The U.S. Securities and Exchange Commission (SEC) is attempting to create a “chilling effect” on the blockchain industry by labeling nine tokens at the center of an insider trading case as securities, without giving the token creators a chance to defend themselves. Last year, the SEC lodged a complaint against former Coinbase manager Ishan Wahi for tipping off his brother and close friend regarding new listings of tokens on Coinbase. Wahi recently pleaded guilty to insider trading charges, but is still contesting the securities fraud charges. The SEC’s move is seen as a warning to the blockchain industry, as it could lead to more stringent regulations and enforcement actions in the future.
The Blockchain Association, a Washington-based crypto lobbying organization, is challenging the SEC’s attempt to charge a man with securities fraud for trading in nine tokens, including AMP, XYO, LCX, POWR, RLY, RGT, DDX, DFX, and KROM. The tokens in question have low trading volume and do not rank in the top 150 tokens tracked by CoinGecko. The Association is arguing that these tokens are not securities, and therefore the man cannot be charged for securities fraud. They are also arguing that the SEC is engaging in “absentee enforcement” as the token creators are not linked to the case and cannot intervene or be otherwise heard. The Association is hoping to advance the argument that these tokens are not securities, and that the man should not be charged with securities fraud.
The U.S. Securities and Exchange Commission (SEC) is facing criticism for its alleged backdoor approach to setting a precedent in its case against FTX and its former exchange token FTT. The SEC has accused FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison of securities law violations, but neither of them have contested the complaint as part of a plea agreement. Critics argue that the SEC’s behavior is improper for a government agency and is in violation of due process. They also argue that the SEC’s motive is to set a precedent that can be used in other cases, which the SEC has already done in other cases.
The Administrative Procedure Act (APA) is a federal statute that outlines the procedures of administrative law, and how federal administrative agencies make rules and adjudicate. The Securities and Exchange Commission (SEC) has been accused of not following the APA when it comes to regulating the securities industry. Instead, the SEC has issued a long history of inconsistent, incomplete, and confusing public statements, and has pursued a pattern of “regulation by enforcement”. This means that the SEC has been making decisions without following the proper procedures outlined in the APA. This has led to criticism that the SEC is not following the law and is instead using “regulation by unchallengeable allegation”.
The U.S. digital asset industry is facing a confusing and opaque legal landscape due to the SEC’s enforcement actions. The SEC’s docket outlines in detail how digital asset laws and prior enforcement have caused material changes to the value of tokens. This has made it difficult for businesses to operate in the U.S. digital asset market, as the legal landscape is constantly shifting. The SEC’s docket provides a comprehensive overview of the current state of digital asset laws and enforcement, and offers insight into how businesses can navigate this complex and ever-changing legal environment.
A court case involving the US Securities and Exchange Commission (SEC) and crypto entrepreneur Maksim Zaslavskiy has taken an interesting turn. Zaslavskiy’s lawyers have filed a motion to dismiss the SEC’s complaint regarding securities fraud, arguing that the tokens in question are not securities. The SEC’s pronouncement that the tokens are securities has already resulted in delisting from cryptocurrency trading platforms, such as Binance.US. Zaslavskiy is due back in court on April 6 and has pleaded guilty to insider trading and other charges. The outcome of this case could have a major impact on the cryptocurrency industry, as it could set a precedent for how the SEC views digital tokens.
