SEC Reportedly Probing Investment Advisers on Crypto Custody Compliance

U.S. securities regulator probes investment advisers over crypto custody -sources

The U.S. Securities and Exchange Commission is probing registered investment advisers over whether they are meeting rules around custody of client crypto assets, three sources with knowledge of the inquiry told Reuters.

The SEC has been questioning advisers’ efforts to follow the agency’s rules around custody of clients’ digital assets for several months, but the probe has gathered pace in the wake of the blow-up of crypto exchange FTX, the sources said. They spoke on condition of anonymity as the inquiries are not public.

Retail Investors Plan to Demonstrate at SEC Offices Nationwide

Retail investors will picket outside Securities and Exchange Commission offices across the country on Friday and Saturday, meme-stock internet personalities say.

“Occupy SEC 2023” will be an “educational awareness rally,” said Mike Mynar, an event organizer and personality behind TheMarine Activist Channel on YouTube, which discusses and promotes retail investments in meme stocks.

Rally attendees hope to raise “awareness of the want and need for a fair and transparent market for retail investors,” according to an anonymous event sign-up.

Despite its name, it is “not a protest or a march,” Mynar noted in another video, though he did not clarify how the event differs from a protest or march.

The Washington, D.C., daytime event has a permit for 200 people, but Mynar expects “a lot more” because word of it has spread on social media, he said. “Not to mention the 11 other SEC locations folks are going to.”

India’s Adani Group Shares Plunge, Extend Rout From Hindenburg Research Report

The selloff in Gautam Adani’s corporate empire accelerated on Friday, erasing more than $51 billion of market value in two sessions as Asia’s richest man struggles to contain the fallout from a scathing report by US short seller Hindenburg Research.

The rout is piling pressure on the Indian tycoon as it erodes his net worth and threatens to sour investor sentiment toward the $2.5 billion share sale by his flagship firm Adani Enterprises Ltd. Losses deepened even after the Adani Group disputed Hindenburg’s allegations in a Thursday call with bondholders and pledged to release a detailed rebuttal on Friday.

Mango Markets to Resume Crypto Trading, SEC Be DamnedJoin the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28. Secure Your Seat Developers behind the shuttered decentralized crypto exchange Mango Markets say they’re pushing forward with a relaunch of the project – even as the U.S. Securities and Exchange Commission (SEC) alleges the project’s native token, MNGO, is a security.

The SEC’s labeling of the token raises knotty problems about whether Mango Markets’ “version 4” can proceed without facing regulators’ wrath. The SEC hasn’t alleged wrongdoing by Mango. But the agency last week accused MNGO trader Avraham Eisenberg, who drained $116 million from the exchange in October, of securities market manipulation.

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“By noting that purportedly ineligible U.S. investors participated in the token sale, the SEC is implying that it also has authority to bring a future case asserting this is an unregistered securities offering,” said Howard Fisher, a former SEC trial counsel and partner at the law firm Moses Singer.

Breach of the Duty of Oversight Liability Extends to Officers as Well as Directors

In a shareholder claim against the former global head of HR at McDonald’s, the Delaware Chancery Court has held that liability for breach of the duty of oversight, which Delaware courts had previously extended only to corporate directors, can also extend to corporate officers, as well. In addition, in a separate part of the opinion that may not gain as much attention as the duty of oversight ruling, the same court also held that a breach of fiduciary duty claim can be alleged against an officer based on sexual harassment allegations….

How the Crypto Industry Can Prepare for Regulatory Scrutiny: Earn Respect from Regulators

Their posture is not, “We’ve seen what’s happened with FTX and others and think it’s time we bring regulation to the space to make it safer.”

Rather, it seems to be: “We don’t want to have any responsibility for this space that we think is disreputable and risky, and we certainly don’t want to be seen as legitimizing it by regulating it.”

What does this mean for founders and companies operating in this space? If the past two years were about educating government, the next two will need to be about earning their respect as a necessary precondition for trust.

This might mean starting to look more like the institutions they already regulate and are familiar with. Rather than saying you deserve to be part of the financial system, you’ll need to show it.

Sen. Ted Cruz Wants to Force Capitol Hill Vending Machines to Accept Crypto

But Sen. Ted Cruz (R-Texas) has proposed requiring vendors on Capitol Hill to accept cryptocurrency as payment.

On Wednesday, Cruz introduced a concurrent resolution that, if adopted, would require the Architect of the Capitol, the Secretary of the Senate and the Chief Administrative Officer of the House of Representatives to only contract with food service contractors and vending machine operators that accept cryptocurrency for the Capitol complex in Washington, D.C.

FTX Owes Money to Netflix, Crypto Exchange Binance, Wall Street Journal, Filing Shows

It’s the list everyone has been waiting for, minus 9.7 million redacted customer names. But the 116-page FTX creditor list, which names companies including Netflix (NFLX) and Apple (AAPL), still paints a comprehensive picture of the failed crypto enterprise’s reach and the impact of its collapse.

Media companies, universities, airlines and charities, among others, appear on the list, a court filing from Wednesday shows. The document was filed by lawyers for the company as part of the bankruptcy proceedings in the U.S. Bankruptcy Court in Delaware.

Judge John Dorsey, who is overseeing the proceedings, allowed the names of individual creditors to remain sealed for three months at a hearing in early January, but requested a list of institutions that invested in the company to be filed by FTX lawyers.