UpGate

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  • Robinhood Rejects AMC’s Demand to Halt Stock Token Trading Amid Securities Law Dispute

    Robinhood Rejects AMC’s Demand to Halt Stock Token Trading Amid Securities Law Dispute

    Robinhood has publicly rejected AMC Entertainment’s demand to cease trading stock tokens that track AMC’s stock, escalating a dispute over securities laws and the nature of tokenized assets. Robinhood’s chief legal officer, Dan Gallagher, responded directly to AMC CEO Adam Aron’s public demand, stating, “Send your lawyers and we’ll educate them.” Robinhood CEO Vlad Tenev affirmed this stance, adding, “We stand behind Stock Tokens.”

    Adam Aron had accused Robinhood of marketing unregistered securities and undermining shareholder rights, demanding that Robinhood “voluntarily CEASE AND DECIST the trading of AMC stock tokens.” Aron also indicated that AMC’s legal counsel would explore options to force Robinhood to stop trading the tokens and that the company would raise its concerns with the Securities and Exchange Commission (SEC).

    Robinhood’s disclosures describe the tokens as debt securities issued by Robinhood Assets (Jersey) Limited. According to these disclosures, the tokens are not registered under U.S. securities laws and cannot be offered or sold within the United States or to U.S. persons. AMC’s core contention is that the tokens are being marketed in a way that misrepresents them as AMC stock and bypasses U.S. securities regulations.

    Legal experts suggest that AMC’s potential legal angles could involve claims of trademark misuse or a false association with AMC. However, they also note that Robinhood could counter these claims by clearly identifying the products as tracking tokens without AMC’s endorsement and limiting the use of AMC’s branding, potentially arguing for fair use. According to Miami crypto lawyer Russell Klein, if Robinhood provides clear disclaimers that the tokens are derivatives and not company shares, AMC may have limited recourse beyond legal threats and lobbying regulators. Klein also suggested that trademark law can permit the use of a company’s logo to identify it, and that traders are unlikely to believe they possess shareholder rights through these tokens.

    Daniel Lasko, general counsel at Arcus, questioned AMC’s ability to prevent such products, comparing the arrangement to an investment manager including a company’s stock in an ETF. Lasko argued that publicly traded companies have limited control over how their stocks are packaged into financial products and that tokenized stocks could potentially attract international investors, thereby promoting investment in U.S. capital markets.

    Tokenized stocks are blockchain-based assets designed to track or represent shares in publicly traded companies. This market segment saw significant activity, generating $15.1 billion in spot trading volume in the first quarter of 2026, according to CoinGecko. Robinhood first introduced tokenized stock trading for its European customers last summer. This move follows a previous instance where OpenAI objected to tokens bearing its name in July of the previous year, citing a lack of partnership or approval from Robinhood.

    The dispute between AMC and Robinhood highlights potential ambiguities in existing securities and trademark laws concerning novel blockchain-based financial products. The situation could also lead to increased regulatory scrutiny of such products by the SEC, as AMC has stated its intention to raise concerns with the commission. The ultimate legal outcome and the future regulatory treatment of tokenized stocks remain uncertain.

    Why This Matters

    The materials describe a narrow update: Robinhood, through its chief legal officer Dan Gallagher, publicly rejected AMC Entertainment’s demand to stop trading stock tokens that track AMC’s stock. Whether AMC will file a lawsuit against Robinhood.

    Broader Context

    Source materials place the factual news in this context: Robinhood has rejected AMC Entertainment’s demand to stop trading tokens tied to its stock, with the brokerage’s top lawyer challenging the theater chain to pursue its legal threats.

  • US Jobs Data Jolts Markets, BTC Pauses at $82K; Buying Strategy Returns

    US Jobs Data Jolts Markets, BTC Pauses at $82K; Buying Strategy Returns

    Bitcoin Stalls at $82K as Strong US Jobs Report Jolts Markets; Corporate Buyer Resumes Accumulation

    The cryptocurrency markets experienced another eventful week as August drew to a close, with Bitcoin (BTC) finishing the month in positive territory for the first time during a bear market, suggesting a significant shift in sentiment. However, Friday’s jobs report dramatically altered the landscape.

    Last Week’s Market Dynamics

    A week prior, Bitcoin briefly surpassed $81,000 on multiple occasions before being pushed back below $80,000. Most altcoins, however, posted substantial weekly gains. This rejection followed a hawkish stance from Fed Chair Kevin Warsh, which sent BTC down to just under $77,000 on Saturday morning. The cryptocurrency quickly rebounded, touching $79,000 on Sunday, only to fall again to $77,000 on Monday morning amidst escalating tensions between the US and Iran.

    Volatility and Breakout

    The primary cryptocurrency remained volatile in the subsequent days, trading within a narrow range between $76,400 and $79,000. Bitcoin tested the upper boundary on Wednesday morning, with bulls successfully defending it. A more significant upward movement occurred on Thursday.

    Bitcoin broke through its $79,000 resistance and surged past $80,000. In the early hours of Friday, it climbed to $82,400, its highest point since mid-May. While this level proved to be a ceiling, Bitcoin maintained a position above $81,000 until the release of a stronger-than-expected US jobs report.

    Jobs Report Impact and Weekly Winners

    The BTC price immediately dropped by $2,000, as the market anticipates the Federal Reserve will be more inclined to raise interest rates later this month. Despite the pullback, the weekly performance highlighted several clear winners. Zcash (ZEC) gained 20%, even surpassing $1,000 earlier today. Monero (XMR) was up 10%, and Uniswap (UNI) surged by nearly 40%.

    Cryptocurrency Market Overview Weekly, September 4.
    Source: QuantifyCrypto
    Market Cap: $2.775T | 24H Vol: $121B | BTC Dominance: 57.6%
    BTC: $79,270 (-0.35%) | ETH: $2,450 (-2.5%) | XRP: $1.39 (-1.5%)

    Corporate Buyer Resumes Bitcoin Purchases

    Monday began with significant news as the world’s largest corporate holder of Bitcoin resumed its purchases for the first time in over two months, acquiring 4,603 BTC for $370 million. This move comes as the company faces the challenge of buying back at higher prices after selling at lower levels.

    Gold’s August Reversal vs.

    Bitcoin’s Resilience

    Gold experienced a sharp decline, erasing all of its August gains. The precious metal had surged alongside BTC in mid-August, reaching $4,700 for the first time in months. However, it lost all its gains, even dipping below its starting price of $4,360 earlier this week. In contrast, Bitcoin remains up approximately 25% even after Friday’s correction.

    Expert Outlooks and Security Concerns

    Arthur Hayes, former CEO of BitMEX, advises investors to look beyond Fed statements and Kevin Warsh’s pronouncements, suggesting that the euro-yen exchange rate may be a more critical indicator for Bitcoin’s next move.

    Meanwhile, Trezor, the hardware wallet manufacturer, disclosed that a data breach involving its shipping partner, ShipMonk, is more extensive than initially reported. The number of affected US customers has risen to over 80,000, significantly higher than the initial estimate of 13,689.

    Bitcoin’s Historic August and Lingering Bear Market Doubts

    As previously noted, Bitcoin concluded August on an unexpectedly positive note, marking its first green August during a bear market. The asset closed the month with a nearly 25% surge, defying historical trends.

    Despite Bitcoin’s return above $80,000, Fidelity analysts remain cautious. They have pointed to historical patterns, suggesting that the bear market may not yet be over.

    This week’s analysis also includes chart reviews of Ethereum, Ripple, Cardano, Binance Coin, and Hyperliquid.

  • Ben Delo’s £4 Million Donation to Reform UK Subject to Regulatory Questions

    Ben Delo’s £4 Million Donation to Reform UK Subject to Regulatory Questions

    Ben Delo, a co-founder of the cryptocurrency exchange BitMEX, has made two cash donations totaling £4 million to the political party Reform UK. The payments, made on April 17 and April 30, bring Delo’s total contributions to the party this year to £8 million.

    These recent donations represent a significant portion of Reform UK’s fundraising, accounting for 75% of the party’s total donations in the quarter. According to Electoral Commission records, these were the two largest single gifts made to any British political party during that period. Reform UK’s total donations for the quarter reached £5.33 million, compared to Labour’s £3.59 million in the same timeframe.

    The donations were made in cash, following the UK’s ban on cryptocurrency political donations, which came into effect in March. This ban meant Reform UK, which had previously been a recipient of crypto donations, had to adjust its funding methods.

    Donor Background and Legal Issues

    Delo’s past legal issues have drawn attention to his donations. In 2022, he pleaded guilty to violating the Bank Secrecy Act in the United States. He was later pardoned by U.S. President Donald Trump in 2025, along with other BitMEX co-founders Arthur Hayes and Samuel Reed. Delo has publicly stated that he views the case as “a regulatory failing that isn’t even a crime in the UK.”

    Party Scrutiny and Funding Controversies

    The timing of Delo’s substantial donations coincides with wider scrutiny of Reform UK’s funding. Last Friday, two party officials, Dan Jukes and James Orr, stepped down following Channel 4 footage that appeared to show them arranging funding for party polling. Nigel Farage, the leader of Reform UK, has stated that the party has “taken no illegal money.”

    Further complicating the party’s financial landscape is a separate donation of £5 million from Christopher Harborne, a Thailand-based stakeholder in Tether. The Parliamentary Commissioner for Standards is currently considering whether Farage should have declared this personal gift.

    Regulatory Questions and Uncertainties

    There are ongoing uncertainties regarding the regulatory compliance of these donations. A key question is whether Ben Delo had been registered on the UK electoral register for the required 12 months to make donations exceeding £100,000 in a year, a rule implemented in March. The Electoral Commission has stated it is in touch with the Metropolitan Police regarding the funding allegations, though the police have not yet opened an inquiry.

    Reform UK has expressed confidence that it may not be required to return Delo’s £4 million donation. Farage has attributed the controversy surrounding the funding arrangements to “loose pub talk” by individuals not authorized to speak on behalf of the party.

    BitMEX, the exchange co-founded by Delo, is scheduled to close on September 23, following an announcement by its owner, HDR Global Trading, after a strategic review.

    Why This Matters

    Ben Delo’s recent large cash donations to Reform UK are significant but occur within a complex regulatory environment and amidst broader scrutiny of the party’s funding, with several uncertainties remaining.

    Broader Context

    Ben Delo is a BitMEX co-founder.

  • Crypto Price Watch: ETH, XRP, ADA, BNB, HYPE

    Crypto Price Watch: ETH, XRP, ADA, BNB, HYPE

    Crypto Price Analysis: A Look at Ethereum, Ripple, Cardano, Binance Coin, and Hyperliquid

    This week’s market analysis delves into the performance of five prominent cryptocurrencies: Ethereum, Ripple, Cardano, Binance Coin, and Hyperliquid.

    Ethereum (ETH)

    Ethereum experienced a flat week, with its price holding steady above the crucial $2,400 support level. However, trading volume has been on a downward trend since its initial rally, and volatility has significantly diminished compared to earlier periods. While consolidation is a natural phase, it also presents a window of opportunity for sellers to re-enter the market. Nevertheless, as long as the key support at $2,400 remains unchallenged, buyers are expected to maintain control. For the rally to persist, ETH must stay above this level. While buyers currently appear dominant, the path towards the $2,800 mark could prove more challenging than in recent weeks.

    Ripple (XRP)

    XRP also saw minimal movement this week, registering a modest 2% gain. The cryptocurrency has been trading within a sideways range, confined between $1.3 and the resistance at $1.6. This price band has historically capped XRP’s movements between February and May of this year. To regain upward momentum, XRP will need to decisively break out of this range, which would likely coincide with a return of trading volume and increased volatility. Based on current price action, buyers hold an advantage, but this could shift if they fail to overcome the $1.6 resistance. Looking ahead, the market exhibits some indecision following a strong price surge. While a continuation of this upward trend could signal an end to the bear market, it remains too early to confirm. This uncertainty may be contributing to buyer hesitation.

    Cardano (ADA)

    Cardano closed the week 5% higher, buoyed by strong buyer activity that pushed the price to retest the $0.23 resistance level. At the time of this report, this resistance remains intact but could face renewed pressure from further buying. For Cardano to solidify a bottom above $0.15, the price must break through its current resistance. Buyers were previously rebuffed at this level in August, but a renewed push in September could prove successful. Looking forward, Cardano appears poised for a significant rally once the $0.23 level transitions into key support. A successful breakout could easily propel ADA towards the $0.30 and $0.40 targets, provided buying volume increases.

    Binance Coin (BNB)

    Binance Coin maintained a position above the $690 support this week but struggled to make substantial gains beyond it, resulting in a mere 1% increase over the past seven days. Despite a decrease in momentum, BNB is nearing a higher high. A price exceeding $745 would confirm this development and likely fuel a continuation of its rally towards the $900 mark. The market appears to be taking a brief pause before momentum potentially returns. While current price action favors a continued rally, confirmation of a higher high is needed to bolster confidence.

    Hyperliquid (HYPE)

    Hyperliquid successfully broke above the $85 resistance this week, closing 4% higher and establishing a new price record. The key question now is whether this level will hold as support or if sellers will reclaim it as resistance. Should sellers regain control, buyers may retreat to the $76 support level to defend recent gains. However, HYPE has been on a sustained rally for weeks without significant pullbacks or corrections, suggesting that a correction is eventually due. Looking ahead, Hyperliquid could continue its upward trajectory towards the psychological $100 level, where sellers might mount a defense. For now, observing the price reaction at $85 in the coming days will be crucial.

  • ACQUA1, Liquid Mercury Subsidiary, Completes Initial MERC Exchange Offering and Burns Tokens

    ACQUA1, Liquid Mercury Subsidiary, Completes Initial MERC Exchange Offering and Burns Tokens

    ACQUA1, LLC, a subsidiary of Liquid Mercury, has completed the initial closing of its MERC exchange offering. This transaction involved verified accredited investors exchanging MERC tokens for non-voting Class B units of ACQUA1. Following the closing, ACQUA1 burned 563,230,000 MERC, removing it from circulation as stipulated by its operating agreement.

    ACQUA1 operates Liquid Mercury’s Lab Company program, licensing its technology to companies that primarily tokenize real-world assets in exchange for fees and minority equity stakes. Liquid Mercury provides the underlying infrastructure for professional crypto trading and digital asset marketplaces, with its MERC token serving as the access and platform layer across its Pro, OTC, and RWA platforms.

    The initial closing occurred on September 1, 2026, with investors exchanging MERC for Class B units of ACQUA1 at a rate of 10 MERC per unit. The subsequent burning of 563,230,000 MERC on September 2, 2026, fulfills the requirement to burn 100% of received MERC within five business days of each closing. The MERC contract does not have a native burn function; tokens are removed from circulation by transfer to a dead address.

    This offering was conducted under Rule 506(c) of Regulation D of the Securities Act of 1933, exempting it from registration requirements. Consequently, the Class B units and associated ACQUA1 tokens were offered exclusively to verified accredited investors, as defined by Rule 501(a) of Regulation D, and were governed by ACQUA1’s confidential private placement memorandum and subscription documents.

    ACQUA1 tokens are considered restricted securities, subject to transfer limitations within ACQUA1’s operating agreement. Investors should be aware that these tokens may remain illiquid indefinitely, and there is no guarantee that Rule 144 will be applicable for their transfer. As of the publication date, the outstanding supply of MERC, excluding tokens in the dead address, stands at 5,436,770,000.

    Statements concerning future revenues, valuations, portfolio performance, and subsequent closings are forward-looking and subject to inherent risks and uncertainties. Actual results could differ materially from those projected.

    Why This Matters

    This event signifies a structured approach by Liquid Mercury, through its subsidiary ACQUA1, to integrate real-world asset tokenization with specific tokenomic mechanisms. The exchange of MERC for ACQUA1 units and the subsequent burn of MERC tokens directly impact the token’s supply and reflect a controlled participation model for verified accredited investors within this specific program. The reliance on Regulation D and the restricted nature of ACQUA1 tokens highlight the private, regulated framework of this initiative.

    Broader Context

    Source materials place the announcement in this context: ACQUA1 operates Liquid Mercury’s Lab Company program, licensing Liquid Mercury technology to companies primarily tokenizing real-world assets and receiving fees plus a minority equity stake in return.

  • MEMONS Launches Integrated Digital Collectibles Platform

    MEMONS Launches Integrated Digital Collectibles Platform

    MEMONS has officially launched its digital collectibles platform, integrating capsule opening, collection management, and a marketplace to create a continuous user ecosystem. The platform, which went live on September 4th, 2026, in Los Angeles, California, allows users to obtain, collect, and trade digital cards of varying rarity.

    At its core, MEMONS offers a unified approach to digital collectibles. Users can acquire digital cards of different rarity levels through a ‘Capsule Opening’ feature. These cards can then be added to a personal collection, and subsequently traded with other users via the platform’s ‘Marketplace.’ This integration aims to foster an ongoing user experience, distinguishing MEMONS from traditional collectible services where engagement often ends with acquisition.

    The platform combines established concepts from the global collectibles market, such as collecting, scarcity, and trading, within a digital framework. This approach mirrors mechanics found in physical collectible card games, loot boxes, and gacha systems, adapted for a digital and Web3-native audience.

    MEMONS’ launch aligns with a broader trend in the Web3 space, where projects are increasingly expanding beyond token-centric and community-focused models. These evolving models often incorporate services that encourage active user participation, including IP integration, gaming, digital content, and marketplaces. MEMONS positions itself within this trend by aiming to become a scalable platform capable of connecting various IPs and Web3 projects.

    APEPE serves as MEMONS’ founding IP and core ecosystem partner, with the platform having been incubated within the APEPE ecosystem. This partnership represents the initial step in MEMONS’ strategy to integrate diverse IPs and Web3 communities.

    The MEMONS platform is accessible via its website: https://memons.io.

    Why This Matters

    The materials describe a narrow update: MEMONS, a digital collectibles platform, has launched. MEMONS connects Capsule Opening, Collection, and Marketplace functions within a single platform, unlike conventional collectible services that end once an item is acquired.

    Broader Context

    Source materials place the announcement in this context: MEMONS is a digital collectibles platform where users can obtain digital cards of various rarity levels by opening Capsules, collect them, and trade them with other users through the Marketplace.

  • AMC CEO Adam Aron Criticizes Robinhood’s Unregistered Stock Tokens

    AMC CEO Adam Aron Criticizes Robinhood’s Unregistered Stock Tokens

    AMC Entertainment CEO Adam Aron has publicly criticized Robinhood for issuing “Stock Tokens” that track AMC’s share price without the company’s involvement or approval. According to Adam Aron, AMC has no connection to these tokens, does not condone them, and is investigating their legality.

    Robinhood’s documentation states these tokens are debt securities offering economic exposure to a share price without conferring rights to the underlying security or the issuing company. The tokens are not registered under U.S. securities laws and are not offered to U.S. persons. However, the base prospectus for the tokens received approval from Liechtenstein’s Financial Market Authority.

    AMC intends to instruct outside securities counsel to investigate the legality of these offerings, as stated by Adam Aron. This action highlights concerns regarding the regulatory status of tokenized securities.

    Robinhood’s Stock Tokens are issued by Robinhood Assets (Jersey) Limited. The company’s issuer page indicates that the Jersey entity “is not regulated,” and that the consents it holds do not constitute supervision or endorsement. This structure raises questions about oversight and investor protection.

    This is not the first instance of Robinhood issuing tokens tracking public companies. Last year, the platform airdropped tokens tracking OpenAI and SpaceX to European users. In response to those offerings, OpenAI said it had not partnered with Robinhood and did not endorse the product. Similarly, Anthropic and OpenAI warned this year that unauthorized vehicles selling exposure to their shares could leave buyers with nothing.

    SEC Commissioner Hester Peirce has previously cautioned that blockchains do not transform the nature of the underlying asset, suggesting that regulatory frameworks for traditional securities may still apply. The current situation with AMC’s stock tokens underscores the ongoing tension between financial innovation and regulatory compliance.

    Robinhood’s program reportedly covers more than 190 companies and is further restricted in Canada, the U.K., and Switzerland. The disclosures use the term ‘U.S. persons’ as defined in Regulation S.

    The legality of Robinhood’s stock tokens remains uncertain. It is also unclear whether Robinhood will face regulatory action, and the extent to which investors understand the rights associated with these Stock Tokens is also a point of uncertainty. AMC’s investigation into the legality of the tokens is ongoing.

    Why This Matters

    The materials describe a narrow update: Adam Aron, CEO of AMC Entertainment, expressed strong disapproval of Robinhood’s issuance of ‘Stock Tokens’ that track AMC’s share price. The legality of Robinhood’s stock tokens.

    Broader Context

    Source materials place the factual news in this context: Robinhood’s program covers more than 190 companies.

  • CPUSDT Perpetual Contract Launches in Innovation Zone with 20x Leverage

    CPUSDT Perpetual Contract Launches in Innovation Zone with 20x Leverage

    Bybit Lists Cluster Protocol Perpetual Contract in Innovation Zone

    Cryptocurrency exchange Bybit has announced the listing of the CPUSDT Perpetual Contract, featuring the Cluster Protocol (CP) as the underlying asset and USDT as the settlement asset. The new contract is now available for trading in the platform’s Innovation Zone, offering users up to 20x leverage.

    The CPUSDT Perpetual Contract operates with a tick size of 0.00001 and a maximum leverage of 20x. The capped funding rate is set at 2.5%, with funding fees settled every four hours. Trading for the contract is available 24/7.

    The Innovation Zone designation signifies that the CPUSDT contract will incur a higher trading fee compared to other contracts on the Bybit platform. Further details regarding trading fees in the Innovation Zone can be found on Bybit’s help center.

    The official website for Cluster Protocol is https://www.clusterprotocol.ai/, and its official X account can be accessed at https://x.com/openprotocolfnd.

  • Binance to Distribute WDC and NVDA Cash Dividends via bStocks

    Binance to Distribute WDC and NVDA Cash Dividends via bStocks

    Tokenized Securities to Distribute Dividends via Multiplier Adjustment

    Binance, through its affiliate BTech Holdings NVDA Limited, will distribute dividends to holders of its tokenized securities, known as bStocks. These bStocks, classified as Certificates representing certain Financial Instruments, represent an interest in underlying securities held by the issuer, rather than direct ownership of the underlying shares. Holders of bStocks do not possess direct ownership of shares in the listed companies.

    On-chain holders of WDCB and NVDAB will receive their respective bStock dividends through a multiplier adjustment.

    Users holding WDCB as of the record date snapshot on September 8, 2026, at 00:00 UTC, will be eligible for dividend distribution. Similarly, users holding NVDAB as of the record date snapshot on September 10, 2026, at 00:00 UTC, will qualify for the dividend payout. Trading of WDCB/USDT and NVDAB/USDT pairs will remain unaffected.

    Service Suspensions for WDCB and NVDAB

    WDCB:
    The token conversion service for 1:1 swaps between WDC stock and WDCB bStocks will be suspended on September 4, 2026, at 23:30 UTC. Subsequently, deposits and withdrawals of WDCB tokens will be suspended on September 7, 2026, at 23:30 UTC. Users are advised to allow ample time for their WDCB token deposits to be fully processed before this suspension.

    NVDAB:
    The token conversion service for 1:1 swaps between NVDA stock and NVDAB bStocks will be suspended on September 9, 2026, at 23:30 UTC. On the same date and time, deposits and withdrawals of NVDAB will also be suspended. Users should ensure sufficient processing time for their NVDAB deposits prior to this cutoff.

    Deposits, withdrawals, and the token conversion service for both WDCB and NVDAB will resume once the dividend distribution is complete. No further announcements will be made regarding the resumption of these services. Users may subscribe to recovery notifications where available.

    Dividends earned from assets held in accounts other than the Spot Account, including but not limited to Savings and Margin Accounts, will be credited to the Spot Account. Binance will manage all technical aspects for users participating in this event.

    Dividend reinvestment and distribution will be processed after the deduction of applicable withholding taxes. Users are encouraged to consult company announcements for further details. A dedicated FAQ is available for more information on bStocks dividend distribution.

    Binance Convert will pause the conversion of WDCB and all associated trading pairs on September 7, 2026, at 23:30 UTC. Similarly, Binance Convert will pause the conversion of NVDAB and all associated pairs on September 9, 2026, at 23:30 UTC.

    Information regarding Western Digital and NVIDIA dividend histories can be found through their respective company resources.

    Binance reserves the right to amend or cancel this announcement at any time and for any reason without prior notice. The information provided in connection with tokenized securities is not intended as an offer, solicitation, promotion, recommendation, or invitation to buy or sell securities. Tokenized securities are not offered, sold, distributed, made available, or accessible in the United States or to U.S. persons. These securities have not been registered under U.S. securities laws, and a public offering will not be conducted in the United States or other jurisdictions, with the exception of the ADGM. By accessing this product, users represent and warrant that they are not U.S. persons, are not located in the United States, are not acting for the benefit of any U.S. person, and will not transact in tokenized securities from within the United States.

  • Utah First State to Target VPNs in Age-Verification Push

    Utah First State to Target VPNs in Age-Verification Push

    Utah Leads the Charge in Digital Rights Battle with New VPN Age Verification Law

    Utah has broken new ground in the ongoing digital rights debate, becoming the first state to directly address the use of Virtual Private Networks (VPNs) in age verification processes. The new legislation mandates that websites hosting adult content must verify the ages of visitors, even when VPNs are employed to mask their location. This places the onus on website operators to determine if users are physically within the state.

    SB 73 Targets VPN Use for Age Verification

    Utah’s Senate Bill 73 (SB 73) requires commercial websites that “knowingly and intentionally publish or distribute material harmful to minors” to verify the ages of Utah-based visitors. This applies when such material constitutes more than one-third of their content, irrespective of whether visitors use VPNs or proxy servers to conceal their location.

    The bill explicitly states, “A commercial entity that operates a website that contains a substantial portion of material harmful to minors may not facilitate or encourage the use of a virtual private network, proxy server, or other means to circumvent age verification requirements.”

    Under the new law, individuals physically present in Utah are considered Utah users, regardless of their use of VPNs, proxy servers, or other location-disguising tools. VPNs function by routing internet traffic through remote servers, thereby obscuring the IP address that a website would typically identify.

    Restrictions on Bypassing Age Checks

    The legislation also prohibits website operators from assisting users in bypassing age verification measures. This includes providing instructions on how to access websites via VPNs or evade geographic restrictions.

    A tweet from Nym, a privacy company, highlighted a specific provision: “Utah’s SB 73 bans websites from publishing instructions on how to use a VPN to bypass age verification. Publishing information about how VPNs work is now illegal in Utah if it relates to age verification. The law restricts speech about a privacy tool. That is a First…”

    Penalties and Compliance

    The Division of Consumer Protection is empowered to impose administrative fines of up to $2,500 per violation. Courts can levy civil penalties of a similar amount, in addition to other potential remedies.

    The statute also mandates that verification providers must not retain identifying information after granting access. Operators who utilize verification methods that adhere to standards set by the division are considered compliant with the age-verification requirements.

    Privacy Advocates Raise Concerns

    Privacy company Nym has voiced concerns on X, arguing that SB 73’s prohibition on covered websites offering VPN instructions to circumvent age checks infringes upon speech related to privacy tools. “The law restricts speech about a privacy tool,” the company stated. “That is a First Amendment question the courts have not answered yet.”

    Global Trend of VPN Scrutiny

    SB 73 represents the latest move by regulators to scrutinize VPNs, both for enforcing platform bans and for preventing users from circumventing age verification.

    In September 2024, Brazilian authorities initiated investigations into users suspected of employing VPNs to bypass the country’s temporary ban on X, with potential fines reaching approximately $9,000 per day.

    In July 2025, demand for VPNs in the UK surged by over 6,000% following the implementation of age verification measures. Harry Halpin, CEO and co-founder of Nym, attributed this increase to the UK’s “ill-thought-out Online Safety Bill.” Nym, which operates a decentralized VPN service, observed a 12% rise in its NYM token value during this surge, a day after launching its iOS application.

    Earlier, in February, France considered restricting minors’ use of VPNs to bypass age controls but ultimately ruled out an outright ban.