An anonymous Slashdot reader shared this report from the New York Times: The collapse in cryptocurrency prices last year forced a procession of major firms into bankruptcy, triggering a government crackdown and erasing the savings of millions of inexperienced investors. But for a small group of corporate turnaround specialists, crypto's implosion has become a financial bonanza.

Lawyers, accountants, consultants, cryptocurrency analysts and other professionals have racked up more than $700 million in fees since last year from the bankruptcies of five major crypto firms, including the digital currency exchange FTX, according to a New York Times analysis of court records. That sum is likely to grow significantly as the cases unfold over the coming months. Large fees are common in corporate bankruptcies, which require complex and time-intensive legal work to untangle. But in the crypto world, the mounting fees have sparked widespread outrage because many of the people owed money are amateur traders who lost their personal savings, rather than corporations with the ability to weather a financial crisis. Every dollar in fees is deducted from the pool of funds that will be returned to creditors at the end of the bankruptcies.

The fees are "exorbitant and ridiculous," said Daniel Frishberg, a 19-year-old investor who lost about $3,000 when the crypto company Celsius Network filed for bankruptcy last year. "At every hearing, they have an army of people there, and most of them don't need to be there. You don't need 20 people taking notes."

Agence France-Presse reports that "Two years ago, El Salvador shrugged off a chorus of warnings and adopted Bitcoin as legal tender in a bid to revitalize its economy and improve access to financial services.

"It has not worked... Economist Cesar Villalona told AFP that Bitcoin 'does not exist in the local economy' in any significant way, because in El Salvador 'everything' is paid in dollars: wages, services and goods." Bitcoin has lost more than half its value since then and though President Nayib Bukele is wildly popular for his clampdown on criminal gangs, his currency gamble has not gone down equally well... [T]wo years after El Salvador became the first country in the world to adopt Bitcoin as its currency, alongside the U.S. dollar, "the goals that were pursued... have not been achieved, people hardly use it, they don't have much trust" in crypto, economist and former Reserve Bank governor Carlos Acevedo told AFP. "The experiment has not worked, it is a crypto winter," he said.

There are no figures available on how many Salvadorans have taken up Bitcoin. But a poll conducted in May by the Central American University found that 71 percent believed the cryptocurrency "has in no way helped to improve their family economic situation."

On the streets of San Salvador, the verdict is harsh. "I don't see that money working, it's just propaganda. Where's the benefit? There's no benefit. It's a bad investment," newspaper vendor Juan Antonio Salgado, 65, told AFP. "It's robbery," he added, in reference to the currency's volatility.
Even a video report from Al Jazeera opens by asking "So has the experiment succeeded? The general verdict — not yet, at least."

They report that even though one fifth of El Salvador's GDP comes from remittances, less than 2% of its remittances went through crypto currency and digital wallets so far this year. Building has yet to begin on "Bitcoin City" — and the country has yet to actually issue the "Volcano Bonds" that would fund its creation.

And meanwhile, the government's bitcoin purchases have now lost an estimated $45.4 million.

An anonymous reader quotes a report from Bloomberg: Cryptocurrency trading volume declined in August to the lowest level of the year, another sign of waning investor interest since the collapse of digital asset prices from all-time highs in late 2021. The combined monthly volume of so-called spot and derivatives trading fell 11.5% to $2.09 trillion, and was the second-lowest monthly total since October 2020, according to data compiled by CCData. "The (spot) trading volumes on centralized exchanges have remained low since April this year and are now comparable to the stagnant trading activity in the bear market of 2019," CCData said in a report published Thursday.

The tepid interest appears to be carrying into September, with crypto bellwether Bitcoin little changed through much of the first week of the month. Bitcoin, which accounts for about half of crypto's $1 trillion market capitalization, was little changed at around $25,800 on Thursday. It almost reached $69,000 in November 2021. [...] While Binance remains the largest exchange for crypto spot trading, its market share shrank for the sixth straight month, settling at 38.5%, the lowest since August 2022, according to CCData.

Bitcoin mining outfit Riot Platforms earned $31.7 million from Texas power authorities last month for curtailing operations -- far more than the value of the Bitcoin it mined in the same period. The Register reports: In a press release yesterday, Riot said it produced 333 Bitcoin at its mining operations in Rockdale, Texas, which would have been worth just shy of $9 million on August 31. All the cash earned from those energy credits, on the other hand, equates to around 1,136 Bitcoin, Riot CEO Jason Les said in the company's monthly update. "August was a landmark month for Riot in showcasing the benefits of our unique power strategy," Les said. "Riot achieved a new monthly record for Power and Demand Response Credits ... which surpassed the total amount of all Credits received in 2022. "These credits significantly lower Riot's cost to mine Bitcoin and are a key element in making Riot one of the lowest cost producers of Bitcoin in the industry," Les said.

The Electric Reliability Council of Texas (ERCOT) operates a demand response program that allows big energy consumers, like Riot, to earn power credits for using less of it for operations and selling power back to the grid, as well as additional credit for being enrolled in its demand response programs. As we reported in August of last year, the company earned $9.5 million in credits during a July 2022 heatwave as well -- still far less than it earned in Texas's hottest August on record this year.

The London Stock Exchange Group has drawn up plans for a new digital markets business, saying this will make it the first major exchange to offer extensive trading of traditional financial assets on the blockchain technology best known for powering cryptocurrency. From a report: Murray Roos, head of capital's markets at the LSE Group, told the Financial Times that the company had been examining the potential for a blockchain-powered trading venue for about a year, and had reached an "inflection point" where it had decided to take the plans forward. It has asked Julia Hoggett, head of the London Stock Exchange, one unit in the broader group, to spearhead the project.

Roos stressed that his exchange was "definitely not building anything around cryptoassets" but was looking to use the technology that underpins popular tokens such as bitcoin to improve the efficiency of buying, selling and holding traditional assets. "The idea is to use digital technology to make a process that is slicker, smoother, cheaper and more transparent and to have it regulated," Roos said. He added that LSEG had waited to proceed until it was sure that the public blockchain technology was "good enough" and that investors were ready.

The U.S. Court of Appeals for the D.C. Circuit has paved the way for bitcoin exchange-traded funds. From a report: On Tuesday, the court sided with Grayscale in a lawsuit against the Securities and Exchange Commission which had denied the company's application to convert the Grayscale Bitcoin Trust to an ETF. The decision could impact other companies that want to create bitcoin ETFs, like BlackRock and Fidelity. A spot bitcoin ETF would be traded through a traditional stock exchange, although the bitcoin would be held by a brokerage, and would allow investors to gain exposure to the world's biggest cryptocurrency without having to own the coin themselves. Many crypto bulls believe that approval of a spot bitcoin ETF will lead to more mainstream institutional adoption.

Bitcoin, ether and other major cap crypto coins surged on the news, and Coinbase, which is listed as the custodian partner in multiple spot bitcoin ETF applications, was up more than 14% on Tuesday. "The Commission failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale's proposed bitcoin ETP," the court said, referring to exchange-traded products. "In the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful." Grayscale Investments, which manages the world's biggest crypto fund, initiated its lawsuit against the SEC in June 2022 after the agency rejected its application to turn its flagship bitcoin fund, better known by its ticker GBTC, into an ETF. The company decided to pursue the ETF, which would be backed by bitcoin rather than bitcoin derivatives, after the SEC approved ProShares' futures-based bitcoin ETF in October 2021.

The federal government is escalating efforts to make cryptocurrency investors comply with tax law, nearly 15 years after people started trading bitcoin. From a report: The Treasury Department proposed new rules Friday with twin goals: making it harder for crypto investors to dodge income taxes when they sell digital assets, and simplifying complicated tax messes for people who are trying to follow the law. When they are fully implemented, the rules will require crypto exchanges such as Coinbase to deal with the Internal Revenue Service in a manner similar to brokers who handle investors' stock and mutual-fund portfolios.

The crypto exchanges will send annual reports on Form 1099s to the IRS and to taxpayers that show the gross proceeds from transactions. That starts in 2026 for tax year 2025. Later, they will start reporting how much customers paid for the assets, known as their cost basis. Capital gains are the difference between sale price and cost basis, and investors face federal taxes of up to 23.8%.

Long-time Slashdot reader UnknowingFool writes: In 2021, Craig Wright sued 12 bitcoin developers who refused help him recover 111,000 bitcoins he claimed were lost in a hack. His company, Tulip Trading, wanted the developers to put in a backdoor mechanism in bitcoin that would override the ownership of the coins, arguing it was the developers "fiduciary duty" to assist him. The developers allege (PDF) that Tulip and Wright never owned the coins and the evidence of ownership provided is "fabricated." Tulip Trading "never owned the digital assets and has commenced this claim fraudulently and in reliance on fabricated documents," the developers' lawyers said in a statement. "Dr. Wright has a long history of fraud, forgery, and dishonesty ... [and is using] the English courts as an instrument of fraud."

A Bloomberg investigative reporter wrote a new book titled Number Go Up: Inside Crypto's Wild Rise and Staggering Fall. This week Bloomberg published an excerpt that begins when the reporter received a flirtatious text message from a woman named Vicky Ho for a scam that's called "pig butchering".

"Vicky's random text had found its way to pretty much exactly the wrong target. I'd been investigating the crypto bubble for more than a year..." After a day, Vicky revealed her true love language: Bitcoin price data. She started sending me charts. She told me she'd figured out how to predict market fluctuations and make quick gains of 20% or more. The screenshots she shared showed that during that week alone she'd made $18,600 on one trade, $4,320 on another and $3,600 on a third... For days, she went on chatting without asking for me to send any money. I was supposed to be the mark, but I had to work her to con me.... Vicky sent me a link to download an app called ZBXS. It looked pretty much like other crypto-exchange apps. "New safe and stable trading market," a banner read at the top. Then Vicky gave me some instructions. They involved buying one cryptocurrency using another crypto-exchange app, then transferring the crypto to ZBXS's deposit address on the blockchain, a 42-character string of letters and numbers...

People around the world really were losing huge sums of money to the con. A project finance lawyer in Boston with terminal cancer handed over $2.5 million. A divorced mother of three in St. Louis was defrauded of $5 million. And the victims I spoke to all told me they'd been told to use Tether, the same coin Vicky suggested to me. Rich Sanders, the lead investigator at CipherBlade, a crypto-tracing firm, said that at least $10 billion had been lost to crypto romance scams.

The huge sums involved weren't the most shocking part. I learned that whoever was posing as Vicky was likely a victim as well — of human trafficking. Most "pig-butchering" operations were orchestrated by Chinese gangsters based in Cambodia or Myanmar. They'd lure young people from across Southeast Asia to move abroad with the promise of well-paying jobs in customer service or online gambling. Then, when the workers arrived, they'd be held captive and forced into a criminal racket. Thousands have been tricked this way. Entire office towers are filled with floor after floor of people sending spam messages around the clock, under threat of torture or death.

With the assistance of translators, I started video chatting with people who'd escaped...

I'd heard that [southwestern Cambodia's giant building complex] Chinatown alone held as many as 6,000 captive workers like "Vicky Ho."
Two of the workers interviewed "said they'd seen workers murdered." And another worker said Tether was used specifically because "It's more safe. We are afraid people will track us... It's untraceable."

The reporter's conclusion? "It was hard to see how this slave complex could exist without cryptocurrency."

An anonymous reader quotes a report from Ars Technica: The Sotheby's auction house has been named as a defendant in a lawsuit filed by investors who regret buying Bored Ape Yacht Club NFTs that sold for highly inflated prices during the NFT craze in 2021. A Sotheby's auction duped investors by giving the Bored Ape NFTs "an air of legitimacy... to generate investors' interest and hype around the Bored Ape brand," the class-action lawsuit claims. The boost to Bored Ape NFT prices provided by the auction "was rooted in deception," said the lawsuit filed in US District Court for the Central District of California. It wasn't revealed at the time of the auction that the buyer was the now-disgraced FTX, the lawsuit said.

"Sotheby's representations that the undisclosed buyer was a 'traditional' collector had misleadingly created the impression that the market for BAYC NFTs had crossed over to a mainstream audience," the lawsuit claimed. Lawsuit plaintiffs say that harmed investors bought the NFTs "with a reasonable expectation of profit from owning them." Sotheby's sold a lot of 101 Bored Ape NFTs for $24.4 million at its "Ape In!" auction in September 2021, well above the pre-auction estimates of $12 million to $18 million. That's an average price of over $241,000, but Bored Ape NFTs now sell for a floor price of about $50,000 worth of ether cryptocrurrency, according to CoinGecko data accessed today. [...]

The amended lawsuit alleges that "[Bored Ape creator Yuga Labs] colluded with fine arts broker, Defendant Sotheby's, to run a deceptive auction." After the sale, a Sotheby's representative described the winning bidder during a Twitter Spaces event as a "traditional" collector, the lawsuit said. The lawsuit said it turned out the auction buyer was now-bankrupt crypto exchange FTX, whose founder Sam Bankman-Fried is in jail awaiting trial on criminal charges. Ethereum blockchain transaction data shows that after the auction, "Sotheby's transferred the lot of BAYC NFTs to wallet address 0xf8e0C93Fd48B4C34A4194d3AF436b13032E641F3,77 which, upon information and belief, is owned/controlled by FTX," the complaint said. Speculation that FTX was the buyer had been percolating since at least January 2023. The lawsuit alleges that Yuga Labs and Sotheby's violated the California Unfair Competition Law, the California Corporate Securities Law, the US Securities Exchange Act, and the California Corporations Code. The plaintiffs also claim that Sotheby's Metaverse, an NFT trading platform opened after the auction, "operated (or attempted to operate) as an unregistered broker of securities."

Sam Bankman-Fried used money he stole from customers of his FTX cryptocurrency exchange to make more than $100 million in political campaign contributions before the 2022 U.S. midterm elections, federal prosecutors said on Monday. Reuters reports: An amended indictment accused the 31-year-old former billionaire of directing two FTX executives to evade contribution limits by donating to Democrats and Republicans, and to conceal where the money came from. "He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow," the indictment said.

Bankman-Fried faces seven counts of conspiracy and fraud over FTX's collapse, though the indictment no longer includes conspiracy to violate campaign finance laws as a separate count. [...] Bankman-Fried's indictment does not name the two people prosecutors say he used for "straw donors" to donate money at his direction. But other court papers and Federal Elections Commission data show they are Nishad Singh and Ryan Salame. Singh, FTX's former engineering chief, pleaded guilty to fraud and campaign finance violations in February. He donated $9.7 million to Democratic candidates and causes, and said in court he knew the money came from FTX customers.

Salame, the former co-CEO of FTX's Bahamian unit, gave more than $24 million to Republican candidates and causes in the 2022 election cycle, according to Federal Election Commision data. He has not been charged with a crime. In a separate court filing on Monday, prosecutors said Salame's lawyer had told them he would invoke his Fifth Amendment right against self-incrimination if called to testify. Prosecutors said Salame told a family member in a November 2021 message that Bankman-Fried wanted to use political donations to "weed-out" anti-crypto Democratic and Republican lawmakers, and would likely "route money through me to weed out that republican [sic] side." On Friday, a U.S. judge revoked Sam Bankman-Fried's bail due to probable cause that he tampered with witnesses at least twice. He is being sent to jail.

What to make of the news that early research appears unable to duplicate the much-ballyhooed claims for the LK99 superconductor?

"The episode revealed the intense appetite in Silicon Valley for finding the next big thing," argues the Washington Post, "after years of hand-wringing that the tech world has lost its ability to come up with big, world-changing innovations, instead channeling all its money and energy into building new variations of social media apps and business software..." [M]any tech leaders are nervous that the current focus on consumer and business software has led to stagnation. A decade ago, investors prophesied that self-driving cars would take over the roads by the mid-2020s — but they are still firmly in the testing phase, despite billions of dollars of investment. Cryptocurrencies and blockchain technology have had multiple hype cycles of their own, but have yet to fundamentally change any industry, besides crime and money laundering. Tech meant to help mitigate climate change, like carbon capture and storage, has lagged without major advances in years. Meanwhile, Big Tech companies used their huge cash hoards to snap up smaller competitors, with antitrust regulators only recently beginning to clamp down on consolidation. Over the last year, as higher interest rates have cut into the amount of venture capital and slowing growth has caused companies to pull back spending, a massive wave of layoffs has swept the industry, and companies such as Google that previously said they'd invest some of their profits in big, risky ideas have turned away from such "moonshots..."

Room-temperature superconductors would be especially relevant to the tech industry right now, which is busy burning billions of dollars on new computer chips and the energy costs to run them to train the AI models behind tools like ChatGPT and Google's Bard. For years, computer chips have gotten smaller and more efficient, but that progress has run up against the limits of the physical world as transistors get so small some are now just one atom thick.

An anonymous reader shared this report from CNBC: The mastermind behind a ransomware hosting service that allegedly helped criminals collect more than 5,000 bitcoin in ransom from hundreds of victims was indicted in federal court this week, prosecutors announced Thursday. Artur Grabowski's LolekHosted service operated for about a decade and advertised itself as a haven for "everything but child porn," according to Florida prosecutors. Clients allegedly used the hosting service to deploy ransomware viruses that infected around 400 networks around the world... [That's 400 just for the Netwalker ransomware, which the announcement calls "one of the ransomware variants facilitated by LolekHosted."]

Grabowski was charged with computer fraud, wire fraud, and conspiracy to commit international money laundering. Grabowski himself is also the subject of a $21.5 million seizure order... Grabowski, a Polish national, faces a maximum sentence of 45 years, if he is ever detained and convicted.
Grabowski also "remains a fugitive," according to an announcement from the U.S. Department of Justice. It notes that the 36-year-old's site — registered in 2014 — also "facilitated" brute-force attacks, and phishing.

"Grabowski allegedly facilitated the criminal activities of LolekHosted clients by allowing clients to register accounts using false information, not maintaining Internet Protocol (IP) address logs of client servers, frequently changing the IP addresses of client servers, ignoring abuse complaints made by third parties against clients, and notifying clients of legal inquiries received from law enforcement."

PayPal has launched a U.S. dollar stablecoin, becoming the first major financial technology firm to embrace digital currencies for payments and transfers. Reuters reports: PayPal's announcement, which lifted its shares 2.66% on Monday, reflects a show of confidence in the troubled cryptocurrency industry that has over the last 12 months grappled with regulatory headwinds that were exacerbated by a string of high-profile collapses. "PayPal isn't quite as polarizing as Facebook, but it's a high-profile name that will surely get attention on Capitol Hill, and from the [Federal Reserve] and [Securities and Exchange Commission]," said Ian Katz, managing director of Capital Alpha Partners, in a note.

PayPal's stablecoin, dubbed PayPal USD, is backed by U.S. dollar deposits and short-term U.S Treasuries, and will be issued by Paxos Trust Co. It will gradually be available to PayPal customers in the United States. The token can be redeemed for U.S. dollars at any time, and can also be used to buy and sell the other cryptocurrencies PayPal offers on its platform, including bitcoin. "PYUSD is the first of its kind, representing the next phase of U.S. dollars on the blockchain," Paxos posted on messaging platform X, formerly known as Twitter. "This is not just a milestone moment for Paxos & PayPal, but for the entire financial industry."

Brazil's central bank has named its upcoming digital currency "DREX," which it aims to use to boost financial services. DREX is scheduled to launch next year. Reuters reports: The DREX will use distributed ledger technology (DLT) to settle wholesale interbank transactions, while retail access will be based on tokenized bank deposits. Officials from the central bank previously predicted that the adoption of the Brazilian digital currency would commence by the end of 2024, following the completion of its testing phase.

But Fabio Araujo, the coordinator of the initiative at the bank, said that employee strikes demanding better career advancement could potentially impact the project. During a live discussion organized by the central bank, he emphasized that the development of DREX is primarily aimed at improving access to financial services in the country. "By enabling simple and reliable access to registered values through DLT technology, we reduce costs and democratize access to financial services," Araujo stated.

He also highlighted that Brazilians are already engaging in extensive digital payments through the instant payment platform Pix, which was launched in late 2021 and has been widely embraced. Now, the expectation is that DREX will bolster lending, investments, and insurance services. "We aim to make these financial products accessible to the public and increase financial inclusion in Brazil," Araujo added.

A husband and wife cyber-crime team have pleaded guilty to trying to launder $4.5bn of Bitcoin that he had stolen in a hack in 2016. From a report: Heather Morgan and Ilya Lichtenstein were arrested last year in New York after police traced their riches back to the crypto heist. While evading police, Morgan masqueraded as a rapper and tech entrepreneur. As part of a plea deal, Lichtenstein admitted he was behind the hack. The couple both pleaded guilty to money laundering, but Morgan pleaded guilty to an additional count of conspiracy to defraud the United States. In spite of attempting to cover up her crimes, Morgan published dozens of expletive-filled music videos and rap songs filmed in locations around New York, under the name Razzlekhan. In her lyrics she called herself a "bad-ass money maker" and "the crocodile of Wall Street."

In articles published in Forbes, Morgan also claimed to be a successful tech businesswoman, calling herself an "economist, serial entrepreneur, software investor and rapper." But while developing her rapping and tech persona, she and her computer programmer husband were attempting to cash out their fortune stolen from the crypto firm Bitfinex. The couple now face prison sentences with Lichtenstein in line for a possible maximum 20 years in prison and Morgan a possible 10. At the time of their arrest in February 2022, the stash of 119,000 Bitcoins was worth about $4.5bn -- making it the US Department of Justice's largest single financial seizure in its history. When the hack was carried out, the Bitcoins were worth about $71m.

Worldcoin (WLD), the eyeball-scanning crypto project launched by OpenAI's Sam Altman, is being investigated by French data protection regulator CNI for "questionable" practises, the regulator told CoinDesk. From a report: "The legality of this [data] collection seems questionable, as do the conditions for preservation of biometric data," a CNIL spokesperson said in a written statement, referring to Worldcoin's practise of scanning retinas to ensure that no single person can claim crypto rewards twice.

"CNIL has initiated investigations," supporting the work of Bavarian privacy regulators who have primary responsibility under EU law, the spokesperson added. Worldcoin went live on Monday and its cheerleaders say it could spread crypto wider than bitcoin (BTC), but it has drawn the ire of privacy watchdogs in the U.K., where the Information Commissioner's Office has warned that people must freely give consent to the processing of their personal data, and be able to withdraw it without detriment.

United States presidential candidate Robert F. Kennedy Jr. has announced a plan to back the dollar with Bitcoin, and end taxes on Bitcoin.

From a report: Speaking at a Heal-the-Divide PAC event, Democratic Presidential Candidate Robert F. Kennedy Jr. outlined specific Bitcoin-focused policies that he would enact as president, including gradually backing the U.S. dollar with bitcoin and making bitcoin profits exempt from capital gains taxes.

"My plan would be to start very, very small, perhaps 1% of issued T-bills would be backed by hard currency, by gold, silver platinum or bitcoin," Kennedy said, describing his vision for returning to a hard currency standard in the U.S.

He added that, depending on the outcome of that initial step, he would increase that allocation annually. This potential policy reimagines the financial system, pointing to a future where bitcoin's absolute scarcity and sound monetary principles reinforce the U.S. dollar's eroding position as the world reserve currency. Kennedy Jr. added: "Backing dollars and U.S. debt obligations with hard assets could help restore strength back to the dollar, rein in inflation and usher in a new era of American financial stability, peace and prosperity."

In addition, Kennedy announced his administration "will exempt the conversion of bitcoin to the U.S. dollar from capital gains taxes"

BlackRock's move into crypto fits into the asset management giant's broader mission of creating products that are easy to use and cheap for investors, CEO Larry Fink said Friday. From a report: "We believe we have a responsibility to democratize investing. We've done a great job, and the role of ETFs in the world is transforming investing. And we're only at the beginning of that," Fink said. BlackRock applied for a spot bitcoin ETF on June 15, which appeared to spur a rally in cryptocurrencies and a flurry of similar filings from other asset managers. The initial filing for the iShares Bitcoin Trust did not include a management fee.

[...] Fink had previously been critical of crypto, saying in 2017 that the popularity of digital currencies was do in large part to money laundering. However, interest from clients and the high cost of transactions motivated BlackRock to take a closer look at entering the space, Fink said. He also added that crypto can serve a diversification role in investor portfolios. "It has a differentiating value versus other asset classes, but more importantly, because it's so international it's going to transcend any one currency," Fink said.

It was the court case the entire crypto industry was waiting for -- the showdown between the Securities and Exchange Commission and Ripple, an early digital assets firm behind the popular XRP token. From a report: The SEC alleged that sales of XRP constituted offering unregistered securities, while Ripple defended its $25 billion market, chiding the SEC's lack of clear guidance. On Thursday, a federal judge agreed partly in favor of both parties, with Ripple -- and the broader crypto industry -- appearing the early victor. The existential question for the U.S. crypto sector has been whether the thousands of tokens, from Bitcoin and Ether to Dogecoin and Pepecoin, are securities -- a financial term for an investment contract, which would require registration with the SEC. Crypto firms have argued that working with the agency is impossible under the current rules, while the SEC has accused nearly every token, with the clear exception of Bitcoin, as operating illegally.

Ripple became an important trial balloon for the debate. In 2020, the SEC charged the company -- founded in 2012 with the promise of disrupting the global payments network through its proprietary token, XRP -- and two of its executives with raising over $1.3 billion through an unregistered digital asset securities offering. Unlike other subjects of SEC lawsuits, Ripple challenged the case, which has been litigated for the past three years in the Southern District of New York. The proceedings have enraptured the crypto industry, especially as the SEC has aggressively pursued other exchanges and projects for allegedly offering unregistered securities. A decision that found XRP was not a security could buoy other firms and weaken the SEC's torrent of lawsuits against the industry, while a total victory for the SEC would have proved disastrous and likely climbed its way to the Supreme Court.