the ban on crypto
trading in the Asian country.

On the other hand, South Korea-based crypto exchange, Upbit, pulled off an upset last month,
beating top exchanges such as OKX and Coinbase to claim the position of
second-largest exchange by trading volume after Binance. While Upbit’s spot
trading volume surged by 42.3% to $29.8 billion in July, OKX and Coinbase saw
their volumes plummet by 11.6% and 5.75% to $28.6 billion and $29 billion,
respectively.

“Compared
to last month, Upbit saw the largest increase in market share, with the
exchange now accounting for 5.78% of the trading volumes on centralised
exchanges,” CCData elaborated. “Huobi Global and Kucoin also increased their
market share by trading volume, rising 1.92% and 0.47% to 3.84% and 2.21%
respectively.”

Acuity unveils ‘NewsIQ’; Spectrum Markets appoints compliance head; read today’s news nuggets.

DOJ Weighs Fraud Charges against Binance, Worried about Bank Run: Report

https://www.financemagnates.com/cryptocurrency/doj-weighs-fraud-charges-against-binance-worried-about-bank-run-report/

US
prosecutors are mulling over whether to initiate criminal charges against
Binance, thereby turning the heat on 13 civil charges filed by the securities
watchdog against the top crypto exchange earlier in June, Semafor reported today
(Wednesday), citing insider sources. However, the Department of Justice (DOJ)
is worried that such action could lead to a bank run, throwing the exchange
into a position similar to that of the now-bankrupt crypto exchange, FTX.

Prosecutors
Contemplate Criminal Charges

According
to the report, the DoJ is contemplating opting for other measures such as fines
and deferred or non-prosecution agreements (NPAs). An NPA means that a
prosecutor will halt prosecution in cases where it believes a crime has been committed in exchange
for the
defendant’s compliance with certain conditions.

These
conditions typically include paying fines, undergoing corporate reforms, and
fully cooperating with a probe. In such cases, the charges are dismissed if the
defendant complies with the conditions.

US
prosecutors are mulling over whether to initiate criminal charges against
Binance, thereby turning the heat on 13 civil charges filed by the securities
watchdog against the top crypto exchange earlier in June, Semafor reported today
(Wednesday), citing insider sources. However, the Department of Justice (DOJ)
is worried that such action could lead to a bank run, throwing the exchange
into a position similar to that of the now-bankrupt crypto exchange, FTX.

Prosecutors
Contemplate Criminal Charges

According
to the report, the DoJ is contemplating opting for other measures such as fines
and deferred or non-prosecution agreements (NPAs). An NPA means that a
prosecutor will halt prosecution in cases where it believes a crime has been committed in exchange
for the
defendant’s compliance with certain conditions.

These
conditions typically include paying fines, undergoing corporate reforms, and
fully cooperating with a probe. In such cases, the charges are dismissed if the
defendant complies with the conditions.

SEC ‘Weaponized’ XRP Quarterly Reports in Lawsuit, Ripple Says

https://www.financemagnates.com/cryptocurrency/exchange/sec-weaponized-xrp-quarterly-reports-in-lawsuit-ripple-says/

Brad
Garlinghouse, the Chief Executive Officer of Ripple Labs, a payment protocol
and exchange network, has slammed the US Securities and Exchange
Commission for allegedly using the company’s quarterly reports about its native
cryptocurrency, XRP, in the agency’s case against the crypto firm. Garlinghouse
stated this today (Wednesday) in a Twitter post, quoting the company’s XRP
quarterly report for the second quarter (Q2) of this year.

Ripple
Criticizes SEC

In the
Twitter post, the Ripple CEO noted that the company initiated the reports to
“voluntarily” provide updates about its XRP holdings. However, the securities
allegedly used them against the firm during the lawsuit process.

“While
published in a good faith effort at transparency, these quarterly reports have
been weaponized against the company by the SEC. Ironic for an
agency that touts transparency and disclosure,” Ripple further said in the latest quarterly report published on Monday.
“Accordingly, Ripple is re-evaluating the role and contents of this report
going forward and will have updates on that front in Q3 2023,” the firm added,
reiterating its commitment to transparency.

Also
commenting, John Deaton, a lawyer known for being vocal about the SEC vs Ripple
case, tweeted on the issue, noting that “the SEC used the transparency of these
reports against Ripple and its two executives.”

“As a private
company, Ripple was under no obligation to share this info,” Deaton stated.
“Other companies not only didn’t share token sales but intentionally disguised
those transactions.”

In
mid-July, the US District Judge, Analisa Torres, delivered a landmark
judgment
on the
SEC’s case against Ripple, ruling that the crypto firm’s sale of XRP tokens to
retain investors on public exchanges did not violate US securities law, Finance Magnates
reported. However,
the court noted that the sale of the token to sophisticated investors amount to
a contravention of federal securities law. The ruling followed years of the securities watchdog’s lawsuit against Ripple in a case that started in December
2020
.

Ripple
Addresses ‘Misconceptions’

Meanwhile,
in the XRP quarterly report quoted by Garlinghouse, Ripple addressed several “misconceptions”
about the court ruling, including those that the judgment is a split decision and that the
court’s decision means that XRP is a security in some situations but is not in
others.

Specifically addressing the belief that the ruling was a split decision, the crypto firm noted that
the court judgment “is a resounding win for Ripple and the industry more
broadly.”

Moreover,
Ripple in the report noted that its XRP holding jumped by about 4.4 million
from 5.51 billion as of March 31, 2023, to 5.55 billion at the end of June this
year. As a result, the total number of XPR locked in Ripple’s ledger escrows
decreased by about 9 million to 41.9 billion at the end of June.

IG’s share buyback; new features on Fortex; read today’s news nuggets.

Brad
Garlinghouse, the Chief Executive Officer of Ripple Labs, a payment protocol
and exchange network, has slammed the US Securities and Exchange
Commission for allegedly using the company’s quarterly reports about its native
cryptocurrency, XRP, in the agency’s case against the crypto firm. Garlinghouse
stated this today (Wednesday) in a Twitter post, quoting the company’s XRP
quarterly report for the second quarter (Q2) of this year.

Ripple
Criticizes SEC

In the
Twitter post, the Ripple CEO noted that the company initiated the reports to
“voluntarily” provide updates about its XRP holdings. However, the securities
allegedly used them against the firm during the lawsuit process.

“While
published in a good faith effort at transparency, these quarterly reports have
been weaponized against the company by the SEC. Ironic for an
agency that touts transparency and disclosure,” Ripple further said in the latest quarterly report published on Monday.
“Accordingly, Ripple is re-evaluating the role and contents of this report
going forward and will have updates on that front in Q3 2023,” the firm added,
reiterating its commitment to transparency.

Also
commenting, John Deaton, a lawyer known for being vocal about the SEC vs Ripple
case, tweeted on the issue, noting that “the SEC used the transparency of these
reports against Ripple and its two executives.”

“As a private
company, Ripple was under no obligation to share this info,” Deaton stated.
“Other companies not only didn’t share token sales but intentionally disguised
those transactions.”

In
mid-July, the US District Judge, Analisa Torres, delivered a landmark
judgment
on the
SEC’s case against Ripple, ruling that the crypto firm’s sale of XRP tokens to
retain investors on public exchanges did not violate US securities law, Finance Magnates
reported. However,
the court noted that the sale of the token to sophisticated investors amount to
a contravention of federal securities law. The ruling followed years of the securities watchdog’s lawsuit against Ripple in a case that started in December
2020
.

Ripple
Addresses ‘Misconceptions’

Meanwhile,
in the XRP quarterly report quoted by Garlinghouse, Ripple addressed several “misconceptions”
about the court ruling, including those that the judgment is a split decision and that the
court’s decision means that XRP is a security in some situations but is not in
others.

Specifically addressing the belief that the ruling was a split decision, the crypto firm noted that
the court judgment “is a resounding win for Ripple and the industry more
broadly.”

Moreover,
Ripple in the report noted that its XRP holding jumped by about 4.4 million
from 5.51 billion as of March 31, 2023, to 5.55 billion at the end of June this
year. As a result, the total number of XPR locked in Ripple’s ledger escrows
decreased by about 9 million to 41.9 billion at the end of June.

IG’s share buyback; new features on Fortex; read today’s news nuggets.