The U.S. Securities and Exchange Commission (SEC) has charged Galois Capital Management, a Cryptocurrency advisory firm, with failing to comply with asset custody rules. The company has agreed to pay a civil penalty of USD 225,000 after storing funds on the now-defunct cryptocurrency exchange FTX. This resulted in the loss of more than half of its assets.
Galois Capital, known for its focus on algorithmic markets and over-the-counter trading, managed nearly $200 million in assets. However, following the collapse of FTX, the firm was only able to return 90% of non-FTX-related funds to its clients. While the remaining 10% was temporarily held.
The SEC accused the firm of failing to adequately protect client assets, including cryptocurrencies offered and sold as securities, by failing to hold them with a qualified custodian as required by the Custody Rule of the Investment Advisers Act.
Additionally, the SEC found that Galois Capital misled certain investors by requiring five business days’ notice for redemptions, while allowing other investors to make redemptions with less notice.
FBI warns of sophisticated North Korean cybercriminal tactics to steal cryptocurrencies
The FBI has issued a warning about cyberattacks by North Korean hackers who are using highly elaborate social engineering strategies to steal cryptocurrency from employees of Web3 companies. These tactics, described as “complex and difficult to detect,” are capable of fooling even highly technical people, according to the statement issued by the agency.
Cybercriminals are focusing their efforts on cryptocurrency and decentralized finance (DeFi) companies, aggressively targeting their employees to compromise networks connected to digital assets. The FBI has called these activities a “persistent threat” to entities handling large sums of cryptocurrency or related products.
Additionally, the FBI revealed that North Korean actors have been actively investigating targets related to cryptocurrency exchange-traded funds (ETFs) in recent months. These investigations include pre-operational preparations suggesting potential cyberattacks targeting companies linked to cryptocurrency ETFs and other digital financial products.
Moving $62M in Bitcoin Reignites Do Kwon and Terraform Labs Controversy
A wallet linked to Terraform Labs and its co-founder Do Kwon has transferred $62 million worth of Bitcoin to a new address, according to reports from analytics firm Arkham Intelligence. On Sept. 2, more than 1,075 bitcoins, valued at approximately $62 million, were moved from a wallet associated with the company. It is not confirmed whether Do Kwon, who faces possible extradition proceedings from Montenegro, was directly involved in the transaction.
The Terra ecosystem founded by Kwon suffered a significant crash in 2022. This led to authorities in the United States and South Korea filing charges against him and some of his associates, accusing them of having a role in the platform’s downfall. In 2023, Kwon was arrested in Montenegro on unrelated charges and served a four-month prison sentence.
Since his release, Kwon has been relatively free inside Montenegro, while the United States and South Korea seek his extradition. The case has been through several court instances in Montenegro, and Kwon’s legal fate has yet to be decided. The recent Bitcoin transfer adds another layer of uncertainty and scrutiny over Kwon’s actions and the future of Terraform Labs.
Charles Hoskinson sparks controversy by questioning the need for Bitcoin in the crypto industry
Cardano founder Charles Hoskinson has once again found himself in the spotlight in the cryptocurrency community after an old video resurfaced in which he criticized the role of Bitcoin. In the recording, Hoskinson claimed that the industry no longer needs Bitcoin to thrive and suggested that other cryptocurrencies, backed by more advanced technology, could take its place as the new “digital gold.”
“Bitcoin needs the industry to survive, but the industry no longer needs Bitcoin,” Hoskinson said, adding that he sees Bitcoin as more of a “religion” than a viable ecosystem in the long term. He compared the situation to the evolution of technology, mentioning how operating systems like Windows have lagged behind mobile platforms like Android and iOS.
NEW: 🔔 Charles Hoskinson, founder of Cardano, says that the crypto industry doesn’t need Bitcoin anymore. It’s nice to have, but “I just don’t see how it survives. “It’s a religion, not an ecosystem.” pic.twitter.com/6OvIR0jpVJ
— DΛVID 🟢 (@DavidShares) September 1, 2024
Hoskinson’s remarks were quick to spark a backlash. Bitcoin advocates, including well-known analyst Tuur Demeester, harshly criticized the Cardano CEO, pointing out the decline in Cardano’s market capitalization compared to Bitcoin, which has gone from representing 10% of Bitcoin’s value to just 1% in the past three years.
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