Nigeria to create the stablecoins and ICOs legal framework

January 10, 2023 Coin Telegraph

The necessity to create a legal framework for stablecoins is marked in the latest Central Bank of Nigeria strategy paper.

As one of the world’s pioneers in adopting its own central bank digital currency (CBDC), Nigeria declares its readiness to accept the existence of private stablecoins as well. The necessity to create a legal framework for stablecoins is marked in the latest central bank strategy paper.

Published under the headline “Nigeria Payments System Vision 2025”, the 83-page report from the Central Bank of Nigeria (CBN) considers the development of a regulatory framework for the potential implementation of a stablecoin. According to the document, there is a need to develop a framework, given that stablecoins are likely to become a successful payment mechanism in the country.

The report also pays attention to the regulation of initial coin offerings (ICOs). It highlights the current absence of regulation in the area, causing the investors’ losses. However, the CBN sees potential for adopting ICOs as a new approach to fundraising for capital projects, peer-to-peer lending and crowdfunding. Hence, a regulatory framework is also needed “in the event of adoption of an ICO-based investment solution.”

However, the stablecoins and ICOs segment of the report is ways smaller than the one dedicated to Nigerian CBDC, eNaira. The Central Bank considers it a potential “enabler for transformation” in the national economy. It hopes to achieve a final implementation of the currency in 3-5 years.

In December 2022, Nigeria has reduced the amount of cash individuals and businesses can withdraw to $225 and $1,125 per week, respectively in an attempt to push its “cash-less Nigeria” policy and increase the use of the eNaira.

Adoption rates for a CBDC have been low since its launch in 2021. As reported by Cointelegraph, the CBN has struggled to convince its citizens to use the digital currency, with less than 0.5% of the population reported having used the eNaira as of Oct. 25, 2022, a year from its launch.

SEC Charges Gig Economy Platform for $2.6 Million Unregistered Coin Offering

December 26, 2022 Bitcoin.com

SEC files unregistered securities charges against Thor Token creators for 2018 ICO

December 21, 2022 Coin Telegraph

Coin Telegraph

Thor Technologies got a lump of coal in its Christmas stocking from the SEC in the form of charges relating to the ICO for its Thor Token that failed a year later.

The United States Securities and Exchange Commission (SEC) filed a complaint against Thor Technologies and its cofounder and CEO David Chin in U.S. District Court in San Francisco on Dec. 21. The SEC claimed that Thor’s 2018 initial coin offering (ICO) constituted an unregistered securities sale under the Securities Act of 1933.

Thor Technologies raised $2.6 million from 1,600 investors between March and May 2018 through the sale of its Thor (THOR) coin. About 200 of the 1,600 investors lived in the United States. Not all of them were accredited investors. The SEC claimed in the suit that the sale of constituted a securities sale.

The complaint stated that Thor claimed it would “develop a software platform for ‘gig economy’ companies and workers,” although that platform was never completed. The SEC continued:

“Thor marketed the Thor Tokens to investors who reasonably viewed the Thor Tokens as an investment vehicle that might appreciate in value based on Thor’s and Chin’s managerial and entrepreneurial efforts in developing the gig economy software platform.”

The tokens had no practical use at the time of the offering, according to the SEC. The business closed in 2019 after it “was not able to gain traction and achieve commercial success.” According to Chin’s LinkedIn profile, Thor Technologies now produces the Odin software-as-a-service (SaaS) platform and mobile app, which also provide “gig economy” services. The business should not be confused with the Thor blockchain.

Thor Technologies is the latest in several cases with similar charges the SEC has brought against crypto operators. The agency announced in June that it was looking into Binance’s 2017 ICO. LBRY stated at the beginning of December that its loss to the SEC on charges of unregistered security sales would likely lead to its closure. The highest-profile case of this type currently is the SEC’s suit against Ripple.

Our CEO Mayande Walker discusses the blockchain *live* with John Paller CEO and Founder, @EthereumDenver and @opolisproject, and David Chin CEO, Thor Technologies @gothortech *today* Wednesday, January 9th at 2pm EST. Details: https://t.co/n2Pw7DWHk0 … #blockchain #telecom #chat pic.twitter.com/1vJJ2mHFJg
— OpenCT (@OpenCryptoTrust) January 9, 2019

Thor cofounder and one-time chief technology officer Matthew Moravec, who has since left the company, has settled with the SEC and agreed to injunctions and monetary penalties, the agency announced in a statement.

New Hampshire Court Sides With SEC in Lawsuit Against LBRY, Project’s Team Says Loss Sets a ‘Dangerous Precedent’

November 7, 2022 Bitcoin.com

Crypto Stories: How an entrepreneur raised $10M for her startup during a bear market

October 11, 2022 Coin Telegraph

Crypto Stories: How an entrepreneur raised M for her startup during a bear market

Coin Telegraph

Josipa Majic explains what she and her partners did to build a crypto company at a time when investors were fleeing the space.

In the midst of the 2018 crypto price slump, a young entrepreneur invested all her funds and personal money into a prototype that combined fintech and crypto services to offer virtual debit cards and crypto payment services for subscriptions. But because it was a bear market, no one wanted to invest the capital to put the solution on the market.

In the latest episode of Cointelegraph’s “Crypto Stories” series, Josipa Majic explains how she and her partners built a crypto company during a bear market at a time when investors were fleeing the crypto space.

“Everyone said no the moment they heard about our crypto roadmap. They said, our LPs [limited partners] — so, their investors — do not understand crypto. [...] It was a really discouraging moment because it just felt like everything was against us. And at that point, May of 2021 approached, and we had little to no cash.”

The company, Revuto, eventually raised $10 million and had 3 million customers on its waiting list before launch.

“Working on a crypto startup is so much more faster, exciting and also stressful than working on a normal startup. It’s literally an order of magnitude in terms of the change.”

South Korean central bank eyes MiCA, says future regulations may allow ICOs again

August 29, 2022 Coin Telegraph

Central Bank

A Korean translation of the EU regulatory framework gave the Bank of Korea food for thought, and it shared its views on ICOs, stablecoins and protecting innovation.

The South Korean central bank has indicated that initial coin offerings (ICOs) will be allowed under the Digital Assets Framework Act, according to a local news report. That comprehensive legislation is expected to be introduced in 2023 and implemented the following year.

The Bank of Korea (BOK) discussed ICOs in comments to a Korean translation of the European Union’s Markets in Crypto-Assets (MiCA) legislation released Monday. The BOK stated that the MiCA regulatory package protected users and investors without hindering innovation.

“A balanced approach is needed to foster a sound market through the introduction of a crypto asset regulatory system to promote blockchain and crypto asset innovation while not hindering the development of related industries due to excessive regulation,” the Korean central bank wrote, continuing:

“When the on Digital Assets Framework Act is enacted in the future, it is necessary to institutionally allow domestic crypto-asset ICOs.”

South Korea banned domestic ICOs in 2017, at the height of the ICO “mania” that led to restrictions worldwide. That decision was controversial from the start. Since the imposition of the ban, South Korean crypto firms have issued new crypto assets abroad and sold them in South Korea through domestic exchanges.

The BOK also commented on the MiCA approach to stablecoin regulation, “Considering that users suffered a lot from the Luna-Terra incident, it is necessary to adopt MiCA-level regulations for stablecoins,” adding:

“When enacting the Framework Act on Digital Assets, it is necessary to ensure that the role and responsibilities of the Bank of Korea, the monetary authority, for stablecoins, etc. are specified.”

Stablecoins have given the attention of the South Korean government in recent months after members of the parliament began an enquiry into the collapse of Terra (LUNA) — now renamed Terra Classic (LUNC). South Korean president Yoon Suk-yeol, a member of the conservative People Power Party, made crypto industry deregulation a campaign issue leading up to his election in March.

2017 ICOs aren’t over yet: SEC files suit against Dragonchain and its founder

August 16, 2022 Coin Telegraph

Coin Telegraph

The commission said it would be seeking “permanent injunctions, disgorgement with prejudgment interest, civil penalties against and conduct-based injunctions."

The United States Securities and Exchange Commission, or SEC, has filed a complaint related to a 2017 initial coin offering from a blockchain project originally developed by the Walt Disney Company.

In a Tuesday notice, the SEC said it had charged Dragonchain, the Dragonchain Foundation, the Dragon Company, and their founder John Joseph Roets for raising $16.5 million in a presale and initial coin offering from 2017. According to the financial regulator, Roets, Dragonchain, and the Dragonchain Foundation allegedly conducted an unregistered offering of the blockchain’s DRGN tokens in an August 2017 presale and an October and November 2017 ICO, raising $14 million. All three entities and their founder also allegedly sold $2.5 million worth of DRGNs “to cover business expenditures to further develop and market Dragonchain technology” from 2019 to 2022.

Before Dragonchain’s offering, the SEC released a report in July 2017 urging companies to register with the government agency, suggesting it planned to consider many ICOs as securities offerings subject to applicable laws. The commission said it would be seeking “permanent injunctions, disgorgement with prejudgment interest, civil penalties against and conduct-based injunctions” against Roets and the three entities based on alleged violations of the Securities Act of 1933.

According to a letter from May 2022 posted to Dragonchain’s Twitter account on Tuesday, Roets knew the SEC intended to pursue charges related to the sale of unregistered securities before the statute of limitations expired. He criticized the government agency for having a seemingly outdated approach to regulating crypto.

“The SEC is picking and choosing projects to target, often singling out the ones with the biggest opportunity to disrupt incumbent interests, while giving a free pass to others,” said Roets. “The commission is trying to shoehorn software technology into incompatible securities law from the 1930’s. This calls into question whether the Commission understands the technology enough to effectively regulate it.”

https://t.co/y0V9s13t87 https://t.co/KcqVCbI2WP
— Dragonchain (@dragonchain) August 16, 2022

The Walt Disney Company started developing the Dragonchain blockchain in 2014, making it an open source platform and releasing it to the public in 2016. Former Disney employees later established the Dragonchain Foundation to manage the protocol. The blockchain was still active at the time of publication, buDragonchain has largely stayed out of mainstream crypto news amid other burgeoning projects.

In July 2013, the SEC took its first enforcement action against a firm in the crypto space, charging an individual and business with allegedly defrauding investors in a Ponzi scheme involving Bitcoin (BTC). Cointelegraph reported in January there were 6 cases involving cryptocurrencies initiated by the SEC between 2013 and 2017, while 14 of 97 actions brought in 2021 were related to ICOs.

SEC Fines John McAfee’s Associate $375K in Penalties for ICO Promotions

July 16, 2022 Bitcoin.com

SEC dismisses claims against John McAfee, fines accomplice for ICO promo

July 16, 2022 Coin Telegraph

Coin Telegraph

On October 5, 2020, the SEC alleged that McAfee and Watson promoted ICO investments on Twitter without disclosing that they were paid for them.

The United States Securities and Exchange Commission (SEC) obtained the final judgment for an initial coin offering (ICO) promotion scheme against late entrepreneur John McAfee and accomplice Jimmy Gale Watson, Jr., filed on October 5, 2020.

In the original complaint, the SEC alleged that McAfee and Watson promoted ICO investments on Twitter without disclosing that they were paid for them. Watson allegedly assisted McAfee in negotiating promotional deals with ICO issuers and cashing out the crypto payments, among other pump-and-dump charges.

The U.S. District Court for the Southern District of New York found Watson guilty of violating the law and imposed a cumulative fine of $375,934.86. In addition, Watson has been barred from participating in ICO-related issuance, purchase, offer or sale. The litigation states:

“However, that such injunction shall not prevent Watson from purchasing or selling securities for his own personal accounts.”

Providing closure to the impending case, the SEC's claims against McAfee were dismissed after the Commission filed a notice of death for the infamous entrepreneur.

The U.S. Treasury sought input from the public to include in reporting to the president on the possible implications of digital assets on finance and payment infrastructures. Sharing his views on the matter, Nellie Liang, Under Secretary of the Treasury for Domestic Finance stated:

“For consumers, digital assets may present potential benefits, such as faster payments, as well as potential risks, including risks related to frauds and scams.”

Therefore, Liang hopes to gain input from Americans and market participants to understand better the impacts of mainstreaming crypto assets.

Cardano accelerator program Genius X ISPO nets $105 million in ADA

May 20, 2022 Coin Telegraph

Cardano

Cardano-based accelerator program Genius X continues to attract ADA delegators after the launch of its ISPO.

Cardano-based accelerator program Genius X has seen more than $105 million worth of ADA delegated to its initial stake pool offering (ISPO).

This comes after the firm’s decentralized automated market maker and liquidity management protocol Genius Yield completed its ISPO on May 10, with over 14,500 delegators staking 270 million ADA across four official stake pools, making it one of the biggest ISPOs within the Cardano ecosystem.

Genius Yield is a Cardano-based DeFi protocol that features a decentralized exchange with an order book. It integrates a liquidity provision model which aims to mitigate market risk and eliminate impermanent loss.

Genius X will serve as the accelerator program arm of the company, providing early-stage blockchain startups with relevant tools, consulting services and investment to build blockchain-based companies within the ecosystem.

The Genius X ISPO has garnered significant support in the week following the ISPO launch on May 15. More than 205 million ADA ($105 million) has been delegated to four staking pools by nearly 14,000 participants.

Genius X investors will receive GENSX for delegated ADA staked in the four staking pools of the accelerator’s ISPO - GENS1, GENS2, GENS3, and GENSX.

Dr. Sothy Kol-Men, the managing partner of Genius, believes the high interest in the ISPO is heartening given the last fortnight of events in the cryptocurrency space, dominated by the collapse of algorithmic stablecoin and DeFi platform Terra:

"This is an endorsement from our community and investors that we are on the right path, building and releasing the necessary foundation to accelerate growth, support ambitious projects planning to leverage Cardano's unique smart contracting architecture, and indeed, further promote adoption."

An ISPO is the Cardano ecosystem’s crowdfunding equivalent of an initial coin offering (ICO). ADA stakers delegate tokens to pools and exchange staking rewards for a project’s native token. An ISPO is non-custodial, meaning investors can reclaim their delegated ADA at any stage.

The fundraising method has gained popularity given that investors continue to control their delegated funds to a given project, giving added peace of mind. The method contrasts a conventional ICO, in which investors part ways with a specific token to have a stake in a project or company.

ICO

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