ProBit Bits — ProBit Global’s Weekly Blockchain Bits Vol. 58

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 SEC Targets Crypto Exchanges

Major crypto exchanges in the US are squarely in the crosshairs of the US Securities and Exchange Commission (SEC), as the federal watchdog has brought charges against Binance and Coinbase. The charges involve Binance and Coinbase operating as unregistered exchanges and securities brokers, with SEC Chair Gary Gensler alleging that neither exchange has followed laws governing clearing houses and brokers.

Gensler alleges in 13 charges that Binance CEO, Changpeng Zhao (popularly known as CZ), “engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.” The SEC Chair took further aim at Binance’s native digital assets: BNB and BUSD stablecoin, including them in the “unregistered securities” that the company had listed.

Just a day after serving charges against the Binance CEO, the SEC issued similar charges against Coinbase, while specifically citing Coinbase’s staking programs as an “unregistered securities offering.” These charges mirror those brought against major crypto exchange Kraken, with the rival exchange eventually removing staking services as it conceded to the SEC’s charges.  

In the wake of the charges, the wider crypto market saw prices tumbling to monthly lows. In a further twist, news reports as of June 8 also note that Gensler had close ties to CZ, unsuccessfully applying to provide legal representation for Binance in March 2019.

 Atomic Wallet Users Left In The Lurch As Millions Lost To Hackers

Users of crypto wallet provider, Atomic Wallet, were left bereft of their crypto holdings as reports of hacks emerged on social media. The security breach saw losses of up to six figures for certain users, although some reported that they were able to successfully recover lost funds. Reports from blockchain intelligence firm Elliptic, contend that North Korean hacking group, Lazarus, is responsible for the breach. By tracing funds to crypto mixer, Elliptic has linked the $35-million hack to the infamous cell.

The wallet provider has since moved to allay fears around the hack, stating that less than 1% of their 5-million user base have been affected, and that they will be enlisting the help of Chain Analysis to investigate and retrieve stolen funds.

 Iconic Louis Vuitton Trunk Emerges As Digital Collectible

Luxury French brand Louis Vuitton has recently released a version of its legendary trunk as a digital collectible. Originally created in the 19th century as a hard-wearing statement luggage piece for his clients, the Web3 version of Vuitton’s suitcase (named ‘VIA Treasure Trunk’) will cost users approximately $42,000 and will grant users access to exclusive previews of items from the Maison, Vuitton’s design house.

The digital version of the suitcase has been conceived as a ‘soulbound token,’ intimately linked to its owner’s identity, and will be open to purchase using cryptocurrencies. Although ownership the ​​Treasure Trunk itself will not be transferable, other collectibles acquired on the Louis Vuitton VIA portal may be traded on various NFT marketplaces.

 Bkex Suspends Withdrawals Following Money Laundering Incident

Bkex, a crypto exchange headquartered in the British Virgin Islands, has temporarily suspended withdrawals following allegations of money laundering involving a user's funds. In an announcement posted on the exchange’s website, they intend to cooperate with law enforcement and have halted withdrawals as part of investigations.

The exchange also announced the withdrawal suspension on Twitter, revealing the connection between a user's funds and the suspected money laundering incident. Established in 2018, Bkex claims to have a user base of over eight million across 100 countries. As a result of being domiciled in the British Virgin Islands, the exchange is not subject to reporting on cryptocurrency transactions or income taxes.

Legacy Banking Meets Blockchain In Pilot Project

In a move set to connect legacy banking systems with blockchain networks, Swift will partner with Chainlink (LINK) to trial simplified settlement processes for tokenized assets. The partnership, originally announced in September 2022, will see the cross-border payment behemoth implement a cross-chain interoperability protocol (CCIP) to instruct on-chain token transfers.

Chainlink–as an EVM-based protocol–uses smart contracts to execute settlements across various chains such as Ethereum, Binance Smart Chain, Polygon, Avalanche Mainnet and Fantom. With this smart contract functionality, Chainlink will be used to securely connect the Swift network to the Ethereum Sepolia network to trial cross-chain transactions.

The banks set to take part in this pilot project include Australia and New Zealand Banking Group Limited (ANZ), BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear and Lloyds Banking Group. The partnership follows “undeniable interest” in crypto from institutional investors, according to SWIFT’s Strategy Director Jonathan Ehrenfeld Solé.

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