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Pro-XRP Lawyer Deems SEC’s ‘Crypto Asset Securities’ Warning A Scam

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3 months ago

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Pro-XRP lawyer Fred Rispoli has publicly criticized the U.S. Securities and Exchange Commission’s (SEC) latest investor alert, calling it misleading and suggesting it’s part of a larger scam. This comes amid backlash after the recent switch on the “crypto assets securities” stance.

SEC Attracts Backlash On ‘Crypto Asset Securities’ Saga

In a post on X, Rispoli deemed the investor alert to be a “scam” as the agency used the term “crypto assets securities.” He stated, “This post in and of itself is a scam as the SEC the same day swore to a federal judge that there is no such thing as ‘crypto asset securities.’” He also also mentioned that he had requested X Community Notes to be added to the SEC’s post.

The criticism comes as the SEC faces backlash over its sudden shift in stance on the classification of crypto assets. In a surprising move, the SEC recently filed a motion to amend its original complaint against Binance, Binance.US, and Changpeng Zhao.

In the amendment, the SEC now acknowledges that several major crypto tokens are not considered securities under its revised framework. These include Solana (SOL), Cardano (ADA), Polygon (MATIC), and other seven tokens.

The shift in stance follows a U.S. district court ruling in a related case against the crypto exchange Kraken, where the SEC’s previous broad definitions of crypto assets as securities were challenged. Hence, in its amended complaint, the SEC clarified that it uses the term “crypto asset securities” not to refer to the tokens themselves, but to the investment contracts and agreements tied to their sales.

The SEC stated in its filing: “As the SEC has consistently maintained since the very first crypto asset Howey case, the term is a shorthand reference… the security is not simply the [crypto asset], which is little more than an alphanumeric cryptographic sequence.”

eToro Settlement In Spotlight

Moreover, this change in stance has been met with strong reactions from the crypto community. Jake Chervinsky, Chief Legal Officer of Variant, expressed his frustration on X, saying:

“I genuinely can’t get over how insane this is. The SEC used the term ‘crypto asset securities’ eight times in the eToro settlement order they issued on THE SAME DAY they told a federal eToro settlement order that they wouldn’t use it to avoid confusion.”

Chervinsky’s comment reflects the growing confusion surrounding the SEC’s inconsistent language and its shifting position on crypto enforcement. Despite the SEC’s apparent shift in its legal stance, the regulatory body continues to warn investors about potential scams involving crypto assets.

In a recent investor alert, the SEC’s Office of Investor Education and Advocacy issued a warning about fraudsters exploiting the popularity of cryptocurrencies, coins, and tokens. The alert emphasizes that fraudsters often use new technologies to perpetrate investment scams and exploit the complexity of crypto assets to lure retail investors.

This alert also attracted criticism from FOX Business journalist Eleanor Terrett. She weighed in on the issue, noting, “Is now a good time to point out that the SEC is still using the term ‘crypto asset securities’ in its investor alert blasts?” Her comment underscores the ongoing use of the term despite the SEC’s legal assertion that it no longer applies to certain tokens.

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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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Regulation

Cambodia crackdown locks out 16 crypto exchanges

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6 hours ago

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December 3, 2024

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  • Cambodia has intensified its digital assets regulatory measures.
  • It has placed a ban on 16 popular cryptocurrency exchange platforms.

Cambodia has reportedly blocked websites of 16 crypto exchanges amid regulatory efforts to combat potential crypto related crime.  Among those blocked are Binance and Coinbase.

Binance is the world’s largest cryptocurrency exchange by trading volume and global user count, while Coinbase is the largest US-based crypto exchange.

Cambodia’s crackdown on unregistered exchanges

In a move to regulate the crypto space, the Cambodian government requires the exchanges to obtain a legal licence from the country’s Security and Exchange Regulator and the said exchanges failed to do so.

The Cambodian Telecommunication Regulator cited that the 102 sites banned were linked to online gambling. Shockingly, Binance which had signed a partnership with the Cambodian authorities in 2022, is among those whose sites are inaccessible following the TRC ban.

However, despite this ban, most of the banned exchanges’ mobile apps remain functional.

The National Bank of Cambodia banned the use of cryptocurrency in 2017 though citizens continued to gamble and do online exchanges of the said digital assets. The recent ban, as Nikkei Asia reported, is because the exchanges lack the licenses as required by TRC.

Despite the unfolding development, exchanges and other platforms play a huge role in the development of the country’s growing digital assets economy

Binance presence in Cambodia

In 2022, Binance signed an agreement with SERC to support Cambodia’s digital assets. The exchange went further to cement its presence in the country with a partnership with the conglomerate Royal Group.

Binance is among multiple exchanges that also faced a similar scenario to that reported in Cambodia earlier this year.

In January 2024, Indian authorities banned several platforms for failing to register.

This came a few days after India’s Financial Intelligence Unit pushed for the removal of exchange apps of several crypto exchanges from the Apple App Store and Google Play Store. It wasn’t until August 2024 that Binance officially reentered the Indian market, paying a $2 million penalty in the process.

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

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17 hours ago

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December 3, 2024

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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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US Rep French Hill Reveals Plan To Investigate Operation Chokepoint 2.0

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20 hours ago

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December 2, 2024

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US Representative French Hill has outlined a plan to thoroughly investigate Operation Chokepoint 2.0, a campaign allegedly targeting industries like digital assets. Hill emphasizes regulatory fairness, transparency, and proportionate oversight, seeking to reverse politically motivated debanking practices under the current administration.

French Hill Vows To Investigate Operation Chokepoint 2.0 Debanking Practices

Rep. French Hill has publicly committed to investigating Operation Chokepoint 2.0, a campaign accused of politically targeting industries by denying them access to financial services. Hill stated that financial institutions should not terminate customer accounts without valid, material reasons, framing such actions as weaponization of government resources.

He underscored the importance of fairness and transparency in financial regulations, calling the practice detrimental to lawful businesses.

In a recent social media post, Hill condemned the continuation of these practices under the Biden-Harris administration, citing parallels to the original Operation Choke Point. He announced his intention to push for legislative scrutiny of the actions and policies of regulatory agencies to determine their adherence to legal standards. In addition, Hill expressed a strong stance on eliminating what he described as political targeting in financial oversight.

The US Congressman emphasized, 

“There should be no place for politicized debanking of legal businesses in the American financial system. I plan to fully investigate “Operation Choke Point 2.0”.

Moreover, Charles Hoskinson reiterated French Hill’s call for transparency and fairness in financial regulations, emphasizing urgent legislation to protect crypto businesses from Operation Chokepoint 2.0. He urged collaborative action to prevent further economic and emotional harm to the industry.

Regulatory Tailoring and Optional Climate Stress Tests

More so, French Hill emphasized the importance of tailoring financial oversight to individual institutions as part of his broader reform plan. Hill proposed requiring federal prudential regulators to consider factors such as size, risk profile, and business model when implementing policies. This approach will prevent one-size-fits-all regulations and ensure that smaller community banks and credit unions are not unfairly burdened.

Hill also advocated for making climate stress testing optional for financial institutions. He argued that climate-related risks should be assessed within existing frameworks like credit and operational risk evaluations. This practice will eliminate the need for overlapping mandates. 

Industry Leaders Join Calls for Action 

Meanwhile, the remarks by French Hill align with calls from industry figures for more transparency and fairness in financial regulations. Coinbase Chief Policy Officer Faryar Shirzad recently urged enhanced public disclosure regarding regulatory actions.

However, Faryar Shirzad expressed optimism about the swift passage of pro-crypto legislation under Donald Trump’s administration. He highlighted the presence of a historically pro-crypto Congress, with Republicans controlling both the Senate and the House. Shirzad expects key bills, such as the FIT 21 Crypto Bill and the Clarity for Payment Stablecoins Act, to advance rapidly.

In Barbados, entrepreneur Gabriel Abed shared his experience of being debanked by First Citizens Caribbean Bank after a Bitcoin-related deposit. Similar cases illustrate the broader challenges facing businesses in the digital asset space. More so, Hoskinson called on the crypto industry to collaborate and advocate for laws to prevent such practices. 

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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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