The United States Securities and Exchange Commission (SEC) has responded to Coinbase’s claims that it lacks jurisdiction to prosecute the crypto exchange.
In a letter addressed to a district judge on July 7, the SEC stated that Coinbase was well aware of the possibility that federal securities laws could apply to its operations.
The regulator highlighted that Coinbase had openly informed its shareholders about the potential classification of assets traded on its platform as securities.
The SEC’s response emphasized that Coinbase, being a “multi-billion-dollar entity advised by sophisticated legal counsel,” was deliberately disregarding decades of established law, particularly the Howey test.
READ MORE: Former BitMEX CEO Says Bitcoin Will Reach $760,000 as Currency of Artificial Intelligence
This behavior, according to the SEC, indicated Coinbase’s attempt to create its own standard for determining what constitutes an investment contract.
The SEC’s letter was in direct response to a previous filing made by Coinbase on June 28.
In that filing, Coinbase informed the court of its intention to submit a motion for judgment, which is typically used when a party believes there are no significant factual disputes in a case, as explained by Cornell University.
Coinbase had referred to statements made by SEC Chair Gary Gensler during his appearance before Congress, where he supposedly claimed that crypto exchanges were not under the purview of a market regulator and that only Congress had the authority to regulate them.
Coinbase also highlighted that the SEC had filed charges against the company two years after its public listing, despite having been provided with exhaustive descriptions of its activities.
Roland Chase, a corporate and securities lawyer, shed light on the SEC’s authority.
He explained that the SEC’s role, as authorized by Congress, is to review a company’s going public documents and provide comments to enhance disclosure to potential investors.
Chase emphasized that the SEC does not have the power to deny a company’s public listing simply because it disagrees with the investment prospects.
The SEC had previously charged Coinbase on June 6 for allegedly offering unregistered securities since 2019. A pre-motion conference for the case is scheduled for July 13 at 2:00 pm UTC.
The highly anticipated layer 2 blockchain Shibarium is set to launch following a conference in Toronto scheduled for August, according to a blog post by developer Shytoshi Kusama on Thursday.
Layer 2 technology involves a collection of off-chain systems, or separate blockchains, built on top of layer 1 protocols.
These systems help address scalability issues by bundling multiple off-chain transactions into a single layer 1 transaction, reducing data load and fees.
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Kusama stated that during the conference, the completed Worldpaper, all Shib-branded projects, and Treat would be showcased in detail for the first time.
Additionally, the long-awaited L2 Shibarium is expected to be discussed and released.
Moreover, the developer team will introduce DoggyDAO, a decentralized autonomous organization (DAO) operated and governed by token holders.
DoggyDAO will serve as a funding source for projects built on the Shibarium network.
Shibarium’s testnet, a blockchain used for testing purposes, has witnessed significant activity in recent months, with an estimated 20 million transactions from approximately 16 million wallets as of June.
This high level of activity on the testnet reflects the growing demand for the network.
Developers have previously emphasized Shibarium’s focus on metaverse and gaming applications, particularly as the non-fungible token (NFT) sector is expected to experience substantial growth in the coming years.
The launch of Shibarium could provide a strong foundation for shiba inu (SHIB), a meme coin initially inspired by the Shiba Inu breed of dog that has since sought to establish itself as a serious project with its own blockchain network and decentralized app (dapp) ecosystem.
Meanwhile, movements in Shiba Inu ecosystem tokens have been mixed over the past 24 hours.
According to CoinGecko data, bone (BONE) experienced a surge of up to 4.5%, while leash (LEASH) rose by 2%. However, SHIB tokens declined by 5%, aligning with a broader drop in major tokens.
As the launch of Shibarium draws near, the cryptocurrency community eagerly awaits the realization of its promised capabilities and the potential impact it may have on the market.
According to a report by Bloomberg News on July 5, investigators from the Commodity Futures Trading Commission (CFTC) have concluded that Celsius, a bankrupt crypto lender, and its former CEO Alex Mashinsky violated U.S. regulations prior to the company’s collapse.
Sources familiar with the matter stated that attorneys in the CFTC’s enforcement unit found evidence that Celsius had misled investors and should have registered with the regulatory body.
If the majority of the CFTC’s commissioners concur with this determination, the agency may initiate legal proceedings in federal court as early as this month.
Neither Celsius nor the CFTC provided an immediate response when approached by Reuters for comment.
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The downfall of TerraUSD last year triggered market turmoil that resulted in the failure of numerous prominent cryptocurrency companies, including Celsius Network.
As a consequence, the company filed for bankruptcy, leaving its clients with substantial losses.
As part of Celsius’ bankruptcy proceedings, an independent examiner was appointed to investigate allegations that the firm had functioned as a Ponzi scheme.
The examiner’s task was to scrutinize how Celsius had managed its cryptocurrency assets and produce a report on their findings.
Earlier this year, the Attorney General of New York filed a lawsuit against Alex Mashinsky, the founder of Celsius.
The lawsuit alleged that Mashinsky had defrauded investors of billions of dollars in digital currency by concealing the deteriorating state of the lending platform.
These developments underscore the challenges and risks associated with the crypto industry.
Regulatory bodies such as the CFTC play a crucial role in ensuring compliance and protecting investors from potential misconduct.
The outcome of the CFTC’s investigation and any subsequent legal action will shed further light on the alleged wrongdoing by Celsius and its former CEO.
Ripple Labs, a prominent digital payments and blockchain technology company, has unveiled an ambitious initiative aimed at revolutionizing the real estate industry through tokenization.
Antony Welfare, Ripple’s central bank digital currency (CBDC) adviser, recently highlighted the increasing global interest in CBDCs and stablecoins, emphasizing that Ripple’s team is actively exploring practical applications for these technologies, with a particular focus on tokenizing real estate assets.
During a fintech conference in Romania, Welfare presented a compelling use case that combines the digital Hong Kong dollar (e-HKD), tokenized real estate, and finance lending protocols.
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This innovative pilot program seeks to empower users to tokenize their real estate assets and utilize them as collateral for loans, leveraging Ripple’s CBDC platform.
Ripple’s foray into real estate asset tokenization, utilizing blockchain and digital currencies, is driven by a desire to address existing challenges in the real estate sector.
By overcoming these obstacles, successful tokenization initiatives can yield significant benefits, including enhanced liquidity, expanded market reach, and streamlined transactions.
Tokenization has captured substantial interest across various industries due to its transformative potential.
This groundbreaking approach involves converting tangible assets such as real estate, artwork, and intellectual property into digital tokens securely stored on the blockchain.
These tokens represent ownership or stakes in the underlying assets, enabling their buying, selling, and trading on decentralized platforms.
Tokenization’s allure lies in its ability to revolutionize traditional asset ownership and investment models.
Leveraging blockchain technology, tokenization offers amplified liquidity, accessibility, efficiency, transparency, and security.
As more industries and investors recognize the advantages and potential of tokenization, it is poised to gain further momentum as a prominent trend in financial and asset management circles.
However, the widespread adoption and implementation of tokenization may encounter regulatory hurdles that necessitate compliance with local laws.
Alongside regulatory considerations, the industry must also address security concerns surrounding tokenized assets as it continues to evolve.
Ripple Labs’ ambitious initiative to transform the real estate industry through tokenization demonstrates the company’s commitment to exploring new frontiers in digital payments and blockchain technology. By leveraging the power of CBDCs and stablecoins,
Ripple aims to drive innovation and foster a more efficient and accessible real estate market for the benefit of individuals and businesses alike.
Bitcoin mining company Marathon Digital attributes its 21% decline in Bitcoin mined in June to harsh weather conditions in Texas and a significant fall in transaction fees, according to a statement on July 5.
The firm’s main operations based in Texas produced 979 Bitcoin, markedly less than the previous month due to the impact of the transition from spring to summer.
National Weather Service data showed a considerable temperature increase in Texas, with an 8.4 degrees fahrenheit jump from an average of 75.6 degrees in May to 84 degrees in June.
Such changes in weather conditions have historically proven disruptive for crypto mining operations in the state.
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For instance, Riot Platforms, another crypto mining firm, experienced a temporary halt in its operations when 17,040 of its rigs went offline due to severe winter weather in February.
Further compounding Marathon Digital’s challenges, the company’s transaction fees dipped to roughly 5.1% of the total Bitcoin earnings for June, down from 11.8% in May.
This decline came despite the increased transaction fees brought about by the advent of Bitcoin Ordinals in May.
Although network congestion receded in June, Marathon Digital maintains an optimistic view regarding the long-term profitability of mining.
The recent downturn highlights the susceptibility of crypto mining operations to external factors, particularly weather conditions.
In 2022, Argo Blockchain, another crypto mining firm operating in West Texas, was forced to suspend its mining activities temporarily due to a conservation alert issued by the Electric Reliability Council of Texas.
In contrast, a July 5 report by Coin Metrics, a cryptocurrency analytics platform, revealed a bright spot for the broader industry:
Bitcoin miners accrued $184 million from transaction fees in Q2 2023, surpassing the total earnings from fees for the entirety of 2022. Despite individual setbacks, this suggests a thriving overall trend for the industry.
Stablecoin issuers Circle and Tether have taken action to freeze assets totaling more than $65 million in connection with a suspected exploit of the cross-chain router protocol Multichain.
The decision came after a series of large outflows from the Multichain MPC bridge on July 6 left many questions unanswered.
0xScope, a knowledge graph protocol, has identified three addresses that received at least $63.2 million worth of USD Coin (USDC) from Multichain, and these addresses have now been frozen.
Additionally, the Fantom Foundation reported that more than $2.5 million in Tether (USDT) has been frozen from two addresses listed as “Multichain Suspicious Addresses” on Etherscan.
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On July 6, a total of over $125 million worth of cryptocurrencies was withdrawn from multiple wallets, affecting the ecosystems of Multichain’s Fantom bridge, Dogechain, Moonriver, Kava, and Conflux.
The reason behind this abnormal transfer of assets remains unclear.
Multichain took to Twitter to announce the suspension of its services, without specifying when they will be reinstated.
The company urged users not to utilize the Multichain bridging service, cautioning that all bridge transactions would be stuck on the source chains.
According to Fantom protocol CEO Michael Kong, the fund transfer does not appear to be a typical hack, as the assets sent to the alleged attacker’s wallets have not been moved elsewhere. Investigations into the incident are ongoing.
Multichain is a platform that enables the transfer of tokens between different networks.
However, it has encountered technical and operational difficulties since its leadership vanished a few weeks ago.
Such bridge protocols like Multichain are highly susceptible to attacks by crypto hackers, with numerous incidents reported in 2022.
A recent report from blockchain security firm SlowMist disclosed that since 2012, more than $30 billion in crypto assets has been hacked in hundreds of incidents.
The most common types of hacks include smart contract vulnerabilities, rug pulls, flash loan attacks, scams, and private key leaks.
Out of the total incidents, there were 118 exchange hacks, 217 hacks in the Ethereum ecosystem, 162 hacks in the BNB Smart Chain ecosystem, 119 hacks in the EOS ecosystem, and 85 hacks involving nonfungible tokens.
Over the past decade, crypto exchange hacks alone have resulted in losses exceeding $10 billion.
According to a report by SlowMist on July 7, a staggering $30 billion worth of cryptocurrency has been hacked in 1,101 documented incidents from 2012 to the present.
This represents approximately 2.5% of the total market capitalization of cryptocurrencies. SlowMist, a blockchain security firm, identified the top five most common types of hacks as smart contract vulnerabilities, rug pulls, flash loan attacks, scams, and private key leaks.
Among the documented incidents, there were 118 exchange hacks, 217 hacks within the Ethereum ecosystem, 162 within the BNB Smart Chain ecosystem, 119 within the EOS ecosystem, and 85 hacks related to nonfungible tokens (NFTs).
Exchange hacks accounted for the largest losses, with over $10 billion lost over the past decade.
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Notable early attacks in the history of Bitcoin include the infamous 2014 Mt. Gox hack and the 2016 Bitfinex hack.
Mt. Gox, once the largest Bitcoin exchange in the world, filed for bankruptcy in 2014 after discovering that 850,000 BTC (valued at $25.2 billion at the time) had been stolen through discreet hacks over several years.
Since then, Mt. Gox has managed to recover 200,000 BTC (worth $6.1 billion) and is in the process of redistributing them to creditors.
Similarly, in 2016, Bitfinex experienced a security breach that resulted in the loss of 119,576 BTC, valued at around $70 million at the time and approximately $3.7 billion now.
On February 8, 2022, special agents from the United States Department of Justice managed to recover 94,000 of the stolen BTC.
Interestingly, the report indicates that hack events with losses exceeding $1 billion peaked in the early 2010s and between 2019 and 2021.
Since 2022, there has been a decrease in the number of security incidents, aligning with findings from other reports.
These alarming figures highlight the ongoing challenges of securing cryptocurrencies and the need for robust security measures within the crypto ecosystem.
As the industry continues to evolve, it is crucial for individuals, exchanges, and projects to prioritize cybersecurity to safeguard against potential attacks and protect the investments of users.
Bitcoin (BTC) has the potential to become the currency of choice for artificial intelligence (AI), according to Arthur Hayes, the former CEO of BitMEX.
In his recent essay titled “Massa,” Hayes argues that as fiat currencies become increasingly dysfunctional, the AI revolution will flourish, leading to a surge in BTC adoption.
Hayes predicts that the price per coin could reach $760,000 as a result.
Hayes believes that the future will witness a significant expansion of AI-related applications, making AI an integral part of everyday life.
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The rapid advancements in computing power have brought us to the verge of an AI explosion that will revolutionize humanity.
Hayes cites the example of ChatGPT, which acquired 100 million monthly active users in just two months, highlighting the unprecedented pace of technological adoption.
When it comes to financial solutions for AI integration, Hayes suggests that Bitcoin, rather than a tailor-made altcoin, will be the preferred choice.
This is because AI systems are likely to perceive Bitcoin’s qualities, such as its fixed supply, digital scarcity, and status as “energy money,” as the most logical option.
AI systems are unlikely to rely on anything operated by human governments, thus making Bitcoin and gold the most suitable choices.
Hayes also outlines a potential path for Bitcoin’s price to reach $1 million.
He anticipates that the real impact of AI will be felt in approximately three years, and it could take another decade for the network value boost driven by AI alone to push BTC/USD to nearly $1 million.
Hayes emphasizes that his predictions aim to create a narrative that gains traction before the peak of what he calls “deranged growth investing” in 2025 to 2026.
Depending on the extent of investment, Bitcoin’s price could surge to $760,000 per coin.
Hayes concludes by stating that the market is most lucrative when it shifts from believing something is impossible to considering it as a possibility.
His optimistic outlook on Bitcoin’s future price is based on the expectation that the market will overvalue Bitcoin’s network growth if it sees a chance of his assumptions coming true.
Arthur Hayes is renowned for his bullish long-term perspective on Bitcoin and has previously advocated for a million-dollar price target, attributing it to the disintegration of fiat currencies.
Logan Paul has decided to not refund CryptoZoo investors, a source in the influencer’s camp told Crypto Intelligence News on Saturday.
Paul found himself under increased security after crypto YouTuber and sleuth Coffeezilla published a video about the failed crypto gaming project in late December.
In the video, Coffeezilla criticised Paul and other senior figures of the project, and he also spoke to several victims, who cumulatively lost millions of dollars as a result of the failed project.
He later promised to refund some of the investors, after his initial tactic of blaming senior advisors failed.
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However, over six months later, Paul is yet to have paid a dime in compensation, nor has he provided an update on the situation or how exactly investors can claim compensation.
Coffeezilla revealed in a recent video that Paul had been ignoring his messages regarding CryptoZoo, with only his lawyers responding to his requests for comment.
“Paul has not paid back his victims. He hasn’t talked about it since he first announced he was going to pay them back. And what’s worst of all, he doesn’t seem to have a plan in place to refund anyone,” he said.
A source with ties to Paul and the now-defunct project has now told Crypto Intelligence News that the American influencer has changed his mind about compensating investors.
Specifically, the source said that Paul was unhappy with the response he received online after he announced his intention of compensating investors from his own pocket, feeling that he didn’t receive enough credit.
Crypto Intelligence News has reached out to Logan Paul’s team for comment, but has not received a reply as of publishing this story.
In recent times, a trend has emerged in certain corners of the cryptocurrency market, where investors are flocking towards microcaps that claim to be the next big thing after popular meme coins.
Tokens such as pepe 2.0, floki 2.0, and bobo 2.0 have gained significant attention within the past week by presenting themselves as new iterations of the well-known pepe, floki, and bobo tokens.
Consequently, trading volumes for these tokens have surged into the millions, attracting substantial liquidity and transforming modest investments into substantial fortunes almost overnight.
However, the lifespan of these microcaps is typically short-lived. Last year, we witnessed a similar phenomenon when hopeful investors placed their bets on articles inspired by the English language, as well as grimacecoin, which was sparked by a tweet from McDonald’s.
READ MORE: Top Executives Depart Binance Amidst Legal Scrutiny and Compliance Concerns
The ability for anyone to create tokens on Ethereum or other blockchains through smart contracts for minimal costs, coupled with the presence of decentralized exchanges, allows for the rapid issuance, liquidity provision, and trading of these tokens shortly after their creation.
For instance, pepe 2.0, currently the most popular among the clones, recorded nearly $7 million in trading volume within a 24-hour period.
Its market capitalization reached a peak of $45 million last week but has since declined to $18 million.
Remarkably, a wallet that invested a mere $900 in pepe 2.0 witnessed its value soar to over $176,000 in less than 24 hours.
This profitable position was cashed out through the sale of 2 ether (ETH) clips as the token’s value continued to rise.
Bubblemaps, an on-chain analysis tool, has highlighted the centralized behavior of some early buyers who likely cornered a significant portion of the pepe 2.0 supply during its launch.
These individuals have been gradually selling their tokens, contributing to the substantial price surge due to heightened buying demand and limited sales from early buyers.
Meanwhile, the original pepecoin (PEPE) remains attractive to investors, as evidenced by substantial purchases that have propelled an impressive 80% rally over the past two weeks.
Notably, Lookonchain data reveals that two wallets acquired millions of frog-themed tokens on Monday, signaling a niche segment of the market speculating on these tokens surpassing dogecoin (DOGE) and shiba inu (SHIB), which are widely regarded as the most popular meme coins, in the foreseeable future.