Over the past decade, the U.S. Securities and Exchange Commission (SEC) has contended with “significant non-compliance” and “creative attempts” by cryptocurrency market participants to avoid its jurisdiction. According to the SEC’s enforcement director, the commission has regularly prevailed in its numerous court cases against these participants. A ‘Decade’s Worth of Arguments’ In the past decade, […]
Bitcoin News
Congressman Warren Davidson Rails Against Treasury’s ‘Red Herring Arguments’ On Crypto
Warren Davidson, Vice Chairman of the Subcommittee on Digital Assets, Financial Technology, and Inclusion of the House Financial Services Committee, has rejected the policy suggestions made by the U.S. Treasury on crypto assets, stating these seek to ban digital assets in the U.S. using unworkable compliance requirements as tools for this task.
Warren Davidson Qualifies U.S. Treasury’s Crypto Policy Proposals as ‘Dishonest’
Warren Davidson, Vice Chairman of the Subcommittee on Digital Assets, Financial Technology, and Inclusion of the House Financial Services Committee, rejected the policies presented by the U.S. Treasury to regulate crypto assets. In a recent opinion post titled “Setting the record straight and debunking unworkable illicit finance proposals,” Davidson explains that these suggestions, very similar to the proposals presented by Sen. Elizabeth Warren, seek to disarm the cryptocurrency industry in the U.S.
The suggested policies would classify wallet providers, miners, validators, and other network participants as a new group of crypto financial institutions, subject to the same reporting standards that traditional finance institutions do.
Davidson explains that Sen. Warren’s allegations indicating even validator node operators “pose national security concerns” show a degree of ignorance “unbecoming of any policymaker.”
On the objective of these measures, he stated:
It’s an attempt to capitalize on others’ ignorance by pursuing a backdoor pathway to effectively ban digital assets in the United States through a crushing and entirely unworkable compliance burden.
Furthermore, Davidson stresses that blockchain and cryptocurrency are not the preferred methods for terrorism financing, given that recent media reports incorrectly pointed out that the terrorist group Hamas had raised over million in digital assets. He claims this notion has been used to push this kind of policy that seeks to dismantle the future of the crypto industry in the U.S.
Davidson argued that the first measure to combat illicit movements in crypto should be to bring more crypto companies to the U.S., a goal that will be difficult to fulfill if these policies get approved. “Their purposefully unworkable framework will drive companies and capital offshore,” he concluded.
What do you think about Warren Davidson’s take on crypto policing? Tell us in the comments section below.
Court Upholds Detention of Ex-FTX CEO Sam Bankman-Fried, Deeming Release Arguments ‘Unpersuasive’
As Sam Bankman-Fried’s legal representatives gear up to appeal the ex-FTX chief’s recent verdict, they have requested the court for his provisional release from the Metropolitan Detention Center in Brooklyn, New York. Upon examination of Bankman-Fried’s claims, a clerk from the court of appeals deemed them “unpersuasive.”
Bankman-Fried’s Attempt at Release Has Been Denied by the Court of Appeals
Sam Bankman-Fried is eager to leave incarceration at Brooklyn’s Metropolitan Detention Center, where he has been since August. In a recent effort, his attorneys sought to secure his release while preparing for his appeal, filing a motion with the Court of Appeals. However, the court’s clerk, Catherine O’Hagan Wolfe, firmly rejected this plea, maintaining the necessity for continued imprisonment.
The decision by the United States Court of Appeals, Second Circuit, is rooted in the initial grounds for revoking his bail. The court identified credible evidence suggesting Bankman-Fried attempted to influence two witnesses, which played a pivotal role in the decision against his release.
Furthermore, the court dismissed the argument that alternatives to detention weren’t adequately evaluated. The district court had previously intensified release stipulations in response to Bankman-Fried’s actions, concluding that no viable option existed apart from detention. The clerk noted:
The record shows that the district court thoroughly considered all of the relevant factors, including the defendant-appellant’s course of conduct over time that had required the district court to repeatedly tighten the conditions of release.
Moreover, the court characterized Bankman-Fried’s arguments as “unpersuasive” and “denied as moot.” His sentencing is scheduled for March 28, 2024, and he potentially faces a sentence exceeding a century for his crimes. These recent legal maneuvers by his team indicate a determination to challenge the case in the Court of Appeals.
What do you think about the court denying Bankman-Fried’s latest attempt for release? Share your thoughts and opinions about this subject in the comments section below.
Judge Limits Bankman-Fried’s Trial Arguments; Allows Recreational Drug Use Questions
A federal judge has issued rulings limiting some arguments the defense can make at Sam Bankman-Fried’s criminal fraud trial next month. However, the judge will allow Bankman-Fried’s lawyers to question witnesses about past recreational drug use.
Bankman-Fried Can’t Mention Jail Time at Trial
In a 16-page order, Lewis Kaplan, the U.S. District judge presiding over the case granted some of prosecutors’ requests to bar certain defense strategies and evidence at the October trial of the FTX cryptocurrency exchange founder. Kaplan prohibited Sam Bankman-Fried‘s lawyers from telling jurors he’s been detained pretrial or referencing his family and personal life.
The judge also barred arguments over whether FTX customers were negligent in using the exchange or that Bankman-Fried intended to pay back any allegedly stolen funds. Kaplan wrote both are irrelevant or unfairly prejudicial.
However, Kaplan declined to prohibit Bankman-Fried’s lawyers from asking witnesses about recreational drug use. Prosecutors claimed it would harass witnesses and prejudice jurors. Kaplan said the defense must notify him and the prosecutors before raising it.
The rulings came on dueling requests from prosecutors and defense lawyers to limit arguments and evidence at the New York trial, which follows the alleged multibillion-dollar fraud that caused Bahamas-based FTX’s collapse in November 2022.
Bankman-Fried, 30, has pleaded not guilty to charges he defrauded investors and looted customer deposits on FTX, cheating customers out of billions. He was originally freed on 0 million bond but the bond was revoked.
Judge Says Government’s FTT Market Manipulation Evidence Is Admissible
Kaplan also said that the alleged tampering with the cryptocurrency tokens, which supposedly altered Alameda Research’s financial records, was a direct action taken as part of the claimed secret plan or conspiracy. Thus, Kaplan believes the claimed tampering is directly linked to the main accusation in the case.
Additionally, the claim that the defendant instructed the former CEO of Alameda Research, Caroline Ellison, to change the price of FTT shows that they had a close and trusting relationship. Kaplan stressed the importance of this information in proving the case is greater than any potential bias it might cause, so he’s allowed it as evidence in the trial.
Kaplan wrote the ruling after reams of pretrial motions from prosecutors and defense lawyers aiming to tilt the playing field in their favor. Furthermore, Bankman-Fried’s lawyers have attempted to get him released before the trial for the third time in a row.
Jury selection is set for October 3, 2023, with opening statements likely in late October.
What do you think about the upcoming trial against Bankman-Fried? Share your thoughts and opinions about this subject in the comments section below.
Judge Rejects Bankman-Fried’s Attempt to Dismiss Criminal Charges, Calls Arguments ‘Unpersuasive’ and ‘Without Merit’
On Tuesday, U.S. district judge Lewis Kaplan rejected Sam Bankman-Fried’s attempt to dismiss criminal charges against him. Bankman-Fried claims he was charged in a manner that violates the “rule of specialty” as far as the extradition treaty between the Bahamas and the United States is concerned.
Judge Throws Out Bankman-Fried’s Motion to Dismiss
Disgraced FTX co-founder Sam Bankman-Fried’s (SBF) attempt to dismiss criminal charges against him has been rejected by U.S. district judge Lewis Kaplan on June 27, 2023. SBF moved to dismiss the post-extradition charges (counts 4, 6, 9, 10, 12, and 13) because his legal team believes he was charged in a manner that violates the “rule of specialty.”
Essentially, SBF claimed that the extradition process from the Bahamas to the United States did not adhere to the rule of specialty because he was being charged with additional offenses beyond those specified in the extradition request.
SBF’s legal team insisted that the United States exceeded the initial agreement’s scope by bringing forth charges that were not part of the extradition arrangement. Judge Kaplan determined that the charges brought against Bankman-Fried were within the permissible scope of the extradition treaty.
As a result, the judge rejected Bankman-Fried’s attempt to dismiss the criminal charges, indicating that he would have to face trial for the offenses specified in the extradition process.
Kaplan said the charges are “joined properly with the other pre-extradition charges in this case because a common scheme unifies them.” The common scheme was to “accelerate the growth of FTX and Alameda and to enrich the defendant thereby,” the court filing details.
Interestingly, SBF attempted to get counts 1 and 2 dismissed which include the charges of “conspiring to commit and committing wire fraud on FTX customers.” SBF contends that these charges should be dropped since the indictment fails to mention any “financial harm” inflicted upon FTX customers. Kaplan disagrees and states:
The defendant is wrong both factually and as a matter of law.
A great deal of SBF’s arguments leverage the language written in the indictments and jurisdiction gray areas to justify the dismissal of the charges against him. Yet the judge details on numerous occasions that the defendant’s arguments are “unpersuasive” and the counts against SBF “are legally sufficient.”
Kaplan opined that the dismissal arguments are “either moot or without merit” and for those reasons, the motion to dismiss is denied. “Accordingly, the motion to dismiss for improper venue is denied without prejudice to renewal under Federal Rule of Criminal Procedure 29,” the judge concluded.
What are your thoughts on Judge Kaplan’s decision and the arguments presented by Sam Bankman-Fried’s defense team? Share your views and opinions about this subject in the comments section below.
Former SEC Enforcement Chief: Coinbase’s Arguments ‘a Surefire Loser’ and Possibly Criminal
According to John Reed Stark, crypto exchange Coinbase’s assertions that its business activities were endorsed by the U.S. Securities and Exchange Commission (SEC) when it approved its initial public offering are “a surefire loser.” According to Stark, the SEC’s approval of Coinbase’s registration statement was done to ensure the latter had made “proper disclosures in their application.”
SEC Not Constrained by Any Doctrine
John Reed Stark, a former chief of the U.S. Securities and Exchange Commission (SEC) Office of Internet Enforcement, has said the arguments that Coinbase’s business activities were endorsed by the commission when it approved its initial public offering (IPO) are “a surefire loser.” Stark also said the assertion that Coinbase has “some sort of regulatory safe harbor” and that the SEC is constrained by some sort of doctrine “has no basis in law or in fact.”
The remarks by Stark came just days after Coinbase chose to publicly disclose its response to the Wells notice it received from the SEC back in March. As reported by Bitcoin.com News, Coinbase made clear its opposition to the SEC’s enforcement actions. Coinbase also implied in its response that the SEC had in fact greenlighted its core business when it allowed the IPO to proceed. The company went public in April, 2021.
Some argue that when the SEC approved Coinbase’s IPO, the SEC also approved Coinbase’s business. What a crock and possibly a criminal offense. Yes, you read that correctly — a criminal offense. Having served as Chief of the SEC Office of Internet Enforcement for 11 years, IMHO,… pic.twitter.com/aIQXgCRVNb
— John Reed Stark (@JohnReedStark) May 1, 2023
However, in his May 1 Twitter thread, Stark, who worked for eleven years as an SEC chief, assailed the assertion that the commission’s approval of Coinbase’s registration statement amounted to an endorsement of the crypto exchange’s activities. According to Stark, the SEC’s approval of Coinbase’s registration statement was done to ensure the latter had made “proper disclosures in their application.”
‘No Approval Clause’
To further support this argument, Stark pointed to regulations which compel companies seeking to raise funds from the public to insert a “No Approval Clause” in their respective prospectuses. The intention of this clause is to inform prospective investors that regulators that include the SEC have neither approved nor disapproved securities being offered.
The former SEC enforcement chief also shared more links which seemingly support the argument that the Commission is not being constrained by some “sort of regulatory estoppel.”
Meanwhile, Stark also suggested in his tweet that Coinbase’s own Form S1 Registration Statement under the Securities Act of 1933 proved that the crypto exchange was aware that its business activities had the potential to cause problems. He said:
Finally, Coinbase’s Form S1 Registration Statement under the Securities Act of 1933, the form that Coinbase filled out to become a public company and the form that the SEC reviewed, disclosed that there is regulatory uncertainty regarding the status of their activities and that Coinbase could be subject to a litany of civil, criminal, and administrative fines, penalties, orders and actions (which is exactly what is happening right now).
Stark ended the long tweet by reiterating that the “no approval clause” was a sufficient warning to Coinbase executives who may face potential jail time should the crypto exchange lose its fight against the SEC.
What are your thoughts on this story? Let us know what you think in the comments section below.
RBI Ignored Exchanges’ Arguments on Bitcoin Ban: Court
The Reserve Bank of India (RBI) did not correctly respond to the presentation that could have removed the necessity of banning bitcoin trading in the country, found the apex court.
The Supreme Court of India noted in a hearing today that the central bank forwarded the presentation to the government. But what it should have done is provide the exchanges with a detailed, point-by-point response. Judge Rohinton Fali Nariman ordered the RBI to respond to the same presentation in two weeks, shifting the next hearing date to September 25, 2019.
“After hearing arguments we are of the view that detailed representations by exchanges purusant to this court’s order 17.05.2018, have not been answered point by point, therefore RBI to reply them with in 2 weeks. SG to furnish various docs within 1 week,” said Judge Nariman, as confirmed by Crypto Kanoon, an India-based cryptocurrency news source, which was reporting the hearing live via Twitter feeds.
Case takes the most unlredictable turn. Justice Nariman directs that RBI must respond to the representation in the manner appropriate.
Offers to defer the case for 2 weeks as part heard, let the answer come on reconsideration of banking ban by RBI.
RBI has agreed.
— Crypto Kanoon (@cryptokanoon) August 21, 2019
Bitcoin Ban Unconstitutional?
The decision came on the third day of an ongoing courtroom battle between RBI and the Internet and Mobile Association of India (IAMAI). The two have been in a lockdown ever since the former barred banks from dealing with firms associated with cryptocurrencies. The move hurt an otherwise-booming bitcoin exchange industry wrong, forcing many leading players to either shut down shops or migrate to more crypto-friendly destinations.
IAMAI questioned the constitutional authority of RBI in imposing the bitcoin prohibition. The argument was reflecting in the court session today, as the central bank’s legal counsel explained that specific provisions allowed RBI to take necessary actions whenever it believes the country’s monetary system is at risk.
“Counsel refers to Section 10 (2) of PSS Act which provides power to RBI to issue guidelines in reference of any payment system,” reported Crypto Kanoon. “Also refers to Section 18 of the PSS Act emphasizing that RBI has power to issue policy in order to manage or operate its payment system and in public interest etc. Points out that RBI has wide powers to regulate its entities is there is a threat to the payment system.”
Government Didn’t Suggest a Bitcoin Ban
While Judge Nariman agreed that RBI is an expert body which took its decision after studying bitcoin thoroughly, the real argument is whether they had the power to legislate the cryptocurrency ban. RBI chose to ban bitcoin after claiming that they had empirical data against the cryptocurrency, which “satisfied” them.
IAMAI’s counsel argued that RBI never had any data to back their ban. Also, the satisfaction of one federal body cannot become a benchmark for the satisfaction of every federal organization. RBI cannot ban bitcoin based on the decision taken by others, the counsel added while referring to the recommendation of an interministerial government to ban bitcoin.
“Reading out Ministry of Finances advisory. Which says that two things raise concern. 1. its use as a payment system 2. its use in illicit activities. So the Govt. has also not advocated about the complete ban. it only said that vices should be eradicated/ regulated,” reported Crypto Kanoon.
Judge Nariman took notice of the argument and angrily asked the RBI to become more responsive to the possibility of regulating bitcoin. He asked the central bank to respond to each and every point raised by the IAMAI’s counsel.
Mr. Sood reads out the suggestions given to RBI by exchanges. That Money laundering Act can be made applicable to exchanges as intermediaries making them responsible for reporting directly. or enjoining on banks to make additional requirements for exchanges.
— Crypto Kanoon (@cryptokanoon) August 21, 2019
The post RBI Ignored Exchanges’ Arguments on Bitcoin Ban: Court appeared first on NewsBTC.
Japanese Regulator FSA Hears Arguments for not Calling Bitcoin a Virtual Currency
n Japans FSA does not unanimously agree that Bitcoin is a virtual currency, meeting minutes shown
CryptScout #BitFeed RSS – Bitcoin and Cryptocurrency News 24/7
UBS Economist Bashes Bitcoin, Arguments Based on Lacking Information
Another day, another CNBC Fast Money crypto- and Bitcoin-related segment.
Following a three-day streak of bullish-on-Bitcoin guests, CNBC’s somewhat notorious Fast Money panel turned the tables, calling upon an impassioned cryptocurrency critic to make an appearance. However, as is normally the case, this skeptic’s arguments fell short and failed to dent the price of Bitcoin, even in the slightest.
UBS says it's time to bury bitcoin. The man behind the bold call UBS' Paul Donovan makes his case. #bitcoin $BTC pic.twitter.com/8eX8E4fK1A
— CNBC's Fast Money (@CNBCFastMoney) November 29, 2018
UBS’ Bitcoin Basher Takes To CNBC Fast Money
On Wednesday, to the dismay of crypto’s advocates worldwide, Paul Donovan, the global chief economist at UBS, released an anti-crypto note, endowed with the hair-raising title, “I come to bury Bitcoin, not to praise it.” Although Donovan was quickly put on the back foot by crypto’s zealous knights, the UBS executive took to Fast Money to double-down on his scathing comments.
CNBC anchor Mellisa Lee first asked the apparent cynic if the timing of the note’s release was opportunistic, meant to capitalize on crypto’s recent collapse to finally “bury Bitcoin.”
Responding to this inquiry with unbridled assurance, Donovan, the author of the now-infamous piece, exclaimed that “anybody with a higher school education in economics would be a Bitcoin skeptic from the [get-go],” essentially echoing near-identical claims made by Nouriel “Dr. Doom” Roubini.
Trying to referencing his credentials and multiple decades of experience inside the economic realm, Donovan touched on the controversial sentiment that cryptocurrencies aren’t currencies, nor will they be at “any point in the future.” The representative of UBS, a multinational investment and financial services giant, then touted his cynicism further, noting that by late-2017, it was clear that “this (cryptocurrency) was going to end badly.”
Aiming to contradict his remarks, given with little-to-none context, Lee, a crypto-leaning CNBC host, brought up the Wall Street and Silicon Valley “brain drain,” where traditional firms saw executives and employees exit en-masse to foray into crypto. Still, Donovan remained true to his conjectures, noting that this so-called “brain drain” was the result of hype and fears surrounding the legacy financial system.
Missing the point of Bitcoin and cryptocurrencies entirely, the economist added that it is irrational to think that the U.S. government’s incessant money printing habits should be a concern, totally skipping over the value proposition of this nascent technology in borderless, decentralized, and censorship-resistant transfers of value and data.
He concluded his comments by trying to disprove the sentiment that Bitcoin is digital gold, the world’s next go-to store of value, by stating that with Bitcoin, supply cannot be controlled, before claiming that he dismantled the gold 2.0 argument entirely.
Again, this couldn’t be further from the truth, as Bitcoin hasn’t only maintained its value over its decade-long history, but outperformed every single other asset class in just a few years.
Not So Fast, Paul Donovan
In a testament to Donovan’s fallacious points, prominent crypto commentators and analysts took to Twitter to contradict the controversial CNBC Fast Money segment. Airswap’s Rob Paone, better known as Crypto Bobby, joked:
Shaking in my space boots, Paul pic.twitter.com/VWRX0DdUtT
— Crypto Bobby (@crypto_bobby) November 30, 2018
Tom Lee, Fundstrat’s head of research and internal crypto proponent/researcher, addressed Donovan’s comments with skepticism by simply stating that “time will tell,” ending his tweet on the matter with a foreboding ellipsis.
Crypto Dog and I am Nomad, two prominent pseudonymous crypto traders, called out UBS, with the former analyst trashing the performance of UBS’ public shares, while the latter drew attention to the financial institution’s kerfuffles regarding money laundering.
Related Reading: Bitcoin is Criminal Money Says the Media While Deutsche Bank Gets Raided for Laundering
The four comments were just the tip of the iceberg, as dozens, if not hundreds of this community’s most devoted participants quickly picked apart Donovan’s claims and unease around this infant subject.
And as such, it has become apparent that this nascent industry’s leading players aren’t ready to bury the hatchet with UBS and its in-house Bitcoin skeptic, as such pieces of criticism are usually wanton and arguably, slanderous. So just like with JP Morgan CEO Jamie Dimon’s classification of Bitcoin as a “fraud,” many believe it is just a matter of time before Donovan will take to public forums to shamefully retract his baseless qualms with the world’s first cryptocurrency.
Related Reading: No, Jamie Dimon and Warren Buffett Won’t Have the Last Laugh on Bitcoin
Featured Image From Shutterstock
The post UBS Economist Bashes Bitcoin, Arguments Based on Lacking Information appeared first on NewsBTC.
Recent House Financial Services Hearing Bashes Bitcoin, Illogical Arguments
Whenever the topic of Bitcoin regulation comes up, things often deteriorate rather quickly. That situation is no different where House Financial Services subcommittee meetings are concerned. Their most recent get-together raised a lot of questions and showed there is a massive bias toward cryptocurrencies.
The Subcommittee Hearing’s Purpose
On paper, the recent meeting of the House Financial Services subcommittee had positive intentions. The goal is to get an overview of the cryptocurrency landscape. based on that information, regulatory measures may be introduced in the future. Unfortunately, the members of this subcommittee are rather divided on cryptocurrencies altogether. It seems there is a very strong bias toward this form of money, which is not entirely surprising.
Representative Brad Sherman of California is convinced cryptocurrencies are a “crock”. He is not a fan of how people can make a lot of money from buying, selling, and trading cryptocurrencies. At the same time, most stock market traders make good money by sitting at home in their pajamas as well. It seems the bias against cryptocurrencies is mainly because it is cryptocurrency. An unregulated form of money that makes people millions is a thorn in the side of Sherman.
Airing these concerns during a subcommittee hearing is always positive, though. Everyone’s opinion matters when these groups get together. However, Sherman is not a big fan of the ICO business model either. In his opinion, ICOs are a “lie to the public” and a way to disguise unregulated IPOs. Again, this shows there is some need for regulation of sort sorts, albeit that is much easier said than done.
Regulation is Coming Eventually
Even though the bashing of Bitcoin is clearly visible, the regulatory discussions are far from over. Instead, we will see further subcommittee meetings to discuss the regulatory aspect of the “crypto craze”. Protecting investors is one of the main objects of this subcommittee. Things will move along rather slowly, though .The lack of understanding cryptocurrencies is a problem which is difficult to solve.
It seems a study on the ICO market will be published rather soon. Whether or not that study will be as biased as this subcommittee’s meeting, remains unknown. It is evident a ruleset needs to be put in place for both ICOs and the cryptocurrency at some point. What those rules will entail exactly, has yet to be determined. Once the report is published, the subcommittee will “move in” to establish some new guidelines.
Luckily, not everyone is as biased to cryptocurrencies. Representative Tom Emmer of Minnesota is in favor of a hands-off approach, for the time being. Finding the balance between regulation and innovation is not all that easy. A mixed bag of responses from this House Financial Services subcommittee, with conflicting interests as well. All of this seems to indicate a unified regulation of cryptocurrency and ICOs is still far away.
The post Recent House Financial Services Hearing Bashes Bitcoin, Illogical Arguments appeared first on NewsBTC.