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Bitcoin

Did Jump Trading just ‘Fracture’ the trust of the entire crypto industry?

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Did Jump Trading just ‘Fracture’ the trust of the entire crypto industry?

Is Jump Trading responsible for the collapse of DIO tokens? How did a market maker supposedly take advantage of a partnership with Fracture Labs to pocket millions and leave chaos behind?

Jump Trading, a prominent name in the crypto trading space, is now entangled in a legal battle. Fracture Labs, the creators of the blockchain-based game Decimated, has sued Jump, accusing the firm of executing a “pump and dump” scheme.

At the heart of the lawsuit, Fracture Labs claims Jump Trading exploited its role as a market maker to inflate the value of its DIO gaming token artificially. Once the price peaked, Jump allegedly sold off its holdings, triggering a sharp price decline.

How does a collaboration designed to promote a token’s success devolve into allegations of fraud and manipulation? Let’s break down the sequence of events leading up to the lawsuit and why it has drawn so much attention.

What happened between Jump Trading and Fracture Labs?

On Oct. 15, Fracture Labs filed a lawsuit against Jump Trading in an Illinois district court, accusing the firm of breaching their agreement and manipulating the DIO token.

To fully grasp the situation, we need to revisit 2021. During this time, Fracture Labs had just launched its DIO token to support its blockchain game, Decimated, and entered a partnership with Jump Trading to facilitate the token’s market introduction.

Jump Trading agreed to serve as a market maker—a role that involves providing liquidity to ensure smooth trading and price stability for the token. Market makers typically buy and sell assets to maintain balanced trading conditions, especially for newly launched tokens like DIO.

As part of the arrangement, Fracture Labs loaned 10 million DIO tokens to Jump, valued at approximately $500,000 at the time. The expectation was that Jump would assist in the token’s debut on the crypto exchange Huobi (HT), now known as HTX.

In addition to the loaned tokens, Fracture Labs sent 6 million more tokens directly to HTX, worth about $300,000, as part of its broader marketing campaign. With these preparations in place, everything seemed primed for a successful launch.

HTX played its part by heavily promoting the DIO token and leveraging influencers and social media campaigns to boost its visibility.

The strategy appeared successful — perhaps overly so. The price of DIO surged to $0.98, dramatically raising the value of Jump’s 10 million DIO holdings from $500,000 to a staggering $9.8 million in a short period.

For Jump Trading, this price surge represented an enormous windfall. The 10 million tokens they had borrowed were suddenly worth nearly $10 million. However, what followed is where the allegations of manipulation arise.

Fracture Labs alleges that Jump Trading saw the soaring price as a profit-making opportunity. Instead of continuing to provide liquidity and stabilize the token, Jump allegedly began selling off its DIO holdings in large quantities.

This mass sell-off caused a steep drop in DIO’s value, plummeting from nearly a dollar to just $0.005—a dramatic collapse that decimated the token’s worth.

The lawsuit further claims that after selling the tokens at their peak, Jump repurchased the devalued DIO tokens for just $53,000. This allowed Jump to return the 10 million tokens it had borrowed, fulfilling its obligation to Fracture Labs, all while pocketing millions in profit.

The collapse of DIO’s price had devastating consequences for Fracture Labs. According to the lawsuit, the sudden and severe drop in value crippled the company’s ability to attract new investors or sustain interest in the DIO token.

Adding to their troubles, Fracture Labs had deposited 1.5 million Tether (USDT) into an HTX holding account as a safeguard against accusations of market manipulation. This deposit was intended to reassure the market that Fracture Labs would not manipulate DIO’s price during its first 180 days of trading.

However, due to the extreme price volatility that Fracture Labs claims were triggered by Jump Trading’s actions, HTX allegedly refused to return most of the USDT deposit. This left Fracture Labs with not only a devalued token but also a substantial financial loss from their USDT deposit.

Fracture Labs is now accusing Jump Trading of fraud, civil conspiracy, breach of contract, and breach of fiduciary duty. They assert that Jump Trading abused the trust placed in them as a market maker, using their privileged position to manipulate DIO’s price for personal gain.

The lawsuit seeks damages, the return of the profits that Jump allegedly made from the scheme, and a jury trial to settle the matter. Interestingly, HTX is not named as a defendant in the lawsuit.

Jump Trading’s troubled past

The controversy surrounding Jump Trading is not new, as the firm has been under regulatory scrutiny multiple times in recent years.

In fact, both Jump Trading and its crypto arm, Jump Crypto, have faced several legal and regulatory challenges, raising concerns about their operations in the crypto market.

One of the more prominent cases surfaced in November 2023, when Jump Crypto’s involvement came under the spotlight in the U.S. Securities and Exchange Commission’s lawsuit against Terraform Labs.

The lawsuit, originally filed in February 2023, alleged that Terraform Labs and its former CEO, Do Kwon, engaged in fraudulent activities and sold unregistered securities, focusing on their failed algorithmic stablecoin, TerraUSD (UST).

The collapse of UST in May 2022 led to billions of dollars in losses and significant turmoil across the broader crypto market.

According to the SEC, when UST first began losing its dollar peg in 2021, Terraform Labs collaborated with Jump Crypto to artificially boost the stablecoin’s value. 

The regulator claimed that Jump Crypto purchased large amounts of UST to restore its price, temporarily stabilizing the asset. However, when UST experienced its final collapse in May 2022, no similar intervention took place.

Terraform Labs, however, denied these claims, stating that Jump Crypto’s actions had no bearing on UST’s earlier recovery.

In April 2024, Terraform Labs reached a settlement with the SEC, agreeing to pay $4.47 billion after a jury found them liable for defrauding investors. The settlement included $420 million in civil fines, $3.6 billion in disgorgement, and $467 million in interest.

Although Jump Crypto was linked to UST’s earlier recovery efforts, it was neither charged nor formally implicated in any wrongdoing as part of the settlement.

By June 2024, Jump Crypto found itself under investigation by another U.S. regulatory body—the Commodity Futures Trading Commission. The CFTC launched a probe into Jump Crypto, reportedly scrutinizing its trading and investment activities within the crypto sector. Kanav Kariya, the firm’s former president, resigned just days later.

While the specifics of the investigation remain confidential, and no official allegations have been made, the probe reflects a broader push by U.S. regulators, including the CFTC, to intensify their enforcement actions against crypto firms throughout 2023 and 2024.

What to expect next?

If Fracture Labs succeeds in proving Jump Trading’s misconduct, it could trigger a major shift across the crypto industry, leading to tighter regulations and increased scrutiny of market makers.

However, this case is more than just one lawsuit. Governments, especially in the U.S. and Europe, are actively developing policies aimed at curbing market abuses. This case might provide regulators with the prime example they need to justify stricter oversight of market makers.

Additionally, token creators may start advocating for decentralized solutions or pushing for more restrictive contracts that limit the influence of market makers.

For the crypto industry to truly mature, this could be a crucial moment that compels everyone — projects, exchanges, and investors — to reevaluate how tokens are launched and managed, placing a greater emphasis on fairness and trust.

Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
Theo Crypto News

Công nghệ

Can crypto shape the Senate? Breaking down Warren and Deaton’s heated debate

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How did the debate between Warren and Deaton expose deeper tensions within U.S. financial regulation, and could their opposing views on crypto play a role in shaping the Senate’s future?

The classic face-off

The first face-off between Democratic Senator Elizabeth Warren and her Republican challenger, attorney John Deaton, on Oct. 15 night was anything but polite. 

Co-sponsored by WBZ-TV and The Boston Globe, the hour-long debate was a rollercoaster of policy clashes and personal digs, with the topic of cryptocurrency taking center stage at one point.

Senator Warren, known for her firm stance on regulating the crypto industry, wasted no time in accusing Deaton of being too cozy with crypto players. 

On the other hand, Deaton, a prominent lawyer with a history of defending crypto investors, painted himself as a champion for financial innovation. 

Warren, a long-time advocate for consumer protection, has often criticized the crypto world, labeling it as a ‘haven for fraud and scams.’ Her push for tougher regulations has earned her both supporters and critics. 

Deaton, on the other hand, has built a reputation for defending the rights of individual investors and smaller players in the crypto space, notably in cases against the SEC. His stance reflects a more pro-crypto, less regulatory-heavy approach.

Let’s uncover the key moments from this fiery discussion and what it tells us about the future of crypto regulation in the U.S. Senate race.

Crypto clash in Senate debate

The first Senate debate between Elizabeth Warren and John Deaton was supposed to be about multiple issues. But in true political drama, the topic that stole the show was crypto.

Warren, known for her strong advocacy of tighter crypto regulation, wasted no time accusing Deaton of being overly aligned with the crypto industry.

She cited campaign finance numbers, stating, “90% of his [Deaton’s] campaign funding comes from the crypto industry.” She added, “If John Deaton goes to Washington, his crypto buddies will expect a return on their investment,” framing him as a candidate more interested in defending crypto interests than addressing the needs of regular citizens.

Deaton responded by questioning the Senator’s focus on crypto:

“I wish Senator Warren would attack inflation the way she attacks crypto. I wish she would attack securing the border the way she’s focused on crypto.”

Deaton also defended his pro-crypto stance by sharing a personal story about his mother, who had been impacted by high banking fees.

“When Bitcoin (BTC) came along, I thought of my mom, who couldn’t maintain a bank account due to fees. Bitcoin offered a way to cut out the predatory banks and middlemen,” he explained, positioning himself as a candidate who sees crypto as part of the solution for financial access, particularly for marginalized communities.

Warren, in response, doubled down on her familiar narrative that crypto facilitates illegal activities, such as money laundering and terrorism financing. She argued that crypto should be subject to the same regulations as other financial institutions.

“I just want crypto to follow the same rules as every bank, stockbroker, and credit union,” Warren asserted, framing her stance as a matter of financial safety and regulatory fairness.

The debate also touched on Bitcoin self-custody, with Deaton accusing Warren of favoring large financial institutions over individual investors. He criticized her for supporting a bill that, according to him, restricts Bitcoin self-custody for individuals while allowing banks to custody Bitcoin.

“Her bill bans Bitcoin self-custody in America, but she’s allowing banks to custody Bitcoin,” he said, highlighting what he sees as a contradiction in Warren’s policies.

Deaton also brought up his involvement in the Ripple (XRP) v. SEC lawsuit, where he advocated for XRP holders against what he called “regulatory overreach.”

He used this as evidence of his willingness to take on big institutions and stand up for small investors, suggesting that his efforts led to a recent $1 million donation from Ripple co-founder Chris Larsen to a super PAC supporting Vice President Kamala Harris.

Deaton argued that he has often clashed with crypto insiders, despite Warren’s claims that he is beholden to them.

“If I didn’t do what I did — sue the SEC on behalf of small retail investors—that donation to your candidate of choice, Senator, would not have happened. So, Madam Vice President, if you’re watching, you’re welcome.”

Crypto histories of Warren and Deaton

The crypto clash between Senator Warren and challenger Deaton in the Massachusetts Senate debate didn’t emerge out of thin air. Both candidates have deep histories tied to digital assets—though in vastly different ways.

Warren: The crypto critic

Warren has been a vocal critic of the crypto industry for years. Now seeking her fourth term as a U.S. Senator, she sits on both the Senate Finance Committee and the Committee on Banking, Housing, and Urban Affairs—two key bodies that oversee financial regulation, including crypto.

In May 2024, during a Senate Armed Services Committee hearing, Warren brought attention to how cryptocurrencies could undermine U.S. national security.

She cited intelligence reports indicating that Iran and North Korea have been using crypto to evade sanctions, with more than 50% of North Korea’s foreign currency revenues now reportedly coming from crypto.

Warren also grilled high-ranking military officials, pushing for stricter anti-money laundering regulations to prevent adversaries from exploiting the growing crypto ecosystem.

Her firm belief is that, without proper oversight, cryptocurrencies offer a gateway for bad actors to fund illicit activities such as terrorism, drug trafficking, and sanctions evasion.

But Warren’s opposition to crypto isn’t just about national security. She’s consistently argued that the industry exposes consumers to fraud, volatility, and environmental harm — particularly from energy-intensive Bitcoin mining.

Her push for tighter regulations is rooted in ensuring that the crypto world follows the same rules as traditional financial institutions, offering the same protections for average citizens.

Deaton: The crypto advocate

Deaton, a long-time crypto advocate, is best known for his work defending XRP holders in the high-profile Ripple v. SEC case. In 2021, Deaton filed a petition challenging the SEC’s claim that XRP, the native cryptocurrency of Ripple, was a security.

His petition argued that the SEC’s approach violated legal precedent, and his advocacy led to his appointment as amicus counsel in the case, representing over 75,000 XRP holders.

In addition to his legal work, Deaton runs CryptoLaw, a platform that provides updates on legal and regulatory developments in the crypto industry.

In February 2024, Deaton officially launched his bid for the U.S. Senate in Massachusetts to face off against Warren. He secured the Republican nomination and has made crypto regulation a central issue in his campaign.

In September 2024, shortly after securing the Republican nomination for the Senate, Deaton tweeted that the SEC’s actions in the Ripple vs. SEC case had caused small investors to lose over $15 billion due to its “gross overreach.”

He’s particularly critical of the enforcement-heavy approach taken by the SEC, which he argues has stifled innovation and punished ordinary investors rather than protecting them.

His frustration with Warren stems from her role on the Senate Banking Committee, which oversees the SEC. Deaton has repeatedly called out Warren for failing to hold the SEC accountable, stating:

“Since Warren won’t do it, when I get to the Senate, I will.”

His decision to run for the Senate was, in part, motivated by his desire to challenge the status quo of financial regulation and to hold regulators like the SEC accountable for their actions. Deaton has made it clear that, in his view, current lawmakers, including Warren, have failed to protect the very people they claim to represent.

What to expect next?

The 2024 U.S. elections are shaping up to be drastically different from those of 2020, particularly when it comes to the role of crypto. 

Back in 2020, crypto was barely mentioned in the presidential debates, with digital assets still in the shadows of the broader political arena. 

Fast forward to 2024, and crypto has become a key issue, driven by widespread adoption and relentless advocacy from within the space.

As Warren and Deaton gear up for their second debate on Oct. 17, the odds remain in Warren’s favor, with polling data showing her leading by 22.5%. 

However, Deaton’s pro-crypto stance could still resonate with voters looking for change, particularly those who see crypto as an engine for innovation and financial empowerment. 

Meanwhile, on the national stage, the U.S. presidential race is also heating up. According to Polymarket, Donald Trump currently leads with 60% odds against Vice President Kamala Harris’s 40%. 

The fact that crypto has become a major talking point in both Senate and presidential races reflects the industry’s growing influence, marking a turning point for both the sector and the American financial system as a whole.

Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
Theo Crypto News

Altcoin

Crypto scandal, legal drama, and a broken home: The Salame and Bond story

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Were Ryan Salame and Michelle Bond’s ambitions in crypto and politics too big to handle? Could they have avoided the scandal, or was their collapse inevitable?

When ambitions meet greed

Ryan Salame and Michelle Bond were once the epitome of a power couple — wealthy, influential, and deeply embedded in Washington’s political and crypto circles.

Salame, a top executive at FTX, had the ear of powerful Republicans, with millions to support their causes. Bond, a former U.S. Securities and Exchange Commission lawyer, stood out as a prominent crypto policy advocate with ambitions of running for Congress.

Together, they seemed unstoppable — until the collapse of FTX in November 2022 brought their world crashing down.

Now, both are facing prison time, their once-glamorous lives unraveling into a tangled web of legal battles, accusations, and public disgrace.

But how did it all happen?

The beginning of the end

To understand the fall of Salame and Bond, we have to start with the implosion of FTX.

In November 2022, FTX, the crypto exchange once valued at over $32 billion, collapsed after it was revealed that billions of customer funds were missing.

Its founder, Sam Bankman-Fried, had orchestrated one of the most catastrophic financial frauds in U.S. history. But the effects of FTX’s downfall didn’t stop with Bankman-Fried.

As investigators dug deeper, prosecutors uncovered a complex web of political donations, illegal financial transactions, and campaign finance violations — and Salame and Bond were right in the middle of it.

Salame, who had been CEO of FTX Digital Markets, played a critical role in the company’s political outreach. He had poured millions into Republican campaigns, making himself one of the top conservative donors in the country.

His political contributions totaled over $22 million, much of which was later revealed to be illegally sourced from FTX’s coffers. Salame’s donations were part of a broader strategy to gain political influence and push for crypto-friendly policies.

But by August 2023, the game was over. Facing mounting evidence, Salame pleaded guilty to campaign finance violations and operating an unlicensed money-transmitting business.

His actions, it turned out, were far from the above-board political donations he once claimed. He had funneled money through FTX to make large contributions in his name, violating multiple U.S. laws in the process.

Judge Lewis A. Kaplan, who sentenced Salame to 7.5 years in prison in May 2024, called his actions ‘astonishing,’ highlighting how they had shaken the trust of America’s political system.

The political dream gone wrong

Michelle Bond’s story follows a parallel path to Salame’s but with its own unique twists.

A former lawyer with the SEC, Bond had established herself as a crypto policy expert, serving as the CEO of the Association for Digital Asset Markets. And her voice carried weight in Washington.

But like Salame, Bond had ambitions beyond policy. In 2022, she launched an ambitious bid for Congress, hoping to represent New York’s 1st Congressional District.

Armed with endorsements from political figures like Donald Trump Jr. and backed financially by her partner Salame, Bond’s campaign was meant to propel her into the political spotlight. Yet, beneath the surface, cracks were already forming.

While Bond publicly portrayed herself as a self-funded candidate, the reality was far more complicated. Federal prosecutors later revealed that much of the money supporting her campaign—upwards of $1.5 million—was not her own but came from FTX via Salame.

According to court documents, Bond accepted hundreds of thousands of dollars from Salame to fund her campaign—money prosecutors argue was illegally sourced from FTX.

In August 2024, Bond was indicted on multiple counts of campaign finance violations, marking the start of her legal downfall.

The indictment detailed how Bond allegedly funneled money through consulting agreements and personal payments, all while maintaining the appearance of compliance with campaign finance laws.

She had once been the face of crypto regulation in Washington, but now, her career was in ruins. Even after stepping down as CEO of ADAM, the stain of the scandal followed her.

Her congressional campaign, fueled by crypto money, ended in failure, with Bond capturing only 27% of the vote in the Republican primary.

But her troubles extended beyond politics—the legal ramifications were now impossible to ignore.

One text exchange between Bond and Salame, used as evidence in court, painted a damning picture of their financial dealings.

In February 2022, Bond thanked Salame for paying off a consulting firm’s invoice, to which he replied, “If you’re thanking me for that, the expenses on you actually running are going to get me so much love <3.”

That love, however, wouldn’t last as both their legal troubles worsened.

The downfall of a power couple

Beyond the courtroom drama, Salame and Bond’s personal lives were unraveling just as quickly. The couple, who share a child, had been living in a $4 million home in Potomac, Maryland — a symbol of their success.

But with Salame’s guilty plea, that home is now set to be sold, with the proceeds going toward the restitution of FTX’s defrauded customers.

Salame claimed his guilty plea was part of an “implied deal” with prosecutors, suggesting that if he cooperated, they would leave Bond out of it. However, federal prosecutors denied this, and in August 2024, they indicted Bond anyway.

In a revealing interview, Salame admitted that his involvement in FTX had brought more harm than good to Bond. “Being in a relationship with me was going to be a problem,” he said. “It hasn’t been great for her, having me in her life.”

Salame’s regret came too late, with his prison sentence set to begin in October 2024 at a federal correctional facility in Maryland.

But Salame isn’t giving up just yet. He has pinned his last hopes on a presidential pardon, banking on a Republican victory in the 2024 U.S. elections to set him free.

In a candid interview, Salame hinted that his best chance lay with Donald Trump, given his previous political donations. “I’d be much more shocked if Harris would grant it based on, sort of, political things,” Salame said, referencing Democratic candidate Kamala Harris. 

Yet, whether or not a pardon is in his future, Salame’s reputation has already been permanently tarnished.

As Salame prepares for prison, Bond faces the possibility of her own jail time, depending on the outcome of her trial. However, despite her looming legal challenges, Michelle Bond hasn’t given up on her crypto ambitions.

In June 2024, Bond announced the creation of a think tank called Digital Future, aimed at shaping regulatory policies for digital assets and artificial intelligence. 

According to Bond, the think tank would advocate for favorable regulations in an industry still reeling from the collapse of FTX.

However, Bond’s announcement was met with skepticism. With her indictment arriving just two months after launching Digital Future, many questioned whether she could credibly lead a think tank while under federal investigation.

While their story is far from over, their fall from grace will likely be remembered for years to come—a reminder of how ambition, greed, and a dash of crypto can spin even the brightest futures out of control.

Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
Theo Crypto News

Pháp Lý

New industry billionaires: US regulators received over $32b from crypto companies

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U.S. regulators have imposed $32 billion in fines on crypto companies to resolve compliance disputes. Who did they make the most money from?

Of the total, a record $19.45 billion came in 2024. This is due to the $12.7 billion payment to FTX and Alameda Research. In August, Judge Peter Castel ruled that the firms must pay, jointly and severally, $8.7 billion in restitution to those who suffered losses. In addition, the agreement calls for a $4 billion fee to be paid in return for the ill-gotten gains.

The settlement with Terraform Labs brought regulators $4.5 billion in 2024. The firm will pay about $3.59 billion in interest and a fine of $420 million. Its founder, Do Kwon, will pay $204.3 million in interest, fines, and compensation and must accrue at least the same amount to the “bankruptcy estate,” which will be distributed among investors.

Among the most significant fines were Binance’s $4.3 billion and Celsius’s $4.7 billion, which occurred in 2023. As part of the case, the largest crypto exchange was ordered to pay a fine of $1.81 billion in a criminal case and will lose $2.51 billion in compensation.

“The leading global crypto exchange agreed to plead guilty in November 2023, to resolve lawsuits with multiple U.S. regulators including the Department of Justice (DOJ), Treasury Department and the Commodity Futures Trading Commission (CFTC).”

CoinGecko report

As for the Celsius fine, in 2023, the U.S. Federal Trade Commission announced a settlement against the Celsius Network. As part of the agreement, Celsius and its subsidiaries were prohibited from offering, selling, or promoting any product or service that may be “used to deposit, exchange, invest, or withdraw any asset.”

Source: CoinGecko

Terra was the catalyst for the bear market, followed by the bankruptcy of Celsius, and culminated in the collapse of FTX in November 2022. Of these crypto platforms, only Binance remains operational, remaining the largest centralized exchange by trading volume.

However, the sharp increase in recovery amounts occurred in 2023, when the total amount of settlements for claims by U.S. government agencies amounted to $10.87 billion across eight cases.

When did the significant crypto enforcement actions in the U.S. occur?

The last two years have seen many crypto enforcement actions in the U.S. Of the 25 significant actions, 16 were carried out in this period, reflecting increased regulatory scrutiny following the FTX collapse in late 2022. In 2023, law enforcement agencies settled eight lawsuits for $10.87 billion, a record and an increase of 8,327.1% over the previous year.

In 2024, another eight settlements were reached for $19.45 billion. With only a few months left, the settlement value 2024 has already increased by 78.9% over the previous year.

“Given that U.S. regulators show no signs of slowing down crypto industry scrutiny, 2024 may be on track to record more lawsuit settlements than last year.”

CoinGecko report

From 2019 to 2022, American regulators also made progress in major cryptocurrency litigation. The first significant settlement came in late 2019 with Block.one, when the SEC reached a $24 million settlement over unregistered securities sales. In 2020, the SEC successfully settled two major cases: BitClave for $29.34 million in May and Telegram for $1.24 billion.

In 2021, three significant cases occurred amid rising crypto prices. Tether agreed to pay $18.5 million and then $41 million in a settlement with the CFTC. Poloniex and BitMEX also reached settlements in their lawsuits for $10.39 million and $100 million, respectively. In 2022, BlockFi reached a $100 million settlement with the SEC, and Bittrex reached a $29 million settlement with the Treasury Department.

Actual deductions may be even higher

At the same time, CoinGecko experts did not consider fines and other payments imposed by the CFTC on individual top managers.

In particular, not long ago, the founder of Binance agreed to pay a $50 million fine and voluntarily arrived for a court hearing from the UAE to the United States.

Another case concerns the charges against the BitMEX crypto exchange in 2020. Then, U.S. regulators brought charges against BitMEX and its three founders, including Arthur Hayes, the head of the exchange. Hayes left the company, pleaded guilty, paid a fine of $10 million, and was sentenced to two years of probation.

The total fines for just two individuals was a whopping $60 million. However, the regulators have a history of other personal fines, therefore the actual revenues for the regulators may be several billion dollars more.

Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
Theo Crypto News

Pháp Lý

Uyeda: SEC’s crypto approach a ‘disaster for the whole industry’

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In a candid interview on Fox Business’s Mornings with Maria, SEC Commissioner Mark Uyeda sharply criticized the agency’s handling of crypto, acknowledging that its current strategy has been “a disaster for the whole industry.”

Uyeda’s remarks come amid mounting legal challenges, including a fresh lawsuit filed by Crypto.com against the U.S. Securities and Exchange Commission following the issuance of a Wells notice.

Crypto.com’s lawsuit alleges that the SEC has overstepped its jurisdiction by enforcing regulations on the cryptocurrency market without issuing clear regulatory guidance. The Wells notice — a formal communication from the SEC indicating that enforcement action is likely — accused Crypto.com of operating as an unregistered broker-dealer and securities clearing agency due to its handling of tokens that the SEC deems securities.

Uyeda’s critique of the SEC’s approach highlights a growing frustration within the agency and the wider crypto industry.

“We have been sending this ‘policy through enforcement,’” Uyeda stated, referring to the SEC’s practice of targeting companies with legal actions without offering explicit guidance on how they should operate within existing regulations. “We’ve done nothing to provide guidance on it,” he continued. “And as a result, this has been shaped by the courts. And different courts have ruled in different ways.”

Indeed, the SEC’s reliance on enforcement has led to legal battles, including a high-profile case against Ripple Labs. 

The courts have often delivered mixed rulings, adding to the uncertainty for crypto firms. While the SEC recently lost a major ruling to Ripple (XRP) regarding the classification of XRP tokens, the agency has already filed an appeal, signaling that these legal struggles are far from over.

Crypto firms are fighting back

Crypto.com’s lawsuit is just the latest in a series of legal confrontations between the crypto industry and the SEC. The lawsuit, sparked by the Wells notice, argues that the agency has been regulating beyond its mandate. Crypto.com’s leadership insists that legal action is necessary to protect the future of cryptocurrency innovation in the United States.

Mark Uyeda refrained from commenting directly on the Crypto.com litigation, but he emphasized the broader issue of the SEC’s failure to offer clarity. “We have not provided interpretive guidance as to what you can and cannot do,” Uyeda said, adding that the lack of clear rules has left companies guessing about how to comply with securities laws.

Uyeda’s comments also touched on the SEC’s broader regulatory philosophy, particularly in relation to environmental, social, and governance mandates. He criticized the agency’s focus on ESG issues, suggesting that such efforts often stray from financial relevance. “It is about micromanaging a lot of what corporations are doing on things that have absolutely no financial purpose,” he said, adding that financial regulators should not be vehicles for social change.

Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
Theo Crypto News

NFT

Are NFTs making a comeback or just riding the hype? Here’s what the numbers say

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After a dull stretch, NFT sales have taken a turn for the better. What’s behind this momentum, and is it a sign of a lasting revival?

NFTs are finally making a comeback

Non-fungible tokens are starting to show signs of life again after a rather dull performance in the last few weeks.

According to data from CryptoSlam, sales between Sep. 30 and Oct. 6 soared past $84.9 million, marking the highest sales volume since the week ending Aug. 25, which recorded over $93 million.

What’s even more interesting is that the NFT market has been gaining momentum throughout September. During the week of Sep. 16-22, NFT sales reached $69 million, and the following week, Sep. 23-29, saw a modest uptick to $75 million.

The current week, as of Oct. 7, has already clocked over $5.5 million in sales, suggesting that the market could continue this upward trend.

In addition to the rise in sales volume, there’s been an increase in activity, with over 2 million transactions recorded in the last seven days as of Oct. 7, a 29.73% jump from the previous period.

However, it’s not all sunshine. The average sale price of NFTs has dropped by 32.91%, now sitting at around $43 per sale, indicating that while more people are engaging with NFTs, the high-priced collectibles may still be lagging behind.

With the numbers showing positive momentum, what’s driving this rebound? Let’s dive deeper into which blockchains are leading the NFT race, why NFTs are making a comeback, and what we can expect in the days to come.

Which blockchains are leading the race?

As of Oct. 9, Ethereum (ETH) still holds the crown as the dominant blockchain in the NFT space, but the landscape is shifting, and other platforms are quietly gaining ground.

Ethereum (ETH)

Ethereum remains the leader in terms of NFT sales, bringing in over $26.5 million in the past week. Ethereum’s sales accounted for nearly 31% of the entire NFT market, but it’s also plagued by a relatively high percentage of wash trading — roughly 11.69%.

Wash trading involves artificially inflating the volume by buying and selling within the same wallet to create the illusion of higher demand.

Despite this, Ethereum’s vast user base and dominance in the NFT ecosystem cannot be ignored, as it recorded over 136,000 buyers during this period.

However, the volume of transactions (over 654,000) suggests a growing reliance on smaller trades, with the average sale price taking a sharp dip.

Mythos (MYTH)

Mythos (MYTH), a relatively newer player, is perhaps the most surprising competitor. Sales skyrocketed by over 6200% in the last week alone, reaching $15.3 million, giving it the second spot.

This explosion is driven by its gaming-centric focus, tapping into a relatively untapped and highly passionate user base. In-game assets such as NFTs have been a concept that gamers are increasingly embracing, and Mythos is positioning itself as the leader in this niche.

What’s even more interesting is that this surge isn’t heavily tied to wash trading, as only 0.28% of its transactions are wash trades, showing the platform is experiencing genuine user-driven growth.

Mythos has attracted over 632,000 transactions this week alone, which is nearly five times that of Ethereum, signaling that it might be a blockchain to watch closely as it builds on this rapid adoption.

However, gaming NFTs are highly dependent on the success of the underlying games. Hence, if those games fail to attract or retain users, the NFT market on Mythos might see a sharp decline.

Bitcoin (BTC)

Bitcoin (BTC) entering the NFT race was not something many anticipated a few years ago. Traditionally viewed as a store of value, Bitcoin’s blockchain wasn’t designed with NFTs in mind.

However, the introduction of Ordinals has breathed new life into Bitcoin’s potential in this space. While its weekly sales volume of $14.1 million might seem modest compared to Ethereum, the fact that Bitcoin’s NFT market is growing organically, with only 5.15% wash trading, is worth noting.

Interestingly, despite having fewer transactions and users compared to Ethereum, Bitcoin boasts a higher average sale price, hinting that its NFT market might be more geared toward high-end, premium assets.

Solana (SOL)

Solana (SOL) continues to be a serious competitor, posting over $10.8 million in sales this week, ranking fourth.

However, Solana’s wash trade percentage — at a whopping 22.7% — is one of the highest among the top blockchains, indicating that while Solana is seeing growth, much of its activity may be artificially inflated.

Yet, with nearly 223,000 unique weekly buyers and over 421,000 weekly transactions, it’s clear that Solana remains a key player, especially among collectors who prefer faster and cheaper transaction fees than Ethereum offers.

Polygon (POL)

Polygon (POL), known for its efficiency and low transaction costs, clocked over $10.7 million in sales last week, with wash trades making up only 0.25% of its transactions — far lower than Ethereum or Solana.

Polygon also recorded an impressive 84,532 sellers, indicating that the blockchain is attracting a healthy level of marketplace activity.

Why are NFTs surging again?

The recent surge in NFT sales can be traced to a few key developments, the most notable being a high-profile, yet dubious, CryptoPunk sale and the introduction of innovative NFT features by Telegram.

A flash loan-fueled transaction involving CryptoPunk #1563 recently made headlines when it appeared to sell for an eye-popping $56.3 million on the Ethereum blockchain.

On the surface, this seemed like a monumental sale in a space that has been struggling with lower sales volumes and declining prices.

But a closer look revealed that the sale was anything but legitimate. The buyer of the CryptoPunk used a flash loan — an uncollateralized loan that’s paid back in the same transaction — creating the illusion of a massive purchase.

In reality, the Punk, which had been purchased for just $69,000 in September, was simply transferred between wallets without any real funds changing hands. Despite this, the sale grabbed attention and sparked conversations, renewing interest in the NFT space.

These carefully orchestrated events often attract investors’ attention, especially those who had stepped away from the market amid the broader decline in NFT activity.

The psychological impact of these “sales” can reignite fear of missing out, pulling speculators back into the space as they anticipate that increased attention could lead to real opportunities.

Simultaneously, Telegram’s move into the NFT arena has introduced a more accessible avenue for users to engage with digital collectibles.

On Oct. 5, Telegram launched its new “Gifts” feature — animated images that can be sent to contacts on the platform. But what’s most exciting is that these Gifts are set to be converted into NFTs later this year, with Telegram allowing users to mint these limited-edition assets on the TON blockchain.

This feature builds on Telegram’s previous introduction of its in-app currency, Stars, which users can spend on digital services within the platform. By linking NFTs to social interactions, Telegram is making NFTs more accessible to everyday users.

Telegram’s integration of NFTs is a key development because of its massive user base and the seamless experience it offers. Users will soon be able to convert these digital gifts into NFTs, trade them, and even auction them off, all while staying within the Telegram ecosystem.

While the broader market saw its lowest sales volume since January 2021 in September, these recent events have breathed new life into the sector. Whether this resurgence will hold remains to be seen, but for now, NFTs are back in the spotlight.

What to expect next?

Looking ahead, the NFT space faces some uncertainties, especially with the recent Wells notice issued by the U.S. Securities and Exchange Commission to OpenSea, the largest NFT marketplace. 

On Aug. 28, the SEC signaled its intent to take enforcement action against OpenSea, claiming that some NFTs on the platform may qualify as securities. This could have major implications for the entire NFT ecosystem.

A Wells notice is a formal warning that the SEC might pursue legal action, and while OpenSea has the opportunity to respond, the looming threat creates an atmosphere of uncertainty. 

If the SEC classifies certain NFTs as securities, it could trigger a wave of regulatory scrutiny, not just for OpenSea, but for other platforms and NFT projects. 

The potential for stricter regulations could make some investors hesitant and slow down market growth, especially for projects that don’t have clear legal frameworks in place.

At the same time, the current uptick in NFT sales seems largely fueled by hype. It remains to be seen whether this buzz will translate into long-term growth or if it’s just another short-lived trend.

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Theo Crypto News

Pháp Lý

Will Trump’s SEC pick be crypto’s savior? All eyes on Dan Gallagher

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Is the SEC about to get a crypto-friendly makeover with Dan Gallagher at the helm? How would his approach differ from Gensler’s crackdown?

Crypto’s Robinhood in the making?

Rumors are swirling that Dan Gallagher, Robinhood‘s Chief Legal Officer and a former U.S. Securities and Exchange Commission commissioner, may be tapped to lead the SEC if Donald Trump wins the 2024 election.

Gallagher’s name emerges at a time when tensions between the SEC and the crypto industry are already at an all-time high. Under the leadership of SEC Chair Gary Gensler, the SEC has been cracking down on crypto exchanges like Coinbase, Kraken, and Binance, arguing that many cryptocurrencies should be classified as securities.

Moreover, in recent months, Robinhood’s crypto division has found itself in the SEC’s crosshairs, receiving a Wells Notice in May — an indicator that charges could be forthcoming.

Not just Robinhood, but OpenSea, the largest non-fungible tokens marketplace, also received a Wells Notice from the SEC in August, alleging that certain NFTs on the platform may be classified as securities — a claim that could have serious repercussions for the entire NFT space.

Meanwhile, the crypto industry argues that the current SEC framework doesn’t fit digital assets, creating a regulatory headache for companies trying to comply.

If Gallagher does step into the chair position, his background in both traditional finance and digital assets could offer a new approach to regulating the evolving crypto market.

But what exactly does this mean for the future of the industry? Let’s dive deeper into what a Gallagher-led SEC might look like and how it could shape the crypto space.

Who is Dan Gallagher?

Dan Gallagher’s career in financial regulation is both extensive and diverse, making him a compelling candidate for the SEC chair position, should Donald Trump return to office.

Gallagher has held various key roles that have shaped his approach to securities law, market regulation, and, more recently, the crypto industry.

He first gained recognition as a Republican SEC commissioner from 2011 to 2015, where he advocated for a regulatory environment that balanced oversight and innovation.

His time at the SEC coincided with implementing the Dodd-Frank Act, a sweeping piece of legislation aimed at reforming the financial system following the 2008 crisis. 

While Gallagher supported certain aspects of the law, he often voiced concerns about overregulation, criticizing how excessive rules could hinder market growth and innovation, particularly for smaller firms.

Before his time as commissioner, Gallagher had already accumulated considerable experience within the SEC. He worked as counsel to SEC Commissioner Paul Atkins, which exposed him to critical regulatory issues, including enforcement actions and market structure.

In 2020, Gallagher joined Robinhood as Chief Legal Officer, a move that thrust him into the spotlight once again, particularly as Robinhood rapidly expanded its role in both traditional finance and crypto markets.

His tenure at Robinhood has not been without controversy. In early 2021, Robinhood faced intense public scrutiny during the GameStop short squeeze when the platform temporarily halted trading of certain stocks. 

This move led to allegations of market manipulation and calls for regulatory investigations. Although Gallagher wasn’t directly responsible for the decision, his role as legal chief required him to manage the legal and reputational fallout.

What to expect from a Gallagher led SEC?

Dan Gallagher’s public statements and tweets reveal much about his views on the intersection of regulation, innovation, and government oversight in both crypto and broader financial markets.

Gallagher has consistently criticized what he sees as the SEC’s failure to establish a clear and workable regulatory framework for digital assets, often pointing to the agency’s reliance on enforcement actions rather than setting clear rules.

In response to a May 2024 tweet about the FIT21 Act, Gallagher critiqued the SEC, stating, “The SEC is clearly not going to step in and provide a working regulatory framework for crypto. I’m happy to see Congress filling the void.”

The FIT21 Act, which passed the House despite opposition from President Biden and current SEC Chair Gensler, aims to delineate responsibilities between the SEC and the CFTC, with the goal of offering regulatory clarity and consumer protections.

Gallagher’s vocal support for the legislation suggests that, under his leadership, the SEC could be more open to collaborating with Congress to develop comprehensive rules for digital assets—rules that don’t rely solely on enforcement but instead provide businesses with a clear path to compliance.

One of the most critical aspects of this potential shift could be how crypto firms are regulated. Gallagher has advocated for the idea that the existing regulatory framework, designed for traditional financial institutions, doesn’t suit the decentralized and fast-evolving nature of crypto assets.

This suggests that a Gallagher-led SEC would push for clearer distinctions between digital assets that qualify as securities and those that fall under the CFTC’s purview, such as commodities. The current ambiguity has left companies facing legal uncertainty, and Gallagher’s approach would likely aim to eliminate this confusion.

Gallagher’s tweets also offer insight into his broader regulatory philosophy. In December 2023, he criticized the SEC’s new “predictive data analytics” proposal, calling it “unreasonably broad and burdensome.” He warned that such rules would lead to “higher costs and less technology and access for investors.”

His stance suggests that, if he were to lead the SEC, he would advocate for a more hands-off approach to regulating emerging technologies, especially those that improve market access and efficiency.

However, while his vision for a more innovation-friendly regulatory environment may resonate with industry players, it could face opposition from consumer advocacy groups or those pushing for stricter oversight of digital assets.

The game of odds

As the 2024 presidential election approaches, the odds of Donald Trump returning to the White House are gaining momentum. 

Data from Polymarket, a popular prediction platform, shows Trump’s chances of reclaiming the presidency have risen to 52.8%, marking his largest lead over Democratic contender Kamala Harris since she entered the race. 

With over $1.46 billion in total bets placed on the election, Trump has attracted the lion’s share of betting volume, raking in $366 million compared to Harris’ $285 million.

Trump’s recent surge in the polls, particularly after his October rally in Butler, Pennsylvania, has bolstered speculation about what his return to power could mean for various industries, including the crypto space. 

During the rally, Trump stopped short of making any direct promises regarding cryptocurrency, but he did hint at revisiting the case of Ross Ulbricht, the founder of the Silk Road.

If Trump returns to the White House, the SEC is likely to experience a leadership shakeup, with Gary Gensler possibly being replaced by a new face — Dan Gallagher.

Gallagher’s appointment would likely lead to clearer rules for crypto, and a friendlier environment for digital asset companies to thrive. 

But as with anything in both politics and markets, nothing is set in stone. The upcoming election remains a tight race, and the future of the SEC — and by extension, the future of crypto regulation—hinges on who will sit in the Oval Office come 2025.

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Theo Crypto News

Bitcoin

SEC filing underway, Bitcoin rewards app Fold adopts FLD ticker

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Bitcoin financial services company Fold app has submitted an S-4 SEC filing to the US Securities and Exchange Commission in preparation to go public with its IPO.

The Fold app submitted its S-4 SEC filing on Oct. 7. An S-4 filing is a statement created with the SEC by a publicly traded company undergoing a merger or acquisition. In the case of Fold, it announced last July that it plans to go public by merging with FTAC Emerald Acquisition.

According to the document, if the merger is approved and recognized by stakeholders and regulators, then Fold will remain listed on the Nasdaq with FLD as the new ticker symbol. The registration statement lists the firm Emerald as the registrant and Fold as the co-registrant.

“Merger Sub will be merged with and into Fold, with Fold surviving the Merger as a wholly-owned subsidiary of Emerald,” said the statement.

In July 2024, Fold agreed to merge with the special purpose acquisition company FTAC Emerald Acquisition at a pre-money equity valuation of $365 million.

According to the press release, Fold currently holds more than 1,000 Bitcoin(BTC) in its balance sheets. The funds acquired from the merger were allocated for the purpose of bolstering Fold’s growth in regards to its operations and treasury

The fintech company was founded in 2019 Founded in 2019 by William Reeves, Matthew Luongo, and Corbin Pon, Fold raised $20.2 million from 28 investors, according to PitchBook. Fold allows users to earn bitcoin rewards through its debit card, similar to credit card cashback. The company currently has 574,000 accounts.

In 2020, Fold partnered with Visa to introduce a new card that enables users to receive 1 to 2 percent of payment made back in the form of Bitcoin. In 2023, the Visa-Fold rewards program expanded to accommodate card users living in Latin America, Europe, and Asia Pacific regions.

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DeFi

Ripple to fight SEC’s appeal over XRP’s non-security status

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Ripple Labs will fight the United States Securities and Exchange Commission’s appeal of the court ruling that determined retail XRP sales were not in violation of securities laws.

In an Oct. 3 X post, Ripple (XRP) CEO Brad Galinghouse vowed to fight the SEC as long as it takes to uphold XRP’s status as a non-security and defend against the regulator’s appeal. Calling the SEC’s appeal “misguided and infuriating,” the Ripple exec wrote:

“Somehow, they still haven’t gotten the message: they lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.”

The SEC filed an appeal on Oct. 2 to counter a ruling by the Southern District Court of New York that concluded that XRP cannot be classified as a security.

Recall that on July 13, Judge Analisa Torres ruled that the sales of XRP to retail investors were not an illegal securities offering, and the altcoin itself did not qualify as a security under the Howey test.

However, it was stated that Ripple’s institutional offerings violated the same laws due to the manner in which the sales were conducted, leading the SEC to propose a $1.95 billion penalty against Ripple Labs.

Judge Torres reduced the penalty to $125 million while mandating that Ripple must formally register with the SEC if it wants to offer securities in the future. 

Subsequently, in a Sept. 4 filing, both parties agreed to a stay order, under which Ripple would deposit 111% of the $125 million fine into a secure account, pending the resolution of any appeal. This arrangement effectively postponed the payment and strongly hinted at the SEC’s intention to appeal the ruling.

Ripple’s chief legal officer, Stuart Aldertoy, said the commission’s decision to appeal was “not surprising” as he criticized the agency and its current chair, Gary Gensler, for engaging in what he described as “litigation warfare” against the crypto industry.

“This just prolongs what’s already a complete embarrassment for the agency,” Aldertoy wrote in an Oct. 3 X post, adding that the blockchain payments firm will opt for a cross-appeal if it deems fit.

Hodl Law founder Fred Rispoli speculated that the process could be lengthy, noting that a ruling from the Second Circuit appeals court is unlikely to come before January 2026 and, more realistically, around March or April 2026. 

Meanwhile, Gensler has recently come under fire from U.S. lawmakers for the SEC’s aggressive enforcement action strategy towards the crypto sector. During a congressional hearing, the SEC chair was criticized for forging terms like “crypto asset security” and the SEC’s unclear language regarding digital assets like Ethereum.

In related news, Ripple has continued to focus on its global expansion efforts despite the legal complexities, with the firm recently securing an in-principle approval in Dubai.

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Theo Crypto News