The American Securities Association (ASA) filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) on Thursday for failing to comply with the Freedom of Information Act (FOIA). The ASA seeks to compel the SEC to disclose records related to its “recordkeeping sweep initiative” that imposed penalties on broker-dealers for retaining off-channel communications, such […]
Bitcoin News
‘ETH Should Not Be Treated as a Security’ — Consensys Sues SEC Over Ethereum Regulations
In a significant legal move, Consensys has initiated a lawsuit against the U.S. Securities and Exchange Commission (SEC) to protect the Ethereum blockchain from what it deems overreaching regulations. A report further alleges that the SEC issued a Wells Notice to Consensys, asserting that Metamask functions as an “unlicensed broker-dealer.” Consensys Confronts SEC Following Receipt […]
Bitcoin News
Google Sues Chinese Nationals for Running Crypto Scam Using Google Play App Store
Tech giant Google has filed a lawsuit against two Chinese nationals, accusing them of developing fraudulent cryptocurrency apps on the Google Play store and defrauding more than 100,000 users globally. “This is a unique opportunity for us to use our resources to actually combat bad actors who were running an extensive crypto scheme to defraud […]
Bitcoin News
Detained Binance Executive Sues Nigerian Anti-Graft Agency for ‘Fundamental Rights’ Violation
The Binance executive who is being held by Nigerian law enforcement has sued the country’s anti-corruption agency for violating his fundamental rights. The executive also wants the local court to declare the seizure of his passport “a violation of his fundamental right to personal liberty.” Violation of the Right to Personal Liberty The detained Binance […]
Bitcoin News
British Man Who Lost 7,500 BTC Sues for Right to Search Council Landfill
A British computer expert, who inadvertently misplaced a hard drive containing 7,500 bitcoins, has initiated a legal action to compel the Newport City Council to permit him to search through the landfill where the storage device is believed to be buried. Anticipating a further increase in the value of the cryptocurrency, the expert said he […]
Bitcoin News
Congressman Calls for Gensler’s Removal After SEC Sues a Crypto Exchange Twice in 10 Months
A U.S. lawmaker has urged Congress to pass his bill that would fire U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler. This call followed the securities regulator filing a second lawsuit against crypto exchange Kraken this year after the exchange paid million to settle the initial lawsuit.
Lawmaker Seeks to Fire Gary Gensler
Congressman Warren Davidson (R-OH) has called on Congress to pass his bill that would fire Gary Gensler as the chairman of the U.S. Securities and Exchange Commission (SEC) after the securities regulator sued crypto exchange Kraken twice in 10 months. Rep. Davidson wrote on social media platform X on Tuesday:
Now would be a great time to pass my SEC Stabilization Act and fire Gary Gensler.
On Monday, the SEC filed its second lawsuit this year against Kraken for operating a crypto trading platform “as an unregistered securities exchange, broker, dealer, and clearing agency.” The initial charge in February pertained to the crypto exchange’s staking program, resulting in a settlement with the SEC and a million payment by Kraken.
Jesse Powell, Kraken’s co-founder and former CEO, wrote on social media platform X on Monday: “USA’s top decel is back with another assault on America … I thought we settled all their concerns for m in Feb. Now they’re back for seconds?” He stressed:
Message is clear: M buys you about 10 months before the SEC comes around to extort you again. Lawyers can do a lot with M but the SEC knows that a real fight will likely cost 0M+, and valuable time. If you can’t afford it, get your crypto company out of the U.S. warzone.
Commenting on Powell’s statements, lawyer John Deaton opined on X: “Gary Gensler is a despicable and dishonorable regulator. He knew that Kraken believed it was buying peace for the M.” He explained that in a court case, “M takes you only so far, like maybe only 1/3 of the way — if you’re lucky. Ask Ripple and Brad Garlinghouse who spent 0M plus so far, and is still paying millions in legal fees.”
Rep. Davidson introduced the SEC Stabilization Act in June to remove SEC Chair Gary Gensler in order to safeguard U.S. capital markets “from a tyrannical chairman.” He explained that the bill would “remove the role of chairman,” noting: “It would preserve the current commissioners but it would add a sixth commissioner so there would be no more than three from any one political party.”
Do you think SEC Chair Gary Gensler should be fired? Let us know in the comments section below.
SEC Sues Kraken: Crypto Exchange Plans to ‘Vigorously Defend’ Its Position in Court
The U.S. Securities and Exchange Commission (SEC) has sued cryptocurrency exchange Kraken for the second time this year, alleging that the crypto trading platform operates as an unregistered securities exchange, broker, dealer, and clearing agency. Kraken disagreed with the securities regulator’s claims, insisting: “We do not list securities, and plan to vigorously defend our position.”
SEC Sues Kraken Again
The U.S. Securities and Exchange Commission (SEC) announced Monday that it has charged “Payward Inc. and Payward Ventures Inc., together known as Kraken, with operating Kraken’s crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency.” This is the SEC’s second lawsuit against Kraken this year. The first was in February over the crypto exchange’s staking program, which Kraken agreed to pay million to settle.
In its lawsuit filed on Monday, the SEC alleged that since at least September 2018:
Kraken intertwines the traditional services of an exchange, broker, dealer, and clearing agency without having registered any of those functions with the Commission as required by law.
Moreover, the SEC alleged that “Kraken’s business practices, deficient internal controls, and poor recordkeeping practices present a range of risks for its customers.” The securities regulator further claimed that “Kraken commingles its customers’ money with its own, including paying operational expenses directly from accounts that hold customer cash.” In addition, the watchdog has accused Kraken of listing crypto securities.
The SEC is seeking “injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains plus interest, and penalties.”
Kraken Intends to Fight Back
Following the SEC’s lawsuit announcement, Kraken issued a statement, stating: “We disagree, and intend to vigorously defend our position in court.” The exchange detailed:
The complaint against Kraken alleges no fraud, no market manipulation, no customer losses due to hacking or compromised security, and no breaches of fiduciary duty.
“It includes big dollar amounts but does not allege a single one of those dollars is missing or misused — no Ponzi scheme, no failure to maintain adequate reserves, and no failure to preserve the identity of client funds 1:1. Indeed, none of these things would be true,” the company emphasized.
Kraken CEO Dave Ripley posted on social media platform X: “We strongly disagree with the SEC claims, stand firm in our view that we do not list securities, and plan to vigorously defend our position. As we have seen before, the SEC argues that Kraken should ‘come in and register’ with the agency, when there is no clear path to registration.”
What do you think about the SEC suing Kraken again this year after the crypto exchange paid million to settle the previous lawsuit? Let us know in the comments section below.
CFTC Sues Former CEO of Crypto Lender Voyager for Fraud
The U.S. Commodity Futures Trading Commission (CFTC) charged the former CEO of bankrupt cryptocurrency lender Voyager Digital with fraud. The regulator accused Stephen Ehrlich and the company of luring investors with promises of high-yield returns while breaking derivatives rules. Ehrlich was also sued by the Federal Trade Commission (FTC).
U.S. Commodities Regulator Takes Legal Action Against Former Chief Executive of Voyager
The CFTC filed a lawsuit against co-founder and ex-CEO of Voyager Digital, Stephen Ehrlich. The complaint submitted to the U.S. District Court for the Southern District of New York charges him with fraud and registration failures in connection with Voyager and the operation of an unregistered commodity pool, the Commission announced.
The U.S. regulator also alleged that Ehrlich and the company falsely touted Voyager as a “safe haven” offering an opportunity to earn high-yield returns, of up 12%, in order to lure customers to purchase and store digital assets on the platform. Commenting on the Commission’s legal action, CFTC Director of Enforcement Ian McGinley stated:
Ehrlich and Voyager lied to Voyager customers. While representing they would treat customers’ digital asset commodities safely and responsibly, behind the scenes, they took shockingly reckless risks with their customers’ assets, leading to Voyager’s bankruptcy and huge customer losses.
Ehrlich and Voyager pooled and transferred billions of dollars’ worth of customers’ digital assets as “loans” to high-risk third parties, the CFTC explained and gave an example from early 2022 when they transferred over 0 million in customer funds to a digital assets hedge fund identified as “Firm A” without proper due diligence.
Voyager filed for bankruptcy in early July 2022, amid volatile crypto markets and after the collapse of the Three Arrows Capital (3AC) hedge fund. The latter had defaulted on a 0 million loan from the crypto lender. Voyager’s crash resulted in U.S. customer losses of .7 billion.
“When their business began to collapse, they continued lying to their customers, concealing Voyager’s true financial health. Amplifying their fraud, Ehrlich and Voyager broke their trust with customers while acting in capacities that required CFTC registration, which they failed to obtain,” McGinley added.
The Federal Trade Commission, the U.S. antitrust and consumer protection agency, also sued Ehrlich on Thursday for falsely claiming that customers could rely on Federal Deposit Insurance protection for their assets. He and Voyager were charged with violating the FTC Act and the Gramm-Leach-Bliley Act.
In a statement quoted by Bloomberg, Ehrlich said he was “outraged and deeply dismayed” by the allegations from the two regulatory bodies and that he was being used as a “scapegoat,” blaming others in the industry for the losses suffered by Voyager’s customers and creditors.
What are your thoughts on the legal actions taken by the CFTC and the FTC against Voyager and its former CEO Stephen Ehrlich? Tell us in the comments section below.
US Grocery Chain Trader Joe’s Sues Decentralized Exchange Trader Joe for Trademark Infringement
Grocery chain Trader Joe’s filed a lawsuit this month against the decentralized exchange (dex) platform Trader Joe for trademark infringement. The suit, filed in federal court in Los Angeles, alleges that Trader Joe illegally copied the Trader Joe’s brand name and seeks to bar the exchange from using the name.
Supermarket Trader Joe’s Says Dex Platform Causes Reputational Damage and Brand Erosion
Trader Joe’s, the national chain of grocery stores known for its private label products, sued Trader Joe in federal court for illegally using its trademark. The lawsuit alleges that the dex platform, which launched in 2021, infringes on Trader Joe’s brand name.
The grocery retailer outlined several instances of alleged illegal use, including Trader Joe naming their exchange “after the supermarket” without permission and using the exact “Trader Joe’s” trademark on their website and social media. Trader Joe’s sent multiple cease-and-desist letters demanding the exchange stop using the name, which were allegedly ignored.
The lawsuit claims that the exchange’s use of a confusingly similar name causes reputational damage and erodes Trader Joe’s brand recognition. The complaint seeks an injunction barring further use of Trader Joe’s trademarks and domain names.
“Defendants’ ‘Trader Joe’ branding is designed to allow them to commercially profit from Trader Joe’s famous mark and broader reputation by causing confusion as to the source, sponsorship, affiliation, or endorsement of defendants’ website and services and by trading on Trader Joe’s hard-earned goodwill and name recognition,” the supermarket’s lawyers argue.
Founded in 2021 by pseudonymous developers Cryptofish and Oxmurloc, Trader Joe operates a dex, liquidity pools, and lending services on the Avalanche blockchain with over million in total value locked. The exchange also has a native token, JOE, currently trading around .23.
Trader Joe’s alleges the exchange misled an international domain name dispute resolution process by claiming the platform was named after the developer’s brother Joe Liu. The complaint calls this a fraudulent attempt to avoid transferring the traderjoexyz.com domain name.
The lawsuit asserts counts of federal trademark infringement and dilution, cybersquatting, unfair competition, and conversion. Trader Joe’s is seeking injunctive relief, damages, and legal fees.
What do you think about Trader Joe’s suing the decentralized exchange over its name? Share your thoughts and opinions about this subject in the comments section below.
SEC Sues Musk to Make Him Testify in Twitter Takeover Investigation
U.S. Securities and Exchange Commission (SEC) is trying to force Elon Musk to testify in its probe into his purchase of Twitter, now X. After some back and forth, the billionaire investor bought the social media platform for billion in October 2022 and the SEC’s probe is focused on Twitter shares he had acquired ahead of the takeover.
SEC Seeks to Compel Elon Musk to Testify Over Twitter Stock Purchases
The U.S. securities regulator has asked a judge to force the owner of X, Elon Musk, to provide testimony over Twitter stock transactions carried out before the acquisition of the social media networking service. The move comes after he failed to do so last month, Bloomberg and Reuters reported, and opens another chapter in Musk’s feud with the SEC.
Launched in April 2022, the investigation aims to establish if the entrepreneur broke federal securities laws when he bought shares in Twitter. It also looks into his statements and filings related to the deal, with the Commission questioning whether he presented the appropriate paperwork.
Before closing the deal to acquire Twitter, Musk had bought a 9.2% stake in the company in March, last year, and disclosed the stake to the SEC in April. Later that month, the financial regulator queried him about the disclosure of this major stake.
On Thursday, the regulatory body revealed it subpoenaed Musk in May 2023 and he initially agreed to appear to testify at its San Francisco office on Sept. 15. However, two days before the scheduled interview, he raised “several spurious objections,” according to the SEC.
Elon Musk accused the government agency of trying to harass him and complained about the chosen location for their meeting. Investigators proposed new dates and agreed to move the interview to Fort Worth, Texas, near Musk’s current residence, but he refused to show up.
Since the start of the probe, the SEC has requested thousands of documents from Musk and others involved. According to its Oct. 5 filing in San Francisco federal court, he has so far testified twice in July 2022. Alex Spiro, an attorney for the investor, issued a statement, saying:
The SEC has already taken Mr. Musk’s testimony multiple times in this misguided investigation – enough is enough.
Elon Musk’s story with the SEC does not start with Twitter. In 2018, he was probed for his contribution to the self-driving car claims by electric vehicle manufacturer Tesla, which he chaired. He has also clashed with the U.S. Justice Department and the Biden administration.
In a comment on X to a post on the latest and previous such cases, Musk stated that “a comprehensive overhaul of these agencies is sorely needed.” He also suggested “a commission to take punitive action against those individuals who have abused their regulatory power for personal and political gain,” adding: “Can’t wait for this to happen.”
What are your thoughts on Elon Musk’s clash with the SEC and other U.S. authorities? Share them in the comments section below.