Crypto Guides, Knowledge & Insights

Gemini and Genesis seek to dismiss SEC lawsuit over defunct Earn product

On May 26, Gemini and Genesis submitted a request to the court to dismiss the SEC lawsuit related to their Earn product.　　Genesis says Earn wasnt a security　　According to Geminis lawyer, Jack Baughman, in response to the SEC lawsuit, he stated that the contract establishing the Earn program was not a security, and even if it were, the SEC would need to demonstrate that the contract was sold, which never occurred.　　Gemini collaborated with Genesis Global Capital to offer the Earn product, enabling users to earn interest on their cryptocurrency deposits through reinvestment by the providers. In their recent filing, Gemini argued that this offering constituted a lending arrangement rather than a security. Their primary argument centered around the fact that the contracts were not sold on a secondary market.　　Gemini asserted that the lending agreements they entered into should not be considered securities and requested the court to dismiss the complaint with prejudice. Baughman highlighted that Genesis has also filed a motion to dismiss the case, and Gemini is supportive of this argument.　　Earn was halted in November　　In November 2022, Genesis compelled Earn to suspend withdrawals, and subsequently, on January 10, 2023, Gemini permanently discontinued the service. Following these events, on January 12,

2023-05-29Deep Dive

Arbitrum-Based Liquidity Protocol Exploited For $7.5M

Just three days after the launch of its version 2, the Jimbos Protocol, built on the Arbitrum network, fell victim to an exploit that resulted in the loss of 4090 ETH, equivalent to $7.5 million.　　PeckShield, a renowned security firm, identified that the hack was made possible due to the protocols inadequate control over slippage for the tokens it managed.　　Hacker used $5.9 million flash loan to exploit Arbitrum-based protocol　　According to a report by PeckShield, the recent hack on the Jimbos Protocol can be attributed to the absence of proper slippage control during liquidity-shifting operations. This allowed the attacker to exploit the imbalanced price range by executing a reverse swap for profit, taking advantage of the protocol-owned liquidity.　　In order to carry out the attack, the hacker utilized a flash loan totaling $5.9 million.　　Following the incident, Jimbos Protocol took to Twitter and acknowledged the exploit, stating that they are actively cooperating with law enforcement and security experts. They have assured the public that further information will be shared as it becomes available.　　Tokens price falls 40%　　Following its launch on May 16, the Jimbos Protocol, built on the Arbitrum network, encountered a smart contract bug that rendered the protocol inoperable. In response, users were advised

2023-05-29Deep Dive

Digital Currency Group Shuts Institutional Trading Platform, Cites Crypto Crisis

Digital Currency Group (DCG), a prominent digital-asset conglomerate, has announced the closure of its institutional trading division, TradeBlock, attributing the decision to the challenging conditions prevailing in the cryptocurrency market. TradeBlock specialized in offering institutional investors trade execution, pricing, and prime brokerage services. As per Bloombergs report, DCG plans to wind down its prime brokerage subsidiary, TradeBlock, by the end of this month.　　Prolonged crypto winter season　　Digital Currency Group (DCG) has announced the closure of its institutional trading platform, citing several factors including the broader economic conditions, an extended period of downturn in the crypto market, and the uncertain regulatory landscape for digital assets in the United States. The decision to shut down the institutional trading side of the business follows the earlier closure of DCGs wealth-management division headquarters, which was necessitated by the bankruptcy of Genesis, its lending business.　　Prior to the closure, Digital Currency Group engaged in negotiations with creditors associated with its bankruptcy lending business, Genesis. These discussions played a significant role in the companys decision to shut down its subsidiary, TradeBlock.　　In addition, Digital Currency Group (DCG) disclosed losses surpassing $1 billion in the previous year, stemming from the ripple effect of the FTX collapse and the overall downturn

2023-05-26Deep Dive

Japan Gears Up To Enforce AML Measures For Crypto

Japan has announced the implementation of new anti-money laundering (AML) measures for cryptocurrencies to combat increasing fraudulent activities in the industry. 　　Japan Revises AML Measures, Tightens Crypto Regulation　　In an effort to combat the rise in crypto-related crimes and ensure the integrity of its financial system, Japan will be enforcing strict anti-money laundering (AML) measures across the countrys crypto industry. These measures, which were first proposed earlier this year, are set to take effect from June 1st.　　There has been an ever-increasing rate of illicit activities like money laundering and terrorism financing, especially in crypto. With Japan being such a significant player in the global cryptocurrency market, the countrys cabinet is seeking to address potential risks associated with the anonymity and decentralized nature of digital assets.　　The country‘s existing legal framework has come under criticism by the international financial watchdog, Financial Action Task Force (FATF). As a result, the country’s cabinet revised the relevant laws in December, focusing on monitoring the movement of illicit funds under the guise of legal crypto transactions.　　New Measures Include “Travel Rule” 　　The enforcement of the “Travel Rule” is a significant aspect of the new measures aimed at ensuring more precise monitoring of illicit proceeds. The proposal of the

2023-05-26Deep Dive

Fintoch securities fraud warning from Singapore

Fintoch has received a securities fraud warning from Singapore. The Monetary Authority of Singapore added Fintoch to its Investor Alert List on May 4th. MAS cites Fintoch‘s website domains as “fintoch.com” and “fintochonline.com”. The first website is Fintoch’s official website. The second website belongs to Fintoch promoter Shaikh Noorul Amin.　　The Investor Alert List provides a list of persons who, based on information available to MAS,　　i) may be or may have been wrongly perceived as being licensed or in any other way authorised or regulated by MAS;　　ii) have made an offer of units in a business trust or collective investment scheme which may be or may have been wrongly perceived as being authorised, recognised or registered by MAS;　　iii) have made an offer of investment which may be or may have been wrongly perceived as being made in or accompanied by a document lodged or registered with MAS. As a passive returns investment scheme, points two and three apply to Fintoch. Fintoch is not registered to offer securities in any jurisdiction. The company commits securities fraud and operates illegally the world over.　　The reason for this is Fintoch is a Ponzi scheme. Fronted by US actor Mike Provenzano, playing Fintoch CEO “Bobby Joe

2023-05-26Deep Dive

Negotiations Show Positive Signs

Bitcoin (BTC) recorded a slight recovery towards the $26,500 level following positive announcements from debt ceiling negotiations.　　24h BTC price chart. Source: CoinMarketCap　　On May 25, local time, White House Press Secretary Karina Jean-Pierre said in a briefing that day that White House negotiators had had productive discussions with the teams House Speaker McCarthy on the debt ceiling issue.　　Mr. Pierre said partisan views on budget priorities remained divided, but representatives from both sides understood that an agreement would need a plan that would work for both sides.　　While the White House and US Congress say “progress” for a while and “no deal” for a while, the US Treasury Department has begun preparations for the eventual triggering of the debt ceiling.　　US Treasury officials are notifying various departments about possible changes to the payment process when the debt ceiling is activated and possible responses, according to the reports of people familiar with the matter.　　Additionally, as reported by Golden Ten, the US Treasury Departments cash balance has fallen below US$50 billion and may be empty as early as next month. US House of Representatives Speaker McCarthy said the negotiators would stay on Capitol Hill and continue working over the weekend.　　As investors watch the ongoing debt ceiling

2023-05-26Deep Dive

90% Of Chinese Firms Accept Bitcoin And USDT Payments To Supply Fentanyl

Elliptic researchers received offers from over 90 China-based companies to supply fentanyl precursors, 90% of which accepted cryptocurrency payments. Most are Bitcoin and USDT.　　Recent research has found that cryptocurrency payments facilitate the illegal trade of fentanyl precursors in China. Elliptics blockchain analysis tools have identified over 90 Chinese chemical companies that accept cryptocurrency payments, with Bitcoin being the most popular, followed by Tether. Payments have increased by 450% year-on-year, and wallets have received over $27 million.　　Fentanyl is a synthetic opioid used for pain relief, but its also highly addictive and dangerous, with a high potential for overdose. Fentanyl precursors, which are chemicals used to make fentanyl, are often sold by illegal traders to drug cartels for the production of this illicit drug. The fentanyl trade is extremely profitable for these cartels but also extremely dangerous for those who consume it.　　Therefore, it‘s crucial to disrupt the trade of fentanyl precursors for crypto. This can be done by services that act as gateways into and out of crypto assets. Most crypto exchanges comply with anti-money laundering regulations and sanctions and use blockchain monitoring systems, such as those provided by Elliptic, to ensure they don’t facilitate illicit activity.　　Elliptic has notified the exchanges used

2023-05-25Deep Dive

Japan Effectively Prevents Crypto Anti-Money Laundering In June: Report

According to local news site Kyodo News, Japan is due to introduce tighter anti-money laundering measures, including the Financial Action Task Forces (FATF) so-called “travel rule,” on June 1.　　The decision was announced by Japans cabinet on Tuesday, after the global financial crime watchdog FATF found the countrys anti-money laundering measures inadequate.　　According to the research, oversight groups have increased their surveillance of crypto assets that might be used to launder money, a practice in which money earned from unlawful acts is made to seem legitimate by processing it via legal transactions.　　The FATF suggested the travel rule in 2019 to prevent money laundering and terrorism funding using cryptocurrency. By June 2022, the FATF was pressing member countries to pass travel rules “as quickly as feasible.”　　The regulation mandates a financial institution conducting a crypto asset transfer to pass on customer information to the next institution, including the sender and recipients names and addresses.　　Stablecoins, or cryptocurrencies tied to a currency such as the US dollar or a commodity, are among the crypto assets sought. If offenders do not comply with authorities remedial directives, they will face criminal charges.　　Earlier this month, the Group of Seven (G-7) international political body expressed support for the FATF‘s efforts

2023-05-25Deep Dive

Ponzi Project EmpiresX Pays Nearly $35 Million In Fines To The US SEC

The bankrupt EmpiresX digital asset hedge fund has agreed to pay $34,839,951 in fines to the US SEC in compensation for allegations of investor fraud and violations of securities laws.　　The settlement, which was agreed on Friday only with the corporate entity EmpiresX, imposes a payment of $32,178,397, representing profits derived from the scheme. An additional $2,661,554 in interest brings the total to $34,849,951. EmpiresX is also permanently barred from violating future securities of the type described in the SEC complaint and from buying, offering, or selling any future securities.　　The court had issued a final judgment against co-defendant Nicholas on April 19, fined the trader $300,000, and barred him from attracting any new investors, receiving additional funds from other existing investors, and issuing, buying, offering, or selling any securities.　　Last June, the SEC announced fraud charges against EmpiresX, co-founders Emerson Sousa Pires and Flavio Mendes Goncalves, and principal trader Joshua David Nicholas. The defendants are accused of enticing investors with false claims of one percent daily returns but instead embezzling large sums of investors money for personal use.　　EmpiresX, or Empires Consulting Corp, is a Florida-based digital asset hedge fund run by the co-founders Pires and Goncalves and the platforms principal trader Nicholas.

2023-05-25Deep Dive

Binance Announces Delisting 21 Trading Pairs

Binance has just announced that it will remove and stop trading the following spot trading pairs.　　The list of Binance spot trading pairs will be delisted in the next three days.　　Spot trading pairs removed:　　APT/BRL, AMP/BTC, BEL/ETH, FIS/BRL, GAL/ETH, GMT/BRL, APE/AUD, AVAX/AUD, AXS/AUD, DOT/AUD, FTM/ AUD, LINK/AUD, SAND/AUD, SHIB/AUD, GMT/GBP, JASMY/BTC, KP3R/BNB, REI/BNB, SANTOS/BRL, STMX/BTC, XTZ/BNB　　Binance will terminate trading for the aforementioned spot trading pairs after May 26 (UTC).　　Users can still trade the above assets on other trading pairs available on Binance.　　Binance is a cryptocurrency exchange founded by Changpeng Zhao. Currently, It is the worlds largest cryptocurrency exchange in terms of trading volume with over 1460 trading pairs.

2023-05-24Deep Dive

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