New York Attorney General Letitia James Sues CoinEx

CoinEx, a cryptocurrency exchange, has been served with a lawsuit by New York’s Attorney General Letitia James, who contends that the company falsely represented itself as an exchange by failing to register as a securities and commodities broker-dealer in the state. James’s allegations can be found in the lawsuit.

James submitted a petition to the New York Supreme Court on February 22 that consisted of 38 pages, alleging that CoinEx “engaged in repeated and persistent fraudulent practices” and violated the state’s Martin Act, which is widely regarded as one of the strictest anti-fraud and securities regulation laws in the United States. The petition was filed in response to a previous complaint that CoinEx had violated the Martin Act.

In addition to this, she said that CoinEx was a marketplace that offered a variety of tokens, including Amp (AMP), LBRY Credits (LBC), Rally (RLY), and Terra, that qualified as “both commodities and security” (LUNA).

James noted in a statement that CoinEx is not registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission, “as is necessary under New York law,” in order to sell the tokens. James made this statement on February 22.

The Attorney General’s Office is said to have opened a CoinEx account using a computer and internet address situated in the state of New York and to have been able to engage in trading on the platform.

She went on to say that the days of cryptocurrency firms such as CoinEx behaving as if the regulations did not apply to them are gone.

In addition, the petition alleges that CoinEx did not comply with a subpoena that was sent by the Attorney General’s Office on December 22. The subpoena required CoinEx to “give testimony about the virtual asset trading operations of its platform.”

“CoinEx was compelled by subpoena to appear for an examination under oath on January 9, 2023, and failed to appear. CoinEx’s non-appearance is prima facie proof that CoinEx has engaged in the [mentioned] fraudulent practices.” [Citation needed] “CoinEx was compelled by subpoena to appear for an examination under oath on January 9, 2023, and failed to appear.”

James is seeking a court order to stop CoinEx from marketing itself as an exchange and preventing it from operating in the state by ordering it to geoblock internet addresses and GPS location data originating from New York. The petition can be found here. James is also seeking a court order to prevent CoinEx from operating in the state.


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Frax Finance has voted to fully collateralizing

The community behind the decentralized financial stablecoin protocol Frax Finance has agreed to completely collateralize its native stablecoin Frax (FRAX), putting an end to the network’s previous reliance on algorithmic support.

The governance proposal for FIP-188, which was first posted on February 15 and would reform the collateralization model of FRAX, has now attained a quorum, and according to a snapshot taken on February 23, 98% of those voting have voted in support of the plan.

According to what was said in the proposal, “the moment has come for Frax to progressively eliminate the algorithmic basis of the protocol.”

It was mentioned that the first protocol had a “variable collateral ratio” that changed dependent on the amount of demand there was for the stablecoin in the market. The market would determine the amount of collateral that must be deposited in order for one FRAX to be equivalent to one United States dollar.

The combination of the two models led to the stablecoin having an 80 percent backing by crypto asset collateral while also being partly stabilized by algorithms. This was accomplished by minting and burning its governance token, FXS, which has seen a price increase of 12% over the course of the previous twelve hours.

With a market value of slightly more than one billion dollars, Frax is the sixth most valuable stablecoin in the business.

As soon as the proposal is put into action, the protocol will stop minting any new FXS in an effort to reduce the amount of tokens available and to boost the collateral ratio.

To clarify, the implementation of this proposal does not need the minting of any FXS in order to meet the CR requirement of 100%.

It intends to keep the income generated through the protocol in order to finance the higher collateral ratio, which will involve suspending the repurchase of FXS.

Additionally, it will permit the purchase of up to $3 million worth of Frax Ether (frxETH) every single month in order to raise the collateral ratio. frxETH operates in a manner that is similar to that of a stablecoin, except it is anchored to Ether (ETH) instead. Within the context of the Frax ecosystem, it makes the transfer of Ether liquidity easier to do.

Recently, DeFiLlama published a report on the expansion of frxETH during the course of the previous month.

The decision was made in the midst of what looks to be a greater assault on stablecoins in the aftermath of the disastrous collapse of Terra and Luna that occurred a year ago.

On February 22, the Canadian Securities Administrators released a comprehensive list of additional conditions that must be met by crypto businesses and stablecoin issuers if they want to continue operating lawfully inside the borders of Canada.

The trading of stablecoins was subject to a stringent set of criteria, and algorithmic or non-fiat-backed stablecoins were expressly forbidden by the list in question.


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Chamber of Digital Commerce argues the SEC is overstepping its authority

In the insider trading prosecution that the United States Securities and Exchange Commission is now conducting against former Coinbase workers, the SEC has once again been accused of going beyond the scope of its power and incorrectly classifying cryptocurrencies as securities.

The U.S.-based Chamber of Digital Commerce argued in an amicus brief that was filed on February 22 that the case should be dismissed because it represented an expansion of the SEC’s “regulation by enforcement” campaign and seeks to characterize secondary market transactions as securities transactions. The Chamber of Digital Commerce argued that the case should be dismissed because it represented an expansion of the SEC’s “regulation by enforcement” campaign.

“This case represents a stealthy, yet dramatic and unprecedented effort to expand the SEC’s jurisdictional reach and threatens the health of the U.S. marketplace for digital assets,” wrote Perianne Boring, founder and CEO of the Chamber of Digital Commerce. “This case represents a stealthy, yet dramatic and unprecedented effort to expand the SEC’s jurisdictional reach.”

The Chamber emphasized that “the SEC’s encroachment into the digital assets market” was never authorized by Congress, and it noted that in other Supreme Court cases, it has been ruled that regulators must first be granted authority by Congress. The Chamber also highlighted the fact that the Supreme Court has ruled that regulators must first be granted authority by Congress.

On Twitter, the Securities and Exchange Commission (SEC) stated: “By operating without authority from Congress, [the SEC] continues to contribute to a chaotic regulatory environment, therefore endangering the same investors it is tasked to defend.”

The Chamber also argued that the SEC was essentially asking the court to uphold that secondary market trades in the nine digital assets mentioned in an insider trading case against a former Coinbase employee constitute securities transactions, which the Chamber suggested was “problematic.” The Chamber also argued that the SEC was essentially asking the court to uphold that secondary market trades in the nine digital assets mentioned in an insider trading case against a former Coinbase employee constitute securities transactions.

Perianne added, “We have serious concerns about the attempt by [the SEC] to label these tokens as securities in the context of an enforcement action against third parties who had nothing to do with creating, distributing, or marketing those assets.” “We have serious concerns about the attempt by [the SEC] to label these tokens as securities.”

In its brief, the Chamber made reference to the case LBRY v. SEC, in which the court decided that transactions using secondary markets would not be considered to be transactions involving securities.

The judge had been persuaded by a paper written by commercial contract attorney Lewis Cohen, which pointed out that no court had ever acknowledged the underlying asset was a security at any point since the landmark ruling in SEC v. W. J. Howey Co. — a case which set the precedent for determining whether or not a security transaction exists. The judge had been persuaded by the paper because it pointed out that no court had ever acknowledged the underlying asset was a security at any point since

The most recent amicus brief comes on the heels of a similar filing that was made on February 13 by an advocacy group called the Blockchain Association. That filing argued similarly that the SEC had exceeded its authority in the case and claimed that it was “the latest salvo in the SEC’s apparent ongoing strategy of regulation by enforcement in the digital assets space.”

An amicus curiae, sometimes known as a “friend of the court,” is a person or organization that is not directly engaged in a lawsuit but that may be able to help the court by providing pertinent information or insights. This person or organization may submit an amicus brief.

The Securities and Exchange Commission (SEC) filed a lawsuit in July against Ishan Wahi, a former Coinbase Global product manager; his brother, Nikhil Wahi; and an associate, Sameer Ramani, alleging that the three had used confidential information obtained by Ishan to make gains totaling $1.5 million from trading 25 different cryptocurrencies. The lawsuit also names Sameer Ramani as a defendant.


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Blockchain Association Rejects Court’s Securities Ruling on Private Blockchains

Following the decision of a federal judge to allow a lawsuit against Dapper Labs’ NBA Top Shot nonfungible tokens (NFTs) to go forward, the chief legal officer of the Blockchain Association stated that “it would be absurd” for a United States court to rule that digital assets on private blockchains are securities. This statement was made in response to the judge’s decision to allow the lawsuit to go forward.

U.S. attorney Jake Chervinsky issued a statement after a federal court refused a move to dismiss a 2021 lawsuit claiming Dapper Labs of marketing NFTs as unregistered securities. The ruling prompted Chervinsky’s comments.

Chervinsky was one of a number of attorneys who posted on Twitter to repeat that the judge’s rejection of the motion does not indicate that a decision has been reached about the complaint; rather, it just indicates that the lawsuit was “facially plausible.”

“The judge didn’t make any decisions at all. Because the securities allegations were at least “plausible,” an exceedingly low standard and not at all a final determination, he permitted the case to go beyond a request to dismiss it. He noted that this decision was not a final judgement at all.

“Putting this debate to the side for a moment, it would be completely ridiculous if every valuable digital object held on centralized databases was a security.”

According to his explanation, this would force every major video game producer, event ticketing site, travel rewards program, and so on to become publicly traded companies that are subject to regulation by the SEC.

Jesse Hynes, an additional attorney in the United States, weighed in on the move in a tweet on February 22. He said that motions to dismiss are “rarely ever successful” due to the fact that the plaintiff just has to allege sufficient evidence for the case to continue.

“The court concluded in the Dapper case that the plaintiff presented sufficient evidence showing, IF ALL THE ALLEGATIONS ARE TRUE, then there is a securities breach,” the judge said.

“Now we enter the phase of discovery in which we seek to uncover what the actual facts are. The attorney continued by saying that after that is finished, Dapper would most likely submit a move for a summary judgment.

The charges that Dapper Labs distributed the NBA Top Shot Moments NFTs on a privately-run blockchain were a “fundamental” component for the court’s decision to deny the motion to dismiss, according to another United States attorney by the name of James Murphy, also known as “MetaLawMan.”

As a result of this, MetaLawMan proposed that the fact that XRP (XRP) is issued on a public blockchain “could be considered a net positive” for Ripple in its case against the U.S. Securities Exchange Commission (SEC). This was prompted by the fact that this “could be considered a net positive” for Ripple.

Plaintiff Jeeun Friel initiated the class-action lawsuit against Dapper Labs in May 2021. In the complaint, Ms. Friel said that the defendant offered NFTs in the capacity of unregistered securities.

On February 22, Judge Marreo ruled against the plaintiff’s petition to dismiss the complaint. He said that the method through which Dapper Labs provides the NFTs has the ability to establish a suitable legal connection between investors and themselves, which fulfills the investment contract conditions outlined in the Howey test. This is the case because the Howey test was developed.

However, given that Marreo said that not all NFTs would constitute securities and that each case will need to be evaluated on a case-by-case basis, it is very doubtful that the eventual result of this case will set a precedent for NFTs.

In the 15 minutes after the termination, the price of the Dapper Labs-issued Flow (FLOW) token dropped by 6.4%, moving from $1.24 to $1.16. According to CoinGecko, the FLOW token has recently made a comeback and is now trading at $1.29.


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Celebrities asked to dismiss second amended complaint in class-action lawsuit

Kim Kardashian, Floyd Mayweather, and a number of other celebrities are attempting to persuade a court to reject an additional effort to hold them accountable for allegedly promoting EthereumMax (EMAX) without providing the appropriate information.

A second amended case from EthereumMax investors was filed in December 2022, and the celebrities urged a federal court in California to dismiss the complaint as frivolous. The defendants claim that the newly raised claims are an advancement of the “same fundamental notion” that the court had previously rejected.

The investors’ class-action complaint is based on the idea that the EthereumMax team collaborated with celebrities in order to engage in a scam that they refer to as a “pump-and-dump” scheme when it came to the sale of EMAX tokens to investors.

However, the defendant’s motion to dismiss the renewed complaint argues that the theory revolving around celebrities advertising the EMAX tokens to pump its price artificially was already rejected by the court due to the fact that the tokens do not have any value other than what the market is willing to pay for. The court stated that the theory was rejected because the tokens do not have any value other than what the market is willing to pay for. They penned the following in their paper: “The Court otherwise rejected the preceding complaint in its entirety due to basic deficiencies.” The remedy cannot be found in the inclusion of additional claims, defendants, or more than a hundred pages of accusations that are mostly unrelated to the situation.

In addition, the motion makes the suggestion that the investors’ current belief is that they maintained ownership of EMAX owing to the misrepresentations made by the celebrities. On the other hand, the investors “suffered no damage by just holding onto the tokens,” according to the argument that supports the move to dismiss the case.

While this is going on, Kardashian has already been penalized once for promoting EthereumMax on her various social media platforms. After failing to disclose that she received a payment of $250,000 to promote the cryptocurrency project, the United States Securities and Exchange Commission (SEC) and the American socialite reached a settlement agreement on October 3, 2022 that was worth $1.26 million. The agreement was reached on October 3.

The Securities and Exchange Commission (SEC) has just just issued a warning to celebrities who advocate cryptocurrency. When encouraging investment in stocks, celebrities are required by law to reveal how much money they are being paid and from whom it is coming, as was pointed out by the Securities and Exchange Commission on February 17th.


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DZ Bank to Integrate Digital Currencies Into Asset Management Services in collaborated with Turkish technology company

Together with the digital asset company Metaco, Germany’s second-largest bank by asset size, DZ Bank, will completely incorporate digital currencies into its asset management services. This endeavor will take place in the next months.

“With the offering we can build by using this technology, we trust that we can create a long-lasting and rapidly expanding business cooperation as well as an attractive solution for our customers that can also meet the requirements of digital currencies and decentralized financial instruments,” Christopeit added. “In addition to this, we believe that we will be able to meet the demands of digital currencies and decentralized financial instruments.”

Craig Perrin, who serves as the chief sales officer for Metaco, offered his thoughts on the relationship as well. The CEO conveyed the joy that the team has in providing assistance for the institutional products of DZ Bank. He said that the infrastructure provided by Metaco is purpose-built to provide assistance to organizations interested in adopting digital assets and taking part in the digital asset market. He continued by saying, “We are thrilled to announce this partnership as it further confirms Metaco as a market leader in Germany, and it has the confidence of some of the top banks and exchanges in the nation.”

In Germany, Metaco has been actively engaging with a wide variety of significant companies in the industry. The digital asset management platform made the announcement on February 9 about their relationship with the German DekaBank to establish a tokenization platform that is based on blockchain technology. The news indicates that the construction of the infrastructure is scheduled to take place in 2023, and it is possible that it will be made available in 2024.

The digital asset management platform worked with a Turkish carmaker and one of the most well-known local banks in the Philippines, in addition to Germany, which was the primary country involved. On January 10, Metaco entered into a partnership with the Turkish automotive technology firm Togg with the purpose of assisting Togg in securing its smart contract-based vehicle mobility services. The company was also instrumental in assisting UnionBank of the Philippines with the introduction of its custody and trading services for Bitcoin (BTC) and Ether on November 2, 2022. (ETH).


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Circle Plans to Increase Workforce by 15-25%

According to a report from The Wall Street Journal, the issuer of USD Coin (USDC), Circle, intends to boost its employment by 15–25% in 2023 despite the widespread trend of layoffs throughout the sector.

Circle is going against the grain of the business landscape by increasing its headcount at a time when the majority of companies in its sector are reducing their workforces in an effort to improve their financial situations.

The bitcoin business was responsible for 41% of all job losses that occurred in 2023. Polygon, Chainalysis, Bittrex, Huobi,, Coinbase, Gemini, Genesis, and Wyre are a few examples of major cryptocurrency companies who have reduced their workforce by a large amount.

The protracted crypto winter and various crypto implosions, which wiped billions of dollars off the balance sheets of several connected firms, were important contributors to the decision made by cryptocurrency corporations to reduce their workforces. However, these massive layoffs in the cryptocurrency business were not an isolated event. In the month of January, almost 48,000 employees were let off amongst just four companies: Google, Amazon, Microsoft, and Salesforce.

After postponing the launch of Circle to the public for a few months, the company has decided to hire more people to work on the project. In December of 2022, Circle and Concord Acquisition came to an agreement to mutually cancel their intentions to go public together. Concord Acquisition is a special purpose acquisition company (SPAC). The transaction was first reported to be worth 4.5 billion dollars back in July 2021, but it was then revised to be worth 9 billion dollars in February 2022 when Circle’s value increased significantly.

According to Jeremy Fox-Geen, Circle’s chief financial officer, the company has not abandoned its plans to go public; nevertheless, they are holding off until market circumstances improve. He went on to say that in order for public-market investors to reevaluate the prospects of companies dealing in digital assets, the cryptocurrency sector needs more time to pass after the collapses of Terra and FTX.

The stablecoin issuer had around 900 workers at the end of 2022, and there are plans to grow the number of staff by 135–225 in 2023. On the other hand, the expansion of the personnel is happening at a slower rate than it did in 2022, when the headcount more than doubled from 2021.

The USDC token, which is produced by Circle and presently has a market valuation of $42 billion, is the second biggest stablecoin behind Tether’s (USDT) token.


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Binance.US Could Be in Violation of Securities Law

Binance.plan US’s to buy over one billion dollars’ worth of assets that had belonged to the bankrupt cryptocurrency lending company Voyager Digital has been met with opposition from the United States Securities and Exchange Commission (SEC).

The Securities and Exchange Commission (SEC) is of the opinion, as stated in a document that was filed on February 22 with the United States Bankruptcy Court for the Southern District of New York, that certain aspects of the asset restructuring plan of Binance.US’ acquisition may violate securities law.

Formal inquiries have been opened by the Securities and Exchange Commission (SEC) into the possibility that Binance.US and other associated debtors violated anti-fraud, registration, and other requirements of the federal securities laws. The Securities and Exchange Commission expressed special worry on the safety of assets during the course of the intended purchase.

The SEC contends that the information provided in the planned purchase of Voyager assets does not adequately outline whether Binance.US or affiliated third parties will have access to customer wallet keys or control over anyone who has access to such wallets. The SEC’s argument is based on the fact that the information was provided in connection with the planned purchase of Voyager assets.

In addition, the lawsuit claims that inadequate measures have been provided to guarantee that user assets are not moved outside of the Binance.US platform. Additionally, the SEC contends that Binance.US has not stated its internal controls and processes that are designed to protect the assets of its customers.

The Securities and Exchange Commission (SEC) has requested that Binance.US address these concerns by providing information on who has access to client funds and the required controls after the transaction has been executed.

The first phase of Binance.strategy US’s and disclosure statement for its bid on Voyager is the primary focus of the SEC’s attention at this time. The U.S. regulator’s primary worry is that the firm will retain the right to sell bitcoins belonging to Voyager in order to distribute them to account holders. However, the company will not use this power.

On the other hand, “however, the Debtors (Binance.US) have yet to establish that they would be able to make such transactions in conformity with the federal securities laws.”

According to the petition, a number of different cryptocurrency transactions will need to take place in order to rebalance money before they can be redistributed to account holders. The SEC thinks that these transactions may violate certain provisions of the Securities Act.

The regulating body contends that the disclosure statement provided by Binance.US and the other debtors does not address the likelihood that these transactions violate any applicable laws. It is hypothesized that this possibility might have an effect on the estimated 51 percent of recovered monies that were distributed to Voyager account holders and claims.

In the filing, there is a footnote that discusses the possibility of Voyager purchasing and then selling certain digital assets in order to rebalance their asset holdings. The possible sale of Voyager Tokens (VGX), which were issued by Voyager, has been brought to the attention of the SEC because it “may constitute the unregistered offer or sale of securities under federal law.”

According to the SEC, there is a possibility that Binance.US is performing the functions of an exchange in violation of the laws that are currently in place under the Exchange Act. If this is the case, Binance.US is in violation of the law because it is not registered as a national securities exchange and does not have an exemption from these requirements.


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Music streaming platform Spotify expands its Web3 efforts

The music streaming giant Spotify is increasing its focus on Web3 by conducting trials of token-enabled playlists in a number of important locations.

On February 22nd, Overlord, a Web3 game platform, made the announcement that it will be partnering with Spotify. People who have Creepz nonfungible tokens (NFTs) on Spotify may now access the token-enabled community-curated playlist from Overlord by using their Web3 wallets. This feature was previously only available on Spotify. The playlists can only be unlocked by those who use Android and come from the United States, the United Kingdom, Germany, Australia, or New Zealand.

In addition, members of the Fluf, Moonbirds, and Kingship metaverse communities are taking part in the trial project for a period of three months. Although Fluf and Moonbirds have not disclosed any information on their partnership with the streaming service to the public, Kingship has stated on Twitter that it will be participating in a pilot. Users need to have a Kingship Key Card NFT in order to open the tracklist, which include popular songs from artists such as Queen, Missy Elliott, Snoop Dogg, and Led Zeppelin.

The news caused a significant increase in the number of Web3 music tokens. For instance, the value of Viberate’s (VIB) native token increased by 33 percent. The value of other tokens, such Audius (AUDIO) and Rhythm (RHYTHM), increased by 4% and 2.5%, respectively.

In May 2022, Spotify started conducting experiments using NFT galleries on the profiles of artists. The users were able to see the artists’ NFTs and then be routed to the OpenSea website where they could buy the things, despite the fact that there was no possibility for direct purchase on this platform.

One of the most rapidly developing industries for cryptocurrency use is still the music industry. A collaboration between the value-for-value podcasting platform Fountain and Zebedee was announced in the end of January. This cooperation would allow Bitcoin (BTC) micropayments for podcast listeners. The royalties rights to Rhianna’s popular song from 2015, “Bitch Better Have My Money,” were included in a collection of 300 non-functional tokens that were put up for sale in February.


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The Development of Blockchain Chips

The use of blockchain technology is on the increase, and the majority of businesses are investigating the technology in some form. As blockchain technology grows more widespread, users of all stripes will want access to the possibilities offered by this platform in the most effective manner possible.

The development of blockchain chips as energy-efficient accelerators is one of the measures that have been taken as a result of this. Chain Reaction, a blockchain chip business located in Tel Aviv, said on February 23 that it has funded $70 million in order to grow its technical staff in preparation for the development of its next chip.

According to Alon Webman, co-founder and CEO of Chain Reaction, the new chip will be a “completely homomorphic encryption” device. This kind of chip would allow the user to continue working on data even while the chip is in the process of encrypting it.

“Today, if you have data (which) is encrypted into the cloud, and in order to perform any data operation or data analytics, or do A.I., you need to decrypt the data,” said the researcher. “This is a must.”

He went on to explain that governments and big companies, such as the military industry, that may use cloud services but are now barred from doing so owing to worries about security.

“As soon as the data is encrypted, it is vulnerable to assault by a hostile person who may read it, steal it, or even modify it.”

A chip that is encrypted and also provides access to data that is encrypted might be helpful in this situation. According to Webman, Chain Reaction anticipates releasing that chip as soon as the year 2024 comes to a close.

According to Webman, Chain Reaction plans to begin mass manufacturing of its existing blockchain chip, Electrum, in the first quarter of 2023. This information comes from Webman. The chip was developed to facilitate hashing in a speedy and effective manner. Additionally, it has applications in the mining of several cryptocurrencies.

The software maker Intel also introduced a blockchain chip created by Nvidia in February 2022. This chip was meant to speed up energy-intensive blockchain operations that demand enormous quantities of computational power.

Additionally, Nvidia has a dedicated processor designed just for the mining of Ethereum.


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