The Week in Crypto: Oct. 29 – Nov. 4, 2018
Bitstamp acquired by European-based investment company
European based crypto-exchange Bitstamp has reportedly been acquired by Belgian-based investment company NXMH in an all-cash deal for nearly $400 million (though this has not been verified as NXMH has not disclosed terms of the deal). The deal represents a coup for CEO Nejc Kodric, as only 2 years ago Bitstamp sat at a $60 million valuation. Kodric explained the reason for deal relates to “the quality of the buyer, the quality of the offer and the fact that the industry is at a point where consolidation makes sense.” Kodric and the rest of the leadership team will stay on and maintain a minority ownership stake.
NXMH is a subsidiary of South Korean holding company NXC, which also owns the South Korean exchange Korbit. While the two exchanges will continue to operate independently, there will be a good deal of cooperation and Bitstamp will receive significant upgrades as a result of the capital inflow.
Bitcoin Trader pleads guilty to running unlicensed exchange
The US Department of Justice scored a win in its effort to crack down on unlicensed crypto exchanges after 21-year-old Jacob Burrell Campos pleaded guilty to operating an unlicensed money transmitting business. Burrell reportedly helped over 1000 people buy Bitcoin for fiat dollars. He would first buy coins himself on Coinbase then enter into direct transactions with customers. The service was advertised on Localbitcoins and came with a 5% transaction fee. However, Burrell ran the service on a no-questions-asked basis, which ultimately ran him afoul of a host of KYC/AML laws. He reportedly bought and sold millions worth of Bitcoin from 2015 to 2018, and also admitted to laundering money into Mexico with the help of a precious metals dealer. Burrell faces up to five years in prison and has agreed to an $800,000 fine.
SEC Annual Report details action against ICO issuers
The SEC included in its 2018 annual report a list of actions taken against ICO issuers while declaring itself to have “emerged as a global leader in addressing misconduct relating to digital assets and initial coin offerings.” The agency claims to have pursued statement-making cases in an effort to send a message to the industry as a whole that fraudulent offerings will not be tolerated. While the report did not list specific names of cases, it highlighted facts strikingly similar to its case against the founders of Centra Tech in a section devoted to touting its efforts to “keep pace with technological change.” As part of this initiative, the report notes the agency plans to step up efforts to police the crypto industry as it continues to grow.