Market Watch | Bitcoin | $13,059 | 7 day: +13.6% | | Ethereum | $416 | 7 day: +10% | | All crypto | $398b | 7 day: +9.3% | | Bitcoin dominance | 60.9% | 7 day: +2.2% | Prices as of 4 p.m. EDT
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Regarding the relationship between OKEx, police, OKCoin, and Changpeng Zhao. China's OKEx claims to process billions of dollars worth of daily transactions and several trillion dollars in volume to date. Earlier this month, its co-founder Mingxing "Star" Xu was detained by police. Recent updates: - On Tuesday, the troubled OKEx exchange claimed that peer-to-peer trading had resumed in CNY-, INR-, and VND-denominated fiat pairs.
- However, withdrawals from the exchange are still halted. (Only existing assets may be traded within the exchange, but not withdrawn.)
- See our prior edition of Inside Cryptocurrency regarding OKEx's allegedly temporary seizure of billions of dollars worth of its customers' assets.
Historical context: - Nikkei Asia reports that this is at least the second incident between the police and Xu.
- Xu was detained by the police in September 2018 over a dispute with investors who suffered considerable losses on Xu's previous exchange, OKCoin.
- OKCoin hired multiple employees from Chinese technology giants Alibaba and Baidu.
- OKCoin investors complained that on Sept. 5, 2018, when prices of bitcoin and other cryptocurrencies crashed, the OKCoin platform went offline, resulting in severe losses.
Changpeng Zhao: - Binance CEO Changpeng Zhao worked at OKCoin between June 2014 and February 2015 as its Chief Technology Officer.
- In August 2014, Zhao launched OKCoin's futures trading platform.
- Within six months, OKCoin shared news of Zhao's "resignation" on Reddit, clarifying that "Zhao has not officially resigned, he has accepted a verbal agreement," and that the company "found no need to make a public statement."
- Zhao subsequently founded Binance and has sold billions of dollars worth of Binance Coin (BNB) under his original promise of using corporate operating profits to buy back BNB and reward investors, all while claiming that BNB was not a security.
- Binance's offices change location frequently. Its CEO Zhao refuses to locate himself and his company's headquarters. He also refuses to enter the U.S.
OKCoin's transformation into OKEx P2P: - In the beginning, OKCoin was a standalone exchange focused on Chinese customers.
- On Oct. 30, 2017, OKCoin ceased standalone operations and fully merged into OKEx's exchange.
- OKCoin formed part of OKEx's peer-to-peer (P2P) exchange.
- OKCoin's remnant brand converted into a "blockchain solution provider" consultancy.
Mingxin Xu's first police detainment: - According to Beijing-based Chinese media group Caixin, in 2018, police detained Xu in Shanghai.
- Xu was facing investor backlash from losses based on OKEx's platform errors.
- A class of investors demanded compensation for the financial damages they incurred as a result of OKEx's exchange errors.
- Among many complaints, investors claimed that they were unfairly washed out of leverage on Sept. 5, 2018, when cryptocurrency prices crashed. The exchange platform malfunctioned that day, resulting in personal losses.
- OKEx admitted to forcing some liquidations on July 31, 2018, as described in its retelling of the events.
Writer's note: The connections between OKCoin, Binance, BNB, Changpeng Zhao, OKEx, and China could fill volumes. I regret the lack of staff availability to attend to this topic, which deserves deeper consideration.
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More on Paypal's upcoming listing of bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). - Yesterday, Paypal (NASDAQ:PYPL) had rallied as much as 6% on the news. Subsequently, shares have retraced all but 1% of that gain, as of publication time.
- Bitcoin, however, has not retraced its gains and is still trading over $1,000 higher.
- Paypal's Venmo app will not add the four cryptocurrencies until next year.
- Last year, PayPal pulled out of Facebook's Libra Association and its fiat-backed stablecoin project.
- PayPal is working with central banks' initiatives regarding central bank digital currencies (CBDCs).
Bloomberg 
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 Joint Letter, Signed by Counsel to both SEC and Kik Kik (KIN) plans to settle with the SEC and pay a $5m fine, concluding a multi-year legal battle regarding its $100m unregistered ICO. - A proposed judgment for injunctive and monetary relief suggests that Kik, the company behind a $100m initial coin offering (ICO) for its KIN, will pay a $5m penalty to the SEC. The proposal awaits federal District Court Judge Alvin K. Hellerstein's approval, requiring Kik to give the SEC 45-day notice on any transactions related to its Kin token treasury.
- Last month, Judge Hellerstein of the Southern District of New York ruled that Kik's token distribution event was indeed a securities sale after passing the standard Howey Test for determining securities characteristics.
- Kik's legal counsel claimed that the SEC provided insufficient evidence to support their claims.
- In a motion for summary judgment filed at the District Court for the Southern District of New York, the SEC said that Kik failed to produce a solid reason for not registering its token sale with the SEC.
- On Jun. 4, 2017, the SEC filed a lawsuit against Kik Interactive Inc. for conducting an unregistered ICO of Kin token, which traded at half the value that public investors paid during the offering.
- The SEC also alleged that Kik lost money on its primary product, an online messaging app, for years before turning its focus toward the ICO.
- The SEC alleges that Kik marketed KIN tokens as investment opportunities, misleading various U.S-based investors that demand would raise Kin token's price.
- Kik proposed incorporating KIN tokens on its messaging platform and creating a "unique" KIN transaction and reward service, which never gained meaningful traction relative to the size of its ICO.
Kik's Discontent with the Result: - Eileen Lyon, Chief Compliance Officer and General Counsel of Kik Interactive, said that the SEC’s facts as summarized in a Wells response were "alarmingly inaccurate" during an interview.
- Kik authorities claimed that they had properly filed a Form D for the 2017 presale, exempting it from registering with the SEC.
- Kik Interactive founder and CEO Ted Livingston said that Kin token acted as a currency, not "an unregistered security," according to a Wall Street Journal report.
- During an Unchained podcast, Livingston said he spent $5m on a crowdfunding initiative at defendcrypto.org to fund its fight against the SEC. The Canadian entrepreneur also blogged about the topic.
SEC
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Quick Hits: - The European Commission opposed a petition lodged with the European Union Parliament by a consortium of Onecoin victims to establish a compensation fund.The commission could not administer such a fund, noting that the scam occurred primarily in China and other areas not under EU jurisdiction. The Commission kept a door ajar regarding non-civil matters, saying that the EU might be able to assist victims of violent crime.
- The marketing strategy of swapping cash reserves for bitcoin continues to reward public companies. U.K.-based fintech company Mode Global Holdings (MODE.L) announced plans to convert 10% of its cash reserves into bitcoin. Following the meme playbook that we have covered here at Inside Cryptocurrency for months, the market cap of MODE.L immediately rallied 10%, paying for that bitcoin purchase within one trading day.
- Chargebee's virtual summit gathers the biggest market disruptors from Apple, Slack, Drift, Zendesk and the likes to empower SaaS businesses. Join the summit for free.*
*This is a sponsored post.
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 |  | Written and curated by wide-eyed bitcoin watcher since $1, Aaron Wise. Streaming headline junkie, Associated Press fanboy, eye-strained news terminal watcher, 2017 founder of Cryptocurrency Newsfeed. Temporarily based in Florida while awaiting the construction of cryptopia. |  | | Editor | Edited by Eduardo Garcia in New York. Eduardo is writing an illustrated book about climate change that will be published by Ten Speed Press, an imprint of Penguin Random House. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade. | |
