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Class-Action Lawsuit Accuses Terraform Labs of Misleading Investors

19/06/2022 by Idelto Editor

Following the Terra stablecoin depegging incident, a class-action lawsuit has been filed against the company Terraform Labs and a number of other crypto companies over the collapse of terrausd (UST). The case against Terraform Labs (TFL) was filed by the plaintiff Nick Patterson on behalf of others similarly situated and the law firm Scott+Scott LLP.

A Class-Action Lawsuit Has Been Filed Against TFL and Affiliated Firms — Plaintiffs Claim Terra-Based Tokens Were Unregistered Securities


According to recently filed documents in the U.S. District Court in Northern California, Terraform Labs is accused of selling unregistered securities and misleading investors. In addition to TFL, Jump Crypto, Jump Trading, Republic Capital, Definance Capital, GSR Markets, Three Arrows Capital, Nicholas Platias, and Do Kwon are also named in the lawsuit. Patterson and the group of plaintiffs accuse the defendants of “repeatedly touting the stability of UST.”

TERRAFORM LABS AND CO-FOUNDER DO KWON SUED IN U.S. COURT OVER COLLAPSE OF STABLECOIN TERRAUSD – COURT FILING

— *Walter Bloomberg (@DeItaone) June 18, 2022

Moreover, the lawsuit claims that Terra-based tokens were unregistered securities. “The Terra tokens are securities that the TFL failed to register before selling,” the plaintiff’s lawyers insist. The lawsuit was revealed on June 18, 2022, and the whistleblower Fatman tweeted about the case being filed in California. The lawsuit explains that investors were told that UST and Anchor were stable.

Nicholas Platias, author of the Anchor white paper is quoted in the court filing as saying Anchor’s interest rate was “stable” and the decentralized finance (defi) protocol offered a “low-volatility yield” with a “reliable rate of return.” “TFL and the Luna Foundation Guard misled U.S. investors concerning the stability of UST and LUNA, as well as the sustainability of Anchor,” the plaintiff’s argument notes.

The plaintiffs also quote a tweet made by the Anchor Protocol’s official Twitter account on March 17, 2021, which said:

Anchor is not your ordinary money market. The protocol offers stable, 20% APY interest to depositors and only accepts liquid staking derivatives as posted collateral by borrowers.

Three Arrows Capital Co-Founder Accused of Telling People to Take out Loans Against Bitcoin and Deposit Proceeds Into Anchor


The lawsuit against TFL and the group of hedge funds follows the recent lawsuit against Binance US, which is accused of selling unregistered securities and advertising terrausd (UST) as “safe.” Further another lawsuit against Coinbase has been filed concerning the UST fallout as plaintiffs accuse Coinbase of passing UST off “as just another stablecoin.” The lawsuit was initiated by Erickson Kramer Osborne and the law firm Milberg Coleman Bryson Phillips Grossman LLP.

In addition to TFL, Nicholas Platias, Do Kwon, Jump Crypto, Jump Trading, Republic Capital, Definance Capital, and GSR Markets, Three Arrows Capital (3AC) co-founder Su Zhu is accused of telling people to take loans out on their bitcoin to use the proceeds on Anchor. “Seven days later, immediately following the UST collapse, this post was deleted,” the lawsuit against TFL details. 3AC is allegedly facing financial hardships according to reports and crypto community members have accused the crypto hedge fund of being insolvent.

What do you think about the class-action lawsuit against TFL? Let us know what you think about this subject in the comments section below.

Filed Under: 3AC, and GSR Markets, Binance, california, Class Action Lawsuit, Class-Action, Coinbase, Definance Capital, depegging, do kwon, English, Jump Crypto, Jump Trading, LUNA, News, News Bitcoin, Nicholas Platias, Republic Capital., Terra, terraform labs, TerraUSD, TFL, Three Arrows Capita, UST, UST depeg, whistleblower Fatman

California Governor Signs Executive Order Encouraging Bitcoin And Crypto Businesses

04/05/2022 by Idelto Editor

The governor of California signed an executive order to drive innovation for bitcoin and other cryptocurrency-based businesses with transparent regulation.

  • Gavin Newsom, Governor of California, signed an executive order today crafting a regulatory framework for companies operating in bitcoin and other cryptocurrencies.
  • The EO combines a multitude of regulatory agencies set to define regulatory practices throughout a public process based on feedback from stakeholders.
  • The order also initiates the creation of a workforce pathway and educational opportunities for those hoping to enter the cryptocurrency space.

Governor Gavin Newsom of California signed an executive order (EO) today creating the legal framework for companies working within bitcoin and other cryptocurrencies, per a press release from the governor’s office.

The EO states one of its main priorities is “GovOps shall explore opportunities to deploy blockchain technologies to address public-serving and emerging needs.”

Should the state seek to determine if a company is an applicable fit for a particular vendor need, the state will review particular use-cases of each company and determine whether or not it will accept vendors based on factors such as environmental impact and relevance.

Members of the Governor’s Council for Postsecondary Education are expected to create a research and work environment to strengthen innovation in cryptocurrency designed for exposing students to new opportunities in the space. The goal is to develop a workforce pathway and generate paths for continued education “to ensure a pipeline of talent.”

The EO states multiple priorities of the state in creating this regulatory framework, but one in particular is the creation of a consistent and transparent business environment for any companies operating with the bitcoin or broader cryptocurrency ecosystem.

The order means to create a feedback system of stakeholders led by the Governor’s Office of Business and Economic Development (GO-Biz) and Business, Consumer Services and Housing Agency (BCSH) and the Department of Financial Protection and Innovation (DFPI).The goal of this coalition is to harmonize state and federal authorities for regulatory action.

These regulatory agencies will work together gathering feedback on how to properly operate in the space by collecting data from a vast array of stakeholders including companies in and outside of California, lower economic communities unaffected by technological growth, experts, venture capital firms, and many others.

The DFPI is set to engage in a public development process for comprehensive regulation at the direction of federal guidelines. The DFPI is expected to solicit public commentary regarding regulation under the California Consumer Financial Protection Law (CCFPL) while performing a voluntary solicitation of companies already working within the space about their financial products. The governor seeks open and transparent regulatory practices that will lead to innovative practices fostering a healthy economy.

“California is a global hub of innovation, and we’re setting up the state for success with this emerging technology – spurring responsible innovation, protecting consumers, and leveraging this technology for the public good,” said Governor Newsom. 

Filed Under: Bitcoin, Bitcoin Magazine, california, crypto, English, Executive Order, Markets, News

Food Chain Everbowl To Let Employees Get Paid In Bitcoin

23/02/2022 by Idelto Editor

The California-based business said the move aims to provide an alternative savings vehicle for its employees.

Corporate employees of superfood chain everbowl now have the option to receive a portion of their salaries in bitcoin, the company said in a press release Wednesday.

“We are proud to be at the forefront of exploring how Bitcoin can be used as an alternative savings vehicle for our corporate employees,” everbowl founder and CEO, Jeff Fenster, said in the release.

The optionality for everbowl’s employees follows a move from earlier this month by the California, U.S.-based company to operate in a Bitcoin standard, a decision that also led to the conversion of the company’s cash reserves into bitcoin.

The company is calling its new functionality a Bitcoin Savings Plan, and everbowl said it expects to launch the option for its corporate employees to get paid in bitcoin next month.

“The plan, slated to launch in March 2022, allows corporate workers to take as much of their earnings in each pay period as they want in Bitcoin,” per the release.

Fenster will be “leading by example” and taking his salary in bitcoin, the release said.

“The highest U.S. inflation rate in four decades and the excessive debasement of the U.S. dollar have contributed to everbowl’s move to become an early adopter of the Bitcoin Standard at the corporate level,” Fenster said. “These situations affect our employees as well, and our position as a high-growth company allows us to be innovative in providing opportunities for our employees to be successful.”

The quick-serve restaurant chain was established in 2016 in Southern California and has since grown to over 50 locations in the state and across the country, including Arizona, Florida, Georgia, Indiana, Missouri, Nevada, Texas, and Utah, among others.

The adoption of a Bitcoin standard could help everbowl propel its business even further. In 2020, Canadian restaurant Tahinis embarked on a Bitcoin standard and converted all of its cash reserves into bitcoin, a move that is paying dividends a couple of years later as the group starts expanding across Ontario.

Filed Under: Bitcoin Magazine, business, california, English, Everbowl, News, paid in bitcoin

New Bill Would Let California State Agencies Accept Bitcoin

22/02/2022 by Idelto Editor

The bill is the latest to join a growing cohort of state legislation being proposed to encourage bitcoin’s usage for payments.

California is the latest U.S. state to jump on the bitcoin payments bandwagon.

Senator Kamlager filed Bill 1275 to the state’s legislature on Friday to add a section to the government code that relates to services provided by Californian agencies to the public.

“This bill would authorize a state agency to accept cryptocurrency as a method of payment for the provision of government services,” per the text.

The bill joins a growing cohort of U.S. states looking to implement legislation that incentivizes the usage of bitcoin as a medium of exchange.

Last week, Colorado Governor Jared Polis pledged that its citizens would be able to use bitcoin and cryptocurrency to pay state taxes by this summer, adding that they are a “very forward-looking, innovative state.” However, Polis highlighted that the state would immediately convert the cryptocurrencies received as payment into U.S. dollars.

Other states are still in the process of studying existing Bitcoin legislation and gauging alternatives for the future. New Hampshire Governor Chris Sununu last week signed an executive order establishing a commission to investigate current Bitcoin-related laws and propose new ones as the state seeks to encourage innovation and attract businesses in the sector.

Missouri, on the other hand, is seeking to incentivize bitcoin adoption through tax cuts. State Representative Phil Christofanelli on Feb. 11 said that Missouri should stay “open to innovation” and proposed that bitcoin be exempt from property taxes at the state, county, and local levels.

A couple of days before the Christofanelli proposal, Tennessee State Representative Jason Powell introduced two bills. The first would allow the state and its municipalities to buy bitcoin for their treasuries, while the second sought to establish a bitcoin and cryptocurrency study committee to “help determine how to make [Tennessee] the most forward thinking and pro-business state for cryptocurrency and blockchain and to foster a positive economic environment for blockchain and cryptocurrency.”

On a federal level, the White House is eager to set out a cohesive set of policies to regulate Bitcoin and digital assets as currently, legislation and its enforcement are scattered across sectors and agencies. To do so, the Biden administration is expected to release an executive order soon to task federal agencies with assessing the risks and opportunities that Bitcoin and cryptocurrencies could pose.

Filed Under: bill, Bitcoin, Bitcoin Magazine, california, English, Markets, News

Superfood Chain Everbowl Adopts Bitcoin Standard

04/02/2022 by Idelto Editor

The California-based food chain said inflation and eroding purchasing power of fiat currencies prompted the switch into Bitcoin.

Everbowl, a craft superfood chain based in California, will now run its business operations on a Bitcoin standard and convert all of its cash reserves to bitcoin, the company said in a Friday statement.

“We’ve concluded that running the business exclusively on cash isn’t the most advantageous, nor the safest, method of running a business in 2022 and beyond,” Everbowl founder and CEO, Jeff Fenster, said in a statement. “Also, I understand that it is still early in terms of corporate adoption, as well as governmental adoption of Bitcoin, but we plan to make a contribution to this cause by leading with our example.”

“A disruptive growth company should always position itself ahead of the pack and take the lead by adopting new technologies early rather than late. We believe it’s a matter of ‘when,’ not ‘if,’ that the Bitcoin Standard will become the Gold Standard,” Fenster added.

Fenster said he started to rethink his company’s treasury strategy “in light of the excessive debasement of the U.S. dollar coupled with a 39-year high inflation rate.” The chief executive then began to learn more about the structure of a Bitcoin standard, after which the decision to adopt it became natural.

“The value of the cash within our company is eroding at an unsustainable rate,” Fenster added. “I strongly encourage all business leaders to at a minimum do their own research on Bitcoin to better understand the strategy.”

Everbowl will also offer its employees the option to be paid in bitcoin, a move the company will formally announce soon.

“While we understand it is not possible to convert 100% of our business operations to the Bitcoin Standard at this time, we will increase our adoption and conversion as more access points become available,” Fenster said.

In 2020, Canadian restaurant Tahinis embarked on a Bitcoin standard and converted all of its cash reserves into bitcoin. A couple of years later, the group started expanding across Ontario with the boost sound money gave its business.

Filed Under: Bitcoin Magazine, bitcoin standard, business, california, English, Everbowl, News

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