US Judge Supports Government Bid to Quash Binance.US’s $1 Billion Deal

The US government’s bid to quash a $1 billion deal by Binance.US to buy the assets of Voyager, a bankrupt crypto lender, has received support from District Judge Jennifer Rearden. The judge stated that the government had a “substantial case on the merits” and promised to move quickly to settle the dispute, given that delays could cost as much as $10 million per month for the estate. This decision came after objections from the US Attorney, who argued that the contract effectively rendered Voyager immune by exculpating it from breaches of tax or securities law.

Earlier in March, U.S. Bankruptcy Judge Michael Wiles had approved the sale, but Judge Rearden put it on hold this week. In her further reasoning published on Friday, Judge Rearden appeared sympathetic to government arguments, saying that “the Exculpation Clause appears to go further than the quasi-judicial immunity doctrine allows.” The judge also noted that the government’s arguments have “gone entirely unrebutted” by Voyager and its creditors, neither of which has provided any authority for the proposition that a bankruptcy court can release criminal liability.

Binance.US’s bid to purchase Voyager’s assets for $1 billion has been embroiled in controversy, with the US government seeking to block the deal due to concerns about Voyager’s alleged breaches of tax and securities law. Binance.US is a cryptocurrency exchange that operates in the US and is a subsidiary of the larger Binance platform. Voyager is a crypto lender that filed for bankruptcy in February 2022 after facing regulatory issues.

The controversy surrounding the deal underscores the ongoing debate about the regulation of cryptocurrencies and related assets. While cryptocurrency advocates argue that the decentralized nature of these assets makes them immune to traditional forms of regulation, governments and financial institutions are increasingly seeking to impose greater oversight and control. The situation with Binance.US and Voyager highlights the complexities and challenges involved in reconciling these competing interests.

In addition to the issues related to the sale of Voyager’s assets, the case also raises broader questions about the role of bankruptcy courts in addressing criminal liability. Judge Rearden’s decision to put the sale on hold suggests that the court is taking seriously the concerns raised by the US government. The ultimate outcome of this case could have far-reaching implications for the regulation of cryptocurrencies and the legal responsibilities of companies operating in this space.


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US Government to Sell Seized Silk Road Bitcoin

The United States government has announced plans to sell more than 41,000 Bitcoin that were seized as part of the case against Silk Road creator Ross Ulbricht. The news comes from a filing submitted to the U.S. District Court for the Southern District of New York on March 31, which detailed the ongoing proceedings against James Zhong.

The U.S. government authorities have already begun liquidating roughly 51,352 Bitcoin (BTC) seized in the Ulbricht case. The filing reported that officials sold around 9,861 BTC for over $215 million on March 14, which leaves approximately 41,491 BTC remaining.

According to the court filing, “The Government understands [the Bitcoin] is expected to be liquidated in four more batches over the course of this calendar year.” It remains to be seen how the Bitcoin market will react to such a large influx of cryptocurrency hitting the market, but it is likely that this news will generate significant interest among investors.

Silk Road was an online black market that allowed users to purchase illegal goods and services using Bitcoin. The website was shut down by the FBI in 2013, and its creator, Ross Ulbricht, was arrested and sentenced to life in prison without parole in 2015.

The U.S. government’s seizure of the Bitcoin associated with Silk Road was one of the largest cryptocurrency seizures in history. At the time, the Bitcoin was worth roughly $1 billion, although its value has since increased significantly.

This announcement from the U.S. government is just the latest in a series of moves to regulate the cryptocurrency industry. Regulators around the world are increasingly concerned about the potential for cryptocurrencies to be used in illegal activities such as money laundering and terrorism financing. As a result, we can expect to see further scrutiny of the industry in the years ahead.

In conclusion, the U.S. government’s decision to liquidate the seized Silk Road Bitcoin is likely to have a significant impact on the cryptocurrency market. Investors will be closely watching the market to see how it reacts to such a large influx of Bitcoin, and regulators will be keen to ensure that the cryptocurrency industry is not used for illegal activities. We will continue to monitor this developing story and provide updates as they become available.


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Blockchain Association Rejects Court’s Securities Ruling on Private Blockchains

Following the decision of a federal judge to allow a lawsuit against Dapper Labs’ NBA Top Shot nonfungible tokens (NFTs) to go forward, the chief legal officer of the Blockchain Association stated that “it would be absurd” for a United States court to rule that digital assets on private blockchains are securities. This statement was made in response to the judge’s decision to allow the lawsuit to go forward.

U.S. attorney Jake Chervinsky issued a statement after a federal court refused a move to dismiss a 2021 lawsuit claiming Dapper Labs of marketing NFTs as unregistered securities. The ruling prompted Chervinsky’s comments.

Chervinsky was one of a number of attorneys who posted on Twitter to repeat that the judge’s rejection of the motion does not indicate that a decision has been reached about the complaint; rather, it just indicates that the lawsuit was “facially plausible.”

“The judge didn’t make any decisions at all. Because the securities allegations were at least “plausible,” an exceedingly low standard and not at all a final determination, he permitted the case to go beyond a request to dismiss it. He noted that this decision was not a final judgement at all.

“Putting this debate to the side for a moment, it would be completely ridiculous if every valuable digital object held on centralized databases was a security.”

According to his explanation, this would force every major video game producer, event ticketing site, travel rewards program, and so on to become publicly traded companies that are subject to regulation by the SEC.

Jesse Hynes, an additional attorney in the United States, weighed in on the move in a tweet on February 22. He said that motions to dismiss are “rarely ever successful” due to the fact that the plaintiff just has to allege sufficient evidence for the case to continue.

“The court concluded in the Dapper case that the plaintiff presented sufficient evidence showing, IF ALL THE ALLEGATIONS ARE TRUE, then there is a securities breach,” the judge said.

“Now we enter the phase of discovery in which we seek to uncover what the actual facts are. The attorney continued by saying that after that is finished, Dapper would most likely submit a move for a summary judgment.

The charges that Dapper Labs distributed the NBA Top Shot Moments NFTs on a privately-run blockchain were a “fundamental” component for the court’s decision to deny the motion to dismiss, according to another United States attorney by the name of James Murphy, also known as “MetaLawMan.”

As a result of this, MetaLawMan proposed that the fact that XRP (XRP) is issued on a public blockchain “could be considered a net positive” for Ripple in its case against the U.S. Securities Exchange Commission (SEC). This was prompted by the fact that this “could be considered a net positive” for Ripple.

Plaintiff Jeeun Friel initiated the class-action lawsuit against Dapper Labs in May 2021. In the complaint, Ms. Friel said that the defendant offered NFTs in the capacity of unregistered securities.

On February 22, Judge Marreo ruled against the plaintiff’s petition to dismiss the complaint. He said that the method through which Dapper Labs provides the NFTs has the ability to establish a suitable legal connection between investors and themselves, which fulfills the investment contract conditions outlined in the Howey test. This is the case because the Howey test was developed.

However, given that Marreo said that not all NFTs would constitute securities and that each case will need to be evaluated on a case-by-case basis, it is very doubtful that the eventual result of this case will set a precedent for NFTs.

In the 15 minutes after the termination, the price of the Dapper Labs-issued Flow (FLOW) token dropped by 6.4%, moving from $1.24 to $1.16. According to CoinGecko, the FLOW token has recently made a comeback and is now trading at $1.29.


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The Most Unworkable State Law

The cryptocurrency industry has recently criticised a bill that was recently proposed in the Illinois Senate due to its “unworkable” intentions to compel blockchain miners and validators to perform “impossible things.” One example of this would be undoing transactions if a state court ordered them to do so.

The Senate Bill was surreptitiously submitted into the Illinois senate on February 9 by Illinois Senator Robert Peters. However, it does not seem that the community was aware of it until February 19, when Florida-based attorney Drew Hinkes mentioned it in a tweet.

The bill, which would give the courts the authority to alter or rescind a blockchain transaction that was carried out through the use of a smart contract, would be given the title “Digital Property Protection and Law Enforcement Act,” and it would give the courts this authority in response to a valid request from the attorney general or a state’s attorney that is made in accordance with the laws of Illinois.

Any “blockchain network that executes a blockchain transaction originating in the State” would be subject to the act if it were to become law.

When it comes to blockchain technology and cryptocurrencies, Hinkes referred to the proposed legislation as “the most impractical state law” he has ever seen.

“This is a shocking about-face for a state that was previously supportive of innovation. Instead, he tweeted that the state had enacted “probably the most impractical state legislation relating to cryptocurrency and blockchain I have ever seen.”

According to the provisions of the law, miners and validators on the blockchain might be subject to fines ranging from $5,000 to $10,000 for each day that they disobey the instructions of the court.

Hinkes said that it would be “difficult” for miners and validators to comply with the measure suggested by Senator Peters, despite the fact that he acknowledged the need of passing legislation that would increase consumer protection.

Hinkes was also surprised to learn that miners and validators who worked on a blockchain network that “has not adopted reasonably available processes” to comply with the court orders would have “no defense” open to them.

The law also seems to dictate that “any person utilizing a smart contract to supply goods and services” must include code in the smart contract that may be used to comply with court orders. This code can be used to ensure that the terms of the smart contract are followed.

“Any person utilizing a smart contract to supply goods or services in this State should incorporate smart contract code capable of implementing court orders respecting the smart contract,” is the full text of the law.

Other members of the bitcoin community have replied with derision of the measure in a manner similar to what was previously said.

On February 19, the crypto analyst “foobar” remarked to the 120,800 people who follow him on Twitter that court-ordered transactions would need to be changed “without having the private key” of the participants, which he found to be “hilarious.”


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SEC panel votes in favor of proposal that may make it more difficult

By a vote of 4-1, a panel of the United States Securities and Exchange Commission (SEC) decided to approve a proposal that, if implemented, would make it more difficult for companies that deal in cryptocurrencies to act as custodians of digital assets in the future. This proposal could make it more difficult for companies to act as custodians of digital assets. There were five people on the panel altogether.

According to a statement that was issued by SEC Chairman Gary Gensler on February 15, the proposal, which has not yet been officially approved by the SEC, recommends amendments to the “2009 Custody Rule” that will apply to custodians of “all assets,” including cryptocurrencies. This rule will apply to custodians of “all assets,” including cryptocurrencies, according to the statement. The “2009 Custody Rule” would be updated to include these modifications.

According to Gensler, at the current moment there are a number of cryptocurrency trading platforms that are not in reality “qualified custodians” despite the fact that they are promoting the provision of custody services.

According to the Securities and Exchange Commission (SEC), a qualified custodian is typically a bank or savings association that is federally or state-chartered, a trust company, a registered broker-dealer, a registered futures commission merchant, or a financial institution that is located outside of the United States. In addition, a qualified custodian must be able to demonstrate that it meets the requirements of the SEC.

These custodians will be required to jump through additional hoops such as annual audits from public accountants, among other transparency measures, as part of the newly proposed rules. In addition, U.S. and offshore companies will be required to ensure that all custodied assets, including cryptocurrencies, are properly segregated in order to become a “qualified custodian.” These new rules were proposed by the Financial Stability Oversight Council (FSOC). To achieve the status of “certified custodian,” businesses based in the United States or abroad would further be required to guarantee the safety of any assets under their care.


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LidoDAO is considering selling or staking its $30 million

The decentralized autonomous organization that is responsible for Lido, which is the biggest Ethereum staking pool, is now debating whether or not it should stake the $30 million in Ether (ETH) that is currently in its treasury or sell it.

Steakhouse Financial, the financial arm of the DAO, put out a proposal on February 14 that examines four potential courses of action. One of these options is the possibility of the DAO staking some or all of its ETH to Lido in the form of Lido Staked ETH (stETH).

Another possibility involves the LidoDAO selling some or all of its 20,304 ETH in exchange for a stablecoin. This would be done with the intention of extending the DAO’s runway.

The suggestion comes at a time when ETH staking withdrawals will soon be possible via Ethereum’s Shanghai and Capella upgrades. According to the Ethereum Foundation, both upgrades are scheduled to take effect at some point in the beginning of this year.

Although changing the ETH to Staked ETH might result in an increase in the number of protocol awards, the DAO is mindful of the possibility that excessive staking could result in the organization not having sufficient Ether on hand “just in case.”

Steakhouse Financial said that in order to “preemptively secure more runway,” it may be required to exchange Ether for a stablecoin. This statement was made with reference to operational expenditures.

With the price of ETH fluctuating between $1,100 and $1,700 over the last few months, Steakhouse Financial observed that with LidoDAO’s current inflows at roughly 1000 stETH each month, the DAO is producing about $1.3 million to 1.5 million per month.

According to Steakhouse Financial, the numbers should be “sufficient to pay monthly operating expenditures” on their own.

However, they are currently considering whether or not it would be beneficial to convert their surplus of stETH into a stablecoin in order to better prepare themselves for any changes in market circumstances that may result in higher operational expenditures.


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SEC plans to propose new rule changes that could impact crypto firms

According to recent reports, the United States Securities and Exchange Commission (SEC) intends to propose new regulation changes this week that might have an effect on the kind of services that cryptocurrency businesses are permitted to provide their customers.

According to a report that was published on February 14 by Bloomberg, which cited “people familiar with the matter,” the securities regulator is working on a draft proposal that would make it more difficult for cryptocurrency companies to act as “qualified custodians” on behalf of their customers’ digital assets.

This might, in turn, have an effect on the many hedge funds, private equity companies, and pension funds who collaborate with cryptocurrency startups.

Those individuals who were quoted said that on February 15 a five-person SEC panel would decide on whether or not the plan will advance to the next level.

In order for the remaining members of the SEC to cast an official vote on the proposal, they will need to achieve a majority vote of three votes out of five. If the idea is accepted, it will be revised based on the input provided wherever required.

People who are aware with the situation have said that it is not obvious what particular modifications the United States Financial Watchdog is seeking. This is despite the fact that the SEC has been deliberating on what should be necessary to be a certified custodian of cryptocurrencies since March 2019.

According to Bloomberg, if the deal is confirmed, some cryptocurrency businesses may be required to relocate the digital asset holdings of their customers to another location.

According to the study, these financial institutions may be exposed to “surprise audits” on their custody ties or other ramifications. This information was included in the report.

After a story published on January 26 by Reuters said that the SEC may soon investigate Wall Street financial advisors over how they’ve given cryptocurrency custody to their customers, the news of the vote proposal that will be held on Wednesday comes as a surprise.

The Securities and Exchange Commission (SEC) has been quite busy in recent days dealing with Paxos Trust, the issuer of the Binance USD (BUSD) stablecoin. The SEC is of the opinion that Paxos Trust issued the cryptocurrency in the form of an unregistered security.

Paxos said that they were willing to “vigorously litigate” the matter if it came to it.


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Reversing Censorship on Ethereum

Since October 11, the proportion of Ethereum blocks that are compliant with orders made by the United States Office of Foreign Asset Control (OFAC) has decreased to its current level of 47%, which is the lowest level since that date.

The most recent achievement in the fight against censorship comes about two and a half months and one day after the proportion of OFAC-compliant blocks reached its all-time high of 79% on November 21.

OFAC-compliant blocks are ones that do not include any transactions that involve parties who have been blacklisted by the Office of Foreign Assets Control within the United States Treasury Department.

Those individuals who are opposed to censorship inside the Ethereum ecosystem may see a decrease in the number of compliant blocks as a victory.

According to a statement released by the blockchain consulting company Labrys, the originator of MEV Watch, the decline may be linked to more validators choosing to utilize MEV-boost relays that do not filter transactions in compliance with OFAC standards.

The majority of the shift in market share has been taken up by the BloXroute Max Profit relay, the Ultrasound Money relay, and the Agnostic Boost relay in particular.

MEV-boost relays play the role of trustworthy middlemen between block producers and block builders, which paves the way for Ethereum validators to delegate the construction of their blocks to third-party block builders.

The Chief Executive Officer of Labrys, Lachlan Feeney, issued a statement on February 14 in which he expressed his satisfaction with the manner in which the Ethereum community has reacted to the censorship problem ever since it first appeared during the Merge event.

He pointed out that the recent decline of censorship-compliant blocks was especially noteworthy since it was accomplished without the involvement of a user-activated soft fork (UASF). He made the observation that “many individuals” of the Ethereum community had requested the soft fork prior to the Merge in order to resist censorship.

“I am incredibly proud of the Ethereum community for the progress we have made with this issue,” said Feeney, adding: “When we released the MevWatch tool drawing attention to a flaw within Ethereum, the community did not stick its head in the sand but instead rose to the occasion and made significant progress addressing the issue.” “When we released the MevWatch tool drawing attention to a flaw within Ethereum, the community did not stick its head in the sand but instead rose to the occasion and made significant progress

However, as Feeney emphasized, “there is still a great deal more work to be done.”

On August 8, OFAC sanctioned wallet addresses that transact using the Ethereum-based privacy mixing technology Tornado Cash. These wallet addresses are associated with Ether (ETH) and USD Coin (USDC).

On September 16, during the first 24 hours of Ethereum’s new proof-of-stake consensus mechanism, just 9% of blocks were filtered by OFAC.

Nevertheless, this number shot up dramatically over the subsequent two months, reaching its highest point of 79% on November 21.

After then, the proportion of OFAC-compliant blocks stayed anywhere between 68 and 75% until the 29th of January, when it dropped to 66%. Since then, in spite of a few brief increases, it has been consistently going down.


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3 Website Operators Lured Romance-Seeking Victims Into Their Fraud

The New Jersey Bureau of Securities has issued a cease and desist order to the owners of three websites, instructing them to stop attempting to con people who are looking for love into investing in their fraudulent cryptocurrency scams. The order was issued in response to the New Jersey Bureau of Securities’ discovery that the owners of these websites were targeting people who were looking for love. The New Jersey Bureau of Securities made the finding that the websites were specifically targeting persons who were interested in romantic relationships, which led to the issuance of the order. The New Jersey Bureau of Securities conducted an investigation into the websites in question, and based on the results of that investigation, the agency made the decision to issue the order.

The orders to cease and desist were reportedly sent to the firms Meta Capitals Limited, Cresttrademining Limited, and Forex Market Trade, as stated in a press release that New Jersey Attorney General Matthew Platkin released on February 3rd. The office of the state’s Attorney General made the statement that was issued by Platkin available to the general public for viewing.

The three companies all pretended to be platforms for trading cryptocurrencies, and they convinced their customers that they would be able to significantly increase the amount of money that they had in their accounts if they simply replicated the actions taken by the “expert traders” employed by the companies. However, the customers lost all of their money because the companies were only pretending to be platforms for trading cryptocurrencies.

By contacting individuals who are using dating apps like Tinder to hunt for love connections, these organisations recruit fresh victims for a scam that is frequently referred to as “pig slaughtering.”

Con artists will contact prospective victims on social media, attempt to build a romantic relationship with them, and when they have gained the confidence of their victims, they will try to trick them into investing in a fake bitcoin investment plan. This kind of fraudulent behaviour that takes place online is referred to as “pig butchering,” and it has its own moniker.


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Billionaire investor Ray Dalio has described fiat currency as being in serious jeopardy

Ray Dalio, a billionaire investor, has said that fiat money is under “jeopardy” as an effective store of wealth, but he does not think that Bitcoin (BTC) and stablecoins will be the answer to the problem.

On February 2, the founder of the hedge fund firm Bridgewater Associates appeared on CNBC’s Squawk Box to discuss his concerns regarding the “effective money” status of the United States dollar and other reserve currencies as a result of the massive amount of money that has been printed using these currencies.

“We live in a world where the form of money that we are used to is under peril. We are creating too much money, and it’s not just the United States doing it; it’s all of the reserve currencies.”

Nevertheless, Dalio was quick to add his opinion on whether Bitcoin was a viable answer to the problem, noting that despite everything it has done in “12 years,” it is still too unpredictable to function as money:

“This is not going to be a productive use of money. It does not function very well as a means of storing riches. “He claimed that it is not a viable medium of trade since it is not efficient.

Stablecoins, which are replicas of state-backed fiat currency, were another kind of cryptocurrency that he thought was ineffective as a form of money.

Instead, Dalio recommended the introduction of a “inflation-linked currency,” which would help customers preserve their purchasing power in the face of rising prices.

“The item that comes the closest to that is something called an inflation index bond,” he said. “However, if you developed a coin that says OK, this is purchasing power that I know I can save in and put my money in over a period of time and trade in everywhere, I believe that would be a terrific coin.”

“Therefore, I believe that you are going to witness the creation of currencies that you have not seen before and that most likely will end up becoming coins that are both beautiful and viable. He continued by saying, “I don’t believe Bitcoin is the answer.”

On the other hand, Dalio’s assessment of Bitcoin and the practicality of an inflation-linked currency did not get widespread support from the financial community.


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Bitcoin (BTC) $ 43,965.78 0.33%
Ethereum (ETH) $ 2,255.54 1.24%
Litecoin (LTC) $ 73.53 0.14%
Bitcoin Cash (BCH) $ 246.93 0.35%