Crypto Flipsider News – Tornado Cash Linked to Russia; SEC Delays ETF; Binance Bans Accounts; CoinSwitch Raid; Uniswap Foundation Approved

08/26/2022

4 minutes read

2022.08.26 19:34

Read in the Digest:

The developer of Tornado Cash allegedly worked for the Russian security agency

SEC delays ruling on VanEck’s Bitcoin ETF application until October 11

Controversy as Binance helps enforcement agencies ban Chinese accounts

Indian authorities raid crypto exchange CoinSwitch for violating forex laws

The Uniswap Foundation has been approved, with 86m votes in favor

Developer of Tornado Cash Allegedly Worked for Russian Security Agency

The August 8 sanction of crypto mixing platform Tornado Cash over its involvement in laundering billions of dollars stirred controversies in the crypto space.

The news was shortly followed by the arrest of its developer, Alexey Pertsev, in the Netherlands. Recent disclosures of Pertsev’s history link the Tornado Cash developer with the Russian Federal Security Service.

According to a Kharon report, Pertsev worked as a smart contract developer and an information security specialist for the Russian Digital Security OOO in 2017.

In 2018, the U.S. Treasury sanctioned Digital Security OOO for providing technological and material support to the FSB. According to Alex Zerden of the Center for a New American Security, the link justifies the Treasury’s move to sanction Tornado Cash.

Flipsider:

The crypto community has called the sanction an attack on open-source development, with Cardano’s CEO, Charles Hoskinson calling it an extremely dangerous precedent.

Why You Should Care

Pertsev’s involvement with the FSB has now opened up a lot of credibility issues for the developer of Tornado Cash.

SEC Delays Ruling on the VanEck’s Bitcoin ETF Application Until October 11

The United States Securities and Exchange Commission (SEC) has once again delayed its decision on the application for a Bitcoin spot exchange-traded fund (ETF) filed by the New York-based Global investment manager VanEck.

In an August 24 filing, the SEC announced that it was extending the decision to list VanEck’s spot Bitcoin ETF by another 45 days, until October 11. The agency said it needed a longer time to consider and take action on the proposed rule change.

The latest application was filed by VanEck after the SEC rejected its November 2021 proposal, citing concerns surrounding “fraud and manipulation” of the Bitcoin spot market.

The SEC stated market manipulation and a lack of investor protection as barriers to a bitcoin spot ETF approval. However, market enthusiasts argue that approval of the proposal will add some legitimacy to the market and decrease the agency’s worry.

Flipsider:

While the SEC is yet to give the green light for a spot Bitcoin ETF, it has approved several Bitcoin futures ETF requests from VanEck itself, ProShares and Valkyrie.

Why You Should Care

The SEC’s unwillingness to approve a spot-based Bitcoin ETF has led to serious issues like the Grayscale-SEC pending lawsuit.

Controversy as Binance Helps Enforcement Agencies Ban Chinese Accounts

Binance, the world’s largest cryptocurrency exchange, has been caught in controversy for helping law enforcement agencies ban Chinese accounts. The calls from users who had their accounts suspended eventually reached Binance.

In a statement sent to its Chinese community who had their accounts temporarily suspended, Binance said it is obliged to provide necessary assistance when law enforcement agencies put forward reasonable needs for assistance in investigations.

According to Wu Blockchain, Binance issued a follow-up statement on August 24 clarifying that some of the accounts were suspended as “black property” was involved.

Binance assured users that their funds were secure. The exchange also noted that it would unlock the accounts and assets of the blocked users if there was no further effective judgment from enforcement agencies.

Flipsider:

Binance‘s CEO Changpeng Zhao recently took to Twitter (NYSE:TWTR) to lash out at the major Chinese news site 163 for publishing fake news on Binance to spread FUD.

Why You Should Care

In the statement, Binance advised users to be careful of receiving assets from unknown sources through OTC transactions.

Indian Authorities Raid Crypto Exchange CoinSwitch for Violating Forex Laws

The office of the Indian crypto exchange CoinSwitch Kuber was raided on Thursday, August 25, by India’s Enforcement Directorate (ED) over claims of violation of the country’s foreign exchange laws.

According to an official at the Bangalore cell of the ED, the five premises connected to the crypto exchange are being searched in connection to India’s Foreign Exchange Management Act (FEMA).

According to the report, the search includes the residences of directors, the CEO, and the official properties. The official explained in the report that the ED moved to raid the premises as it did not receive the desired corporations early on.

The ED believes that the Indian startup acquired shares of over $200 million in violation of local forex laws. The search and questioning are to find “multiple possible contraventions under FEMA and other entities that are connected to it.”

Flipsider:

According to a CoinSwitch Kuber spokesperson, the company had received queries from various government agencies but has approached them with transparency.

Why You Should Care

The raid is a continuation of the ED’s crackdown on crypto firms, which started with a money laundering investigation into Zanmai Labs, the creator of WazirX.

The Uniswap Foundation Has Been Approved, with 86M Votes in Favour

The world’s largest decentralized exchange (DEX), Uniswap, voted in favour of creating the Uniswap Foundation. The approval endorses the $74 million budget proposed by two former Uniswap Labs executives.

The proposal voting was conducted via Uniswap’s app from August 17 – August 23. An average of 40 million votes was required for the proposal to pass, but it received more than 88 million votes, with over 99% in favor of the proposal.

According to the proposal submitted by Devin Walsh and Kenneth Ng, the Foundation will streamline Uniswap’s Grant Program (UPG), reinvigorate the protocol’s governance system, bolster the community, and support developers in the Uniswap ecosystem.

The $74 million will be disbursed from Uniswap DAO treasury. The funds will be distributed in two tranches: $20 million will be allocated to operating expenses and $54 million to the Uniswap Treasury in 6-12 months once the Foundation becomes legal.

Flipsider: