SEC Faces Criticism over Its Targeting of Cryptocurrencies 0 23

US’s Securities & Exchange Commission (SEC) has been under criticism because according to most of the crypto community members SEC is deliberately targeting cryptocurrencies without any rationale. Brad Garlinghouse, the CEO of Ripple Labs too joined the criticism and raised his voice against the actions of SEC by suggesting that his company has been trying to settle the ongoing dispute with the officials of SEC, however, it is like talking to the walls who only listen but do not speak or respond.

SEC nowadays is very active in taking enforcement actions against cryptocurrencies and any activities in relation thereto.

The latest action taken by SEC was against a newly NASDAQ listed crypto entity, Coinbase. The enforcement action by SEC against Coinbase has been criticized by most of people. People are claiming that SEC has lost its conscious mind and is overstretching its authority and power. SEC claimed that Coinbase is not legally authorized to launch any lending program because the program involves “securities”.

According to Coinbase, the firm was in the process of launching the proposed lending scheme before the end of October, 2021. However, the firm was issued a legal notice by SEC informing the company to refrain from launching the proposed program. In the notice, SEC alleged that the proposed program is likely to get involved “securities”, hence, needs to be suspended. SEC then advised Coinbase that if the program is not suspended then legal action will be taken against it. But the firm till to date hasn’t responded to SEC’s notice. Instead, the firm’s officials discussed the matter on Twitter. They claimed that they were surprised to receive such an uncalled for notice from SEC. SEC has made a final determination without affording any opportunity to the firm and without mentioning any reasons.

SEC’s action was later on criticized by global crypto community as being misuse of its power. This then gave the opportunity to Ripple Labs to raise criticism against SEC’s action. The criticism came directly from Brad Garlinghouse, the CEO of Ripple Labs. He commented that it isn’t surprising at all that Coinbase has become the latest target of SEC. SEC is using the tactics of ‘lawfare’ which is different from the warfare as it includes molding the law to dominate adversaries. He then suggested that it is useless to come to terms with SEC and its officials. If table-talks would have been the solution to settle dispute with SEC, then XRP’s dispute wouldn’t have lingered on for three years.

Persons who are aware with the Ripple’s dispute with SEC are suggesting that SEC is going after Coinbase as it did with Ripple Labs. Stuart Alderoty, Ripple’s counsel, stated that SEC should stop using intimidation tactics or else consumers would suffer.

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Absconding Directors of South African Crypto Fraud “Africrypt” Agree To Attend Court Hearing Virtually 0 15

After proceeding of trial against infamous Africrypt, it would be for the first time that the main accused will attend court hearing, although virtually. The Court, upon the request of Cajee brothers’ counsels has agreed to offer virtual hearing option and fixed the date of 19th & 20th October, 2021 for recording of their testimonies.

The Courts in every country have been insisted upon by legal experts to utilize innovation and technology for justice system. Litigants everywhere criticize that justice is delayed. Primarily in the Asian and African regions, often Courts are criticized for not being able to decide cases even after 5 to 10 years. Recording of evidence kept linger on because the witness are not available in the country. In the modern countries, usually the Courts have provided for virtual hearings, however, such option was hardly utilized by Asian and African regions.

However, due to pandemic, the courts, which never used virtual hearing option, are now conducting hearings virtually as well. The practice has finally made its way into the justice system of both these regions as well. This very option has recently been utilized in a high profile crypto fraud case of South Africa namely “Africrypt”.

According to the complaints of Africrypt, the firm Africrypt looted their money while the perpetrators fled with millions of dollars. They claimed that a crypto scam of “exit” nature was committed on them.

Meanwhile, when the founders/operators of Africrypt namely Amer and Raees Cajee were there, they said they claimed a hack occurred. But nobody believed and said that they were concocting a false story to hide their crime while the money was taken by them. However, the local authorities soon came to know that both brothers went into hiding. No one knew where they were taking shelter or why they opted to hide if they did not do anything wrong. But their counsels were representing them before the Court and told the Court that Cajee brothers were receiving life threatening warnings. They were threatened by certain people of dire consequences which may involve harming their family members as well. So they went into hiding, claimed their attorneys.

Now an opportunity has been offered by the South African court to Cajee brothers to plead their case virtually. It has been noticed in the press as well that the Cajee brothers have accepted Court’s offer of attending Court’s hearing virtually.

The virtual hearing date was fixed to take place in September. But the date was requested by Cajee brothers’ counsels to be fixed in the month of October for various reasons. The Court has accepted the request of the counsels and has re-fixed the case for 19th October, 2021. On the said date of hearing, it is anticipated that both the main accused with record their testimonies virtually.

60 Crypto Exchanges in South Korea to Shut Down their Services 0 13

This is the week of the deadline for crypto exchanges as well as wallet operators in South Korea to comply with the new regulatory requirements introduced in order to stay open. Up until now, only one exchange has been granted the license for continuing their operations in the country. It is expected that around 60 crypto exchanges will either shut down fully, or cut down on their services. According to the new ‘Act on the Reporting and Use of Special Financial Transaction Information (Special Act)’, all crypto exchanges in South Korea have to register with the Financial Intelligence Unit (FIU) in the country and get certification for Information Security Management System (ISMS).

The last day to be able to do is September 24th. Crypto exchanges that are unable to do either of these things will have to cease their operations fully. Local media reported that around 34 exchanges have not been granted ISMS certification, which means they will entirely shut down by the given date. Around 29 crypto exchanges do have ISMS certification, but only one of them has managed to register with the FIU successfully. This is part of the country’s top financial regulator, the Financial Services Commission (FSC). On Friday, the Financial Intelligence Unit (FIU) had had their first crypto business review meeting.

Their goal had been to check the report that was submitted by Dunamu Inc. that operates the largest crypto exchange in South Korea named Upbit. The report was accepted by the review committee, which made Upbit the first licensed crypto exchange operator. It was further revealed by the FIU that other than Upbit, there were four other exchanges that had also submitted a report, which included Coinone, Korbit, Korea Digital Exchange (Flybit) and Bithumb. Furthermore, a report was also submitted by Korea Digital Asset (KODA), which is a wallet operator.

The FSC had said back then that since there was only a week left till the deadline, virtual asset providers should file a report right away, if they haven’t already done so. Furthermore, registered crypto exchanges that are interested in offering trading in the Korean won are also required to partner with banks for providing users with accounts verified with their real names. Up until now, banking partnerships have only been secured by the country’s largest exchanges, such as Upbit, Korbit, Coinone and Bithumb. Banks are not willing to partner with smaller exchanges because they are concerned about risks like money laundering.

This means that of the 29 exchanges that have been ISMS-certified, only 25 of them will be crypto-only exchanges in case they register with the FIU successfully. By September 24th, they will have to cease offering trading services in Korean won and should have already notified their clients, as per the rules of the financial regulators. Huobi Korea, Hanbitco, Gdac and Gopax are four companies that said they were still working on securing partnerships with banks by the given deadline. This indicates that out of 63 exchanges, only the leading four will continue to operate normally in the country. 

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