US Democrats Prepare to Endorse SEC's Stringent Regulation of Digital Assets, Sparking Concern Among Crypto Leaders
Democratic committee members in the US Congress are reportedly preparing to endorse the Securities and Exchange Commission's (SEC) strict regulation of digital assets, which has sparked reactions among top crypto leaders. Cardano founder Charles Hoskinson has condemned the memo, urging Americans to consider it a top priority issue in the next presidential election. He advised US citizens to become single-issue voters and support pro-digital asset candidates in the next election cycle. The memo suggests that the US Democrats and the government are planning a major crackdown on digital assets, with the SEC gaining full authority over digital asset oversight.
SEC Chairman Gary Gensler Asserts Rules Already Published for Crypto Companies to Remain in Compliance with Federal Law
During a keynote speech at the 27th annual Financial Markets Conference, Securities and Exchange Commission chairman Gary Gensler pushed back on criticism that the SEC has not provided useful guidance for crypto companies looking to remain in compliance with federal law. While Gensler barely touched upon the digital assets market, moderator Tom Barkin brought up the subject, asking about the SEC’s ongoing court case with Coinbase, as well as whether Gensler thought the agency had fallen behind on enforcement with cryptocurrencies. Gensler reminded the public how cryptocurrency companies are building fraudulent business models and insisted that they also need to adhere to the rules. The European Union has been working hard to usher in a new set of rules for the crypto industry, while U.S. regulators like Gensler insist that current regulations are enough.
SEC Seeks To Reduce $22M Penalty Against LBRY to $111K, Recognizes Platform’s Financial Struggles
The Securities and Exchange Commission (SEC) has requested a reduction in the $22 million penalty imposed on LBRY, a decentralized publishing platform, acknowledging that the company may not be able to afford the fine. The SEC is now asking for a lower penalty of $111,614. LBRY's CEO, Jeremy Kauffman, claimed that the SEC's decision to no longer seek disgorgement should not be seen as a change of heart, but rather as pure self-interest. The SEC won its case against LBRY last November, charging the company with selling unregistered securities in March 2021.
SEC Chair Pushes Back Against Coinbase's Call for Digital Asset Rules
Gary Gensler, the Chair of the US Securities and Exchange Commission, has rejected Coinbase's request for the agency to propose and adopt rules for digital assets. Gensler stated that rules governing exchanges, broker dealers, advisers, custodying assets and how to register securities offerings already exist. He added that there is nothing about a new technology that makes it inconsistent with public policies. Coinbase filed a petition in July 2022 asking for the agency to propose and adopt rules for digital assets, while criticizing its "enforcement-first approach." The petition garnered support from the US Chamber of Commerce.
Former SEC Attorney and Tether's CTO Engage in Heated Debate Over Company's Financial Statements and Regulatory Framework
Former Securities and Exchange Commission enforcement attorney John Reed engaged in a heated Twitter discussion with Tether's CTO, Paolo Ardoino, over Reed's criticism of the company's opaque financial statements and lack of regulatory framework. Despite Tether's latest attestation report, Reed remained skeptical and called for proper auditing. Ardoino defended Tether, stating that the company works closely with authorities and serves unbanked individuals in emerging markets. The discussion ended with Reed expressing concern for anyone using Tether and referencing the company's massive first quarter profits.
SEC Under Fire for Its Custody Rule: Law Decoded, May 8–15
Last week, the United States Securities Exchange Commission (SEC) faced criticism from industry figures and officials regarding its proposed custody rule. The Blockchain Association claimed the rule exceeded the SEC's authority and would inhibit advisers from transacting with crypto exchanges, leaving investors' assets at more risk.
Attorney Morgan explains how the SEC plans to prove XRP is a security
Lawyer Bill Morgan has speculated on how the US Securities and Exchange Commission (SEC) plans to prove that XRP is a security. Morgan believes that the SEC wants to expand the Howey test to cover cryptocurrencies by taking an extensive view of common enterprise, which has made it difficult for anyone to pinpoint the common enterprise in the SEC vs. Ripple case.
SEC seeks to revise $22 million penalty against LBRY, citing lack of funds and near-defunct status
The Securities and Exchange Commission (SEC) is seeking to revise its $22 million punishment against LBRY, a decentralized content platform, as the company is unlikely to be able to pay it. The SEC has asked the court to impose a fine of $111,614 instead, citing LBRY's "lack of funds and near-defunct status." The request also asks to stop LBRY from conducting future unregistered offerings of crypto asset securities. The SEC won the case in November 2022, and the smaller penalty was a compromise between the need to balance deterrence from a penalty with LBRY's inability to pay.
Former SEC Member Accuses Tether of Counterfeiting and Lack of Transparency
John Reed Stark, a former SEC member and experienced lawyer, has raised serious concerns about the legitimacy of Tether, a popular cryptocurrency. Stark has accused Tether of being a "counterfeiter" and criticized the lack of transparency in the operations of Bitfinex, the company responsible for Tether. He has emphasized that Tether falls short of embodying the fundamental characteristics of a legitimate currency and lacks any true resemblance to the US dollar. Stark's comments have sparked a debate about the credibility of Tether and the need for enhanced regulation and oversight in the cryptocurrency industry.
Tron Witnesses Increase in Usage and Market Cap in Q1 2023, Despite SEC Lawsuits: Report
According to a report from Messari, Tron blockchain experienced an increase in usage in Q1 2023, with its native token TRX's market cap up by almost 20%. Despite the SEC announcing lawsuits against Tron ecosystem tokens, the network activity remained mostly unaffected, with total quarterly revenue climbing to $90.04 million, an 88% jump from Q4 2022. The report also highlighted that the increase in average daily transactions can be partially attributed to staking activity on the network, with the total transaction count originating from staking activity up by 197% QoQ. Additionally, Tron's position in the stablecoin landscape remains substantial, with its USDT market cap increasing by 30% to $10 billion QoQ.
