SEC Vs. Do Kwon and Paxos

Coinigy Team -

Hello there!

Welcome to our weekly roundup of all the hottest happenings in the crypto space. In summary, the SEC made major headlines in the last seven days, facing off with Do Kwon, Paxos, and others.

As per the overall sentiment, most of the market experienced substantial gains, with Bitcoin even touching $25k before dropping. However, it kept up to 15% of its profits.

Anyway, here are the major highlights of the week

  • SEC sues Do Kwon and Terraform Labs for fraud
  • Paxos facing SEC lawsuit over Binance USD
  • Binance Moved $400M to Trading Firm Managed by CZ
  • Proposed EU Parliament Rule Could Have Banks Apply 1,250% Risk Weight to Crypto Exposure

SEC sues Do Kwon and Terraform Labs for fraud

The U.S. SEC has filed a lawsuit against Terraform Labs and its founder, Do Kwon, for "organizing a multi-billion dollar crypto asset securities fraud." The government agency said that Kwon and Terraform sold and offered an "interconnected suite of crypto asset securities," many of which were sold without registration. Read the full story.

Paxos facing SEC lawsuit over Binance USD

According to a Feb. 12 report in The Wall Street Journal citing people familiar with the matter, the SEC has issued a Wells Notice to Paxos—a letter the regulator uses to inform companies of planned enforcement action. According to the people, the notice alleges that Binance USD is an unregistered security. Follow the latest story.

Binance Moved $400M to Trading Firm Managed by CZ

​​Reuters says that Binance moved about $400 million from its US Silvergate Bank account to a trading company run by CEO Changpeng Zhao. The exchange reportedly moved the funds between January and March 2021 from a trading account, BAM Trading, to Merit Peak, a company said to be now under investigation by the SEC. Read the entire story.

Proposed EU Parliament Rule Could Have Banks Apply 1,250% Risk Weight to Crypto Exposure

The European Parliament has put out a report on a draft bill that says banks that hold cryptocurrencies should set aside a lot of money to deal with possible risks. According to a February 9 notice from EU lawmakers, any framework for crypto assets must "adequately mitigate the risks of these instruments for the financial stability of the institutions." They suggested that banks give digital assets a risk weight of 1250%, which is one of the highest risk ratings for investments. The proposed law suggested that such requirements go into effect until December 30, 2024. Read the full story.

Other highlights worth mentioning