Tag: Securities And Exchange Commission

Co-Founder of AirBit Club Sentenced to 12 Years for Cryptocurrency Ponzi Scheme

by Blockchain News

Key Takeaways

  1. Pablo Renato Rodriguez, co-founder of AirBit Club, sentenced to 12 years in prison.

  2. Rodriguez and co-defendants ordered to forfeit approximately $100 million in assets.

  3. Co-defendants await sentencing; previous involvement in pyramid schemes revealed.

Background and Conviction

Pablo Renato Rodriguez, co-founder of AirBit Club, was sentenced to 12 years in prison on September 26, 2023, by U.S. District Judge George B. Daniels. The sentencing was announced by Damian Williams, the United States Attorney for the Southern District of New York. Rodriguez was convicted for his role in orchestrating a global pyramid scheme through AirBit Club, a purported cryptocurrency mining and trading company. The co-defendants, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan, and Karina Chairez, have pled guilty and are awaiting sentencing.

Deceptive Practices

AirBit Club was founded in 2015 by Rodriguez and Dos Santos. They falsely promised investors guaranteed profits in exchange for cash investments in club memberships. The company was marketed as a multilevel marketing club in the cryptocurrency industry. However, no actual Bitcoin mining or trading took place on behalf of the investors. Instead, Rodriguez and his co-conspirators used the money for personal expenses and to finance more recruitment events.

Asset Forfeiture

Rodriguez and his co-defendants have been ordered to forfeit their fraudulent proceeds, which include assets consisting of U.S. currency, Bitcoin, and real estate currently valued at approximately $100 million.

Previous Legal Troubles

Before AirBit Club, Rodriguez and Dos Santos were sued by the Securities and Exchange Commission (SEC) for another pyramid scheme known as Vizinova, and paid $1.7 million in disgorgement and fines.

Upcoming Sentencings

Dos Santos, Millan, Chairez, and Hughes have pled guilty to charges including wire fraud conspiracy, money laundering conspiracy, and bank fraud conspiracy. They are scheduled to be sentenced in early October 2023.

Cryptocurrency Ponzi schemes are not uncommon in a world where regulatory oversight is still catching up. On September 28, 2022, the U.S. Attorney’s Office announced the eighth distribution of over $4 billion to victims of the Madoff Ponzi scheme, which was not cryptocurrency-related but serves as a reminder of the recurring nature of such fraudulent schemes.

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Thailand SEC Eases ICO Restrictions

by Blockchain News

Thailand’s Securities and Exchange Commission (SEC) has announced plans to ease restrictions on retail investments in initial coin offerings (ICOs) to boost digital investments in the country. In an official announcement on March 30, the regulator indicated its willingness to lift the limit of 300,000 baht ($8,800) for asset-backed ICOs per person, paving the way for more significant investments in real estate and infrastructure-backed ICOs.

The move comes amid growing interest in digital investments in Thailand, particularly in the real estate sector. The SEC’s decision to ease restrictions on retail investment is expected to encourage more participation from investors and promote greater innovation in the digital investment space.

Currently, ICOs in Thailand are only permitted for institutional and high-net-worth investors, who are required to meet strict criteria for investment. The SEC’s decision to expand the scope of retail investments in ICOs is a significant step towards greater inclusivity and accessibility in the digital investment space.

Thailand’s ICO market has been growing in recent years, driven by the government’s commitment to promoting digital investments and the country’s thriving tech startup scene. The government has been working to create a regulatory framework that supports the growth of the ICO market while protecting investors’ interests.

The SEC’s move to lift the restrictions on retail investment in asset-backed ICOs is expected to stimulate further growth in the sector. The regulator has been closely monitoring the ICO market and has taken steps to prevent fraud and protect investors. The SEC’s decision to ease restrictions is a positive sign for the ICO industry, indicating that the regulator is committed to promoting innovation and growth in the digital investment space.

In conclusion, Thailand’s Securities and Exchange Commission’s decision to ease restrictions on retail investment in ICOs is a significant step towards greater inclusivity and accessibility in the digital investment space. The move is expected to encourage more participation from investors and promote innovation in the sector. With the government’s commitment to promoting digital investments and the SEC’s efforts to create a supportive regulatory framework, Thailand’s ICO market is poised for further growth in the coming years.

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Signature Bank Under Investigation by US Government Bodies

by Blockchain News

Signature Bank, a cryptocurrency-friendly bank, is reportedly under investigation by two United States government bodies over concerns that it did not take adequate measures to detect potential money laundering by its clients. According to a Bloomberg report on March 15, investigators with the Justice Department were examining whether Signature was taking preemptive measures to monitor transactions for “signs of criminality” and properly vetting account holders. A separate probe by the Securities and Exchange Commission was also “taking a look” at the bank, although details regarding the nature of the SEC’s probe were not reported.

The investigations may have contributed to the recent decision by New York state regulators to close the bank, although it is unclear when the investigations began and what effect, if any, they had on the closure. Signature and its staff are not accused of wrongdoing, and the investigations may be finalized without any charges or further action taken by the SEC or the Department of Justice.

The report comes after a class action lawsuit was filed by Signature shareholders on March 14, alleging that the bank and former executives claimed to be “financially strong” just three days before it was forcibly shuttered. Barney Frank, a former board member of Signature Bank, has claimed that the regulators wanted “to send a very strong anti-crypto message” and that the bank became the “poster boy” for this message, despite there being “no insolvency based on the fundamentals.”

Signature Bank was closed on March 12 as part of a series of bank closures that also included Silvergate Capital and Silicon Valley Bank. The DOJ and the SEC have reportedly since initiated separate investigations into the collapse of Silvergate Capital and SVB. The regulators will examine the events leading up to the bank’s collapse, including scrutinizing security filings that disclosed the sale of SVB shares by the firm’s CEO Greg Becker and CFO Daniel Beck that took place two weeks prior to its downfall.

The SEC has not formally commented on the matters, but SEC chair Gary Gensler said on March 12 that it “will investigate and bring enforcement actions if we find violations of the federal securities laws.” The investigations into Signature Bank and other cryptocurrency-friendly banks highlight the increasing scrutiny of the cryptocurrency industry by regulatory bodies, particularly in the United States.

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Thai SEC Bars Crypto Staking & Lender Services after Zipmex’s Bankruptcy

by Blockchain News

Thailand’s Securities and Exchange Commission (SEC) on Thursday announced a ban on crypto firms from offering staking and lending services to investors in the country.

The move comes a few months after Thai-based crypto exchange Zipmex ran into financial difficulties due to a severe liquidity crisis following a sharp selloff in markets that started in May with the collapse of two paired tokens, Luna and TerraUSD.

Centralized crypto exchanges offer different staking and lending options, thus allowing customers to earn interest on their idle digital assets. But the Thai SEC has now imposed a ban that prohibits companies from providing such services.

According to the announcement, Thailand’s regulators held a meeting on September 1 and discussed the liquidity troubles facing several foreign crypto companies in the country.

Authorities, therefore, approved a decision to ban crypto firms from offering interest-based services to customers as a way to help safeguard investors from liquidity risks. The SEC also believes that the decision will clarify misconceptions surrounding the regulatory status of crypto staking and lending services.

Domino Effect When Crypto Collapsed

The collapse of a multibillion-dollar cryptocurrency called Terra caused a massive bloodbath in the crypto market in May. As a result, several crypto firms, mainly lending platforms, became bankrupt, thus making it impossible for customers to access their deposited funds.

From Celsius to Three Arrows Capital, several major industry players have lost massive funds to the 2022 crypto plunge triggered by the cascading effect of the LUNA/UST crash.

On July 20, Zipmex, a crypto exchange headquartered in Singapore, which also operates in Thailand, Indonesia, and Australia, suspended withdrawals, citing reasons “beyond its control” like volatile market conditions and the resulting difficulties of key business partners.

Although the distressed crypto exchange resumed partial withdrawals shortly after a temporary suspension, its actions caught the attention of Thailand’s authorities.

In late July, the Thai SEC quickly launched a probe into the exchange, seeking reasons for the suspension. Zipmex later said it had $53 million exposure to troubled crypto lenders Celsius Network and Babel Finance.

Celsius and Babel Finance are among several crypto players that have fallen into difficulties in recent months.

Thai watchdog worked with law enforcement to look into potential losses among the public after Zipmex suspended withdrawals.

The SEC also created an online forum to collect data from affected Zipmex customers to take legal action against the platform.

Last week, the SEC filed a police complaint against Zipmex and Akalarp Yimwilai, a co-founder of the company, and the CEO of its Thai unit, for failing to meet the deadline for sharing required transactional information.

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XRP gains 30% after Ripple gets permission to explain ‘fair notice defense’ vs. SEC

by Cointelegraph

XRP price rose by nearly 30% in less than a week amid positive sentiment around the court case, in which the U.S. Securities and Exchange Commission (SEC) claims that Ripple sold XRP as illegal securities.

SEC vs. Ripple

Judge Analisa Torres has granted Ripple permission to respond to the SEC’s Memorandum of Law in support of Motion to Strike fair notice defense, according to court documents.

Additionally, Judge Torres also ordered to unseal three documents concerning the SEC vs. Ripple case, including Ripple’s CEO Brad Garlinghouse’s email thread and deposition notice and founder Chris Larsen’s email string.

Markets received Judge Torres’s orders positively. Soon after they made it to the wire, XRP’s price rallied by almost 30%, rising from its Feb. 3’s lowest level of $0.058 to as high as $0.782 on Feb. 7.

The upside move picked momentum also as Jeremy Hogan, partner at law firm Hogan & Hogan, noted that the SEC vs. Ripple might be heading toward a verdict.

XRP “death cross” ahead?

The latest bout of buying in the XRP market also appeared as the token retested its multi-month support trendline, as shown in the chart below.

XRP/USD weekly price chart. Source: TradingView

XRP now faces a resistance confluence ahead in the form of its 20-week (green) and 50-week (red) exponential moving averages (EMAs). Meanwhile, the two moving averages look poised to form a “death cross” should the 20-week EMA cross below the 50-week EMA — a classic sell signal.

Nonetheless, a decisive, high-volumed close above the said EMAs may limit the selloff risks associated with the death cross. Moreover, an extended upside momentum may have XRP price retest its descending trendline resistance near $1.26, a 50% price increase from current levels.

Related: Ripple announces $200M share buyback and expresses optimism for 2022

Alexander Mamasidikov, the co-founder of crypto wallet service MinePlex, ignored the downside warnings, asserting that the end to a long-standing court battle between the SEC and Ripple would prove bullish for XRP.

“With the anticipation that the SEC-induced legal battle alleging the status of XRP as security will be settled this year, the current buy ups can be seen as an avenue to stack up at a discount for possible price surge in the longer term,” he said, adding:

“Should the current trend be sustained, XRP’s community’s ambitious backing can help push the cryptocurrency to hit a new monthly high of $0.88 per coin.”

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