The Other Likely Focus of the SEC's Probe of Coinbase

What reports of the SEC investigation of Coinbase have missed

What reports of the SEC investigation of Coinbase have missed is the unique nature of the SEC’s jurisdiction. The SEC probe of Coinbase is likely vast and infinite in an unusual way.

First off, the SEC is looking for fraud, market manipulation, insider trading, registration failures and other securities violations relating to Coinbase’s crypto-trading platform operations. But there is also likely a second and equally targeted SEC realm of inquiry, which Coinbase has probably never experienced before.

Given that Coinbase is also a US public company that submits quarterly, annual and other filings to the SEC, the SEC is also likely investigating the accuracy of those filings.

Celsius customers write pleas to bankruptcy court to get crypto back: ‘This is an emergency situation, simply to keep a roof over my family and food on their table.’

Some customers of crypto lender Celsius Network, which filed for bankruptcy earlier this month, have written to the Bankruptcy Court for the Southern District of New York, with a hope of getting their funds back.

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In letters to the bankruptcy court, many Celsius customers said they felt lied to by the company and by Alex Mashinsky, its chief executive. “Every Friday AMA (Ask me anything) on YouTube, Celsius continued to tell people they were better than a bank. Safer, with better returns. As well as tell us they had billions in liquid cash,” wrote Brian Kasper, one of the platform’s customers.

“I watched every single AMA each Friday since sign-up, and week in and week out Alex would talk about how Celsius is safer than banks because they supposedly don’t rehypothecate and use fractional reserve lending like the banks do,” Stephen Richardson wrote in a letter to the court. He described himself as a Celsius customer since 2019, with more than six figures worth of crypto on the platform.

Top GOP Senator Slams SEC for Ignoring Crypto Inferno

Sen. Pat Toomey accused the Securities and Exchange Commission (SEC) of dragging its feet on instituting oversight of crypto firms as some of those companies collapsed, taking investors’ cash with them.

“Had the SEC responded to calls for clarity on how it would apply existing securities laws to novel digital assets and services, things could have been different,” Toomey, who is the ranking Republican on the Senate Banking Committee that oversees the regulator, wrote in a letter to SEC Chair Gary Gensler. “Companies could have adjusted product offerings accordingly, preventing investor losses today, and the SEC would have been free to focus enforcement efforts on the worst actors.”

SEC Denies Whistleblower Award Claim Because Disclosure was Not Voluntary

Under the SEC Whistleblower Program rules, a whistleblower’s disclosure is voluntary if it is made “before a request, inquiry, or demand that relates to the subject matter of [their] submission is directed to [the whistleblower] or anyone representing [the whistleblower] by the Commission.”

In this case, the SEC issued a Preliminary Determination denying a whistleblower award claim because the Claimant provided information “after Enforcement staff had already subpoenaed Claimant and taken Claimant’s testimony in the Investigation on a subject matter related to his/her information.”

Tether’s recovery of an $840mn loan scrutinised in Celsius bankruptcy

Tether, whose $66bn stablecoin known as USDT plays a key role in crypto markets, recouped an $840mn loan to Celsius ahead of the bankruptcy by selling bitcoin Celsius pledged as collateral.

The question now is whether Celsius could reclaim the value Tether received in the loan liquidation. The answer would clarify an uncertain area of bankruptcy law and in the worst case for Tether hit the reserves that underpin USDT.

“Can Celsius recover?.?.?.?loan liquidations completed in the 90 days before filing?” Celsius’s law firm Kirkland & Ellis said in a presentation to the New York bankruptcy court last week. The question was among the “legal issues critical to the outcome of the case”.

ESG should be boiled down to one simple measure: emissions

Unfortunately esg suffers from three fundamental problems. First, because it lumps together a dizzying array of objectives, it provides no coherent guide for investors and firms to make the trade-offs that are inevitable in any society. Elon Musk of Tesla is a corporate-governance nightmare, but by popularising electric cars he is helping tackle climate change. Closing down a coalmining firm is good for the climate but awful for its suppliers and workers. Is it really possible to build vast numbers of wind farms quickly without damaging local ecology? By suggesting that these conflicts do not exist or can be easily resolved, esg fosters delusion.

The industry’s second problem is that it is not being straight about incentives. It claims that good behaviour is more lucrative for firms and investors. In fact, if you can stand the stigma, it is often very profitable for a business to externalise costs, such as pollution, onto society rather than bear them directly. As a result the link between virtue and financial outperformance is suspect. Finally esg has a measurement problem: the various scoring systems have gaping inconsistencies and are easily gamed. Credit ratings have a 99% correlation across rating agencies. By contrast, esg ratings tally little more than half the time. Firms can improve their esg score by selling assets to a different owner who keeps running them just as before.

Kraken, a U.S. Crypto Exchange, Is Suspected of Violating Sanctions – The New York TimesKraken, one of the world’s largest cryptocurrency exchanges, is under federal investigation, suspected of violating U.S. sanctions by allowing users in Iran and elsewhere to buy and sell digital tokens, according to five people affiliated with the company or with knowledge of the inquiry.

The Treasury Department’s Office of Foreign Assets Control has been investigating Kraken since 2019 and is expected to impose a fine, said the people, who declined to be identified for fear of retribution from the company. Kraken would be the largest U.S. crypto firm to face an enforcement action from O.F.A.C. Sanctions against Iran, which the United States imposed in 1979, prohibit the export of goods or services to people or entities in the country.