Big StoryU.S. Senator Elizabeth Warren Praises SEC’s Crypto Industry Regulation EffortsSenator Elizabeth Warren has praised the efforts of the U.S. Securities and Exchange Commission (SEC) and its chief, Gary Gensler, in regulating the crypto industry. In an interview with the American Economic Liberties Project, she called for lawmakers to provide the SEC with the necessary resources and powers to continue their work. Gensler, who took charge of the SEC in 2021, has made a good start in bringing the crypto ecosystem into regulatory compliance after former President Donald Trump’s regulators allowed it to explode, according to Warren. She also highlighted the SEC’s efforts to protect investors from crypto products and prevent bitcoin exchange-traded funds from hitting the market. Warren also praised the commission’s enforcement actions against celebrity crypto promoters and crypto exchanges for alleged insider trading. More here.
LawsuitMango Markets vs. Avraham Eisenberg: A $47 Million Lawsuit Over Fraud and DeceptionMango Markets, a decentralized crypto exchange, has filed a lawsuit against Avraham Eisenberg in the United States District Court for the Southern District of New York for $47 million in damages. The lawsuit states that Eisenberg, a decentralized finance trader, had taken and converted $114 million from Mango Markets through fraud and deception and later returned $67 million but retained the remainder. The SEC charged Eisenberg last week for draining the money from Mango Markets, and the CFTC charged him for exploitation and violation of federal commodities law through the manipulation of the price of the MNGO token through swaps. He also faced similar charges from the Department of Justice Details here.
Crypto CustodianEx-UK Chancellor Philip Hammond Named Chairman of Crypto Custodian Copper Technologies
Copper Technologies Ltd, a crypto custodian, announced on Thursday that Philip Hammond, the former Chancellor of the Exchequer in the UK, has been appointed as its new chairman. Hammond has been a senior advisor to the London-based firm since 2021 and will take on this role immediately. He had previously served as the head of the UK’s Treasury for three years after the Brexit vote and was appointed to the House of Lords in 2020. Copper, which was founded in 2018, provides crypto custody and trading services to institutional clients including State Street Digital, Nickel Digital, and Fasanara Capital. It is known as one of the most prominent crypto firms in the UK and has over 300 employees. More here.
FundingSpatial Labs Secures $10 Million in Seed Funding Round Led by Blockchain Capital
Infrastructure company Spatial Labs, which powers new technologies to redefine the consumer experience, announced on Thursday that it has raised $10 million in a seed funding round led by Blockchain Capital, a leading venture firm in the blockchain industry. The round also saw the participation of Jay-Z’s Marcy Venture Partners, bringing the company’s total funding to over $14 million. The new capital will be used to support efforts to scale and diversify Spatial Labs’ proprietary blockchain-enabled tech stack, deepen the company’s footprint across the consumer goods landscape, and expand into other industries, including media and entertainment. It will also be allocated towards a range of technical, business, and strategic team development efforts targeting C-Suite executives. Full report here.
Cybercrime EcosystemHive Ransomware Dismantled: FBI Announces Disruption Of Cybercrime Ecosystem
The United States Federal Bureau Of Investigation on Thursday announced the disruption and dismantling of the Hive ransomware group’s infrastructure in the US and abroad after it had been active for over a year and a half affecting thousands of victims globally. According to Director Christopher Wray, the FBI’s strategy to combat ransomware involves targeting the entire cybercrime ecosystem, including the actors, their finances, communications, malware, and infrastructure. “Since 2021, that’s exactly how we’ve hit Hive Ransomware,” he said. He added that the FBI was able to gain clandestine, persistent access to the group’s control panel, which allowed them to exploit that access to help victims without Hive catching on. More here.
FTX CaseU.S. Prosecutors Allegedly Link Sam Bankman-Fried’s FTX Exchange to Investment in Mystery VC Firm Modulo Capital
Federal prosecutors in the United States have raised suspicions that Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, may have used funds from the exchange to invest in venture capital firm Modulo Capital. According to The New York Times, Bankman-Fried’s hedge fund and FTX’s sister company, Alameda Research, invested a total of $400 million in Modulo in 2022, making it one of the largest investments by Bankman-Fried. This funding has raised questions among regulators, as Modulo, a relatively unknown company, was able to secure a large amount of capital during a difficult period for the crypto market. More here.
FTXFTX Seeks to Subpoena Founder’s Family in Probe into Alleged Misappropriation of Funds
FTX, a crypto exchange that collapsed, is seeking to subpoena several individuals, including its founder’s immediate family, to investigate the alleged misappropriation of funds. In a legal filing made on Wednesday, FTX’s lawyers stated that the founder’s brother, mother, and father, who served as advisors to the company, should be subpoenaed to testify in court. The filing stated, “Key questions remain, however, concerning numerous aspects of the Debtors’ finances and transactions… the debtors have not received meaningful engagement or any response” from certain individuals. FTX also wants to subpoena former executives and the founder, Sam Bankman-Fried, himself. Read More
FTX CollapseCFTC Commissioner calls for an expanded regulatory authority to prevent future crypto crisis in wake of FTX collapse
The CFTC commissioner, Kristin Johnson, recently spoke at Duke University and discussed the need for Congress to modify laws surrounding digital assets in order to prevent another situation like the collapse of FTX. She specifically called for the agency to have more authority to investigate any company, domestic or foreign, that wants to acquire a significant portion of a CFTC-registered market participant. Johnson referenced LedgerX as an example and emphasized the importance of regulations that ensure customer funds are protected, proper financial resources are in place, and effective governance and risk management controls are implemented. Full report here.
CoinbaseCoinbase Fined $3.6 Million by Dutch Central Bank for Operating Without Proper Registration
The Dutch central bank has issued a fine of $3.6 million to Coinbase, a popular cryptocurrency exchange, for operating in the Netherlands without proper registration. According to Dutch laws, crypto providers must register under anti-money laundering and terrorist financing regulations. The central bank stated that the fine was increased due to the severity and level of responsibility for the noncompliance, as well as the size of Coinbase’s customer base in the Netherlands and the advantage the exchange gained by not paying supervisory fees. Coinbase has until March 2nd to contest the fine and has stated that they disagree with the enforcement order and are reviewing the appeals process. More here.
StablecoinsMoody’s Develops System to Score Stablecoins, Evaluating Quality of Attestations on Reserve Backing
Moody’s, a well-known rating agency, is working on creating a system to evaluate stablecoins. The system will evaluate around 20 different stablecoins and rate them based on the quality of attestations that confirm the reserves backing them. According to anonymous sources, the rating will not be considered as an official credit rating. The project is still in its early stages, as reported by Bloomberg. Attestations are external confirmations of a company’s statements and are often done by a third-party firm. Tether, a popular stablecoin, was recently required to provide them on a quarterly basis as part of a settlement with the New York Attorney General’s office, which alleged that Bitfinex used Tether’s funds to conceal $850 million lost to a payment processor. More here.
Market BuzzCryptocurrency Market Mixed: Bitcoin steady at $23,000 while Altcoins Show Gains
The cryptocurrency market was mixed, with Bitcoin remaining relatively stable at around $23,000 while ether and other altcoins showed some gains. Ethereum dipped by 1% to trade at around $1,607 while Cardano’s ADA increased by 1.5% and Polygon’s MATIC jumped by 10% in the past 24 hours. Other cryptocurrencies like Aptos, Dogecoin, and Shiba Inu also saw some positive movement. Meanwhile, in the stock market, Silvergate fell by 2% and Jack Dorsey’s Block also decreased by 0.6%. However, MicroStrategy and Coinbase performed well with the latter’s shares seeing a 2% increase and the former adding 0.2%. In economic news, the US economy grew by 2.9% in Q4 of 2020, driven by consumer and government spending.