Two citizens, Chan Wing-yan and Herbert Lee Sun-him, have filed the first civil lawsuit against the cryptocurrency platform JPEX, seeking to recover approximately 240,000 units of tether, worth about HK.85 million. This marks the first civil lawsuit since the alleged fraud was uncovered nine months ago. The plaintiffs allege unauthorized transfers of their funds shortly […]
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SEC’s Regulatory Overreach Challenged in Court: Motion Filed to Vacate ‘Dealer’ Rule
Crypto Freedom Alliance of Texas and Blockchain Association filed a motion on May 17 to vacate the U.S. Securities and Exchange Commission (SEC)’s new Dealer Rule. The plaintiffs’ counsel argues that the SEC’s expanded definition of “dealer” exceeds its statutory authority under the Securities Exchange Act, particularly affecting the digital asset industry. The brief asserts […]
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Digital Currency Group Strikes Back: Motion to Dismiss Gemini’s Lawsuit Filed
Digital Currency Group (DCG) has filed a motion to dismiss the lawsuit brought against them by Gemini Trust Company, LLC. The motion, filed in the Southern District of New York, argues that Gemini’s allegations of fraudulent misrepresentations related to the Gemini Earn program are without merit and inadequately substantiated. DCG’s legal team asserts that the lawsuit lacks actionable evidence and calls for the court to dismiss the complaint.
Digital Currency Group Seeks Dismissal of Gemini Lawsuit, Citing Lack of Evidence and Inadequate Allegations
In the preliminary statement of the motion, DCG outlines Gemini’s claims related to the Gemini Earn program, formerly operated by Gemini in coordination with Genesis Global Capital, LLC (Genesis). DCG argues that Gemini’s allegations, aimed at holding DCG and Barry Silbert responsible for Genesis’s actions, are unfounded.
DCG’s motion further points out that Gemini’s allegations fail to adequately allege fraud by the defendants. The argument section of the motion elaborates that none of the statements made by the defendants are actionable and that the defendants are not liable for alleged misrepresentations by Genesis.
“Gemini argues that defendants aided and abetted Genesis’s alleged fraud through various corporate transactions and paperwork. This effort fares no better,” the letter supporting the motion to dismiss filing published on August 10, 2023, explains. “There are no well-pled allegations that Defendants had actual knowledge of any alleged fraud, and Gemini does no more than rely on Defendants’ corporate relationship with Genesis to argue otherwise.”
In addition to the lack of evidence for fraudulent actions, DCG’s motion accuses Gemini of failing to plead knowledge of the alleged fraud. They further dismiss Gemini’s accusations as baseless, criticizing the lack of substantial support for the claims. “The rest of the complaint is a hodgepodge of conclusory allegations against non-defendant Genesis,” DCG’s attorneys insist. The motion continues:
Gemini tries in various ways to hold defendants responsible for alleged misrepresentations by Genesis, but Gemini’s efforts to impute them to defendants fail as a matter of law. It is a settled principle of law that parents are not liable for the conduct of their subsidiaries, and Gemini does not even try to allege any theory of alter ego. Instead, it asserts that defendants are liable for not affirmatively correcting the alleged misstatements of Genesis.
Digital Currency Group’s response to the lawsuit comes after Gemini co-founder Cameron Winklevoss publicly announced legal action against DCG and CEO Barry Silbert. Gemini’s lawsuit seeks to recover damages and losses incurred as a result of alleged false and misleading representations by DCG and Silbert. At the time, DCG stressed that the lawsuit was simply “another publicity stunt from Cameron Winklevoss to deflect blame.”
What do you think about DCG’s motion to dismiss? Share your thoughts and opinions about this subject in the comments section below.
FTX Founder Bankman-Fried Seeks Dismissal of Charges Filed After Extradition
Former CEO of crypto exchange FTX, Sam Bankman-Fried, has asked a judge in the U.S. to dismiss several charges against him filed after his extradition from the Bahamas. His lawyers insist that prosecutors have not obtained consent from Bahamian authorities for the additional counts.
FTX’s Sam Bankman-Fried Urges Court to Drop Post-Extradition Charges
Attorneys representing Sam Bankman-Fried (SBF), co-founder and ex-chief executive of the failed cryptocurrency exchange FTX, have filed a series of motions in Manhattan federal court on Monday, requesting the dismissal of a number of criminal charges against him.
The lawyers say the charges filed after his extradition to the United States are invalid because prosecutors did not get proper consent from the Bahamian government, Bloomberg reported. They are asking U.S. District Judge Lewis Kaplan to drop them.
The 31-year-old crypto entrepreneur was accused of running a multibillion-dollar scheme to defraud investors through what was one of the world’s largest crypto trading platforms before it filed for bankruptcy protection amid liquidity issues in November 2022.
U.S. authorities also allege that SBF misused customer funds, including to buy property and increase trading through his crypto hedge fund Alameda Research. About a month after the Chapter 11 filing, he was arrested in the Bahamian capital, Nassau, where he had been residing.
Sam Bankman-Fried consented to simplified extradition to the United States. His lawyers argue that he still retained his rights under extradition law, insisting he could not be tried on charges beyond those to which he agreed to be extradited for, stating:
Mr. Bankman-Fried consented to be tried only on the charges in the original indictment for which the government of the Bahamas agreed to extradition.
Since his arrival in the United States, prosecutors have filed two superseding indictments in the case that brought the total number of charges to over a dozen. Among them are a campaign finance law violation charge and several other counts of fraud.
“After Mr. Bankman-Fried returned to this country, the government superseded the original indictment, not once but twice, improperly adding several new, unrelated charges without first obtaining the express consent of the Bahamian government,” his lawyers elaborated. Although, according to court documents, U.S. prosecutors have notified Bahamian authorities before unsealing these indictments.
SBF has pleaded not guilty to all charges and is expected to face trial in October. His lawyers are also trying to compel the new management of FTX to turn over certain documents to him. They accused the company’s new CEO, John Jay Ray, of acting as “a public mouthpiece for the government by continuing to make disparaging remarks” about Sam Bankman-Fried.
Do you think the Manhattan federal court will dismiss the post-extradition charges against Sam Bankman-Fried? Share your expectations in the comments section below.
At Least 1,000 Lawsuits Filed Against Crypto Miners in Russia’s Irkutsk Region
Authorities in the Russian region of Irkutsk have so far filed 1,000 lawsuits against what they call “gray” miners, or people minting coins in their homes. In over half of these cases, courts have ordered the defendants to compensate the operators of the distribution networks.
Hundreds of Crypto Miners Sued in Irkutsk for Extracting Digital Currencies Using Subsidized Electricity
Power distributors in the Siberian Irkutsk Oblast have filed lawsuit number 1,000 against consumers illegally mining cryptocurrency in residential areas. In 600 of these, judges have decided that the so-called “gray” miners should pay a total of more than 260 million rubles (.5 million) in compensation for losses and damages.
The most common reason for going to court is an unusually high usage of electricity, the regional news portal Irk.ru reported. Such is the recent case with the owner of a house in the village of Novaya Razvodnaya, whose average monthly power consumption over the course of one year reached almost 80,000 kWh, exceeding the total burned by the other 15 homes on the same street.
The man denied any misconduct, claiming he didn’t mine cryptocurrencies but used heat guns to dry his basement. The Irkutsk Regional Court did not accept his explanation and as a result he will have to pay the local power utility, Irkutskenergosbyt, more than 2 million rubles (approx. ,000).
The amount should cover the difference between the subsidized electricity rates for domestic purposes, which can be as low as .01 per kWh in rural districts, and the much higher tariffs that businesses are required to pay.
In the past couple of years, authorities have been trying to clamp down on home crypto mining in the region, which has become a popular source of additional income for a growing number of people. Officials believe that the regulation of mining in Russia and the introduction of differentiated rates, depending on consumption, will help solve the issue.
Quoting Deputy Ministry of Energy Pavel Snikkars, the Russian press reported in December that electricity distribution companies have started to identify improvised mining farms in residential buildings by the increased loads on the grid at substations and are now prosecuting the illegal miners.
While crypto mining is yet to be regulated in Russia, with a dedicated bill under review in the parliament, such activities are not explicitly prohibited at the moment. Nevertheless, utilities can still prove in courts that these consumers are not using the electricity for domestic needs and request to charge them at commercial rates.
Do you think Russian authorities will continue to crack down on amateur crypto miners? Share your thoughts on the subject in the comments section below.
BlockFi Filed For The Coveted Spot Bitcoin ETF With The SEC
Will BlockFi be the one? The rumors are flying, apparently, the U.S. Securities and Exchange Commission will approve a spot Bitcoin ETF soon. With that in mind, the news that crypto lending platform and investment service BlockFi just filed to get one approved was met with suspicion and excitement by the Bitcoin community. Unlike the Bitcoin Futures ETF, a spot one will require the company sponsoring it to buy a huge amount of Bitcoin. This will definitely affect the price. However… BlockFi?
Related Reading | Bitcoin Futures ETF Exceeds Expectations, Trades Billion On Day One
Last year, hackers targeted BlockFi and stole sensitive user data including their clients’ activity history. To add insult to injury, the hackers used a simple SIM swap to breach their security, and the company didn’t disclose the hack until days after it happened. More recently, regulators from five states accused the controversial lending platform of violating security laws with their BlockFi Interest Account product. In a statement regarding the issue, the company said:
“BlockFi’s BIAs have been the subject of recent activity by securities regulators in New Jersey, Texas, Alabama, Vermont and Kentucky, and we are in active dialogue with these regulators. We believe that our products and services are lawful and appropriate for crypto market participants, and we remain steadfast in our commitment to protect consumers’ rights to earn interest on their crypto assets.”
In any case, past performance doesn’t guarantee future results. And BlockFi could score big if they’re the chosen one. The first spot Bitcoin ETF is expected to shatter all kinds of records, but let’s not get ahead of ourselves.
BTC price chart for 11/09/2021 on Oanda | Source: BTC/USD on TradingView.com
What Do We Know About BlockFi’s Version Of A Bitcoin ETF?
Not much, actually. The project is a joint venture with investment management firm Neuberger Berman. If approved, it will trade on the New York Stock Exchange. It will “reflect the performance of bitcoins held by the Trust, less the Trust’s expenses and other liabilities.” Yes, the registration statement actually says “bitcoins,” but let’s give them a pass for now. What else does the document reveal? Well…
“Barring a liquidation or extraordinary circumstances, the Trust will not purchase or sell bitcoin directly, although the Trust may direct the Custodian to sell bitcoin to pay certain expenses. Instead, when the Trust sells or redeems its Shares, it will do so in “in-kind” transactions in blocks of [] Shares (a “Creation Basket”) based on the quantity of bitcoin attributable to each Share (…). Because the creation and redemption of Creation Baskets will be effected in in-kind transactions based on the quantity of bitcoin attributable to each Share, the quantity of bitcoin in Creation Baskets so created or redeemed will generally not be affected by fluctuations in the value of bitcoin.”
In any case, is not even close to guaranteed that BlockFi will win the coveted first spot. The amount of ETF fillings regarding Bitcoin is getting ridiculous, actually.
Who’s Next On The SEC’s Bitcoin ETF List?
The list Bloomberg Intelligence’s James Seyffart provides shows 21 hopeful spot Bitcoin ETFs and even more derivatives-based ones. That includes the BlockFi Futures ETF that the company filed for last month. Here’s the list.
Here's the current list of #Bitcoin and Crypto ETF filings with the SEC. Next big date is still 11/14/21 for VanEck's spot Bitcoin ETF. It will be either approval or denial from SEC — no more delays. https://t.co/Z8phpVlsOK pic.twitter.com/g9ayoibmQN
— James Seyffart (@JSeyff) November 8, 2021
According to the expert, the “Next big date is still 11/14/21 for VanEck’s spot Bitcoin ETF. It will be either approval or denial from SEC — no more delays.” Will VanEck be the chosen one? We’ll have to wait and see, but Seyffart feels it won’t be. He tweeted, “We fully expect a denial based on recent comments from SEC/Gensler. Would be shocked if VanEck’s filing is approved (despite believing it *should* be approved). BUT, the denial letter should give us insight into SEC’s current views/opinions.”
Related Reading | Bitcoin ETF Inflows Slow Down As Altcoins Interest Rebound
Chances are all the approved spot Bitcoin ETFs will make tons of fiat money, but the first-mover advantage in a product as anticipated as this one is worth millions of Dollars. Billions, even.
Featured Image by Chris Stermitz from Pixabay – Charts by TradingView
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CEO of Canadian Crypto Exchange QuadrigaCX Filed Will 12 Days Before Death
n The recently deceased CEO of Canadian QuadrigaCX had reportedly filed a last will 12 days prior to his death, leaving all assets to his wife including properties in Canada, a Lexus and a yachtn
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CEO of Crypto Exchange Quadriga Filed Will 12 Days Before his Death
The CEO and founder of the Canadian crypto exchange QuadrigaCX reportedly signed his last will and testament just days before his death. Gerard Cotten passed away in December last year in India and apparently neglected to leave copies of the exchange platform’s cold-storage access, leaving the company and its customers out of pocket.
The beneficiary of Cotten’s estate is named in the document as his wife, Jennifer Robertson. She stands to inherit properties, high-end vehicles, and a pair of pet chihuahuas but claims to have no clue where information relating to Quadriga’s cold-storage solution could be.
Crypto Community Continues to Scream “Exit Scam” Over Quadriga Debacle
The case of the death of QuadrigaCX’s CEO continues to get deeper the more emerges about it. The latest revelation, reported by Bloomberg, is that the late Gerard Cotten filed his will just days before he passed away in India last year.
The document was signed on November 27, 2018. It states that the CEO’s wife, Jennifer Robertson, would receive all his assets following his death. Cotten then passed away on December 9, less than two weeks after he had made arrangements for his estate.
The official cause of death stated by Robertson and the J.A. Snow Funeral Home in Halifax was Crohn’s disease. Further complicating matters is the fact that Cotten is believed to have died in Jaipur, India, in an area reportedly known for “Fake Death Certificate Mafias”.
The fact that Cotten passed away with apparently the only access to Quadriga’s cold storage has caused many in the cryptocurrency community to presume the worst. Thanks in part to the 5 million in lost crypto assets and the suspicious circumstances surrounding the death, many are now crying foul play.
Spoiler alert – The guy didn't die. He exit scammed. #quadrigacx @Telegraph #btc pic.twitter.com/zJxecd1UlP
— ACDMBitcoinEssex (@acdmbe) February 6, 2019
Some have even gone as far as to state that there exists no obituary from the funeral home mentioned:
That pill is way too big to swallow. Does Gerald take us all for fools? @QuadrigaCoinEx #QuadrigaCX
— Brett (@Thinkofwhy) February 6, 2019
Quadriga Customers Plan Lawsuits Over Missing Crypto
According to reports, Quadriga owes customers just over US million of the 5 million trapped in cold storage. Some customers who are out of pocket are now pursuing their own legal action against the exchange. Amongst them is software engineer Xitong Zou, believed to be the largest loser amongst those impacted, having lost out on over US4,000. This figure has been taken from an affidavit filed in Halifax yesterday.
Those affected by the loss of cold storage access have reportedly formed a committee and are seeking the guidance of law firm Bennett Jones LLP and McInnes Cooper with their legal representation. However, they will have to wait for 30 days since Nova Scotia Supreme Court Justice Michael Wood granted month long stay yesterday, halting any legal proceedings against the exchange for the time being.
NewsBTC will bring you more on this fascinating story as it continues to develop.
Related Reading: Canadian Crypto Exchange Has Lost Access to its Cold Storage
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2018 Sees 550 Uptick in Exempt ICO Securities Offerings Filed With the US SEC Report
n 2018 witnessed a significant uptick in the number of ICOs authorized by the U.S. SEC to sell securities to large-scale investorsn
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After Cancelling ICO, Crypto Startup Zwoop Filed for Administration Report
n Crypto and e-commerce startup Zwoop reportedly filed for administration after suspending its ICOn
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