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US Senators Demand SEC Halt Crypto ETP Approvals Due to Disclosure Concerns

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US Senators Demand SEC Halt Crypto ETP Approvals Due to Disclosure Concerns

The Securities and Exchange Commission (SEC) is facing
pressure from Democratic senators to halt the approval of new cryptocurrency
exchange-traded products (ETPs), citing concerns over risks to retail
investors.

According to a letter written to the regulator on
March 11, Senators Jack Reed and Laphonza Butler emphasize the dangers posed by
inadequate disclosures by brokers and insufficient liquidity in major
cryptocurrencies.

The senators mentioned: “We write to urge the
Securities and Exchange Commission (SEC) to take steps to protect investors
following its recent approval of the listing and trading of certain spot
Bitcoin exchange-traded products (ETPs).”

“The SEC’s approvals have provided a green light
for Wall Street to sell volatile cryptocurrency investments to ordinary
Americans through their brokerage and retirement accounts.”

Senators Reed and Butler highlighted findings from a
survey by FINRA revealing that 70% of brokers’ communications with retail
investors violated fair disclosure rules.

Specifically, the legislators expressed alarm over
brokers falsely equating cryptocurrency with cash and providing misleading
explanations of cryptocurrency risks. Such deficiencies raise concerns about
incomplete and deceptive information regarding Bitcoin ETPs.

Risk Factors

The senators argue that labeling spot Bitcoin ETFs as such obscures important characteristics,
potentially misleading retail investors. They stressed the need for investors
to understand the differences between ETPs and traditional funds.

Additionally, Reed and Butler expressed skepticism
about the integrity of cryptocurrencies , particularly highlighting Bitcoin’s
vulnerabilities and susceptibility to fraudulent schemes. They warned of the risks retail investors could face
from ETPs linked to cryptocurrencies, especially those prone to price
manipulation.

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In January, the SEC approved 11 spot Bitcoin ETFs.
This approval happened after years of anticipation and rejections, signaling a
significant shift in how investors can access and engage with cryptocurrencies
on traditional financial platforms.

The approval of spot Bitcoin ETFs simplifies retail
investors’ access to cryptocurrencies, enabling them to trade crypto through
their brokerage accounts. This eliminates the need for separate crypto exchanges
and mitigates risks associated with direct holdings, such as security breaches
and fraud.

The Securities and Exchange Commission (SEC) is facing
pressure from Democratic senators to halt the approval of new cryptocurrency
exchange-traded products (ETPs), citing concerns over risks to retail
investors.

According to a letter written to the regulator on
March 11, Senators Jack Reed and Laphonza Butler emphasize the dangers posed by
inadequate disclosures by brokers and insufficient liquidity in major
cryptocurrencies.

The senators mentioned: “We write to urge the
Securities and Exchange Commission (SEC) to take steps to protect investors
following its recent approval of the listing and trading of certain spot
Bitcoin exchange-traded products (ETPs).”

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“The SEC’s approvals have provided a green light
for Wall Street to sell volatile cryptocurrency investments to ordinary
Americans through their brokerage and retirement accounts.”

Senators Reed and Butler highlighted findings from a
survey by FINRA revealing that 70% of brokers’ communications with retail
investors violated fair disclosure rules.

Specifically, the legislators expressed alarm over
brokers falsely equating cryptocurrency with cash and providing misleading
explanations of cryptocurrency risks. Such deficiencies raise concerns about
incomplete and deceptive information regarding Bitcoin ETPs.

Advertisement

Risk Factors

The senators argue that labeling spot Bitcoin ETFs as such obscures important characteristics,
potentially misleading retail investors. They stressed the need for investors
to understand the differences between ETPs and traditional funds.

Additionally, Reed and Butler expressed skepticism
about the integrity of cryptocurrencies , particularly highlighting Bitcoin’s
vulnerabilities and susceptibility to fraudulent schemes. They warned of the risks retail investors could face
from ETPs linked to cryptocurrencies, especially those prone to price
manipulation.

In January, the SEC approved 11 spot Bitcoin ETFs.
This approval happened after years of anticipation and rejections, signaling a
significant shift in how investors can access and engage with cryptocurrencies
on traditional financial platforms.

The approval of spot Bitcoin ETFs simplifies retail
investors’ access to cryptocurrencies, enabling them to trade crypto through
their brokerage accounts. This eliminates the need for separate crypto exchanges
and mitigates risks associated with direct holdings, such as security breaches
and fraud.

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Capitol Connections: Rep. Scot Matayoshi on banning cryptocurrency kiosks, cell phones in schools

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Capitol Connections: Rep. Scot Matayoshi on banning cryptocurrency kiosks, cell phones in schools

This post is part of our Capitol Connections series, where Annalisa Burgos sits down with state lawmakers to discuss their priorities for the legislative session and issues affecting their districts. Watch the full interview above and click here for more Capitol Connections.

HONOLULU (HawaiiNewsNow) – State Representative Scot Matayoshi is proposing legislation to combat fraud and scams and restrict cryptocurrency ATM purchases after hearing multiple accounts of kupuna being victimized.

Matayoshi, D, who represents Kaneohe and Kailua and chairs the House Consumer Protection and Commerce Committee, said a relative told him about a friend who was defrauded out of hundreds of thousands of dollars through an online scam.

“I think every single person I’ve talked to has known a cousin, an auntie, a friend of an auntie or a friend of a mom or whatnot that has been defrauded or at least has experienced someone trying to defraud them of money,” Matayoshi said.

Bank teller freeze authority

One bill would allow bank tellers to freeze transactions if they suspect fraud is occurring. Matayoshi said bank tellers serve as the first line of defense because many seniors visit banks in person and have relationships with tellers.

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“If the bank teller believes that there’s a fraud, a fraudulent transaction happening, they can put a freeze on it and for a couple of days or however long they need in order for the person to honestly just snap out of it,” Matayoshi said.

He said victims typically realize they’ve been scammed within 24 to 48 hours, but by then the money is already gone and difficult to recover.

Cryptocurrency ATM restrictions

Matayoshi is also introducing legislation to prohibit cryptocurrency purchases through kiosks found inside grocery stores and convenience marts across the state, citing their frequent use in fraudulent transactions targeting seniors.

“These crypto kiosks, in my opinion, are mostly used for fraudulent transactions,” Matayoshi said. “The benefit to them doesn’t outweigh the massive fraud going on with these ATMs.”

The bill would still allow people to withdraw money from crypto ATMs if they already own cryptocurrency and want to convert it to cash.

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Store owners have reported seeing seniors at crypto kiosks with cash, talking on phones with someone guiding them through transactions. Matayoshi said scammers often instruct victims to use the machines after claiming their relatives are in danger and need bail money.

Deceptive mailer protections

Another bill targets deceptive mailers that appear to be from mortgage companies or government agencies but are actually third-party services charging excessive fees.

“I’ve been getting a lot of letters that purport to be my mortgage company, that purport to be my car company,” Matayoshi said. The bill would require large disclaimers stating the mailers are not from actual companies and make transactions voidable if proper disclosures aren’t included.

School cell phone ban

Matayoshi is also proposing a school-wide cell phone ban from “bell to bell” that would protect teachers and schools from liability when confiscating devices.

As a former seventh-grade science teacher in Nanakuli, Matayoshi said teachers currently avoid confiscating phones worth hundreds or thousands of dollars due to liability concerns.

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“If the cell phone broke, if another kid stole it out of my desk, if it got lost, then I would be held responsible for it,” Matayoshi said.

The bill includes exceptions for emergencies and educational use, and requires parents to pick up confiscated phones. Matayoshi said removing phones from classrooms could reduce bullying and allow students to interact without fear of being recorded.

Budget concerns

Matayoshi said his measure of success for the legislative session will be ensuring essential services like SNAP benefits and Medicaid are maintained despite tight budget constraints.

“Success for me at the end of session would be making sure that those core essential services are still being taken care of, that the government is still providing for people in need,” Matayoshi said.

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French police arrest six over crypto-related magistrate kidnapping

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French police arrest six over crypto-related magistrate kidnapping

French authorities have arrested six suspects, including a minor, after a magistrate and her mother were held captive last week for around 30 hours in a cryptocurrency ransom plot, prosecutors said on Sunday, February 8.

Four men and one woman were detained, three overnight and two on Sunday morning, Lyon prosecutor Thierry Dran told AFP. He later confirmed a minor had been arrested on Sunday afternoon.

The individuals were taken into custody following the discovery of the 35-year-old magistrate and her 67-year-old mother on Friday morning, found injured in a garage in the southeastern Drôme region. Two of those arrested overnight were detained as they attempted to take a bus to Spain, according to a source close to the case speaking on condition of anonymity.

Authorities continue to actively search for further suspects, a second source close to the case said, adding that the woman in custody is the partner of one of the four male suspects.

During a press conference Friday after the pair’s escape, prosecutor Dran said the magistrate’s partner – who was not home when the two victims were abducted overnight Wednesday to Thursday – has a leading position in a cryptocurrency start-up.

A massive police search involving 160 officers was launched after the magistrate’s partner had received a message and a photo of her from the kidnappers demanding a ransom to be paid in cryptocurrency.

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The captors threatened to mutilate the victims if the transfer was not made quickly, Dran told reporters, declining to specify the amount demanded. But the two women managed to free themselves and call for help without any ransom being paid, by banging on the garage door in Bourg-les-Valence.

“Alerted by the noise, a neighbour intervened. He was able to open the door and allow our two victims to escape,” Dran said.

Crypto-linked kidnappings

French authorities have been dealing with a string of kidnappings and extortion attempts targeting the families of wealthy individuals dealing in cryptocurrencies.

In January 2025, kidnappers seized French crypto boss David Balland and his partner. Balland co-founded a crypto firm called Ledger, valued at the time at more than $1 billion.

Balland’s kidnappers cut off his finger and demanded a hefty ransom. He was freed the next day, and his girlfriend was found tied up in the boot of a car outside Paris.

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In May, the father of a man who ran a Malta-based cryptocurrency company was kidnapped by four hooded men in Paris. The victim, whose finger was also severed by the kidnappers and for whom a ransom of several million euros was demanded, was released 58 hours later in a raid by the security forces.

Read more Subscribers only The rise and fall of a gang of crypto-ransom kidnappers

Le Monde with AFP

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Cryptocurrency and Charity: The Blockchain's Growing Role in Philanthropy

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Cryptocurrency and Charity: The Blockchain's Growing Role in Philanthropy
According to Kraken’s BTC to USD rate, Bitcoin alone is worth $2.09 trillion of that. Some leaders of nonprofits are now thinking about whether accepting cryptocurrency donations could help their organizations make charitable giving more open and easy to track.
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