UpGate

Tag: Regulation & Policy

  • Anthropic Adds Imperceptible Watermark to Claude AI Text

    Anthropic Adds Imperceptible Watermark to Claude AI Text

    Anthropic has begun embedding an imperceptible watermark into text generated by its newest Claude AI models, a development aimed at enhancing transparency and aligning with regulatory expectations.

    This feature, implemented for models launched in the European Union on August 2, 2026, is part of Anthropic’s adherence to the EU AI Act’s Code of Practice on transparency and is planned for global application. The watermark is integrated directly into the text, remaining invisible to users and without affecting the output’s meaning, quality, or readability. Anthropic states the watermark is designed to persist through copy-pasting and some editing. For files, an additional layer of signed metadata, adhering to the C2PA standard, is also applied.

    While Anthropic has not yet disclosed the specific methods used for creating or detecting the watermark, researchers speculate it employs a statistical signature, similar to Google’s SynthID Text technology. The effectiveness and reliability of Anthropic’s watermark are subject to ongoing evaluation, particularly pending the release of official detection tools and thresholds from Anthropic.

    Anthropic’s implementation follows previous scrutiny regarding its AI models’ data handling. In March, the company removed a hidden Claude Code tracker that used undisclosed Unicode markers to tag user activity, including location and proxy usage. This prior action may influence current privacy reactions to the watermark implementation.

    The watermark is described as a model-level and text-native feature, not an external tool. Researchers are actively exploring methods to circumvent or remove the watermark. Several open-source projects have emerged on platforms like GitHub, including “mikiane/claude-watermark-cleaner” (106 stars) and “guillaumemeyer/watermarks-remover” (4.6k stars), which aim to strip or obscure these watermarks. These efforts suggest that while the watermark is designed to be persistent, it may not be unbreakable, especially with significant editing.

    Anthropic acknowledges that heavy editing can remove the watermark and that the absence of a watermark does not definitively suggest that text was written by a human. The company is expected to release detection tools that may allow for the verification of the watermark’s presence. The exact technique Anthropic uses and the specific detection documentation remain uncertain until these tools are published.

    The implementation aligns with broader industry and regulatory trends. The EU AI Act’s Code of Practice aims to enhance transparency in AI systems. Additionally, the COPIED Act, a U.S. bill, advocates for standardized watermarking of AI content to facilitate origin tracing.

    The watermark is intended to reach all surfaces where Claude is available, including its chatbot interface, API, Claude Code, and through cloud partners such as AWS, Google Cloud, and Microsoft Foundry. The C2PA standard, used for file metadata, functions as a digital manifest detailing the origin and any subsequent modifications to a file.

    It is important to note that the watermark suggests Claude’s involvement in text generation but does not suggest that the entire text was solely produced by the AI. Anthropic has stated that the watermark is not a formal approval or order and that its presence or absence should not be solely relied upon for determining authorship.

    Broader Context

    Source materials place the factual news in this context: Anthropic signed the EU AI Act’s Code of Practice on transparency.

    Why This Matters

    Anthropic is implementing an imperceptible watermark in text generated by its Claude AI models. This development is part of Anthropic’s adherence to the EU AI Act’s Code of Practice on transparency, aiming to provide a traceable signal for AI-generated content.

  • Blockchain Association Urges Supreme Court Review of Fed’s Payment Access Authority

    Blockchain Association Urges Supreme Court Review of Fed’s Payment Access Authority

    The Blockchain Association has filed an amicus brief with the U.S. Supreme Court, urging the justices to review a case involving Custodia Bank and the Federal Reserve. The brief supports Custodia Bank’s petition and argues that the Federal Reserve should not possess the authority to deny payment system access to eligible state-chartered banks. The association contends that a recent lower court ruling in favor of the Fed could allow regulators to effectively exclude lawful businesses, particularly within the digital asset industry, from the financial system.

    Core Dispute Over Payment System Access

    The central issue involves Custodia Bank, a state-chartered bank based in Wyoming offering digital-asset services, which has been seeking a master account with the Federal Reserve. Such an account would grant direct access to the U.S. payments system. However, an appeals panel ruled in October that eligibility alone did not entitle Custodia to a master account. Custodia Bank subsequently requested a rehearing of the case by the full Tenth Circuit in December.

    Arguments Against Federal Reserve Authority

    The Blockchain Association argues that the Federal Reserve’s actions threaten the integrity of the dual banking system, where both state and federal authorities can charter banks. According to the association, if the lower court’s ruling stands, federal regulators could override state banking decisions by controlling access to essential financial infrastructure. The crypto trade group stated that this scenario provides federal regulators a “quiet way to cut lawful businesses out of the banking system.”

    Concerns Over Regulatory Overreach and Historical Parallels

    In their brief, the Blockchain Association also drew parallels to “Operation Choke Point 2.0.” They described this as a program from the prior administration that allegedly used “vague rules, excessive discretion, informal guidance, and aggressive enforcement actions to pressure banks away from serving digital asset clients” and engaging with digital assets. The association views Custodia’s fight as the latest phase of this alleged campaign.

    The Blockchain Association argues that the Federal Reserve’s decision ratifies what they perceive as the Fed’s “misuse of its payment services to further an impermissible policy goal—debanking the digital-asset industry.” They further claim that federal regulators, “based on their own discretionary whims, can intrude on state prerogatives and debank lawful businesses,” a question they deem of “exceptional importance with broad consequences for the national economy.”

    An amicus brief, meaning “friend of the court,” is a legal filing submitted by a party not directly involved in a case but who has a strong interest in the subject matter. These briefs provide additional arguments and context to help the court make its decision.

    Uncertainty and Next Steps

    Key uncertainties remain regarding the case. It is not yet determined whether the Supreme Court will agree to hear Custodia Bank’s petition. Furthermore, the extent of the Federal Reserve’s ultimate control over access to the U.S. payments system remains a subject of ongoing legal and regulatory debate.

    Why This Matters

    The Blockchain Association has filed a brief supporting Custodia Bank’s petition to the Supreme Court, raising questions about the Federal Reserve’s authority over payment system access for state-chartered banks. Whether the Supreme Court will agree to hear the case remains uncertain.

    Broader Context

    The Blockchain Association is urging the Supreme Court to take up Custodia Bank’s fight with the Federal Reserve.

  • Hawaii to Restrict Cash Deposits at Crypto ATMs

    Hawaii to Restrict Cash Deposits at Crypto ATMs

    Hawaii will prohibit cash deposits at cryptocurrency ATMs starting October 1st, following Governor Josh Green’s signing of Act 224 into law on July 9th. This new regulation aims to curb the use of crypto kiosks for illicit activities, driven by significant concerns over scams and financial losses.

    The law specifically makes it unlawful for operators to accept U.S. currency from customers in exchange for digital assets at these kiosks. However, it permits ATMs to facilitate the exchange of digital assets for U.S. currency or the exchange of one digital asset for another. This distinction aligns with the legislative intent to address vulnerabilities exploited in fraudulent schemes.

    Evidence cited in a committee report indicates the scale of the problem: investigations by the attorneys general of Washington, D.C., and Iowa found that over 93% of examined kiosk transactions were linked to scams. Further data from the FBI’s Internet Crime Complaint Center (IC3) highlights the impact on Hawaii residents. In 2025, the IC3 logged 92 kiosk-related complaints from Hawaii, resulting in adjusted losses of $3.85 million. The state also recorded 826 overall cryptocurrency complaints in 2025, valued at approximately $80 million.

    Hawaii’s banking commissioner, Dwight Young, told Hawaii News Now that the anonymity and traceability challenges associated with crypto ATMs make them attractive to criminals. Scammers often initiate contact through unsolicited calls, texts, or emails, falsely claiming compromised bank accounts or missed jury duty, and then persuade victims to transfer cryptocurrency to controlled wallet addresses. Staff observing kiosk usage reported that many users, particularly elders, appeared distressed.

    Approximately 57 crypto ATMs are currently operational across four of Hawaii’s islands, according to CoinATMRadar. The legislative action in Hawaii is part of a broader trend of state-level regulatory responses to cryptocurrency-related fraud. Lawmakers in Texas are considering a similar ban on crypto kiosks following scams that cost residents $57 million, and Delaware has advanced its own bill concerning these machines.

    The committee concluded that banning cash purchases at kiosks was appropriate, given that consumers have alternative methods for acquiring digital assets. This measure seeks to protect consumers by removing a key avenue for fraudulent transactions while allowing other forms of cryptocurrency exchange to continue.

    Why This Matters

    The materials describe a narrow update: Hawaii has enacted a law, Act 224, signed by Governor Josh Green on July 9th, which will make it illegal to operate a cryptocurrency ATM that accepts cash deposits from customers starting October 1st. The distinction in the law reflects what lawmakers were targeting, which was the use of kiosks in scams.

    Broader Context

    Source materials place the factual news in this context: Hawaii will make it unlawful to run a crypto kiosk that takes cash from customers starting October 1, under a measure Governor Josh Green signed on July 9 as Act 224.

  • Binance Launches bStocks for Tokenized Securities

    Binance Launches bStocks for Tokenized Securities

    Binance Launches Promotional Campaign for Tokenized Securities

    Binance is offering a special promotion on its tokenized securities, known as bStocks, allowing users to convert existing assets into bStocks at a fixed 1:1 rate with no fees. This offer is valid until August 26, 2026, at 23:59 UTC.

    How to Access and Utilize bStocks

    Users can access bStocks by selecting “Convert Now” from their deposit details. Once converted, these bStocks are available for 24/7 trading, withdrawal, or redemption for the underlying stock. The promotional campaign features a 1:1 conversion rate with zero fees. Daily per-user limits apply, and users are advised to check the Convert page for current restrictions.

    The tokenized securities offer full flexibility, enabling 24/7 trading on Binance and 1:1 redemption for the underlying stock without any fees.

    Currently supported bStocks include:

    • Tesla (TSLAon), available on ETH and BSC networks.
    • MicroStrategy (MSTRon), available on ETH and BSC networks.
    • Coinbase (COINon), available on ETH and BSC networks.
    • Circle (CRCLon), available on ETH and BSC networks.

    Important Notes on Tokenized Securities

    Deposited third-party tokenized securities can only be held or converted into bStocks and are not eligible for Spot trading. Binance reserves the right to modify or terminate the promotional campaign at any time.

    Understanding Binance bStocks Tokenized Securities

    Binance bStocks tokenized securities are classified as Certificates representing certain Financial Instruments, as per paragraph 92, Schedule 1 to the FSMR. It is crucial to understand that bStocks are not actual stocks or shares, and holding them does not grant direct ownership in the underlying listed company. Furthermore, bStocks do not imply any affiliation with the issuer of the underlying asset.

    These bStocks are offered through an Approved Prospectus in the ADGM (Abu Dhabi Global Market) and are not available in any other jurisdiction. No public offering is made outside of the ADGM. Tokenized securities are exclusively available to eligible users in permitted jurisdictions on a secondary market basis. Users are solely responsible for ensuring that accessing and trading tokenized securities is lawful within their jurisdiction. Binance disclaims any liability or obligation if access is sought from a prohibited or restricted jurisdiction. Binance may restrict, suspend, reject, cancel, or unwind access or transactions if it determines, at its sole discretion, that such actions may breach applicable law, product restrictions, eligibility criteria, sanctions requirements, or relevant offering documents.

    Tokenized securities can be held and transferred on-chain outside of the CSD (Central Securities Depository) environment. However, the transfer of tokenized securities back into the CSD environment is subject to specific conditions, and failure to meet these conditions may prevent trading, redemption, or other dealings within the CSD environment.

    The information provided in connection with tokenized securities is not intended as an offer, solicitation, promotion, recommendation, or invitation to buy or sell securities in any jurisdiction. Tokenized securities are not offered, sold, distributed, made available, or accessible in the United States or to, or for the account or benefit of, U.S. persons. These securities have not been registered under the U.S. Securities Act of 1933 or any U.S. state securities laws, and a public offering of bStocks will not be conducted in the United States or any other jurisdiction, with the exception of the ADGM. By accessing this product, users represent and warrant that they are not a U.S. person, are not located in the United States, are not acting for the account or benefit of any U.S. person, and will not access, purchase, sell, transfer, redeem, or otherwise transact in tokenized securities from within the United States.

  • SEC’s ‘Regulation Crypto’ Vote: A Procedural Step Toward Formalizing Digital Asset Rules

    SEC’s ‘Regulation Crypto’ Vote: A Procedural Step Toward Formalizing Digital Asset Rules

    The U.S. Securities and Exchange Commission (SEC) is set to vote on August 14, 2026, on whether to publish a proposal for public comment regarding crypto asset offerings. This procedural step, dubbed ‘Regulation Crypto,’ aims to establish a more formal regulatory framework for digital assets, potentially offering a clearer path for the industry as legislative efforts remain stalled.

    The vote itself is not to finalize a rule but to initiate a formal rulemaking process that would allow for public input. If commissioners approve publication, the proposal would be released for comment, after which the SEC would consider feedback before potentially bringing a final rule back to the commission. This contrasts with the SEC’s current approach, which has substantially relied on staff statements and policy guidance for governing crypto asset offerings.

    ‘Regulation Crypto’ Proposal Details

    ‘Regulation Crypto’ is expected to create a bespoke offering regime under the Securities Act for investment contracts involving crypto assets. A significant aspect of the proposal may address circumstances under which an asset initially qualifying as part of an investment contract might no longer be considered a security once the managerial efforts involved have been exhausted. This could provide issuers with greater clarity on compliance throughout a project’s lifecycle.

    Context: Legislative Stalemate and Agency Action

    This potential move by the SEC gains significance as legislative progress on crypto regulation has stalled. The Senate did not make a decision on the CLARITY Act before its August recess, with the next meeting scheduled for September. In this environment, the SEC’s formal rulemaking process is emerging as a primary avenue for defining crypto offerings under federal securities law, offering a clearer path for U.S. crypto policy while Congress deliberates broader legislation.

    TD Cowen analyst Jaret Seiberg noted that the proposal could be the first in a series of regulatory initiatives from the SEC, following the stalled legislative efforts. The SEC’s work also includes ongoing efforts with the Commodity Futures Trading Commission (CFTC) to develop a taxonomy for crypto assets and rules for tokenized securities.

    Market Snapshot and Uncertainties

    For those tracking specific assets like XRP, the immediate significance of the August 14 meeting is procedural. Commissioners will decide whether to publish a proposed framework for comment, not to adopt a final rule that day. XRP USD was trading just above key support at $1, with its price closing at approximately $1.00 on August 12, its lowest daily close since November 2024. This price action occurred against a backdrop of regulatory uncertainty.

    Several uncertainties remain regarding the ‘Regulation Crypto’ proposal. It is unclear whether the SEC commissioners will ultimately approve the publication of the proposal for public comment. Furthermore, the final details of the proposal, including the specific exemption for qualifying crypto projects and the circumstances under which SEC securities jurisdiction may no longer apply, will be subject to the rulemaking process and public feedback. The ultimate impact on crypto projects will depend on the final rule adopted.

    SEC Chairman Paul Atkins has previously emphasized crypto rulemaking as a top priority for the agency and has also called for congressional legislation to establish guardrails around U.S. crypto markets. The SEC’s rulemaking and potential congressional action can proceed on separate tracks, with the agency’s proposal focusing on the regulatory treatment of crypto-related investment contracts.

    Broader Context

    Source materials place the factual news in this context: The SEC is scheduled to vote on August 14, 2026, on whether to publish a proposal known as Regulation Crypto for public comment.

  • SEC may Propose Rules for Tokenized Stocks and Crypto Initiatives

    SEC may Propose Rules for Tokenized Stocks and Crypto Initiatives

    The U.S. Securities and Exchange Commission (SEC) is preparing to propose new rules for tokenized stocks and crypto initiatives in the coming days, potentially offering a regulatory framework for projects seeking to raise capital through token sales without full securities registration. Per Bloomberg, the SEC plans to hold an open meeting this Friday to unveil ‘Regulation Crypto,’ a framework designed for token sales. An accompanying ‘innovation exemption’ for tokenized stocks is also anticipated.

    This exemption could allow tokenized versions of traditional stocks, such as those from Apple, Tesla, and Nvidia, to trade on blockchains. Such trading might feature 24/7 availability, fractional ownership, and near-instant settlement. These tokens typically represent economic exposure but usually lack voting rights or dividend entitlements.

    The tokenized stock market has seen notable growth, with platforms like Robinhood Chain, Solana, and Base experiencing increased activity. Robinhood Chain, for example, reported a fivefold jump in Real World Asset (RWA) volume this summer. The New York Stock Exchange (NYSE) is also reportedly developing its own onchain settlement platform, signaling broader industry interest.

    Major financial entities are also participating in tokenization. BlackRock has launched tokenized funds on Solana and Ethereum, and Circle’s Arc has listed BlackRock, Visa, and Mastercard as validators. However, a significant portion of tokenized stock trading has reportedly been directed towards non-US users.

    The SEC’s forthcoming proposals aim to provide regulatory clarity, potentially filling a void left by stalled congressional action, as legislation like the CLARITY Act is not expected until at least September. Details regarding the ‘innovation exemption’ for tokenized stocks remain uncertain, as is the finalization timeline for the SEC’s proposals. It is important to note that the SEC has not formally approved tokenized stocks, nor are they fully regulated by the agency at this time, and Congress has not yet passed specific legislation.

    Tyler Warner’s analysis and opinions suggest that these proposals, if enacted as expected, could represent a significant development for the crypto space, potentially amplifying growth targets for tokenized assets and the RWA market by providing crucial legal clarity.

    Why This Matters

    The materials describe a narrow update: The SEC is planning to propose a framework called ‘Regulation Crypto’ to allow projects to raise capital through token sales without full securities registration. Details of the ‘innovation exemption’ for tokenized stocks.

    Broader Context

    Source materials place the factual news in this context: Morning Minute is a daily newsletter written by Tyler Warner.

  • Crypto Lender CEO Sentenced to 15 Years for $49M Fraud

    Crypto Lender CEO Sentenced to 15 Years for $49M Fraud

    Delio CEO Sentenced to 15 Years in Prison Over Crypto Platform Collapse

    The Seoul Southern District Court has sentenced Delio chief executive Jeong Sang-ho to 15 years in prison for his role in the collapse of the South Korean cryptocurrency deposit platform. The sentence falls five years short of the term sought by prosecutors.

    Court Upholds Partial Charges Amid Procedural Challenges

    Criminal Division 11, led by Judge Jang Chan, delivered the ruling on Thursday afternoon, according to local outlet Newsis. The court found Jeong guilty on a portion of the prosecution’s original case, primarily on a set of revised charges filed later. This decision stemmed from procedural issues, as Jeong’s legal team successfully argued that a search and seizure conducted at Gabia, the company hosting Delio’s servers, was unlawful. The court agreed, stating that prosecutors had failed to guarantee Delio’s right to participate in the search and had not provided a list of seized items. Consequently, the court ruled that the platform’s database and any information derived from it lacked evidentiary value.

    Reduced Victim Count and Financial Impact

    This procedural ruling significantly altered the indictment, which had accused Jeong of defrauding approximately 2,800 individuals of about 250 billion won (roughly $176 million) in cryptocurrency between August 2021 and June 2023. The case that proceeded focused on a reserve claim, involving around 1,100 victims and approximately 70 billion won (or $49 million). Prosecutors had added this claim as a contingency after the initial evidence was challenged. Jeong was acquitted of charges related to 41 additional victims for whom no evidence was presented.

    Falsified Records and Dishonest Licensing

    Jeong was also convicted of registering Delio as a virtual asset service provider using a falsified accounting firm report. Prosecutors alleged this report overstated the company’s coin holdings by about 47.6 billion won (roughly $34 million). The court stated that Jeong obtained his license dishonestly and took more than 70 billion won from customers. Judges added that Jeong had promoted Delio as a cryptocurrency bank despite lacking the operational capacity and had evaded responsibility by attributing his failure to return customer assets to bankruptcy.

    Mitigating Factors and Verdict Delay

    In considering the sentence, the court acknowledged that external factors had contributed to the platform’s collapse and noted that Jeong had no prior convictions carrying penalties beyond a fine. The verdict was originally scheduled for July 16 but was postponed after Jeong’s legal team raised the evidence issue, prompting the court to reopen arguments. Prosecutors subsequently filed the narrower, fallback charges in anticipation that the server material might be excluded, which ultimately occurred.

    Delio’s Operations and Bankruptcy

    Delio had offered high interest rates on deposits of Bitcoin, Ethereum, and other tokens, positioning itself as a digital asset bank. The platform abruptly halted withdrawals in June 2023. It suspended its services in August of the same year after failing to secure court approval for operational costs, including web hosting. Delio was declared bankrupt in November 2024.

  • Trump Faces Lawsuit Over $100K Truth Social Feed Amid Media Deal Talks

    Trump Faces Lawsuit Over $100K Truth Social Feed Amid Media Deal Talks

    Trump Faces Lawsuit Over $100,000 Truth Social Feed

    New York, NY – Former President Donald Trump has been sued in federal court in Manhattan over Truth API, a service that provides paying subscribers with access to his Truth Social posts for up to $100,000 per month. The lawsuit, filed on August 12, alleges the arrangement is “extraordinary, corrupt, and unconstitutional.”

    The complaint was brought by Citizens for Responsibility and Ethics in Washington (CREW), in conjunction with Yale Law School’s Media Freedom and Information Access Clinic, the Public Integrity Project, and the law firm Altshuler Berzon LLP.

    Plaintiffs argue that the First Amendment guarantees equal access to presidential announcements and that the Fifth Amendment prohibits charging exorbitant fees for such information. They are seeking a court order to halt the program.

    Trump Media launched Truth API on August 1 as a business-to-business subscription service offering low-latency access to posts from the ten most-followed accounts on Truth Social. This list includes accounts such as @realDonaldTrump, @WhiteHouse, and Vice President JD Vance. The service costs $100,000 per month, with a discounted rate of $60,000 annually for customers committing to a three-year term.

    Kevin McGurn, interim Chief Executive Officer of Trump Media, stated in the company’s second-quarter earnings release that more than ten customers have already signed up. He told Axios in an interview that the primary direct buyers are high-frequency trading firms utilizing the posts to inform their algorithmic trading strategies. Trump Media has filed its disclosures with the Securities and Exchange Commission (SEC).

    McGurn also indicated that the company intends to disrupt web scrapers that collect the same posts without charge. “We’re going to create a lot of friction for those folks that aren’t coming to us directly,” he said.

    During the earnings call, McGurn revealed that Trump Media is exploring licensing the feed to prediction market operators and is considering deals with large language model developers. The lawsuit quotes these remarks, characterizing the prediction market plan as a means to facilitate betting on presidential announcements.

    In related news, Trump Media terminated its venture with Crypto.com on August 7. Following this development, Cronos (CRO), the cryptocurrency associated with Crypto.com, fell below $0.05, its lowest point since October 2023. The two companies now plan a marketing agreement that will feature Crypto.com’s prediction markets on the Truth Social platform, replacing an embedded integration announced in October 2025, which had previously boosted CRO by 10% in an hour.

    McGurn acknowledged the competitive landscape, noting that the sector is already crowded with established companies, and highlighted Intercontinental Exchange’s commitment of approximately $2 billion to Polymarket.

  • Regulators Seize $51M in Assets from Goliath CEO Delgado

    Regulators Seize $51M in Assets from Goliath CEO Delgado

    Regulators Target Goliath Ventures and CEO in Alleged Crypto Ponzi Scheme

    Goliath Ventures and its chief executive, Christopher Alexander Delgado, are facing enforcement actions from two U.S. financial regulators over an alleged cryptocurrency Ponzi scheme. The actions come just two months after Delgado pleaded guilty to charges related to the same case.

    Dual Regulatory Complaints Filed

    The Commodity Futures Trading Commission (CFTC) has filed a complaint against Goliath Ventures and Delgado in the U.S. District Court for the Middle District of Florida. On the same day, the Securities and Exchange Commission (SEC) initiated separate charges against the company and its CEO.

    Hundreds of Millions Allegedly Raised Through Deception

    Regulators allege that Goliath Ventures defrauded investors out of hundreds of millions of dollars by promising substantial profits through cryptocurrency asset trading and liquidity pools. The CFTC stated that approximately 1,600 customers contributed at least $397 million. The SEC, meanwhile, reported that the scheme raised around $425 million from over 1,300 investors.

    Unregistered Securities Offering and Fabricated Returns

    According to the SEC, the company operated the scheme from at least January 2023 through January 2026, utilizing an unregistered securities offering. Investors were solicited to “partner” with Goliath to invest in crypto asset liquidity pools, with promises of monthly returns ranging from 3% to 10% on fees generated by trading activities within those pools, in addition to the return of their principal investment.

    However, the SEC claims the funds were never actually invested in the liquidity pools. Instead, money from new and existing investors was allegedly used to cover the promised returns to earlier participants. The CFTC echoed these allegations, stating that customer funds were also diverted to pay fictitious profits and to support Delgado’s personal lifestyle.

    CEO’s Lavish Spending and Fabricated Performance

    The filing indicates that Delgado personally benefited by at least $51 million, using the funds for personal expenses including homes, luxury vehicles, a yacht, and travel. Goliath Ventures also employed sales agents to recruit more investors, compensating them with commissions drawn from investor funds. To maintain the illusion of profitability, the SEC stated that account balances and investment performance figures were fabricated to suggest investors were earning returns and that their assets were actively invested in crypto pools.

    Scheme Collapses as Funds Dry Up

    The CFTC further alleged that the defendants issued false account statements and provided false guarantees of investment returns. By November 2025, Goliath Ventures was reportedly unable to attract new capital quickly enough to meet its obligations to existing investors. This led to the cessation of monthly distributions and the eventual collapse of the scheme.

    SEC Charges and CEO’s Settlement

    The SEC has charged Goliath Ventures and Delgado with multiple violations of federal securities laws. Delgado has reportedly agreed to a bifurcated settlement, pending court approval. Under this agreement, he has consented to permanent injunctions prohibiting him from violating the charged provisions, participating in certain securities transactions, and acting as or being associated with a broker or dealer.

  • CFTC Rescues Kalshi in New York

    CFTC Rescues Kalshi in New York

    CFTC Intervenes to Keep Prediction Market Operating in New York Amid State Lawsuit

    The Commodity Futures Trading Commission (CFTC) has invoked emergency authority to prevent New York from shutting down the prediction market platform Kalshi, just as the company experiences a significant surge in revenue. The federal regulator’s intervention comes days after New York Attorney General Letitia James filed a lawsuit seeking to block Kalshi’s sports-related contracts. Kalshi had formally requested the CFTC’s intervention.

    The implications of this dispute are substantial. According to a report by The Information, Kalshi has reached an annualized revenue run rate exceeding $4 billion, a doubling of its figures from just two months prior. The company is reportedly raising capital at a valuation of $40 billion, positioning it as one of the fastest-growing entities in the financial sector. This rapid expansion coincides with state-level efforts to curb its operations.

    New York contends that sports prediction markets constitute gambling, circumventing state licensing requirements and tax obligations. The state asserts that these revenues are crucial for funding schools and programs aimed at addressing problem gambling. The CFTC, however, maintains that these contracts are federally regulated swaps. CFTC Chairman Mike Selig, appointed by the Trump administration and known for his crypto-friendly stance, argued that “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws.” He accused New York of attempting to stifle these contracts through its “iron curtain of state gaming laws” and asserted that these are interstate financial markets which New York has no jurisdiction to regulate.

    This marks the third instance of the CFTC intervening on behalf of Kalshi, following a similar action in Michigan. The CFTC has also initiated its own lawsuit against New York. However, the underlying legal cases remain unresolved, and a judge has previously ruled against Kalshi’s attempt to halt the state’s lawsuit. Meanwhile, Kalshi continues to report escalating revenues and secure higher valuations.

    The central question at stake is whether a federal license grants these platforms the ability to operate nationwide, or if individual state regulators will retain veto power. The CFTC has decisively sided with the former, and with Kalshi’s revenue doubling, both parties have significant financial interests riding on the outcome.