Cryptocurrency exchange Binance is facing a class-action lawsuit in Canada for allegedly violating local securities laws. The lawsuit, filed in the Ontario Superior Court of Justice, claims that cryptocurrency exchange sold crypto derivative products without proper registration, breaching the Ontario Securities Act and federal law.
Plaintiffs, are seeking damages and the rescission of unlawful derivatives trades. They argue that tens of thousands of Canadian users invested in Binance’s cryptocurrency derivatives products. The certification motion highlights the significant involvement of retail investors in cryptocurrency derivatives trading.
The class-action lawsuit follows Binance’s announcement in June 2021 to cease operations in Ontario after a warning from the Ontario Securities Commission. Despite Binance’s departure from Canada in May 2023, the investigation into its activities by local authorities has continued. The court motion confirms that the Ontario Securities Commission is actively examining the defendants.
Notably, no comment or response from Binance regarding the class-action lawsuit has been provided in the news text. Therefore, the official stance of Binance on the allegations remains undisclosed.
Thailand has announced plans to block “unauthorized” cryptocurrency platforms in order to enhance law enforcement efforts to combat online crime. The decision was made following a meeting of the Technology Crime Prevention and Suppression Committee, which instructed the country’s Securities and Exchange Commission (SEC) to submit information about unauthorised digital asset service providers to the Ministry of Digital Economy and Society. The goal is to block access to these platforms.
To facilitate a smooth transition, users will be provide with sufficient time to manage their accounts before losing access to the services. In an announcement, the SEC urged users of affected platforms to promptly withdraw their assets. The Thai SEC also cited previous actions taken by countries such as India and the Philippines, which have blocked unauthorized cryptocurrency platforms.
Thai regulators have been striving to strike a balance between supporting the cryptocurrency ecosystem and preventing fraud. While institutional investors and high-net-worth individuals have been allowed to invest in cryptocurrency exchange-traded funds (ETFs), and retail investors have been able to invest without limitations in digital tokens backed by real estate or infrastructure, custodians are required to have contingency plans in place in case of unforeseen issues.
The move to block unauthorized crypto platforms in Thailand reflects the global trend towards regulation in the cryptocurrency industry. The aim is to enhance the efficiency of law enforcement in addressing online criminal activities associated with cryptocurrencies, while also ensuring a secure and trustworthy environment within the crypto space.
The Belgrade Crypto conference, held on Friday, 12 April 2024, by one of the two registered cryptocurrency exchange offices in Serbia, CRYPTO12, shed light on the current cryptocurrency regulation and industry in Serbia. The conference brought together prominent stakeholders to share knowledge of the cryptocurrency and digital assets industry and highlight essential points in the related landscape.
Is Serbia on the cryptocurrency regulation map?
The conference featured three insightful panels addressing key cryptocurrency regulation and innovation aspects. The first panel, ‘The Crypto Conundrum: Navigating Regulatory Waters in Serbia & Beyond,’ focused on Serbia’s evolving crypto regulations and their impact on fostering a dynamic fintech ecosystem. Discussions included compliance strategies and the role of the International Cooperation and Development Department of the Securities Commission on behalf of the Ministry of Economy, represented by Anina Milanovć, and the participation of the Administration for the Prevention of Money Laundering on behalf of the Ministry of Finance, represented by Đorđije Vujičić, along with prominent stakeholders like Erwin Voloder, Head of Policy – European Blockchain Association and other influent characters from the financial and economic realm, discussing the shaping, transforming and driving of the digital monetary politics.
Serbia was among Europe’s first nations to implement cryptocurrency asset regulation in 2021, with the Law on Digital Assets drafted by the National Bank of Serbia. The current regulatory framework was created with the help of several EU jurisdictions at the forefront of regulatory efforts in this industry. The panel also emphasised the importance of compliance with the FATF AML rules, in which Serbia made significant progress.
The second panel, ‘Crypto Crossroads: Serbia’s Tax Labyrinth and Legal Landscapes,’ explored the complexities of cryptocurrency tax regulations and legal frameworks, offering guidance for businesses navigating these challenges. Topics ranged from real estate transactions to payroll solutions involving cryptocurrencies held by attorneys and board members of prominent companies from the region and beyond, such as Seker, Vice President of Crypto.com or Dušan Romčević – board member at B2BINPAY CY.
What to expect from the industry?
The last panel, ‘Crafting the Future of Crypto Services,’ delved into the future of digital currencies. Industry leaders projected advancements, a worldwide regulatory shift, and ethical considerations shaping the crypto industry’s trajectory. The panel highlighted strategic directions, challenges, and opportunities defining the future of cryptocurrencies and blockchain technology in Serbia and the surrounding region.
Is the EU’s MICA regulation the way forward for all?
The conference provided attendees with deep insights into navigating regulatory landscapes, tax implications, and the future landscape of crypto services, bringing experts from state institutions and the private sector. The panels also included discussions about the EU’s Markets in Crypto Assets (MiCA) regulation, which set the role model for the whole continent, an important piece of regulation that will most definitely play a crucial role for both EU and non-EU countries which should comply with the legislation to stay at the forefront and participate in the landscape of digital assets.
Terraform Labs PTE Ltd. and its former CEO, Do Kwon, have been found liable for defrauding investors in crypto asset securities by a jury in the United States District Court for the Southern District of New York. This verdict follows the court’s previous determination that the defendants unlawfully offered and sold these securities in violation of the registration provisions of the US Securities Act.
According to Gurbir S. Grewal, the Director of the Division of Enforcement at the Securities and Exchange Commission (SEC), this decision marks a victory in combating crypto fraud. The defendants allegedly deceived investors by misrepresenting the stability of the crypto asset security known as Terra USD, as well as providing false information about a popular payment application supposedly utilizing Terraform’s blockchain. These deceptions resulted in devastating financial losses for investors and caused the market value of Terra USD to plummet by tens of billions overnight.
“For all of crypto’s promises, the lack of registration and compliance has very real consequences for real people.” Grewal expresses the SEC’s commitment to utilizing all available tools to protect investors, while also urging the crypto market to align itself with regulatory requirements.
The defendants allegedly engaged in fraudulent activities by providing misleading information about the stability of a crypto asset security and the application of their blockchain technology. As a result, investors suffered significant financial losses and the market value of Terra USD experienced a sharp decline.
Google has initiated legal action against two alleged crypto scammers for distributing fraudulent cryptocurrency trading apps through its Play Store, deceiving users and extracting money from them. Based in China and Hong Kong, the accused developers uploaded 87 deceptive apps that reportedly conned over 100,000 individuals. According to Google, users suffered losses ranging from $100 to tens of thousands per person due to these schemes, which have been operational since at least 2019.
The lawsuit marks Google’s proactive stance against such scams since Google swiftly removed the fraudulent apps from its Play Store. The company’s general counsel, Halimah DeLaine Prado, emphasised that holding these bad actors accountable is crucial to safeguarding users and maintaining the integrity of the app store. The company claims it incurred over $75,000 in economic damages while investigating this fraud.
The scam reportedly enticed users through romance messages and YouTube videos, urging them to download fake cryptocurrency apps. The scammers allegedly misled users into believing they could profit by becoming affiliates of the platforms. Once users invested money, the apps displayed false investment returns and balances, preventing users from withdrawing funds or imposing additional fees, ultimately leading to more financial losses.
Google’s legal action accuses the developers of violating its terms of service and the Racketeer Influenced and Corrupt Organizations Act. The company seeks to block further fraudulent activities by the defendants and aims to recover unspecified damages. The legal move represents Google’s commitment to combating app-based scams and protecting users from deceptive practices on its platform.
Project Agorá aims to investigate the integration of tokenised commercial bank deposits and tokenised wholesale central bank money using smart contracts and programmability. The goal is to enhance the functioning of the monetary system while maintaining its two-tier structure. By leveraging smart contracts, new settlement methods and types of transactions that are not currently practical or viable can be enabled.
This public-private partnership recognizes the challenges in cross-border payments, including varying legal, regulatory, and technical requirements, operating hours, and time zones. Project Agorá seeks to overcome these inefficiencies by streamlining processes and automating financial integrity controls, which are often duplicated for the same transaction depending on the number of intermediaries involved.
The BIS Innovation Hub will lead Project Agorá and work towards delivering public goods to the global central banking community. The BIS will issue a call for expressions of interest to private financial institutions, with the IIF acting as the intermediary. Their aim is to involve regulated financial institutions representing each of the seven currencies involved.
Argentina is implementing new rules for legitimate crypto exchange activities. These efforts started on March 14, 2024, when the Argentine Senate moved forward with legislation to curb money laundering and terrorism financing. It includes a mandate for for creating a registry of “virtual asset service providers”. Argentina’s National Securities Commission (CNV) proclaimed that providers that are not registered will not be allowed to operate.
On March 25, CNV announced that crypto service providers must adhere to Financial Action Task Force (FATF) guidelines. As part of Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT) law reforms, crypto businesses must now register with the Argentine government.
Upon Javier Milei’s ascension to power in Argentina in December 2023, expectations were high for potential benefits to Bitcoin and cryptocurrency adoption due to his economic plans and pro-crypto views. However, regulatory measures have increased under his administration raising concerns about the future of digital assets in the country.
The Monetary Authority of Singapore (MAS) has announced the expansion of its regulation on cryptocurrency-related activities to include custodial services and cross-border money transfers. The amendments to the Payment Services Act (PS Act) aim to provide regulatory clarity and user protection in the cryptocurrency sector.
Under the new regulations, digital payment token (DPT) or cryptocurrency service providers will be required to comply with user protection and financial stability-related requirements. These include segregating customers’ assets in a trust account, maintaining proper books and records, and ensuring effective systems and controls are in place.
The expansion of the regulations is seen as a response to the volatility and turmoil experienced in the cryptocurrency sector, including the crash of FTX. By broadening the scope of regulation, Singapore aims to address regulatory gaps and promote stability in the cryptocurrency ecosystem.
Angela Ang, a senior policy adviser for blockchain intelligence firm TRM Labs and a former MAS regulator, expressed that the expansion of the regulations is a long-awaited development that provides regulatory clarity to key aspects of the crypto ecosystem, particularly custodial services.
The amendments are scheduled to take effect within six months from 4th April 2024. Existing entities engaged in crypto-related activities under the Payment Services Act are required to initiate a transition process within 30 days and submit a license application within six months. To obtain the license, these entities must demonstrate compliance with anti-money laundering and countering the financing of terrorism requirements, which will be validated by an external auditor within nine months.
Failure to comply with the requirements will result in entities being required to cease all cryptocurrency-related activities
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.
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.
