Autor Cointelegraph By David Attlee

California regulator orders Celsius to stop selling securities in the state

California regulator orders Celsius to stop selling securities in the state

Uverejnil používateľ | aug 10, 2022 |

The Department of Financial Protection and Innovation of California (DFPI) continues to bring actions against crypto interest account providers, failing to comply with the local law. After commanding BlockFi and Voyager to stop their offerings in the state, the DFPI issued a desist and refrain order to crypto lending firm Celsius. The order simply means that the crypto lending platform, which is undergoing the bankruptcy procedure, should stop all of its further operations on the sale and marketing of securities in the state of California. The order had been published on Aug. 8 and claims that Celsius Network and its CEO, Alex Mashinsky, made material misrepresentations and omissions in the offer of crypto interest accounts, particularly in understating the risks of depositing digital assets. According to the Department, the unmentioned risks include the risk that third-party custody services might lose access to digital assets; the risk that lenders would be unable to return Celsius’ collateral on time; the risk that in the event of a sudden request for withdrawals Celsius wouldn’t possess adequate assets to meet customer withdrawal demands. Related: Crypto lending platform Hodlnaut suspends services due to liquidity crisisThe platform is also being accused of non-qualifying the deposited digital assets as securities in compliance with California legislation, a Corporations Code Section 25110. To sell these kinds of securities in the state, a company must obtain a permit from the DFPI. In July 2022, the DFPI issued two cease and desist orders to BlockFi and Voyager, respectively. Voyager, a crypto exchange affiliated with the failed hedge fund Three Arrows Capital (3AC), filed for bankruptcy under Chapter 11 on July 6. Celsius paused rewards and withdrawals for all users on June 13 and have since paused margin calls, liquidations and issuing new loans. During the first bankruptcy hearing, platform lawyers claimed that Celsius is free to “use, sell, pledge, and rehypothecate those coins” as users transferred the title of their coins to the firm as per its terms of service (ToS).

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The Reserve Bank of Australia to explore use cases for CBDC

The Reserve Bank of Australia to explore use cases for CBDC

Uverejnil používateľ | aug 9, 2022 |

The Reserve Bank of Australia weighs in the central bank digital currencies (CBDCs) race to explore use cases for a CBDC in the country. It will collaborate with the Digital Finance Cooperative Research Centre (DFCRC) on a respective research project. As stated in an announcement from Aug. 9, the joint project of the Reserve Bank and DFCRC will focus on “innovative use cases and business models” that could be supported by the issuance of a CBDC. The technological, legal and regulatory considerations will also be assessed in the project’s course. The pilot will last about a year and take the form of the CBDC operating in a ring-fenced environment. Industry stakeholders will be invited to develop specific use cases, which The Bank and the DFCRC will then evaluate. The selected cases will participate in the pilot, resulting in a special report. Related: Huobi gets green light as exchange provider in AustraliaThe Reserve Bank intends to publish the paper with further details on the project in the next few months. As Michele Bullock, the deputy governor of the Reserve Bank, stated: “This project is an important next step in our research on CBDC. We are looking forward to engaging with a wide range of industry participants to better understand the potential benefits a CBDC could bring to Australia.”The DFCRC is a $180 million research program funded by industry partners, universities and the Australian Government, which aims to bring together stakeholders in the finance industry, academia and regulatory sectors to develop the opportunities arising from the next transformation of financial markets. On Aug. 5, the Bank of Thailand announced the two-year pilot of retail CBDC testing, which should start by the end of 2022.

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BitMEX former executive pleads guilty to violating the Bank Secrecy Act

BitMEX former executive pleads guilty to violating the Bank Secrecy Act

Uverejnil používateľ | aug 9, 2022 |

Another top executive joins three co-founders of the crypto exchange BitMEX, pleading guilty in the United States District Court for the Southern District of New York. The court case under the headline “U.S. v. Hayes et al.” goes on for two years, with BitMEX management being indicted for violating the U.S. Bank Secrecy Act. According to the Wall Street Journal, on Aug. 8, a one-time head of business development at BitMEX, Gregory Dwyer, admitted his guilt of violating the Bank Secrecy Act in court. As part of a plea deal, Dwyer would pay a $150,000 fine. As Manhattan Attorney Damian Williams commented on this development: “Today’s plea reflects that employees with management authority at cryptocurrency exchanges, no less than the founders of such exchanges, cannot willfully disregard their obligations under the Bank Secrecy Act.” All the founders that Williams mentions have already pleaded guilty earlier. Former CEO Arthur Hayes and one of the co-founders, Ben Delo, admitted their guilt on Feb. 24, 2022, while the third co-founder, Samuel Reed entered a plea two weeks later. Hayes was sentenced to two years probation, Delo received 30 months of probation, and Reed is facing up to five years in prison. Reed alone agreed to pay a $10 million fine, the same sum would be jointly paid by Hayes and Delo. The charges against a trio of BitMEX co-founders and Dwyer were filed in 2020. Prosecutors accused the Seychelles-incorporated exchange of false withdrawal from the U.S. market, as it didn’t try hard enough to stop American users from signing up. In addition, BitMEX had been indicted for operating as a money-laundering platform, lacking the necessary anti-money-laundering (AML) and know-your-customer (KYC) protocols.

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Two more lawsuits for Coinbase: Law decoded, Aug. 1–8

Two more lawsuits for Coinbase: Law decoded, Aug. 1–8

Uverejnil používateľ | aug 8, 2022 |

The Coinbase drama, which started at the end of July, continues with new developments. Last week, former Coinbase Global product manager Ishan Wahi pleaded not guilty to two counts of wire fraud conspiracy and two counts of wire fraud in a Manhattan federal court. Wahi was arrested during his attempt to board a flight from the United States to India in May and accused of insider trading. While the Wahis are central to two separate court cases, another two lawsuits appeared last week against the San-Francisco-based crypto exchange. Legal firm Bragar Eagel & Squire revealed that it would be suing Coinbase for making deceptive claims about its business practices. Pomerantz LLP has also filed a claim against the exchange, alleging that it is entitled to compensation for any losses incurred as a result of the defendant’s violations of federal securities laws.In both complaints, plaintiffs claim that Coinbase made fraudulent and deceptive representations regarding the company’s business, operations and compliance efforts between April 14, 2021 and July 26, 2022. Coinbase reportedly refused to disclose that it permitted U.S. citizens to trade digital assets that required Securities and Exchange Commission (SEC) registration as securities despite its knowledge and complacency. 11 individuals are charged over $300M crypto ‘pyramid scheme’A hot season for enforcers, indeed — SEC has charged 11 individuals for their alleged role in creating t “fraudulent crypto pyramid scheme” platform Forsage. The charges were laid in a United States District Court in Illinois, with the SEC alleging that the founders and promoters of the platform used the “fraudulent crypto pyramid and Ponzi scheme” to raise more than $300 million from “millions of retail investors worldwide.”Continue readingThe new crypto bill could extend CFTC’s regulatory powersWhile both the Lummis-Gillibrand crypto bill and several versions of stablecoin legislation seem to be delayed until fall, United States Senate Agriculture Committee chair Debbie Stabenow and ranking member John Boozman introduced the Digital Commodities Consumer Protection Act. The bill mandated the registration of a broad spectrum of market players by the CFTC and was met with wide approval within the crypto community. Continue readingBanks are shutting down the crypto exchanges’ accounts in PortugalSeveral large banks in Portugal have reportedly begun closing the accounts of cryptocurrency exchanges due to “risk management” concerns. There are at least four domestic cryptocurrency exchanges that have seen their accounts shut, including CriptoLoja, which was the first one to obtain a license to operate in the country. The closure of these accounts is seen as a blow to Portugal’s crypto-friendly approach, as authorities had previously rejected two tax proposals that might have been applied to investors making money from cryptocurrencies.Continue reading

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The Bank of Thailand to pilot Retail CBDC by the end of 2022

The Bank of Thailand to pilot Retail CBDC by the end of 2022

Uverejnil používateľ | aug 5, 2022 |

On top of its wholesale central bank digital currency (CBDC) projects and proof-of-concept Retail CBDC testing with corporates, the Bank of Thailand (BOT) will extend the scope of CBDC development aimed at retail to a pilot phase. A possible real-life application of the “Retail CBDC” will be conducted inside the private sector on a limited scale. As the Aug. 5 announcement on the official page of the BOT goes:“The BOT will assess the benefits and associated risks from the Pilot to formulate related policies and improve the CBDC design in the future.”The pilot is separated into two tracks. During the first one — a “Foundation track” — CBDC will be tested in cash-like activities, i.e. paying for goods and services, within limited areas and a scale of 10,000 retail users. There will be three companies to participate in the experiment — the Bank of Ayudhya, Siam Commercial Bank and 2C2P. The testing should start at the end of 2022 and last until mid-2023.A second phase dubbed the “Innovation track” will focus on presenting innovative use cases for CBDC. The private sector and the public will have a chance to present their use cases for Retail CBDC via a “CBDC Hackathon,” which will take place Aug. 5 – Sept. 12, 2022. Selected participants will get mentorship from experienced financial institutions.In the meantime, the BOT doesn’t plan to issue Retail CBDC, “as the issuance requires thorough consideration” of risks and benefits for the financial system in general.Related: Strict Thai crypto regulation causes SCB to delay Bitkub acquisitionOn Aug. 4, Thailand’s financial regulator, the Securities and Exchange Commission (SEC) granted operating licenses to four digital asset operators, despite turmoil regarding the Singaporean exchange Zipmex, which suspended withdrawals for customers in the country in July. Crypto volumes in Thailand surged almost 600% in early 2021 as the bull market was building momentum.

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