The SEC tightens the grip, while the community pushes back
According to Bloomberg’s anonymous sources, the US Securities and Exchange Commission (SEC) has reached consensus with other US regulatory bodies over its authority to crackdown on stablecoins.
Earlier in September, Do Kwon — the co-founder of the Terra (LUNA) blockchain and Mirror (MIR) protocol — has been served with a subpoena by the US SEC during Messari’s Mainnet conference in New York City. Since the regulator served Kwon with a subpoena in public right before he was about to go on stage to give a scheduled presentation, such a move was seen as an intimidation tactic by many in the crypto space.
Although Terraform Labs — the company behind the Terra blockchain — is not based in the US and Do Kwon is a resident of South Korea, he was physically present in the geographic area where the US SEC has jurisdiction.
As CoinDesk first reported, Kwon decided to push back against regulators and filed a new lawsuit against the SEC on Oct. 22, accusing the agency of failing to follow its own procedural rules.
The US regulators have a long history of going after non-US crypto entrepreneurs, often outside of their jurisdiction. In 2020 the US SEC essentially shut down the TON blockchain project of UAE-based Telegram Messenger, led by Russian-born Kittitian developer Pavel Durov. In 2017 Russian founder of the BTC-e exchange Alexander Vinnik was arrested in Greece at the request of the US on money laundering charges.
Earlier in July, Riccardo ‘Fluffypony’ Spagni — a former South African developer of Monero — was arrested in the US at the request of the South African authorities, which allege that Spagni made $100,000 creating fake invoices while working for Cape Cookies in 2009.
Ripple — another crypto giant and the company behind the XRP cryptocurrency — achieved some success in its legal battle with the US SEC. The court ordered the regulator to provide further responses to some of Ripple’s contention interrogatories. Previously, the financial watchdog refused to disclose documents showing whether its employees were permitted to trade XRP and other cryptos.
By the end of 2020, the SEC led by Jay Clayton introduced legal actions against Ripple Labs for allegedly selling an unregistered security. Since then, Clayton has left his position of SEC chairman and joined the crypto advisory board of hedge fund One River Digital Asset Management.
Nearly $190 million were drained while the network stood clogged
A series of exploits and exit-scams has shuttered the crypto space while the Ethereum blockchain experienced another network congestion amid the ‘Altair’ upgrade with average transaction fees soaring above $50. Because of this, Ethereum saw its first consecutive week of negative supply issuance, meaning that more Ether was burned than mined.
DeFi lending protocol CREAM Finance has been exploited to the tune of $130 million, making it one of the largest DeFi heists according to Rekt. It appears that CREAM’s protocol-to-protocol lending platform Iron Bank has not suffered from the attack.
Another project, Anubis DAO, had $60 million drained from a token sale pool, making its native token ANKH essentially worthless since liquidity has been withdrawn from the ANKH/ETH pool as well. The project used the Copper launchpad to raise capital, but it seems like the fundraising platform hasn’t been compromised and the exploit was a result of leaked private keys.
More than 3 million email addresses of users of CoinMarketCap were leaked and sold online on various hacking forums. The cryptocurrency tracking website was acquired by Binance in 2020 for nearly $400 million, according to The Block. The acquisition was followed by a number of controversies, a mass resignation of CoinMarketCap’s top executives, and the rise of popularity of similar price tracking websites such as Coingecko.
In other news
American retail giant Walmart has partnered with Coinstar and Coinme to install 200 Bitcoin ATMs in its stores in the United States as part of a pilot program. The corporation has a broader plan to install 8,000 Bitcoin ATMs in the future. The ATMs will have an 11% surcharge and customers will have to set up a Coinme account and complete a background check to buy cryptos.
The American firefighters pension fund in Houston with billions in total net assets has allocated part of its portfolio towards crypto.
The president of El Salvador announced on Twitter the addition of 420 bitcoin to the country’s treasury. Additionally, the Central American nation is moving with its new project of building 20 ‘Bitcoin Schools’, funded with capital gains from the state’s Bitcoin Trust account.
Major Indonesian Islamic organization Nahdlatul Ulama (NU) labeled the use of cryptocurrencies as “haram” - forbidden - under the Islamic law.