bitcoins

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Bittrex, a cryptocurrency trading platform, has filed for Chapter 11 bankruptcy protection in the District of Delaware. The bankruptcy proceedings cover Bittrex’s Seattle-based entity, two entities in Malta, and an affiliated entity called Desolation Holdings LLC.

The filing estimates more than 100,000 creditors, between $500 million and $1 billion in assets, and between $500 million and $1 billion in liabilities. However, the filing does not include Bittrex Global GmbH, the Liechtenstein-based global entity for exchange. The declaration of bankruptcy comes after the US Securities and Exchange Commission (SEC) charged Bittrex and its co-founder and former CEO William Shihara for securities violations in April.

Acku, nog coins daar?

[Jack The Ripper]

Hotbit stopt er ook mee. Dus als iemand daar nog coins heeft best weghalen

[radje]

"stopt ermee" klinkt alsof ze op pensioen gaan na een lange carriere lol

faillissement na financieel illegaal wangedrag dus, coins weghalen voor ze u nog meer scammen en 't aftrappen met uwe crypto

[Jack The Ripper]

Welja, die shit die ik er opstaan heb ik sowieso al geen kloot meer waard. Kan me meer kosten om de coins af te halen dan wat ze waard zijn.

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In the Genesis bankruptcy, Genesis’ parent company Digital Currency Group missed a $630 million payment to Genesis due earlier this month. Note that that’s a payment from themselves to themselves, and they still failed to make it.

This failure to pay was noted by Gemini, which has a tremendous interest in getting that money so Gemini Earn investors can be paid back. Gemini Earn’s retail customers are the largest creditor of Genesis. [Gemini, archive of May 25, 2023]

Gemini Earn was an investment product where Gemini customers put their money into Genesis to earn unlikely interest rates. Gemini’s customers were not so happy at the prospect of their money being stuck in the Genesis bankruptcy for months or years.

So in February, the creditors worked out an “agreement in principle” — not, you’ll note, an actual deal — whereby they would get money back from DCG, as the owners of Genesis. [press release]

In April, the creditors got sick of DCG messing about and upped their demands. This led to a bizarre statement from DCG on May 9 that they were “in discussions with capital providers for growth capital and to refinance its outstanding intercompany obligations with Genesis.” They didn’t have the money to pay themselves. [CoinTelegraph]

Gemini also plans to file a reorganization plan of its own. This is likely why Genesis has filed asking for its exclusive right to make reorganization proposals to be extended to August 27. The court will hear this motion on June 5. [Doc 329, PDF]

Either DCG is trying extremely hard to screw over Genesis customers … or, despite all the millions and billions with dollar signs in front in their accounts, and “$200 million” a year in Grayscale management fees, DCG is broke — at least in actual money — and has been pretending not to be broke. And we’re pretty sure Gemini is pushing this point this hard because they can’t cover their customers either. Imaginary assets are great — until you have to pay up.

https://amycastor.com/2023/05/26/cry...ex-was-hacked/

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Reuters has caught Binance at it again. This time, Binance was commingling customer funds and company revenue on the order of billions of (actual) dollars in their Silvergate accounts in 2020 and 2021. Controls? What are controls? [Reuters]

Binance told Reuters that this was money being used to buy BUSD and this was “exactly the same thing as buying a product from Amazon,” per Brad Jaffe, Binance’s VP of communications since August 2022.

This explanation is at odds with Binance’s previous claims to customers that dollars they sent to Silvergate were “deposits” that they could “withdraw” as dollars. Jaffe said that “the term ‘deposit’ is a communication term, it’s not an indication of the technical treatment of the funds.” Oh, a communication term — you mean like when words mean things in a context?

Reuters didn’t find any misappropriation of customer funds in the documents they saw. But commingling is a massive red flag for incompetence (as it turned out to be with FTX) and fraud — such as moving money around to evade regulatory scrutiny. Reuters includes a complex diagram of the international flows of Binance’s cash in the report.

Binance PR person Patrick Hillmann dismissed the story as “1000 words of conspiracy theories” and said that Reuters was “making stuff up.” Though Hillmann never stated at any point that Binance hadn’t commingled funds at Silvergate. Hillmann also decried “the xenophobia behind consistently mentioning @cz_binance’s ethnicity without noting that he’s been Canadian since the age of 12” … which the Reuters story didn’t do at all. [Twitter, archive]

https://amycastor.com/2023/05/26/cry...ex-was-hacked/

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S.E.C. Accuses Binance of Mishandling Funds and Lying to Regulators

The nation’s top securities regulator filed 13 charges against Binance and its founder, Changpeng Zhao.

The Securities and Exchange Commission has accused Binance, the world’s largest cryptocurrency exchange, of mishandling customer funds as well as lying to regulators and investors about its operations in a sweeping case filed in federal court on Monday.

The Wall Street regulator said Binance had been mixing billions of dollars in customer funds and secretly sending them to a separate company called Merit Peak Limited, which is controlled by Binance’s founder, Changpeng Zhao.

The charges included misleading investors about the adequacy of its systems to detect and control manipulative trading and about its efforts to restrict U.S. investors from trading on its unregulated platform. Regulators said in the civil lawsuit, filed in Federal District Court in Washington, that Binance and Mr. Zhao “enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk.”

Regulators have long seen Binance as a major target in their quest to bring to heel an industry built around an explicitly anti-government ethos. In its court filing, the S.E.C. cited a 2018 email from Binance’s chief compliance officer saying “we do not want [Binance.com] to be regulated ever.”

The charges against the biggest crypto exchange were the latest actions by U.S. regulators and prosecutors to rein in the Wild West of crypto trading and force major players in the space to come into compliance with U.S. laws.

Binance was already under increasing pressure. The Justice Department is investigating the exchange for money-laundering violations. Binance lost its outside auditing firm when Mazars announced that it would no longer do business with crypto companies late last year. The company has also seen its control of the crypto market shrink.

To improve its reputation, Binance has hired a slew of new compliance officials, including a former federal prosecutor who now heads its compliance operation.

“We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk,” said Gurbir S. Grewal, director of the S.E.C.’s enforcement division.

The nation’s top securities regulator filed 13 charges against Binance and Mr. Zhao, better known in the crypto world as “C.Z.” The S.E.C. is taking action a little over a month after the Commodities Futures Trading Commission filed its own civil enforcement action against Binance and Mr. Zhao.

Binance representatives had no immediate comment.

The C.F.T.C. is seeking to bar Mr. Zhao from doing business that falls under its jurisdiction for life. The agency also wants to permanently banish Binance from the United States.

The S.E.C. and C.F.T.C. often coordinate the filing of enforcement actions when they are investigating the same company, but the agencies have been engaged in a turf battle to determine which would emerge as the primary regulator of crypto trading.

The S.E.C.’s complaint accuses of Binance of recruiting U.S. customers even when the exchange was not supposed to operate in the United States. “On the surface, we cannot be seen to have U.S. users but in reality, we should get them through other creative means,” a Binance executive wrote in an internal message excerpted in the complaint.

When Binance took steps to submit to a U.S. regulatory regimen, it did so disingenuously, the filing said. It created an American company that it said was completely separate from its offshore parent but in which, regulators said, “behind the scenes” Mr. Zhao and other senior Binance leaders were “intimately involved.” That led one executive to remark that “the entire team feels like they’ve been duped into being a puppet,” according to the complaint.

The S.E.C. said that Mr. Zhao gave instructions to encourage so-called V.I.P. customers to bypass systems meant to restrict U.S. customers’ access to the platform. “Binance’s plan to retain lucrative U.S. investors while pretending to restrict them was a success,” the complaint said.

The moves against Binance and Mr. Zhao come months after the filing of criminal charges against Sam Bankman-Fried, the founder of FTX, which had been a big crypto trading rival until FTX imploded and filed for bankruptcy last November.

Some of the allegations in the complaint echoed the behavior that brought down FTX, leading to criminal charges against Mr. Bankman-Fried for using customers’ deposits to conduct other business operations and make political and charitable donations. According to the complaint against Binance, the bank account of Merit Peak, the trading firm controlled by Mr. Zhao, has received more than $20 billion which included customer funds.

FTX had used a trading firm called Alameda Research, controlled by Mr. Bankman-Fried, to improperly divert and use customer money.

“Sending Binance customer funds to Merit Peak placed those funds at risk, including of loss or theft, and was done without notice to customers,” the complaint said.

https://www.nytimes.com/2023/06/05/b...e=articleShare

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The SEC sues Coinbase. It’s on.

Boom! After a year of warning them repeatedly, the SEC has finally taken action against Coinbase, the biggest US crypto exchange, for operating as an illegal securities exchange and selling unregistered securities.

In a 101-page complaint, filed in a Manhattan court on Tuesday, just one day after the SEC filed a suit against the Binance exchange — which we’ll be covering next time — the SEC says that Coinbase has operated illegally “since at least 2019” by:

• dealing in unregistered securities (at least 13 crypto tokens);
• running an exchange, a broker-dealer, and a clearinghouse as part of the same operation and without registering any of them. (See also the Bittrex complaint);
• offering staking services, which are also securities, without registering.

SEC wants Coinbase to be enjoined from doing any of this again, pay disgorgement and interest, pay a civil money penalty, and pay “equitable relief” to investors.

There are no surprises in the charges — and unlike the Binance lawsuit, no claims of fraud. Coinbase CEO Brian Armstrong was also not named in the complaint, unlike the Binance complaint where founder CZ was named.

The complaint outlines how Coinbase executives understood the laws governing the market and sale of securities in the US, even as they failed to abide by those laws.

None of this should come as a surprise. The SEC sent Coinbase a Wells notice in March, giving them a heads-up that an enforcement action was coming down the pipes.

In security

The SEC warned crypto exchanges about offering illegal securities in its DAO report in July 2017.

Even a year before the DAO Report, Coinbase demonstrated it understood the Howey test when it began assessing tokens before listing them:

In or around December 2016, Coinbase released on its website a document entitled, “A Securities Law Framework for Blockchain Tokens.” This document included a section on “How to determine if a token is a security,” and explained: “The US Supreme Court case of SEC v Howey established the test for whether an arrangement involves an investment contract. An investment contract is a type of security.” This “Framework” acknowledged that “[f]or many blockchain tokens, the first two elements of the Howey test” — i.e., investment of money and common enterprise—“are likely to be met.”

Starting in 2019, Coinbase relied on its “Crypto Rating Council” (CRC) to determine if an asset was a security.

It turns out Coinbase offered some tokens even after their own internal report said they were very likely securities:

Meanwhile, between late 2019 and the end of 2020, Coinbase more than doubled the number of crypto assets available for trading on the Coinbase Platform, and it more than doubled that number again in 2021. During this period, Coinbase made available on the Coinbase Platform crypto assets with high “risk” scores under the CRC framework it had adopted. In other words, to realize exponential growth of the Coinbase Platform and boost its own trading profits, Coinbase made the strategic business decision to add crypto assets to the Coinbase Platform even where it recognized the crypto assets had the characteristics of securities.

Coinbase also contacted some token promoters to suggest they use less security-like phrasing in their documents — as if the SEC cares what you call your thing, and not how it works.

The complaint names 13 tokens on Coinbase as securities — Solana (SOL), Cardano (ADA), MATIC, Filecoin (FIL), Sandbox (SAND), Axie Infinity (AXS), Chiliz (CHZ), Dapper Labs FLOW, ICP, NEAR, Voyager Token (VGX), DASH, and Nexo’s in-house token NEXO.

...

The complaint goes through each of the 13 tokens and spells out precisely why each qualifies as a security according to the Howey test.

The SEC notes that for Exchange Act purposes, it only needs to show that one of these tokens is a security. But it’ll show its working on all thirteen, just to bludgeon the point home.

In three cases — SOL, FIL, and FLOW — the tokens literally filed with the SEC as offerings of securities, but ones exempt from registration. So Coinbase may have some trouble now claiming those tokens aren’t any sort of security.

The SEC notes that it outlined why AMP, DerivaDAO (DDX), LCX, Omegle (OMG), Powerledger (POWR), Rally (RLY), and XYO were securities in previous actions. All of these tokens are or were listed on Coinbase.

Because Coinbase listed those tokens on its platform, which the SEC says are securities, Coinbase was required to register as an exchange, brokerage, and clearing agency — all businesses it was clearly operating — but just didn’t.

...

This is the beginning of the end for crypto in the US.

Every crypto exchange in the US has been operating illegally, and it was only a matter of time before the SEC would start shutting them down. They knew it was coming. The SEC sued Bittrex in April.

At best, Coinbase will try to reestablish itself overseas — but the writing is on the wall. Coinbase is the US dollar cashier’s desk for the broader crypto casino. Coinbase can’t make the money it needs to make from trading on bitcoin and ether alone.

On news of the SEC complaint, the COIN stock price fell 12% and Coinbase’s bonds tumbled into distressed territory.

Coinbase is relatively well-behaved for a crypto exchange — though it ran an entire fake market in Litecoin through 2018, for which the CFTC duly busted and fined it. But hey, it’s better than Binance, probably.

Grewal tells Bloomberg he’ll take the SEC fight to the Supreme Court if he has to! Of course, he would say that. As with the SEC suit against Ripple, this suit is existential for Coinbase.

Coinbase’s strategy all along has been to avoid regulation and hope it could lobby Congress to make special rules for it.

The new bill on crypto markets that House Republicans hope to put through would make it easier for exchanges like Coinbase to trade tokens that would previously have been unregistered penny stocks at best.

They might be lucky? But crypto equals fraud in the minds of the public these days, and hence in the minds of politicians.

https://davidgerard.co.uk/blockchain...inbase-its-on/

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Fortune favours the brave

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Damn son.

[killerbot]

Aan de frequentie van CSM posts lijkt dit het moment om nog wat te kopen.
Thx

[Avalanche]

Originally Posted by Avalanche

Dit is de bottom, als ik geld had zou ik kopen, bedank me in 4-5 jaar en dan ben ik de nieuwe Buize-Jezus

Called it.

[CSM]

Originally Posted by killerbot

Aan de frequentie van CSM posts lijkt dit het moment om nog wat te kopen.
Thx

Denk je dan dat de twee grootste exchanges in de wereld die aangeklaagd worden door de Amerikaanse overheid er voor gaat zorgen dat de prijzen gaan dalen, om later weer te stijgen. Of wat is je redenering achter je advies?

[Avalanche]

Ja, precies. Per definitie. Aard van het beestje.

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De aard van het beestje is dat autoriteiten de boel proberen opdoeken?

[Vrieskou]

*te controleren