Republicans Make SEC's Gensler "Top Target" to Reign in

U.S. Republicans prepare consumer watchdog, SEC probes as mid-term elections loom

“A new day is coming,” Tom Emmer, the top Republican on the House finance panel’s oversight and investigations subcommittee, said in an interview, adding the two agencies are not being held accountable by Democrats. “Once we have the power to subpoena, once they have to listen to us, aggressive congressional oversight will only strengthen our system of government.”

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CFPB Director Rohit Chopra and SEC Chair Gary Gensler are top targets due to their ambitious agendas and tough enforcement stances, which have sparked pushback from industry groups. The groups have urged Republicans to rein in the agencies and are identifying issues they believe lawmakers should probe.

Coinbase Under SEC Scrutiny Over Its Crypto-Staking Programs

Coinbase Global Inc. said it’s being probed by the US Securities and Exchange Commission over its staking programs, which allow users to earn rewards for holding certain cryptocurrencies.

The company “has received investigative subpoenas and requests from the SEC for documents and information about certain customer programs, operations and existing and intended future products,” according to a quarterly regulatory filing. The requests relate to Coinbase’s staking programs, asset-listing process, classification of assets and stablecoin products, the company said.

Recent SEC Enforcement Hints at Looming Crackdown on ESG Claims

A new SEC task force to police corporate environmental, social and governance disclosures is gradually ramping up enforcement, putting companies on notice.

The Securities and Exchange Commission created its Climate and ESG Task Force a year and a half ago. The unit has mostly kept working behind the scenes. But in the last four months, it has helped bring at least three enforcement actions, according to agency records.

Companies that have faced allegations of misleading ESG claims include Bank of New York Mellon Corp., health insurance distributor Benefytt Technologies Inc., and Brazilian mining company Vale S.A.

Investors in Alleged Crypto Ponzi Scheme EminiFX Are Cheering CEO Eddy Alexandre

For Louisiana Francois, who sank $10,000 into what prosecutors say was a Ponzi-like crypto scheme, driving four hours from her home outside Boston to watch the man who allegedly took her money appear in court was an easy call.

But she didn’t go to condemn him. She went to cheer him on.

“I’m standing with Eddy Alexandre, because he was helping us,” Francois said. “As a nurse, I used to have two jobs. Because of EminiFX, I have only one job right now.”

EminiFX was the platform Alexandre marketed as a crypto and foreign currency exchange based on a unique proprietary technology. Federal authorities say that technology was smoke and mirrors and that Alexandre scammed hundreds of clients out of at least $59 million, luring them with “promises of huge passive income returns.”

FTC Probes BitMart Exchange Hack, Marking US Agency’s First Crypto Case

The Federal Trade Commission is investigating the operators of the BitMart cryptocurrency exchange over a December 2021 hack that led to consumer losses between $150 million and $200 million — marking the agency’s first known probe into crypto markets.

The investigation was disclosed Wednesday in an FTC order denying a bid by BitMart operators Bachi.Tech Corporation and Spread Technologies LLC to block the agency’s efforts to compel them to turn over information. The companies had argued that the FTC’s document request was overly broad and that some of the information was located overseas.

What’s at Stake: Will the Merge Turn Ether Into a Security?

Ethereum’s upcoming Merge could make the second-largest blockchain greener, faster and cheaper. But a law professor says it could also create regulatory headaches by transforming ether (ETH), the network’s native asset, into a security under U.S. law.

“After the Merge, there will be a strong case that ether will be a security. The token in any proof-of-stake system is likely to be a security,” tweeted Georgetown Law professor Adam Levitin on July 23.

If Levitin is right, and, more importantly, if the U.S. Securities and Exchange Commission (SEC) shares his view, exchanges that list ether (and that would be nearly all of them) would be subject to more onerous regulatory requirements. Like the bitcoin (BTC) cryptocurrency, ether has until now been treated as a commodity, outside the SEC’s jurisdiction.

South Korea Makes First Arrests in Major Crypto-Linked Inquiry

South Korean prosecutors made their first arrests in a probe of $3.4 billion worth of foreign-exchange transactions for possible links to illegal cryptocurrency-related activities.

Three people were held on allegations including setting up paper companies and operating a cryptocurrency trading business without registration, the Daegu District Prosecutors’ Office said in a text message on Thursday.