Hydrogen Technology Corporation Settles Crypto Manipulation Lawsuit

Hydrogen Technology Corporation, a firm accused of manipulating the price of cryptocurrencies, has settled a seven-month-long lawsuit with the Securities and Exchange Commission (SEC) for $2.8 million. The SEC had filed a complaint against Hydrogen and its former CEO, Michael Ross Kane, in September, alleging that they manipulated the volume and price of the firm’s ERC-20 token, Hydro (HYDRO), by using its market maker, Moonwalkers Trading Limited.

On April 20, a New York District Court Judge ordered Hydrogen and Kane to pay $2.8 million in remedies and civil penalties. The payment comprises approximately $1.5 million in “disgorged” profits, which refers to gains made from unlawful conduct, as well as a penalty of more than $1 million. Additionally, Kane agreed to pay an individual fine of approximately $260,000, and the remaining amount is made up of prejudgment interest.

The SEC’s complaint alleged that Kane and Moonwalkers CEO Tyler Ostern worked together to manipulate the volume and price of Hydro’s token, following its distribution through airdrops, bounty programs, and direct-to-market sales in 2018. According to the complaint, Ostern sold the tokens in an “artificially inflated market,” which allowed Hydrogen to net more than $2 million in profit.

A day after the complaint was filed, Ostern settled the case for $41,000. Both Hydrogen and Kane are now bound by the conditions of the settlement, which prevents them from disputing the charges levied against them by the SEC.

As part of the settlement, Hydrogen and Kane are also prohibited from selling any additional cryptocurrency until the Hydro tokens have passed the Howey test and received further approval from the SEC. However, Kane is still permitted to participate in the wider cryptocurrency market, meaning he can still buy and sell crypto assets for personal gain.

The settlement of the lawsuit marks a significant win for the SEC, which has been cracking down on cryptocurrency-related fraud and misconduct. The case also serves as a reminder to cryptocurrency companies and their executives to comply with securities laws and regulations.

It is worth noting that the Howey test mentioned in the settlement is a legal test used to determine whether an asset is a security. If an asset meets the criteria of the test, it is considered a security and must comply with securities laws and regulations. This means that Hydrogen and Kane cannot sell any additional cryptocurrency until the SEC approves the Hydro tokens as a security.

In conclusion, the settlement of the cryptocurrency manipulation lawsuit brought against Hydrogen Technology Corporation and its former CEO is a significant development in the ongoing effort to regulate the cryptocurrency market. The settlement serves as a reminder to companies and their executives to comply with securities laws and regulations to avoid legal action by regulators.


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South Korea Grants Central Bank More Power Over Crypto

The Bank of Korea (BoK) has been granted increased power to investigate cryptocurrency service providers and issuers, as discussions on virtual asset legislation continue in South Korea. According to a report by The Korea Herald, the BoK will now have the right to scrutinize cryptocurrency-related businesses and request transaction data from digital currency operators.

The BoK has been in competition with the country’s financial regulator, the Financial Services Commission (FSC), over who should govern the regulation of the digital asset sector. While the BoK has expressed concerns over the financial stability risks associated with stablecoins, the FSC has warned that if the central bank governs crypto, it will send the message that digital assets have the same standing as traditional finance.

Despite the ongoing debate, the BoK’s right to request data from crypto exchanges has been confirmed by an official from the National Assembly’s Political Affairs Committee. The FSC will express its official position at a subcommittee meeting on April 25, which is expected to accelerate the rollout of South Korea’s virtual asset laws.

The South Korean government has been trying to push forward crypto legislation, but there have been arguments between the central bank and the FSC over who should control it. Democratic Party lawmaker Kim Han-gyu, who proposed the Crypto Assets Act, said that while the FSC admits it is necessary for the BoK to have the right to request data, it is refusing to include it in the bill.

The latest development means that both the South Korean central bank and its financial regulator will have increased power to investigate crypto operators and have full access to transaction data. This move follows several years of disagreement between the two institutions over crypto regulations.

The FSC has been active recently with enforcement actions against crypto companies and takes the same position as the United States Securities and Exchange Commission in that it considers crypto assets securities. South Korea’s Financial Supervisory Service, which operates under the FSC, announced the creation of an investigative body called the Digital Assets Committee in mid-2022.

In conclusion, the South Korean government is continuing its efforts to regulate the cryptocurrency sector. The Bank of Korea has been granted more power to investigate cryptocurrency-related businesses, and the Financial Services Commission is expected to accelerate the rollout of South Korea’s virtual asset laws. Despite disagreements between the two institutions, both will now have full access to transaction data and be able to investigate crypto operators.


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US Treasury Suggests Easier Oversight for Nonbank Financial Institutions

The US Treasury and a number of top financial regulators have suggested new rules to make it easier for the Federal Reserve to designate nonbank financial institutions as systemically important. This move would make it easier for the government to supervise and regulate these institutions. During a recent Financial Stability Oversight Council (FSOC) Council Meeting, Treasury Secretary Janet Yellen expressed concerns over the lack of supervision of nonbank financial institutions and their potential to cause wider financial contagion during periods of distress.

Nonbank financial institutions are entities that provide specific financial services but do not hold a bank license and are not insured by the Federal Deposit Insurance Corporation (FDIC). This includes venture capital firms, crypto companies, and hedge funds. Yellen noted that the existing guidance issued in 2019 created inappropriate hurdles during the designation process for nonbank status for major financial firms, a process that currently takes up to six years.

Yellen added that the new guidance measures would remove these hurdles and streamline the designation process for nonbank status. The new, shorter oversight and designation process will still allow regulators and institutions enough time to communicate and discuss specifics. The new guidance will replace the 2019-era rules with an analysis process where the council determines if “material financial distress at the company or the company’s activities could pose a threat to U.S. financial stability.”

Yellen also referred to the recent collapses of crypto- and tech-friendly banks such as Silvergate Bank, Signature Bank, and Silicon Valley Bank, which caused the worst banking crisis since 2008. She reassured both investors and everyday citizens that the US banking sector remains robust and secure. Yellen warned that the recent banking crisis is a clear example of why greater oversight and emergency provisions should be granted to FSOC and the Federal Reserve.

In rewriting the article, it’s important to note that the US Treasury’s recent proposal to ease oversight of nonbank financial institutions is not an isolated event. Rather, it is part of a larger effort to reform financial regulations in the US. This effort began following the 2008 financial crisis, which exposed weaknesses in the regulatory framework that governed the US financial system.

One of the key pieces of legislation that emerged from this effort was the Dodd-Frank Wall Street Reform and Consumer Protection Act. This act created the FSOC, a council made up of the heads of the major US financial regulatory agencies. The FSOC was charged with identifying and addressing threats to US financial stability, including those posed by nonbank financial institutions.

The 2019-era rules that Yellen referenced were put in place to make it more difficult for the FSOC to designate nonbank financial institutions as systemically important. The designation comes with a number of regulatory requirements, including higher capital buffers and more frequent stress tests. Nonbank financial institutions argued that the rules were overly burdensome and unnecessary.

However, Yellen and other regulators argued that the 2019-era rules created too many hurdles and slowed down the designation process. They also pointed out that nonbank financial institutions were playing an increasingly important role in the US financial system and needed to be subject to greater oversight.

The new guidance proposed by the US Treasury and other regulators seeks to strike a balance between the need for oversight and the concerns of nonbank financial institutions. The guidance would create a more streamlined designation process that still allows for enough time for regulators and institutions to communicate and discuss specifics.


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WEF Promotes Eco-Friendly Crypto Mining Firm Crusoe Energy

The World Economic Forum (WEF) recently shared a video promoting the efforts of Crusoe Energy Systems, a Colorado-based cryptocurrency mining firm that has been recognized for its eco-friendly practices. The video focuses on Crusoe’s innovative approach to reducing flaring, a process where large amounts of gas are wasted during oil production or from decomposition.

In the video, Chase Lochmiller, CEO and co-founder of Crusoe, explained that the company builds and operates modular data centers that are co-located with waste energy sources to use wasted methane streams to generate power. This enables the production of ultra-low-cost computing infrastructure by utilizing stranded energy sources that would otherwise go unused.

Despite the prominent imagery of what appears to be cryptocurrency mining facilities presented throughout the video, it never directly addresses what is actually happening. However, several crypto industry figures, including MicroStrategy co-founder Michael Saylor, praised Crusoe’s efforts and recognized the environmental benefits of their approach to mining.

Kristine Cranley, a director at the advocacy group the Texas Blockchain Council, pointed out in a tweet that the video didn’t once mention “the b word”: Bitcoin. However, it’s worth noting that Crusoe Energy Systems did expand its Bitcoin mining assets through the acquisition of Great American Mining (GAM) in October 2022, adding over 10 megawatts to its mining output, along with approximately 4,000 application-specific integrated circuit (ASIC) crypto-mining rigs.

Crusoe Energy Systems’ innovative approach to cryptocurrency mining has not gone unnoticed, as they recently partnered with the government of Oman in June 2022. Oman exports 21% of its gas production and seeks zero gas flaring by 2030. Crusoe will open an office in Oman’s capital city of Muscat and install its equipment for capturing gas waste at well sites to use as computing power for crypto mining.

It’s worth noting that the WEF has previously expressed concerns about the environmental impact of Bitcoin’s current consensus mechanism and has advocated for changing its code to proof-of-stake. Some users have suggested that the WEF’s failure to directly mention cryptocurrency mining in the video is due to their previous stance on the issue.

Despite the lack of direct mention of cryptocurrency mining in the WEF video, Crusoe Energy Systems’ approach to mining is an excellent example of how technology can be utilized to reduce waste and promote sustainable practices. Their innovative use of waste energy sources to power their mining facilities is not only beneficial for the environment but also serves as a reminder that the crypto industry can play a significant role in promoting eco-friendly practices.


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Grimes Offers to Split Royalties with AI-Generated Music Creators

The rise of artificial intelligence (AI)-generated art has created a stir across various industries, and while some have highlighted concerns around copyright infringement issues involving AI-generated art, not all artists are against the fusion of AI and their intellectual property.

One such artist is Canadian musician and producer Grimes. In a recent tweet, she announced that she would treat AI creators using her voice the same as other artists she collaborates with. Grimes wrote that she would want to “split 50% royalties on any successful AI-generated song” that uses her voice.

Grimes has no label and, therefore, “no bindings” to any major entity in the music industry that could cause intellectual property rights issues. The artist continued to say that she finds it “cool to be fused with a machine” and that she is in favor of open-sourcing art, ultimately “killing copyright.”

Grimes mentioned that she is “curious” about what creators can do with the technology and is “interested in being a Guinea pig.” In the initial tweet, Grimes posted an article on the recent outcry surrounding AI-generated tracks of Drake and the Weekend, which have been floating around the internet.

However, not everyone is on board with the idea of AI-generated art. On April 13, music industry giant Universal Music Group sent an email to all major streaming services to block AI from accessing its catalogs for learning purposes. The company said it won’t hesitate to do what is necessary to protect its rights and those of the artists it represents.

Despite the concerns, Grimes believes that the fusion of AI and music is the future. In a separate statement, she revealed that she is creating a voice simulation program along with a team of developers, which will be made publicly available. She sees the potential for AI-generated music to lead to new and exciting sounds that were previously impossible to create.

However, AI-generated deep fakes utilizing images and voices of individuals are already causing major headaches and ethical concerns. Recently, a German tabloid used AI to generate a fake interview with the former Formula One driver Michael Schumacher. Concerns are even circulating within the companies producing the technology, after reports revealed Google employees’ worries over its forthcoming AI-chatbot.

The debate around AI-generated art and the implications it has for copyright and intellectual property is ongoing. While some are hesitant about its implications, others, like Grimes, are excited about the possibilities and are pushing the boundaries of what is possible with this emerging technology.


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Romania’s ICI Bucharest Launches NFT Trading Platform for Web3 Adoption

Romania’s National Institute for Research and Development in Informatics (ICI Bucharest) has set its sights on driving Web3 adoption in the country with the launch of its very own institutional NFT trading platform, ICI D|Services. This platform is set to go live on April 26, and aims to bridge the gap between private and public sector institutions and users through its NFT marketplace. Public and institutional users can now create, manage and trade their own unique NFTs on this platform.

For the past five years, ICI Bucharest has focused mainly on research and development. However, the growing interest and popularity of blockchain, Web3 and nonfungible tokens worldwide have prompted the institute to explore this area. According to Dr. Mihnea Gheorghe, Director General of ICI Bucharest, NFTs have gained significant traction in recent years due to their ability to create unique and scarce digital assets, which can be applied to numerous use cases. This has made them valuable assets for institutions, leading to the proposal of the NFT platform within ICI Bucharest in late 2021.

As a result, ICI Bucharest began developing and implementing the marketplace system’s architecture in partnership with MultiversX in mid-2022. This strategic project marks the first time the institution is working with the blockchain infrastructure provider.

By launching ICI D|Services, ICI Bucharest aims to support Web3 adoption in Romania and enable the country to embrace the opportunities offered by blockchain technology. The platform also seeks to create a link between institutions and users, promoting the growth of the NFT market and blockchain-based solutions in the region.

With ICI Bucharest’s new institutional NFT platform, Romania can expect to see a rise in interest and adoption of Web3 and blockchain technology. By providing a secure and reliable platform for NFT trading, ICI Bucharest is helping to pave the way for a more decentralized future.


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South Korean Court Clears Former Terraform Labs CEO of Security Violations

A South Korean district court has cleared former Terraform Labs CEO and co-founder Hyun-seong Shin of security violations in a ruling that is expected to affect how the country’s regulators treat cryptocurrencies. The court ruled that LUNA (LUNA), the native token of the LUNA ecosystem, is not a security under Korea’s Capital Markets Act.

The prosecution had accused Shin of fraudulent transactions that breached the Capital Markets Act and committed crimes involving property, making property confiscation a possibility. However, the southern district court in Seoul dismissed the appeal, stating that it is difficult to see Luna Coin as a financial investment product regulated by the Capital Markets Act.

The court’s decision is significant because it categorically states that Luna is not a security. Previous court rulings had used more cautious language, such as “there is room for dispute in terms of the law” and “it is questionable whether the Capital Market Act can be applied.” The latest ruling clarifies the regulatory status of LUNA and other native tokens in South Korea.

While rejecting the prosecution’s request for confiscation of Shin’s properties, the court noted that it is difficult to see that the property subject to the claim had been “acquired by a crime or an asset derived from it.” The ruling makes the Terra-LUNA saga a case of fraud and breach of trust rather than a violation of the Capital Markets Act.

Shin’s lawyer hailed the court’s decision, stating that Luna could not easily be considered an investment product based on the ruling. The court also rejected the prosecution’s requests for an arrest warrant for Shin and individuals associated with the case.

However, the prosecution is still focusing on the securities aspect of the native token and has appealed to the Supreme Court against the verdict of the lower district court. The case highlights the need for clear regulatory guidelines for cryptocurrencies in South Korea and other countries.

The judgment by the Korean district court is in contrast to the stance of the United States Securities and Exchange Commission (SEC), which has charged Terraform Labs and its founder, Do Kwon, with violation of securities law. Kwon’s lawyers have denied the SEC’s securities fraud allegations.

The Terra-LUNA case is closely watched by the cryptocurrency community as it raises important questions about the regulatory status of native tokens and the scope of securities laws. The South Korean court’s ruling is likely to have a significant impact on the future of cryptocurrencies in the country and beyond. As the regulatory landscape evolves, it is essential for companies and investors to stay informed and compliant with the latest laws and guidelines.


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KuCoin Twitter Hack Leads to Loss of Funds

In a recent incident, the official Twitter account of the cryptocurrency exchange KuCoin was compromised by hackers, resulting in the loss of funds for some users who fell victim to a fake giveaway event. According to KuCoin, the hack lasted for almost an hour on April 24, 8 AM ET. During this time, the attackers posted a fake activity on KuCoin’s Twitter account to lure users into thinking that they were participating in an official event. The exchange identified 22 transactions that were involved in the incident and promised to reimburse the victims.

KuCoin has urged the victims to contact them for assistance and promised to implement better security measures to prevent similar incidents in the future. The exchange is also collaborating with Twitter in conducting further investigations into the incident. Despite the unfortunate incident, some community members commended KuCoin for its quick response to the attack.

However, the KuCoin Twitter hack is just one of many incidents where hackers have taken over official Twitter accounts of crypto exchanges and NFT projects to promote scams. In September 2022, the Twitter account of the crypto exchange CoinDCX was compromised and used to promote fake XRP advertisements. Similarly, in January 2023, the Twitter account of the trading platform Robinhood was taken over by hackers who promoted a crypto token.

The incident involving KuCoin also highlights the need for better security measures in the Web3 space, particularly in nonfungible token (NFT) projects. In January 2023, the Twitter account of the NFT project Azuki was hacked, resulting in losses of $758,000 in just 30 minutes.

In conclusion, the KuCoin Twitter hack serves as a reminder for crypto exchanges and NFT projects to strengthen their security measures to prevent similar incidents from happening in the future. While KuCoin pledged to reimburse the victims and improve their security, it is important for other platforms to take proactive steps to protect their users’ funds and information.


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China expands digital yuan usage for cross-border trade

China is expanding the use cases for its central bank digital currency (CBDC), the digital yuan, also known as e-CNY, to promote cross-border trade in its Belt and Road initiative. The digital yuan was one of the first CBDCs to be developed and widely tested, with the government having expanded its testing parameter to include multiple cities and millions of people.

Xuzhou, a trade hub in Jiangsu province, plans to promote the use of e-CNY to pay for services and storage charges for goods carried by cross-border trains, according to a plan promoting the use of the Chinese digital currency in cross-border trade that was issued in the city. There are 18 regular cross-border rail connections from Xuzhou to 21 nations in Asia and Europe, making it an ideal location to pilot the use of e-CNY in cross-border payments.

The Hong Kong Monetary Authority (HKMA) is also testing the digital yuan as a cross-border payment tool in the Guangdong-Hong Kong-Macau Greater Bay Area. “The HKMA is working with mainland’s central bank, the People’s Bank of China, to test the digital yuan as a cross-border payment tool in Hong Kong,” said HKMA deputy chief executive Darryl Chan. The Chinese government hopes to improve efficiency and reduce the cost of cross-border transactions with these pilot projects.

Jiangsu province has been proactive in promoting digital yuan use cases, with Changshu, another city in the province, announcing that it will pay civil servants and people who work for public institutions using digital yuan. The Chinese government has ramped up its CBDC efforts at a time when the international trade markets are moving away from the standard U.S. dollar. Recently, China has completed multiple trade treaties with the likes of Russia and India based on their national currency over the U.S. dollar.

While the digital yuan has not yet been officially launched, the government’s efforts to test and expand its usage suggest that it is moving closer to a launch. The expansion of the digital yuan’s use cases for cross-border trade is part of a broader trend towards the digitalization of currencies, with other countries also exploring the use of CBDCs. China’s efforts in this area may give it a competitive advantage in the international trade markets, particularly as countries seek to diversify away from the U.S. dollar.

In addition to its use in cross-border trade, the digital yuan may also have implications for domestic payments in China. The Chinese government plans to use the digital yuan to reduce its dependence on the traditional banking system and to increase financial inclusion for those who are currently unbanked. The success of the digital yuan could also help China to expand its economic influence in the Asia-Pacific region and beyond, as other countries adopt its use in cross-border trade and potentially even domestic payments.


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Binance Integrates AI Chatbot ChatGPT into Its Education Platform

In late November 2022, the artificial intelligence (AI) chatbot ChatGPT made headlines worldwide, sparking much opposition to the technology. However, despite the initial pushback, the technology has continued to gain traction and see growing implementations. The latest example of this is the integration of ChatGPT into Binance Academy, the education platform of cryptocurrency exchange and blockchain developer Binance.

On April 24, Binance announced the launch of its new AI-driven tool, the Binance Sensei, which uses machine learning to source answers from Binance Academy’s education platform to help users answer questions related to Web3. The tool is essentially an “AI-powered mentor” that users prompt with a specific question or keywords. In response, the Sensei provides a “concise, approximately 150-word summary” for each user.

Although the news has been received positively by many in the Binance community, some have questioned the idea of “allowing a robot to be our teacher.” The integration of AI in education has sparked concerns about the potential misuse of the technology.

Binance Sensei is not the first AI-based learning tool to be implemented in the cryptocurrency space. Industry giants such as Microsoft, Google, and Alibaba have all announced their own versions of ChatGPT. The technology is also finding a role in bringing more efficiency to the memecoin community.

However, the adoption of AI in various industries has also led to an increase in concern over the technology’s capabilities if left unchecked. Italy was one of the early adopters of a brief ban on the usage of the technology, while regulators across the European Union have decided to probe the AI-algorithms of BigTech companies.

Industry insiders speculate that there may be an upcoming regulatory crackdown on AI as it becomes more pervasive. In China, for instance, authorities are set to enforce mandatory security reviews for all AI services in the country.

In conclusion, the integration of AI chatbot ChatGPT into Binance Academy is another example of the increasing use of AI in various industries, including cryptocurrency. While the technology may provide many benefits, it is important to consider its potential consequences and regulate its use to prevent misuse.


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