Gensler to Crypto Industry: "Not Liking the Message Isn’t the Same Thing as Not Receiving it"

Speech by SEC Chair Gary Gensler: "Kennedy and Crypto"

My predecessor Jay Clayton said it, and I will reiterate it: Without prejudging any one token, most crypto tokens are investment contracts under the Howey Test.

Some in the crypto industry have called for greater “guidance” with respect to crypto tokens.

For the past five years, though, the Commission has spoken with a pretty clear voice here: through the DAO Report, the Munchee Order, and dozens of Enforcement actions, all voted on by the Commission. Chairman Clayton often spoke to the applicability of the securities laws in the crypto space.

Not liking the message isn’t the same thing as not receiving it.

Elizabeth Holmes Says Fraud Trial Unfair Since She Went Before Theranos’ Balwani

Theranos Inc. founder Elizabeth Holmes asked for a new trial on the grounds that she was unfairly disadvantaged by being tried before her ex-boyfriend and Theranos President Ramesh “Sunny” Balwani.

Facing a sentencing next month that could put her in prison for as much as a decade, Holmes has filed a flurry of long-shot motions in recent weeks to try to get a new trial. In a filing late Wednesday in federal court in San Jose, California, her lawyers claimed she would’ve been exonerated if Balwani had gone on trial first.

Head Trader of Crypto Platform EmpiresX Pleads Guilty in $100 Million Fraud Scheme

The head trader of South Florida-based cryptocurrency platform EmpiresX pleaded guilty in an alleged investment fraud scheme that raised around $100 million from investors, the Justice Department said.

Joshua David Nicholas, of Stuart, Fla., pleaded guilty Thursday at the U.S. District Court for the Southern District of Florida in Miami to one count of conspiracy to commit securities fraud, according to court documents.

Prosecutors allege that Mr. Nicholas and the founders of the firm, which is also known as Empires Consulting Corp., fraudulently claimed their business operated a trading bot using artificial and human intelligence that guaranteed returns to investors. In reality, however, EmpiresX was “a Ponzi scheme” that paid earlier investors with money obtained from later investors, prosecutors allege. The company also failed to register its investment program with the U.S. Securities and Exchange Commission as required.

SEC to form a new office for crypto disclosures

The Securities and Exchange Commission will establish a new office for cryptocurrency filings.

The office will be within the Division of Corporation Finance, which handles disclosures for publicly traded firms, said Cicely LaMothe, the associate director for disclosure operations within that division.

LaMothe told the audience at a legal conference in Washington on Thursday that the SEC saw the new office as necessary to address “unique and evolving” filings around crypto assets, the vast majority of which the SEC views as securities.

U.S. judge rejects AT&T bid to dismiss SEC lawsuit over leaks to analysts

A U.S. judge on Thursday rejected AT&T Inc’s bid to dismiss an unusual Securities and Exchange Commission lawsuit accusing the phone company of selectively leaking financial information to Wall Street analysts.

In a 129-page decision, U.S. District Judge Paul Engelmayer in Manhattan said he found “formidable” evidence that AT&T and three investor relations executives improperly warned analysts in March and April 2016 that lower-than-expected smartphone sales would cut into overall revenue.

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“This case will now proceed toward trial, barring settlement,” Engelmayer wrote.

Coinbase bankrolls suit against Treasury Department following Tornado Cash sanctions

Coinbase is footing the bill for a lawsuit filed against the Treasury Department Thursday by users of the recently sanctioned crypto service, Tornado Cash.

The six plaintiffs include Coinbase employees and other users of the mixing service that was blacklisted by the Treasury’s Office of Foreign Assets Control (OFAC) in August.

Mixing services like Tornado Cash are used to obfuscate crypto transactions, which while anonymous, are easily traceable. The Treasury Department argued this particular service was used to launder more than $7 billion worth of digital currency in the past three years by North Korean hackers and other bad actors.

Crypto Exchange Binance to Issue ‘Soulbound’ Tokens to Users Who Complete Know-Your-Customer Checks

Cryptocurrency exchange Binance plans to issue a “soulbound” token on the BNB blockchain to all users who complete know-your-customer (KYC) requirements, according to an official announcement.

Soulbound tokens, which in this case act as an identity passport across the BNB chain, are unique and non-transferrable. Users who would prefer their identity not be shared across the entire network can opt out of the token.

Binance’s soulbound token – named binance account bound (BAB) – will allow users to participate in “building projects” while earning rewards, according to the release.