Tag: Policy

US Judge Rejects Motion to Dismiss Fraud Case Made by Former OpenSea Employee

by Blockchain News

Nathaniel Chastain, former Head of Product at OpenSea has been denied the motion to dismiss the wire fraud case leveled against him by a Southern District Court in New York as reported by The Block.

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In a memorandum and order published in the week, District Judge Jesse Furman expressed his formal disagreement, denying the motion to dismiss the indictment, stating that the argument “is without substance.”

 

Chastain was indicted in May by a grand jury for allegedly misappropriating OpenSea’s business information under count one charge as regards which Non-Fungible Tokens (NFT) are going to be featured thus using the information to buy NFTs before they are featured on the company’s homepage.

 

The indictment claims that Chastain engaged in “insider trading” of NFTs from approximately June 2021 until approximately September 2021. More precisely, Chastain is accused of stealing from OpenSea, his employer, by using the company’s trade secrets.

 

Chastain’s Attorney stated in his filing to dismiss the case that NFTs are neither commodities nor securities and therefore Insider trading cannot arise in any way or circumstance if there is no connection to the financial markets.

 

He also highlighted that the necessary bitcoin movements from one personal digital wallet to another personal digital wallet do not and cannot be claimed by the government to constitute a “financial transaction” under the money laundering legislation. The indictment must therefore be dismissed due to the reasons stated above.

 

OpenSea in the Face of On-going Challenges

 

OpenSea has continued to thrive and develop its processes in spite of challenges that are being faced in the digital ecosystem.

 

In August, OpenSea, the largest marketplace in the world for trading NFT goods, made public its new rules dictating how stolen digital artwork and other types of theft are handled on its platform.

 

Opensea has recently introduced new functionality in its platform that allows users to bulk list and buy up to 30 products at once from the same chain in a cart before paying for them all in one transaction in a recent report.

Image source: Shutterstock

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OpenSea Introduces New NFT Theft Policy

by Blockchain News

OpenSea, the world’s biggest venue for trading Non-Fungible Token (NFT) items, has revealed its new policy governing the handling of stolen digital arts and general theft on its platform. 

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According to OpenSea, some of the users who bear the most brunt in the digital collectable world are those who buy stolen NFTs but have no fault whatsoever in the transactions. With its new policy, the trading platform said that some of the challenges it has been facing with respect to handling stolen NFTs can now be resolved.

OpenSea said its previous allowance to apply police reports only on escalated reports on stolen NFTs will no longer be the case, but rather, the police reports will be treated equally for all reports of NFT thefts respectively.

“Based on your input, we’ve already called to adjust elements of how we implement our policy. 1st, we’re expanding the ways we use police reports: we’ve always used them for escalated disputes, but they’ll now be used to confirm all theft reports,” the NFT marketplace said, adding that;

“For all reports going forward, if we don’t receive a police report within 7 days, we’ll re-enable buying & selling for the reported item. This change will help prevent false reports. We think this is a good 1st step & we’re grateful for the community’s suggestions.”

While hacking and funds looting is commonplace in the broader Web3.0 world, with some of the most concerning cases this year being the loot on Ronin Bridge and Nomad, NFTs are also incessantly being looted in several ways. OpenSea, the largest digital collectable trading platform presents a very good avenue for cyber criminals to discharge their stolen items.

To provide cross-bound protection for all of its users, OpenSea said it will enable NFTs reported as stolen to be resold 7 days after if police reports are not submitted to back up the claims. OpenSea also said it will reduce the process by which users who list an item as stolen can retract their claim and list the items for sales when recovered without needing a notary.

Image source: Shutterstock

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Will Cryptocurrencies Shatter The Monopoly Governments Have On The Creation Of Money?

by Forbes

If you want to see the future of cryptocurrencies, look at Turkey. Its currency, the lira, is plunging in value, down 40% against the dollar since September. The official inflation rate—which the Turks don’t trust—is 36% and rising. That’s why desperate people there are diving into cryptocurrencies. Bitcoin is highly volatile and has taken a hit recently, but Turkish buyers feel its long-term value is upward, as it has been since its inception.

What’s really interesting—and what should give central bankers everywhere pause—is that the favorite crypto in Turkey currently is Tether. Why? Because Tether is a “stablecoin,” a class of crypto that’s tied to a specific asset—in Tether’s case, the U.S. dollar.

A stablecoin, properly structured and transparent about the actual assets backing it up, will become an alternative to government money. Its very stability makes it usable for commercial transactions, especially ones involving long-term contracts.

Sensing just such a threat, Turkey’s government last year banned cryptocurrencies as a form of payment. But such prohibitions will ultimately fail. The attraction of cryptos is precisely that they avoid traditional banking and financial payment systems. People prize their speed and the privacy they offer from greedy governments.

When people don’t trust their domestic currencies, they find more trustworthy substitutes. That’s why the dollar, for all its troubles, is still preferred around the world to local junk currencies. Over half of all dollars in circulation are being used outside the United States.

The situation in Turkey is particularly instructive. Strongman Recep Tayyip Erdoğan’s central bank has been printing too many lira. The basic money supply in Turkey has increased 50% in the past year. Instead of cooling off the printing presses, Erdoğan has scapegoated food vendors, evil foreigners and others, while demanding that the Turkish central bank lower interest rates. Similar to governments for thousands of years, Turkey’s is attacking the symptoms, not the real causes, of its inflationary problems.

It’s no wonder that two-thirds of bank deposits in Turkey are denominated in foreign currencies, primarily the dollar and the euro. The fear is that a desperate government may seize those deposits and replace them with Turkish lira.

To shore up the beleaguered lira, Turkey this past December introduced a scheme whereby in special lira savings accounts the government would guarantee to make up any depreciation of the lira against the dollar. But again, Turks are increasingly skeptical of such government promises. Hence the growing move into cryptocurrencies.

Turkey is an extreme example regarding inflation. But the U.S. and other countries are also moving—albeit more slowly—in the wrong direction.

The process of stable cryptos challenging governments’ monopoly of money is just beginning.

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Cathie Wood Buys More Robinhood And Tesla, Tells Investors To Take ‘Advantage’ Of Volatility

by Forbes

Topline

Widely-followed stock picker Cathie Wood of Ark Invest, looking to bounce back as her funds continue to underperform, is using recent market volatility to buy the dip on big growth names like Tesla and Robinhood—both of which have seen shares struggle amid the wider sell-off in January.

Key Facts

The founder and CEO of Ark Invest purchased a total of 2.58 million shares of popular stock trading app Robinhood after the stock plunged to a record low of less than $10 per share on Friday following a dismal quarterly earnings report.

Wood purchased more than 2 million shares for her $12 billion flagship ARK Innovation ETF, with a total stake in Robinhood worth nearly $200 million, according to Morningstar data.

Robinhood is down nearly 70% since going public last year but Wood has continued to buy shares of the company since late October—when the stock plunged below its IPO price of $38 per share.

Another of Wood’s big trades in recent days: Adding to her position in Tesla for the first time since June 2021, buying roughly 55,000 shares—worth nearly $50 million—of the electric vehicle maker.

Tesla’s stock has fallen over 20% so far this year amid a wider selloff in growth and tech stocks, but Wood’s latest purchase may be a sign that she thinks shares are down to a more reasonably priced level.

Elon Musk’s electric vehicle outfit is Wood’s biggest holding in her flagship fund, making up about 8% of the ARK Innovation ETF—a position worth over $900 million, according to Morningstar data.

Surprising Fact:

The Ark Invest founder also sold 70,000 shares worth of Spotify on Friday, amid the latest controversy surrounding the company. Several artists have boycotted the music streaming platform in light of false Covid-19 claims spread on Joe Rogan’s podcast. Wood still holds a sizable stake in Spotify—it is one of her flagship fund’s top ten holdings—worth almost $500 million, according to Morningstar. 

Crucial Quote:

Amid the wider sell-off in tech stocks, Wood told investors last week that “innovation is on sale,” though she remained unswayed by the recent market swings. “We use volatility to our advantage,” she said. “We concentrate towards our highest conviction names and that tends to work very well as we go through these corrections.”

Key Background:

After rising to fame in 2020, with her flagship fund surging nearly 150%, Wood’s performance has since gone downhill. The ARK Innovation fund fell 24% in 2021—losing over a fifth of its value–while the S&P 500 was up 27%. So far this year, the fund is down another 20%. With the Federal Reserve tightening its monetary policy and preparing to raise interest rates, investors have largely dumped riskier growth stocks, with shares of tech companies particularly hard-hit. The Nasdaq Composite index subsequently fell into correction territory in January, more than 10% below its record highs last November.

Further Reading:

Robinhood Shares Plunge Amid Gloomy Revenue Outlook Just One Year After Meme Stock Mania (Forbes)

Cathie Wood Doubles Down On Growth Stocks After Fund Loses A Fifth Of Its Value In 2021 (Forbes)

Stocks Just Had Their Worst Month Since March 2020: January’s Wild Ride In 8 Numbers (Forbes)

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Elon Musk And The Other Billionaires Whose Fortunes Fell This Week As Tech Stocks Continue To Struggle

by Forbes

THE CHANGING FORTUNES OF THE WORLD’S RICHEST

The founders of Tesla, Oracle and Airbnb lost billions of dollars this week amid surging market volatility and continued pressure on tech stocks.

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espite several days of declines, stock indices finished the week slightly higher, offsetting some of this month’s widespread losses. But the market’s troubles look far from over. 

Many tech company CEOs and founders were unsurprisingly among the billionaires whose fortunes fell the most since the market close on Friday, January 21, according to Forbes’ calculations.

Leading the declines for the second week in a row: Tesla chief exec Elon Musk, whose fortune fell $22 billion after shares of his electric vehicle maker had yet another rough week, falling over 10%. Even though Tesla posted record profits after reporting quarterly earnings on Wednesday, investors focused on the company’s warning that supply chain issues may hurt growth in 2022. 

Musk also took to Twitter on Thursday to insult President Joe Biden, apparently in response to being snubbed at a White House forum for electric vehicle makers. Still the world’s richest person, Musk now has a net worth of $222.2 billion, according to Forbes’ estimates.

Oracle cofounder Larry Ellison, meanwhile, fell from fifth to eight richest in the world over the course of the  week as shares of his software giant sank more than 2%. Ellison, who owns about 35% of Oracle (and has pledged millions of his shares as collateral for loans), saw his fortune drop by $3.4 billion, to $109.2 billion, according to Forbes’ calculations. Shares of Oracle have been on a downward trajectory since last month, when the company confirmed it was planning to acquire medical records company Cerner for nearly $30 billion.

Other notable billionaires whose net worths fell this week include Airbnb CEO Brian Chesky and Roblox cofounder David Baszucki. Chesky, who cofounded the home rental company in 2008, dropped $1.1 billion to $11.3 billion, , as shares of Airbnb fell 9% this week. Meanwhile, shares of gaming company Roblox fell nearly 16% since last Friday, shaving roughly $700 million off of Baszucki’s net worth, which now stands at $3.9 billion, Forbes estimates.

Fourth quarter earnings season has so far failed to boost equities as some big name companies posted lackluster results. Combined with investor fears about the Federal Reserve’s tightening monetary policy and upcoming interest rate hikes, the stock market is now on pace for its worst month since March 2020. 

As government bond yields surge, investors have continued to rotate out of riskier growth and tech stocks, many of which have been among the hardest hit in the market’s wider sell-off. The  tech-heavy Nasdaq Composite, which is in correction territory after falling nearly 15% since the start of 2022, is on pace for its worst January ever—and its worst month overall since the financial crisis in October 2008

Other billionaires whose fortunes contracted this week: Coinbase CEO Brian Armstrong’s  net worth dropped around $600 million to $7.3 billion, as shares of his cryptocurrency exchange fell 7.5%. Spotify cofounder Daniel Ek similarly lost around $400 million—putting his net worth at $2.9 billion—as shares of his music streaming platform fell nearly 12% since last Friday.

The fortunes of Snap cofounders Bobby Murphy and Evan Spiegel,  declined by $350 million and $250 million, respectively. They’re now worth $6.4 billion and $6.2 billion, after Snap’s stock fell over 5% this week.

HERE’S HOW SOME OF THE WORLD’S RICHEST PEOPLE FARED THIS WEEK.

The net worth change is from close of markets Friday, January 21 to Friday, January 28.

NET WORTH | $222.2 BILLION, DOWN $22 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | TESLA

NET WORTH | $109.2 BILLION, DOWN $3.4 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | SOFTWARE

NET WORTH | $11.3 BILLION, DOWN $1.1 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | AIRBNB

NET WORTH | $3.9 BILLION, DOWN $700 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | ONLINE GAMES

NET WORTH | $7.3 BILLION, DOWN $600 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH| CRYPTOCURRENCY

NET WORTH | $107 BILLION, DOWN $500 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | FACEBOOK

NET WORTH | $6.6 BILLION, DOWN $400 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | TWITTER, SQUARE

NET WORTH | $2.9 BILLION, DOWN $400 MILLION

COUNTRY | SWEDEN

SOURCE OF WEALTH | SPOTIFY

NET WORTH | $6.4 BILLION, DOWN $350 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | SNAPCHAT

NET WORTH | $6.2 BILLION, DOWN $250 MILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | SNAPCHAT

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Robinhood Shares Plunge Amid Gloomy Revenue Outlook Just One Year After Meme Stock Mania

by Forbes

Topline

Shares of popular stock trading app Robinhood tumbled nearly 10% after the company reported fourth quarter earnings that failed to impress investors, while also issuing a grim revenue forecast for the start of 2022 as trading activity continues to slow down.

Key Facts

Robinhood’s stock, which fell nearly 7% to around $11 per share on Thursday, plunged another 8% in after hours trading following the company’s quarterly earnings report.

The popular stock trading app reported earnings which came in slightly below Wall Street expectations: For the fourth quarter, revenue fell slightly from $365 million to $363 million, while Robinhood’s loss of 49 cents per share was wider than the 45 cent loss expected by analysts, according to Refinitiv.

The trading platform’s total number of accounts grew from 22.4 million last quarter to 22.7 million by the end of 2021—though monthly active users fell to 17.3 million from 18.9 million in the previous quarter.

What particularly spooked investors, however, was Robinhood’s gloomy revenue forecast for the next quarter: The company anticipates revenue of less than $340 million—significantly less than the nearly $450 million expected by analysts, according to FactSet.

Transaction based revenues on Robinhood’s platform fell slightly to $264 million in the fourth quarter, with revenue from cryptocurrency trading accounting for just $48 million of that figure and down slightly from $51 million last quarter.

As of Thursday’s close, the stock is down more than 70% off its initial public offering price in July 2021, with shares falling more than 30% alone this month.

Big Number: $22 Billion.

That’s how much Robinhood has lost in market value since going public at a $32 billion valuation in July 2021. After recent stock struggles, the company now has a market capitalization of just $10 billion.

Surprising Fact:

With Robinhood shares at a new record low, cofounders Vlad Tenev and Baiju Bhatt both have both lost their billionaire status, according to Forbes. The pair first became billionaires in September 2020 after a private funding round valued Robinhood at $11.7 billion, by Forbes’ calculations.

Crucial Quote:

“Robinhood’s awful results highlight the several challenges the trading platform company currently faces, mainly a slowdown in user growth, as well as weaker retail trading activity in stocks and crypto,” according to Jesse Cohen, senior analyst at Investing.com. “With a current valuation of roughly $10 billion, Robinhood’s market cap still seems high… they haven’t done a good job of justifying its sky-high valuation and the market has punished the stock accordingly.”

Key Background:

Shares of Robinhood have fallen nearly 40%—to less than $15 per share—so far in 2022, continuing a downward trend in recent months. After a blockbuster start to last year—when a wild rally in meme stocks like GameStop and cryptocurrencies like Dogecoin helped spur massive growth for Robinhood, trading activity and account growth has substantially settled down. Robinhood’s stock plunged 10% after reporting lackluster earnings in October, in which the company warned that lower retail trading activity “may persist” into the end of 2021. The popular stock trading app had reported a steep revenue drop in quarterly revenue—from $565 million to $365 million, in large part due to a sharp decline in revenue from crypto trading on Robinhood’s platform.

Further Reading:

Robinhood’s Struggles Continue: Its Cofounders Are No Longer Billionaires, Shares Down 60% Since IPO (Forbes)

Robinhood Shares Plunge After A Decline In Crypto Trading Hits Earnings (Forbes)

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Binance Partners With Thai Billionaire’s Energy Giant To Set Up Crypto Exchange

by Forbes

Binance, the world’s largest cryptocurrency exchange, has teamed up with Sarath Ratanavadi’s Gulf Energy Development to look into setting up a digital asset trading platform in the Southeast Asian country. 

Gulf Energy said the agreement with Binance is a response to the “rapid growth” of Thailand’s digital infrastructure in the foreseeable future, according to the firm’s statement filed to the Bangkok stock exchange on Monday. The two companies will study the possibility of establishing a crypto exchange and related business in Thailand, Gulf Energy said. 

Binance described the collaboration as the “first step” in exploring opportunities in Thailand. “Our goal is to work with government, regulators and innovative companies to develop the crypto and blockchain ecosystem in Thailand,” the company’s spokesperson said. 

Gulf Energy, one of Thailand’s biggest power producers, has been diversifying its portfolio with investments into renewable energy, motorway projects and telecommunications. The company in October reached an agreement with Singapore’s telecom giant Singtel to develop a data center business in Thailand. It came months after Gulf Energy acquired more shares of Intouch Holdings, which owns Thailand’s largest mobile phone operator.

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Gulf Energy’s tie up with Binance marks the first time the company has ventured into the crypto industry, which serves to underscore the rising popularity of digital assets among the country’s residents. In November, Thailand’s oldest lender Siam Commercial Bank announced that it had acquired 51% stake in local crypto exchange Bitkub for 17.85 billion baht ($538.7 million). 

The crypto boom has also attracted the attention of Thailand’s financial authorities who recently stepped up scrutiny of the nascent industry. The nation’s central bank said in December it was considering rules that would regulate the usage of cryptocurrencies as a mean of payments. The move is said to be aimed at controlling the risks digital assets might bring to financial stability and also provide some safeguards for investors. 

Binance has already run into trouble with the Thailand’s regulator. Last July, the Securities and Exchange Commission of Thailand filed a criminal complaint against the crypto giant for operating without a license. The offence carries a penalty of two to five years imprisonment and a fine of up to 500,000 baht. Binance said earlier that the platform had not been actively soliciting users in Thailand. 

Binance was established in 2017 by Changpeng Zhao and fellow cofounder He Yi, who together built it into the world’s largest crypto exchange by trading volume, according to CoinGecko’s ranking. Binance processed $2.3 trillion worth of bitcoin and other crypto assets in December alone, says market data researcher CryptoCompare.

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Turkey’s Soaring Inflation And The Future Of Cryptocurrencies

by Forbes

With the value of the Turkish lira plunging, people in Turkey are diving into cryptocurrencies. What this segment of What’s Ahead finds really interesting—and what should give central bankers everywhere pause—is that the favorite crypto in Turkey right now is Tether.  

Why? Because Tether is a stablecoin, which is a class of crypto that is tied to a specific asset—in Tether’s case, the dollar. A stablecoin, properly structured and transparent about the assets backing it, is ideal for commercial transactions. In other words, stablecoins will challenge the government monopoly on money. 

Turkey has banned cryptos for use as a form of payment. But such prohibitions will ultimately fail. 

While Turkey’s case is extreme, inflation is everywhere, and people will increasingly look for alternatives to government money.

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Steve Forbes

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Ontario Securities Commission Criticizes Binance for Incomplete Registration

by Blockchain News

The Ontario Securities Commission (OSC) of Canada stated that Binance has not yet obtained the legal operating qualifications for the province of Ontario.

In a statement on its website on Thursday, OSC condemned Binance for telling users on its platform that they have succeeded in continuing to operate in Ontario, but they have not yet registered under Ontario’s securities laws.

In the official statement issued by OSC, it read that:

“This is unacceptable. Binance has issued a notice to users, without any notification to the OSC.”

On Wednesday, Binance sent a memo to its users stating that the company has cooperated with regulators to ensure continued operations and that users in Ontario do not need to close their accounts before December 31, 2021.

Ontario is Canada’s most populous province. OSC stated in its statement that Binance “has no right to provide derivatives or securities transactions to individuals or companies in Canada’s most populous province” as Binance Group did not conduct any form of securities registration in Ontario, and this move is not compliant.

The committee listed the six encryption platforms that have been registered with OSC this year as follows:









Weathsimple

June 18

Coinberry

Aug. 19

Netcoins

Sept. 29

Coinsmart

Oct. 21

Fidelity

Nov. 16

Bitbuy

Nov. 15

The exchange stated on Thursday that there was “misinformation” and explained the incident:

“We did not meet directly with the Ontario Securities Commission about our intentions, which was clearly an error that we are correcting. We will provide updated guidance to users as soon as possible.”

Binance has promised OSC to ensure that no new transactions will be made on its platform after December 31.

Image source: Shutterstock

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Binance Gains Regulatory Approvals In Bahrain And Canada To Provide Crypto Services

by Forbes

Binance, which runs the world’s largest cryptocurrency exchange, has been green lighted by regulators in Bahrain and Canada for its affiliates to operate in the two countries.

The company announced on Monday that it had obtained in-principle approval from Bahrain’s central bank to establish itself as a crypto-asset service provider in the island nation. 

Binance said it will still have to complete the full application process, which is expected to close in “due course.” If concluded, Bahrain would become the first country within the Middle East and North Africa (MENA) region to grant regulatory approval to a Binance entity. 

“The Central Bank of Bahrain has demonstrated leadership and forethought in addressing crypto as a future asset class,” said Changpeng Zhao, the billionaire founder and CEO of Binance. “The approval recognizes Binance’s commitment to comply fully with regulatory requirements and our broader commitment to anchor operations and activities in Bahrain.”

Zhao also announced on Twitter on the same day that a separate entity of Binance has been registered with Canada’s financial intelligence agency, the Financial Transactions and Reports Analysis Centre of Canada. The entity, named Binance Canada Capital Markets, will offer services that involve cryptocurrencies, foreign exchange and money transfers.

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The application and registration are part of Binance’s efforts to become a “fully regulated centralized” crypto exchange. The firm has been doubling down on compliance after drawing attention from financial regulators around the world over its decentralized corporate structure and lack of proper operating licenses. 

One of the significant measures Binance took is actively looking for a location to set up its formal headquarters. The company has reportedly been in talks with regulators in Dubai about basing its head office in the United Arab Emirates, according to Bloomberg.

Last week, Binance signed a cooperation agreement with the Dubai World Trade Centre Authority to form an international virtual asset ecosystem. The company has also named Richard Teng, the former CEO of Binance Singapore, as the regional head of Binance’s Middle East and North Africa unit.

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Bitcoin (BTC) $ 44,186.84 2.36%
Ethereum (ETH) $ 2,377.42 0.87%
Litecoin (LTC) $ 78.90 6.65%
Bitcoin Cash (BCH) $ 255.81 3.98%