Two SEC Lawyers Resign in Fallout from DEBT Box Case

SEC Lawyers Resign After Judge Blasts Agency in DEBT Box Crypto Case

Two Securities and Exchange Commission lawyers resigned after a federal judge sanctioned and sharply rebuked the Wall Street regulator for “gross abuse” of power in a crypto case.

Michael Welsh and Joseph Watkins stepped down this month after an SEC official told them that they would be terminated if they stayed, according to people familiar with the matter. The pair were lead attorneys on a case against Digital Licensing Inc., a crypto platform known as DEBT Box.

Hedge Fund Manager Sentenced for Operating Multimillion-Dollar Ponzi Scheme

A Florida man was sentenced today to one year and one day in prison for using his hedge fund management company as part of a years-long, multimillion-dollar Ponzi scheme.

According to court documents, Michael Wayne Williams, 48, of Miami, was the founder and operator and investment manager of Highguard Capital and its affiliated entities, Guardian Opportunity Fund and Guardian Opportunity Management. Williams convinced his victims to invest over $3.6 million in Guardian Opportunity Management and used their money for undisclosed and unauthorized purposes, including to settle civil lawsuits accusing him of fraud and to repay investors from discontinued funds that he previously managed.

Williams pleaded guilty in October 2023 to wire fraud.

In Silicon Valley, You Can Be Worth Billions and It’s Not Enough

Andreas Bechtolsheim doesn’t like to waste time. The entrepreneur made one of the most celebrated investments in the history of Silicon Valley — the initial $100,000 that bankrolled a search engine called Google in 1998 — while on the way to work one morning. It took just a few minutes.

Twenty one years later, Mr. Bechtolsheim may have seized a different kind of opportunity. He got a phone call about the imminent sale of a tech company and allegedly traded on the confidential information, according to charges filed by the Securities and Exchange Commission. The profit for a few minutes of work: $415,726.

The history of Silicon Valley is full of big bets and abrupt downfalls, but rarely has anyone traded his reputation for seemingly so little reward….

Sam Bankman-Fried agrees to help FTX investors in lawsuits against Tom Brady, Larry David

Investors in Sam Bankman-Fried’s bankrupt crypto firm FTX agreed to drop their claims against the convicted fraudster in exchange for his cooperation in lawsuits against other defendants — including celebrities Tom Brady, Gisele Bundchen and Larry David who promoted the company before its stunning collapse.

According to the settlement — filed by a group of FTX investors in Miami federal court Friday — Bankman–Fried would be free of any civil liabilities from the multi-district litigation now and in the future, according to Bloomberg.

The Mango Guy

I’ve become increasingly convinced that the right regulatory approach to crypto might be “let them scam each other as much as possible, and laugh at the results,” but the US Department of Justice disagrees, and their position seems to be more popular with juries….

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[Avi Eisenberg] definitely did “market manipulation,” in the traditional sense; whether or not he did a crime depends on whether you think “market manipulation,” in the traditional sense, is illegal when the market is crypto. He did not. The Justice Department does….

Failed Mt. Gox’s $9 Billion of Bitcoin Closer to Being Disbursed

Some creditors of the Mt. Gox crypto exchange said they received updates on their claims, indicating the officials winding up the platform are stepping up efforts to return a $9 billion Bitcoin hoard.

The updates included information such as the number of digital tokens to be returned and in some cases repayment dates, according to the creditors. Mt. Gox’s trustee didn’t immediately respond to an email seeking comment.

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Once the world’s biggest Bitcoin exchange, Tokyo-based Mt. Gox was hacked in 2011 and went bankrupt in 2014. Last year, US prosecutors accused two Russian nationals of conspiring with others to break into the exchange’s servers.

‘Buy Bitcoin’ Sign Flashed Behind Janet Yellen Receives Bid of Almost $140,000

Here’s the latest sign that animal spirits have returned to the cryptocurrency market: A legal pad with the words “Buy Bitcoin” scribbled on it is currently fetching bids of almost $140,000 in an online auction.

The hastily written message became a rallying call for supporters of the cryptocurrency after it was flashed behind then-Federal Reserve Chair Janet Yellen during Congressional testimony almost seven years ago. The bidding for the ink drawling is slated to end late Wednesday.