Stay in the loop with our weekly crypto digest as we get you up to speed on the hottest trends and events in the crypto space.
Here’s what happened in crypto this week:
Judge Rules SEC Lawsuit Against Kraken Can Move Forward
US District Judge William H. Orrick ruled that cryptocurrency exchange Kraken must face a Securities and Exchange Commission (SEC) lawsuit alleging securities violations. The SEC’s complaint, filed in November 2023, claimed that some blockchain transactions executed on Kraken’s platform qualify as investment contracts under the Howey Test.
According to the court’s ruling, the SEC has made a plausible case that certain activities on Kraken’s platform involve securities, subjecting them to federal securities laws. The ruling is a setback in the industry’s ongoing tussle with the SEC to define which cryptocurrencies, if any, qualify as “securities” under US law and, therefore, fall under the SEC’s jurisdiction.
Digital Currency Group (DCG) Is Now Debt-Free
According to their quarterly shareholder letter, Digital Currency Group (DCG) has fully repaid its short-term debts as of June.
DCG repaid over $1 billion to creditors in the past 18 months, and its only remaining debt is a $1.1 billion promissory note to its bankrupt crypto-lending unit Genesis, due in eight years.
DCG helped Genesis stay in business by lending it cash and presenting it with the promissory note after it was implicated in the market contagion event in 2022.
Genesis and DCG have been able to fully repay the majority of Genesis’ creditors, with over 99% of more than 200,000 claim holders receiving a full recovery.
Telegram Founder And CEO Pavel Durov Arrested In France
Telegram chief executive Pavel Durov was arrested by the French police at an airport near Paris on Saturday evening for alleged offenses related to his popular messaging app. The 39-year-old Franco-Russian billionaire was detained at Le Bourget airport north of the French capital.
France’s OFMIN, an office tasked with preventing violence against minors, had issued an arrest warrant for Durov in a preliminary investigation into alleged offenses, including fraud, drug trafficking, cyberbullying, organized crime, and promotion of terrorism, one of the sources said.
Durov is accused of failing to take action to curb the criminal use of his platform.
France Officially Indicts Pavel Durov And Places Him Under Supervised Release
Telegram founder and CEO Pavel Durov has been released from custody after being charged by French authorities and placed under judicial supervision after appearing in court.
French prosecutors indicted Durov on criminal charges related to his role at Telegram. He was barred from leaving France and required to post five million euros in bail before being released from custody. He is also required to report to the French police station twice a week.
The formal investigation does not imply guilt in the French legal system but indicates that prosecutors believe there is enough of a case to merit a severe official investigation. He has not yet been formally charged.
Justin Sun Proposes A DAO To Help Free Pavel Durov
In an X post, Tron (TRX) founder Justin Sun wants to create a decentralized autonomous organization (DAO) to help free Telegram CEO Pavel Durov and is ready to donate $1 million if the community supports it.
Sun tagged Elon Musk and Mario Nawfal to get them involved. French authorities recently detained Pavel Durov, and his current status remains unclear, with no official charges announced yet.
Abra Charged By The SEC For Unregistered Crypto Offers And Sales
The Securities and Exchange Commission (SEC) has charged Abra, a crypto asset platform operated by Plutus Lending LLC, for allegedly failing to register its retail crypto asset lending product, Abra Earn. The SEC’s recent charges also include allegations that Abra operated as an unregistered investment company, raising concerns about investor protection and regulatory compliance.
According to a statement by the SEC, Abra launched Abra Earn, a program allowing US investors to lend their crypto assets in exchange for variable interest rates, in July 2020. This program amassed significant traction, with $600 million in assets at its peak, nearly $500 million of which came from US investors.
The SEC claims that Abra Earn should have been registered as a security and that Abra held over 40% of its total assets in investment securities. Abra agreed to settle the charges by paying civil penalties and accepting an injunction against further violations.
Russia To Start Using Crypto For International Transactions Next Week
According to a Bloomberg report, Russia is preparing to begin trials involving cryptocurrency exchanges and digital tokens for cross-border transactions, aiming to mitigate payment difficulties exacerbated by international sanctions. The trials are scheduled to start on September 1st.
The trials will utilize the National Payment Card System, a network established by Russia’s central bank in 2014. This system, which currently supports Mir cards (a payment system) and instant interbank payment services, was chosen for its robust infrastructure, making it capable of handling complex transactions like those involving cryptocurrency exchanges. The central bank entirely regulates the system, ensuring compliance with existing financial regulations during the testing phase.
Nasdaq Seeks SEC Approval To Start Trading Bitcoin Options
Nasdaq is seeking approval from the US SEC to launch options on a Bitcoin index.
This move represents a significant step toward legitimizing and normalizing Bitcoin trading within financial markets. While the SEC has yet to approve any options tied to spot Bitcoin prices, the green light could reshape trading strategies.
Introducing these options would give institutional investors and traders alternative methods to hedge their exposure to Bitcoin, leveraging the CME CF Bitcoin Real-Time Index to track the cryptocurrency’s volatile market.
Options lie in their ability to offer cost-effective risk management tools and enhanced liquidity, potentially paving the way for a more stable Bitcoin market.
Donald Trump Releases His Fourth NFT Collection
Donald Trump announced his fourth NFT collection with bonus trading cards in the Bitcoin Ordinals network.
Titled “Series 4: The America First Collection,” former President Trump revealed that his digital trading card collection, released as non-fungible tokens, will offer additional benefits to purchasers.
The NFTs are priced at $99 each, but buyers who spend up to $24,750 on the cards can receive perks such as Trump cocktails, sneakers, a dinner with Trump in Florida, and a piece of his suit from the recent CNN debate against US President Joe Biden.
HashKey Exchange Adds Avalanche (AVA) And Chainlink (LINK) For Hong Kong Retail Investors
HashKey Exchange, one of Hong Kong’s two licensed crypto exchanges, has received approval to sell two additional tokens to retail investors in addition to Bitcoin (BTC) and Ethereum (ETH).
HashKey CEO Livio Weng said HashKey listed Avalanche (AVAX) and Chainlink (LINK), allowing retail investors in the city-state to buy them with Hong Kong and US dollars.
The Asian financial hub looks to regain momentum in its ambitions to become a virtual asset hub.
OpenSea Receives Wells Notice From The SEC
OpenSea CEO Devin Finzer has disclosed that the NFT marketplace received a Wells notice from the Securities and Exchange Commission (SEC), signaling a potential enforcement action.
Finzer said the SEC alleges that the NFT marketplace facilitated trading unregistered securities on its platform. In a post, he wrote that the company was “shocked the SEC would make such a sweeping move against creators and artists,” but they are “ready to stand up and fight.”
It is worth noting that the securities regulator has been issuing several Wells notices to crypto firms for the past couple of months, warning of potential enforcement actions tied to alleged securities violations.
SEC Set To Approve Monthly Reporting For Mutual Funds And ETFs
The SEC will now require mutual funds and exchange-traded funds (ETFs) to report their portfolio holdings monthly rather than quarterly.
The change aims to increase transparency for investors, allowing them to monitor their investments better and giving the agency more timely data to respond to market changes.
The Commission voted 3-2 along party lines, with Republican members expressing concerns that the new rules’ costs would outweigh their benefits.
While the SEC resisted more controversial “swing pricing” proposals due to industry opposition, it issued guidance on complying with existing liquidity risk management rules for open-end funds.
The new reporting rules will take effect in November next year or May 2026 for smaller funds with net assets of $1 billion or less.
Final Thoughts
So that’s it for this week!
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Have a fantastic week ahead!
