October 2023

Two of the CFTC’s crypto tipsters scored $15 million alone, which brought successful enforcement cases for the regulator.

The United States commodities regulator has paid $16 million this year to whistleblowers who gave information leading to successful enforcement actions, with the majority of the tips involving crypto.

In an Oct. 31 statement, Commodity Futures Trading Commission Commissioner Christy Goldsmith Romero said most of the tips received this year involved crypto, which she claimed was “an area that continues to have pervasive fraud and other illegality.”

Very proud of these offices and their outsized results. As a former IG, I know firsthand how important whistleblowers
are. The CFTC could not fully protect customers and markets w/o them. Click to read about the highest # of tips, crypto tips & environmental fraud tips. https://t.co/C4I9tgnxRU

— Commissioner Christy Goldsmith Romero (@CFTCcgr) October 31, 2023

Two whistleblowers received $15 million alone for their information, which led the CFTC to successful enforcement cases in September; however, the regulator didn’t delve into the nature of those cases in its statement at the time.

Romero said whistleblowers are vital to mitigating commodities fraud and that the CFTC wouldn’t be able to “fully protect” customers and markets without them:

“Whistleblowers help identify fraud and other illegality, interpret key evidence, and save considerable Commission resources and time. The faster we can stop fraud, the more we can protect customers from harm.”

Romero acknowledged the efforts of CFTC’s Office of Customer Education and Outreach, which teaches people to spot, avoid and report cryptocurrency fraud.

“With the rise of crypto, more retail customers have come under the CFTC’s jurisdiction,” Romero said.

Related: CFTC issues $54M default judgment against trader in crypto fraud scheme

The CFTC has doled out almost $350 million since the program started in 2014. It’s led to over $3 billion in enforcement sanctions ordered in cases tipped off by whistleblowers.

The CFTC won a record $3.4-billion penalty payment in a Bitcoin (BTC)-related fraud case in April and won its case against Digitex CEO Adam Todd in July, who was ordered to pay $16 million in penalties.

In April, Romero iterated that managing the risks associated with cryptocurrency would be crucial to upholding market integrity, national security and financial stability.

She’s advocated integrating stronger identity verification measures, saying it would minimize illicit finance in the cryptocurrency market.

As the bear market deepens, more crypto companies will have to lay off employees to keep the lights on.

This creates a new risk: disgruntled former employees often become whistleblowers, especially if they have valuable intel that entitles them to an SEC or CFTC bounty reward.

— Jake Chervinsky (@jchervinsky) December 29, 2018

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

The CIO of Ikigai Asset Management, Mr Travis Kling sent us a message, he asked for a blog post with a link to every Tweet we made in relation to the SBF trial. We decided to comply. Please see all the links below: Full transcripts to the days with the SBF cross-examination Our prediction SBF on […]

The post SBF Trial – Full List of BitMEX Research Tweets appeared first on BitMEX Blog.

There have been a number of XRP price predictions over the last month and the vast majority have been incredibly bullish. This bullishness stems from the fact that Ripple has secured multiple wins against the United States Securities and Exchange Commission (SEC) over this time, allowing the digital asset the space to begin climbing up […]

The U.S. Government Accountability Office posted a complaint about a cryptocurrency-related bulletin from the country’s main securities regulator on Oct. 31. The accountability office said that the U.S. Securities and Exchange Commission (SEC) missed a key step when it issued guidance related to how companies should account for and disclose custodial obligations around safeguarding users’ […]

The post SEC missed a step with its crypto safeguarding rule, U.S. government watchdog says appeared first on CryptoSlate.

Don’t be surprised if we see more investment, more regulation and more artificial intelligence defining crypto during the last two months of 2023.

As the holiday season approaches, anticipation in the cryptocurrency world heightens for the annual phenomenon known as the "Santa rally." Amidst this festive period, market dynamics tend to shift. This season, there are several factors that could influence the last few months of the year.

Institutional investment surge

Cryptocurrency prices spiked notably at the end of 2020 and 2021, driven by increased investor optimism and institutional interest. Major financial institutions and hedge funds began viewing Bitcoin (BTC) not just as a speculative asset but as a hedge against inflation and a potential store of value. Large companies like Square and MicroStrategy added major Bitcoin holdings to their balance sheets, further solidifying this image shift.

Additionally, Bitcoin reached all-time highs, igniting a positive sentiment throughout the market. Further, institutional investment was demonstrated when businesses like Tesla made large-scale Bitcoin acquisitions publicly known. Moreover, the introduction of a number of cryptocurrency ETFs and funds gave institutional investors a more convenient and familiar way to access the market.

Firms are catering to institutional investors looking for safe storage options for their cryptocurrency holdings in the quickly evolving financial landscape of 2022 by offering custody services, which are essential for safeguarding digital assets.

Related: Bitcoin is evolving into a multiasset network

Despite some fluctuations, the trajectory was generally upward in 2022. Once skeptical, traditional financial institutions started to provide a variety of crypto services, such as lending, trading, and custody. Institutional actors have also recognized the emergence of decentralized finance (DeFi) and nonfungible tokens (NFTs), particularly venture capital firms and specialized funds searching for novel investment opportunities.

For example, prominent financial institutions collaborated to establish EDX Markets (EDXM), a novel exchange designed for the trading of digital assets through reliable intermediaries. This platform will cater to both institutional and retail investors, ensuring a secure environment for digital asset trading. Noteworthy backers of this initiative included renowned entities such as Charles Schwab, Fidelity Digital Assets, Paradigm, Sequoia Capital, Citadel Securities, and Virtu Financial, reinforcing the exchange's credibility and strength within the market.

In 2022, despite the crypto winter, development in the crypto sector increased by 5%, indicating sustained interest in underlying technology. Additionally, a 2022 Celent survey revealed 91% of institutional investors are keen on investing in tokenized assets, highlighting strong demand.

The upcoming season might witness an even larger influx of institutional capital into the crypto domain, exemplified by entities like MicroStrategy, which is expanding its crypto holdings by acquiring additional 1,045 Bitcoin for its growing treasury. Also, research by EY-Parthenon reveals that a majority of institutional investors hold a strong belief in the enduring value of blockchain technology and crypto assets, leading them to plan substantial scaling of digital asset investments over the next two to three years.

Moreover, there is a growing interest among investors to participate in tokenized financial assets, prompting institutions to actively explore opportunities to tokenize their own assets in response to the evolving financial landscape. As the industry continues to mature and gain legitimacy, new financial products tailored specifically for institutional investors could emerge, further facilitating their entry into the market.

Regulatory clarity

In 2020, as the cryptocurrency market boomed, it inevitably caught the attention of regulators worldwide. Some nations responded by enacting complete prohibitions, but others adopted a more measured strategy and started the process of developing regulatory frameworks to monitor and control the rapidly expanding domain of digital assets.

In 2021, U.S. regulatory developments — particularly those pertaining to the SEC's position on cryptocurrencies — became central to the global narrative surrounding cryptocurrencies. The industry was alert due to the ongoing discussions about cryptocurrency regulations and the push for approvals of Bitcoin ETFs. Concurrently, there have been substantial market realignments and conversations regarding decentralization as a result of China's crackdown on cryptocurrency mining and trading.

If Satoshi Nakamoto went as Satoshi Nakamoto for Halloween, would we be able to tell?

Happy 15th anniversary to Satoshi’s famous white paper that started crypto.

Any crypto companies that are tricking investors should start treating them to compliance with the securities laws.

— Gary Gensler (@GaryGensler) October 31, 2023

The cryptocurrency regulatory environment began to evolve in 2022. After preliminary discussions, a number of nations established precise legislative frameworks with rules governing cryptocurrencies, initial coin offerings (ICOs), and DeFi platforms. At the same time, there was a surge in the global movement to create central bank digital currencies (CBDCs), with many countries introducing or testing their own digital currencies.

This year, significant developments reshaped the global cryptocurrency landscape. For instance, Thailand’s Securities and Exchange Commission is poised to ease restrictions on retail investments related to ICOs, aiming to stimulate digital investments and foster market growth.

Meanwhile,the European Union took decisive action by enacting the Markets in Crypto-Assets (MiCA) regulatory framework in April 2023, ushering in a new era of comprehensive crypto regulations within the region.

Related: IRS proposes unprecedented data-collection on crypto users

A pivotal moment occurred in July 2023 when a ruling by U.S. Circuit Judge Analisa Torres affirmed Ripple's compliance with the law regarding XRP sales on public exchanges, marking a significant legal victory for the cryptocurrency sector against U.S. regulators. However, she also clarified that Ripple had violated securities laws by offering XRP to hedge funds and institutional buyers.

In September, four members of the United States Congress rallied for immediate approval of spot Bitcoin listing by Securities and Exchange Commission Chair Gary Gensler. As these events have unfolded, we’ve also seen growing anticipation of a spot Bitcoin ETFs. This potential milestone holds the prospect of introducing clearer regulatory frameworks, providing the cryptocurrency industry and investors with a more structured and defined trajectory ahead.

The confluence of AI and Web3

The convergence of Web3 and AI technology started to dramatically alter the cryptocurrency environment in the waning months of 2020. Predictive analytics and AI-driven trading algorithms gained popularity, enabling institutional and individual investors to make data-driven choices in the erratic cryptocurrency market. With the use of this technology, market analysis was improved, allowing investors to predict price fluctuations and make the most of their trading tactics throughout the upswing.

The relationship between Web3 and artificial intelligence (AI) grew stronger in 2021. AI-powered DApps became more prevalent, providing innovative solutions in fields like NFTs and DeFi. The market gained momentum as a result of this integration, which made yield farming, and NFT creation and trading more effective. AI-driven sentiment analysis tools also played a crucial role, providing insights into market sentiment and trends, aiding investors in making informed decisions.

In 2022, we witnessed the maturation of AI and Web3 integration with projects like Aave using AI algorithms to streamline lending processes, Rarible’s use of AI to provide individualized NFT curation. These initiatives showcased secure, automated, and trustless transactions, boosting investor confidence.

The confluence of AI and Web3 is poised to redefine this Christmas season once again. AI algorithms will develop further, allowing for proactive trading decisions and real-time monitoring of market data. Web3 technologies are anticipated to support creative investment models and decision-making procedures, particularly in the areas of decentralized autonomous organizations (DAOs) and AI-driven governance systems.

The incorporation of AI-generated content in crypto in the form of NFTs and AI-powered virtual reality experiences could be a driving force in the market in the months ahead. That enthusiasm could contribute to newfound liquidity in the markets, and development for the industry.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

On Oct 31, Microsoft announced an AI-powered assistant for industrial enterprises developed in partnership with Siemens. Called the Siemens Industrial Copilot, it is designed to bolster human-machine collaboration and productivity in manufacturing. The tool will enable users to rapidly generate, optimize, and debug complex automation code, effectively transforming a task that previously might have taken […]

The post Microsoft, Siemens announce AI copilot for industrial automation appeared first on CryptoSlate.

Michael van de Poppe, a prominent figure in the world of crypto analysis and trading, recently shared some striking viewpoints with the crypto community. On the popular social media platform X, the esteemed analyst made a bold declaration, emphasizing the early stages of what he believes to be a colossal bull cycle, one that will […]

A Comprehensive Overview of the Leading Crypto Trading Platforms for October The cryptocurrency world is as vibrant as ever, and in October 2023, several spot exchanges emerged as top contenders…

The post Top 10 Cryptocurrency Spot Exchanges in October 2023 appeared first on Bitcoinsensus.

Former FTX CEO Sam Bankman-Fried has concluded the testimony and cross-examination portion of his ongoing criminal case, Bloomberg reported on Oct. 31. Bankman-Fried acknowledged the existence of an $8 billion hidden debt within Alameda Research, which came to light after a bug was fixed in an account known as fiat@. Despite his claims of discovering […]

The post Sam Bankman-Fried claims to have overlooked $8B ‘bug’ in last day of testimony appeared first on CryptoSlate.

The SEC’s Staff Accounting Bulletin 121 has been the target of much criticism in the crypto community.

United States Senator Cynthia Lummis has scored another one for crypto with a Government Accountability Office (GAO) decision issued on Oct. 31. The GAO found that U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin 121 should be subject to congressional review. The bulletin, issued in March 2022, has been a source of ire for many pro-crypto lawmakers.

The GAO was acting on a letter sent by Lummis to the U.S. Comptroller General in August 2022. It considered whether the bulletin was a rule subject to the Congressional Review Act (CRA). Under the CRA, a report on an agency rule must be submitted to the comptroller general and both chambers of Congress, with a procedure for Congress to disapprove the rule. Using the definition of a rule found in the Administrative Procedures Act (APA), the GAO found the SEC bulletin to be subject to the CRA. The GAO said:

“It is reasonable to believe that companies may change their behavior to comply with the staff interpretations found in the Bulletin […] The Bulletin is also of future effect and was designed to interpret and prescribe policy. Accordingly, we conclude that the Bulletin meets the definition of rule under APA.”

The bulletin “expresses the views of the staff regarding the accounting for obligations to safeguard crypto-assets an entity holds for platform users,” according to the SEC. It said, “The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission’s official approval. They represent staff interpretations and practices.”

This is huge.

The GAO reviewed SAB 121, an illogical anti-crypto accounting bulletin issued by the SEC last March, and found that it's a "rule" under the CRA and APA.

The SEC didn't comply with either.

This is a clear statement from a federal agency that the SEC broke the law. https://t.co/brglK3sm8S

— Jake Chervinsky (@jchervinsky) October 31, 2023

The bulletin used hypothetical situations to describe what the SEC considered best practices to safeguard crypto-assets held by platforms for their users. Coinbase and PayPal are examples of such platforms. It advises platforms to list their users’ assets on their books as liabilities and assets at their fair value at initial recognition. This represented a sharp turn in accounting practice as custodied assets were not previously recorded on balance sheets.

Related: US House Financial Services Committee tells SEC it doesn’t like custody proposal

The bulletin was quickly met with objections from several sides. SEC commissioner Hester Peirce released a critical response within days. Peirce stated that the accounting procedure described in the bulletin was a response to risk that the SEC itself was partially the source of.

Five Republican senators, including Lummis, wrote to SEC chair Gary Gensler in June 2022 to express their disapproval of the bulletin’s “backdoor regulation.” Gensler was further lectured on the bulletin by Representative Mike Flood when he appeared before the House Financial Services Committee this September.

GAO findings are recommendations only. However, the agency notes, “Clearly, agencies are taking our recommendations.”

Magazine: Gary Gensler’s job at risk, BlackRock’s first spot Bitcoin ETF and other news: Hodler’s Digest, June 11-17