U.S. Regulator

Nonprofit Sats Center Launches To Educate U.S. Regulators On Bitcoin

09/12/2021 by Idelto Editor

Sats Center aims to educate elected officials and regulators on the power of Bitcoin for economic advancement and financial inclusion.

Leading Bitcoin Companies have launched Sats Center, a nonprofit business league dedicated to fostering an innovative environment for Bitcoin, the organization said in a statement Thursday. The nonprofit will provide education to the public, elected officials, and regulators seeking to learn more about Bitcoin and how it can empower economic growth and financial inclusion.

“Sats Center will focus primarily on the state and local level, filling in knowledge gaps about Bitcoin and the opportunities it can bring to communities,” the company said in a statement. “The organization will also create an environment for the innovative open-source industry to connect with regulators and community leaders.”

While many U.S. politicians and regulators are aware of Bitcoin, most still lack a comprehensive understanding of the network. Few people in power in the country realize the true value proposition of the peer-to-peer monetary system and how it can improve the lives of everyday citizens.

This dynamic became clear on Wednesday, as lawmakers of the House Financial Services Committee hosted a hearing to better understand the nuances of Bitcoin technology. Most of those present bundled the sound monetary network and “digital assets” into the same basket, discussing how Congress could help regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission embed them into current rules — dismissing critical differences between the two technologies.

Sats Center’s mission intersects with that reality. The nonprofit said it envisions a future where Bitcoin is leveraged to enable commerce, access to financial services, and individual economic sovereignty. To achieve that, Sats Center said it would build a grassroots community of educators, supporters, and advocates working together to inform people and build that future.

Founding members of the nonprofit organization include Bitcoin Magazine, Bit Block Boom, Bitrefill, Casa, Compass Mining, Core Scientific, Marathon, Riot Blockchain, River Financial, Swan Bitcoin, and Upstream Data, among others.

Digital Securities Brokers May Not Be Subject to Enforcement for 5 Years, Says US Regulator

24/12/2020 by Idelto Editor

The U.S. Securities and Exchange Commission (SEC) issued a statement and is looking for public comment toward the custody of digital asset securities that have been handled by special purpose broker-dealers. The statement from the SEC follows the recent crackdown against Ripple Labs and the subsequent delisting of XRP on various platforms.

Ever since the SEC announced it was suing the company Ripple and the top two executives, the crypto-asset XRP dropped significantly in value. Moreover, since the SEC announcement, three cryptocurrency exchanges such as OSL, Crosstower, and Beaxy have all dropped XRP from the platforms. Furthermore, Bitwise investment fund also decided to sell it’s XRP holdings after the SEC lawsuit as the fund’s portfolio held close to 4% in XRP.

On December 23, the SEC issued a statement concerning the custody of digital asset securities that have been handled by broker-dealers. The government entity released the statement in order to “encourage innovation around the application of Securities Exchange Act Rule 15c3-3 to digital asset securities.”

Essentially for a period of five years, some brokers that have dealt with digital securities and provide customers with certain disclosures may not see enforcement against them.

“For a period of five years, a broker-dealer operating under the circumstances set forth in the statement will not be subject to a Commission enforcement action on the basis that the broker-dealer deems itself to have obtained and maintained physical possession or control of customer fully paid and excess margin digital asset securities for the purposes of paragraph (b)(1) of Rule 15c3-3,” the SEC statement details.

The U.S. regulator adds:

These circumstances, among other things, include that the broker-dealer limits its business to digital asset securities, establishes and implements policies and procedures reasonably designed to mitigate the risks associated with conducting a business in digital asset securities, and provides customers with certain disclosures regarding the risks of engaging in transactions involving digital asset securities.

The U.S. financial watchdog also said that the government entity is “requesting comment” in order to gain insight into the “evolving standards and best practices,” in regard to digital asset securities custody.

The SEC has been cracking down on the crypto industry for quite some time, and charged the blockchain company Block.one for conducting an unregistered initial coin offering of digital tokens (ICO). Block.one settled the charges by paying a $24 million civil penalty, the U.S. regulator detailed last year.

In addition to the exchanges and Bitwise dropping XRP, The Block’s contributor Frank Chaparro detailed on Wednesday, Mike Novogratz’s Galaxy Digital and the firm Jump Trading allegedly decided to stop dealing in XRP since the SEC charges, according to sources. Following the SEC’s statement, however, other platforms may decide not to drop XRP going forward.

“The Commission welcomes engagement from interested parties on these issues,” the U.S. regulator concluded.

What do you think about the SEC’s recent statement toward special purpose broker-dealers who deal with digital currency securities? Let us know what you think in the comments section below.

The post Digital Securities Brokers May Not Be Subject to Enforcement for 5 Years, Says US Regulator appeared first on Bitcoin News.

Presidential Candidate Brock Pierce Served With Lawsuit for Alleged ICO Fraud

16/09/2020 by Idelto Editor

Former Disney child actor and U.S. Presidential candidate, Brock Pierce, was served with a lawsuit during a political campaign event held on Monday. The class-action lawsuit was filed in May and it claims the defendants, including Pierce, sold unregistered securities during the EOS initial coin offering (ICO).

Last May, a class-action lawsuit on behalf of any person who purchased or received EOS tokens during the June 2017 ICO was filed against a number of firms and company executives behind the EOS project.

The lawsuit named Brock Pierce, but also Block.one cofounders Daniel Larimer and Brendan Blumer are named as defendants too in the matter. The complaint says that Pierce alongside other Block.one leadership is “accountable for duping global investors in what may be the biggest of all crypto frauds.”

Moreover, the court filing details that Block.one operated in Hong Kong and the state of Virginia, but it is registered in the Cayman Islands. Even though the startup did not register with the U.S. Securities Exchange Commission (SEC) or seek exemption from registration, it still sold 900 million EOS tokens.

The class action accuses the company and executives of “aggressively marketing to investors in the United States and other countries.” Ultimately the plaintiffs believe EOS “left investors with an unregulated asset that became virtually worthless.”

Meanwhile, on Monday the former child actor and now crypto billionaire, Brock Pierce, held a campaign rally in New York City. Later in the day, a video of the rally surfaced from the CEO of Typhon Capital Management, James Koutoulas, who is a member of the plaintiff’s counsel in the EOS class-action lawsuit.

In the video, Pierce is served with the court subpoena while he is greeting a number of political supporters in New York. Koutoulas tweeted about the entrepreneur being served during his rally.

“Our team served Brock Pierce for securities fraud at his rally in NYC,” Koutoulas said. “Pro tip- when you’re trying to avoid getting served for a multi B fraud case, maybe lay off outlandish presidential campaigns.”

Koutoulas further added:

As we progress in holding this conman accountable, feel free to reach out if you lost money after buying eos in the ICO or on exchange.

Pierce’s official Twitter account and campaign did not release a statement in response to the securities fraud allegations. Instead, Pierce thanked everyone for coming out to the campaign event in NYC later in the day. He also said he was “glad to see that [his] candidacy is being taken so seriously,” when his campaign story was featured on the front page of the New York Post.

Brock Pierce is also well known in the cryptocurrency space and his campaign website also details how he has raised billions of dollars during the crypto ecosystem’s early days. Pierce is also running against the hip hop star, Kanye West, who is campaigning for POTUS against the Republican incumbent Donald Trump and Democrat challenger Joe Biden as well.

Block.one was already in trouble with the SEC last year and the organization settled with the U.S. regulator for $24 million or 0.6% of the $4 billion ICO funds. “Institutional funds that were lied to by Block.one have a duty to all their investors – large and small – to take action against fraudsters and con artists,” said Koutoulas.

What do you think about Brock Pierce being served with a lawsuit against the EOS initial coin offering (ICO)? Let us know what you think about this subject in the comments section below.

The post Presidential Candidate Brock Pierce Served With Lawsuit for Alleged ICO Fraud appeared first on Bitcoin News.