Settle in for "The Only Crypto Story You Need"

The Only Crypto Story You Need, by Matt Levine

There was a moment not so long ago when I thought, “What if I’ve had this crypto thing all wrong?” I’m a doubting normie who, if I’m being honest, hasn’t always understood this alternate universe that’s been percolating and expanding for more than a decade now. If you’re a disciple, this new dimension is the future. If you’re a skeptic, this upside-down world is just a modern Ponzi scheme that’s going to end badly—and the recent “crypto winter” is evidence of its long-overdue ending. But crypto has dug itself into finance, into technology, and into our heads. And if crypto isn’t going away, we’d better attempt to understand it. Which is why we asked the finest finance writer around, Matt Levine of Bloomberg Opinion, to write a cover-to-cover issue of Bloomberg Businessweek, something a single author has done only one other time in the magazine’s 93-year history (“What Is Code?,” by Paul Ford). What follows is his brilliant explanation of what this maddening, often absurd, and always fascinating technology means, and where it might go. —Joel Weber, Editor, Bloomberg Businessweek

Speech by SEC Chair Gary Gensler: “Competition and the Two SECs” Remarks Before the SIFMA Annual Meeting

1933 was an important year in SEC history.

No, I’m not referring to the passage of the first federal securities law.

I’m not actually referring to the Securities and Exchange Commission at all.

I mean the other SEC: you know, the Southeastern Conference.

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The Southeastern Conference was first formed in February 1933. That was a mere three months before Congress and President Franklin Delano Roosevelt enacted the Securities Act of 1933. About a year and a half later, they set up the slightly younger SEC — the one where I’m honored to work.

A Focus on Competition

What does the SEC have to do with the SEC?

Beyond our similar abbreviations and vintages, the two SECs share one big thing in common: a focus on competition.

Though it may seem less obvious than at the Southeastern Conference, competition is central to the Securities and Exchange Commission’s remit, too.

SEC Charges Canadian Cannabis Company and Former Senior Executive with Accounting Fraud

The Securities and Exchange Commission today charged Cronos Group Inc., a Nasdaq-listed cannabis company based in Toronto, for improperly accounting for millions of dollars of revenue and for other accounting misconduct in multiple reporting periods. The SEC also charged Cronos’s former Chief Commercial Officer, William Hilson, with fraud and aiding and abetting the company’s violations. In agreeing to settle with Cronos, the Commission determined that the company should not incur a financial penalty, given its timely self-reporting, significant cooperation, and remediation.

According to the SEC’s order, in three separate quarters between 2019 and 2021, Cronos submitted financial statements with the SEC that contained material accounting errors related to, among other things, revenue recognition and goodwill impairment. The order also found that, in one of the quarters, Hilson entered into an undisclosed oral agreement to sell cannabis raw material and to repurchase cannabis product in the following quarter. This agreement was neither known nor accounted for by Cronos, which discovered the $2.3 million accounting error during an internal investigation. After discovering the accounting errors, Cronos promptly reported the misconduct to the SEC and provided extensive cooperation that meaningfully advanced the Commission’s investigation. It also took effective remedial steps to enhance its internal accounting controls.

Two Chinese Intelligence Officers Charged with Obstruction of Justice in Scheme to Bribe U.S. Government Employee and Steal Documents Related to the Federal Prosecution of a PRC-Based Company | DOJ

According to court documents, Guochun He, also known as “Dong He” and “Jacky He,” and Zheng Wang, also known as “Zen Wang,” allegedly orchestrated a scheme to steal files and other information from the U.S. Attorney’s Office for the Eastern District of New York related to the ongoing federal criminal investigation and prosecution of a global telecommunications company (Company-1) based in the PRC, including by paying approximately $61,000 in Bitcoin bribes to a U.S. government employee who the defendants believed had been recruited to work for the PRC, but who in fact was a double agent working on behalf of the Federal Bureau of Investigation (FBI).

Warren, Ocasio-Cortez Ask Regulators to Clarify Stance on Crypto Hires

U.S. Senator Elizabeth Warren (D-Mass.) and Representative Alexandria Ocasio-Cortez (D-N.Y.) have asked regulators to clarify their rules on former employees taking roles in the crypto industry.

In a letter sent to almost all federal financial regulators, the lawmakers noted “the increasing number of revolving door hires” and asked how long individuals involved in regulating the crypto industry are barred from seeking employment in it.

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The letter was addressed to the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Treasury, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).

‘The million-dollar question’: CFTC chair on regulating crypto alongside the SEC

Speaking at a Rutgers Law, Wall Street Blockchain Alliance, and Lowenstein Sandler event in Manhattan on Monday, Commodity Futures Trading Commission Chair Rostin Behnam sought to dispel the narrative of a turf war between his agency and the Securities and Exchange Commission.

“It’s a pretty cynical view to suggest two agencies can’t figure it out and work together,” he said to an audience of lawyers and industry leaders.

With crypto legislation stalled in Congress and unlikely to pass with elections looming, the regulators have sparred in a series of public talks and enforcement actions as to where authority lies. In particular, the question of which cryptocurrencies are commodities, and subject to CFTC oversight, as opposed to securities, and subject to SEC oversight, has created a perception of division between the two key agencies.

SEC Names Jason J. Burt as Regional Director of the Denver Office

The Securities and Exchange Commission today announced that Jason J. Burt has been named Regional Director of the Denver Office, where he has served as Acting Co-Director since July.

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Prior to becoming Acting Co-Director of the Denver Office, Mr. Burt served as the Office’s Associate Regional Director, overseeing the region’s enforcement program beginning in 2019.  During his 18-year tenure with the Commission, Mr. Burt has served at both the SEC headquarters and in the Denver Office.

S. Korean Prosecutors Request Eight Year Prison Sentence for Ex-Bithumb Chairman on $70M Fraud ChargesSouth Korean prosecutors have asked the court to sentence Lee Jung-hoon, the former chairman Bithumb Holdings, which operates South Korean crypto exchange Bithumb, to eight years in prison on $70 million fraud charges.

The trial took place on October 25 and the verdict will be delivered on December 20, according to Yonhap.

Lee is accused of stealing $70 million from Kim Byung Gun, chairman of cosmetic surgery empire BK Group, during negotiations of a deal that would have seen Kim acquire Bithumb Holdings.