Kraken: Register as an Exchange? No Need for That, Thanks!

Crypto exchange Kraken has no U.S. SEC registration plans, says incoming CEO

Ripley will take the helm of Kraken not only at a time when the crypto market is facing a major rout, with bitcoin down nearly 60% this year, but also as the fast-growing industry has been at odds with regulators like the SEC.

Despite reports that the SEC is scrutinizing Coinbase for listing several tokens on its platform the regulator identified as securities in a July insider trading lawsuit, Kraken has no plans to remove those tokens from its exchange, Ripley said.

Ripley added Kraken also sees no reason to register with the SEC as an exchange because his company does not offer securities, despite calls from SEC Chair Gary Gensler for crypto platforms to register.

“There are not any tokens out there that are securities that we’re interested in listing,” he said. “There could be some new token out there that becomes interesting and also happens to simultaneously be a security [and] in that case, we would potentially be interested in that path.”

Companies That Really Want to Do Some Good Should Unbundle ‘ESG’ and ‘DEI’Both ESG and DEI have generated massive industries. Investment giants, notably BlackRock Inc., State Street Corp. and Vanguard Group Inc., claim that more than a third of their assets, or $35 trillion, are monitored through one ESG lens or other. Every Fortune 100 company and most Fortune 500 companies have adopted DEI programs. Walmart has committed $100 million to its Center for Racial Equity. Many human resource departments are evangelists for DEI in part because it turns an unglamorous activity (paying salaries and the rest) into a crusade for social justice.

But do these letters really fit together logically? Or are they muddlings of buzzwords that are either ineffective or even counterproductive? The evidence increasingly suggests the latter. Both ESG and DEI bundle together different things that range from the admirable to the questionable. This bundling not only risks setting conflicting, fuzzy or even questionable goals for companies. It also distracts from the mission that initially set the buzzwords afloat — preventing the world from overheating in the first case and tapping a wider range of talent in the second.

1 BTC = 1 BTC: Crypto Looks for New Narrative as Plunge Goes On

Virtual money, digital gold, inflation hedge, uncorrelated asset, store of value: those are phrases once used by Bitcoin’s fans to describe the cryptocurrency’s virtues. Its new narrative? A Bitcoin is a Bitcoin.

That’s the expression that’s making its rounds on Twitter in recent days, where users, amid a deep decline in prices, have been posting that 1 BTC = 1 BTC. The idea is that it doesn’t really matter what the coin’s price is. Its supply is fixed and that should, theoretically, act as a buoy for prices in the long run.

“1 BTC = 1 BTC is something Bitcoin maximalists say tongue-in-cheek when looking at the USD price of BTC becomes too painful,” said Joshua Lim, former head of derivatives at Genesis Trading. “The implication is that BTC will eventually become a unit of account so just focus on the absolute number of BTC you own today.”

US SEC Ramps Up Scrutiny of Private Equity Firms’ Writedowns

Buyout firms have been forced to erase billions of dollars from the value of their wagers in the economic downturn, and financial regulators are now scrutinizing whether managers are reducing fees for investors when those deals sour.

The Securities and Exchange Commission has been ramping up inquiries to private equity firms about whether they adjust customer fees when bets get written off to zero or below their original price tags, people with knowledge of the matter said.

While these questions have come up sporadically in recent years, regulators are now asking private equity firms about the issue regularly in routine exams and seeking a level of detail that they didn’t before, the people said. The goal is to make sure that private equity firms, which take a cut of the money they manage, aren’t overcharging state pensions, university endowments and other investors.

SEC Charges Compass Minerals for Misleading Investors about Its Operations at World’s Largest Underground Salt Mine

The Securities and Exchange Commission today announced settled charges against Compass Minerals International Inc. for misleading investors about a technology upgrade that the company claimed would reduce costs at its most significant mine, but in reality, had increased costs, and for failing to properly assess whether to disclose the financial risks created by the company’s excessive discharge of mercury in Brazil. Compass is ordered to pay $12 million to settle the charges.

According to the SEC’s order, Compass repeatedly assured investors in 2017 that a technology upgrade at its Goderich mine – the world’s largest underground salt mine which is located near Ontario, Canada and hailed by the company as its crown jewel – was on track to materially reduce costs and boost its operating results starting in 2018. Compass’s statements were misleading because they failed to tell investors that costs at the mine were increasing rather than decreasing, which substantially undermined the projected savings. The SEC also found that Compass misled investors by overstating the amount of salt it was able to produce at Goderich.

Crypto Darling Helium Promised A ‘People’s Network.’ Instead, Its Executives Got Rich.

Davis is one of thousands of people who bought into Helium’s promise, together spending an approximate $500 million on hotspots they believed would pay steady dividends. But so far, citizens of the People’s Network have seen vanishingly small crypto rewards. After waiting more than six months for her $500 hotspot to arrive at her home in Houston, Davis has mined a single token in three months — about $5. “I could have used my money elsewhere and actually gained some income,” the 52-year-old real estate agent told Forbes, “not lose it after I pay my electricity bill.”

But Helium has made a handful of people disproportionately rich: its executives and their friends.

Interpol Issues ‘Red Notice’ for South Korean Crypto Founder Do Kwon

Interpol has issued a “red notice” for the search and arrest of Do Kwon, the South Korean co-founder of Terraform Labs, the Seoul Southern District Prosecutors’ Office said on Monday. The South Korean authorities had requested assistance from the global police agency to trace Mr. Kwon’s whereabouts earlier this month.

Mr. Kwon and his company faced investigations by the South Korean government after the value of his cryptocurrencies, Luna and TerraUSD, plummeted and contributed to a $300 billion crash across the crypto economy in May. The plunge caused an uproar among investors and led to calls for an inquiry into Mr. Kwon and his company after allegations of tax evasion and fraud.

California ‘BitLicense’ Bill Vetoed by Governor Gavin Newsom

California Governor Gavin Newsom (D) vetoed a crypto licensing and regulation bill seen as a possible West Coast version of New York’s “BitLicense” on Friday.

Assembly Bill 2269, sponsored by Assemblymember Tim Grayson (D), would have created a licensing regime for anyone hoping to facilitate crypto transactions, likening it to how money transmissions are currently overseen by the Money Transmission Act. It was one of eight bills Newsom vetoed Friday, He signed 21 other bills, addressing issues ranging from crossing signals to cybersecurity to infrastructure concerns.

SEC Charges Executives and Director with Lying to AuditorsAccording to the SEC’s complaint, filed in the United States District Court for the District of Nevada, Thompson, Loveless, and Mylock provided Spyr’s auditors with false and misleading information about an SEC investigation into Spyr’s investment in a biotechnology company. The SEC alleges that the defendants told Spyr’s auditors that they were not aware of “any situations where the company may not be in compliance with any federal or state laws or government or other regulatory body regulations,” even after Spyr had received a Wells notice, settlement discussions with SEC staff had broken down, and management believed that an SEC action would be filed soon. The complaint also alleges that Thompson and Loveless signed Spyr’s 2017 Form 10-K and 2018 first quarter Form 10-Q, neither of which disclosed the potential SEC enforcement action. According to the complaint, Spyr was required by generally accepted accounting principles to disclose the potential SEC enforcement action because it was reasonably possible that it could lead to a material loss for the company.