Sam Bankman-Fried, the CEO of cryptocurrency exchange FTX, has been sentenced to 25 years in prison by U.S. federal judge Lewis Kaplan for his involvement in a fraud and conspiracy scheme that led to the collapse of FTX. The judge criticized Bankman-Fried for his lack of remorse and characterized his attempts to portray himself as an altruistic individual to the public as nothing more than an act. In addition to his prison sentence, Bankman-Fried has been fined $11 billion and will have to sell off assets such as a private jet. The defense’s argument claiming that Bankman-Fried was not likely to commit future crimes was dismissed by the judge.
Bankman-Fried’s 25-year prison sentence follows his conviction on seven criminal counts in November, a year after FTX filed for Chapter 11 bankruptcy. He plans to appeal the conviction, which, according to his lawyer, cannot proceed until after Kaplan’s sentencing decision.
During the sentencing hearing, the judge heard comments from various individuals involved in the case, including prosecutors, Bankman-Fried’s attorney, a victim, a lawyer representing other FTX victims, and Bankman-Fried himself. U.S. Attorney Damian Williams stated that the sentence sends a powerful message that financial crimes will face swift and severe consequences. The judge also noted that Bankman-Fried’s reputation has suffered greatly, but acknowledged his persistence and marketing skills while justifying the lengthy sentence.
Bankman-Fried’s attorney, Mark Mukasey, argued that his client’s decisions were guided by mathematical considerations rather than malice.
In his statement, Bankman-Fried expressed concern for the FTX customers awaiting the return of their funds, emphasizing that he was more focused on their needs rather than his own emotional life or theoretical future children. He acknowledged that his useful life was likely over, having spent the last six months in the Metropolitan Detention Centre in Brooklyn. Bankman-Fried also claimed that there were sufficient assets for FTX’s creditors to be repaid in full, despite the self-induced “liquidity crisis” the company faced. He expressed regret for his role in FTX’s collapse and took responsibility for it, extending apologies to his former friends and government witnesses.
Federal prosecutors in the US have charged cryptocurrency exchange KuCoin and two of its founders, Chun Gan and Ke Tang, with violating anti-money laundering laws. The charges allege that the exchange operated in the US while misleading investors about its operations and failed to register with US government or maintain an anti-money laundering program.
The charges claim that cryptocurrency exchange KuCoin, with over 30 million customers, did not implement a know-your-customer (KYC) or anti-money laundering (AML) program until 2023. Even when the KYC program was introduced, it did not apply to existing customers. KuCoin’s lack of these programs allowed it to be used for money laundering, including proceeds from sanctions violations, darknet markets, and fraud schemes.
Specifically, the indictment alleges that KuCoin indirectly received over $3.2 million worth of cryptocurrency from Tornado Cash, a sanctioned crypto mixer. The charges are linked to criminal filings against two developers associated with Tornado Cash.
United States Commodity Futures Trading Commission (CFTC) has also filed a suit against KuCoin, claiming the exchange did not register as a futures commission merchant. It also failed to implement the CFTC’s equivalent of a KYC program.
The U.S. Securities and Exchange Commission (SEC) is reportedly seeking a $2 billion judgment against Ripple Labs in their ongoing legal battle. The SEC filed a motion for judgment and remedies last Friday, which is currently sealed. However, Ripple Labs’ chief legal officer, Stuart Alderoty, revealed on social media that redacted versions of the documents will be made public by Tuesday, 26th March.
The requested judgment, if granted, would mark the conclusion of this phase of the multi-year legal battle between Ripple Labs and the SEC. The conflict started in December 2020 when the SEC filed a lawsuit against Ripple Labs and its executives, claiming that they violated federal securities laws by selling XRP cryptocurrency to both institutional and retail customers.
In a previous ruling last July, New York Judge Analisa Torres determined that the sale of XRP on exchanges and through algorithms did not breach U.S. law, only Ripple’s institutional sales of XRP did. The SEC’s recent motion emphasizes the need for the court to consider the ease with which actors in the crypto asset space can engage in similar conduct to Ripple’s. They argue that a strong message must be sent to deter such abuses.
Ripple Labs’ chief legal officer, Stuart Alderoty, criticized the SEC and stated that the company plans to file its response to the SEC’s motion next month. The SEC filing specifies that Ripple Labs’ response must be filed no later than 22nd April 2024.
The European Banking Authority (EBA) has released the final draft of the Regulatory Technical Standards (RTS) for handling complaints received by issuers of asset reference tokens (ARTs) under the Markets in Crypto-Assets (MiCA) regulation. The EBA collaborated closely with the European Securities and Markets Authority (ESMA) in developing the requirements, templates, and procedures necessary for effectively managing complaints related to stablecoins.
The draft RTS cover a range of aspects regarding complaints handling. They include guidelines for the complaints management policy and function, the provision of information to stablecoin holders and other interested parties, templates and recordings, languages, procedures for investigating complaints, and communication of the investigation outcomes to complainants. Specific provisions are outlined for complaints handling involving third-party entities. These comprehensive guidelines aim to establish a fair and transparent process for dealing with complaints in relation to stablecoin issuers.
During the public consultation period the proposed approach by the EBA received overall support from respondents who considered it to be appropriately balanced. However, some respondents suggested a more uniform approach to complaints handling between the EBA’s RTS and the equivalent RTS by ESMA for the crypto asset service provider sector.
Taking into account the responses received, the EBA has made targeted amendments to the draft RTS in order to add clarity and align more closely with ESMA’s RTS. The amendments primarily focus on requirements related to languages, data protection, and the procedure for submitting an electronic complaint. These changes aim to address the suggestions put forward during the public consultation period and ensure consistency between the two authorities.
The London Stock Exchange has detailed the process for admitting Crypto Exchange Traded Notes (ETNs) to its trading platform. ETNs are debt securities that provide exposure to an underlying asset, and in this case, Crypto ETNs track the performance of cryptoassets like Bitcoin or Ethereum.
For the admission of Crypto ETNs, the London stock exchange has established specific criteria to protect the reputation and integrity of its markets. Firstly, the proposed Crypto ETN must be physically backed and not leveraged. Secondly, it must have a reliable and publicly available market price or value measure for the underlying asset. Lastly, the underlying cryptoassets must be Bitcoin or Ethereum.
Regarding the custody of the cryptoassets, they must be held in “cold storage,” meaning offline depositary wallets. If alternative arrangements are used instead of cold storage, the issuer must obtain an audit report from a qualified third party. The custodians holding the cryptoassets must also comply with Anti-Money Laundering (AML) regulations in the United Kingdom, European Union, Jersey, Switzerland, or the United States.
To facilitate a smooth admission process for Crypto ETNs, the London stock exchange encourages early engagement from prospective issuers. Issuers can admit up to three different currency lines for each Crypto ETN. These lines can be applied for simultaneously with the main currency line or at a later stage. The required documentation for multi-currency lines is similar to that of the standard line, except for the prospectus/pricing supplements.
The European Commission has imposed a first-time fine of 1.8 billion euros ($1.95 billion) on Apple for restricting Spotify and other music streaming services from offering alternative payment options outside its App Store. This verdict follows Spotify’s 2019 complaint concerning these limitations and Apple’s 30% App Store fees.
The EU competition authority deemed Apple’s restrictions as unfair trading practices. Margrethe Vestager, EU antitrust chief, explained how Apple exploited its market dominance for a decade by limiting developers from suggesting cheaper music services outside the Apple ecosystem, a violation of EU antitrust regulations. Apple is instructed to eliminate App Store constraints, aligning with requirements from the new Digital Markets Act (DMA), which Apple must comply with by March 7.
Apple expressed its intent to contest the EU’s decision in court, stating the ruling disregards the lack of credible proof of consumer harm and overlooks a flourishing and competitive market. The company further remarked that Spotify, the primary proponent and benefactor of this decision, holds the world’s largest music streaming app and has engaged extensively with the European Commission.
South Korea’s Personal Information Protection Commission (PIPC) has launched an investigation into cryptocurrency project Worldcoin following numerous complaints about its collection of personal information. Of particular concern is the project’s use of iris scanning in exchange for cryptocurrency. The PIPC announced on Monday that it will examine company’s collection, processing, and potential overseas transfer of sensitive personal information, and will take action if any violations of local privacy rules are found.
It is worth noting that OpenAI, which co-founded Worldcoin, was fined last year by the privacy watchdog for leaking personal information of South Korean citizens through its ChatGPT application. This connection with OpenAI adds weight to the concerns surrounding the handling of personal data by Worldcoin.
Worldcoin is an identity-focused cryptocurrency project. Participants in the protocol receive WLD tokens in return for signing up. The project’s unconventional sign-up process has also raised concerns in other jurisdictions. As of now, company has not responded to the investigation or the accusations.
China’s Supreme People’s Procuratorate (SPP) is ramping up efforts to combat cybercrime by targeting criminals who use blockchain and metaverse projects for illegal activities. The SPP is alarmed by the recent surge in online fraud, cyber violence, and personal information infringement. Notably, the SPP has observed a significant rise in cybercrimes committed on blockchains and within the metaverse, with criminals increasingly relying on cryptocurrencies for money laundering, making it challenging to trace their illicit wealth.
Ge Xiaoyan, the Deputy Prosecutor-General of the SPP, highlights a 64% year-on-year increase in charges related to cybercrime-related telecom fraud, while charges linked to internet theft have risen nearly 23%, and those related to online counterfeiting and sales of inferior goods have surged by almost 86%. Procuratorates have pressed charges against 280,000 individuals involved in cybercrime cases between January and November, reflecting a 36% year-on-year increase and constituting 19% of all criminal offenses.
The People’s Bank of China (PBoC) acknowledges the importance of regulating cryptocurrency and decentralized finance in its latest financial stability report. The PBoC emphasizes the necessity of international cooperation in regulating the industry.
Despite the ban on most crypto transactions and cryptocurrency mining, mainland China remains a significant hub for crypto-mining activities.
The US Federal Trade Commission (FTC) has ordered a software company Avast, to pay $16.5 million and cease selling or licensing web browsing data for advertising purposes. The charges against Avast include allegations that the company collected and sold users’ browsing information without their consent, despite promising to protect their privacy.
Czech company based in the UK, collected the US consumers’ browsing information using browser extensions and antivirus software, according to the FTC complaint. The collected data included details about users’ web searches, visited webpages, religious beliefs, health concerns, political leanings, location, financial status, and visits to child-directed content. This information was stored indefinitely and sold to third parties without adequate notice or consent.
The FTC also argues that Avast deceived users by falsely claiming that its software would safeguard their privacy and block third-party tracking. Company failed to sufficiently inform consumers that it would sell their detailed, re-identifiable browsing data. The data was sold to over 100 third parties through Avast’s subsidiary, Jumpshot.
In addition to fine, Avast and its subsidiaries will be prohibited from misrepresenting their data usage practices. Under the proposed order, Avast is required to delete the browsing information transferred to Jumpshot and any products or algorithms derived from that data.
The company must also notify consumers whose browsing information was sold without consent about the FTC’s actions. Furthermore, they will be required to implement a comprehensive privacy program to address the misconduct highlighted by the FTC.
Waymo’s application to expand its robotaxi service in Los Angeles and San Mateo counties has been suspended for 120 days by the California Public Utilities Commission’s Consumer Protection and Enforcement Division (CPED). Company can still operate driverless vehicles in San Francisco, but further expansion is on hold until June 2024. According to the CPED, the application has been suspended for additional staff review.
Waymo clarifies that this suspension is a standard procedural step in the CPUC’s thorough review process. However, David J. Canepa, Vice President of the San Mateo County Board of Supervisors, contends that Waymo has failed to engage in meaningful discussions about expanding into Silicon Valley, prompting the CPUC to suspend the application. Canepa sees this as an opportunity to address genuine concerns regarding public safety.
Waymo currently operates a commercial service round-the-clock in San Francisco and is permitted to offer free driverless rides in certain parts of Los Angeles. In January, Waymo submitted a document to the CPUC’s Consumer Protection and Enforcement Division, seeking approval of its updated safety plan and an expansion areas where its robotaxi vehicles can operate.
Various entities, including the city of South San Francisco, the Los Angeles County Department of Transportation, and the San Francisco Taxi Workers Alliance, have expressed opposition to Waymo’s expansion plans.
