Category: Crypto News

KuCoin’s native token 15% shortly after news of the lawsuit emerged.

The United States government, via the Attorney’s Office for the Southern District of New York, has sued KuCoin, one of the largest centralized cryptocurrency exchanges by trading volume, and its founders for operating an unlicensed money-transmitting business and willfully violating the Bank Secrecy Act.

According to a press release by the Attorney’s Office, KuCoin founders Chun Gan and Ke Tang violated US anti-money laundering laws to grow their platform into one of the world’s largest exchanges. The duo willfully failed to maintain an anti-money laundering (AML) and terrorist financing program to prevent the crypto exchange from being used for illegal activities.

News about the lawsuit swiftly dragged KuCoin’s native token, KCS, down to weekly lows. At the time of writing, the asset was trading at $12.60, down 15% in the past 24 hours.

US Charges KuCoin

KuCoin and its affiliates allegedly failed to maintain standard know-your-customer (KYC) procedures and refrained from filing any reports on suspicious activity from the time of its launch in 2017. 

The government claims KuCoin serves millions of customers in the US despite claiming not to do so. The exchange allegedly failed to register with the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Commodity and Futures Trading Commission (CFTC) until late 2023.

When the duo eventually implemented KYC procedures on KuCoin in July, the program was exclusive to only new customers, leaving millions of existing customers on the exchange, including those in the US, without necessary means of identification.

KuCoin Founders Face Five Years in Prison

Furthermore, the KuCoin founders attempted to hide the existence of US customers on the crypto exchange, making it appear the platform was exempt from the country’s AML and KYC laws. While KuCoin took steps to prevent American users from identifying themselves when opening accounts, the exchange advertised itself to the US market, touting the absence of KYC procedures on the platform.

Hence, since its inception, KuCoin has received and sent $5 billion and $4 billion in criminal proceeds.

Although Gan and Tang have not been apprehended, they face maximum sentences of five years in prison for their roles in the business.

Meanwhile, New York’s Attorney General Letitia James entered an agreement requiring KuCoin to cease its operations in the city in December 2023 and pay a $22 million fine to settle a lawsuit filed in March of the same year.

The SEC claimed its request is geared at sending a “strong message” to other crypto market players about not tolerating conduct like Ripple’s.

The three-year lawsuit between the United States Securities and Exchange Commission (SEC) and blockchain solutions firm Ripple Labs is nearing its end. However, the SEC wants roughly $2 billion in fines and penalties.

A tweet by Ripple chief legal officer Stuart Alderoty disclosed that the SEC requested the damages in its motion for judgment and remedies filed on Friday, March 22. The redacted version of the document is to be made public today.

SEC Requests $2B Damages in Ripple Case

Although the SEC’s brief is still under seal, information obtained by CoinDesk revealed that the agency asked the court to order Ripple to pay $876 million in civil penalties, $876 million in disgorgement, and $198 million in prejudgment interest, amounting to $1.95 billion in total.

The SEC claimed its request is geared at sending a “strong message” to other crypto market players about not tolerating conduct like Ripple’s. In 2020, the US agency accused Ripple of violating securities laws through its sales of XRP, the native token of the Ripple ecosystem, to both retail and institutional customers. The Commission said Ripple raised roughly $1.3 billion by offering unregistered securities.

Over two years after the SEC filed the lawsuit, a New York judge ruled that only Ripple’s institutional sales of XRP violated securities laws, not the trading of the asset to retailers on exchanges.

Ripple to File Response Next Month

Both parties have worked toward concluding the case over the past few months. Last week, they filed a joint letter seeking the court’s approval to seal issues related to the upcoming remedies-related briefing. The grand trial has been scheduled for April 23.

While Alderoty slammed the SEC in his tweet, he revealed that Ripple would file its response to the agency’s request next month. The court expects the firm’s response by April 22.

“Our response will be filed next month, but as we all have seen time and again, this is a regulator that trades in statements that are false, mischaracterized, and designed to mislead. They stayed true to form here. Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large,” the Ripple CLO said.

Meanwhile, XRP was trading at $0.65, up 2.6% in the past 24 hours at the time of writing. Analysts expect the asset to have a remarkable year if the court’s ruling favors Ripple.

Solana (SOL), the native crypto asset of the Solana blockchain, has been making bullish moves and is on track to hitting its previous all-time high of $260. 

According to popular crypto analyst CryptoJelle, SOL has flipped a former resistance level into a new support zone.  Showing the current SOL chart, the analyst noted that the move is a bullish signal for a long-lasting upward movement in no distant time. 

Jelle, who has been active in the crypto market analysis, reflects a high level of optimism on Solana after considering present market conditions. 

Solana to Hit New All-Time High

As indicated by Jelle, the chart shows a recovery on SOL and a sustained bullish trend to its previous all-time high. Following days of bearish trends and consolidation, Solana has broken out upwards, according to the analyst. 

The move indicates that many crypto investors have turned their attention to SOL and are becoming more positive about adopting Solana as a promising cryptocurrency to invest in. The asset’s movement to turn a position of resistance to support has increased trust and attracted further attention to the token as its adoption keeps increasing.

Many crypto and financial market analysts are now keeping a close eye on Solana. Its founding ecosystem has proven to be sustainable in the crypto industry with many utility projects including functional decentralized applications (dApps) being built on the network. 

Solana has survived many wavy and challenging market conditions which has contributed to its growth and solidity in the crypto space.   

Solana’s Recent Trading Movement

At the time of writing,SOL was trading above $190 with around an 86% increase from last month’s price and above an 11.8% increase within the past 24 hours. The asset’s trading volume has also increased by more than 48% over the past month and is at $4.2 billion.

Solana’s current market is above $86.1 billion and continues to increase as many investors discover and acquire the token. The asset now stands solidly as the fifth biggest cryptocurrency by market cap with just $3 billion below BNB ranking fourth and $50 billion above XRP ranking sixth.

As the crypto market maintains an uptrend and Solana continues to progress, it becomes easier for SOL to attain the predicted $250 and even beat its previous all-time high to set a new one. 

Shibarium’s rally to the $3.8 million range comes within a month after its TVL crossed the $1 million mark.

Shibarium, the Ethereum-based layer-2 scaling network built by the Shiba Inu (SHIB) team, just achieved a major milestone in its journey; its total value locked (TVL) has reached a new all-time high.

Data from decentralized finance TVL aggregator DeFiLlama shows that Shibarium’s TVL hit $3.8 million on March 25, following two days of massive growth.

Shibarium TVL Hits $3.8M

Shibarium’s rally to the $3.8 million range comes within a month after its TVL crossed the $1 million mark. The network’s TVL plunged to $558,000 within weeks after its launch in August 2023. Since then, it has hovered below $1 million except for a couple of occasions in December and early February when it briefly spiked above the range.

By late February, Shibarium caught the wave of the crypto market’s rally, and its TVL moved up and stayed above $1 million until March 23, when it experienced an explosive surge to $3.4 million, recording a 137% increase.

With Shibarium’s TVL sitting at $3.8 million at the time of writing, the network has seen gains of 165% within three days.

Shibarium DEXs Drive Growth

The rise of Shibarium’s TVL is driven by user activity on its decentralized exchanges (DEXs), particularly WoofSwap, which has over $2.4 million in total value locked, representing a 4,238% rise in the past seven days and a 6,316% increase in the past month.

Two other DEXs are playing significant roles in the network’s growth, although they have smaller TVLs compared to WoofSwap. MARSWAP’s TVL is $805,500, while that of ChewySwap is around $428,600.

It is worth mentioning that WoofSwap attributes its growth to the launch of a new memecoin, Damn (DAMN), which has rallied over 400% since its launch on March 18, per data from DexScreener.

Besides Damn’s uptick, SHIB has also recorded significant gains recently, with more than a 6% increase in the past week. At the time of writing, data from Cryptocurrencies to Watch showed the dog-themed memecoin was trading at $0.00002918, representing a 5% rise in the past 24 hours.

Meanwhile, Shibarium has achieved several other milestones in addition to the rise in its TVL. The protocol’s total blocks have surpassed 3.8 million, its total transactions are above 412 million, and at the time of writing, over 1.385 million addresses hold SHIB.

U.S. Judge Shelby slammed the securities regulatory for serious misconduct.

The United States Securities and Exchange Commission (SEC) has come under intense scrutiny and potential sanctions following allegations of severe abuse of authority and misconduct against Utah-based crypto firm DEBT Box.   

SEC Faces Sanction 

U.S. District Judge Robert Shelby instructed the SEC to clarify its actions after attorneys representing DEBT Box expressed concerns about the regulator’s behavior and misconduct. Although the SEC acknowledged its errors, it appealed to the judge not to impose formal sanctions.

The case garnered attention following the defendants’ allegations that the SEC misrepresented crucial facts to secure a temporary restraining order, which froze assets on the crypto platform.   

In a decision rendered on Monday, Judge Shelby dismissed the SEC’s appeal and underscored numerous instances of “bad faith” behavior. He held the agency accountable for its actions, saying it had “significantly compromised the integrity of the proceedings and the judicial process.”  

Also, in an 80-page document filed by Shelby, sanctions were levied against the SEC, which mandates the agency to reimburse DEBT Box’s attorney’s fees and expenses associated with the restraining order. Additionally, the judge rejected the regulator’s plea to dismiss the lawsuit with prejudice, denying the SEC the opportunity to refile the lawsuit later.   

SEC’s Integrity and Transparency in Jeopardy

Initially, Judge Shelby granted the SEC’s request, but later raised concerns about the accuracy of the agency’s information, which led to a demand for evidence.   

In December, the regulator acknowledged and admitted errors, with enforcement chief Gurbir Grewal apologizing for the oversight.  But the securities watchdog tried to avoid sanctions, contending against accusations of bad faith conduct. In January, the commission filed a motion to dismiss the case, asserting that sanctions were unwarranted. 

The legal tussle started after the SEC filed an action against DEBT Box in July 2022 for allegedly that the crypto firm defrauded investors of nearly $50 million through the sale of unregistered securities.  The regulator also requested for an ex parte temporary restraining order, a measure typically reserved for situations where there’s a risk of evidence tampering or fleeing the country.  

The SEC claimed that DEBT Box executives were closing bank accounts and planning to depart from the United States.  

In his judgement, Judge Shelby criticized the SEC for relying on its federal agency status to justify its actions, particularly in pursuing the restraining order. Shelby expressed concerns over the disruption caused to lives by granting the initial order.  

He further highlighted the SEC’s repetition of factual inaccuracies and introduction of new falsehoods in subsequent court representations. 

Shelby underscored that these matters couldn’t be brushed aside as unintentional mistakes. He concluded that the SEC’s lawyers deliberately made strategic decisions to present information, fully aware that without it, they wouldn’t be able to obtain the restraining order and asset freeze. 

Ray insisted that even the best conceivable outcome in FTX’s bankruptcy proceeding would not give victims a true recovery, making it look like the fraud never happened.

John Ray III, the interim CEO of the bankrupt cryptocurrency exchange FTX, has revealed that the company’s creditors will never be made whole despite founder and former chief executive Sam Bankman-Fried’s (SBF) claims that customers and investors incurred no harm.

Never to be Made Whole

According to a victim impact statement addressed to Judge Lewis Kaplan of the United States District Court for the Southern District of New York on March 20, Ray believes that FTX customers would never be in the same economic position they would have been had they not crossed paths with SBF and his altruism brand.

Ray insisted that even the best conceivable outcome in FTX’s Chapter 11 bankruptcy proceeding would not give affected parties a “true, full economic recovery” to the point that it would look like the fraud never happened.

One major reason for Ray’s statements is the rising value of cryptocurrencies, which is not reflected in the funds to be disbursed to creditors. According to the Bankruptcy Code, each creditor’s claim must be valued as of the bankruptcy date. Since the values of many cryptocurrencies have risen substantially since the petition date, November 2022, FTX victims would be receiving less than the current value of their assets. Bitcoin alone has risen over 400%.

SBF is Making False and Reckless Statements 

In addition to outlining FTX creditors’ losses, Ray tagged several statements recently made by SBF in his sentencing submission as “categorically, callously, and demonstrably false.”

In late February, SBF claimed FTX and its affiliated companies were solvent when they filed for bankruptcy. The convicted fraudster also said customer funds were on the exchange, not lost, reducing the harm done to creditors to zero.

“The value we hope to return to creditors would not exist without the tens of thousands of hours that dedicated professionals have spent digging through the rubble of Mr. Bankman-Fried’s sprawling criminal enterprise to unearth every possible dollar, token or other asset that was spent on luxury homes, private jets, overpriced speculative ventures, and otherwise lost to the four winds,” Ray said, insisting that SBF’s claims were badly asserted.

The FTX interim CEO explained that SBF relied on misinterpretations of materials prepared and publicly released by the exchange’s current management at his instruction before a January 31 hearing. He said the statements were both false and reckless, and SBF used them in an attempt to land a lighter jail term.

Grayscale is planning to reduce its GBTC fees shortly after announcing a mini bitcoin ETF.

Michael Sonneshein CEO of the popular digital asset management company Grayscale announced on Monday that fees on its bitcoin Exchange-Traded Fund (ETF) will come down over time as the bitcoin ETF market continues to progress. 

GBTC Current Management Fees

Earlier this year, the United States Securities and Exchange Commission (SEC) approved the Grayscale Bitcoin Trust (GBTC) alongside other bitcoin ETFs. Thus, making it easier for institutional investors to acquire and trade bitcoins.  

Following the approval, Grayscale has been charging 1.5% management fees, clearly higher than what is charged by BlackRock and other bitcoin ETF providers. Grayscale has defended its high fees that are above average market price. However, following the outflow of about $12 billion within two months, Sonneshein said the company expects to reduce GBTC fees in the coming months. 

Grayscale manages a $26 billion bitcoin ETF and has witnessed an outflow of $12 billion, around 46% of GBTC. Grayscale recorded its highest single-day outflow on Monday with withdrawals amounting to $643 million. Whereas, other bitcoin ETFs like BlackRock have recorded an inflow of about $850M in a single day.

Speaking on the matter, Grayscale CEO said that other ETFs charge lower fees because they “do not have a track record” and that they’re trying to attract investors with fee incentives. He added “All these new issuers came into the market to compete with us” and are also rivaling each other. 

“I’ll happily confirm that, over time, as this market matures, the fees on GBTC will come down,” Sonneshein said in an interview.  He further explains that the company has always expected outflows because investors have been wanting to take gains in their portfolios.  

Additionally, Grayscale has introduced an easier way for investors to access its bitcoin ETF at a low cost – The Grayscale Bitcoin Mini Trust, which is set to trade at a lower fee than GBTC. Existing GBTC holders can also swap to the mini GBTC without paying capital gainns tax.

The SEC will not receive any part of the civil penalty until all parties, including Gemini Earn investors, receive their bankruptcy claims. (more…)