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US crypto crackdown.

US crypto crackdown.

 US authorities stepped up their crypto crackdown yesterday, while one of the industry’s most prominent banks revealed that its clients had withdrawn billions of dollars as the fallout spreads from last year’s FTX collapse.

Regulators intervened in selling a failed crypto lender’s assets and brought fraud charges against the head of a now-defunct group. Its parent group, Digital Currency, is trying to raise capital and pay back creditors after being hit by the industry-wide crisis.

The collapse in November of Sam Bankman-Fried’s FTX empire and the failure of several other prominent firms have piled pressure on global regulators to toughen their scrutiny of the sector.

The New York attorney-general hit Alex Mashinsky, founder of bankrupt crypto lender Celsius Network, with a civil lawsuit accusing him of defrauding hundreds of thousands of investors and flouting securities laws.

Mashinsky had promised returns of up to 17 per cent and urged users to stay invested despite the hole in the platform’s balance sheet growing more extensive, it added.

Benjamin Allee, Mashinsky’s attorney, said that his client «denies these allegations» and «looks forward to vigorously defending himself in court».

Separately, the Securities and Exchange Commission filed an objection to Binance US’s proposed $1bn purchase of assets belonging to Voyager Digital, which went bankrupt last summer.

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Comments

  1. Nigel6 January 2023 at 16:58

    The show has begun then, hasn't it? We are going to see these kinds of news in spades in the following months and even years. Until the crypto market isn't better regulated there will always be people that try to scam the masses.

    ReplyDelete
    Replies
    1. Oma56 January 2023 at 17:37

      While I agree with some regulations, total control over this market is out of the question. After all, crypto is a way to buy and sell freely, without having the government knowing your every move.

      Delete

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