According to stablecoin transfer volume metrics divided by blockchain, Solana’s daily transfer volume has decreased from a range of billion to 0 billion daily to around billion daily. Additionally, a crypto advocate expressed doubts about the legitimacy of Solana’s previous stablecoin transfer volumes, indicating that the metrics were highly overstated. Stablecoin Metrics Reveal […]
Bitcoin News
Crypto Friendly Evolve Bank Under Scrutiny: Cease and Desist Order Issued
The Federal Reserve and Arkansas State Bank Department have mandated sweeping reforms at Evolve Bank & Trust following significant compliance breaches. The order highlights issues in anti-money laundering efforts and consumer protection, especially in its dealings with fintech companies and prominent crypto players like FTX. Compliance Concerns Trigger Regulatory Action Against Evolve Bank Evolve Bank […]
Bitcoin News
Worldcoin to Establish Latam Hub in Argentina Despite Heavy Scrutiny
Worldcoin, the biometric identification project, has announced a new expansion process in Argentina, where it reportedly will seek to open 50 new locations with eye-scanning hardware. The announcement comes after Buenos Aires indicted Tools For Humanity, the company behind Worldcoin, for including abusive clauses in its service agreements, and a meeting between Worldcoin executives with […]
Bitcoin News
US Scrutiny of Tether Could Disrupt Crypto Ecosystem, Ripple CEO Warns
Ripple’s CEO, Brad Garlinghouse, has voiced concerns that the U.S. government’s scrutiny of Tether, the foremost issuer of stablecoins by market cap, could notably affect the cryptocurrency environment. His comments come amid apprehensions about Tether’s alleged utilization by terrorist networks and nations under sanctions, such as Russia, aiming to circumvent U.S. economic sanctions. “The U.S. […]
Bitcoin News
FTX Nets $1.9B in Solana Sale at $64 per SOL, Discount Price Draws Creditor Scrutiny
In a report informed by individuals close to the situation, the FTX estate has successfully liquidated .9 billion by offloading a considerable amount of solana (SOL), including tokens that were not immediately available due to a vesting schedule. Insiders Say FTX Sold Millions of Locked Solana Tokens at a Deep Discount The bankrupt entity formerly […]
Bitcoin News
FTX Under New Scrutiny: Appellate Court Orders Independent Investigation
An independent examiner was initially barred from delving into the FTX bankruptcy case. However, the Third Circuit Court of Appeals in Philadelphia has recently overturned this decision, mandating that the defunct crypto exchange undergo an investigation by an external party. This ruling points out that such an inquiry may intensify oversight and inform prospective investors about the inner workings of these types of operations.
Court Mandates External Probe into FTX, Highlighting Potential Crypto Market Risks
The U.S. government has expressed a strong desire for an independent examination of the FTX debacle. When U.S. trustee Andrew Vara, overseeing the case, requested a third-party investigation, Judge John Dorsey rejected the plea. Consequently, the government escalated the matter to the Appellate Court, seeking to reverse this decision. Ultimately, the trustee’s efforts proved successful, achieving the sought-after objective.
The Third Circuit Court of Appeals in Philadelphia, in a verdict announced on Friday, now requires a court-appointed independent examiner to scrutinize the business and bankruptcy issues, ensuring that this party holds no ties with the debtors. The ruling raises concerns about FTX Group’s development of FTT and the manner in which FTX, along with its quantitative trading desk, Alameda Research, escalated the value of the exchange token.
This situation might signal “potential investors to undisclosed credit risks in other cryptocurrency companies,” as detailed in the decision of the Philadelphia Appellate Court.
Vara initially suggested the court-appointed independent examiner a month following FTX’s bankruptcy filing. Yet, John Ray III, the current CEO and restructuring leader of FTX, resisted this proposal. In February 2023, Judge Dorsey aligned with the debtors, rejecting the idea of a third-party examination.
The decision from the Philadelphia court indicates that an investigation conducted solely by the estate and its attorneys falls short of adequacy. This latest directive might hinder the estate’s current reorganization strategy, which intended to compensate customers based on the value of their crypto assets as of Nov. 11, 2022.
What do you think about the judge deciding that an independant examiner is needed for the FTX bankruptcy case? Share your thoughts and opinions about this subject in the comments section below.
Binance Compliance Officer Under Scrutiny For FTX, Gemini, And Sex Trafficker Associations
In a recent investigative report by the media outlet Unlimited Hangout, serious allegations were made against Noah Perlman, the chief compliance officer of Binance.
The report highlights Perlman’s alleged ties to the collapse of FTX, the troubled Gemini exchange owned by the Winklevoss twins, and even convicted and deceased sex trafficker Jeffrey Epstein.
If the allegations made by the media outlet prove true, and Perlman is investigated by US authorities, Binance could find itself embroiled in another executive scandal following the departure of former CEO Changpeng Zhao (CZ).
Associations With Epstein And Alleged Fraud
Unlimited Hangout alleges that Perlman’s father, Itzhak Perlman, a renowned violinist, had flown on multiple occasions on a plane owned by Jeffrey Epstein. Itzhak Perlman also reportedly accompanied Epstein to Michigan’s Interlochen Center for the Arts, where Epstein later built a lodge for him, which was later described as a “lair to target girls.”
While Noah Perlman served as a federal prosecutor for the Department of Justice’s Special Coordinator for Crimes against Children, these family connections to Epstein raise questions about his associations.
After leaving the Department of Justice, Perlman joined Gemini, the cryptocurrency exchange owned by the Winklevoss Twins, as the chief compliance officer. Although Perlman had left Gemini months before the New York Attorney General filed a lawsuit against the exchange, he had been allegedly “heavily involved” in Gemini’s Earn program, which became the focus of the alleged .1 billion fraud.
As reported by NewsBTC, the lawsuit alleges that certain individuals knew that the program’s partner, Genesis, was financially unstable and withdrew their funds before its collapse.
Per the report, Perlman held the position of chief operating officer at the time, raising suspicions about his role in the alleged misconduct.
Troubled Bank’s Links To Binance Officer And FTX
Perlman’s involvement with Farmington State Bank, later renamed Moonstone, adds another layer of complexity to the alleged wrongdoing cited by Unlimited Hangout.
According to the report, in 2019, Perlman was listed as a director of FBH Corp., the entity that took over the rural bank. Moonstone Bank later garnered attention when Alameda Research, linked to FTX, acquired an .5 million stake.
Sam Bankman-Fried, the former chief of FTX, also reportedly invested million in the bank. However, Moonstone Bank faced regulatory challenges, with the Federal Reserve initiating an enforcement action against it shortly before the Bank of Eastern Oregon acquired its deposits and assets.
Overall, Perlman is at the center of serious allegations concerning his alleged connections with Jeffrey Epstein, the failed Earn program at Gemini, and Moonstone Bank.
However, it is important to note that these allegations have not been substantiated by any investigations or official connections made by US authorities or other global agencies.
The claims and allegations put forth by media news outlets require further response from Binance’s executives and investigation by relevant authorities.
There has been no official statement from Perlman regarding these allegations. It remains to be seen how the exchange and Perlman himself will address these claims and provide clarity on the matter.
Featured image from Shutterstock, chart from TradingView.com
Paypal Faces SEC Scrutiny Over New Stablecoin PYUSD, Cooperates With Document Production Request
After releasing its new stablecoin PYUSD, the payments giant Paypal disclosed that the U.S. Securities and Exchange Commission (SEC) subpoenaed the company concerning the stablecoin. Paypal stated in its Form 10-Q for the third fiscal quarter that it had been asked to produce documents for the SEC and is “cooperating” with the securities regulator.
Paypal Subpoenaed by SEC Over PYUSD Token
Paypal is engaged with the SEC in matters related to its stablecoin asset PYUSD. This information came to light in the company’s latest financial disclosure, showcasing the firm’s third-quarter earnings.
“On November 1, 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to Paypal USD stablecoin,” the filing notes. “The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request.”
The filing also notes that Paypal allows its customers to buy, hold, sell, convert, receive, and send bitcoin, ethereum, bitcoin cash, litecoin, and the PYUSD stablecoin. Additionally, the document details that in August 2023, Paypal partnered with the third-party issuer Paxos to issue PYUSD, subsequently launching it for Venmo customers in September 2023.
“We have selected custodian partners and the PYUSD Issuer, and may in the future select additional custodian partners and stablecoin issuing entities, that are subject to regulatory oversight, capital requirements, maintenance of audit and compliance industry certifications, and cybersecurity procedures and policies,” the 10-Q filing adds.
The Paypal earnings report follows the company receiving approval from the Financial Conduct Authority in the United Kingdom. After recently pausing crypto purchases in the U.K., it is expected that Paypal will resume services following the regulatory approval. However, the company may not be able to add new customers moving forward.
What do you think about Paypal getting probed by the SEC over its new stablecoin PYUSD? Share your thoughts and opinions about this subject in the comments section below.
Binance Faces Scrutiny Over Alleged ICO Missteps And Token Distribution Discrepancies
Binance, the world’s largest cryptocurrency exchange, is currently grappling with challenges that have raised concerns about its credibility and market performance.
Recent reports by Forbes shed light on Binance’s initial coin offering (ICO) and the subsequent distribution of its native cryptocurrency, Binance Coin (BNB).
Behind The Curtain
The investigation reveals allegations of undisclosed token retention, discrepancies in the ICO process, and the accumulation of a significant token reserve by Binance.
Per the report, in June 2017, Binance initiated its ICO, aiming to raise million by selling 100 million BNB tokens. However, the Forbes investigation, conducted with the assistance of crypto forensic firms, suggests that only around 10.78 million BNB tokens were transferred to investors during the ICO.
An additional 20 million tokens were “quietly” allocated to angel investors, doubling their initial allocation to 40 million tokens. Consequently, according to Forbes, Binance likely raised less than million during the ICO, contrary to the million claimed by founder Changpeng Zhao.
The Forbes report indicates that Binance’s white paper did not disclose the company’s plans for unsold tokens in the event of an undersold ICO. While it is not illegal for issuers to retain unsold tokens, transparency is crucial in such cases, Forbes alleges.
Binance founders and insiders reportedly ended up with 145 million BNB tokens instead of the originally planned 80 million. These tokens, initially valued at less than million, are now estimated to be worth approximately billion.
Furthermore, Binance implemented a token buyback and burn program to reduce the total supply of BNB tokens over time.
According to Binance’s website, approximately 48 million tokens have been burned as of August 31, 2023. However, Forbes suggests that Binance controls nearly 117 million tokens, accounting for 76% of the total outstanding supply.
The analysis combines disclosed tokens issued to the founding team with a proprietary probabilistic analysis that identifies previously undisclosed wallets holding customer funds and serving other corporate purposes.
Forbes concludes discrepancies and lack of transparency surrounding Binance’s ICO and token distribution raise questions about the integrity of reported trading volumes and the adequacy of consumer protections.
Binance CEO Maintains Silence Amid Ongoing Forbes Allegations
Changpeng Zhao (CZ), the Chief Executive Officer of Binance, has remained silent in the face of recent allegations and ongoing investigations brought forth by Forbes.
The prolonged exchange of statements between the cryptocurrency firm and the renowned news outlet has endured for a significant period. Binance had taken legal action against Forbes in 2020, filing a defamation lawsuit in the US District Court in New Jersey.
The lawsuit stemmed from Forbes’ publication of “false statements” that Binance allegedly used deceptive practices to deceive regulators and participated in money laundering activities.
Forbes published a series of articles that made damaging claims about Binance’s corporate structure, asserting that it was deliberately designed to deceive regulators and engaged in activities characteristic of money laundering. Binance vehemently denied these allegations, deeming them false and highly defamatory.
Binance’s attorney, Charles J. Harder, has emphasized the harm caused to Binance’s reputation by Forbes’ misleading story. Binance had requested a retraction or correction from Forbes, which was refused, leading to the necessity of the defamation lawsuit.
Overall, Binance and Forbes have been embroiled in contentious claims and disputes, with both parties accusing each other of disseminating inaccurate information.
As the situation unfolds, it remains uncertain how the cryptocurrency exchange will respond to the latest allegations put forth by Forbes.
Featured image from Shutterstock, chart from TradingView.com
Fraud Investigation of Crypto Exchange JPEX Triggers Trading Halt, Arrests, Increased Regulatory Scrutiny
A fraud investigation of cryptocurrency exchange JPEX in Hong Kong has led to the shutdown of some trading activities on the platform, the arrest of multiple people, and increased regulatory scrutiny of the entire crypto sector. “This incident highlights the importance that when investors want to invest in virtual assets, then they must invest on platforms that are licensed,” Hong Kong Chief Executive John Lee stressed.
Crypto Exchange JPEX’s Troubles Continue
Cryptocurrency exchange JPEX announced Monday that it has suspended some trading activities on its platform. This decision comes as the Hong Kong police persist in their investigation of the exchange. The announcement explains that users will be unable to create new orders through the platform’s Earn Trading interface. The exchange claimed that it was “negotiating with … third-party market makers to resolve the liquidity shortage.”
On Tuesday, Hong Kong Chief Executive John Lee said at a news conference:
This incident highlights the importance that when investors want to invest in virtual assets, then they must invest on platforms that are licensed.
Lee emphasized that the Hong Kong Securities and Futures Commission (SFC) “will monitor the situation very closely and ensure that investors are sufficiently protected.” He further noted that the government will step up education to ensure that investors have a better understanding of the risks involved in crypto trading and the regulatory framework governing crypto trading platforms.
Elizabeth Wong, head of the SFC’s fintech unit, said the regulator was investigating whether JPEX had violated the anti-money laundering ordinance, and it had referred the case to the police. The report triggered an investigation by the Commercial Crime Bureau.
The SFC subsequently issued a warning to investors to exercise caution when dealing with JPEX, emphasizing that the exchange had not submitted any license applications. The regulator further alleged that JPEX was making false claims about having obtained authorizations from overseas regulators.
Moreover, the financial regulator emphasized that the trading platform had promoted products with returns on savings that were “too good to be true” and many investors relied on misleading statements from social media influencers who were paid promoters.
According to the Associated Press, the police said Tuesday that they have frozen bank accounts worth 15 million Hong Kong dollars (.9 million) and seized three properties valued at 44 million Hong Kong dollars (.6 million) related to the exchange. They also revealed that they had received 1,641 complaints about JPEX involving .2 billion Hong Kong dollars (3 million.)
What do you think about the troubles at cryptocurrency exchange JPEX? Let us know in the comments section below.