Ripple Wins Its Case Against the SEC and Other Relevant News

Audy Castañeda
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Ripple Wins Its Case Against the SEC and Other Relevant News

The five most exciting events for cryptocurrency investors.

Here are the five most important news of the week that has just ended.

  • Ripple wins its case against the SEC.
  • Google Play allows payments with cryptocurrencies through its platform.
  • Celsius ex-CEO arrested and charged with cryptocurrency financial crimes.
  • South Korea will require companies to disclose their cryptocurrency investments.
  • The Central Bank of Brazil may confiscate assets and freeze accounts in Real Digital (CBDC).

Ripple Wins Its Case Against the SEC

Ripple Labs has won the long legal battle against US regulators, after the judge in charge of the case ruled in favor of the Blockchain solutions company.

The United States Securities and Exchange Commission (SEC) had filed a lawsuit alleging that Ripple Labs raised more than $1 billion through an unregistered securities offering by selling its native cryptocurrency, XRP.

The judge ruled that XRP is not necessarily a security, although the institutional sale did violate securities laws.

Google Play Allows Payments with Cryptocurrencies through its Platform

Google Play allows developers to embed cryptocurrency and token transactions into their apps and games. The policy update includes rewarding users with non-fungible tokens (NFTs) and other Blockchain-based assets, with the goal of fostering innovation and offering cryptocurrency experiences to users.

Google highlights its responsibility to protect users and maintain transparency in all transactions, and developers will need to clearly disclose tokenized digital assets that are sold or earned through apps.

Former Celsius CEO Arrested and Charged for Cryptocurrency Financial Crimes

Celsius founder and former CEO Alexander Mashinsky has been arrested and charged with deception, market manipulation, and cryptocurrency-related fraud.

Mashinsky currently faces several decades in prison and must appear before a federal judge in Manhattan. The authorities have focused on their management during the crisis, including the manipulation of the CEL cryptocurrency price, as well as the use of client funds to finance the company’s operation.

South Korea Will Require Companies to Disclose Their Cryptocurrency Investments

The South Korean Financial Services Commission has announced new regulations that will require companies that issue or hold cryptocurrencies to provide detailed disclosures about their holdings in their financial statements.

The regulations will enter into force in January 2024 and seek to strengthen accounting transparency. Companies will be required to disclose information about the quantity and characteristics of their crypto tokens, their business models, and their internal accounting policies related to the sale and associated profits.

Companies that hold cryptocurrencies for investment purposes will be required to disclose information about the token rank, book value, and market value of their holdings.

Central Bank of Brazil May Confiscate Assets and Freeze Accounts in Real Digital (CBDC)

The Central Bank of Brazil confirmed that it will continue to freeze accounts and confiscate assets in the final version of Real Digital (CBDC) to adjust the platform to Brazilian legislation and justice.

The inclusion of these features has generated debate about the balance between financial security and privacy in a CBDC. In this regard, Pedro Magalhães’ discovery of the CBDC trial code details has raised concerns that a CBDC could allow excessive control by financial institutions, and thus violate the users’ privacy.

By Audy Castaneda

The Crypto Industry at Tipping Point: Regulations and Challenges in the US and Indonesia

Audy Castañeda
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0
The Crypto Industry at Tipping Point: Regulations and Challenges in the US and Indonesia

Regulations in the US, Indonesia’s plans to launch its own cryptocurrency exchange, and more news in today’s roundup.

The crypto industry and regulations are at a tipping point. In the United States, popular cryptocurrency exchange Coinbase has announced that it will temporarily prevent its clients from staking additional assets in four states due to ongoing legal proceedings. This measure, which affects users in California, New Jersey, South Carolina and Wisconsin, is a reflection of the regulatory challenges facing the industry in the country.

Coinbase’s suspension of certain staking services comes after the United States Securities and Exchange Commission (SEC) filed a lawsuit against the platform in June, alleging that it was offering unregistered securities. As a consequence, regulatory bodies in ten US states launched their own legal proceedings, which has led to the suspension of specific services on Coinbase.

Indonesia Moves Forward with Its Own Cryptocurrency Exchange

Despite the regulatory steps being taken in the United States regarding crypto assets, Indonesia is taking a bold step towards regulating and adopting cryptocurrencies. According to reports from Tempo.co, the Indonesian Commodities and Futures Trading Regulatory Agency (Bappebti) is planning to launch its own cryptocurrency exchange later this month. The original release was scheduled for December 2022, but suffered some delays.

Bappebti plans to restrict cryptocurrency sales to local transactions, keeping them in line with international market developments. This would include the question of cryptocurrency prices, as long as Bappebti approves them.

Indonesian regulators have completed system integration tests between merchants, exchanges, clearing and depository. Which indicates that they are close to finalizing the preparations for the launch of the national cryptocurrency exchange.

Eeon Intervenes in SEC Lawsuit Against Binance

In the case of the lawsuit filed by the United States SEC against Binance, a third party entity called Eeon has stepped forward to intervene and represent the interests of Binance clients. According to the filing with the District Court for the District of Columbia, Eeon claims that neither the SEC nor Binance’s lawyers have adequately represented the interests of clients. Which has led Eeon to seek representation on his behalf.

In its filing, Eeon claims to be a proper party in the case, as the court identified them as “Customers” in an order issued on June 17, 2023. Eeon contends that they are interested parties, investors, and owners of cryptocurrencies held by Binance and its affiliates, and argue that their interests have not been considered appropriately.

Nevada-based Eeon argues that cryptocurrencies should be classified as commodities rather than securities. They further claim that the SEC has no jurisdiction over cryptocurrencies, and point to the absence of regulations tailored to this emerging asset class.

SEC Accepts Bitcoin ETF Application

The SEC has accepted the application for a Bitcoin exchange-traded fund (ETF), its official website reported. This decision follows the acknowledgment of a similar request from Bitwise the day before.

Such application acceptance signals the official start of the review process for the Nasdaq Bitcoin ETF proposal. Although this is only the first step in a long regulatory journey, it is of great importance to the Bitcoin community. The SEC’s willingness to explore the idea of ​​a Bitcoin ETF and assess its potential effects on the market is evident from this acknowledgment.

By Audy Castaneda

A Network of Cyber ​​Scams that Laundered their Profits with Cryptocurrencies Falls

Marina Meza
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A Network of Cyber ​​Scams that Laundered their Profits with Cryptocurrencies Falls

The organization sent massive SMS warning of a false security problem in its online banking accounts.

In Spain, the National Police have arrested seven people in an operation in which they have dismantled a network that defrauded more than 100,000 euros by posing as banking entities on the internet and laundering their earnings by buying cryptocurrencies and also selling their computer applications to other organizations.

As reported by the Police on Monday, in the operation against this highly professionalized network, seven people have been arrested, including the alleged leader of the organization, and five searches have been carried out -four in Hospitalet de Llobregat (Barcelona) and one in the Catalan capital-, in which numerous mobile phones, computer equipment, cryptocurrency storage devices and 74 marijuana plants have been intervened.

The network leader, besides directing the now dismantled organization, offered other criminal groups his computer applications specifically designed for the commission of fraud, according to the Police.

More than 100,000 Euros Stolen

The networks sent massive SMS to the victims, throughout Spain, warning of a security problem in their online banking accounts, with a link that directed them to a fraudulent website created by them, which in its format, text and content almost perfectly simulated that of the bank.

Subsequently, they called the victims by phone, posing as bank employees, to obtain their credentials -such as ID and access passwords-, pretending that they were helping them solve the security problem in their online accounts.

The detainees, with a high degree of specialization, had the knowledge and technical resources to impersonate the telephone and the web of a large number of companies, mostly from the banking sector but also mercantile, energy and parcel services.

With the victims’ data, they took control of their accounts and diverted their money to the organization’s bank accounts, obtaining more than 100,000 euros, which they hid and laundered through the purchase of cryptocurrencies on various platforms.

According to the investigators, the detainees carried out a significant number of cryptocurrency transactions, with the sole objective of making it difficult to trace the money and identify those truly responsible for the scams.

In addition, part of the defrauded money was used to pay for computer equipment and resources, as well as the commissions of the people who provided the bank accounts in which the victims’ money was initially diverted.

The stolen money was sent over and over again through different accounts until it finally reached the top of the criminal network. The leader, in addition to coordinating the actions of the dismantled group, offered “crime as a service” tools to other organizations.

This was achieved thanks to the high technical and professional level of the organization. The detainees marketed their computer applications specially designed for the commission of fraud. The arrested gang worked throughout the territory of Spain and used cryptocurrencies as a means of escaping funds.

Unauthorized Money Transfers

According to the Police, the records carried out have also proven that part of the profits were invested in indoor marijuana plantations.

The investigation began as a result of several complaints from victims who stated that unauthorized money transfers had been made from their bank accounts, which allowed agents from the Central Cybercrime Unit of the National Police to get on the trail of this network.

In their investigation, the Police have been able to prove that the network, which had its epicenter of action in Hospitalet, temporarily moved to other towns in Spain to act from different geographical points to try to make it difficult to locate.

By Marina Meza

Crypto Money Laundering a Growing Problem, Report Says

Audy Castañeda
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Crypto Money Laundering a Growing Problem, Report Says

A new study from SmartSearch reveals that dirty money is entering the crypto industry at an alarming rate. 28% of crypto companies have reported an increase in Suspicious Activity Reports (SARs) in the last six months. Financial professionals use SARs to notify law enforcement of possible money laundering or terrorist financing.

Dirty money is pouring into the industry at an alarming rate, according to a new study. More than a quarter (28%) of crypto companies reported an increase in the number of Suspicious Activity Reports in the last six months.

Financial professionals, including lawyers, accountants, and real estate agents, use Suspicious Activity Reports (SARs) to alert law enforcement to potential cases of money laundering or terrorist financing.

Crypto the Best Option for Dirty Money

They provide law enforcement in the UK with additional perspective on economic crime in the private sector. However, they are not the same as a crime or fraud report. They also do not constitute an official criminal complaint.

The new data comes from SmartSearch, which surveyed 500 compliance decision makers across various industries. Including crypto platforms, gambling companies, property developers and banks.

Recent numbers highlight the ongoing struggle by compliance professionals to combat the growing scourge of cryptocurrency-related money laundering. BeInCrypto reported on a survey revealing that two-thirds of crypto businesses are concerned about anti-money laundering (AML) violations.

That’s not the only data point, though. According to a First AML survey, 53% believe that current practices only partially address money laundering risks through cryptocurrencies.

Additionally, 41% have identified money laundering cases involving cryptocurrencies. In addition, 51% have faced fines or sanctions for not complying with anti-money laundering regulations.

Criminals view cryptocurrencies as a lucrative alternative to traditional money laundering for a number of reasons. First, cryptocurrencies like Bitcoin are pseudonymous and more difficult to trace than fiat currency bank transfers.

Crypto is also easy and fast to transact in large sums and can be accessed from anywhere in the world. Additionally, many Virtual Asset Service Providers (VASPs) lack the structures or resources to monitor illegal activity effectively.

In the most recent Chainalysis Crypto Crime Report, 2022 was a record year for crypto money laundering, with $23.8 billion in funds “cleaned” using cryptocurrencies, which marks a 68% increase from the previous year. However, the same report also noted that less than 1% of all cryptocurrencies have any connection to illicit activities.

Binance Investigated in France for “Aggravated Money Laundering”

Martin Cheek, managing director of SmartSearch, believes that criminal gangs target crypto companies to exploit weaknesses in their compliance processes, especially when faulty manual customer checks are used.

“These common practices, like requesting an identity document, are no longer enough,” he explained. “Not only do they fail to comply with know-your-customer (KYC) and AML standards, but they can also leave the door open for identity theft.”

Cheek further explains the situation as follows:

“The quality of forged documents has evolved to a level of sophistication that makes identification increasingly difficult. The Home Office’s own guide on verifying forgeries of official documentation lists 24 potential points of failure, many of which require expert knowledge to detect.

Money laundering has plagued the cryptocurrency industry as it attempts to present a legitimate and compliant public face. On June 16, French authorities announced that they are investigating Binance, the world’s largest exchange, for “aggravated money laundering.”

The EU is currently in a consultation process on the inclusion of VASP in its anti-money laundering regulations.

By Audy Castaneda

Will Cryptocurrencies Replace Gold as a Safe Investment? BlackRock’s Larry Fink Shares His Perspective

Audy Castañeda
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0
Will Cryptocurrencies Replace Gold as a Safe Investment? BlackRock’s Larry Fink Shares His Perspective

BlackRock CEO Larry Fink’s appreciation of investor demand: Gold or cryptocurrencies?

Larry Fink, CEO of BlackRock, has mentioned on several occasions that investors are showing increasing interest in cryptocurrencies, especially in the context of gold. Investors who have traditionally looked to gold as a safe and stable investment are beginning to wonder if cryptocurrencies could offer a similar alternative.

As a curious fact, Larry Fink in 2017 stated: «Bitcoin just shows how much demand for money laundering there is in the world. It is all that it is. It’s an index of money laundering.”

Currently, Fink has highlighted that although cryptocurrencies are a relatively new asset and not yet fully regulated, they are gaining popularity and attention in the financial markets. Some investors seek to diversify their portfolios and see cryptocurrencies as an opportunity to do so.

In this regard, on July 14, Michael Saylor tweeted that “Larry Fink of BlackRock thinks Bitcoin will transcend every international currency due to broad-based worldwide demand.”

Gold and Cryptocurrencies, Competitors or Partners? Larry Fink’s Perspectives on Investor Demand

In an interview with Fox Business, Larry Fink assured that the role of cryptocurrencies and Bitcoin is to digitize gold in many ways. Functioning as a hedge against inflation, a hedge against the onerous problems of any country or the devaluation of its currency in any country in which it is located.

“As I said just 3 days ago. Public opinion on Bitcoin is about to change so fast you won’t believe it.”

Specifically, on CNBC, Larry Fink said that “increasingly” gold investors have been asking about the role of cryptocurrencies in the last five years, highlighting the role of the exchange.

“If you look at the value of our dollar, how it has depreciated in the last two months and how much it has appreciated in the last five years…an international crypto product can really transcend that.”

“That is why we believe that there are great opportunities and that is why we see more and more interest. And the interest is wide and global,” he further explained.

Fink reaffirmed that BlackRock’s philosophy is based on the perspective of the future and the importance of providing investment options to users in those assets that they believe will appreciate over time.

The “BlackRock” Effect

Since BlackRock filed its application for a Bitcoin ETF in mid-June, the cryptocurrency industry has seen encouraging momentum from a number of quarters:

BlackRock’s decision to apply to launch this product prompted other major players, including Fidelity, Invesco, and several others, to submit their own applications for a Bitcoin ETF as well.

In line with the above, there was a notable increase in interest from enthusiasts and investors in adding Bitcoin to their portfolios, which also generated a positive impact on the value of Bitcoin in the main markets, where prices are now seen close to $31,000 per unit.

According to a study by K33 Research, institutional activity in BTC was “currently thriving,” according to the research. In fact, the CME Chicago stock exchange posted its “strongest monthly entry point since October 2021” in bitcoin ETPs in June.

European ETFs increased their capital inflow by 5%, several of which have physical holdings of the digital currency behind them. Even assets in Brazil benefited, with growth of 3% in the last month.

By Audy Castaneda

What Defines a Crypto Asset as a Security in the United States?

Audy Castañeda
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0
What Defines a Crypto Asset as a Security in the United States?

In United States law, a security is defined as “an investment of money in a common enterprise with benefits derived solely from the efforts of others.” Many industry players argue that most cryptocurrencies do not fit the legal definition of securities in the United States and have called for new regulations or laws.

The case between Ripple Labs and the United States Securities and Exchange Commission (SEC) has taken a significant turn. Judge Analisa Torres has ruled that some sales of Ripple’s XRP token are not subject to securities laws.

Said ruling is a major victory for Ripple in its legal battle against the SEC, which had sued the company for making an unregistered offering of $1.3 billion in XRP between 2013 and 2020.

Although the decision did not cover secondary sales of XRP, it has built confidence among cryptocurrency exchanges to once again offer the Ripple token to their users.

Marco Santori, Kraken’s legal director, said on Twitter that they see the court ruling as a first step toward greater legal clarity in the United States. He added that this clarity allows them to plan, contract and invest in the country where they were founded.

The partial victory of Ripple Labs against the United States regulatory body can be considered as a very significant blow against the “war” that the SEC is waging in favor of traditionalism and to the detriment of the cryptocurrency market. However, lawyers who know the industry say that it has not been a definitive triumph.

Victory for Ripple and the Market

Ripple, as expected for some months now, had everything to win in this trial brought up by the most conservative faction of the US government. However, it took more than two and a half years for the judge to say that XRP is not a security.

This court decision ends the dispute that began in December 2020, when US regulators filed lawsuits against Ripple Labs and its CEOs, Brad Garlinghouse and Chris Larsen, alleging that the technology company had raised more than $1 billion. through offering unregistered securities, making direct reference to the sale of its native token, XRP.

According to Judge Torres, the sale of the XRP token by Ripple on exchange platforms and through algorithms does not correspond to investment contracts, although the institutional sale of this digital asset would have violated the securities laws of the North American giant.

The SEC’s lawsuit sought to force Ripple to stop offering and selling its native token, based on the premise that this was a security, an issue in which it has just failed.

XRP Sales Are Not Securities Offerings

According to Judge Torres’ ruling, Ripple’s sales on public exchanges to retail investors are not securities offerings because the buyers had no reasonable expectation of profit tied to Ripple’s efforts. However, it also ruled that Ripple violated securities laws when it sold XRP directly to sophisticated investors like hedge funds.

Bitcoin is not considered a security because investor returns do not depend on the efforts of developers or managers. Some Blockchain projects have attempted to finance their operations by first offering securities under SEC regulations and then providing or selling cryptocurrency after building a working Blockchain.

However, it is still unclear what would be required to convert a security to a non-security, as the SEC has not provided clarification on this matter, Reuters reports.

By Audy Castaneda

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