August 5, 2023

Welcome to the Global Crypto News hub! Articles by Killerwhale go over the news you may have missed that involves crypto, but had a real world effect. Sit back, relax, and enjoy! News is gathered throughout the week and posted every Saturday!

Micheal Freckelton and Ross Jay, 37 and 33 years old respectively, were arrested this week by the UK authorities following the settlement of the “Operation Curry” and were sentenced to 6 years imprisonment each. The two fraudsters at the head of their fictitious company, called “Digi Ex” have stolen more than £400,000 in the span of two years from individual investors after using cold calling methods to scam the victims and make them “invest” in a completely fictitious token called “Telecoin”.

The pair, according to a report from Southwark Crown Court, planned a fake share sale and utilized the money for personal advantage, with absolutely no intention in any way of delivering a service that even slightly seemed like a reliable investment. Detective Chief Inspector Lee Parish added: “It’s easy for investors, and sadly victims in this case, to be sucked into what they think is an area of potential and growth for their hard-earned cash due to how new the area of crypto investment is.”

Together, the shady pair had the ability to pay themselves salaries totaling more than £139,000, all of which was funded by the money of naive investors. Additionally, they pulled out a significant volume of money from the Digi Ex company account, representing £145,000, which increased their illegal profits.

As a matter of fact, as the scam was carried out between 2015 and 2017, the victims didn't know enough about the crypto ecosystem as well as all the scams that take place there at this time, since the ecosystem was growing at exponential speed without people understanding the risks and complexities involved.

Witnessing people buy a token that doesn't even exist seems completely out of whack today. But on the contrary, this scam is still going strong, I would even say it’s at its peak, when we see hundreds of people sending hundreds of thousands of dollars to influencers who are deliberately scamming them, and who aren't even hiding it. It's important to note, however, that some investigations can take several years to be completed and brought to court, and it would be no delusion to see some of our favorite scam influencers in court in a few years' time.

Source: https://www.cityoflondon.police.uk/

The Securities and Exchange Commission (SEC) has filed a lawsuit against Richard Heart under his real name Richard Scheuler, founder of the ERC-20 cryptocurrency Hex, and his affiliated protocols PulseChain and PulseX. The SEC alleges that Heart and his organizations raised more than $1 billion through three unregistered crypto-asset services, in violation of securities regulations. The SEC claims that Heart and his organizations misled investors about the nature of the crypto-asset services they were offering. They allegedly told investors that the services were not securities, when in fact they were. The SEC also alleges that Heart and his organizations used investor funds for personal expenses, such as luxury cars and jewelry such as a 555-carat black diamond known as "The Enigma".

The SEC alleges that in addition to constituting a serious violation of securities law, this involves price manipulation and, most significantly, the personal use of client funds. As a matter of fact, Richard Scheuler used the chance to add several million dollars in ETH to his own cryptocurrency holdings. On his DeFi platforms, he produced thousands of transactions in an attempt to artificially increase volume, attract new customers, and earn transaction fees.

The market responded immediately to the SEC complaint's disclosure. Over 30% of Hex's price dropped in just 24 hours as well as 40% for PLS and 47% for PLSX, indicating a massive decline in investor confidence. Market responses and the larger regulatory framework provide insight into how crypto-currency regulation is currently structured. The demand for transparent and equitable regulation will only rise as the sector develops and grows.

The SEC is seeking to recover the funds that Heart and his organizations raised from investors, as well as civil penalties. Heart and his organizations have denied the allegations in the SEC's lawsuit. The lawsuit is the latest in a series of enforcement actions by the SEC against cryptocurrency companies. In recent years, the SEC has brought cases against companies that have raised billions of dollars through unregistered securities offerings.

The SEC is cracking down on cryptocurrency companies that it believes are violating securities laws, in an effort to protect investors. The stock market regulator does not, however, always prevail in court. A federal court recently found that the XRP coin was not a financial security and so was not exposed to the SEC's control in the SEC's procedure against Ripple. However, there is an important caveat: the judge did take into account the possibility that XRP may qualify as a financial security when it comes to institutional investors, even while it is not a financial security for individual investors. Unhelpful in terms of shedding light on the issue, the SEC has appealed the judgment.

The lawsuit against Heart and his organizations is a significant development in the battle between the SEC and cryptocurrency companies. The outcome of the case could have a major impact on the future of cryptocurrency regulation in the United States.

Source: https://sec.gov

While a separate law, ratified by the Russian legislation in mid-July, basically prohibited the application of other digital financial assets for payments. The legislative basis and legal framework for a central bank digital token based on a two-tier retail model approach called the "digital ruble" was implemented on July 24 following the signature of Vladimir Putin, President of Russia, which makes the latter become one of the largest adopters of CBDCs to date.

According to Stanislav Danysh, Chairman of the Board of Ingosstrakh Bank, a consortium of Russian banks participating in the test phase of the digital ruble project will start experimenting with transactions on a limited scale but with real consumers in mid-August while insisting that the digital ruble is neither a cryptocurrency nor a stablecoin, as it is a centralized token. that could act as a hedge against the volatility of the Russian ruble, considered one of the worst-performing currencies.

This digital ruble is a project that the Central Bank of Russia has been working on since 2020, and launched its first test platform in February 2022 with the participation of twelve Russian banks.According to Anatoly Aksako, the digital ruble allows government authorities and currency users to control how their money is being spent by others through smart contracts. What Aksako doesn’t say is that this would also be an instrument of determining how government funds designated for social programs are spent.

Under the amendments, the Central Bank of Russia will have full authority over the new currency and holders' accounts as it acts as the only platform operator. Another risk is the level of visibility a government would be granted into private transactions and transfers which could also be the continuity of mass surveillance, already being operated in Russia.

Furthermore, considering that Russia has been at war against Ukraine since February 2022, the deployment of this new digital token could be a means of circumventing the international restrictions and economic embargoes imposed by Western powers on Russia. Additionally, the central bank has shown interest in its international applications, claiming that the CBDC may offer a workaround for SWIFT, the messaging system that forbade Russian institutions.

However, according to Olga Skorobogatova, deputy chair of the central bank; “All citizens will get an opportunity to open digital wallets, receive and use digital rubles around 2025-2027."

Source: cbdctracker.org