A million-dollar cryptocurrency question might be whether tokens can be considered securities in the United States, with some cryptocurrency companies betting big on it.
For the payment platform Ripple – sued by the United States Securities and Exchange Commission (SEC) in 2020 – defense costs have already exceeded USD 200 million, Cointelegraph has learned. The SEC claims that Ripple sold XRP (XRP) tokens as an unregistered security in the same way that it has recently accused many other crypto companies.
Even the possibility of costly regulatory litigation is not stopping companies and projects from testing the limits of what can be considered value. The Arbitrum Foundation – the entity behind the Arbitrum blockchain – plans to reward more than $6 million worth of Ether (ETH) tokens to holders of its native Arbitrum (ARB) token, according to a recent proposal in its governance forum. DAO.
The tokens were generated through base fees and excess revenue from network transactions. Although the proposal has gained support, some community members raised concerns about revenue sharing as a way to label ARB tokens as securities.
This week’s Crypto Biz explores Arbitrum’s latest controversial proposal, Ripple’s two-year battle with the SEC and a coalition of large corporations to build blockchain solutions tailored for institutional investors.
Defending against the SEC will cost Ripple $200 million, according to its CEO
A case brought against Ripple by the SEC has cost the company $200 million, CEO Brad Garlinghouse said during a talk at the Dubai Fintech Summit. Garlinghouse also said that the US is stagnant compared to regulatory progress in the United Arab Emirates and the recent Crypto Asset Markets bill in the European Union. The SEC sued the crypto payment platform in December 2020, alleging that Ripple illegally sold XRP tokens as an unregistered security.
Microsoft, Goldman Sachs and others partner on a new blockchain network
A conglomerate of players in the financial and technology space, including Microsoft and Goldman Sachs, is preparing a new blockchain network for financial institutions. Canton Network will be an interoperable blockchain network for companies that work with institutional assets. The platform is based on Daml, Digital Asset’s smart contract language, which creates an interoperable system in which “assets, data and cash” can be synchronized through linked applications.
Bittrex Files for Chapter 11 Bankruptcy Just Weeks After SEC Indictments
The Bittrex cryptocurrency exchange platform has filed for Chapter 11 bankruptcy protection in the United States. Bittrex Global CEO Oliver Lynch told Cointelegraph that the bankruptcy is part of the liquidation of the exchange’s US operations, adding that the funds are safe and will be turned over to the court. The move comes after the SEC charged the company and its co-founder William Shihara in April with violating securities regulations. In October 2022, the exchange received charges from the US Treasury’s Office of Foreign Assets Control. The agency is the largest creditor listed in Bittrex’s bankruptcy filing, which records a claim of $24.2 million.
Arbitrum DAO will receive more than 3,350 ETH of income from transaction fees
Layer 2 blockchain Arbitrum plans to distribute nearly $6.2 million worth of Ether tokens among its community. According to a recent proposal in its governance forum, Arbitrum’s decentralized autonomous organization will raise around 3,352 ETH. Funds collected come from base fees and excess revenue generated from network transactions. Crypto Fees data shows that Arbitrum users paid $387,423 in fees in the last seven days. The proposal appears to have broad support, but some community members noted that the revenue distribution could classify the ARB token as a security.
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