Appold Market Watch - Week ending 9 August 2024
Market Update & Industry News - Week ending 9 August 2024
🔷 A US Federal Judge ordered Ripple Labs to pay a $125m civil penalty to the U.S. Securities and Exchange Commission (SEC) for breaching securities law while engaged in the institutional sale of Ripple’s native token XRP last year. The $125m fine fell short of the $2b fine initially sought from the SEC but was accompanied by an injunction against future securities law violations.
Appold view: The ruling could cast doubts on the SEC’s strategy of “regulation by enforcement,” as they only received around 6% of what they wanted, suggesting that the courts do not fully support this aggressive strategy.
🔷 The U.S. Commodity Futures Trading Commission (CFTC) ordered FTX, a bankrupt digital assets exchange, to pay its customers $12.7 b in compensation. In a statement, the CFTC chairman alleged FTX misled its customers into investing in the digital assets market and then embezzled customer funds into an associated hedge fund, Alameda Research.
Appold view: Whether every client will receive 100% of their money back is unclear at this stage, but rest assured that there will be enormous fees to pay to the company administrators and other service providers involved in the process. Let’s hope that these funds are dispersed promptly to alleviate the distress caused to many retail clients.
🔷 Global digital assets exchange Bitstamp announced a partnership with payments processor Stripe to accelerate adoption. Through a customisable Stripe onramp widget, customers in the European Union can have an easier fiat-to-crypto onramp.
Appold view: This would certainly improve the client transaction process as the exchange gears up for the completion of the Robinhood acquisition, set to be completed in the first half of 2025.
🔷 The UK Financial Conduct Authority released further guidance for digital asset firms that advertise in the UK following regulations that came into force last October. The FCA’s Director of Consumer Investments stated that the FCA had issued over 1,000 warnings to unregistered digital asset firms illegally operating in the UK.
Appold view: This is a sizeable number, which underscores the challenges regulators have faced in keeping pace with consumer protection.
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