Tether Blacklists, Dogecoin Goes Viral and Coinbase May Go Public — Crypto News of the Week
Tokenized Bitcoins, Exchanges Under Fire and TRX as a Security: Crypto News of the Week
OKEx Insights presents the top five crypto news stories of the past week.
Bittrex and Poloniex added to class-action lawsuit against Bitfinex and Tether
Cryptocurrency exchanges Bittrex and Poloniex have been added to an amended class-action lawsuit against Bitfinex, Tether and associated entities.
The lawsuit, originally filed in October 2019 and updated this week, alleges that Bitfinex and Tether manipulated the cryptocurrency market by inflating prices via fraudulent tactics. As the official complaint explains:
“In reality, Tether issued billions of USDT to itself with no U.S. dollar backing— simply creating the USDT out of thin air. Tether hid that fact by ‘selling’ newly issued USDT to Bitfinex, a crypto-exchange that was secretly owned and operated by the same individuals who owned and operated Tether. Because Bitfinex and Tether were essentially the same, Tether could simply transfer newly issued USDT into its account on Bitfinex without receiving U.S. dollars in exchange, as was required from genuine customers.”
Bittrex and Poloniex, meanwhile, are alleged to have knowingly participated in the USDT printing scheme by transferring large sums of knowingly-unbacked tethers.
- Tether is no stranger to controversy and is currently embroiled in a legal battle with the New York Attorney General. This news only adds fuel to the fire.
- The amended class-action lawsuit against Tether and associated firms is growing, with new exchanges being added as defendants. The potential for other cryptocurrency exchanges to be added may exist.
- If the lawsuit is won, shockwaves would undoubtedly be felt throughout the entire industry and the price of Bitcoin would likely react negatively.
Tokenized bitcoins on Ethereum outnumbering Lightning and Liquid
When it comes to off-chain Bitcoin transactions, Ethereum-based projects like WBTC and imBTC are currently the most popular choices — topping well-known Bitcoin-based projects like Lightning Network and Liquid.
As reported by CoinDesk, there are 70 percent more bitcoins on these Ethereum projects than then on the Bitcoin sidechains mentioned above. Furthermore, the tokenized Bitcoin supply has grown 330 percent in 2020.
- More options for off-chain Bitcoin transactions provide more choices for users, facilitating adoption.
- Ethereum’s diversity of use cases is illustrated by the growing number of tokenized bitcoins. It stands to reason we will continue to see use cases grow.
“Crypto Mom” Hester Peirce nominated for second SEC term
Hester Peirce, known by some in crypto as “Crypto Mom” for her advocacy of the industry — has been nominated to serve a second term as a member of the U.S. Securities and Exchange Commission (SEC) until 2025.
- Peirce has been the only member of the SEC to voice opposition to Bitcoin ETF application denials. Should her second term be approved, the likelihood of ever seeing such an exchange-traded fund is, at the very least, not damaged.
- Peirce has also argued for self-regulation and a safe harbor from the SEC for projects with decentralized tokens.
Europol sets sights on Bitcoin privacy tool Wasabi Wallet
Europol is reportedly targeting privacy-focused, open-source Bitcoin wallet, Wasabi Wallet.
The news was first reported by CoinDesk after a European Union’s law enforcement agency’s “law enforcement only” report on the wallet leaked on Telegram. The leak was later verified by Europol’s press department.
Europol’s European Cybercrime Centre (EC3) cited data from Chainalysis, the leading blockchain analysis company in the space. The report states:
“According to [Chainalysis], over the last three weeks, BTC in the amount of nearly 50 million USD were deposited into Wasabi with almost 30% coming from dark web markets. This is a significant amount, relatively speaking, given the dark web transactions are estimated to have only 1% share of total transactions.”
- Though it does not necessarily infer specific action will be taken by Europol, the report clearly illustrates how Bitcoin privacy tools are on law enforcement’s radar.
- Privacy tools obscure data on Bitcoin’s distributed public ledger, but regulators may step in.
TRON’s TRX strongly resembles a security, says industry council
The Crypto Rating Council (CRC) has unofficially deemed Tron’s, Nervos’ and Polkadot’s respective tokens as facing a higher likelihood of being deemed securities under U.S. securities law, according to a mid-April rating list obtained by The Block.
The unpublished rating list in question reportedly assigned a score to each token of 4.75 out of 5.00, which means that they strongly resemble securities.
- The CRC was founded by Coinbase, Circle, Genesis Capital, and other high-profile crypto firms to provide clarity on regulatory issues surrounding cryptocurrencies. Thus, its assessment does not mean that TRX and others are actually securities in the eyes of regulators — only that the council has determined that they resemble them.
- If the SEC was to hypothetically heed the CRC’s assessment, the Tron, Nervos and Polkadot ecosystems would likely undergo a tumultuous experience.
OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.