SEC
SEC charges Mango Markets exploiter for allegedly stealing $116M in crypto
The SEC has accused Avraham Eisenberg of manipulating the Mango Markets platform by manipulating the MNGO token, which the company allegedly sold as a security. Breaking news Own this piece of history Collect this article as an NFT The United States Securities and Exchange Commission has followed the Commodity Futures Trading Commission and others in filing parallel charges against the crypto user allegedly behind a multimillion-dollar exploit of decentralized exchange Mango Markets. In a Jan. 20 notice, the SEC alleged Avraham Eisenberg manipulated Mango Markets’ MNGO governance token, allowing him to steal roughly $116 million worth of cryptocurrency from the platform. According to the complaint, Eisenberg allegedly executed a series of large MNGO purchases in order to artificially raise...
The aftermath of LBRY: Consequences of crypto’s ongoing regulatory process
The case of LBRY highlights a wave of renewed regulatory pressure that could affect both blockchain token-issuing companies and their investors. In November, an over year-long court battle between the United States Securities and Exchange Commission (SEC) and blockchain development company LBRY and its LBRY Credits (LBC) token culminated in the ruling of the token as an unregistered security, despite the company’s argument of its use as a commodity within the platform. The court’s decision in this case sets a precedent that could influence not only the regulatory perception of blockchain-based platforms, but cryptocurrencies as well. The old Howey Old standards don’t always apply when it comes to the regulation of new technologies. The LBRY case was mostly centered on the basis of th...
Grayscale files brief in ETF suit against SEC, oral arguments may come within months
Grayscale filed a reply brief in its appeal of the United States Securities and Exchange Commission (SEC) denial of its application to convert its $12-billion Grayscale Bitcoin Trust (GBTC) into a spot-based Bitcoin (BTC) exchange-traded fund (ETF). The brief, filed in the District of Columbia Circuit Court, addressed points made in the SEC reply brief filed in December and restated its own arguments. The SEC based its decision on findings that Grayscale’s proposal did not sufficiently protect against fraud and manipulation. The agency had made similar findings in a number of earlier applications to create spot-based BTC ETFs. 1/ As part of our suit challenging the SEC’s decision to deny $GBTC conversion to a spot #bitcoin #ETF, @Grayscale just filed our Reply Brief with the DC Circu...
Gary Gensler finds new audience for his crypto skepticism: the US Army
United States Securities and Exchange Commission (SEC) chair Gary Gensler has found a new audience for his crypto-skeptical pep talks — the United States Army. On Jan. 11, the U.S. Army hosted its first Twitter Spaces event of 2023, with Gensler and SEC commissioner Caroline Crenshaw joining the discussion to provide financial advice on how and where U.S. soldiers should invest their money. https://t.co/oRjE3pDc8C — U.S. Army (@USArmy) January 11, 2023 Sergeant Lawrence Holmes noted “there are soldiers that look for those alternative investments [such as] crypto assets,” asking the pair what risks there were to crypto investing. “It’s the Wild West,” Gensler answered, adding that “most of these 10,000 or 15,000 tokens will fail.” “History tells us there’s not much room for micro currencies...
Crypto exchange Zipmex probed by Thai SEC amid buyout
The cryptocurrency exchange Zipmex is the focus of a new probe by the Securities and Exchange Commission (SEC) of Thailand for a breach of local rules. A Bloomberg report revealed that local authorities are looking into activities that they believe may violate business rules for digital asset service providers. This includes its offerings of certain digital asset products. According to the Thai SEC, Zipmex has until Jan. 12 to clarify whether it has been functioning as a “digital asset fund manager without permission” in Thailand. If true, the firm would have needed to obtain a permit before conducting business in the country. Cast your vote now! Zipmex is currently in the process of being acquired by V Ventures, a subsidiary of Thoresen Thai Agencies PCL, for around $100 million.&nb...
False alarm: DOJ did not classify MNGO as a commodity
Avraham Eisenberg was arrested in Puerto Rico on Dec. 26 on commodities fraud and manipulation charges relating to the $110 million exploit of the decentralized Mango Markets exchange. Eisenberg had self-identified as the actor behind what he called a “highly profitable trading strategy” and insisted that he had taken “legal open market actions, using the protocol as designed.” Eisenberg’s arrest predictably lit up crypto Twitter, with some observers paying particular attention to the fact that commodities fraud charges were being pressed in a case involving a crypto coin: “AVRAHAM EISENBERG, the defendant, willfully and knowingly, directly and indirectly, used and employed, and attempted to use and employ, in connection with a swap, a contract of sale of a commodity in interstate an...
SEC general counsel announces departure from public service
Dan Berkovitz, general counsel for the United States Securities and Exchange Commission, said he will be leaving the agency after more than a year. In a Dec. 22 announcement, the SEC said Berkovitz will depart on Jan. 31. A former commissioner with the Commodity Futures Trading Commission, Berkovitz joined the agency in November 2021. At the time, he said he planned to work with SEC chair Gary Gensler on a “regulatory agenda that will enhance investor protection.” “After thirty-four years of public service, it is time for me to pursue new and different challenges and opportunities,” said Berkovitz. It’s unclear whether Berkovitz intends to join the private sector after leaving the SEC. Brian Quintenz, who served as a CFTC commissioner from 2017 to 2021, joined&n...
Be ‘very wary’ of crypto proof-of-reserve audits: SEC official
A senior official from the United States Securities and Exchange Commission has warned investors to be “very wary” about relying on a crypto company’s “proof-of-reserves.” “We’re warning investors to be very wary of some of the claims that are being made by crypto companies,” said SEC’s acting chief accountant Paul Munter in a Dec. 22 interview with The Wall Street Journal. A number of crypto firms have commissioned “proof-of-reserves” audits since the collapse of crypto exchange FTX, aiming to quell concerns over their own exchange’s financial soundness. However, Munter said the results of these audits isn’t necessarily an indicator that the company is in a good financial position. “Investors should not place too much confidence in the mere fact a company says it’s got a proof-of-reserves...
Alameda’s Caroline Ellison and FTX’s Gary Wang hit with additional fraud charges
The United States Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) have hit former Alameda Research CEO Caroline Ellison and former FTX co-founder Gary Wang with fresh fraud charges. The new charges from the SEC and CFTC come as the pair plead guilty to federal fraud charges filed by the U.S. Department of Justice (DOJ) earlier on Dec. 22. SEC states that Ellison and Wang were charged for their role in the “multiyear scheme to defraud equity investors in FTX,” with the SEC also investigating whether other securities laws were violated as well. The SEC alleges that Ellison, under the direction of former FTX CEO Sam Bankman-Fried, furthered the scheme by manipulating the price of FTX Token (FTT), which is described as a crypto security toke...
4 legislative predictions for crypto in 2023
If you saw the returns in my crypto portfolio this year, you would take a pass on my predictions for the direction of the cryptocurrency market. So, I will stick to what I know and share some regulatory predictions for the crypto industry. Few legislative changes A few minor victories will logroll small legislative fixes into “must pass” bills like the defense authorization or omnibus spending bills. The top candidate would be a de minimis exemption for smaller crypto transactions to exempt users from capital gains tax liability every time they purchase a coffee with crypto. The protection for noncustodial crypto providers in Republican Representative Tom Emmer’s bill might make it in as well. On the outside, a bipartisan stablecoin bill may be possible, though Senate Democrats are still a...
SBF signs extradition papers, set to return to face charges in the US
Sam Bankman-Fried, the jailed founder of the FTX cryptocurrency exchange has reportedly signed papers on Dec. 20 that will soon see him handed over to Federal Bureau of Investigation (FBI) agents and flown to the United States to face criminal charges. The move was expected, as Bankman-Fried was reported to have agreed in principle to being extradited to the U.S. earlier this week on Dec. 19, despite earlier reports indicating he wanted to see the indictment against him fir ABC News reported the development that Bankman-Fried signed extradition papers on Dec. 20 citing The Bahamas’ acting commissioner of corrections Doan Cleare. A Dec. 21 report from Bloomberg said the exchange founder signed surrender documents on Dec. 20 citing Cleare, with another set of papers waiving h...
SEC was “asleep at the wheel” about FTX – US Rep. Sessions
The Securities and Exchange Commission (SEC) was “asleep at the wheel” regarding how FTX Group and its subsidiaries met financial and corporate control requirements, Representative Pete Sessions said in the Saturday Report on December 17. “We need to look at what the Securities and Exchange Commission was doing”, stated the Texas Congressman, adding that “the SEC was asleep at the wheel for these billions of dollars that we now find out about a year later.” The SEC filed charges against Sam Bankman-Fried (SBF), the former CEO of FTX, on Dec. 13, claiming that Bankman-Fried violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. In the complaint, the SEC requests an injunction to prohibit Bankman-Fried fro...
