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Michael Saylor Supports Argument That Ethereum Risks Terra (LUNA) Like Collapse

Mark Brennan
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Michael Saylor Supports Argument That Ethereum Risks Terra (LUNA) Like Collapse

Saylor speaks against Ethereum again, supporting an argument that the DeFi King could crash as Terra did in May.



MicroStrategy founder Michael Saylor in a tweet yesterday, has thrown his weight behind an argument that Ethereum risked crashing like Terra.

The comments from Saylor came in response to a YouTube video from fellow Bitcoin maximalist Matthew R. Kratter. In the video shared with his 190k subscribers, Kratter argued that Ethereum’s proof-of-stake consensus mechanism makes it vulnerable to a Terra-like collapse. Kratter asserts while staked ETH protects the network, if prices drop lower and validators capitulate and pull out their stake in a protocol-level bank run, the network could effectively collapse.

“The lower Ethereum’s price falls, the more people will choose to unstake their coins, which further erodes Ethereum’s security and could lead to a death spiral,” Kratter wrote in the video description. “Regulators need to look into whether proof of stake protocols like Ethereum and Cardano are at risk of catastrophic implosions like Terra Luna.”

Saylor, in support, surmises Kratter’s arguments and describes PoS protocols as “inherently unstable, inefficient, opaque, and risky due to their fragile design.” In contrast, he touts Bitcoin as stable, strong, and increasingly secure. 

It is worth noting that it is not the first time the Bitcoin evangelist has thrown a jab at Ethereum and other altcoins. Instead, as highlighted by several users in the comments, the MicroStrategy chief has made a habit of doing so much to the irritation of Ethereum supporters. Saylor asserting that Ethereum is security, recently argued that the Ethereum staking contract constitutes an investment contract, urging the US Securities and Exchange Commission to “pretty much shut down all of it.”

The Bitcoin evangelist continues to champion the narrative that Bitcoin is the only “ethical” crypto asset and a superior inflationary hedge. On the back of this belief, MicroStrategy, under his administration, has made a $4 billion bet on Bitcoin, accumulating 130k BTC in about two years at an average price of over $30k. The billionaire remains unfazed despite the bet being over $1.6 billion in the red at current prices.

Unsurprisingly, his latest statements have attracted flak from the Ethereum community, with holders pointing out flaws in Bitcoin’s proof-of-work model or highlighting its lack of programmability. However, for maximalists, Bitcoin’s rarely changing code is a strength, not a weakness.

How To Remain Compliant With Data Privacy Regulators When You Are In the Crypto Industry

Andrew MacGill
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How To Remain Compliant With Data Privacy Regulators When You Are In the Crypto Industry

Since we live in the age of data privacy regulators, we must pay close attention to whether we remain compliant with them. Especially when dealing with crypto, it’s even more important to remain compliant with consumer data privacy laws.

The crypto industry is very anonymous and data collection differs from other industries. However, what do you need to adjust in your crypto marketing strategy to remain compliant? 

Let’s find out more in this article! 

Blockchains and cryptocurrencies

Cryptocurrencies and data privacy go together, and their security and encryption make the data unreadable to others without having the decrypt key, which returns the encrypted data to its original context. 

Once a transaction is performed in a blockchain, they are irreversible and can’t be deleted. This is a good sign and means corrupting the blockchain is nearly impossible. Data Subject Access Requests (DSAR) Is a data subject rights granted by the GDPR that gives individuals the right to access personal data from all organizations, so they can see if their data is being correctly processed and remaining compliant with privacy policy terms. 

Within a blockchain, the individual can view the cryptocurrency transaction in detail. Moreover, this gives you complete transparency to all cryptocurrency and blockchain transactions conducted on the public blockchain. However, it’s not the same story on a private blockchain because access is limited and only available to those with a private key. 

Persistent storage in the blockchain

Once a transaction is conducted on a blockchain, it can never be adjusted, deleted, or canceled. All the existing data remains unchanged. For example, if you buy something using Bitcoin or any other cryptocurrency, the entire transaction is already committed to the blockchain and can’t be reverted. 

A downside is that your cryptocurrencies can even get stolen or illegally transferred. Therefore, it’s never possible to revert these transactions. 

Data mapping

Especially when you are dealing with blockchains and cryptocurrencies, you need to consider using data mapping. Data mapping involves taking a set of data and mapping out its destination. Most organizations do this to make their data much more structured and accessible for their customers and internal team. Data mapping identifies personal and non-personal information within the system and gathers it into one place so you can easily track and protect it. 

Data mapping isn’t a requirement imposed by data privacy regulators but is an excellent way to respond to data subject access requests (DSARs) and create records of processing activities (RoPAs). 

In other words, data mapping is the roadmap to data compliance. Through your data mapping guide, you can continue further and build the rest. Understanding the data you are trying to collect within multiple databases and systems is always important. 

Think of it this way, a blockchain is much more complicated, so the last thing you want to happen is not knowing where your data is. If you don’t know about this, you won’t know about the threats and opportunities. 

Privacy policy implications

The GDPR, The Californian Privacy Rights Act (CPRA), and many other privacy policy regulators across the globe provide a document that grants users the right to have their personal information erased when needed. 

Mainly because you are in the crypto industry and transactions can’t be reverted, it’s even more important to conduct a privacy audit regularly to identify the key risks associated with consumer data and how to eliminate them. 

For instance, the GDPR asks you to confirm how data is transferred outside EU boundaries. With a website, it might not be too difficult to do so, but when it comes to cryptocurrencies, the story is more complex because nobody controls the blockchain’s host nodes. Overall, they can be located anywhere around the world. 

The GDPR and other privacy regulators claim that data privacy can be maintained by deleting unnecessary data, but it’s different in the case of a blockchain. 

How to remain compliant with privacy policies when dealing with cryptocurrencies

Privacy policies like the GDPR, CPRA, and others will affect what can be stored on the Blockchain. According to most privacy regulators, personal data shouldn’t be written to the Blockchain because they can’t be adjusted or erased after they’ve been written. Organizations creating cryptocurrency marketing policies should set up compliant policies (depending on where they live) and ensure they follow the procedures. 

Additionally, it’s never a bad idea to generate privacy policies either for doing so. Finding a solution to remaining compliant with privacy policies is not to store any personal data on the blockchain because you won’t ever be able to adjust or delete the data after. Instead, store personal data externally on the blockchain. 

Furthermore, we know the differences between blockchains and privacy policies, but there are many solutions you can use to remain compliant:

  • Consider using a software system that stores all transactional data within the blockchain. 
  • Your organization must comply with its local privacy regulator and the GDPR or CPRA (depending on your location). All personal information related to cryptocurrency transactions should be stored outside the blockchain but carefully monitored and highly secure. 
  • When using a software system to remain compliant with privacy regulators, the process starts with the software system sending a request for personal data. After the request is sent, it must be verified to view the data. Once the request is valid and verified, you’ll receive an authorization key from the software to access the data offline. 
  • The link granted by the software allows it to update personal information and delete it once requested, ensuring that it maintains compliance with privacy regulators. Especially when you are dealing with blockchain transactions, this is vital because you can’t erase the data, but the software allows you to find a solution. 
  • Regarding blockchain and crypto transactions, the software system can verify the data isn’t corrupted by comparing both the hash values of retrieved data and values provided by the blockchain. If both hash values match, the data privacy is confirmed valid and isn’t corrupted. 

Conduct a privacy audit

Before you go any further, read more about your local data privacy regulators and larger ones like the GDPR and CPRA. In order to conduct an effective privacy audit, you should clarify the following: 

  • Know the individual’s rights: Even though data can’t be deleted or altered in the blockchain, you need to know what kind of rights individuals have. The software system will store all transactional and sensitive data within the blockchain. This software system allows users to delete or access their data. However, the software system can’t access the data without sending a request and the authorization key. 
  • Brech management: You need to always have a backup plan in case a data breach occurs, but this is even more difficult to happen with cryptocurrencies. It’s not impossible, but highly unlikely. However, when dealing with cryptocurrencies, you want to ensure that the platform you are buying and selling cryptocurrencies is secure. It’s all about the platform and if it’s not widely used and has a bad history, it’s best to stay away from it. The most popular platforms used for buying and selling cryptocurrencies are Binance, Coinbase, Crypto.com, and Gemini. 
  • Data consent: Under privacy regulators, the consent should always be valid and up to date. Data privacy regulators like the GDPR also have additional consent requirements for children’s data processing. 

The risk of not complying with data privacy regulators

You may think that because you are in the crypto industry and because data and transactions are more anonymous, it might not be necessary to comply with data privacy regulations. However, all industries, including crypto, must comply with data privacy laws. Those who don’t will have to face large fines if they aren’t compliant. 

The only time you can get away with this is if the personal data stored on the blockchain is highly anonymized, which is very difficult to achieve. Otherwise, all the storage and process of the data must comply with data privacy regulations. 

Why should you remain compliant with data privacy regulations even though blockchains are anonymous?

We know that you can’t delete or alter data in a blockchain, but that never means you don’t need to stay compliant. For example, if you do business, it involves collecting and storing data. This also happens in the crypto industry because people use cryptocurrencies to make purchases and when a transaction is performed, it always gathers sensitive data. 

We mentioned before that the personal data stored within a blockchain needs to be hidden entirely so you do not have to comply with data privacy policies. Otherwise, it’s always mandatory and we dove deep into what needs to be done for you to remain compliant and avoid any fines. 

Nexera ID Brings Self-Sovereign Identity & Verifiable Credentials To Any Crypto Wallet

Andrew MacGill
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Nexera ID Brings Self-Sovereign Identity & Verifiable Credentials To Any Crypto Wallet

Some of the biggest problems in crypto today have to do with security, identity and privacy, and these are precisely the issues that AllianceBlock says it can tackle with the launch of Nexera ID. It’s a new self-sovereign identity solution that allows crypto users to prove they are who they say they are, without giving up their privacy, while safeguarding their digital assets against hacks and lost seed phrases. 

Nexera ID is officially described as a “self-custodial identity solution” that’s able to create programmable smart wallets leveraging multi-factor authentication. It’s based on a Nexera’s “MetaNFT” token technology that enables users to prove their identity with zero-knowledge proofs. The great thing about Nexera ID is that it’s incredibly versatile, having the ability to integrate with all manner of custodial and non-custodial wallets, including hardware wallets. 

It’s a novel product that promises to solve a lot of headaches for crypto users. The privacy aspect is just one advantage. Using Nexera ID, AllianceBlock says individuals will be able to undergo a traditional KYC or KYB process just once, in order to verify themselves. After that, they’ll be able to validate their identities and access all manner of DeFi services while masking their private information. It does this by allowing the user to prove their identity without giving up any personal details about themselves, thanks to its trustless identity verification technology. Best of all, Nexera ID can integrate with multiple KYC and KYB providers. 

Privacy is not the only thing Nexera ID is good for. Another problem it solves is the need to secure digital assets using a private seed-phrase that’s necessary to recover a crypto wallet. This is a big problem in the crypto industry because there have been multiple incidents of people losing their private keys, and with that, losing access to a small fortune in crypto assets. With Nexera ID, users can create customized recovery mechanisms for individual crypto wallets, and even the specific assets within those wallets. In this way, Nexera ID promises to not only safeguard against the risk of losing a seed phrase, but also prevent users from falling victim to hackers. 

A third benefit of Nexera ID is that it massively simplifies the login process for Web3 decentralized applications, with users able to aggregate multiple methods for verifying themselves, including social media, email, facial recognition and more. 

In a nutshell, Nexera ID allows users to better protect their privacy and secure their crypto assets, safe in the knowledge that they’ll never lose access to them. 

This kind of reassurance is likely going to be necessary for the crypto industry to recover from what has been one of the bleakest years on record. The long and painful crypto winter that began this year has been exacerbated by a string of high profile collapses of crypto platforms, including the FTX exchange and protocols like Celsius and BlockFi. In the wake of those events, the need for secure, self-custody of crypto assets has never been more apparent.

“Nexera ID solves some of the biggest challenges in the space today around self-sovereignty, self-custody and privacy,” said AllianceBlock CEO & Founder Rachid Ajaja. “With Nexera ID, we are ushering in the next era of self-sovereignty, self-custody, security of digital assets and protecting users’ privacy.” 

The launch of Nexera ID will help propel AllianceBlock further towards its goal of pushing DeFi into the mainstream. The company has built up an entire ecosystem of DeFi tools with the aim of acting as a bridge from the world of traditional finance.

U.S. Senator Warren Introduces Bipartisan Bill to Address Crypto Money Laundering

Albert Brown
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U.S. Senator Warren Introduces Bipartisan Bill to Address Crypto Money Laundering

 

The Digital Asset Anti-Money Laundering Act from Elizabeth Warren addresses loopholes within the crypto space being exploited for money laundering.

 

United States senator Elizabeth Ann Warren is seeking to address growing concerns about the emergence of crypto-related crimes. She recently introduced a bipartisan bill along with Kansas junior senator Roger Marshall. The bill, dubbed The Digital Asset Anti-Money Laundering Act, is meant to tackle money laundering practices within the cryptocurrency scene.

Information from a CNN report reveals that the bipartisan team-up between Warren and Marshall will introduce provisions that would handle loopholes native to the crypto industry, which make it possible for bad actors to exploit the space for money laundering. The development follows the collapse of Sam Bankman-Fried’s FTX, which the DoJ claims was used for money laundering crimes, amongst other financial offenses.

According to the report from CNN, chances of the bill making it through the current Congress are slim due to time constraints, as the recent 117th Congress meeting will end on January 3 next year. Consequently, Warren and Marshall might have to bring it up once more in the next session of the U.S. Congress for proper consideration.

“I’ve been ringing the alarm bell in the Senate on the dangers of these digital asset loopholes, and I’m working in a bipartisan manner to pass common-sense crypto legislation to safeguard U.S. national security better,” Warren remarked in an exclusive CNN interview.

Warren addressed the recent FTX implosion, noting that the current charges brought on Sam Bankman-Fried and the developments following the debacle within the political scene are a testament to the “serious [political] scrutiny” the digital asset space is under.

The bill comes amidst a growing rate of crypto-related money laundering crimes due to the level of anonymity blockchain technology introduces, which has not been adequately regulated due to its nascency. Following the sanction of crypto mixer Tornado Cash, the Treasury Department, in August, highlighted the increasing rate of crypto money laundering crimes.

Provisions of the Bill

The Digital Asset Anti-Money Laundering Act will penetrate the crypto scene by introducing within the space provisions native to traditional finance entities and banks regarding money laundering. These provisions will subject crypto entities to the measure of scrutiny that traditional banks are under regarding money laundering.

Once the bill is passed, the Financial Crimes Enforcement Network (FinCEN) bureau of the U.S. Treasury Department will be given a directive to regard crypto miners, wallet providers, and other concerned firms as money service entities. This move will automatically subject crypto entities to provisions of the Bank Secrecy Act of 1970, which include Know-Your-Customer (KYC) dictates.

The bill will direct American financial regulators to enforce restrictions regarding crypto wallets that would address specific openings utilized in circumventing anti-money laundering measures. This move involves a directive to FinCEN to implement a guideline introduced in 2020 that would force banks and non-bank financial entities to verify customer IDs, maintain proper records, and report data associated with unhosted accounts.

Other provisions of the bill include:

  • It requires U.S. citizens carrying out cross-border crypto transactions worth $10,000 or more to file reports with the Internal Revenue Service (IRS).
  • It restricts banks and other regulated financial entities from operating or interacting with technologies that bolster anonymity, such as crypto mixers.
  • Financial regulators must ensure that provisions of the Bank Secrecy Act are complied with through periodic compliance check exercises for financial entities.
  • It ensures that crypto ATM operators report the physical location of their kiosks where necessary.

“Following the September 11, 2001, terrorist attacks, our government enacted meaningful reforms that helped the banks cut off bad actors’ from America’s financial system,” Marshall remarked in an official statement. He noted that these measures ought to be employed within the crypto space, as they would efficiently combat crypto-related money laundering while concurrently ensuring that the average consumer has adequate access to crypto services.

American Broadcaster And Bitcoin Maxi Max Keiser Says XRP is a Security

Mark Brennan
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American Broadcaster And Bitcoin Maxi Max Keiser Says XRP is a Security

XRP is a security, according to Keiser.


Max Kaiser asserts that XRP is a security as the line between commodities and securities in the US crypto space remains blurred.

In a tweet today, Popular Bitcoin Maximalist Max Keiser asserted that XRP is a security.

“Technically, XRP is a security,” Keiser tweeted in a retort to a claim by a user that XRP is a digital asset.

In an earlier tweet, the broadcaster had said, “Good-bye XRP & ETH” in response to a Bitcoin Magazine report where US Securities and Exchange Commission chief Gary Gensler said the SEC is ready to carry out enforcement action on companies violating securities law.

It bears mentioning that this assertion is not uncommon amongst Bitcoin maximalists. Notably, most of them believe that most, if not all, crypto, except for Bitcoin, are securities. For example, MicroStrategy founder and Bitcoin evangelist Michael Saylor made a similar claim over a week ago, as reported by The Crypto Basic.

Notably, the debate on what constitutes security in crypto will likely rage on until regulators and lawmakers come together to provide regulatory clarity. However, judging from XRP’s decentralized nature and use cases per previous metrics provided by regulators and recently cited by attorney John Deaton, it isn’t easy to assume that XRP is a security.

Ripple remains locked in a two-year-long case with the SEC over this debate.

Shiba Inu Ranks as 6th-Largest Asset Held By Top 100 ETH Whales, Collectively Holding 5.76T SHIB

Lele Jima
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Shiba Inu Ranks as 6th-Largest Asset Held By Top 100 ETH Whales, Collectively Holding 5.76T SHIB

 

Ethereum whales’ interest in Shiba Inu spikes.


Leading cryptocurrency on-chain wallet tracker WhaleStats has revealed that the top 100 Ethereum whales hold a whopping amount of 5,768,472,707,423 (5.76T) Shiba Inu tokens. According to a tweet posted today by WhaleStats, the top 100 Ethereum whales hold a total of $52,839,210 ($52.83M) worth of SHIB.

Per the data, Shiba Inu is ranked as the sixth-largest crypto asset held by the top 100 Ethereum whales. The canine-themed cryptocurrency ranked behind top stablecoins like USDT, USDC, and DAI. Interestingly, Shiba Inu sits above WBTC, BUSD, LOCUS, and BIT in the ranking.

It bears mentioning that the milestone comes 24 hours after WhaleStats reported that the top 5,000 Ethereum whales hold over 7.7 trillion SHIB, worth $70,559,415 ($70.55M).

Growing Whales’ Interests in SHIB

The development suggests a growing interest in Shiba Inu tokens among the top Ethereum whales. It is not surprising to see Shiba Inu in the list of assets held by the top whales on the Ethereum network. In recent times, deep-pocketed investors have steadily amassed hefty amounts of the canine-themed cryptocurrency.

As reported today, a new Ethereum whale scooped an astounding 1.9 trillion Shiba Inu tokens worth $17.71M at the time of the transaction. On December 9, a primary Ethereum whale increased its Shiba Inu holdings to 13.9T after adding 3.05T SHIB in one month.

US Congress Candidate Walker Calls Crypto Community to Collectively Support Ripple Against SEC Overreach

Albert Brown
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US Congress Candidate Walker Calls Crypto Community to Collectively Support Ripple Against SEC Overreach

 

January Walker highlighted the widely-held belief that a ruling against Ripple would be detrimental to the majority of assets within the crypto space.



United States Congress Candidate and Utah-based politician January Walker has asked the entire crypto community to show solidarity with Ripple by ensuring collective support for the American technology company against the United States Securities and Exchange Commission (SEC) in the ongoing litigation.

According to Walker, it will be in the best interest of the entire crypto community to pull their weight behind Ripple at this time, as an unfavorable ruling against the firm is likely to affect how the American legal system deals with subsequent cases regarding digital assets. This represents a widely-held belief within the crypto community.

“The crypto community needs to rally behind XRP Ripple against the SEC. What happens to one will happen to all with government overreach,” Walker remarked in a tweet yesterday. Walker’s recent comment followed an earlier tweet in which she pointed out the importance of a Ripple win, claiming that a settlement would be a loss for Web3 and the world, as earlier reported bu The Crypto Basic.

 

In a thread of tweets, Walker opined that the global scene tends to lean towards the direction the U.S. financial space takes. Consequently, she claimed that how the American financial system handles XRP would set a precedent for the world to follow about how they deal with all digital assets, not just XRP.

“Instead of battling against each other claiming one group is better than another, we need to work together for the right legislation,” she advised, calling for one voice within the crypto community.

Walker Has Faced Some Opposition in Her Request

On the flip side, the President of the Texas Blockchain Council, Lee Bratcher, made remarks claiming that XRP’s model fits the Howey Test and the asset should be considered a security. Bratcher’s comments responded to Walker’s call for solidarity and support for Ripple in the ongoing litigation. “There is a spectrum of decentralization, and XRP is towards the centralized side,” Bratcher asserted. A few other proponents have come up to support Bratcher on his claims.

 

In response, former Principal Developer Advocate at Ripple Matt Hamilton noted that certain blockchain councils and bitcoin maximalists are “mistakenly leading” people to believe that XRP is a security. According to him, this represents a problem within the crypto space, as these entities are siding with the SEC, but they are not yet aware that this could also affect bitcoin and the entire crypto scene in the long run.

In response to Bratcher, Walker highlighted that the SEC could not prove that XRP is a security according to the provisions of the Howey Test, according to the filings she saw last week. “More concerning, the SEC was trying to expand the test to make Ripple a security unlawfully. We shouldn’t support overreach,” she added.

Uquid Announces Shiba Inu Giveaway for FIFA World Cup

Lele Jima
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0
Uquid Announces Shiba Inu Giveaway for FIFA World Cup

Uquid wants to give away 15M Shiba Inu for FIFA World Cup.


Web3 e-commerce platform and Binance Pay partner, Uquid has announced a giveaway of 15M SHIB for the Shiba Inu community. In a recent tweet, Uquid called on members of the SHIBArmy to participate in a giveaway event for the FIFA World Cup 2022.

According to Uquid, participants are required to state the hashtag of their favorite World Cup Semi-Finalist team alongside the World Cup 2022 hashtag in the comment section. The move is an effort by Uquid to determine which of the 2022 World Cup semi-finalists, including Argentina, France, Croatia, and Morocco, has the strongest fan base in the Shiba Inu ecosystem. Furthermore, Uquid requires participants to follow the official Twitter handles of Shiba Inu and Uquid.

The rules also mandate that participants tag three friends in the comment section to invite them to the giveaway event.

 

Per the announcement, the giveaway event will run from December 13, 2022, to December 18, 2022, at 23:59:69 PM (UTC). Uquid also plans to double the giveaway prize if the tweet amasses 2,000 likes before the 2022 FIFA World Cup competition ends.

Uquid said it would randomly select the lucky winners of the most crowded community. 

“Attention: The giveaway is available from 2022-12-13 until 2022–12–18 (23:59:59 UTC). The Prize pool will double if the post reaches 2,000 likes. The lucky winners of the most crowded community will be randomly chosen by Uquid,” the official Twitter handle of Uquid added.

It bears mentioning that the giveaway prize is worth $137.7 at press time. The giveaway prize may seem paltry to many SHIB enthusiasts. However, Uquid intends to spice up the ongoing FIFA World Cup Qatar 2022 for SHIB enthusiasts. At press time, the tweet has gotten 256 likes, 226 retweets, and 173 comments.

Launched in 2016, Uquid is an innovative Web3 shopping platform for both physical products and non-fungible tokens. The firm is committed to establishing a bridge between e-commerce and decentralized finance (DeFi). Uquid’s goal is to connect buyers and sellers through smart contracts directly. Last month, Uquid announced it would leverage Ethereum scaling solution, Polygon to optimize its Web3 shopping experience. 

Uquid claims to have over 85M products listed on its platform, with comprehensive shipping services to over 150 countries.

SBF To Remain In Bahamian Correctional Facility Till February 8

Mark Brennan
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SBF To Remain In Bahamian Correctional Facility Till February 8

SBF is likely to remain in Bahamian jail till the date of his extradition hearing as the judge denied bail.


Disgraced FTX founder Sam Bankman-Fried will remain in a Bahamian correctional facility till the date of his extradition hearing set for February 8, 2023, per a CNBC report shared by CNBC Squawk Box today.

The ruling comes after the judge refused to grant the crypto founder bail calling the former crypto whiz kid a flight risk. Notably, SBF’s lawyers had requested that the court set bail at $250k, citing his depression and veganism as reasons why he could not remain in custody, per a DailyMail.com report. In the same report, a lawyer tells DailyMail.com that the disgraced crypto founder will still get another chance to fight for bail in the Supreme Court, and he is likely to get it.

Additionally, SBF is planning to fight against extradition to the US, per a CoinDesk report from the scene.

Recall that the erstwhile crypto billionaire was arrested in the Bahamas on Monday at the behest of the US Department of Justice, as highlighted by Kate Rooney in the CNBC report and reported by The Crypto Basic. In the now unsealed filing with the Southern District of New York, the DoJ charged SBF with wire fraud, conspiracies to commit commodities and securities fraud, conspiracy to commit money laundering, and campaign finance violations.

As previously reported, the US Securities and Exchange Commission and the Commodity Futures Trading Commission have also filed separate fraud charges. The SEC filing accuses the FTX founder of a years-long scheme of defrauding equity investors, diverting customer funds for personal gain, and expanding his empire while claiming to maintain best practices when raising billions from investors.

Present FTX CEO and restructuring officer John Ray III appears to corroborate this in the House Committee on Financial Services hearing held yesterday, per the CNBC report. Ray described SBF’s activities as “plain old embezzlement.”

“This is really old fashioned and embezzlement,” Ray said in the hearing. “This is just taking money from customers and using it for your own purpose. Not sophisticated at all. This is just plain old embezzlement.”

FTX, the once leading crypto exchange, collapsed in early November after a bank run confirmed reports of illiquidity likely due to fraudulent financial practices.

U.S. Senator Toomey Says Indictment Against SBF is not Against Crypto

Albert Brown
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0
U.S. Senator Toomey Says Indictment Against SBF is not Against Crypto

The crypto-friendly Pennsylvanian senator noted that the recent charges are aimed at the individuals abusing crypto, not the industry itself.



United States businessman and senator Patrick “Pat” Toomey Jr. recently weighed in on the charges on SBF and the testimony of current FTX CEO John J. Ray who was called to testify on the firm’s implosion in the wake of Sam Bankman-Fried’s detainment.

According to Toomey, the FTX saga looks like a case of commonplace fraud, and the charges brought on SBF by the DoJ and SEC are not against the crypto industry but those who abuse it.

Recall that, following his arrest by Bahamian police at the behest of United States authorities, the U.S. Department of Justice (DoJ) filed formal charges against SBF on the grounds of ‘fraud, money laundering, and campaign finance offenses.’ The U.S. Securities and Exchange Commission (SEC) also indicted the FTX founder for defrauding exchange investors. Furthermore, the CFTC charged SBF, FTX Trading, and Alameda Research with fraud and material misrepresentations yesterday.

“The testimony yesterday underscored a very important point: this really looked like garden-variety fraud that has happened in the past, usually with dollars or securities of the conventional sort; and here, it happened to happen with crypto. It is not an indictment against crypto; it is an indictment against the guys who misused it,” Toomey said in a CNBC Squawk Box interview.

 

Toomey Reiterates the Need for Regulatory Clarity 

Toomey further noted that the recent FTX collapse highlights the need for regulatory clarity within the crypto industry. “We are inevitably going to have a big conversation on where we go from here,” Toomey said. He stated that the U.S. Congress should pass the legislation he has been calling for, which will clarify which agency oversees which assets and how these can be regulated.

“Congress should finally pass the legislation that I’ve been urging us to pass, which will provide the regulatory clarity so that we don’t have this ambiguity as to who’s got the authority here – who doesn’t – and how does it get regulated. We need to eliminate that; then we would have business flowing to prudent, sensible, well-regulated American exchanges,” he concluded.

In July, Senator Toomey asserted that SEC Chair Gary Gensler’s refusal to provide regulatory clarity for cryptocurrencies is responsible for hurting consumers, as proper consumer protection measures are not enacted.

Furthermore, the 61-year-old American politician echoed the desire of the members of The U.S. Committee On Banking, Housing, and Urban Affairs when he said he is hoping to get more insight into how the whole collapse went down today. The committee has scheduled an open session at 10 AM today (PT) dubbed “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers,” with four witnesses, including FTX investor Kevin O’Leary.

John Ray’s Testimony in the Senate Hearing

This session would follow the Senate Hearing on the FTX collapse, which featured testimony by John Ray. Ray did not mince words in the revelations made during the hearing. According to him, FTX engaged in old-fashioned embezzlement. “This is just taking money from customers and using it for your own purpose. Not sophisticated at all,” Ray said in the hearing.

He further disclosed to the U.S. House Committee on Financial Services that SBF lied when he said in a now-deleted tweet that FTX had enough funds to cover all client holdings at the saga’s beginning. He also revealed that Bankman-Fried allowed about 1,500 Bahamas-based customers to withdraw up to $100 million in the 24 hours following the bankruptcy filing.

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