Legal Tussles in Crypto World: US Prosecutors, Goledo Finance and more on the Offence
Summary:
US federal prosecutors have rebutted former Celsius CEO Alex Mashinsky's attempt to dismiss commodities fraud and market manipulation charges. Meanwhile, Decentralized finance protocol, Goledo Finance confirmed a recent flash loan attack and threatened legal action against the attacker. Blockchain-backed karaoke platform, Somesing, disclosed it was exploited by hackers and $11.5 million was stolen. In other news, Nonfungible token marketplace, OpenSea, hints at being open to acquisitions and partnerships. Finally, warnings are issued over potential investor misconceptions around Bitcoin regulation and risky staking programs.
In a motion to dismiss commodities fraud and market manipulation charges, former CEO of Celsius, Alex Mashinsky, was met with a direct rebuttal from US federal prosecutors. His January 12 request for the charges dismissal, based on their alleged inconsistency and lack of "fair notice," was roundly rejected in the same month. Prosecutors claimed that Mashinsky lacked proper grasp of relevant cases when arguing to dismiss the commodities fraud charge. According to the prosecutors, the fraud connected to a contract of sale of a commodity (Bitcoin), is rightly classified as commodities fraud, and there's nothing peculiar or unprecedented about that conclusion. They also countered Mashinsky's "fair notice" argument, insisting that his case is preliminary and should wait until the end of the trial. Notwithstanding, prosecutors expressed firm belief that Mashinsky's argument would, regardless, be unsuccessful. They alleged that Mashinsky, despite publicly denying, knew well that the price increase of the CEL token was due to Celsius's huge undisclosed purchases of CEL token – indicative of manipulative conduct which he understands is illegal. Concerning Mashinsky's request to eliminate mention of Celsius' bankruptcy in the charges, prosecutors posited that the bankruptcy details were germane to the charges. Mashinsky awaits trial in September 2024.
Decentralized finance (DeFi) protocol, Goledo Finance, confirmed that it suffered a flash loan attack recently. The protocol has threatened to involve law enforcement if the attacker does not respond to a 10% bounty offer for the return of the stolen funds. Prior to the confirmation, the protocol announced an ongoing investigation into certain irregularities in its lending pool. Blockchain security firm MetaTrust later reported a loss of $1.7 million worth of crypto to the attacker. Subsequent to this disclosure, Goledo identified and reported the attacker's associated wallet addresses for freezing and revealed that local law enforcement had been briefed about the situation. Pending a resolution, both the lending pool and loan interests affected would remain frozen temporarily.
A hacking incident reported on January 27 left Somesing, a blockchain-supported karaoke platform, $11.5 million short. The hacker(s) made away with 730 million of the platform's SSX tokens. The hack did not involve any team member, and the methods indicate that professional hackers were responsible. Consequently, Somesing reported to the Cyber Investigation Unit of the National Police Agency in South Korea and also plans to involve Interpol. In response, crypto exchanges listing SSX suspended deposits and withdrawals of the token as they trace the on-chain transfers in order to locate the missing funds and identify the culprits.
Nonfungible token (NFT) marketplace, OpenSea, is reportedly considering possible acquisitions and potential buyers. CEO and co-founder, Devin Finzer says that OpenSea, despite having no direct plans to sell and not actively seeking a sale, is open to the idea of suitable partnerships. Currently lagging behind Blur, its main rival, OpenSea now has around 20,000 daily transactions, down from 60,000 to 80,000. The company recorded $2.8 million in trading volumes on January 27, a drastic fall from the $144.5 million recorded the previous year.
Commodity Futures Trading Commission chair, Rostin Behnam, warned of potential investor misconceptions about asset regulation if spot Bitcoin exchange-traded funds is approved. Hong Kong's Securities and Futures Commission (SFC) raised concerns about potentially risky staking programs aligned with the Floki ecosystem, which promises up to 100% annual returns. The Floki team maintains that the SFC's complaint arises from the fact that the staking programs are simply performing too well.
Published At
1/29/2024 8:54:04 AM
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