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Kik Survives Legal Battle With the SEC, Kin Crypto to Continue Trading on Exchanges

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The Kin Foundation, the non-profit organization aiming to promote and govern the Kin crypto project, disclosed that both itself and the cryptocurrency has survived the recently concluded legal dispute with US Securities and Exchange Commission (SEC) over the 2017 Kin initial coin offering (ICO).

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The federal judge Alvin Hellerstein of the US District Court for the Southern District Of New York settled the legal case between Kik Interactive software development firm and the SEC. Justice Hellerstein said that Kik is “permanently restrained and enjoined” from violating Section 5 of the Securities Act.

As per the court order, Kik would have to pay a civil penalty of $5 million to the SEC within the next 30 days of the final court judgment. Besides that, Kik must give 45 days’ notice to the commission before any indirect or direct participation of a transfer, sale, offer, or issuance of any new digital asset, digital token or cryptocurrency, or any kind of ICO.

According to its blog post, Kin Foundation said that the Foundation and its Kin cryptocurrency are now out of the legal dispute. The Foundation said:

“In a nutshell, Kik is going to be OK. Beyond the monetary fine, Kik’s assets are still Kik’s property, including its remaining treasury, its Kin reserves, and all of its intellectual capital. Concurrently, the future of the Kin Foundation is not adversely affected. The SEC has not asked to register Kin as a security, and didn’t impose trading restrictions on it.”

Kik is now able to continue with its active development of the new code wallet and the open-source Kin SDK. Furthermore, the foundation stated that the SEC is not considering Kin as a security and is not in violation of securities laws therefore the token is free to trade on cryptocurrency exchanges.

The foundation said that its reserve is still active and it intends to continue growing the Kin ecosystem, seeking to hire a new executive director to join the team next month. The foundation revealed that the planned activity to migrate the token to the Solana blockchain would continue as scheduled.

The Origin of the Battlefront Between KiK and the SEC

In June 2019, the SEC filed a law enforcement action against Kik, alleging that Kik’s 2017 ICO was illegal because the firm sold tokens to US investors without registering the sale and offer as required by U.S security laws. Kik conducted an ICO in 2017 and consequently managed to raise $98 million, including $50 million in presales for Kin cryptocurrency.

Kik claimed that the ICO was for a currency and, therefore, was not subject to securities laws.  However, last month, Justice Alvin Hellerstein granted a motion for summary judgment to the SEC, noting that the commission was correct in its lawsuit, saying that tech company KiK should have registered its ICO under securities laws. The judge, therefore, ruled that Kik’s unregistered token offering violated Section 5 of the Securities Act.

Image source: Shutterstock Source: https://Blockchain.News/news/kik-survives-legal-battle-us-sec-cryptocurrency-continue-trading-exchanges

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Venezuelan Health Workers Receive USDC as Aid from US

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Despite frustrations caused by the disputed 2019 Presidential election in Venezeula, healthcare workers are getting financial aid, thanks to Crypto.

Airtm, a Latin American crypto exchange, is working with Circle and the US government to dispatch much needed aid to first line workers in Venezuela. This aid distribution has some complicated politics behind it, but the usefulness of the technology is clear.

Dos Presidentes

Venezuela has seen a difficult political reality recently, with two different men claiming the presidency as their own. Nicolás Maduro became the country’s leader in the wake of Hugo Chavez’s death from cancer in 2013. In 2019, a disputed election led to another man, Juan Guaidó, claiming to be the country’s leader.

While Guaidó says his legitimacy stems from his role as head of the National Assembly, Maduro disputes this. The current US administration has been warm to Guaidó as well.

It has also accused Maduro of drug trafficking and President Trump even offered a $15 million reward for Maduro’s arrest.

Despite these tensions amid politicians, Maduro remains in power and in the presidential palace, with the military, allies, and the state-run oil company backing him.

Over 50 countries now recognize Guaidó as President of Venezeula. In turn, Maduro limited Guaidó’s access to funds. Nonetheless, Guaidó maintains he is the true president. And it is through him that aid is meant to be distributed. Unfortunately for Guaidó, he has no control over Venezuela’s treasury.

The Work Around

But there indeed exists a way for Guaidó to get money. Circle, the company which runs the USDC stablecoin, has earmarked Venezeulan funds for healthcare workers. The country, hard hit by the COVID-19 pandemic, has also seen a dearth of supplies and runaway inflation. Workers have few sources of income.

In a post on its website, Circle briefly explained how the system of distributing aid works. The US Federal Reserve and Treasury will take funds that had previously been seized from Maduro’s government and transfer them to Guaidó via a US bank.

With US dollars virtually in hand, but several borders away, Guaidó will be able to mint USDC and send it to the Airtm exchange. From there, Venezuelan health care workers can claim their funds as “AirUSD”. This stablecoin will be available for withdrawal to the recipients.

Picking Favorites

The move, Circle seems to admit, is a way of bypassing Maduro’s regime, which controls banks in the socialist country. Circle is framing the move as a way to reward workers risking their lives in the hard-hit nation. The aid is said to number in the millions of dollars.

Jeremy Alliare, co-founder of circle, touted this use case of cryptocurrencies on Twitter. Hasu, a crypto researcher, replied that the US sending funds to other countries via crypto is both, “Impressive and scary.”

In 2019, Washington broke ties with Maduro’s government after calling the presidential elections there “fraudulent”. On Nov 19, 2020, the US decided to send its first ambassador in a decade to the South American nation.

After president-elect Joe Biden’s win on Nov 9, 2020, Maduro told the media he wished to resume a “decent” dialogue with the US.

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Harry Leeds is a writer, editor, and journalist who spent much time in the former USSR covering food, cryptocurrencies, and healthcare. He also translates poetry and edits the literary magazine mumbermag.me.

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Source: https://beincrypto.com/venezuelan-health-workers-receive-usdc-as-aid-from-us/

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South African Regulator Gets Tough in Sweeping Policy Proposal

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The South African Financial Sector Conduct Authority (FSCA) has unveiled a draft cryptocurrency regulation policy framework. This proposal aims to bring all crypto trading and investment activities in the country under its close supervision. Under the policy revealed to the public on Nov 20, all crypto exchanges must receive FSCA authorisation to act as financial services providers.

The proposal uses South Africa’s Financial Advisory and Intermediary Services (FAIS) Act 2002 for its basis. The new policy classifies crypto assets as financial products. This classification brings all crypto investment, trading and advisory services under the FCA’s regulatory jurisdiction. The move is a departure from the country’s erstwhile soft touch regulatory approach to crypto.

New South African Regulations Explained

Under the new rules, South Africa’s previously unregulated crypto economy is now expressly classified as part of the financial services sector. All providers must demonstrate the same fiduciary capacity as traditional financial institutions.

While bringing crypto trading and investment under the FSCA, the new regulations do not mean that cryptocurrency is recognised as money in South Africa. According to the FSCA’s supporting statement in the policy proposal, the regulations aim to stem the tide of cryptocurrency scams which have swept through the country over the past three years.

In fact, the FSCA’s director of investigations and enforcement Brandon Topham was quoted in Business Insider saying that in his opinion crypto is “highly suspect and nobody should be invested in anything form of cryptocurrency or any of the products that go with it”.

An excerpt from the document reads:

The Declaration in no way legitimises or gives credence to crypto assets, but is merely attempting to regulate intermediaries that are selling and advising customers to invest in crypto assets. It is envisaged that this will either result in customers making more informed decisions when purchasing crypto assets or potentially in a decline in intermediaries attempting to advise on and/or sell crypto assets. It will also reduce instances of fraudulent activity where players purport to be selling investments in crypto assets but are in reality absconding with customer
funds.

Implications Of New Regulations

The new regulations will mandate all exchange platforms, advisors and brokers involved in the crypto space to certify themselves under the FSCA’s standards. They will have to prove that they have the relevant qualifications, capacity, experience and knowledge, as well as pass a personal character evaluation.

Crypto trading and investment activities will also require a financial services provider license. Failure to obtain this license could lead to jail time. Brokers and other intermediaries offering crypto investment are required to justify any decision to recommend a crypto investment to their clients.

Explaining this decision, the statement reads in part:

[This] will result in improved disclosures to customers that more effectively highlight the high risks involved in investing in crypto assets and should also ensure that a more robust advice process is adopted (including proper risk assessments) when intermediaries decide to advise customers to purchase crypto asset.

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David is a journalist, writer and broadcaster whose work has appeared on CNN, The Africa Report, The New Yorker Magazine and The Washington Post. His work as a satirist on ‘The Other News,’ Nigeria’s answer to The Daily Show has featured in the New Yorker Magazine and in the Netflix documentary ‘Larry Charles’ Dangerous World of Comedy.’ In 2018, he was nominated by the US State Department for the 2019 Edward Murrow program for journalists under the International Visitors Leadership Program (IVLP). He tweets at @DavidHundeyin

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Source: https://beincrypto.com/south-africa-financial-regulator-goes-tough-on-crypto-in-sweeping-policy-proposal/

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Bitcoin Chases JP Morgan to Top World Bank

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On Nov 20, 2020, the market cap of Bitcoin rose above the market cap of JP Morgan Chase, the world’s largest public bank. Though it dropped back to number two on Nov 21, BTC’s quiet rise has enraptured the financial world.

JP Morgan v Bitcoin

JP Morgan Chase CEO Jamie Dimon has had a complicated relationship with Bitcoin. Since 2017, when Dimon claimed that Bitcoin was a fraud, much has changed at JP Morgan.

More recently, JP Morgan launched its own cryptocurrency and invested in ConsenSys. Though Dimon proclaimed on Nov 18, 2020 that Bitcoin is still, “not my cup of tea,” Bitcoin parried with its massive rise to near all time highs. Bitcoin, which itself is flirting not only with all time highs, but also with highest monthly closes, briefly overtook JP Morgan by market capitalization.

JP Morgan is America’s largest bank, rivaled by the Industrial and Commercial Bank of China in size. With a market cap of about $350 billion, JPMorgan is #17 of the Fortune 500 list of the largest US companies, just ahead of General Motors.

So when the market capitalization of Bitcoin surpassed JP Morgan at about $351 billion this weekend, it turned some heads. Bitcoin seems to be getting unprecedented interest from large wall street players and banks.

Crypto is FUNdamnetal

At the same time, the current crypto bull-run has arguably more fundamentals behind it than the one in 2017. The industry is more solid, the security more proven, the companies more transparent, and the backers better-known.

There are a few of possibilities fueling this current bull run. One theory is the growing understanding of Bitcoin as a replacement for gold. With the potential for huge post-stimulus inflation, US companies are seeking assets that will hold their own against rising prices.

Another possibility is the future of Bitcoin in the eyes of the law. In the United States, outgoing SEC Chairman Jay Clayton has clarified that Bitcoin is a store of value and not a security, a status that could make it more attractive to tax-conscious companies.

While this does not make Bitcoin an official “bank”, the cryptocurrency is still a financial instrument with more value parked in it than almost anything aside from gold.

With DeFi making an unbanked world a real possibility, cryptocurrencies continue to hold their own against traditional financial systems.

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Harry Leeds is a writer, editor, and journalist who spent much time in the former USSR covering food, cryptocurrencies, and healthcare. He also translates poetry and edits the literary magazine mumbermag.me.

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Source: https://beincrypto.com/bitcoin-chases-jp-morgan-to-top-world-bank/

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Ethereum Classic Users to Access Ethereum with WETC

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Ethereum Classic Labs (ECL) announced the launch of Wrapped ETC (WETC), a token that connects Ethereum Classic (ETC) users to Ethereum. The company stated that WETC uses a bridging mechanism that effectively makes ETC interoperable on Ethereum. ECL made the move to give ETC users access to the large DeFi pool in Ethereum.

The launch of WETC follows the recent launch of the DAI-ETC bridge. This bridge gave ETC users access to the Ethereum-based stablecoin DAI. It also follows the same cross-chain bridging template developed by ChainSafe Systems.

ETC-ETH Bridging Template for WETC

According to ETC Labs, the cross-chain solution uses ChainBridge, a decentralised application developed by ChainSafe Systems. ChainBridge is a smart contract interface across the ETC and ETH blockchains. It mints and burns WETC tokens on the Ethereum blockchain to equal the ETC transferred into or withdrawn from the smart contract.

WETC tokens are compatible with all wallets that use the ERC-20 standard. Like other ERC-20 tokens, WETC works with all Ethereum DeFi-based exchanges, lending platforms, betting platforms and gaming platforms.

Explaining the necessity behind giving ETC users access to Ethereum DeFi protocols, ETC Labs founder and chairman James Wo said:

The realities of a global pandemic and economic crisis are cementing DeFi as an integral piece of the rapidly-expanding digital economy. Especially where access to financial services like trading, savings, lending, and borrowing are inaccessible due to distance or inability to set up a bank account, DeFi will be an increasingly important force for positive change.

ETC on ETH Blockchain – A Growing Phenomenon

Theoretically, Ethereum is a fork of Ethereum Classic following the DAO hack in Mar 2016. This should make the blockchains rivals. However, in October, ETC Labs announced the launch of the DAI-ETC bridge. This bridge enables ETC users to use their tokens on the Ethereum-based MakerDAO protocol. Like WETC, the ETC-DAI Bridge uses the ChainBridge smart contract interface to make the blockchains interoperable.

Some believe that the moves are effectively a concession to Ethereum’s place in the battle for DeFi supremacy. ETC Labs itself admits that there is a need to make the Ethereum ecosystem accessible to ETC. This is because Ethereum currently hosts the vast majority of DeFi protocols. A quote from the company reads:

Decentralized Finance (DeFi) has grown to over half a million users, with over $13 billion USD locked into DeFi protocols. Given the vast majority of DeFi protocols are based on Ethereum, WETC will provide ETC users an easy way to access DeFi on the Ethereum blockchain.

According to the company, efforts are currently underway to get WETC listed on exchanges.

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David is a journalist, writer and broadcaster whose work has appeared on CNN, The Africa Report, The New Yorker Magazine and The Washington Post. His work as a satirist on ‘The Other News,’ Nigeria’s answer to The Daily Show has featured in the New Yorker Magazine and in the Netflix documentary ‘Larry Charles’ Dangerous World of Comedy.’ In 2018, he was nominated by the US State Department for the 2019 Edward Murrow program for journalists under the International Visitors Leadership Program (IVLP). He tweets at @DavidHundeyin

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Source: https://beincrypto.com/ethereum-classic-users-to-access-ethereum-with-wetc/

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