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Kik’s Issues With the SEC May Soon Finish

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Kik’s Issues With the SEC May Soon Finish
Kik’s Issues With the SEC May Soon Finish

A new round of documents has been filed in the lengthy dispute between the United States Securities and Exchange Commission, or SEC, and Kik Interactive Inc. over the messaging company’s 2017 initial coin offering, or ICO. Both parties are seeking summary judgment, with the SEC submitting a proposed order that it hopes the court will sign. However, Kik is confident that the judge will rule in its favor, asserting that the SEC’s argument rests heavily on construing the Telegram case as precedent.

The SEC filed a proposed order on May 8 outlining its request for summary judgment that it hopes the court will choose to sign. If signed, the order would find Kik guilty of violating U.S. securities laws through failing to register its public and private offerings with the SEC, invoking the three-pronged Howey test to argue that Kik’s tokens comprised securities. On the same day, Kik filed a memorandum in support of its motion for summary judgment, rejecting the arguments posed by the SEC.

Firstly, Kik advances that “the SEC cannot establish two of the three requirements of the Howey test: a common enterprise and expectation of profits from the essential managerial efforts of others.” The firm asserts that its ICO comprised two separate offerings — an exempt offering of securities to accredited investors, and a public ‘token distribution event’ that sold utility tokens — emphasizing that the token sales “involved different rights, different contractual agreements, different purchasers, and different consideration.” 

The filing also argues that the SEC places extensive and misplaced reliance on the recent preliminary injunction ordered in the regulator’s suit against Telegram and precedent for the denial of Kik’s motion for summary judgment. “Telegram involved an entirely different set of facts and circumstances, and so even the tentative conclusions reached the preliminary injunction stage are irrelevant to this case,” the motion states.

Speaking on the topic, a Kik representative described the documents as “the standard last step in the process.” “The judge likely won’t rule for another 4-6 weeks,” the representative added. Kik’s General Counsel, Eileen Lyon, said that the SEC’s argument “relies heavily on the recent Telegram case which we think was poorly reasoned and wrongly decided. “As you know, the Telegram case is not binding precedent, so it will be interesting to see what impact it might have, in light of the many other authorities we have cited and the significant factual differences in the two token offerings,” she added.

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Tether Chimes In On Why It Hasn’t Burned Any USDT

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Tether Chimes In On Why It Hasn’t Burned Any USDT
Tether Chimes In On Why It Hasn’t Burned Any USDT

Tether (USDT) cites the popularity of its Ethereum (ETH)-based asset as the reason why the company has never burned a single token. The recent report from Flipside Crypto concluded that Tether is not in the practice of burning its Ethereum tokens: “We can also see that no tokens ever go to the “burn” category, which means that throughout the course of April no USDT supply was destroyed. Looking at the full history of USDT on Ethereum, we found that no tokens have ever been burned.”

Paolo Ardoino, who serves as CTO for both Tether and Bitfinex, explained that the company burns its tokens on Omni and Tron (TRON) networks, while it holds authorized but unissued and unbacked ERC20 tokens in the “inventory”:

“We have not yet destroyed Ethereum-based USDt. We have destroyed unneeded USDt on Omni and Tron so far. Ethereum has been the most popular blockchain in recent months and demand for ERC20-based USDt has been high. Accordingly, when redemptions have been processed, Tether retained those USDts in its authorized but unissued — and unbacked — inventory for future market demand.”

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New Tipbot Uses Cryptocurrency As An Incentive For People To Answer Questions

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New-Tipbot-Uses-Cryptocurrency-As-An-Incentive-For-People-To-Answer-Questions
New Tipbot Uses Cryptocurrency As An Incentive For People To Answer Questions

A new kind of cryptocurrency tipbot allows users to pay others to answer their questions on social media, providing a new tool to pool data in the ecosystem. Liser Lee of CCTip said that the system can help drive engagement or generate expert commentary. It lets users create a Twitter poll and automatically pay anyone who shares it with cryptocurrency, helping a poll gain more exposure and answers. 

The company is also considering a system that pays the poll respondents instead. Other than Twitter, CCTip will also work on Telegram, Discord, WeChat, and on Reddit as well. It supports 200 different crypto assets, including Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), Tron (TRX), and many Ethereum-based tokens. Tron founder Justin Sun publicly thanked the firm when it added support for TRX in early April. Lee explained said that using a cryptocurrency-powered system is more effective when interacting with crypto enthusiasts compared to traditional systems. She pointed out that crypto community members may be simply happy to see their favorite crypto asset being used in the real world:

“If you pay BCH to a BCH enthusiast, he’s happy to see that BCH being used.”

Furthermore, the firm also launched the CCTip Ask feature last week, enabling users to ask any Twitter user a question. Lee showcased the system on May 18 by asking Bitcoin ABC lead developer Amaury Sechet if he believes Bitcoin Cash’s value can exceed the value of Bitcoin. Sechet was paid 0.5 BCH (about $114 as of press time) to answer the question he was asked on Twitter through the system. Lee commented:

“[CCTip Ask is] an effective way to get your question answered by a celebrity. If you raise a good question, answering the question is a good way to show your opinions. And it will attract more users’ attention.”

Cryptocurrencies enable anyone to instantly send payment to anyone else without having to share sensitive information with each other. This feature makes crypto assets the perfect fit for social media tipping, as many users on those platforms prefer to remain pseudonymous or otherwise protect their privacy. Because of this synergy, there’s lots of development in the crypto tipping space. 

It was recently reported, that blockchain firm Aeternity recently launched its own social media monetization tool, which supports tipping in the form of Aeternity’s native coin, AE. The ever-changing landscape of cryptocurrency regulation still often threatens companies operating in the space, including tipbot services. In mid-May, XRP TipBot, a service enabling users to transfer XRP to each other via comments on Twitter, Reddit, and Discord, managed to save itself from having to shut its operations due to new regulations by partnering with digital payment platform Uphold.

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A Crypto Futures Exchange Is Integrating Chainlink’s Price Oracles

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A Crypto Futures Exchange Is Integrating Chainlink's Price Oracles
A Crypto Futures Exchange Is Integrating Chainlink's Price Oracles

Forthcoming Seychelles-based crypto derivatives trading exchange Digitex Futures has announced it will integrate Chainlink’s (LINK) decentralized price reference contracts on its platform. Chainlink’s decentralized price oracles are typically utilized by decentralized finance (DeFi) applications. 

With the integration, Digitex claims to comprise the first centralized crypto futures exchange to decentralized oracles. The integration will be used as an anchor to detect internal deviations over a defined percentage. Chainlink describes its price feeds as “security reviewed, sybil resistant, fully independent.” The index is informed by “a variety of trusted spot market sources.”

Digitex asserts that the price reference contracts provide traders “with strong protection against price manipulation,” and “overexpos[ure] to slippage” should the firm’s internal index produce extreme fluctuations. The contracts will be used to support Digitex’s initial Bitcoin (BTC)/U.S. dollar perpetual contracts, before incorporating additional feeds alongside other crypto assets in the future. 

Adam Todd, the founder and chief executive of Digitex, stated that “Chainlink provides Digitex with highly reliable and transparent price feeds that protect our users against the negative outcomes of abnormal market conditions or internal complications.” Digitex’s futures exchange opened on mainnet to selective user onboarding at the end of April. The platform currently plans to publicly launch during summer.

At the end of April, it was announced that leading Tezos (XTZ) developer teams Cryptonomic and SmartPy had begun working to bring Chainlink’s price oracles to the Tezos network. The move followed Coinbase’s launch of its own price oracle for the DeFi ecosystem.

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