Ripple’s expensive battle, Bittrex bankruptcy and a new blockchain network
A million-dollar question in crypto might be whether tokens can be considered securities in the United States, with some crypto companies staking a lot of money on it.
For payment platform Ripple — sued by the U.S. Securities Exchange Commission (SEC) in 2020 — defense costs have already topped $200 million, Cointelegraph has learned. The SEC claims Ripple sold XRP (XRP) tokens as an unregistered security in the same way it has recently accused many other crypto companies.
Even the possibility of expensive litigation with the regulator isn’t stopping firms and projects from testing the limits of what can be considered a security. The Arbitrum Foundation — the entity behind the Arbitrum blockchain — plans to reward Ether (ETH) tokens worth over $6 million to holders of its native Arbitrum (ARB) token, according to a recent proposal in its DAO governance forum.
The tokens were generated through base fees and surplus revenue from network transactions. Although the proposal has gained support, some community members voiced concerns about the revenue distribution 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 large corporations’ coalition to build blockchain solutions tailored for institutional investors.
Defending against SEC to cost Ripple $200 million, CEO Brad Garlinghouse says
A case brought against Ripple by the SEC has cost the company $200 million, said its CEO Brad Garlinghouse during a fireside chat at the Dubai Fintech Summit. Garlinghouse also said the U.S. is stuck compared with the regulatory progress in the United Arab Emirates and the recent Markets in Crypto-Assets bill in the European Union. The SEC sued the crypto payment platform in December 2020, claiming Ripple illegally sold XRP tokens as an unregistered security.
Microsoft, Goldman Sachs, others partner in new blockchain network
A new blockchain network for financial institutions is in the works from a conglomerate of participants in the finance and tech space, including Microsoft and Goldman Sachs. The Canton Network will be an interoperable blockchain network for companies working with institutional assets. The platform is built on Daml, the smart contract language of Digital Asset, which creates an interoperable system where “assets, data, and cash” can synchronize across linked applications.
Bittrex files for Chapter 11 bankruptcy just weeks after SEC charges
Cryptocurrency trading platform Bittrex has filed for Chapter 11 bankruptcy protection in the United States. Bittrex Global CEO Oliver Linch told Cointelegraph that the bankruptcy is part of the exchange’s wind-down of operations in the U.S., adding that funds are safe and will be handed 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 U.S. Treasury’s Office of Foreign Assets Control. The agency is the largest creditor listed on Bittrex’s bankruptcy filing, which records a claim of $24.2 million.
Arbitrum’s DAO to receive over 3,350 ETH revenue from transaction fees
Layer-2 blockchain Arbitrum plans to distribute Ether tokens worth nearly $6.2 million to its community. According to a recent proposal on its governance forum, around 3,352 ETH will be collected by Arbitrum’s decentralized autonomous organization. The funds collected come from base fees and surplus revenue generated from network transactions. Data from Crypto Fees shows that Arbitrum’s users paid $387,423 in fees over the past seven days. The proposal appears 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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