Supreme Court Urged to Limit SEC's Disgorgement Power

SEC Power to Recoup Illegal Profits at Risk as Justices Eye Case

The SEC’s practice of forcing defendants to relinquish profits from illegal activities, even when there’s no apparent harm to investors, is under scrutiny again as influential groups urge the US Supreme Court to take up a case that could limit the Wall Street cop’s powers.

The stakes of the fight were laid out in briefs filed this month supporting petitioner Ongkaruck Sripetch, a trader who was ordered to pay more than $2 million in disgorgement by the US Court of Appeals for the Ninth Circuit in September for his role in a pump-and-dump scheme.

The Securities and Exchange Commission, which pulled in a record $6 billion through disgorgement in fiscal 2024 before the Trump administration took over, should only be able to use the tool to return investor losses, according to groups including free market boosters such as the Cato Institute and the California Alternative Investments Association.

Do Kwon Says Five Years in Prison Enough for Terra Crypto Fraud

Terraform Labs Pte. co-founder Do Kwon says he should get no more than five years in prison in the US for his role in a fraud tied to the $40 billion collapse of the TerraUSD stablecoin in 2022.

Kwon pleaded guilty in August to conspiracy and wire fraud and averted a trial after he was extradited to the US from Montenegro, where he’d been arrested and convicted of using a phony passport while a fugitive from charges in his native South Korea.

In their sentencing recommendation filed late Wednesday, Kwon’s lawyers said that while prosecutors agreed in his plea deal not to seek more than 12 years in prison, that is “far greater than necessary” to achieve justice.

North Korea Suspected of $30 Million Crypto Hack, Yonhap Says

North Korean hacking group Lazarus is suspected of being behind an exploit that saw 45 billion won (about $30 million) drained from South Korea’s largest crypto exchange Upbit on Thursday, Yonhap News reported.

South Korean authorities plan to carry out an on-site investigation at the crypto exchange and believe Lazarus was behind the incident, according to the report, which cited unidentified government and industry sources.

S&P downgrades Tether’s assets to lowest level

Tether’s ability to maintain its peg to the US dollar has been called into question by S&P Global Ratings, which downgraded the stablecoin operator’s reserves to its lowest measure due to rising exposure to high-risk assets.

In a note on Wednesday, the rating agency downgraded its assessment of Tether’s assets to “weak” from “constrained”. It also flagged “an increase in high-risk assets” backing the stablecoin, with corporate bonds, precious metals, bitcoin and secured loans accounting for 24 per cent of total reserves at the end of September, up from 17 per cent a year ago.

Tether runs USDT — by far the world’s biggest stablecoin with about $184bn in circulation — a form of digital cash outside the banking system that is pegged to the dollar and mostly backed by high-quality securities such as US Treasuries.