Crypto Guides, Knowledge & Insights

DOJ Wants To Stop Binance.US Buying Voyager — Because SEC

Despite gaining approval for its acquisition by Binance.US two days ago, Voyager is now facing an appeal by the Department of Justice (DOJ) in New York seeking to halt the deal. On Tuesday, U.S. Bankruptcy Judge Michael Wiles approved Voyagers restructuring plan, which involves Binance.US taking over Voyager client assets for $20 million, originally valued at $1.3 billion in July last year. However, during the hearing this week, SEC officials opposed the plan, claiming that Binance.US is operating an unregistered securities exchange.　　In response to concerns about creditors waiting for access to their invested property amid the uncertainty, Judge Wiles stated that action must be taken. The Department of Justice (DOJ) has filed an appeal, claiming that the SEC has the authority to intervene to ensure compliance with securities laws regarding the management of Voyagers cryptocurrency assets.　　According to the appeal filing, the Confirmation Order and Plan do not grant jurisdiction to the court over any police and regulatory actions taken by the SEC. The SEC retains the power and authority to initiate and continue any such actions against any individual or entity, including the Debtors.　　Even if the appeal is dismissed, Voyager still has the option to withdraw from the agreement with

2023-03-11Deep Dive

Crypto Market Loses $60 Billion; Bitcoin Crash Under $20K; What’s Happening?

On Friday, the digital asset market worldwide experienced a significant sell-off as concerns mounted about the prospects of US-based banks that support cryptocurrencies. The collective market capitalization of the crypto market has plummeted by 7%, shedding over $60 billion in the past 24 hours, bringing it down to $930 billion.　　Liquidation Breaches $300 Mln　　According to WikiBIT data, the crypto market has seen liquidations totaling $308 million in the last 24 hours. The largest single liquidation order, worth $9.49 million, occurred on the Bitmex exchange. Meanwhile, Binance recorded liquidations of approximately $106 million over the same period, with OKX exchange following closely behind with $74 million in liquidations.　　According to data, Bitcoin, the largest cryptocurrency in the world, experienced a liquidation of $120 million in the past 24 hours. During the same time frame, the price of Bitcoin plummeted by a significant 8%, and it is currently trading at an average price of $19,988 as of the time of writing.　　　　In the past day, the price of Ethereum also decreased by more than 7%, and it experienced a liquidation of $75 million during the same period. As of the time of writing, Ethereum is trading at an average price of $1,421.　　　　　　Why Crypto Market Is

2023-03-10Deep Dive

NY Attorney General Sues KuCoin for Alleged Violations of Securities and Commodities Laws

The KuCoin cryptocurrency exchange is being sued by the New York Advocate Generals office for reportedly breaking state securities and commodities rules. Attorney General Letitia James asserts that Ethereum (ETH), is the second-largest cryptocurrency by market value, as well as Terra (LUNA) and TerraUSD (UST) stocks.　　KuCoin allegedly misrepresented itself as an exchange when it is actually a broker-dealer for commodities and stocks. The complaint seeks to geo-fence KuCoins website based on IP addresses and GPS positions in order to prevent entry to the exchange in New York.　　Based on the “confidence score,” Seychelles-based KuCoin is the fifth-largest cryptocurrency market globally and the 17th-largest based on 24-hour trading activity. The business once billed itself as “the most sophisticated and safe bitcoin platform,” but in 2020 it was the victim of a $150 million breach.　　In this case, it is claimed that the fact that holders of ETH can profit financially qualifies it as an asset. Since Ethereum switched to a proof-of-stake network last year, owning ETH immediately correlates to receiving staking compensation. A person can possibly make more compensation the more BTC they risk.　　Given the focus that marking services have gotten from authorities, the timeliness of the case is noteworthy. Popular American exchange

2023-03-10Deep Dive

KuCoin Crypto Exchange Sued By NYAG Over Selling Securities

The New York Attorney Generals office has filed a lawsuit against the KuCoin cryptocurrency exchange on Thursday, accusing the company of promoting unregistered securities and commodities. The lawsuit claims that KuCoin, headquartered in Seychelles, has been operating in New York without registering as a broker-dealer of securities and commodities.　　　　　　NYAG Seeks To Block KuCoin　　　　　　Although KuCoin is not registered in New York, the Office of the Attorney General (OAG) was able to engage in buying and selling cryptocurrencies on the platform while being present in the state. Through this legal action, Attorney General James seeks to prohibit KuCoin from operating in New York and to restrict access to its website until it complies with the law.　　The lawsuit filed by the New York Attorney General against KuCoin also claims that the exchanges in-house lending and staking product, known as KuCoin Earn, constitutes an unregistered security offering. It is noteworthy that NYAGs previous submission classified Ethereum (ETH) as a security, but it has been modified to “commodities” according to recent reports.　　　　　　Growing Crypto Crackdowns　　Recent regulatory crackdowns in the United States have placed crypto exchanges at the forefront. U.S. authorities have targeted well-known companies such as Kraken, Coinbase, CoinEx, and even the largest crypto trading platform

2023-03-10Deep Dive

Coinbase Launches Wallet-as-a-Service to Help Crypto Firms Build Customizable On-chain Wallets

Coinbase Global (Nasdaq: COIN), one of the worlds largest cryptocurrency exchanges, has announced a new offering called Wallet-as-a-Service (WaaS). The new service provides crypto firms with scalable and secure wallet infrastructure APIs, allowing them to create and deploy fully customizable on-chain wallets.　　In a Twitter thread, Coinbase also highlighted that its wallet infrastructure provides multi-party computation (MPC) cryptography, which removes the need to manage a complicated 24-word recovery phrase. This feature provides an additional layer of security and convenience for users.　　Coinbase has already onboarded several crypto firms, including Tokenproof, Floor, Thirdweb, and Moonray, to its WaaS. The company believes that this new offering will help bring the “next hundred million consumers into Web3”, the next generation of the internet powered by blockchain technology.　　According to Coinbase, more and more companies are realizing the potential of Web3, which is expected to generate a massive industry of new decentralized applications and services. With WaaS, these companies can empower their customers to access these new services more easily.　　For instance, Fonz, the founder of Tokenproof, explained that when users download the Tokenproof app, they will create their first wallet powered by Coinbase, welcoming them into Web3. This, he believes, is a significant step towards making the

2023-03-09Deep Dive

Silvergate, A Cryptocurrency Lending Bank, To Liquidate Following A Fallout With FTX

Silvergate Capital, a bank that has been lending to the cryptocurrency industry for a decade, has announced that it will shut down and liquidate. The decision was attributed to recent industry and regulatory developments. The move makes Silvergate the latest victim of the so-called “crypto winter” jitters in the digital asset industry, following the implosion of its major customer, the exchange FTX, in November.Silvergates Involvement in FTX Fraud Case Raises Concerns Over Cryptocurrency Industry Viability　　The recent news that Silvergate Capital has been implicated in the FTX fraud case has sent shockwaves through the crypto community. The involvement of a well-respected bank like Silvergate in such a serious case has raised concerns about the risks associated with lending to the cryptocurrency industry and has led many to question the industrys long-term viability.　　Silvergate, which is based in California, has been providing services to high-profile firms like Coinbase and Galaxy Digital. However, the collapse of FTX and its sister firm Alameda Research, as well as the arrest of their founder Sam Bankman-Fried for fraud and other crimes, resulted in a run on deposits at Silvergate. Customers withdrew more than $8 billion from the platform late last year, and the bank reported a $1

2023-03-09Deep Dive

East London Unlicensed Crypto ATMs Face FCA Action

The Financial Conduct Authority (FCA) is the regulatory body that oversees financial services in the United Kingdom. One of its primary responsibilities is to ensure that all financial activities, including those related to cryptocurrency, comply with the law. Recently, the FCA took action against an unregistered crypto ATM located in East London.Unregulated Crypto ATMs: A Potential Haven for Illegal Activities　　UCrypto ATMs, also known as Bitcoin ATMs, allow users to buy and sell cryptocurrencies using cash. They are becoming increasingly popular as more people invest in cryptocurrencies like Bitcoin, Ethereum, and Dogecoin. However, crypto ATMs are not regulated in the same way that traditional ATMs are. This means that they can be used for illegal activities, such as money laundering and terrorism financing.　　The FCA has been closely monitoring the use of crypto ATMs in the UK. In September 2021, the regulator issued a warning to all crypto ATM operators that they must be registered with the FCA by January 2022. Failure to register could result in fines, imprisonment, or both.　　Despite this warning, some crypto ATM operators have continued to operate without registering. In December 2021, the FCA took action against an unregistered crypto ATM located in East London. The regulator issued

2023-03-09Deep Dive

Binance.US's $1.3 Billion Takeover Of Voyager Gets The Go-Ahead From US Bankruptcy Court

Judge Michael Wiles of the US Bankruptcy Court has authorized Voyagers reorganization plan, which calls for Binance.US to buy the business. As part of the agreement, Binance.US will hand over the crypto assets placed by Voyager clients, which were assessed at $1.3 billion in February, and give $20 million in cash to Voyager. The digital assets owned by the clients account for the majority of the deals value.　　Wiles overturned the US Securities and Exchange Commissions challenge to the Binance purchase, which the SEC had argued was running an illegal stock exchange, and the reorganization plan was authorized. Wiles characterized the complaint as “vague,” contending that the SEC should not have delayed until the last minute to raise a particular concern and that it failed to provide any supporting documentation.　　The transaction is still under review, despite Wiles acceptance of Voyagers plan enabling the business to start moving client assets to Binance. The dangers to national security posed by foreign investment in Voyager are being looked into by the Committee on Foreign Investment in the United States (CFIUS).　　Voyagers financial advisors have stated that the company requires up to four weeks to review new questions about Binance.USs commitment to the acquisition, Binance.USs regulatory

2023-03-08Deep Dive

Singapore Probes TerraUSD's Do Kwon for Securities Fraud

Singaporean authorities have opened an investigation into Do Kwons Terraform Labs, the company behind the failed TerraUSD stablecoin. The announcement came after the US Securities and Exchange Commission (SEC) filed a lawsuit against Kwon and his organization for securities fraud. The SEC claimed that Kwon and Terraform Labs had transferred over 10,000 Bitcoin out of their project and were cashing out through a Swiss bank.　　　　　　Terraform Labs is a Singapore-based company that developed TerraUSD, an algorithmic stablecoin intended to maintain a constant value of $1 through a combination of algorithms and trader incentives involving a sister token, Luna. However, in May 2022, the stablecoin lost its peg to the US dollar after a wave of sell-offs hit the cryptocurrency market. Terraform Labs managed to partially repair the peg by purchasing $2 billion in UST, but the continued sell-off drained those funds, hyperinflated LUNA, and crashed the price of both LUNA and UST.　　The investigation by Singaporean authorities is ongoing, and Kwon is not currently in the city-state. The SEC lawsuit, which was filed in February 2023, is also ongoing. The commission accused Kwon and Terraform Labs of orchestrating a multi-billion dollar crypto asset securities fraud involving TerraUSD and other crypto asset securities.　　　　　　The

2023-03-08Deep Dive

Indian Crypto Exchange BitBNS Concealed $7.5 Million Hack in 2022: Details and Implications

Indian cryptocurrency exchange BitBNS recently admitted to a $7.5 million hack that occurred in February 2022. According to BitBNS CEO Gaurav Dahake, law enforcement advised the exchange to withhold information from users until the investigation was completed or reached a dead end. Instead, BitBNS cited “system maintenance” to its users to explain the unavailability of its platform.　　The news came to light after a pseudonymous crypto sleuth ZachXBT uncovered the hack and called out BitBNS on social media. Dahake confirmed that the exchange had contacted law enforcement immediately after discovering the breach and had even traced the person responsible.　　Currently, the Cyber Crime Bengaluru agency is conducting the investigation. Dahake invited others to help with the case and stated that he had spoken with ZachXBT to collaborate in identifying “bad actors.”　　The revelation of BitBNSs concealment of the hack raises several concerns, particularly with regard to user trust and transparency in the cryptocurrency industry. It is critical for exchanges to communicate openly and honestly with their users to maintain their credibility and reputation. While law enforcement advised BitBNS to keep the hack under wraps, the exchange could have still communicated with its users in a transparent manner without revealing sensitive information.　　Moreover, the BitBNS

2023-03-08Exposure

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