The SEC has sued Dragonchain's founder and CEO, John Roets, for selling unregistered securities. The regulatory watchdog claims that Roets sold unregistered securities, offering Dragon tokens (DRGB) to 5,000 investors in 2017. More: - Dragonchain was developed in 2014 and markets itself as a hybrid blockchain for "solving business problems at an enterprise scale," originating a the Walt Disney Studios in Seattle.
- The SEC filed a case against Roets for raising $16.5M by selling unregistered crypto asset securities. The company was fined $50,000 and issued a cease and desist order, and now it seeks permanent injunctions for wrongfully obtaining profits.
- The case has been filed in the U.S District Court for the Western District of Washington, charging the founder and three other legal entities, including:
- Dragonchain Inc. (“Dragonchain”),
- Dragonchain Foundation (the "Foundation"),
- and The Dragon Company ("TDC").
- The company sold DragonChain tokens in 2017 for members of its crypto community, selling DRGN tokens via an ICO in Oct. and Nov. 2017.
- Crypto companies offer ICO offerings to raise money quickly, which involves inviting people to buy it before its official public release.
- The SEC legal filing states that:
- The ICO raised $14M from 5,000 investors worldwide, including the U.S.
- The Dragon Company offered and sold $2.5M worth of DRGN tokens to cover business and market Dragonchain.
- Dragonchain published a response to the SEC lawsuit by stating "to provide our clear argument for the existence and demonstrate that the commission should not charge any of these parties with intentional or unintentional violation of U.S. securities laws."
- Roet believes that the SEC is trying to "shoehorn software technology into incompatible securities law from the 1930s."
- Roet and many others in the crypto industry wonder if the commission fully understands the technology enough to regulate it.
Crypto Times 
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Sudoswap, the NFT ecosystem, is gaining momentum as its TVL jumped from $120,000 to $3M over the past month. The company's liquidity pool skyrocketed 2,400%, facilitating over 60,000 NFTs and 29,000 transactions. More: - The challenge in the NFT space is poor liquidity and slippage. For instance, a CryptoPunk might sell for $100,000 one day and not others.
- This marks confusion for NFT investors as they are unsure of the true value of the NFT.
- Sudoswap wants to solve this problem by releasing an NFT automated market-making (AMM) algorithm and liquidity pools similar to Uniswap.
- With the AMM, NFT traders can buy and sell without waiting for offers, and sellers contribute their liquidity for automated trades.
- Sudoswap operates like its own pool, allowing sellers to provide liquidity to those pools, and users can sell NFTs on a bonding curve that increases the value as items are purchased.
- The platform's trades skyrocketed:
- 60,000 NFTs were traded,
- 29,000 transactions,
- the total representing $16.5M in trade volumes.
- The platform charges low fees in addition to liquidity pools. In comparison, OpenSea processed $800M in NFT trades simultaneously.
Blockworks
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Colombia's tax chief says the country may introduce its own Central Bank Digital Currency. Colombia's new president, Gustavo Petro, took office on Aug. 7 and is looking into integrating digital currencies. More: - The government of Colombia may create its own 'digital currency' to enable faster and easier consumer transactions.
- CBDCs are digital replicas of a country's fiat currency backed by a bank.
- President Petro, 62, campaigned to tackle corruption, create opportunities for youth, wean off fossil fuels, and express interest in digital assets.
- During his campaign, he also said that the country should mine Bitcoin instead of producing cocaine.
- China has already released its CBDC, the digital Yuan, and others like Columbia and smaller Caribbean countries are in the research phase.
Decrypt
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Jesse Powell, CEO of Kraken, calls the Tornado ban "unconstitutional" and a knee-jerk response to Terra's collapse this year. Powell and many others in the crypto industry condemn the sanctions as it impacts the entire industry and legitimate crypto investors. More: - Following the sanctions, Github removed Tornado Cash's source code; Powell says that it "was not necessary" and that people have the right to financial privacy.
- A representative confirmed that Toronado Cash's smart contracts are still on Ethereum.
- Powell believes that the sanctions will not survive a challenge in court.
- In 1996, in a federal court case titled "Bernstein v. U.S.," the court established "source code as a speech."
- This case remains the leading case applying First Amendment standards to encryption issues.
- The Ninth Circuit Court of Appeals ruled that software source code was a speech protected by the First Amendment and that the government's regulations preventing its publication were unconstitutional.
- Citing the case, Hayden Adams, inventor of Uniswap, called the sanctions a "freedom of speech issue."
Decrypt
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Japan SBI Remit will utilize RippleNet Technology to facilitate money transfers from Japan to Thailand. More: - The partnership includes Thailand's Siam Commercial Bank (SCB), Ripple, and SBI Remit to allow for seamless money transfers between the two countries.
- Ripple's enterprise blockchain solution, RippleNet, will process real-time remittance services.
- SBI remit customers in Japan can use ATMs to instantly send money to the recipient's SCB savings account in Thailand.
- Ripple underlined the progressive regulations in the South Pacific that helped the company expand to new markets and offer faster money transfers.
Crypto Potato
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Genesis CEO Micheal Moro stepped down as the company cut 20% of its employee headcount. The firm announced layoffs to reduce costs during bear market conditions. More: - Genesis, the N.Y.-based company, launched in 2013 and is the largest crypto brokerage for global institutional investors.
- The company is known for releasing the industry's first Bitcoin OTC. Last week the company announced that it originated over $40B in new loans in the second quarter, a 9% drop from the first quarter.
- In June, Genesis had $4.9B in active loans and reported over $17B in spot volume trading during the second quarter.
- Genesis was also the largest creditor for Three Arrows Capital, a crypto hedge fund that filed for bankruptcy this year; $2.36B was owed to the firm.
- CEO Michael Moro is being replaced by Derar Islim, Genesis COO, as an interim CEO until a suitable replacement is found.
- Moro will continue with the company as an advisor through the transition and said:
- "It has been an honour to lead Genesis for nearly a decade, and I look forward to supporting the company's next phase of growth."
- The company also hired key executives to continue strengthening the firm's future position, including:
- chief risk officer Michael Patchen,
- chief compliance officer Michael Patterson,
- chief financial officer Alice Chan,
- chief legal officer Arianna Pretto-Sakmann,
- and chief technology officer Matthew Johnson.
Decrypt
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 |  | Gia Mattu is based in Calgary, Alberta. She is an entrepreneur with experience in climate technology, drones, AI, machine learning, and blockchain technology. When she's not working, she loves to hike the Canadian Rockies, try new cuisine, and travel. | | | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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