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Implication of SEC Suit on Crypto Industry

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The crypto industry is facing a major regulatory challenge as the U.S. Securities and Exchange Commission (SEC) has sued two of the largest crypto platforms, Coinbase and Binance, for allegedly violating securities laws. The SEC claims that both platforms operated as unregistered exchanges and allowed users to trade unregistered securities, among other charges. The lawsuits have sent shockwaves across the crypto market, as investors fear that the SEC’s actions could stifle innovation and growth in the sector.

The lawsuit follows a similar action by the Commodity Futures Trading Commission (CFTC) in March, which accused Binance and CZ of violating U.S. derivatives trading laws. The CFTC also alleged that Binance secretly coached U.S. customers on how to bypass compliance controls.

The SEC and CFTC actions are part of a broader crackdown on the crypto industry by U.S. regulators, who have expressed concerns about the lack of transparency, accountability, and consumer protection in the sector. SEC Chair Gary Gensler has compared the crypto market to “the Wild West” and called for more regulation and enforcement.

The lawsuit could have significant implications for the crypto industry, as Binance is the dominant player in the global market, with over $1 trillion in trading volume in May 2023. Binance offers a wide range of services, including spot trading, futures trading, margin trading, lending, staking, and decentralized finance (DeFi).

If the SEC succeeds in its lawsuit, Binance could face hefty fines, penalties, injunctions, and disgorgement of ill-gotten gains. Binance could also be forced to stop serving U.S. customers or comply with stricter rules and regulations. This could affect the liquidity, innovation, and growth of the crypto market, as well as the confidence and trust of investors..

However, some industry observers have questioned Binance’s claims and said that the company has been operating in a gray area for too long. They have also pointed out that Binance has faced regulatory scrutiny and pressure from several other countries, including the UK, Japan, Germany, Canada, Singapore, and Thailand.

The outcome of the SEC lawsuit is uncertain and could take months or years to resolve. However, it is clear that the crypto industry is entering a new phase of regulatory challenges and uncertainties that could reshape its future.

Coinbase, which went public in April 2021, is the largest crypto platform in the U.S., with over 70 million verified users and $223 billion in assets on its platform. Binance is the world’s largest crypto platform by trading volume, with over 100 million users and $1.4 trillion in monthly volume. Both platforms offer a wide range of crypto products and services, including spot trading, futures and options contracts, lending and borrowing, staking, decentralized finance (DeFi), and non-fungible tokens (NFTs).

The SEC’s lawsuits allege that both platforms failed to register as brokers or dealers with the agency, as required by the Securities Exchange Act of 1934. The SEC also alleges that both platforms facilitated the trading of unregistered securities, such as tokens that may be deemed as investment contracts under the Howey test. The Howey test is a legal framework that determines whether an asset is a security based on whether it involves an investment of money in a common enterprise with an expectation of profit from the efforts of others.

The SEC’s lawsuits seek injunctive relief, disgorgement of ill-gotten gains, civil penalties, and permanent bans on both platforms from operating in the U.S. The lawsuits also name the CEOs of both platforms, Brian Armstrong of Coinbase and Changpeng Zhao of Binance, as defendants, holding them personally liable for the alleged violations.

The lawsuits have sparked a fierce debate in the crypto industry over the role and scope of regulation. Some industry players argue that the SEC’s actions are necessary to protect investors from fraud and manipulation, and to ensure a level playing field for all market participants. Others contend that the SEC’s actions are overreaching and arbitrary, and that they stifle innovation and growth in the sector.

Coinbase and Binance have both denied the SEC’s allegations and vowed to fight them in court. Coinbase has also filed a suit against the SEC for failing to respond to its July 2022 petition that asked the agency to provide guidance for the crypto industry using its formal rulemaking process. Binance has also said that it has been trying to cooperate with regulators and comply with local laws in every jurisdiction it operates in.

The lawsuits could affect the adoption and innovation of crypto technologies, such as DeFi and NFTs, which rely on decentralized platforms and protocols that may not fit neatly into existing regulatory frameworks. The SEC also cites specific features or statements of some cryptocurrencies that support its claim that they are securities. For example:

BNB: The SEC alleges that BNB is a security because it represents an investment contract with Binance, which controls its supply and demand through various mechanisms, such as burning tokens to reduce circulation and increase scarcity.

BUSD: The SEC alleges that BUSD is a security because it represents an investment contract with Paxos, which issues and redeems BUSD tokens in exchange for U.S. dollars at a 1:1 ratio.

Solana: The SEC alleges that Solana is a security because it has a deflationary model powered by a burning mechanism that creates profit expectations for investors. The SEC also cites promotional statements made by Solana’s parent company to increase demand for its token.

Polygon: The SEC alleges that Polygon is a security because it represents an investment contract with its developers, who control its governance and development through a foundation and a DAO (decentralized autonomous organization).

Cardano: The SEC alleges that Cardano is a security because it represents an investment contract with its developers, who control its governance and development through a foundation and a treasury system.

Filecoin: The SEC alleges that Filecoin is a security because it represents an investment contract with its developers.

The outcome of these lawsuits could have significant implications for the future of the crypto industry, as they could set precedents for how crypto platforms are regulated and what kinds of products and services they can offer. 

Unlocking Financial Inclusion With Stellar (XLM) and HedgeUp (HDUP)

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Since the creation of Bitcoin in 2009, we have seen the development of all kinds of blockchain protocols. Each of these protocols has been created as a potential solution to some problem in the crypto or mainstream finance worlds.

In Stellar’s (XLM) case, the network was developed with financial inclusion in mind. The protocol’s goal is to make financial services more accessible and affordable, particularly in underserved regions of the world.

This has made it the ideal protocol for other decentralized finance (DeFi) projects that have the same goal in mind. HedgeUp (HDUP) is one such protocol. HedgeUp’s goal is to make alternative investments cheaper and more accessible to people worldwide.

Financial inclusion with Stellar (XLM)

Stellar (XLM)  was created in 2014 and launched in 2015 by Jed McCaleb. It is designed as a decentralized payment protocol with a focus on features that allow for low-cost cross-border transactions. It was also designed to allow for the issuance and transfer of real-world assets as digital assets.

The payment protocol’s native cryptocurrency is called Lumens (XLM). XLM plays several crucial roles in the Stellar ecosystem. It is used to pay transaction fees and maintain overall system security. But perhaps its most innovative feature is that it can be used as a bridge currency to facilitate the transfer of value between digital assets and real-world assets.

Thanks to this, Stellar (XLM) allows users to create, transfer, and trade digital representations of all kinds of on-chain and off-chain assets.

This feature makes Stellar an attractive platform for projects like HedgeUp (HDUP). This is a DeFi project that’s using tokenization to provide investors with opportunities to invest in alternative assets like diamonds, gold, valuable jewelry, exquisite artwork, rare drinks, and more within the blockchain ecosystem.

HedgeUp (HDUP): inclusion through alternative assets

The alternative assets market is worth more than $17 trillion. It’s one of the best markets to invest in because assets like gold and diamonds tend to be less volatile. Their values remain relatively stable over a long period, making them the perfect tools to beat inflation. And to add to that, they have good potential returns.

Unfortunately, the market is inaccessible to most people worldwide. This is because of a complete lack of these investment opportunities in some regions. And even in places where they’re available, the cost of investments is typically high and out of reach for most of the population.

HedgeUp (HDUP) sees this as a very big problem that needs solving. That’s why the project has decided to tokenize alternative assets into NFTs. These NFTs will then be traded on HedgeUp’s (HDUP) own marketplace, giving investors from all over the world exposure to the alternative assets market.

HedgeUp (HDUP) will also allow for fractional investments, a feature that will see investors pay as little as $1 to own a slice of an asset. This is a feature aimed at making investments as cheap as possible and thus, accessible.

The project is currently in presale. And although it was built on the Ethereum blockchain, there are plans to move it to Stellar (XLM).

For more information about HedgeUp (HDUP) presale use the links down below:

  • Website: https://hedgeup.io/
  • Presale: https://app.hedgeup.io/sign-up
  • Telegram: https://t.me/HedgeUpChat
  • Twitter: https://twitter.com/HedgeUpOfficial

Fuel Subsidy: Edo State Nigeria Announces N40k Minimum Wage, Three Working Days

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Edo State Governor, Mr. Godwin Obaseki, has announced a measure to alleviate the hardships faced by the people due to the removal of fuel subsidy. In a statement he personally issued, Obaseki expressed empathy with the citizens and assured them of the government’s support during these challenging times.

The governor acknowledged the significant increase in fuel prices, which has resulted in a rise in the cost of goods and services, as well as the overall cost of living. In response to these circumstances, the Edo State Government is taking steps to reduce the burdens and mitigate the sufferings of the people.

Obaseki highlighted that his administration had already increased the minimum wage for workers in Edo State to N40,000, the highest in the country. He affirmed the government’s commitment to maintaining this wage and expressed hope for further increments if the state receives an additional allocation from the Federal Government due to the anticipated savings from the fuel subsidy removal.

Recognizing the hardships caused by the policy, particularly the increased transportation costs affecting workers’ wages, the Edo State Government has decided to reduce the number of workdays for civil and public servants. Instead of the usual five days a week, employees will now only need to commute to their workplaces three days a week. The remaining two days will be designated as work-from-home days.

Furthermore, the government plans to expand the EdoBEST@Home initiative, which aims to create more virtual classrooms. This expansion will lessen the commuting expenses for teachers, parents, and students. The Edo State Universal Basic Education Board (SUBEB) will provide more details on this initiative in the coming days.

Another governor towing the same path is Sheyi Makinde of Oyo State. On Monday, the governor constituted a committee to review the state’s workers’ salaries as part of efforts to mitigate the impact of the subsidy removal.

“Yes, the fuel subsidy removal is going to affect all of us but we do have control over certain things in this state, and one of these is to be proactive and engage ourselves. They may call for strike or certain actions at the Federal level but the labour leaders in the state must be aware of our own situation. So, we must appreciate the fact that our economy is fragile. We must be proactive and set the tone without prejudice to whatever negotiation is happening at the Federal level,” the governor said.

The Trade Union Congress (TUC), in a statement signed by its president, Festus Osifo, and Secretary General, Nuhu Toro, on Monday, demanded an immediate increase and implementation of N200,000 per month minimum wage, from the current N30,000. The union also demanded adjustment on Cost of Living Allowance (COLA), like feeding, transport, housing, etc. before the end of June.

Calls for a minimum wage increase have risen in the wake of the removal of fuel subsidy late last month, especially following economic reports that the federal government’s decision will have a severe economic impact on the Nigerian people if palliatives are not provided.

KPMG, a multinational audit, tax, and advisory services firm, on Tuesday, predicted that the subsidy withdrawal could see the inflation rate climb to 30 percent from June.

“Our internal macro model also supports the World Bank’s findings with a forecast of an increase of about six percent over the June 2023 inflation rate to bring it to about 30 percent,” the firm stated.

Israeli Digital Bank, One Zero, to Introduce Generative AI Chatbot to App

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Israeli First established independent Digital Bank headquartered in Tel Aviv, One Zero, is set to launch a generative AI chatbot into its system, which is capable of providing immediate replies to customer queries.

To achieve this, the digital bank partnered with AI21 Labs to introduce a cutting-edge chat platform powered by Generative AI, which is scheduled to roll out to all One Zero bank customers in the fourth quarter (Q4) of 2023.

This offering will encompass not only informative and personal inquiries but also extend to consultations on matters related to money management. While customers will have the option to request assistance from a human banker at any point, the advanced chatbot will address the majority of customer queries, making more time for the bankers to provide comprehensive financial advice.

Speaking on the introduction of the cutting-edge chat platform powered by Generative AI, CEO of One Zero Bank Gal Bar Dea said,

“Generative AI technology replaces the traditional ‘bot’ creating an exceptional customer experience that closely resembles one-on-one human interaction, with zero wait time. The integration of this technology into banking is set to redefine service standards. Paired with the bank’s proprietary AI technology, which offers valuable money management insights, it advances our mission to provide inclusive private banking services to all”.

Reports reveal that the pilot program will initially involve 450 customers of One Zero Bank and will progressively expand until its official launch for all customers in the fourth quarter. 

During the process of developing and implementing the new technology, the digital Bank has incorporated unique advancements that are anticipated to be registered for patents.

The new technology will offer customers immediate responses without waiting times while enabling the bank to achieve continued growth with a cost-effective framework. This cost efficiency allows for potential savings to be passed on to customers through reduced fees and interest rates, benefiting their overall banking experience.

The new chat system will replace the current conversation menus, which rely on decision trees and predefined answers. Instead, it will enable customers to engage in free-flowing conversations, receiving responses that closely simulate human interaction.

Considering the learning curve associated with the technology, customers will have the option to seamlessly switch to a conversation with a human banker whenever they wish to. The AI-based chat platform will offer responses to both general informational queries and personalized questions, tailored to the unique characteristics of each customer’s account.

Following the development of OpenAI chatbot ChatGPT last year, which is currently the rave of the moment, this has seen several companies integrate generative AI tools into their products. Lately, several fintech and banking institutions are beginning to debut generative AI chatbots into their systems, with early successes coming in call center automation and marketing campaigns.

AI chatbots have reportedly transformed personalized banking and customer service. This has seen rapid processing requirements, unique customer needs, secure data management, and 24/7 availability which have all been met with the advent of conversational AI chatbots.

Several financial institutions are currently utilizing AI chatbots to streamline everyday operations and boost company performance which has brought about benefits such as enhanced customer service, cut down of cost, personalized banking experience, better risk mitigation, improved work efficiency, and reduction of workload, amongst others.

Experts predict that AI would revolutionize the banking industry, with the largest impact expected to be seen in areas of SMB Banking, Retail Banking, Investment, and commercial banking.

With the hype around these AI chatbots and their efficiency, it is not far-fetched to say that chatbots for banking services are here to stay, as banks would be likely unable to function without them in the future.

Financial Institutions integrating AI Chatbots might be making the best decision, as there is no other better time than now to take action, as it can also provide them with a competitive edge among competitors.

The Lesson From The Church’s Secondary School Students’ Celebration

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Close-up of multi coloured confetti flying mid-air against black background.

Last Sunday, in a local Church here in America, high school (i.e. secondary school) students were celebrated for simply graduating. People, it is a very big deal.  They put their names on the church board, the church’s circulars, etc – and parents over parents were testifying , congratulating the teenagers and themselves.

As  I sat down, I saw people who truly treasure any positive step taken, no matter how small. Here, families traveled days to come and celebrate a mere and simple graduation from secondary school! 

In Nigeria, did any person notice that you graduated from a university, apart from your immediate family? Simply, did that church, mosque or village celebrate you?

Here is my message: do not be too hard on yourself.  Most times, we are making progress but we rarely acknowledge anything. Do all necessary to keep improving, no matter how little. And if you do, a positive attitude will help you achieve more.

Good People, a great energy with a positive attitude helps.  Discover your happiness by acknowledging some of your little wins. It does help.

Comment on Feed

Comment 1: Thanks Ndubuisi. I used to criticize high school graduation in the US until I realized that it is a big deal. Apart from the success, it is a passage to adulthood and responsibilities.

We don’t celebrate some successes because we think that those achievements are worth next to nothing. What we don’t value will not add value. That is why we don’t get the benefits of many of our achievements. Celebration of achievement is not just for enjoyment, it is a psychological stimulation to build on the achievement.

In addition, waiting to celebrate only when we achieve something great means we may never celebrate anything. The size of success is relative to situations. The higher we go, the higher the expectations. We should all learn to celebrate our achievements at any level no matter how small.

Comment 2: I really like the Post for so many reasons! The Professor is right on target concerning priorities, something I have personally had to balance concerning the professional life balancing the private life. In all honesty it has been a continual process regarding this balance. By coincidence, this morning in a few hours I am attending my granddaughter’s 5th grad graduation ceremony, I had to prioritize this over a important business meeting later this afternoon. Here is my thoughts, this is a one off, her 5th grade graduation, the business meeting is not. I can’t wait to tell her how proud of her I am! This going to be a lasting memory! What I like about this Post also is the fact this happens all over the world, makes me feel good we ALL have some commonality.

Comment 3: Well said, prof!
Africans should celebrate our little wins. It even has good effects on mental health and psyche.
Inasmuch as we keep progressing in the right direction.

Upbringing and background matters in all of these things too. Most of us were not celebrated that much for little our wins and achievements except the few significant ones. We are now adults. It’s not too late to celebrate ourselves and more importantly do it to our kids…

Life is what we make it to be for ourselves.

Thanks sir