Attorney and XRP supporter John Deaton believes new evidence will be revealed in the U.S. Security and Exchange Commission’s lawsuit against Ripple.

The SEC filed its lawsuit against Ripple Labs in late December 2020, declaring XRP a security and accusing the San Francisco payments company of selling the crypto asset without proper authorization.

Deaton represents 67,000 XRP holders in the lawsuit after U.S. District Judge Analisa Torres granted the crypto investors “Amici Curiae” status last year.

“Amici Curiae” means “friend of the court,” according to Cornell Law School. Amici curiae can submit documents known as amicus briefs on issues relevant to the case as long as the court approves the briefs in advance.

Deaton says once the summary judgment motions are out, followers of the case will likely encounter evidence that they have not previously seen or heard.

“When the Summary Judgment motions are public, we will see evidence we are currently unaware of, including testimony from Brad Garlinghouse, Chris Larsen, David Schwartz, and former Ripple employees. It includes testimony from Hinman and other SEC officials (i.e. Amy Starr, Valerie S, etc.).

I predict we also see why it was so important that XRP holders be heard. Will the SEC specifically argue XRP – the token itself – is the embodiment of all the promises and efforts made by Ripple starting in 2012 and continuing today and therefore all XRP are securities?”

Deaton also criticizes SEC Chairman Gary Gensler in a new opinion piece published on Fox Business.

“With meme stocks attracting leagues of first-time investors, and the crash in SPACs (special purpose acquisition companies) you would think Gensler has too much on his plate to be messing with cryptocurrencies that have traded for over a decade. Yet, he calls crypto the ‘Wild West’ of investing because digital assets are known to finance illegal activity. But the vast majority of money laundering takes place using the greenback, and there’s lots of bad stuff happening on an unregulated internet.”

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The anonymous host of InvestAnswers says blockchain scaling solution Polygon (MATIC) is his top altcoin pick.

In a new YouTube video, the host tells his 444,000 subscribers that MATIC may not have the most upside of any token, but it represents “the most upside balanced with the least amount of downside.”

The analyst also says Polygon, according to his calculations, has the third-highest “smart-contract platform score” after Ethereum (ETH) and Solana (SOL).

“It has the lowest risk. It has extremely high adoption. [It has] very solid daily active users, especially considering all the stuff that’s happened in this crypto winter. It has ZK (zero knowledge) rollup functionality, and the move of Ethereum to proof-of-stake will not negate the need for L2s at all, by any stretch.”

MATIC is trading at $0.82 at time of writing. The 17th-ranked crypto asset by market cap is up more than 1% in the past 24 hours and nearly 15% in the past seven days. The token is also down more than 70% from its all-time high of $2.92, which it hit last December.

The InvestAnswers host cautions that he doesn’t offer financial advice but says the $0.60 is a “pretty solid” historical support level for Polygon. He also notes that $0.65-$0.66 represents a “killer entry” for the altcoin.

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Things have not been looking too good for the crypto market in recent months, with the market seemingly being gripped by one piece of bad news after another. To this point, on Aug. 8, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued legal sanctions against digital currency mixer Tornado Cash.

As per the regulatory body, since the platform’s inception in 2019, it has been used for a host of illicit money laundering activities estimated to be worth $7 billion. Of this sum, it is estimated that $455 million was controlled by the notorious Lazarus Group, a North Korean state-sponsored hacking group. Additionally, Tornado Cash was also used to launder over $96 million of ill-gotten funds derived from June’s Harmony Bridge hack and $7.8 million from this month’s Nomad heist.

Before proceeding any further, however, it would be best to understand what exactly a cryptocurrency mixer is. Simply put, it is an offering that helps obfuscate potentially identifiable or tainted cryptocurrency funds with others to erase any trails linked with the assets, thus making it impossible for anyone to trace the tokens back to their original source.

Creator arrest leads to public outcry

On Aug. 12, Alexey Pertsev, the creator of Tornado Cash, was arrested by Dutch authorities. According to a press release issued by the financial crime authority of the Netherlands — the Fiscal Information and Investigation Service — the arrest was made based on Pertsev being involved in the “concealment of criminal financial flows and facilitating money laundering.”

While Tornado Cash can potentially be used by bad actors to hide criminal proceeds, it can and is also be used to facilitate a wide array of legitimate activities. The Dutch police have yet to make it clear as to which exact rules Pertsev broke, even though different media outlets have speculated and offered varying explanations as to why he was arrested. The Tornado creator has yet to be charged with any wrongdoing.

Following Pertsev’s detainment, a mass of protesters gathered in Amsterdam’s Dam Square on August 20 to voice their displeasure with the handling of the matter. And, while the demonstrators did not directly comment on the legal issues surrounding the arrest, they did claim that Pertsev’s arrest signaled a dark future for the fast-growing Web3 ecosystem. Not only that, but they also believe that it could have a chilling effect on the Netherlands’ existing blockchain ecosystem.

Mark Smargon, CEO of decentralized payment network Fuse, told Cointelegraph that while he is very disappointed to see a developer being arrested for simply having written a piece of code, to avoid such scenarios in the future, crypto finance entities — especially those who see mainstream adoption on the horizon — should be willing to meet regulators halfway to mitigate existing security issues while ensuring people’s rights to individual privacy.

However, Abraham Piha, CEO and co-founder of Web3-focused firm Tomi, told Cointelegraph that government sanctions like these are scary if one starts looking at them objectively:

“Tornado existed only because most blockchains were not private enough. If successive updates of Ethereum or Bitcoin include protocol integrations like Mimblewimble, will the next step be to block them as well? This act is yet another reason to push for Web3, a free web, controlled by users and not by some big brother governments.”

A spokesperson for crypto policy think tank Coin Centre noted that the nonprofit is considering taking the matter to court since it believes that the core argument prohibiting the platform from operating is unjustified. Not only that, but the independent body also believes that the Treasury’s actions may have exceeded its statutory authority.

Was Tornado’s forced shutdown unconstitutional?

In a recent interview with Bloomberg, Jesse Powell, CEO of digital-asset exchange Kraken, argued that the Treasury Department’s actions to shut the Tornado Cash could be “unconstitutional,” stating that people have a right to privacy and thus, it will be interesting to see if the regulatory body’s assertions can hold any sort of ground in a court of law. He further stated that the subsequent removal of Tornado’s native code repositories was a “totally unnecessary step.” 

Recent: Ethereum Merge prompts miners and mining pools to make a choice

Following the sanctions, USD Coin (USDC) stablecoin issuer Circle decided to block all Tornado Cash addresses, to which Powell reacted: “Having a digital currency that’s so controlled and able to be controlled by maybe unconstitutional government action is a little bit scary.”

Kenny Li, co-founder and core developer for Manta Network — a privacy-preservation protocol — told Cointelegraph that the Treasury’s decision to sanction Tornado Cash is far-fetched and extreme even though in the past, certain individual crypto wallet addresses have been subject to the same treatment. But, in most cases, he said, there was a clear case of fraud, hacks or a Ponzi scheme:

“In this case, smart contract addresses are being blacklisted. Smart contracts aren’t people. Not only that, but people forget that Tornado Cash is a protocol, not a person or an entity, which means it will continue to run regardless of the sanctions. It is time that we realize privacy and anonymity aren’t the same, and Web3 is all about privacy.”

On the subject of people moving their USDC to other stablecoins following Circle’s decision to block Tornado Cash wallet addresses, Li noted that, unfortunately, there has been an increase in the number of platforms blacklisting wallet addresses maintained via Tornado Cash. 

He pointed out that the move was due to Circle’s status as a regulated platform, thus obliging it to comply with any sanctions issued by a government body whose jurisdiction it operates under.

Lastly, he believes that Circle’s actions of blocking the movement of millions of dollars worth of USDC can potentially inhibit innovation within this space. Li concluded:

“No one wants their funds to be blocked, especially for activities they aren’t involved in. That said, there’s no certainty that tomorrow Tether won’t block addresses that have touched Tornado Cash. Ultimately, this action from the Treasury will likely instigate a domino effect, most of which is yet to be felt.”

Human rights violations brewing?

One aspect of Pertsev’s detention that has drawn public attention is that since his arrest, he has reportedly been denied visits of any sort, including those from his wife, Ksenia Malik. 

In recent correspondence with Cointelegraph, Malik said, “He’s kept in prison as if he were a dangerous criminal,” despite simply “writing open source code.”

With Dutch authorities continuing to bar any contact with the outside — not even “one short call” — several rallies are being organized to support him. Decentralized finance aggregator 1inch tweeted that the arrest stands to establish a dangerous precedent, one that could potentially “kill the entire open-source software segment” if developers are continued to be held accountable for any misuse that emanates as a result of the software they create.

Decentralized finance aggregator 1inch tweeted that the arrest stands to establish a dangerous precedent, one that could potentially “kill the entire open-source software segment” if developers are continued to be held accountable for any misuse that emanates as a result of the software they create.

1/ Is it really a crime to be an open-source #blockchain developer nowadays ⁉️

Stand up for the right to build open-source software!

Help Alex Pertsev get out of jail!

Sign the petition: https://t.co/r5sdHaYKCN#FreeAlex #OpenSourceNotACrime #DeFi

Why is it important⤵️ pic.twitter.com/CqqD4Ds8AQ

— 1inch Network (@1inch) August 18, 2022

Despite the heartfelt sentiments of the open-source development community, it is pertinent to highlight a recent report from blockchain security platform SlowMist, which found that approximately 74% of all funds stolen from the Ethereum network over Q1 and Q2 of this year made their way to Tornado Cash, with researchers noting:

“The platform accounts for most of the initial funding for these security incidents. There have also been reports of withdrawals from exchanges, trading platforms, and personal wallets to fund these security incidents.”

Lastly, it should be noted that despite the outpouring of public support for Pertsev, his arrest hasn’t been entirely disapproved of by members of the global finance arena. For example, in a recent interview, venture capitalist Kevin O’Leary stated that platforms like Tornado Cash — which are advertised as “privacy tools” — have created a culture where it is fine to tinker around with federal regulations. 

Recent: Ethereum advances with standards for smart contract security audits

In his view, Pertsev’s arrest was necessary and that it’s fine to have “sacrificed him” because it will, in his view, help introduce a high degree of stability within the market in the long run.

Therefore, moving forward, it will be interesting to see how legal issues such as these continue to be dealt with by regulatory agencies across the globe.

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iFinex, the company responsible for Bitfinex Derivatives, announced on Tuesday the launch of a new service offering available to users before the highly-anticipated Ethereum Merge. The exchange now offers Ethereum Chain Split Tokens (CSTs).

Tokens available to users represent the two systems involved in the Merge: ETHW, which is proof-of-work (PoW) and ETHS, which is proof-of-stake (PoS). Bitfinex released the new trading tokens so users would be ableto trade on the potential forking event.

The coins will be available through the Bitfinex derivatives platform.

Bitfinex chief technology officer Paolo Ardoino said they released these new tokens to better prepare users for all Merge-related possibilities. However, the tokens come with an expiration date set for the end of the year.

Related: 3 strategies investors might use to trade the upcoming Ethereum Merge

According to the exchange, there are three foreseeable outcomes for which these tokens can help users prepare.

If there is no consensus change on the proof-of-work chain, ETHS will expire and ETH will be given for all ETHW holdings. However, if the consensus change is successful with no fork, the opposite will happen, ETHW will expire and ETH will exchange for ETHS.

In the scenario of both a successful consensus change and a successful fork, both ETHW and ETHS tokens will be credited with ETH.

The Merge, which is scheduled to take place around mid-September, has the entire industry on edge. Users are eager to see if the event will happen around the timeframe promised by developers and also if any disruptive side effects will occur.

The Merge has been delayed multiple times in the past. Protocols like Aave encouraged users on the network to commit to PoS ahead of time, though there has been pushback from the PoW community.

Miners especially are faced with the choice of how to proceed with the Merge. While some large mining pools have already shifted to staking, other PoW miners plan to freeze contracts to keep PoW alive despite skeptics.

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Prague is the birthplace of the world’s first hardware wallet, the first Bitcoin mining pool, and, reportedly, even the first Bitcoin cafe. It is among the most affluent cities in Central Europe, visited by millions of tourists each year.

Ranked as one of Europe’s most charming and beautiful cities, Prague is a burgeoning tech hub with a new generation of crypto-saavy individuals populating its streets.

Fast facts

City: Prague
Country: Czechia
Population: 2.7 million (Metropolitan Area)
Established: 8th Century
Languages: Czech, Slovak, English, Ukrainian, German, Vietnamese, Russian

Understand

Known for its bridges, majestic fortifications and Bohemian architecture, Prague was voted the most beautiful city in the world last year by Time Out Magazine. At the crossroads of Europe, it’s visited by over 8 million tourists annually and has become a popular choice among filmmakers as a backdrop, including the makers of Mission: Impossible and Casino Royale. 

More than 1,000 years ago, the migration of the Czech people — a Western Slavic tribe — founded the City of Prague on the banks of the Vltava river. Prague quickly developed into a major metropolitan center in medieval times and was the seat of many Bohemian kings who would also reign as the emperors of the Holy Roman Empire. 

Ruled over variously by the Austrian Empire, a short era of independence, and then by Nazi Germany, Prague managed to escape destruction at the hands of Nazis or Allied bombers. But after just three years of independence after the war, communists backed by the Soviet Union staged a coup and toppled the country’s democratic government in 1948. Development stalled during communist times, and despite a flicker of hope for liberalism in the Prague Spring of 1968, it wasn’t until the Velvet Revolution protests that the ruling communist party resigned on Nov. 28, 1989, putting the local people once again in charge of their own destinies. 

Crypto culture

Today, Prague is a leading tech hub in Central Europe. Having changed currencies once a generation due to their various rulers and independence, the Czech people are known for monetary skepticism and have enthusiastically adopted digital currencies. This interest has been compounded by the growing inflationary pressure on the Czech koruna (CZK), which stood at 18.0% per annum in June 2022. 

Firms such as SatoshiLabs, Alza, Trezor, Braiins and many others have ramped up education about digital assets in the country. However, the Czech National Bank has largely remained on the sidelines with regard to regulating the industry. While interest in crypto remains strong among the Czech people (especially those in Prague), recent industry blowups and bear market sell-offs have hampered confidence somewhat. 

But that does not take away from the fact that it was here where the world’s first hardware wallet, first Bitcoin mining pools and first Bitcoin coffee shop all came into action within the past decade. In recent years, Prague has also become a hotspot for digital nomads, being voted as the top destination in the world for remote work, along with Krakow, Poland in 2021. Thanks to the effort of early adopters, the city is rife with crypto meetups, hackathons, venues and seminars that make it distinct from its neighbors in Central Europe. 

Notable Projects

Nowadays, cryptocurrency hardware wallets are renowned for their ability to safeguard investors’ assets in a self-custodied manner, but just who invented them? The idea all started in 2011 after a Bitcoin conference in Prague.

Two crypto enthusiasts, Pavol “Stick” Rusnák and Marek “Slush” Palatinus envisioned a small, single-purpose computer that would securely store users’ Bitcoin private keys. In 2013, the two founded SatoshiLabs. The following year, the first-ever Trezor wallet — Trezor One — launched. Then came the Trezor Model T, which added a touchscreen to the device. Both devices have sold over 1 million units since inception, with their firmware patched monthly or so. It has become the standard for hardware crypto storage worldwide. 

We and @invity_io are safe & sound in Miami, ready to discuss sound money with you at @TheBitcoinConf.

Wallets? ✅
Keys? ✅
Booth AMAs, prizes, other activities? You bet!

We will be sharing the conference experience with you along the way. Let our crew tell you more details: pic.twitter.com/vNiEmZtggR

— Trezor (@Trezor) April 6, 2022

SatoshiLabs comprises a basket of companies (Trezor, Invity and Tropic Square) forming the forefront of crypto and tech development in Czechia.

Apart from its flagship product, it is also responsible for creating over 20 industry standards, such as the recovery seed and passphrase used in all cryptocurrency hardware wallets today. 

Like many in the crypto industry, they were incensed by the Russian invasion of Ukraine this year and wanted to help. Vojtěch Černý, head of commerce at Trezor, and Bach Nguyen, head of business development at Invity, drove nearly 900 kilometers to the Slovak–Ukrainian border town of Vel’ké Slemence, delivering humanitarian supplies and bringing back four women and two children refugees to safety in Czechia. 

SatoshiLabs also donated 1 million euros worth of Bitcoin to charities helping Ukraine shortly after the war started, citing the “effects of occupation and destruction of individual freedom” during five decades of Communist rule over Czechoslovakia as the inspiration.

Invity is another branch of SatoshiLabs.

The firm is a price aggregator that scrutinizes every crypto exchange and other platforms to find the best rates for purchasing cryptocurrency. It combines everything in one place with a straightforward interface designed for users just getting into crypto. Invity also has a wide range of resources about education for novel crypto enthusiasts. 

Lastly, during the development of Trezor at SatoshiLabs, it became clear that the firm needed an auditable integrated circuit with better security solutions than market alternatives. Thus, Tropic Square was born with an ambitious plan to make an open-source, auditable custom chip to transform low entropy code into high entropy data for cryptographic operations. Led by tech-savvy developers such as CEO Evžen Englberth and chief technology officer Jan Pleskač, chips developed by Tropic Square are now found in each and every one of Trezor’s hardware wallets.

Before he created Trezor, Palatinus founded the first Bitcoin mining project in Prague in 2010, which was simply called Bitcoin.cz. After he moved on, Braiins, a company doing embedded Linux development and research, took over the mining pool and renamed it accordingly (until recently rebranding it back to Slush Pool), with 1.3 million BTC mined since inception.

Fast forward to now, Braiins/Slush Pool has grown to become one of the biggest Bitcoin mining pools. There are currently over 15,000 users of the firm’s mining optimization software in the space, with its total hash rate accounting for 5%–8% of the overall Bitcoin network. The company derives 100% of its income via BTC and charges a 2%–2.5% commission from its mining firmware.

Kristian Csepcsar, chief marketing officer of Braiins, explains that mining and Bitcoin is a way of life — not just a way to make money:

“Bitcoin miners are one of the most hardcore Bitcoiners, and their commitment to secure networks can be seen in the global hash rate numbers. Bitcoin’s price fell more than 70% recently, but the hash rate has only dropped about 20% from all-time highs…. Bitcoin’s relative price to fiat can change, but Bitcoin will be forever one Bitcoin, and miners deeply understand this point.”

General Bytes is the world’s second-largest Bitcoin and ATM manufacturer, with offices in Prague and Bradenton, Florida. Since its inception in 2013, the company has sold over 13,000 machines across 142 countries, most of which are located in the United States.

More than 180 fiat currencies can be used to purchase 60+ types of digital assets at its cash machines. Over 22.5 million crypto transactions have been performed worldwide on its network of Bitcoin ATMs. 

Backed by the $2.5-billion Rockaway Capital, the Rockaway Blockchain Fund is a venture capital firm backing leading Web3 founders. Founded in 2020, the Prague-based firm has now invested in 36 projects and 26 funds. In addition to investing capital and boosting liquidity, Rockaway backs its projects through community networking, a staking team that runs its validator nodes, and an in-house development team known as RBF Labs. It was one of the early backers of Solana, along with several investments in the Cosmos ecosystem, including Agoric.

Rockaway raised $123 million in its first VC fund, which is now nearly 75% deployed with a portfolio value of approximately $300 million as of June 30. In addition to that, RBF also has a separate lending fund that provides loans to market makers and liquidity to DeFi protocols, with an asset under management of approximately $35 million at the end of June.

Where can I spend my crypto?

Located near the heart of Prague’s Old Town is Bar No. 7, a laid-back venue with multilingual staff that’s extremely popular among expats and locals alike. It’s also a great place to go for value on one’s crypto: One can get delicious cocktails for around 150 CZK each ($6.24) and a pint of beer for just 25 CZK ($1.04) all paid for with crypto. There’s also a Bitcoin ATM located right inside the venue. But beware — it gets packed quickly in the evenings almost every day of the week. 

For scenic, short-term rentals or long-ish stays, you can book and pay for lodging with Prague Siesta Apartments using Bitcoin. Apartments are located at the heart of Prague, a minute’s walk away from attractions such as the Old Town Square and the Astronomical Clock. Prices vary by season and typically fluctuate above or below 2,000 CZK per night ($83.08) with discounts for longer stays. 

Paralelní Polis is the first coffee shop to accept cryptocurrencies in Central Europe and has been active since 2014. Though it has now largely evolved to become a co-working space and club venue, hosting various events, projects and refreshments for its members. But one can still purchase the venue’s original Bitcoin Coffee at its doorstep. Bitcoin, Litecoin or Lightning Network are accepted. It’s named after Czech activist Václav Benda’s 1973 concept of “Paralelní Polis” (Parallel Polis) — an independent society not oppressed by laws and decisions of representatives of central authorities. The idea became a rallying call for political dissidents and sounds very much like Libertarian Bitcoiner politics. 

Alza is a leading e-commerce platform in Central Europe with close to $1.2 billion in annual sales. It has a catalog of crypto-related hardware devices that customers can pay for with Bitcoin (Ether and Litecoin payments are expected in the future). It also accepts Bitcoin on its local e-commerce subsidiaries operating in Slovakia, Germany, Austria, the United Kingdom and on Alzashop.com.

For crypto tourists who don’t have an address in Prague to deliver to, you can get products shipped to the unique Alza Boxes package lockers for pickup. And thanks to General Bytes, it is also possible to buy cryptocurrencies at some of Alza’s retail locations via in-store ATMs. 

Finally, A Maze in Tchaiovna is a solid venue for tea and craft beer lovers alike. It is an all-in-one stop that combines elements of a teahouse, theater, gallery and bar. Cryptocurrency can be tendered for beverages and snacks. Live music is available periodically.

IT’S HERE.

…the handbook with everything you and your friends need to know about the basics of bitcoin mining.

We have 400 free copies to share this week at @MiningDisrupt in Miami, and it’ll soon be available on Amazon (hardcopy) and on the Braiins website (free e-book). pic.twitter.com/vzTCUfXZmI

— Braiins | bitcoin mining tools (@braiins_systems) July 25, 2022

Education

Braiins, the company behind Slush Pool, runs a regular blog about how to get started on one’s Bitcoin mining rig, along with the economics of such an operation. Similarly, Alza has its own blog series dedicated to educating readers and shoppers about Bitcoin. But Braiins takes it one step further by also publishing a series of books about the nature of Bitcoin decentralization and the future. They are free to read and are available in both hard copies and as complete pdfs on its site. 

Currently, the University of New York in Prague is issuing digital diplomas using blockchain technology for all degrees accredited by the Czechia’s Ministry of Education. Students are provided a hyperlink to such accreditation with a QR code attached to verify its authenticity and can be freely shared among social networks. 

Controversies

Being a closely-knit crypto community, Prague is not known for crypto scams or digital asset-related crime. The majority of misconduct happened in the previous decade, such as the collapse of the Bitcash.cz crypto exchange in 2013 and the theft of approximately 485 BTC. Another instance involved Czech national Tomáš Jiříkovský and his alleged role in laundering $40 million worth of BTC in stolen funds from a securities fraud case in 2015. Earlier this year, an incident occurred with Trezor where the firm’s customer data was breached on third-party data vendor Mailchimp. It subsequently evolved into a phishing scam before it was quickly addressed. 

That said, a much more serious incident occurred on August 18. Via a zero-day bug, hackers made themselves the default administrators of General Bytes’ ATMs and modified settings so that all deposits were transferred to their wallet address. A central client access server hosting the entirety of the company’s operation was compromised. General Bytes has urged customers to refrain from using its servers until its owners patches the exploit in an update.

Notable People

Pavol “Stick” Rusnák, co-founder of SatoshiLabs; Mark “Slush” Palatinus, co-founder of SatoshiLabs; Pavel Moravec, co-CEO of Braiins; Jan Capek, co-CEO of Braiins; Bach Nguyen, head of business development at Invity; Vojtěch Frgál, CEO of General Bytes; Evžen Englberth CEO of Tropic Square; Jan Pleskač, chief technology officer of Tropic Square; Josef Tětek, economist and SatoshiLabs’ brand ambassador; Kristian Csepscar, chief marketing officer of Braiins; Vojtěch Černý, head of commerce at Trezor; Tommy Poole, owner of Bar No. 7 Praha. 

Cointelegraph members based in Prague: 

Ever wonder whose creative mind is behind that of Cointelegraph’s signature artistic style? Well, Cointelegraph’s talented art team is led none-other by lead artist and art editor Anastasia Zhdanova, who is based in Prague. With an art career spanning 13+ years, Zhdanova is also the creator behind the Серые будни магов (Magic Routine) comic series. She graduated from the prestigious Stieglitz Academy of Art and Design in Saint Petersburg, Russia.

If you have any suggestions for additions to this guide, please get in touch with zhiyuan.sun@cointelegraph.com 

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The Securities Commission (SC) of Malaysia issued a statement on Monday regarding Huobi’s operations in the country. According to the statement, the crypto exchange is now on the SC’s Investor Alert List. 

Malaysian financial regulators say Huobi has been operating a digital asset exchange in the country without official registration with the SC.

Huobi Global [https://t.co/la9Y3ntGuq]
has been added to the SC’s Investor Alert List for operating a digital asset exchange (DAX) in Malaysia without being registered with the SC. pic.twitter.com/z3IGgnCa0t

— SC Malaysia (@SecComMY) August 22, 2022

In a follow-up tweet, the SC said that any operations that perform or offer capital market activities within the country require its approval. Those who aren’t granted such approval are considered unlicensed or unregistered entities. Local authorities say investors are “strongly urged” not to invest in such operations.

Additionally, the SC highlighted that anyone who does utilize such a service does so at a risk and would not be able to legally resolve monetary losses.

Such a statement does not bode well for the exchange. Local investors responded to the tweet by saying a simple fix is to change exchanges.

In an official statement, the Huobi Group responded to Cointelegraph, stating that compliance is a core pillar of its business model in every country of its operations:

“We are currently in discussions with Malaysian regulatory authorities regarding our presence in the local Malaysian market.” 

This comes amid an array of developments for the global exchange.

In countries such as Australia and the United States, Huobi is taking steps toward expansion. Australian regulators greenlit the exchange in early August. In the United States, Huobi has secured a FinCEN license, which brings it one step closer to offering services to American clients.

Related: Huobi co-founder reportedly looks to sell majority stake valued at over $1B

While the exchange is taking steps in the right direction in some places, there are road bumps in others, like Thailand and New Zealand. Huobi’s Thailand affiliate recently shut down because it could not fix major systematic issues, despite several extensions from local regulators.

In New Zealand, Huobi announced on Aug. 16 that it will end derivatives trading to complianc with local regulations. This comes only a few months after it won its initial license to operate in New Zealand.

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