Bankrupt BlockFi Aims to Return 100% of Eligible Claims amid Recovery from FTX

The bankruptcy estate of the now-collapsed crypto lending platform BlockFi announced yesterday (Thursday) its plans to return 100 percent of the distressed clients claims. However, it will calculate the value of the claims based on the date of the bankruptcy and not the current crypto market value.

Recovery of Funds from FTX

The return of the claim in its entirety became possible as the bankruptcy administrator of the bankrupt BlockFi successfully sold outstanding claims against FTX for an amount in excess of the face value of the claims.

While these recoveries cannot undo the impact of the platform pause, efficiently distributing 100% of the dollarised value of allowed claims to eligible clients in the near future is an extraordinarily positive outcome, the announcement noted.

BlockFi entered into bankruptcy at the end of November 2022 after the collapse of FTX. Days before its bankruptcy filing, the platform even suspended withdrawals for its users, citing the lack of clarity regarding the situation with FTX.

Meanwhile, FTX is also preparing to return more than 100 percent of the claims to its distressed creditors, as it managed to recover significant cash after selling its assets. Similar to BlockFi, other creditors of FTX also sold their claims. Earlier, European digital asset investment company CoinShares received a return of £31.32 million on a £26.6 million claim.

Final Distribution in 90 Days

Meanwhile, BlockFi also highlighted that it is working to make final distributions as quickly as possible.

Although the US-based creditors of the collapsed crypto lending platform will likely receive the final distributions within the next 90 days, the international clients might have to wait longer. US-based clients were also instructed to set up their Coinbase accounts before 23 August to receive the claims.

At this time, international clients can expect to receive their funds on a longer timeline due to certain Bermuda regulatory requirements, BlockFis announcement added. These regulatory requirements may require further identity verification and Know Your Customer diligence for distributions that have not been made.

View Details

FCA Penalizes Coinbase's CBPL £3.5 Million for Violating High-Risk Customer Restrictions

CB Payments Limited (CBPL) has been fined £3,503,546 by theFinancial Conduct Authority (FCA) for breaching a regulatory requirement. Thefine is a result of CBPL's failure to comply with a rule that prevented it fromoffering services to high-risk customers.

CBPL, part of the Coinbase Group, operates a globalcryptoasset trading platform. While CBPL itself does not handle cryptoassettransactions, it facilitates customer access to these transactions throughother Coinbase Group entities. The firm is not registered for crypto asset activities in the UK.

CBPL Breaches High-Risk Limits

In October 2020, CBPL agreed to a voluntary requirement(VREQ) after discussions with the FCA. This requirement was imposed due toconcerns about the effectiveness of CBPLs financial crime control framework.The VREQ prohibited CBPL from onboarding new high-risk customers until itimproved its control measures.

Despite this restriction, CBPL onboarded and providede-money services to 13,416 high-risk customers. Approximately 31 percent ofthese customers deposited about USD $24.9 million. These funds were used forwithdrawals and cryptoasset transactions through other entities in the CoinbaseGroup, totaling around USD $226 million.

We've fined CB Payments Ltd £3,503,546 for repeatedly breaching a requirement that prevented the firm from offering services to high-risk customers. #cryptoassets #CryptoTrading #FinancialRegulation https://t.co/etahpXO3q3

First FCA Fine under Regulations

The breaches occurred because CBPL did not properly design,test, implement, or monitor the controls necessary to ensure compliance withthe VREQ.

The firm failed to account for all potential onboarding methods anddid not adequately monitor compliance. As a result, repeated and significantbreaches went undetected for nearly two years.

Therese Chambers, Joint Executive Director of Enforcementand Market Oversight at the FCA, stated: The money laundering risks associatedwith crypto are obvious and firms must take them seriously. Firms like CBPLthat enable crypto trading need to have strong financial crime controls.

CBPL'scontrols had significant weaknesses, which is why the requirements wereimposed. However, CBPL repeatedly breached those requirements. This increasedthe risk that criminals could use CBPL to launder the proceeds of crime. Wewill not tolerate such laxity, which jeopardizes the integrity of our markets.

This enforcement action marks the first use of the FCA's powers under the Electronic Money Regulations 2011. CBPL agreed to resolve thematter and received a 30% discount on the fine for doing so.

View Details

HSBC Australia Blocks Crypto Transactions amid $171M Loss

HSBC's Australian branch has informed customers that it hasbegun blocking payments to cryptocurrency exchanges starting July 24. The bankcited scams as the reason for this action.

HSBC Blocks Crypto Payments

In a July 24 email to customers, HSBC Australia explainedits new safety measures. The bank stated: From 24 July 2024,HSBC will block payments from bank accounts and credit cards that we reasonablybelieve are being made to cryptocurrency exchanges, for your protection.The email also advised customers to find alternative ways to make payments tothese exchanges.

HSBC supported its decision by referencing data fromAustralia's competition and consumer regulator, which showed Australians lostup to $171 million in investment scams in 2023. The bank apologized for theinconvenience but emphasized that its priority is keeping customer money safe.

HSBC Australia halts crypto payments due to scam concerns!Customers can no longer make payments to crypto exchanges.Is this a sign of tighter regulations to come?

Bendigo Bank Blocks Crypto

Following HSBC's move, Bendigo Bank also decided to blockpayments to cryptocurrency exchanges. This bank similarly cited the need toprotect customers from investment scams.

Amy-Rose Goodey, Managing Director of the Digital EconomyCouncil of Australia (DECA), stated that DECA was not informed in advance ofHSBC's decision. She told Cointelegraph that HSBC's decision highlights theongoing challenges between Australian banks and the cryptocurrency sector.

Goodey described the move as part of a concerning trend ofrestrictions that affect the digital currency community.

Goodey emphasized the need for dialogue and improvedregulatory frameworks that balance innovation and risk management. She warnedthat without dialogue, more Australians could lose their financialright to participate in the digital economy.

Goodey also mentioned that establishing clear, fair,and forward-thinking regulations would help banks and industry playerscombat scams without hindering innovation. She noted that DECA has madeprogress since 2023, including being added to the advisory board of theNational Anti-Scam Center.

HSBC clarified that it would still accept customer paymentscoming from cryptocurrency exchanges and that other banking services wouldcontinue as usual. HSBC Australia currently serves 1.5 million customersthrough 45 branches across the country.

View Details

WazirX Halts Withdrawals after $235 Million Breach Linked to Tornado Cash

Today (Thursday), Cyvers Alert, a Web3 security firm,announced the detection of multiple suspicious transactions involving WazirXsSafe Multisig wallet on Ethereum. The firm identified that $234.9 million infunds from the wallet were transferred to a new address.

Each transactions caller was funded by Tornado Cash, adecentralized protocol for private transactions. The new address has alreadyswapped the transferred funds, which comprised Tether.

Funds Shifted Secretly

Crypto sleuth ZachXBT, in a Telegram post in theInvestigations by ZachXBT channel, announced that the suspected primaryattacker address still has over $104 million to dump. A review of the addressholdings revealed the wallet mainly contains approximately $100 million inShiba Inu.

It also holds $4.7 million in FLOKI, $3.2 million in Fantom, $2.8million in Chainlink, and $2.3 million in Fetch.ai. The remaining fundsare split between a wide range of other tokens.

More than $230M of assets have been abnormally transferred from the #WazirX(@WazirXIndia) wallet to the wallet"0x04b2".Currently, wallet "0x04b2" is dumping these assets, and has dumped 640.27B $PEPE($7.6M).https://t.co/wem0wVk7OH pic.twitter.com/66Poia2qAk

In response to the security breach, WazirX has temporarilypaused the withdrawal of cryptocurrencies and INR on its platform. The exchangeposted on X, formerly known as Twitter, explaining that they are activelyinvestigating the incident and will provide updates as the situation develops.

Increasing Crypto Security Breaches

Earlier, CoinStats, a crypto portfolio management platform, experienceda major security breach, as reported by Finance Magnates. Thissophisticated hack involved social engineering, tricking an employee intocompromising the company's AWS infrastructure, resulting in the theft of $2million in crypto assets.

Cybercriminalsexploited Orbit Bridge, a service of the cross-chain protocol Orbit Chain,stealing about $82 million in cryptocurrencies. Orbit Chain confirmed theattack occurred on December 31, 2023, and is currently investigating the issuewith international law enforcement.

View Details

SEC Chair Warns Crypto Exchanges: Actions Speak Louder than Disclosures

US Securities and Exchange Commission (SEC) Chairman GaryGensler delivered a cautionary message to cryptocurrency exchanges,underscoring that merely providing disclosures to investors does not immunizethem from regulatory scrutiny.

Crypto Disclosure Gaps and Regulatory Concerns

Speaking in an interview with CNBC yesterday (Wednesday),Gensler stressed the inadequacy of disclosures alone, especially if cryptoexchanges are involved in activities like market manipulation or disseminationof misleading information affecting investment decisions.

He highlighted the prevalent absence of disclosures fromnumerous crypto firms, operating in a manner that would not meet the standardsexpected in traditional financial markets. The SEC has intensified its enforcement efforts in thedigital assets realm, particularly following the collapse of cryptocurrencyexchange FTX in late 2022.

The agency is actively pursuing legal actions against someof the major players in the US crypto market, including an ongoing case againstCoinbase, the largest exchange in the country by daily trading volume.

News Flash - 5 Jun 2024 !1 @SECGov Chair @GaryGensler Asserts Disclosures Alone Insufficient to Protect #Crypto Exchanges #SEC Chair Gary Gensler stated in a #CNBC interview that crypto exchanges providing disclosures are still subject to enforcement actions by the agency. pic.twitter.com/SD4quYVrM7

Balanced Approach on Crypto ETFs

Gensler adopted a nuanced approach when discussing thepotential for crypto exchange-traded funds (ETFs), citing examples like thoseinvolving the Solana memecoin BONK.

The year is 2024 Jim Cramer is asking Gary Gensler if we should have a BONK ETF on CNBCthis is real life pic.twitter.com/5zyCzDZwAq

This moderated stance aligns with the SEC's recent greenlight on spot Ethereum ETFs, a decision that surprised many given previousconsiderations of Ethereum as an unregistered security. The SEC's approval of Ethereum ETFs has spurred discussionson the agency's openness to considering other altcoin spot ETFs.

Observers speculate that political dynamics, including theinfluence of the crypto lobby and the impending 2024 election, may havecontributed to the SEC's evolving position.

View Details

MiCA Deadline in 3 Days, Only 9% of Companies Fully Prepared: Report

A recent report highlights the impending impact of theEuropean Union's Markets in Crypto Assets Regulation (MiCA) on cryptocurrencytrading surveillance. Commissioned by Eventus, the report, "The Impact ofMiCA on Crypto Market Surveillance: Insights and Challenges," draws frominterviews with senior executives at 68 firms involved in crypto trade, conductedby Acuiti.

MiCA Compliance: Progress and Challenges

MiCA, a pioneering regulatory framework within a majorfinancial jurisdiction, is prompting a surge in efforts to establishcomprehensive market surveillance systems across the industry. The regulation,akin to the EU's Market Abuse Regulation (MAR), mandates stringent requirementsfor market participants, ushering in new operational standards.

According to the findings, only 9% of surveyed firms fullycomply with MiCA requirements, with a significant 25% yet to commencepreparations. As MiCA's implementation deadline approaches at year's end, firmsare urged to ascertain their regulatory scope promptly and initiate compliancemeasures.

Despite challenges, such as identifying suitable third-partysoftware vendors and navigating compliance costs, the report notes a growingsophistication in market surveillance practices. Even among firms initiallyexcluded from MiCA's scope, 57% already employ robust surveillance systems.

"For firms that are not already operating under MIFIDII, MiCA will present a significant operational lift to become compliant, andit is no surprise that we found that firms were looking to third-party vendorsto assist them in their preparations," said Ross Lancaster, Head ofResearch at Acuiti.

"There is a relative lack of awareness among some areasin the market as to who is in scope, which will need to be addressed if firmsare going to have time to get ready for compliance."

Only 9% of firms are ready for EU's crypto regulation, Acuiti report showsThe EU's Markets in Crypto Assets Regulation (MiCA) is set to transform crypto trading oversight, but industry readiness varies widely. A recent Acuiti study, commissioned by Eventus, reveals that only 9%

Outsourcing Trends and Compliance Costs

The study highlights consultations on MiCA's final technicalstandards, revealing that 25% of affected firms have yet to initiatepreparations, while others are at various stages of readiness. Notably, 64% offirms intend to outsource system development, anticipating challenges in vendorselection and resource allocation.

Key concerns among firms anticipating MiCA's impact includecompliance costs and securing qualified personnel, reflecting broader industryadjustments to regulatory mandates. As regulations change, industry leaders must adjust to newrules under MiCA.

Eventus CEO Travis Schwab said: "We investedsignificantly beginning several years ago in ensuring we could meet the needsof this sector, including the ability to handle real-time alert generationcovering billions of messages per day, 24x7. Regulation in the EU is only thebeginning of new regulatory guidelines we expect to see in jurisdictions acrossthe globe in the coming years."

View Details

American Duo Gets Prison Time for Manipulating Crypto Price

Michael Kane and Shane Hampton have received jail terms for manipulating the price of a cryptocurrency of their company, Hydrogen Technologies, with wash and spoof trading, thus defrauding investors.

Jail For Market Manipulation

According to the announcement by the Department of Justice yesterday (Tuesday), Kane, co-founder and CEO of the company, received three years and nine months in prison, while Hampton, the Head of Financial Engineering, received two years and 11 months.

The sentencing came after Kane pled guilty to one count of conspiracy to commit securities price manipulation, one count of conspiracy to commit wire fraud, and two counts of wire fraud last November. Hampton, on the other hand, was convicted in February for one count of conspiracy to commit securities price manipulation and one count of conspiracy to commit wire fraud.

Shane Hampton, Michael Kane, and their co-conspirators defrauded investors by using a trading bot to manipulate the price of their companys cryptocurrency, said the Principal Deputy Assistant Attorney General, Nicole Argentieri.

Wash and Spoof Trades

The duo hired South Africa-based Moonwalkers Trading to manipulate the price of HYDRO, the token of Hydrogen Technologies, on a US-headquartered cryptocurrency exchange. Between October 2018 and April 2019, the cryptocurrency exchange flooded the market with fake and fraudulent orders using an automated trading application or bot.

The court documents showed that the bot executed about $7 million in wash trades and placed $300 million in spoof trades. These trades pumped the price of HYDRO, inducing retail traders to purchase the token.

Furthermore, Kane, Hampton, and their co-conspirators made about $2 million from selling HYDRO over a 10-month period.

Meanwhile, the jury in the case found that HYDRO qualifies as an investment contract, making it an unregistered security.

In this case, for the first time, a jury in a federal criminal trial found that a cryptocurrency was a security and that manipulating cryptocurrency prices was securities fraud, Argentieri added. This prosecution and the sentences imposed today should serve as a warning: The Criminal Division will not hesitate to use all tools at its disposalincluding the federal securities lawsto protect the integrity of cryptocurrency markets.

View Details

B2Broker Shakes Up B2Trader with Advanced Features

B2Broker, a technology and liquidity provider, has releasedan update for its B2Trader Brokerage Platform. The new version, BBP v1.1,introduces BBP Prime functionality, enhanced reporting features, andcustomizable layouts.

Adding Prime Brokerage Capabilities

A key addition in BBP v1.1 is the BBP Prime feature. Thisenables the BBP to act as a prime brokerage platform for other B2Traderplatforms. Linked platforms can manage and top up their balances on BBP Prime,which oversees balances on associated accounts. BBP Prime monitors brokers'accounts, processes orders, and manages trades through a custom FIX gateway.

The update also enhances the platform's customizationoptions. BBP admins can now offer personalized workplace layouts, including adefault template for new traders. Admins can import, export, and save up to tencustom setups, accessible from the Settings section.

The reporting system in BBP v1.1 has been extended to helpadmins gain insights into platform activity. A new report type allows admins tolist active accounts over specific periods, aiding in the assessment ofplatform growth. Reports can be generated and customized via a new Reportbutton.

A massive update to our turnkey brokerage solution is incoming! Introducing BBP V1.1 and iOS 1.0. Weve revamped B2Trader with a new prime brokerage feature, improved reporting, and more! https://t.co/5L5LEvRyRX

Account management has been streamlined with the ability toselect accounts directly from the Trading terminal. When traders switchprofiles, widgets and settings automatically adjust to display relevantinformation for the selected account.

The terminal update includes new tabs and workspaces,allowing traders to open up to ten tabs and manage multiple trading spaces.Users can apply broker-provided layouts or create custom setups to organizetheir trades more efficiently.

iOS App with Full Trading Features

B2Broker has released the BBP iOS mobile app as part of theB2Trader turnkey package. The app integrates with the B2Core CRM solution,offering a seamless trading experience for iPhone users. The BBP iOS app v1.0includes all desktop trading functionalities.

The app allows users to switch accounts and view availableand on-hold funds in the Account Details screen. The Market screen providesreal-time charts, historical price data, and quick access to trading andaccount details. Users can place various types of orders and use advancedfilters to manage them.

View Details

Legal Blow for Cristiano Ronaldo as Judge Denies Dismissal Motion

In a legal blow to Cristiano Ronaldo, the famed Portuguesesoccer star, the judge overseeing the $1 billion class action lawsuit againsthim has rejected his motion to dismiss the case. The lawsuit, filed in Florida,accuses Ronaldo of endorsing Binance, which allegedly led investors into making costly and riskyinvestments.

Ronaldo's Motion Denied in Binance NFT Lawsuit

Judge Roy Altman's ruling, issued on May 4, followed arequest from the plaintiffs to stay proceedings until a ruling on a motion tocompel arbitration. Simultaneously, the judge denied Ronaldo's motion todismiss the case, stating: "We deny without prejudice the Defendant's 29 motionto dismiss."

The lawsuit revolves around Ronaldo's promotion of Binance,particularly in relation to a collection of non-fungible tokens (NFTs) launchedin partnership with the soccer star in November 2022, called "CR7."Through social media endorsements and other promotional activities, Ronaldoencouraged fans to invest in Binance, promising rewards and emphasizing thepotential of NFT investments.

Cristiano Ronaldo Suffers Legal Blow For Promoting Unsafe CR7 NFTs by Cryptocurrency Exchange Binance#CR7 | #CristianoRonaldo | #Cryptocurency https://t.co/aBXitJjvU3

Back in November 2022, Finance Magnates reported that Ronaldo,was set to unveilhis inaugural non-fungible token (NFT) collection exclusively on theBinance NFT marketplace. This launch marks the culmination of a multi-yearpartnership deal between the Portuguese star and Binance, initiated nearly fivemonths ago.

Binance announced that the collection aims to provideRonaldo's fans with an introduction to Web3 through the realm of NFTs. Thepartnership aimed to facilitate broader blockchain understanding while alsoshowcasing Binance's role in building Web3 infrastructure for the sports andentertainment sector.

Arbitration Stay Granted in Binance Endorsement Lawsuit

Ronaldo's endorsements of Binance extended to his Instagramaccount, where he frequently touted the exchange and its associated products.Despite the legal action, Ronaldo's publicist has not yet provided comment onthe matter.

The plaintiffs in the lawsuit are seeking damages exceeding$1 billion, alleging that Ronaldo's endorsements led them into makinginvestments that resulted in financial losses. Their request for the case to bestayed for arbitration, which would involve a third party resolving thedispute, has been granted by Judge Altman.

View Details

Genesis Parent Will Not See Any Recovery amid $3 Billion Payout Approval

Genesis Global, a bankrupt crypto lender, has received court approval to distribute $3 billion in cash and cryptocurrencies to its creditors. However, the decision excludes its parent Digital Currency Group (DCG) from receiving any recovery from the bankruptcy.

The courts ruling on Friday cleared the company to unfreeze and return customers assets that were locked up since November 2022. The lender also shuttered all trading operations last year.

Another Failed Crypto Lender

Genesis filed for Chapter 11 bankruptcy protection in New York in January 2023 following the troubles it faced from its exposure to Three Arrows Capital, a collapsed crypto hedge fund, and FTX, which is also under bankruptcy process. At the time of bankruptcy, it owed over $3.5 billion to the top 50 creditors alone.

The approval of $3 billion in distribution only represents about 77 percent of the value of the customers claims. According to the court order, the creditors with claims in USD will receive 100 percent of their loan balance (deferring payment of post-petition interest) but creditors with claims in cryptocurrencies will bear a shortfall.

No Recovery for DCG

At the time of Genesis bankruptcy, the value of Bitcoin was around $24,000, which has now jumped to over $66,000. Previously, DCG argued that the value of the creditors recovery should be capped at the value of cryptocurrencies during the bankruptcy filing, allowing potential recovery of its assets, but the court rejected the proposal.

The record here clearly establishes that there is not sufficient value in the Debtors estates to provide DCG a recovery as equity holder after unsecured creditors are paid, Judge Sean Lane wrote in his ruling. Given the size of the creditor claims, DCG is out of the money as an equity holder by billions of dollars, even if the Court valued creditor claims using the method DCG proposes.

The court further pointed at the anomalies in DCGs financial practices as it assumed $1.1 billion of Genesis's debt from the Three Arrows Capital collapse with a 10-year promissory note. Genesis also sued DCG for failure of payment of a loan. DCG already paid $227.3 million of the loan and reached an agreement with Genesis last November to pay another $275 million by April.

Earlier this year, the US securities regulator also fined Genesis $21 million for operating an illegal crypto lending platform.

View Details

Canadian Crypto King Arrested and Charged for $30 Million Fraud

The authorities in Canada have arrested Aiden Pleterski, who called himself the Crypto King, and charged him with fraud and money laundering. He allegedly swindled investors out of CAD 40 million (about USD 30 million) with his crypto and foreign exchange Ponzi investment scheme.

The Fall of Crypto King

The announcement yesterday (Wednesday) by the Ontario Securities Commission (OSC) detailed that, along with the 25-year-old Pleterski, the authorities also charged his associate, 27-year-old Colin Murphy, with fraud. The arrest and the charges came after a 16-month-long joint investigation by the OSC and the Durham Regional Police Service (DRPS). Dubbed Project Swan, the investigation started amid the bankruptcy case tied to the investment scheme that gathered media attention.

The DRPS and the OSC urge investors to always check the registration of any person or business trying to sell them an investment or provide investment advice, the announcement stated.

Meanwhile, Pleterski has received bail against a CAD 100,000 bond signed by his parents. However, he needed to surrender his passport and must refrain from posting about financial matters on social media. He was further ordered not to trade cryptocurrencies.

A Luxurious Life with Investors Money

Pleterski started to operate the investment scheme under his company, AP Private Equity Limited, and received about CAD 40 million (about USD 30 million) from approximately 160 investors between 2021 and 2022. He promised to invest the proceeds on behalf of the investors in crypto and forex markets.

According to the trustee overseeing the bankruptcy case, Pleterski invested only 2 percent of the proceeds he collected from the investors and misappropriated the rest, spending at least CAD 16 million on luxury cars, international travel, and even renting a lakefront mansion.

View this post on Instagram

A post shared by aiden pleterski (@aiden.ptrs)

He was also a small-time live streamer and showcased his luxurious lifestyle on social media. During the bankruptcy process, the administrators seized two McLarens, two BMWs, and one Lamborghini.

Interestingly, Pleterski was also kidnapped by five victims of his alleged Ponzi scheme in December 2022 and then beaten and tortured during his three-day-long captivity. Following his release, he posted a 12-minute-long apology video on social media for his investors, which his lawyer later said was coerced. The Canadian authorities already arrested four of the alleged perpetrators involved in Pleterskis kidnapping and charged them.

View Details

Robinhood Bets Big on Crypto in Europe: Launches Staking

Although Robinhood may face enforcement actions in the United States for its cryptocurrency offerings, it is expanding its services in Europe further. Today (Wednesday), the brokerage has announced its first crypto staking services for Solana holders, which will be available only to its customers in Europe.

Robinhood's First Crypto Staking Service

Apart from staking, the American-headquartered brokerage firm is also launching its crypto investment app in three local languages in three European countries: Italy, Poland, and Lithuania. The move is very strategic, as these are the three top countries in the continent with Robinhood Crypto app downloads.

The brokerage's European crypto offerings were enhanced only six months after its launch on the continent. The platform is onboarding European Union users under its Lithuania-licensed entity.

Since launching at the end of last year, our customers in Europe have told us loud and clear that they want an app that provides local language support and products that help them earn additional passive income, said Johann Kerbrat, VP and GM of Robinhood Crypto.

The platform also revealed that Bitcoin (BTC), Dogecoin (DOGE), Solana (SOL), and Ethereum (ETH) are the favourites of its European users as they brought in the highest trading volume in the continent since launch.

Furthermore, Robinhood Crypto revealed that it is the first crypto trading platform for a third of its users in Europe.

Crypto Pays Off

Robinhood entered Europe last December with its crypto trading services, but it has been offering the same in the United States for years. However, on its home turf, the company has always been very cautious with its crypto-based offerings: the number of crypto listings is limited and it is not offering staking services.

Despite these cautious moves, crypto transactions remained a massive revenue booster for the brokerage. As Finance Magnates reported, the cryptocurrency revenue of the platform in the first three months of 2024 jumped by 232 percent to reach $126 million. The revenue was driven by the notional crypto trading volume in the quarter, which reached $36 billion, 224 percent higher.

However, earlier this month, Robinhoods cryptocurrency trading arm received a Wells Notice from the Securities and Exchange Commission. In a subsequent public statement, Robinhood highlighted that it expects future regulatory actions to involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding, along with civil money penalties and limitations on activities.

View Details

Ripple Pushes Back: Challenges SEC's Proposed $2 Billion Fine

Ripple Labs has formally opposed the US Securities andExchange Commissions (SEC) proposition to levy a substantial fine of nearly $2billion against the company linked to the XRP Ledger blockchain. Filed yesterday(Monday), Ripple's opposition challenges the SEC's proposal, which seeks topersuade a New York judge to impose the hefty penalty.

Legal Battle between Ripple and SEC

The SEC's proposal outlines a fine totalling $1.95 billion,comprising $876 million for disgorgement, $198 million for prejudgmentinterest, and a civil penalty of $876 million. The basis for the SEC's casestems from allegations that Ripple Labs violated federal securities lawsthrough its institutional sales of XRP. Notably, the court ruled in favour ofRipple on some fronts, dismissing parallel claims by the SEC regarding thelegality of XRP sales on exchanges and through algorithms.

Ripple's opposition document includes a redacted paragraphconcerning its revenue from institutional sales, the income taxes it paid, andits incurred losses. Within this segment, Ripple asserts that it had no gainsto disgorge, positioning it as a crucial argument in its defence against theSEC's proposed penalties.

The Court should deny the SECs requests for an injunction,for disgorgement, and for pre-judgment interest, and should impose a civilpenalty of no more than $10 million, the filing said.

BREAKING SEC VS. RIPPLE NEWS:#Ripple has filed a Motion to Strike new expert materials the SEC submitted in support of its Motion for Remedies and Entry of Final Judgment! FINAL JUDGEMENT! Source: https://t.co/QgmUZcL0aX pic.twitter.com/uaFAluXMG2

Anticipating Rise in Cryptocurrency Integration

Meanwhile, Ripplehas upgraded its crypto-enabled cross-border payments solution, known asRipple Payments, as reported by FinanceMagnates. This enhancement aims to improve enterprise-grade blockchaininfrastructure. In a statement released today, the cross-border remittancenetwork highlights the ongoing shift in the global financial space, withincreasing investment from companies and legacy payment institutions inblockchain integration.

It's anticipated that over 80% of global financialfirms will incorporate cryptocurrencies into their operations within the nextthree years. Currently, Ripple offers expanded access to its extensive globalnetwork, spanning over 70 crypto and traditional payout markets, resulting innearly 100% global payout coverage through a single onboarding process.

View Details

Hong Kong Conditionally Approves Bitcoin and Ether ETFs

Hong Kongs Securities and Futures Commission has become the latest regulator to approve the first spot Bitcoin and Ethereum exchange-traded funds (ETFs). However, the approvals of at least three offshore Chinese asset managers remain conditional.

Conditional Approval Crypto ETFs

Although the regulator confirmed the conditional approval, it did not reveal any details of the ETFs. The regulatory conditions include fee payments, document filings, and approval of the Hong Kong Stock Exchange's listing, according to Reuters.

Crypto ETFs are listed on stock exchanges and can be traded from regular brokerage accounts without the need to create a crypto exchange account or use custodial services. These investment products lower the entry barrier and complexity of investment into cryptocurrencies.

Additionally, the Hong Kong unit of China Asset Management, which has been developing spot Bitcoin and Ether products, received approval to provide virtual asset management services.

The introduction of the virtual asset spot ETFs not only provides investors with new asset allocation opportunities but also reinforces Hong Kong's status as an international financial centre and a hub for virtual assets, Bosera Asset Management stated.

The Rising Demand for Crypto

The conditional approval in Hong Kong followed approximately three months after the US Securities and Exchange Commission approved 11 Bitcoin ETFs in one go. These approvals ensued from prolonged efforts by several companies over the years. However, the US did not approve any Ether ETFs despite the application of multiple firms.

While the green light for Bitcoin ETFs in the US triggered a price surge of cryptocurrencies, the latest Hong Kong approval failed to do so. Bitcoin is trading below $63,000 apiece, as of press time, compared to its peak of about $74,000.

Other than the US and Hong Kong, spot Bitcoin ETFs are listed on the exchanges in eight additional jurisdictions, including Canada, Germany, Jersey, Switzerland, Australia and three more locations. However, those markets are small, and the demand for these crypto instruments remains low.

View Details

LBBW Announces Partnership with Bitpanda for Crypto Custody Services

Landesbank Baden-Württemberg (LBBW), Germany's state-backedlender, has unveiled plans to venture into cryptocurrency custodyservices. In a strategic move, LBBW has announced a partnership with theAustrian exchange platform Bitpanda to facilitate this initiative.

Expansion into Cryptocurrency Custody

This collaboration aims to provide LBBW with the necessaryinfrastructure for "Investment-as-a-Service," enabling the storageand procurement of various cryptocurrencies, including bitcoin and ether.

"By offering crypto-asset custody, we are positioningourselves with a clear added value for our corporate clients while ensuringthe highest security standards," Stefanie Münz, the Member of the LBBW Boardof Directors responsible for Finance, Strategy and Operations, said in a pressstatement. "Bitpanda provides the necessary technical and regulatoryinfrastructure to offer our customers innovative and, above all, securesolutions in the area of digital assets."

New partnership alert: Bitpanda x LBBW Landesbank Baden-Württemberg, Germany's largest federal state bank will enhance their digital asset offering in partnership with Bitpanda!Bitpanda Technology Solutions provides LBBW with an "Investment-as-a-Service" infrastructure in pic.twitter.com/hIwNXp9Wp4

Services to Launch for Corporate Clients in 2024

Initially, the crypto custody services will be targetedtowards corporate clients, with a market launch scheduled for thelatter half of 2024. This reflects the increasing interest and demand forcryptocurrency-related services within the financial sector.

"The demand from our corporate customers for digitalassets is increasing. We are convinced that crypto assets will establishthemselves as a building block for further business models. With thecooperation, we are creating the technical and regulatory basis at an earlystage to best support the individual crypto strategies of our corporatecustomers," said Jürgen Harengel, the COO of Corporate Bank at LBBW.

Earlier, BayernMunich, the German football club, announced a multi-year partnership with Bitpanda,as reported by Finance Magnates. Bitpanda has become the club's platinumpartner and official crypto trading sponsor. The partnership was revealed atBayern's home stadium, the Allianz Arena, during a match against TSG Hoffenheimon January 12 this year.

View Details

The Role of Self-Regulation in the Cryptocurrency Industry: Where do we go from here?

<p class="MsoNormal">In recent years, the cryptocurrency industry has grown significantly, with new technologies and financial instruments emerging to challenge conventional financial systems. With this expansion, however, comes the need for regulation to prevent financial crimes and safeguard consumers. </p><p class="MsoNormal">While government regulation is essential, self-regulation has also had a significant impact on the cryptocurrency industry. This essay will look at the role of self-regulation in the cryptocurrency industry, as well as the lessons learned and future paths.</p><p class="MsoNormal">What exactly is self-regulation?</p><p class="MsoNormal">The practice of setting and enforcing rules within a business by the industry itself is known as self-regulation. Self-regulation in the cryptocurrency industry takes the shape of industry-led initiatives, organizations, and best practices promoting transparency, accountability, and customer protection.</p><p class="MsoNormal">The creation of industry-led organizations, such as the CryptoUK in the United Kingdom and the Blockchain Association in the United States, is one of the most important instances of self-regulation in the cryptocurrency industry. These organizations work to create and promote industry best practices, as well as to set codes of conduct for cryptocurrency companies.</p><p class="MsoNormal">Self-Regulation in the Cryptocurrency Industry: Lessons Learned</p><p class="MsoNormal">Self-regulation has been critical in shaping the cryptocurrency sector, and several lessons can be drawn from this experience.</p><p class="MsoNormal">For starters, self-regulation can aid in the establishment of confidence and legitimacy in a rapidly changing industry. Self-regulatory organizations can encourage transparency and accountability among industry participants by establishing and enforcing industry standards. </p><p class="MsoNormal">As a result, consumers and investors who are wary of the risks associated with cryptocurrencies can gain confidence.</p><p class="MsoNormal">Second, self-regulation can aid in the filling of regulatory voids in the government. Cryptocurrencies are a relatively new technology, and governments may lack the expertise or resources to successfully regulate them. Self-regulatory organizations can assist in filling these gaps by creating industry best practices and guidelines that can serve as a framework for future government regulation.</p><p class="MsoNormal">Third, self-regulation can aid in the rapid resolution of emerging issues in the business. The cryptocurrency industry is continuously changing, with new technologies and financial instruments appearing on a regular basis. Self-regulatory organizations can react rapidly to these changes, creating new best practices and guidelines to address emerging issues before they become major issues.</p><p class="MsoNormal">Future Self-Regulation Directions in the Cryptocurrency Industry</p><p class="MsoNormal">While self-regulation has played an essential role in shaping the cryptocurrency industry, there are a number of challenges that must be addressed in order for it to continue to thrive.</p><p class="MsoNormal">First and foremost, self-regulation must be comprehensive and representative of the complete industry. The cryptocurrency business is vast, with numerous players such as exchanges, wallets, and miners. Self-regulatory groups must ensure that their standards and guidelines apply to all industry participants, not just the largest or most established.</p><p class="MsoNormal">Second, self-regulatory groups must maintain their vigilance in the face of new risks and challenges. The cryptocurrency industry is always changing, and new risks and challenges are bound to appear in the future. Self-regulatory organizations must be ready to react swiftly to these challenges, creating new best practices and guidelines to address emerging risks and challenges.</p><p class="MsoNormal">Third, self-regulation groups must collaborate closely with government regulators to ensure that their efforts are in accordance with government regulations. While self-regulation can assist in filling gaps in government regulation, it is also critical that self-regulatory organizations do not function in conflict with government regulations. </p><p class="MsoNormal">Working closely with government regulators, self-regulatory organizations can guarantee that their efforts complement rather than compete with government regulation.</p><p class="MsoNormal">The dangers of self-regulation</p><p class="MsoNormal">Self-regulation can be a double-edged sword when it comes to the cryptocurrency industry. While it can provide flexibility and autonomy for businesses, it can also create an environment of unchecked risks and vulnerabilities. </p><p class="MsoNormal">Cryptocurrency is a decentralized digital currency that uses blockchain technology to ensure its security and transparency. Unlike traditional currencies, cryptocurrencies are not backed by any government or financial institution. The lack of centralized authority makes it a challenge to regulate the industry, and as a result, many have opted for self-regulation.</p><p class="MsoNormal">One of the main dangers of self-regulation in the cryptocurrency industry is the potential for fraud and scams. Cryptocurrency transactions are irreversible, and once funds have been transferred, they cannot be recovered. This makes it a prime target for hackers and scammers who are looking to exploit vulnerabilities in the system.</p><p class="MsoNormal"><a href="https://www.financemagnates.com/cryptocurrency/regulation/the-regulatory-landscape-of-crypto-global-developments-and-implications/" target="_blank" rel="follow">Without proper regulation</a>, there is a risk of fraudulent activities such as Ponzi schemes and fake ICOs (Initial Coin Offerings). These scams have already caused significant financial losses to investors and have damaged the reputation of the entire cryptocurrency industry.</p><p class="MsoNormal">Another danger of self-regulation in the cryptocurrency industry is the lack of protection for consumers. Unlike traditional financial institutions, cryptocurrency companies are not required to comply with regulations that protect consumers' interests. As a result, there is a risk of data breaches, financial loss, and other fraudulent activities.</p><p class="MsoNormal">Furthermore, self-regulation can also lead to market manipulation. Cryptocurrency companies with significant market power can exploit their dominance to manipulate prices, leaving smaller players at a disadvantage. Without regulations in place, there is a risk of price manipulation, insider trading, and other unethical practices that can harm the industry's credibility.</p><p class="MsoNormal">Conclusion</p><p class="MsoNormal">Self-regulation has had a significant impact on the cryptocurrency business, encouraging transparency, accountability, and consumer protection. Self-regulatory organizations have served to create trust and legitimacy in a rapidly evolving industry by developing industry standards, guidelines, and codes of conduct. </p><p class="MsoNormal">However, several challenges, such as inclusivity, vigilance, and cooperation with government regulators, must be addressed to guarantee the ongoing success of self-regulation in the cryptocurrency industry. As the industry evolves, self-regulation is likely to play an essential role in shaping the industry and promoting responsible practices.</p><p class="MsoNormal">In addition to industry-led initiatives and organizations, other self-regulatory mechanisms exist in the cryptocurrency business. To promote transparency and accountability, some cryptocurrency projects, for example, have adopted community-driven governance mechanisms such as token voting. These mechanisms enable token holders to vote on important project decisions such as protocol changes or fund allocation.</p><p class="MsoNormal">The use of smart contracts to implement rules and regulations is another example of self-regulation in the cryptocurrency industry. Smart contracts are self-executing contracts that can be programmed to automatically enforce specified rules and conditions. </p><p class="MsoNormal">A smart contract, for example, could be programmed to implement KYC and AML regulations for a specific cryptocurrency exchange, ensuring that only verified users can use the platform.</p><p class="MsoNormal">Overall, self-regulation is an essential and evolving topic in the cryptocurrency business. While government regulation is essential for preventing financial crimes and protecting consumers, self-regulation can also play an important role in encouraging transparency, accountability, and consumer protection. </p><p class="MsoNormal">Self-regulatory organizations can help to establish trust and legitimacy in a rapidly changing industry by creating industry standards, guidelines, and codes of conduct. As the industry evolves, self-regulation is likely to play an essential role in shaping the industry and promoting responsible practices.</p> This article was written by Finance Magnates Staff at www.financemagnates.com.

View Details

New Zealand’s Central Bank Does Not Want Crypto Regulations

The Reserve Bank of New Zealand issued a statement today (Friday) to notify its intention to increase the monitoring of stablecoins and crypto assets. However, the central bank does not believe in bringing regulatory oversight to the industry.

No Need for Crypto Regulations

The regulatory clarification came following public input around the issues and risks of private money on the financial system and monetary sovereignty.

“We agree with the balance of submitters that a regulatory approach isn’t needed right now, but increased vigilance is,” Ian Woolford, Director of Money and Cash at the Reserve Bank of New Zealand, said in a statement released today (Friday).

Prior to deciding on its stance, the central bank considered the input of 50 stakeholder submissions on crypto and decentralized finance. The stakeholders are the crypto advocacy group, BlockchainNZ, blockchain company Ripple, and banks like Westpac and the Bank of New Zealand.

New forms of money such as crypto and stablecoins create opportunities and risks for New Zealanders and the financial system. Have your say now on these and how we should respond: https://t.co/RE9j0ryjVk#rbnz pic.twitter.com/yvcR2tjd9y

“The submissions reinforce our view that there are significant risks and opportunities from stablecoins and other private money innovations, but also significant uncertainties about how the sector will develop and where the optimal balance will lie. We agree that caution is needed, which also reinforces the need for enhanced data and monitoring to build understanding,” Woolford added.

Jurisdictional Confusion?

He further highlighted that the Reserve Bank of New Zealand has no jurisdiction to regulate “cryptoassets and other innovations.”

“However, issues such as consumer and investor protection or potential commercial or regulatory barriers to entry do matter for the collective vision we have for a reliable and efficient money and payment system that better meets the evolving needs of New Zealanders,” Woolford added.

Meanwhile, New Zealand’s Financial Markets Authority (FMA) raised multiple alarms against retail investments in ‘volatile and risky’ Bitcoin. The crypto industry is also unregulated in the country.

The New Zealand central bank’s stance against bringing crypto regulations occurred when other global regulators were in line to control the booming industry. European Union has already passed the Markets in Crypto Assets (MiCA) law, while jurisdictions like Hong Kong also brought progressive crypto regulations.

View Details

Russia Scraps Plan for a Crypto Exchange under MOEX

The Russian government has abandoned its plan to establish a national cryptocurrency exchange. Instead, the country now wants to set up rules to regulate cryptocurrency exchanges, according to the local news agency Izvestia, which cited State Duma member Anatoly Aksakov.

No National Crypto Exchange

The Russian lawmakers initially floated the idea of launching a unified cryptocurrency exchange as a part of the Moscow Exchange last year. However, the country’s Ministry of Finance was among the authorities against the development of such a government-backed crypto exchange.

“The [Ministry] did not support the establishment of one national crypto-exchange,” said Ivan Chebeskov, the Director of the Financial Policy Department of the Ministry of Finance for the Russian Federation, adding that the idea now is to “legally regulate the possibility of creating such sites by business.”

Russian lawmakers have said they will no longer move forward with plans to create a state-level cryptocurrency trading platform. Focus on developing rules that would allow private companies to set up such trading platforms, overseen by Russia's central bank, which is set to…

Sanctions against Russia

Russia, because of its ongoing aggression against Ukraine, is facing heavy economic sanctions brought by the Western governments. The European Union and its allies even imposed a SWIFT ban on Russian financial institutions, impacting cross-border business transactions.

Aksakov highlighted that regulated crypto exchanges would help Russian businesses to process cross-border transactions. However, such service facilities by global crypto exchanges could lead to sanctions being raised against them.

The sanctions against Russia were extended to cryptocurrencies when, in August 2022, the European Union imposed a crypto wallet cap of EUR 10,000 on Russian accounts. Later, these sanctions were broadened to a crypto payment ban, eliminating Russians from using any crypto service registered in the EU.

Global crypto exchanges had adhered to these rules and suspended their services within Russia. However, Binance, the largest crypto exchange in terms of trade volume, quietly reinstated its services for Russians, according to media reports. Presently, the exchange is reportedly facing a US probe for possibly violating sanctions against Russia.

Earlier, the Bank of Russia termed cryptocurrencies as properties and proposed an outright ban on crypto payments. Additionally, Russian President Vladimir Putin signed a law to outlaw payments in digital assets.

View Details

Spanish Data Protection Agency Orders Halt to Worldcoin's Data Collection

The Spanish Data Protection Agency (AEPD) has taken decisiveaction against Tools for Humanity Corporation, issuing a precautionary measureto halt the collection and processing of personal data within the framework ofits Worldcoin project. The move comes in response to multiple complaints lodgedagainst the company, citing concerns over inadequate information disclosure,the collection of data from minors, and the inability to withdraw consent,among other infringements.

Precautionary Measures Against Tools for HumanityCorporation

The Worldcoin project, spearheaded by Tools for HumanityCorporation, has been under scrutiny for its handling of personal data withinSpanish territory. The AEPD's intervention underscores the gravity of thesituation, particularly regarding the processing of biometric data, which fallsunder the purview of the General Data Protection Regulation (GDPR) due to its sensitivenature.

According to the AEPD, the processing of biometric dataposes significant risks to individuals' rights, necessitating immediate actionto safeguard personal data and prevent its potential transfer to third parties.The precautionary measure aims to block further data collection andprocessing by Tools for Humanity Corporation and secure the data alreadycollected.

Urgency of AEPD Intervention to Safeguard Privacy Rights

Tools for Humanity Corporation, headquartered in Germany with itsEuropean establishment, faces legal consequences under the GDPR, allowingsupervisory authorities like the AEPD to implement provisional measures inexceptional cases to safeguard individuals' rights and freedoms.

The AEPD emphasized the urgent need to intervene to preventirreparable harm to individuals' privacy rights. The temporary prohibition ofdata collection activities seeks to uphold the fundamental right to theprotection of personal data, as enshrined in the GDPR.

Sam Altmans Worldcoin Faces Roadblock In Spain, WLD Price Dips 12%The Spanish data protection agency, AEPD, has ordered Worldcoin to stop gathering personal data within Spain.Worldcoin, backed by Sam Altman, has encountered another setback concerning privacy breaches. The

The duration of the precautionary measure, not exceedingthree months, underscores the urgency of the situation and the need forimmediate corrective action by Tools for Humanity Corporation. Failure tocomply with the AEPD's directives may result in further legal consequences forthe company.

View Details

MAS Grants Bitstamp Crypto Regulatory Approval for Singapore Expansion

Bitstamp, a European cryptocurrency exchange, has securedin-principle regulatory approval from the Monetary Authority of Singapore(MAS). It positions Bitstamp as the first major European crypto exchange toreceive such approval in Singapore, signaling a new era of expansion in theregion.

MPI License Enables Digital Payment Token Services inSingapore

The approval comes in the form of a Major PaymentInstitution (MPI) license, which will empower Bitstamp to offer digital paymenttoken services within Singapore. This announcement was conveyed through anofficial email today (Wednesday), underlining Bitstamp's focus on complianceand regulatory standards in its global operations.

Bitstamp's entry into Singapore marks an addition to thecryptocurrency ecosystem in the city-state. With the MPI license, Bitstamp will be ableto cater to a diverse array of customers, including financial institutions,payments processors, fintech companies, and brokerages. The exchange aims toprovide comprehensive services to these entities, leveraging its expertise andexperience in the crypto space.

European cryptocurrency exchange @Bitstamp has earned in-principle regulatory approval from the @MAS_sg. By @JamieCrawleyCDhttps://t.co/zzZpz60mVW

Catalyst for Cryptocurrency Growth in Southeast Asia

The process of obtaining full licensing in Singapore hashistorically been rigorous and thorough. The most recent precedent was set bySouth Korean firm Upbit, which received its MPI license in January. Upbit'sjourney from in-principle approval to full licensing took approximately threeand a half months, highlighting the careful evaluation and scrutiny involved inregulatory assessments.

European Banks Embrace Cryptocurrency

Last year, Bitstampwas in advanced negotiations with three major European banks to facilitatethe launch of cryptocurrency services, with announcements anticipated in thefirst quarter of 2024, FinanceMagnates reported. These discussions signal growing acceptance of digitalassets in Europe, coinciding with the EU's regulatory push under MiCA.

Bitstamp's "Bitstamp-as-a-service" offering isgarnering significant interest, providing white-label solutions for banks andfintech firms to enter the cryptocurrency market. Robert Zagotta, Bitstamp'sGlobal Chief Commercial Officer, disclosed these developments during aninterview with CoinDesk, highlighting the evolving landscape of traditionalfinancial institutions embracing digital assets.

View Details