The NYT's Deep Dive on the SEC's Pivot Away from Crypto Cases

The S.E.C. Was Tough on Crypto. It Pulled Back After Trump Returned to Office

While crypto firms hailed what Mr. Atkins has called a “new day” for their industry, career S.E.C. lawyers who had brought some of these cases have expressed alarm at the pullback. […]

Christopher E. Martin was a senior trial counsel at the S.E.C. and led the case against one of those crypto firms. He retired after the agency dropped the suit this year.

“It was a complete surrender,” he said of the S.E.C.’s broader retreat. “They’ve really just thrown investors to the wolves.” […]

During the presidential transition, Mr. Gensler’s enforcement chief, Sanjay Wadhwa, implored enforcement staff to “do the work the American people are paying us to do,” according to people with knowledge of his comments who spoke on the condition of anonymity to discuss a private meeting.

Some of the staff, however, got cold feet.

One of the crypto team’s senior leaders took an unannounced multiweek vacation, the people with knowledge said, and did not respond to emails about the cases. Another senior official refused to sign her name to one of the few crypto cases the agency brought after Election Day. Other officials stopped working on crypto cases altogether, stymying Mr. Gensler’s final push.

US prosecutors probe last-ditch funding pleas before First Brands collapsed

US prosecutors are examining representations made by First Brands and investment bank Jefferies as the car parts maker rushed to refinance debt shortly before it collapsed into bankruptcy, people with knowledge of the investigation have told the Financial Times.

The prosecutors have sent subpoenas, which are legal demands requiring recipients to produce evidence for an investigation, to a range of parties with links to First Brands, according to the people. Investigators are trying to determine whether laws governing securities, bank and wire fraud were violated in the failure of First Brands, which declared bankruptcy in September with nearly $12bn in debt and off-balance sheet financing.

The investigation was seeking evidence of communications made to lenders and potential lenders to First Brands, including financial information, the people said. The investigation is being led by the Manhattan US attorney’s office, the elite outpost of the US justice department that often takes a lead role in prosecuting financial crime.

From FTX to Terraform, Crypto Cases End With Years Behind Bars

Engelmayer rejected prosecutors’ recommendation of a 12-year prison sentence following Kwon’s guilty plea to fraud charges in August stemming from the $40 billion collapse of the Singapore-based crypto firm he cofounded in 2018. Calling the proposed sentence “not reasonable,” the judge instead entered a 15-year sentence because of the extraordinary scope of the fraud and the sheer number of victims, which made restitution “impracticable.”

The sentence places Kwon among a growing list of high-profile figures in the cryptocurrency industry who have received significant prison terms since 2024 for fraud and money-laundering schemes. Still, like Kwon’s case—which imposed a maximum sentence of 25 years—the sentences in many of these cases have fallen short of the maximum penalties available to judges.

Sentencing outcomes across the crypto sector have varied, depending on the scale of misconduct, the defendant’s cooperation with prosecutors and the specific charges involved. But judges have still consistently imposed significant sentences on the faces of these companies.

Vanguard Equity Quant Says Bitcoin Still a ‘Digital Labubu’ Toy, For Now

Vanguard Group may now allow clients to trade spot Bitcoin exchange-traded funds, but one of the firm’s senior investment leaders says its underlying view of crypto remains unchanged.

Bitcoin is better understood as a speculative collectible — akin to a popular plush toy — than as a productive asset, according to John Ameriks, Vanguard’s global head of quantitative equity, who said the token lacks the income, compounding and cash-flow properties the firm looks for in long-term investments.

Absent clear evidence that the underlying technology delivers durable economic value, “it’s difficult for me to think about Bitcoin as anything more than a digital Labubu,” he said Thursday at Bloomberg’s ETFs in Depth conference in New York, making a reference to the viral stuffed toy collectibles.