Summary of this article
SBI denies filing Bitcoin-XRP ETF, awaits regulation.
Paxos settles $48.5M over BUSD compliance failures.
Ripple, SEC end XRP case by dropping appeals.
SBI Holdings, the large Japanese financial services firm, denied that it has submitted an application for a Bitcoin and XRP-based exchange-traded fund (ETF). The financial institution has businesses in banking, asset management, insurance, and fintech and has been actively engaged with the digital asset ecosystem through several subsidiaries.
Media reports recently announced that SBI was about to launch two new ETF products, one which brings together gold and crypto assets, and another for both Bitcoin and XRP. SBI Holdings, however, clarified that these are mere concepts being discussed and no formal applications have been filed.
In a statement made to Cointelegraph, SBI Holdings clarified that the news was false and that it has not submitted any ETF proposal for crypto assets to regulators. Japan's Financial Services Agency is in the process of reviewing legal amendments that would permit crypto-based ETFs. SBI Holdings indicated that it would rather wait until those amendments are definitive before advancing.
For the time being, SBI Holdings is still in the planning phase and has not submitted any filings in connection with a Bitcoin-XRP ETF. The firm is moving cautiously given the continued regulatory movement.
Paxos Pays $48.5 Million To Settle With Regulator Over Binance Deal
Paxos, a blockchain firm that facilitates the development of crypto tools and mints digital tokens, has consented to pay $48.5 million to settle with the New York Department of Financial Services (NYDFS). The matter concerned Paxos' former collaboration with Binance, the largest crypto exchange globally, for the issuance of the Binance USD (BUSD) stablecoin.
The NYDFS explained that Paxos failed to prevent illegal activity associated with Binance. It alleged that the company did not effectively screen users and transactions, resulting in billions of dollars in suspicious transactions. Paxos was, therefore, directed in 2023 to refrain from producing further of the BUSD token.
Of the total figure, $26.5 million will be used as a fine and $22 million will fund the enhancement of the company's compliance systems. This includes tighter controls to prevent money laundering and more effective rules for knowing one's customers.
Paxos was also approached by the US Securities and Exchange Commission (SEC), who thought BUSD could be a form of investment that would need to be registered. That warning was subsequently withdrawn, though. At around the same time, NYDFS expressed similar objections, stating the business put out unauthorised versions of BUSD on other blockchains. The regulator clarified it had only authorised BUSD on Ethereum.
As per Cointelegraph, Paxos has since addressed the concerns raised by the regulator and assured that there are no investigations active at the moment concerning its previous operations with Binance or BUSD.
SEC And Ripple End Legal Battle By Withdrawing Appeals
Ripple Labs and the US Securities and Exchange Commission (SEC) have come to a settlement to put an end to their prolonged legal battle by withdrawing their appeals. The move follows almost three years of hearings in the courts regarding whether Ripple's XRP token is to be classified as a security.
In 2023, an American judge had declared that XRP sold to ordinary investors on public markets was not a security. The court maintained, however, that Ripple's straight sales of XRP to institutional buyers did violate securities law. Ripple was required to pay a $125 million fine, significantly lower than what the SEC initially requested.
Both the SEC and Ripple had intended to appeal some portions of the ruling. Now, however, they are not going to pursue those appeals. Both parties will pay for their own attorneys' fees. This would render the court's previous ruling as the final decision and nothing would happen in this case anymore.
Ripple's legal lead stated the company is now prepared to put the matter behind it and return to business as usual.
As reported by Cointelegraph, this formal settlement to drop the appeals brings the legal battle to an end. The suit was followed very closely in the cryptocurrency space, as most saw it as a test of how cryptocurrencies would be handled by US law. With it having come to a close, the result could determine the manner in which other crypto projects interact with regulators going forward.
