SEC sues Do Kwon, Paxos ready to litigate, SBF’s VPN: Hodler’s…

This Week’s Top Stories

Paxos ‘disagrees’ with SEC that BUSD is a security

The United States Securities and Exchange Commission (SEC) has designated the Binance USD (BUSD) stablecoin as a security in a Wells Notice sent to the issuer, Paxos Trust Company. The SEC said the organization failed to register BUSD under federal securities laws. The company, however, “does not agree” with the view of the authorities, and is prepared to “vigorously litigate” the matter in US courts. Also this week, Paxos was given directions from the New York Department of Financial Services to stop issuing new BUSD tokens. The department allegedly received a complaint last year from Circle – another stablecoin issuer – claiming that Binance’s reserves were insufficient to support BUSD.

The SEC sued Do Kwon and Terraform Labs for fraud

The US SEC also filed a lawsuit against Terraform Labs and its founder Do Kwon for allegedly “managing a multi-billion dollar crypto asset securities fraud.” Regulators said Kwon and Terraform offered and sold “an array of related crypto-asset securities, many in unregistered transactions.” It refers to the company’s now collapsing algorithmic stablecoin, TerraClassicUSD (USTC) and its linked cryptocurrency Terra Classic (LUNC). The complaint seeks charges of violating the registration and anti-fraud provisions of the securities laws.

A federal judge has ordered Sam Bankman-Fried to be denied internet access as a condition of his bail

Sam Bankman-Fried appeared in court for the first time in days after allegedly using a VPN to watch football. Prosecutors said VPN use raised “a number of potential concerns,” after the former CEO contacted potential witnesses in the criminal case earlier this month. Prosecutors want Bankman-Fried banned from using cellphones, tablets, computers, or the internet, meaning no League of Legends or other video games. In FTX bankruptcy news, a federal judge approved the release of the guarantor’s name for the $250 million bond. Bankman-Fried’s criminal trial is scheduled to begin in October, while the FTX bankruptcy case is still pending.

El Salvador to open a ‘Bitcoin Embassy’ in the United States

A “Bitcoin Embassy” was opened by El Salvador in the United States. Ambassador Milena Mayorga said that the representative office of the state and the state of Texas will work on a new joint project to promote the adoption of Bitcoin. In another headline, the International Monetary Fund advised El Salvador to reconsider its plans to increase exposure to Bitcoin, citing the “speculative nature” of the crypto market, as well as its impact on fiscal sustainability and consumer protection. Bitcoin has been legal tender in El Salvador since 2021.

Celsius chose NovaWulf’s bid to emerge from bankruptcy

Bankrupt crypto lender Celsius Network has chosen NovaWulf Digital Management as the sponsor for its proposed Chapter 11 restructuring plan, which will see the investment advisory firm take over the operations of the new company, with most former Celsius customers expected to recover up to 70% of their funds. The proposed plan has the support of a committee of unsecured creditors and will create a new public platform called NewCo owned by Earn creditors. Six companies placed bids on the Celsius crypto asset, including Binance and Galaxy Digital.

Winners and Losers

At the end of the week, Bitcoin (BTC) that’s it $24,372Ether (ETH) at $1,694 and XRP at $0.39. The total market capitalization is at $1.11 trillion, according to CoinMarketCap.

Among the 100 largest cryptocurrencies, the three biggest altcoin gainers of the week were Filecoin (FIL) at 51.13%, Computer Internet (ICP) at 46.86% and Astar (ASTR) at 43.80%.

The top three altcoin losers of the week are The Graph (GRT) at -1.62%, Nexo (Next) at -1.49% and ONE but LEO (LEO) at -1.05%.

For more information on crypto prices, be sure to read Cointelegraph’s market analysis.

Most Memorable Quotes

“Paxos disagreed with SEC staff because BUSD is not a security under federal securities laws.”

Paxos Trust Companythe issuer of Binance USD stablecoin

“But enforcement regulations that do nothing to help consumers and drive innovation offshore are not the answer. Understand the real staking problem.”

Paul Grewalchief legal officer at Coinbase

“The SEC has done more to confuse than to clarify the application of US securities laws.”

Kristin SmithBlockchain Association CEO

“As an industry, we have the power and the responsibility to prevent digital assets from becoming havens for money launderers and people who evade sanctions.”

Simon ManingCEO of Elliptic

“Make no mistake: Based on the way most crypto platforms operate, investment advisors cannot be trusted as qualified custodians.”

Gary Genslerchairman of the US Securities and Exchange Commission

“When you see the price action, when you see the excitement of our customers calling, building FOMO, it’s not surprising that we are [Bitcoin] was at $30,000 at the end of the quarter.

Mike NovogratzCEO of Galaxy Digital Holdings

Sunday Predictions

Bitcoin Metrics prints ‘the mother of all BTC bullish signals’ for the 4th time

The Bitcoin price indicator has flashed green only four times this week as a major warning for bears.

According to crypto market analyst Mohit Sorout, the current dollar cost averaging indicator “suggests a raging bull market.” Buy signals are rare, with Sorout only seeing three in Bitcoin’s history, each time preventing serious BTC price gains.

“Today the 4th sign of this signal suggests a crowded bull market,” he wrote in a comment, describing the event as “the mother of all $btc bullish signals.”

FUD from Sunday

Circle squashes rumors of planned SEC enforcement action

Circle, the company behind the stablecoin USDC, has been hit by fear, uncertainty, and doubt after the Fox Business reporter said on Twitter that the company was ordered by the US securities regulator to stop selling USDC, claiming it was an unregistered security. The rumor was later dismissed by Circle’s chief strategy officer, although fears of regulatory action against the stablecoin issuer are still high after Paxos, the issuer of the Binance USD stablecoin, received a Wells Notice for allegedly failing to register its offering under federal securities laws.

Korean e-commerce exec accused of accepting LUNA to shill Terra Labs

South Korean prosecutors have sought an arrest warrant for the former CEO of Tmon, a Korean e-commerce platform, for allegedly accepting billions in bribes from Terra founder Daniel Shin in return for promoting the Terra token (LUNC) as a payment method. . The e-commerce company reportedly advertised the token as a safe asset, thus increasing its value, before selling it for multibillion returns.

Senator Warren vowed the reintroduction of an AML bill that extends to DAOs and DeFi

Vocal crypto critic US Senator Elizabeth Warren will reintroduce to Congress a bi-partisan Anti-Money Laundering (AML) bill that covers “decentralized entities” such as decentralized financial protocols and decentralized autonomous organizations. According to Warren, the crypto community wants decentralized entities running the code to be exempt from AML requirements.

Cointelegraph’s best features

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Asia Express: China Telco crypto SIM, Korean exchange in turmoil… and more

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