After a period of relative calm, the United States Securities and Exchange Commission (SEC) kicked off its summer crypto crackdown by targeting two major exchanges, Binance and Coinbase.
A total of 13 charges have been filed against Binance. One of the allegations in the suit claims that funds from Binance and Binance.US were commingled into an account controlled by the Changpeng Zhao-associated company, Merit Peak.
As for Coinbase, the SEC claims it has been offering unregistered securities and was never registered as a broker, securities exchange or clearing agency. Many in the crypto industry have been puzzled by the allegations against Coinbase, primarily because it is a publicly-traded company and received a previous green light from the regulator.
While not surprising, this week’s developments again shed light on the dubious practices of the SEC toward the crypto space, as it claimed companies failed to register with the regulator, despite the absence of a path to do so. Ripple CEO Brad Garlinghouse said the latest string of lawsuits is an attempt by the SEC to “distract” from the agency’s “FTX debacle” Let’s not forget the SEC has not sued FTX, although it has charged its founder and former executives.
The crypto space has seen sell-offs in tokens and stocks, services halted and heightened uncertainty in recent days, but these events may also bring something that the industry is eager for — legal clarity.
Along with the recent wave of lawsuits, this week’s Crypto Biz also explores Apple’s new headset moving beyond the metaverse, Brazil’s Mercado Bitcoin gets the green light for its fintech payments arm, and how European Union regulators are targeting fake news generated by artificial intelligence.
SEC complaint hints at why Brian Brooks resigned as Binance.US CEO
The SEC’s latest complaint against Binance could explain why former Binance.US CEO Brian Brooks chose to step down in August 2021, only three months after his appointment. According to legal sources, the complaint cites an “unnamed source” who ran Binance.US for a brief period in 2021. The dates correlate with the time that Brooks was CEO of the company. Brooks — a former top banking regulator — led operations at the crypto exchange after replacing former CEO Catherine Coley. According to comments cited in the complaint, Brooks quickly realized that he was “not actually the one running this company.” Upon recognizing this, he decided to leave, announcing his resignation just three months later.
1/ The SEC complaint against @Binance appears to solve the mystery of why Brian Brooks abruptly resigned as CEO of @BinanceUS in 2021.— MetaLawMan (@MetaLawMan) June 5, 2023
CZ allegedly reneged on promises that Brooks would be given autonomy to run https://t.co/reBq6K7KAs independently from @Binance.
Brazilian crypto exchange Mercado Bitcoin licensed as payment provider
Cryptocurrency exchange Mercado Bitcoin was granted a payment provider license from Brazil’s central bank on June 2. With the license, the company will launch its fintech solution MB Pay. The fintech arm will provide Brazilian users with specific digital banking services using crypto assets held on the exchange, such as digital fixed-income investments, staking and other financial transactions. A debit card offering a crypto off-ramp for users is expected to go live soon. Global crypto exchanges operating in Brazil’s market include Binance, Coinbase, Crypto.com and Bitso.
Apple’s Vision Pro headset reveal swaps metaverse for ‘spatial computing’
Apple’s newly revealed mixed-reality headset, the Apple Vision Pro, has turned tech-enthusiast heads in the past few days. The company, however, deliberately labeled its technology the first “spatial computer” to move away from the metaverse concept and differentiate its virtual reality tool from competitors. Apple’s marketing is focused on the words “spatial” and “spatial computing” rather than words such as “metaverse,” “AR,” and “VR.” A clear step away from Microsoft’s Hololens and Meta’s headsets. Apple’s headset will be launched in the U.S. in early 2024, for a hefty retail price of $3,499, before expanding internationally.
EU officials want all AI-generated content to be labeled
A new effort by the European Union to stamp out fake news targets artificial intelligence-generated content. According to EU officials, companies deploying generative AI tools should label their content to combat fake news. The statement comes as the EU prepares its forthcoming Artificial Intelligence Act, which will be a comprehensive set of guidelines for the public use of AI and the companies deploying it. Major tech companies, including Google, Microsoft and Meta Platforms, have already signed onto the EU’s 2022 Code of Practice on Disinformation.
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