Gemini, the crypto exchange founded by brothers Tyler and Cameron Winklevoss, has filed a lawsuit against Barry Silbert’s Digital Currency Group (DCG) alleging fraud.

According to the court filing, filed on Sept. 15, Gemini claims that DCG is trying to avoid accountability for the damage inflicted on the victims of its Earn product and other creditors. This legal action by Gemini is a direct response to a recent statement issued by DCG concerning a proposed agreement involving the latter, the debtors, and the Official Committee of Unsecured Creditors.

Gemini’s allegations center on DCG’s creation of a $1.1 billion promissory note, which Gemini claims was an attempt to obscure substantial financial losses stemming from the collapse of Three Arrows Capital (3AC). This revelation raises concerns about transparency and financial integrity in the cryptocurrency space, especially as regulatory scrutiny in the industry continues to intensify.

Gemini contends that DCG intentionally kept the true terms of the promissory note hidden, resulting in misleading information being conveyed to Gemini’s creditors.

Additionally, Gemini asserts that DCG borrowed a significant quantity of Bitcoin (BTC) from Gemini instead of delivering the expected capital. These allegations deepen the legal dispute and cast a shadow over the actions of a major player in the cryptocurrency arena.

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Adding to the legal confrontation, Gemini emphasizes that DCG has yet to fulfill its obligation to repay over $630 million borrowed from its company, with the repayment deadline already due months ago.  

DCG responds to Gemini

In response to these allegations, DCG has put forward a proposal that involves Genesis creditors, including Gemini, extending credit to DCG over several years. However, Gemini has made it clear that it will contest this proposal, firmly advocating that DCG should fulfill its obligations by providing creditors with a fair and just amount.

Gemini has also accused DCG of employing a strategy over the past ten months to wear down creditors to persuade them to accept a reduced settlement amount. Despite these tactics, Gemini remains resolute and is determined to pursue an equitable resolution rather than yield to these pressures.

According to the lawsuit, Gemini is demanding substantial improvements in the terms of the loans extended by DCG if it intends to gain the support of the aggrieved parties. Furthermore, Gemini is also accusing DCG of bearing responsibility for the insolvency of its subsidiary and sacrificing both the exchange and its creditors to shield itself from liability.

It’s important to note that Gemini’s court filing comes after months of negotiations with DCG and follows the collapse of the Gemini Earn program. The program’s demise triggered legal disputes and severed ties between Digital Currency Group and the cryptocurrency exchange.

Crypto exchanges face regulatory scrutiny 

In Jan. 2023, the U.S. Securities and Exchange Commission (SEC) charged Genesis Global Capital LLC and Gemini Trust Company LLC for the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program, which later left investors in limbo. 

The SEC alleges that Genesis and Gemini had offered unregistered securities to the public, bypassing disclosure requirements designed to protect investors. 

Through this unregistered offering, Genesis and Gemini had raised billions of dollars worth of crypto assets from hundreds of thousands of investors promising high deposit yields. 

However, Genesis later froze withdrawals, leaving Earn customers in a state of uncertainty.

In June 2023, the SEC also charged Coinbase for operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency, as well as for failing to register the offer and sale of its crypto asset staking-as-a-service program. 

Other centralized crypto trading venues, including Changpeng Zhao’s Binance and Kraken, have incurred the wrath of the Gary Gensler-led watchdog in recent months.  

Read more: Gemini files lawsuit against DCG and Barry Silbert alleging fraudulent activities

A dating app encounter turned awry when a fraudster used a fake Uniswap account to dupe his date into a $20,000 cryptocurrency scam.

The deceptive digital love connection

In a world increasingly intertwined with technology, online romance can sometimes take unexpected and costly turns. According to a local Detroit report, a Troy, Michigan-based woman has lost $20,000 to a fraudster she met on a dating app. 

According to the report, the victim crossed paths with a seemingly charming man back in June through a dating app. Over time, their connection grew stronger, and trust developed.

However, the scammer convinced the woman to invest $20,000 in cryptocurrency through what appeared to be a legitimate Uniswap interface.

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As the victim plunged into the crypto world, her newfound partner’s true intentions began to emerge. Just a day after pumping her hard-earned money into the scam scheme, the victim received unsettling emails from an entity claiming to be Coinbase. 

These messages informed her that her account had been flagged as high risk and that she needed to deposit an additional $30,000 to regain access.

Panicked but not defeated, the victim contacted Coinbase directly to verify the situation. To her dismay, she discovered that the Uniswap platform she had used was a fraudulent clone of the original one. 

A simple comparison between the phony site’s logo and the actual Uniswap interface confirmed her worst fears — she had been scammed.

Realizing the gravity of her situation, the victim tried to contact the man who had led her into this crypto trap. However, as if evaporating into thin air, the scammer stopped replying, leaving the victim to grapple with her financial losses and newfound skepticism.

Other recent crypto scams

This unfortunate incident is far from being an isolated occurrence. Vitalik Buterin recently found himself ensnared when scammers successfully breached his social media account. The breach led to the illicit transfer of almost $700,000 from unsuspecting users, serving as a reminder of the ongoing challenges posed by online security threats.

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Even established billionaires like Mark Cuban are not immune to cryptocurrency scams. Cuban recently fell victim to a scam that led to a loss of almost $870,000 across various digital assets. He suspected that the exploit occurred when he accessed his MetaMask wallet after several months of inactivity.

International efforts to combat crypto crimes

Governments and law enforcement agencies worldwide are intensifying their efforts to combat cryptocurrency scams. In Thailand, authorities arrested four Chinese nationals and a Lao citizen involved in a cryptocurrency fraud that caused victims a staggering 2.7 billion Baht (approximately $76 million) in losses.

Meanwhile, the Israeli police have concluded an investigation against crypto scammers responsible for defrauding users of “tens of millions” of euros. The alleged culprits had developed sting software that tricked crypto investors into losing their hard-earned money.

The tactics of scammers continue to evolve as the day goes by. It’s crucial for crypto market participants always to exercise due diligence when dealing with crypto. 

Read more: Сrypto scam investigation reveals human trafficking in Cam

The Magic Eden non-fungible token (NFT) marketplace has expanded its support for compressed NFTs (cNFTs) — a new system of NFT creation powered by Solana.

This strategic decision offers creators a cost-efficient solution for their digital collectible minting, the company explained.

Magic Eden, which recently welcomed BRC-20 tokens to its multi-chain platform, announced its support for cNFTs on X, formerly known as Twitter. At a time when the longstanding crypto winter is crippling NFT trading volume, Magic Eden says the latest feature will bring about a notable transformation in non-fungible tokens.

The team claims cNFTs offer creators an economical and streamlined avenue for generating NFT content on a substantial scale. Through the magic of compression technology, the production of cNFTs becomes significantly more cost-efficient when compared to traditional NFTs. The team further explained that the “C” in cNFTs stands for “compressed” rather than Cardano.

The cost-efficiency of cNFTs is expected to empower creators to push their artistic boundaries, fostering experimentation without imposing prohibitive financial constraints.

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Another feature of cNFTs is the potential to serve as an accessible gateway for individuals new to NFTs. By enabling creators to produce content at a larger volume, cNFTs open doors for collectors to engage with NFTs that are more affordable.

Today we’re releasing support for cNFTs (find them in our popular collections) 🪄cNFTs are a new wave of NFT creation only possible on Solana. The "c" stands for compressed (not Cardano don't worry) which allows them to be produced at a fraction of the cost of traditional… pic.twitter.com/WbO4qqWLEt

— Magic Eden 🪄 (@MagicEden) September 14, 2023

NFT marketplaces holding strong amid crypto winter

NFT marketplaces have emerged as crucial platforms for creators to sell their digital assets and for collectors to purchase unique items. These platforms are the backbone of the global NFT market, providing a space for buyers and sellers to connect.

While several NFT marketplaces are in operation, each has strengths and weaknesses. Blur, OpenSea and SuperRare are among the leading NFT platforms, experiencing significant growth in the past year.

In April, some NFT marketplaces, including Blur and OpenSea, slashed artist royalties to attract buyers and boost trading volume. 

Artist royalties are typically a percentage of the sale price paid to the artist when their work is sold on an NFT exchange. Still, reducing or eliminating royalties has made the NFT platform more competitive.

The reduction in artist royalties is also a sign of the current slump in the NFT market. Trading volume has fallen sharply in the past year, and many investors are sitting on the sidelines. 

However, the move has been met with criticism from some creators. They argue that reducing royalties is unfair, as it slashes their earnings. The unregulated nature of NFT marketplaces has also led to several scams and frauds in recent times. 

In April, celebrity marketer Raichu was accused of participating in numerous rug pulls and pump-and-dump operations. 

At the time of writing, Blur is the top NFT marketplace, with a trading volume of over $4.15M, according to DappRadar.

Read more: Scammers stole $3.23 million worth of NFTs in April

 

PolkaWorld has announced its decision to cease operations after Polkadot’s treasury rejected its funding proposal. 

PolkaWorld, a community in the Polkadot ecosystem, raised concerns over treasury management under Polkadot’s new open governance platform, OpenGov, claiming that it negatively affects long-term ecosystem contributors.

PolkaWorld cited numerous instances where the treasury denied organizations and subsequently left the Polkadot ecosystem. The previous governance system — where a council elected by Polkadot DOT holders evaluated proposals — was more effective and should be incorporated into the current OpenGov model, it argued.

🫥 It's super sad to say that PolkaWorld's proposal was rejected, and we've been halted operations for half a month now. This is the first time we've had to pause in the four years and three months since we started in 2019. All of these changes happened after @Polkadot initiated… https://t.co/KxqhCRKTXC

— PolkaWorld (@polkaworld_org) September 15, 2023

PolkaWorld emphasized that the former council members were experts in specific areas and had the necessary knowledge to assess proposals effectively. In contrast, the OpenGov system allows all DOT token-holders to participate directly in governance, which may not yield the best decisions due to a lack of specialized knowledge.

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Polkadot aims for decentralized decision-making

Meanwhile, Brushfam, a platform facilitating businesses’ transition to Polkadot, announced its departure from the ecosystem. Founder Markian Ivanichok expressed frustration at the difficulty securing financing and claimed their efforts were unappreciated in an ecosystem that “doesn’t care about users, business practices, and marketing its product.”

24\ Sadly enough that is rather unproductive or impossible in the ecosystem that doesn’t care about users, about business practices and about marketing its product.

— Markian Ivanichok 🇺🇦 (@0xMarkian) September 14, 2023

Polkadot’s OpenGov system was launched earlier this year to democratize decision-making by granting every token holder a voice in shaping the platform. DOT token holders can participate in a voting process on proposals aimed at modifying the ecosystem.

The recent developments have sparked debate within the Polkadot community, with some questioning the effectiveness of the OpenGov system. As the situation unfolds, it will be interesting to see how Polkadot responds to these criticisms and whether it will change its governance model to retain and attract contributors.

Read more: USDC to launch on Base, Polkadot and four more platforms

Shiba Inu (SHIB), the meme coin launched by anonymous founder Ryoshi, is making waves again as its burn rate soars by 350% within just 24 hours. 

SHIB burn rate surges

Shiba Inu’s burn rate, a mechanism designed to reduce the amount of SHIB tokens in circulation, has experienced an extraordinary surge. Data from Shibburn, a portal tracking SHIB’s burn metrics, reports a 350% increase in the burn rate over the past 24 hours. In perspective, approximately 150 million SHIB tokens were burned during this short timeframe.

Shibburn provides essential insights into SHIB’s tokenomics, including the total burnt from the initial supply, the circulating supply, and xSHIB tokens, which are staked SHIB tokens. The recent surge in burn rate is a significant development for the SHIB community, as it reduces the overall token supply, potentially impacting its scarcity and value.

In an important update shared by one of Shiba Inu’s developers, Kaal Dhairya, a blog post outlined crucial steps related to BONE minting and the renunciation of the BONE contract ownership. Currently, a timelock contract safeguards the BONE system, controlled by a multisig wallet. The post also provides transparency regarding the owners of this contract.

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SHIB price analysis

Per the latest data, Shiba Inu (SHIB) is currently trading at $0.00000741, experiencing a modest 0.72% price increase over the past 24 hours, but it remains down by -2.32% in the weekly timeframe, according to CoinGecko.

Despite a recent impressive surge in its burn rate and ongoing developments like the Shibarium blockchain launch, the SHIB token has been facing challenges in 2023, struggling to surpass the $0.000008 mark.

The coin has plummeted over -91% from its all-time high in October 2021, and in the last month alone, it has seen a 13.8% drop. This mixed performance reflects the uncertainty and volatility that continue to characterize SHIB’s price movements, making it important for investors to exercise caution and stay informed about its developments.

Data reveals that only 10% of SHIB holders are currently in profit, while a striking 85% are dealing with losses. This data underscores the uncertainty that surrounds SHIB’s future performance. 

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Shibarium milestone amid price slip

Despite recent challenges, Shibarium — a notable development within the Shiba Inu ecosystem — has reached a significant milestone. The number of Shibarium wallets has surpassed one million unique addresses.

However, it’s important to note that both Shiba Inu (SHIB) and Bone ShibaSwap (BONE) have experienced notable price declines.

According to the Shibarium blockchain explorer, the total number of wallets on the layer-2 network has exceeded 1 million, while the total number of blocks on Shibarium has surpassed 600,000. These achievements showcase the growing interest in the project despite the current market conditions.

The surge in SHIB’s burn rate is a noteworthy development that has captured the attention of the cryptocurrency community. However, the coin’s struggle to maintain its value and the high percentage of holders incurring losses highlight its challenges.

With Shibarium reaching key milestones, there is optimism within the project’s ecosystem, but the road ahead remains uncertain, and investors are closely watching for signs of recovery.

Read more: Shibarium hits 100k wallets milestone amid relaunch

Jacksonville Jaguars quarterback Trevor Lawrence, who previously endorsed the now-defunct FTX, is ready to pay settlements to clear his name.

Lawrence is among the list of famous names who promoted FTX and is currently facing charges related to the fall of the exchange.

Lawrence, high-profile figures embroiled in FTX scandal

Lawrence is set to settle allegations surrounding his endorsement of the now-defunct FTX cryptocurrency exchange. This settlement, which also includes YouTube influencers Kevin Paffrath and Tom Nash, forms part of a legal battle involving sports figures accused of participating in FTX’s fall, allegedly orchestrated by founder Sam Bankman-Fried.

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Bankman-Fried, who has pleaded not guilty, is expected to face trial next month in Manhattan on criminal charges. Other high-profile individuals who endorsed FTX and are now facing lawsuits include Shaquille O’Neal, Tom Brady, and Steph Curry.

Court documents indicate that Bankman-Fried heavily invested in endorsements to raise FTX’s profile, securing the support of celebrity athletes, Major League Baseball, NBA teams, and Formula 1 racing. He also reportedly secured the naming rights to the Miami Heat’s arena and ran a Super Bowl commercial featuring Larry David.

The lawyers leading the $1 billion case stated they are currently in confidential settlement discussions with other defendants and anticipate additional settlements with parties linked to FTX. They have also expressed their desire to work with lawyers overseeing FTX’s bankruptcy case to facilitate mediation to settle claims.

Endorsements and allegations in the FTX cryptocurrency saga

Previously with the Clemson Tigers and the first overall pick in the 2021 NFL draft, Lawrence became an endorser for FTX in the same year. He also received a significant signing bonus in cryptocurrency.

Paffrath, a California-based real estate broker and entrepreneur, promoted FTX on his YouTube channel and received payment each time he mentioned the platform.

FTX collapsed in November 2022 after investigations revealed that Bankman-Fried had used over $8 billion in customer deposits as trading capital for his hedge fund, Alameda Research, which incurred significant losses through high-risk trades and questionable real estate investments.

Read more: https://crypto.news/wp/wp-admin/about.php

The Holesky testnet meant to celebrate Ethereum’s one-year anniversary of The Merge will be rebooted after configuration errors caused a network crash.

Ethereum engineers plan to relaunch the Holesky public testnet following issues with the network’s initial deployment on Sep. 15.

The testnet, which developers released at 10 a.m. ET, encountered “major problems” due to network misconfigurations, according to Galaxy researcher Christine Kim. Devs said Holeksy would be launched again soon, but no definite date was mentioned.

Holesky genesis didn't go as expected, but that's what testnets are here for. See y'all again soon 👋https://t.co/6TWicgIhaw pic.twitter.com/Pvkp0oKXC8

— beaconchain.eth 📡🦇 (@beaconcha_in) September 15, 2023

Holesky was set to join Goerli and Sepolia as Ethereum’s third testnet. Testnets allow developers to simulate upgrades and run applications intended for the main network or mainnet. They are akin to dress rehearsals for blockchain builders to fix bugs and test deployments.

Tim Beiko, an Ethereum Foundation contributor, said developers allocated 1.6 billion testnet Ether (ETH) as Holesky’s genesis token supply. The massive testnet ETH pool is likely to incentivize use of the network.

There were some concerns around whether clients could handle this (10x the mainnet supply!), but with devnets regularly using 10B supply, everyone was fine going forward with the proposed 1.6B. A genesis state for the network will be shared 🔜!

— timbeiko.eth ☀️ (@TimBeiko) August 17, 2023

Ethereum testnets

Regarding Ethereum testnets, there has been talk of sunsetting Goerli in early 2024. This possible outcome could place Holesky at the epicenter of developer activity on Ethereum and even networks compatible with Ethereum Virtual Machine (EVM)

Furthermore, developers launched Holesky on the one-year anniversary of The Merge, Ethereum’s switch from Proof of Work (PoW) to Proof of Stake (PoS).

The Merge marked a massive structural upgrade for Ethereum, including changes to network participant roles and token emissions. 

Read more: Ethereum co-founder says US and crypto philosophies are aligned

According to on-chain data dashboard ultrasound.money, Ethereum net token supply reduced by 0.24% or 299,922 ETH. This means that ETH’s supply is deflationary in terms of how many new tokens enter circulation annually.

The Merge also introduced staking on Ethereum, which is locking up ETH in a smart contract to earn rewards or qualify as a network validator among other incentives. Per Coinbase data, nearly 25% of ETH’s supply is staked. It amounts to over 20 million ETH tokens.

Ethereum boasts a $40 billion staking market with protocols like Lido Finance dominating the space.

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Core Scientific sold a Cedarvale, Texas-based mining location to bankrupt crypto lender Celsius for $14 million, while also releasing $31 million worth of claims against the company.

According to a court filing, Core Scientific jettisoned the mining location in Ward County, Texas. The deal with Celsius came to light in a Thursday court filing, which also revealed that Core Scientific is releasing its $31 million worth of claims against Celsius, elevating the overall transaction to $45 million.

Celsius Network and Core Scientific settlement. In exchange, Core will sell the Cedarvale site to Celsius and release all of Core’s own claims against Celsius. https://t.co/NN2Zs4WYBa pic.twitter.com/o5MCD3rdVA

— Ang 💕🌈💕🌈💕 (@Ang_0ne) September 15, 2023

Celsius court filing

The court filing stated, “After months of negotiations, Celsius and [Core Scientific] have now consensually resolved their long-running disputes and agreed to a global settlement that will fully resolve this litigation.”

Both companies are in the midst of financial challenges, with Core Scientific itself going through bankruptcy procedures. The settlement is pending court approval before it can be officially enacted. While this agreement appears to be a financial lifeline for both parties, it is also a strategic move aimed at restructuring and reinventing their businesses.

According to the documents, the mining site that Celsius acquired will serve as “a key component of Celsius’ reorganized mining business under its Plan.”

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The site is a “partially-developed, non-operational” mining facility boasting 215 megawatts of available power. Core Scientific is also transferring the site’s design plans to Celsius, thereby equipping the latter to complete construction.

In terms of historical context, Core Scientific had previously hosted 37,000 of Celsius Mining’s Bitcoin(BTC) rigs. Issues started cropping up when the parent company, Celsius, plunged into bankruptcy in July 2022, leading to Celsius Mining defaulting on fee payments and power bills.

Core Scientific ended its hosting agreement with Celsius in January 2023, essentially concluding what had been a financially turbulent relationship between the two entities.

Core Scientific CEO Adam Sullivan expressed his satisfaction at the resolution, stating he was pleased to resolve “all existing litigation” with Celsius Mining. He also mentioned that Core Scientific aims to emerge from its restructuring process later this year.

This recent agreement not only offers an immediate financial solution for the involved parties but also provides a blueprint for their respective futures in an increasingly competitive and evolving crypto mining industry.

Read more: Former Celsius CEO arrested in New York, SEC files lawsuit

Renowned entrepreneur and Dallas Mavericks owner Mark Cuban reportedly fell victim to a cryptocurrency scam, resulting in a loss of nearly $870,000 across various digital assets.

How Mark Cuban fell victim

According to DL News, Blockchain sleuth WazzCrypto was the first to detect suspicious activities on a wallet titled “Mark Cuban 2” on EtherScan.

Cuban was caught off guard when DL News informed him about the suspicious wallet movements. The billionaire later confirmed that he had been scammed, saying, “Someone got me for 5 ETH.”

Cuban believes the exploit happened when he accessed MetaMask for the first time in months.

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However, his losses weren’t limited to just five Ether, which is approximately worth $9,000 at current market rates. In total, Cuban lost close to $870,000, in about 10 different cryptocurrencies. Among the notable assets he lost were tokens like Lido-staked Ether, SuperRare, Ethereum Name Service, and a range of stablecoins.

Cuban suspects that he might have downloaded a compromised version of MetaMask. He recalled that his MetaMask crashed multiple times while trying to clean up his account on his phone. Following the incident, he secured his NFTs on OpenSea and transferred all his Polygon to the account.

Risks in digital transactions

The Cuban incident highlights the risks associated with crypto scams, where fraudsters create fake versions of MetaMask extensions or apps, luring users into revealing their private keys or seed phrases. Once they gain access, they can quickly empty users’ cryptocurrency wallets.

Cuban has been a vocal advocate for cryptocurrencies and blockchain technology. Earlier this year, he joined Blocto Wallet as an advisor and investor, leading it to close its Series A funding round at around $80 million. The MetaMask scenario underscores the potential risks and challenges that even experienced investors can face in cryptocurrencies’ volatile and often unpredictable world.

In addition to this incident, Cuban and his NBA team, the Dallas Mavericks, have faced cryptocurrency-related legal issues. They are currently under lawsuit over Voyager Digital, a cryptocurrency platform they promoted, described by plaintiffs as an unregulated and unsustainable fraud, similar to other Ponzi schemes. 

Read more: Mark Cuban and John Reed Stark spar over FTX collapse

Investigating crypto scams around Tether’s stablecoin, journalist Zeke Faux uncovers a large human trafficking ring in Cambodia.

Crypto scams and exchange hacks are becoming almost a regular occurrence in the digital assets space. But a recent revelation from Bloomberg’s investigative reporter Zeke Faux shows how crypto is being used as a fishing hook to run more sophisticated and larger criminal activities – in this case – human trafficking. 

Faux’s journey began with a seemingly innocuous text message from a woman named Vicky Ho. Claiming to be a divorced woman running a chain of nail salons in New York, Vicky engaged Faux in conversation before eventually steering it toward cryptocurrency investments.

Faux, suspecting a scam, played along to gather more information. Vicky introduced him to a crypto-exchange app called ZBXS and instructed him to deposit Tether to start trading.

Bloomberg reporter and author Zeke Faux started off looking at Tether, but ended up investigating modern slavery in Cambodia https://t.co/c4YcCDspfV

— Bloomberg Crypto (@crypto) September 15, 2023

Faux’s initial probe aimed to understand the legitimacy of Tether’s stablecoin USDT. However, his investigation took a grim turn when he discovered a human trafficking ring operating out of Cambodia.

As Faux delved deeper, he found that the scam, commonly known as “pig butchering,” was not just a financial fraud but a front for a more sinister operation. It was orchestrated by Chinese gangsters based in Cambodia and Myanmar, who lured young people from Southeast Asia with promises of well-paying jobs. Once there, they were held captive and forced into criminal activities, including running scams like the one Vicky was involved in.

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Faux’s investigation revealed that these operations were housed in large compounds, such as “Chinatown” in Sihanoukville, Cambodia. The compound was filled with office towers where thousands of captive workers sent spam messages under the threat of torture or death. Some workers reported being forcibly injected with methamphetamine to increase productivity.

Zeke Faux’s story is not just one isolated case. Recent reports suggested that more than 200,000 people across Cambodia and Myanmar are forced to run scam operations by large criminal enterprises. These scams range from crypto-fraud to online gambling, and they’re also active in other Southeast Asian countries like Laos, Thailand, and the Phillippines.

Read more: SIM swap scams: growing threat to crypto community

Rashawn Russell admits wrongdoing after falsely promising investors ‘assured profits’ for their crypto investments. 

Rashawn Russell, a former investment banking professional at Deutsche Bank, is preparing to enter a guilty plea on charges of cryptocurrency fraud, according to new court filings. 

Russell had initially entered a not-guilty plea in April after federal prosecutors accused him of misleading investors with pledges of “assured profits.” However, after multiple delays to allow for plea discussions between Russell’s counsel and federal authorities, the case was handed over to a magistrate judge specifically for a “guilty plea hearing,” as stated in recent court records.

Jurisdictional tug-of-war continues. @CFTC asserts in their case against Rashawn Russell for a fraudulent “digital assets trading scheme” that BTC, ETH, and USDC are commodities pic.twitter.com/bOBFVaWQMt

— Alexander Grieve (@AlexanderGrieve) April 12, 2023

The first case filing against Russell in April 2023

An anonymous source close to the situation confirmed Russell’s decision to Bloomberg today.

Rashawn Russell’s crypto fraud

Prosecutors assert that Russell had misled his clients about the utility of their funds. He promised investors that he would invest their capital in crypto, assuring lucrative returns exceeding 100%. But in the end, he created fraudulent documentation to present an illusion of significant liquidity.

According to federal authorities, a large portion of the funds that Russell acquired from investors was allegedly spent on personal expenditures, including gambling, as well as servicing prior investors.

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Notably, Deutsche Bank has not been implicated in any misconduct related to this case. The financial institution has confirmed its full cooperation with law enforcement agencies during the probe.

In addition to facing federal charges, Russell is also confronting legal challenges from the Commodity Futures Trading Commission (CFTC). The CFTC has accused him of defrauding investors through a digital asset fund named “R3 Crypto Fund,” alleging the misappropriation of approximately $1 million between November 2020 and July 2022.

Pre-trial controversies

Controversies have marred Russell’s period of pre-trial liberty. Authorities in June charged him with violations of his bond conditions by frequenting gambling venues and illicitly obtaining credit cards under aliases. Following these allegations, a federal magistrate mandated using an electronic monitoring device on Russell and instructed officials to monitor his online activities.

As the case develops, it promises to be a focal point in the ongoing national conversation about the regulation and policing of cryptocurrencies and digital assets.

Read more: North Korean hackers turn to Russia to launder crypto

The Hong Kong Monetary Authority has cautioned the public against crypto firms that describe themselves as banks or offer products termed as deposits.

On Sept. 15, the Hong Kong Monetary Authority (HKMA) issued a public statement expressing concern over crypto companies labeling themselves as “banks” and offering what they describe as “deposits.”

According to HKMA, such categorizations may contravene Hong Kong’s Banking Ordinance, which strictly forbids unlicensed entities from using the term ‘bank’ or making any representations that suggest they are conducting banking activities in the region. The authorities consider such acts an “offense.”

In the official release, the HKMA stated,

“The HKMA is aware of some crypto firms describing themselves using terms such as crypto bank, crypto asset bank, digital asset bank, digital bank, or digital trading bank, or claiming to offer banking services or banking accounts.”

The concern with this is the potential to mislead the general public, who might incorrectly believe these entities are authorized financial institutions from Hong Kong.

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The risk is compounded when these firms also use terms like “deposits” for funds given to them by clients and advertise “savings plans” as “low risk” with “high return.”

This move comes as part of a broader effort by Hong Kong authorities to protect consumers in a jurisdiction recently dubbed as the most “Crypto-Ready” nation. It follows a separate warning from the Securities and Futures Commission (SFC) against the JPEX crypto exchange, which has been engaging in suspicious activities.

As these digital entities multiply, offering services that parallel those of traditional financial institutions, it becomes essential for regulatory bodies to offer clarity and protection to consumers.

The HKMA’s alert emphasizes,

“Crypto firms which are not banks in Hong Kong are not supervised by the HKMA and funds placed with them are not protected by the Hong Kong Deposit Protection Scheme.”

Read more: Hong Kong’s financial secretary Paul Chan sees web3 as future

Buterin shared doubts about Hong Kong’s crypto welcome party and laws during a Singapore summit, prompting an invitation from local regulator Johnny Ng.

A member of the Legislative Council invited Ethereum (ETH) creator Vitalik Buterin to scope out Hong Kong’s regulatory atmosphere and assured Buterin of lasting crypto-friendly rules for compliant operators.

Council member Johnny Ng beckoned Buterin to Hong Kong in response to the crypto OG’s comments at the Web3 Transitions Summit in Singapore. 

During the event, Buterin noted that though he did not fully understand the “complicated interaction between Hong Kong and mainland China.” He worried about how long policies meant to bootstrap crypto innovation in the region might last.

Hong Kong is a special administrative region linked to mainland China with its legislative procedures and policy formulation. According to Johnny Ng, Hong Kong has Beijing’s backing to explore digital assets and develop a framework to oversee crypto compliance.

The central government has always expressed support for the development of “one country, two systems” in Hong Kong, so Hong Kong has room to formulate policies on virtual assets and welcomes global compliance companies to develop in Hong Kong.

Johnny Ng, Hong Kong Legislative Council Member

Read more: Hong Kong grants crypto license to Swiss bank SEBA’s branch

Johnny Ng emphasized that Hong Kong’s laws on crypto are stable and will not change overnight. The policymaker offered to help entities demystify the region’s stand on virtual currencies in addition to Buterin’s invite. 

Hong Kong’s approach to the digital asset industry is arguably in stark contrast to Beijing’s blanket ban on Bitcoin and cryptocurrencies.

Indeed, the city-state unveiled a licensing regime to attract compliant market participants amid a crypto exodus in the US due to an uncertain regulatory climate. Authorities specified frameworks to oversee institutional and retail crypto investments.

Hong Kong also boasts a central bank digital currency (CBDC) pilot program and a dedicated web3 task force for sustainable crypto ecosystem growth.

On Aug. 28, HashKey began operations in Hong Kong as the region’s first licensed crypto exchange for retail investors. 

While Hong Kong hopes to establish itself as a global cryptocurrency hub, authorities remain vigilant against non-compliant actors.

You might also like: Hong Kong’s SFC cautions against unregulated crypto trading by JPEX

This year has brought about changes in the global economy and regulations for virtual assets. Even so, the crypto industry is still progressing by introducing new products that meet the demands of users and the community. One of these new developments is real-world asset (RWA) tokenization, which can offer a fresh opportunity for value capture.

You might also like: SEC accuses Binance US of hampering securities violation probe

As this wave gains momentum, native decentralized finance (defi) protocols like MakerDAO and Aave are actively moving to embrace RWA. 

BNB.WIN recently launched its first RWA product, BNB.WIN.

After monitoring their performance for several weeks, many are questioning the true value of BNB.WIN and similar products.

Is BNB.WIN safe?

BNB.WIN is a rebasing RWA protocol on the BNB Chain, a smart contract platform. 

The process involves staking BNB to mint BNB tokens at a 1:1 ratio. BNB staked are pegged to real-world assets. Rewards are distributed to token holders via the smart contract BNB.WIN-RWA using a rebase mechanism.

You might also like: SEC accuses Binance US of hampering securities violation probe

Experts consider the platform safe due to its backing by real-world assets, such as short-term government bonds. BNB is supported by a reserve of real assets, while BNB.WIN is directly linked to short-term government bond investments.

In this structure, BNB.WIN appears less prone to default risks unless there is an extreme scenario of national insolvency.

Analyzing performance

In a recent interview, BNB.WIN founder Satoshi Aoki explained that BNB.WIN is versatile and can be integrated into different defi lending, yield farming, and futures protocols. 

It is also available for trading on exchanges. BNB.WIN has the potential to serve as the basis for generating rewards for defi protocols.

You might also like: Binance’s CZ regulations prevent market from adding 100m users

Users who subscribe earn yields from investments in stable assets like margins, loans, and bonds. They also receive staking rewards based on a proof-of-stake (PoS) mechanism and platform incentives. 

BNB.WIN is also transparent. On Aug. 28, 2023, the protocol announced the latest Merkle tree asset-proof data. According to the official announcement, the reserve ratios for USDT and BNB are 122,404,586 USDT and 84,410 BNB, respectively.

BNB.WIN will regularly conduct proof-of-reserve audits.

Conclusion

BNB.WIN highlights the potential benefits of RWA assets, such as asset tokenization, on-chain liquidity, and transparency through smart contracts, while removing traditional financial barriers for premium investment opportunities. 

They also plan to be part of the stablecoin asset-liability structure.

Read more: Metaverse taxation: integrating virtual world into current tax policies

Disclosure: This content is provided by a third party. crypto.news does not endorse any product mentioned on this page. Users must do their own research before taking any actions related to the company.

With the metaverse booming to 400 million users, the challenge arises: how do we tax this burgeoning virtual world?

Metaverse is a virtual world where millions of people spend their time nowadays. To give you an idea of its popularity, there are currently about 400 million active users worldwide.

Back in 2021, the metaverse was valued at about $58.5 billion. Fast forward a few years, experts are saying it could skyrocket to a mind-blowing $1.5 trillion by 2030. This isn’t just a place for fun and games. It’s shaping up to be a serious contender in the global economy.

Now, with all this growth, a big question is popping up: How will we include this virtual economy in our existing tax systems? It’s like when online shopping became a thing, and everyone was scratching their heads about how to handle taxes.

A Harvard scholar Young Ran (Christine) Kim, who is part of the team at the Benjamin N. Cardozo School of Law, recently shared her insights in a research paper, opening up a conversation about the potential ways to approach taxation in the metaverse. It’s all about figuring out how to update our current tax policies to make sure they cover what’s happening in this rapidly evolving digital world.

Why does the metaverse need to be taxed?

So, why there’s a buzz about taxing the metaverse? 

According to the findings in Kim’s research, it seems we can think of the metaverse as just another business sector. And just like any other sector, it should be part of our existing tax systems.

Let’s dive a bit deeper into the “why” here. This argument for taxing the metaverse isn’t just a spur-of-the-moment idea—it’s grounded in well-established theories and perspectives on regulation. 

Whether it’s companies making profits, investments seeing gains, or people earning rewards in this virtual space, all these activities are quite similar to the recognized ways people make money, as described in Section 61 of the Internal Revenue Code (a big rule book for US taxes).

Going beyond just theories, the paper mentions that there’s also the core principle that governments have the right, or rather the duty, to tax economic activities within their borders.

The research states this should include the bustling virtual spaces of the metaverse, too. Not tapping into the vast potential revenues from this booming sector could mean missing out on a significant chunk of money that could have been used to fill the country’s treasury.

Besides, the paper says that having a proper taxation system in place could prevent the metaverse from becoming a kind of tax haven where people can hide assets or income to avoid paying taxes.

Furthermore, bringing taxation into the metaverse could be a powerful tool for keeping things transparent and well-reported within its financial markets. While we’ve made some progress in bringing cryptocurrencies under tax policies worldwide, it’s high time we take a broader approach, the research suggests.

You might also like: US senators call to implement strict tax reporting rules for crypto

Taxable elements in the metaverse

Let’s investigate how people might make money in the metaverse and how these could be taxed.

Earnings and profits

First, let’s talk about the usual suspects: earnings and profits. Just like in the real world, people in the metaverse can make money through salary, business profits, and even dividends. But here, the earnings might look a bit different, coming in the form of virtual goodies or cryptocurrencies.

“Such activity falls under the Haig-Simons conception of income as participants can spend and accumulate in-game currency and other digital items that hold real economic value.”

the paper states.

To relate this to current US taxation methods, the Internal Revenue Service (IRS) already classifies cryptocurrencies as property, meaning they are subject to capital gains tax rules when sold or traded. Similarly, these guidelines could be extended to various digital assets in the metaverse, establishing a tangible link between virtual earnings and real-world tax implications.

Now, this whole digital money thing does throw a bit of a wrench in the works. Figuring out the exact value of these assets can be a bit of a rollercoaster ride because of their ever-changing nature. The paper suggests the US tax system may need to develop dynamic approaches akin to mark-to-market taxation. In this strategy, assets are taxed based on their market value at the end of the tax year to assess the value of metaverse transactions and holdings fairly.

Plus, converting these digital assets into cash isn’t always straightforward. But, according to the research, we can still use existing tax rules as a starting point to navigate these waters. 

To get around these challenges, one idea floated in the paper is introducing taxes paid in-kind, meaning paying taxes with goods or services instead of cash. In the metaverse, this could mean using digital assets or services available within that space to pay your taxes. 

Drawing parallels to bartering transactions in the US, which are subject to tax implications, similar principles could be applied to transactions occurring within the metaverse, helping to create a balanced and equitable tax structure that integrates seamlessly with existing frameworks.

Self-made or enhanced assets 

The metaverse is a breeding ground for creativity, with users creating or improving digital assets, be it crafting virtual weapons or personalizing unique digital tokens known as non-fungible tokens (NFTs). NFTs currently carry a 28% tax on all gains from the proceeds. However, the rest of the digital assets are undefined.

The paper suggests the metaverse could be an arena where a new category of imputed income emerges, stemming from the digital assets users create or enhance. An imputed income is a kind of economic gain that happens when people use their own resources or services for personal gains. Up until now, taxing this type of income has been avoided, mainly because figuring out the value and keeping track of it all can be a nightmare. 

However, the metaverse could change this, making it easier to instantly value and monitor these activities, possibly opening the door to new tax opportunities, especially on virtual properties that have a clear market value. 

Now, this is a pretty big departure from the norm, so it’s something that needs a lot of discussion to work out the most effective way to implement it. This would involve multi-stakeholder dialogues involving policy makers, tax experts, and industry representatives, ensuring a fair and feasible approach to taxation in the metaverse.

Rewards 

Now, onto rewards, a crucial part of keeping users hooked in the metaverse. We’re talking about things like loot drops that players get during games. While they’re a big draw, they also create a bit of a tax headache. 

The research suggests that these virtual rewards, which do have real-world value, should technically be taxed in certain scenarios. The big question, though, is when and how to tax them. 

Because of the digital tracking capabilities of the metaverse, it might be possible to impose taxes on these rewards immediately, helping to keep things fair and avoid tax dodging. Note that the rewards in the US are generally non-taxable, but rewards in the metaverse can be an extension.

Unrealized gains from virtual assets

Lastly, we dive into the tricky topic of unrealized gains in the metaverse. Gains that are only “on paper” are called unrealized gains. Currently, the laws only tax these gains when they’re realized, meaning when they’re converted into cash or used to buy something. However, this approach might not be the best fit for the fast-moving and fluid world of virtual assets.

An alternative approach might be to shift to a system where these assets are taxed based on their market value at the end of each year, giving a more accurate picture of someone’s financial standing. 

The paper strongly hints that the unique nature of the metaverse might allow for this immediate taxation, shaking up the traditional tax landscape and ushering in a new era in the world of taxation.

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Where should taxes be collected?

Now, let’s tackle the elephant in the room – figuring out how to tax this sprawling virtual universe called the metaverse when it doesn’t even have a physical address. It gets pretty tangled when trying to pinpoint where exactly these transactions are happening and who should be overseeing them. Let’s dive into some potential strategies discussed in the paper.

The big question is finding the best place to collect taxes in the metaverse. One idea is to use the location of the servers (basically the computers where all the virtual action is hosted) as a stand-in for where the business is happening. 

But this is not foolproof because people can play tricks with server locations to take advantage of lower tax rates, even though there are limits to this because of the need for fast data transfer.

Another suggestion is to look at where the platform owners are based. This seems more stable, but it brings up worries about giving too much tax power to certain places, which might shift the economic balance in those areas. 

Then, there’s the idea of tracking where users are by their internet addresses, but again, users can mask these or use virtual networks to seem like they are somewhere else, seeking better tax rates.

The paper suggests that we need a flexible system that can deal with these complications, including handling digital nomads and people with homes in multiple places fairly and efficiently.

How to make sure the rules are followed

After figuring out where the tax should be collected, the next step is ensuring the rules are followed. Initial talks are hinting at a rule where money made from online gaming above $600 each year should be reported using a specific form, but only when the income is converted into real cash.

But this research paper is suggesting we think bigger and also keep track of money that hasn’t yet been taken out of the metaverse. They’re talking about using a Unified Ledger Transaction Reporting System (ULTRAs) to handle this kind of tax, which is a modern approach to the ever-changing nature of virtual assets.

When it comes to making sure these taxes are collected, two main roads are being considered. One is to put the responsibility on the metaverse platforms themselves, asking them to send the tax directly to the IRS, which could cut down on mistakes and dodging taxes. This would gel nicely with the current taxation at the source system, making things smoother and easier to handle. 

On the flip side, tying it into where users live makes it a bit more complicated but blends seamlessly into the current tax filing process, offering a straightforward way to pass tax information to users.

The road ahead

In a nutshell, building a robust tax structure for the metaverse is no small feat. It calls for a versatile plan that not only pinpoints the right places to collect tax but also strengthens the mechanisms to ensure compliance, mirroring the complex and ever-changing landscape of the metaverse itself. It’s a conversation that’s just beginning, with ongoing efforts to carve out a just and effective system, ensuring a bright future for the digital frontier.

The Crypto Valley Venture Capital (CVVC) has released the German Blockchain Report 2023. It shows a significant increase in blockchain funding within the country.

The report analyzes the performance of the blockchain sector in Germany from Q3 2022 to Q2 2023. It shows that the German blockchain sector had a 3% year-on-year increase in funding in the blockchain industry.

Germany had a total investment of $355 million in venture capital funding over 34 deals. The report also highlighted that the country reached its record on global funding, attracting 2.4% of international blockchain funding and 2.5% of worldwide deals.

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Crypto industry development and regulations in Germany

Germany has emerged as one of the leading countries in Europe regarding the crypto industry. The German government has taken proactive steps to embrace cryptocurrencies and blockchain technology, aiming to position the country as a fintech and digitization hub.

According to Nomad Capitalist, 5.8% of the population in Germany owns cryptocurrency, and 69% of this percentage invests in Bitcoin (BTC).

There is still a lack of regulatory framework towards cryptocurrency in Germany. The financial authority in charge of supervising the financial markets in the country is known as BaFin. Following the recent MiCA approval in the European region, more clear guidelines regarding regulations in the crypto industry in Germany are expected.

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CoinEx moved to open talk with the hackers who stole $54 million from the crypto exchange, offering a reward if the stolen assets are returned.

Crypto exchange CoinEx told the attackers behind a Sept. 12 hack to reach out and discuss a possible resolution.

In an open letter published on X, formerly Twitter, the platform offered a bounty if hackers returned the looted cryptos. CoinEx also provided contact details and instructions on how to reach the team. 

“We encourage you to communicate and negotiate with us actively on the blockchain or through our official email address (support@coinex.com). If you are willing to return the stolen assets, we will offer you a generous bug bounty as a reward.”

CoinEx Open Letter

CoinEx’s team stressed the hack’s impact, noting that the assets represent trust from millions of global users. Furthermore, the platform promised to upgrade its systems and sought to establish common ground with the attackers as fellow blockchain enthusiasts. 

Whether you’re dissatisfied with the current state of blockchain security or simply testing the security of the exchange system, we hope to build a sincere and open channel of communication…If possible, we sincerely invite you to discuss the future upgrade of CoinEx’s security system.

CoinEx Open Letter

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It’s not unheard of for exploited crypto parties to offer rewards for returned assets or attempt to negotiate with hackers. However, recoveries are not guaranteed with this olive branch, and hackers often ignore these requests for dialogue.

The chances for recovery are perhaps even lower if Lazarus exploited CoinEx for $54 million in cryptocurrencies. 

On-chain investigator ZachXBT said North Korean hackers masterminded the attack on CoinEx. The assertion was corroborated by blockchain security firm SlowMist, citing data that showed transactions between wallets involved in previous hacks on platforms like Stake and Alphapo.

Considering that the FBI tied Lazarus to these attacks, many now believe that North Korean cyber criminals who have reportedly stolen $270 million from crypto digital asset operators also hacked CoinEx.

Read more: North Korea linked to latest crypto hacks, surpassing $270m

Binance Coin (BNB) might recover as the team rolls out new updates. Meanwhile, Uniswap (UNI) remains bullish buoyed in part by the launch of UniswapX. However, after completing stage 2 of its presale, analysts expect Everlodge (ELDG) to lead the upcoming rally.

Summary

BNB predicted to reach $307

UNI may climb to $8.88 by the end of 2023

Analysts expect Everlodge to lead gains

BNB forecast

BNB prices might find support as BNB Chain developers plan to roll out new updates. 

Specifically, Age of Dino will be a part of the opBNB layer-2, potentially attracting more interest.

You might also like: opBNB layer-2 scaling solution launches on BNB Chain

Last week, prices recovered from $206, reaching $218. Based on BNB price prediction, traders expect the coin to reach $307 by the end of 2023.

Uniswap price projection

Last month, Uniswap launched the UniswapX platform to protect users from MEV bots. 

The amount left on the table for arbitrageurs will now be returned to swappers. 

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Interest in UNI rose as a result. Prices dropped to as low as $4.06 before rising to $4.52, but critical resistance lies at $5. 

If broken, UNI might soar to $8.44 by the end of the year. 

Everlodge democratizes real estate investments

Everlodge aims to enhance access to the real estate sector. By tokenizing assets, the project solves high costs, lack of accessibility, and hefty fees that have plagued the industry for years.

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By relying on the blockchain and fractionalizing assets using non-fungible tokens (NFTs), the Everlodge marketplace allows a larger pool of investors to own prime properties with as little as $100. Subsequently, this enhances liquidity since global investors can trade their NFTs on secondary markets. 

ELDG is native to Everlodge. In stage 3 of its presale, the token is available for $0.018 but will rise to $0.019 in stage 4. 

Find out more about the Everlodge (ELDG) Presale

Website: https://www.everlodge.io/ 

Telegram: https://t.me/everlodge 

Read more: Everlodge presale drawing Uniswap and Polkadot supporters

Disclosure: This content is provided by a third party. crypto.news does not endorse any product mentioned on this page. Users must do their own research before taking any actions related to the company.

A Bitcoin miner who mistakenly received the 19.8 BTC in fees returned the funds to the New York-based regulated blockchain, Paxos.

On Sept. 10, a BTC transaction that moved only nearly $2,000 had a payment fee of $500,000.

Later, on Sept. 13, it was revealed that Paxos made the transaction. The company explained to crypto.news that it was due to an internal server mistake. Paxos added that the funds were safe and belonged to the team.

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On Sept. 15, the F2Pool that received the fee have sent the 19.82108632 BTC overpayment back to Paxos.

F2Pool have sent the 19.82108632 BTC fee overpayment back to Paxos https://t.co/IB32RNq5uO

— mempool (@mempool) September 15, 2023

Paxos is a blockchain infrastructure provider that was founded in Singapore in 2012. The company aims to bring regulatory oversight to digital assets and blockchain technology. Paxos has positioned itself as a trusted and reliable platform for consumers and financial institutions to engage with digital assets securely.

One of Paxos’ notable achievements is its partnership with the Monetary Authority of Singapore (MAS), which serves as the country’s financial regulator. This collaboration allows Paxos to operate under the oversight of MAS, ensuring that its services adhere to regulatory standards.

Paxos has a global presence, with offices in Singapore, New York, and London and a team of over 200 employees, according to Crunchbase.

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Binance’s founder says challenges related to fiat ramps can prevent the market from onboarding the next 100 million users.

Trouble seems to be brewing on the horizon for the crypto market as tight regulations forced traditional institutions to pull away from the industry, Binance founder Changpeng Zhao (CZ) told Insider at the Token2049 crypto event.

Speaking about possible difficulties barring another 100 million users from entering the market, CZ said converting crypto to fiat and vice versa appears to be the main issue nowadays.

“With tightening regulations in the earlier part of this year, we’re seeing a lot of traditional institutions that used to provide fiat ramp channels pull away.”

Changpeng Zhao

For Binance, crypto-to-fiat ramps have become a hot topic recently as weekly trading volume with traditional currencies on the platform has plummeted 60% since the beginning of 2023, according to Kaiko data.

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In September 2023, the analysts added that fiat trading volume on Binance is down by 95% from its 2021 peak.

Weekly fiat trading volume on Binance | Source: X

In June 2023, Binance’s European banking partner, Paysafe Payment Solutions, terminated its partnership with the exchange, citing regulatory challenges globally. Last month, the exchange stopped offering clients in Russia the option to pay one another through sanctioned banks shortly after media reported that the crypto giant was moving money from Russians abroad.

Binance, under the helm of CEO Changpeng Zhao, is currently dealing with legal and regulatory issues across the globe. The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against the exchange and Zhao, accusing them of deceptive practices.

Read more: SEC accuses Binance US of hampering securities violation probe