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New York Attorney General Letitia James on Thursday announced a settlement with CoinEx, a Hong Kong-based virtual currency trading platform the state sued earlier this year for failing to register.

As part of the agreement, CoinEx must refund nearly 5,000 New York investors a total of $1.2 million and pay more than $600,000 in penalties. The company is banned from offering securities and commodities in New York and prohibited from making its platform available in the state.

“Unregistered crypto platforms pose a risk to investors, consumers, and the broader economy,” James said in a statement. “Today’s agreement should serve as a warning to crypto companies that there are hefty consequences for ignoring New York’s laws. My office will continue to crack down on crypto companies that brazenly disregard the law, mislead investors, and put New Yorkers at risk.”

New York’s crypto crackdown 

James has escalated her office’s crackdown on the crypto industry this year and last month introduced proposed legislation that could force companies to refund customers who are victims of fraud. She has also sued KuCoin, along with former Celsius CEO Alex Mashinsky.

New York state has one of the toughest regulatory regimes for crypto companies in the U.S. with its BitLicense that’s overseen by the state’s Department of Financial Services.

James renewed her call on Thursday for New Yorkers “affected by deceptive conduct in virtual assets” to report issues to state authorities. 

“Attorney General James also encourages workers in the cryptocurrency industry who may have witnessed misconduct or fraud to file an online whistleblower complaint with her office,” her office said. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Billionaire investor Mark Cuban argued that the Securities and Exchange Commission’s approach to crypto leaves entrepreneurs and startups on their own without clear guidance.

Cuban largely denounced the convoluted rules for startups to follow, especially those in web3. He suggested the SEC and Congress create a basic registration system for tokens and exchanges that can enable startups and industry giants alike — all while protecting investors. 

“When I and others ask for bright line guidance and oppose “regulation via litigation,” the businesses I see that are thrown under the bus by the SEC and Gary Gensler are the dorm room start ups that are driven by sweat equity,” Cuban wrote on Twitter.

“It’s time for Congress to respond again and modify the exemptions available to this technology so that registration is obvious and the path for exchanges are doable in a way that protects investors and enables the industry to grow. They are not mutually exclusive,” Cuban added.

The tech entrepeneur argued that the SEC shouldn’t be making judgement calls on whether certain technologies are valid.

Former SEC chief responds to Mark Cuban

Cuban was debating the issue with John Reed Stark, former Chief of the SEC Office of Internet Enforcement. Stark claimed the argument that there is a lack of regulatory clarity is irrelevant, citing comments made by Judge Amy Jackson in the case. He also argued that litigation and enforcement is how securities regulation works.

“SEC registration is difficult to say the least but tough financial regulation makes for a safer/more trustworthy marketplace. The crypto verse has just operated in an unregulated space for too long and likes it that way,” said Stark.

However, he did agree with Cuban on the barriers to entry for startups. “I’m with you on the barriers to entry for entrepreneurs, especially relating to onerous, burdensome and unreasonable regulation,” he said.

Cuban invested in numerous high-profile crypto projects, such as the multichain wallet Blocto and the NFT utility project AlchemyNFT. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Xai, a gaming-focused permissionless Layer 3 blockchain, is set to launch on Arbitrum later this year, hosting Ex Populus games. 

Built on the Arbitrum Orbit technology stack — a platform for launching new chains in the Arbitrum ecosystem — Xai aims to address the specific scalability requirements of web3 games to become a “decentralized gaming console,” according to a statement.

The Xai Foundation will lead the development of Xai with support from Arbitrum developer Offchain Labs and web3 games developer Ex Populus to transition the technology into the Arbitrum ecosystem.

Xai is the first Layer 3 to collaborate directly on infrastructure, marketing and product support with Offchain Labs. Ex Populus will be the first contributor to Xai and intends to migrate its gaming franchises to the Layer 3 blockchain once it goes live. Previously built on Solana, Ex Populus also plans to migrate to Arbitrum before ultimately deploying its games on Xai.

“We are excited to announce that Offchain Labs will be working with the Xai Foundation and Ex Populus as they transition their backend technology into the Arbitrum ecosystem,” Offchain Labs chief strategy officer A.J. Warner said in the statement. “We have been working closely with the Ex Populus team for nearly a year and eagerly await the migration to the Arbitrum ecosystem. The launch of Xai will enable its gaming ecosystem to live on an optimized, dedicated chain while benefiting from links to the vibrant Arbitrum ecosystem. I’m excited for the upcoming launch of the gaming franchises and gaming-focused Layer 3.”

Upcoming game releases

The Ex Populus team has a background at gaming companies such as Pixar, Ubisoft and Activision Blizzard. It has two games currently in development — high-frequency trading card and battle-oriented experience Final Form and online multiplayer PvP game LAMOverse, both of which will launch on Xai later this year. 

Xai also plans to bring existing Ex Populus NFT collections like Mike Tyson’s Iron Pigeons and Decentralized Autonomous GigaUnits to the Arbitrum ecosystem, making them available to play in Final Form upon its launch.

“Our decision to partner with the Xai Foundation was simple. The Foundation’s decision to leverage Arbitrum Orbit was a clear indication that the ecosystem understood scaling as a requirement for gaming in web3,” said Ex Populus co-founder Soban Saqib. “Having curated technology built to the needs of our games was critical, and with the direct support of the Offchain Labs team, we are confident that our games will run seamlessly on Arbitrum Orbit and provide our players with the type of gaming experience they’ve come to love and expect.”

Over time, Xai plans to introduce additional features for gaming developers, including increased smart contract size support, account abstraction allowing wallets to handle complex tasks automatically, and other functionalities that appeal to the gaming community.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Lens Protocol, a decentralized social media platform, has introduced Lens Improvement Proposals (LIPs) to promote open governance.

The initiative draws inspiration from similar strategies used in blockchain ecosystems, such as Ethereum Improvement Proposals (EIPs).

LIPs provide a mechanism for community developers and users to contribute to the development and evolution of Lens Protocol. This decentralized model invites community members to submit suggestions, feature enhancements, bug fixes, and updates via Lens Protocol’s GitHub repository.

Focus on community feedback 

In a deviation from the typical approach of decentralized autonomous organizations (DAOs), the Lens governance system evaluates a proposal’s popularity based on community feedback instead of using a token-based on-chain voting system.

This method separates Lens from other Web3 projects that typically rely on DAO tokens for decision-making.

So far, three initial proposals have been introduced under the new model to be published on its GitHub repository. This repository for LIPs will also house all open standards utilized by Lens Protocol, divided into specific folders for each type of standard, such as the Lens Open Algorithm Standards.

The first proposal, LIP-0, establishes a governance model emphasizing transparency. The second proposal, LIP-1, suggests the creation of open standards for algorithms to foster user choice and enable the integration of third-party algorithms and machine learning services. The third proposal, LIP-2, would standardize metadata to improve Lens’s interoperability with other projects. 

Launched on Polygon in May 2022, there are over 110,000 social media profiles and hundreds of applications on Lens.

Earlier this month, Lens Protocol announced a $15 million funding round led by IDEO CoLab Ventures. The team is also working on a blockchain scaling solution called Momoka to store social media transaction data off-chain while verifying them on-chain.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Coinbase said Thursday that it has partnered with Bitkey, the self-custody bitcoin wallet app from Jack Dorsey’s Block, in a move that will allow customers to easily purchase bitcoin while maintaining control of their private keys. 

Bitkey users can buy, sell and transfer bitcoin via Coinbase Pay on their mobile app or hardware wallet through the new partnership. The platform is still in beta testing, but a public launch is planned later this year.

“Customers participating in the global beta program will see a game-changing feature that allows you to effortlessly move your bitcoin from centralized exchanges to the secure Bitkey self-custody wallet,” Coinbase said in a statement. 

Coinbase self-custody 

“When Bitkey moves into its wider public launch later this year, customers will also be able to seamlessly buy bitcoin and initiate the transfer of their bitcoin bought on Coinbase to their self-custody Bitkey wallet, all within the Bitkey wallet using Coinbase Pay,” Coinbase continued. 

The feature will be available to joint Bitkey and Coinbase customers in countries including the U.S., Canada, UK, Brazil and Australia. Transparent pricing will allow customers to “understand the true cost of their bitcoin purchase.”

“Partners play a key role in bringing self-custody to a wider group of people around the world, and we are incredibly proud to have partnered with leading companies like Coinbase to make self-custody both secure and easy to use,” Bitkey business lead Lindsey Grossman said in the statement. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Amy Wu, who once served as the head of FTX’s venture arm, has taken on a new role at Menlo Ventures.

Axios first reported the hire Thursday morning. The outlet said that Wu will work in New York focusing on consumer-centric startups. She said on Twitter that she’d lead investments in consumer and gaming.

“Hit me up on DMs if you’re building in consumer and gaming (web 2 or web3!),” she wrote. 

Wu’s previous experience before Menlo

Wu, who previously worked as a partner at VC firm Lightspeed, took on the FTX Ventures role in January 2022, when the now-failed crypto exchange launched a $2 billion startup investment fund. She resigned from FTX Ventures as the exchange entered bankruptcy last November, as The Information previously reported. 

Wu spoke about her FTX Ventures experience in an interview with Axios, saying that “it was really difficult; I was there for a short period of time — it was 10 months and it felt like 10 years. I found out about what happened on Twitter, along with most of the employees.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.