Binance, long seen as a crypto renegade, has taken a surprising turn toward regulation.
On November 21, the exchange pleaded guilty to money laundering and other federal charges, marking a significant departure from its previous laissez-faire approach.
To atone for its transgressions, Binance has agreed to pay a monumental $4.3 billion fine, the largest ever imposed by the U.S. Treasury Department.
Furthermore, Changpeng Zhao, or “CZ,” Binance’s founder, CEO, and principal owner, will be sidelined for at least three years, under the supervision of a court-appointed monitor.
But the ramifications extend beyond these penalties. Yesha Yadav, a law professor at Vanderbilt University, emphasized that the settlement ushers in a new era of systematic oversight for Binance.
It signifies the end of an era where the exchange operated in a borderless manner without a domestic regulator.
Binance will now face increased scrutiny over its products, risk management, governance, trading partnerships, and compliance standards, likely resulting in significant structural reforms to ensure compliance.
The agreement, reached with the U.S. Department of Justice (DOJ), the Treasury Department, and the Commodity Futures Trading Commission (CFTC), could have far-reaching consequences for the entire cryptocurrency and blockchain industry, according to Austin Campbell, an adjunct professor at Columbia University’s School of Business.
He sees it as a long-term positive, signaling crypto’s permanence and the importance of accessibility.
Binance’s significance cannot be overstated; it once processed the majority of all digital trades globally, with CZ regarded as a prominent figure in the industry.
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The U.S., with its unique extraterritorial application of law, has sent a clear message to the crypto world: violations involving U.S. users, money laundering, and evading sanctions will not go unpunished.
However, Binance’s legal challenges may not be over, with separate charges from the SEC still pending.
These charges, broader than those brought by the DOJ, CFTC, and Treasury, allege commingling of client assets and misuse of customer assets, similar to the actions taken by FTX before its collapse.
Nonetheless, the plea deal offers some relief to the crypto sector, removing uncertainty about the government’s intentions towards Binance.
It could also pave the way for the launch of a Bitcoin spot-market ETF in January 2024 and potentially an Ethereum Spot ETF later in the year.
The settlement reflects the maturation of the cryptocurrency industry, moving away from its early days as a frontier sector.
Binance, once considered an “evasive pirate enterprise,” has evolved into a more compliance-oriented organization with KYC/AML programs and risk professionals in place.
It appears that Binance’s survival is in the interest of regulators, as a reformed Binance could set industry standards and represent a more mature and responsible entity.
However, Binance may face challenges as it relinquishes its image as a risk-tolerant firm focused on customer acquisition at all costs.
It could lose market share to smaller offshore exchanges, especially if the SEC’s broader charges come to fruition.
Nevertheless, the settlement offers Binance a path to redemption and a chance to align itself with evolving industry standards.
Thai cryptocurrency exchange Zipmex, currently facing financial turmoil, has unveiled a restructuring proposal that offers creditors an initial payout of 3.35 cents for every dollar owed, with the potential for increased payments in a recovery scenario.
This move comes as the exchange grapples with a substantial debt of $97 million owed to its customers.
According to a report from Bloomberg on November 29, Zipmex has outlined a plan that could potentially elevate the payout to 29.35 cents per dollar, contingent upon a successful recovery.
However, significant creditors have expressed their opposition to this proposed scheme, calling for an independent assessment of the company’s financial obligations.
While Zipmex CEO Marcus Lim did not confirm the specific details of the restructuring plan, he did highlight the existence of “inaccuracies” in the numbers reported by the media.
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Zipmex initially encountered financial difficulties in the summer of 2022 when the cryptocurrency exchange, operating primarily in Southeast Asia, sought bankruptcy protection in Singapore.
At that time, the company needed a period to devise a strategy to address its outstanding debt of $53 million to crypto lenders Babel Finance and Celsius.
Throughout this period, Zipmex repeatedly requested extensions of the debt moratorium from the Singaporean court.
According to Bloomberg, creditors will have the opportunity to vote on the current restructuring plan in early December.
In a separate development in November, Zipmex announced its intention to suspend all digital asset trading activities in Thailand by January 31, 2024.
This decision followed an ongoing investigation by Thailand’s Securities and Exchange Commission, which commenced in early 2023.
The future of Zipmex remains uncertain as it navigates its complex financial situation and attempts to find a viable path forward.
The fate of the proposed restructuring plan and the resolution of its debts will likely have a significant impact on the exchange’s future operations and its ability to recover from its current challenges.
A recent lawsuit filed by a group of FTX users alleges that the Mercedes-AMG Petronas F1 Team and Major League Baseball (MLB) played a role in facilitating fraud through their promotional partnerships with the crypto exchange, FTX.
These twin class-action lawsuits, filed in a Florida district court on November 27, accuse the organizations of aiding and abetting FTX Group’s massive global fraud, as well as promoting unregistered securities.
In 2021, Mercedes F1 entered into a promotional agreement with FTX, prominently displaying the exchange’s logo on various assets, including cars, uniforms, and hats.
In a groundbreaking move, MLB also signed a similar deal with FTX, becoming the first professional sports league to do so.
MLB umpires even wore FTX’s logo on their uniforms, marking a historic departure from tradition.
The class complaint filing highlights that the inclusion of FTX.US patches on MLB umpire uniforms represented a significant milestone in the sport’s long history.
Similarly, Mercedes F1 prominently featured FTX’s logo on its cars, merchandise, and marketing materials.
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The lawsuit suggests that FTX regularly cheered on and congratulated Mercedes F1 and its drivers, creating an illusion of trustworthiness among fans.
The same group of FTX users is pursuing legal action against celebrities who endorsed the exchange, including former sports stars like Shaquille O’Neal and Tom Brady, on similar grounds of promoting unregistered securities.
Some of these celebrities have sought to dismiss the lawsuits, asserting that they did not encourage users to deposit money on FTX.
However, a few, such as American footballer Trevor Lawrence and YouTubers Kevin Paffrath and Tom Nash, have reached settlements in their respective cases.
In a significant development, FTX’s founder and former CEO, Sam Bankman-Fried, faced convictions on seven charges related to fraud, conspiracy, and money laundering in November.
Furthermore, just a year after sealing their partnership deals, both MLB and Mercedes F1 terminated their contracts with FTX in 2022.
MLB ended its five-year promotional agreement with FTX shortly after the exchange filed for bankruptcy, while Mercedes F1 severed ties with FTX and removed its logo from its cars and merchandise.
These lawsuits and actions by prominent organizations and individuals underscore the growing legal scrutiny surrounding the cryptocurrency industry and its partnerships, as regulators and investors seek to ensure compliance and accountability.
Crypto investment platforms eToro and M2 have received approval to offer their services in the United Arab Emirates (UAE) from the ADGM Financial Services Regulatory Authority, which oversees the Abu Dhabi Global Market (ADGM), the UAE’s international financial center.
eToro has been granted a Financial Services Permission (FSP), enabling it to operate as a broker for securities, derivatives, and cryptocurrency assets in the UAE.
This approval marks a significant milestone in eToro’s global expansion journey, according to Yoni Assia, the company’s founder and CEO.
In September, eToro also received a Crypto Asset Service Provider (CASP) registration from the Cyprus Securities and Exchange Commission (CySEC), emphasizing the importance of securing European operating licenses for crypto companies aiming for worldwide growth.
On the other hand, cryptocurrency exchange M2 has obtained recognition as a fully regulated Multilateral Trading Facility (MTF) and custodian.
This allows M2 to onboard both UAE residents and institutional clients. M2’s services in the UAE encompass crypto custody, UAE dirham-based Bitcoin and Ether trading, and on/off-ramp services for the dirham.
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M2 CEO Stefan Kimmel views the timing of the license issuance as opportune, coinciding with a resurgence of positive investor sentiment.
The UAE has become increasingly attractive to international crypto players, as it continues to grant operational licenses.
Simultaneously, the ADGM’s registration authority has introduced comprehensive regulations for Web3 organizations in November.
These regulations, known as the Distributed Ledger Technology (DLT) Foundations Regulations 2023, are designed to provide regulatory clarity for blockchain foundations, Web3 entities, decentralized autonomous organizations (DAOs), and traditional foundations venturing into DLT.
Under these regulations, entities can establish a “DLT Foundation” by submitting a signed charter detailing the foundation’s initial assets, governance structure, and potential token issuance. A
dditionally, organizations must provide their white paper, tokenomics paper, and a link to a technical document known as a DLT Framework.
These measures aim to foster a regulatory environment that promotes transparency and accountability within the blockchain and Web3 space in the UAE.
New Spanish legislation is set to require residents holding cryptocurrency assets on foreign platforms to report their holdings by March 31, 2024.
The Spanish Tax Administration Agency, commonly referred to as Agencia Tributaria, has introduced Form 721, a tax declaration form designed for virtual assets held abroad.
This new regulation was initially announced in the Boletín Oficial del Estado, Spain’s official state gazette, on July 29, 2023.
Starting from January 1, 2024, and continuing until the end of March, individuals and businesses are mandated to disclose the amount of funds they have stored in foreign crypto accounts as of December 31, 2023.
However, the reporting requirement applies only to individuals with crypto assets valued at over 50,000 euros, which is approximately $55,000.
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Those who hold their assets in self-custodied wallets are required to report their holdings using the standard wealth tax Form 714.
The Agencia Tributaria has intensified its efforts to ensure compliance among local crypto asset holders.
In April 2023, it sent out 328,000 warning notices to individuals who had failed to pay taxes on their crypto holdings for the 2022 fiscal year, representing a 40% increase compared to the previous year’s 150,000 warnings. In contrast, in 2021, there were only 15,000 notifications.
Spain is taking proactive steps to establish comprehensive regulations for the cryptocurrency sector.
In October, the Spanish Ministry of Economy and Digital Transformation announced that it would implement the Markets in Crypto-Assets Regulation, the European Union’s first comprehensive crypto framework, at the national level in December 2025, six months ahead of the official deadline.
Furthermore, in November, Spain’s primary financial regulator, the National Securities Market Commission, initiated its first case against a technology provider for breaching crypto promotion rules.
These regulatory developments reflect Spain’s commitment to ensuring the responsible and transparent use of cryptocurrencies within its borders.
Coinbase, the popular cryptocurrency exchange, has recently experienced a surge in its stock price, reaching an 18-month high.
This boost in share value coincided with the guilty pleas of Binance, a rival exchange, and its former CEO, Changpeng “CZ” Zhao, who admitted to charges related to money laundering and sanctions violations in the United States.
On November 27th, Coinbase’s stock closed at $119.77, marking its highest level since May 5, 2022, when it closed at $114.25, as reported by TradingView data.
Although there was little movement in after-hours trading, this recent performance has propelled Coinbase shares up by approximately 256.5% year-to-date.
However, it’s worth noting that the stock is still down 65% from its all-time high of nearly $343 on November 12, 2021.
This surge in Coinbase’s share price occurred shortly after Binance and its founder, CZ, pleaded guilty to charges related to money laundering, U.S. sanctions violations, and operating an unlicensed money-transmitting business.
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As part of the settlement, Zhao stepped down as CEO, and Binance agreed to comply with monitoring requirements from the U.S. Justice Department and Treasury Department for up to five years, amounting to a $4.3 billion settlement.
Coinbase has also benefited from the pending approval of U.S. spot Bitcoin and Ether exchange-traded funds (ETFs).
Analysis by Bloomberg ETF analyst James Seyffart reveals that Coinbase serves as the custodian for 13 out of 19 spot crypto ETFs currently awaiting approval from the U.S. Securities and Exchange Commission (SEC).
However, Coinbase is not without its challenges. The exchange is currently facing a lawsuit from the SEC, alleging that it failed to register with the regulatory authority and listed tokens that violated U.S. securities laws.
Coinbase had attempted to dismiss the lawsuit and questioned the SEC’s authority to oversee the cryptocurrency industry.
In summary, Coinbase’s stock has experienced a significant uptick in value following the legal troubles of its rival Binance and its founder.
The exchange’s involvement in pending cryptocurrency ETFs also contributes to its positive momentum, despite ongoing legal challenges with the SEC.
Vitalik Buterin, co-founder of Ethereum, has raised concerns about the unchecked advancement of super-advanced artificial intelligence (AI), suggesting that it could potentially become the next dominant species on Earth.
He emphasized that the outcome largely depends on how humans choose to intervene in AI development.
In a blog post dated November 27, Buterin, known for his influence in the cryptocurrency space, argued that AI differs fundamentally from previous inventions like social media, airplanes, or the printing press.
AI has the capability to create a new form of intelligence, which could pose a threat to human interests.
Buterin stated, “AI is a new type of mind that is rapidly gaining in intelligence, and it stands a serious chance of overtaking humans’ mental faculties and becoming the new apex species on the planet.”
One of Buterin’s key concerns is that superintelligent AI, if left uncontrolled, could potentially lead to the extinction of humanity, especially if it perceives humans as a threat to its survival.
He cited a survey conducted in August 2022 by over 4,270 machine learning researchers, who estimated a 5–10% chance of AI causing harm to humanity.
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Despite the extreme nature of these claims, Buterin believes there are ways for humans to maintain control over AI.
He proposed the integration of brain-computer interfaces (BCI) as a means to give humans greater influence over AI-based computation and cognition.
BCIs establish a communication pathway between the brain’s electrical activity and external devices, such as computers or robotic limbs.
This would significantly reduce the communication lag between humans and machines and ensure that humans retain a level of “meaningful agency” over AI-driven decisions.
By incorporating BCIs, humans could actively participate in every decision made by AI systems, reducing the incentive for AI to take autonomous actions that may not align with human values.
Buterin emphasized the importance of “active human intention” in directing AI towards outcomes that benefit humanity rather than purely focusing on profit.
In conclusion, Buterin acknowledged the remarkable progress of human technology throughout history and expressed hope that humans, as the brightest star in the universe, can continue to use technology to expand their potential.
He envisioned that human innovations like space travel and geoengineering would play a crucial role in shaping the future of life on Earth and beyond for countless years to come.
A Bored Ape Yacht Club (BAYC) enthusiast recently narrowly escaped a potential disaster when confronted by a scammer posing as a Forbes journalist.
On November 27, “Crumz,” a nonfungible token (NFT) collector, recounted his encounter with this fraudulent individual.
Crumz received a direct message from someone impersonating a real Forbes editor, Robert LaFanco. The imposter offered an interview opportunity for a new article about BAYC.
Despite noticing some red flags, such as the use of a non-premium Zoom account and a request to use a separate recording bot, Crumz proceeded with the interview.
During the conversation, the scammer asked Crumz to grant access for recording purposes. Initially, Crumz complied, not suspecting anything amiss.
However, towards the end of the interview, the imposter made an unusual request for Crumz to mention something related to his Bored Ape. Specifically, the scammer suggested mentioning a banana.
Crumz soon realized that this was an attempt to distract him from his computer while the scammer took control of his system to steal his valuable assets.
Instead of following the distraction, Crumz stayed vigilant by his computer. As expected, the scammers attempted to manipulate his screen.
Quick thinking saved the day as Crumz muted his screen, preventing any video feed and thwarting the scammers when they tried to access delegate.cash.
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Crypto casino Rollbit partner borowik.eth raised the alarm to his 140,000 followers on X (formerly Twitter) on the same day.
He identified a fake account posing as Robert LaFranco, claiming to be a Forbes assistant managing editor.
Borowik.eth warned that the imposter’s intentions were to deceive and gain access to users’ PCs to steal their valuable NFTs.
Additionally, BAYC community member Laura Rod also reported being contacted by the same bogus Forbes editor.
This incident is not isolated, as blockchain security firm Slowmist recently exposed a series of scams in which victims lost their cryptocurrency assets to fake journalists.
The attackers typically scheduled interviews, guided victims to join Telegram interviews, provided interview outlines, conducted lengthy interviews, and then shared malicious links for publication consent.
In a similar case in October, a user on Friend.tech fell victim to a fake Bloomberg journalist who lured them into clicking a link for a supposed “consent form,” which ultimately resulted in their Friend.tech account being drained.
To stay safe in the cryptocurrency and NFT space, industry observers advise being cautious of scammers using BAYC profile pictures on platforms like X. Vigilance and skepticism are essential tools in guarding against such fraudulent attempts.
ARK Invest recently capitalized on the soaring stock price of Coinbase, a cryptocurrency exchange, by selling 43,956 Coinbase shares from its ARK Fintech Innovation ETF on November 27th.
At the time of the sale, Coinbase shares were valued at $119.7 each, amounting to a transaction worth $5.3 million, as reported by TradingView.
This move came as Coinbase’s stock surged to an 18-month high, attributed in part to the legal issues faced by rival exchange Binance and its former CEO Changpeng Zhao, who pleaded guilty to money laundering and sanctions violations in the United States on November 21, 2023.
Over the past year, Coinbase’s stock has witnessed an impressive 168% increase and has surged by over 220% since January 2023.
Despite these gains, it still remains approximately 70% lower than its all-time high of $319, reached in September 2021, a few months after its trading launch in April 2021.
ARK Invest has been strategically divesting its Coinbase holdings throughout 2023.
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In October, Cathie Wood’s investment firm sold 63,675 Coinbase shares from its ARK Next Generation Internet ETF (ARKW), totaling $5.1 million.
Additionally, in July 2023, when Coinbase was trading around $90 per share, ARK offloaded more than $103 million worth of Coinbase shares.
ARK has also been actively shedding shares of Grayscale Bitcoin Trust (GBTC). On November 24, ARKW sold 94,624 GBTC shares for approximately $3 million, following the sale of nearly 700,000 GBTC shares in the previous month.
Bloomberg’s ETF analyst, Eric Balchunas, clarified that these sales do not indicate a lack of bullish sentiment towards Bitcoin or preparation for ARK Invest’s upcoming spot Bitcoin ETF in partnership with 21Shares. Instead, ARK appears to be adjusting its portfolio to maintain desired weightings.
Simultaneously with the sale of Coinbase and GBTC shares, ARK has been adding positions in crypto-related stocks.
On November 27, ARKF acquired 252,421 shares of the crypto-friendly banking app SoFi. Year to date, ARK has purchased a total of 1.6 million SoFi shares, valued at $11 million at current prices.
Additionally, ARK invested $1.1 million in the stock of the crypto-friendly investment app Robinhood on November 8th, indicating continued interest in the cryptocurrency space.
Circle, the company responsible for USD Coin (USDC), has entered into a strategic partnership with SBI Holdings, a Tokyo-based financial services firm, aimed at accelerating the adoption of USDC and Web3 services within Japan.
This collaboration was solidified through a memorandum of understanding (MOU) signed on November 27th, signifying a pivotal moment in the expansion of USDC into the Japanese market.
This partnership comes in the wake of Japan’s government’s revision of the Payment Services Act in June, which introduced regulatory frameworks for stablecoins.
Circle anticipates that these regulations will encourage the issuance and circulation of stablecoins in Japan, fostering the country’s transition towards a Web3 economy.
To facilitate the integration of USDC into the Japanese financial landscape, SBI Holdings is in the process of seeking registration as an electronic payment instruments service, pending approval from Japanese authorities.
Yoshitaka Kitao, CEO and President of SBI Holdings, expressed optimism about this move, seeing it as a crucial step towards the widespread adoption of stablecoins in Japan.
Circle’s CEO, Jeremey Allaire, emphasized the significance of this collaboration, describing it as a shared vision for the future of digital currency in Japan and Asia. It also marks an important milestone for Circle’s expansion plan in the region.
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Additionally, Circle and SBI will collaborate to promote the adoption of Circle’s comprehensive Web3 Services suite, offering end-to-end development, deployment, and operational platforms for Web3 applications across various blockchains, including domains such as gaming, culture, and consumer entertainment.
Allaire expressed enthusiasm about setting new standards in Japan’s financial sector through this collaboration with SBI.
To facilitate USDC access and liquidity for businesses and users in Japan, SBI Shinsei Bank, an SBI subsidiary, will provide banking services to Circle.
While Circle is headquartered in the United States, it’s noteworthy that a substantial 70% of USDC adoption occurs outside of the United States, with Asia leading this trend.
The demand for secure and transparent digital dollars is also on the rise in Latin America and Africa.
As of now, USDC is the second-largest stablecoin globally, with a market capitalization of $24.6 billion, as reported by CoinGecko.
This partnership with SBI Holdings is poised to play a pivotal role in furthering the growth and adoption of USDC in the Japanese market and beyond.