SEC - Page 115

Binance is reportedly aiding in the investigation of a malicious attack on Turkish cryptocurrency exchange BtcTurk, resulting in the freezing of over $5 million in stolen funds, according to Binance CEO Richard Teng.

“Binance is assisting BtcTurk with investigations and have frozen over $5.3M in stolen funds so far,” Teng shared in a June 22 X post.

BtcTurk disclosed on its website that the attack primarily targeted holdings in hot wallets, which are internet-connected software-based crypto wallets.

While hot wallets facilitate frequent transactions, they are more susceptible to cyberattacks compared to offline cold storage.

“Only a portion of the balances of 10 cryptocurrencies in our hot wallets were affected by this cyber attack, while the majority of assets held in our cold wallets remain secure,” stated BtcTurk in a June 22 announcement, translated from Turkish.

The exchange boasts over five million users.

Teng also informed his 299,800 followers on X that Binance would provide updates as more information becomes available.

READ MORE: Top Asset Managers File Revised Proposals for Ethereum ETFs with SEC, Eye July Launch

“Our investigations & security teams work around the clock as part of our proactive efforts to protect the ecosystem from bad actors.

“We will provide further updates as relevant,” Teng stated.

Blockchain investigator ZackXBT commended Binance for its community support during security breaches.

“Binance gets crucified by the media when in reality their security team generally does more for victims + goes out of their way to assist in incident response,” ZackXBT posted on June 22.

BtcTurk’s CEO Özgür Güneri has not publicly commented on X regarding the incident.

This event follows closely on the heels of another incident where Swiss-based crypto exchange Lykke halted withdrawals after an exploit on June 4.

Blockchain security researcher SomaXBT accused Lykke of attempting to conceal the breach, stating, “@lykke CTX got exploited and lost $19.5 million worth crypto assets but the team is still trying to hide this fact.”

Cointelegraph has reached out to BtcTurk for comment but did not receive a response at the time of publication.

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Billionaire investor Mark Cuban has revealed that he lost access to his Gmail account following a hoax call, just months after more than $800,000 was drained from his cryptocurrency wallet.

“I just got hacked at my mcuban@gmail.com because someone named Noah at your 650-203-0000 called and said I had an intruder and spoofed Google’s recovery methods,” Cuban posted on X (formerly Twitter) on June 22.

This scam typically involves tricking users into providing personal information or account credentials by pretending to be an official representative, in this case, from Google.

Cuban cautioned his 8.8 million followers, “If anyone gets anything from mcuban@gmail.com after 3:30pm pst it’s not me.”

The crypto community responded with supportive messages, though some speculated about the number of emails he might miss during his lockout.

“When you get your access back, please post a screenshot of the number of unread emails.

“I’m betting it is up to 5 digits by now,” wrote Nick Percoco, chief security officer of crypto exchange Kraken. Some even wondered if his X account was also compromised.

READ MORE: LayerZero’s ZRO Token Launch Spurs 16,680% Surge in Arbitrum Fees, Sets Revenue Record at $3.43M

“Is it POSSIBLE that his X account has now been hacked also by the hackers?

“Therefore they’re trying to get more information,” speculated a user named Mickamious.

This incident follows a significant security breach Cuban experienced nine months ago, when his cryptocurrency wallet was drained of approximately $870,000.

Hackers likely targeted Cuban after he logged into MetaMask for the first time in months.

In September 2023, Cointelegraph reported that independent blockchain investigator Wazz noticed suspicious activity in one of Cuban’s wallets, which he had not used for about five months.

Despite these setbacks, Cuban has remained an outspoken advocate for cryptocurrency.

He has been particularly vocal about the need for more favorable crypto regulations in the United States.

Recently, Cuban argued that the U.S. Commodity Futures Trading Commission (CFTC) should regulate “all crypto” rather than the U.S. Securities and Exchange Commission (SEC), criticizing the SEC’s approach of regulation by enforcement in the crypto industry.

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The Winklevoss twins, billionaires and founders of the cryptocurrency company Gemini, received refunds after their Bitcoin donations to Donald Trump’s presidential campaign exceeded federal legal limits.

Bloomberg reported that the excess contributions were returned to the donors. A campaign official, speaking anonymously, provided this information.

The twins each announced $2 million in Bitcoin donations on the social media site X, supporting the presumptive Republican nominee.

However, this amount surpasses the $844,600 legal limit per person that the Trump committee can accept.

READ MORE: Top Asset Managers File Revised Proposals for Ethereum ETFs with SEC, Eye July Launch

It remains unclear if the Trump 47 Committee, which accepted the Bitcoin donations and typically focuses on larger contributors, returned the excess amount in Bitcoin or its equivalent value in cash.

The report indicates that the donated funds are divided among Trump’s campaign, a leadership political action committee covering his legal bills, the Republican National Committee, and 42 GOP state party committees.

Trump’s acceptance of Bitcoin donations highlights his campaign’s growing relationship with the crypto industry, a significant player in the 2024 election.

Investors and supporters are rallying behind candidates advocating for lighter regulations.

The Winklevoss twins attended a June fundraiser for Trump, costing up to $300,000 per person.

They have also contributed approximately $5 million to the Fairshake political action committee and its affiliates, which are involved in attack ads against lawmakers and supporting certain Democratic and Republican candidates.

Users of Gemini, the twins’ crypto exchange, spent months attempting to recover funds invested in Gemini Earn, a program offering yields on crypto assets in partnership with the now-bankrupt Genesis. Recently, users can now retrieve their Earn assets in kind.

Last week, New York Attorney General Letitia James announced the recovery of about $50 million from Gemini for users who “were defrauded.”

In February, Gemini agreed to return at least $1.1 billion to customers through the Genesis bankruptcy as part of a settlement with the New York Department of Financial Services.

The Securities and Exchange Commission sued Gemini and Genesis over Gemini Earn early last year, with Genesis settling the charges.

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Renowned rapper Curtis James Jackson III, also known as “50 Cent,” has claimed that his X account and website were hacked, leading to the promotion of a cryptocurrency pump-and-dump scam.

In a scheme known as a “Rug pull,” fraudulent developers created a new cryptocurrency token called “GUNIT.”

They exploited Jackson’s vast X following of about 12.9 million to attract investors and inflate the token’s price before depleting its value.

Consequently, the token’s price plummeted to $0.00016.

On June 21, Jackson informed his 32.8 million Instagram followers that his X account and website had been compromised, resulting in significant financial losses for the victims.

“Twitter worked quickly to lock my account back down.

“Whoever did this made $300,000,000 in 30 minutes,” Jackson stated, emphasizing that he has “no association with this crypto.”

He shared three images depicting posts from the crypto community about the GUNIT memecoin, showcasing a classic rug-pull pattern with a sharp price increase followed by a steep decline.

READ MORE: Federal Judge Hints at Denying Kraken’s Motion to Dismiss SEC Case, Suggests Digital Assets May Be Securities

Cointelegraph reviewed trading data of the GUNIT memecoin on Dex Screener, revealing that multiple wallet addresses sold substantial amounts of the token.

Four accounts sold over $100,000 of the memecoin following its promotion on Jackson’s X account.

50 Cent asserted that over $300 million was defrauded from users, a figure that significantly exaggerates the actual value made by anonymous traders from selling GUNIT tokens.

At the time of publication, the token’s total trading volume was $19.4 million.

This incident follows a series of celebrities being linked to cryptocurrency launches recently.

Caitlyn Jenner is one of the latest celebrities to delve into the crypto memecoin market, causing industry confusion with mixed messages surrounding her token launch.

Initial speculations about her X account being hacked were dismissed but later resurfaced. Simultaneously, she defended the JENNER token.

On May 27, Cointelegraph reported that Jenner’s X account posted a statement asking followers to “send me some of your favourite memecoins.”

Although she later removed the post, she continued to promote JENNER.

“That ad for a third party token was taken down! As I have said from the beginning the only focus I have is $Jenner and the ad I posted confused too many people, and was not worth it.

“Like I had said time and time again I’m fully focused on my token $Jenner,” she posted on X.

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The Chamber of Digital Commerce, a leading blockchain industry trade association, has provided feedback on the U.S. Internal Revenue Service’s (IRS) proposed Form 1099-DA, aimed at reporting digital asset transactions.

The chamber’s response emphasizes the need to simplify the form, making it easier for brokers handling digital assets like cryptocurrencies to use.

It also underscores privacy concerns, advocating for the request of only essential information for reporting purposes.

The chamber criticized the draft form for requesting excessive information, recommending that the final version require only the basic details necessary for tax reporting.

They suggest that brokers should retain additional information for specific IRS examinations only.

Moreover, the chamber raised concerns about the form’s request for sensitive information, such as transaction IDs and digital asset addresses.

They argue that these details could infringe on taxpayer privacy and should only be collected if there is a suspicion of criminal activity.

The feedback also notes that the draft form implies the necessity for specific broker instructions, which were not included.

The chamber advises the IRS to release these instructions for public review before finalizing the form to ensure brokers can accurately complete it.

READ MORE: Federal Judge Advances Securities Lawsuit Against Ripple Labs, Rejects Summary Judgment Bid

Additionally, the chamber suggested that the form should allow brokers to indicate if a digital asset is subject to a different tax rate, such as non-fungible tokens (NFTs) that might be treated as collectibles and taxed at a higher rate.

This, they state, would help prevent errors in IRS processing and ensure accurate tax reporting.

The IRS released the draft form on April 18 and invited comments.

The chamber’s input follows its earlier feedback on related proposed regulations submitted in November 2023.

According to the draft form, brokers will prepare Form 1099-DA for each customer who sells or exchanges digital assets.

Brokers include kiosk operators, digital asset payment processors, hosted wallet providers, unhosted wallet providers, and others.

Following the announcement of the proposed reporting requirements, the crypto community provided feedback.

The Blockchain Association stated that the rule contains “fundamental misunderstandings about the nature of digital assets and decentralized technology.”

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LayerZero‘s token launch on June 20 caused a significant increase in fees on Arbitrum, resulting in a record daily revenue of $3.43 million for the blockchain, an astonishing 16,680% jump from the previous day.

The ZRO token launch on Thursday faced criticism due to its mandatory “donation” mechanism, requiring claimants to spend a small amount of money per token to secure their allocation.

This mechanism led to a spike in average gas fees on the blockchain, rising to 89 cents from its usual less-than-1-cent fee.

Consequently, Arbitrum’s profits soared to $3.29 million on the day, setting a new record high for the network, according to data from Dune Analytics and DefiLlama.

LayerZero stipulated that ZRO token claimants must donate a small amount per token.

“To claim ZRO, users must donate $0.10 in USDC, USDT, or native ETH per ZRO,” LayerZero stated in a June 20 X post.

They clarified that these donations go to the Protocol Guild, which supports funding for Ethereum developers.

READ MORE: Police Officer Saves Elderly Woman from Losing $40,000 in Bitcoin Scam

LayerZero contended that its token launch is “not an airdrop,” arguing that airdrops are incompatible with their goals of equitable distribution, community building, and protocol health.

They noted that many airdrop recipients show “little to no interest” in the project long-term.

This event marked Arbitrum’s most profitable day since December 14, when it earned $2.13 million in revenue.

That day, the network went offline due to a surge in inscriptions, a type of data formatting that carries larger packages, such as images, which are more expensive due to their size.

The increased cost of handling inscriptions was also passed on to Arbitrum, which only made a profit of $414,000 on December 14, due to the higher fees needed to post and verify the expensive inscription data on Ethereum.

Meanwhile, the value of ZRO has dropped significantly. It fell by 23% in the last day to $3.42, after peaking at $4.79, according to CoinGecko.

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Bitcoin neared six-week lows on June 21, as traders cautioned that buyers were still absent.

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $63,356 on Bitstamp, indicating another challenging day for Bitcoin’s price.

The cryptocurrency has declined 3.7% week-to-date and 5.75% in June overall, struggling to maintain the $64,000 level.

Skew, a popular trader, noted that although some buying interest was emerging at lower prices, consistent buying was necessary for a broader recovery.

“Potential LTF absorption going on here,” he updated on X. “A lot of shorting by looks of it & spot selling into price around the lows. Need to see buyers push for control to get a bounce.”

Skew also expressed concern about the “lack of real market participation,” attributing price movements to automated trading algorithms.

Roman, another trader, pointed out that Bitcoin seemed to be targeting $60,000 again as it was losing ground at $64,500.

He noted bullish divergences in the RSI and MACD indicators on four-hour timeframes, suggesting a potential rebound.

“Looks like price wants 60k once again as 1D is currently losing 64.5k.

“H4 has bull divs all over RSI/MACD so subject to change,” he wrote.

READ MORE: Federal Judge Advances Securities Lawsuit Against Ripple Labs, Rejects Summary Judgment Bid

Jelle, another trader, commented on Bitcoin’s RSI staying above 30 despite the price drop, calling it “interesting behavior.”

“Bitcoin failed to reclaim the range lows, and continues to bleed lower — while the RSI stays above the 30 level,” he added.

Bitcoin’s latest decline brought it to a critical bull market trendline, the short-term holder cost basis (STHCB), also known as realized price.

At $64,000, this level had provided support since the end of the 2022 bear market. Cointelegraph reported the significance of this event, with On-Chain College stating, “time for Bitcoin to battle.”

He observed, “A nice breakout above the STHCB now, with price at $64.2k and the STHCB at $64k. Let’s see how it interacts at this level throughout the day.”

Keith Alan, co-founder of Material Indicators, highlighted the 21-week simple moving average (SMA) at $63,074 as another critical point.

In his latest video update on X, he warned that order book liquidity was “relatively low” around this area.

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The Blockchain Association is once again opposing the Internal Revenue Service’s (IRS) proposed broker-dealer rules, highlighting the excessive burden these rules would impose on investors, cryptocurrency companies, and the IRS itself.

In a letter, the advocacy group referenced the Paperwork Reduction Act, which mandates that government regulators should not impose unnecessary and complex paperwork requirements on those in the financial system.

The Blockchain Association’s spokespeople argued that implementing these proposed rules would result in 8 billion 1099-DA tax forms needing processing, wasting 4 billion hours of labor, and incurring an annual compliance cost of $254 billion.

The letter presented figures showing that these compliance costs and labor burdens starkly contrast with earlier IRS estimates, it was reported.

The IRS had projected the new regulations would require 0.15 hours per customer to complete, totaling a compliance cost of $136,350,000.

Furthermore, the Blockchain Association argued that annual compliance costs of $245 billion were entirely unreasonable for an asset class and markets that generate a tax gap of at most $10 billion.

In 2023, the Blockchain Association sent a 39-page letter to the IRS, detailing their comprehensive objections to the proposed broker regulations.

The advocacy group described the IRS’s proposed broker reporting rule as government overreach, noting that certain entities within the blockchain ecosystem, such as decentralized finance protocols, would struggle to comply with these rules.

READ MORE: Federal Judge Hints at Denying Kraken’s Motion to Dismiss SEC Case, Suggests Digital Assets May Be Securities

The letter emphasized “fundamental misunderstandings” about cryptocurrencies, digital assets, and decentralized finance among U.S. government officials, who find it challenging to grasp the paradigm shift introduced by blockchain technology.

The proposed tax rules and reporting criteria from the IRS have sparked a significant backlash from the crypto community.

Many individuals and institutions have expressed their disapproval of the requirements, deeming them out-of-touch.

Jerry Brito, executive director at Coin Center, echoed the objections raised in the Blockchain Association’s letter.

He pointed out the logistical difficulties of imposing these reporting requirements on decentralized networks and their participants, further underscoring the impracticality of the proposed rules.

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Rising operational costs and lower rewards are impacting Bitcoin miners, though it’s not at a catastrophic level, according to cryptocurrency analyst James Check.

“We are in a period of hash ribbon inversion, and blocks are coming in about 14 seconds slower than they should do.

“That tells you that there is less hashrate online, blocks are being found slightly slower,” said Check, also known as “Checkmatey,” in a June 21 X video.

“About 5% of mining hashrate is struggling at the moment,” Check explained, referring to the processing and computing power given to the network through mining.

“Check claims that while 5% isn’t enormous, Bitcoin miners are likely distributing some of their holdings, but it doesn’t appear to be a “complete and total firesale.”

A hash ribbon inversion happens when the 30-day moving average of the hashrate falls below the 60-day moving average, indicating a period of mining difficulty.

This can result from increased operational costs, a decline in Bitcoin’s price, or equipment issues among miners.

After the Bitcoin halving on April 20, the hash rate began to decline as mining firms turned off unprofitable rigs.

The halving event, occurring every four years, cuts miners’ rewards in half. The April 20 halving reduced mining rewards to 3.125 BTC from 6.25 BTC.

As of the article’s publication, the Bitcoin network’s hashrate stands at 586 exahashes per second (EH/s), down 2% over the past 30 days, according to Blockchain.com data.

Check suggested that miners might be just breaking even, mining new Bitcoins to cover operational costs.

READ MORE: 3iQ Seeks Approval for North America’s First Solana ETP on Toronto Stock Exchange

“Miners might be treading water up here, they may not be full-scale bear market level capitulating, probably just treading water, they mine 10 Bitcoin, they sell 10 Bitcoin,” Check said, echoing other analysts’ comments on the profitability challenges for Bitcoin miners.

“Bitcoin miners are selling most of their coins to pay the bills,” Panos wrote in a June 18 X post.

In a separate post on X the same day, Check noted that Bitcoin “transaction fees represent an increasingly large proportion of miner revenues.”

“Miners must adapt and adjust to fees becoming their primary revenue stream, forcing the industry to further innovate, and apply efficient capital management,” he wrote.

“Nearly all Bitcoin miners are selling 100% of their coins, while CLSK is managing to Hodl their BTC & use their relatively USD balance sheet to acquire new capacity,” VanEck head of digital assets research Matthew Sigel wrote.

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Apple has decided to delay the release of Apple Intelligence, iPhone Mirroring, and SharePlay Screen Sharing in the European Union due to concerns about the regulations in the Digital Markets Act (DMA), according to multiple reports.

Apple Intelligence is the company’s new artificial intelligence upgrade.

An Apple spokesman told CNBC that “Apple Intelligence is a collection of ‘highly capable’ large language and ‘diffusion models,’ as well as an ‘on-device semantic index’ that worked across apps to identify data and feed it to models.”

This upgrade impacts the Siri voice assistant and other functions, as London Insider reported on Saturday.

iPhone Mirroring allows users to see and control their iPhones from their Macs, while SharePlay Screen Sharing lets FaceTime users control others’ devices during conversations.

Fred Sainz, Apple’s senior director of corporate communications, explained to The Verge, “We are concerned that the interoperability requirements of the DMA could force us to compromise the integrity of our products in ways that risk user privacy and data security.”

Apple is one of six companies the EU has labeled as “gatekeepers” due to their significant market power.

The other gatekeepers are Alphabet, Amazon, ByteDance, Meta, and Microsoft.

READ MORE: LayerZero’s New Token Launch Sparks Controversy Over Donation Requirement, Drops 17% in Value

These companies manage 22 “core platform services,” according to EU lawmakers.

The Digital Markets Act, effective since May 2023, imposes specific rules on gatekeepers.

The DMA rules include requirements on interactions with third parties, user control over their data, and business rights to verify advertising on their platforms.

Violating these rules can lead to penalties of up to 10% of a company’s global annual turnover, or up to 20% for repeated offenses, along with other potential remedies.

Apple is already under investigation for its business practices in the EU.

The European Union comprises 27 member states and has a population of 448.4 million.

Cointelegraph reached out to the Apple press department and Sainz for further confirmation and information but did not receive an immediate response.

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