SEC Moves for 28-Day Extension in Coinbase Case, Says Crypto Task Force May Facilitate Potential Resolution

‘Potential Resolution’: SEC Moves for 28-Day Pause in Coinbase Litigation

The U.S. Securities and Exchange Commission moved for a 28-day extension on Friday in the U.S. Court of Appeals for the Second Circuit in connection with its ongoing litigation against Coinbase Inc.

In doing so, the SEC pointed to acting Chairman Mark T. Uyeda’s Jan. 21 launch of the Crypto Task Force. The task force aims to help the SEC develop a regulatory framework for digital assets. And the SEC noted that the task force’s work “may affect and could facilitate the potential resolution of both the underlying district court proceeding and potential appellate review, conserving judicial resources.”

“Because the commission’s review of crypto-related issues is ongoing, the commission requests this additional time to prepare its answer to Coinbase’s petition and for appropriate review,” the SEC added in the motion. “No party will be prejudiced by the grant of the requested extension. This is not an expedited appeal, and Coinbase consents to this motion.”

The Writing is Now on the Wall: SEC Crypto-Enforcement Has Officially Expired

On Friday, the SEC told the 2nd Circuit that its newly formed Crypto Task Force effort may lead to a resolution in its case against Coinbase, warranting a brief delay to the SEC’s response to Coinbase’s bid for appellate review of whether securities laws apply to the transactions on its platform.

Per the unprecedented 3-page joint motion, the SEC’s review of crypto-issues is “ongoing,” and an extension will give the SEC time for “appropriate review” to answer Coinbase’s petition. Translation: Stick a fork in the SEC’s case against Coinbase, it’s done.

Along the same lines, in a similarly bizarre 2-page joint motion, the SEC and Binance argued that the work of the SEC’s newly created crypto task force “may impact and facilitate the potential resolution of this case” so a stay is appropriate and in the interest of judicial economy.”

Also, an alarming SEC purge has begun. The SEC’s Crypto Unit has been secretly rebranded as the “Cyber and Emerging Technologies Unit,” and the SEC trial lawyer who championed the victories of Coinbase and Binance (and countless other SEC crypto-cases), is now gone from both the Coinbase and Binance pleadings, and transferred to the SEC’s IT department.[…]

The Stark reality is that the litany of powerful judicial precedent finding that digital assets are securities are now all moot. And SEC crypto-enforcement is as dead as Julius Caesar. RIP.

Elon Musk’s DOGE has rattled federal agencies. The SEC and DOL could be next

The Labor Department and SEC “are unfortunately no different” than other agencies, like the CFPB, that Musk and his team have been targeting, said Aaron Stephens, senior legislative strategist at P Street — one of the organizers behind the CFPB protest and a sister organization to the Progressive Change Campaign Committee.

“There is a lot of fear around the commission about who’s going to stay, who’s going to go, what the criteria will be, because it seems pretty arbitrary right now,” said Igor Rozenblit, managing partner at Iron Road Partners, a regulatory and compliance consulting firm, and former SEC staffer from 2010 to 2021.

Rozenblit said it’s likely that some of the SEC’s best workers go on to find other roles, given the uncertainty that DOGE is bringing to the federal workforce.

‘Smartest Guys in the Room’ Author Questions Efficacy of Enron Sentences

Although The Smartest Guys played a major role in highlighting the wrongdoing at Enron, I’ve never taken delight in Skilling’s sentence. As the years have gone by, I’ve increasingly felt like it was a waste. If we could have salvaged something good out of a sad story, it wasn’t by having Skilling spend a chunk of his life in jail. Clearly, there needs to be some kind of punishment for white-collar criminals. But jail sentences are no deterrent, and locking up smart people is pointless when they could better serve the communities they’ve harmed by helping to prevent a repeat of their own wrongdoing.

FINRA’s Probe of Businessman Violates Due Process, Says Lawsuit

The Financial Industry Regulatory Authority is exceeding its constitutional authority by forcing a New York financial planner to waive his right against self-incrimination or face sanctions, according to a lawsuit.

Francis G. Smith of FGS Financial Inc. filed his complaint Feb. 15 in the US District Court for the District of Columbia against the financial industry’s self-regulator.

During a probe of Smith’s compliance with continuing education requirements, FINRA sought sworn testimony, the complaint says. The self-regulator’s request allegedly said Smith could face expulsion from the securities industry if he asserted his Fifth Amendment privilege.