Reading the Tea Leaves Following the Grayscale-SEC Oral Argument

US court questions SEC’s rejection of Grayscale’s bitcoin fund proposal

U.S. federal appellate court judges questioned on Tuesday whether the U.S. Securities and Exchange Commission (SEC) was correct to reject Grayscale Investment’s application for a spot bitcoin exchange-traded fund, since the agency had previously approved bitcoin futures products.

The SEC rejected Grayscale Investment LLC’s application to convert its flagship spot Grayscale Bitcoin Trust into an exchange-traded fund (ETF) last June, arguing the proposal did not meet anti-fraud and investor protection standards.

A panel of judges in the District of Columbia Court of Appeals in Washington pressed the SEC on Grayscale’s argument that, because the regulator previously approved certain surveillance agreements to prevent fraud in bitcoin futures-based ETFs, the same setup should also be satisfactory for Grayscale’s spot fund, since both spot and futures funds rely on bitcoin’s price.

Brazilian police bust ‘Wolf of Wall Street’ crime ring in Lisbon

Brazilian police and the Portuguese branch of Interpol have dismantled a criminal network operating a sham company in Lisbon that defrauded thousands of Brazilians in a scheme inspired by the film “The Wolf of Wall Street”.

In a statement, Brazilian police said a Czech national based in Lisbon had opened a call centre and hired hundreds of struggling Brazilian workers living in the Portuguese capital.

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There was a “sociopathic atmosphere” at the call centre, which police said mimicked the 2013 blockbuster “The Wolf of Wall Street”, based on the memoir of Jordan Belfort, who ended up in prison in the 1990s for defrauding investors out of millions of dollars.

Workers were encouraged to watch the movie and replicate the behaviour of the main character played by Leonardo Di Caprio.

Bribes

Oldest story in the world: Rio Tinto Plc, a global mining company, wanted to win some mining rights in Guinea. It needed a local representative to help it navigate Guinean politics, so it found “a French investment banker and former classmate of the Senior Government Official” in charge of the mining-rights decision, and hired him as a consultant. The consultant “had no direct work experience relating to the mining business,” but he was buddies with the guy making the decision, and that is the main thing you want.

The etiquette here is that the consultant should do a good job of advocating for Rio Tinto, making relevant arguments and providing analyses of the benefits of Rio Tinto’s plans and oh yes absolutely having a nice dinner with the government official and reminiscing about their school days. Friendly but also professional. And in return Rio Tinto should pay him a nice consulting fee. But if Rio Tinto were to hand him a sack of cash, and he were to take some of the cash out of the sack for himself and hand the rest to the government official, that would be bad! But you can see how the boundaries might be blurry. He is a consultant, Rio Tinto is not supervising him closely, and the whole point of the arrangement is that he is closer to the official than they are.

The SEC’s Approach to Digital Asset Regulation Harms InvestorsActions such as Wahi threaten profound economic harm to virtually everyone involved. Creators of digital assets targeted by the SEC face damage to goodwill and reputation, and the exchanges that sell the assets could be regarded as unlicensed securities brokers and face severe regulatory consequences of their own—as well as class action lawsuits brought by private parties.

Even more troublingly, purchasers of the assets in question face an unexpected and rapid loss in value of their holdings. As SEC Commissioner Hester Peirce recently stated, the agency’s “imprecise application of the law has created arbitrary and destructive results,” with “secondary purchasers of the token often … left holding a bag of tokens that they cannot trade or use.” But the SEC’s core mandate is to protect the investing public, not cause it harm.

Women Gain 34 S&P 500 Board Seats in Strong Start to New Year

Women gained 34 seats on the boards of S&P 500 companies in the first two months of the year, the strongest start since at least 2019, bolstered by the naming of three female chief executive officers.

The increase compares with 2022, when the pace of advancement was about half the rate of the previous two years, according to data compiled by Bloomberg. This year, women gained 16 seats in January and 18 in February, the data show. The average number of female directors was unchanged, however, at 3.6, out of an average board size of 11.2.

The pace of female appointments slowed last year with women close to occupying 33% of board seats — a number often considered a crucial point for exerting more influence. With fewer than 500 seats changing hands each year, directors are starting to discuss ways to speed up the turnover, said Friso van der Oord, senior vice president of content at the National Association of Corporate Directors.

Live Question & Answer Event – The Bull and Bear Cases for Crypto

The 2022 cryptocurrency crash roiled the industry and wiped out roughly $1 trillion in market value. Yet, even as regulators battle to reign in crypto and more firms go bankrupt, some investors continue to see the long-term value of digital currencies.

The Journal’s lead writer for live markets, Gunjan Banerji, sits down with former White House communications director and crypto bull, Anthony Scaramucci, and former chief of the Securities and Exchange Commission’s Office of Internet Enforcement and crypto bear, John Reed Stark, for a conversation about the bull and bear cases for crypto.