Binance.US To Delist AMP following SEC’s Claim Token as Security

Binance.US, the U.S. arm of the world’s largest cryptocurrency exchange Binance, announced on Monday that it will delist the AMP token after the US Securities and Exchange Commission (SEC) described the token as a security.

Last week on July 21, the SEC identified nine crypto assets as securities, and the AMP token was one of them.

In a statement made on Monday, Binance.US said that the exchange always supports transparency while adhering to compliance with the directives of federal authorities.

The exchange stated that projects trading under its platform should continue to meet the listing standards based on the legally approved scope of the Digital Asset Risk Assessment Framework.

Binance.US said it will delist the AMP token “out of an abundance of caution” of potential enforcement by federal regulators.

The exchange disclosed it will close down deposits of Amp (AMP) and remove the AMP/USD trading pair from its platform on Aug 15. The exchange said the move follows the token’s mention in legal action from the SEC.

According to its blog post, Binance.US stated: “We believe that, in some circumstances, delisting an asset best protects our community from undue risk. We operate in a rapidly evolving industry, and our listing and delisting processes are designed to be responsive to market and regulatory developments.”

Binance.US said AMP is the only token of the nine mentioned in the SEC’s legal case trading on its platform. The exchange added that it may resume trading of AMP in the future on its platform, according to the regulator’s decision.

Implications of SEC Calling Coins Securities

On 21st July, The SEC brought insider trading charges against a former Coinbase (COIN) product manager and other two individuals. The regulator also mentioned nine cryptocurrencies as securities, with potential plans to charge the issuers and the exchange listing the so-called securities.

The designation of the nine cryptocurrencies as securities could have wide implications in the crypto markets. The designation means that the coins will be regulated as if they were a stock or a bond. The issuers of such tokens will also have to comply with the country’s securities laws to be able to offer the assets to investors within the US.

Such designations would make running a crypto exchange more expensive and complex. Furthermore, exchanges would face continuous scrutiny by regulators, which could lead to penalties, fines, penalties and, in the worst case, prosecutions if criminal authorities got involved. This could also mean losing future funding from investors who may abandon trading because of fear of increased compliance burdens and regulatory scrutiny.

And more implications are yet to come as SEC’s rulings are underlay.

In its simplest form, whether an asset is or is not a security under US rules is basically a question of how much such a token looks like shares issued by a firm raising money.

To determine that, the SEC applies a legal test from a 1946 US Supreme Court decision. Under that framework, the SEC can consider an asset as security if investors raise or pump in funds with plans to profit from the efforts of the company’s leadership.

In December 2020, the SEC filed a lawsuit against Ripple Labs Inc., for allegedly raising funds by selling the XRP digital token without registering it as a security.

The regulator claimed that the firm was funding its growth by issuing XRP to investors, betting its value would rise. The case is now a massive legal battle between the SEC and Ripple.

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Major Korean Exchanges Delisting Litecoin Subject to New Privacy Feature Concerns

Major crypto exchanges in South Korea, including Upbit, Bithumb, Coinone, Korbit, and Gopax, have announced their intention to delist Litecoin from their trading services subject to the new privacy-based MimbleWimble upgrade on the Litecoin blockchain.

The idea of delisting has been brewing for a while. On May 20, Litecoin developers activated a privacy-preserving protocol called MimbleWimble Extension Blocks (MWEB) on the cryptocurrency. The new MimbleWimble update has added a ‘confidential transactions’ feature to the Litecoin blockchain, allowing users to transfer coins while concealing transactional data.

But South Korean crypto exchanges have not been comfortable with the new upgrade because they have to comply with strict laws regarding privacy coins.

A few days later on May 23, Upbit and Bithumb informed investors about the risk associated with Litecoin following the MimbleWimble upgrades. The two exchanges referred to Korea’s Act on the Reporting and Use of Specific Financial Transaction Information, which mandates that cryptocurrency exchanges must comply with KYC and AML measures.

More further developments have continued to unfold. Upbit announced yesterday that it would delist Litecoin because of the anti-money laundering rules that require exchanges to record data on cryptocurrency transactions. Upbit stated that because of the nature of the Mimblewimble privacy protocol, it will not support Litecoin transfers and will remove the coin from its exchange.

Upbit further mentioned that it would halt trading of Litecoin on June 20 and give users one month’s notice to withdraw their funds.

Bithumb also announced yesterday that it will halt all Litecoin deposits from June 8 (that is yesterday). The exchange has given customers until July 25 to withdraw their Litecoin funds, after which it would not support such withdrawals.

Three other South Korean exchanges, namely Gopax, Korbit, and Coinone, have also made official announcements about delisting Litecoin transactions to their customers.

Exchanges Facing Tighter Supervision

South Korea is the third-largest market for cryptocurrency trades globally, coming in behind Japan and the United States.

South Korea’s crypto market first rose to fame in late 2017, when Bitcoin trading skyrocketed in popularity among ordinary citizens who looked to cash in on the virtual currency’s rising price. Since that time, crypto demand has remained so high in the country.

In recent months, Seoul has ramped up the control of its crypto industry to rein in illicit activities such as money laundering and tax evasion. Regulators view cryptocurrency as a risky financial activity among young retail traders.

In 2022, the government announced plans to introduce a crypto capital gains tax. Investors who make over $2,135 in trading profit are expected to face a 20% tariff.

Recently, South Korean financial authorities announced plans to enhance monitoring of local crypto exchanges and introduce legal safeguards in the industry. This came after hundreds of thousands of local investors fell victim to the collapse of the Terra stablecoin and its sister token, LUNA.

Authorities expect local exchanges to play their role properly. Exchanges that violate rules are held legally responsible for their actions.

Last month, the country’s Financial Services Commission (FSC) collaborated with the Financial Supervisory Service to enforce emergency inspections into local crypto exchanges, asking for data on the number of transactions and investors.

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OKCoin delists two Bitcoin forks over ‘malicious misinformation’ campaign

While the original Bitcoin rallies past a $1 trillion dollar marketcap, two forks of the world’s most popular cryptocurrency have instead lost a source of liquidity as crypto exchange OKCoin delists BSV and BCH. 

In a blog post today, OKCoin CEO Hong Fang explained the decision to delist as one focused on protecting investors from a “malicious misinformation war.”

Fang noted that the exhcange regularly reviews listed assets across a variety of metrics, “including ecosystem development and ethos” as well as “ethical or reputational red flags,” and that the two forks were removed following the most recent review. Given the “unique history and context,” however, the Fang writes that the company felt compelled to explain their decision.

“When the news hit that Craig Wright — the infamous self-proclaimed creator of Bitcoin and BSV supporter — was taking actions to enforce copyright claims on the Bitcoin white paper, we found ourselves facing a very uncomfortable dilemma,” the post read.

While Fang specified that the company believes “Bitcoin is an open software,” and both disagreements between individuals and hard forks are permitted in an open software context, ultimately “we are just having a hard time ignoring the malicious misinformation war waged by Craig Wright and other high-profile members of [the BCH and BSV] communities.”

“We view both factors as very destructive to Bitcoin — the cornerstone layer of our industry. Before we have a better way to both separate BSV from Wright’s attack on the open-source community, and to differentiate these two derivative protocols from the original Bitcoin on our platform, we feel more comfortable with removing them,” Fang concluded.

According to Coingecko, OKCoin is incorporated in the United States and trades $50 million daily, with BTC/USD accounting for 70% of that volume. Leading up to the announcement, BSV only accounted for $30,000 in volume and BCH $150,000, per Coingecko, both in the lower range of the 32 assets OKCoin offers. 

BCH has had an up-and-down year leading into the delisting. Earlier in the month, Dogecoin’s wild price surge pushed BCH out of the list of top-10 assets by marketcap, though in December of last year entrepreneur Kim Dotcom threw his weight behind the Bitcoin fork, calling a $3,000 price target per coin. BCH is up 70% on the year to $714.

BSV has had a rougher year by comparison, trading down 21% to $241. The coin has had some positive press recently, however: following an appearance by Jimmy Nguyen on Fox Business, some have speculated that the network booked the BSV advocate by mistake when trying to bring in an expert on the original Bitcoin.