The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against crypto exchange Binance and its CEO Changpeng Zhao (CZ) with allegations of regulatory violations in seven counts. The complaint was filed in the U.S. District Court for the Northern District of Illinois. More: - The CFTC accused Binance of engaging in proprietary trading activity with at least 300 house accounts connected directly or indirectly to CZ.
- The suit claimed those accounts were exempt from certain safeguards, including anti-fraud or anti-manipulation controls and the platform’s insider trading policy.
- Other accusations include executing unregistered futures transactions, providing illegal commodities options, failing to properly register with the derivatives regulator, law evasion, market manipulation, obscuring the location of executive offices, and failing to supervise diligently or implement anti-money laundering (AML), terrorism financing, and Know Your Customer (KYC) measures.
- CEO Zhao said they do not agree with the allegations in the lawsuit, calling the complaint unexpected and disappointing.
- CZ also confirmed that he has two accounts at Binance for his crypto holdings and Binance Card.
- Following the news, withdrawals from Binance jumped significantly, with nearly $1B in net outflows within just 24 hours.
Zoom Out: - The CFTC had been investigating Binance since 2021.
- Binance, the largest crypto exchange by trading volume, has also been under scrutiny by the Internal Revenue Service (IRS), the Securities and Exchange Commission (SEC), and federal prosecutors in the U.S.
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U.S. Judge Jennifer Rearden has temporarily put Binance.US' $1B Voyager Digital acquisition deal on hold. The decision came right after the U.S. government requested an emergency stay related to the Department of Justice's (DOJ) appeal to the deal. More: - The ruling will cause the bankrupt crypto lender Voyager Digital and the crypto exchange Binance's U.S. arm, Binance.US, to have to wait until a final decision on the DOJ's appeal.
- The DOJ applied for the emergency stay on March 17.
- Earlier in March, U.S. Bankruptcy Judge Michael Wiles gave the green light to the deal, citing that even the U.S. Securities and Exchange Commission (SEC) and the DOJ were not sure whether the sales deal would create legal issues.
- However, Wiles' decision was followed by multiple attempts from U.S. regulators to halt the deal.
- If ultimately approved, the acquisition deal will allow Binance.US to buy the assets of Voyager and pave the way for Voyager's investors to get back 50-73% of their holdings.
- The sale is also expected to result in a $100M gain for customers compared to a possible liquidation.
Zoom Out: - Voyager filed for Chapter 11 bankruptcy in July 2022.
- In December, Binance.US made a deal with Voyager to acquire its assets for $1B.
- The U.S. regulators' objections to the deal are mainly based on the transaction's potential to include the sale of unregistered securities, including Voyager's native token VGX.
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A new bail agreement between U.S. prosecutors and lawyers for Sam Bankman-Fried (SBF), the former CEO of bankrupt crypto exchange FTX, has restricted SBF's access to messaging apps. The new terms are pending approval by U.S. District Judge Lewis Kaplan. More: - The agreement came shortly after Kaplan, overseeing SBF's case, said the former CEO should be sent to prison pending trial.
- As part of the deal, SBF will not be able to use any electronic communication devices except for a phone without internet access and a laptop with limited capabilities.
- The new phone will allow only text messages and voice calls, and SBF will not be able to use any messaging apps on the device.
- The laptop will also be constantly monitored through user activity tracking software, and SBF will not have any administrative access.
- In any case of a possible violation, SBF will have to send devices for review.
- SBF's parents also signed sworn affidavits that they would not bring prohibited electronic devices into the home.
- SBF will appear in court on Oct. 2 to defend himself against over a dozen criminal charges, of which he has pleaded not guilty to eight.
Zoom Out: - The former FTX CEO was extradited from the Bahamas to the U.S. in December and released on a $250M bond to home detention at his parents' home in California.
- Concerns around SBF's attempt to contact FTX executives in January caused federal prosecutors to seek severe restrictions on his internet access.
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Official documents from the Serbian Business Registry have revealed that Do Kwon, the founder of the collapsed Terra ecosystem, established a shell company dubbed Codokoj22 in Serbia for less than $1. The company was founded three weeks after the International Criminal Police Organization (Interpol) issued a red notice for Kwon's arrest in September 2022. More: - According to the documents, Kwon received help from local lawyers in Serbia to found the company and signed a contract with the Serbian law firm Gecic Law to represent him.
- In the documents, dated Oct. 12, 2022, Do Kwon did not hide his identity.
- The company was founded by Kwon together with Han Chang-Joon, the chief financial officer of Terraform Labs.
- Kwon and Han were recently arrested at the Podgorica Airport in Montenegro while trying to leave for Dubai carrying falsified traveling documents.
- Both the U.S. and Kwon's native South Korea seek the Terra founder's extradition, though they do not have a direct extradition treaty with Montenegro.
- Recent reports claimed that Do Kwon plans to appeal against the Montenegrin court's decision to extend detention time for up to 30 days.
- Before being arrested in Montenegro, the 31-year-old founder was thought to be hiding in Serbia since December last year.
Zoom Out: - The multibillion-dollar Terra ecosystem collapsed last year after its native token Luna's price plummeted nearly to zero in May 2022 and lost all its value against the U.S. dollar (USD), triggering a prolonged crypto winter.
- The collapse caused over $60B of money to be wiped off the crypto market.
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The U.K. Treasury has abandoned its plans to release a government-backed NFT dubbed NFT for Britain. The decision followed the department's consultation with the Royal Mint, the official maker of British coins. More: - Treasury Select Committee Chair Harriet Baldwin cited economic uncertainty in the crypto industry and the speculative nature of the NFTs while explaining the decision.
- The country's economic secretary, Andrew Griffith, said the department would keep the proposal under review, even though it is currently not proceeding.
- The project was first proposed by U.K. Prime Minister Rishi Sunak in April 2022 while he was chancellor, with the Royal Mint tasked with releasing the NFT by the summer of last year.
- The collection saw several delays after Sunak's order and was ultimately canceled.
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Crypto exchange Kraken has signed a multi-year sponsorship deal with the popular Formula 1 team Williams Racing. The financial details of the deal have yet to be disclosed. More: - The agreement became Kraken's first major sponsorship deal.
- As part of the deal, Williams Racing will place Kraken's logo on the halo and rear wing of the cars, along with drivers' and team uniforms, for the rest of the 2023 season.
- Artists will also see their NFTs sold on Kraken's NFT marketplace on the rear wing of Williams Racing's cars during some races.
- In May 2022, Williams Racing signed a similar multi-year deal with metaverse platform Terra Virtua, though it cut ties with the firm at the end of the year.
- Kraken's chief marketing officer, Mayur Gupta, said the exchange is actively exploring the areas beyond Formula 1.
Zoom Out: - Throughout the 2022 season, crypto gained massive popularity in Formula 1, with all 10 teams having at least one sponsorship with crypto-related firms, including OKX and Crypto.com.
- The presence of crypto firms in Formula 1 was reduced by almost half at the beginning of the season amid the prolonged crypto winter, crypto exchange FTX's bankruptcy, and Terra ecosystem's collapse wiping more than $60B off the market.
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 |  | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. |  | | 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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