Happy Thursday! In today’s Daily, we look at Ripple’s $125 million fine, JPMorgan’s Bitcoin rally is largely supported by institutional investors, Franklin Templeton’s tokenized fund appears on Arbitrum, and more.
Meanwhile, a U.S. court judge has approved a $12.7 billion settlement between FTX and the CFTC, ending a 20-month-long lawsuit.
Let’s begin.
Ripple fined $125 million
- In 2020, the SEC accused Ripple of raising $1.3 billion by selling XRP, an unregistered security.
- “The SEC’s motion for relief and entry of final judgment are granted in part and denied in part,” reads the filing, signed by New York District Judge Analisa Torres. “The Court enters a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150.”
- In July 2023, Judge Torres ruled that some of Ripple’s XRP sales (programmatically) did not violate securities laws because they were subject to blind bidding procedures. However, she ruled that other direct sales of XRP to institutional investors were investment contracts and therefore constituted unregistered securities sales.
- While Ripple’s fine is significantly lower than the $2 billion the SEC is proposing, Ripple argued that the fine should be closer to $10 million.
- “The SEC asked for $2 billion, and the court recognized that they had gone too far and reduced the amount they were asking for by about 94%,” Ripple CEO Brad Garlinghouse said after the ruling.
- An SEC spokesperson told The Block, “The court also noted the ‘egregious nature of Ripple’s conduct,’ stating that ‘there is no doubt that repeated, profit-making violations of Section 5 constitute a serious crime.’”
- According to The Block’s XRP price page, XRP immediately surged more than 25% on the news, reaching around $0.63 before undergoing a slight correction.
Bitcoin institutional investor rebound
Bitcoin has rebounded this week after a 15% price crash on Monday, largely supported by institutional investors who have shown little or no effort to hedge their risk in bitcoin futures despite the volatility, according to JPMorgan analysts.
- Analysts said the JPMorgan Futures Positions indicator, which tracks cumulative open interest for CME bitcoin futures contracts, and the positive slope of the futures curve suggest a bullish outlook for these investors.
- Institutional investor optimism has been further bolstered by factors such as Morgan Stanley allowing asset managers to recommend bitcoin ETFs, the imminent end to the massive liquidations of Mt. Gox and Genesis, and U.S. political parties expressing support for more favorable cryptocurrency regulation, they added.
- Despite the rebound, JPMorgan analysts remain cautious on crypto markets overall, reflecting ongoing equity market weakness and generally positive factors.
Franklin Templeton’s Tokenization Fund Expands to Arbitrum
- Investors will be able to invest in the underlying FOBXX asset via Franklin Templeton’s blockchain-integrated Benji Investments platform and the BENJI token, which is already available on Stellar and Polygon.
- This expansion aims to leverage Arbitrum’s position as the largest Ethereum Layer 2 network by total locked value to strengthen the integration of traditional finance and DeFi.
- FOBXX was the first U.S. registered fund to use a public blockchain, launched in 2021, while Franklin initially pioneered the tokenized U.S. Treasury market, which now stands at $1.8 billion.
- But in April, FOBXX was overtaken by BlackRock’s new BUIDL fund, which had $519 million in assets under management and 28.4% of the market, while Franklin had 22% ($402 million).
WazirX Cancels All Transactions After $230 Million Hack-Related Withdrawals Freeze
- User portfolio balances on the WazirX platform will be restored as of July 18, 2024, 3:30 AM ET, and this will be done “over the next few days,” the company said.
- On that day, WazirX suffered a wallet exploit that resulted in over $230 million worth of crypto assets being transferred without permission. The attack targeted the exchange’s multisig wallet on Ethereum, and blockchain analytics firm Elliptic said it was likely carried out by North Korea-linked hackers.
- On July 27, WaxirX announced a “socialized loss strategy” via social media poll, but received significant backlash, and decided to restore balances instead.
Kamala Harris is tied with Trump in the polls with 49%.
- The decentralized prediction platform now gives Trump a significantly lower chance of winning the election than the 70% it predicted in mid-July.
- The Harris campaign has recently begun reaching out to the cryptocurrency industry, with cryptocurrency advocate and former Binance Global Advisory Board member David Plouffe reportedly joining her team.
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