The price of cryptocurrency XRP plunged again on Wednesday after the Securities and Exchange Commission filed a lawsuit alleging that Ripple Labs, a blockchain company that supports the digital currency, sold more than $1 billion of XRP virtual tokens without registering with the agency.
The SEC on Wednesday formally sued Ripple, alleging that its co-founder Christian Larsen and CEO Bradley Garlinghouse “created an information vacuum” that allowed them to sell XRP into a market that only had information they chose to share.
According to the SEC’s lawsuit, the duo ignored legal advice that the cryptocurrency could be considered an investment contract and therefore was a security.
“From a financial perspective, the strategy worked,” raising at least $1.38 billion “over a years-long unregistered offering of securities,” the SEC said. “Ripple used this money to fund its operations without disclosing how it was doing so, or the full extent of its payments to others to assist in its efforts to develop a ‘use’ for XRP and maintain XRP secondary trading markets.”
Larsen and Garlinghouse both fervently have denied the SEC’s allegations, publicly arguing that XRP is a currency and should not have to be registered with the SEC as an investment contract. The company has also questioned the lawsuit’s timing – SEC Chairman Jay Clayton is soon to step down – and said the U.S. government and other regulators had previously given XRP currency status.
XRP lost its place as the world’s third-most valuable cryptocurrency on Wednesday to tether – a dollar-pegged token investors often use to trade crypto — with tether surpassing it in value, according to CoinMarketCap data.
Even so, XRP has still more than doubled in value this year, with a market value of about $21 billion.
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Author: M. Corey Goldman
Bitwise Liquidates XRP Position After Ripple’s SEC Lawsuit
Bitwise has liquidated its XRP position from its institutional crypto index of ten cryptocurrencies.
Three other cryptocurrency exchanges—OSL, Beaxy, and CrossTower—have also halted XRP trading after SEC charges Ripple for an “ongoing” sale of illegal securities.
Exchanges have begun halting XRP trading in light of the SEC’s lawsuit against Ripple. These exchanges’ users can withdraw XRP from their accounts, but trading is suspended until there is more clarity to the situation.
Please note: In light of US Securities & Exchange Commission’s enforcement action against Ripple Labs & 2 of its executives, we have suspended all #XRP payment in and trading services on the OSL platform, effective immediately and until further notice.https://t.co/EXJJEHMawn
— OSL (@osldotcom) December 23, 2020
Bitwise has decided to exclude XRP from the Bitwise 10 Crypto Index Fund, launched earlier this month. The press release for exclusion reads:
“The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws.”
The SEC’s legal filing has accused Ripple and two of its founders, Chris Larsen and current CEO Brad Garlinghouse, of participating in the “ongoing” sale of unregistered securities.
Investors are hopeful of a bull run if the lawsuit gets settled with a fine, similar to others in the past, for example, EOS. However, some experts have also stated that the lawsuit against Ripple is far graver.
this isn’t remotely similar to the EOS/B1 case. the SEC is going for the jugular here.
— nic carter 🎄 (@nic__carter) December 22, 2020
The case might run for months or even years, and U.S. exchanges may delist XRP to safeguard themselves from related lawsuits.
If XRP is deemed a security, exchanges would require a license from the Financial Industry Regulatory Authority (FINRA). Currently, most of these avenues are operating as Money Transmitter Businesses (MSBs).
The liquidity of the cryptocurrency will drain in mere months if the above situation plays out. XRP price plummeted 36% to lows of $0.3 after the court filing was released, sliding down one spot to become the fourth-largest cryptocurrency by market capitalization.
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Crypto Derivatives Exchange ACDX Kicks Off the World’s First WOZX Perpetual Futures Listing
- ACDX is the world’s first crypto exchange to list WOZX perpetual futures
- WOZX is the native token of Efforce, the decentralized energy saving trading platform founded by Apple’s co-founder Steve Wozniak
- ACDX hopes to reaffirm their commitment to the expanding decentralized economy
MAHE, Seychelles, Dec. 24, 2020 /PRNewswire/ — ACDX, the crypto derivatives exchange offering advanced structured products for sophisticated traders, is introducing their users with a new trading option, WOZX Perpetual Futures. It is the world’s first crypto exchange to kick off such listing, empowering users to trade WOZX/USD perpetual futures with up to 100x leverage.
Efforce is the company behind the multimillion-dollar-backed WOZX ecosystem. Led by Apple’s co-founder Steve Wozniak, it is a blockchain-based decentralized energy saving trading platform which connects cotributors and companies that need funds for their energy efficiency projects.
“We are always looking for innovative projects to list on ACDX. Efforce is exactly what we are seeking,” said Andy Cheung, founder and executive chairman of ACDX.
ACDX is a next-generation crypto exchange that offers quarterly futures, perpetual futures, and futures spread trading at launch. Apart from their native token ACXT, the other available trading assets are those trusted ones like Bitcoin, Ethereum, and TECH100 index which comprises the world’s top 100 non-financial technology companies.
Given the proliferation of DApps this year, however, ACDX has decided to reaffirm their commitment to the expanding decentralized economy. Days before, they officially announced the listing of DeFi perpetual futures in the coming weeks with the first newcomer being Polkadot (DOT). Just before Christmas, they continue to deliver the vision to bridge the gap between the decentralized and centralized blockchain fields by introducing the listing of WOZX perpetual futures.
“We have been closely keeping our eyes on the decentralized space. Our team notice that many DApps projects have blossomed in 2020 with the potential to flourish further in 2021. To respond to our community’s need, we decide to explore this field,” commented Andy Cheung.
ACDX offers a next-generation cryptocurrency derivatives trading platform with cryptocurrency structured products that the industry has not yet seen. The exchange is focused on true innovation across a wide range of easy-to-use, fair, and transparent trading products that suit the needs of current and emerging cryptocurrency traders.
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Cryptocurrency exchange CoinDCX raises Rs 100cr in Series B
New Delhi: Cryptocurrency exchange CoinDCX on Tuesday said it raised Rs 100 crore ($13.9 million) in its series B round led by Block.one.
The funding round also saw the participation of DG, Jump Capital, Uncorrelated Ventures, Coinbase Ventures, Polychain Capital, Mehta Ventures and Alex Pack, CoinDCX said.
This makes for the third round of funding for CoinDCX in 2020.
In March, the company raised Series A funding worth $3 million from companies such as Polychain Capital, Bain Ventures and Bitmex.
In May, the exchange raised $2.5 million in a strategic round from the above companies as well as Coinbase Ventures, the investment arm of San Francisco-based cryptocurrency trading platform Coinbase.
Compiling all three rounds of funding this year, CoinDCX has raised close to $19.4 million, till date.
“This has been the most exciting year for CoinDCX. While the pandemic forced everyone indoors, CoinDCX scaled up exponentially and continues to do so. Our team tripled in number from 30 in March to 90 in December, and we are continuing to hire aggressively,” Sumit Gupta, CEO and co-founder of CoinDCX, said in a statement.
“The funds raised in the past as well as the current round will help us develop our newly launched Bitcoin & Crypto Investment App CoinDCX Go and make it the easiest and the safest way to onboard the everyday Indian into cryptocurrencies.”
CoinDCX said it saw 3X growth in the overall volume traded and saw 4X quarter-over-quarter growth in daily active users, in the Apr-Jun quarter.
Overall in Q2 and Q3, CoinDCX saw 12 per cent increase in signups and 20 per cent increase in volume.
The exchange said it saw 21 per cent month-on-month (MoM) growth in trade volume and 25 per cent MoM growth in the number of users, in October.
Why Bitcoin Buyers Should Beware of Unregulated Exchanges – Crypto Money Daily
There are many reasons to be optimistic about the future of cryptocurrency. This year, as bitcoin soared past its all-time high, we saw PayPal introduce support for digital assets; a Nasdaq-listed company boosted their bitcoin balance sheet to $1.6 billion; and the first bitcoin owner, Cynthia Lummis, made it to the U.S. Senate. Ethereum also became the first blockchain to settle $1 trillion in a single year. In short, it was a good year.
And yet for all the rampant positivity, there remains an 800lb elephant in the crypto room: Regulation. Regulatory headwinds haven’t just caused Facebook’s stablecoin project Libra to grind to a halt; they’ve also forced countless crypto companies to think about how they want to operate in the coming years. Following the much-publicized DoJ charges brought against the owners of cryptocurrency trading exchange BitMEX in October, we have seen capital flow out of not only BitMEX but also OKEx, Huobi, and Binance.
This crypto flight to safety should give budding bitcoin buyers pause for thought – and to think twice before trading on unregulated exchanges.
Regulators have been a step behind crypto for years, but that is beginning to change. Hence the recent powwow involving finance ministers and central bank governors from the U.S., Canada, Japan, Great Britain, Germany, France, Italy, the European Commission, and the Eurogroup. The topic under discussion? How to implement stronger regulation in the digital asset ecosystem.
One thing we can be sure of: regulators aren’t going anywhere. The success of the crypto industry will only strengthen the resolve of global authorities seeking to put measures in place that prevent malpractice, safeguard users and, inevitably, ensure national governments get their piece of the pie.
Interestingly, the latest regulatory battlefront has centered on the validity of private crypto wallets, with U.S. regulators contemplating banning the use of non-custodial wallets. In other words, digital asset exchanges will be responsible for ensuring users cannot send funds from their custodial account to a hardware (offline) wallet. This action is already underway in Switzerland and Singapore, and in Korea and Japan regulators have made every effort to prevent local exchanges supporting assets that facilitate private transactions; earlier this month, France approved new measures to crack down on anonymous transactions too.
Entities such as the Financial Crimes Enforcement Network (FinCEN), the Financial Action Task Force (FATF), and the Securities and Exchange Commission (SEC), not to mention blockchain-centric analytics firms such as Chainalysis and CipherTrace, are busy laying the foundations that will determine the success or failure not only of crypto exchanges but the entire industry. After all, if regulations torpedo leading crypto projects, confidence among users will inevitably falter.
According to CoinZoom CEO Todd Crosland: “Although cryptocurrency adoption has come a long way, the simple fact is that digital assets aren’t deemed trustworthy by the general public – and this is largely due to a lack of oversight.”
“If more services were regulated, the reputation of the entire industry would benefit. Regulations can help to reduce the number of scams, and therefore help address distrust among potential new users.”
If Crosland is correct, the merits of using a fully compliant exchange, such as CoinZoom, Coinbase, or Gemini in the U.S., or favoring a regulated stablecoin like USDC, should be evident.
Cryptocurrency users should avoid unregulated offshore exchanges and educate themselves on the developing legislative picture. Crypto is an incredibly exciting industry that represents an impressive evolution of the traditional financial system. What it’s lacked, up until now, is the regulatory framework to match. After years of inertia, all that’s now changing fast and the days of fly-by-night exchanges are numbered. Traders who cherish their crypto should take their assets elsewhere while they still can.