Quite a lot has happened in the past couple of day, so in case you’ve missed the sagas that happened in the crypto world during the past week, here is a brief summary.
Crypto exchange Binance faced yet another regulatory scuffle this week, adding to the numerous problems including the Monetary Authority of Singapore issuing an investor alert against the business. The Singaporean regulator placed Binance’s global entity Binance.com on an investor alert list on two days ago; listing the firm among entities that are unregulated by the body. This may quite possibly be wrongly assessed as licensed or regulated.
The world’s biggest crypto exchange platform has been getting hit by regulatory warnings after regulatory warnings in multiple countries around the world during the past couple of months; some of which are the UK, Japan, Italy and Germany. Authorities have taken issue with the company’s lack of transparency and alleged offering of regulated products without appropriate approvals.
Binance operates via a network of local affiliate businesses since it has no official headquarters, and even after undergoing questioning from regulators, the platform hasn’t been able to provide the names, locations and senior staff of all affiliates publicly available. It did apply for license to operate in Singapore through its local subsidiary, and is now permitted to continue operating while it resolves the issues at hand.
Moving on, the Securities and Exchange Commission of the United States has accused crypto platform BitConnect and its founder, Satish Kumbhani, of a $2bn fraud involving Bitcoin raised from global investors. Back in 2016, the platform sold its own cryptocurrency token to investors in exchange for Bitcoin, claiming that it had an automated program that would make money by trading the contributed virtual currency. Profits made would then be shared with investors through interest payments.
However, the SEC claimed that BitConnect’s CEO didn’t use a program to trade bitcoin and that instead it kept some of the Bitcoin for himself and other promoters of the scheme. The current whereabouts of Kumbhani, who was based in India at the time of the alleged scam, are unknown.
The SEC said in the lawsuit filed in New York on 2 September that thousands of people have invested in BitConnet; many of whom lost most or all of their funds.
The SEC’s chairman Gary Gensler said that the gaps in US regulation of the cryptocurrency sector must be fixed if watchdogs are to sufficiently protect investors from the growing risks that comes with putting money in virtual currencies. Speaking as he gave evidence to the European Parliament’s economic and monetary affairs committee on three days ago, the boss of the US’ top markets authority said there are holes in the country’s legislation that will allow the public to be hurt.
Gensler, who is also a former chair of the CFTC, added that “the transformation we’re living through right now could be every bit as big as the internet in the 1990s”.
In other news, Crypto exchange platform FTX has agreed to acquire LedgerX, the first company to gain federal approval to offer crypto-linked derivatives in the US, for an undisclosed sum. The move means FTX’s US entity, FTX.US, might soon move into the derivatives market.
FTX.US’s president has said in a 31 August statement that they believe it is incumbent upon the industry to be proactive and to seek out working relationships with regulatory groups like the CFTC to help shape the industry’s future. FTX lately set the record as the largest private funding round in the cryptocurrency sector ever, and raised $900m at a valuation of $18bn in July. Its founder Sam Bankman-Fried is the richest person in crypto with a net worth of $16.2bn.
Lastly, smaller cryptocurrencies are having a resurgence, as Bitcoin posted its eighth consecutive week of outflows and Cardano reported record-level inflows. Altcoins including Ether, Solana and Polkadot have made up 32% of total digital assets under management by investors last week, according to data from CoinShares, surpassing levels sighted in 2018 when the crypto market was much smaller.
Cardano, which trades under the ticker ADA, gained $10.1m in inflows, setting a new record for the world’s third-largest cryptocurrency. Cardano’s market capitalization was nearing $100bn as its price rose to a record high on 2nd September, which is far behind Ether’s $455bn and Bitcoin’s $926.7bn.
Bitcoin, however, continues its slide with outflows of $3.8m. The cryptocurrency has reported outflows in 14 out of the last 16 weeks.
02 Feb 2023
© 2015-2023 Coinposters. All rights reserved!