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Elon Musk’s $56 Billion Tesla Pay Deal Struck Down Again: Details

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2 days ago

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A Delaware Court judge has once again rejected Elon Musk’s $56 billion pay package. The decision, issued by Judge Kathaleen McCormick, strikes down the compensation agreement despite shareholders’ attempt to “re-ratify” the deal. McCormick’s ruling follows a previous judgment in January, where the pay package was invalidated. The judge’s decision adds another layer to the ongoing legal battle, with Tesla expected to pursue an appeal.

Elon Musk’s $56B Tesla Compensation Deal Invalidated: Court Ruling Details

According to a Monday court filing, Judge Kathaleen McCormick has denied the tech company’s request to revise her earlier decision regarding Elon Musk’s pay package. The legal team for Tesla had argued that the recent shareholder vote to “re-ratify” the deal addressed the court’s concerns from the first ruling.

However, McCormick rejected this argument, citing that despite the vote, the pay package remained problematic.

The judge maintained that the CEO’s compensation deal was influenced by his power over the board of directors, leading to terms that were not “entirely fair.” In her opinion, Tesla had failed to ensure that investors were fully informed before agreeing to the pay package. McCormick reiterated that while the board could have chosen an appropriate amount of compensation, it capitulated to Elon Musk’s terms, which the court found to be excessive.

The judge added, 

“There were undoubtedly a range of healthy amounts that the Board could have decided to pay Musk. Instead, the Board capitulated to Musk’s terms and then failed to prove that those terms were entirely fair.”

Moreover, the legal setback also carries a financial penalty for Tesla. In addition to the ruling on the compensation package, the court awarded the plaintiff’s attorneys a $345 million fee, which the tech company must pay in cash or shares. 

In response, the Tech giant said,

“This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders.”

Tesla To Appeal Ruling At Delaware Supreme Court

Following McCormick’s decision, the tech company will appeal the ruling to the Delaware Supreme Court. The company had hoped that the re-ratification by shareholders would allow the deal to proceed, but McCormick’s decision has created additional legal hurdles. 

The decision also raises broader questions about corporate governance and executive compensation in the tech industry. The outcome of the appeal could set an important precedent for future cases involving large executive pay packages.

In other legal developments, the tech giant CEO filed a lawsuit against OpenAI and Microsoft, accusing the companies of engaging in anti-competitive practices. The lawsuit, filed in the U.S. District Court for the Northern District of California, claims that OpenAI’s shift to a for-profit model undermines competition in the AI sector. Elon Musk’s legal team argues that OpenAI, backed by a $13 billion investment from Microsoft, has been using its influence to suppress competitors, including xAI.

Despite the ongoing legal challenges surrounding his pay package, Musk experienced a positive outcome in a separate legal battle. A U.S. District Court judge recently ruled in Musk’s favor in a case involving the U.S. Securities and Exchange Commission (SEC). The SEC had sought to sanction Elon Musk over his handling of the X acquisition, but the court denied the request. The court noted that Elon Musk had already reimbursed the SEC for costs related to a missed meeting.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Donald Trump Picks Paul Atkins As Next US SEC Chair

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1 hour ago

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December 4, 2024

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US President-elect Donald Trump has picked pro-crypto Paul Atkins as the next chair of the US Securities and Exchange Commission. Atkins will replace the current US SEC chair, Gary Gensler, who will resign on January 20, the same day Trump becomes president.

Donald Trump Picks Paul Atkins For US SEC Chair Role

In a post on the Truth Social platform, Donald Trump announced that he was nominating pro-crypto Paul Atkins for the US SEC chair role. The US president-elect mentioned that Atkins is a proven leader for “common sense” regulations.

Trump also alluded to the crypto industry, noting that Atkins also recognizes that digital assets and other innovations are critical to making America greater than ever.

This development comes after weeks of speculation, during which names like Robinhood Chief Legal Officer (CLO) Dan Gallagher had come up as potential candidates to succeed Gensler. However, Dan Gallagher stepped out of the race when he clarified that he didn’t want the job.

Meanwhile, Paul Atkins’ nomination will undoubtedly delight individuals like pro-XRP lawyer John Deaton, who endorsed him for the job.

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Boluwatife Adeyemi

Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across DeFi, NFTs, smart contracts, and blockchain interoperability, among others. Boluwatife has a knack for simplifying the most technical concepts and making it easy for crypto newbies to understand. Away from writing, He is an avid basketball lover and a part-time degen.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Australia Crypto Industry Slams ASIC Digital Asset Regulation Draft Changes

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7 hours ago

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December 4, 2024

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The Australian Securities and Investments Commission (ASIC) released a new consultation paper while providing key updates to the digital assets guidance and related financial products. With this update, the regulator seeks to provide greater clarity on how the existing financial product definition applies to crypto, and can be part of the digital asset regulation. However, some crypto industry experts slammed the move saying that it will benefit only big businesses and push small players out of the market.

Australia’s ASIC Seeks Feedback on Crypto Guidance

Australia’s top financial regulator ASIC released Consultation Paper 381 (CP 381) earlier today outlining the updates to Information Sheet 225 (INFO 225) regarding (IETH) and related financial products. These products will provide clarity on how some of the traditional market rules are also applicable to digital assets.

ASIC Commissioner Alan Kirkland emphasized the importance of balancing responsible financial innovation with consumer protection. He said:

“We want to promote the growth of responsible financial innovation while ensuring consumer protection. A well-regulated financial system benefits everyone in the community as it supports consumer confidence, market integrity and facilitates competition and innovation”.

Kirkland also noted that Australia’s regulatory regime is broad as well as technology-neutral allowing digital assets to accommodate within the existing framework for financial products. Furthermore, ASIC is seeking feedback on key issues which include:

  • The application of existing financial services licensing processes to digital asset businesses.
  • The regulatory challenges related to wrapped tokens and stablecoins.
  • The potential for regulatory relief for businesses transitioning to new regimes.

Furthermore, ASIC noted that it would consult on these updates until February 28, 2025. The regulator will publish a final version of INFO 225 in mid-2025 after considering the feedback received.

Moreover, it would also continue to use its regulatory tools to protect consumers and maintain market integrity within the digital asset space. These guidelines will also be applicable to some of the top crypto exchanges in Australia.

Crypto Industry Experts Slam the Move

Crypto industry experts stated that compliance will no longer be optional under the new regulatory rules and market players are likely to have a close look at it. There have also been growing concerns that ASIC’s draft guidance could leave crypto startups vulnerable, potentially driving an exodus of firms from Australia.

Crypto lawyer Joni Pirovich commented on LinkedIn that the updated guidance could make launching a crypto business in Australia “as costly as, or even more expensive than, launching offshore”. She added:

“From a timing perspective, Australian innovators that want to launch now will likely do so offshore. Those that are based here face a significant step up in compliance costs”.

Liam Hennessy, a partner at Clyde and Co law firm, also echoed similar thoughts on this. He said: “Obviously, the bigger businesses will be better able to withstand all of that regulation, all of that legal cost, compliance cost that is associated with it. Smaller businesses may struggle”.

However, he also appreciated the move towards greater regulatory clarity. Hennessy said: “It is a significant piece of regulatory guidance to the market. Anything which gives regulatory clarity is a good thing for the market.”

The Changing Digital Assets Regulation and Landscape

Australia’s digital assets landscape has been changing amid global developments and the emergence of crypto ETFs in the market. As part of the region’s improving clarity on digital asset regulation, asset manager Monochrome launched its Ethereum ETF (IETH) amid the rising demand growth in the local market. Crypto investment products have been also gaining traction amid changes in the global regulatory market and rising acceptance.

Looking at the regulatory development, crypto firms are also looking to expand in Australia. Circle has announced the expansion of its USDC stablecoin operations into Australia while collaborating with venture capitalist Mark Carnegie’s MHC Digital Group. The partnership aims to leverage the robust financial infrastructure of Australia enhancing the utility and accessibility of USDC in the region.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast with a keen understanding of financial markets. His interest in economics and finance has led him to focus on emerging Blockchain technology and cryptocurrency markets. He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Bitcoin Jesus Roger Ver Fights US Indictment Alleging Tax Evasion: Details

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16 hours ago

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December 4, 2024

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Roger Ver, recognized in the crypto community as “Bitcoin Jesus,” is contesting an eight-count indictment brought by the U.S. Attorney for the Central District of California. Ver, known for his early investments in Bitcoin and advocacy for digital assets, is accused of failing to report $50 million in taxes on Bitcoin transactions valued at $240 million in 2017. 

Additional charges allege that Ver underrepresented the value of his businesses during his 2014 renunciation of U.S. citizenship to avoid higher exit taxes.

Roger Ver Fights Tax Evasion Charges

According to FOX Business, Roger Ver is challenging allegations that he evaded paying $50 million in taxes on substantial Bitcoin sales in 2017. Prosecutors claim Ver also underreported the value of two companies he owned, MemoryDealers US and Agilestar, when he expatriated in 2014. 

Allegedly, the underreporting allowed him to avoid a higher exit tax, a levy imposed on unrealized capital gains for individuals relinquishing U.S. citizenship.

Ver’s legal team, comprising attorneys from prominent law firms Steptoe LLP and Kimura London & White, filed a motion to dismiss the indictment. The motion argues that the Justice Department engaged in unconstitutional government overreach and selectively withheld key evidence. It also claims the actions violated Ver’s right to due process. 

The filing includes correspondence between Ver and his attorneys, indicating his efforts to ensure compliance with crypto tax regulations at the time.

Allegations of Government Overreach and Communication Misuse

Roger Ver’s legal representatives contend that prosecutors improperly obtained privileged attorney-client communications and used them to build their case. These communications include detailed emails in which Ver sought professional advice to meet his tax obligations, even under ambiguous guidelines.

The legal team also claims that the indictment reflects selective enforcement against Roger Ver, a vocal critic of U.S. cryptocurrency regulations. The motion claims crypto tax rules during Ver’s expatriation were unclear, making criminal charges unwarranted.

Furthermore, the attorneys assert that the government’s actions violate core constitutional protections for individuals seeking to renounce citizenship.

More so, Ver’s defense argue that crypto tax regulations were insufficiently defined at the time of his alleged offenses. The IRS began issuing guidance on virtual assets as property in late 2014, after Ver had renounced his U.S. citizenship. 

His legal team maintains that Roger Ver relied on attorneys and accountants to comply with all applicable laws. In an email correspondence dated April 2013 and included in the filing, Ver expressed to his lawyer, 

“I want to make sure that my exit tax payments are as clean as possible, with no room to have trouble from the IRS in the future.”

Moreover, emails reveal that Ver’s advisors recommended obtaining third-party appraisals to address the difficulty of valuing Bitcoin accurately, given the low market liquidity in 2014. The defense further argues that any discrepancies were unintentional and do not warrant criminal prosecution.

The motion to dismiss is being reviewed by the U.S. District Court for the Central District of California. Ver’s attorneys express optimism that the incoming Trump administration, may influence the case’s outcome.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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