SEC sues Do Kwon, Paxos ready to litigate, SBF’s VPN: Hodler’s…

Top Stories This Week

Paxos ‘categorically disagrees’ with the SEC that BUSD is a security

The United States Securities and Exchange Commission (SEC) has defined the stablecoin Binance USD (BUSD) as a security in a Wells Notice sent to its issuer, Paxos Trust Company. The SEC alleges the organization failed to register BUSD under federal securities laws. The firm, however, “categorically disagrees” with the authority’s view, and it’s prepared to “vigorously litigate” the matter in the U.S. courts. Also this week, Paxos was given directions from the New York Department of Financial Services to halt the issuance of new BUSD tokens. The department allegedly received a complaint last year from Circle — another stablecoin issuer — claiming that Binance’s reserves were insufficient to back BUSD.

SEC sues Do Kwon and Terraform Labs for fraud

The U.S. SEC has also filed a lawsuit against Terraform Labs and its founder Do Kwon for allegedly “orchestrating a multi-billion dollar crypto asset securities fraud.” The regulator said Kwon and Terraform offered and sold an “inter-connected suite of crypto asset securities, many in unregistered transactions.” It pointed to the firm’s now-collapsed algorithmic stablecoin, TerraClassicUSD (USTC) and its connected cryptocurrency Terra Classic (LUNC). The complaint seeks charges for violations of registration and anti-fraud provisions of securities laws.

Federal judge hints at denying Sam Bankman-Fried any internet access as condition of bail

Sam Bankman-Fried appeared in court for the first time in days after using a VPN for allegedly watching football. Prosecutors claim the use of a VPN raised “several potential concerns,” after the former CEO contacted potential witnesses in his criminal case earlier this month. Prosecutors want Bankman-Fried to be prohibited from using cellphones, tablets, computers, or the internet, meaning no more League of Legends or other video games. In FTX bankruptcy news, a federal judge approved the release of the guarantors’ names for the $250 million bond. Bankman-Fried’s criminal trial is scheduled to begin in October, while FTX’s bankruptcy case is ongoing.

El Salvador to open a ‘Bitcoin Embassy’ in the United States

A “Bitcoin Embassy” is being opened by El Salvador in the United States. Ambassador Milena Mayorga said the country’s representative office and the state of Texas will work on new joint projects to promote Bitcoin adoption. In another headline, the International Monetary Fund advised El Salvador to reconsider plans to increase Bitcoin exposure, citing the “speculative nature” of crypto markets, as well as its impacts on fiscal sustainability and consumer protection. Bitcoin has been a legal tender in El Salvador since 2021.

Celsius chooses NovaWulf’s bid to exit from bankruptcy

Bankrupt crypto lender Celsius Network has chosen NovaWulf Digital Management as the sponsor for its proposed Chapter 11 restructuring plan, which will see the investment advisory firm take over the operations of a new company, with most former Celsius customers estimated to recover up to 70% of their funds. The proposed plan has the support of the unsecured creditors’ committee and would see the creation of a new public platform called NewCo fully owned by Earn creditors. Six firms placed bids on Celsius crypto assets, including Binance and Galaxy Digital.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $24,372, Ether (ETH) at $1,694 and XRP at $0.39. The total market cap is at $1.11 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Filecoin (FIL) at 51.13%, Internet Computer (ICP) at 46.86% and Astar (ASTR) at 43.80%.

The top three altcoin losers of the week are The Graph (GRT) at -1.62%, Nexo (NEXO) at -1.49% and UNUS SED LEO (LEO) at -1.05%. 

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.