SEC - Page 50

CoinGecko has recently introduced a new index, the “Top Alleged Securities Coins,” which tracks the largest crypto tokens perceived as securities by the United States Securities and Exchange Commission (SEC).

This index organizes the selection of crypto assets based on their market capitalization.

Topping the list is BNB with a market cap of $243, followed by Cardano (ADA) at $0.292, Solana (SOL) at $23, and TRON (TRX) at $0.0765.

A spokesperson from CoinGecko informed Cointelegraph that the index was launched in early August.

It was created by compiling a list of the most prominent tokens that the SEC had classified as securities in previous legal battles.

Although the SEC currently identifies 68 tokens as securities in recent lawsuits against crypto exchange giants Coinbase and Binance, CoinGecko’s index lists only 24 of them.

According to CoinGecko’s data, the top tokens included in the SEC’s litigated remit account for approximately $84.9 billion of the entire crypto market, which represents around 7.5% of the total crypto market capitalization of $1.21 trillion.

SEC Chair Gary Gensler has been assertive in stating that the majority of crypto assets should be considered securities.

READ MORE: Elon Musk’s X Pledges to Fund Legal Bills for Users Mistreated by Employers over Social Media Activity

He previously expressed that “everything other than Bitcoin” falls under the SEC’s regulatory purview.

If Gensler’s stance is upheld, it would imply that nearly all of the approximately 25,500 cryptocurrencies listed on CoinMarketCap’s platform would come under the SEC’s regulation.

As regulatory scrutiny intensifies in the crypto space, CoinGecko’s new index sheds light on the tokens considered as securities by the SEC.

This development also raises concerns among crypto enthusiasts and market participants about the potential implications of broader regulation on the industry.

While the SEC aims to protect investors and ensure market integrity, the evolving regulatory landscape poses challenges and uncertainties for crypto projects and investors alike.

Market participants will closely monitor how this space evolves and how it impacts the future of cryptocurrencies as a whole.

Other Stories:

Coinbase CEO Affirms Commitment to US Amid Regulatory Uncertainty

U.S. Senators Call for Crackdown on North Korea’s Cryptocurrency Funding of Nuclear Program

Latvia Sees Decline in Crypto Asset Purchases Amidst Concerns Over Fraud and Money Laundering

Massachusetts securities regulators have initiated an investigation into the use of artificial intelligence (AI) in the securities industry, expressing growing concerns about the potential implications of this emerging technology.

On August 3rd, William Galvin, the Secretary of the Commonwealth in Massachusetts, officially announced the investigation.

The commonwealth’s securities division had previously sent letters of inquiry to both registered and unregistered firms that were known to be utilizing or developing AI for their business operations within the securities industry.

The purpose of these letters was to gather data on how these companies were incorporating AI into their activities.

The targeted firms have until August 16, 2023, to respond to the regulator’s inquiries.

Among the aspects of AI utilization that particularly interest Galvin are the supervisory procedures that firms have in place to ensure that AI systems prioritize the interests of clients over those of the firm itself.

The securities division will also scrutinize the disclosure policies of firms that have already deployed AI.

Galvin stressed the significance of U.S. securities regulators in safeguarding investor protection regarding AI deployment.

He expressed concern that without proper disclosure and conflict consideration, this technology could potentially harm investors.

Aside from supervisory measures, Massachusetts securities regulators are also looking into marketing materials provided to investors that may have been generated using AI.

The global regulatory landscape has increasingly turned its attention to AI due to its rapid growth.

In the second fiscal quarter of 2023, major tech companies mentioned AI much more frequently during their earnings calls, indicating its prominence in business operations.

However, some regulators have been wary of the potential risks associated with AI for years. As early as 2017, the Financial Stability Board (FSB) voiced concerns about AI and machine learning in financial services.

One of the FSB’s specific concerns was the concentration of AI and machine learning services in a few large technology firms, potentially leading to natural monopolies or oligopolies.

This concentration could pose financial stability risks, as the disruption or insolvency of one of these firms could have widespread repercussions in the world of finance.

In light of these growing concerns, the Massachusetts securities division is taking proactive steps to investigate and understand the use of AI in the securities industry, aiming to protect investors and maintain financial stability in the face of advancing technological innovations.

Between March and May, BlackBerry’s cybersecurity division thwarted over 1.5 million cyberattacks, unveiling malware families that attempt to take control of computers for mining or theft of cryptocurrencies.

Finance, healthcare, and government sectors were found to be the most affected, as per the BlackBerry report.

The report highlighted a prevalent malware named RedLine, a perennial financial threat involved in the collection of cryptocurrency and banking data.

Another significant threat was the Clop ransomware, a version of the CryptoMix ransomware family, which particularly aimed at banking and financial organizations, causing the data breach of Hatch Bank, a fintech platform.

The most widespread malware families in BlackBerry’s data include SmokeLoader, RaccoonStealer, and Vidar. SmokeLoader, dating back to 2011, has mainly been utilized by Russian-based threat actors to deploy crypto miners and other malware.

READ MORE: Decentralized Exchange on Coinbase’s Base Network Pauses Trading Amidst Concerns of Exploit

RaccoonStealer has been implicated in stealing cryptocurrency wallet data and is purportedly being traded on the dark web. Vidar is another malware extensively used to harvest cryptocurrency wallets.

Linux stood out as the most targeted operating system. BlackBerry suggests that organizations using Linux should frequently update their security patches, as hackers often hijack Linux-based computers to mine cryptocurrencies.

Atomic macOS, a new breed of infostealer, primarily targets macOS users, collecting credentials from keychains, browsers, and crypto wallets.

In response to the growing cybersecurity threat, OpenAI, the developer of ChatGPT and Dall-e, announced a $1 million grant program to promote the development of AI-driven cybersecurity technologies.

The company stated in its official announcement, “Our aim is to foster the advancement of AI-driven cybersecurity capabilities for defenders through grants and additional assistance.”

This initiative underscores the urgent need for advanced cybersecurity measures in the face of an evolving threat landscape.

Other Stories:

U.S. Judge Denies Motion to Dismiss SEC Lawsuit Against Terraform Labs

Binance CEO CZ Unveils Plan to Launch Smaller Algorithmic Stablecoins

IRS Issues New Ruling: U.S. Crypto Investors Must Report Staking Rewards as Gross Income

The United States Securities and Exchange Commission (SEC) is moving forward with its lawsuit against Terraform Labs, as a U.S. judge overseeing the case denied the firm’s motion to dismiss on July 31.

This legal battle began on February 16 when the SEC filed a suit against Terraform Labs and its founder, Do Kwon, accusing them of orchestrating a multi-billion dollar crypto asset securities fraud.

Terraform Labs’ legal representatives tried to have the case dismissed in April, followed by additional materials supporting their motion in June.

Judge Jed Rakoff of the Southern District Court of New York reviewed the arguments and found that, for the purpose of this motion, all well-pleaded allegations must be taken as true, and all reasonable inferences must be drawn in favor of the SEC.

Terraform Labs had argued that the SEC lacked jurisdiction over the company and its founder.

They also contested the agency’s classification of tokens like Mirror Protocol (MIR), Terra Classic (LUNC), and TerraUSD Classic (USTC) as securities.

Terraform Labs further suggested that the SEC should wait for Congressional action on crypto regulation.

However, Judge Rakoff rejected the claim that the SEC lacked the authority to regulate crypto tokens without Congressional authorization.

READ MORE: Liquid Staking Tokens Poised to Dethrone Ethereum’s Ether (ETH) as Dominant DeFi Asset

He also disagreed with Terraform Labs’ reliance on the “Major Questions Doctrine.”

The judge extensively analyzed the Howey test, an important legal framework for determining whether an asset qualifies as a security.

He emphasized that no formal contract is necessary to meet the Howey test, and tokens themselves may be considered securities in court arguments.

Furthermore, Judge Rakoff rejected the idea of distinguishing between tokens like MIR and LUNA based on their manner of sale.

This rejection contrasts with a similar case involving Ripple Labs Inc., where another judge had drawn such a distinction.

The Ripple case involved the SEC’s claim that XRP was not a security when sold on the secondary market, which was partially accepted, providing Ripple with a partial win.

With Judge Rakoff’s ruling, the SEC’s case against Terraform Labs continues, indicating that the court is not following the same approach as in the Ripple case.

This ruling might have implications for future cases involving crypto assets and could set a precedent for the SEC’s regulation of the crypto industry.

Other Stories:

SEC Chairman Gary Gensler Raises Alarm Over Widespread Fraud in Crypto Market

BNB Smart Chain (BSC) Hit by Copycat Attacks

Bitcoin’s Reduced Volatility Sparks Anticipation for Exciting Long-Term Bull Signal

The Nigerian Securities and Exchange Commission (SEC) has issued a warning to local investors regarding the use of Binance, one of the world’s largest cryptocurrency exchanges.

This cautionary measure comes as a response to a previous circular issued against a fraudulent company that was illegally using the Binance brand.

On July 28, the SEC released a statement advising against investing with Binance, citing the absence of a valid license for operations in the country, thereby rendering its activities illegal.

The commission also emphasized the substantial risks associated with investing in cryptocurrencies, highlighting the potential for significant financial losses:

“Any member of the investing public dealing with the entity, making such solicitation is doing so at his/her own risk.”

This is not the first time the SEC has taken action against Binance.

In June, the commission published a similar circular, limiting the activities of Binance Nigeria, which was proven to be a fraudulent entity unaffiliated with the legitimate Binance exchange.

In response, Binance issued a cease and desist notice to Binance Nigeria.

READ MORE: SEC Chairman Gary Gensler Raises Alarm Over Widespread Fraud in Crypto Market

It’s worth noting that Nigeria has maintained a cautious approach to the crypto industry, despite its efforts to promote the central bank digital currency (CBDC), known as the eNaira, which was launched in 2021.

However, adoption rates of the eNaira have fallen below expectations, leading the central bank to explore options to boost its usage.

In July, the CBDC system was upgraded with near-field communication technology, enabling more convenient and secure contactless payments.

Furthermore, starting from May 2023, Nigeria implemented a 10% tax on gains from the sale of digital assets, including cryptocurrencies.

Local stakeholders criticized this measure as “premature.”

Cointelegraph sought further commentary from Binance regarding the SEC notice, but no additional statements have been provided at this time.

As for Binance and other unregistered platforms, the SEC demands an immediate cessation of services in Nigeria.

The regulatory body is determined to safeguard local investors and uphold the legality of financial activities within the country’s borders.

Other Stories:

Liquid Staking Tokens Poised to Dethrone Ethereum’s Ether (ETH) as Dominant DeFi Asset

Bitcoin’s Reduced Volatility Sparks Anticipation for Exciting Long-Term Bull Signal

BNB Smart Chain (BSC) Hit by Copycat Attacks

Binance, a major cryptocurrency exchange, has achieved a significant regulatory milestone in its relationship with authorities in the United Arab Emirates (UAE) by obtaining a new license in Dubai.

The license was granted to Binance’s Dubai-based subsidiary, Binance FZE, by Dubai’s Virtual Asset Regulatory Authority (VARA) on July 31.

With this operational minimum viable product (MVP) license, Binance is now officially permitted to offer cryptocurrency exchange and virtual asset broker-dealer services in Dubai.

However, the services allowed by the license are currently limited to institutional and qualified retail investors within Dubai.

Eligible investors in the region can access authorized services, including crypto-to-fiat exchanges that comply with the guidelines set by the intergovernmental Financial Action Task Force (FATF).

To become a user of Binance in Dubai, an investor must hold the status of a “qualified retail client” and meet specific criteria.

This includes being at least 21 years old and having a net liquid asset value of 500,000 United Arab Emirates dirhams ($136,000), supported by relevant documentation such as bank statements and proof of funds.

Qualified investors also need to provide valid identification documents like passports, visas, and proof of a valid UAE address with contact details.

Binance’s Dubai entity can now offer a range of services, including crypto-to-fiat exchange and conversions, transfers and custody, brokerage, and virtual asset payments and remittance services.

This latest regulatory achievement for Binance builds upon the progression from the provisional MVP license issued by VARA in March 2022, as well as the preparatory MVP license obtained in September 2022.

READ MORE: Tech Firms Call on European Union to Support Open-Source AI in New Regulations

In April 2023, VARA requested more information from Binance about its business requirements, aiming to enhance regulatory standards in Dubai.

Binance complied with the request and expressed its willingness to cooperate further with VARA as they prepare for the next phase of licensing.

It’s worth noting that the preparatory MVP license previously granted by VARA only allowed exchanges to serve a restricted set of accredited investors.

This limitation was highlighted by some crypto exchanges, such as Bybit, earlier this year.

The news of Binance’s new license comes shortly after VAR suspended the operational license of another crypto exchange, BitOasis, for not meeting regulatory conditions within specified timeframes.

BitOasis is currently working with VARA to fulfill the remaining conditions.

Binance emphasized that VARA’s framework includes compulsory rulebooks related to general operations, compliance, and market conduct requirements.

Key highlights of these regulations were published by VARA in 2023.

As Binance moves forward with its operations in Dubai, it will continue to comply with the regulatory standards set by the UAE authorities.

Other Stories:

SEC Suffers Setback as Court Overturns Ruling on SPIKES Index Securities Classification

Margot Robbie’s Comparison of Bitcoin to Ken from Barbie Ignites Debate

Blockchain Could Save Financial Institutions $10 Billion by 2030: Ripple-FPC Report