A federal judge has ordered the U.S. Securities and Exchange Commission (SEC) to pay over .8 million in its case against the crypto firm Digital Licensing, also known as Debt Box. The penalty resulted from the SEC’s bad faith conduct in obtaining and defending an ex parte temporary restraining order (TRO) based on misrepresentations. Additionally, […]
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Worldcoin Ordered to Stop Operations in Spain
Worldcoin, the biometric identity project, has been banned from operating in Spain for up to three months, according to a press release from the Spanish data agency, the AEPD. The agency will also require Worldcoin to stop using the already collected data from Spanish citizens, utilizing the EU’s General Data Protection Regulation (GDPR) as a […]
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Artists Ordered to Pay $9 Million in BAYC Copyright Dispute
Artists Ryder Ripps and Jeremy Cahen are mandated by a federal court to pay million in damages to Yuga Labs, following a high-profile legal dispute over unauthorized use of the Bored Ape Yacht Club’s copyrighted non-fungible tokens (NFTs).
Yuga Labs Wins Big as Artists Ordered to Pay up Million Over BAYC Dispute
Artists Ryder Ripps and Jeremy Cahen have been ordered by the court to pay nearly million in damages to Yuga Labs, the creator of the Bored Ape Yacht Club (BAYC), following the dismissal of their counterclaims in a high-profile copyright lawsuit.
Ripps and Cahen, known for launching the Ryder Ripps BAYC (RR/BAYC) collection, have been embroiled in legal battles since May 2022. Their project, which played on the BAYC brand, was found to have infringed upon Yuga Labs’ copyrights, leading to a lawsuit that concluded in April 2023 with a victory for Yuga Labs.
Initially, the court mandated Ripps and Cahen to compensate Yuga Labs with .57 million in damages and cover legal expenses. A recent court filing dated Feb. 2, however, revealed an escalated penalty totaling almost million. This sum includes disgorgement, legal fees, and expert witness fees, reflecting the severity of the copyright infringement.
Moreover, the artists are required to either destroy any RR/BAYC NFTs they own or hand them over to Yuga Labs for disposal. This directive extends to all related infringing materials, including promotional items and advertisements bearing the BAYC mark. They are also ordered to relinquish all social media accounts and the smart contract associated with the RR/BAYC collection.
The counterclaims filed by Ripps and Cahen, which included allegations of emotional distress and a plea for declaratory judgment of no defamation, were dismissed by the judge. The court’s decision emphasized Yuga Labs’ claims of false designation of origin and cybersquatting, setting a precedent for the protection of intellectual property rights in the rapidly evolving NFT space.
Cahen, who is popularly known as Pauly among his followers on X, has announced plans to appeal the decision in the Ninth Circuit Court of California, signaling a potential continuation of this legal saga.
BREAKING
On a Saturday, The Federal Court has entered its final judgement against me in my case vs. YugaLabs.
Judgement Total: ,112,496.50
(Note: My name is misspelled in the order)
We are appealing this outcome in the Ninth Circuit Court of California.
Case is ongoing. pic.twitter.com/fHcEsbBL6a
— PAULY (@Pauly0x) February 3, 2024
Do you think Cahen’s appeal in the Ninth Circuit Court of California will be successful? Share your thoughts and opinions about this subject in the comments section below.
Binance Founder Ordered To Stay Put In The US In Ongoing Probe
Binance Co-founder and former Chief Executive Officer (CEO) Changpeng CZ Zhao, has been confined to remain in the United States in advance of his sentencing expected to take place next year.
Former Binance CEO No Longer Leaving The US
The Binance co-founder has been ordered by US District Judge Richard Jones to remain in the country in a ruling on Thursday. Zhao was instructed to stay in the US due to the significance of his recent guilty plea.
The ruling read:
As relief, the government requests that Mr. Zhao be required to remain in the continental United States in the period between his plea and sentencing.
The Thursday ruling reversed an earlier decision that would have allowed Zhao to return to the United Arab Emirates (UAE). Jones acknowledged in his decision the arguments provided by Zhao, which ordinarily would result in the government’s motion being denied.
However, Jones highlighted the distinctive features of Zhao’s case. These include his riches, the absence of an extradition treaty with the UAE, and Zhao’s family living in the UAE.
Furthermore, the judge also highlighted that Zhao poses a flight risk if he were allowed to return to the UAE. This is due to the former CEO’s substantial assets and the meager connections he has to the United States.
Additionally, knowing that the Binance ex-CEO faces a potential 18-month sentence in prison also sparks a possible flight risk. Jones asserted that Zhao is asking for a lesser sentence, which might lead to 18 months of incarceration as indicated by the government.
The judge stated that despite promises that CZ wouldn’t flee if permitted to travel to the UAE, the court wasn’t convinced. This led to the order that he should remain in the US until his sentencing on February 23, 2024.
So far, the court stated in the ruling that its decision is not based on Zhao’s citizenship and alienage. “The risk of the defendant not showing up is posed by the circumstances surrounding their combined facts,” the court said.
Changpeng “CZ” Zhao’s Guilty Plea
Last Month, the former Binance CEO pleaded guilty and stepped down from the cryptocurrency exchange he founded about 6 years ago. Zhao’s plea to one count of violating the Bank Secrecy Act was formally accepted by Judge Jones.
Jones accepted the plea after a thorough consideration report and recommendation of the United States Magistrate Judge which found him guilty.
Jones wrote:
This Court, having considered the Report and Recommendation of the United States Magistrate Judge, to which there has been no timely objection, hereby accepts the plea of guilty of the defendant.
His plea was accepted just over two weeks after both he and Binance acknowledged a number of criminal and civil charges. These include failure to maintain an appropriate anti-money laundering program, running an unlicensed money transfer business, and violation of sanctions law.
SEC Ordered to Re-Evaluate Grayscale’s Bitcoin ETF Conversion With Court Mandate
The U.S. Securities and Exchange Commission (SEC) once again holds the reins when it comes to evaluating Grayscale’s spot bitcoin exchange-traded fund (ETF) application. On October 23, 2023, the U.S. Court of Appeals for the D.C. Circuit delivered a directive, compelling the SEC to take another look at the company’s prospectus. Now, the SEC stands at a crossroads: greenlight Grayscale’s proposal or pinpoint alternative reasons for rejection.
Court Mandate Urges SEC to Reassess Grayscale’s Bitcoin ETF Application
In late August, Grayscale secured a victory at the U.S. Court of Appeals for the D.C. Circuit in its spot bitcoin conversion suit against the SEC. Grayscale labeled the decision as a “monumental step” in its ongoing battle with the regulator. Not becoming complacent, the firm dispatched a letter in September, prodding the securities watchdog to accelerate the approval process.
While the SEC could have contested the ruling, they let the opportunity slip by, and insiders conveyed to the media that an appeal wasn’t on the cards. Unwavering, Grayscale refreshed its approach with an updated S-3 submission to the SEC. With the court’s latest directive, it’s back to the drawing board for the SEC; they must revisit Grayscale’s case and either give it the nod or reject it on fresh grounds.
The SEC isn’t just dealing with Grayscale; they’ve got a stack of nearly a dozen spot bitcoin ETF registration requests to sift through. This includes heavyweight financial submissions from the likes of Blackrock, Fidelity, Invesco, and Franklin Templeton. Meanwhile, on Monday, Bloomberg Intelligence’s lead analyst, Eric Balchunas, unveiled on social network X that the Depository Trust & Clearing Corporation (DTCC) had cataloged the Ishares Bitcoin Trust under the ticker “IBTC.”
Following the Grayscale revelations and the DTCC’s addition of IBTC, bitcoin’s value surged on Monday, nearing ,800 on Monday. As for GBTC, its shares have seen an uptick concerning the discount to its net asset value (NAV). A stark contrast to the hefty 48% discount from ten months prior, it dwindled to a mere 11.03% on October 20, 2023, as per ycharts.com data.
What do you think about the court order filed on Monday? Share your thoughts and opinions about this subject in the comments section below.
Farmington Bank Faces Fed Wrath: Alameda-Backed Financial Institution Ordered to Shutdown
In a statement released August 17, 2023, Farmington State Bank, with an investment from Sam Bankman-Fried’s Alameda Research, consented to a cease and desist order from the U.S. Federal Reserve. Alameda invested .5 million into the bank’s coffers in January 2022. Government seizure documents from January 2023 indicate Bankman-Fried reportedly had million stashed in the bank.
Fed Puts Brakes on Alameda-Funded Farmington: Another Bank Bites the Dust
Farmington State Bank (Moonstone Bank) is complying with the U.S. central bank’s cease and desist order signed July 18, 2023. The Federal Reserve Board and Washington State Department of Financial Institutions (WDFI) issued the order against Farmington State Bank of Farmington, Washington, and its holding company, FBH Corporation of Baltimore, Maryland.
The regulators determined Farmington violated commitments to regulators by engaging in digital asset activities, such as stablecoin issuance, without necessary approvals. Farmington allegedly agreed to build infrastructure to facilitate a third-party’s stablecoin issuance in exchange for fees, began implementation and altered its business model without regulatory approval.
The order mandates Farmington cease unauthorized activities, halt dividends, maintain assets and avoid further actions without written consent. The bank also agreed to sell all loans and deposits and terminate operations. Farmington’s August 17 press release confirmed adherence to the Federal Reserve and WDFI order. Alameda Research funded the bank in January 2022.
Following the FTX and Alameda downfall, the bank acknowledged Alameda’s .5 million investment, describing the quantitative trading firm as a “passive investor.” In January 2023, federal prosecutors revealed the seizure of 7 million in assets from Bankman-Fried. While the majority (6 million) consisted of 56 million Robinhood shares, million was purportedly taken from Farmington, also known as Moonstone Bank.
Prosecutors noted at the time that it was believed the confiscated funds were misallocated FTX customer assets. Farmington is among numerous banks forced to wind down operations this year, curiously associated with FTX, Alameda, and Bankman-Fried in various capacities.
What do you think about the Fed shutting down Farmington State Bank? Share your thoughts and opinions about this subject in the comments section below.
Saxo Bank Ordered to Liquidate Its Portfolio of Crypto Assets by Danish Financial Regulator
According to a July 4, 2023 press release from the Danish Financial Supervisory Authority, Denmark’s Saxo Bank has been instructed to liquidate its holdings of cryptocurrency assets. The financial regulator maintains that Saxo Bank’s portfolio of crypto assets falls “outside the legal business area of financial institutions” and is in violation of the country’s Financial Business Act.
Danish Financial Regulator Insists ‘Unregulated Trading in Crypto-Assets Can Create Distrust in the Financial System’
The Danish financial regulatory authority, tasked with overseeing financial markets in Denmark, has directed Saxo Bank to liquidate its crypto asset portfolio. Saxo Bank, an investment bank established in 1992, specializes in online trading and investment. In 2017, Saxo Bank incorporated crypto assets into its services, enabling trading of digital currencies like BTC, LTC, and ETH.
The bank also offers customers access to crypto exchange-traded products (ETPs), allowing investors to gain exposure to prominent cryptocurrencies. The Danish Financial Supervisory Authority (DFSA) asserts that Saxo Bank, in addition to offering crypto services, maintains “a portfolio of crypto assets, which are held as a hedge to offset the market risk associated with the bank’s crypto asset products.”
The DFSA maintains that trading in crypto assets is not listed in Annex 1 of the Financial Business Act. Moreover, the activity is deemed unacceptable as an ancillary bank business due to concerns regarding financial stability. The regulator believes that “unregulated trading in crypto-assets can create distrust in the financial system.”
Hence, the DFSA has now directed Saxo to “dispose of its own holdings of crypto assets,” citing that holding cryptocurrencies for the bank’s own account exceeds the legal boundaries established for Danish financial institutions. Nevertheless, the DFSA does not specify a deadline or indicate in the press release the timeframe for Saxo’s compliance with the recent ruling.
In a statement provided to Coindesk, a Saxo spokesperson expressed that the financial institution will “naturally take the decision of the Financial Supervisory Authority into account and will read it thoroughly to consider how we otherwise respond to it.”
What impact do you think the liquidation of Saxo Bank’s crypto assets will have on the broader adoption and regulation of cryptocurrencies in Denmark and beyond? Share your thoughts and opinions about this subject in the comments section below.
Binance Ordered to Cease All Crypto Services in Belgium
Crypto exchange Binance has been ordered by Belgium’s Financial Services and Markets Authority (FSMA) to cease providing any crypto exchange and custody wallet services in the country. The Belgian financial regulator stressed that it “takes the view that by offering such services in Belgium from countries that are not members of the European Economic Area, Binance is in violation of that prohibition.”
Belgian Regulator Orders Binance to Cease Crypto Services in the Country
Belgium’s Financial Services and Markets Authority (FSMA) announced Friday that it has ordered cryptocurrency exchange to “cease immediately all offers of virtual currency services in Belgium.”
The FSMA noted that “Binance is offering and providing exchange services in Belgium between virtual currencies and legal currencies, as well as custody wallet services, from countries that are not members of the European Economic Area.” The financial regulator emphasized: “The FSMA takes the view that by offering such services in Belgium from countries that are not members of the European Economic Area, Binance is in violation of that prohibition.” The announcement details:
By way of its decision dated 23 June 2023, the FSMA has therefore decided to order Binance to cease, with immediate effect, offering or providing any exchange services in Belgium between virtual currencies and legal currencies, as well as custody wallet services.
“Failure to comply with this prohibition is subject to criminal sanctions pursuant to Article 136 of the Belgian Law on the prevention of money laundering and terrorist financing,” the regulator warned.
In addition to ordering Binance to cease crypto activities in Belgium, the FSMA stated that it has “demanded that Binance take immediate measures” to return to Belgian clients “all cryptographic keys and/or all virtual currencies that Binance holds for their account, or to transfer these to entities governed by the law of an EEA member state and duly authorized by their domestic law to carry out such activities.”
Belgium’s Crypto Regulation
The financial regulator explained that providing exchange services “between virtual currencies and legal currencies and of custody wallet services (VASP) remains an unregulated activity, except as concerns combating money laundering and terrorist financing (AML/TF).”
The FSMA noted that the European Union’s Markets in Crypto-Assets (MiCA) regulation, which was published in the Official Journal of the European Union on June 9, “will introduce more general rules, and in particular prudential rules, governing activities relating to crypto-assets.” The regulator clarified:
These rules, with direct effect in Belgian law, will enter into force in January 2025.
In the absence of specific regulations, the common law and relevant provisions of the Belgian Criminal Code are applicable to crypto assets, the FSMA noted.
Binance is facing increased regulatory scrutiny across multiple countries. The U.S. Securities and Exchange Commission (SEC) has filed charges against Binance, CEO Changpeng Zhao (CZ), and Binance US. In addition, Binance has ceased operations in the United Kingdom. The exchange has also pulled out of the Netherlands and is seeking to deregister in Cyprus. Furthermore, French investigators are investigating Binance on allegations of money laundering and regulatory breaches.
What do you think about Binance being ordered to halt its crypto services in Belgium and its decision to withdraw from multiple countries? Let us know in the comments section below.
Virginia Bitcoin Mining Operation Ordered to Liquidate Assets
n A Bitcoin mining operation in the city of Virginia Beach was ordered to liquidate its assets by a federal judgen
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Scammer Ordered to Forfeit $1.12 Million Bitcoin in Landmark UK Case
A scammer who sold people’s personal details on the dark web has been ordered to forfeit .12 million worth of Bitcoin. Grant West, also known as “Courvoisier “, gathered sensitive information about individuals using a phishing scam targeting a popular online takeaway ordering service and other well-known British retailers.
The investigation and subsequent confiscation is the reportedly the first time that the Metropolitan Police have seized cryptocurrency from an individual. Precise details of how West stored the digital currency are not known at present.
Met. Police Seize Bitcoin from Phishing Scam Artist
According to a report in UK news publication the Daily Mail, Grant West launched his phishing campaign against users of the food delivery online middleman Just-Eat. He also targeted customers of other popular British retailers, including Asda, Uber, and Argos.
The scam ran between August and December, 2015. West would email victims offering money off vouchers in return for them answering questions relating to their accounts. Naturally, the emails were made to look as much like they came from the companies in question as possible. This lent an air of greater legitimacy to the correspondence.
Once he had taken details from a victim, West sold them for Bitcoin via the now-defunct Dark Web marketplace, AlphaBay. On the platform, he went by the name of “Courvoisier”.
West was arrested in May for a string of offences relating the the phishing scam. On a police raid, the authorities found digital storage devices containing almost 80 million password and username combinations, as well as the credit card details of 63,000 users,
Also during the raids, police seized almost million worth of Bitcoin. The value of the confiscated cryptocurrency has since decreased to approximately .2 million. The Metropolitan Police claim this to be the first seizure of its kind in the UK.
A UK court today ordered that West must pay back individuals and businesses impacted by the phishing scam. The prosecutor, Kevin Barry, stated:
“I therefore order confiscation of that amount, £915,305.77, to be paid by way of confiscation to losers or be jailed for four years.”
He added that West was no longer in control of the assets in question.
It is not clear how exactly West stored his cryptocurrency. However, it appears that he must have practised less than perfect personal security measures.
For authorities to have access to his cache of digital assets, they must first have found the private key or seed phrase associated with his storage solution. When stored optimally, cryptocurrency would require extortion or physical coercion to confiscate.
Related Reading: Crypto Community Unites On Paid Group Reviews to Rid Market of Scams
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