Ripple’s Expensive Struggle, Bittrex Bankruptcy, and a New Blockchain Network

A million dollar question in crypto may be whether tokens can be considered securities in the US, with some crypto companies betting big on it.

For the payment platform Ripple – sued by the US Securities Exchange Commission (SEC) in 2020 – defense costs have already topped $200 million, Cointelegraph has learned. The SEC claims that Ripple sold XRP (XRP) tokens as an unregistered security in the same way it has recently accused many other crypto companies.

Even the possibility of expensive litigation with the regulator does not prevent companies and projects from testing the limits of what can be considered a security. The Arbitrum Foundation – the entity behind the Arbitrum blockchain – plans to reward over $6 million worth of Ether (ETH) tokens to holders of its original Arbitrum (ARB) token, according to a recent proposal in the DAO forum.

The tokens were generated through base fees and excess revenue from network transactions. Although the proposal has gained support, some community members expressed concern that the revenue distribution serves as a way to label ARB tokens as securities.

This week’s Crypto Biz explores Arbitrum’s latest controversial proposal, Ripple’s two-year battle with the SEC and a coalition of major companies to build blockchain solutions tailored for institutional investors.

Defending against SEC to cost Ripple $200 million, CEO Brad Garlinghouse says

A case filed against Ripple by the SEC has cost the company $200 million, CEO Brad Garlinghouse said during a fireside chat at the Dubai Fintech Summit. Garlinghouse also said the U.S. is lagging behind regulatory progress in the United Arab Emirates and the recent Markets in Crypto-Assets bill in the European Union. The SEC sued the crypto payment platform in December 2020, claiming that Ripple was illegally selling XRP tokens as an unregistered security.

Microsoft, Goldman Sachs, others collaborate on new blockchain network

A new blockchain network for financial institutions is in the works from a conglomerate of participants in the finance and technology space, including Microsoft and Goldman Sachs. The Canton Network will be an interoperable blockchain network for companies working with institutional assets. The platform is built on Daml, the smart contract language of Digital Asset, which creates an interoperable system where “assets, data and cash” can be synchronized across connected applications.

Bittrex files for Chapter 11 bankruptcy just weeks after SEC charges

Cryptocurrency trading platform Bittrex has filed for Chapter 11 bankruptcy protection in the United States. Bittrex Global CEO Oliver Lynch told Cointelegraph that the bankruptcy is part of the exchange’s winding down of US operations, adding that the funds are safe and will be handed over to the court. The move comes after the SEC charged the company and its co-founder William Shihara with securities violations in April. In October 2022, the exchange received charges from the US Treasury Department’s Office of Foreign Assets Control. The agency is the largest creditor listed on Bittrex’s bankruptcy filing, listing a claim of $24.2 million.

Arbitrum’s DAO to receive over 3350 ETH revenue from transaction fees

Layer-2 blockchain Arbitrum plans to distribute Ether tokens worth nearly $6.2 million to the community. According to a recent proposal on the governance forum, around 3,352 ETH will be collected by Arbitrum’s decentralized autonomous organization. The funds collected come from base fees and excess revenue generated from online transactions. Data from Crypto Fees shows that Arbitrum’s users have paid $387,423 in fees over the past seven days. The proposal appears to have broad support, but some community members pointed out that the revenue distribution could classify the ARB token as a security.

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