Bittrex and Former CEO Charged by SEC, 6 Tokens Named as Securities
Bittrex, a crypto asset trading platform, and its former CEO William Shihara has been charged by the US Securities and Exchange Commission (SEC) for running an unregistered national securities exchange, broker, and clearing agency. Bittrex Global GmbH, a foreign affiliate of Bittrex, has also been charged for failing to register as a national securities exchange.
According to the SEC, Bittrex and Shihara coordinated with issuers to remove certain “problematic statements” to avoid regulatory scrutiny. Bittrex earned at least $1.3 billion in revenues from servicing investors as a broker, exchange, and clearing agency without registering any of these activities with the Commission.
SEC Names 6 Tokens as Securities
OMG Network (OMG), Dash (DASH), Algorand (ALGO), Monolith (TKN), Naga (NGC), and Real Estate Protocol (IHT) have all been named in the Bittrex lawsuit as securities. Following the release of the lawsuit, Algorand experienced a 2.5% drop to $0.22. However, the crypto community remains optimistic that the SEC will lose the case, and that price fluctuations are only temporary.
Bittrex responds to SEC’s action
Bittrex has stated that they have been requesting clarification from the SEC regarding securities, but have yet to receive a clear response. Despite their plans to cease operations by April 30th, the SEC is now taking legal action against them. Many believe that the SEC is attempting to push cryptocurrency out of the United States
Richie Lai, the co-founder of Bittrex, has tweeted about the SEC’s charges against the company, stating that they had been trying to work with the regulator for years to determine which crypto assets were securities. He further noted that the SEC filed the lawsuit against the company after it announced plans to leave the US, which is not how governments are supposed to work. Lai also mentioned that they look forward to fighting the charges in court.
The Need for Cohesion in the Crypto Industry
Cryptocurrency commentator and lawyer Jeremy Hogan has weighed in on the Securities and Exchange Commission (SEC) charges against Bittrex, saying that the SEC is hoping for a quick win to establish that the six tokens in question are securities.
Hogan suggests that the Algorand Foundation and the other five projects should intervene in the lawsuit under Rule 24 and fight together against the SEC. He also recommends that if the projects do not fight voluntarily, Bittrex should move to bring them in with a Motion to Dismiss for failure to add an indispensable party (Rule 19) and force the SEC to bring them in.
Hogan believes that the exchanges and projects must work together or face the consequences separately. He also argues that Bittrex cannot successfully argue that Algo or another token is not a security and that the projects must unite to fight against the SEC’s allegations.
Justin Sun and Other Celebrity Charged with Fraud by SEC, Exposing Potential Pitfalls for Crypto Investors
The Securities and Exchange Commission (SEC) has charged crypto entrepreneur Justin Sun and eight celebrities for fraudulently promoting and selling unregistered cryptocurrency securities. The news of the lawsuit has had a significant impact on the price of TRX, with the token’s value plunging by 6.1% following the announcement.
Unregistered Sale of Crypto Asset Securities
The SEC has charged Sun and three of his companies for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT). The complaint alleges that Sun and his companies offered and sold TRX and BTT through multiple unregistered “bounty programs” and monthly airdrops, which directed interested parties to promote the tokens on social media and create BitTorrent accounts in exchange for TRX and BTT distributions.
Manipulating the Secondary Market
The SEC also charged Sun for fraudulently manipulating the secondary market for TRX through extensive wash trading. Sun allegedly directed his employees to engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled, with between 4.5 million and 7.4 million TRX wash traded daily. This scheme required a significant supply of TRX, which Sun allegedly provided. As alleged, Sun also sold TRX into the secondary market, generating proceeds of $31 million from illegal, unregistered offers and sales of the token.
Paying Celebrities to Tout TRX and BTT
The SEC also charged Sun and his companies for orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation. The celebrities charged include Lindsay Lohan, Jake Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), and Aliaune Thiam (Akon). Sun allegedly induced investors to purchase TRX and BTT by coordinating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.
With the exception of two celebrities, the charged celebrities agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings.
Investors Beware: High Risk of Unregistered Crypto Asset Securities
The charges against Sun and his affiliated companies serve as a warning to investors about the potential risks associated with unregistered crypto asset securities. Sun and his companies targeted US investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors. The SEC’s findings also reveal that Sun coordinated wash trading to create a misleading appearance of active trading in TRX and induced investors to purchase TRX and BTT by concealing celebrity endorsements.
In conclusion, investors should exercise caution and do their due diligence when investing in crypto asset securities, particularly those that are unregistered.
Cardano Bulls Are All Charged up Ahead of the Launch of Its Stablecoin DJED
As the broader cryptocurrency market recovery gathers steam, the price of Cardano (ADA) has increased by 45% over the past month and 7.7% over the past week. However, in addition to the general market rebound, the much-anticipated launch of the DJED stablecoin on the mainnet, which is planned for this month, also supports the bullish Cardano market sentiment.
Just before the debut, the well-known Singaporean cryptocurrency exchange Bitrue revealed plans to list the DJED stablecoin together with SHEN, its reserve coin. Before a user can receive Djed, more than 400% in collateral value must be provided. Djed will be backed by other tokens. By doing this, it will be possible to replace the volatile gas fees with a transaction cost that is consistent and predictable.
“As part of our effort to stake the ADA that is deposited to the Djed smart contract and generate extra rewards for SHEN holders, we are developing a snapshot mechanism and UI that will be added to djed.xyz, where SHEN holders will be able to track these extra rewards,” as reported by Coindesk, the developers said.
The ADA token, which is the native currency of Cardano, is being used to finance the Djed cryptocurrency. Users will be able to transfer ADA to the platform’s smart contract in order to earn Djed in return. As the preferred currency for covering transaction costs on the Cardano network, it aims to replace all other cryptocurrencies.
Through an official blog post on its website and a subsequent tweet from COTI Network, Bitrue announced its intentions to list DJED. In the near future, Bitrue intends to add support for DJED and SHEN staking, according to the blog announcement. SHEN is the reserve token to be used in preserving DJED’s peg to the dollar and is supported by Cardano.
In the meantime, COTI, the payments platform in charge of the stablecoin’s issuance, has made a number of advances to guarantee the launch is a success with the introduction of DJED anticipated on the mainnet this month. The public testnet version of DJED v. 1.1.1 with Vasil compatibility was made available by COTI last month.
Bittrex Charged For Violating Sanctions, US Treasury Agrees To Settle
The post Bittrex Charged For Violating Sanctions, US Treasury Agrees To Settle appeared first on Coinpedia Fintech News
The Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) of the United States Treasury Department reported on October 11 that they had settled charges with the crypto exchange Bittrex. The cryptocurrency exchange was charged with breaking sanctions and failing to establish appropriate sanctions compliance measures from March 2014 to December 2017.
The violations were caused by transactions from “individuals reportedly situated in the Crimea area of Ukraine, Iran, Sudan, Cuba, and Syria,” according to US Treasury regulators. U.S. officials state that the transactions added up to $263M worth of cryptocurrency transactions that were in violation of the country’s financial sanctions.