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President Biden, SEC Face Backlash From Coinbase, Ripple

Published

5 months ago

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President Joe Biden recently vetoed a House Joint Resolution to repeal the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121). This bulletin mandates financial institutions holding cryptocurrencies so that customers can list these assets on their balance sheets.

Critics argue that this requirement complicates the ability of financial institutions to collaborate with crypto companies. Biden’s statement emphasized that the veto was necessary for consumer and investor protection.

Concerns Over President Biden’s SAB 121 Veto

Prominent figures in the cryptocurrency industry have expressed their discontent with the President’s decision. Faryar Shirzad, Chief Policy Officer at Coinbase, criticized the veto, stating,

“The President was not served well by his team. He is using his extraordinary veto power to protect a sneaky bureaucratic move by the SEC Chair to hide behind his staff to destabilize an entire industry.” 

Shirzad argued that defending the views of an agency’s staff, which were not formally considered by the Commission, against bipartisan majorities in Congress is a disservice to President Biden and the Office of the President.

Ripple CEO Brad Garlinghouse also commented on the situation in an interview with CNBC. He highlighted the increasing institutional involvement in the crypto industry and noted that the election of leaders who support crypto innovation and consumer protection is a positive development. However, he expressed concerns about the broader implications of the SEC’s guidance on the industry.

Crypto Community Response

The veto has also drawn strong reactions from Congress. Senator Cynthia Lummis and Representative Patrick McHenry, critical proponents of the resolution, have voiced their opposition. McHenry stated, 

“The President’s veto weakens consumer protections in digital asset markets and upends decades of custody rules. By rejecting the bipartisan consensus of Congress, the Administration is doubling down on its failed approach. Senate action on #FIT21 is more urgent than ever.”

Both houses of Congress had passed the resolution with bipartisan support, reflecting widespread concern about the SEC’s approach to regulating digital assets. Lawmakers have urged the administration to reconsider the veto or work with the SEC to rescind the guidance.

The banking sector has also expressed reservations about the guidance. In a letter to President Biden, banking organizations noted that the Government Accounting Office’s assessment of SAB 121 blocks regulated banking groups from offering custody services. This sentiment was echoed by lawmakers, who stressed the need for a regulatory framework supporting innovation and consumer protection.

Read Also: El Salvador President Nayib Bukele Begins Second Term to Lead Bitcoin Adoption

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Kelvin is a distinguished writer specializing in crypto and finance, backed by a Bachelor’s in Actuarial Science. Recognized for incisive analysis and insightful content, he has an adept command of English and excels at thorough research and timely delivery.

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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Regulation

Polymarket Faces French Ban After Massive Bets On US Election Results

Published

12 hours ago

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November 7, 2024

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Polymarket, a crypto-based prediction market, is likely to be prohibited by France’s gambling regulator, the ANJ, after a huge amount of bets were placed on the 2024 U.S. presidential election. Since the global audience engaged in prediction platforms, Polymarket experienced a record jump, with $450 million expected to be distributed to users following the victory of Donald Trump.

This increase of betting volume and large stakes has become a matter of concern for the French regulator because the platform offers unlicensed gambling services.

$450 Million in Payouts Expected After U.S. Election Bets

Prediction markets, which are expected to increase their payout to election bettors to around $450m following Donald Trump’s projected win, are attracting increasing attention. 

Although conventional polls pointed to a closer contest, prediction markets such as Polymarket and Kalshi recorded a steep rise in Trump’s chances in the last few days, indicating a strong divergence with poll-based expectations.

Among the active users of Polymarket, a French trader called “Theo” made a $26 million bet on Trump’s win and won $49 million. This big bet made Polymarket popular, as the French authorities paid attention to the platform and its popularity among French residents, which led to concerns about the compliance of the platform with French gambling legislation.

France’s ANJ Considers Blocking Access to Polymarket

The ANJ has claimed that Polymarket is involved in gambling which is only allowed in France by licensed operators. According to local media, the regulator has the power to ban access to unlicensed gambling sites and is expected to restrict access to Polymarket soon. 

An ANJ insider said: “Polymarket is just betting on something that is completely uncertain, which is exactly what gambling is.”

If put in place, the ban would prevent the usage of the application in France, despite the fact that users can still try to avoid the restriction by connecting to VPN. The ANJ could also try to influence media outlets and directories to stop advertising or linking to Polymarket and, thus, limit its audiences even more.

Regulatory Concerns Over Market Manipulation

The high level of activity on Polymarket has led to speculations that the platform may be used for market manipulation. Two blockchain analysis firms, Chaos Labs and Inca Digital, recently revealed that there was potential wash trading within Polymarket’s U.S. presidential betting market where the same assets are bought and sold to simply create a fake market. This type of trading is rather manipulative and can lead to the distortion of signals on the market and mislead other participants.

The US Commodity Futures Trading Commission also has concerns about prediction markets and put forward a rule in May aiming at stricter regulation of such markets due to the potential for manipulation.

Although no final decision has been reached, regulatory actions could impact Polymarket’s ability to operate freely in other markets, including the U.S.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

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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FTX Co Founder Gary Wang Appeals For No Jail Time, Here’s Why

Published

14 hours ago

on

November 7, 2024

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FTX co-founder Gary Wang has requested a federal judge not to send him to prison. He noted that he is testifying against the former business partner, Sam Bankman-Fried, someone he has known for a long time in a fraud case.

The lawyer for Wang submitted a sentencing memo in Manhattan federal court wherein he claimed that his client should not be incarcerated as he provided assistance to the prosecutors as well as his role in the scheme was comparatively less.

Wang, who pleaded guilty to fraud and conspiracy when FTX went bankrupt in 2022, is to receive his sentencing on the 20th of November.

FTX Co-Founder Gary Wang Appeals for No Jail Time

The defense counsel for FTX co-founder Gary Wang highlighted his client’s early cooperation with the federal prosecutors as one of the key reasons why the court should consider him for mercy. According to Graff, Wang was one of the first FTX executives to meet with the authorities and share information on the FTX and Alameda Research. Wang gave a testimony in the trial that led to the recent conviction of Bankman-Fried who was sentenced to 25 years in prison.

Speaking at the trial, Wang described how he was ordered to change the code of FTX in order to enable Alameda Research to use the assets of the company’s clients, which is one of the key points of Bankman-Fried’s fraud.

FTX co-founder’s lawyer noted that his involvement in the fraud was less than some of the other former executives, including Caroline Ellison, former CEO of Alameda Research, and Nishad Singh, FTX’s former head of engineering. Wang, his lawyer said, did not start or operate the scheme and was not personally involved in the provision of false information to the investors.

“Gary was not involved in the scheme at its inception, was never provided with details of the scheme, and, in contrast to Bankman-Fried, Ellison and Singh, never engaged in any affirmative action of deception,” Graff wrote.

Sentencing Comparisons to Other Executives

Wang’s attorney argued that a prison sentence would create an “unwarranted sentencing disparity” with Nishad Singh, who avoided jail time after pleading guilty and cooperating with the government. Singh, who faced potential decades-long sentences, was ultimately sentenced to time served and three years of supervised release. 

Ellison, another major cooperator, received a two-year prison sentence. FTX co-founder Gary Wang contended that Wang’s level of involvement was even lower than Singh’s, supporting a non-custodial sentence for Wang as well.

Graff also noted Wang’s personal circumstances, stating that Wang is expecting the birth of his first child shortly after his sentencing date. Wang’s attorney suggested that allowing him to remain with his family would align with the court’s treatment of other cooperators in the case.

“Gary wants nothing more than to be a good husband and father and to continue his work to facilitate FTX victims’ recovery,” Graff wrote.

Separately, the U.S. government is working to reclaim approximately $13.25 million in political donations made by FTX executives, including Bankman-Fried and Singh.  Judge Lewis Kaplan however granted the government additional time to negotiate the return of these funds, extending discussions with the PACs until January 15, 2025.

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Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

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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US SEC Files Motion for Judgment Against Kraken, Challenges Key Defenses

Published

18 hours ago

on

November 6, 2024

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The U.S. Securities and Exchange Commission (SEC) has filed a motion seeking judgment in its case against cryptocurrency exchange Kraken, focusing on defenses such as “fair notice” and the “major questions doctrine.”

This move, led by SEC Chairman Gary Gensler’s team, aims to limit further discovery into the agency’s regulatory policies, particularly those affecting the crypto sector. The timing of the filing has drawn attention, as some in the industry view it as a strategic attempt to shield the SEC’s methods from closer examination.

US SEC Files Motion for Judgment Against Kraken

The SEC’s motion seeks to dismiss defenses put forward by Kraken that include the fair notice defense and the major questions doctrine. The fair notice defense argues that Kraken did not receive adequate regulatory guidance regarding its crypto-related activities. 

Meanwhile, the major questions doctrine suggests that regulatory agencies, such as the SEC, should not make major policy decisions without clear direction from Congress.

Subsequently, the US SEC’s motion appears intended to prevent further discovery into its policies, which Kraken and other crypto advocates have criticized as inconsistent and unclear. A similar motion was filed in Ripple case, where the US SEC failed to secure a judgment. Michael O’Connor, an attorney representing Kraken expects a similar outcome in the Kraken case, though Kraken has indicated that it has additional defenses should this motion proceed.

This Is A Breaking News, Please Check Back For More

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

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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