WuBlockchain Weekly: KuCoin Faces U.S. Lawsuit and Top10 News

1. BlackRock CEO: Launching Ethereum ETF Remains Feasible Even If Ethereum Is Deemed a Security link

Larry Fink, the CEO of BlackRock, expressed in an interview with Fox Business that even if the Securities and Exchange Commission (SEC) designates Ethereum as a security, the launch of an Ethereum ETF remains a possibility. When asked about the possibility of BlackRock launching an Ethereum spot ETF after Ethereum is considered a security, Fink gave an affirmative response. Currently, eight potential issuers, including BlackRock, have submitted applications for Ethereum spot ETFs to the SEC. The SEC is expected to make a final decision in May, and industry experts predict that the applications are unlikely to be approved regardless of how the SEC views the nature of Ethereum.

2. London Stock Exchange to Accept Listings of Crypto ETNs Starting April 8, 2024 link

The London Stock Exchange has announced that it will begin accepting listing applications for Bitcoin and Ethereum cryptocurrency ETNs (Exchange-Traded Notes) starting from April 8, 2024. Following approval from the Financial Conduct Authority (FCA), the first batch of cryptocurrency ETNs is set to commence trading on May 28, 2024.

3. SEC Requests Judge to Impose $2 Billion Fine on Ripple Labs link

Ripple’s Chief Legal Officer, Stuart Alderoty, has stated that the SEC has requested a New York judge to impose a $2 billion fine on Ripple Labs as part of their ongoing legal battle spanning several years. Ripple’s response is set to be submitted next month. However, as seen before, Ripple has denounced the SEC’s statements as false, inaccurately described, and intended to mislead. Ripple alleges that the SEC has not faithfully executed the law but instead aims to punish and intimidate Ripple and the entire industry.

4. SBF Sentenced to 25 Years in Prison link

SBF was ultimately sentenced to 240 months in prison by the judge, followed by an additional consecutive 60 months (which will start immediately after completing the previous sentence), totaling 300 months (25 years). Earlier, prosecutors had recommended a 40-year sentence. According to guidelines, a life sentence could have been imposed. Additionally, Bloomberg reports that the judge ordered the forfeiture of over $11 billion from SBF.

The judge dismissed SBF’s argument that investors had been fully reimbursed, stating that the incidental increase in the value of certain cryptocurrencies was irrelevant to the severity of the crimes committed. Even if restitution had been made, a thief who takes stolen goods to Las Vegas and successfully bets on them does not qualify for a reduced sentence. The judge deemed the loss amount far exceeding the highest level of $550 million, with investors losing $1.7 billion, creditors losing $1.3 billion, and clients losing $8 billion.

5. KuCoin Faces Lawsuit in the United States, Considered Selling Its Business

a. US Attorney’s Office, CFTC Sue KuCoin and Its Two Founders link

The United States Attorney’s Office announced the filing of a lawsuit against KuCoin and its two founders, Chun Gan and Ke Tang, alleging conspiracy to operate an unlicensed money transmission business and conspiracy to violate the Bank Secrecy Act. It is alleged that they deliberately failed to maintain adequate anti-money laundering (AML) programs designed to prevent KuCoin from being used for money laundering and terrorist financing, failed to implement reasonable procedures to verify customer identities, and failed to submit any suspicious activity reports. KuCoin is also accused of operating an unlicensed money transmission business and flagrantly violating the Bank Secrecy Act. The CFTC has initiated civil enforcement proceedings against KuCoin, seeking the return of ill-gotten gains, civil penalties, permanent injunctions against trading and registration, as well as permanent injunctions against further violations of the CEA and CFTC regulations.

b. KuCoin Considered Halting Operations and Selling Business in 2023 link

Three independent sources have confirmed to WuBlockChain that in 2023, KuCoin had considered halting its operations and selling the exchange. Personnel from various exchanges, including Binance, received information about the sale. In 2023, KuCoin expedited the divestment of many of its businesses to reduce risks.

In 2023, KuCoin came under criminal investigation by the U.S. Department of Justice (DOJ) and faced multiple investigations in China as well. Previously, KuCoin was the only major offshore exchange that had not banned U.S. IPs. Wu’s data research conducted in 2022 had indicated that KuCoin might face significant pressure from the United States. The DOJ criticized KuCoin for its passive regulatory stance, as it had never submitted any necessary suspicious activity reports. In July 2023, when KuCoin was informed of the U.S. criminal investigation into its activities, it finally initiated KYC procedures for new clients.

6. OKX Elevates Compliance Department Priority to Highest Level link

WuBlockChain has exclusively learned that recently, OKX internally elevated its compliance department located in the United States to the highest priority among all departments. All operations are now conducted with the compliance department in the United States as the utmost priority. The founders of OKX also frequently travel to the United States. OKX recently announced regulatory measures in Europe to delist USDT and carried out the largest-scale USDT freeze in collaboration with Tether, sparking industry attention.

It is worth noting that Patrick Donegan, OKX’s Global Chief Compliance Officer, resigned in January of this year, after serving only six months in the position (having joined OKX in August 2023). His responsibilities prior to his departure included anti-money laundering and overseeing a team of 300 people. Patrick Donegan previously served as Chief Compliance Officer and Senior Vice President at Signature Bank, where he worked for nearly eight years.

7. CommEx, Buyer of Binance’s Russian Business, Announces Gradual Shutdown of Operations link

CommEx, the buyer of Binance’s Russian operations, has announced a gradual cessation of its operations. Starting from March 25th, 18:00 Beijing time, new user registrations will be temporarily suspended, and asset transfers from the original Binance will be halted. On May 10th, the official website will be closed, rendering users unable to access any CommEx-related content. Binance had announced its comprehensive withdrawal from the Russian market in September last year, with the relevant business being sold to CommEx.

8. Nigerian Media: Detained Binance Executives Escape from Custody in Nigeria link

According to reports from Nigerian media outlet Premium Times, a detained Binance executive escaped from custody in Nigeria. Anjarwalla, after being taken to a nearby mosque for Friday prayers on March 22nd, fled the detention facility. A spokesperson for Binance stated that the primary concern is the safety of the staff and that they are closely cooperating with Nigerian authorities to resolve the issue as soon as possible. Additionally, Binance faces accusations from Nigerian authorities of tax evasion, with four counts of tax evasion charges including failure to remit value-added tax, corporate income tax, failure to file tax returns, and conspiracy to assist clients in tax evasion through its platform.

Another detained Binance executive, Tigran Gambaryan, has filed a lawsuit against the Nigerian National Security Agency (NSA) and the Economic and Financial Crimes Commission (EFCC). Tigran Gambaryan filed the lawsuit against the NSA on March 28th, alleging violations of his fundamental human rights and seeking five primary reliefs from the court. He urges the court to order the return of his passport and immediate release within three weeks; requests an injunction against future detention in similar investigations; demands public apologies from the NSA and EFCC; and seeks reimbursement of full compensation for legal fees.

9. Tether: Strategic Focus Expands into AI Domain link

Tether has announced a strategic expansion into the field of artificial intelligence (AI). Initially, Tether Data plans to pioneer the development of open-source, multi-modal AI models, seamlessly integrating AI solutions into market-driven products, and is committed to advancing the development of open AI fields. Additionally, Tether Data has announced a global recruitment drive for AI talent.

10. Vitalik: We Need to Create a World Where Blockchain and AI Collaborate link

Vitalik, speaking at the BUIDL Asia 2024 conference held in Seoul on March 28th, emphasized the growing significance of artificial intelligence (AI) in today’s expanding market landscape. He advocated for the creation of a symbiotic relationship between blockchain technology and AI, stressing the potential of AI to develop applications with as little as 100 to 500 lines of code. Furthermore, he proposed that possessing the capability to write 10,000 lines of code could significantly reduce bugs within the Ethereum Virtual Machine (EVM).

In addressing the imperative to ensure AI development is conducted safely and with decentralization in mind, Vitalik introduced data provisioning and incentivization mechanisms. He suggested that the blockchain developer community should exclusively feed AI with meticulously curated data, rewarding contributors with tokens as an incentive. This approach aims to safeguard data integrity and reduce dependency on centralized AI models.

Fundraising

Binance Labs and OKX Ventures strategically invested in StakeStone, a sci-fi themed NFT card game. link
The cryptographic game developer Parallel announced the completion of a $35 million financing round for its sci-fi themed NFT card game. link
Gunzilla Games, a leading developer in the crypto gaming space, disclosed securing $30 million in financing. link
DePIN L1 blockchain project Peak successfully raised $15 million in pre-launch financing. link
Illuvium, a blockchain gaming studio, closed a $12 million Series A financing round, with Animoca Brands among the lead investors. link
Reya Labs, the developer behind Reya Network, secured $10 million in financing, with Coinbase Ventures among the participants. link
0G Labs, a Web3 infrastructure company, completed a $35 million Pre-Seed financing round. link
ALEX, a Bitcoin DeFi platform, successfully closed a $10 million strategic financing round, with Spartan Capital leading the investment. link
BEVM, a Bitcoin L2 project, announced securing a multi-million dollar financing round with participation from ArkStream Capital. link
Bitlayer, another Bitcoin L2 project, completed a $5 million seed round of financing, with Framework Ventures and ABCDE Capital co-leading the investment. link
MyShell, a Web3 AI platform, raised $11 million with Dragonfly Ventures as the lead investor. link
7 Digital Labs, a Web3 game studio, announced the completion of a $4 million seed round of financing. link
DappOS, a decentralized application execution network, closed a $15.3 million Series A financing round. link
RWA project Midas announced the completion of an $8.75 million seed round of financing. link

Learn more, check out crypto-fundraising.info.