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CFTC Fines Stablecoin Issuer Tether and Crypto Exchange Bitfinex $42.5 Million

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CFTC Fines Stablecoin Issuer Tether and Crypto Exchange Bitfinex $42.5 Million

CFTC Fines Stablecoin Issuer Tether and Crypto Exchange Bitfinex $42.5 Million

On Friday, October 15, 2021, the U.S. Commodity Futures Trading Commission (CFTC) announced that it had ordered the company Tether Holdings Limited and Ifinex Inc., the parent company of Bitfinex, to pay fines totaling $42.5 million. The CFTC accuses Tether of “making untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin.”

CFTC Issues Two Fines to Tether and Bitfinex, CFTC Expects ‘Honesty and Transparency in the Developing Digital Assets Marketplace’

The stablecoin issuer Tether and Ifinex have been charged by the U.S. Commodity Futures Trading Commission (CFTC) and the two firms have been ordered to pay $42.5 million. Tether is accused of “making untrue or misleading statements and omissions” in regards to the stablecoin the firm issues.

The U.S. regulator also claims that the crypto exchange Bitfinex “engaged in illegal, off-exchange retail commodity transactions in digital assets with U.S persons on the Bitfinex trading platform and operated as a futures commission merchant (FCM) without registering as required.”

“This case highlights the expectation of honesty and transparency in the rapidly growing and developing digital assets marketplace,” the acting CFTC chairman Rostin Behnam explained on Friday. “The CFTC will continue to take decisive action to bring to light untrue or misleading statements that impact CFTC jurisdictional markets.”

In the past, Tether and Bitfinex had issues with the New York Attorney General’s Office (NYAG), but reached a settlement this year. At the time, New York Attorney General Letitia James declared in a statement:

Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines. Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system.

CFTC’s Acting Director of Enforcement Says Regulation Is Meant to ‘Promote Market Integrity and Protect US Customers’

Bitfinex and Tether eventually settled with the NYAG in late February 2021, and the firms had to pay an $18.5 million fine. The acting director of CFTC enforcement, Vincent McGonagle, says the latest news concerning the CFTC’s fines against the two crypto companies shows the regulator is committed to promoting integrity.

“As demonstrated by today’s actions against Tether and Bitfinex, the CFTC is committed to carrying out its statutory charge to promote market integrity and protect U.S. customers,” McGonagle said in a press statement. The CFTC’s acting director of enforcement further added:

The CFTC will use its strong anti-fraud enforcement authority over commodities, including digital assets, when necessary. The CFTC will also act to ensure that certain margined, leveraged or financed digital asset trading offered to retail U.S. customers must occur on properly registered and regulated exchanges. Moreover, as the Bitfinex order reflects, the CFTC will take decisive action against those who choose to violate CFTC orders.

Meanwhile, crypto markets have been enthralled by the rumors of a bitcoin exchange-traded fund (ETF) getting the green light from regulators. So much so that crypto markets did not even flinch when the CFTC’s news about Tether and Bitfinex dropped on Friday afternoon.

In a concurring statement, CFTC commissioner Dawn D. Stump said: “I agree with the Commission’s findings” concerning the fines against Tether and Bitfinex. “The settlement with the Tether respondents finds that there were misrepresentations regarding the assets backing tether, specifically that the USDT tokens were backed 1-to-1 by US dollars. The evidence establishes that this assurance provided to tether customers was not 100% true, 100% of the time. When reviewing this record, it is clear to me that wrongdoing occurred, and that someone should be held accountable,” Stump added.

What do you think about the CFTC fining Tether and Bitfinex $42.5 million? Let us know what you think about this subject in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Bitcoin surges into US open as forecast points to attack on $60K

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Bitcoin surges into US open as forecast points to attack on $60K

A familiar scene as U.S. trading begins sees BTC price action head for formidable resistance at $60,000 and beyond.

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Bitcoin surges into US open as forecast points to attack on K

Bitcoin (BTC) met the start of U.S. trading with a bang on Dec. 1 as the Wall St. open sparked a run above $58,500. 

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Analyst: $56,000 may have been resistance flip

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining 2% in an hour Wednesday, canceling out the majority of overnight losses.

The pair had hit $59,000 the day before in a similarly-timed move before giving up progress to dive to local lows of $56,700 on Bitstamp.

For Cointelegraph contributor Michaël van de Poppe, hope was back that Bitcoin would now challenge firm resistance at $60,000.

— Michaël van de Poppe (@CryptoMichNL) December 1, 2021

As Cointelegraph reported, the area at and above $60,000 now represents the resistance level to beat and hold in order to secure bullish continuation.

Recent events appeared to make such a scenario less likely in the short term, as resistance intensified and support at lower levels conversely evaporated.

Much like what happened earlier in the year with the $30,000 floor, however, hope remains that $50,000 will continue to form the line in the sand.

Wall’s been pulled. Either they’re done accumulating (30k wall was also pulled at the time), or VolQ is right. pic.twitter.com/sG6DdtFQzL

— Material Scientist (@Mtrl_Scientist) November 30, 2021

The November close meanwhile marked the first failure in a longstanding Bitcoin price model to capture BTC price performance. The floor model from analyst PlanB predicted an end-of-month price of $98,000.

Ethereum comes within 5% of all-time highs

Altcoins took advantage of the latest Bitcoin increase, with the top ten cryptocurrencies by market cap posting as much as 6% gains on the day.

Related: Ethereum approaches a new ATH, but derivatives data reflects mixed emotions

Ether (ETH) returned to within striking distance of $5,000, this accompanied by continued strength against Bitcoin.

ETH/BTC hit 0.083 BTC on Dec. 1, marking its highest since May and almost challenging levels from 2018.

ETH/USD 1-week candle chart (Bitstamp). Source: TradingView

“ETH is only +5% away from reaching new All Time Highs,” trader and analyst Rekt Capital noted.

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IDEX to launch hybrid liquidity decentralized exchange on Polygon

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IDEX to launch hybrid liquidity decentralized exchange on Polygon

The platform seeks to provide solutions to drawbacks on traditional DEX platforms, most notably front-running and slippages.

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IDEX to launch hybrid liquidity decentralized exchange on Polygon

IDEX, a decentralized cryptocurrency exchange (DEX) based in San Francisco, has announced the upcoming launch of its v3 Hybrid Liquidity DEX on Polygon.

The hybrid model will merge traditional order book functionalities with automated market maker (AMM) liquidity pools in a bid to cultivate higher financial returns for the services liquidity providers, as well as provide typical investing tools such as stop-losses, limit orders and real-time execution.

According to the platform, operating on the Polygon network enables lower transaction costs to the value of “10,000–100,000 times cheaper” than is typically witnessed on Ethereum layer-one, in addition to benefitting from the network’s full-stack Ethereum scaling mechanics.

— IDEX (@idexio) November 30, 2021

For greater context into the burden of high fees for liquidity providers in decentralized finance (DeFi), a research paper published by Topaz Blue and Bancor Protocol uncovered that almost half of all liquidity providers on Uniswap v3 have been subject to impermanent loss based upon a 43% data snapshot of the platform.

Despite this, the platform ranks first in DEX 24-hour trading volume at $2.8 billion, according to data from CoinGecko, closely followed by PancakeSwap v2 with $2.3 billion.

As for gas prices, many DeFi participants have been encouraged to transition over to Ethereum Virtual Machine-compatible and layer-two networks in search of cheaper alternatives, a trend that has resulted in a soaring level of market total value locked.

Related: DeFi TVL hits new highs while Metaverse tokens show signs of exhaustion

IDEX CEO Alex Wearn said, “DeFi has been hamstrung by issues like gas prices, front-running and slippage since its inception, yet few solutions have truly offered answers to these problems,” adding:

“The novel Hybrid Liquidity design protects users from these pain points, while simultaneously generating higher returns for liquidity providers to boost the scalability of the wider decentralized economy.”

Alongside the protocol launch, the exchange is also offering a number of incentives for users that interact with the platform. Liquidity Mining will provide 1,400,000 IDEX tokens per week to enhance liquidity, while a rewards program will acknowledge regular activity.

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Wear-to-earn NFTs target the billion-dollar fashion industry

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Wear-to-earn NFTs target the billion-dollar fashion industry

The rise of the Metaverse and Web 3.0 are set to disrupt multiple sectors including the billion-dollar global fashion industry. As the world moves from physical to digital, traditional fashion design can transform into virtual wearables that can be leveraged in both augmented reality (AR) and in real life. 

Megan Kaspar, managing director at Magnetic Capital and member of Red DAO — a fashion-focused decentralized autonomous organization — told Cointelegraph she believes that digital fashion nonfungible tokens, or NFTs, will be the largest NFT category of Web 3.0:

“Digital fashion NFTs include clothing, shoes, jewelry, accessories and more that can be worn virtually or within gaming ecosystems. These digital wearables are currently being used for speculative investment and collecting, to clothe avatars in decentralized games, to wear in augmented reality environments and to be superimposed onto photos and videos.”

While Kaspar is aware that digital wearables are being leveraged in decentralized gaming environments today — such as the NFTs utilized in Decentraland — she explained that in the next two years wearable fashion will be more interactive. For instance, Kaspar recently demonstrated how virtual NFT earnings and other accessories can be worn during video interviews.

Wear-to-earn model enters the fashion industry

Kaspar further mentioned that a “wear-to-earn” model will thrive in AR environments, noting that designers, brands and retailers will create clothes to accommodate digital closets. In order to build long-term relationships with consumers, Kaspar noted that designers will pay consumers to wear their virtual items:

“Brands will compensate customers for wearing pieces by giving them access to exclusive items or airdropping fashion pieces to their virtual wallets, or by paying them in the form of a fungible token.”

According to Kaspar, the Italian luxury fashion house Dolce & Gabbana will soon launch “D&G Family,” which is a community-based NFT drop taking place on the UNXD curated marketplace. “This will give consumers access to exclusive physical apparel only available through the drop,” she said. Dolce & Gabbana recently launched their “Collezione Genesi” NFT collection to underscore the power of metaverse wearables.

Related: Culture converges with blockchain as luxury fashion brands launch NFT collections

While Kaspar anticipates seeing UNXD as the first luxury platform to offer wear-to-earn features, other NFT ecosystems have started to adopt the concept. For example, Davaproject – an NFT project from the startup studio Unopnd – is currently building a system of avatar NFTs that reflect changes in various combinations on a blockchain network. A recent announcement claims that the project will initially consist of 10,000 avatar NFTs called “Dava,” which will be minted with 30,000 wearable items. Davaproject will set the rarity of each wearable, showing different rankings across a user dashboard. Owners will then receive benefits such as invites to community events, NFT airdrops, giveaways and new item drops by wearing these items.

Given the rise of virtual wearables, Norman Tan, editor in chief at Vogue Singapore, told Cointelegraph that he is bullish on digital fashion. Tan recently published Vogue Singapore’s September issue, which demonstrated the theme of “New Beginnings.” The September issue featured a unique print cover in the form of a QR code serving as a portal to two digital-only NFT covers. Tan said:

“Fashion and innovation has always been at the heart of what we do at Vogue Singapore. With the global September issue theme of ‘New Beginnings,’ we took the bold step to venture into the metaverse — the destination for a new class of digital artists and designers.”

Not only will digital fashion disrupt the Metaverse, Tan added that virtual wearables will help alleviate sustainability issues by introducing a post-waste economy. According to Kaspar, 40% of western closets go unworn, noting that digital clothes can be an eco-friendly replacement for physical items.

Source: Vogue Singapore

Additionally, virtual fashion shows are proving to be more sustainable and accessible. For example, NFT Runway — a company democratizing fashion by enabling brands to deploy in sustainable ways — is hosting a digital fashion show on Dec. 3-5 during “Fashion Community Week San Francisco.” The interactive fashion show will be broadcast live in the Metaverse with NFT versions of physical items recreated using patented 3DREALtm technology. This will allow audience participants to virtually “hop on” the runway to view each item while twisting their avatar around to view the clothing from any angle.

Oh Tepmongkol, chief operating officer of Ohzone, Inc — the company behind Ohzone’s 3DREALtm interactive technology — told Cointelegraph that it makes sense for both virtual and real-world fashion shows to incorporate NFTs:

“They are tokens that serve as certificates of authenticity, and they can bring a lot of additional utility to any clothing item. That could mean unlocking a digital version of the item or gaining special access to the designer’s online community. Plus, NFTs are easy to include, as they can be incorporated through a small QR Code for any piece of apparel.”

Tepmongkol added that NFT wearables also make it easy to donate to charities. For example, NFT Runway’s digital fashion show will consist of an auction to benefit a number of non-profit organizations with revenue generated from sales. According to Tepmongkol, smart contracts on the blockchain allow NFT Runway to set up “NFT endowments.” She said, “This is where charities can be set up to receive a portion of the sales through the smart contract in perpetuity.”

The future of digital wearables

While the concept of interactive digital fashion is still emerging, Kaspar believes that the wear-to-earn model will eventually be bigger than play-to-earn. Following the release of Axie Infinity, play-to-earn has become the most popular search term in the blockchain ecosystem.

Kaspar, however, explained that the wear-to-earn concept will undoubtedly appeal more to the mainstream — particularly women — rather than just gamers. For instance, Kaspar mentioned that digital wallets will soon resemble virtual closets, a feature that will attract many new users to the blockchain space: “Many companies are working on creating interoperable digital closets where you can move NFTs in and out of.”

Although innovative, Tan pointed out that online games helped inspire the rise of digital fashion:

“Fortnite and other online games as such created a whole new economy with brands like Balenciaga seeing the opportunity to reach out to these users in a digitally-native manner. This, coupled with the advent of COVID-19, saw more people online and exploring how they can best interact and express themselves in a digital sphere.”

Sebastien Borget, co-founder and chief operating officer of The Sandbox — a decentralized gaming virtual world using NFTs — further told Cointelegraph that the difference between play-to-earn wearables and wear-to-earn fashion-focused NFTs is that one is geared toward players and the other socializers. He added that The Sandbox will soon incorporate wear-to-earn NFTs to many of its games:

“Having wearables that reward users based on engagement is an interesting model that really fits the identity of avatar NFTs — the more time you spend using the avatar, the more players can earn.”

Tepmongkol further shared that NFT Runway is looking to bridge the virtual fashion industry together with decentralized games: “Some Web 3.0 metaverse spaces like Decentraland require some additional formatting and registration to work on their platforms; we are working on that as part of our long-term roadmap.”

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