The United States Securities and Exchange Commission (SEC) charging nonfungible token (NFT) project Stoner Cats sparked feedback from commissioners Hester Peirce and Mark Uyeda, arguing that the project’s activity constitutes fan crowdfunding, which they believe is common for artists.
On Sept. 13, the SEC charged Stoner Cats 2 LLC, the firm behind the animated series dubbed “Stoner Cats,” with conducting an unregistered crypto-securities offering using NFTs. Stoner Cats 2 LLC agreed to a cease-and-desist order and other imposed measures by the commission.
Making its case, the SEC argued that the NFTs were marketed by the company as having potential for secondary sales and implied that their value would rise. In addition, the SEC pointed out that the company will receive a 2.5% royalty on every secondary sale. The SEC highlighted that the company sold over 10,000 NFTs for $800 each, and the proceeds were used to fund the series. Furthermore, there were at least 10,000 secondary sales, worth over $20 million, according to the SEC.
— Hester Peirce (@HesterPeirce) September 13, 2023
Not everyone within the SEC agrees with the enforcement action. SEC commissioners Hester Peirce and Mark Uyeda published a dissenting statement, arguing that the activity could be considered fan crowdfunding. Pierce and Uyeda argued that this is “a common phenomenon in the world of artists, creators, and entertainers.”
They also noted that instead of the SEC’s approach of bringing actions against NFT projects, they should lay down clear rules. The commissioners wrote:
“Rather than arbitrarily bringing enforcement actions against NFT projects, we ought to lay out some clear guidelines for artists and other creators who want to experiment with NFTs as a way to support their creative efforts and build their fan communities.”
The commissioners also compared the Stoner Cats NFTs to collectibles sold by Star Wars in the 1970s. According to Pierce and Uyeda, toy company Kenner sold early bird certificates that are redeemable for future action figures and membership to the Star Wars fan club. The duo argued that based on the actions against Stoner Cats, the SEC should’ve “parachuted in” to save those buyers back in the 70s.
Apart from the SEC commissioners, members of the crypto community were also unhappy with the SEC’s actions. YouTuber Crypto Tea argued in a post that Stoner Cats raised money to make a show and delivered. The social influencer said that she bought the NFTs for fun and to support the show without expecting any profits.
An artist should always be able to say “buy my art, it will become the most expensive art in the Universe”.
To forbid an artist from making an ostentatious claim about the value of their own work would dull the world.
— toly (@aeyakovenko) September 14, 2023
Solana co-founder Anatoly Yakovenko also expressed his opinion about the topic on X (formerly Twitter). According to Yakovenko, artists should not be forbidden to make claims about the value of their work. Yakovenko believes that doing this would “dull the world.”
Almost 400,000 patients spend 24 hours or more in A&E, figures show
Twenty-four hours in A&E is now “no longer a documentary”, leading medics have warned, as figures show almost 400,000 patients spent a day or more in an emergency department in England last year.
The Royal College of Emergency Medicine (RCEM) said the very long waits are a “matter of national shame”.
Figures uncovered by the college and shared with the PA news agency show 399,908 people waited 24 hours or more in an emergency department in England in 2022-23.
The college warned there could be a similar situation this year, with Dr Adrian Boyle, its president, cautioning that patients are coming to avoidable harm as a result of long waits.
“We know that long stays in emergency departments are harmful,” Dr Boyle said.
“There is good scientific data that shows that once people spend more than about six hours, and they need to be admitted into hospital, actually their mortality starts to get worse.
“I think it should be a matter of national shame that we have these very long waits for admitted patients.”
He said people caught up in the long waits are “often elderly and vulnerable”.
Political parties urged to end overcrowding
The RCEM has made a number of calls to political parties in its general manifesto, including:
• To end overcrowding in emergency departments, including by ensuring there are enough hospital beds to prevent people being stuck in emergency departments when they need a bed on a ward.
• More funding for social care to prevent a system where people who no longer need hospital care can be discharged when ready.
• More emergency medicine staff to deliver “safe and sustainable care” and for more work to retain current staff.
• More data to be published on hospital performance.
• A call to “resource the NHS to ensure the emergency system can provide equitable care to all”.
Record number attend A&E
A record number of patients attended A&E in England in 2022-33, 25.3 million, up 4% from the previous year, according to figures released last week.
The data also shows 71% of people spent four hours or less in A&E in 2022-23.
The NHS recovery plan sets a target of March 2024 for 76% of patients attending A&E to be admitted, transferred or discharged within four hours, with further improvements expected the following year.
An NHS England spokesperson said: “This data relates to last year and winter, when services were facing record demand, industrial action and a twindemic of COVID and flu, but since we published our urgent and emergency care recovery plan in January we have seen significant improvements.
“Thanks to the hard work of NHS staff Category 2 ambulance response times are now an hour faster than in December, A&E four-hour performance is up from 69% to 73%, and the proportion of patients waiting 12 hours in A&E is down a sixth.
“We know there is more to do, which is why we set out our winter plans earlier than ever before this year, expanding care ‘traffic control’ centres, delivering additional ambulance hours and extra beds to boost capacity and reduce long waits for patients, and other initiatives like same day emergency care units and virtual wards which can mean patients are able to get the care they need without an unnecessary trip to an emergency department – this is better for them, and means A&E staff can continue to prioritise those with the most urgent clinical need.”
Hong Kong to list ‘suspicious’ crypto platforms in wake of JPEX scandal
One of Hong Kong’s principal financial regulators, the Securities and Futures Commission (SFC) has vowed to step up efforts to combat unregulated cryptocurrency trading platforms in its jurisdiction.
According to a Sept. 25 announcement, the SFC said it will publish a list of all licensed, deemed licensed, closing down and application-pending virtual asset trading platforms (VATPs) to better help members of the public identify potentially unregulated VATPs doing business in Hong Kong.
The SFC said it will also keep a dedicated list of “suspicious VATPs” which will be featured in an easily accessible and prominent part of the regulators’ website.
The new rules come immediately in the wake of the ongoing JPEX crypto exchange scandal, an affair which local media outlets are describing as one of the worst cases of financial fraud to ever hit the region. JPEX stands accused of promoting its services to Hong Kong residents despite not having applied for a license in the country.
Speaking at a Sept. 25 press briefing on the new rules and the JPEX scandal, Kit Wilson, the SFC’s director of enforcement explained that due to “evasive” behavior from stakeholders and unsatisfactory responses to requests for information, JPEX was placed on their alert list in July 2022.
Wilson shared that the SFC then launched a complex investigation involving multiple parties across a range of jurisdictions, which escalated in April 2023 after the organization received its first official investor complaint.
“In June 2023, an AMLO (Anti-Money Laundering Ordinance) came into full effect. At that time enforcement commenced a more formal fraud investigation. As a result of that investigation we issued a formal warning on Sept. 13 and referred the matter to the police.”
The financial fallout from JPEX is estimated to reached around $178 million at the time of publication, with local police havi received more than 2,200 complaints from affected users of the exchange.
A total of 11 people including crypto influencers, YouTubers, and employees of the allegedly fraudulent crypto exchange have been taken into custody for questioning.
In a statement, the SFC said the resulting fallout from JPEX “highlights the risks of dealing with unregulated VATPs and the need for proper regulation to maintain market confidence.”
The regulators added that it would be working with local police to establish a dedicated channel for citizens to share information on suspicious activity and potential legal breaches by VATPs, as well as better investigating the JPEX incident to help “bring the wrong-doers to justice.”
Deposit risk: What do crypto exchanges really do with your money?
JPEX scandal masterminds still at large as 11 suspects taken into custody: Report
The masterminds behind Hong Kong’s JPEX alleged crypto exchange scandal — referred to by some as the largest financial fraud to ever hit the city — have eluded authorities despite 11 people already being taken in for questioning in relation to the case.
According to a Sept. 23 report from the South China Morning Post, police have now received more than 2,265 complaints from victims of the exchange, with the total monetary value of the fallout estimated to be in the vicinity of $178 million (1.4 billion Hong Kong dollars).
The complaints appear to be related to difficulties withdrawing cryptocurrency from the platform. On Sept. 15, the JPEX exchange raised its withdrawal fees to 999 USDT.
— 梭教授说 (@hellosuoha) September 14, 2023
So far, the list of people reportedly taken into custody for questioning includes crypto influencer Joseph Lam Chok, who has made numerous attempts to publicly distance himself from the exchange.
Police have also arrested three employees of the JPEX Technical Support Company, along with two YouTubers, Chan Wing-yee and Chu Ka-fai — who have a combined following of more than 200,000 — in relation to the scandal.
Others sought or taken in for questioning include the company’s sole director Kwok Ho-lun, a restaurant director, and three celebrities who had reportedly promoted JPEX in some form in the pa.
Hong Kong’s authorities however said the ringleaders of the operation are still on the run. Police added that the investigation was continuing and further arrests were likely in the near future.
Local police have also reportedly enlisted the help of Interpol and other international enforcement agencies after it identified suspicious crypto transfers being made from the JPEX exchange. Police has also requested that local telecommunications providers block access to the exchange’s website.
During the Token2049 conference in Singapore on Sept. 13, the JPEX team allegedly abandoned its corporate booth after Hong Kong police arrested six employees on charges of fraud for operating an unlicensed crypto exchange.
The Platinum sponsor, JPEX, abandoned their booth at #Token2049 on the second day.
On a side note, their logo looks quite similar to FTX. Is that a sign? pic.twitter.com/KZw9o5vNgF
— J O Y (@joyxspacelatte) September 14, 2023
The JPEX scandal first appeared on the radar on Sept. 13 when Hong Kong’s financial regulator notified the public that it had received over 1,000 complaints about the unregistered crypto exchange platform, with claims of losses amounting to over $128 million (HK$1 billion).
The exchange later shuttered a number of its yield-bearing products, and ratcheted up its withdrawal fees to 999 USDT, while blaming its third-party market-makers for “maliciously” freezing liquidity.
At the time, it claimed that it had attempted to register with the relevant authorities and cited “unfair” treatment from the SFC.
In a Sept. 20 statement, the SFC revealed that JPEX had been operating without a license for virtual asset trading.
According to the official website, JPEX purports to be headquartered in Dubai and claims to be licensed for crypto trading activities in the United States, Canada and Australia. Founded in 2020, JPEX claimed to oversee some $2 billion in assets and said its goal was to be included in the world’s top five crypto exchanges.
Deposit risk: What do crypto exchanges really do with your money?
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