Multichain has released a report indicating that Chinese Police took away its CEO Zhao Jun on May 21, 2023
Multichain CEO Zhao Jun has not been heard from since May, and the MPC node operators have all their operational access keys to the MPC node servers revoked.
The company claims there is currently no access to Zhao Jun’s cloud server account; therefore, no one can log onto the MPC Servers.
Public communication indicates Chinese Police reportedly took Multichain CEO Zhao Jun in May; since then, no one has heard from him. Multichain suspiciously claims no one can access Jun’s cloud server; thus, everyone is locked out of MPC node servers and cannot access investor funds stashed away by his sister.
Multichain CEO Zhao Jun not heard from since May
Multichain has released an announcement asking GoDaddy to help them bring down Multichain.org to keep customers from using the Multichain Service anymore. The team claims it wants to take this step as it lacks alternative sources of information and operational funds, forcing it to cease operations.
In connection to the missing of Multichain CEO Zhao Jun, the team has reported that it had established a connection with his family and learnt that all the tech devices belonging to Zhao Jun had been taken away by the Chinese authorities. They indicated that since its inception, Zhao Jun used to control all operational funds and investments from Multichain users.
As such, the team could only maintain the project through its remaining access to some non-MPC servers that had not been revealed yet. Also, according to a lawyer’s advice, the team intends to comply with the Multichain CEO Zhao Jun family’s demands to keep details of the Chinese investigations under wraps.
Multichain explained that it released the news of Multichain CEO Zhao Jun going missing on May 30 and explained its technical difficulties. It, however, says that Zhao Jun’s family seems to have some access to the cloud server platform though it’s not clear how far they can go as they do not intend to allow Multichain to access it.
“On June 4, Zhaojun’s family successfully logged into the cloud server platform using the historical information on his home computer. However, Zhaojun’s family only allowed Multichain team engineers physical access to the home computer to fix technical issues with Router2 and Router5.”
At the time, the family and lawyer were in contact with the authorities. They did not give Multichain detailed information though they said Jun would be released soon. On July 7, Jun’s sister transferred investors’ assets locked on the MPC addresses. On July 9, she transferred the remaining user assets to the router pool and notified the team to the EOA address controlled by her.
“The funds were transferred to EOA addresses controlled by Zhaojun’s sister. 0x1eed63efba5f81d95bfe37d82c8e736b974f477b 0x6b6314f4f07c974600d872182dcde092c480e57b”
The family contacted Multichain on July 13, saying that Jun’s sister was also in police custody, and now there is no contact with her. According to the Multichain team, the status of the assets she ‘preserved’ remains uncertain. There are no operational funds to keep Multichain afloat, necessitating the closure of the multichain.org domain.
A rug pull at play?
A rug pull is a common type of crypto scams involving fraudulent developers luring investors into a lucrative project. At most times, there is always a flaw in the project code that allows the developers to have a back door to the funds accumulated.
In Multichain’s case, all these factors are satisfied. Multichain CEO Zhao Jun was in charge of controlling all funds, which means that no funds would flow from the accounts held by the protocol without passing through him. As such, it screams a centralized project.
Conveniently, he went missing, and all other MPC node operators were locked out of the MPC node servers. At the same time, the CEO’s sister transferred assets from secure MPC addresses to EOA addresses before conveniently going missing, after which Multichain now wants to bring down its website.
In all this, the team had nowhere communicated to investors about how funds flow. Also, they did not use litigation against the Jun family for denying them access to company funds while transferring them to their private addresses. Whether this is, a rug pull is up to you to decide.
Keep watching Fintech Express for more updates on crypto and other fintech-related developments.
US SEC is under fire after posting a rather unconvincing press release detailing that they won against Ripple in some cases where the crypto company had tried to introduce an unconventional law.
The crypto community is calling out the US SEC for its tendency to want to regulate the crypto industry greedily.
Voices have been raised against US SEC following its recent loss in the case against Ripple regarding XRP being security. The crypto community feels that authority should have been fair, meaning they would have expected SEC to have an outright win.
The crypto community celebrates a win against the US SEC
The crypto community has come together to celebrate another massive win against the US SEC after the judge officiating the case between the regulator and Ripple ruled in favor of Ripple that Primary markets sale of XRP does not constitute properties of a securities asset.
The SEC has fallen prey to an unforgiving crypto community after posting an official press release that ‘celebrates’ its win against Ripple, claiming that the crypto company tried to formulate its own rules.
A statement in their press release reads:
“ The court agreed with the US SEC that the Howey Test governs the securities analysis of crypto transactions and rejected Ripple’s made -up test as to what constitutes an investment contract, onstead emphasizing that the Howey test and subsequent cases have held that a variety of tangible and intangible assets can serve as subject of an investment contract.”
The US SEC continued:
“ Further, the court rejected Ripples fair notice argument noting that Howey test is clear and that claiming ignorance is not a defense to violating the securities laws. We’ll continue to review the decision.”
No surprise that an agency led by Gary Gensler chooses to lose dishonorably.
This development has been received with open arms by crypto exchanges like Coinbase, which is in a similar court battle with the US SEC. Coinbase has relisted XRP and claims that the win from Ripple is a win for the industry, developers, and investors.
W.
W for @ripple. W for the industry. W for the builders. W for a clear rulebook. W for updating the system.
Trading on the XRP/USDT pair begins on 7/14 at 9 a.m. ET.@Ripple XRP aims to facilitate fast and low-friction value transfers, providing institutions with a solution for cross-border transactions.
The crypto community has also reacted to the story, with investor Scott Melker calling out the US SEC for their unpopular press release. Scott asks the US SEC to digest the developments rather gracefully.
— The Wolf Of All Streets (@scottmelker) July 13, 2023
Ripple CEO Brad Garlinghouse was also included, as he notes the important part of the ruling. He tweeted saying:
“The most important part of this ruling: “XRP, as a digital token, is not in and of itself a “contract, transaction[,] or scheme” that embodies the Howey requirements of an investment contract.” This is a now a matter of law (not up for trial.).”
Watch Fintech Express for more updates on crypto regulation and other fintech-related developments.
Ripple won a court battle against the US SEC that XRP is not a security
The development is causing an uproar, with the US Financial Services GOP asking the SEC to work with Congress to regulate the industry
Gary Gensler is under fire after the US SEC partially lost a case against Ripple in the Southern District of New York. Judge Torres ruled on July 13 that the XRP token is not a security so long as it is traded programmatically on exchanges. The US House Committee on Financial Services for Republicans has asked him to work with Congress to regulate digital assets.
Gary Gensler and Congress must work together following the partial loss in the XRP Ripple case
The US House Committee on Financial Services has asked Gary Gensler to cooperate with the US Congress to regulate crypto assets following a disgraceful loss against Ripple, and the US SEC partially lost that the sale of XRP tokens on primary markets does not constitute securities features.
However, the sale of XRP tokens to institutional investors and venture funds passes the Howes test and can be regulated under securities laws. As a result, Coinbase and Binance have gained an edge against the SEC in the ongoing crypto lawsuits, which shows the authority did not do a very good job when pushing Ripple in a years-long court battle.
This development calls for unison in regulating crypto assets, a move that House Rep Emmer agrees with. Emmer and other lawmakers have tabled a regulation to see Gary Gensler ejected from power and SEC restructured, but it is yet to be heard and voted in the US Congress.
Keep watching Fintech Express for more updates on this and other fintech-related developments.
Ripple wins in its case against the US SEC as a US judge rules that it’s not a security.
Per July 13 filing, Judge Torres has given Ripple an early win in his ruling that XRP should not be classified as a security.
Ripple has scored a win in the Southern District of New York after the Judge presiding over SEC vs Ripple ordered that XRP is not a security. This filing has sent the crypto token exploding 60% in minutes.
Ripple XRP explodes by 60%
Judge Torres, who has been presiding over the case between SEC and XRP, has handed the latter a win in a monumental way. He first predated the release of Hinman documents which showed ignorance of the law by the US SEC, tipping the odds of winning the case to XRP.
The Southern District of New York concluded that Ripple’s Programmatic Sales and Other Distributions of XRP did not constitute the offer and sale of investment contracts.
But Ripple’s Institutional Sales of XRP constituted the unregistered offer and sale of investment contracts… pic.twitter.com/VjrEmWVT83
“The defendant’s motion for summary judgements is GRANTED as to the programmatic sales and Other Distributions, Larsen’s and Garlinghouse’s sales, and DENIED as to the Institutional Sales.
Within minutes, the coin exploded by over 60% as the crypto space received the news rather happily. This landmarking ruling was well awaited as the crypto space felt that the SEC was playing foul on the industry and seeking to smother it for greedy reasons.
Some notable names have hit back at the SEC as they await the Coinbase and Binance rulings, where SEC says that over 6o crypto assets, including XRP, are securities. Gemini’s Cameron Winklevoss has called the SEC out, telling them to focus on the TradFi sector and let crypto be regulated more meaningfully.
The sale of XRP on exchanges is NOT a security. Which means the sales of all cryptos on exchanges are NOT securities and @SECGov and @GaryGensler have NO jurisdiction over them. This is a watershed moment that relegates the SEC to TradFi and makes it a dinosaur regulator. Buh-bye pic.twitter.com/PRuumqQBEL
The former CEO of the bankrupt crypto lender Celsius Network Limited has been arrested by the US
Alex Mashinsky was arrested pending a probe by the US authorities into how Celsius was operated
Alex Mashinsky is being sued by the US SEC following the collapse of the crypto lender Celsius. Mashinsky served as the CEO of the fallen crypto giant till its last days.
US arrests Alex Mashinsky over collapsed crypto lender Celsius
Alex Mashinsky, the Ex-CEO of the fallen crypto liner Celsius Network Limited, has been sued by the US SEC pending an investigation. The SEC believes that Alex Mashinsky knowingly ignored securities laws when operating Celsius crypto lender, exposing US users to unmitigated risks.
The lawsuit against Mashinsky was communicated on July 13 2023, and was filed with the US federal court in Manhattan. Earlier on, New York Attorney General Letitia James had sued him on claims of him defrauding investors by making false advertisements on the state of Celsius Network Limited, which encouraged the continued flow of money.
Alongside the US SEC, other US regulators such as the Department of Justice (DOJ), Commodity Futures Trading Commission (CFTC), and Federal Trade Commission (FTC) have also filed separate lawsuits against Celsius Network and Alex Mashinsky.
Mashinsky’s charges include Securities Fraud, Commodities Fraud, Wire Fraud, and Conspiracy to manipulate the price of CEL (celsius native token. Fraudulent scheme to manipulate the price of CEL, Market Manipulation of CEL tokens, and Wire Fraud in connection with CEL token manipulation.
Now, Mashinsky has joined a growing list of ‘crypto kingpins’ that have been involved in losing millions of dollars to their users and creditors. The US is also pursuing several other crypto executives, including but not limited to FTX’s Sam Bankman Fried and Terra’s Do Kwon. It is also in a court battle with Binance US and CEO Changeng Zhao, Coinbase, and its CEO Brian Armstrong.
Keep watching Fintech Express for more updates on this story.
