SEC – The Shib Daily

SEC Publishes Crypto Custody Guide to Help Investors Store Assets Safely

Michaela — Mon, 15 Dec 2025 07:21:47 +0000

The U.S. Securities and Exchange Commission (SEC) has released an investor bulletin outlining best practices and risks for storing and managing crypto wallets.

“The SEC’s Office of Investor Education and Assistance is issuing this Investor Bulletin to help educate retail investors about the ways investors can hold crypto assets,” the Commission’s bulletin wrote. “This Investor Bulletin provides an overview of types of crypto asset custody and provides tips and questions to help you decide how to best hold crypto assets,” it added.

Investors opting for third-party custody should carefully review the custodian’s policies, including whether assets are “rehypothecated” by being lent out or if client holdings are commingled rather than kept in segregated accounts. The SEC bulletin also outlines different types of crypto wallets, citing the advantages and risks of hot wallets and other storage options.

The SEC’s custody guide also noted a major regulatory shift, marking a departure from the framework established under the previous administration.

As cryptocurrency adoption continues to grow, the SEC’s guidance underscores the increasing importance of understanding how digital assets are stored and managed. Investors now face a landscape where the choices they make regarding wallets and custodians can have long-term implications for security, access, and even legal compliance.

Beyond just selecting a service, individuals are encouraged to consider operational practices, insurance coverage, and contingency plans for potential disruptions or breaches.

The bulletin also serves as a signal to the industry itself, emphasizing that transparency, robust internal controls, and clear communication with clients are not optional, they are expected standards. Custodians and wallet providers may face greater scrutiny, with regulators likely to prioritize compliance and risk mitigation as crypto continues to integrate with mainstream finance.

For retail and institutional investors alike, the takeaway is clear: proactive education and due diligence are essential. Understanding the mechanics of crypto storage, from the differences between hot and cold wallets to the nuances of third-party custody agreements, equips holders to protect their assets more effectively. As digital assets evolve and regulatory expectations shift, staying informed and adopting best practices will be critical in navigating this complex and rapidly changing environment with confidence.

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Netflix to Release Comedy Starring Jennifer Garner About Lost $35M Crypto

Michaela — Fri, 12 Dec 2025 15:19:18 +0000

Subscription-based streaming service, Netflix, Inc., has announced a new original drama film following a couple racing against time to recover $35 million in cryptocurrency after forgetting their wallet password.

According to What’s On Netflix, the upcoming Netflix Original film, titled One Attempt Remaining, follows a divorced couple who receive text messages from the U.S. Securities and Exchange Commission (SEC) about an unclaimed cryptocurrency prize they won during a Vegas style cruise they had taken in their earlier years. With the funds now worth millions, the pair must recover their forgotten wallet passwords within three days before access is lost.

Filming is set to begin in February 2026, with Jennifer Garner, star of 13 Going on 30, also serving as a producer on the project.

The film appears inspired by real-life incidents where individuals lost access to vast sums of cryptocurrency due to forgotten passwords or misplaced private keys. One notable example is Stefan Thomas, the former Ripple CTO, who was locked out of an IronKey hard drive containing 7,002 Bitcoin, valued at over $92,000 at the time.

Netflix Taps Crypto Scandals to Captivate Mainstream Audiences

In line with its trend of exploring timely cultural phenomena, Netflix is capitalizing on the growing mainstream interest in cryptocurrency. Netflix has started production on a limited series chronicling the roles of former FTX CEO Sam Bankman-Fried and ex-Alameda Research executive Caroline Ellison in the high-profile collapse of the FTX cryptocurrency exchange.

The upcoming series will explore the relationship between Bankman-Fried and Ellison, highlighting their roles in one of crypto’s largest scandals and the events that led to FTX’s over $10 billion collapse.

Before FTX’s collapse, Bankman-Fried was considered a leading figure in the cryptocurrency sector, gaining recognition for his innovative approach to digital assets and for rapidly building one of the largest crypto trading platforms. He was noted for his technical expertise, philanthropic initiatives, and outspoken views on cryptocurrency regulation.

The moves signal Netflix’s growing interest in bringing crypto stories to mainstream audiences, reflecting how the digital asset world is increasingly shaping popular culture and storytelling.

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US CFTC Approves Spot Crypto Trading on Regulated Exchanges

Michaela — Fri, 05 Dec 2025 11:17:01 +0000

Acting Chairman of the Commodity Futures Trading Commission (CFTC) Caroline Pham has announced that spot cryptocurrency products will now be allowed to trade on federally regulated U.S. futures exchanges for the first time.

The CFTC said the move represents a major step in the Trump Administration’s push to position the U.S. as a global leader in cryptocurrency. In a statement, Pham noted the agency’s history of fostering responsible innovation on futures exchanges while maintaining safeguards for both retail and institutional traders. She also credited President Donald Trump’s leadership in shaping a coordinated government strategy to strengthen America’s role in digital asset markets.

“Recent events on offshore exchanges have shown us how essential it is for Americans to have more choice and access to safe, regulated U.S. markets,” Pham stated. “Now, for the first time ever, spot crypto can trade on CFTC-registered exchanges that have been the gold standard for nearly a hundred years, with the customer protections and market integrity that Americans deserve,” she added.

Furthermore, Pham referenced Congress’s actions fifteen years ago, noting reforms enacted to strengthen U.S. markets following the financial crisis, including the mandate that leveraged retail commodity trading be conducted exclusively on regulated futures exchanges.

Despite these reforms, the CFTC had not provided clear guidance on listing retail exchange-traded products, leaving a key customer protection measure unimplemented amid growing market demand.

“Instead, the CFTC chose regulation by enforcement rather than making clear rules of the road, resulting in huge fines that targeted the crypto industry but did not protect the retail public by giving them a safe place to trade,” Pham stated.

The CFTC’s decision is designed to ensure American investors have access to secure domestic markets rather than relying on offshore exchanges that may lack fundamental safeguards.

The CFTC’s approval of spot crypto trading follows recommendations from the President’s Working Group on Digital Asset Markets and insights gathered through the agency’s Crypto Sprint initiative, as well as coordination with the U.S. Securities and Exchange Commission (SEC). The Crypto Sprint also launched public consultations on additional proposals from the Working Group report, including enabling tokenized collateral like stablecoins in derivatives markets and updating CFTC rules on collateral, margin, clearing, settlement, reporting, and recordkeeping to support blockchain-based market infrastructure.

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SEC Halts 3–5x Leveraged Crypto ETFs, Warning Investors of Risks

Michaela — Thu, 04 Dec 2025 09:47:51 +0000

The U.S. Securities and Exchange Commission (SEC) has issued warning letters to multiple exchange-traded fund (ETF) providers, pausing applications for leveraged crypto ETFs proposing 3-5 times exposure, exceeding the 200% regulatory limit.

In the SEC letters, ETF issuers Direxion, ProShares, and Tidal were cited under the Investment Company Act of 1940, which limits fund exposure to 200% of value-at-risk based on a “reference portfolio” of unleveraged assets or benchmark indexes. The SEC noted that this reference portfolio serves as the baseline to assess the leverage risk of each fund’s proposed leveraged portfolio.

The SEC instructed the ETF issuers to scale back their proposed leverage to comply with existing regulations, effectively pausing the approval of 3-5x leveraged crypto ETFs in the U.S.

In October, the crypto market plunged following a flash crash that triggered $20 billion in leveraged liquidations, prompting analysts and investors to debate the risks of high leverage and its impact on market stability.

Following the SEC’s warning letters, the spotlight on leveraged ETFs has intensified, particularly in the crypto sector where volatility is a constant factor. Analysts warn that highly leveraged funds can amplify both gains and losses, making them a risky tool for retail investors who may not fully understand the mechanics of leverage. Unlike standard ETFs, leveraged ETFs aim to multiply the daily returns of an underlying asset or index, meaning even a small market movement can result in significant swings in value.

The SEC’s move signals that regulators are prioritizing caution, highlighting the potential systemic risks that unchecked leverage could introduce. Experts emphasize that these products, while not subject to margin calls like crypto futures, still carry the potential for rapid capital erosion, particularly in sideways or declining markets.

Market participants are now closely monitoring how the regulatory push will affect the availability of leveraged crypto ETFs in the U.S., and whether issuers will adjust their strategies to comply with the 200% exposure limit. The SEC’s intervention spotlights the fine line between innovation and investor protection in the evolving crypto financial landscape.

The SEC’s actions serve as a reminder that in the fast-moving world of crypto finance, prudence remains just as important as opportunity.

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Nasdaq Promises Fast Move on SEC Approval for Tokenized Stocks

Michaela — Mon, 01 Dec 2025 07:39:30 +0000

Matt Savarese, Nasdaq’s head of digital asset strategy, has stated that securing U.S. Securities and Exchange Commission (SEC) approval for the stock exchange’s plan to offer tokenized versions of its listed stocks is a top priority, with Nasdaq prepared to address any regulatory questions.

In an interview with CNBC, Savarese said Nasdaq aims to advance its proposal as quickly as possible, emphasizing the exchange’s intent to work closely with the SEC. Submitted on September 8, the plan seeks SEC approval to let investors trade stock tokens, digital representations of shares in publicly listed companies, directly on the exchange.

Savarese clarified that Nasdaq does not intend to fundamentally change stock investing. He emphasized that the exchange aims to advance tokenization responsibly, encouraging other major exchanges to adopt the approach while adhering to SEC guidelines and maintaining an investor-focused framework.

In its submission, Nasdaq noted that tokenized shares would carry the same rights and protections as traditional stock. The exchange also proposed distinct labeling for these digital assets to ensure that clearing firms and the Depository Trust Company could process orders in the same manner as conventional equities.

Nasdaq further stated that tokenized securities would receive equal priority to traditional shares during trade execution. The proposal extends beyond a technical upgrade, prompting broader considerations about how stocks are issued, defined, and settled in today’s financial markets.

If approved, Nasdaq’s push into tokenized shares could mark a significant step toward modernizing the infrastructure of U.S. equity markets. By bridging traditional finance with blockchain technology, the exchange may pave the way for more flexible, efficient, and accessible trading options for investors.

While challenges remain, including regulatory clarity and operational integration, Nasdaq’s proposal signals a growing acceptance of digital assets within mainstream finance.

As the industry explores these innovations, the move could reshape expectations for how stocks are bought, sold, and settled in the years ahead, potentially setting a new standard for the future of trading.

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SEC’s Hester Peirce Says Crypto Self-Custody Is a Fundamental Right

Michaela — Mon, 01 Dec 2025 07:39:25 +0000

U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce, who leads the agency’s Crypto Task Force, emphasized that individuals have a fundamental right to retain control over their crypto holdings and financial privacy through self-custody.

In a conversation with The Rollup podcast, Peirce described herself as a “freedom maximalist,” adding that self-custody of assets is a fundamental human right. “Why shouldn’t I have the right to hold my own assets? “Why should I have to be forced to go through someone else to hold my assets?” Peirce stated, clarifying that although not for everyone, there are many people who would rather be in control of their own assets. “It baffles me that in this country, which is so premised on freedom, that would even be an issue. Of course, people can hold their own assets,” the SEC Commissioner added.

Peirce emphasized that online financial privacy should be the default, stressing that Americans have a right to keep their transactions confidential. She added that while there is a common assumption that seeking privacy implies wrongdoing, the presumption should instead favor an individual’s right to discretion.

Self-custody in crypto refers to the practice of individuals holding and managing their own digital assets directly, without relying on banks or third-party platforms. It gives users full control over their private keys and ensures that only they can access or transfer their funds.

Self-Custody: Take Control of Your SHIB Tokens

Peirce’s stance spotlights why SHIB holders should prioritize self-custody when managing their crypto holdings. By keeping tokens in private wallets, users maintain full control over their assets, reducing reliance on exchanges or third-party services that could be vulnerable to hacks, outages, or regulatory pressures.

This approach aligns with the broader ethos of decentralization, empowering individuals to make financial decisions independently while safeguarding personal information. For SHIB investors, practicing self-custody not only enhances security but also supports privacy, ensuring transactions are fully under the user’s control.

Peirce’s comments serve as a reminder that protecting your tokens starts with taking responsibility for their storage, reinforcing the idea that true ownership comes with both autonomy and accountability.

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Crypto Exchange Kraken Files for US IPO After $20B Valuation

Michaela — Thu, 20 Nov 2025 09:03:19 +0000

U.S.-based Crypto exchange Kraken has confidentially submitted a draft registration with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO), ending months of industry speculation.

Kraken announced in a Wednesday notice that it confidentially filed a Form S-1 with the SEC for a proposed IPO of its common stock, initiating the review process required for the company to go public.

The filing follows comments from Kraken co-CEO Arjun Sethi, who recently stated the exchange was not rushing to go public, despite 2024 reports indicating plans for an IPO.

Kraken’s IPO filing comes as U.S. crypto exchanges continue to explore public offerings, following Coinbase’s 2021 IPO and Gemini’s 2025 debut. The announcement arrives shortly after Grayscale Investments submitted its own Form S-1, four months after a confidential filing. Less than a day before the filing, Kraken revealed a $20 billion valuation after raising $800 million across two 2025 funding rounds.

In June, reports emerged that OKX is exploring the possibility of a public listing in the United States following its relaunch in the country and amid increasing regulatory pressures across Asia. Since returning to the U.S. market in April, the crypto exchange has reportedly been considering both an initial public offering and a potential listing on a domestic stock exchange.

OKX’s potential U.S. IPO comes as the exchange faces mounting regulatory challenges in Asia. In late May, the Thai Securities and Exchange Commission announced a ban preventing OKX and four other exchanges, Bybit, 1000X, CoinEx, and XT.COM, from operating within Thailand. This regulatory crackdown adds urgency for OKX to pursue new growth avenues and compliance strategies outside of the Asian market.

As the crypto industry continues to evolve, exchanges like Kraken and OKX are navigating a complex landscape of market opportunities, investor expectations, and regulatory oversight. Their moves toward potential public listings in the U.S. signal a broader trend of mainstream financial integration for digital asset platforms.

These developments spotlight the increasing sophistication of the sector, where strategic timing, compliance, and market positioning play crucial roles in shaping long-term growth. The outcomes of these IPO explorations may set precedents for the broader market and influence future capital-raising strategies in the space.

Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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SEC Chair Promises Tough Crypto Oversight, Eyes New Token Taxonomy

Michaela — Thu, 13 Nov 2025 06:46:43 +0000

U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has outlined the agency’s approach to tackling digital asset fraud through its “Project Crypto” initiative, while emphasizing how upcoming legislation in Congress aims to define the respective roles of the SEC and the Commodity Futures Trading Commission (CFTC) in regulating cryptocurrencies.

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Key points:

Chair Paul Atkins outlined the SEC’s approach to regulating digital assets, including plans to create a token taxonomy based on the Howey test to clarify which tokens qualify as securities.
Digital commodities, collectibles, network tokens, and utility-focused assets generally fall outside SEC oversight, while tokenized securities remain subject to regulation.
The SEC intends to reduce regulatory uncertainty, enabling blockchain projects to focus on development, user engagement, and building a more dynamic and inclusive ecosystem.

In a Wednesday address at the Federal Reserve Bank of Philadelphia, Atkins detailed the agency’s plans to modernize its regulatory framework for digital assets, emphasizing a focus on fairness and practical application of federal securities laws to cryptocurrencies and their associated transactions.

Atkins indicated that in the coming months, the SEC is expected to explore the creation of a token taxonomy, grounded in the established Howey test for investment contracts, while acknowledging the limitations of existing laws and regulations.

The SEC chair noted Commissioner Hester Peirce’s view that a token may initially qualify as an investment contract at launch, but that designation can change over time. Once the original investment contract concludes, the token can continue trading without those transactions being considered securities.

Atkins stated that under his leadership, the SEC would generally not classify digital commodities, collectibles, tools, or network tokens as securities, while “tokenized securities” would remain subject to the agency’s oversight.

“By streamlining this process, innovators in the blockchain space can focus their energies on development and user engagement rather than navigating a maze of regulatory uncertainty,” Atkins stated. “Additionally, this approach would cultivate a more inclusive and dynamic ecosystem—one in which smaller and less resource-intensive projects are free to experiment and to thrive,” he added.

What the SEC Clarification Means for SHIB Holders

For SHIB holders, the SEC’s recent clarifications on which tokens qualify as securities carry meaningful implications. Shiba Inu, primarily designed as a utility-focused token, falls outside the direct regulatory oversight of the SEC under the proposed framework.

This distinction could provide investors and community members with added confidence in the token’s long-term potential, as it suggests that day-to-day use, transactions, and ecosystem activity are less likely to face regulatory interruptions.

By establishing a clearer line between securities and utility tokens, the SEC’s guidance allows SHIB to continue developing real-world applications, fostering adoption, and supporting community-driven initiatives without the looming uncertainty of enforcement actions.

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Grayscale Sees 11 Altcoins Poised for Breakout Under New SEC Rules

Michaela — Mon, 03 Nov 2025 10:00:40 +0000

Grayscale Investments has predicted significant growth in the digital asset market, pointing to recent U.S. regulatory clarity that could spur a new wave of altcoin exchange-traded products (ETPs) and broaden access to regulated crypto investments.

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Key points:

Grayscale Investments projects a surge in altcoin ETPs following the SEC’s approval of new generic listing standards, allowing broader crypto access for U.S. investors.
The firm expects 11 additional crypto assets, including Shiba Inu, Dogecoin, and Cardano, to qualify for spot ETPs under the updated SEC framework.
Analysts say the SEC’s shift toward standardized listings could accelerate institutional adoption and strengthen the connection between traditional finance and crypto markets.

Grayscale’s research team anticipates a sharp rise in the number of altcoins available through spot ETPs in the coming weeks, following recent regulatory adjustments by the U.S. Securities and Exchange Commission (SEC). In September, the SEC approved new generic listing standards for crypto asset ETPs, allowing tokens to be listed based on broad eligibility criteria rather than case-by-case reviews.

If an asset meets the new standards, exchanges will be permitted to list and trade ETPs tied to that token, provided a valid registration statement for the product is in effect.

Additionally, Grayscale anticipates that 11 additional crypto assets, excluding Solana, will meet the SEC’s new generic listing standards for ETPs. The firm added that the number of eligible digital assets is expected to grow further as the market continues to mature.

“The altcoins qualifying for ETPs under the new generic listing standards (including Solana) represent four of the six Crypto Sectors, and account for roughly 11% of total Crypto Sectors market capitalization,” the research team wrote. “Combined with Bitcoin and Ethereum, the assets available to U.S. investors through spot ETP products will account for about 90% of the Crypto Sectors market cap,” Grayscale added.

The 11 crypto assets include Cardano (ADA), Bitcoin Cash (BCH), Polkadot (DOT), Avalanche (AVAX), Litecoin (LTC), Dogecoin (DOGE),Chainlink (LINK), Hedera (HBAR), and Shiba Inu (SHIB).

The regulatory changes creating broader access to altcoin ETPs could have meaningful implications for Shiba Inu (SHIB). As one of the 11 digital assets expected to qualify under the SEC’s new generic listing standards, SHIB may gain greater exposure to both institutional and retail investors through regulated investment products.

This development could provide more transparency and potentially increase liquidity for the token, while also offering a framework for U.S. investors to engage with SHIB within established compliance guidelines. Analysts suggest that inclusion in ETPs does not guarantee price movement, but it may contribute to wider adoption and integration of SHIB in mainstream crypto markets.

The evolution of such regulated offerings illustrates how altcoins, including SHIB, are navigating the intersection of innovation, market participation, and regulatory oversight in the growing U.S. digital asset landscape.

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Bitwise Nearly $223M Solana ETF Soars After New SEC Staking Clarity

Michaela — Wed, 29 Oct 2025 08:40:34 +0000

Bitwise, a U.S.-based crypto asset management firm known for offering regulated investment products tied to digital assets, has launched the Bitwise Solana Staking ETF (BSOL), which has already drawn approximately $222.8 million in assets.

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Key points:

Bitwise launched the Bitwise Solana Staking ETF (BSOL), the first U.S. fund offering 100% direct exposure to Solana (SOL), attracting nearly $223 million in assets within days of trading.
The fund allows investors to earn Solana’s 7%+ average staking rewards through Bitwise’s professional on-chain staking infrastructure.
The launch follows recent SEC guidance clarifying that certain proof-of-stake (PoS) activities are not securities offerings, paving the way for greater institutional participation in staking-based crypto products.

“BSOL is the first U.S. ETP with 100% direct exposure to Solana (SOL). The Fund offers investors the opportunity to benefit from staking rewards through professionally managed staking, while capturing the potential growth of one of the fastest, most efficient, and most widely used blockchains,” the official announcement from Bitwise wrote.

The BSOL fund is designed to capture Solana’s average staking yield of over 7%, with all assets fully staked through Bitwise Onchain Solutions to enhance investor returns.

Bloomberg Intelligence senior ETF analyst Eric Balchunas described the early performance of Bitwise’s BSOL fund as “impressive,” noting that it had already drawn approximately $222.8 million in assets since trading began on Tuesday. He added that while it was unexpected for Bitwise to forgo a Day One debut, typically used to boost volume and inflows, the approach allows for a clearer view of genuine, organic investor demand.

$BSOL is beginning life with $220m in assets. Impressive, already half the size of $SSK. Surprised they didn't hold off tho and have it come in on Day One to get volume and flows higher. Good news is now we'll have only organic, easier to measure true demand pic.twitter.com/bHXQuCRw1Z
— Eric Balchunas (@EricBalchunas) October 28, 2025

BSOL marks the first Solana-focused exchange-traded fund (ETF) available in the United States. While Bitwise had previously introduced a similar Solana staking product in Europe, the U.S. launch was postponed amid regulatory uncertainty surrounding staking practices. That landscape shifted in May when the U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance clarified that certain proof-of-stake (PoS) activities are not considered securities offerings under federal law.

The debut of BSOL signals growing investor confidence in Solana’s long-term potential and a broader shift toward diversified crypto exposure within traditional finance. As institutional players increasingly explore on-chain yield opportunities, products like this may help bridge the gap between decentralized networks and regulated investment vehicles.

Bitwise’s latest move not only expands access to Solana’s ecosystem but also reflects a changing regulatory environment that’s slowly adapting to the realities of proof-of-stake innovation. Whether this momentum sustains will depend on market conditions, but for now, it’s a notable milestone for both Bitwise and the maturing digital asset sector.

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Ripple CEO Demands Equal Treatment for Crypto and Traditional Banks

Michaela — Thu, 16 Oct 2025 10:12:06 +0000

Ripple CEO Brad Garlinghouse has urged regulators to apply the same standards to crypto firms as they do to traditional financial institutions, emphasizing fair oversight as Ripple awaits a decision on its national charter.

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Key points:

Ripple CEO Brad Garlinghouse called for equal regulatory treatment between crypto firms and traditional banks, urging fair access to financial infrastructure and oversight.
Ripple’s pursuit of a national bank charter could set a precedent for blockchain-based entities, despite opposition from U.S. banking groups warning of policy risks.
A shift toward regulatory parity could benefit ecosystems like Shibarium by legitimizing on-chain liquidity systems, attracting institutional interest, and strengthening bridge compliance.

At DC Fintech Week on Wednesday, Garlinghouse questioned the fairness of current regulatory practices, arguing that crypto firms, such as Ripple, face tougher scrutiny than traditional banks. While he noted that a change in leadership, whether at the U.S. Securities and Exchange Commission (SEC) under Chair Paul Atkins or in the White House under President Donald Trump, was unlikely to shift policy direction, Garlinghouse called for more consistent treatment across the financial sector.

Garlinghouse emphasized that the cryptocurrency sector should adhere to the same Anti-Money Laundering (AML), Know Your Customer (KYC), and Office of Foreign Assets Control (OFAC) requirements as traditional financial institutions. He added that crypto firms should also have equal access to key financial infrastructure, including eligibility for a Federal Reserve master account.

In July, Ripple submitted an application for a national bank charter. However, as the company and other crypto firms sought similar approvals, several U.S. banking associations urged the Office of the Comptroller of the Currency (OCC) to delay any rulings. The groups argued that granting charters to digital asset companies like Ripple could pose major policy and procedural challenges.

The Ripple Effect: What It Could Mean for Shibarium

Such a move could mark a turning point for projects like Shibarium, which operate at the intersection of decentralized infrastructure and real-world utility. A shift toward parity between banks and crypto entities might encourage regulators to explore frameworks that recognize on-chain liquidity systems as credible financial infrastructure.

For Shibarium, that could mean expanded access to cross-chain liquidity, more robust bridge compliance, clearer settlement rails for tokenized assets, and greater institutional custody options. Enhanced regulatory clarity would also likely attract conservative capital, foster compliant onramps, and incentivize developers to build safer, audited smart contracts and web3 projects that meet bank-grade standards.

As Ripple tests the boundaries of crypto’s relationship with traditional finance, Shibarium and similar ecosystems stand to gain from the ripple effect, pun intended, of clearer rules, broader acceptance, and a pathway toward deeper integration with the global financial system.

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Sam Bankman-Fried Alleges Political Payback After Donating to Republicans

Michaela — Thu, 16 Oct 2025 10:02:41 +0000

Sam Bankman-Fried, co-founder of the now-defunct crypto exchange FTX, has alleged that his 2022 arrest was politically driven, claiming the Biden administration targeted him after he privately contributed tens of millions of dollars to Republican campaigns.

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Key points:

Sam Bankman-Fried alleges his 2022 arrest was politically motivated, claiming the Biden administration targeted him after donating tens of millions to Republicans.
House Republicans have questioned the timing of his arrest and demanded SEC Chair Gary Gensler release communications surrounding the case.
The SEC’s Office of Inspector General disclosed that Gensler’s government phone was wiped, deleting nearly a year of messages, intensifying scrutiny of the agency’s transparency.

In a post on the social platform GETTR on Wednesday, Bankman-Fried said his political alignment shifted from center-left in 2020 to a more centrist position by 2022, citing what he described as aggressive crypto enforcement under then-U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler and the Department of Justice (DOJ). SBF claims that shortly after making sizable donations to the Republican Party, the Biden administration’s SEC and DOJ began pursuing charges against him.

Source: Sam Bankman-Fried GETTR

“They had me arrested weeks before the crypto bill I was working on was set for a vote—and the night before I was set to testify before Congress,” Bankman-Fried wrote.

Bankman-Fried claimed that House Republicans suggested his arrest was intended to stop him from testifying before Congress. Lawmakers reportedly urged Gensler to release communications related to the timing of the charges and his detention, a move that has fueled further scrutiny of the Biden administration’s handling of the case.

Late last month, the SEC’s Office of Inspector General revealed that Gensler’s official phone was subjected to an “enterprise wipe,” deleting all text messages sent and received between October 2022 and September 2023. Reports indicate the device stopped syncing with the agency’s system in July 2023 and was flagged as “inactive” for 62 days, despite remaining operational.

After unsuccessful forensic efforts to retrieve Gensler’s deleted messages, the SEC’s Office of Information Technology examined phone records to determine his most frequent contacts. Investigators compiled a list of 34 agency employees believed to have regularly communicated with the former SEC chair.

Gensler did not assist in creating the list, and other commissioners were initially excluded. Although staff described most texts as routine, the Inspector General’s review found several that contained substantive, work-related discussions.

As Bankman-Fried continues to serve his sentence, his latest claims mark a new chapter in his post-conviction narrative, one that intertwines politics, regulation, and personal redemption. Whether his allegations gain traction or fade into the broader debate over crypto’s relationship with Washington remains to be seen, but they’ve already reignited scrutiny of how power and policy collide in the digital finance era.

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SEC’s ‘Innovation Exemption’ Could Open New Doors for Shiba Inu

Michaela — Wed, 08 Oct 2025 12:11:31 +0000

U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has confirmed the agency plans to implement an “innovation exemption” for digital asset firms, aiming to begin formal rulemaking by late 2025 or early 2026.

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Key points:

SEC Chair Paul Atkins confirmed plans for an “innovation exemption” to provide clearer rules for digital asset firms, with formal rulemaking expected by late 2025 or early 2026.
The exemption aims to foster U.S.-based crypto innovation, prevent projects from moving abroad, and shift the SEC away from enforcement-heavy oversight.
Clearer regulatory guidance could encourage institutional participation, accelerate partnerships between crypto projects and fintech firms, and foster innovation in decentralized finance, staking, and NFT applications.

According to reports, at a Futures and Derivatives Law Report event on Tuesday, Atkins noted that the current government shutdown has “hamstrung” the SEC’s rulemaking efforts. He emphasized, however, that advancing the “innovation exemption” remains a top priority.

Atkins emphasized that supporting the crypto sector is the SEC’s “job one,” describing the agency as increasingly pro-innovation and focused on fostering development by U.S.-based entrepreneurs and developers. “As you know, we’ve had four years, at least, of repression of that industry, and with the result of pushing things abroad, rather than having innovation being done,” Atkins stated during a panel discussion.

Furthermore, Atkins noted that the timeline for formal rulemaking may be affected by the ongoing U.S. government shutdown, but he remains optimistic. He noted that establishing clear rules for crypto would move the SEC beyond the previous administration’s reliance on regulation-by-enforcement and the current use of informal guidance and staff notes.

Following the panel, during a Q&A with reporters, Atkins stated that the “innovation exemption,” which he first advocated for last month, is a priority he hopes to finalize soon. He emphasized the importance of creating a welcoming environment for innovators in the U.S., aiming to prevent talent and projects from moving to foreign jurisdictions.

How the “Innovation Exemption” Could Unlock Growth for Shibarium

The exemption could also encourage institutional participation in Shibarium, as clearer rules reduce legal uncertainty and make the network more attractive to investors.

With the SEC signaling a shift from enforcement-heavy oversight to structured guidance, partnerships between Shiba Inu projects and fintech firms could accelerate. Developers might explore novel decentralized finance (DeFi) applications, staking mechanisms, or NFT utilities within Shibarium, fostering deeper engagement.

For the broader SHIB community, this regulatory clarity could enhance adoption, increase transaction volume, and boost confidence in long-term growth. The innovation exemption may ultimately position Shibarium as a competitive, U.S.-friendly layer for blockchain experimentation and expansion.

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House Republicans Probe Deleted Texts of Former SEC Chair Gensler

Michaela — Thu, 02 Oct 2025 10:12:00 +0000

U.S. House Republicans have opened an inquiry into missing text messages from former SEC Chair Gary Gensler, notifying current U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins that they are seeking answers on how text messages from Gensler’s tenure were lost.

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Key points:

House Republicans are investigating nearly a year of missing text messages from former SEC Chair Gary Gensler after an OIG report revealed their loss.
The messages were permanently erased after OIT staff performed a factory reset on Gensler’s phone, which had not been backed up since October 2022.
Lawmakers raised concerns about inconsistent IT policies and possible preferential treatment, citing risks to transparency, oversight, and federal recordkeeping laws.

In a letter to SEC Chair Atkins, House Financial Services Committee Chairman French Hill and Ranking Members Ann Wagner, Dan Meuser, and Bryan Steil pointed to findings from the agency’s Office of Inspector General (OIG). The report revealed that close to a full year of text messages from Gensler had been erased. “The report raises concerns regarding the SEC’s treatment of information technology (IT), particularly as it relates to its most senior officials,” the letter wrote.

Source: U.S. House Committee on Financial Services

The report stated that Gensler’s smartphone ceased syncing with the SEC’s mobile device management system on July 6, 2023. Although the device was said to be operating normally and in regular use beforehand, the system flagged it as “inactive” for a span of 62 days.

The issue was reportedly flagged multiple times, yet the SEC’s Office of Information Technology (OIT) took no steps to investigate or resolve it. Then, on August 10, 2023, the OIT introduced a new policy requiring any SEC-issued mobile device that failed to connect to the management system for 45 days to be remotely wiped.

Additionally, the lawmakers expressed concern that the OIT may have adopted a policy that was “poorly understood” and inconsistently applied. They pointed out that the former SEC Chair’s phone was not wiped until September 6, 2023, over two weeks later than the policy would have required, raising questions about whether he received preferential treatment.

The report noted that although Gensler’s smartphone had been wiped, his data could still have been preserved. Instead, OIT staff performed a full factory reset, permanently erasing the device’s contents, including nearly a year of text messages. The loss was compounded by the fact that the device had not been backed up since October 18, 2022, leaving no recovery option for the missing records.

After forensic attempts to recover Gensler’s lost texts failed, the OIT reviewed phone records to identify likely contacts. They compiled a list of 34 agency employees Gensler was believed to text most often, though the former SEC chair did not contribute to the list, and fellow commissioners were initially excluded. While staff claimed his texts were mostly administrative, the OIG found several exchanges contained substantive, mission-related communications.

“Collectively, these incidents, along with the OIG’s findings, raise serious concerns about former Chair Gensler’s and OIT’s compliance with federal recordkeeping laws, transparency obligations, and the integrity of agency oversight,” the letter wrote. “The Committee is engaging with the OIG to learn more about their report, seek clarity on outstanding questions, and discuss additional areas that require further oversight and investigation,” it added.

The former SEC Chair resigned after a turbulent tenure marked by lawsuits, delayed ETF approvals, and criticism of “regulation by enforcement.” Crypto firms argued his approach fueled uncertainty and pushed innovation abroad, while courts overturned some SEC actions. Gensler defended his focus on investor protection, but his clashes with the industry left lasting divides. His exit now raises hopes for clearer rules and broader approval of digital asset products.

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SEC Explores Tokenization of Stocks — What It Could Mean for SHIB

Michaela — Wed, 01 Oct 2025 10:41:44 +0000

The U.S. Securities and Exchange Commission (SEC) is reportedly preparing to let blockchain-based versions of stocks trade on crypto exchanges, marking a major move toward merging digital assets with traditional finance.

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Key points:

The SEC is exploring the trading of tokenized stocks, signaling increased regulatory acceptance of blockchain-based financial products.
Tokenization of stocks could improve market accessibility, liquidity, and efficiency, enabling faster and more global trading.
The integration of blockchain with traditional finance may drive innovation, expand digital asset adoption, and reshape how investors access and trade financial products.

According to The Information, the early-stage proposal would allow investors to buy and sell stock tokens, digital representations of shares in publicly traded companies, on approved crypto platforms.

The SEC’s initiative signals increasing regulatory acceptance of tokenization, the creation of blockchain-based tokens representing traditional asset ownership. Tokenized stocks are emerging as a key growth area in the broader tokenization market. While initial efforts focused on private credit and U.S. Treasury bonds, publicly traded stocks are now starting to gain traction.

This shift could make equity markets more accessible and efficient by enabling faster, 24/7 trading on blockchain networks. This may also open the door for new financial products and expand participation to a broader range of investors globally.

Tokenization Paves the Way for Mainstream Crypto Integration

The SEC’s exploration of stock tokenization spotlights a broader shift toward integrating blockchain technology with traditional financial markets. For SHIB holders, this regulatory openness signals a more receptive environment for digital assets, potentially encouraging mainstream investors to explore crypto markets with greater confidence.

As tokenized stocks gain traction, they could bring new liquidity, market participants, and infrastructure improvements that benefit the wider crypto ecosystem. Platforms supporting digital assets may see increased adoption, while established projects like SHIB could benefit from heightened awareness and credibility.

Over time, such developments may reinforce the case for holding tokens not just as speculative instruments, but as part of a growing digital economy where blockchain-based assets play a tangible role. Regulatory clarity and innovation together could help bridge the gap between mainstream finance and the decentralized world, creating a more robust, investor-friendly landscape for crypto communities.

As regulators and markets continue to explore the possibilities of tokenization, the evolution of digital assets is likely to accelerate, reshaping how investors access, trade, and think about financial products. The convergence of blockchain technology with traditional finance signals a new era of innovation, where digital tokens could become a standard part of everyday investing.

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SEC–CFTC Roundtable Confirms No Merger, Signals Impact on Crypto Market

Michaela — Tue, 30 Sep 2025 13:08:52 +0000

Regulators from the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) have held their first joint roundtable in over a decade to discuss aligning rules for the crypto industry, stressing cooperation rather than a merger.

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Key points:

The SEC and CFTC held their first joint roundtable in over a decade, focusing on collaboration to harmonize crypto regulations rather than pursuing a merger.
Officials emphasized that past regulatory gaps created a “no man’s land,” delaying products from reaching the market and underscoring the need for clearer guidance.
While cooperation may improve regulatory clarity, the U.S. crypto landscape remains fragmented, leaving long-term uncertainty for digital asset firms as future policies and agency guidance continue to evolve.

“Our focus is on harmonization, not on a merger between the SEC and CFTC,” SEC Chair Paul Atkins reportedly stated at the roundtable. “Working together is working better – the turf war is over,” acting CFTC Chair Caroline Pham stated.

“Our focus is on harmonization, not on a merger between the SEC and CFTC.” @SECPaulSAtkins
— Frank Corva (@frankcorva) September 29, 2025

At the September 29 roundtable, Atkins described the regulatory gap between the two agencies as a “no man’s land,” noting it has left a trail of “dead products” that might have reached the market if not for the prevailing uncertainty.

Pham, the sole remaining commissioner at the CFTC after a series of departures, emphasized in her opening remarks how closer collaboration between the two agencies could reshape the regulatory framework for digital asset firms.

Executives from cryptocurrency firms, including Kraken and Crypto.com, participated in the roundtable, which took place as the U.S. government faces a potential shutdown amid partisan disagreements over healthcare funding from a July budget bill.

SEC–CFTC Roundtable Could Bring Clarity for SHIB Holders

For SHIB holders, the SEC–CFTC roundtable signals more clarity than constraint. With both agencies stressing collaboration rather than a merger, exchanges where SHIB trades are unlikely to face sudden regulatory shifts, keeping liquidity and access largely stable for the time being.

This is particularly important for digital asset investors who rely on predictable market conditions to trade or participate in token-based ecosystems. That said, the U.S. crypto regulatory landscape remains fragmented, with overlapping responsibilities and differing enforcement approaches between the SEC and CFTC still in place.

While this fragmentation prevents immediate shocks or sweeping rule changes, it also maintains an element of long-term uncertainty, leaving investors and market participants watching closely for future policy updates. For SHIB holders, the takeaway is that there’s no new restriction on the horizon, but vigilance remains key, as evolving regulations, potential legislation, and agency guidance could shape the broader market environment in the months ahead, affecting adoption, trading, and overall investor confidence.

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SHIB ETF Path Clears Now; VP Warns on Market Risks

Gushiken Yona — Mon, 29 Sep 2025 08:20:09 +0000

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The U.S. Securities and Exchange Commission’s approval of new generic listing standards has defined a direct path for a potential spot Shiba Inu ETF. The asset meets the key requirement as its futures contract has been trading on the CFTC-regulated Coinbase Derivatives exchange for over a year. As the path clears for a wave of new crypto ETFs, including one for SHIB, 3iQ’s Executive Vice President of Product, Greg Benhaim, warns of the significant market challenges that lie ahead.

Key Points

Expert Warns of ETF Glut: Greg Benhaim of 3iQ cautions that the imminent launch of numerous crypto ETFs will create a hyper-competitive environment for capital and could confuse retail investors.
SHIB Now ETF-Eligible: Shiba Inu meets the SEC’s key requirement for an ETF because its futures have been trading on the CFTC-regulated Coinbase Derivatives exchange since July 15, 2024.
Challenge Shifts to Market Competition: With the regulatory path clear, the success of a potential SHIB ETF now hinges on its ability to compete for investor attention and capital in a crowded field.

Expert Cautions on Imminent ETF Wave

In response to new SEC guidelines for ETFs, Greg Benhaim, Executive Vice President of Product at 3iQ, offered a counter-narrative focused on practical market challenges. Drawing from his firm’s experience as an ETF issuer in Canada, he highlighted the potential downsides of this sudden market expansion in a note shared with The Shib Daily.

“At first glance, this seems bullish for the industry,” Benhaim shared. “However… it may be challenging for issuers to fight for raising capital when new products are being listed every single day.”

He also underscored the risk for retail participants who will soon face a barrage of new products. “To the average investor, they may have a tough time distinguishing between which coins to purchase,” Benhaim explained. “For example an AVAX ETF and an ADA ETF are very different but the investor may not appreciate this fully.”

How New SEC Rules Make a SHIB ETF Possible

Benhaim’s warning coincides with the removal of regulatory hurdles for a spot SHIB ETF. The SEC’s new generic listing standards allow exchanges to list crypto ETPs without a lengthy approval process, provided the asset has a futures contract that has traded for at least six months on a CFTC-regulated market.

Shiba Inu meets this critical requirement. According to a market notice from Coinbase Derivatives, futures for “1k Shib (SHB)” began trading on its platform on July 15, 2024.

Having traded for over 14 months, the SHIB futures contract exceeds the SEC’s six-month mandate, placing it in the same eligibility pool as assets like Solana and Polkadot. The new SEC rule makes a spot SHIB ETF a regulatory possibility.

From The Shib: How Shiba Inu Can Unlock Its SHIB ETF Future

Focus Shifts to Market Viability and Competition

The SEC’s decision alters the process for listing crypto investment products in the U.S. The primary challenge for issuers now involves proving an asset’s viability in a competitive market.

For the Shiba Inu community, which has long advocated for an ETF, the new rules signal the beginning of a more competitive phase. As Benhaim noted, the market itself will now act as the ultimate filter.

The proliferation of funds “will pave the way for the industry to identify which assets have significant retail appeal in ETF format and which don’t.”

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SEC Pushes ‘Innovation Exemption’ to Fast-Track Crypto Products

Michaela — Wed, 24 Sep 2025 12:38:21 +0000

U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has announced that the agency is developing an “innovation exemption” aimed at streamlining approval for digital-asset products by the end of the year, allowing crypto firms to launch offerings without facing outdated regulatory barriers.

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Key points:

SEC Chair Paul Atkins announced an “innovation exemption” to streamline digital-asset product approvals, allowing crypto firms to launch offerings faster under temporary regulatory relief.
The exemption could accelerate adoption of tokens like SHIB by making them easier to integrate into ETFs, mutual funds, and exchange offerings, boosting accessibility and visibility for retail and institutional investors.
While oversight remains, the framework encourages financial innovation, supports faster product approvals, and balances investor protection with market growth in regulated U.S. financial markets.

In an interview with Fox Business anchor Maria Bartiromo, Atkins shared that the agency is developing an “innovation exemption” to streamline the approval of digital-asset products. The exemption would temporarily relieve crypto firms from older securities regulations, enabling them to introduce new offerings while the SEC crafts rules tailored to the evolving market.

“We’re trying to get the marketplace some kind of stable platform upon which they can introduce new products,” Atkins stated in the interview. “There’s a lot going on and I’m really very excited about this opportunity to make this industry in America stand on firm ground so that America can lead with innovation as the President has called for,” he added.

Atkins’ remarks coincide with the launch of Project Crypto, a U.S. initiative aimed at modernizing securities regulations for digital assets. The effort seeks to help America’s financial markets transition on-chain, while separately, the SEC and Commodity Futures Trading Commission (CFTC) have been called on to coordinate through joint rulemaking.

“Innovation Exemption” Could Accelerate SHIB Adoption and Market Access

The SEC’s proposed “innovation exemption” aims to streamline the approval process for new digital asset products, potentially creating a faster pathway for tokens like SHIB to be included in ETFs, mutual funds, or exchange offerings.

By reducing regulatory delays, exchanges and asset managers may feel more confident listing or integrating SHIB into their platforms, making it more accessible to a broader audience. Increased visibility could attract both retail and institutional investors, driving liquidity and trading volume.

For holders, this development may signal stronger market recognition and adoption potential, positioning SHIB as a more mainstream digital asset. Additionally, faster product approvals could encourage financial innovation around SHIB, including structured investment products or derivatives, without waiting for lengthy regulatory reviews.

While the exemption would not remove all oversight, it would provide a controlled framework for experimentation, balancing investor protection with the opportunity for accelerated growth and integration in regulated financial markets.

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Lawmakers Push SEC to Fast-Track Trump’s Crypto 401(k) Retirement Plans

Michaela — Tue, 23 Sep 2025 12:23:35 +0000

The U.S. Securities and Exchange Commission (SEC) has been urged by nine lawmakers to act on President Donald Trump’s executive order to fast-track the inclusion of alternative assets, including crypto, in U.S. retirement plans.

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Key points:

Nine U.S. lawmakers urged the SEC to expedite Trump’s executive order allowing crypto in 401(k) retirement plans and adjust regulations as needed.
Easing restrictions could give Americans more flexibility in retirement planning, though critics warn alternative assets carry higher risks, fees, and lower transparency.
Allowing crypto in retirement plans could help normalize digital assets as a mainstream investment, attracting broader participation from developers, investors, and financial institutions.

In a letter to SEC Chair Paul Atkins, the nine lawmakers urged the commission to expedite last month’s executive order allowing crypto investments in U.S. 401(k) retirement plans. They also requested the SEC consider any regulatory or guidance adjustments needed to implement the directive effectively.

“Given these directives, we encourage the SEC to provide swift assistance to the Secretary of Labor and to make any necessary revisions to its current regulations and guidance,” the letter wrote. “We are hopeful that such actions will help the 90 million Americans that are currently restricted from investing in alternative assets to secure a dignified, comfortable retirement,” it added.

In August, President Trump signed the executive order aimed at giving alternative asset managers greater access to trillions in U.S. retirement funds, potentially reshaping how Americans save and grow wealth. The White House noted that regulatory hurdles and concerns over legal challenges have limited retirees’ ability to invest in options that might offer higher returns.

Officials argue that easing these restrictions could give Americans more flexibility in retirement planning. Critics warn, however, that alternative assets often carry higher risks, lower transparency, and increased fees compared with traditional retirement investments.

Retirement Plans Could Open the Door for Crypto and SHIB Growth

If U.S. retirement accounts begin allowing crypto investments, the impact could ripple far beyond the biggest names like Bitcoin and Ethereum. Ecosystem tokens such as SHIB stand to gain from increased exposure to long-term, institutional capital.

With an estimated $93 billion in potential inflows into 401(k) plans, even a small portion directed toward SHIB could significantly boost its adoption, market stability, and credibility.

Broader participation from retirement funds could also help normalize crypto as a mainstream asset class, attracting more developers, merchants, and investors to the space. This move could mark a pivotal step in blending traditional financial systems with the emerging decentralized economy, strengthening both investor confidence and market growth.

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US Lawmakers Press SEC on Justin Sun, Trump Ties, and Tron Nasdaq Listing

Michaela — Fri, 19 Sep 2025 09:38:06 +0000

Two members of Congress, Senator Jeff Merkley and Representative Sean Casten, have called on the Securities and Exchange Commission (SEC) to explain its decision to drop an enforcement case against Tron founder Justin Sun and clarify how it handles crypto firms going public on U.S. exchanges.

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Key proints:

Lawmakers Jeff Merkley and Sean Casten have asked the SEC to explain its dropped fraud case against Justin Sun and clarify rules for crypto listings.
They cited Sun’s ties to Donald Trump, including investments in the $TRUMP memecoin and World Liberty Financial, raising conflict of interest concerns.
The letter also flagged Tron’s Nasdaq debut via reverse merger, warning of financial, security, and disclosure risks tied to the process.

In a September 17 letter addressed to SEC Chair Paul Atkins and Acting Director of the Division of Corporation Finance Cicely LaMothe, Merkley and Casten raised concerns about Sun’s business ties with President Donald Trump. The lawmakers questioned whether these connections created potential conflicts of interest or risks of foreign influence, citing the SEC’s decision during the Trump administration to drop its fraud case against Sun.

“Mr. Sun’s decision to take his company public, potentially with the assistance of members of the Trump family, raises significant national security and investor protection concerns,” the letter wrote. “We urge the SEC to commit to ensuring full oversight of Mr. Sun and his company’s attempts to access U.S. capital markets, with particular attention to his concerning ties to President Trump and his family,” it added.

Merkley and Casten noted that the SEC filed a lawsuit against the Tron founder in 2023, accusing Sun of inflating the price of TRX, the native token of his Tron blockchain, to secure $31 million in unlawful gains. The lawmakers also suggested that Sun’s concerns over the case appeared to ease following Donald Trump’s re-election in November 2024.

Additionally, the two members of Congress spotlighted Sun’s significant investments in two cryptocurrency ventures they said “directly enriched the President and his family.” They emphasized that Sun is the largest publicly known investor in both the $TRUMP meme coin and World Liberty Financial (WLF), a decentralized finance initiative backed by Trump and his family.

Merkley and Casten raised concerns over Tron’s July debut on Nasdaq through a reverse merger, arguing the listing poses potential financial and national security risks because of the project’s reported ties to the Chinese government.

“The SEC has previously identified instances of fraud and other abuses involving reverse merger companies,” the letter pointed out. “Reverse merger transactions can enable private companies to bypass the disclosures, scrutiny, and months-long process associated with a formal Initial Public Offering (IPO),” it added.

Furthermore, the two members of Congress urged the SEC to confirm that Tron Inc. complies with the strict requirements for listing on U.S. stock exchanges. They also pressed the agency to address a series of questions tied to their concerns, setting an October 2 deadline for a response.

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Robinhood Pushes SEC for Fund Letting Everyday Investors Back Startups

Michaela — Tue, 16 Sep 2025 10:46:50 +0000

Brokerage firm Robinhood has announced that it is seeking approval from the U.S. Securities and Exchange Commission (SEC) for Robinhood Ventures Fund I (RVI), a closed-end fund designed to give retail investors direct access to its venture capital portfolio on the New York Stock Exchange (NYSE).

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Key points:

Robinhood seeks SEC approval for Robinhood Ventures Fund I, a closed-end fund giving retail investors access to its venture capital portfolio on the NYSE.
The fund targets private companies at the forefront of their industries, offering long-term exposure through IPOs and diversifying across multiple sectors.
By expanding venture access, Robinhood could increase visibility and engagement for its crypto offerings, potentially boosting SHIB liquidity and trading activity.

On Monday, Robinhood announced it filed a Form N-2 with the SEC to register shares of RVI, which will be managed by its newly established subsidiary, Robinhood Ventures DE. If approved, RVI shares would be listed on the NYSE, allowing investors to buy and sell them through participating brokerage platforms.

“Robinhood Ventures Fund I (RVI) is a closed-end fund that aims to offer retail investors exposure to companies at the frontiers of their industries, while they are still private,” Robinhood wrote in their announcement.

Allowing retail investors to participate in these investments would represent a significant shift, as access to early-stage private companies has traditionally been restricted to venture capital firms and high-net-worth individuals.

“Today’s filing is Robinhood’s latest effort to democratize access to private markets globally,” Robinhood stated. Robinhood added that RVI will target a focused portfolio of private companies operating at the forefront of their industries, with a long-term investment horizon extending through IPOs and beyond, while diversifying across multiple sectors.

Robinhood Expands Access, Could Boost SHIB Exposure

For SHIB holders, Robinhood’s venture fund initiative emphasizes the platform’s expanding influence in the broader digital asset and tech investment ecosystem. By giving retail investors access to high-growth sectors like blockchain, tokenization, and other emerging technologies, Robinhood is lowering barriers that have traditionally limited participation in venture opportunities.

This increased access could draw more attention to its crypto offerings, keeping SHIB in front of a broader and more engaged audience. As Robinhood continues to merge traditional venture investing with its digital asset services, SHIB holders may see enhanced liquidity, more active trading, and a stronger link between innovative markets and crypto adoption.

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SEC Will Notify Crypto Firms Before Enforcement Actions, Says SEC Chair Atkins

Michaela — Tue, 16 Sep 2025 07:55:08 +0000

U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has announced a policy shift, stating the agency will begin issuing advance notices to crypto firms before pursuing enforcement actions, moving away from its long-criticized regulation-by-enforcement approach.

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Key points:

SEC Chair Paul Atkins announced the agency will issue advance notices to crypto firms about potential violations before pursuing enforcement actions.
The shift comes alongside the SEC’s new Crypto Task Force, led by Commissioner Hester Peirce, which will host a major hearing on financial privacy and surveillance in October.
The policy change emphasizes the SEC’s move toward greater transparency and dialogue with the blockchain industry, aiming to balance innovation with investor protection.

According to a report by the Financial Times, Atkins revealed that the SEC intends to alert firms of potential technical violations through formal notices rather than moving directly to enforcement. He also voiced criticism of the regulator’s past reliance on aggressive enforcement when dealing with the blockchain industry.

Atkins acknowledged the wave of criticism directed at the SEC in recent years, noting that the agency’s actions lacked a clear foundation in precedent and offered little predictability for the industry.

The announcement that the SEC will begin issuing notices to crypto firms coincides with news that its dedicated Crypto Task Force is preparing to hold a major hearing on financial privacy and surveillance this October.

Building on the Spring Sprint Toward Crypto Clarity roundtables, the President’s Executive Order on Digital Assets, and the President’s Working Group report, Commissioner Hester Peirce has tasked the SEC’s Crypto Task Force with advancing U.S. leadership in digital assets and fintech while safeguarding economic freedom.

As part of this effort, the upcoming Financial Surveillance and Privacy roundtable will convene leading technologists and policy experts to explore innovations in privacy protection and examine key regulatory issues tied to financial surveillance.

The SEC established the Crypto Task Force earlier this year to address ongoing concerns from the digital assets industry, appointing Commissioner Peirce to lead the initiative.

The SEC’s evolving stance reflects a broader trend among regulators wrestling with how to balance innovation with investor protection. By adopting measures that emphasize dialogue and transparency, the agency is signaling a willingness to rethink its role in the fast-moving digital asset sector.

Whether these shifts will restore trust and foster a healthier relationship with the industry remains to be seen, but the change marks an important moment for U.S. crypto policy. The coming months, and the Task Force’s upcoming discussions, may prove pivotal in shaping the regulatory environment that defines the next stage of blockchain adoption.

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Nasdaq Pushes SEC to Approve Tokenized Stock Market on Blockchain

Michaela — Tue, 09 Sep 2025 13:40:38 +0000

The Nasdaq has formally requested approval from the U.S. Securities and Exchange Commission (SEC) to list and trade tokenized stocks, aiming to integrate blockchain technology into mainstream Wall Street trading while maintaining existing investor protections.

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Key points:

Nasdaq has requested SEC approval to list and trade tokenized stocks, aiming to integrate blockchain technology while keeping investor protections intact.
The proposal ensures tokenized shares carry the same rights as traditional equities, with clear labeling and equal priority in trade execution.
Wider adoption of tokenized assets could legitimize digital tokens like SHIB, opening new liquidity, visibility, and engagement opportunities in a tokenized financial ecosystem.

On September 8, Nasdaq submitted a filing to the SEC seeking amendments to existing rules, including the definition of a security, to allow tokenized stocks to trade with the same execution and documentation standards as traditional equities. Any changes would still need to undergo a public comment period and receive SEC approval before implementation.

In its filing, Nasdaq emphasized that tokenized shares would maintain the same rights and protections as their traditional counterparts. The exchange also proposed clear labeling of tokenized assets to ensure that clearing firms and the Depository Trust Company could handle orders just as they do for conventional stocks.

Nasdaq also noted that tokenized securities would receive the same priority as traditional assets during trade execution. The proposal goes beyond a mere technical update, raising deeper questions about how stocks are issued, defined, and settled in modern markets.

Nasdaq and the Rise of SHIB in a Tokenized Economy

If Wall Street begins treating tokenized assets as a standard part of the financial ecosystem, it could significantly shift the perception of digital tokens like SHIB. This isn’t necessarily about SHIB being directly tokenized on the Nasdaq, it’s about how its presence in an increasingly tokenized economy could bolster its legitimacy.

As traditional financial institutions explore tokenized stocks, the broader acceptance of blockchain-based assets could create new liquidity opportunities, enhance market visibility, and integrate digital tokens into everyday financial infrastructure.

For SHIB, this means that even without direct tokenization, its role in a tokenized economy becomes more meaningful. Investors, traders, and institutions may view it as a more credible digital asset simply because the frameworks that support tokenized equities are becoming normalized. In this context, SHIB could benefit from increased adoption, more robust trading volumes, and deeper engagement from the mainstream finance sector.

Ultimately, Nasdaq’s push to tokenize the stock market represents a bridge between conventional finance and blockchain technology. As these two worlds converge, tokens are better positioned to be taken seriously in broader financial discussions.

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New US Crypto Bill Could Redefine DeFi Rules — What It Means for SHIB

Michaela — Mon, 08 Sep 2025 06:52:00 +0000

U.S. senators have introduced a revised draft of the Responsible Financial Innovation Act of 2025, a crypto bill aiming to clarify the oversight roles of the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) in digital asset regulation. The proposal also adds protections for decentralized finance (DeFi) developers and addresses emerging blockchain sectors such as DePINs.

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Key points:

The proposed crypto bill clarifies SEC and CFTC oversight while protecting DeFi developers, validators, and wallet creators from being treated as traditional financial entities.
Common crypto activities like airdrops, staking rewards, and liquid-staking outputs would not be considered securities, easing legal concerns for users and ecosystems.
For Shibarium, the bill could bring clearer safeguards for liquidity, staking, and rewards, while recognition of DePIN tokens opens doors to decentralized infrastructure integrations.

“To clearly draw the line between digital asset securities and commodities, to impose disclosure requirements for certain transactions involving ancillary assets, and for other purposes,” the draft wrote.

The Responsible Financial Innovation Act of 2025 calls for the creation of a Joint Advisory Committee on Digital Assets, bringing together members from both the SEC and CFTC. While its recommendations would remain nonbinding, the agencies would be obligated to issue public responses, marking a move toward greater transparency and interagency coordination.

Furthermore, the draft provides explicit protections for participants in the DeFi sector. Developers, validators, liquidity providers, wallet creators, and infrastructure contributors would not be automatically subject to traditional financial regulations, provided the protocols they support are not under centralized control.

The bill also seeks to ease regulatory concerns around common crypto activities such as airdrops, staking rewards, and liquid-staking outputs. Under the proposal, these activities would not be classified as securities offerings, reducing the risk of unintended legal exposure for users.

Decentralized Physical Infrastructure Networks (DePINs) would receive tailored recognition under federal law, with tokens supporting these systems exempt from securities classification provided no single entity holds more than 20% of the supply.

What the Crypto Bill Could Mean for Shibarium

The draft bill’s protections for DeFi developers, validators, and wallet builders could have direct and meaningful implications for ecosystems like Shibarium. If passed, SHIB holders and Shibarium builders may finally gain clearer legal safeguards, particularly in areas such as liquidity provision, staking programs, and the development of cross-chain utilities that expand network functionality.

By confirming that airdrops and staking rewards are not securities, the crypto bill could ease long-standing concerns over how Shibarium’s reward mechanisms might be treated under federal law. This clarity could encourage more participation and innovation within the ecosystem.

Additionally, the recognition of DePIN tokens creates a potential pathway for Shibarium to explore partnerships with decentralized infrastructure projects, positioning the network to expand its utility while offering its community stronger legal protection and more opportunities for growth.

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SEC, CFTC Open Door for Spot Crypto

Michaela — Wed, 03 Sep 2025 12:07:38 +0000

The U.S. Securities and Exchange Commission’s (SEC) Division of Trading and Markets and the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight and Division of Clearing and Risk have launched a joint initiative to streamline and coordinate the regulatory process for listing and trading specific spot crypto products.

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Key points:

SEC and CFTC launch joint effort to clarify rules for spot crypto trading.
Registered exchanges can list spot crypto products under current law.
Regulators will review filings and ensure markets meet transparency and investor protection standards.

In an official statement, the SEC and CFTC said the joint effort builds on the SEC’s Project Crypto and the CFTC’s Crypto Sprint. The initiative also reflects recommendations from President Donald Trump’s Working Group on Digital Asset Markets, which urged both agencies to collaborate in order to position the U.S. as a global leader in blockchain innovation and cryptocurrency markets.

“Today, the Divisions provide their view that DCMs, FBOTs, and NSEs are not prohibited from facilitating the trading of certain spot crypto asset products,” the statement wrote. “Market participants are invited to engage with SEC staff or CFTC staff, as needed,” it added.

The statement emphasized that current law does not prevent exchanges registered with the SEC or CFTC from offering trading in certain spot crypto assets. Under the Commodity Exchange Act, most leveraged, margined, or financed “retail commodity transactions” must take place on a CFTC-registered designated contract market (DCM) or foreign board of trade (FBOT), unless an exception applies, such as transactions listed on an SEC-registered national securities exchange (NSE).

The agencies also confirmed that they will swiftly review filings and requests from DCMs, FBOTs, and NSEs aiming to offer trading in certain spot crypto assets. In their joint statement, the SEC and CFTC noted key factors for market participants to consider when operating markets or engaging in spot crypto trading.

Regulators stated they are prepared to evaluate exchange filings, respond to inquiries regarding custody and clearing, and ensure that new spot crypto markets uphold standards for transparency, oversight, and investor protection. Exchanges and market participants were encouraged to reach out to the SEC or CFTC with proposals or questions.

The joint initiative signals a broader shift toward regulatory clarity in the U.S. crypto market, offering exchanges and investors a clearer framework for participation while emphasizing the government’s intent to balance innovation with market integrity. This approach could encourage more traditional financial venues to explore crypto offerings, potentially expanding access and adoption in the coming months.

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Shiba Inu Breaks Into Mainstream Finance with New European ETP

Gushiken Yona — Fri, 29 Aug 2025 12:45:27 +0000

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Shiba Inu (SHIB) is taking a major step toward mainstream financial adoption as asset manager Valour lists a new Exchange-Traded Product (ETP) on Sweden’s Spotlight Stock Market. This regulated offering allows traditional investors to gain exposure to SHIB directly through their banks and brokers, bridging a key gap between digital assets and conventional investment platforms.

Key Points

European Access: Valour’s SHIB ETP allows investors to buy Shiba Inu using Swedish krona through regular banks and brokerage accounts.
Mainstream Adoption: The listing provides legitimacy and visibility for SHIB, enabling investors to access it without relying on crypto exchanges or wallets.
U.S. Spot ETF Challenges: Approval of a U.S. spot ETF for SHIB faces higher regulatory hurdles, particularly the absence of a CME-regulated futures market.

A Bridge Between Crypto and Traditional Finance

The Valour Shiba Inu ETP, priced in SEK, is part of a broader expansion of eight crypto ETPs in Europe. It provides regulated exposure for investors who may be unfamiliar with or hesitant to use digital wallets and exchanges. The product comes with a 1.9% management fee.

“Nordic investors continue to seek simple and transparent access to a wider range of digital assets,” said Johanna T. Belitz, Head of Nordics at Valour. She added that the new products are “directly aligned with the market’s demand for diversified exposure.”

From The Shib Magazine: One Shib, Many Chains: The Official Blueprint for Interoperability

We’re proud to expand our Nordic product suite with the launch of eight new SEK-denominated ETPs on @__Spotlight___ Stock Market – Valour now provides 85+ ETPs across Europe, reinforcing our leadership in regulated digital-asset investment solutions.

“Nordic investors… pic.twitter.com/icfJ8FenmV
— Valour (@ValourFunds) August 27, 2025

By including SHIB alongside blockchain projects like VeChain and Celestia, Valour positions it as a viable option for diversified investment strategies. This helps move Shiba Inu beyond its “meme coin” origins toward recognition as a durable digital asset with a large, active community.

The U.S. Regulatory Landscape and SHIB ETF Prospects

While the European ETP is a milestone, a potential U.S. spot ETF for Shiba Inu remains a complex challenge. Following spot Bitcoin and Ethereum ETF approvals, a more crypto-receptive administration has sparked optimism, and the SEC is reviewing over 75 crypto-related ETF filings.

From The Shib Magazine: One Shib, Many Chains: The Official Blueprint for Interoperability

Market analysts predict favorable odds for spot ETFs tracking major altcoins like Solana and XRP, with key deadlines approaching in October 2025. Approval of these assets would set a precedent for Shiba Inu.

However, a key hurdle remains: the SEC historically requires a regulated futures market, such as one on the Chicago Mercantile Exchange (CME), for spot crypto ETFs. Currently, Shiba Inu does not have a CME-listed futures product.

Valour’s European listing gives investors immediate, regulated access to Shiba Inu, demonstrating growing demand for mainstream crypto products. While a U.S. spot ETF remains a longer-term goal, this launch highlights SHIB’s evolution from community-driven meme token to a recognized digital asset in regulated financial markets.

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CFTC Taps Nasdaq Tool to Hunt Insider Trading in Crypto & Stocks

Michaela — Thu, 28 Aug 2025 08:41:36 +0000

Summary: Why is the CFTC using Nasdaq surveillance technology?

The CFTC is using Nasdaq surveillance technology to improve fraud detection and monitor trading more effectively. The platform provides automated alerts and cross-market analytics to flag unusual activity across multiple asset classes. This upgrade helps the CFTC respond faster and strengthen the integrity of U.S. markets.

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The Commodity Futures Trading Commission (CFTC) has announced it has begun using Nasdaq’s advanced surveillance technology to strengthen fraud detection and market monitoring, marking a key step in modernizing its outdated systems.

“As our markets continue to evolve and integrate new technology, it’s critical that the CFTC stays ahead of the curve,” Acting Chairman Caroline Pham stated in a Wednesday press release. Acting Chairman Pham explained that Nasdaq Market Surveillance will equip the CFTC with automated alerts and cross-market analytics, enhancing the agency’s ability to detect and prevent fraud, manipulation, and other abusive practices across all its divisions.

The new technology suite is expected to streamline the analysis of market trends and swiftly flag unusual or disruptive trading activity, enabling CFTC staff to respond more effectively.

“It’s the latest example of our work in recent months to bring about the transformation and optimization necessary to make the CFTC a 21st century regulator. The CFTC is a leader in derivatives regulation, and Nasdaq’s Market Surveillance platform will be a key component to our success,” Acting Chairman Pham stated.

“As both an owner and operator of heavily regulated markets, as well as a technology provider to financial services companies worldwide, Nasdaq occupies a unique position at the intersection of innovation and regulation. We’re proud to partner with the CFTC and support their mission to promote the integrity, resilience, and vibrancy of U.S. derivatives markets,” Tal Cohen, President at Nasdaq, stated.

Nasdaq Market Surveillance, one of the most widely adopted monitoring systems worldwide, supports more than 50 exchanges and 20 international regulators. With the CFTC overseeing a diverse and expanding derivatives market, including commodities, fixed income, currencies, crypto assets, and event-driven products, the platform is expected to help the Commission detect potential manipulation across asset classes, perform detailed transaction-level analysis, and generate automated alerts across multiple trading venues.

The CFTC’s adoption of Nasdaq’s surveillance technology comes in the wake of recommendations from President Donald Trump’s Working Group on Digital Assets, which advocated for a collaborative regulatory framework. The report proposed that oversight of digital assets be shared between the SEC and CFTC, with the latter responsible for regulating commodity-backed tokens.

The enhanced surveillance capabilities could reshape how market participants approach trading, creating stronger incentives for compliance and fostering a more resilient financial ecosystem.

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Global Regulators Warn SEC: Tokenized Stocks Could Risk Investors’ Cash

Michaela — Tue, 26 Aug 2025 10:28:09 +0000

Summary: Why are global regulators concerned about tokenized stocks?

Regulators warn that tokenized stocks can pose risks to investors because they don’t always provide the same rights as traditional shares, such as voting or dividends. They also caution that these products could harm market integrity if misrepresented as equivalent to real stocks. As a result, authorities are urging stricter oversight and clearer legal frameworks for these digital assets.

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Global market regulators, including the World Federation of Exchanges (WFE), the European Securities and Markets Authority (ESMA), and IOSCO’s Fintech Task Force, have urged the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force to tighten oversight of tokenized stocks, warning that the blockchain-based assets pose investor risks and threaten overall market integrity.

According to Reuters, the WFE raised concerns in a letter sent to three regulatory bodies, warning about the growing number of brokers and crypto platforms that are either already offering or planning to offer “so-called tokenised U.S. stocks.” “These products are marketed as stock tokens or the equivalent to stocks when they are not,” the letter stated.

The WFE did not identify the specific brokers or trading platforms in question. It warned that companies whose shares are replicated through tokenized versions could face reputational harm if those products fail.

WFE CEO Nandini Sukumar told Reuters that the organization’s stance reflects the worries of market infrastructure participants and the wider financial industry. Sukumar added that several share issuers had voiced concerns directly to their respective exchanges.

Furthermore, the WFE emphasized that regulators should enforce securities laws for tokenized assets, clarify legal standards for ownership and custody, and ensure these tokens are not promoted as equivalent to traditional stocks.

Tokenized stocks are digital representations of traditional shares that exist on a blockchain. Each token mirrors the value of the underlying stock, allowing investors to buy, sell, and trade them on crypto platforms.

While they aim to offer easier access and faster settlement than traditional markets, tokenized stocks do not always provide the same legal rights as owning the actual shares, such as voting or dividends, which raises concerns about investor protection and market integrity.

The rise of tokenized stocks spotlights the tension between innovation and investor protection, as regulators and market participants seek to balance new financial technologies with the stability and transparency of traditional markets.

The post Global Regulators Warn SEC: Tokenized Stocks Could Risk Investors’ Cash first appeared on The Shib Daily.

SEC Signals Most Tokens Aren’t Securities: What It Means for SHIB Holders

Michaela — Wed, 20 Aug 2025 07:10:37 +0000

Summary: How could the SEC’s stance on securities affect crypto markets?

SEC Chair Paul Atkins indicated that most crypto tokens are not securities, reducing the risk of trading restrictions or liquidity issues. This approach creates a clearer and more predictable regulatory environment for digital assets. It could also encourage broader adoption and greater institutional participation in the crypto market.

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U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has indicated that only a limited number of crypto tokens should be classified as securities, signaling a shift in the agency’s approach to digital assets. He also addressed the Commission’s interactions with the Trump administration and outlined plans for regulating the growing cryptocurrency market.

At the Wyoming Blockchain Symposium on Tuesday, Atkins emphasized the SEC’s Project Crypto initiative, which aims to set clear rules for digital assets. He suggested that the agency intends to pursue its own regulatory approach even as Congress considers legislation to define the broader market structure.

Atkins noted that the SEC can not view tokens as inherently being securities. He stated that the Commission will move forward with the perspective that a token alone is generally not considered a security. “There are very few, in my mind, tokens that are securities, but it depends on what’s the package around it and how that’s being sold,” Atkins stated.

While as SEC Chair, Atkins has the authority to interpret rules for digital assets, Congress is also moving to establish a formal crypto market structure.

The House passed the Digital Asset Market Clarity (CLARITY) Act in July, and Senate Banking leaders plan to build on that framework. Speaking at the Wyoming Blockchain Symposium, Senate Banking Chair Tim Scott noted that a number of Democrats could join Republicans in backing the legislation when the Senate returns from recess on September 2.

In a recent interview with Fox News, Atkins stated that the SEC is actively working to position the U.S. as a global leader in digital assets, reflecting President Trump’s agenda for the sector.

Atkins noted that the Commission has begun mobilizing its divisions and offices to coordinate efforts and advance the implementation of its digital asset strategy.

Softer SEC Approach to Securities Could Boost SHIB Adoption and Stability

A softer regulatory stance from the SEC could be good news for the Shiba Inu community. If fewer tokens are classified as securities, it lowers the risk of trading restrictions or liquidity constraints that could hinder market activity. For SHIB holders, this approach signals a more predictable regulatory environment, paving the way for broader adoption and greater long-term stability in the U.S. market.

Such a stance could also encourage more institutional interest in crypto projects like Shiba Inu, as companies and investors gain confidence that regulatory hurdles may be more manageable. Additionally, a clearer framework from the SEC could help crypto platforms and exchanges expand their services without the fear of sudden enforcement actions, benefiting the entire SHIB ecosystem.

While challenges remain, including ongoing debates in Congress over digital asset legislation, the shift in tone from the SEC represents a potential turning point for U.S.-based crypto adoption and the future growth of community-driven tokens.

The post SEC Signals Most Tokens Aren’t Securities: What It Means for SHIB Holders first appeared on The Shib Daily.

SEC-Ripple Truce Sets Stage for Crypto Rules — What It Means for SHIB

Michaela — Wed, 13 Aug 2025 07:51:23 +0000

Summary: What does the end of the Ripple case mean for the cryptocurrency industry?

The conclusion of the Ripple case allows the SEC to shift its focus toward developing clearer regulations for the crypto market. This clarity could help define how digital assets are classified and traded in the U.S. It also sets the stage for more consistent regulatory guidelines that encourage innovation while protecting investors.

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Following the conclusion of its nearly five-year legal battle with Ripple Labs, U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins has indicated the Commission’s renewed focus on establishing a clear and comprehensive regulatory framework for the cryptocurrency industry.

“With this chapter closed, we now have an opportunity to shift our energy from the courtroom to the policy drafting table,” Atkins wrote in an X post in response to SEC Commissioner Hester Peirce’s message about the end of the SEC-Ripple case.

Source: Paul Atkins

Atkins emphasized that with the conclusion of the case, the SEC’s priority should shift to developing a “clear regulatory framework” that encourages innovation and safeguards investors.

Both the SEC and Ripple have agreed to withdraw their legal appeals and cover their own expenses. The dispute began in December 2020, when the SEC filed a lawsuit accusing Ripple of raising $1.3 billion through the sale of unregistered XRP securities. In a July 2023 ruling, the court determined that XRP did not qualify as a security for retail investors but was considered a security in transactions involving institutional buyers.

“A welcome development for many reasons,” Commissioner Peirce wrote. “Minds once occupied with litigation now can concentrate on creating a clear regulatory framework for crypto,” she added.

Source: Hester Peirce

Ripple Case Sets Stage for New Rules

The conclusion of the Ripple case marks a significant moment for the broader cryptocurrency industry. For tokens like SHIB, this shift could provide much-needed clarity on how digital assets are categorized under U.S. law, potentially easing the pathway for more consistent listings on exchanges and improving liquidity.

However, the introduction of stricter regulations may also bring challenges. Enhanced compliance requirements could affect how SHIB and its related tokens, BONE and LEASH, are marketed and incorporated into decentralized finance (DeFi) platforms.

Such changes might influence investor demand and the ease with which these tokens can be accessed or utilized within the ecosystem. As the SEC moves toward clearer rules, Shib holders and developers will need to stay engaged with regulatory developments to navigate this evolving landscape effectively.

Overall, the SEC’s renewed focus on regulation spotlights the importance of a clear and adaptable framework for the Shiba Inu community. Thoughtful policies moving forward have the potential to support SHIB’s continued growth and strengthen its position within the evolving digital asset landscape.

The post SEC-Ripple Truce Sets Stage for Crypto Rules — What It Means for SHIB first appeared on The Shib Daily.

SEC Rules Certain Liquid Staking Activities Outside Securities Laws

Michaela — Wed, 06 Aug 2025 10:11:23 +0000

Summary: What did the SEC say about liquid staking?

The SEC clarified that certain liquid staking activities do not count as securities offerings. This means participants don’t have to register them under current securities laws. The decision reflects an effort to provide clearer rules for crypto-related activities.

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The U.S. Securities and Exchange Commission (SEC) has clarified that certain cryptocurrency liquid staking activities are not considered securities offerings, signaling a step toward clearer regulatory guidance for the digital asset industry.

In an official statement, the Commission’s Division of Corporation Finance noted that, depending on specific facts and circumstances, the liquid staking activities addressed in the guidance do not constitute an offer or sale of securities. The agency cited relevant provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 to support its position.

“It is the Division’s view that participants in Liquid Staking Activities do not need to register with the Commission transactions under the Securities Act, or fall within one of the Securities Act’s exemptions from registration in connection with these Liquid Staking Activities,” the Commission stated.

The SEC described liquid staking as the practice of locking digital assets through a protocol in exchange for a receipt token that represents the staker’s interest or ownership in those assets.

“Under my leadership, the SEC is committed to providing clear guidance on the application of the federal securities laws to emerging technologies and financial activities,” SEC Chairman Paul Atkins said. “Today’s staff statement on liquid staking is a significant step forward in clarifying the staff’s view about crypto asset activities that do not fall within the SEC’s jurisdiction. I am pleased that the SEC’s Project Crypto initiative is already producing results for the American people,” he added.

The SEC’s clarification comes alongside the launch of Project Crypto, a new initiative designed to align the agency’s regulatory efforts with President Donald Trump’s stated goal of establishing the United States as a global leader in the cryptocurrency sector.

Atkins shared Project Crypto was established in direct response to recommendations laid out in the recent digital assets report issued by President Trump’s Working Group.

The SEC’s recent moves come as part of a broader shift in how regulators are engaging with the evolving digital asset landscape. With market participants seeking clearer guardrails and consistent guidance, industry watchers are closely monitoring how these developments may influence future policymaking and innovation.

While questions remain around the application of existing laws to emerging technologies, signals from the Commission suggest a growing awareness of the need for regulatory frameworks that foster both investor protection and technological advancement. As digital finance continues to expand, clarity and communication between regulators and stakeholders will likely remain a central focus in the months ahead.

The post SEC Rules Certain Liquid Staking Activities Outside Securities Laws first appeared on The Shib Daily.

CFTC Eyes Spot Crypto Trading — Could SHIB Be Next in Line?

Michaela — Tue, 05 Aug 2025 11:55:35 +0000

Summary: What is the CFTC doing about spot crypto trading?

The CFTC is launching an initiative to regulate spot crypto trading on federally registered exchanges. It aims to apply existing laws to ensure that retail trading involving leverage or margin happens on approved platforms. The agency is also seeking public feedback to help clarify and refine the regulatory framework.

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Commodity Futures Trading Commission (CFTC) Acting Chairman Caroline Pham has unveiled a new initiative aimed at overseeing spot crypto trading of digital asset contracts listed on CFTC-registered futures exchanges, also known as designated contract markets (DCMs).

In an official statement, the CFTC confirmed the initiative marks the agency’s first major step in its so-called “crypto sprint”, a push to begin implementing policy recommendations laid out in the Trump administration’s Working Group on Digital Asset Markets report.

“Under President Trump’s strong leadership and vision, the CFTC is full speed ahead on enabling immediate trading of digital assets at the Federal level in coordination with the SEC’s Project Crypto,” Acting Chairman Pham stated.

Acting Chairman Pham emphasized that the agency already has a straightforward path forward under existing law. She noted that the Commodity Exchange Act mandates that all retail commodity trading involving leverage, margin, or financing must take place on a DCM.

Furthermore, the CFTC has called on all stakeholders to collaborate with the Commission in clarifying regulatory guidelines for listing spot crypto asset contracts on DCMs under its current authority. “Together, we will make America the crypto capital of the world,” Acting Chairman Pham stated, echoing the sentiments of President Trump.

Feedback is requested on relevant legal provisions, including specific sections of the Commodity Exchange Act and CFTC regulations, as well as potential overlaps with securities laws overseen by the SEC. This collaboration aims to ensure clear and consistent regulatory frameworks for spot crypto trading.

Stakeholders are encouraged to submit their written feedback to the Commission via the CFTC’s official website by August 18. All submitted comments will be made publicly available on the site.

Spot Crypto Trading May Boost SHIB Access

The CFTC’s initiative to permit spot crypto trading on federally registered exchanges represents a significant development for tokens like SHIB. Should SHIB be included among the assets approved for trading on these regulated platforms, it could unlock new, compliant venues for U.S. investors to buy and sell the token.

This enhanced accessibility may lower barriers currently faced by retail traders, fostering greater participation and liquidity in SHIB markets.

Moreover, the regulatory emphasis on leverage and financing requirements could shape how SHIB is handled within derivative and margin trading contexts. Clearer rules could provide added protections for traders while potentially attracting institutional interest, as compliance reduces uncertainty around trading practices.

For the Shiba Inu community, these changes may translate into increased market confidence and broader adoption, reinforcing SHIB’s position in the evolving digital asset landscape.

The post CFTC Eyes Spot Crypto Trading — Could SHIB Be Next in Line? first appeared on The Shib Daily.

CFTC and SEC Launch Crypto Sprint — New Rules Could Shake Up DeFi

Michaela — Mon, 04 Aug 2025 11:31:19 +0000

Summary: What is the goal of the CFTC and SEC’s new crypto sprint?

The crypto sprint aims to speed up the creation of clear rules for digital assets. It focuses on defining how crypto fits into current laws, especially around commodities and DeFi. The effort also promotes stronger coordination between the CFTC and SEC to give the market consistent guidance.

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Commodity Futures Trading Commission (CFTC) Acting Chair Caroline Pham has announced the launch of a “crypto sprint” aimed at accelerating the agency’s adoption of key regulatory recommendations, aligning with former President Donald Trump’s call to establish America as the “crypto capital of the world.”

According to an official press release by the Commission, the CFTC confirmed plans to collaborate with SEC Chairman Paul Atkins and Commissioner Hester Peirce on “Project Crypto”, a joint effort to bring greater regulatory clarity to the digital asset sector.

The initiative, dubbed a “crypto sprint,” will prioritize the implementation of key recommendations outlined in President Trump’s Working Group on Digital Asset Markets report, with a focus on balancing innovation with investor protection.

“Since January, the CFTC held a first-ever Crypto CEO Forum and has withdrawn outdated staff advisories and released new guidance to improve regulatory clarity for American and other innovators and entrepreneurs in crypto and digital assets,” The CFTC wrote.

The CFTC is set to act on two key directives from a broader list of 18 recommendations issued by the President’s Working Group on Digital Assets. Among them is a call to clarify how cryptocurrencies should be treated as commodities under existing law, provide registration guidance for decentralized finance (DeFi) protocols, and issue clear rules for how CFTC-regulated entities can engage with digital assets.

Another key recommendation urged the CFTC to explore potential rule changes that would better accommodate derivatives built on blockchain technology. Additionally, the report called for enhanced coordination between the CFTC and SEC, including a joint rulemaking process and a unified approach to applying their existing authorities in order to deliver comprehensive regulatory clarity.

Crypto Sprint May Shake Up Shiba Inu DeFi

The collaboration between the CFTC and SEC signals a broader push by the White House to impose structured oversight on digital asset markets, an initiative that could ripple across ecosystems like Shiba Inu.

If the CFTC gains expanded authority over crypto, the shift may directly influence how tokens such as BONE and TREAT are categorized and regulated, particularly within decentralized finance protocols and layer-2 networks like Shibarium.

For SHIB holders, this could mark a turning point. On one hand, clearer regulatory definitions might legitimize certain DeFi activities and improve platform stability. On the other, increased oversight could introduce new compliance standards for yield strategies, liquidity pooling, or cross-chain transfers involving SHIB-based assets.

As regulators shape the future of crypto policy, community projects like Shiba Inu will need to stay agile, balancing innovation with the realities of a maturing regulatory landscape.

The post CFTC and SEC Launch Crypto Sprint — New Rules Could Shake Up DeFi first appeared on The Shib Daily.

SEC Wins Partial Victory as Judge Rejects Kraken’s Jurisdiction Defense

Michaela — Tue, 28 Jan 2025 18:07:48 +0000

A California federal judge has ruled in favor of the U.S. Securities and Exchange Commission (SEC), dismissing a defense from Kraken, the popular crypto exchange, that Congress had not granted the regulator authority over cryptocurrency.

In a ruling on January 24, Judge William Orrick dismissed Kraken’s “major questions doctrine defense,” one of three arguments the SEC sought to have removed in its lawsuit against the exchange. The SEC alleges that Kraken offered unregistered securities, marking a partial win for the regulator in the ongoing legal battle.

Judge Orrick ruled that the SEC was not claiming authority that was “exceedingly broad” or “beyond what Congress could have reasonably delegated” to the agency. He also determined that the SEC’s actions, in this case, did not represent an overextension of its regulatory authority, clarifying that the major questions doctrine typically applies to matters with broad economic impact, such as the energy sector or student loan debt, rather than the cryptocurrency industry.

Judge Orrick further concluded that, despite its growth, cryptocurrency has not yet attained the same level of economic significance as other sectors.

Crypto companies such as Coinbase, Ripple, and Binance have relied on the major questions doctrine in their legal cases, which asserts that government agencies cannot exercise authority unless explicitly granted by Congress. These firms argue that Congress has not specifically authorized the SEC to regulate the cryptocurrency industry.

Although the ruling bolstered the SEC’s stance in its case against Kraken, the exchange successfully retained its “fair notice” defense, claiming that the SEC did not adequately inform it that its operations were in violation of securities laws.

Additionally, Judge Orrick acknowledged Kraken’s claim of lack of ”fair notice,” which could raise concerns about due process. He noted that the SEC must prove that a typical entity like Kraken would reasonably understand how the Howey Test—used to determine whether something qualifies as a security—applies to transactions on its platform. The judge stated that the SEC had not yet provided sufficient evidence to support that claim.

In November 2023, the SEC filed a lawsuit against Kraken, accusing the company of operating as an unregistered securities exchange. The regulator also alleged that Kraken’s parent companies, Payward Inc. and Payward Ventures, have been in violation of securities laws dating back to 2018.

The case has progressed through multiple phases, including a decision in August by a U.S. federal court that rejected Kraken’s attempt to have the SEC’s lawsuit dismissed.

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CFTC Announces Crypto Roundtables to Address Market Rules and Safeguards

Michaela — Tue, 28 Jan 2025 16:50:27 +0000

Caroline Pham, the acting chair of the U.S. Commodity Futures Trading Commission (CFTC), has revealed that the agency will host public roundtable discussions to tackle market concerns, with a focus on digital assets.

On January 27, the CFTC announced plans to host roundtable events in the coming months, tackling topics such as conflicts of interest, prediction markets, and digital assets. Pham stated that these discussions would build on prior engagements with industry leaders and market stakeholders.

“As I have long said, the CFTC must take a forward-looking approach to shifts in market structure to ensure our markets remain vibrant and resilient while protecting all participants,” Pham stated in the filing.

In line with President Donald Trump’s forward-thinking stance on crypto, both the U.S. Securities and Exchange Commission (SEC) and CFTC are exploring the possibility of implementing regulations that favor the growth of the digital asset sector. If these regulators move forward with crypto-friendly policies, the U.S. could position itself as a leading force in the global cryptocurrency market.

“A holistic approach to evolving market trends will help to establish clear rules of the road and safeguards that will promote US economic growth and American competitiveness,” Pham said.

The CFTC’s announcement came just days after commissioners appointed Pham as the acting chair, following President Trump’s inauguration. As of now, it remains uncertain who President Trump will nominate to officially fill the role of chair.

Pham assumed the role of acting CFTC Chair following Rostin Behnam’s resignation, which occurred on the same day SEC Chair Gary Gensler also stepped down. In his last remarks, Behnam called on policymakers to tackle regulatory gaps in the cryptocurrency space.

Behnam called for clearer regulations that would establish a definitive distinction between what is deemed “permissible” and “impermissible” within the industry. Behnam’s emphasis on regulatory clarity reflects the ongoing need for more comprehensive frameworks to guide the rapidly evolving digital asset sector.

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The Shib News Recap: Tuesday

Malaya Ruiz — Tue, 21 Jan 2025 22:00:00 +0000

In today’s headlines, the spotlight is on the significant market performance of Shiba Inu Treat ($TREAT) on KuCoin. Mark Cuban’s encouraging comments about Shiba Inu further contribute to the excitement, suggesting a bright future for the Shib ecosystem. Meanwhile, ongoing leadership shifts in crypto regulation and the possibility of Ross Ulbricht’s pardon are also stirring conversations.

Shiba Inu Treat ($TREAT) Rallies 111%; Mark Cuban Recognizes Shiba Inu’s Viability

$TREAT has surged 111% in the past 24 hours, which led to it becoming a top gainer on KuCoin. It surpassed notable tokens like $OBT and $SWARMS during this period. $TREAT is part of the growing Shiba Inu ecosystem. This momentum, along with ongoing developments, suggests that the token may continue to rise as Shiba Inu continues to expand.

In other Shib ecosystem news, Mark Cuban recently declared Shiba Inu as one of the very few meme coins that actually “worked.” He proposed a new meme coin with a 20% float to support the U.S. Treasury, reflecting on the current meme coin trend. Cuban noted that only a few meme coins, like Doge and Shiba Inu, have succeeded. Shiba Inu’s lead visionary, Shytoshi Kusama, responded to the post, inviting Cuban to a call to explore the technology behind Shiba Inu.

Regulatory Shifts: New Acting SEC Chair and Acting CFTC Chair

Following President Trump’s inauguration, Mark Uyeda was appointed as the acting SEC chair. A Republican commissioner since June 2022, he succeeded Gary Gensler, who often clashed with the finance and crypto sectors. Uyeda’s past criticisms of the SEC’s unclear guidance on crypto registration may resonate with industry players. He has prior experience advising Senator Pat Toomey and working with California’s securities regulator.

Meanwhile, the CFTC has appointed Caroline Pham as its acting chair after a vote by the commissioners. She replaces Rostin Behnam until a permanent chair is nominated by President Trump and confirmed by the Senate. Pham expressed her gratitude for the opportunity and looks forward to engaging with stakeholders. She has been a CFTC commissioner since April 2022 and has advocated for digital asset regulation.

Ross Ulbricht’s Pardon Expected Soon, Says Elon Musk

Elon Musk has stated that Ross Ulbricht, the creator of the Silk Road marketplace, will be pardoned by President Trump. Musk’s comment on X suggested Ulbricht’s release is imminent. Although Trump promised to commute Ulbricht’s sentence on his first day as president, no official action has been taken so far. Angela McArdle, chair of the Libertarian National Committee, anticipates the pardon will happen within the next two days.

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Trump Appoints Mark Uyeda as Acting SEC Chair Post Gensler’s Resignation

Gushiken Yona — Tue, 21 Jan 2025 02:58:54 +0000

The balance of power at the Securities and Exchange Commission (SEC) tilts dramatically as U.S. President Donald Trump appoints Mark Uyeda acting chair, a move that not only replaces Gary Gensler but also promises a significant rollback of his ambitious regulatory agenda, particularly in the realm of digital assets.

Uyeda Appointment: A New Direction for the SEC?

The appointment of Uyeda as acting SEC chair followed President Trump’s inauguration, marking a significant shift in the regulatory landscape for both traditional finance and the burgeoning cryptocurrency industry. The newly appointed acting SEC chairman, a Republican SEC commissioner since June 2022, replaced Gary Gensler, whose tenure was marked by an ambitious agenda that often clashed with Wall Street and the crypto sector.

Gensler’s departure paved the way for Uyeda to take the helm at the SEC, pending the confirmation of Trump’s nominee for permanent chair, Paul Atkins.

A Crypto-Friendly Stance: New Views on Digital Assets and the SEC

Uyeda’s appointment is likely to be welcomed by crypto companies, given his past criticisms of the SEC’s approach to digital assets. He has publicly stated that the agency has failed to offer clear guidance on how crypto companies can register with the SEC, calling the agency’s approach a “disaster for the whole industry” in an October interview with Fox Business.

This stance suggested a potential easing of regulatory burdens for crypto firms and a move towards more defined rules for digital assets under Uyeda’s leadership at the SEC.

Policy Overhaul: Expected Changes Under Uyeda at the SEC

Earlier reports revealed that the newly appointed acting SEC chairman, along with fellow Republican Commissioner Hester Peirce, is expected to initiate a cryptocurrency policy overhaul at the SEC as early as this week. This could involve halting new enforcement actions against crypto firms that lack allegations of fraud or harm and have failed to register with the commission.

Additionally, it could entail reviewing all cases currently in active litigation regarding the issue, including cases against Coinbase, Kraken, and Ripple. Uyeda has also expressed a desire to ease regulatory burdens that prevent companies from going public and to focus on capital formation and innovation, while protecting investors from fraud, all while leading the SEC.

Akio Lang, head of BizDev at Qstarlabs_ai is hopeful about Uyeda, stating, his “selection signals priority shift at SEC. Career expertise over political theater bodes well for market clarity.” Jeremy Hogan, marked Uyeda’s appointment as the start of a new era. “And just like that, the Gensler SEC ends and a a new one begins; a new SEC which promises to create better rules for the digital asset space and focus on fraud and true investor protection. Uyeda will be acting Chair until the new Chair is confirmed – maybe in March or April,” he said.

Uyeda’s Background: A Career in Finance and Regulation at the SEC

Before joining the SEC, Uyeda worked for the former U.S. Senator Pat Toomey on the Senate Banking Committee and was previously tapped by former California Governor Arnold Schwarzenegger as a top advisor to the state’s securities regulator. He has also publicly dissented on SEC enforcement actions, including a settlement with the blank-check company that helped take Trump’s media company public.

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The Shib News Recap: Monday

Malaya Ruiz — Mon, 13 Jan 2025 21:03:33 +0000

This Monday, The Shib Daily brings you the latest news in the crypto sector, featuring insights from Shytoshi Kusama’s new podcast episode on Fully Homomorphic Encryption (FHE) and the innovative Shib Identity System. Other updates delve into the closure of a DeFi platform following a settlement with the U.S. Securities and Exchange Commission (SEC) and potential policy shifts as a result of the creation of a crypto subcommittee.

Shytoshi Kusama Discusses FHE and Shib Identity System in Latest Podcast Episode

Shytoshi Kusama’s podcast has revealed groundbreaking news: quantum-proof data security through FHE. In the latest episode, he introduced a new operating system that enhances online privacy. Kusama emphasized that FHE allows for complete data encryption. Shiba Inu aims to lead in FHE technology, focusing on achieving true quantum-resistant data protection.

He also discussed the Shib Identity System. This system goes beyond financial uses, offering a comprehensive way for users to manage their identities. It enables them to control their data, deciding when to sell or share it. Kaal Dhairya, Shiba Inu’s tech expert, calls it the “Aviation Service,” which provides verifiable digital proof of identity.

Only 0.4% of Pump.fun Traders Earn $10K or More

According to Dune analyst Adam Tehc, traders on Pump.fun are struggling to make significant profits, with only 0.4% of wallets earning $10,000 or more. Just 294 wallets (0.002% of the total) have exceeded $1 million in profits. Pseudonymous analyst Alon dismissed these findings as FUD, arguing they overlook unrealized profits. He also contested Dune’s claim that many of the platform’s 13 million traders are seeing negative returns, noting that about 30% of wallets have made just one sell order.

Mango Markets to Cease Operations After SEC Settlement

DeFi platform Mango Markets is shutting down after settling with the SEC. The decision comes amid ongoing legal issues tied to a 2022 exploit. The platform recently urged users to close their positions. As part of the settlement, Mango DAO will pay $700,000 in penalties, destroy MNGO tokens, and seek their removal from trading platforms.

Mango Markets will be shutting down
It is time for users to close their positions

Mango v4 & Boost are winding down. Most borrowing on Mango will be economically unviable going forward

Proposals are live & become executable on January 13, Monday 8PM UTC

Details below
— Mango (@mangomarkets) January 11, 2025

Tim Scott Forms Crypto Subcommittee to Drive Digital Asset Legislation

Senator Tim Scott has announced the formation of the Senate Banking Committee’s first crypto subcommittee. This demonstrates the Republican commitment to advancing digital asset legislation. Senator Cynthia Lummis, a pro-crypto Republican, will lead the subcommittee. Additionally, freshman Senators Bernie Moreno, Dave McCormick, Thom Tillis, and Bill Hagerty may also participate.

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Crypto Council CEO Sheila Warren’s X Account Hacked to Promote Scam Token

Michaela — Mon, 30 Dec 2024 15:26:06 +0000

The Crypto Council for Innovation (CCI), a leading crypto industry advocacy group, confirmed in a recent social media post that CEO Sheila Warren’s X account was compromised on December 26 and used to promote the fake SPELL token.

Warren’s compromised X account falsely promoted $SPELL as an artificial intelligence and cryptocurrency project designed for Web3 and the Solana network. The posts also included a contract address and additional promotional material for the token.

This is a scam and NOT Sheila Warren. We are working to resolve the issue. Disregard any tweets and do not click on any links. pic.twitter.com/b0UrcsOmxx
— Crypto Council for Innovation (@crypto_council) December 27, 2024

“This is a scam and NOT Sheila Warren. We are working to resolve the issue. Disregard any tweets and do not click on any links,” the CCI stated in response. The fraudulent posts were subsequently removed.

The attack took place just two weeks after the CEO announced she was stepping down from her role at the organization. Warren’s departure is set to occur one month before the inauguration of President-elect Donald Trump.

While Warren did not directly specify the reasons for her resignation, she referenced the evolving landscape of the crypto industry since she took on the role of CEO in 2021. In an X post, she highlighted significant events, such as the FTX collapse and ongoing scrutiny of the sector by U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler.

I am filled with mixed emotions as I share that I will be stepping down as the inaugural CEO of @crypto_council in January. The incomparable @_JiKim will be stepping into a new role as President and Acting CEO of CCI, and I will provide support as Senior Global Policy Advisor.…
— Sheila Warren (@sheila_warren) December 13, 2024

The CCI’s chief legal officer, Ji Kim, will succeed Warren as CEO, while Warren will continue to contribute as a senior policy advisor.

“I’m excited to see Ji carry forward CCI’s legacy of deep expertise, sophistication, and global perspective in his new role,” Warren wrote.

Account Takeover Scams on the Rise

Account takeover (ATO) scams have seen a significant rise recently, particularly in the cryptocurrency sector. These scams occur when cybercriminals gain unauthorized access to users’ accounts—such as crypto wallets, exchange accounts, or social media profiles—by exploiting weak security practices, phishing, or leveraging data breaches.

Once attackers gain control, they can drain funds from crypto wallets, manipulate social media accounts to spread fraudulent links, or steal sensitive personal information.

Blockchain investigator ZachXBT reported in a December 24 X post that a hacker had stolen $500,000 by targeting investors of Solana meme coins and popular X accounts, including KickStreaming, Brett, and Alex Blania.

Additionally, in November, former professional Fortnite player “Serpent” was accused of stealing $3.5 million through meme coin scams targeting several well-known brands and artists. Wallet addresses linked to Serpent were found to be central to multiple pump-and-dump schemes involving meme coins launched on the Pump.fun platform.

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The Shib News Recap: Tuesday

Malaya Ruiz — Tue, 17 Dec 2024 23:00:00 +0000

It may only be Tuesday, but today’s recap is packed with explosive Web3 news you wouldn’t want to miss. Highlighted in today’s headlines are Shytoshi Kusama’s recent remarks on a new use case for the upcoming TREAT token in a collaboration with an innovative project, the latest names on the SEC’s Wells notice list, and Grayscale’s alarming $21 billion outflows.

Shytoshi Kusama Reveals New Horizons for TREAT

Shiba Inu lead visionary Shytoshi Kusama has revealed a crucial use case for the TREAT token in partnership with Oogwai, focusing on fully homomorphic encryption (FHE) and longevity research. This collaboration aims to utilize TREAT for efficient data processing. Kusama’s tweet highlighted this new use case, stating, “Finally, a new use case for $TREAT.” Oogwai called the initiative an innovative social experiment leveraging advanced scientific research.

Finally, a new use case for $TREAT. FHE LONGEVITY RESEARCH WITH $Ogai @ogaicoin. The ecosystem is just getting started! https://t.co/8vJKwdQWne
— Shytoshi Kusama (@ShytoshiKusama) December 13, 2024

SEC Targets Unicoin and CyberKongz with Wells Notices

Cryptocurrency investment firm Unicoin has received a Wells notice from the SEC, reportedly stating intentions to charge the firm with fraud and selling unregistered securities. CEO Alex Konanykhin mentioned that the SEC had sent subpoenas in May related to Unicoin’s primary offering, supported by significant real estate assets. Unicoin’s legal team is preparing a response due by December 24. Konanykhin suspects that the SEC’s actions are politically motivated and aim to block the company’s ICO plans.

Similarly, CyberKongz, a prominent NFT project, received a Wells notice from the SEC, indicating potential charges related to its ERC-20 token. The SEC argues the token requires registration as a security for use with a blockchain game. CyberKongz contends this reflects the SEC’s misunderstanding of blockchain and could set a bad precedent for Web3 gaming. They are determined to challenge the SEC’s position and seek clearer regulations for digital assets, earning backing from their community on X.

GBTC Posts $21 Billion in Outflows

Grayscale Bitcoin Trust (GBTC) reported $21 billion in outflows since its January 2024 launch, making it the only U.S. spot Bitcoin ETF with a negative trend. It has averaged daily outflows of $89.9 million over the past 11 months. Meanwhile, other U.S. spot Bitcoin ETFs have seen inflows totaling $20.737 billion. BlackRock’s iShares Bitcoin Trust (IBIT) has played a significant role in the positive performance of the market.

The post The Shib News Recap: Tuesday first appeared on The Shib Daily.

The Shib News Recap: Thursday

Malaya Ruiz — Thu, 12 Dec 2024 23:00:00 +0000

The top headlines this Thursday from The Shib Daily are marked by increasing regulatory scrutiny in financial markets and the growing adoption of stablecoins. Furthermore, financial actions by politically connected figures also spark intrigue—but not as much as the newest controversy surrounding AI, which you’ll find out more about below.

SEC Commissioner Crenshaw’s Renomination Vote Stalled

The vote to renominate SEC Commissioner Caroline Crenshaw has been delayed because of a procedural conflict. The change in schedule overlaps with a Senate rule. Senator Brown is tasked with rescheduling the vote, but a timeline is yet to be announced. Crenshaw, facing controversy in the crypto community, must pass both committee and Senate votes within the next seven days.

Binance and Circle Unite to Drive Global USDC Adoption

Binance and Circle have teamed up to boost USDC adoption and support the growth of digital assets worldwide. Circle will assist Binance with technology and liquidity solutions to enhance USDC usage. This partnership will facilitate the broader integration of USDC into Binance’s offerings. The CEOs of both companies express optimism about their collaboration’s potential.

World Liberty Financial Purchases $12M Worth of ETH, LINK, and AAVE

World Liberty Financial (WLFI) has acquired Ethereum (ETH), Chainlink (LINK), and Aave (AAVE) using USD Coin (USDC). On December 12, WLFI processed $12 million in transactions, leading to a 6.86% surge in Ethereum’s price. Their Ethereum holdings now exceed 14,500 ETH, valued at over $56 million.

‘Deus in Machina’: The Controversial AI Jesus Draws Criticism

A project featuring an AI version of Jesus has sparked debate among some critics. Named “Deus in Machina,” it started in August at St. Peter’s Chapel in Lucerne, Switzerland. Created by Philipp Haslbauer and Marco Schmid, the project used OpenAI’s GPT-4o and an AI video generator. The avatar answered questions about faith and morality; it also referenced Scripture. Bishop James Long, Presiding Bishop of the United States Old Catholic Church, voiced his criticism, calling it “not sacramental” and “truly just sacrilege.”

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SEC’s Peirce Calls for End to ‘Operation Chokepoint 2.0,’ Proposes New Path for Crypto

Gushiken Yona — Tue, 10 Dec 2024 11:58:45 +0000

SEC Commissioner Hester Peirce is pushing for a major shift in cryptocurrency regulation, urging an end to what she calls “Operation Chokepoint 2.0.” Speaking on Fox Business, Peirce outlined a plan to provide clarity for the crypto industry and foster innovation, a move that could reshape the digital asset landscape in the United States.

Peirce Blasts Chokepoint 2.0, Lays Out Three-Step Crypto Plan

Peirce criticized government efforts to limit the crypto industry’s access to banking services, particularly custody. “Stop the chokepoint aspect of government regulation,” she told Fox Business host Liz Claman.

She argued that clear access to such services is crucial for the industry’s growth. The term “Operation Chokepoint 2.0” refers to what many in the crypto industry perceive as a coordinated effort by U.S. regulators to discourage banks from providing services to cryptocurrency companies.

This alleged effort mirrors “Operation Chokepoint,” a controversial Department of Justice initiative under the Obama administration that aimed to curb fraud by targeting payment processors and banks dealing with certain “high-risk” businesses. Critics of both initiatives argue they unfairly targeted legitimate businesses and limited their access to essential financial services.

Peirce proposed a three-pronged approach for cryptocurrency regulation in the U.S.:

End the Chokepoint: Allow crypto businesses to work with regulated financial institutions for secure storage and transfer of digital assets.
Clarify SEC Jurisdiction: Define clear guidelines on which crypto activities fall under securities regulations, giving the industry much-needed certainty.
Collaborate with Industry: Engage in an open, transparent process with stakeholders to determine how existing regulations apply to digital assets and where adjustments are needed.

Operation Chokepoint 2.0: Crypto Industry Feels the Squeeze

The impact of Operation Chokepoint 2.0 has been felt acutely within the crypto industry. Gabor Gurbacs, founder of PointsVille and strategy advisor at Tether, described the devastating effects: “Many entrepreneurs were debanked in operation chokepoint 2.0. without warning, explanation or ability to appeal. Excommunicado.”

He alleged strong-arm tactics by government agencies, stating, “Government mafiosi from the Treasury and OCC called and threatened banks to debank specific people and companies.” Caitlin Long, founder of Custodia Bank, echoed these concerns, asserting that such actions are not uncommon. “Bank regulators do this kind of stuff that’s not legal all the time, and they hide behind confidential supervisory information,” she said.

"Bank regulators do this kind of stuff that's not legal all the time, and they hide behind confidential supervisory information."@CaitlinLong_ on Operation Chokepoint 2.0. pic.twitter.com/FQ8QxvucXX
— TFTC (@TFTC21) November 27, 2024

Crypto Community Divided: Skepticism and Cautious Optimism

Reactions within the crypto community varied. Data analyst Dakota Sidwell expressed doubt, tweeting, “Hester will do nothing to assist the broader public.” However, David Barrera, co-founder and CEO of Enumma, offered a more nuanced take.

While acknowledging Peirce’s intentions, he cautioned, “Something tells me she won’t be generous to crypto in trying to set the perimeter outside of which the SEC doesn’t have jurisdiction.” Barrera believes Peirce may still favor classifying many tokens as securities, posing challenges for initial coin offerings (ICOs) seeking to avoid SEC oversight.

Will the SEC Embrace Change?

The debate over how to regulate cryptocurrencies in the U.S. continues. Many believe a clear framework is essential for the sector’s legitimacy and growth.

Gemini co-founder Tyler Winklevoss, in a stark warning, stated, “As long as these political hits on industries are allowed, America’s economy will continue to be crippled. It’s called Operation Choke Point 2.0 for a reason — there was a 1.0 during the Obama Administration. Let’s make sure there can never be a 3.0.”

Peirce’s call for collaboration could mark a turning point. However, the SEC’s willingness to embrace these reforms remains uncertain.

The post SEC’s Peirce Calls for End to ‘Operation Chokepoint 2.0,’ Proposes New Path for Crypto first appeared on The Shib Daily.

The Shib News Recap: Thursday

Malaya Ruiz — Thu, 05 Dec 2024 22:00:00 +0000

This Thursday, The Shib Daily reports on pressing issues in the cryptocurrency world, including crucial regulatory decisions that could influence the U.S. crypto market. Questions about the government’s transparency in managing digital assets are also raised, while Shiba Inu’s Shytoshi Kusama exposes startling details regarding a controversial airdrop.

Trump’s SEC Nominee Paul Atkins and CFTC Contenders: A New Era for Regulatory Leadership in Crypto?

Trump has nominated Paul Atkins, a former SEC Commissioner, to succeed Gary Gensler. He praised Atkins for his commitment to “common-sense regulations” and the importance of digital innovation. With his regulatory background, Atkins is seen as a qualified leader. Anndy Lian noted the nomination’s importance, suggesting that the relationship between Atkins and crypto enforcement leaders will be pivotal for the industry.

In a related context, the position of Chair of the Commodity Futures Trading Commission (CFTC) is under consideration by the President-elect. Perianne Boring has emerged as a leading candidate, thanks to her experience as a TV anchor in international finance. The Trump transition team sees this background as a significant asset. However, other candidates, including commissioners Caroline Pham and Summer Mersinger, are still being evaluated.

US Government Moves $33.6 Million from FTX—What’s the Strategy?

The U.S. government has moved $33.6 million in seized cryptocurrency from FTX and Alameda Research to undisclosed wallets. This includes $18.17 million in Ethereum (ETH) and $13.58 million in Binance USD (BUSD). Smaller amounts of other tokens, like SHIB and WBTC, were also transferred. The move raises questions about its intentions and possible market impacts, especially as investigations into former FTX executives continue.

Shytoshi Kusama on $HAWK Token: Airdrop for Shib Army Approved, Fell Through, No Partnership

Shiba Inu project lead Shytoshi Kusama addressed their limited role with the $HAWK token. They initially declined an offer to promote the token but later accepted a proposal for an airdrop to the Shib Army. Kusama criticized the project for its rushed launch and lack of organization. They also clarified that this was not a partnership but merely a gesture to benefit the community.

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SEC Shake-Up: Trump Nominates Pro-Crypto Atkins, Gensler Leaves Enforcement Bombshell

Gushiken Yona — Thu, 05 Dec 2024 11:31:32 +0000

The U.S. Securities and Exchange Commission (SEC) faces a critical juncture as President-elect Donald Trump nominates former SEC Commissioner Paul Atkins, known for his pro-cryptocurrency stance, to replace Chair Gary Gensler. Gensler, in a strategic move before his departure, has bolstered the SEC’s crypto enforcement division, setting the stage for a potential shift – or clash – in how digital assets are regulated in the United States.

Trump Nominates Crypto Advocate Atkins

President-elect Trump nominated Paul Atkins, a former SEC Commissioner (2002-2008) and recognized expert in financial regulation, to head the agency. Atkins, then CEO of Patomak Global Partners and co-chair of the Chamber of Digital Commerce’s Token Alliance, had publicly advocated for transparent, growth-oriented policies for digital assets.

Trump emphasized Atkins’ commitment to “common-sense regulations” and his recognition that “digital assets and other innovations were crucial to making America greater.”

Breaking: President-elect Trump nominates Paul Atkins as the next SEC Chair, signaling a potential shift toward deregulation in financial oversight. #SEC #BreakingNews #TheShibDaily #CryptoNews pic.twitter.com/vgqnbmSDzv
— Yona Gushiken (@yonashib) December 4, 2024

Atkins’ background as a former regulator and his role in the digital commerce space positioned him as a credible authority. This expertise lent weight to expectations that his leadership could foster a more collaborative relationship between the SEC and the cryptocurrency industry.

Intergovernmental blockchain expert Anndy Lian noted the nomination’s significance, stating that Atkins’ “well-documented deregulatory stance and market-friendly approach” from his prior SEC tenure “could signal a shift in the SEC’s regulatory priorities, particularly in areas like cryptocurrency and fintech, where the current administration has taken a more aggressive enforcement posture,” Lian said.

Gensler Bolsters Crypto Enforcement Before Exit

Despite the anticipated change, outgoing SEC Chair Gary Gensler moved to ensure the agency’s aggressive enforcement posture continued. John Reed Stark, a former Chief of the SEC’s Office of Internet Enforcement, revealed on social media platform X that Gensler had quietly promoted three senior crypto-enforcement lawyers to key executive positions.

Stark described these promotions as “unprecedented and signaled that the SEC’s crypto enforcement efforts would continue unabated, even with impending leadership changes.”

Gensler’s tenure was characterized by aggressive actions against major cryptocurrency exchanges and token issuers, alleging unregistered securities offerings and other violations. The SEC’s moves suggested an intent to maintain this approach.

Regulatory Clash Looms: Atkins’ Deregulatory View vs. Strengthened Enforcement

The contrasting approaches of Atkins and Gensler set the stage for a potential clash within the SEC. Atkins’ deregulatory stance appeared at odds with the reinforced enforcement division left by Gensler, creating uncertainty for the future of U.S. crypto regulation.

“The dynamic between Atkins and the newly promoted crypto-enforcement leaders will be critical to watch,” Lian observed. “Will there be a clash of priorities, or will Atkins find a way to balance his deregulatory philosophy with the enforcement momentum already in place? Either way, the crypto industry should brace itself for a continued battle.”

The transition from Gensler to a potentially Atkins-led SEC marked a pivotal moment for the cryptocurrency industry. The outcome would significantly impact the future of digital assets in the U.S. and could have global ramifications for the broader crypto market.

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The Shib News Recap: Monday

Malaya Ruiz — Mon, 02 Dec 2024 21:30:00 +0000

This Monday, The Shib Daily shines the spotlight on Shiba Inu (SHIB), which analysts predict is on the brink of a major price surge. Furthermore, Shibarium’s total value locked (TVL) is witnessing significant growth ahead of a critical hard fork.

We also bring you pivotal crypto news headlines that examine the fallout from mining scandals and unregistered operations, and what this means for cryptocurrency and investment funds. The conversation also shifts toward the monopolistic tendencies emerging within the tech industry.

Shiba Inu Bullish Breakout Sparks 179% Price Predictions; Shibarium Hits Another Record TVL

Shiba Inu surged over the weekend due to a confirmed bullish pattern breakout, with predictions of a 179% price rise to $0.000081. It briefly reached $0.00003300 before falling to $0.00002907 on Monday, reflecting a 2.98% dip. Nevertheless, it remains up 10.90% for the week and 64.30% for the month. A 31.25% increase in trading volume indicates heightened investor activity responding to these forecasts.

Meanwhile, Shibarium has reached a new all-time high (ATH) in TVL at $10.22 million. This achievement coincides with an upcoming hard fork, which indicates important progress for the ecosystem. The TVL grew from $8 million just a week ago, thanks to increased user engagement and DeFi activity. Additionally, the network now has 203,266 accounts, a 12.92% rise since November 2.

Touzi Capital’s $95 Million Crypto Scheme Under SEC Scrutiny

The SEC has filed a lawsuit against Touzi Capital, LLC and Eng Taing for allegedly misleading over 1,200 investors about the use of their funds in cryptocurrency mining. Allegations include unregistered securities offerings that raised nearly $95 million between 2021 and 2023. The SEC also claims that Taing misused investor funds for personal expenses and commingled funds from other ventures. The Commission is requesting injunctions, civil penalties, and a ban on Taing from serving in leadership roles.

Elon Musk’s Lawsuit Claims OpenAI and Microsoft Are Thwarting Competition in the AI Industry

In a lawsuit filed in Northern California, Elon Musk accuses OpenAI and Microsoft of anti-competitive behavior in the AI sector. Musk argues that OpenAI has moved from a non-profit to a $157 billion for-profit model. He claims their partnership has resulted in market monopolization and raises concerns about conflicts of interest involving OpenAI CEO Sam Altman. Although Musk asserts these actions have hurt xAI’s funding opportunities, the company has still managed to secure a $5 billion investment.

Listen to “The Shib and Tell,” the official podcast of The Shib available on Spotify for the latest updates on the Shiba Inu community and the crypto space. Don’t forget to subscribe to The Shib Daily on YouTube as well for a wealth of exclusive insights.

The post The Shib News Recap: Monday first appeared on The Shib Daily.

Trump Administration Eyes CFTC for Crypto Oversight, Potentially Sidelining SEC

Gushiken Yona — Wed, 27 Nov 2024 11:27:57 +0000

The incoming Trump administration reportedly favors the Commodity Futures Trading Commission (CFTC) over the Securities and Exchange Commission (SEC) to regulate Bitcoin and Ether, potentially reshaping the future of crypto oversight in the U.S.

This potential shift, reported by Fox Business, signaled a departure from the SEC’s often-aggressive approach to crypto regulation under outgoing Chair Gary Gensler. It suggested a move towards a more tailored regulatory framework, with the CFTC taking the lead on digital assets deemed commodities, like Bitcoin and Ether.

Previously, the SEC asserted broad jurisdiction over the crypto space, often classifying tokens as securities based on the Howey test. This led to numerous enforcement actions and uncertainty within the industry.

However, even Gensler has publicly acknowledged Bitcoin as a commodity. Furthermore, the CFTC itself classified Ether as a commodity in a legal action against Kucoin earlier this year, lending credence to the potential regulatory shift.

President-elect Trump’s vocal support for the crypto industry further reinforces this narrative. During his campaign, he promised initiatives like a federal Bitcoin reserve and the appointment of a White House crypto advisor. His criticism of Gensler’s regulatory approach, coupled with Gensler’s announced resignation effective on Trump’s inauguration day, fueled speculation of a deliberate move towards a new regulatory paradigm.

Industry watchers reacted to the news with a mix of optimism and caution. “Makes sense if there’s a clear line between digital asset security and commodity,” commented Jeremy Hogan, a crypto legal expert.

“The CFTC only regulates fraud, etc in the spot markets and that is really what the crypto space is calling for.” Hogan added, “It would be an easy piece of legislation to draft, I could do it in an hour, but…when/how is that going to happen?”

Caitlyn Long, founder of Custodia Bank, offered a more critical view, suggesting the issues may extend beyond policy decisions to agency culture. “This is smart,” Long said, referencing the potential shift towards CFTC oversight.

“The worst offenders weren’t just the political appointees at the SEC—the worst offenders included many of the career agency staff too. Same at the Fed, FDIC & OCC. I know where the proverbial bodies are buried!!!”

Matt Hamilton, a senior developer advocate at Arbitrum, expressed a more reserved view. “Well, it could be a lot worse. But I don’t see anything that would suggest it would be better. At the moment the biggest issue is there isn’t any clarity on which regulator has jurisdiction over what in crypto.”

While a shift toward CFTC oversight for Bitcoin and Ether could provide some clarity, significant questions remain. The precise definition of a digital asset security versus a commodity remains unclear. The scope of the CFTC’s authority over the broader crypto market, including decentralized finance (DeFi) protocols and stablecoins, also needs to be defined.

Furthermore, legislative action would likely be required to formalize any shift in regulatory responsibilities. The timeline for such legislation, and the potential for political gridlock, adds another layer of uncertainty to the evolving regulatory landscape.

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Crypto and Wall Street’s Costliest Year? SEC Announces Record $8.2 Billion in Fines and Penalties

Gushiken Yona — Mon, 25 Nov 2024 09:41:07 +0000

The U.S. Securities and Exchange Commission (SEC) announced a record $8.2 billion in fines and penalties for fiscal year 2024, its highest ever, just as Chairman Gary Gensler prepares to depart the agency in January 2025.

This record sum revealed in the SEC’s Nov. 22 annual report, highlighted an aggressive enforcement strategy under Gensler’s leadership. Over half stems from a single $4.47 billion settlement with Terraform Labs and its former CEO Do Kwon, following fraud charges related to the 2022 collapse of their blockchain ecosystem.

Significantly, without this landmark settlement, the SEC’s 2024 collections would have been their lowest since 2013, totaling just $3.72 billion. The $8.2 billion includes $2.1 billion in penalties and a record $6.1 billion in disgorgement—returning ill-gotten gains to investors.

Gensler, who said he would step down on Jan. 20, 2025, said, “The Division of Enforcement is a steadfast cop on the beat…holding wrongdoers accountable.” His tenure saw a crackdown on cryptocurrency companies, with enforcement actions peaking at 46 cases in 2023. While crypto-related cases decreased to 11 in 2024, associated penalties increased by over 3,000% due to the Terraform settlement.

However, Acting Enforcement Director Sanjay Wadhwa argued that the total fines collected don’t fully represent the commission’s impact. “Beyond the $8.2 billion,” Wadhwa explained, “our proactive investigations…are driving a significant shift toward compliance.”

He highlighted the ripple effect of SEC investigations, noting that even cases not resulting in formal charges often prompt companies to improve their compliance efforts. This proactive approach, Wadhwa argues, is crucial for investor protection and maintaining market integrity, ultimately building trust in capital markets.

The incoming Trump administration, with its indicated move towards easing enforcement in the digital asset space, has fueled anticipation of a regulatory shift. Teresa Goody Guillen, a rumored candidate for SEC Chair, echoed this sentiment, calling for less aggressive regulation and greater engagement with the crypto industry. She advocated for clearer rules and an end to “regulation by enforcement,” arguing that it stifles innovation.

Beyond financial penalties, the SEC barred 124 individuals from serving as officers and directors of public companies – the second-highest number in a decade – and returned $345 million directly to harmed investors as part of the over $2.7 billion returned since 2021. A record 45,130 tips, complaints, and referrals (including 24,000 from whistleblowers) led to $255 million in whistleblower awards, signaling increased public scrutiny of financial misconduct and bolstering the SEC’s enforcement capabilities.

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SEC Chair Gensler Speech Fuels Resignation Rumors Amid Trump’s Potential Sacking

Gushiken Yona — Fri, 15 Nov 2024 06:54:58 +0000

The crypto industry is on edge as rumors swirl about SEC Chair Gary Gensler’s potential departure, fueled by a recent speech and reports of President Trump’s possible move to remove him from office. The uncertainty surrounding Gensler’s future raises questions about the direction of crypto regulation in the U.S. and the potential impact on the industry’s growth.

Gensler, in a speech delivered at the Practicing Law Institute’s 56th Annual Institute on Securities Regulation, reflected on his two-year tenure at the helm of the agency, emphasizing the importance of effective administration of securities laws. He drew parallels to common-sense rules of the road and the need for referees in a football game, arguing that well-regulated markets build trust and create an environment for economic success.

“The securities laws—benefiting investors and issuers alike—help create trust in our capital markets,” Gensler stated. “These laws help lower costs. They help lower risks.” While Gensler did not explicitly announce his departure, his remarks, delivered on Thursday, fueled speculation about a possible transition in leadership.

His reflection on his tenure and his emphasis on the importance of effective administration and compliance suggested a potential shift in focus. The rumors of Gensler’s potential departure have been further amplified by President Trump’s recent statements.

During his speech at the Bitcoin Conference 2024, Trump made headlines with his promises to “make Bitcoin great again” by ensuring the federal government HODLs bitcoin and by firing SEC chair Gensler on day one.

TRUMP'S 50 MINUTES #BITCOIN
2024 SPEECH SUMMARIZED:

⮕ ON HIS FIRST DAY ONLY, HE WILL
FIRE GARY GENSLER.

⮕ HE SAID THAT BITCOIN WILL
PROBABLY SURPASS THE MARKET
CAP OF GOLD ONE DAY!

⮕ TRUMP WILL MAKE THE US THE
CRYPTO CAPITAL ON THE PLANET &
THE BITCOIN SUPERPOWER OF… pic.twitter.com/9uf6zepuQs
— Ash Crypto (@Ashcryptoreal) July 28, 2024

In his speech, Gensler highlighted key initiatives undertaken during his tenure, including reforms to the Treasury markets, updates to equity market rules, and enhanced corporate governance regulations. He also emphasized the importance of disclosure, citing the SEC’s efforts to increase transparency around cyber and climate risks, as well as the adoption of rules requiring covered firms to notify customers of data breaches.

Turning to the burgeoning cryptocurrency market, Gensler acknowledged the SEC’s focus on ensuring compliance with existing securities laws, particularly for digital assets other than Bitcoin. He reiterated the SEC’s stance that Bitcoin is not a security but emphasized the need for registration and disclosure for other crypto assets that meet the definition of securities. “Those parties offering or selling securities to the public need to register and give proper disclosure to the public,” Gensler stated.

“Everything we’ve done is focused on ensuring compliance with our laws,” the SEC chair said. “What we’ve found since the 1930s is that compliance matters. It protects investors. It builds trust in our capital markets. It helps issuers tap into our markets. History has shown for 90 years that robust securities regulation both creates trust in markets and fosters innovation.”

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18 States Challenge SEC Authority Over Crypto Staking in Landmark Lawsuit

Gushiken Yona — Fri, 15 Nov 2024 05:07:25 +0000

Eighteen states, joined by the DeFi Education Fund, are challenging the Securities and Exchange Commission’s (SEC) authority over crypto staking services in a landmark lawsuit filed Thursday. The complaint, lodged in the U.S. District Court for the Eastern District of Kentucky, Frankfort Division, targets SEC Chair Gary Gensler and other commissioners, alleging their aggressive enforcement actions and evolving guidance stifle innovation and unconstitutionally infringe on state regulatory powers.

At the heart of the dispute was the SEC’s assertion that staking services—where cryptocurrency holders lock up their assets to validate transactions and earn rewards—constituted the offering of unregistered securities. The states argued that staking did not meet the criteria of the Howey Test, the long-standing legal standard defining a security.

They emphasized that staking rewards were generated by the operation of the blockchain network, not through the managerial efforts of a third party, a key distinction under the Howey Test. The lawsuit contended that the SEC’s actions preempted state-level regulatory efforts, violating principles of federalism.

The complaint cited Kraken’s decision to halt its U.S. staking services following an SEC enforcement action as evidence of the agency’s detrimental impact on the industry. The complaint stated that “the SEC’s overreach threatens to cripple the development of the digital asset industry nationwide.”

The legal challenge sparked strong reactions across the crypto community. “The proverbial door hitting the regime on the way out,” said, Jeremy Hogan, a partner at Hogan & Hogan. Joshua Jake, CEO of @Discovercrypto_, founder of http://Fomoed.io and co-founder of @OmniSwapAi, expressed a more direct sentiment: “Gary Gensler You Are Fired… Today 18 states sued Chairmen Gary Gensler and the SEC commissioners for regulating the Crypto Industry unfairly by enforcement.”

Gabor Gurbacs, PointsVille founder commented on the lawsuit saying, “18 US states sue the SEC, alleging unconstitutional overreach and unfair persecution of the crypto industry under Gary Gensler. We didn’t stay silent. FAFO.”

The lawsuit arrived amid heightened Congressional scrutiny of the SEC’s actions in the digital asset space. Several bipartisan bills aiming to clarify regulatory oversight of cryptocurrencies were introduced, and hearings on the matter were anticipated. This legal challenge further intensified the pressure on the SEC to provide clearer guidelines.

SEC Chair Gary Gensler maintained a hawkish stance on cryptocurrencies, arguing that many tokens represented unregistered securities requiring SEC oversight. The agency pursued enforcement actions against platforms like Coinbase and Gemini.

Market reaction was muted, with Bitcoin and Ether prices remaining relatively stable. However, experts believed the case’s outcome could significantly reshape the U.S. crypto regulatory landscape.

A ruling for the states could have shifted oversight toward states, fostering a less restrictive environment. Conversely, an SEC victory could have solidified its authority.

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Second Trump Term May Yield ‘Friendlier’ SEC, Says Global Law Firm

Malaya Ruiz — Thu, 07 Nov 2024 20:32:29 +0000

Global law firm Ropes & Gray has released a forecast suggesting that a second term for Donald Trump could lead to a more agreeable and supportive Securities and Exchange Commission (SEC). The firm posits that such a shift may foster a regulatory climate that encourages growth in financial markets and innovation, particularly in the cryptocurrency space and among tech startups.

“It seems likely that issuers of digital assets—and asset managers interested in investing in digital assets on behalf of their clients—will face a friendlier SEC than under Chair Gensler,” the forecast read.

Trump has addressed multiple cryptocurrency audiences, asserting his commitment to making the U.S. the “world capital of crypto.” Moreover, current Republican Commissioners Hester Peirce and Mark Uyeda have challenged the SEC’s regulatory tactics concerning digital assets. The SEC may even consider developing a new regulatory framework for digital assets, possibly in conjunction with the Commodity Futures Trading Commission. This initiative is part of the Financial Innovation and Technology for the 21st Century Act, known also as FIT21, a comprehensive 200-page bill that received bipartisan support and passed through the House in May 2024.

FIT21 was designed to establish the regulatory clarity and robust consumer safeguards crucial for the digital asset ecosystem to prosper in the United States. One of its main objectives is to position the U.S. at the forefront of the future financial system and as a center for technological innovation.

Asset Management Firm CEO Predicts SEC Shift Post-Gensler Departure

Meanwhile, Alexander Blume, CEO of Two Prime, an SEC-regulated investment advisor firm specializing in digital asset derivatives, told Alexa Blockchain that he anticipates many SEC lawsuits will be dismissed early in Trump’s term following Gary Gensler’s departure. Peirce, known for her vocal support of the industry and criticism of current SEC crypto regulations and therefore dubbed “Crypto Mom,” is rumored to be a potential replacement.

Blume pointed out that Gensler’s unfair focus on the crypto sector has greatly suppressed financial innovation, which has negatively impacted well-meaning businesses and investors alike. He stated that Gensler’s removal from the SEC signifies the close of a tough chapter for U.S. citizens in crypto. “America has a history of financial innovation leadership that has been choked out by the SEC. That time has come to an end,” he said.

This corresponds with Ropes & Gray’s analysis regarding expectations for asset managers under new SEC leadership. After the confirmation of a new Chair and Division Director, asset managers can anticipate a more lenient approach regarding penalties and the application of innovative legal theories by the Division of Enforcement. Additionally, these new leaders may introduce procedural changes that could have a significant long-term effect.

However, the firm acknowledged that there are several cases in the SEC’s enforcement pipeline that are expected to remain largely unaffected by Trump’s return to office. These may pertain to insider trading, financial fraud, offering fraud, and other clear violations of SEC guidelines.

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Crypto Showdown: Richard Heart Fights Back Against SEC Suit

Gushiken Yona — Fri, 01 Nov 2024 23:27:43 +0000

A packed courtroom in New York City on Thursday witnessed a heated legal battle between Richard Heart, a prominent crypto figure, and the Securities and Exchange Commission (SEC). Heart’s legal team vigorously contested the SEC’s lawsuit, arguing that the commission lacks jurisdiction over him and his crypto projects, HEX, Pulsechain, and PulseX. The hearing brought to light a fundamental tension within the crypto space: the struggle to reconcile decentralized technologies with traditional regulatory frameworks.

The core of Heart’s defense hinges on a fundamental question: Can the SEC regulate crypto projects that operate outside the traditional boundaries of U.S. financial markets? Heart’s lawyers argued that he primarily resided abroad during the period in question and that his projects, being unincorporated entities, are not subject to U.S. court jurisdiction. They further challenged the SEC’s assertion that the transactions associated with HEX, Pulsechain, and PulseX meet the “Howey Test,” the legal framework used to determine whether a transaction constitutes a security.

The courtroom buzzed with anticipation as Heart’s legal team presented their arguments. One of those who attended the hearing shared his observations and expressed confidence in his defense to the YouTube channel CryptoHeartBeat, declaring, “We pretty much won on that front that this is out of the SEC’s jurisdiction. You know, obviously you can’t sue open-source software.” However, whether the SEC ultimately has jurisdiction over Heart and his projects remains a central question, a decision that Judge Amon will soon make.

The same supporter also claimed that the SEC’s chronology of events contained errors that weakened the commissioners’ case during Thursday’s hearing. His enthusiasm for Heart’s legal strategy went further, with him stating that Heart’s lawyers “adjusted the syntax of my mind” as “a chill ran up my spine.” He claimed the SEC was trying to “take away people’s right to transact” and glowed about how “it really felt we were part of something really special. I feel like Richard Heart changed the syntax of how the legal system is going to have to grapple with this new technology.”

The SEC, in its lawsuit, alleges that Heart committed fraud by using investor funds for personal gain, selling Hexicans’ contributions of ETH and other altcoins to buy personal luxuries. Heart’s lawyers countered this allegation, arguing that Heart consistently warned his supporters against expecting financial gains from his projects. They highlighted Heart’s numerous disclaimers, suggesting that they undermine the SEC’s allegations.

The outcome of this legal battle carries significant implications for the broader crypto industry, as it could reshape how U.S. regulators approach the decentralized nature of blockchain technology and the growing influence of crypto entrepreneurs.

The battle over jurisdiction highlights a fundamental clash between the traditional regulatory framework and the decentralized nature of crypto projects. The SEC’s attempt to assert jurisdiction over projects that operate outside traditional financial systems raises questions about the future of crypto regulation and the balance between innovation and oversight.

Further, the focus on disclaimers underscores the complexities of navigating the legal landscape of the crypto world. The SEC’s argument that Heart’s disclaimers are insufficient to negate fraud accusations could have far-reaching consequences for how crypto projects communicate with investors, potentially requiring more rigorous legal and regulatory frameworks for disclaimers and risk disclosures.

The next few months will be pivotal as the court weighs the arguments. Judge Amon’s decision could have a significant impact on the future of Heart’s projects and the evolving landscape of crypto regulation in the United States. The crypto community will be watching closely as this legal battle unfolds, with the outcome potentially setting precedents that could shape the future of the industry.

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SEC’s $400M Crypto Enforcement Push Sparks Demand for Clear Guidelines

Malaya Ruiz — Fri, 01 Nov 2024 18:41:57 +0000

The U.S. Securities and Exchange Commission (SEC) has spent over $400 million in litigation costs as part of its ongoing crypto crackdown, according to a recent report by the Blockchain Association.

Under the leadership of Chair Gary Gensler, known for his aggressive stance on cryptocurrency regulation, the SEC has intensified its efforts to impose stricter oversight on the digital asset market. Gensler’s commitment to safeguarding investors and establishing a regulatory framework for cryptocurrencies has sparked significant debate. It has consistently raised questions about the effectiveness and financial implications of such a costly endeavor in the crypto sector.

The report sourced data from intelligence platform Har risX, which surveyed U.S. voters, business decision-makers, and cryptocurrency voters. It aimed to understand their views on the digital asset landscape and the SEC’s regulatory actions.

The report revealed that the SEC, under Gensler, has taken action against a record 104 entities in the digital asset sector. Voter preference shows a clear desire for defined rules over enforcement, with a two-to-one ratio. Consequently, this highlights the crypto community’s demand for clear SEC guidelines instead of vague enforcement practices.

The survey showed that no political party “owns” the crypto issue. However, voters are more inclined to back candidates that promote innovation in digital assets. Notably, crypto voters constitute 18% of the electorate and are more open to supporting candidates who oppose the undefined actions of the SEC.

Gensler’s Controversial Reign Faces Potential Legal Reckoning

Crypto analyst MartyParty holds the view that Gensler will face substantial legal challenges from the industry. He believes that numerous class action civil suits will likely follow his departure from office. He also argues that Gensler cannot evade the consequences of his “misuse of power.”

The Blockchain Association says the @SECGov has cost the crypto industry $400 million since Gary Gensler became chair.

IMO: He will be sued heavily by industry and class action civil suits post office.

You don’t get away with this type of misuse of power.

Not a single…
— MartyParty (@martypartymusic) October 31, 2024

Kristin Smith, CEO of Blockchain Association, offered her insights on the matter in a statement on X. “The SEC’s regulation-by-enforcement approach is harming the United States’ global tech leadership—and failing the American investor the SEC is mandated to protect,” she said. She emphasized that the organization remains committed to its mission. It will advocate for its members through legal means and public discussions, aiming to maximize the potential of crypto and blockchain in the U.S. “That begins with a change of leadership,” Smith added.

Paul Grewal, chief legal officer of Coinbase, chimed in to remind the crypto community that the SEC effectively sourced its more than $400 million funding for its anti-crypto crusade from them. He urged individuals to keep this in mind when they log their work hours, file their taxes, and, crucially, when they head to the polls.

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Market Makers in Crypto: Heroes or Villains?

user — Mon, 28 Oct 2024 21:23:44 +0000

Cryptocurrency has taken the financial world by storm, offering new opportunities and challenges. Among the many facets of this digital revolution is market making, a practice that ensures cryptocurrencies remain liquid and tradable. However, recent legal actions by the Securities and Exchange Commission (SEC) have brought to light the ethical and regulatory dilemmas that accompany this essential function.

What Exactly Is Market Making?

Imagine trying to buy or sell a cryptocurrency, only to find that there are no buyers or sellers. This is where market makers come in. They act as intermediaries, always ready to buy or sell, which keeps the market moving smoothly. Quoting both buy and sell prices helps reduce the gap between what buyers are willing to pay and what sellers want to receive, known as the bid-ask spread. This is crucial in the world of cryptocurrencies, where prices can swing wildly in a matter of minutes.

In traditional finance, market making is a well-established practice, governed by clear rules and regulations. It helps maintain market stability and efficiency, which benefits everyone, from small investors to large institutions. But the world of cryptocurrency is different—less regulated, more volatile, and often shrouded in mystery. This environment can sometimes blur the lines between legitimate market making and unethical manipulation.

The SEC’s Crackdown: A Wake-Up Call

Recently, the SEC charged several companies and individuals, including ZM Quant, Gotbit, and CLS Global, with market manipulation. The allegations are serious. These entities are accused of creating a false sense of activity in the market, misleading investors about the true demand for certain crypto assets. Practices like wash trading—where the same asset is bought and sold repeatedly to inflate trading volumes—are at the heart of these charges. Such tactics are illegal in traditional markets and undermine trust in the financial system.

Wash trading gives the illusion of liquidity and demand, enticing unsuspecting investors to jump in. Another tactic, known as spoofing, involves placing large orders with no intention of executing them, misleading traders about market conditions and unfairly influencing prices. These manipulative strategies have long been outlawed in traditional markets, but the relative novelty and complexity of cryptocurrencies have made them easier to exploit.

The ethical landscape of cryptocurrency market making is complex. Transparency and honesty are crucial for maintaining trust and fairness. Market makers should clearly disclose their trading activities, strategies, and any potential conflicts of interest. This transparency allows other market participants to make informed decisions and helps regulators keep an eye out for manipulative practices.

Conflicts of interest are another significant concern. Market makers might have stakes in specific projects or hold large positions in the assets they trade. These conflicts can skew their trading decisions, potentially harming clients and the broader market. To mitigate these risks, market makers should implement strict policies to separate their market-making activities from other trading operations and disclose any potential conflicts to clients and regulators.

The Regulatory Landscape: A Work in Progress

Regulating cryptocurrency market making is a challenge, with different countries taking varied approaches. In the United States, the SEC and the Commodity Futures Trading Commission (CFTC) have started to regulate cryptocurrency markets, especially when digital assets are classified as securities or derivatives. These agencies have issued guidelines and taken enforcement actions to curb manipulative practices and protect investors.

Elsewhere, countries like Japan and South Korea have introduced specific licensing requirements for cryptocurrency exchanges and market makers. These regulations aim to enhance transparency, protect investors, and promote market integrity. However, the global and decentralized nature of cryptocurrencies presents significant challenges for regulators. The lack of a central authority and the pseudonymous nature of transactions make it difficult to monitor and enforce compliance effectively.

Additionally, the cross-border nature of cryptocurrency trading means that market makers may be subject to different regulations in different jurisdictions, leading to potential regulatory arbitrage.

To address these challenges, regulators and market participants must collaborate to develop a more unified and coordinated approach to cryptocurrency market regulation. This could involve creating international standards and best practices, as well as leveraging advanced technologies like blockchain analytics tools to monitor and enforce compliance.

Looking Ahead: The Future of Market Making

As the cryptocurrency industry continues to grow and mature, the role of market makers will remain crucial in ensuring liquidity and stability. However, the industry must address the ethical and regulatory challenges that have emerged. Market makers must adhere to high ethical standards, promoting transparency and fairness in their operations. Regulators, on the other hand, need to develop comprehensive frameworks that protect investors while fostering innovation.

The convergence of regulatory standards with those of traditional financial markets is likely to happen as the cryptocurrency industry matures. This will require market makers to adapt to evolving regulations and ensure that their practices align with principles of fairness, transparency, and investor protection.

In conclusion, while market making is a legitimate and necessary practice in cryptocurrency trading, it is essential to distinguish between ethical market making and manipulative practices. The recent SEC charges serve as a reminder of the potential for abuse in this space and underscore the need for robust regulatory frameworks and ethical standards. By addressing these challenges, the cryptocurrency industry can continue to thrive, offering new opportunities for investors and market participants alike.

About the Author

Anndy Lian is an accomplished business strategist from Asia, recognized for his extensive advisory work with a diverse range of local and international companies, public institutions, and government agencies. A pioneer in blockchain adoption and an experienced entrepreneur, he currently holds the position of Chief Digital Advisor at the Mongolia Productivity Organization, focusing on promoting digitalization. Lian has previously served as Chairman of BigONE Exchange and as an advisory board member for the blockchain arm of Hyundai Motor Group. He has also played vital roles with the Asian Productivity Organisation and Gyeongsangbuk-do Blockchain Special Committee in South Korea.

As an author, he wrote Blockchain Revolution 2030 and NFT: From Zero to Hero. He continues to support start-up incubation and believes in blockchain’s potential to reshape traditional industries.

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Microsoft to Consider Bitcoin Investment in Shareholder Vote, Board Disagrees

Gairika Mitra — Fri, 25 Oct 2024 13:23:49 +0000

Microsoft has disclosed in an SEC filing that shareholders will vote on a proposal to invest in Bitcoin at their December 10 meeting. However, the company’s board has recommended voting against it, emphasizing that the proposal, introduced by a think tank shareholder, is not a priority for the tech giant.

The filing stated that the “Board recommends a vote against this proposal.”

Adam Cochran (adamscochran.eth), Partner at CEHV shared, “this is a fringe proposal by a think tank shareholder, and is not a serious consideration by Microsoft at large.”

Contrasting Crypto Strategies: BlackRock Embraces Bitcoin ETFs While Vanguard Stays Cautious

Vanguard and BlackRock are significant shareholders in Microsoft, with Vanguard holding the largest stake at 9%, while BlackRock has 7.82%.

BlackRock is a major player in the cryptocurrency market, launching Bitcoin spot exchange-traded funds (ETFs) that have attracted over $26 billion in assets under management. In contrast, Vanguard, which manages $9.3 trillion in assets, has taken a more cautious approach to crypto.

After the introduction of spot Bitcoin ETFs earlier this year, Vanguard announced in a blog post that it would not be creating or offering crypto-related ETFs to its clients. “Vanguard does not have plans to create a Vanguard Bitcoin ETF or other crypto-related products,” the company stated. “Additionally, such products from other issuers will not be offered on our brokerage platform.”

Other notable shareholders in Microsoft include State Street Corp., Capital Group, Morgan Stanley, and JP Morgan.

Microsoft Expands Blockchain Offerings: Collaborates with Space and Time, Aptos Labs

Microsoft is working together with the decentralized data platform Space and Time to provide developers with access to real-time blockchain data directly from the Microsoft Azure Marketplace. This collaboration follows a $20 million strategic funding round led by Microsoft’s venture capital arm, M12, about seven months ago.

The Azure Marketplace is an online store that offers applications and services for Microsoft’s Azure cloud platform. Azure is the second-largest cloud infrastructure provider globally, behind Amazon Web Services, according to Statista.

Space and Time specializes in delivering real-time data indexed from major blockchains, integrating it with off-chain datasets supplied by clients. The result is a hybrid transactional and analytical database that comes pre-loaded with real-time, blockchain-native data.

Additionally, Aptos Labs announced a partnership with Microsoft to develop the Aptos Assistant, a chatbot powered by ChatGPT designed to deliver information and analysis about the Aptos ecosystem to both users and developers.

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Crypto Regulation Efforts in the US Stalled, Says CFTC Chair

Lawrence Damilola — Tue, 22 Oct 2024 13:14:28 +0000

During a speech at the Securities Industry and Financial Markets Association (SIFMA) annual meeting in New York yesterday, Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam highlighted significant challenges in regulating the cryptocurrency market due to stalled legislative efforts.

Behnam emphasized the CFTC’s limited capacity to enforce compliance and oversee the market without proper regulatory framework, expressing concern for the vulnerabilities this creates for market participants and institutional investors.

He acknowledged that progress is unlikely to occur before the year ends but remained optimistic about future developments, stating, “I’m not betting on anything happening necessarily at the end of the year, but there’s a unique appetite that this election, I think, has changed around digital assets and technology.”

SIFMA President Kenneth Bentsen also voiced concerns from the financial industry, noting the growing frustration among brokerage firms. According to Bentsen, firms are questioning whether they can operate successfully without facing enforcement actions or if it will remain a persistent risk.

Crypto Regulation Intensifies Fight vs. Fraud

In response to increasing fraud and manipulation cases in the crypto sector, Behnam confirmed that the CFTC is dedicating more resources to address such issues. At the Chainalysis Links conference, he revealed that the agency had filed 23 crypto-related enforcement actions in the past fiscal year. This figure represents nearly half of all such cases brought by the CFTC since 2015.

Behnam remarked that headlines about significant losses in digital assets due to protocol exploits, phishing attacks, and schemes targeting vulnerable individuals have “become far too common.” The surge in these incidents has prompted the CFTC to intensify its focus on enforcement.

During a confirmation hearing in 2023, Behnam stated that the CFTC was prepared to assume primary responsibility for regulating the cryptocurrency market. The question of whether the CFTC or the U.S. Securities and Exchange Commission (SEC) should take the lead on crypto regulation remains a topic of debate among lawmakers.

The Use of AI in Market Surveillance

Behnam also disclosed that the CFTC has been utilizing artificial intelligence (AI) to improve its oversight of the markets. By incorporating AI tools and analytics, the agency can sift through large volumes of data to detect market manipulation, cyberattacks, and potential compliance issues.

He expressed optimism about the potential of AI in crypto regulation, suggesting that its use could lead to a reduction in enforcement cases. “If we can start to use AI collectively to ensure compliance, I think there’s probably going to be a lot fewer enforcement cases,” he added.

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SEC vs. Solana: Round Two… FIGHT! 🥊

Gushiken Yona — Sat, 19 Oct 2024 17:20:26 +0000

Looks like hopium dealers are out of luck this week! The drama between the SEC and everyone’s favorite surfer dude blockchain, Solana (SOL), just took a turn spicier than a kimchi kimbap .

Remember that summer fling where everyone thought the SEC was cooling off on SOL and other altcoins? Yeah, turns out that rumor was about as real as Satoshi’s Twitter account.

The feds just doubled down on their lawsuit against Binance, claiming the exchange violated securities laws by letting users trade SOL (and a bunch of its buddies) . Apparently, that amended complaint in July was just a wardrobe change, not a surrender flag .

So, what’s the big deal this time? In a dramatic plot twist that only the U.S. SEC could dream up , the agency filed new paperwork, and guess what? They’re still arguing that Solana is part of a sneaky, unregistered securities offering. According to the new, juiced-up complaint, the SEC believes that the Solana Foundation practically waved a flag saying, “Come invest in us and watch us moon! ”—thus turning SOL into, you guessed it, an illegal security.

They even threw in some spicy language about how Solana’s ecosystem would benefit from U.S. exchanges listing SOL, leading to profits for holders. Because clearly, nobody in crypto would ever expect to make a profit, right?

Back in July, when the SEC dropped hints that they might soften their stance on “third party crypto assets,” some crypto legal eagles got their hopes up. Maybe they thought, the SEC had finally realized that chasing after every token with a lawsuit was like trying to stop a tidal wave with a sponge .

LOL, nope. The SEC didn’t just keep its foot on the gas—it added turbo . Now, not only is the SEC keeping Solana, Cardano, and Polygon in their crosshairs , but they’re also slapping Binance on the wrist for allowing trades in these tokens. Because apparently, nothing says “protecting investors” like stopping them from doing what they want with their money.

So, what does this mean for Solana? Well, it’s not great . The SEC is basically arguing that Binance shouldn’t have let people trade SOL. Which begs the question: if exchanges can’t list altcoins, what’s the point of even having them? Are we heading towards a crypto dystopia where only Bitcoin and Ethereum are allowed to exist?

And what about the presidential election? Both Harris and Trump are promising to be crypto-friendly. But can they really rein in the SEC? Or is this just political posturing? Are we all just pawns in a larger game of regulatory chess?

After hearing that the @SECGov got away with filing late, I thought this modified meme was quite fitting today.
If you feel the same way as an #xrp holder, or even a #crypto holder in general, or HATE the people below, like and retweet the F out of this! pic.twitter.com/IXwIQuiNaz
— 604XRP (@604XRP) October 18, 2024

The future of altcoins hangs in the balance . Will Solana survive the SEC’s onslaught? Will other altcoins be next? Will the crypto market ever recover from this regulatory beatdown? Only time will tell. In the meantime, grab your popcorn and watch the legal drama unfold.

Stay tuned, folks—this saga is far from over. Until then, hold onto your ledgers, and don’t forget: just because it’s decentralized doesn’t mean the SEC won’t find you.

Disclaimer: This article is satire. No, the SEC won’t stop coming for your altcoins just because you HODL hard. Please consult actual legal advice if you’re worried about your tokens being labeled as “securities.”

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FBI Arrests Alabama Man for Hacking SEC X Account

Lawrence Damilola — Thu, 17 Oct 2024 18:26:27 +0000

The Federal Bureau of Investigation (FBI) has arrested 25-year-old Eric Council Jr. from Athens, Alabama, for hacking the Securities and Exchange Commission’s (SEC) X account.

According to a press release from the FBI today, Council worked with co-conspirators to gain control of the SEC’s account and post a false message regarding Bitcoin exchange-traded funds (ETFs).

False SEC Post Causes Bitcoin Price Surge

On January 9, 2024, the SEC’s X account falsely posted, “Approval for #Bitcoin ETFs for listing on all registered national securities exchanges.” The message caused Bitcoin’s price to increase by $1,000. The price then dropped by $2,000 after the SEC regained control of its account, deleted the post, and confirmed that the information was false.

The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— SEC Chair Gary Gensler Archive (@GenslerArchive) January 9, 2024

The SEC ultimately approved Bitcoin ETFs the following day, but the prior unauthorized post had already affected the market. According to the FBI, Council was allegedly compensated with Bitcoin for his role in the scheme.

Indictment Details on Account Takeover

Court documents state that Council used fraudulent tactics to take control of the SEC’s X account. He allegedly created a fake ID using the personal information of the account holder and deceived AT&T into issuing a SIM card tied to the victim’s phone number. Using that SIM card, Council received account recovery codes sent to the phone number and accessed the account.

After gaining access, Council reportedly passed control to his co-conspirators, who issued the false ETF approval post. Investigators found evidence on Council’s personal computer, including searches for “SECGOV hack,” “telegram sim swap,” and “how can I know for sure if I am being investigated by the FBI.”

Council later returned the iPhone used in the scheme to the Apple Store where it was purchased. According to the indictment, the fraudulent post caused significant price volatility before the SEC took corrective action.

“The FBI works to identify, disrupt, and investigate cyber-enabled frauds, including SIM swapping,” FBI Acting Special Agent in Charge David E. Geist, said. “SIM swapping is a method bad actors exploit to illicitly access sensitive information of an individual or company, with the intent of perpetrating a crime. In this case, the unauthorized actor allegedly utilized SIM swapping to manipulate the global financial market. The FBI will continue to work tirelessly with our law enforcement partners around the country and globe to hold accountable those who break U.S. laws,” he added.

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Trump’s WLFI Token Flops: Raises Less Than 4% of $300M Goal

Lawrence Damilola — Thu, 17 Oct 2024 13:54:18 +0000

The launch of the Donald Trump-endorsed cryptocurrency, WLFI, has not met its initial fundraising expectations.

World Liberty Financial, the organization behind the digital coin, aimed to raise $300 million through the sale of 20 billion WLFI tokens. Currently, the project has sold only 788 million tokens, raising approximately $11.8 million, which is less than 4% of the target. Blockchain data from Etherscan shows that around 9,050 unique wallet addresses currently hold WLFI, representing roughly 9% of the 100,000 wallets whitelisted for participation.

The sale began on Tuesday, with Trump promoting the project through a video on X, formerly Twitter. Despite the promotional efforts, the platform encountered multiple technical issues, with its website repeatedly crashing and going offline for maintenance, hampering the token sale’s momentum.

WLFI is structured as a Regulation D token offering, which limits participation to accredited investors with a net worth of more than $1 million. This provision allows the sale to bypass the U.S. Securities and Exchange Commission’s registration requirements but significantly narrows the pool of potential buyers. Retail investors, who generally make up a large part of token sales, have been largely excluded from this offering.

World Liberty Financial has marketed WLFI as a governance token that allows holders to vote on decisions regarding the platform’s future operations. However, the crypto bank WLFI is tied to is not yet operational, and there are no decisions for token holders to vote on at this time. While the team has filed an approval request with the crypto lending platform Aave, the project is still in the early stages.

Changes to Token Sale Structure

In response to the underwhelming performance, the team made modifications to the sale process. The percentage of tokens available to public buyers has been reduced from 63% to 35%. Additionally, the website now states that investors should assume WLFI tokens could remain non-transferable indefinitely, despite earlier claims that they would become transferable after 12 months.

Donald Trump, as part of his endorsement deal, is set to receive 22.5 billion WLFI tokens, more than what is currently available to public buyers, along with significant fees for his services. The project has yet to release a full white paper or detailed business plan, leaving potential investors with limited information on its long-term plans.

The post Trump’s WLFI Token Flops: Raises Less Than 4% of $300M Goal first appeared on The Shib Daily.

Gensler’s Crypto Comedy: SEC Chair Puts the Chill on Digital Currency Dreams

Gairika Mitra — Sun, 13 Oct 2024 14:09:45 +0000

Howdy howdy, you beautiful folks! What’s up? As usual, we have been busy at the news desk trying to fetch you the latest from the crypto space. Hmm, besides being serious, we didn’t forget to lighten you up! And that’s why we present Gensler for you!!

In a delightful twist to the crypto saga, SEC Chair Gary Gensler recently donned his philosopher’s cap at NYU and threw a bucket of cold water on the cryptocurrency industry’s dreams of becoming the next global currency superstar. Speaking like a modern-day Socrates, he voiced doubts about whether Bitcoin could ever step up as a legit form of payment or a reliable piggy bank.

Rafael Andrade

With a resume that screams “I know my finance,” Gensler likened the crypto debate to philosophical chats from 3,000 years ago—because what’s more thrilling than comparing Bitcoin to Aristotle? Spoiler alert: It’s rare for countries to juggle more than one currency, much like it’s rare to find a cat that likes water. He explained that a single currency is like a good Netflix series: everyone wants to binge on it because it’s all cohesive and reliable.

Gensler: Cryptos Need to Step Up, Show Real Value, and Avoid the Mess of Currency Juggling!

But don’t worry folks! Gensler isn’t throwing cryptos under the bus. He just thinks they need to prove their worth—like getting a job after college—with some real-world applications and transparency. Think of it as the crypto version of a Tinder date where you have to show your résumé first.

In a nod to Gresham’s Law, which sounds like a name for your grumpy uncle, he pointed out that “bad money drives out good.” Countries usually prefer to stick with a single currency because, let’s face it, juggling multiple currencies is as messy as a toddler with spaghetti.

Gensler also tackled the ever-exciting topic of fraud in crypto land. Possibly he highlighted the latest gossip about 18 individuals being charged for market manipulation. Imagine a reality show where the contestants are crypto firm leaders caught red-handed! So far, four have pleaded guilty, and authorities have swooped in like superheroes, seizing over $25 million in cryptocurrency.

When asked about how the upcoming presidential election might affect his role, Gensler decided to keep his lips zipped tighter than a drum. It seems even he knows some things are best left off the record.

In the end, Gensler’s talk was a humorous reminder that while cryptocurrencies may hold glimmering potential, they need to clear quite a few hurdles to prove they’re not just a flash in the pan. Meanwhile, the SEC stands ready, capes on, to protect investors from the baddies lurking in the crypto shadows.

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The Shib Crypto Recap: Friday

Malaya Ruiz — Fri, 11 Oct 2024 20:55:18 +0000

As the crypto world caps off the week, here are the headlines that made it to our top list today. Read about the latest in cybersecurity and customer trust in financial service providers, regulatory developments, Ripple’s legal battles, and a phishing attack with ties to a “draining-as-a-service” (DAAS) tool.

Fidelity Data Breach: Thousands Affected as Hackers Steal Personal Information

Over 77,000 Fidelity customers had their sensitive identity information stolen in a data breach. The incident was disclosed on Wednesday after Fidelity informed authorities. The hackers accessed personal information from August 17 to 19, using two accounts created by a third party. This breach also exposed data from thousands of other customers. Fidelity has since notified those affected and is offering credit monitoring and guidance on protecting their information.

Such incidents emphasize the vital importance of implementing strict account creation procedures and maintaining constant monitoring to recognize and prevent unauthorized access.

Stablecoin Regulation in Focus: Senator Hagerty Introduces New Framework Proposal

U.S. Senator Bill Hagerty has introduced a draft for legislation to establish a regulatory framework for stablecoins. This proposal, which resembles the Clarity for Payment Stablecoins Act, aims to clarify stablecoin regulations. It suggests splitting oversight between the Federal Reserve for banks and the Office of the Comptroller of the Currency for non-bank issuers. Hagerty highlighted the benefits of stablecoins in improving payment systems and increasing demand for U.S. Treasuries.

Discussions on this legislation are ongoing in both the House and Senate, with efforts led by Rep. Patrick McHenry and Rep. Maxine Waters since 2022.

Ripple Files Cross-Appeal Against SEC in Ongoing Legal Battle Over XRP

Ripple Labs has submitted a cross-appeal in its ongoing legal dispute with the SEC, filing it with the U.S. Court of Appeals for the Second Circuit. This move comes after the SEC filed its own notice of appeal regarding a previous court decision. Ripple’s cross-appeal aims to ensure all relevant issues are covered. Stuart Alderoty, Ripple’s chief legal officer, stated that the appeal highlights that an “investment contract” requires specific rights and obligations, which were not present in Ripple’s XRP sales.

Both parties have filed appeals, with detailed arguments expected in the coming months. This ongoing case has been a significant legal issue in the cryptocurrency space for nearly four years.

$35 Million Vanished: How a Phishing Scam Shook the DETH Market

A phishing scam led to the loss of $35 million in fwDETH for a crypto whale. Security firm Scam Sniffer reported that a counterfeit “permit” message deceived the whale, and this allowed the attacker to withdraw the funds. BlockSec co-founder Yajin Zhou noted that this message was used to access the whale’s fwDETH tokens, which caused a major market disturbance. The value of Duo ETH (DETH) dropped more than 90%. It went from $2,000 to $100 before it partially recovered to $1,000. Blockchain security firm SlowMist linked the attack to the Angel Drainer group, which offers scammers tools for phishing.

The post The Shib Crypto Recap: Friday first appeared on The Shib Daily.

Ripple Files Cross-Appeal in SEC Lawsuit

Lawrence Damilola — Fri, 11 Oct 2024 12:11:01 +0000

Ripple Labs has filed a cross-appeal in its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), submitting the appeal to the U.S. Court of Appeals for the Second Circuit. However, this cross-appeal follows the SEC’s recent notice of appeal regarding an earlier court ruling in the case. Ripple’s cross-appeal was filed to ensure that all aspects of the case were fully addressed.

Ripple’s chief legal officer, Stuart Alderoty, commented on the filing yesterday, stating that the cross-appeal focuses on the argument that an “investment contract” requires essential rights and obligations, which Ripple argues were not present in its sale of XRP. This legal action is part of Ripple’s broader strategy in response to the SEC’s charges.

The Background of the Case

The SEC initially brought charges against Ripple in 2020, accusing the company of raising $1.3 billion through the sale of XRP, which it claimed was an unregistered security. U.S. District Judge Analisa Torres ruled in July 2023 that Ripple’s programmatic sales of XRP, conducted through exchanges, did not violate securities laws. However, she also ruled that Ripple’s direct sales of XRP to institutional investors were considered securities transactions under federal law.

Following this ruling, Ripple was ordered to pay $125 million in fines related to direct sales to institutional investors. The court’s ruling drew attention to the distinction between Ripple’s sales to institutions and its programmatic sales on exchanges.

Ripple and SEC File Appeals as Legal Battle Continues

The SEC is seeking to challenge the court’s finding that programmatic sales of XRP did not violate securities laws. The SEC had previously sought an interlocutory appeal, but Judge Torres denied that request.

Both Ripple and the SEC have now filed notices of appeal, and more detailed arguments will be presented in the coming months. The SEC’s brief is expected to be submitted by January 2024, with Ripple filing its response afterward.

Stuart Alderoty has stated that Ripple is prepared to continue contesting the case through the appeals process, noting that the cross-appeal is intended to ensure that all legal arguments are addressed.

The case between Ripple and the SEC has been ongoing for nearly four years and remains a central legal battle within the cryptocurrency sector.

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The Shib Crypto Recap: Thursday

Malaya Ruiz — Thu, 10 Oct 2024 20:41:01 +0000

The Shib Daily’s crypto news this Thursday is rife with discussions about security risks, regulatory and law enforcement challenges, and the ongoing saga of exchange-traded fund (ETF) applications. This intricate mosaic of challenges serves to illuminate the unpredictable nature of cryptocurrencies and captures the essence of a market that is as volatile as it is revolutionary.

Feds Strike Back: 15 Charged in $25 Million Crypto Fraud Operation Using Fake Token

On Wednesday, federal prosecutors charged several cryptocurrency companies and 15 individuals in a $25 million fraud scheme. The charges were the result of an FBI operation in which a fake digital token was created to track illegal activities in the crypto space. Multiple top executives were arrested, and $25 million worth of cryptocurrency was seized. They were implicated in “pump and dump” tactics, artificially increasing prices through wash trading before selling to naive investors.

The operation was named “Operation Token Mirrors” and targeted companies like Gotbit, ZM Quant, and CLS Global for manipulating trading volumes. The token, called NexFundAI, was used to entice suspects into fraudulent actions. According to officials, the aforementioned entities collaborated to manipulate this token on the Ethereum blockchain. Acting U.S. Attorney Joshua Levy said this situation represents the convergence of innovative technology, including cryptocurrency, with classic fraud schemes, pointing out that the defendants’ primary goal was to con investors.

SEC Chair Gensler Doubts Long-term Viability of Digital Currencies

SEC Chair Gary Gensler recently expressed concerns about the future of cryptocurrencies as global currencies. He questioned the long-term viability of Bitcoin and other digital currencies for payments and value storage. The SEC encourages public evaluation via disclosures to assess practical utility. However, Gensler indicated that cryptocurrencies are unlikely to replace traditional currency anytime soon. He said their value must be demonstrated through real-world use and transparent practices like stock evaluations. He also acknowledged the issue of fraud in the crypto industry but refrained from discussing the potential impact of the presidential election on the SEC or his position if Trump is re-elected.

Irish Drug Dealer’s $380 Million Bitcoin Fortune Locked Away—Authorities Stymied

Over $380 million in Bitcoin seized from Irish cannabis dealer Clifton Collins is still out of reach for authorities. The Criminal Assets Bureau (CAB) holds the digital assets in 12 wallets but cannot access them. Since 2019, they have struggled to trace and recover the Bitcoin. Collins bought it years ago when it was worth very little, unknowingly making a great investment. He distributed his Bitcoin across various wallets and stored the access codes in a document he later lost during a break-in. Recently, the CAB reported recovering $1.3 million worth of assets from him, including 89 Bitcoin. The situation is ironic, as Collins forfeited some Bitcoin, yet a much larger amount remains inaccessible.

Beware: $2.23 Million Vanishes in Ethereum Phishing Attack

An Ethereum phishing attack has led to a loss of about $2,230,000. The victim signed a malicious transaction after connecting with a fake address. As a result, a large amount of Ethereum-based assets was sent to an address known as Fake_Phishing504944. Such phishing attacks take advantage of users by creating deceptive smart contracts or addresses, resulting in devastating financial losses.

Canary Capital Files for Spot XRP ETF Amid SEC Uncertainty

Canary Capital has joined the race for cryptocurrency ETFs by filing for a spot XRP ETF. The ET F intends to offer investors XRP exposure without direct holdings. Nevertheless, approval is uncertain due to the SEC’s ongoing legal challenges regarding XRP. Experts like Alex Thorn express doubts about the ETF’s success if the SEC continues its appeal against Ripple. Bloomberg analyst Eric Balchunas highlights that political factors, like the 2024 elections, could influence decisions on XRP ETFs. In contrast, Nate Geraci from the ETF Store is optimistic, believing approval is inevitable, though regulatory clarity might be slow. The resolution of the SEC’s case against Ripple is viewed as essential for moving forward with XRP ETFs.

The post The Shib Crypto Recap: Thursday first appeared on The Shib Daily.

SEC Chair Gensler Casts Doubt on Cryptocurrencies as Future Currencies

Gairika Mitra — Thu, 10 Oct 2024 09:41:05 +0000

The U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, in a recent pronouncement that throws cold water to the glowing ember of the cryptocurrency industry’s ambition, casts doubts today about the potential future of digital currencies serving as viable global currencies.

Speaking at the New York University School of Law on Wednesday Gensler expressed concerns about the long-term viability of cryptocurrencies like Bitcoin serving as a means of payment or storage of value.

Gensler, who has a background in finance and economics from MIT, likened this ongoing debate to discussions dating back 3,000 years to philosophers such as Plato and Aristotle. He asserted that throughout history, it’s been rare for a nation or economic state to have more than one currency. This trend, he explained, is due to the benefits a single currency unit provides: it serves as a store of value, a medium of exchange, and a unit of account – all of which thrive under network economics.

credit: Rafael Andrade

The SEC Chairman remained neutral, emphasizing that the commission allows the public to decide, through disclosures, whether any given cryptocurrency has practical utility. However, Gensler hinted that it’s unlikely that cryptocurrencies will replace traditional currencies anytime soon. Instead, their worth would need to be demonstrated through real-world applications and transparent disclosures, similar to how investors evaluate securities listed on stock exchanges.

He also referenced Gresham’s law, a 19th-century monetary principle stating that “bad money drives out good,” noting that countries usually prefer to maintain a single currency. Gensler noted that a single currency unit is typically preferred due to its role as a store of value, a medium of exchange, and a unit of account, all of which benefit from network economics.

Gensler On Crypto Fraud, Election

Gensler also addressed the issue of fraud within the crypto industry, referring to a recent case in which authorities charged 18 individuals and entities with widespread cryptocurrency market manipulation. With prosecutors in Boston unsealing charges against leaders of four cryptocurrency firms and four market-making companies, the SEC Chair’s concerns about deceptive practices were validated.

To date, four defendants have pleaded guilty, and another has agreed to do so. Arrests were made in Texas, the UK, and Portugal this week, with authorities seizing over $25 million in cryptocurrency and shutting down multiple trading bots used for wash trades across 60 cryptocurrencies.

The SEC chairman, however, refrained from commenting on how the upcoming presidential election might affect the SEC or whether he would resign if former President Trump were to win re-election.

Gensler’s address at NYU serves as a reminder that while cryptocurrencies may hold potential, they must overcome significant challenges to prove their worth and legitimacy in the global financial landscape. The SEC remains steadfast in its mission to protect investors from fraudulent activities and ensure transparency within the crypto market.

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Crypto.com Launches Legal Challenge to SEC’s Crypto Crackdown

Gushiken Yona — Wed, 09 Oct 2024 06:14:53 +0000

Crypto.com throws down the gauntlet, launching a legal salvo against the U.S. Securities and Exchange Commission. The cryptocurrency exchange seeks to halt what it calls an “unjust” regulatory crusade, escalating a battle that is reshaping the future of digital assets in America.

The Singapore-based company filed suit against the SEC just days after receiving a Wells notice, a harbinger of potential enforcement action. Crypto.com’s aggressive move, announced in a blog post on Tuesday, marked a dramatic escalation in the ongoing tension between the cryptocurrency industry and regulators.

The firm argued the SEC had overstepped its bounds, unilaterally expanding its jurisdiction over digital assets and crafting rules without proper public input. Crypto.com pointedly challenged the SEC’s seemingly arbitrary distinction between Bitcoin and Ether, which the agency has generally refrained from classifying as securities, and other cryptocurrencies, which the SEC frequently targets.

The exchange argued that many digital assets share similar characteristics with Bitcoin and Ether and are sold in the same manner, yet face different regulatory scrutiny. Echoing a growing chorus of industry discontent, Crypto.com accused the SEC of “regulation by enforcement,” a tactic it claimed stymied innovation and threatened the future of the crypto industry in the United States.

The company’s CEO, Kris Marszalek, amplified this message on X (formerly Twitter), criticizing the SEC’s “unauthorized overreach” and declaring the company “very bullish” on the American crypto market despite the regulatory headwinds. This legal broadside was not fired in isolation.

Crypto.com joined a growing rank of crypto firms, including Coinbase and Consensys, that have taken the SEC to court. These companies contended that the SEC’s approach lacked clarity and consistency, creating a chilling effect on the nascent industry.

Consensys, for example, filed suit in April, challenging, among other things, the SEC’s stance on Ether. Coinbase has launched multiple legal actions against the SEC, accusing the agency of refusing to establish clear rules for digital assets.

In a parallel maneuver, Crypto.com’s derivatives arm, Crypto.com | Derivatives North America (CDNA), petitioned the SEC and the Commodity Futures Trading Commission (CFTC) for a joint interpretation of the regulatory status of certain cryptocurrency derivatives. This petition invoked the Dodd-Frank Act, seeking to clarify whether these products fell under the jurisdiction of the CFTC, the SEC, or both.

Crypto.com emphasized its commitment to compliance, highlighting its registration with FinCEN as a money services business, its numerous state money transmitter licenses, and CDNA’s registration with the CFTC. The company portrayed its lawsuit not as an act of defiance but as a necessary defense against what it considered regulatory overreach. It expressed confidence that its strong compliance record and recent court rulings against the SEC would bolster its case.

Despite the legal battle, Crypto.com insisted it was “business as usual,” continuing its mission to “put crypto in every wallet.” The company’s lawsuit, however, signaled anything but business as usual in the broader crypto landscape. The clash between the industry and the SEC was intensifying, with potentially far-reaching consequences for the future of digital assets in the United States.

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The Shib Crypto Recap: Tuesday

Malaya Ruiz — Tue, 08 Oct 2024 21:19:34 +0000

It may only be Tuesday, but the week is already presenting a dramatic array of developments. Key stories are emerging that highlight the pressing need for clearer regulations, the growing acceptance of virtual asset trading, rising security challenges at the crossroads of national security and cryptocurrency, and efforts to recover stolen digital assets.

Standardizing Crypto Inclusion: A Call for Uniform EU Crypto Regulations

21Shares, a crypto exchange-traded product (ETP) issuer, has urged EU regulators to create a uniform framework for including crypto assets in investment products. They have requested the European Securities and Markets Authority (ESMA) to revise its regulations to allow crypto in Undertakings for Collective Investment in Transferable Securities (UCITS) funds aimed at retail investors. The firm pointed out that current EU regulations are inconsistent, with some countries allowing crypto in UCITS funds while others do not. This inconsistency leads to confusion among investors in the region.

The ETP provider called for a consistent regulatory approach across the EU to clarify the situation for both retail and institutional investors. Additionally, it suggested that ESMA create guidelines for indirect exposure to crypto through ETPs, which trade like securities.

Building the Future: 35 Years with Bold Vision for Virtual Asset Trading in Hong Kong

The Hong Kong Securities and Futures Commission (SFC) is celebrating its 35th anniversary with a commitment to virtual asset trading platforms (VATPs). By 2025, the SFC aims to complete a comprehensive regulatory framework. This framework will support the tokenization of traditional products and the integration of regional chain and Web3 technologies. The SFC has issued a third license to the Hong Kong Virtual Asset Exchange (HKVAX), following licenses for OSL and HashKey. This move also supports the notion of implementing a new licensing system for cryptocurrency over-the-counter (OTC) services and custody solutions.

Investigation Uncovers Soldiers Trading Military Secrets for Cryptocurrency

A South Korean investigation has discovered soldiers compromising military secrets for cryptocurrency. It has documented 29 instances of leaked classified information. A prominent case features a captain accused of disclosing confidential documents regarding a special forces unit’s missions and allegedly receiving 48 million won (about $35,700) in cryptocurrency in return.

Earlier reports of three active soldiers who shared military passwords and secret papers with loan sharks prompted this investigation. Prosecutors believe these trades were made to invest in cryptocurrency or to settle related debts. Authorities are actively pursuing more cases linked to the unauthorized sharing of sensitive military information.

Dan Gallagher: A Strong Contender for SEC Chair Under a Trump Presidency

Robinhood CLO Dan Gallagher is seen as a possible SEC chair candidate if Donald Trump wins in 2024, according to former regulators and securities lawyers. A Politico report indicated that he would be a “natural choice,” referencing an ex-SEC official. Trump has openly disapproved of the current SEC Chair Gary Gensler, stating he would replace him on his first day in office. Although Trump hasn’t formally named candidates for SEC leadership, Gallagher’s name is often mentioned by industry experts.

Scammed Out of $275K, Elderly Individual Finds Hope Thanks to Blockchain Sleuth

An elderly U.S. resident has managed to recover $275,000 in cryptocurrency stolen by Indian scammers impersonating Coinbase support. The successful retrieval was aided by blockchain investigator ZachXBT. The victim fell for a scam in April 2024 after receiving misleading emails that claimed their Coinbase account was compromised. The fraudsters used psychological tactics to build trust and obtain sensitive financial details. They accessed the victim’s digital wallet and executed unauthorized transactions. The thieves then laundered the stolen funds by converting Ethereum and Bitcoin into Tron and moving stablecoins to over-the-counter platforms.

Thankfully, with ZachXBT’s research and collaboration with law enforcement, the stolen assets were traced and recovered.

The post The Shib Crypto Recap: Tuesday first appeared on The Shib Daily.

Robinhood Legal Chief Dan Gallagher Eyed for SEC Chair if Trump Wins

Lawrence Damilola — Tue, 08 Oct 2024 13:07:03 +0000

Former U.S. regulators and securities lawyers have suggested that Dan Gallagher, Robinhood’s chief legal officer, may be a potential candidate for chair of the Securities and Exchange Commission (SEC) if Donald Trump wins the 2024 presidential election.

Gallagher, who served as an SEC commissioner from 2011 to 2015, was the CLO at Robinhood in 2020. A report from Politico on October 7 cited a former SEC official who described him as a “natural choice” for the position.

Dan Gallagher is not the only name mentioned for the role. Other former officials are reportedly being considered, including Chris Giancarlo, former chair of the Commodity Futures Trading Commission (CFTC), and Robert Stebbins, former SEC General Counsel. SEC Commissioner Hester Peirce, known for her pro-crypto stance, was also mentioned as a possible candidate.

Trump’s Statements on SEC Leadership

Trump has been vocal over his dissatisfaction with current SEC Chair Gary Gensler. In July, he said that if elected, he would remove Gensler “on day one” of his presidency. Trump’s comments come as many in the crypto industry have voiced criticism of the SEC’s regulatory approach under Gensler’s leadership.

As of October, polling data shows a tight race between Trump and Vice President Kamala Harris in both national and battleground state polls. The Politico report noted that Trump has made no formal announcements about potential candidates for SEC leadership, but former regulators and industry experts have frequently mentioned Dan Gallagher.

Possible Pro-Crypto Influence

While Trump has yet to finalize his cabinet picks, his campaign has dismissed rumors about other possible appointments. Trump denied considering JPMorgan CEO Jamie Dimon or BlackRock CEO Larry Fink for Treasury Secretary roles. However, he has suggested that Elon Musk could have a role in his administration if reelected.

Vice President Kamala Harris, who is running against Trump, has not indicated whether she would retain Gensler as SEC Chair if she wins the election. In September, Harris said she intended to support the digital asset industry in 2025, leading to speculation about potential changes in SEC leadership. Gensler’s current term is set to expire in June 2026, though Harris could request his resignation before then. Entrepreneur Mark Cuban has also shown interest in leading the SEC under a Harris administration, according to reports from September.

The SEC’s future leadership remains a point of interest as the 2024 election approaches.

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The Shib Crypto Recap: Thursday

Malaya Ruiz — Thu, 03 Oct 2024 21:21:06 +0000

Today’s top cryptocurrency headlines are focused on conversations about regulatory leadership changes, Edward Snowden’s remarks criticizing Solana, the growing influence of cryptocurrency on U.S. politics, and self-custody practices in crypto highlighted by a major bank’s recent technical outage.

Grewal’s Resignation: A Catalyst for Change or a Sign of Trouble at the SEC?

A cloud of uncertainty surrounds the U.S. Securities and Exchange Commission (SEC) as its top enforcer, Gurbir S. Grewal, plans to resign effective October 11, 2024. This sudden departure is stirring speculation in the financial and cryptocurrency sectors, with many questioning the reasons behind it. The short notice and absence of a permanent successor add to the intrigue.

While the SEC praised Grewal’s three-year tenure, critics argue that his departure may signal a shift in the SEC’s aggressive enforcement approach, particularly regarding cryptocurrencies. Some suggest the abrupt exit hints at possible setbacks in court or even a looming change for Chair Gary Gensler. Grewal’s resignation creates leadership uncertainty within the SEC’s Enforcement Division and raises new questions about the agency’s regulatory strategy.

Ripple’s Legal Battle Continues: Garlinghouse Slams SEC’s “Misguided” Appeal

In other news that involves the SEC, Ripple Labs CEO Brad Garlinghouse intends to continue fighting the regulatory agency after it announced an appeal. This follows Ripple’s partial victory in a 2020 lawsuit, where the SEC charged the company with illegally selling unregistered securities through XRP. Garlinghouse took to X to assert the SEC still doesn’t understand they had already lost key arguments. He stated that XRP’s current classification as a non-security is established law. He called the appeal “misguided” and “infuriating.” Ripple’s chief legal officer, Stuart Alderoty, found the appeal disappointing yet predictable, and mentioned the possibility of a cross-appeal.

Snowden Sounds Alarm on Solana: A Centralized Threat in the Crypto Environment

At the TOKEN2049 conference in Singapore, Edward Snowden criticized Solana as a centralized platform that could be easily controlled by the state. He claimed it is mainly used for “meme coins and scams.” This statement reignites the debate over speed, efficiency, and decentralization in cryptocurrency.

In a Q&A session at the event, he contrasted Bitcoin’s decentralized nature with Solana’s speed, emphasizing that Solana’s centralization makes it more prone to manipulation and censorship. Snowden warned that significant value on SOL could attract state intervention. It remains unclear how the Solana community will engage with his views, but his remarks contribute to ongoing discussions about the future of blockchain technology.

The Crypto Vote: Could It Reshape the 2024 U.S. Presidential Election?

A ConsenSys report suggests that pro-crypto policies could significantly sway voter behavior and draw interest from the expanding crypto electorate. This study points out that crypto voters are emerging as a powerful group aiming to alter how governance is approached in the U.S., emphasizing values such as financial freedom and decentralization. It reveals that voters are 13 points more inclined to vote for candidates outside their party if they support pro-crypto measures. There is also an absence of clear partisan alignment on crypto, with 35% of voters trusting Republicans and 32% trusting Democrats regarding policy.

Additionally, 56% support Donald Trump’s pro-crypto position, with a third more inclined to vote for him due to this stance. Meanwhile, over half (54%) wish for Kamala Harris to define her position on crypto.

Although both politicians have commented on blockchain, it’s still uncertain if this will affect their election success.

Tens of Thousands Locked Out: Bank of America Glitch Reignites Crypto Advocacy

A recent outage at Bank of America left thousands of customers unable to access their accounts or seeing $0 balances. This glitch affected their mobile and online banking on Wednesday, causing outrage among clients who vented their frustrations on social media. With over 20,000 complaints registered within hours, many felt powerless without access to their funds. This situation reignited discussions about decentralized finance among cryptocurrency supporters. They argue that owning crypto and controlling private keys means no centralized entity can restrict access.

Bank of America has apologized and corrected the problem. However, the incident ultimately serves as a stark reminder of the fragility of trust in centralized systems, reinforcing the crypto community’s preference for decentralized currencies like Bitcoin and Ethereum.

The principles of self-custody and decentralization in cryptocurrency merit deeper exploration, especially as traditional finance faces increasing challenges. With the rise of issues within centralized institutions, more individuals are seeking alternative financial solutions that allow them to take control of their assets.

While this article doesn’t offer financial advice, it’s clear that the ongoing turmoil in centralized institutions is driving a shift toward decentralized systems. It further prompts a reevaluation of how people manage and secure their wealth.

The post The Shib Crypto Recap: Thursday first appeared on The Shib Daily.

Ripple Preps for New Legal Battle as SEC Appeals Court Decision

Lawrence Damilola — Thu, 03 Oct 2024 16:18:45 +0000

Ripple Labs CEO Brad Garlinghouse has pledged to continue the company’s legal fight with the U.S. Securities and Exchange Commission (SEC) after the regulator announced plans to appeal a recent court ruling. The appeal follows Ripple’s partial victory in a lawsuit filed by the SEC in 2020, which accused the company of illegally selling unregistered securities through its XRP token.

In a post on X (formerly Twitter) yesterday, Garlinghouse stated, “Somehow, they still haven’t gotten the message: they lost on everything that matters,” referring to the SEC’s decision to challenge the ruling. He added, “While we’ll fight in court for as long as we need, let’s be clear: XRP’s status as a non-security is the law of the land today.” Garlinghouse also criticized the appeal as “misguided” and “infuriating.”

If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC.

Somehow, they still haven't gotten the message: they lost on everything that… https://t.co/1hW7xVSL9b
— Brad Garlinghouse (@bgarlinghouse) October 2, 2024

Ripple’s Legal Position

In July 2023, Judge Analisa Torres of the New York District Court ruled that XRP was not a security when sold on public exchanges — a decision seen as a win for Ripple. However, the judge also found that XRP sales to institutional investors violated securities laws. Ripple was fined $125 million for those sales, but the fine has been stayed as both sides await the appeal.

Stuart Alderoty, Ripple’s chief legal officer, also commented on the appeal, calling it “disappointing, but not surprising.” He noted that the company is considering a cross-appeal, stating, “The SEC’s lawsuit has been irrational and misguided from the start. We’re ready to prove that yet again in the appellate court.”

Extended Legal Battle Anticipated

The timeline for a ruling from the U.S. Court of Appeals for the Second Circuit could extend until at least January 2026, according to lawyer Fred Rispoli, who shared his analysis on X. He explained that both the SEC and Ripple are likely to file their briefs early next year, with responses due by March 2025. Oral arguments are expected in September or October of 2025.

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Coinbase Seeks Court Order Forcing CFTC to Release SEC Docs

Lawrence Damilola — Thu, 03 Oct 2024 15:27:27 +0000

Coinbase has petitioned a federal court to compel the Commodity Futures Trading Commission (CFTC) to disclose communications with several cryptocurrency token issuers. The exchange seeks this information to defend against a lawsuit from the Securities and Exchange Commission (SEC), which alleges that Coinbase sold unregistered securities.

According to a motion filed on Tuesday, Coinbase is asking for the CFTC’s communications with the issuers of 12 cryptocurrencies that the SEC claims are unregistered securities. “This information is critical to Coinbase’s ability to defend itself against the allegations,” the company stated in its filing. The exchange also requested documents regarding the CFTC and SEC’s regulatory authority over digital assets.

Coinbase revealed that it had issued a subpoena to the CFTC in July after a prior attempt with a broader subpoena in June. The exchange noted that its first request was denied by the CFTC, which cited reasons such as “overbreadth, burden, and privilege.” Coinbase stated that the CFTC “has stonewalled” its requests and that the regulator “hasn’t even conducted a single search.”

CFTC’s Response to Subpoena Requests

The CFTC reportedly rejected the first subpoena because it was “overly broad and burdensome.” Coinbase noted that the CFTC “stated its willingness to reevaluate the subpoena if it were narrowed,” leading to a second, more focused request. However, this subpoena was also denied, with the CFTC claiming it was still “overly broad, vague, and would place an undue burden on the Commission.”

In its motion, Coinbase argued that the CFTC has not justified its claims of burden and that “no conceivable privilege could apply to them,” as the communications involved external parties. The exchange emphasized that both the SEC and CFTC have engaged with digital asset issuers in recent years to understand the regulatory environment better.

The SEC’s lawsuit, filed in June 2023, names 13 tokens as unregistered securities, including Solana, Cardano, and Polygon. Coinbase maintains that it requires access to CFTC communications to determine whether these tokens meet the definition of securities.

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Is Gensler Next? SEC Enforcement Chief’s Abrupt Exit Sparks Controversy

Gushiken Yona — Thu, 03 Oct 2024 05:14:06 +0000

A cloud of speculation hangs over the U.S. Securities and Exchange Commission (SEC) as Gurbir S. Grewal, the agency’s top enforcer, prepares to abruptly depart. His announced resignation, effective October 11, 2024, has sent ripples through the financial and cryptocurrency worlds, with some observers suggesting more than meets the eye. The nine-day notice, the lack of a permanent replacement, and the politically charged atmosphere surrounding the SEC all fuel the intrigue.

The SEC’s press release, issued Wednesday, painted a picture of amicable departure and lauded Grewal’s three-year tenure. Chair Gary Gensler praised Grewal’s commitment to investor protection and highlighted the Enforcement Division’s accomplishments under his leadership, including over 2,400 enforcement actions and more than $20 billion in penalties. Grewal, in turn, expressed gratitude for the opportunity to serve and emphasized the dedication of the Enforcement Division staff.

However, the official narrative was quickly challenged by a chorus of critics who viewed Grewal’s exit as a potential turning point in the SEC’s aggressive enforcement strategy, particularly within the cryptocurrency space. House Majority Whip Tom Emmer, a vocal critic of Gensler, linked Grewal to what he called a campaign of “lawlessness and chaos” at the SEC.

Jake Chervinsky, CLO of Variant Fund, questioned the abruptness of the departure, suggesting it might be connected to “embarrassing defeats in court.” Adam Cochran of Cinneamhain Ventures speculated that Grewal’s exit could signal Gensler’s own impending departure or a strategic move to appease critics like Senators Elizabeth Warren and Sherrod Brown.

He also noted the significance of Gensler appointing Sanjay Wadhwa, the current Deputy Director, only as Acting Director, highlighting a lack of confidence in the career official to continue the current enforcement trajectory. The legal community also weighed in.

Crypto Law, founded by John Deaton, described Grewal as one of the “chief architects” of the SEC’s “war on crypto.” Former Messari CEO Ryan Selkis offered a more blunt assessment, calling Grewal a “scumbag.”

Ripple CLO Stuart Alderoty pointed to the timing of the announcement, which coincided with the SEC’s appeal of a recent court ruling in favor of Ripple, hinting at a possible connection. Even within the regulatory sphere, questions arose.

Justin Slaughter, a former SEC and CFTC advisor, echoed the surprise at the short notice and the appointment of an acting director, underlining a lack of a planned succession process. Rep. Warren Davidson, another frequent critic of Gensler, called for the SEC Chair to resign as well.

The departure of Gurbir Grewal leaves a void at the top of the SEC’s Enforcement Division and opens a new chapter in the ongoing debate over the agency’s approach to regulation, particularly in the rapidly evolving world of digital assets. Whether this marks a shift in strategy or simply a change in personnel remains to be seen. The coming days and weeks will undoubtedly offer further clues as the SEC navigates this period of transition and uncertainty.

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BNY Mellon to Hold Your Crypto? Trust Me, Bro! (Said No One Ever)

Gushiken Yona — Sat, 28 Sep 2024 14:25:43 +0000

Cue dramatic music

Ladies and gentlemen, boys and girls, hodlers and paper hands alike, prepare to be wowed. BNY Mellon, the financial institution that’s about as exciting as watching paint dry, has just dropped a bombshell: they’re offering crypto custody services!

Cue gasps of disbelief

That’s right, folks. The same BNY Mellon that’s probably as old as your grandma’s favorite rocking chair is now dipping its toes into the wild and wacky world of crypto. It’s like seeing your favorite grandma trying to TikTok dance – unexpected and a little bit cringeworthy. Because, you know, what could possibly go wrong when the institution that brought you the 2008 financial crisis decides to handle your magic internet money?

Remember that whole “decentralization” thing that crypto was supposed to be all about? Yeah, well, maybe forget about that for a second. Because when institutions like BNY Mellon enter the crypto custody game, it kinda feels like we’re just recreating the same centralized financial system we were trying to escape. Is this the future of crypto? Big banks holding all the keys while we all just, like, trust them? (Narrator: They shouldn’t.)

The SEC seems to be playing favorites, giving BNY Mellon a regulatory hall pass while smaller players struggle to navigate the bureaucratic maze. Is this fair? Is it fostering innovation? Or is it just another example of the “too big to fail” mentality creeping into the crypto space?

@0xmarmaduck

But let’s be real, this move is huge. It’s like a traditional bank admitting that maybe, just maybe, there’s something to this whole crypto thing after all. It’s like a vampire admitting they actually enjoy garlic bread. Or a cat admitting they actually enjoy baths.

However, the crypto world has a bit of a security problem. Hacks, scams, rug pulls – it’s a jungle out there. So, are we really supposed to feel comfortable handing over our precious digital assets to a bank that’s been around for centuries but might not be as agile as a nimble DeFi protocol when it comes to cybersecurity?

Some crypto purists are having an existential crisis. They see the entry of big banks like BNY Mellon into the crypto space as a betrayal of the core principles of financial freedom and autonomy that crypto was supposed to champion. Is this the beginning of the end for the decentralized dream? Or can crypto and traditional finance somehow coexist without one consuming the other?

So, what does this mean for you, the average crypto enthusiast? Well, for starters, it could mean more legitimacy for crypto. If a stuffy old bank like BNY Mellon is getting into the game, maybe it’s not just a fad after all. But let’s be honest, it also raises some eyebrows. Is this the beginning of the end for decentralization? Are we about to see crypto get sucked into the same black hole that traditional finance has been stuck in for centuries?

And let’s not forget about the regulatory implications. BNY Mellon managed to get a green light from the SEC, but what about the rest of us? Are we going to see a flood of new regulations that make it even harder to hodl our favorite coins?

So, what do you think, folks? Is this a win for crypto, or is it a Trojan horse disguised as a friendly giant? Let’s discuss in the comments below.

Disclaimer: This article was written with a tongue planted firmly in cheek. BNY Mellon may not actually be vampires (probably), but trusting old banks with your new digital assets should still be done with caution.

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BNY Mellon Secures Crypto Custody Services Exemption

Gairika Mitra — Fri, 27 Sep 2024 11:14:22 +0000

Bank of New York Mellon (BNY Mellon) has reportedly secured an exemption from adhering to the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) 121 accounting guidelines.

According to a testimony at a Wyoming public hearing by Chris Land, general counsel for U.S. Senator Cynthia Lummis, this move paves the way for BNY Mellon, the largest U.S. custodian bank, to provide crypto custody services to institutional clients.

Chris Land revealed that BNY Mellon is looking to expand its involvement in the crypto custody business. “They had some problems with SAB 121, and the SEC has apparently given them some kind of variance from SAB 121 to move forward,” Land stated during his testimony.

About SAB 121

SAB 121 is a critical regulation that mandates crypto custody firms to protect the digital assets held for their platform users. Implemented in 2022, this rule requires these firms to record a liability on their balance sheets representing their obligation to safeguard these assets. Additionally, SAB 121 necessitates recognizing an asset and a safeguarding liability at fair value for each reporting period.

The rule sparked concerns about the SEC’s scope and application, with some Congress members considering disapproving it. However, BNY Mellon, regulated by both the Federal Reserve and New York’s Department of Financial Services, appears to have found a path forward without any objections from these regulatory bodies regarding its plans for digital asset custody.

Potential Impact on Institutional Crypto Adoption

Michael Saylor, a prominent advocate for Bitcoin, endorsed the news on social media, highlighting that credible rumors are emerging about major U.S. banks soon gaining the ability to custody Bitcoin.

This development might indicate a softening of the federal crackdown on crypto, which industry supporters have criticized as “Operation Choke Point 2.0,” an effort to exclude cryptocurrencies from traditional financial systems.

Credible rumors are circulating that one or more major banks in the US will soon be able to custody #Bitcoin. https://t.co/Zq9UzjoUjk
— Michael Saylor (@saylor) September 20, 2024

Congressional Opposition to SAB 121

U.S. Representative Ritchie Torres has been a vocal critic of the SEC’s SAB 121 policy, saying that it contradicts generally accepted accounting principles (GAAP). He accused the SEC of stifling innovation by discouraging companies from exploring blockchain technology. “There is something profoundly un-American about banning innovation,” Torres remarked.

BNY Mellon’s exemption from SAB 121 guidelines marks a significant milestone in the crypto industry, potentially opening doors for broader institutional adoption and signaling a shift in regulatory stance.

Bankroll Status Loses $230K to Hacker

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The Shib Crypto Recap: Wednesday

Malaya Ruiz — Wed, 25 Sep 2024 21:01:31 +0000

In a world where cryptocurrencies once promised innovation and financial freedom, today’s headlines paint a more troubling picture, featuring tales of fraud, illicit drug distribution networks, and the numerous legal and ethical dilemmas surrounding various crypto ventures. Additionally, the intersection of artificial intelligence (AI) with this sector continues to garner attention, while the FTX saga remains an ever-evolving story. Together, these reports underscore the volatility and unpredictability inherent in the crypto space, prompting concerns about the safety and security of users.

Stablecoin Fraud and Other Crypto-Related Crimes on the Rise

The SEC has penalized crypto company TrueCoin LLC and financial services provider TrustToken Inc. for engaging in fraudulent and unregistered sales of investment contracts related to the stablecoin TrueUSD (TUSD). A complaint filed in the U.S. District Court for the Northern District of California details how the companies conducted an unregistered offering between November 2020 and April 2023, selling investment contracts and profit-making opportunities without disclosing significant risks to investors. While neither company admitted nor denied the allegations, both have agreed to settle the charges, paying civil penalties of $163,766 each, and have consented to judgments preventing future violations of federal securities laws.

Adding to the list of crimes related to illicit crypto transactions is the recent crackdown by South Korea’s Narcotics Crime Investigation Unit on a drug distribution network. This drug ring allegedly used cryptocurrency for illegal transactions, revealing a concerning trend of virtual assets being used in criminal activities. A 33-year-old distributor was arrested for smuggling methamphetamine into the country, along with six accomplices facing prosecution for drug-related charges. The use of cryptocurrency highlights the challenges law enforcement faces in monitoring emerging financial technologies, as officials stress that drug-related crimes threaten both community safety and public health.

Unethical and Exploitative? Worldcoin’s Tech Receives Backlash

Berlin-based cryptocurrency project Worldcoin currently faces serious legal and ethical issues. Despite attracting millions in funding, Worldcoin is under investigation for potential violations of the General Data Protection Regulation (GDPR), especially concerning its collection of biometric data through iris scans. The business model relies on creating a distinct digital identity, referred to as WorldID, using users’ iris data, which they exchange for WLD tokens.

Furthermore, Worldcoin has been criticized for allegedly exploiting marginalized populations, such as homeless individuals, and has been accused of incentivizing those with substance issues to participate in eye scans. Compounding these controversies, the company is facing scrutiny for potentially infringing privacy laws by scanning minors’ eyes without obtaining necessary parental consent.

Building the Backbone of AI: OpenAI’s Data Center Proposal

In a move aimed at addressing the increasing demand for AI technologies, OpenAI has proposed the establishment of large-scale data centers throughout the United States. The plan outlines the need for up to 5 gigawatts of power for these centers. It also anticipates the creation of tens of thousands of jobs and a positive impact on the U.S. economy, emphasizing that this infrastructure is vital for the country to maintain its AI development leadership and ensure national security.

However, some individuals in the energy sector remain skeptical about such ambitious projects. Joe Dominguez, the CEO of Constellation Energy Corp., highlighted the complexities associated with powering a single 5 GW center and noted that OpenAI’s vision of building multiple centers could face substantial obstacles due to existing issues with the energy grid, supply chain challenges, and workforce shortages. The U.S. currently has an installed nuclear capacity of 96 GW, and in a related development, Microsoft, OpenAI’s biggest investor, has partnered with Constellation Energy to rejuvenate the Three Mile Island nuclear plant to supply power for the next two decades.

FTX Fallout: Ellison’s Fate and Salame’s Stark Critique of Legal Disparities

Former Alameda Research CEO Caroline Ellison has faced sentencing for her involvement in the FTX collapse. While all of this was happening, Ryan Salame, the former co-CEO of FTX Digital Markets, accused Ellison of being the one who prompted him to make political contributions. He made sure to emphasize that he had never been asked to do so by Sam Bankman-Fried. He also commented on the flaws within the justice system, suggesting that high-priced attorneys essentially admit that beating the government at trial is nearly impossible.

When challenged on the disparity between his sentence and Ellison’s, considering her pivotal role in the fraud and the corresponding restitution, Salame implied sarcastically that he should have committed more crimes to receive a lighter sentence. Meanwhile, as Ellison was sentenced by Judge Lewis Kaplan, the judge recognized her remorse and exploitation at the hands of Bankman-Fried but emphasized that her cooperation wouldn’t excuse her from the consequences.

Wednesday’s developments paint a complex picture of the cryptocurrency and AI industries. While there are notable developments, the prevalence of crypto-related crimes and ethical dilemmas cannot be overlooked. This duality serves as a reminder that many innovations are still in their infancy. A careful and cautious approach is needed in finding a balance between innovation and responsibility.

The post The Shib Crypto Recap: Wednesday first appeared on The Shib Daily.

Mark Cuban Says Kamala Harris Opposes SEC’s Litigation-Based Regulation

Lawrence Damilola — Wed, 25 Sep 2024 12:08:27 +0000

Billionaire investor Mark Cuban does not mince words in saying that Kamala Harris’ presidential campaign is against “regulation through litigation,” which contrasts with the current approach of the U.S. Securities and Exchange Commission (SEC) under Chair Gary Gensler.

Cuban shared his thoughts following the SEC Chair’s recent testimony at a House Financial Services Committee hearing, where Gensler faced questioning about his approach to regulating cryptocurrencies.

Cuban posted videos from the hearing on X, including a moment where Representative Ritchie Torres (D-N.Y.) asked Gensler to explain the difference between buying a ticket to a Yankees game and purchasing a non-fungible token (NFT) for an animated web series under federal securities regulations. Gensler was unable to provide a clear response — a moment Cuban highlighted in his criticism.

I talked to the Harris team today who told me in no uncertain terms that they are against “regulation through litigation “

CYA Gensler.

You leaving is worth a point in GDP growth https://t.co/NbPd4RQSBF
— Mark Cuban (@mcuban) September 24, 2024

Mark Cuban’s Criticism of Gary Gensler

In another post, Cuban shared footage of House Financial Services Chair Patrick McHenry pressing Gensler on the regulatory uncertainty surrounding cryptocurrencies. Cuban criticized Gensler, calling him “a blight on the technology community,” and challenged his reliance on the Howey test, a decades-old legal standard used to determine whether an asset is a security. Cuban noted that the Reves v. Ernst & Young case exists as a more relevant legal precedent.

Gary Gensler is a blight on the technology community. He says Howey is the law of the land. If it was, there never would be a reason for Reves vs Ernst &Young to exist https://t.co/QebV6xb3uy
— Mark Cuban (@mcuban) September 24, 2024

Cuban’s remarks add to the growing criticism of Gensler from the cryptocurrency industry and lawmakers alike. Congressman Tom Emmer even accused the SEC chairman of overreaching and inventing the term “crypto asset security.” Emmer argued that the regulator had created confusion in the market by enforcing rules without providing clear guidelines.

Cuban’s comments about the Harris campaign’s stance come when many in the cryptocurrency industry seek clarity on the position of key political figures. While Cuban confirmed that Harris’ team is against regulation through litigation, some insiders have doubts whether she will clearly define her position on cryptocurrency policy before the 2024 election.

Cuban commented that Gensler’s departure could positively affect the economy, writing, “You leaving is worth a point in GDP growth.” His statements come amid increasing frustration with the SEC’s handling of digital assets, as critics argue the agency has stifled innovation by enforcing regulations without clear rulemaking.

Additionally, SEC Commissioner Hester Peirce echoed some of these criticisms, stating that the SEC has been slow to admit that many crypto tokens should not be classified as securities.

The post Mark Cuban Says Kamala Harris Opposes SEC’s Litigation-Based Regulation first appeared on The Shib Daily.

SEC Penalizes TrueCoin and TrustToken for Fraudulent TUSD Sales

Gairika Mitra — Wed, 25 Sep 2024 11:19:53 +0000

The Securities and Exchange Commission (SEC) on Tuesday imposed hefty penalties on TrueCoin LLC and TrustToken Inc. for their fraudulent and unregistered sales of investment contracts tied to the purported stablecoin TrueUSD (TUSD).

In a complaint filed with the U.S. District Court for the Northern District of California, the SEC reported that TrueCoin and TrustToken engaged in an unregistered offer between November 2020 and April 2023. It also alleged the sale of investment contracts through TUSD and profit-making opportunities on TrueFi.

The companies purportedly marketed TUSD as a safe and trustworthy investment, claiming that US dollars or their equivalent backed it. However, the SEC alleged that a substantial portion of the assets supposedly backing TUSD had been funneled into a risky offshore investment funds to help generate additional returns for the defendants.

TrueCoin and TrustToken Misled Investors

By March 2022, after TrueCoin sold TUSD operations to an offshore entity, the company invested more than half a billion dollars of the purported reserves in this speculative fund. Despite redemption issues at the offshore fund coming to light by fall of 2022, TrueCoin and TrustToken allegedly continued with their misleading activities. The companies claimed that one-for-one by U.S. dollars backed the TUSD. The deception escalated, with 99% of TUSD’s reserves invested in the speculative fund by September 2024.

“TrueCoin and TrustToken sought profits for themselves by exposing investors to substantial, undisclosed risks through misrepresentations about the safety of the investment,” said Jorge G. Tenreiro, the acting chief of the SEC’s Crypto Assets & Cyber Unit. “This case is a prime example of why registration matters, as investors in these products continue to be deprived of the key information needed to make fully informed decisions,” he added.

As of this writing, without admitting or denying the allegations, TrueCoin and TrustToken agreed to settle the charges. They consented to final judgments enjoining them from violating federal securities laws and agreed to pay civil penalties of $163,766 each.

Additionally, TrueCoin will pay a disgorgement of $340,930 with a prejudgment interest of $31,538. The settlements are pending court approval.

Previously, federal prosecutors formally charged two individuals with stealing over $230 million in cryptocurrencies. Blockchain investigator ZachXBT uncovered the charges.

In another instance, The U.S. Court of Appeals for the Third Circuit seemed unconvinced by the SEC’s decision to reject Coinbase’s request for crypto-specific rulemaking.

Coinbase had petitioned the SEC in July 2022, seeking clear rules for securities traded via digital methods. After the SEC denied the request in late 2023, Coinbase turned to the court, asking it to require the regulator to provide a more thorough explanation.

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US Court Questions SEC’s Denial of Coinbase Crypto Rulemaking Request

Lawrence Damilola — Tue, 24 Sep 2024 14:17:42 +0000

It appears that the U.S. Court of Appeals for the Third Circuit is not sold on the Securities and Exchange Commission’s (SEC) decision to deny Coinbase’s request for crypto rulemaking.

Coinbase filed a petition in July 2022 asking the SEC to establish rules to govern securities traded through digital methods. The SEC denied the request in late 2023, leading Coinbase to ask the court to compel the regulator to provide a more detailed response.

Judges Criticize Lack of Explanation on Coinbase Decision

During the hearing on Monday, Judge Thomas Ambro criticized the SEC’s limited reasoning for denying Coinbase’s petition. “There’s an argument here that this is pretty darn close to vacuous,” Ambro remarked, according to a report from Law360. He acknowledged that the SEC is not required to provide extensive reasoning but emphasized that the denial should include more substance. Ambro added, “I don’t really understand why you’re denying rulemaking, even though I realize you don’t have to give a whole lot.”

Coinbase’s legal counsel, Eugene Scalia, argued that the SEC’s two-page denial was arbitrary and insufficient, especially given the ongoing enforcement actions against crypto firms.

“The commission provided zero explanation for rejecting Coinbase’s demonstration that the current SEC rules make it unworkable for digital asset companies to register with the SEC and for digital assets to function as designed,” Scalia told the panel.

Judges Point to SEC’s Focus on Enforcement

The court also questioned the SEC’s focus on enforcement actions rather than providing clear guidance for the crypto industry. Judge Stephanos Bibas noted that the SEC had pursued multiple enforcement cases against crypto companies. “So it’s not that the agency isn’t interested in the area; it’s just interested in picking off wrongs without giving higher-level guidance,” he said. Bibas also commented, “I would get it if this were the first or the second enforcement action, but we’re way down the road here.”

Coinbase’s Chief Legal Officer Paul Grewal expressed his frustration with the SEC’s approach in a post on X, saying, “The SEC refuses to provide a reasonable explanation for its barebones denial, yet it has wielded its purported authority to engage in an arbitrary enforcement campaign against our industry.”

Today @coinbase made oral arguments before the Third Circuit in our case against @SECgov’s repeated arbitrary and capricious denial of our petition for rulemaking, which we originally put forward over 2 years ago. Here’s the original petition: https://t.co/k0n2wwaBU9 1/5
— paulgrewal.eth (@iampaulgrewal) September 23, 2024

The SEC defended its position, explaining that other priorities and ongoing efforts influenced its decision not to engage in rulemaking at this time. In June 2023, the SEC charged Coinbase with operating as an unregistered securities exchange, broker, and clearing agency.

The post US Court Questions SEC’s Denial of Coinbase Crypto Rulemaking Request first appeared on The Shib Daily.

‘Digital Asset Security’: Was the Term Made Up by the SEC?

Malaya Ruiz — Mon, 23 Sep 2024 19:22:48 +0000

The term “digital asset security” has recently come under scrutiny, with critics questioning its origins and legitimacy. They argue that this term, seemingly conjured by the Gary Gensler-led Securities and Exchange Commission (SEC), may have emerged more from a desire to regulate than from any well-defined legal basis.

This raises a critical question: did the SEC fabricate a term to tighten its grip on digital assets or is there a substantive legal framework that supports this classification? As regulators seek to impose structure on a sector that requires more regulation, the implications of such terminology could have far-reaching consequences for the future of digital assets.

Rep. Ritchie Torres: “The SEC invented the term out of thin air.”

An unvarnished comment by Rep. Ritchie Torres (D-N.Y.) during a recent congressional hearing, aptly titled “Dazed and Confused: Breaking Down the SEC’s Politicized Approach to Digital Assets,” marked a crucial milepost in this scrutiny. He said the term digital asset security does not appear anywhere, challenging the SEC to explain where it came from. He categorically asked, “If it appears nowhere, neither in rule nor statute, did the SEC invent the term out of thin air?”

In a post on X, the Democratic Congressman went all out and doubled down on the issue at hand.

The term ‘digital asset security’ does not appear anywhere in any law enacted by Congress or in any rule promulgated by the SEC or in any decision rendered by the Supreme Court. It appears nowhere in the 2 million pages of the Federal Register. If it comes from neither statute… pic.twitter.com/ucSaCzEvOU
— Rep. Ritchie Torres (@RepRitchie) September 19, 2024

Cato Institute’s Jennifer Schulp: Inefficient “enforce first, make rules never” Strategy

Jennifer Schulp, Director of Financial Regulation Studies at the Cato Institute’s Center for Monetary and Financial Alternatives, did not mince words either during her testimony regarding the SEC’s misguided strategy for regulating cryptocurrency. She discussed how the SEC’s registration requirements do not align well with digital assets. She said the same applies to the regulations being enforced on exchanges. Furthermore, she strongly asserted that enforcing existing rules can be effective when they provide clear guidance. Yet the SEC’s current strategy leaves much uncertainty around digital assets. This lack of clarity essentially results in a ban on crypto activity in the United States.

“This strategy simultaneously exceeds the agency’s authority and abdicates the agency’s role in overseeing the securities markets,” Schulp added.

Yesterday, I testified about the SEC's flawed approach to crypto regulation in front of the @FinancialCmte.

Catch up on my testimony here: https://t.co/NbIIgtqIcp https://t.co/jKfRd4LMh4
— Jennifer J. Schulp (@jenniferjschulp) September 19, 2024

Robinhood’s Daniel Gallagher: Contending with “innovation-killing federal regulatory uncertainty”

Daniel M. Gallagher, former SEC commissioner and incumbent chief legal officer at Robinhood, pointed out the ongoing federal regulatory uncertainty in U.S. digital asset markets. This has hindered innovation and affected millions of Americans wanting to engage. He testified that the SEC’s stance on which digital assets qualify as investment contracts remains unclear. In contrast, instead of clear rules, the SEC continues to impose regulations through enforcement.

“… millions of Americans who wish to participate in them have had to contend with innovation-killing federal regulatory uncertainty,” Gallagher said. He characterized the agency’s strategy as a “scorched earth” approach. He said this is detrimental to innovation in the blockchain and digital asset industries.

Michael Liftik: “No other statutory authority besides assets transacted in investment contracts”

According to Michael Liftik of Quinn Emanuel Urquhart & Sullivan LLP, the SEC’s authority over digital assets is limited to transactions involving “investment contracts.” The agency lacks other legal grounds for control over such assets. The Howey test, a key precedent, is an old approach that focuses on varied circumstances.

“The only reason the SEC arguably has authority over digital assets is when they are transacted in ‘investment contracts.’ There is no other statutory authority the SEC can point to over digital assets,” he testified.

Bitwise’s Teddy Fusaro: “Americans deserve the freedom to make investment decisions for themselves”

In his testimony, Teddy Fusaro, president of Bitwise Asset Management, Inc., explained that many investors who have registered on cryptocurrency exchanges lack the consumer protections provided by federal securities laws. He emphasized the need for sensible regulations and guidance for these platforms. He said clear oversight and approvals should fit within existing regulatory frameworks, highlighting that this will help guide investors who are seeking to engage with these markets, such as through ETFs.

“Americans deserve the freedom to make investment decisions for themselves, and should have the right to choose which services they use to buy all different types of products and services,” Fusaro stated.

Excited to see progress on this – options on bitcoin ETFs r something that the market wants, needs, and should have.

However, there are more steps that need to take place before they can begin trading, including green light from both the OCC and CFTC which may take some time. https://t.co/UIG6Jedfj2
— Teddy Fusaro (@teddyfuse) September 20, 2024

Duke University’s Lee Reiners: “There remains a gap in crypto spot market regulation”

In a slightly more favorable tone, Lee Reiner, a professor at Duke University, recognized the SEC’s efforts in applying the Howey test to safeguard crypto investors. However, he also asserted that there is still a gap that only Congress can close for the protection of investors. While he supports Gensler’s view that most cryptocurrencies are securities, he believes some are commodities. The Commodity Futures Trading Commission (CFTC) regulates commodity derivatives but not spot markets, leading to unregulated U.S. crypto exchanges. Reiner believes that this issue requires immediate attention from Congress.

“In my written testimony before this Subcommittee last March, I noted that the best way to close the gap in cryptocurrency spot market regulation is to have Congress carve out cryptocurrency from the definition of a commodity in the Commodity Exchange Act and recognize cryptocurrencies as securities under a special definition to the securities laws,” he explained.

Source: U.S. House Committee on Financial Services, YouTube

In light of these testimonies, the SEC faces a critical inquiry into the legal validity of the term “digital asset security.” At the same time, it raises important considerations regarding how platforms can enhance investor experiences in the cryptocurrency market without impeding innovation.

The post ‘Digital Asset Security’: Was the Term Made Up by the SEC? first appeared on The Shib Daily.

OpenSea Users File Suit, Say NFTs Sold Were ‘Worthless and Unlawful’

Lawrence Damilola — Mon, 23 Sep 2024 12:57:58 +0000

Two users of the prominent NFT marketplace OpenSea, Anthony Shnayderman and Itai Bronshtein, have filed a class-action lawsuit, accusing the platform of selling unregistered securities.

The lawsuit, initiated on September 19 in Florida, claims that NFTs purchased through OpenSea, including those from the Bored Ape Yacht Club collection, are now worthless due to their allegedly illegal nature.

The plaintiffs argue that certain NFTs sold on OpenSea meet the criteria of an investment contract under the Howey test, which defines what constitutes a security. They claim their purchases were part of a common enterprise, made with the expectation of profit derived from the efforts of others, which they argue qualifies the NFTs as unregistered securities.

OpenSea’s Wells Notice From the SEC

Shnayderman and Bronshtein’s complaint references a Wells notice recently issued to OpenSea by the U.S. Securities and Exchange Commission (SEC). The notice, a formal notification from the SEC indicating the possibility of enforcement action, followed an investigation into the platform’s activities. The plaintiffs argue that this suggests OpenSea may be held responsible for facilitating sales of unregistered securities.

They compare their case to previous SEC actions against NFT-related projects, such as Stoner Cats 2 and Impact Theory, which were charged with selling the same. The lawsuit further claims that OpenSea listings misled users into purchasing NFTs that were “worthless and unlawful” due to their status as unregistered securities.

The lawsuit alleges that OpenSea breached its user warranty by failing to monitor its marketplace properly for securities-related activity. Shnayderman and Bronshtein contend that OpenSea unjustly enriched itself by collecting fees on transactions it should have known involved unregistered securities. The plaintiffs argue that OpenSea knowingly profited from these sales by collecting transaction fees.

Declining NFT Market Trends

In recent months, several companies have scaled back their involvement in NFTs. A CryptoPunk NFT that sold for $23.2 million in 2022 was resold at an 80% discount for 1,500 ETH, approximately $3.9 million. Starbucks also ended its NFT rewards program in March, while GameStop closed its NFT marketplace in January after downsizing its crypto-related services. Social media platform X, previously Twitter, also discontinued a feature that allowed users to display NFTs as profile pictures.

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Australia Fintech Hub Status Solidifies Further with Planned Crypto Law Overhaul

Gairika Mitra — Mon, 23 Sep 2024 12:35:22 +0000

Australia is taking decisive steps to cement its status as a leading global fintech hub by preparing a regulatory overhaul for the crypto industry. The Australian Securities and Investments Commission (ASIC) is set to release updated guidance within two months requiring many crypto asset firms to obtain licenses under corporations law.

Financial Review reported this development on Monday.

ASIC commissioner Alan Kirkland is expected to emphasize Australia’s proactive approach to crypto regulation and share that licensing requirements will extend beyond digital currency exchanges. Most major crypto assets are already captured by the Corporations Act, as per the ASIC. It defines “financial products” as facilities enabling financial investment, risk management, or non-cash payments.

“ASIC’s message is that a significant number of crypto-asset firms in the Australian market are likely to need a license under the current law,” Kirkland said ahead of his appearance at The Australian Financial Review Crypto and Digital Assets Summit in Sydney. “This is because we think many widely traded crypto assets are a financial product,” he added.

Regulatory Clarity and Innovation: Australia Fintech Leadership Journey

By providing regulatory clarity, Australia aims to create an environment that fosters fintech innovation and attracts global investment. The government is drafting legislation requiring crypto exchanges to hold financial services licenses, as well as set rules for digital asset custody. It reportedly aims to reduce investor risks in Bitcoin and Ethereum.

ASIC will also update its “Information Paper 225” by November, and offer guidance on how to treat particular crypto tokens and products.

In February, the Federal Court ruled that start-up Block Earner should have registered as a managed investment scheme. On the other hand, the ASIC is appealing decisions involving Block Earner’s penalty and Finder Wallet’s licensing requirements.

ASIC’s regulatory stance aligns with the Reserve Bank’s recent proactive approach toward blockchain technology in commerce. Deputy Governor Brad Jones hinted at creating a digital Australian dollar for bank settlements using crypto technology. Jones said it could potentially save billions annually by streamlining financial markets and enhancing Australia’s competitive edge.

While acknowledging blockchain’s potential positive impact, Kirkland cautioned that crypto assets remain high-risk and speculative investments. ASIC’s primary concern is mitigating consumer harm and market misconduct, with licensing protections bolstering consumer confidence and market integrity. Both are crucial elements to fostering financial system innovation and attracting global fintech players to Australia.

Australia’s approach to crypto regulation mirrors global trends, with regulators like the U.S. Securities and Exchange Commission (SEC) also grappling with enforcement amid legislative ambiguity.

The SEC has sued major U.S. crypto exchange Coinbase for offering unregistered securities and delayed approving bitcoin ETFs before ultimately allowing listings in January.

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SEC Ends Ethereum 2.0 Probe After ConsenSys Lawsuit; Texas Court Confirms

Gairika Mitra — Fri, 20 Sep 2024 12:46:00 +0000

In a significant development for the Ethereum ecosystem, the U.S. Securities and Exchange Commission (SEC) officially dropped its investigation into “Ethereum 2.0” after ConsenSys filed its lawsuit.

ConsenSys filed the lawsuit to defend the ecosystem from what it described as the SEC’s regulatory overreach. As per the company on X, the SEC’s investigation into Ethereum, particularly its “Ethereum 2.0” upgrade, exemplified the agency’s aggressive enforcement agenda targeting blockchain developers.

The post further mentions that a Texas court recognized that the SEC had already provided the relief ConsenSys sought regarding this critical issue. This came as a surprising move, as earlier the Texas court dismissed the lawsuit. It didn’t even address the merits of ConsenSys’ claims.

The company noted that the ruling focused mostly on procedural technicalities rather than the substantive issues raised. This leaves many questions surrounding the SEC’s role in regulating digital assets unanswered, as per the company.

Previous cases of the SEC

This isn’t the first time the SEC faced criticism. In a related coverage, The Shib Daily reported how two SEC Commissioners Hester Peirce and Mark Uyeda expressed dissent from the SEC’s recent decision to issue an administrative order against a dining club for allegedly offering “crypto asset securities.”

In a related coverage, The Shib Daily wrote how two artists in the United States had sued the SEC. They noted that the agency did not have the authority to regulate the selling of NFTs (non-fungible tokens).

The SEC had also sued Ripple Labs saying that XRP (the digital currency associated with Ripple) was not treated as an investment, similar to stocks or bonds. The agency noted that Ripple must have treated it like that. It should have followed strict financial rules, like registering XRP with the government and providing detailed information to investors.

ConsenSys highlighted the aggressive stance of the SEC towards Ethereum. “Our suit against the SEC laid bare the overzealous investigation of Ethereum, and policymakers and the public at large voiced deep concern over the SEC’s investigation of blockchain software development,” said the firm.

On top of that, the company noted that beyond the courtroom, it observed what it described as a shifting attitude in Washington toward cryptocurrencies and digital assets.

Although the Texas court dismissed the case, ConsenSys said it remains committed to advocating for blockchain developers’ rights. It added that it is on the right track, though it will remain vigilant. The company has ongoing litigation in Brooklyn. “Consensys is resolved to keep fighting for the rights of blockchain developers in the U.S. as we contest the SEC’s action in Brooklyn,” it concluded.

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SEC Settles Charges Against Rari Capital for Unregistered Securities and Misleading Investors

Lawrence Damilola — Thu, 19 Sep 2024 14:47:32 +0000

The U.S. Securities and Exchange Commission (SEC) has agreed to a settlement with Rari Capital, Inc. and its co-founders Jai Bhavnani, Jack Lipstone, and David Lucid on charges that include misleading investors and operating as unregistered brokers.

According to the SEC’s press release, Rari Capital offered two key investment products: Earn pools and Fuse pools. These allowed investors to deposit crypto assets into lending pools with the promise of returns. Some investors also received governance tokens tied to their investments.

The SEC claimed that these were unregistered offers and sales of securities. The Earn pools were promoted as autonomous systems that would rebalance assets to maximize returns. However, the SEC stated, “manual input was often required,” and Rari Capital sometimes failed to intervene, leading to investor losses. At one point, Rari Capital’s platforms managed over $1 billion in crypto assets.

The SEC further alleged that Rari Capital engaged in unregistered broker activities through its Fuse platform. This platform allowed users to create their own lending and borrowing markets, but the SEC stated that Rari Capital’s involvement as an unregistered broker violated securities laws.

“We allege that Rari Capital and its co-founders misled investors about both the features and profitability of certain of the crypto asset investments Rari Capital offered,” commented Monique C. Winkler, director of the SEC’s San Francisco regional office.

In 2022, Rari Capital Infrastructure LLC took over operations from Rari Capital and continued offering interest in the Fuse pools and engaging in unregistered broker activities. According to the SEC, these activities also violated securities laws.

Without admitting or denying the allegations, Rari Capital, its co-founders, and Rari Capital Infrastructure agreed to settle the charges. The settlement includes civil penalties, disgorgement with interest, and a five-year officer-and-director ban for the co-founders. Still pending court approval, it also imposes permanent injunctions on the individuals and companies involved. Rari Capital Infrastructure also agreed to a cease-and-desist order.

The SEC’s investigation was conducted by its Crypto Assets and Cyber Unit. The settlement represents an effort to address the rising number of unregistered securities offerings and unregistered broker activities within the DeFi space.

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HEX Founder Richard Heart Faces Criminal Investigation in Finland

Gairika Mitra — Thu, 19 Sep 2024 14:06:51 +0000

Finnish authorities are investigating Richard Schueler, also known as Richard Heart, the American founder of HEX and PulseChain, for alleged tax evasion and assault.

According to the authorities, Heart, who resides in Helsinki, is suspected of failing to pay hundreds of millions of euros in taxes to Finland.

“Based on the very considerable amount of money in question and the long-term and planned nature of the activity, there are grounds to suspect gross tax evasion,” Helsinki police detective Harri Saaristola told a media outlet.

On September 13, the police issued a remand order for Schueler in absentia, indicating their suspicion of his crimes. The alleged tax evasion reportedly occurred between June 2, 2020, and April 2, 2024. Additionally, authorities are investigating an assault that happened between February 16 and 17, 2021.

Reports indicate that Heart’s income exceeded 15.2 million euros in 2023, although the suspected tax evasion is unrelated to his capital income. Detective Saaristola noted that Heart developed, launched, and marketed cryptocurrencies from Finland and primarily targeted investors abroad.

The Finnish Tax Administration flagged discrepancies between Schueler’s tax returns and the agency’s assessment of his income. Saaristola commented, “It is then a matter of neglecting to report [income] or offering false information.”

U.S. Authorities Involved

The investigation into Richard Heart has garnered attention beyond Finland. U.S. authorities also suspect him of engaging in fraudulent activities. Last year in July, the Securities and Exchange Commission (SEC) charged Heart and three unincorporated entities under his control Hex, PulseChain, and PulseX — with conducting unregistered crypto asset securities offerings that raised over $1 billion from investors.

Eric Werner, Director of the Fort Worth Regional Office, held the view that Heart urged investors to buy crypto asset securities, particularly the ones he failed to register. “He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods. This action seeks to protect the investing public and hold Heart accountable for his actions,” said Werner.

The SEC also charged Heart and PulseChain for misusing at least $12 million from the offerings to buy luxury items. These included sports cars, watches, and a 555.55-carat black diamond called ‘The Enigma,’ also known as the world’s largest black diamond.

As per Detective Saaristola, the authorities initiated their investigation at the request of the Tax Administration. Saaristola confirmed that the probe is in its early stages and involves cooperation with international law enforcement agencies.

On X, Richard Heart expressed optimism stating that he is doing great. He spoke highly of decentralized systems and said he believed they would never go away.

I'm doing great and will continue to great, no matter how many people attack me or whom they work for. HEX was hated and gate kept all the way to 1,000,000% gains.

You can't stop an idea whose time has come. Truly decentralized systems are here and they're never going away. Ever
— Richard Heart (@RichardHeartWin) September 17, 2024

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SEC Investigates Individuals Tied to Nanobit and CoinW6 Scams

Lawrence Damilola — Wed, 18 Sep 2024 18:40:30 +0000

The U.S. Securities and Exchange Commission (SEC) has initiated charges against several individuals and entities tied to two fraudulent cryptocurrency platforms, Nanobit and CoinW6.

The SEC alleges that the participants in these schemes used social media apps such as WhatsApp, LinkedIn, and Instagram to deceive investors by creating fake relationships. The agency noted that these cases represent its first enforcement action against this scam.

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, stated on Tuesday, “Relationship investment scams, including those involving crypto-asset investments, pose a risk of catastrophic harm to retail investors, and the threat is increasing rapidly as these scams become more popular with fraudsters.”

The SEC’s complaint against Nanobit alleges that, between October 2023 and June 2024, participants in the scheme posed as financial professionals on WhatsApp to lure investors. According to the complaint, Nanobit claimed ties to a SEC-registered broker to promote fake initial coin offerings, convincing investors to transfer over $2 million. The funds were subsequently moved to accounts in Hong Kong, where the scammers misappropriated the assets.

The regulator seeks civil penalties and permanent injunctions against those involved. Grewal emphasized that investors should be cautious of schemes promoted by strangers through social media, especially when dealing with unsolicited crypto investment opportunities.

CoinW6, another fraudulent scheme cited by the regulator, reportedly operated from July 2022 to December 2023. Participants in this scam built relationships with victims through social media, often posing as wealthy professionals on LinkedIn and Instagram before transitioning to WhatsApp. The fraudsters convinced their targets to invest in the fake CoinW6 platform, promising daily returns of up to 3%.

However, when investors attempted to withdraw funds, the scammers demanded additional payments for taxes and fees, falsely claiming that the assets were frozen by law enforcement or using compromising romantic communications to blackmail the victims.

The regulator’s actions against both Nanobit and CoinW6 highlight the increasing risks investors face in the crypto space. Grewal used this opportunity to stress the need for individuals to protect themselves from such scams. “These charges are a reminder to the public to be on heightened alert about potential scams involving investment opportunities promoted by strangers on social media,” he said.

The SEC has filed complaints for both cases and is pursuing civil penalties and injunctions to prevent further fraudulent activity associated with these schemes.

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GOP Lawmakers Call on Gensler to Explain SEC’s Stance on Crypto Airdrops

Lawrence Damilola — Wed, 18 Sep 2024 16:53:41 +0000

Two Republican lawmakers are pressing Securities and Exchange Commission (SEC) Chair Gary Gensler to clarify the agency’s stance on crypto airdrops.

In a letter sent yesterday, Representatives Tom Emmer and Patrick McHenry raised concerns over the SEC’s recent actions regarding airdrops in several lawsuits. They argued that the agency’s approach may hinder American blockchain technology innovation.

In its footnote, the letter cited cases like the lawsuit against Hydrogen Technology Corporation in 2022, describing airdropped Hydro tokens as “unregistered offers and sales of securities.”

It took a similar route in March 2023 when the regulator sued Tron founder Justin Sun, accusing him of offering BitTorrent (BTT) tokens in “unregistered monthly airdrops.”

Emmer and McHenry’s letter suggests that the agency’s classification of airdrops as securities could prevent decentralization in blockchain technology. “We are concerned that a misapplication of the securities laws will prevent this technology from achieving decentralization to its full potential,” they wrote.

They are scared to death of decentralization because it restores what this country was built on, which is by the people from the ground up. pic.twitter.com/0SgLMN4IBu
— Tom Emmer (@GOPMajorityWhip) September 17, 2024

Furthermore, Emmer and McHenry requested that Gensler provide answers to five key questions about the regulator’s handling of airdrops by the end of the month. Among these was how the agency considers crypto tokens “given away for free” as falling under the Howey test, which is used to determine whether an asset is a security.

The lawmakers also inquired about how the regulator distinguishes crypto airdrops from other rewards, such as credit card points or airline miles. They emphasized the potential consequences of classifying airdrops as securities. They also asked if the SEC had conducted any assessments on the impact on economic growth, onchain applications, and tax revenue.

“By prohibiting Americans from participating in airdrops, the SEC is preventing American crypto users from fully realizing the benefits of blockchain technology,” Emmer and McHenry wrote. They further stated that this could restrict the ability of U.S. citizens to shape the next iteration of the internet.

This letter marks the second in a week in which Republican lawmakers have questioned Gensler’s leadership. In an earlier letter, McHenry and other GOP lawmakers asked whether Gensler’s political affiliation had influenced staffing decisions at the agency, particularly in filling senior roles. They accused the regulator of hiring individuals from “left-leaning organizations” in potential violation of the Civil Service Reform Act.

As of this writing, the SEC has yet to respond to the requests from Emmer and McHenry, including the questions about regulations on crypto airdrops.

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Robinhood CLO Accuses SEC of ‘Scorched Earth’ Crypto Policy, Calls for Regulatory Clarity

Gushiken Yona — Wed, 18 Sep 2024 15:20:33 +0000

Robinhood’s Chief Legal Officer, Dan Gallagher, delivered a scathing critique of the Securities and Exchange Commission’s (SEC) approach to crypto regulation during a House Financial Services Subcommittee hearing on Tuesday.

Gallagher Laments SEC’s Reliance on Outdated Legal Precedents on Crypto

Gallagher, a former SEC commissioner himself, accused the agency of a “scorched earth” policy that is stifling innovation and driving crypto businesses overseas. In his testimony, Gallagher lamented the lack of clear guidance on which digital assets the SEC deems to be securities, stating that “the most fundamental problem in digital asset markets is that there is no clear guidance on which transactions in digital assets the SEC deems to be investment contracts.”

He further criticized the SEC’s reliance on decades-old legal precedents like the Howey test, arguing that they are ill-suited to the complexities of the modern crypto landscape. Gallagher detailed Robinhood’s extensive efforts to engage with the SEC and seek regulatory clarity, including “over a dozen meetings and calls over a year and a half” to discuss the company’s cryptocurrency business and registration as a digital asset special purpose broker-dealer.

Rumors are floating that Dan Gallagher might replace Gensler in a Trump administration.

Gallagher is the Chief Legal Officer at Robinhood and has served as an SEC commissioner during Obama's term.

Like this post if you think Gallagher will be pro-crypto if elected. pic.twitter.com/rtaelTaOy6
— Lark Davis (@TheCryptoLark) July 2, 2024

SEC’s “Regulation by Enforcement” Approach on Crypto

Despite these efforts, he claimed the SEC staff was “generally non-responsive” to Robinhood’s requests for guidance and ultimately issued a Wells Notice, signaling a potential enforcement action. “Rather than issue rules to provide regulatory certainty to an industry craving it,” Gallagher stated, “the SEC has instead targeted individual firms, including Robinhood, through regulation by enforcement.”

He argued that this approach “is not the way Americans expect our government to work,” echoing concerns raised by federal judges and even SEC Commissioners Hester Peirce and Mark Uyeda about the agency’s reliance on litigation to regulate the crypto industry. Gallagher specifically pointed to the Paxos no-action letter from 2019 as an example of the SEC’s previous willingness to provide tailored relief to the digital asset industry without sacrificing investor protections.

Call for Provisional Crypto Regulatory Regime

He lamented the end of this “short-lived period of innovation at the Commission,” arguing that the current SEC “has done nothing to use its existing authority to provide this much-needed clarity and instead wistfully calls on cryptocurrency platforms and token issuers to ‘come in and register.'” While advocating for Congressional action to establish a comprehensive regulatory framework for digital assets, Gallagher also urged the SEC to utilize its existing authority under Section 36 of the Securities Exchange Act of 1934 to create a provisional regulatory regime.

He suggested that such a framework could address crucial issues like registration requirements, antifraud protections, custody rules, and transaction reporting. “But I would be remiss if I did not point out that, while Congress continues diligently to pursue much-needed legislation,” Gallagher stated, “the Commission has—and has had since 1996—the authority now to establish at least a basic, provisional regulatory regime for digital assets.”

Gallagher’s forceful testimony underscores the growing frustration within the crypto industry over the SEC’s perceived lack of clarity and hostile approach to regulation. As the industry awaits Congressional action, the question remains: will the SEC heed the calls for a more collaborative and proactive approach to regulating this rapidly evolving market, or will its “scorched earth” policy continue to drive innovation and investment overseas?

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Five-Member SEC Commission Called to Testify on Crypto Assets

Lawrence Damilola — Wed, 18 Sep 2024 13:54:01 +0000

All five commissioners of the U.S. Securities and Exchange Commission (SEC) will testify before the House Financial Services Committee next Tuesday. This is the first time since 2019 that all SEC members will appear together for a testimony session.

The specific topics to be discussed during the hearing are still unclear, but there is widespread speculation that crypto regulation could be addressed. Crypto expert James Murphy, also known as MetaLawMan, humorously speculated that SEC Chairman Gary Gensler might again face questions about whether Ethereum (ETH) should be classified as a security. The classification of digital assets like ETH has been a contentious issue with significant implications for the crypto industry and investors.

#NEW: Chairman @PatrickMcHenry announces a full committee hearing entitled "Oversight of the Securities and Exchange Commission."

All five @SECGov Commissioners will testify together before the Committee for the first time since 2019.

Read more https://t.co/R3QNJs45z0
— Financial Services GOP (@FinancialCmte) September 17, 2024

Gensler will testify separately in a session scheduled for Wednesday. This testimony comes as he is being investigated for alleged improper hiring practices. Reports suggest that he may have prioritized political leanings in hiring decisions, potentially violating the 1978 Civil Service Reform Act. Some lawmakers believe this could result in Gensler losing his position.

SCOOP: The full five-member @SECGov Commission is preparing to testify in front of @FinancialCmte/@FSCDems next Tuesday. This will be the first time the whole commission, not just the chair, has testified together since 2019. @GaryGensler himself will testify alone in front of…
— Eleanor Terrett (@EleanorTerrett) September 17, 2024

MetaLawMan also speculated whether Patrick McHenry, Chairman of the House Financial Services Committee, will question Gensler again on whether Ethereum (ETH) should be classified as a security or a commodity.

“Wow—all 5 SEC Commissioners! What are the chances that Patrick McHenry asks Gary again whether ETH is a security or a commodity?” he commented. He also suggested that the testimony could serve as an informal audition for Commissioner Hester Peirce to play a more significant role within the agency should leadership changes occur.

Former SEC officials Dan Gallagher, Chief Legal Officer of Robinhood Markets, and Michael Liftik, a Quinn Emanuel Urquhart & Sullivan LLP partner, are also expected to testify. Gallagher served as SEC commissioner from 2011 to 2015, and Liftik held the role of Deputy Chief of Staff to former SEC Chair Mary Jo White. Both are anticipated to testify about the regulatory body’s current operations.

The legal status of Ethereum, whether it is a security or not, has been debated for years. Earlier this year, New York Attorney General Letitia James classified Ethereum as a security, comparing it to Terra (LUNA) and its associated stablecoin UST, which collapsed in 2022. Despite the SEC approving spot Ethereum ETFs in June 2024, Gensler has remained unclear regarding Ethereum’s categorization.

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Prager Metis Settlement: A Canary in the Crypto Coal Mine?

Gushiken Yona — Wed, 18 Sep 2024 12:04:23 +0000

The $1.95 million settlement between the SEC and Prager Metis over the firm’s negligent audit of FTX might seem like just another headline in the ongoing saga of the crypto exchange’s implosion. But this case, buried under the avalanche of FTX’s dramatic collapse and Sam Bankman-Fried’s legal battles, raises a chilling question: is this a harbinger of a wider auditing crisis brewing in the volatile world of cryptocurrency?

A Test Case for Crypto Auditing

Prager Metis, a mid-sized accounting firm aggressively expanding into the crypto space, is hardly a household name. Yet, its failure to adequately scrutinize FTX’s financials, particularly the “increased risk stemming from the relationship between FTX and Alameda Research,” as the SEC alleged, has far-reaching implications.

SEC sues and reaches a $745K settlement with accounting firm Prager Metis for GAAS violations in FTX audits

[Posted first on @SynopticCom] pic.twitter.com/TWDFEzt357
— Summers (@SummersThings) September 17, 2024

“The Prager Metis settlement serves as a stark reminder of the critical role of auditors in the cryptocurrency space,” says Patrick Camuso, a leading voice in the crypto accounting world and founder of Camuso CPA, the first CPA firm to accept crypto, told The Shib Daily in an exclusive statement. “In an industry characterized by rapid innovation and complex financial structures, auditors must be vigilant in applying rigorous standards and maintaining their independence. This case underscores the importance of safeguarding investor confidence through meticulous auditing practices,” he further said.

It exposes a fundamental vulnerability: traditional auditing methods, designed for a world of tangible assets and established financial practices, might be ill-equipped to grapple with the complexities and opacity of the crypto industry.

John Ray III, the seasoned restructuring expert brought in to salvage FTX after its bankruptcy, famously declared in 2022 that he had “never in my career seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information.” His words now echo ominously in light of the Prager Metis settlement.

If a firm with ambitions in the crypto audit market failed to detect such glaring red flags at FTX, what does this say about the industry’s ability to provide reliable assurance to investors?

SEC’s Tough Stance

The SEC’s action against Prager Metis goes beyond a slap on the wrist. The firm faces restrictions on taking new clients and must retain an independent consultant to overhaul its audit practices.

This sends a clear signal to the accounting industry: the Wild West days of crypto auditing are over. Regulators are now watching, and firms that fail to adapt their methodologies and embrace a more rigorous, skeptical approach risk facing similar consequences.

But the Prager Metis case is not just a cautionary tale for auditors. It also raises uncomfortable questions for investors, particularly those who rely on audited financial statements to make informed decisions.

In the opaque world of crypto, where assets are intangible and transactions often occur beyond the reach of traditional regulatory frameworks, the need for independent and reliable audits is more critical than ever.

The $1.95 million settlement may bring some measure of accountability, but it does little to address the underlying issue: the urgent need for the auditing profession to adapt to the unique challenges of the crypto industry.

The Prager Metis case should serve as a wake-up call, prompting a broader conversation about the development of specialized auditing standards, robust regulatory frameworks, and enhanced investor education to ensure that the crypto market’s future is built on a foundation of trust and transparency. The alternative – a systemic erosion of confidence in crypto audits – could have devastating consequences for the industry’s long-term viability.

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SEC Fines FlyFish Club for NFT Securities; Commissioners Peirce and Uyeda Criticize Overreach

Gairika Mitra — Tue, 17 Sep 2024 14:07:27 +0000

Securities and Exchange Commissioners Hester Peirce and Mark Uyeda expressed dissent on Monday from SEC’s recent decision to issue an administrative order against FlyFish Club (FFC) for allegedly offering “crypto asset securities.”

In a joint statement, the two Commissioners argued that the agency is becoming overly focused on crypto-related cases at the expense of innovation.

The FlyFish Club (FFC) is a private dining club that sells memberships in the form of non-fungible tokens (NFTs). People could transfer these tokens without the club management’s involvement.

The SEC ruled that FFC’s membership NFTs were securities. As a result, the SEC fined FFC $750,000 and required it to stop all NFT-related activities. The SEC’s action consequently sparked a debate over how securities laws apply to new business models utilizing blockchain technology.

“Flyfish Club, a dining club, sold NFTs — unique digital tokens recorded on a blockchain — as the exclusive way to access a yet-to-be-built restaurant and bar,” Peirce and Uyeda noted. “Flyfish NFT owners will be eligible to eat in the restaurant, which is scheduled to open soon. They can also lease or sell their NFT, and Flyfish Club received royalties for secondary sales, totaling $2.7 million.”

Peirce and Uyeda highlighted that FFC has raised $14.8 million by selling approximately 3,000 NFTs. The prices for these were bifurcated as $8,400 for the regular NFTs and $14,300 for the Omakase NFTs. They emphasized that the social and experiential aspects were central to the FlyFish Club model — not the prospect of financial returns for NFT holders.

SEC’s NFT Ruling Sets a Risky Precedent for Creative Ventures, Commissioners Warned

Peirce and Uyeda warned that the SEC’s decision to penalize FFC sets a dangerous precedent, questioning where it would draw the line and suggesting that future cases could target similar membership structures, such as those in country clubs or other social organizations. “Experiments like Flyfish Club are not a threat to the American investor,” they said.

They further noted that there was no need for securities laws in this case. “The Flyfish NFTs were simply a different way to sell memberships. Why shouldn’t a chef be able to sell memberships to eat at her kitchen table and to collect royalties on resales of those memberships?”

In their opinion, NFTs offer a promising way to allow creative people like chefs, musicians, or visual artists to monetize their talent. The NFTs also present an efficient way of selling access to experiences and communities. “Creative people should be able to experiment with NFTs without having to consult a high-priced tea-leaf reader — ahem, lawyer. The Commission can change its menu to include a healthy serving of guidance to give non-securities NFT creators the freedom to experiment,” they wrote.

On X, Nate Geraci (@NateGeraci) applauded this move by the SEC Commissioners.

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Gary Gensler: Is He Harris’ Baggage or Just a Scapegoat?

Gushiken Yona — Sat, 14 Sep 2024 13:59:29 +0000

Gary Gensler, the man who’s been cracking down on crypto like a man on a mission, is suddenly finding himself under investigation for – wait for it – favoritism. Yes, folks, the Chair of the SEC is now being accused of playing favorites when hiring his senior staff.

The plot thickens. As if Gensler wasn’t already causing Kamala Harris enough of a political headache, now there are whispers that his alleged hiring biases might just be the perfect excuse to finally kick him to the curb. And let’s face it, with Gensler becoming more of a political liability every day, you have to wonder: Is this investigation the real deal or just a convenient way to scrub Harris clean of her crypto baggage?

The allegations came to light after Congress started poking around Gensler’s hiring of Dr. Haoxiang Zhu as the SEC’s Director of Trading and Markets. Dr. Zhu reportedly went out of his way to make sure Gensler felt all warm and fuzzy about his political alignment before landing the job. You know, because nothing says “qualified” like, “Hey, I agree with your politics! Need more proof?”

Now, the House Judiciary, Financial Services, and Oversight Committees are digging into whether Gensler has been filling the SEC’s ranks with ideologically aligned friends. Does this raise serious concerns about transparency in government hiring, or is it just the political elite playing their power games?

Harris’ Big Problem: Will She Cut Gensler Loose?

Let’s not forget, Gensler isn’t just anyone—he’s Harris’ problem now. With Democratic donors already calling for his head, Gensler’s antics are making it harder for her to navigate Wall Street’s stormy waters.

And don’t even get us started on the crypto world. Gensler’s been burning bridges with the industry faster than you can say “blockchain,” while Harris, likely bracing for 2024, is left holding the bag. Will she cut him loose in a slick political move, or is she sticking by him until the bitter end?

This brings us to the million-dollar question: Is Gensler under investigation because he really did something wrong, or is this just Washington D.C.’s version of “Survivor,” where everyone’s trying to outwit and outlast? After all, if Gensler is the villain here, Harris gets to play the hero—cleaning house and winning back both Wall Street and crypto.

But what if this is all just political smoke and mirrors? What if Gensler’s so-called “favoritism” is really just a pretext to get him out of the way and clear Harris’ runway for the 2024 election? Are we really concerned about ethics, or is this a strategic maneuver to ensure Harris doesn’t have to answer uncomfortable questions about her crypto-regulator-in-chief?

Welcoming to the stage……. pic.twitter.com/9EP3rBlWLf
— Gary Banking (@GaryBanking) September 11, 2024

The Great Political Reset?

With the 2024 election looming, Harris can’t afford to have Gensler dragging her down. After all, it’s hard to win over voters when the person regulating their finances is busy ticking off everyone from Bitcoin enthusiasts to Wall Street billionaires. The question is: Can Harris afford to keep him, or will she throw Gensler under the proverbial bus to save herself?

If she dumps Gensler now, it’ll look like she’s taking a strong stand against corruption and bias—who wouldn’t love that headline? But if she waits too long, the stink of favoritism might cling to her campaign like a bad crypto investment.

Orchestrated Power Play or Legit Gensler Investigation?

So, is Gensler’s investigation a serious concern, or is it a brilliantly orchestrated power play to remove Harris’ political baggage? Is the SEC really in trouble, or are we just witnessing a good old-fashioned D.C. takedown to give Harris a clean slate before 2024?

The political winds are shifting, and Gensler is caught right in the middle of the storm. Stay tuned, because this drama isn’t over yet.

Disclaimer: This article was not written under the influence of political favoritism, crypto regulations, or anyone’s political baggage. Any resemblance to actual power plays is purely coincidental—unless it’s not.

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Tennessee Rep. John Rose Proposes New Bill for Joint Crypto Advisory Committee

Lawrence Damilola — Fri, 13 Sep 2024 14:02:57 +0000

Tennessee Congressman John Rose has introduced the “BRIDGE Digital Assets Act,” proposing the creation of a joint digital asset advisory committee between the U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

The bill aims to harmonize regulations for digital assets, which have faced varying interpretations by the two regulatory bodies. Also, the proposed committee would consist of 20 private sector members, including digital asset issuers, academic researchers, and users. The purpose of this committee, according to Rose, would be to provide both agencies with guidance on their respective rules, regulations, and policies related to digital assets. “The United States must allow digital assets to thrive because the heavy-handed, regulation-by-enforcement approach isn’t working,” Rose stated on X, referring to the current regulatory landscape.

Rose’s bill addresses the ongoing regulatory conflict between the SEC and the CFTC, where the SEC has viewed certain digital assets as securities, while the CFTC treats them as commodities. This divergence has created an uncertain regulatory environment for digital assets. The congressman believes that establishing a joint advisory committee will help align the views of both agencies on digital asset oversight.

“The Joint Advisory Committee on Digital Assets will provide a framework for the government and private sector partners to cooperate on a path toward success for the regulatory landscape of digital assets and private sector participants,” Rose added.

He further commented that the current approach of regulating through enforcement is not fostering growth and is instead encouraging investment to move overseas.

NEW: I've introduced the BRIDGE Digital Assets Act to establish a Joint Advisory Committee on digital assets between the @SECgov and @CFTC.

The United States must allow digital assets to thrive because the heavy-handed, regulation-by-enforcement approach isn't working. https://t.co/Ty0VpvPgoj
— Congressman John Rose (@RepJohnRose) September 12, 2024

The bill outlines that the joint committee will focus on examining the potential of digital assets to improve the efficiency of financial market infrastructures. Areas of review will include customer protections, increased transparency regarding customer funds, reduced transaction costs, and better access to financial market services. The committee would be required to meet at least twice a year to deliver its findings and recommendations to both the SEC and CFTC.

“The purpose of the committee, I’m told, would be for the industry to provide both agencies with advice on their respective rules, regulations, and policies relating to digital assets,” noted Eleanor Terrett, a Fox Business reporter who first flagged the details of the bill on X.

SCOOP: Republican Tennessee Congressman @RepJohnRose, who sits on the @FinancialCmte, is introducing a new bill called the “BRIDGE Digital Assets Act” that would establish a Joint Advisory Committee on digital assets between the @SECGov and the @CFTC.

The purpose of the…
— Eleanor Terrett (@EleanorTerrett) September 12, 2024

Rose emphasized that the collaboration would provide “a framework for the government and private sector partners” to work together on digital asset regulation.

In May, a bipartisan bill known as FIT21 was approved by the U.S. House of Representatives, dividing regulatory authority between the SEC and CFTC. Yet, SEC chairman Gary Gensler criticized the legislation, labeling it as posing an “immeasurable risk” to investors.

The Bridge Digital Assets Act is seen as a response to ongoing debates over how digital assets should be regulated in the U.S. and whether the SEC and CFTC can effectively work together under a unified framework.

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Gary Gensler Under Scrutiny by House Republicans Over Alleged Hiring Bias

Lawrence Damilola — Fri, 13 Sep 2024 11:17:03 +0000

U.S. House Republicans have initiated an investigation into U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, alleging that the agency may be favoring candidates based on political affiliations during their hiring process. Lawmakers claim this practice could be in violation of federal law, specifically the Civil Service Reform Act of 1978.

On Tuesday, Republican lawmakers Jim Jordan, Patrick McHenry, and James Comer sent a letter to Democrat Gensler, accusing him of hiring “individuals from left-leaning organizations to fill senior roles at the SEC.”

The lawmakers cited email correspondence from May 2021, claiming it shows that Gensler’s decision to hire Dr. Haoxiang Zhu, the SEC’s Director of Trading and Markets, might have been “influenced by his political affiliation.”

The letter states that in May 2021, Gensler had a conversation with Dr. Zhu regarding his potential employment at the SEC. Later, Dr. Zhu sent an email indicating his political stance, saying, “I believe I’m in the right place on the political spectrum, and I’m happy to provide as many details as needed so you feel comfortable.” Dr. Zhu was subsequently hired on November 19, 2021. The lawmakers argued that this correspondence suggests that the SEC “appears to be unlawfully considering an applicant’s political ideology when hiring bureaucrats.”

The House Republicans have requested Gensler to provide documents and communications regarding the SEC’s hiring and staffing decisions since April 17, 2021. They are particularly interested in hiring decisions related to directors, associate directors, and Gensler’s staffers. The letter also asks for any information on how the SEC evaluates its applicants’ political affiliations or ideology.

The letter from the House Republicans emphasized that if these allegations are substantiated, it would mean the SEC is “violating the Civil Service Reform Act to fill the agency with employees who possess a particular ideology.” They have requested Gensler supply all relevant documents to the House Judiciary Committee, chaired by Jim Jordan, by 5:00 p.m. on September 24, 2024.

This request includes all documents related to the SEC’s hiring practices and any evaluations of applicants’ political affiliations or ideologies. Lawmakers argue that such hiring practices could compromise the SEC’s role as an impartial regulatory body.

Gensler, nominated by President Joe Biden, has seen increased scrutiny from Republican lawmakers recently, especially regarding the SEC’s regulatory stance on the cryptocurrency sector. His leadership has been marked by increased enforcement actions against crypto firms, which have doubled from 2021 to 2023.

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TDC Calls for Congress to Exempt NFTs from SEC Regulations

Gairika Mitra — Wed, 11 Sep 2024 12:57:29 +0000

The Digital Chamber (TDC) on Tuesday called for legislation that would help clearly define certain Non-fungible tokens (NFTs) as consumer products, adding that these should not be categorized as securities.

This move appears to have been sparked by the ongoing conflict between the Securities and Exchange Commission and the digital assets industry. Things escalated when the SEC issued a Wells notice to OpenSea, a popular NFT marketplace, and tagged NFTs as unregistered securities.

TDC said NFTs have a consumptive purpose, not financial, so they should not be classified as securities under the SEC, or any equivalent classification.

Consumptive-use NFTs, like digital art, collectibles, or items used in video games and events, should not fall under the regulatory purview of the SEC, even if a secondary market for reselling exists. The group also argued that merely selling a rare comic book for profit doesn’t make it a financial instrument. Similarly, trading a digital collectible should not automatically trigger securities regulations.

TDC Urges Congressional Action to Protect NFT Creators from SEC Overreach

In 2023, TDC laid down a Pixel to Policy report where it showcased a number of the most popular NFT applications. The group criticized the aggressive stance of the SEC and its chairman Gary Gensler, saying that the regulation-by-enforcement approach has put countless individuals’ lives into jeopardy.

TDC said that many creators, artists, and developers have built entire businesses around NFTs. These people “connect with their communities, and sustain themselves by selling and trading digital goods and access rights within this thriving ecosystem.”

TDC also highlighted recent SEC actions against prominent NFT-related companies like DraftKings and Dapper Labs. The group believes that the lack of of clear guidelines has left NFT companies and consumers vulnerable to regulatory overreach.

Hence, the call for congressional intervention. “Congress must act now to ensure that this burgeoning industry remains within the U.S., for the benefit of the U.S. economy, and not move overseas to more favorable regulatory environments,” it concluded.

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Terraform Labs Settlement Boosts SEC Enforcement Action By 3000% to $4.68B

Gairika Mitra — Tue, 10 Sep 2024 16:30:31 +0000

Terraform Labs’ (TFL) recent settlement with the Securities and Exchange Commission (SEC) has driven a 3000% increase in crypto-related fines in the past year compared to 2022, pushing the total to $4.68 billion, according to 2024 report by Social Capital Markets.

The SEC fine was placed on Terraform Labs, along with its co-founder Do Kwon, for allegedly misleading investors and for the sale of unregistered securities, which included the now-defunct TerraUSD stablecoin. This case is said to be the largest on record in digital asset regulation, with severe penalties imposed.

The dissolution of the Terra ecosystem, which destroyed billions in investor funds, was reportedly what elicited the SEC’s aggressive move, possibly setting a new precedent in penalties within the crypto space.

The SEC’s latest move highlights a significant increase in enforcement. Since 2013, the agency has imposed $7.42 billion in fines, with almost $4.7 billion — or 63% of the total — levied just this year, indicating intensified scrutiny of the crypto world.

SEC Focusing on High-Profile Cases

In 2019, the SEC imposed a $1.24 billion fine on Telegram Group Inc. for selling unregistered tokens, signaling the onset of a broader crackdown on token offerings and initial coin offerings (ICOs). Fast forward to 2024, the scale of fines has dramatically increased, with average penalties reaching $426 million—surpassing all previous years by a significant margin.

The SEC’s enforcement actions have fluctuated from 2019 to 2023, showing periods of intense activity followed by quieter phases. This year, the commission has pursued 11 major enforcement actions, including high-profile cases against Terraform Labs, Ripple Labs Inc., and GTV Media Group.

According to Social Capital Markets, the focus on major settlements in 2024 underscores the SEC’s heightened efforts to enhance transparency and protection in the rapidly evolving digital asset market. The Terraform Labs case, in particular, is viewed as a landmark in crypto regulation due to its significant financial implications and the changing regulatory landscape.

The report also emphasizes the growing importance for crypto firms to prioritize regulatory compliance, as the financial consequences of non-compliance have become considerably more severe.

“This emphasizes the need for crypto firms to adhere to regulations as the financial risks grow. As the SEC shapes the industry’s future, compliance will be key to ensuring long-term stability,” the report said.

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SEC’s Galois Capital Crackdown Sparks Crypto Fury

Gushiken Yona — Wed, 04 Sep 2024 16:07:27 +0000

The Securities and Exchange Commission’s (SEC) decision to penalize defunct crypto hedge fund Galois Capital for custody rule violations has ignited a firestorm of criticism within the cryptocurrency community. Many industry leaders and experts are denouncing the SEC’s actions as heavy-handed, counterproductive, and ultimately detrimental to the future of the U.S. crypto industry.

Galois Capital, which shut down in February 2023 following losses incurred in the FTX collapse, agreed to pay a $225,000 civil penalty without admitting or denying the SEC’s findings. The SEC alleged that Galois failed to ensure that certain crypto assets were held with a qualified custodian, violating the Investment Advisers Act’s Custody Rule.

“Gotcha” Lawfare and a Flawed Custody Rule

Kristin Smith, CEO of the Blockchain Association, characterized the SEC’s actions as another attempt to push the crypto ecosystem away from the United States: “Another day, another attempt by the SEC to drive the crypto ecosystem offshore… It’s more of the same from the SEC. Taxpayer-funded ‘gotcha’ lawfare aimed at driving the US crypto industry away for good.”

Smith further criticized the SEC’s Custody Rule, arguing that it creates an impossible situation for investment advisors: “The problem is that SEC-designated “qualified custodians” rarely support crypto tokens. In other words, the SEC has made it impossible for investment advisors to comply with its own rules: they are asked to custody crypto assets with a qualified custodian, but qualified custodians do not generally support crypto assets.”

Calls for Common-Sense Regulation and Leadership Change

Wayne Vaughan, CEO of Tierion, echoed Smith’s concerns, highlighting the inherent contradiction in the SEC’s approach: “The SEC made it impossible for Galois Capital to comply with their custody rules and then threatened legal action against them. We need common-sense regulation, and the only way to achieve it is through a change in leadership.”

Concerns About Selective Enforcement and Misplaced Priorities

Max Schatzow, a legal counsel specializing in regulatory compliance for investment advisors, questioned the SEC’s selective enforcement: “So, SEC brings charges against tiny RIA–Galois Capital. Do they investigate and bring same charges against much larger Pantera Capital?”

So, SEC brings charges against tiny RIA–Galois Capital.

Do they investigate and bring same charges against much larger Pantera Capital?

Disclosure below in Form ADV basically admitting to the same issue. pic.twitter.com/N17J8BYJx3
— Max Schatzow (@AdviserCounsel) September 3, 2024

Evan Van Ness, Chairman of the Bitcoin Foundation, expressed frustration with the SEC’s priorities, arguing that the agency is focusing on the wrong issues: “If Gary Gensler cared at all about protecting investors then we’d have an easy place to look up disclosures like SOL unlocks. Instead, he’s making Galois Capital give $225k back to investors for the crime of holding funds on FTX.”

Galois Capital Defends Its Actions

Galois Capital defended its decision to use Fireblocks, a non-qualified custodian, stating that it believed it was the best solution for securing client assets at the time: “We used Fireblocks, a non-qualified custodian, as a best-in-class solution to secure our crypto assets. Although Fireblocks was not a qualified custodian, we believed they were the best solution for our needs and, in our opinion, the safest way to secure crypto for our investors at the time.”

The firm also highlighted the irony of being penalized for offering investors early redemption options: “We also had a redemption policy for our investors that required at least five business days’ notice before month-end for redemption. However, we thought it would be a nice thing to do to allow investors out of the fund earlier if they didn’t want to be there without having to wait the full five business days. As a result, no good deed goes unpunished.”

The SEC’s decision to penalize Galois Capital has exposed deep divisions between the agency and the cryptocurrency industry. Critics argue that the SEC’s approach is stifling innovation, driving businesses offshore, and failing to adequately protect investors. The call for clearer regulatory guidelines and a more collaborative approach to fostering a thriving crypto ecosystem in the United States is growing louder.

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Ripple Lawyer Slams SEC for Inventing ‘Crypto Asset Security’ Term

Lawrence Damilola — Tue, 03 Sep 2024 15:58:50 +0000

Ripple Labs’ chief legal officer Stuart Alderoty has criticized the United States Securities and Exchange Commission (SEC) for repeatedly using the term “crypto asset security,” stating that it lacks a legal basis.

He accused the SEC of attempting to mislead judges by introducing the phrase into legal arguments.

Alderoty’s comments followed an SEC filing last Friday, where the agency warned that it might oppose any plan by the bankrupt crypto exchange FTX to use stablecoins to repay its creditors. The SEC’s filing mentioned that FTX’s portfolio includes “crypto asset securities.” Alderoty views this as part of the SEC’s effort to incorporate legally unsupported language into its filings.

The term 'crypto asset security' is nowhere to be found in any statute—it's a fabricated term with no legal basis. The SEC needs to stop trying to deceive judges by using it. pic.twitter.com/CyNbUbeoYM
— Stuart Alderoty (@s_alderoty) September 2, 2024

Alderoty’s criticism comes as the SEC faces challenges over its regulatory approach to digital assets. He argues that the SEC uses terms like “crypto asset security” to create a perception that does not align with existing legal definitions.

“There is no such thing as a ‘crypto asset security’ under the law, and the SEC knows it,” said Alderoty. He further contended that this strategy could be seen as an attempt to guide legal interpretations to benefit the SEC’s stance on cryptocurrency regulation.

The term “crypto asset security” has faced scrutiny in other legal contexts. In a case involving the cryptocurrency exchange Kraken, the Federal Court for the Northern District of California raised concerns about the SEC’s use of this terminology. The court described the concept as “unclear at best and confusing at worst.”

Alderoty has also pointed to the SEC’s recent enforcement actions in other cases to argue that the agency’s approach is inconsistent. He referred to an August 29 post on social media platform X, criticizing the regulator’s Wells notice to the NFT marketplace OpenSea. The notice suggested that some of the tokens sold on the platform might qualify as unregistered securities.

“The SEC is taking a position that is not supported by law,” Alderoty stated, arguing that these actions demonstrate a regulatory approach that lacks consistency and clear guidance.

Fun fact: In 1976, the SEC ruled that art galleries, even when promoting and selling to buyers that had investment motives, didn’t need to register with the SEC. https://t.co/CtQJ3mlPkh pic.twitter.com/oR8EgGpXoo
— Stuart Alderoty (@s_alderoty) August 29, 2024

To illustrate his point, Alderoty referenced a historical SEC decision involving art sales. In the past, the Art Appraisers of America, representing artist William Nelson, sought clarification from the SEC on whether selling lithographs and prints could be considered selling unregistered securities. The concern was that collectors might buy the art as an investment, hoping to sell it later at a higher price.

At the time, the SEC decided not to pursue enforcement action, saying that registration was not required. However, the commission noted that this decision was specific to the facts of that case and could change under different circumstances.

Alderoty used this example to argue that the SEC’s regulatory approach varies based on each case’s context and specifics. He suggests that its current stance on crypto assets may similarly lack a firm legal foundation and is an attempt at extending its regulatory reach without clear backing.

“Over 40 years ago, the SEC recognized that the sale of art didn’t require registration, even if someone bought the art as an investment,” said Alderoty.

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Coinbase Legal Chief Calls Out SEC’s Crypto Ambiguity in FTX Case

Lawrence Damilola — Mon, 02 Sep 2024 08:53:10 +0000

Coinbase’s Chief Legal Officer, Paul Grewal, has lambasted the U.S. SEC for its murky stance on the legality of crypto transactions tied to FTX’s bankruptcy.

Grewal, along with other crypto industry players, accused the Securities and Exchange Commission of regulatory ambiguity, particularly when it comes to creditor repayments involving stablecoins. In a Sunday X post, Grewal blasted the SEC for its “overreach” and “unreasonable threats” against FTX creditors.

The SEC didn't outright state that such an action would be illegal, writing, "The SEC is not opining as to the legality, under the
federal securities laws, of the transactions outlined in the Plan," but notes that the agency, "…reserves its rights to challenge transactions… https://t.co/zAMqY7mTcd
— paulgrewal.eth (@iampaulgrewal) September 1, 2024

“Why clarify the market when threats and aspersions will do? Investors, consumers, and markets deserve better. Way better,” the executive further commented. Grewal’s statements reflect ongoing frustrations in the crypto community about the perceived lack of clear guidance from the SEC on digital assets.

The SEC’s recent actions stem from its filing on Aug. 30 to the United States Bankruptcy Court in Delaware, indicating that it could challenge the legality of repayments to FTX creditors made with stablecoins.

While the SEC did not assert that such repayments are illegal under federal securities laws, it reserved its right to dispute transactions involving stablecoins, stating, “The SEC is not opining as to the legality, under the federal securities laws, of the transactions outlined in the Plan and reserves its rights to challenge transactions involving crypto assets.”

Following FTX’s collapse in Nov. 2022, the exchange has been working on methods to repay creditors, including a plan to reboot the exchange, which was later abandoned. The current plan proposes repaying creditors based on the US dollar value of their assets at the time of FTX’s bankruptcy, either in cash or stablecoins. However, the SEC’s stance has created uncertainty over the legal handling of these repayments.

Alex Thorn, head of research at Galaxy Digital, also criticized the SEC’s approach, calling it “the height of jurisdictional overreach.” Thorn noted that the SEC’s filing comes despite the regulator dropping its case against Paxos, the issuer of Binance USD (BUSD), in July. Thorn said, “The SEC doesn’t even make a case here. They are just unwilling to let it go.”

Beyond the repayment method, the SEC and the U.S. Trustee have raised concerns about a provision in FTX’s proposed bankruptcy plan that would shield the exchange from future legal actions by creditors. The U.S. Trustee has called for the court to reject the plan, arguing that it would unfairly limit creditors’ rights to pursue legal claims against FTX.

The filing also highlighted that the current plan does not specify a “distribution agent” responsible for managing the repayment process, whether in cash or stablecoins. The absence of this detail has added to the SEC’s concerns, signaling potential legal challenges ahead for FTX’s proposed repayment plan.

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The SEC’s New Art Form: ‘Regulating’ NFTs One Wells Notice at a Time!

Malaya Ruiz — Sat, 31 Aug 2024 15:28:05 +0000

OpenSea has officially joined the ranks of an elite group of A-listers! But at what cost, you ask? Oh, you know, not much… just a Wells notice from our friendly neighbor, the SEC. An initiation rite if you will.

The invite says, “We intend to take legal action against you soon – see you in court!” Sealed with a kiss from Gensler.

Here we go again with the heated topic of debate (with one party not faring well – you know who) about whether or not NFTs are securities!

Just look at a Wells notice as the SEC’s secret decoder ring. When they buzz you with one, it means they’re pretty sure you’ve been up to no good and might want to have a chat with you. But not at a five-star restaurant, more like an enclosed space with paneled walls, several benches, a witness stand, and a seat reserved for the guy wearing a robe.

Recently, Uniswap, the crypto folks at Robinhood, and those brainiacs at Consensys had their fun interrupted by this not-so-friendly reminder. Looks like the SEC is keeping a close eye on the DeFi crowd! Somehow it became like a badge of honor for the targets, and it’s not looking very good for the SEC.

So when OpenSea got the dreaded Wells notice because the SEC believes the NFTs on its platform are securities, CEO Devin Finzer did not take it sitting down. No, sir. He wrote a blog post. In it, he made some solid points about this move by the SEC potentially affecting not just NFT marketplaces but especially consumers, creators, and entrepreneurs.

Finzer threw a curveball at the SEC, challenging them to really think hard and long about whether the NFTs on OpenSea are actually securities. If we go down that rabbit hole, what’s stopping them from saying someone’s collection of limited-edition cereal boxes is a security too? Then he mentioned fine art, and all I could imagine are museums handing out investor brochures! Our guy Finzer seems to be asking the right questions. But as for valid answers from the SEC, well, let’s just say the crickets are chirping loudly in their front yard.

Not only did Finzer lay down his cards – he also brought back Brian Frye into the picture. Oh, this is just getting better.

And back into the picture Frye did come!

For those of you who don’t know, Frye is a conceptual artist and law professor who filed a lawsuit against the SEC along with Jonathan Mann, the singer and songwriter known as Song-A-Day Man. And yes, they were also pestered by the SEC for similar reasons. Talk about pushing buttons in this space!

The support group joined the party and Frye did not mince words once again. He said if the SEC wants to take a swing at regulating NFTs, then they might as well open the floodgates to the whole art market too. But how is that possible when the art market has been around since time immemorial and the SEC only came into existence in 1934, and between now and then, regulating the art market was unheard of?

“Oh is that a Picasso? Yeah, we’ll have to see if this piece complies with our 10-page regulation on ‘What is abstract?’ before it can go on sale.”

In retrospect, Frye realized it’s not really about implementing regulation – it’s about hunting for someone who’d rather settle than wrestle. That explains why they went after Impact Theory and Stoner Cats – two NFT projects that had seen better days. Make a note of this: Impact Theory was ordered to pay over $6.1 million. That’s a big old mix of disgorgement, prejudgment interest, and a civil penalty. Wild, wild, wild!

So, obviously, the debate isn’t over and it shows no signs of slowing down whatsoever. But here’s something interesting we found in the statement by Commissioners Peirce and Uyeda concerning the Stoner Cats case:

Source: SEC website

Although this statement was made last year, it still points to the nuances involved in the issue of classifying NFTs as securities these days. Even though the commissioners said this in what seems like ages ago and who knows if they’ve changed their minds since then, this just shows how the SEC is being vague about the criteria for calling out NFT projects. Either that or it was just a regular roulette session at the office and the most recent unlucky target was OpenSea.

So what do you think? Should this cat-and-mouse chase continue or should the SEC give up on nitpicking harmless digital collectibles?

Disclaimer: If you are a fan of NFTs, you might love this kind of content. If not, no bad blood! Just remember to critically assess every opinion out there, including mine! And to be absolutely clear, this isn’t a sales pitch disguised as a friendly hug. No one’s twisting your arm here!

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OpenSea Faces SEC Crackdown: NFT Marketplace Accused of Selling Securities

Gushiken Yona — Wed, 28 Aug 2024 14:30:42 +0000

The NFT market has been thrown into turmoil as the Securities and Exchange Commission (SEC) issued a Wells Notice to OpenSea, threatening legal action against the platform. The SEC alleges that NFTs sold on OpenSea are securities, a move that could have far-reaching consequences for the burgeoning NFT ecosystem.

OpenSea CEO and co-founder Devin Finzer took to X (formerly Twitter) on Wednesday to announce the news, expressing shock and defiance at the SEC’s decision. “We’re shocked the SEC would make such a sweeping move against creators and artists,” Finzer wrote. “But we’re ready to stand up and fight.”

The SEC’s move is the latest in a series of aggressive actions against the cryptocurrency industry. Companies like Coinbase, Uniswap, Robinhood, Kraken, and Consensys have been embroiled in legal battles with the SEC over the classification of cryptocurrencies as securities.

However, this latest move against OpenSea marks a new frontier for the SEC. By targeting NFTs, the agency could stifle innovation in a broader sector, impacting hundreds of thousands of online artists and creators who rely on platforms like OpenSea.

Finzer argued that NFTs are fundamentally creative goods, encompassing art, collectibles, video game items, domain names, event tickets, and more. He vehemently opposed the SEC’s attempt to regulate these digital assets in the same way as collateralized debt obligations.

OpenSea highlighted the positive impact of NFTs on creators and communities, citing examples of student artists finding full-time careers, indie game developers enabling open markets for in-game items, and collectors from diverse backgrounds joining communities centered around shared digital ownership.

The potential consequences of the SEC’s action are significant. “It would be a terrible outcome if creators stopped making digital art because of regulatory saber-rattling,” Fenzer said.

“I hope the SEC will come to its senses sooner rather than later, and that they’ll listen with an open mind,” the OpenSea co-founder further said.

OpenSea is not backing down from the fight. The company is pledging $5 million to help cover legal fees for NFT creators and developers who receive Wells Notices, asserting that every creator, big or small, should be able to innovate without fear of regulatory crackdown.

The SEC’s actions have sparked widespread debate within the crypto and NFT community. While some view the move as a necessary step to protect investors, others argue that it will stifle innovation and stifle the growth of the NFT ecosystem.

As this legal battle unfolds, the eyes of the crypto world are firmly fixed on OpenSea and the SEC. The outcome of this case could shape the future of NFTs and the broader cryptocurrency landscape for years to come.

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Nasdaq Seeks Approval From SEC to Launch Bitcoin Index Options

Lawrence Damilola — Tue, 27 Aug 2024 17:55:40 +0000

Nasdaq is seeking regulatory approval from the U.S. Securities and Exchange Commission (SEC) to launch and trade options on a Bitcoin index.

The exchange operator announced this on Tuesday, aiming to provide institutional investors and traders with an additional means to manage their exposure to Bitcoin. The proposed index options would be linked to the CME CF Bitcoin Real-Time Index, which tracks Bitcoin futures and options contracts available on the CME Group’s platform.

Matt Hougan, Chief Investment Officer at Bitwise, commented on the development, stating, “It’s important for options on Bitcoin to be available for this asset class to be fully normalized.” He emphasized that the current market lacks a key piece in the liquidity structure that ETF options could provide. Options, which are financial derivatives allowing the holder to buy or sell an asset at a fixed price by a predetermined date, are seen as tools that can enhance liquidity while offering traders and institutions more flexibility in their investment strategies.

Despite introducing several spot Bitcoin ETFs earlier this year, the SEC has not yet approved options linked to these funds. Nasdaq’s application includes a request to trade options on the iShares Bitcoin Trust ETF by BlackRock, which holds approximately $21.3 billion in assets. Exchanges have been eager to offer options on these ETFs since their launch, but the regulatory process has involved back-and-forth adjustments. Applications were recently withdrawn and refiled in response to feedback from the SEC, according to sources familiar with the matter.

In the meantime, traders have turned to alternative products such as leveraged ETFs to gain amplified exposure to Bitcoin while waiting for a decision on spot Bitcoin ETF options. Introducing Bitcoin index options would allow market participants to manage risk and tailor their exposure to cryptocurrency.

The announcement by Nasdaq comes as the iShares Bitcoin Trust ETF saw its largest daily net inflow in over a month. On Monday, the fund recorded a $224.1 million inflow, marking its highest intake since July 22. This surge occurred during a brief dip in Bitcoin’s price, indicating that investors were positioning themselves to take advantage of market conditions.

Overall, spot Bitcoin ETFs in the U.S. experienced a combined daily net inflow of $202.6 million. However, funds managed by other issuers, including Bitwise and Fidelity, saw net outflows totaling $32.1 million. In the same period, crypto investment products recorded their largest weekly inflows in five weeks, as reported by CoinShares.

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SEC Charges Brothers Over $60 Million Crypto Ponzi Scheme

Lawrence Damilola — Tue, 27 Aug 2024 14:45:11 +0000

The U.S. Securities and Exchange Commission (SEC) has filed charges against Jonathan and Tanner Adam, accusing the brothers of running a $60 million cryptocurrency Ponzi scheme.

According to a complaint filed on August 26 in the U.S. District Court for the Northern District of Georgia, the brothers allegedly lured over 80 investors into the fraudulent scheme by promoting a fake crypto trading bot.

The SEC’s complaint details that from January 2023 to June 2024, the Adams claimed their bot could generate monthly returns of 13.5% by exploiting arbitrage opportunities across different crypto platforms. They promised investors that the bot would buy and sell digital assets simultaneously, taking advantage of small price differences between markets to generate profits. The SEC, however, contends that no such trading bot existed. “The entire trading scheme was fraudulent,” stated Justin Jeffries, Associate Director of Enforcement at the SEC’s Atlanta Regional Office.

The SEC’s filing alleges that the brothers raised $61.5 million from investors and misappropriated $53.9 million of those funds. The complaint states that while some investors received partial returns, the majority of the amount was used for personal luxury purchases, including designer goods, expensive vehicles, and constructing a $30 million condominium. “The Adam brothers promised their investors high returns on a crypto investment that did not exist and then used investor funds to make Ponzi-like payments and to purchase designer goods, recreational vehicles, and million-dollar homes,” said Jeffries.

To prevent further asset dissipation, the SEC has secured emergency asset freezes against the brothers’ companies, GCZ Global, LLC, and Triten Financial Group LLC. According to the complaint, the SEC is pursuing permanent injunctions against the brothers and their companies, the return of all misappropriated funds, and civil penalties.

The complaint also revealed that Jonathan Adam allegedly hid his past criminal convictions from investors, stating that he has three previous securities fraud convictions. The charges come as the agency continues to target fraudulent schemes in the crypto sector.

In a related case, Montenegrin authorities recently arrested Roman Ziemian, co-founder of the FutureNet crypto fraud scheme, which allegedly defrauded investors of $21 million. Ziemian was detained in Podgorica while reportedly living under a false identity. South Korean and Polish authorities are both seeking his extradition on fraud, money laundering, and theft charges.

The post SEC Charges Brothers Over $60 Million Crypto Ponzi Scheme first appeared on The Shib Daily.

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