In a filing on March 22, 2023, the Securities and Exchange Commission charged TRON founder Justin Sun with fraud, along with three companies he owned: Tron Foundation, BitTorrent Foundation, and Rainberry Inc.
Merkle Science, the leading predictive Web3 risk and intelligence platform, has received SOC 2 Type 2 certification, validating its commitment to security and compliance in the corporate, government and fintech space. Security and compliance are important goals at Merkle Science. The SOC 2 Type 2 accreditation assures our customers and partners that our platform is secure, reliable and in line with industry standards. It reflects our commitment to operational transparency and accountability, as well as our commitment to protecting our customers' privacy. Sensiba San Filippo LLP, a Certified B Company, conducted the audit over a period of 8 months. Merkle Science is entrusted with the design and implementation of internal controls for all five trust services- Security, availability, processing integrity, confidentiality, and privacy as part of the certification.
In a continuous effort to improve the security of user funds in crypto exchanges, New York’s Chief Financial Regulator drafted guidance on Monday, January 23rd. The Guidance on Custodial Structures for Customer Protection in the Event of Insolvency (Guidance) stipulates that companies involved with crypto funds must separate users’ assets (crypto assets) from company funds - an issue underscored by FTX’s failures to do so which resulted in significant losses to clients.
On November 11th, 2022, FTX and its 130 subsidiary companies declared bankruptcy under Chapter 11 in the U.S. Bankruptcy Court. While the money involved in the fall of FTX is significant, the fallout has underscored the need to correct weak governance practices and poor financial reporting to ensure history doesn’t repeat itself. Due to these shortcomings, FTX and CEO Sam Bankman-Fried (SBF) have been accused of fraud, mismanagement, and other wrongdoings. Regulatory attention has also been drawn to FTX as a failure of this magnitude hasn't been seen since Enron in the early 2000s.
The ripple effects of FTX’s crash are already manifesting. Genesis, which filed for Chapter 11 bankruptcy on 19th January 2023, has an estimated liability of around $5.1 billion. It owes Gemini, its single largest creditor, nearly $769 million through its Gemini Earn program. BlockFi, a prominent crypto exchange, also filed for bankruptcy on November 28th, 2022. Its liabilities are estimated to be around $1 to $10 billion.
Regulators are intervening to ensure the proper functioning of the crypto companies in light of FTX’s contagion effect. The recent advisory is the latest crypto-related guidance released by the New York State Department of Financial Services (NYDFS), which saw the cryptocurrency market contract by around $1.3 trillion by the end of 2022.
The launch of a new set of guidelines comes at a time when regulators are once again calling out the lack of consumer protection in the cryptocurrency market and provides regulators additional powers to ensure consumer protection in case any company files for solvency moving forward.
Post the FTX fallout, crypto asset standards are under scrutiny by central banks, regulators, and international organizations. The U.S. Senators and members of the European Parliament are pressuring their respective organizations to regulate crypto under existing guidelines. This Guidance will further increase consumer protection as it addresses key fund management issues by crypto organizations. Due to the inherent cross-border nature, governance, management, and policy enforcement around crypto assets can be particularly difficult. Several virtual asset service providers – wallets, exchanges, and issuers – conduct their business from offshore jurisdictions, although they offer their services around the world. Without a unified global strategy, companies prefer tax or regulation-friendly jurisdictions and continue to serve customers in other locations.
On 26th October 2022, the Monetary Authority of Singapore (MAS) issued a consultation paper proposing a framework to regulate stablecoin issuers and intermediaries. To ensure a high degree of value stability in the market, the MAS has proposed to specifically regulate single-currency pegged stablecoins. The objective of the value stability mechanism is to maintain the price stability of stablecoins close to $1 U.S. dollar.
The Financial Stability Board (FSB) defines stablecoins as crypto-assets that aim to maintain a stable value relative to a specified asset (typically a unit of fiat currency or commodity), a pool or a basket of assets. The FSB is an international body that monitors and makes recommendations about the global financial system.
According to the official release published on October 24, 2022, the U.S. Department of Justice (DOJ) has charged 13 individuals, including members of the People’s Republic of China (PRC) security and intelligence apparatus and their agents for alleged efforts to unlawfully exert influence in the United States for the benefit of the government of the PRC.
Merkle Science is proud to announce that we are Service Organization Control (SOC) 2 Type 1 compliant. On May 4, 2022 Merkle Science successfully completed a SOC 2 Type 1 audit, which was conducted by Sensiba San Filippo LLP, a Certified B Corporation that specializes in accounting and business advisory services.
Singapore - 19 August 2022: Merkle Science, the predictive crypto risk and intelligence platform has today announced its partnership with Atato, a licensed digital asset custodian offering that provides corporates and institutions with multi-party computation (MPC) custodial solutions. This collaboration will empower Atato to deliver more innovative, secure, and compliant crypto custody solutions.
We are very pleased to announce that Merkle Science has closed an extension of over $19 million to its Series A round, bringing the total raised to over $24 million. Funding was provided by some of the industry’s top investors, who recognize that Web3-ready risk mitigation, compliance, and forensics solutions will play a fundamental role in the growth of the decentralized economy.
New York— August 9, 2022 — Merkle Science, the predictive crypto risk and intelligence platform, announced an extension of more than $19 million to its Series A funding round, bringing the total raised to over $24 million. BECO Capital, Susquehanna affiliate (Darrow Holdings), and K3 Ventures co-led the extension, with participation from new investors including Republic Capital, Summer Capital, 500 StartUps APAC and US, Aspen Digital, HashKey Capital, and Coinhako. They were joined by existing investors Kraken Ventures, Digital Currency Group (DCG), Kenetic, Uncorrelated Ventures, Fenbushi Capital, Lucy Gazmararian of Token Bay Capital, and Libertus Capital.
