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EtherDelta Founder Charged by SEC as an Unregistered Exchange

Zachary Coburn, the founder of EtherDelta, has just been charged by the US Securities and Exchange Commission (SEC) with operating an unregistered securities exchange. The SEC released the news via a press release yesterday.

EtherDelta Charged

According to the report by the SEC, over the course of 18 months, EtherDelta users placed over 3.6 million orders for digital currencies. Among those ordered were coins considered securities by US federal laws.

Under the current law, EtherDelta was supposed to register in the US or apply for an exemption. However, the cryptocurrency exchange failed to do either.

“EtherDelta had both the user interface and underlying functionality of an online national securities exchange and was required to register with the SEC or qualify for an exemption,” said Stephanie Avakian, Co-Director of the SEC’s Enforcement Division.

According to the SEC, Coburn neither denied or admitted to the findings, instead, he consented to pay the state $300,000 in unlawful profits. In addition to the $300,000 fine, the EtherDelta founder will pay $13,000 for prejudgment interest and an additional $75,000 penalty.

>> Two Teachers Mine for Ethereum Using School’s Power

EtherDelta isn’t the only crypto exchange the SEC has gone after. In fact, many popular global exchanges have barred US citizens from using their platform due to the country’s strict regulations. Many exchanges don’t want to have to go through the process of registering and the potential for fines.

“We are witnessing a time of significant innovation in the securities markets with the use and application of distributed ledger technology,” said Steven Peikin, Co-Director of the SEC’s Enforcement Division. “But to protect investors, this innovation necessitates the SEC’s thoughtful oversight of digital markets and enforcement of existing laws.”

While many within the crypto community feel the restrictions are too harsh, the SEC feels it has a right to protect its citizens from fraudulent activity. Most fraud has surrounded Initial Coin Offerings (ICOs), and the SEC has cracked down the most on these activities in the crypto space.

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Winklevoss Lawsuit | Lawyer States Shrem Committed ‘No Misconduct’

Earlier this month, the NY Times reported that the crypto-famous Winklevoss twins have accused Bitcoin Foundation founder Charlie Shrem of Bitcoin fraud. The Winklevoss lawsuit has now turned into a heated battle between both parties.

Winklevoss Lawsuit

According to the report by the NT Times, Shrem made several lavish purchases in 2018, that caught the attention of the Olympian twins. The pair filed a civil lawsuit against Shrem accusing him of stealing thousands of Bitcoin from them in 2012.

“Either Shrem has been incredibly lucky and successful since leaving prison, or—more likely—he ‘acquired’ his six properties, two Maseratis, two powerboats and other holdings with the appreciated value of the 5,000 Bitcoin he stole from” the Winklevoss twins in 2012, the lawsuit states.

The lawsuit claims the Winklevoss twins worked with Shrem on a previous project before he served one year in jail for purchasing drugs with Bitcoin. The filing claims that Shrem stole 5000 Bitcoins from the twins in 2012, that were worth $13 at the time. Now, the coins are valued at around $32 million.

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Lawyer Defends Shrem

“Shrem can show by verifiable evidence that he did not take the 5,000 bitcoins [the Winklevosses] accuse him of taking,” the filing reads.

The lawsuit against Shrem spans over six years, and the result was a falling out over a deal to help the Winklevosses accrue digital currency. This September, the same judge that charged Shrem with his previous proceedings agreed to partially freeze his assets amid accusations by the Winklevosses. Shrem then failed to pay $1 million in restitution to the state as part of the plea deal.

Klein, Shrem’s lawyer, states this is incorrect and claims:

“The true facts are that Shrem paid a portion of the money owed before he knew of the [Winklevosses’] complaint, and is in the process of paying the rest.”

Klein also denies the idea that Shrem has used the 5,000 Bitcoins in question to purchase all of his new assets.

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Winklevoss Twins Lawsuit | Gemini Founders Sue Charlie Shrem

The Winklevoss twins have filed a lawsuit against infamous BitInstant founder Charlie Shrem. They claim the Bitcoin investor stole 5,000 Bitcoins from them in 2012.

Winklevoss Twins Lawsuit

According to the New York Times, Shrem made several lavish purchases in 2018 that caught the attention of the Winklevoss twins. They filed a civil suit against him, convinced that Shrem made these purchases—which include a $2 million house and luxury cars—using the Bitcoins he had stolen from them in 2012.

Shrem Worked for the Winklevoss Twins Before Lawsuit

The twins hired Shrem in 2012. Tasked with building up a cryptocurrency stockpile, he had access to thousands of dollars to purchase Bitcoin.

At this point in time, Bitcoin was worth around $12 per coin.

The Winklevoss twins’ lawsuit claims that around $60,000 worth of Bitcoin was never accounted for. At approx $12 per coin, this value meant around 5,000 Bitcoins. However, 5,000 Bitcoins in today’s market is worth roughly $30 million.

At that value, the Winklevoss twins have decided to push forward on the matter even though it has been a contentious issue between the parties for several years.

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Shrem’s Legal Team Contests Winklevoss Lawsuit

Charlie Shrem is obviously fighting the accusation. A representative from his legal team gave this response:

“Winklevoss Capital Fund has brought an utterly baseless civil lawsuit against Charlie Shrem. The lawsuit erroneously alleges that about six years ago Charlie essentially misappropriated thousands of bitcoins. Nothing could be further from the truth. Charlie plans to vigorously defend himself and quickly clear his name.”

However, Shrem has had run-ins with the law before. He was arrested in 2014 and served two years in prison for “operating an unlicensed money transmitting business, money laundering conspiracy and willfully failing to file suspicious activity reports with banking authorities.”

According to Prosecutors, Shrem conspired to launder $1 million worth of Bitcoin to help Silk Road users make anonymous and illegal purchases.

Transactions on the Blockchain

The truth should lie in the Blockchain. It is claimed that Shrem sent the missing Bitcoins to addresses that he controlled. He subsequently would have forwarded the coins to other wallets. If this is the case, the answer should be in the log.

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Coinbase will Add Nearly 300 Coins in the Next Year but Won’t IPO

The major US cryptocurrency exchange Coinbase has just announced that it won’t IPO any time soon but will be adding hundreds of more coins in the next year. Coinbase’s President and COO Asiff Hiriji told Bloomberg his company’s plans this morning via Bloomberg TV.

Coinbase Denies IPO

Yesterday, it was announced that Coinbase is now valued at over $8 billion USD after it closed its series E investment last week. This funding round was worth $300 million USD. With its value rising, some began to speculate whether the major cryptocurrency company was eyeing an Initial Public Offering any time soon.

Hiriji himself hinted about the potential offering back in 2017, stating that the company would like to go public “at some point.” The exec confirmed to Bloomberg reporters today:

“There’s not going to be an IPO any time soon; we have so much to do.”

Hiriji elaborated a bit more on what “so much to do” meant by saying his executives want to diversify revenue stream across the company’s two platforms. Currently, Coinbase offers only seven cryptocurrencies at the time. Hiriji elaborated a bit more about his company’s future plans by saying:

“We offer seven [cryptocurrencies], so you should expect us to go from seven to that total number we think is worth it [200 – 300] over the next year or so. Some things will be offered in the U.S., but more things will probably be offered outside the U.S.”

US Regulations

Currently, the US has the strictest policies across the globe when it comes to cryptocurrency. Most companies won’t even offer their services to US citizens because it’s impossible to comply with the regulations put in place by the SEC. It seems the US-based company has no interest in trying to pass these laws and is shifting gears to foreign crypto investors now.

It remains unknown at this time which coins will be available to US investors when the new batch is released.

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Coinbase Funding | Exchange Now Valued at Over $8 Billion

Crypto exchange Coinbase is now valued at over $8 billion after it closed a new $300 million funding round.

The US exchange held a Series E investment last week.

Coinbase Funding will Enhance Growth

Coinbase is one of the world’s largest exchanges by trading volume, and it has been at the fore of the cryptocurrency movement when it exploded in 2017.

In the first half of that year, the exchange facilitated almost $15 billion in digital currency exchanges. That number was five times the amount exchanged across all of 2016. Now, in 2018 and moving into 2019, the platform has amassed $525 million from investors to date.

Broadening Coinbase

The company has spent 2018 focusing on broadening its services; the exchange is aiming to cater to institutional investors, and this new Coinbase funding will help further that effort.

Interestingly, the company is planning on broadening its footprint outside of the US. It wants to offer fiat-to-crypto exchange services in other parts of the world.

And it seems this is a strategy most major platforms are implementing. Binance—the world’s largest exchange based on trading volume—has plans to open ten fiat-to-crypto exchanges worldwide by the end of 2019.

>> California Man Faces Up to Five Years for “Unlicensed” Bitcoin Sales

Coinbase Funding will Add Support

At this point in time, Coinbase has support for seven digital assets. These include Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), ZRX Coin (ZRX), and its newest addition, Circle Coin (USDC).

The newly raised capital will also go toward supporting more tokens in the not too distant future.

The platform has the ambition to house potentially “millions” of coins in the future. But for now, when speaking at TechCrunch Disrupt San Francisco in September, CEO Brian Armstrong said he believed Coinbase could host hundreds of tokens within “years.”

Coinbase and Circle

Only last week, Coinbase and Circle joined forces to establish their own stablecoin, the USDC, or USD Coin. The tech startup companies are calling their joint venture the ‘CENTRE Consortium,’ and its new website is already up and running.

This is the first time the major US cryptocurrency exchange is supporting a stablecoin and the coin is already available for trading on the exchange.

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