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On 17 July 2024, The Securities and Exchange Commission (SEC) announced an award exceeding $37 million to a whistleblower whose information significantly contributed to a successful enforcement action. This individual provided previously unknown information to the SEC, met with Enforcement staff, and identified potential witnesses and documents, thereby conserving valuable staff time and resources. “Today’s award illustrates the importance of the SEC’s whistleblower program, as the whistleblower’s information helped the agency return millions of dollars to harmed investors,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. Payments to whistleblowers are made from an investor protection fund, established by Congress and financed entirely through monetary sanctions paid to the SEC by securities law violators. Whistleblowers are eligible for awards when they voluntarily provide original, timely, and credible information that leads to successful enforcement actions....

On 17 July 2024, Indian cryptocurrency exchange WazirX has revealed a major security breach resulting in the theft of over $230 million from one of its multisig wallets. The incident, involving Liminal’s digital asset custody services, has led to the immediate suspension of Indian rupee withdrawals as the company conducts a thorough investigation. In a statement posted on social media platform X, WazirX described the breach as a “force majeure event beyond our control,” while assuring users that efforts are ongoing to recover the stolen funds. The exchange also disclosed that crypto withdrawals had already been halted prior to the incident. WazirX has blocked some deposits and reached out to concerned wallets in an effort to recover the funds. The compromised WazirX wallet address was identified as 0x27fD43BABfbe83a81d14665b1a6fB8030A60C9b4. The breach was detected in a multisig wallet that has been utilizing Liminal’s custody and wallet infrastructure since February 2023. This...

Cryptocurrency exchange OKX has informed its Nigerian clients that they have until 16 August 2024 to close their positions as the exchange ceases operations in the African country due to local regulatory challenges. The announcement came in an emailed statement dated 17 July 2024, which was obtained by CryptoSlate. OKX stated that starting 16 August, users will no longer be able to open new positions or use services on the platform, except for withdrawals and closing existing positions. The exchange assured users that their funds remain safe and accessible but must be withdrawn by 30 August 2024. After this date, users will need to contact customer support to take any further action on their accounts. This decision has sparked concern among Nigerian cryptocurrency users, who voiced their displeasure on social media platform X. In response, OKXHelpDesk explained that the platform cannot provide KYC (know your customer) services to Nigerian users, adding: “Any updates regarding...

The U.S. Securities and Exchange Commission (SEC) on 17 July 2024, approved multiplle Ether exchange-traded funds (ETFs), including Grayscale’s mini Ethereum ETF and ProShares’ Ethereum ETF. These funds are scheduled to begin trading next week, alongside other spot Ether ETF products. Grayscale’s mini Ethereum ETF will utilize assets from its larger Ethereum ETF, making it more accessible and affordable. This move is part of Grayscale’s broader strategy to convert its existing Ethereum Trust into a spot Ethereum ETF. Currently, the Ethereum Trust operates like a closed-end fund, complicating the redemption of shares. Back in May, the SEC surprised the market by approving proposals from BlackRock, Grayscale, and several other asset managers to launch spot Ethereum ETFs. This approval marks a significant milestone in the SEC’s evolving stance on cryptocurrency regulations. James Seyffart, an ETF analyst at Bloomberg, indicated that the mini fund should mitigate expected outflows from...

On 16 July 2024, the Securities and Futures Commission (SFC) released its consultation conclusions regarding the proposed subsidiary legislation, code, and guidelines for implementing an uncertificated securities market (USM) in Hong Kong. Following extensive market feedback, the SFC has outlined a meticulous 5-year timeline to ensure a smooth transition to the new regime. With the legislative process expected to conclude, the USM regime is scheduled for implementation towards the end of 2025. Companies whose laws align with the new regime will transition in phases, with a complete transition anticipated by the end of 2030. A detailed timeline will be established to guarantee an orderly and efficient shift. The SFC will also conduct a separate consultation to determine the maximum levels of specific USM-related fees. In collaboration with Hong Kong Exchanges and Clearing Limited and the Federation of Share Registrars Limited, the SFC will engage issuers, investors, and other market...

According to the document filed by FTX on 12 July 2024 in the U.S. Bankruptcy Court for the District of Delaware, the bankrupt cryptocurrency exchange FTX and the United States Commodity Futures Trading Commission (CFTC) have reached a $12.7 billion settlement, concluding a 19-month long lawsuit. This agreement follows extensive negotiations and is now pending court approval. "The Proposed Settlement is an integral and valuable component of the Debtors’ proposed chapter 11 reorganization plan," stated Commodity Futures Trading Commission senior trial attorney Carlin R. Metzger and FTX’s CEO John J. Ray III. "It resolves ongoing litigation and disputes with one of the largest creditors of the Debtors, avoids the cost and delay of further litigation, and mitigates a significant risk of diminution of the assets available for distribution to creditors.” The CFTC initially sued FTX, its former CEO Sam Bankman-Fried, and FTX’s sister trading firm Alameda Research in December 2022. The...

The Commodity Futures Trading Commission announced on 12 July 2024 that the Division of Market Oversight and the Division of Clearing and Risk have issued a no-action position regarding swap data reporting and recordkeeping regulations in response to a request from ForecastEx LLC, a designated contract market and derivatives clearing organization. This no-action position ensures that the divisions will not recommend the Commission initiate an enforcement action against ForecastEx or its participants for specific swap-related recordkeeping requirements. Additionally, it covers failures to report data associated with binary option transactions executed on or subject to the rules of ForecastEx to swap data repositories. The no-action letter applies only in narrowly defined circumstances and is consistent with similar no-action letters issued to other designated contract markets and derivatives clearing organizations. This approach reflects the CFTC’s commitment to providing regulatory...

On 11 July 2024, the Commodity Futures Trading Commission (CFTC) and the Department of Justice’s Computer Crime and Intellectual Property Section’s National Cryptocurrency Enforcement Team (NCET) announced the commencement of the first Fraud Disruption Conference, aimed at combating the pervasive fraud scheme known as “pig butchering.” This type of scam, which has resulted in billions of dollars in losses for Americans annually, is a paramount concern for law enforcement. This inaugural conference is the first in a series that the CFTC will host in collaboration with various partners to address a range of financial frauds and explore innovative methods to combat and disrupt these scams. “It is devastating to hear countless stories of everyday Americans being targeted and defrauded by global criminal organizations,” said CFTC Chairman Rostin Behnam. “It has been a longstanding priority of mine to reenergize and expand our customer protection initiatives to combat retail fraud and...

On 10 July, 2024, a British man convicted of selling a deadly substance falsely marketed as a ‘weight loss’ drug was ordered to repay £23,000 in proceeds from his crime. Jack Finney, 28, was compelled to hand over a significant amount of Monero cryptocurrency, marking the first time the UK authorities have converted this privacy-focused digital currency into cash. The Food Standards Agency (FSA) successfully sold the Monero for £15,000, which contributed to the total repayment. Monero, known for its untraceable nature, is often used by criminals on the dark web due to its difficulty in being converted to cash. The remaining money was obtained from the sale of Finney’s Suzuki Vitara SUV for £6,240 and an additional £1,775 in cash. Finney was sentenced to 28 months in prison in December 2021 after pleading guilty at Chester Crown Court to multiple offenses, including selling 2,4-dinitrophenol (DNP), a highly toxic industrial chemical, as a diet pill. DNP has caused at least 33 deaths...

On 11 July, 2024, Bitcoin (BTC) stabilized around the $57,000 mark, while the German Government continues to transfer Bitcoin to exchanges, and US spot Bitcoin ETFs recorded significant inflows. On-chain analytics indicate that whales are accumulating BTC during dips, potentially foreshadowing an imminent rally. According to data from Akram Intelligence, the German Government's Bitcoin holdings decreased from 40,000 to 16,000 BTC this week. This reduction, translating from $2.2 billion to $896 million, has sparked Fear, Uncertainty, and Doubt (FUD) among traders, possibly contributing to a decline in Bitcoin's price. Despite these transfers, US spot Bitcoin ETFs experienced their fourth consecutive day of inflows on Thursday, amounting to $78.90 million. Cumulatively, these inflows reached $737.50 million this week, signaling growing investor confidence. As of Thursday, the combined Bitcoin reserves held by these 11 US spot Bitcoin ETFs amounted to $50.49 billion. Data from...

Securities and Exchange Commission (SEC) announced updates to its website to enhance compliance with federal statutes and standards, as well as to improve functionality and user experience for market participants and the public. “I’m pleased that these updates will improve our website’s compliance with federal standards,” said SEC Chair Gary Gensler. “These changes will benefit investors, issuers, and the broader public.” The updates to SEC.gov include a revamped information architecture to better align with the 21st Century IDEA, the General Services Administration’s U.S. Web Design Standards, and Section 508 of the Rehabilitation Act of 1973. Notable improvements feature a more responsive design, increased mobile usability, enhanced search capabilities, and streamlined content organization. These changes aim to enhance the site’s accessibility for all users, including those with disabilities, and support a variety of devices and screen sizes. The SEC has made navigation more...

On 11 July, 2024, reports emerged that Binance is in the final stages of negotiations to sell a majority stake in South Korean crypto exchange Gopax to local cloud service provider Megazone. The move aims to reduce Binance's 72.6% ownership in Gopax to around 10%, following requests from South Korean financial authorities to improve the exchange’s governance structure. Binance's decision to offload the majority of its stake comes as Gopax faces an August 11 deadline to renew its real-name account contract with Jeonbuk Bank, initially signed in August 2022 for a two-year term. Binance had acquired its controlling stake in Gopax in February 2023 as part of efforts to re-enter the South Korean market after ceasing multiple operations there in 2021. However, South Korean regulators have so far denied approval for the change in majority ownership, blocking Binance’s capital injection into Gopax. An unnamed industry insider told The Chosun Ilbo that Binance is pursuing the stake sale to...