DeFi Money Market closed following SEC allegation

DeFi Money Market closed following SEC allegation

Cryptocurrency News
February 22, 2021 by Delnia
156
What started with the unforeseen closure of an investment platform may have consequences for U.S. DeFi projects say, critics. The SEC’s recent request into the Tim Draper-backed DeFi Money Market platform is the foremost recent illustration in a concerning trend of expanding activity by regulators against unregistered securities. Joining others like Kik Interactive, Ripple, and Coinseed as crypto projects confronting the anger of regulators beneath angles of securities law.
DeFi Money Market closed following SEC allegation

The mystery behind DeFi Money Market unexpected closure on Feb. 5 was revealed within the project’s official Telegram channel on Feb. 9, in an explanation that uncovered the DeFi Money Market Foundation gotten an investigative subpoena from the United States Securities and Exchange Commission on December 15, 2020.

“On the other hand, we reviewed the subpoena carefully and with the assistance of counsel began complying. With the legal requirement to produce documents. Besides, make other info available to the SEC” the post said.

Without providing many specifics, the statement also guaranteed that investor resources held by the DeFi Money Market. This market such as DAI, USDC, USDT, or ETH. They will return to clients “as soon as possible”.

How SEC started going after DeFi Money Market?

The DeFi Money Market extend was at first outlined to permit cryptocurrency traders and investors to get to tokenized, real-world assets. The open deal for DMG. Also, the governance token utilized by the DMM DAO, concluded in Jun. 2020 following a raise of $6.5 M in ETH in less than 48 hours.

It has been plagued with issues since its beginning, with the starting sale riddled with swap errors and scammers capitalizing on the perplexity. The DMM group had at first described the platform’s closure as the “result of the regulatory request“.

Assertive cryptocurrency critic and Assault of the 50 Foot Blockchain author David Gerard said in a post the activity shows the SEC is ramping up efforts to prosecute DeFi-related projects based within the U.S and the DeFi Money Market itself.

He contends typically because “DeFi is pretty blatantly a security within the U.S.” which related tokens fit the criteria of security as characterized by the Howey Test Money Market. Gerard points to past regulatory orders by the SEC. In this method, ICO means the sale of unregistered securities. As the “template” for future indictment endeavors.

DeFi money market projects

While the activity is concerning. DeFi money market projects have more completely decentralized governance. furthermore, it is an unexpected market. Likewise, we have to see how regulators and courts will approach such projects. Many other non-DeFi crypto projects and the Money Market have been unfortunate enough to have been targeted by the SEC recently.

On Jan. 24, a New York area court ruled in favor of the SEC’s movement for summary judgment against Kik Intuitively. Which raised approx. $100 million in token deals in 2017.

In Dec. 2020, the SEC made open their claim against Ripple 2021. Also, charging its founders of raising $1.3 billion within the sales of unregistered securities. In Feb. 2020, the SEC recorded charges against Steven Seagal for his part in promoting a 2018 ICO.

After this in New York. News developed that the State Attorney General is suing crypto exchanging platform Coinseed for defrauding financial specialists with its ICO under the Martin Act.

US crypto exchange PayBito suspends XRP related to SEC lawsuit

One of the major United States-based cryptocurrency exchanges has halted all XRP trading on its stage within the wake of the Securities and Exchange Commission’s progressing claim against DeFi Money Market and Ripple 2021 Labs.

The cryptocurrency exchange, which handled $1.1 billion worth of exchanges in 24 hours leading up to the time of publication. Will suspend all XRP exchanging pairs. As announced on Feb.18.

Notably, the trading suspension will not influence users’ holdings, and also those with coins held on the exchange will still be able to exchange them out of the stage, said PayBito overseeing executive Raj Chowdhury.

PayBito said it would proceed to screen the continuous legal dispute between the SEC and Ripple 2021 Labs. proposing it may restore XRP trading depending on the result of the claim. We are grateful that you have been with Antidolos media so far. Let’s see in the continuation of the article what is the story with Ripple 2021 and its relation with the DeFi money market ?

The story with Ripple 2021

Established in 2012 as OpenCoin. Ripple 2021 Labs is the software company creating the XRP cryptocurrency. Besides, it distributed ledger technology alongside a suite of installment protocols for streamlined cross-border settlement for financial institutions.

XRP functions as the bridge currency underlying Ripple’s liquidity and exchange product, xRapid, which gives budgetary institutions a medium for worldwide value transfer between different fiat currencies.

The XRP coin Ledger is the open-source DLT that gives cryptographically secure, verifiable settlement of the XRP currency. XRP Ledger isn’t part of Ripple’s suite of proprietary software products, because it is open and open to all. And what will happen to DeFi money market?

In December 2020, the SEC recorded a lawsuit against Ripple 2021 Labs. Alleging that the deal of XRP coins constituted a violation of securities laws. Ripple 2021 Labs proceeds to deny the charges and has since requested that the SEC clarify why XRP is classed as a security. Whereas Ether (ETH) isn’t. Authorities from the SEC had already expressed publicly that coins like Bitcoin (BTC) and Ether were sufficiently decentralized to not represent security issuances.

PayBito joins a long list of major exchanges that have selected to direct clear from XRP whereas the claim is underway. Coinbase, Binance, and OKCoin have all either ended XRP exchanging or removed the coin.

References
https://cointelegraph.com/news/closure-after-sec-probe-could-set-rocky-precedent
https://cointelegraph.com/news/us-crypto-exchange-suspends-xrp-trading-in-light-of-sec-lawsuit
https://fortune.com/2021/02/19/sec-lawsuit-mary-jo-white-crypto-unlicensed-securities-xrp/
https://dailyhodl.com/2021/02/21/responds-to-new-complaint-from-sec-on-alleged-manipulation-of-xrp/

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