Ripple (XRP) May Have Won the Battle Against the SEC, but the War is Just Beginning

Leonardo Perez
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Ripple (XRP) May Have Won the Battle Against the SEC, but the War is Just Beginning

Ripple achieved another victory against the SEC in court; However, the legal battle continues, with a trial scheduled for April 23, 2024. The result of Ripple vs. SEC is critical to the crypto industry, and could redefine regulatory guidelines for what is considered a security.

The SEC is on a losing streak in court. This week, Ripple scored another victory after Judge Analisa Torres denied the SEC’s motion to appeal the case because it failed to meet its respective burden of proof, highlighting its lack of evidence.

Ripple boosted its morale after the news and XRP rose over 5% shortly after. The XRP community declared victory, which might be a little early as this long-running legal battle is far from over.

In that same court ruling, Judge Torres set the trial date for April 23, 2024. The two parties must present all necessary pre-trial files and documents by December 4, 2023.

However, the SEC can appeal the case once the trial concludes, and the chances are high since the standard litigation process allows for appeals after the trial, putting the case back on track.

Elliott Z. Stein, senior litigation analyst at Bloomberg, said the court only dismissed the interlocutory appeal before the final ruling in the case. This means that it was only an immediate appeal before the trial itself:

“Correct. This only denied the interlocutory (i.e., immediate) appeal before final judgment in the case. Appeals (probably by both sides) in the regular course of litigation will still come after the individuals’ trial in April and remedies are determined,” Stein posted on X.

Final Judge in Case Could Have Big Impact on Cryptocurrencies

Ripple’s case against the SEC has generated a lot of controversy since it began approximately three years ago. The regulatory agency accused the company of selling unregistered securities, sparking a heated debate over what constitutes a security.

Things haven’t gone exactly as the SEC expected, though, which may explain its abrupt behavior against the cryptocurrency industry, as the agency’s president, Gary Gensler, claimed that the industry is full of hucksters.

The outcome of this case could be one of the most important catalysts for XRP and the crypto community as a whole. Whether this outcome will be positive or negative will determine what gives the SEC jurisdiction over what is security and will redefine the regulatory landscape.

Latest Updates on Ripple and XRP

The last few weeks have been quite busy for Ripple, both on the legal front and in its ecosystem. Regarding the XRP community, there is a new feature that is generating controversy: the Clawback functionality:

  • Clawback, a feature of XRP Ledger version 1.12.0, allows asset issuers to claim tokens if they suspect the receiving party is fraudulent or has lost access to the account.
  • It has been controversial: The community is concerned whether this will give broadcasters excessive control or potential for misuse.

In other news, Ripple was nominated to the Fintech 100 list for modernizing the way cross-border payments are settled.

Finally, Chase Bank, one of the largest financial institution subsidiaries of JPMorgan, recently partnered with blockchain settlement system FCF Pay to allow customers to use cryptocurrencies as a means of payment, including Ripple’s XRP and Shiba Inu (SHIB).

By Leonardo Pérez

Blockchain Summit Latam: Current State of Cryptocurrencies in Latin America and the Caribbean

Audy Castañeda
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Blockchain Summit Latam: Current State of Cryptocurrencies in Latin America and the Caribbean

At the Blockchain Summit Latam 2023, Diego Herrera spoke about the current state of cryptoassets in Latin America and the Caribbean.

On October 4, the Blockchain Summit Latam 2023 began with the outstanding participation of Diego Herrera, a finance expert at the Inter-American Development Bank, who delved into the cryptoasset system.

Within the framework of Business Day, a special day of the Summit dedicated to strengthening alliances and strategies in the crypto world, Herrera, in collaboration with the University of Cambridge, presented a study that analyzes in depth the cryptoasset system in the region.

The research, carried out with Cambridge, addresses crucial topics such as financial inclusion and the custody of digital securities, highlighting the notable segmentation in America, with a special mention to Brazil for its market uniqueness.

Blockchain Summit Latam 2023: Crypto Asset Ecosystem in the Region

Diego Herrera emphasized the significant relevance of the cryptoasset ecosystem, noting that its detailed analysis reveals crucial information to understand its impact and potential.

On the other hand, FintechRegMap was presented, a detailed map that addresses the vertical regulations of cryptoassets in all countries in the region. Herrera highlighted that one of the main obstacles is the lack of understanding by regulators about these assets. On many occasions, he mentioned, they are not perceived as legitimate assets, which leads to a lack of interest in their adequate regulation.

Diego Herrera, after addressing the regulatory aspect, delved into the situation of the entrepreneurial and private sector. He highlighted an evident trend in the region: investment in crypto assets. This inclination, according to Herrera, is due to the fact that there are currently no other areas of significant interest in the industry for investors and users.

This outlook could reveal an early stage in the development of cryptoassets, which, over time, could evolve into a flourishing industry where more than 40% of trading volume is not limited to exchanges alone.

According to the research findings, most participants expressed their desire for clear regulations. Although some ecosystem advocates view regulation with skepticism, companies and entrepreneurs long for clarity in the rules of the game.

Public Policy Observations

To conclude, Herrera, based on the research, mentioned three key points of public policies, as well as reasons why regulating what he considers are key aspects for the development of the industry:

  1. Regulation of activities because of violations of consumer rights.
  2. Systemic risks.
  3. Violation of competition, concurrence and transparency.

For many, these factors only attract unwanted attention to the crypto asset system. However, for the healthy development and massification of services, it is necessary to avoid incidents, systemic risks and even more so, abuse by large market players.

Related News: Ethereum Colombia Community Present at Business Day

The Ethereum Colombia community was present during the BSL 2023 Business Day. Its representatives highlighted the fundamental points of this decentralized autonomous organization (DAO) and its future projections.

Those in charge of speaking about this DAO were Juan Carlos Bell and Jhon Tejada, both belonging to that community. The speakers reviewed the history of the organization, which dates back to 2020, but became official this year in 2023.

Likewise, they emphasized that they were part of the management of the Devcon 2022 event. They explain that it is a project that is booming and is just now taking giant steps in terms of growth.

By Audy Castaneda

Crypto Proof: A 10-Billion Bankruptcy We Won’t Soon Forget

Willmen Blanco
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Crypto Proof: A 10-Billion Bankruptcy We Won’t Soon Forget

The outcome of the FTX matter is pending to await the start of reimbursement to the unfortunate victims.

Before November 2022, no one expected that the American cryptocurrency exchange FTX, valued at over $32 billion, would experience such a tragic end. Colossal losses for the company, its creditors and its founder Sam Bankman-Fried, investments of thousands, even hundreds of thousands of dollars, lost to its creditors (individuals and institutions included), falling prices of cryptocurrencies (Bitcoin, Ethereum, etc.).

The toll is high. Now that the young deposed CEO of FTX is called to court to answer for his actions, here are some details that are sure to give the readers goosebumps.

FTX, The Biggest Crypto Scam of the Century?

It is timely to remember Bernard Madoff, the man who defrauded the largest financial institutions of $65 billion in 2008. The entire world fell apart when his Ponzi scheme was brought down.

Sam Bankman-Fried, a young student-like man who ran the second largest cryptocurrency exchange in the world, behind Binance, did the same again 14 years later. Crypto media did not hesitate to establish the connection between the two scammers once the news broke.

As soon as FTX fell, losses worth tens of billions of dollars were reported. To be more precise, about $10 billion, including liquid and illiquid assets. In this crypto storm, the crypto assets of creditors (wealthy investors, companies of all kinds, individual investors, etc.) vanished. Nearly 130 companies, including Alameda Research, are said to have collapsed in the process.

At the same time, the market value of FTX (FTT), estimated at $32 billion at the beginning of the year, fell sharply. Likewise, the value of the global crypto market has plummeted: the $3 trillion mentioned for November 2021 represented just a mere mirage following the collapse of the SBF exchange.

Whose Fault Is It?

So far, the responsibility for this crypto scourge has fallen on this Palo Alto mama’s boy, Sam Bankman-Fried. Their setbacks (naming sports infrastructures, crazy spending on advertising, financial support for Democratic candidates, purchasing luxury goods of all kinds, etc.) have not gone unnoticed by the crypto community.

However, young Sam did not stop pointing the finger at others responsible for the fall of FTX. Among them, he cited Changpeng Zhao (CZ), his eternal rival, who allegedly practiced unfair competition with a view to monopolizing the cryptocurrency market. Cointelegraph published an article detailing these mutual accusations on the day of the FTX collapse.

SBF also mentioned other names among those close to him, such as Caroline Ellison, ex-girlfriend and former CEO of Alameda Research. The name of the latter constantly circulates in the Court.

But considering how things are developing, the court in charge of the FTX case will not stop calling the parents of Sam Bankman-Fried, Barbara Fried and Joseph Bankman. In fact, both are involved in the launch of the native cryptocurrency FTT.

Meanwhile…SBF’s Trial First Day

The first day of Sam Bankman-Fried’s (SBF) trial ended without final jury selection. The trial will continue for another day. The United States District Court for the Southern District of New York plans to select 12 jurors and six alternates.

Judge Lewis Kaplan dismissed several potential jurors on Oct. 3 due to conflicts of interest and other reasons. Assistant U.S. Attorney Danielle Sassoon named several potential witnesses and people connected to the case.

It remains uncertain whether SBF will testify, although he has previously stated his innocence. The process is expected to take up to six weeks.

By Leonardo Pérez

Regulators Face Dilemmas on Enabling AI Innovation and Thwarting Scams

Audy Castañeda
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Regulators Face Dilemmas on Enabling AI Innovation and Thwarting Scams

MrBeast warns his followers about AI deepfake scams and highlights the need for social media platforms to be prepared. European Commission official Věra Jourová highlights the need for balanced regulations on AI to avoid stifling innovation. OpenAI criticizes the draft EU AI bill for overregulating the technology, threatening to leave Europe.

Cryptocurrencies are not a scam in themselves. It is the projects behind them that can be considered scams, either offering their own token (non-existent or worthless) or promoting popular cryptocurrencies. This is a scourge for the sector, putting limits on the mass adoption of digital assets and blockchain technology.

YouTuber MrBeast has shared his Artificial Intelligence (AI) deepfake clip to inform his followers about scams. Meanwhile, one of the European Union’s (EU) top officials is concerned about strict regulations on AI.

With the rise of Generative AI tools, regulators and users have realized the threat the technology can pose.

Scammers Take Advantage of Influencers’ Popularity to Make AI Deepfake Scams

The main concern is to draft balanced regulations that focus on protecting users but not stopping innovation.

James Stephen Donaldson, the creator of one of the world’s largest YouTube channels, MrBeast, shared his deepfake video on X (Twitter) to warn his followers about AI scams. He wrote the following:

“A lot of people are getting this deepfake scam ad from me… are social media platforms prepared to handle the rise of AI deepfakes? This is a serious problem.”

He further added that “There was one of me on fb after they hacked and took over my account. It’s bad. Still don’t have that account back.”

The video tricks viewers into believing that MrBeast is giving away the latest iPhone 15 Pro for $2. It asks viewers to click on a link, probably redirecting them to some phishing website.

In addition to MrBeast, scammers are creating AI deepfake videos using other famous personalities such as Elon Musk. In September, bad actors were reported to be running crypto scams through Musk’s deepfake videos on TikTok.

European Official Warns Against AI Regulation and Scams

Deepfake videos have been circulating for quite some time. Hence, some are calling for strict regulations on AI.

On the other hand, stricter regulations could slow innovation. Therefore, regulators must strike a balance and not go to the extremes of either party.

Věra Jourová, vice-president for securities and transparency at the European Commission, believes there should be a robust analysis of potential risk factors rather than paranoia when regulating AI. She told the Financial Times the following:

“We shouldn’t mark things as high risk that don’t appear to be high risk at the moment. “There should be a dynamic process where when we see technologies being used in a risky way, we can add them to the high-risk list.”

The EU has been working on drafting a draft law on AI for the past two years. In particular, the bill would require mandatory disclosure of copyrighted material used to train AI models.

EU officials are expected to conclude their discussions on the AI ​​bill by the end of 2023. But OpenAI, ChatGPT’s parent company, believes the EU’s draft AI bill is overregulating the technology.

In May, OpenAI CEO Sam Altman threatened to leave Europe if the bill passed without changes. Meanwhile, the UK is also focusing on AI regulations. In November, the country will host a global summit on the issue.

By Audy Castaneda

“October Has Historically Been a Positive Month for Cryptocurrencies,” Says Head of Institutional Research at Coinbase

Leonardo Perez
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“October Has Historically Been a Positive Month for Cryptocurrencies,” Says Head of Institutional Research at Coinbase

Meanwhile, the company is removing a handful of non-dollar currency pairs for trading on several of its platforms, including SUSHI-BTC, SUSHI-ETH, SUSHI-EUR, and SUSHI-GBP.

David Duong, head of institutional research at Coinbase, believes that the overall macroeconomic outlook is favorable for improving cryptocurrency performance in the fourth quarter of 2023.

Meanwhile, starting October 16, Coinbase plans to suspend a total of 80 token pairs for trading on its Coinbase Exchange, Advanced Trade and Coinbase Prime platforms. Among the group, cryptocurrency and stablecoin trading pairs with the Euro (EUR) and the British Pound (GBP) will be removed.

However, Duong warns that short-term volatility could arise due to issues such as a possible government US close. While traditional risk assets may temporarily influence crypto markets, Duong is optimistic that such impact will be short-lived.

He argues that digital assets like Bitcoin are likely to recover quickly, serving as a hedge against vulnerabilities in the traditional financial system.

Federal Reserve Policy and Its Impact

Duong analyzes the Federal Reserve’s monetary policy and says its “more for longer” stance is already factored into market prices. Specifically, he points out that federal fund’s futures imply only 65 basis points of cuts in 2024, compared to the 100 basis points they discounted at the beginning of September.

He adds that the possible shutdown of the US government could affect the Federal Reserve’s access to crucial data, which could influence its decisions at the next FOMC meeting scheduled for October 31 to November 1, 2023.

The United Auto strikes Workers and the Writers’ Guild could also affect the U.S. economy, potentially preventing the Federal Reserve from raising interest rates. Duong suggests these factors could pave the way for a market rebound through the end of the year.

Role of Macro Factors in September Crypto Performance

According to Duong’s report, macroeconomic factors had only a marginal impact on cryptocurrency performance in September. It stands out that Bitcoin appreciated 3.5% in September, exceeding the losses of the S&P 500 and Nasdaq, which were 3.1% and 3.7%, respectively.

Duong had previously speculated that Bitcoin’s poor seasonal performance would be limited, in part due to its 10.9% depreciation in August. It also mentions that the 10-year yield in the US Treasury bond market rose above 4.60%, affecting traditional risk assets more than cryptocurrencies.

Market Liquidity and Regulatory Developments

Duong notes that market fundamentals are currently secondary to technical factors such as liquidity. It mentions that trading volumes have decreased from an average of $38.2 billion in August to $30.1 billion in September. Regulatory developments, such as the SEC’s deferral of several Bitcoin spot ETF applications, have been the main focus of market participants.

Duong also notes that 90% of SEC staff could be laid off in the event of a US government shutdown, leading to speculation that the SEC is trying to get ahead of this potential risk event.

Protocol Changes and Chain Activity

Duong also refers to on-chain activity and points to a sharp decline in the number of daily transactions on the Bitcoin network. This coincides with a proposal from Ordinals creator Casey Rodamour to replace the current BRC-20 protocol with an alternative called “Runes.”

Duong claims that the minting and transfer of BRC-20 tokens has increased the number of transactions by 51% compared to the first quarter of 2023. However, according to his report, the total dollar value transferred on the network has remained stable.

By Leonardo Pérez

Binance Faces Class Action Lawsuit

Audy Castañeda
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Binance Faces Class Action Lawsuit

The world’s largest crypto exchange, Binance, is facing a class action lawsuit for alleged market manipulation and dishonest practices.

The largest cryptocurrency exchange continues to face problems, this time Binance faces a class action lawsuit. The reasons, according to the plaintiffs, allude to alleged market manipulation. Both Binance and its CEO, Changpeng Zhao, received lawsuits for unfair competition and alleged violations of laws from the United States Securities and Exchange Commission (SEC).

The lawsuit, led by Nir Lahav, explains that Binance behaved like a monopoly and sought to harm its competitors. This time, the plaintiff claims that the company’s strategies monopolized and harmed the companies operated by FTX.

The conflict between Binance and FTX dates back to last year, when Binance publicly announced its withdrawal from a deal with FTX. Binance had invested in FTX tokens (FTT) and owned approximately 5% of the coin’s total supply.

For Alleged Market Manipulation, Binance Faces Class Action Lawsuit

After the fall of FTX, Binance has been pointed out as one of the causes. Although on repeated occasions, the company’s CEO assured that his steps were solely to protect its assets. The reason dates back to November last year, when a CZ post announced the sale of FTT, the FTX token.

The initial sale amount, approximately $530 million, caused the FTT price to drop by 14% in less than 24 hours. This measure and Binance’s declaration and intention to liquidate its holdings, created a domino effect that, for many, was the reason for the fall of FTX.

The lawsuit also revealed that Binance had sold a large amount of FTT the day before CZ made the public announcement. This fact has led to allegations of market manipulation by CZ and therefore makes it liable for the losses suffered by the plaintiff.

After having been one of the most important cryptocurrency exchanges, losing one of its most significant allies and holders destabilized them. The lawsuit filed in a Court of the Northern District of California, USA, indicates that these actions began on November 9 and caused the bankruptcy of the exchange.

The new lawsuit adds to the legal issues Binance already faces. The consequences of these legal actions are being closely watched by the crypto community as they raise questions about regulation and transparency in the cryptocurrency market. The resolution of this case could have a significant impact on the future of Binance and the way the cryptocurrency ecosystem develops as a whole.

Ongoing Investigation of the Exchange by the SEC

Binance is currently under scrutiny by the SEC for alleged violations of federal securities laws. This has even led the exchange to reconsider its position in the United States market, which is why it has continued to expand in other areas.

Despite the accusations and persecution, Zhao maintains his position regarding the innocence of the exchange and his person. The situation does not seem to affect the company’s CEO, who often jokes about the situation on his X account.

The authorities often maintain that Binance collaborates with the Chinese government and even has ties to it. However, after being founded in 2017 in Shanghai, the exchange moved its headquarters to different locations until it was located in the Cayman Islands. Currently, the main headquarters of the exchange is unknown and CZ has dodged the question, claiming that it lacks a formal headquarters.

By Audy Castaneda

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