GOP Plan to Reign in SEC on Crypto Stalls as Lawmakers "Dither"

SEC’s Gensler Claims More Crypto Turf in Washington as Dissent Dithers

The tide was supposed to turn when Republicans gained control over the House last November. Finally, the thinking went, there would be restraints on the SEC chief.

Yet after six months of hearings, initial plans and fiery statements about regulatory overreach, GOP lawmakers have yet to formally introduce their key proposals. The 2024 campaign season is about to kick into gear, and that means less time to debate complex policy issues and garner support from Democrats, who control the US Senate.

Crypto ‘Cool-Down’ Is a Cure In 24/7 Money World

With addiction centers filling up and problem-gambler hotlines ringing off the hook amid a broader normalization of sports betting, and with an estimated 78% of authorized fraud cases originating online, it’s time to consider whether that “Pay Now” button is a speed ramp that needs some guardrails. That’s what some regulators are preparing to do, indirectly, by rolling out new rules requiring a “cooling off” period for certain crypto trades. It’s an idea worth testing.

Starting Oct. 8, first-time crypto buyers in the UK will have to be offered a 24-hour delay between starting a purchase and completing it, as part of proposed tougher crypto advertising rules that also ban referral bonuses. And the European Union’s flagship crypto rules, due to come into force next year, also include a 14-day “right of withdrawal” (similar to existing rules for other online purchases) for consumers who buy tokens that aren’t backed by specific assets or currencies.

‘A Lighter Regulatory Touch’? FCA’s Enforcement Cases Plummet in FY 22/23

Enforcement actions by the UK financial watchdog slumped during the last financial year ended March 31, 2023. The number of cases opened against firms and individuals fell 67% and 33% to 26 and 74, respectively. Similarly, the number of closed cases against firms dropped 10% and against individuals decreased 44%.

Overall, the UK Financial Conduct Authority (FCA) handled a total of 100 new cases during the period and closed 107, compared to 190 and 159, respectively, in the prior year. The figures are based on data gathered over three years by the global law firm, Reed Smith through Freedom of Information (FOI) requests to the FCA.

Israeli Firm Hit with SPAC-Related Securities Suit

In my recent mid-year review of the year-to-date securities lawsuit filings, I noted that certain factors that had contributed significantly to the number of securities suits filed in 2022 were less of a factor in the first six months of 2023. Among these diminished factors was the number of SPAC-related lawsuit filings. But while the number of SPAC-related suit filings has been down so far this year, SPAC-related suits are nonetheless still being filed. The latest example of a SPAC-related filing this year is the suit filed on July 6, 2023, against the Israeli company, Hub Cyber Security, Ltd., which became a Nasdaq-listed company following the February 2022 merger of its predecessor operating company with a SPAC. The new lawsuit illustrates the ways in which litigation can arise against companies that are the product of completed SPAC mergers.

Elizabeth Holmes gets prison term shortened by 2 years

Disgraced Theranos CEO Elizabeth Holmes’s prison sentence has been slashed by two years, according to updated Bureau of Prisons records

According to Holmes’ inmate information on the Bureau of Prisons’ website, the 39-year-old mother of two will be released on Dec. 29, 2032 — nine years, six months and 29 days after she checked into Federal Prison Camp Bryan on May 30.

Holmes, now known as federal inmate 24965-111, was initially sentenced to 11 years and three months in the minimum-security, women-only Texas prison.

Crypto pledged to dethrone Wall Street. It’s getting swallowed instead

The cryptocurrency industry built a cultlike fan base in the United States by promising to break Wall Street and Washington’s joint grip on the financial system. But as the sector weathers a steep decline and faces tough new scrutiny from the SEC, some of Wall Street’s biggest names are trying to enfold it.

The developments place the industry at a crossroads in the United States. Popular interest in crypto has cratered after a year of spectacular meltdowns left a trail of bankrupt crypto companies, criminally charged entrepreneurs, shamed celebrity endorsers and ravaged investors. With the hype deflated, financial giants sense an opportunity for profit by offering their customers a pared-back menu of crypto products and services unlikely to raise hackles from regulators.