A cryptocurrency trading firm and its principal have been fined as well as banned from any future trading in digital assets in a case filed by the Commodity Futures Trading Commission (CFTC).

In the landmark case targeting Cabbage Tech aka Coin Drop Markets and the firm’s principal, Patrick K. McDonnell, the New York Eastern District Court on Wednesday sided with the CFTC, who had accused the defendants of defrauding clients.

Initially reported by Law 360, U.S. District Judge Jack Weinstein ruled that Cabbage Tech and McDonnell flouted the Commodity Exchange Act by engaging in “egregious intentional violations” of federal regulations and law.

Over $1.1 Million in Penalties and Compensation

Besides a permanent injunction being slapped on the defendants, the defendants will also be required to pay a fine of approximately $1,161,716 – $871,287 in penalties and $290,429 in restitution.

According to Judge Weinstein, the evidence that was presented before the court proved that Cabbage Tech and McDonnell engaged in a fraudulent scheme last year between January and July. Among the revelations included the fact that while McDonnell gave the impression that Cabbage Tech was a successful firm with several employees and offices, it was, in fact, a one-man operation fully-owned and run by the principal from a home basement in Staten Island, New York.

The scheme came to an end last year in June when McDonnell claimed that Coin Drop Markets had been hacked before posting a message on the firm’s website indicating that, as a result of the attack, it would be suspending its services. However, the court found that no hacking took place and it was the defendant who shut down the site as well as other digital properties before cutting off communication with clients.

Preying on ‘Bitcoin Fever’

As CCN reported earlier in the year, the CFTC brought the case against Cabbage Tech in January, alleging that the defendants had promised to offer trading advice to customers only to end up stealing from them.

“As alleged, the Defendants here preyed on customers interested in Bitcoin and Litecoin, promising them the opportunity to get the inside scoop on the next new thing and to benefit from the trading acumen of a supposed expert,” the Director of Enforcement at the CFTC, James McDonald, said at the time. “In reality, as alleged, customers only bought into the Defendants’ fraudulent scheme.”

During the litigation period, McDonnell appeared pro se (on his own behalf) since he claimed he couldn’t afford a lawyer. This was despite attempts by the court to impress upon him the need for counsel.

Friday, August 24: crypto markets have seen notable growth today, with all but one of the top 40 cryptocurrencies by market cap solidly in the green, according to data from Coin360.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) has seen solid growth, having surpassed the $6,600 price point, starting the day just over $6,400. The leading cryptocurrency is up around 3 percent over the past 24 hours, trading at $6,624 at press time.

August 22 Bitcoin plunged from above $6,700 to under the $6,400 price point, following news of new anti-crypto policies in China, as well as another series of application denials for several Bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).

According to CoinMarketCap, Bitcoin and VeChain (VET) are the only two cryptocurrencies among top 20 coins by market cap that have seen some gains over the past 7 days, with Bitcoin up just 1.43 percent.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index

The top altcoin Ethereum (ETH) is up about 2.7 percent today, trading at $280 at press time. Following a markable downward trend over the week, the second cryptocurrency by market cap has suffered a heavy-hitting 41 percent loss over the past 30 days.

Ethereum 30-day price chart

Ethereum 30-day price chart. Source: Cointelegraph Ethereum Price Index

Total market cap is slightly up today, mostly holding above the $210 billion mark over the past 24 hours. After dropping to as low as $203 billion August 22, the capitalization of all cryptocurrencies has grown to $214.7 billion by press time.

Total market capitalization of all cryptocurrencies, 7-day chart

Total market capitalization of all cryptocurrencies, 7-day chart. Source: CoinMarketCap

Among the top 10 coins, EOS (EOS) and Monero (XMR) have seen the most significant growth over the past 24 hours, up 4.7 and 3.9 percent respectively.

Today’s solid upswing in the crypto markets comes following an announcement from the U.S. SEC that the Commission will review its August 22 decision to reject nine applications for listing Bitcoin ETFs.

Earlier today, CNBC’s crypto market analyst Brian Kelly predicted that the first Bitcoin ETFs will start operating in February 2019. According to Kelly, the world is getting “incrementally closer” to the first Bitcoin ETF approval, pointing at the bullish “sentiment change,” despite the recent application rejections.

The U.S. Commodities Futures Trading Commission (CFTC) has won a court order to permanently bar the operator of the New York-based firm CabbageTech Corp. for cryptocurrency-related “bold and vicious fraud,” Bloomberg reported August 24.

Earlier this year, Patrick McDonnell, cryptocurrency promoter and operator of CabbageTech Corp., was charged with “fraud and misappropriation in connection with purchases and trading of Bitcoin(BTC) and Litecoin (LTC).” McDonnell subsequently argued that the CFTC did not have the authority to regulate his commercial operations; however, New York district judge Jack B. Weinstein rejected his claim.

In July, Weinstein reportedly held a nonjury trial where he claimed that McDonnell ran a “boiler room,” deceptively luring investors in different states and counties using “trickery, false statements and misappropriation of funds,” Bloomberg notes. Weinstein delivered a judgement that McDonnell must pay $290,429 in restitution and $871,287 in penalties.

According to Bloomberg, CabbageTech was not represented by a lawyer, as McDonnell claimed he could not afford to pay for counsel. McDonnell also stopped appearing in court during the trial.

McDonnell was also involved in a different lawsuit by the CFTC against his another company, Coin Drop Markets. The CFTC claimed in the the lawsuit that customers who paid McDonnell and Coin Drop for crypto trading advice did not receive the advice they paid for, and that McDonnell shut down Coin Drop’s website and failed to respond to customers. The lawsuit also notes that Coin Drop was not registered with the CFTC.

Last month, speaking from Capitol Hill, Congressman Bill Huizenga argued that Congress should empower financial regulators such as the U.S. Securities and Exchange Commission (SEC) and the CFTC to regulate the cryptocurrency market in compliance with the same rules governing other currencies and stocks.

In May, the CFTC chairman Chris Giancarlo said he doesn’t see comprehensive crypto legislation coming from the federal level in the near future, pointing out that the statutes by which the CFTC is operating were written in 1935. He added that embracing a modern innovation like Bitcoin within terms invented decades ago will take time.

The World Bank has launched a blockchain-only bond. The so-called bond-i—for “blockchain operated new debt instrument” and perhaps also for Sydney’s famous Bondi Beach—is a two-year bond that was arranged by Commonwealth Bank of Australia and raised 110 million Australian dollars ($80 million.)

Investors included several Australian banks and state treasuries. Arunma Oteh, the World Bank treasurer, mentioned in a statement the additional help of King & Wood Mallesons, Mark-it, Microsoft and Toronto Dominion Securities.

The World Bank said the bond was the first in the world to be “created, allocated, transferred and managed through its life cycle using distributed ledger technology.” However, that may not be quite accurate.

Some small companies have already issued bonds using cryptocurrency and the public Ethereum blockchain as an experiment in the U.K., and the Russian telecoms firm MTS privately placed bonds on a blockchain with buyer Sberbank in May.

A World Bank spokesperson told Fortune that the bond-is the first blockchain bond “offered to a public, global range of investors” and that “what sets bond-iapart from other blockchain projects is that the entire bond process—from creation to allocation and management throughout its two year life cycle—takes place on blockchain.”

The scale of the bond-i is also much larger than the private blockchain bond offerings, similar to what may have been the first blockchain-based corporate loan, from Spain’s BBVA to Indra, in April. The Australian Securities Exchange is planning to switch to blockchain technology between 2020 and 2021.

The World Bank has also issued other pioneering bonds, such as the first globally-traded and settled bond in 1989, and the first fully-integrated electronic bond in 2000.

“We welcome the huge interest that this transaction has generated from various stakeholders and will continue to seek ways to leverage emerging technologies to make capital markets more secure and efficient,” the World Bank’s Oteh said.

But don’t expect the World Bank to jump on the cryptocurrency bandwagon just yet. Its president, Jim Yong Kim, said earlier this year that while it is investigating using cryptocurrencies, “I’m told the vast majority of cryptocurrencies are basically Ponzi schemes.”

The world’s first public bond created and managed using only blockchain had support from seven investors, Commonwealth Bank of Australia the sole lead manager of the deal said on Friday, helping raise A$110 million ($80.48 million) for the World Bank.

Commonwealth Bank (CBA) executive general manager James Wall said that the deal, designed to test how the technology might improve decades-old bond sales practices, had exceeded expectations and interest had been “overwhelming.”

The American fund Northern Trust, three Australian state governments, local pension fund First State Super, and CBA were the investors in the deal, which is being viewed as an initial step in moving bond sales away from manual processes towards faster and cheaper automation.

World Bank Treasurer Arunma Oteh said there had been “huge” interest.

“I am delighted that this pioneer bond transaction using the distributed ledger technology, bond-i, was extremely well received by investors,” said Oteh, referring to the deal acronym, standing for Blockchain Operated New Debt Instrument as well as a reference to Australia’s most famous beach.

“We are particularly impressed with the breath of interest from official institutions… these high-quality investors understood the value of leveraging technology for innovation in capital markets.”

The World Bank, whose bonds carry an AAA rating, regularly uses its borrowing power to help develop new bond markets as well as pioneering new means for selling and trading the securities.

It issues between $50 billion and $60 billion a year of bonds to back economic progress in developing countries.

Australia is a popular test site for market developments because of its well-established financial infrastructure and the familiarity of international investors with the Australian dollar, which is one of the most-traded currencies in the world.

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While there have been other prototypes or parallel simulation blockchain projects in the market before, CBA said the World Bank bond will be the first time that capital is raised from public investors through a legally valid bond issuance that uses blockchain from start to finish.

The World Bank and the Commonwealth Bank of Australia (CBA), the country’s largest bank, have issued a public bond exclusively through blockchain technology, Reuters reports August 23. The World’s Bank official mandate for the project was first unveiled August 10.

The A$100 million ($73.16 million) deal entails two-year bonds that will settle August 28 and have been been priced to yield a 2.251 percent return, according a CBA statement.

The prototype — dubbed “Bondi” (Blockchain Operated New Debt Instrument, and a pun on Australia’s most well-known beach) — is being hailed by the participants as a milestone in automating decades-old bond issuance and sales practices. Reuters cites CBA executive general manager, James Wall, as saying that:

“You’re collapsing a traditional bond issuance from a manual bookbuild process and allocation process, an extended settlement then a registrar and a custodian, into something that could happen online instantaneously.”

As Reuters notes, Word Bank bonds are classified with an AAA rating — the highest possible rating that indicates a high level of creditworthiness. The bank reportedly issues between $50 and $60 billion in bonds annually to foster economic progress in the developing world.

As Cointelegraph has reported, this May, Sberbank CIB — the corporate and investment banking arm of Russia’s largest bank Sberbank — conducted the first blockchain-based commercial bond transaction in Russia.

The transaction was completed in partnership with leading local telecoms firm MTS and the National Settlement Depository (NSD), and entailed the smart-contract enabled issuance of MTS corporate bonds for the value of RUB 750 billion ($12 million) with 6-month maturity.

In Australia, major initiatives are underway to integrate blockchain across both the government and the financial sector. This July, IBM signed a five-year AU$1 billion ($740 million) deal with the Australian government to use blockchain and other new technologies to improve data security and automation across federal departments, including defense and home affairs.

As of December last year, the Australian Securities Exchange (ASX) has been working to implement blockchain technology to replace its current system for processing equity transactions, a project that Reuters today notes is slated to be completed by 2020.

The de facto central bank of Singapore announced it had signed a deal with multiple big name entities to ease digital asset settlements in a press release Friday, August 24.

Part of its ongoing Project Ubin blockchain integration scheme, the Monetary Authority of Singapore (MAS) partnered with Singapore Exchange (SGX), along with Anquan, Deloitte and Nasdaq to deliver the enhancements.

Together, the parties will create “Delivery versus Payment (DvP)… capabilities for settlement of tokenized assets across different blockchain platforms,” with the latter three acting as technical partners.

“This initiative will deploy blockchain technology to efficiently link up funds transfer and securities transfer, eliminating both buyers’ and sellers’ risk in the DvP process,” Tinku Gupta, head of technology at SGX and leading the project explained.

“This is a collaborative innovation bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem.”

MAS has continued to make positive steps to creating a cryptocurrency-friendly jurisdiction in Singapore, expressing cautious optimism about the technology’s future while championing blockchain via Project Ubin, which it has worked on since 2016.

In February, the organization’s chief fintech officer Sopnendu Mohanty said he expected to see “real impact” of the initiative in 2020.

“Blockchain technology is radically transforming how financial transactions are performed today, and the ability to transact seamlessly across blockchains will open up a world of new business opportunities,” he meanwhile added about the DvP plans.

“The involvement of three prominent technology partners highlights the commercial interest in making this a reality.”

The National Research Council of Canada (NRC) announced Monday that it has built an ethereum blockchain explorer.

The organization wrote in a news release that its Industrial Research Assistance Program (IRAP) is now hosting the explorer on the InterPlanetary File System (IPFS) through services provided by Bitaccess, a blockchain startup.

Using IPFS, it said, ensures web applications are both “unalterable and can be accessed far into the future,” regardless of whether the original host is online or not.

The explorer allows users to search the ethereum blockchain for proactively published grants and contribution data, according to Bitaccess.

The NRC continued:

“These are early days, but NRC IRAP’s experiments with blockchain are expected to provide constructive insight into the potential for this technology and how it may be used for more open and transparent operations for public programs.”

According to the post, NRC IRAP launched the Canadian government’s first live trial of public blockchain technology on ethereum back in January, in an effort to build a more transparent administration of government contracts.

Since the launch, the program is reported to have been exploring additional applications in blockchain technology.

As CoinDesk reported previously, IPFS aims to build a more permanent web by storing multiple copies of data. It initially caught international attention as may were worrying at the time that the new administration in the U.S. would make data from the government agencies disappear.

Moe Adham, co-founder of Bitaccess, said in a news release that the company is helping to “enable constituents to participate in the verification and validation of public information.”

China’s Ping An Insurance, one of the world’s largest insurance company groups, has released a “White Paper on Smart Cities,” advocating for blockchain tech, AI, big data, and cloud computing, People’s Daily reports August 22.

Ping An Insurance, a Chinese conglomerate with operations in insurance, banking, and financial services, was ranked the third most valuable global financial services company in the world as of May 2018.

According to People’s Daily, the company released its “White Paper on Smart Cities” on August 21. The reported goal is to “help the government to create a new model of “city as a service” governance” and to “propose a comprehensive, systematic, highly-recognized methodology and solution, with “wisdom, [and intelligence]” as the main line of thinking.” The document adds:

“In promoting the development of “smart city”, Ping An puts forward the system of [intelligence] in the perspective of service and creativity, and promotes it with practice. At present, Ping An has mastered a large number of core professional technologies and is more confident in this field. Ping An’s five core technologies: biometrics, big data, artificial intelligence, blockchain and cloud platforms have reached the global leading level.”

China is one the leading countries in the world when it comes to implementing new technologies, such as blockchain, AI, internet of things (IoT) in the creation of “smart cities,” of which the country plans to establish one thousand.

Currently, one of the most successful Chinese “smart cities” is Xiong’an, which was declared by President  Xi Jinping as a special economic zone back in October 2017. In July of this year, Xiong’an’s government has signed a Memorandum of Understanding (MoU) with ConsenSys, with plans for the company to advise the government on blockchain software solutions.

There’s no doubt that Ripple Labs tends to stand out from the cryptocurrency crowd. It has more money than most, a large team of programming veterans, and a heavily marketed suite of products aimed at giving the financial services industry a blockchain makeover.

David Schwartz, chief technology officer at Ripple, knows that XRP cannot do everything. In a TNW Answers session earlier this week, Schwartz was quizzed on the limitations of the XRP Ledger.

He gave a rather candid response – Schwartz doesn’t believe there can be just one digital currency that does all the things:

[…] We expect that this will not be a winner take all outcome but instead a number of digital assets can survive for specific use cases. Today, for example, Ethereum provides a “programmable money” function that the XRP Ledger cannot. Adding this capability to the XRP Ledger would have huge costs that reduce XRP’s suitability for payments. You can’t have everything.

[…] While you do get very sophisticated and powerful payment features such as a built in decentralized exchange and the ability to have payments use multiple paths for reduced cost, you can’t get programmable behavior. So I don’t see XRP being the only digital asset any time soon, if ever.

To which effect, Schwartz further highlighted that he even owns some Bitcoin. He wants cryptocurrency projects to work together, rather than fight each other for market dominance.

[Distributed ledger technology] is genuinely a breakthrough and I too hold some [Bitcoin]. If nothing else, the current market mechanics are telling us that we’re all in this together and I don’t think one crypto [sic] project can become successful by pulling others down.

It should probably be noted that despite the hippie attitude, Schwartz then proceeded to throw a bunch of shade on Bitcoin, $BTC▼3.7% calling its Proof-of-Work consensus algorithm a “technological dead-end.” He also claimed that Ripple Labs’ XRP Ledger was improving on Bitcoin’s design.