Dubai’s crypto regulator cracks down on unlicensed firms

Authorities in the US state of Massachusetts continue targeting unlawful cryptocurrency market practices, with a local court fining crypto financial services firm CLS Global.A federal court in Boston on April 2 sentenced CLS Global on criminal charges related to fraudulent manipulation of crypto trading volume, according to an announcement from the Massachusetts US Attorney’s Office.In addition to a $428,059 fine, the court prohibited CLS Global from offering services in the US for a probation period of three years.CLS Global, a crypto market maker registered in the United Arab Emirates, in January pleaded guilty to one count of conspiracy to commit market manipulation and one count of wire fraud.CLS agreed to manipulate the FBI’s “trap token” NexFundAIThe charges against CLS Global followed an undercover law enforcement operation involving NexFundAI, a token created by the FBI as part of a sting operation in May 2024.CLS Global was among at least three firms that took the FBI’s bait and agreed to provide “market maker services” for NexFundAI, including a fraudulent scheme to attract investors to purchase the token.In October 2024, the Securities and Exchange Commission announced fraud charges against CLS and its employee, Andrey Zhorzhes. The US securities regulator also filed complaints against two other NexFundAI manipulators, Hong Kong-linked ZM Quant Investment and Russia-linked Gotbit Consulting.CLS Global’s profileAccording to CLS Global CEO Filipp Veselov, the company was founded in 2017 to fill in a “huge gap in the market for high-quality market-making solutions and trading consulting.”Prior to CLS, Veselov worked at the Russian cryptocurrency exchange platform Latoken, which is advertised as a “global digital asset exchange” and has about 370,000 followers on X.The CLS team also includes chief revenue officer Pavel Singaevskii, who previously served as sales manager at Stex, a crypto platform that reportedly ceased operations without warning in 2023.Source: CLS GlobalAccording to CLS Global’s X page, the platform continues operating and has more than 110,000 followers at the time of publication.How much wash trading is in crypto?Wash trading is an illegal practice involving artificially inflating trading volume by repeatedly buying and selling the same asset, generating a misleading perception of demand.According to a January 2025 report by the US blockchain analytics firm Chainalysis, the crypto market has at least $2.6 billion in estimated wash traded volumes, or just about 2% of total daily crypto trading volumes, as reported by CoinGecko.Estimated wash trade volume in crypto. Source: ChainalysisRelated: Russian Gotbit founder strikes $23M plea deal with US prosecutorsSome studies indicate that wash trading makes up a bigger share of the crypto market.In 2022, the US National Bureau of Economic Research reported that illegal wash trading may account for as much as 70% of average trading volumes on unregulated exchanges.Magazine: Financial nihilism in crypto is over — It’s time to dream big again

US crypto exchange Coinbase has filed with the US Commodity Futures Trading Commission (CFTC) to launch futures contracts for Ripple’s XRP token.“We’re excited to announce that Coinbase Derivatives has filed with the CFTC to self-certify XRP futures — bringing a regulated, capital-efficient way to gain exposure to one of the most liquid digital assets,” stated Coinbase Institutional on April 3. The firm added that it anticipates the contract going live on April 21.According to the certification filing, the XRP (XRP) futures contract will be a monthly cash-settled and margined contract trading under the symbol XRL.The contract tracks XRP’s price and is settled in US dollars. Each contract represents 10,000 XRP, currently worth about $20,000 at $2 per token.Contracts can be traded for the current month and two months ahead, and trading will be paused as a safety measure if spot XRP prices move more than 10% in an hour. “The exchange has spoken with FCMs (Futures Commission Merchants) and market participants who support the decision to launch a XRP contract,” the firm stated. Coinbase is not the first to launch XRP futures in the United States. In March, Chicago-based crypto exchange Bitnomial announced the launch of the “first-ever CFTC-regulated XRP futures in the US.” XRP futures trading is available on many of the world’s leading centralized crypto exchanges, such as Binance, OKX, Bybit and BitMEX. Funding rates remain negativeIn late March, Cointelegraph reported that XRP derivatives’ funding rates had flipped negative as investor sentiment turned bearish. Related: XRP funding rate flips negative — Will smart traders flip long or short?Funding rates are periodic payments between traders in perpetual futures markets that help keep the futures price aligned with the spot price. Positive funding rates mean that long traders (buyers) pay short traders, while negative funding rates mean short traders (sellers) pay long traders. When funding rates go negative, it means short traders are willing to pay a premium to maintain their positions, indicating strong conviction from bearish derivatives traders. XRP funding rates remained negative on major derivatives exchanges as of April 4, according to CoinGlass. XRP OI-weighted funding rates. Source: CoinGlassMagazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set

European Union regulators are reportedly mulling a $1 billion fine against Elon Musk’s X, taking into account revenue from his other ventures, including Tesla and SpaceX, according to The New York Times.EU regulators allege that X has violated the Digital Services Act and will use a section of the act to calculate a fine based on revenue that includes other companies Musk controls, according to an April 3 report by the newspaper, which cited four people with knowledge of the plan.Under the Digital Services Act, which came into law in October 2022 to police social media companies and “prevent illegal and harmful activities online,” companies can be fined up to 6% of global revenue for violations.A spokesman for the European Commission, the bloc’s executive branch, declined to comment on this case to The New York Times but did say it would “continue to enforce our laws fairly and without discrimination toward all companies operating in the EU.”In a statement, X’s Global Government Affairs team said that if the reports about the EU’s plans are accurate, it “represents an unprecedented act of political censorship and an attack on free speech.”“X has gone above and beyond to comply with the EU’s Digital Services Act, and we will use every option at our disposal to defend our business, keep our users safe, and protect freedom of speech in Europe,” X’s global government affairs team said.Source: Global Government AffairsAlong with the fine, the EU regulators could reportedly demand product changes at X, with the full scope of any penalties to be announced in the coming months. Still, a settlement could be reached if the social media platform agrees to changes that satisfy regulators, according to the Times. One of the officials who spoke to the Times also said that X is facing a second investigation alleging the platform’s approach to policing user-generated content has made it a hub of illegal hate speech and disinformation, which could result in more penalties.X EU investigation ongoing since 2023The EU investigation began in 2023. A preliminary ruling in July 2024 found X had violated the Digital Services Act by refusing to provide data to outside researchers, provide adequate transparency about advertisers, or verify the authenticity of users who have a verified account.Related: Musk says he found ‘magic money computers’ printing money ‘out of thin air’X responded to the ruling with hundreds of points of dispute, and Musk said at the time he was offered a deal, alleging that EU regulators told him if he secretly suppressed certain content, X would escape fines. Thierry Breton, the former EU commissioner for internal market, said in a July 12 X post in 2024 that there was no secret deal and that X’s team had asked for the “Commission to explain the process for settlement and to clarify our concerns,” and its response was in line with “established regulatory procedures.” Musk replied he was looking “forward to a very public battle in court so that the people of Europe can know the truth.”Source: Thierry BretonMagazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set