Payment Expert’s Blockchain Bulletin analyses how the world of blockchain is constantly evolving and having a major impact on the payment industry, with cryptocurrencies, NFTs and the metaverse revolutionising the space.
This week, Ripple Labs scored a significant win in its regulatory battle with the US Securities and Exchange Commission (SEC), in what was cited as a landmark moment for digital currencies.
Ripple’s landmark win fuels XRP growth
After years of back-and-forth over a lawsuit the SEC lodged against Ripple Labs in December 2020, the crypto platform landed a win in a New York court last week as its XRP native token was ruled not a security.
This was hugely significant for the overall US crypto sector as the SEC has been aggressively clamping down on crypto exchanges over the past year. The SEC has detailed its belief that exchanges have been circulating unregistered securities – a financial instrument that can be traded which therefore will need to fall under financial regulations.
The US District Court of the Southern District of New York ruled in favour of Ripple as it deemed the tokens on the platform did not violate any federal securities laws and did not constitute the need for any investment contracts.
The aftermath of this ruling may prove crucial for the rest of crypto companies and exchanges, such as Binance and Coinbase who have been sued by the SEC on similar grounds to Ripple, which may lead to the SEC tempering its efforts of suing other crypto companies.
SEC called into question by US Congressman
In a letter addressed to the SEC, US Congressman Ritchie Torres has criticised the financial regulator’s handling of cryptocurrencies and exchanges in the country following an agreement it settled with crypto investment platform, Prometheum.
Despite not trading crypto or digital assets, Prometheum received a Special Purpose Broker Dealer (SPBD) clearance by the SEC which resulted in Torres calling into question its dealings with crypto companies and called for an investigation.
He stated: “Clarity is the cornerstone of compliance. Yet, the SEC refuses to bring even the barest amount of clarity to the application of securities law to digital assets. Its preferred means of communicating is neither rule nor guidance but enforcement.
“The SEC is like an overzealous traffic agent who arbitrarily tickets drivers for speeding while keeping everyone endlessly guessing about the speeding limit. Regulation by enforcement is no way to regulate.”
Ex-Celsius CEO Alex Mashinsky arrested
Alex Mashinsky, former CEO of bankrupt cryptocurrency exchange Celsius, has been arrested on federal securities fraud charges.
The arrest was carried out on 13 July with some of the several charges against Mashinsky including fraud, securities, commodities and wire fraud, along with charges of securities manipulation.
This follows what has been an extremely turbulent time for Mashinsky who had a lawsuit filed against him for his involvement in the bankruptcy of Celsius, along with “defrauding hundreds of thousands of investors”.
Binance axes 1,000 jobs amid regulatory challenges
The world’s largest cryptocurrency exchange Binance has had a turbulent last couple of months, fighting a regulatory battle in the US on two fronts and now being forced to make up to 1,000 layoffs with more expected by the end of the year.
Binance CEO and Founder Changpeng Zhao, confirmed the layoffs this week with reports indicating it could reach as high as 3,000, but a company spokesperson swiftly rebutted the reported high-end figure as “just not right”.
The layoffs come off the back of the cryptocurrency exchange fighting not one but two regulatory battles with the Commodity Futures Trading Commission(CFTC) and the SEC.
Nubank and Fireblocks to help burgeoning Brazilian crypto sector
Nubank has announced that it will be partnering with Fireblocks to bolster its Nubank Cripto service, the in-app solution for buying and selling cryptocurrencies.
Fireblocks’ blockchain capabilities will be integrated into Nubank Cripto to enhance its custody capabilities, bringing enhanced security and governance measures for its customers.
Thomaz Fortes, General Manager of Nubank Cripto, said: “With Fireblocks as our chosen digital asset infrastructure provider, Nuabank reaffirms our long-term commitment to creating value for our customers with blockchain technology.”