SEC Rejects Coinbase's Petition for New Crypto Rules

US securities regulator denies Coinbase petition for new crypto rules

The U.S. Securities and Exchange Commission on Friday denied a petition by the country’s largest crypto exchange, Coinbase Global, seeking new rules from the agency for the digital asset sector.

The five-member commission, in a 3-2 vote, said it would not propose new rules because it fundamentally disagreed that current regulations are “unworkable” for the crypto sphere, as Coinbase has argued.

The letter marked the latest in a broader tug-of-war between the crypto sector and the top U.S. markets regulator, which has repeatedly said most crypto tokens are securities and subject to its jurisdiction. The agency has sued several crypto companies, including Coinbase, for listing and trading crypto tokens which it says should be registered as securities.

“Existing laws and regulations apply to the crypto securities markets,” SEC Chair Gary Gensler said in a separate statement supporting the decision.

7 Months Inside an Online Scam Labor Camp

His account of being trafficked aligns with those of many others who have been rescued from such camps. Taken together, his experience and the material he was able to smuggle out are a rare window into the inner workings and tactics of an underworld that is operating on a staggering scale.

From bases in Cambodia, Laos and Myanmar, the gangs coerce their captives into carrying out complicated online scams that prey on the lonely and vulnerable around the world. Typically, such hoaxes involve using fake online identities to draw people into fictitious romantic relationships, then tricking them into handing over large sums of money in bogus cryptocurrency schemes.

The scam is known as “pig butchering,” for the process involved in gaining the trust of its targets, which can take weeks — fattening up the pig, so to speak — before going in for the kill.

NFT Indicies Remain Stable After $3M NFT Hack

Nansen’s NFT-500 and Blue-Chip-10 indexes were stable after nearly $3 million worth of non-fungible tokens (NFTs) were stolen from trading platform NFT Trader.

The Nansen NFT-500 index is down 0.88% when denominated in ether (ETH), while the Blue Chip 10 index is down 0.51%. Nearly $3 million in NFTs were stolen in the hack, with the attacker demanding a ransom of 120 ETH ($260,000) for their return.

Resisting Hindsight Bias: A Proposed Framework for CISO Liability

Rather than pursue this fraught path, and to provide the CISO community with clarity and reassurance that their good-faith decisions will not expose them to liability,[4] we believe an urgent need has emerged for a regulatory framework of factors for the SEC to consider when evaluating whether to charge a CISO (or other executive responsible for running a company’s cybersecurity program) with violations of the federal securities laws for conduct arising out of his or her CISO duties.

To that end, the CISO Framework described herein proposes that the Commission recognize the critical and evolving nature of the CISO role by focusing the question of CISO liability squarely on whether the CISO made good-faith efforts to perform his or her role. If the answer to that question is yes, CISO liability should never be appropriate, regardless of the Commission’s post-mortem view of the merits of the CISO’s performance.

The SEC’s Efforts To Deter Insider Trading May Just Shift It Around

The United States Congress requires the Securities and Exchange Commission (SEC) to deter market manipulation, such as insider trading, which it achieves through calibrated remedies for harmful behavior. As the SEC stated in its 2015 annual report regarding insider trading, rigorous enforcement actions send “a strong message of deterrence to would-be violators.” Despite the SEC’s commitment to fair markets and combating illegal opportunistic trading, the public has witnessed numerous high-profile insider trading cases over the decades, which questions the effectiveness of SEC enforcement actions targeting insider trading. In a recent working paper, we provide evidence that SEC enforcement actions do not deter insider trading. Instead, they displace it to other firms within the same industry due to insiders’ expectations that the agency does not have the resources to pursue multiple cases within the same industry within a short period of time.

Del. Supreme Court: Fraudulent Transfer Claim Not a “Securities Claim”

Public company D&O insurance policies provide entity coverage (that is, insurance for the benefit of the insured organization) only for “Securities Claims.” But what is a “Securities Claim”? That is the question that Delaware’s courts have grappled with in a long-running dispute between the telecommunications company Verizon and its insurers.

The Delaware Superior Court had held in the ongoing dispute that a litigation trustee’s state law fraudulent transfer claims against Verizon were derivative claims and therefore qualified as a Securities Claim under the applicable policies. In a detailed December 15, 2023, opinion, the Delaware Supreme Court reversed the Superior Court, holding that the fraudulent transfer claim was a direct claim, not a derivative claim, and therefore did not meet the definition of a “Securities Claim.” As discussed below, the Supreme Court’s opinion, while clarifying, also highlights how intricate the question of what is a “Securities Claim” can be. A copy of the Delaware Supreme Court’s opinion can be found here.

US securities regulator appeals ruling on ill-gotten gains

The U.S. Securities and Exchange Commission asked a federal appeals court on Friday to reconsider a ruling that it said prevents the agency from clawing back ill-gotten gains in cases in which laws were violated but no victims were harmed.

The SEC filed a petition asking the full 2nd U.S. Circuit Court of Appeals in New York to review the October ruling made by a three-judge panel in a case involving Aron Govil, former CEO of Cemtrex Inc. If left intact, the ruling risks letting players in the securities industry profit from illegal activity, the agency said.

The question applies to a broad range of cases, including allegations that cryptocurrency industry participants were required to register as securities businesses.