Here are all the major crypto firms facing charges from regulators this year

[ad_1]

Topline

Cryptocurrency trading platform Beaxy announced on Wednesday that it will shut down due to a Securities and Exchange Commission lawsuit accusing it of circumventing federal law, becoming the latest company to be caught wide-ranging crackdown on allegedly illegal cryptographic activity.

A number of crypto firms have been indicted by US regulators this year.

getty timeline

March 29 Crypto exchange Beaxy ceased operations after being accused by the SEC of failing to register as a securities exchange, in a complaint that also alleged that the company’s founder, Artak Hamazaspyan, had embezzled $900,000 of customers’ money for gambling and other personal use.

March 27 The Commodity Futures Trading Commission sued the world’s largest cryptocurrency exchange, Binance, and its chief executive Changpeng Zhao, alleging the company worked to keep money flowing and to avoid compliance, including by allowing US clients to trade on its platform even if it is not registered in the US. law (Zhao called the lawsuit unexpected and disappointing).

March 24Do Hyeong Kwon, founder of the stablecoin TerraUSD and its companion token Luna, was charged with fraud by US prosecutors after his arrest in Montenegro, adding to a civil lawsuit filed against him by the SEC in February, nine months after the sudden collapse. of the two tokens last year.

March 22The SEC announced charges against Justin Sun and three of his companies for selling Tronix and BitTorrent tokens, which the agency says are unregistered securities. The agency also accused eight celebrities of illegally promoting the tokens, including Akon, Lindsay Lohan and Lil Yachty.

March 22 Cryptocurrency exchange Coinbase said it had received notice that the SEC had identified possible violations of securities law. disappointing move and argued that the industry has faced conflicting statements from regulators).

On Feb. 28, Nishad Singh became the third executive of once-dominant cryptocurrency exchange FTX to plead guilty to criminal fraud charges, amid a federal investigation into the crypto giant following its collapse. late last year and its former leader Sam Bankman-Fried was charged.

Feb. 22 The Federal Trade Commission announced it was investigating crypto lender Voyager Digital, which filed for bankruptcy in 2022 for deceptively and unfairly marketing cryptocurrency to the public, a filing claims.

February 9 Crypto exchange Kraken agreed to pay the SEC $30 million in penalties and stop offering staking services to US clients, after the agency said Kraken failed to register the service under securities law (the company that runs Kraken has not admitted or denied the SEC’s allegations as part of its settlement).

January 19 Cryptocurrency lender Nexo Capital agreed to pay the SEC $45 million in fees and fines after the agency accused it of allowing clients to earn interest on their savings in cryptocurrency, although Nexo has never admitted any wrongdoing.

January 18The Department of Justice announced charges against cryptocurrency exchange Bitzlato and its founder, Anatoly Legkodymov, alleging the Hong Kong-based company handled more than $700 million in illicit funds and failed to met US regulatory standards.

January 12The SEC accused cryptocurrency lender Genesis Global Capital and crypto exchange Gemini Trust, owned by Cameron and Tyler Winklevoss, twins known for claiming they created the idea of ​​Facebook by offering unregistered securities to investors with the promise of high interest on deposits through a program. called Gemini Earn, causing Genesis to file for bankruptcy a week later.

Large number

$19,873. It was the price of Bitcoin, the largest cryptocurrency by market capitalization, that fell on March 10, the first time the token broke the $20,000 mark since January. This is a decrease of 71% from its all-time high of $68,990 in November 2021. Bitcoin then rebounded, reaching over $28,000 on March 29.

Key Context

SEC Chairman Gary Gensler has signaled for years that the once freewheeling cryptocurrency industry will face tougher federal regulation, saying in 2021 that the crypto market he called the Wild West was full of frauds, scams, and abuses as there were not enough protections for investors as tokens rose. in price. Gensler suggested that investor protection rules that cover stocks and derivatives should also apply to crypto exchanges, and argued that some cryptocurrencies are securities, an argument that crypto firms dispute. Despite a price spike in tokens like Bitcoin in 2021, crypto markets suffered a loss of nearly $2 trillion in market value the following year amid rising inflation and fears of a recession. Popular cryptocurrencies Bitcoin, Ether and BNB fell 70%, 75% and 65% respectively from record highs as some cryptocurrency companies collapsed or laid off thousands of employees between June and August . The year ended with the fall of crypto exchange FTX and its affiliate trading firm Alameda Research, drawing attention to the operations of the two companies which then led to a number of accusations of fraud. against founder Bankman-Fried.

Tangent

A crackdown on crypto firms is complemented by the closure of two major banks that served the cryptocurrency industry. Crypto banking giant Silvergate Bank announced in March that it was ceasing operations and liquidating its assets, causing Bitcoin to fall below $20,000 for the first time in nearly two months. The bank is also under investigation by the Justice Department over its dealings with FTX and Alameda Research, although the bank has not been charged with fraud or wrongdoing, according to Bloomberg. Signature Bank, also known for its crypto operations, was also shut down by New York regulators and taken over by the FDIC after facing a wave of withdrawals that coincided with the collapse of Silicon Valley Bank.

Further reading

Crypto Exchange Beaxy Shuts Down Amid SEC Accusations (Forbes)

Terra-Luna Coins founder Do Kwon charged with fraud by US prosecutors (Forbes)

Kraken Ends US Crypto Staking to Settle SEC Fees (Forbes)

Coinbase Crypto Exchange Faces Possible SEC Charges, Company Says (Forbes)

[ad_2]