Tag: Settlement

Breaking: Visa Expands Stablecoin Settlement On Solana

by Blockchain News

Visa Inc. (NYSE: V), a global payments giant, has announced the expansion of its stablecoin settlement capabilities, according to Blockchain.News, incorporating the Solana blockchain and initiating pilot programs with merchant acquirers Worldpay and Nuvei.

A Leap in Cross-Border Settlements

Visa’s latest move aims to modernize cross-border money movement by leveraging stablecoins like Circle’s USDC. The company has already conducted live pilots, transferring millions of USDC between its partners over both the Solana and Ethereum blockchain networks to settle fiat-denominated payments authorized via VisaNet.

By leveraging stablecoins like USDC and global blockchain networks like Solana and Ethereum, we’re helping to improve the speed of cross-border settlement and providing a modern option for our clients to easily send or receive funds from Visa’s treasury,

said Cuy Sheffield, Head of Crypto at Visa.

Building on Previous Success

In 2021, Visa initiated a pilot program with Crypto.com, making it one of the first major payment networks to test stablecoin settlement on the issuance side. The pilot was successful in leveraging USDC and the Ethereum blockchain to receive payments from Crypto.com for cross-border volume on their live card program in Australia.

Before the pilot, Crypto.com Visa cardholders faced a days-long currency conversion process and costly international wire transfers for cross-border purchases. Now, Crypto.com can send USDC directly to a Visa treasury managed Circle account, reducing both time and complexity.

Expanding to Merchant Acquirers

While Visa’s treasury operation continues to test receiving funds on-chain from multiple issuer partners, the new settlement options enable Visa to send funds on-chain to acquirers like Worldpay and Nuvei. These acquirers serve a diverse range of sectors, including blockchain and crypto economy merchants such as on-ramp providers, games, and NFT marketplaces.

Stablecoins like USDC are cutting-edge payments technology that can enable online businesses around the world to accelerate their growth,

said Philip Fayer, Chair and CEO of Nuvei.

Solana’s High-Performance Capabilities

Visa’s decision to add support for Solana was driven by the blockchain’s high performance, seeing 400 millisecond block times and averaging 400 transactions per second (TPS), with surges to more than 2,000 TPS during peak demand. This makes Visa one of the first major payments companies to directly utilize Solana for live settlement payments between its clients.

Future Outlook

Visa’s work with Worldpay and Nuvei represents a significant stride in embracing the innovative potential of digital currencies. With an eye towards an increasingly digital financial landscape, Visa is forging ahead with new partnerships, aiming to be at the forefront of digital currency and blockchain innovation.

Stablecoins Gain Traction in Traditional Finance

The move by Visa comes amid increasing signs that traditional financial institutions are embracing stablecoins. On August 7, 2023, PayPal (NASDAQ: PYPL) announced the launch of its U.S. dollar-denominated stablecoin, PayPal USD (PYUSD), as reported by Blockchain.News, aimed at transforming payments in web3 and digitally native environments.

Furthermore, Tether, the issuer of the largest stablecoin USDT, now ranks 22nd in U.S. Treasury Holdings, surpassing countries like Mexico, Australia, and Spain. Tether Holdings Limited released its Q2 2023 assurance opinion, revealing that its excess reserves have increased by approximately $850 million, reaching a total of $3.3 billion. The company’s operational profits for April to June 2023 exceeded $1 billion, marking a 30% increase quarter over quarter.

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Genesis Capital’s Settlement Disrupted by Creditors

by Blockchain News

Genesis Capital, a troubled digital currency company, has hit another roadblock in its settlement process, just two months after reaching an initial agreement with creditors. The company’s parent firm, Digital Currency Group (DCG), has issued a statement on Twitter announcing that Genesis has filed a motion for mediation due to renewed demands from creditors.

In February, Genesis Capital submitted a comprehensive settlement proposal to the bankruptcy court after reaching an “agreement in principle” with DCG and its creditors. Under the proposed restructuring plan, Genesis creditors were expected to recover 80% of funds lost due to the company’s collapsed operations.

However, DCG has now reported that Genesis creditors have raised their demands, significantly disrupting the ongoing court process. “While it is difficult to understand the rationale given the limited engagement from Genesis creditors since the February court filing, our understanding is that a subset of creditors have decided to walk away from the prior agreement,” DCG wrote.

The disruption has raised concerns about the timing of the settlement process, with some experts questioning whether the prolonged proceedings could harm the company’s chances of recovery. However, others have suggested that the additional mediation may ultimately help resolve outstanding issues and pave the way for a successful restructuring.

Genesis Capital’s struggles come amid broader uncertainty in the digital currency market, with many investors and companies grappling with regulatory challenges and price volatility. The company’s difficulties are particularly notable given its high profile in the industry; Genesis has been a leading provider of digital asset lending and borrowing services, with a portfolio of more than $15 billion in assets.

Despite these challenges, DCG expressed confidence in Genesis’ ability to weather the storm. “We believe that Genesis is well-positioned to continue to provide best-in-class digital asset services,” the company wrote. “We remain committed to working through these challenges in partnership with our creditors and the broader digital asset community.”

The case underscores the challenges facing digital currency companies as they navigate a rapidly evolving regulatory landscape and seek to establish themselves as viable players in the broader financial ecosystem. With Genesis’ future hanging in the balance, the industry will be closely watching to see how the settlement process unfolds in the coming months.

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Hydrogen Technology Corporation Settles Crypto Manipulation Lawsuit

by Blockchain News

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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Crypto Exchange BitMEX Reaches $100,000,000 Settlement With CFTC and FinCEN

by Dailyhodl

Crypto derivatives platform BitMEX says it has agreed to pay $100 million to resolve charges that were filed by US regulators in October of 2020.

BitMEX says it has settled with the U.S. Financial Crimes Enforcement Network (FinCEN) and the Commodity Futures Trading Commission (CFTC).

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According to the CFTC, a settlement was reached with five entities that were charged with running the BitMEX crypto derivatives platform.

The five entities are HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited.

“The order requires the BitMEX entities to pay a $100 million civil monetary penalty, and provides that up to $50 million of the penalty may be offset by payments the BitMEX entities make or are credited pursuant to a Consent to Assessment of Civil Monetary Penalty entered by the Financial Crimes Enforcement Network.”

The CFTC further states that its litigation against BitMEX founders Arthur Hayes, Benjamin Delo, and Samuel Reed will continue.

In the CFTC complaint filed on October 1st of 2020, the regulator accused BitMEX’s founders and entities of partially operating from the US and serving US customers.

“The CFTC complaint charged the entities and founders with operating the BitMEX platform while conducting significant aspects of BitMEX’s business from the U.S. and unlawfully accepting orders and funds from U.S. customers to trade cryptocurrencies, including derivatives on bitcoin, ether, and litecoin.”

FinCEN accused BitMEX of operating with inadequate anti-money laundering and customer identification measures.

“For over 6 years, BitMEX failed to implement and maintain a compliant anti-money laundering program and a customer identification program, and it failed to report certain suspicious activity.

From approximately 2014 through 2020, BitMEX allowed customers to access its platform and conduct derivative trading without appropriate customer due diligence – collecting only an email address and failing to verify customer identity.”

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BitMEX Agrees to Pay $100M in Settlements to the CFTC of the US

by Blockchain News

BitMEX has agreed to a Consent Order with the U.S. District Court for the Southern District of New York to settle charges levied by the Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN).

BitMex on the phone display

As revealed by the CFTC, the deal involves all the five companies that operate the BitMEX brand, and the settlement involves the payment of $100 million in a civil monetary penalty.

The charges on BitMEX in which its former founders and executives, Arthur Hayes, Benjamin Delo, and Samuel Reed, were also indicted, involves claims that the exchange allowed American residents to trade derivatives products without registering with the right agencies. The order also prohibits BitMEX from further violations of the Commodity Exchange Act (CEA) and CFTC’s regulations as charged.

“This case reinforces the expectation that the digital assets industry, as it continues to touch a broader pool of market participants, takes seriously its responsibilities in the regulated financial industry and its duties to develop and adhere to a culture of compliance,” said Acting Chairman Rostin Behnam. “The CFTC will take prompt action when activities impacting CFTC jurisdictional markets raise customer and consumer protection concerns.”

Per the press release, the Acting Director of Enforcement Vincent McGonagle noted that the deal with help reinforce the notion that “registration requirements and core consumer protections Congress established for our traditional derivatives market apply equally in the growing digital asset market.”

Authorities are particularly against the growing emergence of derivatives products in the nascent world of cryptocurrencies. Besides the claims that there are inherent risks in trading digital currencies, higher leverages have been noted to expose consumers to such risks. Exchanges are already treading on the path of caution, with outfits like Binance and FTX derivatives exchange already reducing their leverage to 20x from 125x.

The CFTC said its litigation with BitMEX is still ongoing, indicating that the settlement reached was just for the once embattled cryptocurrency exchange.

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Visa Allows USDC Payments on Ethereum

by Cryptobriefing

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Ripple and YouTube Agree on Settling for Lawsuit over XRP Scam Videos

by Blockchain News

Ripple CEO Brad Garlinghouse has revealed that the lawsuit Ripple has served Youtube with has been settled.

Ripple and YouTube Agree on Settlement over Lawsuit on XRP Scam Videos

Ripple sued YouTube last April over streams of running rampant on the social media platform that impersonated Garlinghouse. Fake XRP giveaway scams were promoted through the impersonation of the Ripple CEO. Per the official complaint, Ripple alleged that YouTube benefitted from crypto scammers’ videos, as revenue could be generated from the paid ads that played in between videos. Currently, Garlinghouse has addressed the lawsuit and revealed that both parties have agreed on settling. Per his official announcement:

“Last year, Ripple and I sued YouTube for failing to enforce its own policies by allowing fake accounts (impersonating my/Ripple’s verified accounts) to conduct XRP giveaway scams. We’ve now come to a resolution to work together to prevent, detect and take down these scams.”

Garlinghouse explained that with the rise in popularity of crypto, many social platforms have increasingly come to “acknowledge their role in allowing crypto scams to persist and recognize the need to be part of the solution.” He hinted that collaborations between different entities were crucial, as government bodies have increasingly been drawn towards the crypto industry and scrutinizing it for misdoings.

The exact terms of the settlement were not disclosed, but according to sources familiar with the talks, both parties have reached an agreement where they will collaborate to further the cause of cybercrime prevention.

Twitter suffers the biggest hack in its history

Garlinghouse is not the only one to have fallen victim to cryptocurrency scams. Last year, numerous social media accounts were compromised on Twitter in what was deemed the biggest hack the social platform had ever suffered in its entire history. A Bitcoin scam overtook Twitter. As a result, the social media accounts of numerous high profile-figures such as Elon Musk and Joe Biden were compromised, as hackers leveraged celebrity accounts to demand Bitcoin funds.   

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These Two Firms Want to Upgrade Crypto Infrastructure for Banks and Exchanges

by Coindesk

Announced Tuesday, METACO and Cobalt are launching a software-as-a-service (SaaS) offering that covers the full gamut of institutional trading requirements for digital assets. In short, it brings a combination of bank-grade custody and post-trade settlement to crypto. 

“There is very little institutional-grade infrastructure within digital, in fact, I’m gobsmacked at how little there is,” said Cobalt chairman Adrian Patten. “Also, I’ve noticed that in the crypto world, everyone concentrates on the coin, the crypto bit. They forget the dollar. Whether that’s from a risk management perspective, management of collateral, or settlement, that’s always the thing that holds them back.”

Specifically, the partnership involves integrating METACO’s institutional operating system for digital assets, SILO, with Cobalt’s interoperable FX and digital assets platform to offer a fully integrated end-to-end SaaS solution for the storage, limit allocation and intraday settlement of digital assets, per a press release.

“There’s a lot of friction in the market still,” said Seamus Donoghue, VP of sales and business development at METACO. “When you trade on exchanges or with counterparts in general, you have to pre-fund those positions. That’s capital intensive, there’s a counterparty risk there as well, and it’s just not a very efficient market.” 

Between them, the two firms have a hand in most of the major crypto banking plays happening in Europe right now. METACO is working on crypto custody with Standard Chartered, BBVA, DBS Bank and Gazprombank Switzerland. Cobalt is also involved with Standard Chartered, and has other projects in the pipeline involving the likes of ErisX and LMAX Digital. 

Cobalt’s Patten pointed out that banks and many regulated buy-side firms need certain processes and ways of doing things. “You can’t go settling a transaction on the back of emails. Which is what happens,” he said.

But it’s not just institutions looking for better digital asset trading infrastructure, many of the largest crypto exchanges are in talks with the firms too, Patten said.

“Over 75% of our pipeline is crypto firms looking to upgrade their processes,” Patten said. “They’re having massive increases of volume and volatility, and they realize you can’t carry on doing it in this way. We’re going to be signing a bunch of these firms up in the first quarter.”

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