News Updates October 04, 2022
1. SEC Chair Leading Wrong Narrative Over Crypto Laws? The U.S. Securities and Exchange Commission (SEC) has filed several lawsuits against different firms and individuals for breaching securities laws. However, Gary Gensler, SEC chair has given out assorted statements over crypto regulations. This time XRP’s lawyer caught Gensler red handed replying to questions over a security.
In the interview with CNBC, Becky Quick mentioned that the CFTC chair said that they should be regulating some of the crypto related assets. She added that the SEC built some case laws and set some examples of people agreeing to settle with the agency.
She added that these moves affirm that the SEC should lead the regulations for more.
To this SEC chair replied the law is clear over this. He claims that based on the facts and circumstances most of these tokens are securities. While he added that when a group of entrepreneurs is raising money from the public and they all are anticipating a profit out of it then they need to disclose this.
However, John Deaton, Amicus Curiae in the XRP lawsuit raised concern over this statement. He stated that the SEC chair is wrong over this. Gensler ignores two major requirements considered under the law.
2. Former SEC Chair Jay Clayton Says Crypto Regulation Must Start With Stablecoins.
The former head of the U.S. Securities and Exchange Commission (SEC) says the best place to start regulating crypto is the stablecoin sector.
In a new CNBC interview, former SEC chair Jay Clayton discusses what regulations could look like when applied to the nascent field of crypto technology.
“I think it’s very good that the FSOC [Financial Stability Oversight Council] is getting together. Crypto assets, or digital assets, span the jurisdiction of many groups. What we’re seeing is them getting into the room and saying ‘Where is this in your arena? Where is this in my arena? Where do we need additional guidance or legislation?’ That, I think, is the first step.”
This week, FSOC released a report on crypto assets and their potential to negatively affect the stability of the traditional financial infrastructure of the US.
Given their prominence, Clayton says that stablecoins could be the “low-hanging fruit” of the industry, and that looking at the sector is the best first step for crypto regulation.
“In terms of what I say would be low-hanging fruit, bringing this technology into our traditional financial system, I do think a good first step is regulation around stablecoins. As you’ve pointed out, we’ve had some things labeled stablecoins that are anything but – you might call them unstable coins.
But if you’re going to have a digital asset that is truly pinned to the US dollar, let’s have some regulation around that. It’s very prescriptive as to what is not a security and what is truly stable. I think that’s a good first step.”
3. Bitcoin Gained 2.73% in Last Month and is Predicted to Reach $ 22,352 By Oct 10, 2022.
BTC price is expected to rise by 9.88% in the next 5 days according to our Bitcoin price prediction
Bitcoin BTC, 3.76% is trading at $ 20,343 after gaining 3.76% in the last 24 hours. The coin outperformed the cryptocurrency market, as the total crypto market cap increased by 2.06% in the same time period.
According to our Bitcoin price prediction, BTC is expected to reach a price of $ 22,352 by Oct 10, 2022. This would represent a 9.88% price increase for BTC in the next 5 days.
Bitcoin has been displaying a positive trend recently, as the coin gained 2.73% in the last 30-days. The medium-term trend for Bitcoin has been bullish, with BTC increasing by 3.95% in the last 3 months. The long-term picture for Bitcoin has been negative, as BTC is currently displaying a -58.25% 1-year price change. On this day last year, BTC was trading at $ 48,726.
Bitcoin reached its all-time high price on Nov 10, 2021, when the price of BTC peaked at $ 68,770. The current BTC cycle high is $ 25,186, while the cycle low is at $ 17,698. BTC has been displaying low volatility recently – the 1-month volatility of the coin is at 4.39. Bitcoin recorded 16 green days in the last 30 days.
4. Federal regulators are preparing to pass judgment on Ethereum
The Securities and Exchange Commission is moving to take action against Ethereum that reaches far beyond America’s borders.
Are regulators with the U.S. Securities and Exchange Commission gearing up to take down Ethereum? Given the saber-rattling by officials — including SEC Chairman Gary Gensler — it certainly seems possible.
The agency went on a crypto-regulatory spree in September. First, at its annual The SEC Speaks conference, officials promised to continue bringing enforcement actions and urged market participants to come in and register their products and services. Gensler even suggested crypto intermediaries should break up into separate legal entities and register each of their functions — exchange, broker-dealer, custodial functions, etc. — to mitigate conflicts of interest and enhance investor protection.
Next, there was an announcement that the SEC’s Division of Corporation Finance plans to add an Office of Crypto Assets and an Office of Industrial Applications and Services to its Disclosure Review Program this fall to assist in registering crypto market participants. Then, there was testimony before various Senate Committees on proposed legislation to overhaul crypto regulation, where Gensler reiterated his belief that nearly all digital assets are securities, implicitly endorsing his view that such digital assets and relevant intermediaries should register with the SEC.
But perhaps the most ground-shaking shots occurred when the SEC took aim at Ethereum, possibly reversing a years-long détente that began when a previous SEC official stated that Ether (ETH), along with Bitcoin (BTC), was not a security. In his testimony before the Senate Banking Committee, Gensler suggested that Ethereum’s transition to proof-of-stake (PoS) from proof-of-work could have brought Ethereum under the SEC’s purview because, by staking coins, “the investing public [is] anticipating profits based on the efforts of others.”
5. 89% of employees in the Philippines want to spend more office time in the metaverse:
The Philippines could witness an exodus of corporate workers to the virtual worlds, notes a recent study conducted by Ciena (NYSE: CIEN). The report claimed that a large number of Filipino employees preferred working in the metaverse than traditional office spaces.
Some 89% of the surveyed employees disclosed that video conferencing tools were responsible for an uptick in their productivity. The absence of the need for long commutes to work saves time and money, leading to greater workplace efficiency, said 44% of respondents.
“Filipino business professionals are clearly comfortable with virtual meetings and for the early adopters, ready to move to the metaverse,” said Dion Leung, regional managing director of Ciena in Southeast Asia.
For nearly 90% of respondents, working in the metaverse is the next transition for them, and they hoped their companies opened up the possibility. They argue that “introducing virtual reality space platforms into existing work processes” would see productivity spike to previously unseen levels because it allows teams to collaborate and interface effectively.
Filipino workers moving to work in the metaverse is predicted to be a smooth process because of their familiarity with Web 3 concepts. In the heat of the pandemic, Filipinos turned to digital assets trading en masse to augment their incomes as finances took a big hit. Play-to-earn games on distributed ledger technology (DLT) like Axie Infinity had sky-high numbers of Filipinos on the platform.
In Southeast Asia, the Philippines is topping the charts for transaction volumes on peer-to-peer digital assets exchanges. Thus, Ciena argues that the transition toward a metaverse workspace for firms in the Philippines would be a seamless process.
6. Markets: Bitcoin rises above US$20,000, gaining with Ether and rest of crypto top 10 as U.S. equities surge.
Bitcoin was trading above US$20,000 in Wednesday morning trading in Asia after struggling to break that resistance level for much of the past three weeks. The world’s largest cryptocurrency rose along with Ether and the rest of the crypto top 10 by market capitalization, with Dogecoin posting the most significant gains.
7. Criminals have laundered $4 billion through DEXs, bridges and coin swaps.
Elliptic researchers say financial criminals have laundered billions with the help of popular crypto tools.
Since 2020, cyber criminals have used decentralized exchanges (DEXs), cross-chain bridges and non-KYC exchange services (called coin swaps) to move nearly $4 billion in funds connected with illicit activity, the on-chain analytics firm said on Tuesday.
The firm clarified that while these tools usually have legitimate use cases, they are also being increasingly used to process funds linked with activities such as thefts, dark web services, mixing, scams and ponzi schemes, ransomware and others.
“To be clear, Elliptic is not saying DEXs or bridges are used exclusively by criminals, in fact, the opposite is true, they are mostly used by legitimate users. But Elliptic has traced illicit funds (from hacks etc) that have been moved through DEXs and bridges in order to obfuscate their origin,” a spokesperson for Elliptic told The Block.
In its report, Elliptic researchers broke down its findings for each of these blockchain tools, starting with DEXs. Since 2020, DEXs have facilitated the movement of $1.2 billion in ill-gotten assets, Elliptic said. DEXs are protocols that let users execute buy and sell orders with the help of smart contracts. The use of DEXs by criminals is closely associated with exploits in the decentralized finance (DeFi) space and hacks of centralized exchanges, the firm reported.
Cross-chain bridges are the second kind of tool found by Elliptic to be popular among criminals. Here, the Elliptic researchers reported that since 2020, criminals have funneled nearly $750 million of illicit funds via cross-chain bridges, an activity referred to as “chain hopping” by Elliptic. These bridges let users transfer assets among blockchain networks. The vast majority of these illicit assets moving through bridges (over $540 million) have been processed by RenBridge, a cross-chain bridge between Bitcoin and Ethereum.
The third tool detailed in the report are “coin swaps” or non-KYC cryptocurrency swap services. These allow users to swap assets both within and across blockchains without opening an account. According to Elliptic, coin swaps are mostly advertised on Russian cybercrime forums and cater almost exclusively to a criminal audience. These account for $1.2 billion in illicit transactions since 2020.
8. OpenSea employee accused of fraud wants to subpoena the NFT marketplace.
Nathaniel Chastain, the former OpenSea product manager accused of fraud through front-running the posting of different non-fungible tokens to prominent positions in the marketplace, is making three new moves in his defense, according to recent court filings.
Chastain wants to subpoena OpenSea, his former employer, and claims the Federal Bureau of Investigation violated his fourth and fifth amendment rights in their search of Chastain’s home, and is trying to strike the term "insider trading" from the case.
A subpoena for OpenSea
Chastain wants the court to subpoena OpenSea for documents on whether the information Chastain allegedly used to turn a profit is considered "property" of OpenSea. The wire fraud charge contends that Chastain defrauded his employer when he allegedly used the private information of which NFTs would be listed on the homepage.
The subpoena Chastain wants would include documents into whether OpenSea executives were aware of Chastain's alleged activities. Chastain's defense team hopes to receive Slack messages between Chastain and other employees, documents or communications mentioning OpenSea's employee and confidentiality policies, documents or communications the company shared with the government, and any documents or communications in which OpenSea CEO Devin Finzer and co-founder Alex Atallah referenced Chastain.
The right terms
The Justice Department charged Chastain with wire fraud in June of this year, alleging Chastain traded NFTs he knew would be listed on OpenSea's home page, driving up the price and turning a profit based on private information. But because insider trading is a violation directly related to securities and commodities, and NFTs are not currently classified as such, the DOJ did not technically pursue insider trading charges, though it argues that Chastain's actions were effectively insider trading and uses that language filings.
