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Three Arrows Capital seeks to increase claim against FTX to $1.5B

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The liquidators of Three Arrows Capital (3AC) are now pursuing claims against FTX as part of their ongoing efforts to recover assets for the bankrupt crypto hedge fund. According to recent filings, the liquidators allege that FTX played a significant role in 3AC’s financial collapse, and they are now seeking to recover funds from the exchange. The legal action comes amid a broader investigation into the events that led to 3AC’s liquidation, with the liquidators targeting entities that may have contributed to or enabled the hedge fund’s downfall.

3AC, once one of the largest and most influential crypto hedge funds, filed for bankruptcy in July 2022 after it suffered heavy losses during the market downturn. The fund’s failure sent shockwaves through the crypto industry, exposing vulnerabilities in the DeFi and trading sectors. FTX, which had been involved in lending funds to 3AC, is now facing scrutiny over its role in the collapse. The liquidators argue that FTX’s actions contributed to the fund’s insolvency, prompting the pursuit of claims against the exchange for potential damages.

The legal move highlights the growing number of interconnected bankruptcies and legal disputes within the crypto sector, following the collapse of high-profile entities like 3AC and FTX. FTX itself filed for bankruptcy in November 2022, with founder Sam Bankman-Fried facing charges related to the exchange’s alleged mismanagement and fraud. The investigation into 3AC’s collapse and its links to FTX could further complicate the ongoing legal proceedings for both parties, as creditors and regulators look for accountability in the wake of the massive failures.

As the liquidators continue their recovery efforts, the outcome of this legal action could have broader implications for the crypto industry, particularly for firms involved in high-risk lending and trading practices. With the collapse of 3AC and FTX serving as stark reminders of the need for better risk management and transparency, the legal battles surrounding their bankruptcies are likely to shape the future regulatory landscape of the cryptocurrency market.

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Binance tightens South African compliance rules for crypto transfers

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Binance is tightening compliance measures for crypto transactions in South Africa, announcing it will fully implement the country’s Travel Rule requirements beginning January 2025. The move aligns with regulations set by South Africa’s Financial Intelligence Centre (FIC) and reflects the exchange’s broader efforts to meet global anti-money laundering standards.

Under the new rules, Binance will require South African users to include verified personal information—such as names, addresses, and account details—when sending or receiving crypto between platforms. These changes are designed to increase transparency and traceability of digital asset transfers, making it harder for illicit actors to exploit decentralized networks.

Binance emphasized that users must complete know-your-customer (KYC) verification before transferring crypto to or from external wallets. Transfers to non-compliant platforms may be restricted or flagged, while internal transfers within Binance or to Travel Rule-compliant entities will remain unaffected.

The announcement follows South Africa’s decision in 2023 to designate crypto as a financial product, placing digital asset providers under the supervision of the FIC. The country has since taken steps to integrate crypto into its formal regulatory structure, including licensing requirements and mandatory reporting obligations.

With enforcement beginning in 2025, Binance urged users to familiarize themselves with the new procedures to avoid disruptions. The exchange also plans to provide additional guidance and tools to help users remain compliant as the deadline approaches.

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Ethereum bounces back as market dominance recovers from all-time low

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Ethereum has staged a notable recovery after recently experiencing its lowest market dominance since its early days. The turnaround comes as ETH surged nearly 4% in the past 24 hours, climbing back above the $3,100 mark and narrowing its underperformance gap relative to Bitcoin.

For much of 2024, Ethereum has trailed behind Bitcoin and a growing wave of altcoins, with its market share dropping below 15% — levels not seen since 2015. The slump was driven by investor focus on Bitcoin ETF momentum, lackluster institutional interest in ETH, and rising competition from layer-1 and layer-2 networks offering faster and cheaper alternatives.

Despite these challenges, Ethereum’s fundamentals remain strong. Data shows a healthy uptick in active addresses, transaction volumes, and total value locked in DeFi protocols built on Ethereum. Additionally, hopes remain high for the approval of a spot Ethereum ETF in the U.S., with analysts suggesting a potential turnaround in institutional flows if approved.

Traders are now watching whether this rebound signals a sustained trend reversal or just a temporary relief rally. With key upgrades and ecosystem developments still in the pipeline, Ethereum’s ability to regain dominance may hinge on reigniting both investor confidence and broader developer activity.

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SEC says it won’t re-file fraud case against Hex’s Richard Heart

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The U.S. Securities and Exchange Commission (SEC) has confirmed it will not pursue a retrial in its fraud case against HEX founder Richard Heart, effectively bringing an end to one of the agency’s high-profile crypto enforcement actions.

The decision follows a recent court ruling that dismissed several key allegations against Heart, including claims that he misled investors and violated securities laws through the promotion and sale of HEX, PulseChain, and PulseX tokens. While the SEC initially signaled it would consider further legal options, it has now opted to forgo additional litigation.

Heart, a controversial figure in the crypto world, had long denied the SEC’s accusations, framing the lawsuit as an overreach by regulators. The agency had alleged that Heart raised over $1 billion from investors while misrepresenting how funds would be used and failing to register the offerings.

With the SEC stepping back, the dismissal marks a rare instance in which the regulator has chosen not to continue a crypto-related fraud case, potentially signaling a reassessment of its approach amid growing legal pushback and mounting scrutiny over its enforcement tactics.

Although the case is now closed, legal analysts suggest the outcome could influence future regulatory efforts and may embolden other crypto founders facing similar challenges. Heart, meanwhile, has positioned the development as a vindication, reaffirming his stance that HEX and related projects were never in violation of U.S. securities laws.

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