Monat: September 2024

• US judge dismissed a class-action lawsuit against Atomic Wallet due to no jurisdiction.
• The court ruled that there was insufficient evidence and that there was no deliberate Colorado targeting.
• Plaintiffs have 21 days to justify claims against shareholder Ilia Brusov.

In a recent legal victory for Atomic Wallet, a US federal judge has dismissed a class-action lawsuit against the Estonian-based crypto firm and its key figures, citing lack of jurisdiction.

The lawsuit was filed in 2023 by a group of users after Atomic Wallet suffered a $100 million hack earlier in June.

The allegations against Atomic Wallet

According to the plaintiffs, Atomic Wallet had made its app available for download in Colorado and advertised on platforms like X (formerly Twitter), which, they argued, should have established jurisdiction.

One of the plaintiffs, Graham Dickinson, a Colorado resident, claimed he had frequently communicated with Atomic Wallet’s customer service team from his home in the state.

Insufficient evidence

Judge Brimmer dismissed the plaintiffs’ argument, noting that because Atomic Wallet’s products are digital, it was unlikely the company deliberately targeted the Colorado market.

“The nature of the products at issue here — software applications — makes it even less likely that Atomic Wallet deliberately exploited the Colorado market,” Brimmer wrote in his ruling.

The Colorado District Court Judge Philip Brimmer also ruled that there was insufficient evidence to show that Atomic Wallet had significant contact with the state of Colorado, thus denying the court’s jurisdiction over the company, its CEO Konstantin Gladyshev, shareholder Pavel Sokolov, and Evercode Infinite, the software development firm responsible for the wallet’s technology.

However, while the case against most of the defendants was dismissed, the judge granted the plaintiffs an additional 21 days to explain why the claims against Ilia Brusov, a shareholder and founder of Evercode Infinite, should not be dismissed.

The judge’s ruling marks a crucial step in favour of the crypto wallet provider amid ongoing legal challenges in the aftermath of the hack.

This legal victory provides temporary relief to Atomic Wallet as it continues to navigate the fallout from the massive security breach.

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• Privado ID’s partnership with Telefonica Tech is aimed at accelerating adoption of privacy-focused and compliant digital identities for users in the European Union.
• The collaboration comes as the EU prepares for elDAS2, a key regulation on digital identity.

Telefonica Tech, the digital business arm of Spanish telecom giant Telefónica Group, is collaborating with Privado ID to advance privacy technology and adoption of digital identity across the European Union.

Privado ID, formerly Polygon ID, will leverage TrustOS, a managed blockchain service by Telefónica Tech to bolster its verifiable credential offering, the two firms said in a press release.

“We are delighted to integrate Privado ID technology with our TrustOS platform, advancing the adoption of digital identity solutions that ensure strict compliance with eIDAS2 requirements,” José Luis Núñez, global head of blockchain and web3 at Telefónica Tech, said.

Eyeing EU’s digital ID market

The strategic alliance comes as the European Union prepares for the European Digital Identity Regulation, aka elDAS2. The regulation provides for the implementation of guidelines mandating EU countries to provide a Digital ID Wallet to citizens.

eIDAS2 seeks a standardized framework that will enable EU citizens, residents and citizens to benefit from electronic identification. It also means the adoption of compliant identity solutions, a market Telefónica Tech and Privado ID are eyeing with this partnership.

“Empowering large companies to reliably integrate innovative technologies, such as our advanced zero-knowledge proof-based digital identity platform, is key to widespread adoption of self-sovereign identity,” David Schwartz, chief executive officer of Privado ID, said.

Targeted use cases include accreditations, digital national IDs, e-signature solutions, and privacy-preserving loyalty programs among others.

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• TRON, Tether, and TRM Labs launch T3 FCU to combat illicit USDT transactions.
• T3 FCU has frozen $12M in fraudulent USDT and identified 11 suspects.
• Despite Circle halting USDC minting, TRON minted $19B in USDT this year.

TRON, stablecoin issuer Tether, and blockchain forensic firm TRM Labs have announced a groundbreaking partnership aimed at combating illicit transactions involving USDT on the TRON blockchain.

This strategic alliance has led to the creation of the T3 Financial Crime Unit (FCU), a cutting-edge initiative designed to disrupt and dismantle criminal networks exploiting the TRON network for illegal activities.

#TRON, @Tether_to, and @trmlabs today announced we have joined forces to establish the T3 Financial Crime Unit, a first-of-its-kind initiative aimed at facilitating public-private collaboration to combat illicit activity associated with the use of USDT on the TRON blockchain.… pic.twitter.com/156pMChPra

— TRON DAO (@trondao) September 10, 2024

T3 Financial Crime Unit (FCU)

The T3 Financial Crime Unit (FCU) formation is a response to the increasing prevalence of criminal activities on the TRON network, including scams and fraud.

TRON, known for its expansive ecosystem and high transaction volumes, has become a key player in the stablecoin market. With over 240 million users and 8.4 billion transactions, TRON’s low transaction fees and stability have attracted a significant amount of legitimate activity.

However, these same features have also drawn the attention of criminals, including terrorists and money launderers. The network’s role in facilitating illicit transactions is underscored by the recent report from TRM Labs indicating that USDT, the stablecoin issued by Tether, was involved in over $19 billion worth of illicit funds in 2023, with TRON accounting for 45% of these transactions.

By leveraging real-time data and advanced analytics, the T3 FCU aims to track and address the flow of illicit USDT transactions. Its efforts have already made a tangible impact, freezing over $12 million worth of USDT linked to fraudulent schemes.

In collaboration with global law enforcement agencies from the UK, US, and Australia, the T3 FCU has also identified 11 culprits, with more expected as investigations progress.

Circle halts minting USDC on the TRON blockchain

In a related development, Circle, the issuer of USDC, in February decided to halt minting USDC on the TRON blockchain, citing risk management concerns amidst growing regulatory scrutiny.

However, despite this, TRON continues to play a leading role in the stablecoin market. In August 2024, Tether minted an additional $1 billion in USDT on the blockchain, bringing the total USDT minted for the year to $33 billion, with TRON accounting for $19 billion of this figure.

The launch of the T3 Financial Crime Unit marks a proactive step in addressing the challenges of illicit activities within the blockchain ecosystem, reinforcing TRON’s commitment to a secure and transparent digital financial environment.

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• PayPal and Venmo integrate ENS to simplify crypto transactions with .eth names.
• PayPal has been expanding its web3 efforts and enhancing crypto services since 2020.
• However, PayPal’s stablecoin, PYUSD, has seen a significant market cap drop, mainly on Solana’s network.

PayPal and Venmo have introduced support for Ethereum Name Service (ENS) domain names. This new feature, initially available to US users, allows for streamlined cryptocurrency transactions using easily recognizable ENS names instead of complex wallet addresses.

The move simplifies crypto payments, aligning with PayPal’s broader push into web3 and its expanding crypto offerings, including the PYUSD stablecoin.

🚀 We’re thrilled to announce that @ensdomains is now supported on @PayPal & @Venmo!

This new feature brings the power of ENS to millions, making crypto transfers easier and more secure than ever—starting in the USA.🌐 pic.twitter.com/9hsrhRqEAp

— ens.eth (@ensdomains) September 10, 2024

Simplifying crypto transactions for PayPal and Venmo users

The integration of Ethereum Name Service (ENS) into PayPal and Venmo marks a significant step toward improving the user experience within the crypto space.

Traditionally, sending cryptocurrencies has required users to input long, complex alphanumeric wallet addresses, creating friction and increasing the risk of errors.

ENS simplifies this process by allowing users to link their wallet addresses to easily readable “.eth” domain names. With this feature, users can now send and receive payments by simply entering an ENS name, making cryptocurrency transactions more intuitive and user-friendly.

Khori Whittaker, Executive Director of ENS Labs, expressed excitement about the partnership, stating that they are “excited to bring ENS’ naming capabilities directly into the hands of millions of users through Venmo, PayPal Mobile, and PayPal Web.”

This integration aims to streamline wallet address management and reduce the risks associated with incorrect payments.

ENS, which has been operational since 2017, has registered more than 4 million domain names, showing the growing demand for user-friendly solutions in the web3 ecosystem.

PayPal’s ongoing web3 push

PayPal has been actively expanding its presence in the web3 space since 2020 when it first allowed users to buy, hold, and sell cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. This service was initially made possible through a partnership with Paxos Trust Company, a regulated provider of cryptocurrency services.

Venmo followed suit in 2021, offering its users similar features.

In addition to the ENS integration, PayPal launched its own stablecoin, PayPal USD (PYUSD), in collaboration with Paxos in August 2023 initially on Ethereum before later launching it on Solana in May 2024.

PYUSD is backed by US dollar deposits and short-term US Treasuries, ensuring a 1:1 ratio with the US dollar. It is issued as an ERC-20 token on the Ethereum blockchain and has been integrated with the Solana blockchain, expanding its functionality across networks.

PYUSD market cap decline

Despite PYUSD’s initial success, with its market cap surpassing $1 billion on August 24, the stablecoin has faced recent challenges.

As of early September, PYUSD’s market cap had dropped by 17%, with the majority of the decline occurring on Solana. The stablecoin’s Solana deployment saw a 21.5% decrease in market cap, dropping to $507.5 million, while its Ethereum deployment remained more stable, only falling 3% to $351.8 million.

This decline comes amid PayPal’s broader efforts to establish PYUSD as a trusted stablecoin in the market.

Nonetheless, PayPal and Venmo’s ENS integration demonstrates the companies’ commitment to enhancing the user experience and making cryptocurrency transactions more accessible to a wider audience, particularly as digital assets continue to gain mainstream adoption.

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• Paxos integrates with Arbitrum to expand institutional adoption of on-chain assets.
• The partnership enhances real-world asset tokenization using Arbitrum’s low-cost network.
• Paxos focuses on stablecoin growth post-SEC inquiry, driving long-term digital asset use.

Stablecoin issuer Paxos has announced its integration with Arbitrum, Ethereum’s leading Layer 2 scaling solution. The integration marks Paxos’ first foray into a Layer 2 network, signifying a significant step toward facilitating institutional adoption of on-chain assets.

According to a press release issued by Arbitrum and Paxos, the collaboration aims to bring real-world asset tokenization to the Arbitrum ecosystem, leveraging its high-speed, low-cost infrastructure to enhance the utility of digital assets for enterprises.

Paxos tapping into Arbitrum’s DeFi ecosystem

By integrating with Arbitrum, Paxos taps into Ethereum’s deep liquidity, enabling faster transactions and reduced costs, which are crucial for institutions seeking to adopt blockchain technology.

Arbitrum, which launched in 2021, has quickly grown to become one of the most robust ecosystems in decentralized finance (DeFi), boasting over 520,000 active addresses and nearly 700 decentralized applications.

In addition to offering Paxos access to Arbitrum’s ecosystem, this integration will also allow Paxos to expand its reach within the Ethereum ecosystem, enhancing the accessibility of digital assets for both retail and institutional users.

Leveraging the stablecoin growth

Paxos’ entry into Arbitrum comes at a time when stablecoins growth is poised to accelerate, following the conclusion of an SEC investigation into the company’s Binance-branded stablecoin, BUSD.

With the regulatory hurdles behind it, Paxos is now focused on driving the integration of real-world assets onto the blockchain.

Luke Xiao, Fintech Partnership Lead at Arbitrum, highlighted the transformative impact of Paxos’ tokenization platform on the DeFi ecosystem. Walter Hessert, Paxos’ Head of Strategy, echoed these sentiments, stating that the partnership would drive long-term adoption of digital assets.

As Paxos and Arbitrum work together to bring real-world assets on-chain, this collaboration is set to reshape institutional engagement with blockchain technology and fuel the next wave of innovation in digital finance.

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