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BlockFi Receives Cease and Desist Order From New Jersey Attorney General

5 years 3 months ago

Crypto lending platform BlockFi has received an order from New Jersey’s acting attorney general (AG) to halt its Interest Account (BIA) operations in the state.

  • BlockFi CEO Zac Prince confirmed his company had received the order late Monday.
  • Prince said BlockFi remains “fully operational” for its existing clients in New Jersey and that all aspects of the platform continue to be accessible for its clients in the state.
  • CoinDesk contacted Prince, who declined to comment further.
  • The acting AG’s order requests BlockFi to stop accepting new BIA clients residing in New Jersey beginning July 22, 2021, Prince confirmed in a Tweet.
  • “We will continue to engage with all relevant authorities to protect our clients’ interests and ensure that our products remain available,” said Prince.
  • Having just assumed the position on Monday, Acting Attorney General Andrew Bruck appears to be setting the tone of his new role.
  • It’s also the latest for the embattled lender who, in May, incorrectly deposited and then tried to reverse excessive amounts of bitcoin to users’ accounts.
  • BlockFi was also hit by an attacker spamming its platform with fake sign-ups and abusive language in March.
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Bitcoin Drops Below $30K for First Time in 4 Weeks

5 years 3 months ago

Bitcoin dropped below $30,000, breaking below a trading range that had held for the past four weeks and potentially setting up the largest cryptocurrency for deeper price declines.

The cryptocurrency was trading around $29,998 at press time and is down about 5% over the past week.

Bitcoin has been locked in the broad price range of $30,000 to $40,000 since mid-May, and briefly broke below the $30,000 mark on June 22. The cryptocurrency fleetingly traded at $29,700 a day after the People’s Bank of China ordered the country’s major financial institutions to stop facilitating crypto transactions.

Related: Market Wrap: Sentiment Away From Risk Sends Bitcoin Toward $30K

“I am expecting a strong dip towards $22K,” said Patrick Heusser, head of trading at Crypto Finance AG, in a telegram interview on Monday.

Wall Street is seeing “too much froth” and current virus jitters are triggering widespread panic selling of every top performing asset, with bitcoin being right at the top of this list, according to Edward Moya, senior market analyst at Oanda.

Moya said that bitcoin could be vulnerable to a flash crash towards the $20,000 level which “should attract many institutional buyers that have been waiting patiently on the sidelines,”

“If the stock market selloff intensifies, bitcoin and Ethereum will easily extend their declines,” said Moya.

Related: Bitcoin Miner Iris Energy Aims to Raise $200M in Funding Before Nasdaq Listing: Report

Katie Stockton, founder and managing partner of Fairlead Strategies, said that the consolidation phase bitcoin is currently experiencing is “neutral.”

But in her view, she said, “a breakout is more likely than a breakdown.”

In April, the bitcoin network was “so vibrant, it wasn’t difficult supporting prices above $50K,” said Charles Morris, founder of ByteTree Asset Management.

However, in recent weeks, Morris said, the level of network activity has collapsed.

“Now it is more in keeping with a $15K bitcoin price than a $50K,” he said.

Bitcoin peaked just below $65,000 in mid-April.

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SEC Shutters Mother-Son Duo for Alleged Crypto ‘Supercomputer’ Ponzi Scheme

5 years 3 months ago

The Securities and Exchange Commission (SEC) has shuttered an alleged scam that promised to generate most of its income from bitcoin mining and invest in cryptocurrencies and other assets, the agency said Monday. 

According to the SEC’s complaint, 86-year-old Joy Kovar and her son, 54-year-old Brent Kovar, have raised over $12 million from at least 277 retail investors through their Las Vegas-based company Profit Connect Wealth Services since May 2018. 

The mother-son duo allegedly told investors that Profit Connect invested in Forex, stocks and other assets “to diversify its income stream from the company’s’ main income source of blockchain mining.” The Kovars touted the ability of a supercomputer and artificial intelligence to generate 20%-30% fixed returns per year with monthly compounding interest. 

Related: Ripple Cites SEC Commissioners’ Remarks to Support Dismissal of Case

Instead, the SEC alleges that the Kovars transferred “millions of dollars to Joy Kovar’s personal bank account,” spent millions of dollars to promote Profit Connect, and made “Ponzi-like payments to other investors.” The SEC says over 90%  of Profit Connect’s funds came from investors. 

Brent Kovar used social media to market the firm’s offerings. In a YouTube video, he presents what he says is a mining card to show the audience “what they look like,” and says his company uses artificial intelligence “to only decode [those mining cards] off the blockchain that actually have transactions.”

The complaint alleges that Brent Kovar received almost $353,000 of investor funds, which he used to purchase a residential home. It also alleges that Joy Kovar opened eight accounts at three different banks. 

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US Senators Ask Team USA to Boycott China’s Digital Yuan at 2022 Olympics

5 years 3 months ago

Three Senators are calling on the U.S. national team to effectively boycott China’s digital currency at the 2022 Winter Olympics in Beijing.

Athletes should be forbidden from “receiving or using digital yuan during the Beijing Olympics,” Republicans Marsha Blackburn, Cynthia Lummis and Roger Wicker said in a Monday letter to the U.S. Olympic Committee leadership, citing privacy concerns.

“We cannot allow America’s athletes to be used as a trojan horse to increase the Chinese Communist Party’s ability to spy on the United States,” Lummis told CoinDesk.

Related: Why Central Bankers Invoke Free Banking to Attack Stablecoins

The boycott call amounts to an early salvo in the digital currency arms race, and a poignant one, given its proximity to the 2020 summer games. Tokyo’s year-delayed event is set to begin later this week.

China, which in February 2022 will host the winter games, is in the midst of debuting its e-CNY digital currency, by far the most advanced central bank digital currency (CBDC) project in the world. Last week the People’s Bank of China confirmed travelers will be allowed to open digital wallets while visiting the country.

That’s got the three republicans fearful that China’s commnist regime might attempt to exploit the e-CNY as a surveillance tool.

“Olympic athletes should be aware that the digital yuan may be used to surveil Chinese citizens and those visiting China on an unprecedented scale, with the hopes that they will maintain digital yuan wallets on their smartphones and continue to use it upon return,” they wrote to Olympic Committee board chair Suzanne Lyons.

Related: Digital Yuan Used in $5B of Transactions, Says China’s Central Bank

A representative for U.S. Olympic Committee did not immediately respond CoinDesk.

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En medio de la crisis sanitaria y el embargo económico, cubanos utilizan criptomonedas para ayudar a sus compatriotas

5 years 3 months ago

Los cubanos están recurriendo a las criptomonedas para hacer llegar donaciones a compatriotas que las necesitan.

Los residentes en Cuba comenzaron a protestar contra el gobierno a principios de este mes, señalando el embargo económico al país y el rápido empeoramiento de la crisis del COVID-19. Los casos casi se duplicaron el 9 de julio, con resultados positivos diarios que alcanzaron los 6.422 después de los 3.664 del día anterior. Matanzas, la provincia más afectada, registró la mitad de ellos.

En Twitter, los hashtags #SOSCuba y #SOSMatanzas se convirtieron en trending topic en diferentes partes del mundo.

Related: Por qué bitcoin podría ser algo bueno para El Salvador

Read this article in English.

Al ver lo que ocurría en Matanzas, la emprendedora cubana Thais Liset comenzó a pensar en ideas para ayudar a sus compatriotas en esa provincia y decidió que las donaciones serían la mejor opción para contrarrestar la falta de insumos médicos y alimentos.

Junto al YouTuber cubano Frank el Makina, Liset buscó la ayuda de Erich García Cruz, uno de los principales influencers cubanos de cripto, quien lidera los proyectos BitRemesas y QvaPay, dos emprendimientos enfocados en facilitar la entrada de remesas y el cobro en dólares para cubanos utilizando criptomonedas.

Tras la solicitud, García Cruz creó una cuenta especial dentro de QvaPay para recibir donaciones sin ninguna comisión. “Todas las transacciones son públicas para que se pueda auditar todo lo que está pasando en tiempo real”, dijo García Cruz a CoinDesk.

Related: Bank of America permite el trading de futuros de bitcoin para algunos clientes

La iniciativa busca principalmente recibir dinero de los cubanos en el extranjero. Las criptomonedas proporcionan la forma más fácil y rápida para que los individuos donen, dijo García Cruz, quien agregó que los cubanos en Cuba fueron los que más contribuyeron. El proyecto también incluyó donaciones en fiat por parte de cubanos que están en Cuba, aunque el número de remesas mediante criptomonedas fue superior, dijo.

Muchos cubanos que viven en el extranjero no tenían cuentas en exchanges de criptomonedas, dijo García Cruz. “Son amigos que viven en el extranjero y no saben mucho sobre cómo operar con cripto, así que los guiamos paso a paso para que compraran en Binance o Coinbase”, agregó.

Según García Cruz, las transferencias al país en dólares están prohibidas ya que un embargo impuesto por la Oficina de Control de Activos Extranjeros de Estados Unidos castiga a los bancos que realizan esas operaciones.

Sin embargo, dijo que algunos bancos europeos no están alcanzados por la prohibición y que se crearon agencias privadas de remesas como VaCuba y FonMoney para eludir las sanciones estadounidenses.

FonMoney, por ejemplo, recibe transferencias de euros, libras esterlinas, pesos mexicanos, pesos chilenos y francos suizos. Luego ofrece la conversión de ese dinero a pesos cubanos o dólares estadounidenses y el posterior envío a cuentas en Cuba o tarjetas prepagas, según consiga en su sitio web.

Los cubanos, además, no tienen acceso a productos de Visa o Mastercard debido al embargo comercial de Estados Unidos que rige actualmente, mientras que Western Union, el mayor servicio de transferencia de dinero a nivel global, suspendió las transferencias en dólares estadounidenses a Cuba en noviembre tras la última sanción de la administración Trump.

Por otra parte, una caída en la industria del turismo causada por la pandemia afectó a los cubanos que tenían ingresos en dólares dentro de la isla.

En junio Cuba anunció que dejaría de aceptar temporalmente depósitos bancarios en efectivo en dólares, argumentando que las sanciones de Estados Unidos restringen su capacidad de utilizar esa moneda en el extranjero. Las transferencias bancarias seguirían estando disponibles, anunció el gobierno.

La iniciativa

Según García Cruz, hasta ahora se han recaudado $2.000, y las donaciones hechas mediante criptomonedas están destinadas principalmente a cubanos que no reciben ayuda de sus familiares en el extranjero.

Otra empresa de criptomonedas que se ha sumado a la iniciativa de donaciones es Slyk.

“Puede ser utilizada en Cuba por personas que quieran recaudar donaciones con cualquier método de pago, desde Venmo hasta bitcoin”, dijo a CoinDesk Tim Parsa, CEO de Slyk.

Las donaciones se destinarán a la compra de medicamentos y mascarillas para ayudar a los cubanos de Matanzas y otras ciudades, agregó.

El community manager y representante de Slyk en Cuba es Camilo Noa, uno de las personas que ideó el proyecto de las donaciones.

“Hasta ahora hemos comprado medicamentos, mascarillas, alcohol, gel de manos, cloro, alimentos, productos de higiene personal, ropa y otros insumos. Las donaciones han sido entregadas a la gente, hospitales y centros de aislamiento”, dijo a CoinDesk.

Según García Cruz, ningún sistema o institución está supervisando las entregas. “Esto se trata de cubanos ayudando a cubanos, siendo solidarios y transparentes con quienes más lo necesitan”, dijo.

Liset ofrece actualizaciones en su cuenta de Twitter sobre las cantidades compradas, los precios y las personas a las que se les entregan las donaciones realizadas.

Después de que el gobierno comenzara a detener a manifestantes, las donaciones a Matanzas quedaron en suspenso, ya que la gente no quiere salir de sus casas, dijo Liset.

“Todo iba bien. Con permisos especiales, nosotros mismos estábamos enviando medicinas, suministros médicos, alimentos”, dijo.

Las donaciones se destinan actualmente al personal sanitario y a los pacientes de la llamada Zona Roja Covid-19 de Matanzas. Sin embargo, eso podría cambiar en el futuro, ya que García Cruz no ha dejado de recibir solicitudes de diferentes provincias en los últimos días.

“Otras provincias ya se están sumando a la iniciativa porque el caos es total y la necesidad de ayuda está en todas partes”, dijo García Cruz.

El Consejo para la Transición Democrática en Cuba, creado recientemente por opositores al gobierno local, emitió el sábado 10 de julio un comunicado sobre la crisis humanitaria en el que calificaba de “caótica” la situación sanitaria en Matanzas.

Según el medio opositor local 14ymedio, se registraron decenas de denuncias sobre el colapso del sistema sanitario, la muerte de pacientes en sus domicilios, la falta de medicamentos e insumos médicos, y la mala atención médica.

Como respuesta al papel de las redes sociales en las protestas, el régimen empezó a cortar el servicio de internet.

NetBlocks, un monitor global de Internet, publicó en su Twitter que las redes sociales y las plataformas de mensajería habían sido restringidas desde el proveedor estatal de Internet Etecsa.

Fuentes cubanas confirmaron a CoinDesk que hay cortes de Internet. En algunos casos, los entrevistados tardaron hasta un día en responder los mensajes de Telegram.

En este contexto, las transacciones de criptomonedas también se ven “considerablemente afectadas”, dijo Noa.

Según se observa en el registro público de QvaPay, ha disminuido la cantidad de donaciones en la última semana. De acuerdo a García Cruz, esto está ocurriendo por los cortes de internet y porque, consecuentemente, mucha gente no puede utilizar sus billeteras.

Fuera del sistema

Según García Cruz, los criptoactivos más utilizados para las donaciones son bitcoin y USDT, aunque la plataforma también acepta litecoin, tron y bitcoin cash, entre otros.

Una vez recibidas las donaciones en criptomonedas, éstas se cambian en el mercado paralelo a fiat y luego el dinero es utilizado en las tiendas MLC —moneda libre convertible— donde se pueden adquirir productos solo con monedas extranjeras, añadió García Cruz.

Tras generar el enojo de una parte de la población, varias de estas tiendas fueron saqueadas recientemente.

En el último año el número de tiendas MLC se ha multiplicado en el país y ha concentrado la mayor parte de los alimentos y productos básicos. Sin embargo, la mayoría de los cubanos no tiene acceso a ellas porque no recibe salarios en dólares o euros.

El 1 de enero Cuba puso fin a su sistema de doble moneda, tras eliminar el peso convertible —cotizaba 1 a 1 con el dólar estadounidense— y dejar en circulación al peso cubano, tras una fuerte devaluación que lo llevó a cotizar a $0,042 en la actualidad.

Sin embargo, García Cruz dijo que la tasa de cambio en el mercado negro es más alta —de 60 pesos cubanos por dólar—, mientras que las criptomonedas se cambian a 50 pesos cubanos debido a un factor de oferta y demanda.

Noa dijo que la mayoría de los cubanos no utiliza criptomonedas y que quienes buscan ayuda priorizan obtener dinero en efectivo para comprar los alimentos y medicinas que necesitan. García Cruz, sin embargo, estima que existe una gran comunidad cripto, de aproximadamente 200.000 personas en Cuba.

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Bank of America permite el trading de futuros de bitcoin para algunos clientes

5 years 3 months ago

Bank of America, el segundo banco más grande de Estados Unidos, ha aprobado la negociación de futuros de bitcoin para algunos clientes, según dos personas con conocimiento del asunto que hablaron bajo condición de anonimato.

Al igual que la mayoría de las instituciones, el banco ha sido conservador en su acercamiento al sector de las criptomonedas, pero debido a la gran cantidad de margen requerido para negociar los futuros ahora está permitiendo que algunos clientes accedan a ese mercado, dijo una de las fuentes. 

Algunos clientes se están preparando para operar con futuros de bitcoin, que se liquidan en efectivo, y es posible que uno o dos ya hayan empezado a operar, dijo la otra fuente.

Related: Por qué bitcoin podría ser algo bueno para El Salvador

Read this article in English.

Varios bancos de inversión están permitiendo a sus clientes invertir en productos cripto. En marzo Goldman Sachs confirmó sus planes de relanzar su mesa de trading de criptomonedas después de un paréntesis de tres años, y en mayo el banco de inversión comenzó a comprar y vender futuros de bitcoin en operaciones en bloque a través de Chicago Mercantile Exchange (CME) Group, utilizando a Cumberland DRW como su socio comercial.

Bank of America también utilizará los futuros de CME, según una de las fuentes.

Bank of America declinó hacer comentarios.

Related: En medio de la crisis sanitaria y el embargo económico, cubanos utilizan criptomonedas para ayudar a sus compatriotas

A principios de este mes se supo que el banco con sede en Charlotte, Carolina del Norte, había creado un equipo dedicado a investigar las criptodivisas y las tecnologías relacionadas. En 2018 Bank of America bloqueó a asesores financieros y a clientes la negociación de inversiones relacionadas con bitcoin.

Los futuros de bitcoin de CME se lanzaron en 2017. En mayo, CME lanzó sus productos de futuros “Micro Bitcoin” en un intento de capitalizar el repunte del precio de esa criptomoneda. 

A principios de este año CME ocupó el primer puesto en la lista de las mayores plataformas de negociación de futuros de bitcoin, lo que indica un aumento continuo de la participación institucional. 

El total de intereses abiertos en el mercado de futuros de bitcoin es de $11.300 millones, un 59% menos que el máximo alcanzado el 13 de abril, de $27.300 millones, según Arcane Research.

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Presidential Advisory Group Promises Stablecoin Recommendations

5 years 3 months ago

The President’s Working Group for Financial Markets, a presidential advisory group, plans to issue recommendations about stablecoin regulations within the next few months, it announced Monday.

According to a readout published by the U.S. Treasury Department, the highly anticipated meeting examined stablecoin growth, use cases and possible threats. The meeting was first announced on Friday, capping off a recent rise in attention on stablecoins and their role in the cryptocurrency economy.

“The group also heard a presentation from Treasury staff on the preparation of a report on stablecoins, which would discuss their potential benefits and risks, the current U.S. regulatory framework, and the development of recommendations for addressing any regulatory gaps,” the readout said.

Related: If Stablecoins Cause Instability, Regulators Have Themselves to Blame

Federal Deposit Insurance Corp. Chairwoman Jelena McWilliams, Acting Comptroller of the Currency Michael Hsu, Treasury Under Secretary for Domestic Finance J. Nellie Liang and Federal Reserve Vice Chairman for Supervision Randal Quarles joined Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, Securities and Exchange Commission Chairman Gary Gensler and Acting Commodities Futures Trading Commission chief Rostin Behnam during the meeting.

The meeting came just days after Federal Reserve attorney Jeffery Zhang (writing in a personal capacity and not for the Fed) and Yale University economist Gary Gorton published a paper saying stablecoins could pose a systemic risk to the financial system.

The paper likened stablecoins to the wildcat banks of the 1800s, pointing to a lack of insurance, the risk of bank runs and the chances of a stablecoin losing its peg when a user tries to redeem or spend it.

It’s unclear when specifically the Treasury Department intends to publish its recommendations, or whether it will focus more on congressional action or agency rulemaking.

Related: Why Central Bankers Invoke Free Banking to Attack Stablecoins

“The Secretary underscored the need to act quickly to ensure there is an appropriate U.S. regulatory framework in place,” Monday’s readout said.

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Market Wrap: Sentiment Away From Risk Sends Bitcoin Toward $30K

5 years 3 months ago

Bitcoin traded lower on Monday, mirroring declines in traditional markets as investors pull away from risky assets because of concerns about weaker monetary and fiscal stimulus and rising COVID-19 cases, including those caused by the Delta variant. 

Bitcoin was trading at around $30,600 at press time and is down about 3% over the past 24 hours. The world’s largest cryptocurrency is up about 4% year to date, compared with a roughly 12% return for the S&P 500 Index.

Latest prices

Cryptocurrencies:

  • Bitcoin (BTC) $30755.8, -2.78%
  • Ether (ETH) $1825.6, -3.96%

Related: Polygon Launches Unit to Grow Blockchain Gaming, NFTs

Traditional markets:

  • S&P 500: 4258.7, -1.58%
  • Gold: $1811, -0.05%
  • 10-year Treasury yield closed at 1.2%, compared with 1.294% on Friday
Macro and regulatory headwinds

Regulatory scrutiny regarding stablecoins is also weighing on cryptocurrencies. The People’s Bank of China (PBOC) issued a white paper on Friday outlining initial research for the nation’s digital currency project, which appears to challenge existing cryptocurrencies and stablecoins. 

“Cryptocurrencies are mostly speculative instruments, and therefore pose potential risks to financial security and social stability,” the PBOC’s white paper stated.

“Some commercial institutions even plan to launch global stablecoins, which will bring three risks and challenges to the international monetary system, payment and clearing system, monetary policies, cross-border capital flow management, etc.,” the report said.

Related: Bitcoin Miner Iris Energy Aims to Raise $200M in Funding Before Nasdaq Listing: Report

Another source of selling pressure across risk assets could be the reduction of government stimulus. “Too much stimulus breeds complacency,” MRB Partners wrote in a research note published on Friday. 

MRB also noted widespread asset price inflation, which can lead to market imbalances similar to an episode in Japan in the 1980s that preceded a decade of low investment returns.

Bitcoin market parallels

The chart below shows bitcoin’s current range, which is similar to the sideways pattern of between $5,900 and $7,400 in 2018. The previous range, although more volatile than the current pattern, preceded a nearly 45% sell-off, which extended the bear market until prices recovered in mid-2019. 

A decline was also seen in ether (ETH) below the $400 price level in 2018, similar to the drop to below $2,000 last week.

Bitcoin volatility trap

Bitcoin’s near-term volatility is starting to rise after declining from peak levels in June. Some analysts expect selling pressure could increase, causing bitcoin to break below $30,000 support.

“Front-end vols have been hit the hardest, creating a very steep volatility term structure,” QCP Capital wrote in a Telegram chat. “It makes sense to roll short July positions to September given the significant dip in front-end vols.”

“Front-end vols” refers to “short-term volatility.”

“Bitcoin volatility has started to spike up and is trading close to 80% for July expiry,” Pankaj Balani, CEO of Delta Exchange, wrote in an email to CoinDesk. “We can see sharp moves on the downside if BTC breaks below $30,000 convincingly.”

Balani also noted that options sellers have become more aggressive as bitcoin trades in a tight range. There has been more put writing at $30,000 and $32,000 strikes on the downside, he said. 

Ethereum funds capture inflows

Digital-asset funds have attracted capital over the past two weeks, albeit at a slower pace as investors remain cautious after the crypto crash in May. It appears that investors are warming up to ether, which saw a third consecutive week of inflows, totaling $11.7 million, according to a report by CoinShares.

Stablecoin regulations

As the President’s Working Group on Financial Markets discusses stablecoins at a meeting today, debates about how stablecoins should be regulated heated up. CoinDesk Columnist JP Koning wrote that regulators may have contributed to the fast growth of stablecoin supply because of their failure to close the “pseudonymity loophole” in such financial products earlier. 

In an academic paper titled “Taming Wildcat Stablecoins” released Saturday, Yale economist Gary Gorton and U.S. Federal Reserve attorney Jeffery Zhang said that without proper regulation, the world of stablecoins could evolve into one reminiscent of the 19th century’s free banking period in the U.S. 

It is not the first time for the analogy to be used, and Nic Carter, another CoinDesk columnist explained why. 

Altcoin roundup
  • Polygon Launches New Unit: Polygon has launched Polygon Studios, a unit that aims to advance blockchain gaming and non-fungible tokens (NFTs). The unit will help “bridge the gap between Web 2 and Web 3 gaming,” according to Polygon. The division will look to attract big brands and franchises looking to launch games and NFTs.
  • Grayscale Unveils DeFi Fund: Grayscale, the largest cryptocurrency investment manager, said Monday it has started a fund focused on decentralized finance (DeFi) tokens, based on a new DeFi-specific index produced by CoinDesk’s TradeBlock division. The companies, both subsidiaries of CoinDesk parent Digital Currency Group (DCG), wrote in a joint press release the Grayscale DeFi Fund provides “exposure to a selection of industry-leading DeFi protocols through a market-capitalization weighted portfolio.”
  • ARK Investment Increases Square Holdings: ARK Investment Management increased its holdings of payments services firm Square after Jack Dorsey, Square’s founder, announced Friday the company is creating an “open developer platform.” Following the announcement, Cathie Wood’s New York-based ARK Investment purchased a total of 225,937 shares of Square, according to its daily holding files.
Relevant news Other markets

All digital assets on CoinDesk 20 ended up lower on Monday. 

Notable losers: 

the graph (GRT) -8.56% 

polkadot (DOT) -7.98%

aave (AAVE) -7.12%

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Ripple Cites SEC Commissioners’ Remarks to Support Dismissal of Case

5 years 3 months ago

Ripple lawyers submitted a supplemental letter Monday to support their request for dismissal of an ongoing Securities and Exchange Commission case against them.

The document notes a July 14 statement by SEC commissioners Hester Peirce and Elad Roisman opposing the agency’s enforcement action against Blotics, the operator of the once-popular cryptocurrency website Coinschedule.

The lawyers representing Ripple CEO Brad Garlinghouse and co-founder Chris Larsen highlighted the commissioners’ criticism that the enforcement action against Coinschedule did not pinpoint which tokens the site promoted were securities, as well as wider uncertainty about how tokens are defined.

Related: SEC Files Fraud Charges Against Florida Man in Crypto App Scam

“The Public Statement confirms the Individual Defendants’ arguments that there was (and remains) significant regulatory uncertainty regarding when digital assets may be classified as securities by the SEC,” the Ripple lawyers wrote in their filing.

The lawyers added: “The SEC’s aiding and abetting claim requires that ‘it show that the Individual Defendants knew or recklessly disregarded that Ripple’s offerings and sales of XRP required registration as securities and that those transactions were improper.’”

The SEC alleged in December 2020 that Ripple had conducted an ongoing and unregistered securities sale via the XRP token closely associated with its brand.

The SEC alleged Coinschedule, which profiled initial coin offerings (ICOs) from 2016 to 2019, secretly received compensation from digital asset issuers it was profiling. Blotics agreed to a settlement that included a penalty of $153,434 and an agreement to stop violating the anti-touting provisions.

Related: Ripple Can Depose Former SEC Official in Lawsuit: Report

“There is a decided lack of clarity for market participants around the application of the securities laws to digital assets and their trading, as is evidenced by the requests each of us receives for clarity and the consistent outreach to the Commission staff for no-action and other relief,” Peirce and Roisman wrote following the settlement.

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SEC Files Fraud Charges Against Florida Man in Crypto App Scam

5 years 3 months ago

The U.S. Securities and Exchange Commission has charged a Jacksonville, Fla., man with defrauding investors in two companies he controlled, including one that the SEC says fraudulently claimed to be developing a crypto mobile payments application.

Aron Govil, CEO of mobile application developer Telidyne, allegedly told investors between April 2019 and May 2020 that the company had developed the “Teli App” that allowed users to conduct transactions in cryptocurrencies on a mobile phone, and had also started to develop an app that detected COVID-19. According to the SEC’s complaint, the “Teli App” wasn’t functional and the company hadn’t started work on the COVID-19 detection app. 

Govil is also being charged with separate crimes related to his leadership of technology company Cemtrex Inc. The complaint alleges that Govil misappropriated over $7 million of Cemtrex investor funds between April 2016 and January 2018, and engaged in illegal stock scalping by secretly selling Cemtrex stock while paying stock promoters to recommend it. It also charged him with insider trading. 

Related: Ripple Cites SEC Commissioners’ Remarks to Support Dismissal of Case

The charges against Govil are part of the SEC’s crackdown on crypto-related fraud.

Govil has agreed to pay a $626,782 disgorgement of funds plus interest and a civil penalty of $620,000. Govil may also be subject to additional penalties and disgorgement if the court deems them appropriate.

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Polygon Launches Unit to Grow Blockchain Gaming, NFTs

5 years 3 months ago

Polygon has launched Polygon Studios, focused on helping to advance blockchain gaming and non-fungible tokens (NFTs).

  • The Ethereum-scaling project said Monday the new unit will “bridge the gap between Web 2 and Web 3 gaming.”
  • The division will look to attract big brands and franchises looking to launch games and NFTs.
  • Polygon says it already has more than 100,000 gamers and over 500 decentralized apps, including gaming projects such as Aavegotichi, Decentraland and Skyweaver, and NFT marketplace OpenSea.
  • Polygon Gaming Studio aims to help developers create blockchain-enabled gaming, while Polygon NFT Studio will aid the development of custom NFT models and marketplaces.
  • Polygon has attained a great deal of popularity among developers seeking to escape the high transaction fees on the Ethereum mainnet and in May attracted an undisclosed investment from billionaire investor Mark Cuban.

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Bitcoin Miner Iris Energy Aims to Raise $200M in Funding Before Nasdaq Listing: Report

5 years 3 months ago

Australian bitcoin mining firm Iris Energy is looking to raise $200 million in a new funding round before it seeks a direct listing on the Nasdaq, according to a Bloomberg report. 

  • Iris Energy, which is based in Sydney and emphasizes its use of renewable energy, has been meeting prospective investors and is working with an adviser on the round, Bloomberg said, citing a person familiar with the matter.
  • The money raised will be used to help the firm prepare for its Nasdaq listing as soon as this year, Bloomberg said. Discussions are ongoing and the plans are not final, however, according to Bloomberg’s source.
  • In March, it emerged that Iris was increasing from $15.5 million to $31 million the amount it was looking to raise ahead of its expected initial public offering. Bloomberg reports the company ultimately raised $81.3 million in that round.
  • Iris Energy had not responded to an emailed request for comment by press time.
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Investors Crawl Back to Ether Funds as Bitcoin Outflows Rise

5 years 3 months ago

Digital-asset funds have attracted capital over the past two weeks, albeit at a slower pace as investors remain cautious after the crypto crash in May. It appears that investors are warming up ether, which saw a third consecutive week of inflows totaling $11.7 million, according to a report by CoinShares.

Overall, net inflows to digital asset funds totaled $2.9 million for the week ending July 9, down from $4 million during the previous week. Fund flows have weakened following a period of strong investor demand during bitcoin’s rally in Q4 2020.

  • Minor outflows were seen in bitcoin investment products totaling $7 million last week, which coincided with slowing trading volumes, according to CoinShares.
  • “In recent weeks there has been a regional divide in bitcoin inflows, with North American providers seeing consistent inflows while their European counterparts have continued to see outflows, suggesting a geographic divergence in sentiment is present.”
  • Multi-asset investment products were the most popular last week with inflows totaling $1.2 million, and now represent 16.5% of total assets under management, according to CoinShares.
  • Aside from ether, investors have also flocked to other altcoins such as Binance coin and cardano, which saw inflows of $400,000 and $600,000, respectively.
  • Increased altcoin flows, although small compared to bitcoin, imply investors are starting to diversify across their digital asset holdings.
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Bitcoin Drops as Investors Buy $22K and $20K Puts

5 years 3 months ago

Bitcoin is falling a day after the options market saw increased demand for out-of-the-money or lower strike put options at $22,000 and $20,000.

The leading cryptocurrency was trading at a three-week low of $30,700 at press time, representing a 3.5% drop on the day. The decline has flipped the crucial 50-week simple moving average (SMA) support of $32,250 into resistance.

On Sunday, 500 contracts of the $22,000 put option expiring on Dec. 31 changed hands via the institution-focused over-the-counter (OTC) desk Paradigm. Similar volume crossed the tape for the $20,000 put expiring on Dec. 31.

Related: Market Wrap: Sentiment Away From Risk Sends Bitcoin Toward $30K

“There was interest to buy BTC puts for December in a significant size,” Darius Sit, CEO of the Singapore-based QCP Capital, said. “We made the market for most of the large block trades over the weekend. There was decent interest to sell September BTC puts as well.”

Market makers are always on the opposite side of traders/investors and run a direction-neutral portfolio. That essentially means buyers of the $20,000 and $22,000 puts expiring on Dec. 31 were investors, most likely adding downside hedges against long positions in the spot/futures market.

A put option gives the purchaser the right but not the obligation to sell the underlying asset at a predetermined price on or before a specific date. A put buyer is implicitly bearish on the underlying asset, in this case, bitcoin.

Overall, the options market is still biased bullish for the long term. The six-month put-call skew, which measures the cost of puts relative to calls, remains entrenched below zero. In plain English, longer duration calls or bullish bets are priced higher than puts.

Related: Bitcoin Miner Iris Energy Aims to Raise $200M in Funding Before Nasdaq Listing: Report

However, the one-week, one-month and three-month put-call skews are indicating a negative bias with bearish prints.

Also read: Why Bitcoin Needs to Defend $30K

Bitcoin is currently changing hands near the lower end of the two-month-long trading range of $30,000 to $40,000.

If the support at $30,000 gives away, traders who sold puts at $30,000 over the past few weeks may resort to hedging – taking a short position in the futures or spot market – leading to a deeper decline.

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Biden Accuses Chinese State Actors of Ransomware, Cryptojacking Attacks

5 years 3 months ago

The U.S. president is accusing the Chinese government of supporting cyberattacks, including ransomware, cryptojacking, digital extortion and theft.

The allegations were announced Monday as part of a broader statement claiming China’s Ministry of State Security (MSS) also had a hand in a massive Microsoft Exchange email hack earlier this year that compromised some 30,000 organizations using the service.

The federal government is also charging four individuals it claims work for the MSS with espionage and computer damage crimes.

Related: Anatomy of Ransomware Attack: Chat Support, a Discount and a Surcharge for Bitcoin

“Hackers with a history of working for the PRC Ministry of State Security (MSS) have engaged in ransomware attacks, cyber enabled extortion, crypto-jacking, and rank theft from victims around the world, all for financial gain,” a White House press release said.

Cyberattacks have been on the rise, with ransomware attacks in particular making headlines this year after impacting critical infrastructure. The U.S. government has already announced a new initiative to tackle these sorts of digital crimes, including finding ways of preventing or tracking crypto payments during these attacks.

It also reportedly plans to launch a ransomware task force.

The U.S. government highlighted these efforts in a press call on Sunday.

Related: US State Department Offers to Pay for Cybercrime Tips With Crypto

“We have our four-part counter-ransomware strategy – which you all know – from resilience, to focusing on cryptocurrencies, to working with countries around the world to build a coalition to hold Russia and other countries accountable, to really focusing on disrupting actor’s infrastructure, and funding payments,” said an administration official speaking on background.

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Turkey Plans to Present Law on Cryptocurrencies in October: Report

5 years 3 months ago

The Turkish government plans to present a bill regulating cryptocurrencies to Parliament in October, Sabah reported.

  • The bill will be modeled on legislation in Europe and the U.S., Sabah said Monday, citing Deputy Minister of Treasury and Finance Sakir Ercan Gul.
  • Crypto-asset companies will be supervised by the Capital Markets Board.
  • The legislation will supervise trading, strengthen protections for investors and help prevent the use of crypto for illicit purposes.
  • Tax will be charged on holdings above a certain amount, and capital requirements will be introduced for companies with crypto exposure.
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Grayscale Unveils DeFi Fund Linked to New CoinDesk Index

5 years 3 months ago

Grayscale, the largest cryptocurrency investment manager, said Monday it has started a fund focused on decentralized finance (DeFi) tokens, based on a new DeFi-specific index produced by CoinDesk’s TradeBlock division. 

The companies, both subsidiaries of CoinDesk parent Digital Currency Group (DCG), wrote in a joint press release the Grayscale DeFi Fund provides “exposure to a selection of industry-leading DeFi protocols through a market-capitalization weighted portfolio.” The idea is that investors can allocate money toward DeFi without having to buy the tokens directly. 

DeFi, which consists of blockchain-based software protocols designed for the trading and lending of cryptocurrencies, is one of the fastest-growing segments of the digital-asset industry. The amount of collateral locked into the protocols has increased 19-fold over the past year to about $50 billion, and prices for many of the platforms’ associated tokens have soared. 

Related: Ethereum Documentary Featuring Vitalik Buterin Raises 1,036 ETH

The fund is only open to “eligible individual and institutional accredited investors,” according to the press release. Grayscale said it “intends to attempt to have shares of this new product quoted on a secondary market” but added that “there is no guarantee this will be successful.” 

The CoinDesk DeFi Index is a new product from TradeBlock, one of the first firms to develop an index for professional investors to track bitcoin when it launched the XBX Index in 2014. CoinDesk announced its purchase of TradeBlock for an undisclosed sum in January.

The new index joins a growing list of offerings designed to help investors track prices for DeFi tokens and invest in them. Last month, the technology firm Amun launched two new crypto token products, the DeFi Index Token and DeFi Momentum Index.    

The cryptocurrency data firm Messari has a dedicated screening tool tracking 164 DeFi tokens. The average price of the tokens is up 395% this year, versus 8.3% for bitcoin, the largest cryptocurrency by market value, and 160% for No. 2 ether.  

Related: Ethereum Co-Founder Anthony Di Iorio to Sell Decentral and Cut Major Ties to Cryptocurrency

According to the press release, the CoinDesk DeFi index aims to provide a “broad-based, benchmark representation of DeFi protocols,” with assets weighted by their market capitalization.

As of July 1, 2021, the CoinDesk DeFi Index consisted of the following assets, with their market-capitalization-based weightings:

  • Uniswap (UNI), 49.95%
  • Aave (AAVE), 10.25%
  • Compound (COMP), 8.38%
  • Curve (CRV), 7.44%
  • MakerDAO (MKR), 6.49%
  • SushiSwap (SUSHI), 4.83%
  • Synthetix (SNX), 4.43%
  • Yearn Finance (YFI), 3.31%
  • UMA Protocol (UMA), 2.93%
  • Bancor Network Token (BNT), 2.00%
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Ethereum Documentary Featuring Vitalik Buterin Raises 1,036 ETH

5 years 3 months ago

The documentary “Ethereum: The Infinite Garden,” which will feature Vitalik Buterin, has raised a total of 1,035.96 ETH ($1.9 million), surpassing its funding target of 750 ETH.

  • The filmmakers say the project will be the first feature-length documentary about Ethereum, and will include interviews with people involved in the development of the world computer, including Buterin and Aya Miyaguchi, the executive director of the Ethereum Foundation.
  • Fundraising for the documentary took place over three days on the crowdfunding site Mirror and ended July 16.
  • Producers will also be working with pplpleasr to drop a series of Infinite Garden NFTs tied to select on-screen credits in the film.
  • Film production company Optimist is behind the documentary.

Read more: Vitalik Buterin Is Involved in a New Documentary About Ethereum

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