CFTC Sues Binance And Changpeng Zhao Over Regulatory Violations

Societe Generale FORGE, a subsidiary under the umbrella of the venerable French banking institution Societe Generale, is reportedly introducing EUR CoinVertible (EURCV), a stablecoin linked to the Euro and deployed on the Ethereum blockchain, as indicated in a recent announcement via Bitstamp.

Introducing EURCV

EURCV is an ERC20 token crafted to offer a cryptocurrency with minimal volatility, maintaining a steady value reflective of the Euro. The stablecoin is collateralized by cash deposits and cash equivalents denominated in EUR.

Societe Generale assures the presence of robust legal frameworks to guarantee the separation and accessibility of reserve assets for token holders. Moreover, Bitstamp is commencing order book operations for multiple trading pairs with Flowdesk, a crypto market maker, which was chosen to supply liquidity and engage in active market-making for EURCV on Bitstamp and other platforms.

Initially, the facilitation of EURCV deposits and withdrawals will be restricted to investors whitelisted by Societe Generale, with the bank asserting the application of its existing KYC and AML compliance procedures for the onboarding of digital token holders.

An important development

Although not the pioneer in Euro stablecoins, EURCV stands out as the first to be endorsed by a largely regulated European bank. In 2018, a state owned bank in Brazil known as the Brazilian National Social Development Bank introduced a stablecoin pegged to the Real. Additionally, both Circle and Tether have also entered the market with similar Euro pegged tokens targeted at retail investors.

The launch of EURCV closely follows the inaugural bond issuance on the public Ethereum blockchain by Societe Generale, wherein a digital green bond worth 100 million Euros found full subscription by institutional asset managers AXA and Generali.

A US district judge has reportedly approved the plea agreements reached between Binance, former CEO Changpeng Zhao, and the Department of Justice (DoJ). Binance confessed to charges related to the Bank Secrecy Act (BSA), failure to register as a money transmitter, and violations of the International Emergency Economic Powers Act (IEEPA).

The context

After much back and forth, the biggest crypto exchange in the world agreed to settle the matter by paying over $4 billion to the DoJ. The founder and CEO of Binance, Changpeng Zhao, was also found culpable for not implementing a comprehensive anti-money laundering (AML) program, a breach of the BSA, and subsequently stepped down as Binance CEO. Richard Teng was named as the new CEO shortly afterwards.

US customers were prioritized

As per court records, Binance acknowledged prioritizing growth and profits over adherence to various regulations and laws. Established in 2017, Binance concentrated on attracting high-volume clients, including those based in the United States. After swiftly becoming the largest cryptocurrency exchange, Binance predominantly garnered its clientele in the US.

Furthermore, due to its service to customers based in the United States, Binance was obligated to register with FinCEN as a money services business and establish an effective AML program aimed at reasonably preventing the facilitation of money laundering, as outlined in the court documents.

Thirdweb, a smart contract development entity operating within the Web3 ecosystem, has detected a security vulnerability that has the potential to impact a variety of smart contracts in the Web3 domain. The company, which supplies tools for deploying multi-chain smart contracts in areas like gaming, minting, marketplaces, and wallets, caters to a user base exceeding 70,000 developers.

No panic just yet

On December 4th, Thirdweb revealed a vulnerability in a widely used open-source library, affecting specific pre-built smart contracts, including some developed by the company. Despite the identification of this vulnerability, the investigations have determined that there has been no exploitation of the flaw in smart contracts. This presents a limited timeframe for Web3 firms to implement preventive measures and avoid potential security breaches.

Thirdweb nevertheless stressed the urgency of addressing the vulnerability promptly, highlighting the risk associated with affected pre-built contracts such as DropERC20, ERC721, ERC1155 (all versions), and AirdropERC20 if left unrectified.

In response to the discovery, Thirdweb issued a proactive warning to the Web3 ecosystem, urging users who deployed its contracts before November 22nd to take independent mitigation steps or use a tool provided by the company.

Time is of the essence

Thirdweb recommended that developers assist users in revoking approvals on all affected contracts using revoke.cash, as suggested by DefiLlama developer 0xngmi. This measure aimed to offer additional protection to users who might choose not to implement contract mitigation steps.

In light of the identified vulnerability in the open-source library, Thirdweb has taken proactive measures. The company has reached out to the maintainers of the open-source library responsible for the vulnerability and contacted other teams that may be affected. Thirdweb has also committed to enhancing its investment in security, doubling bug bounty payouts to $50,000, and implementing a more rigorous auditing process for its smart contract deployment tools.

Moreover, Thirdweb is providing a grant to cover contract mitigations for affected users, although the full details of the vulnerability remain undisclosed for security reasons. It is noteworthy that Thirdweb successfully raised $24 million in a Series A funding round in August 2022, with contributions via prominent entities like Haun Ventures, Shopify, Coinbase, and Polygon.

Speculation is circulating within the cryptocurrency community regarding a potential $500 billion investment in Bitcoin (BTC) by the Qatar Sovereign Wealth Fund (QSWF). The motivation behind this significant move appears to be the potential for substantial profits and the increasing recognition of Bitcoin as a mainstream asset.

Qatar looking to get involved

The unverified information emerges as Bitcoin recently surpassed the $43,000 mark, fueled mainly by optimism surrounding the possible approval of a Bitcoin spot exchange-traded fund (ETF) in the U.S as well as the upcoming BTC halving event in April 2024.

According to Bitcoin advocate Max Keiser, the QSWF, tasked with managing the extensive oil and gas-derived wealth of the country, is considering allocating up to $500 billion to the flagship cryptocurrency. To contextualize, this investment would overshadow the publicly disclosed Bitcoin holdings of MicroStrategy, founded by Michael Saylor, by an astonishing 671 times. MicroStrategy currently stands as the largest corporate holder of Bitcoin, possessing 174,530 BTC following its November acquisition.

Still just a rumor

Keiser anticipates that the colossal investment by the QSWF could propel the price of Bitcoin to reach highs of $100,000. If realized, the involvement by Qatar into the crypto industry would signify a significant milestone in the institutional adoption of digital assets.

Addressing the rumor, Bitcoin advocate Luke Broyles emphasized the crucial aspect of the supply and demand dynamics concerning BTC. Broyles pointed out the remaining $76 billion worth of BTC on crypto exchanges, underscoring the fundamental principle of its fixed supply. He suggests that any substantial investment would inevitably drive prices higher.

However, Broyles expresses skepticism about the Qatar news, considering it a mere rumor, and he would be shocked if it were even remotely true. Other cryptocurrency experts share his viewpoint, noting that the QSWF currently holds $475 billion and is unlikely to allocate its entire portfolio to BTC.

Samson Mow, Bitcoin advisor to El Salvador President Nayib Bukele, recently unveiled a strategic plan for incoming Argentine President Javier Milei, set to assume office on December 10th. As the CEO of JAN3, Samson emphasizes tailoring solutions to the growing economic challenges of Argentina, prioritizing stabilization, dollarization, and closure of the central bank before considering Bitcoin integration.

CBDCs out and BTC in

There is a meeting planned in the first quarter 2024 between Milei and Mow, who expresses relief at the abandonment of the central bank digital currency (CBDC) concept. Signals suggest positive inclination toward Bitcoin adoption in the new government, with parallels drawn to the strategy adopted by El Salvador. Mow highlights the role that Bitcoin has in the economic restructuring of Argentina and advocates for its effective adoption going forward.

While much has been discussed about Milei and his agenda, particularly regarding the elimination of the local central bank and the adoption of the dollar, his stance on Bitcoin policies remains unclear. However, in a recent interview, Mow shared details about his affiliations and intentions to integrate BTC in an effective and seamless fashion.

Still a long way to go

Mow stressed the necessity of tailoring strategies to address the distinctive economic hurdles that Argentina has faced for years. He believes that the initial phase will involve exploration, as there are no one-size-fits-all solutions, before underscoring the significance of customizing initiatives according to the unique circumstances of each country, encompassing its distinct culture and institutions.

Mow also advocated for Bitcoin as a long-term solution to inflation, contrasting its stability with the inflationary nature of fiat currencies. In the long term, Bitcoin resolves the inflation issue faced by Argentina or any other country, he stated.

Additionally, Mow claims that achieving a stable inflation rate, similar to that of the USD, is imperative before embracing Bitcoin. Initially, there is a need to address the immediate issues, and once those are resolved, the incorporation of Bitcoin can be realistically explored, he further explained.

The latest developments have revealed that BlackRock has submitted a revised version of the S-1 filing for the Bitcoin Spot ETF to the United States Securities and Exchange Commision (SEC). Various analysts previously communicated ongoing negotiations between the SEC and BlackRock, as well as various other applicants for the Bitcoin Spot ETF. 

A matter of time

In a similar notion, Bitwise recently modified its SEC application. There were several rumours that these updates indicate intense negotiations for companies that filed with the SEC pre-approval. While the SEC stipulates a preference for the cash method, resembling futures transactions, for spot ETF applications to gain approval, applicants are insisting on the in-kind method that directly holds Bitcoin.

In any case, the aforementioned analysts estimate a 90% likelihood of approval for Bitcoin Spot ETFs by January 10th, 2024. Recent developments and delays also suggest that decisions on BTC spot ETFs will be collective, involving all applicants, by the regulatory agency.

Discussions are ongoing

The price of BTC also increased recently due to the anticipation building around the potential approval of a Bitcoin ETF. The flagship crypto surpassed the $42,000 mark before going back down to just under $41,900 as of the time of this writing.

James Seyffart, a cryptocurrency analyst at Bloomberg, commented on the update that BlackRock made on the ETF application, stating that BlackRock indeed submitted an amendment to the Bitcoin ETF S-1 on December 4th, 2023. Apparently, the SEC issues similar instructions to multiple applicants. Without delving into the details, this signifies that progress is ongoing and that both the SEC and the ETF applicants are diligently working towards accuracy. These applications likely result via extensive discussions and efforts on both ends, James added.

In a recent statement, Anatoly Yakovenko, the co-founder of Solana (SOL), provided a fresh perspective on the relationship between Solana and Ethereum (ETH). Yakovenko encouraged avoiding discussions that frame platforms as attempting to eliminate Ethereum, as he believes that these are counter-productive.

Solana can succeed regardless

According to Yakovenko, the triumph of Solana is not contingent on Ethereum failing. He envisions a future where both platforms prosper, underscoring the potential for technology to advance and expand. This viewpoint resonated within the crypto community, eliciting reactions on social media. One user noted that the market is already speculating about potential challengers to SOL.

Despite the various similarities and differences between Solana and Ethereum, this observation reflects the overall dynamic nature of the crypto space, where innovation and healthy competition propel progress. Rather than perceiving it as a threat, the stance taken by Yakovenko suggests that this competition is integral to the broader evolution of the blockchain ecosystem, and that more importantly, Solana can indeed coexist with other blockchain platforms.

A need to coexist

Another user on X stressed the inevitability of a future with multiple chains, emphasizing that skilled technologists continuously push the boundaries of what is achievable. The belief in the simultaneous success of various platforms underscores the potential of blockchain technology to accommodate diverse solutions.

The discussions sparked by Yakovenko are also indicative of the notion that the collaborative ethos of the crypto space is not only positive, but highly recommended. Anatoly envisions an industry ready to embrace a future where various blockchain platforms coexist and collectively contribute to the advancement of decentralized technologies as a whole.

Bitcoin is finally on the rise again, thanks to its recent resurgence which persisted throughout the weekend. The flagship crypto surpassed $40,000 in price on Sunday afternoon, as reported by CoinGecko. More importantly, this marks the first instance since April 2022 that Bitcoin has reached such heights, just before the broader cryptocurrency market experienced a significant downturn. As of the time of this writing, BTC is trading at just over $41,400.

Bitcoin is back

The nearly 20-month peak for Bitcoin signifies a 15% ascent in the last 30 days, with the value of the cryptocurrency more than doubling since this same period last year. The escalating value also seems to mirror ongoing optimism and enthusiasm surrounding the anticipated approval of a Bitcoin spot exchange-traded fund (ETF) in the United States.

Numerous companies have submitted applications to operate these ETFs, and the U.S. Securities and Exchange Commission (SEC) has recently engaged in discussions with some of these firms as well. Moreover, Bitcoin is not the sole cryptocurrency displaying an uptrend over the weekend, as Ethereum found itself trading above $2,200 for the first time since May 2022.

Bull run or trap?

Although both BTC and ETH have seen a modest increase within a 24 hour period, their values have been gradually rising of late. Several prominent NFT projects have also observed increases in their price points this weekend, with the most affordable assets listed in popular projects like Pudgy Penguins, DeGods, and Azuki experiencing double-digit percentage gains over the last 24 hours, according to NFT Price Floor.

In any case, investors are constantly pondering the question of whether this is the early sign of a potential bull run or if it is a false narrative which is designed to trap unaware traders. However, with the aforementioned ETF approval seemingly around the corner alongside the looming Bitcoin halving event, which is expected to occur around the middle of 2024, crypto could very well finally escape the long winter which began in 2022.

Noble has implemented CCTP, the cross-chain transfer protocol for Circle, on its mainnet. This will reportedly enable the native minting of USDC within the inter-blockchain communication protocol (IBC) of Cosmos.

CCTP employs a burn-and-mint mechanism, where USDC is taken out of circulation (burned) on the source chain and then recreated (minted) on the destination chain after being verified.

Accessibility is key

With the integration of CCTP, Circle aims to enhance the usability of USDC by facilitating seamless cross-chain transactions on Noble. This move is anticipated to positively impact the market capitalization of USDC, which has experienced a prolonged decline.

Noble, along with platforms like Arbitrum, Avalanche, Base, Ethereum, and Optimism, now supports the direct minting of USDC through CCTP, while the protocol is currently in the testing phase on Solana.

Users can therefore leverage CCTP to generate Noble USDC, which can be subsequently transferred to other Cosmos applications such as Osmosis or dYdX. The total supply of Noble USDC has also already surpassed $20 million, as reported by MintScan.

A wise approach

It is worth noting that this approach, emphasizing direct asset transfers, is different compared to token bridging, a method where assets are locked on one chain in exchange for equivalent wrapped tokens on another. The burn-and-mint method has gained preference over time, especially in light of security concerns associated with token bridging.

For users looking to withdraw USDC through Cosmos using CCTP, the process must go through Noble. Circle warns that attempting to transfer funds to a Circle account via any other IBC app may result in a loss of funds.

Lastly, as a centralized entity, Circle choosing to invest in a permissionless cross-chain protocol aligns with the broader trend of centralized crypto projects enhancing their decentralized finance (DeFi) offerings. Recent reports also suggest that Circle is contemplating an initial public offering in early 2024.

With a keen focus on crypto, a reputable Swiss bank known as Seba has recently undergone a substantial transformation and rebranded itself as Amina Bank AG. This change is driven by ambitious plans to expand upon pre-existing global trading services and is motivated by the bank needing to have a separate identity to the similarly named SEB Bank in Sweden.

Amina CEO Franz Bergmueller explained that both banks mutually agreed to change their names in 2023, leading to the establishment of Amina. The name Amina is derived via transamination, a term associated with the transfer of compounds between elements.

Going global

The aforementioned decision signifies the overall mission statement of the bank to unify various aspects of traditional, digital, and cryptocurrency banking. In contrast, the previous name was a reference to its founder, Sebastien Merillat, who expressed a passion for technology.

The bank also recently obtained a license by the Hong Kong Securities and Futures Commission, enabling it to provide cryptocurrency trading services in the region. In 2022, it acquired financial services permission by the Abu Dhabi Global Market and established an office in Abu Dhabi.

Amina CEO Franz Bergmueller outlined their vision for 2024, emphasizing accelerated growth in key strategic locations such as Switzerland, Hong Kong, and Abu Dhabi, with a continued focus on Switzerland, Abu Dhabi, and the Asia-Pacific region, including Hong Kong and Singapore.

Services will not be interrupted

Despite the name change, existing clients of Amina Bank, formerly Seba Bank, can anticipate uninterrupted service, as the transition will not impact ongoing operations. Amina operates globally, offering clients both traditional and cryptocurrency banking services.

Launched in 2018, Amina plays a significant role in the cryptocurrency ecosystem, facilitating different kinds of provisions pertaining to crypto-related services. In November 2023, St.Galler Kantonalbank, one of the largest banks in Switzerland, collaborated with the institution, then operating under the Seba brand, to provide digital asset custody and brokerage services to its clients.

According to CoinGecko, Bitcoin (BTC) managed to break through the $38,000 mark, but it is difficult to say how long it will stay there. Altcoins, too, experienced a price increase as Ethereum (ETH) soared past $2,100 and SOL went above $60. IOTA has emerged as the top performer among the top 100 digital assets, soaring by over 30% in a day. The total crypto market cap has slightly decreased to $1.420 trillion.

Crypto gains momentum but falls short

Last Friday, Bitcoin witnessed a surge, propelling it to an 18-month peak of $38,500. However, the momentum could not be sustained, leading to a drop below $38,000 almost immediately. Over the weekend, BTC traded in a range between $37,000 and $37,500. As of this writing, it was trading at $38,300.

Monday and Tuesday brought more challenges as Bitcoin fell to a multi-day low of $36,700. Bulls managed to regain control, pushing BTC to $38,400 on Wednesday. However, the cryptocurrency could not sustain this upward trend and is now trading below $38,000. Its market capitalization is below $740 billion, with dominance over altcoins at 52%.

While some larger-cap altcoins showed significant gains recently, the current landscape has shifted. Ethereum went down by 2%, and various other altcoins like Binance Coin, Ripple, Tron, Toncoin, Avalanche, and MATIC also declined by similar percentages.

Solana, Cardano, and Polkadot have experienced more than a 3% decline. Interestingly enough, Dogecoin (DOGE) is the only top 10 alt in the green, while mid-cap alts like LEO, RUNE, UNJ, and MNT show gains.

Other markets

In the European equity futures market, there were gains despite a slip in Asian stocks following the  third-largest monthly gain of the MSCI All Country World Index within the past decade. European contracts rose ahead of eurozone manufacturing data and comments by Federal Reserve Chair Jerome Powell, while US futures were slightly lower.

Elsewhere, the MSCI Asia-Pacific stock index fell, but Chinese shares recovered after reports of an unidentified state institution buying exchange-traded funds to bolster markets. The United States Dollar weakened against major peers as US inflation eased, supporting expectations of the continued pause by the Fed in the tightening cycle. The Bloomberg Dollar Spot Index also fell in November by the most in a year.

Meanwhile, the US stock market had an exceptional month, with the S&P 500 posting its second-best November since 1980, up 8.9%. Oil steadied after a tumble following the promise of further output cuts, with Brent crude trading near $81 a barrel and West Texas Intermediate around $76. The alliance announced 900,000 barrels a day of fresh output cuts starting next January, but the details remain unclear, and Saudi Arabia will extend its 1 million barrel-a-day reduction through the first quarter.

SoFi Technologies, a reputable financial technology firm, has declared its intention to exit the cryptocurrency business. This decision arises in the face of heightened regulatory pressures in the United States, signaling a shift in the cryptocurrency industry.

Headquartered in San Francisco, SoFi has played a significant role in the cryptocurrency market, enabling users to trade more than 20 different digital currencies, including Bitcoin, Dogecoin, and Ethereum.

No more crypto for SoFi

Despite its previous involvement, the company has announced the cessation of its cryptocurrency services on December 19th, 2023. After this date, eligible customers can either transfer their accounts to Blockchain.com, a platform based in the UK, or close their accounts altogether. It is worth noting that this decision does not apply to cryptocurrency users in New York, where state regulations impose restrictions on such migrations.

The strategic shift reflects the broader challenges confronting the cryptocurrency industry, which has witnessed the downfall of several key players since the previous year. The notable collapse of FTX, led by Sam Bankman-Fried, stands out among these challenges. Despite a recent upturn in investor sentiment, primarily fueled by the filing of spot Bitcoin ETFs, the industry remains under intense scrutiny.

Regulators still at large

The context of the exit is further complicated by recent developments involving Changpeng Zhao, the former CEO of Binance. Zhao recently pleaded guilty to violating US anti-money laundering laws, resulting in a substantial $4.3 billion settlement. Zhao underscored the security of user funds amid the upheaval, stating that he is proud to point out that in the resolutions with the US agencies, they do not allege that Binance misappropriated any user funds and do not allege that Binance engaged in any market manipulation.

This case underscores the increasing scrutiny of the cryptocurrency market by the US Securities and Exchange Commission (SEC) and other regulators. In any case, the exit of SoFi could be interpreted as a proactive measure to navigate an increasingly intricate and closely scrutinized market. The choice to collaborate with Blockchain.com for the migration of its cryptocurrency services indicates a strategic alignment with a platform that operates under a more established regulatory framework in the UK.