A million-dollar question in crypto might be whether tokens can be considered securities in the United States, with some crypto companies betting big money on them.
For payment platform Ripple, sued by the US Securities and Exchange Commission (SEC) in 2020, defense costs have already exceeded $200 million, Cointelegraph has learned. The SEC claims that Ripple sold XRP (XRP) tokens as an unrecorded security in the same way that many other crypto companies have recently been accused of.
Even the possibility of expensive litigation with the regulator does not prevent 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 Ether (ETH) tokens worth more than $6 million for holders of its native Arbitrum (ARB) token, according to a recent proposal on its DAO governance forum.
The tokens were generated through base fees and excess revenue from network transactions. Although the proposal gained support, some community members raised concerns about the revenue sharing serving 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.
Fending off the SEC will cost Ripple $200 million, CEO Brad Garlinghouse says
A case brought against Ripple by the SEC cost the company $200 millionCEO Brad Garlinghouse said during a fireside chat at the Dubai Fintech Summit. Garlinghouse also said that the United States is stuck compared to regulatory progress in the United Arab Emirates and the recent Markets in Crypto Assets bill in the European Union. The second 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 new blockchain network for financial institutions is in the works from a conglomerate of participants in the financial and technology space, including Microsoft and Goldman Sachs. 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 where "assets, data and cash" can be synchronized between linked applications.
Bittrex files for Chapter 11 bankruptcy just weeks after SEC charges
The Bittrex cryptocurrency trading platform has filed for Chapter 11 bankruptcy protection in the U.S. 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 for securities violations in April. 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 millions.
Arbitrum DAO will receive more than 3,350 ETH of revenue from transaction fees
Layer 2 Blockchain Decision plans to distribute ether tokens worth nearly $6.2 million to his 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 charges for the last seven days. The proposal seems to have broad support, but some community members pointed out that the revenue distribution could classify the ARB token as a security.
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