Here’s what happened in crypto today

Here’s what happened in crypto today

The team in charge of FTX has sued Sam Bankman-Fried and other former executives to try to claw back more than $1 billion. Meanwhile, Britain’s financial regulator is launching a Digital Sandbox so payment, lending and investment services can get product development support and Kuwait has banned almost all crypto and virtual asset transactions.

FTX sues SBF and other former execs to recoup over $1B

The restructuring team in charge of the bankrupt FTX has sued former executives from the crypto exchange and its sister trading firm Alameda Research to recover over $1 billion in allegedly misappropriated funds.

In a July 20 court filing former Alameda Research CEO Caroline Ellison, former FTX engineering director Nishad Singh and FTX co-founders Sam Bankman-Fried and Zixiao “Gary” Wang were named as defendants.

The 84-page complaint claimed the group misappropriated customer funds to buy luxury condominiums, donate to political or charitable causes and fund “speculative investments and other pet projects.”

The former executives issued more than $725 million worth of equity to themselves and Bankman-Fried and Wang used $546 million in alleged misappropriated funds to purchase a stake in Robinhood, FTX claimed.

The alleged fraudulent transfers happened when FTX was insolvent — which the group was aware of, the complaint assets. Bankman-Fried allegedly directed a modification to the exchange’s code to allow Alameda’s account to carry a negative balance.

UK regulator to launch Digital Sandbox for startups

On July 20, Britain’s Financial Conduct Authority (FCA) sa its Digital Sandbox program will be available starting in August. The announcement followed two successful pilot programs.

Sandboxes allow developers and startup founders to test their products and services in a controlled environment. The FCA’s Digital Sandbox has been established to help firms launch new products and services in support of the United Kingdom’s economic mandate.

The U.K. is taking measured steps to regulate cryptocurrency and digital assets. This week, the government rejected a Treasury Committee proposal to regulate crypto retail trading in the same way it polices gambling. The government said it’s already working on crypto market regulation and views the sector through the lens of financial services, not gambling.

Kuwait bans crypto and virtual assets transactions

The state of Kuwait is the latest jurisdiction to ban virtually all operations involving cryptocurrencies like Bitcoin. On July 18, Kuwait’s main financial regulator, the Capital Markets Authority (CMA), issued a circular on the supervision and issuance of virtual assets in the country.

In the circular, the CMA confirmed the commitment to “absolute prohibition” on major use cases and operations involving cryptocurrencies, including payments, investments, and mining. The circular also bans local regulators from issuing any licenses allowing firms to provide virtual asset services as a commercial business.

In the meantime, securities and other financial instruments regulated by the Central Bank of Kuwait and the CMA are excluded from the latest prohibitions, the announcement notes.

Apart from the prohibitions, the CMA also required customers to be cautious and aware of the risks associated with virtual assets. The regulator particularly flagged cryptocurrencies, arguing that they “don’t carry a legal status and are not issued or supported.”

The CMA added:

“It is not linked to any asset or issuer, and that the prices of these assets are always driven by speculation that exposes them to a sharp decline.”

The penalties for violating Kuwait’s Anti-Money Laundering laws are stipulated in Article 15 of Law No. 106 of 2013, the regulator noted.

Kuwait’s new regulations align with the country’s measures to combat money laundering and terrorist financing, the regulator stated. The CMA also referred to the conclusions of a study by the National Committee for Combating Money Laundering and Financing of Terrorism regarding the commitment to applying recommendation 15 by the Financial Action Task Force.

According to local reports, the CMA’s crypto restrictions are part of a new inter-departmental crypto ban involving several supervisory authorities in Kuwait. Similar circulars have reportedly been issued by the Central Bank of Kuwait, the Ministry of Commerce and Industry and the Insurance Regulatory Unit.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.