Litigation and Pain Coming for VCs Who Flipped Worthless Crypto Tokens?

It’s Time for the SEC to Overcome a Defensive Bureaucrats’ Approach

Too much time has been spent, in my view, over the last decade post-Madoff simply addressing a perceived survival risk, a defensive bureaucrats’ approach. The time is now for the agency to take back its place as chief regulator, policy maker and enforcer of our securities markets.

And, as to enforcement, it means chasing more than quick-hit cases involving, say, insider trading, crypto or NFTs. Those cases matter, of course, but there are many others that deserve serious attention, too. It’s astounding to me, for example, that financial fraud cases are at what must be at an all-time low given that they used to be a core segment of the SEC’s enforcement program.

Why The SEC’s Rejection of a Bitcoin ETF Was Spot-on

I served with Hester Peirce at the SEC for many years, she is a dedicated public servant, brilliant lawyer and exceptional economic thought leader. I also revere the WSJ — its editorial board is comprised of some of the most distinguished financial experts in the world. But, respectfully, Peirce and the WSJ editorial board are dead wrong about bitcoin ETFs.

This article explains why the SEC’s bitcoin ETF denial was not only appropriate and consistent with the SEC’s mission of investor protection, but it was also spot-on.

Jason Calacanis Rips Into ‘Grifting’ VCs Flipping Crypto Tokens to Retail 

While the US Securities and Exchange Commission has gone after a handful of token-based offerings in recent years, Calacanis predicts that a much bigger blowback is coming after trillions of dollars have been wiped off the crypto market and as valuations in Silicon Valley fall:

“Sure it would be better if they had given us clear guidelines, but having been in the room for these discussions over the past five years, people suspended disbelief. They shopped for attorneys who told them what they wanted to believe about tokens … The tide’s gone out. And those people [who bought tokens] essentially got a free option because, you know, this is the cynical view, but they got to buy the cryptocurrency. If it went up, they could sell it, like these retail investors. And now that it’s gone down, since it was illegal, all of them can now go after these companies. And so that’s just starting and we’re like two pitches into the first inning. We, we are not even close to the second ending of this … If what I learned from the dotcom era is any guide, it’s going to be years of litigation and pain and suffering….

Tesla Sells Majority of Bitcoin After Turbulent Crypto Foray

Tesla Inc. sold a significant chunk of its Bitcoin holding, an investment that helped legitimize the world’s largest electronic currency.

The carmaker had converted roughly 75% of its Bitcoin to fiat currency as of the end of June, adding $936 million of cash to its balance sheet, according to its shareholder letter on second-quarter earnings. Chief Executive Officer Elon Musk said on a call with analysts that the company sold due to uncertainty as to when Covid shutdowns would lift in China.

Stablecoins would get federal supervision under emerging House deal

Top House lawmakers are nearing bipartisan agreement on a proposal to regulate stablecoins, a type of cryptocurrency frequently pegged to the dollar and the subject of intense scrutiny in Washington since last year.

The bill — the product of negotiations between House Financial Services Committee Chair Maxine Waters (D-Calif.) and Rep. Patrick T. McHenry (R-N.C.), the panel’s top Republican — would limit issuers of the digital tokens to banks and certain other financial firms that submit to federal oversight, according to people familiar with the process.