Heads up, everybody! We are launching a weekly news recap, so stay tuned after the interview to find out about the top stories in crypto this week! (Links below.)
Zachary Fallon, principal at Blakemore Fallon and former SEC staffer, explains why the SEC penalty against Block.One, which raised $4 billion in a yearlong ICO, got a penalty of just $24 million and didn't have to register EOS tokens as securities. He also discusses how this differs from the Kik case, what we can learn from another SEC order this week against Nebulous and what other gray areas remain for potential token issuers who may want to sell to U.S. citizens. We also go over the Crypto Rating Council, and what significance those ratings could have on the way they are regulated, if any.
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Episode links:
SEC press release about the Block.One settlement: https://www.sec.gov/news/press-release/2019-202
SEC Order re. Block.One: https://www.sec.gov/litigation/admin/2019/33-10714.pdf
Cooley letter on Block.one: https://www.sec.gov/divisions/corpfin/cf-noaction/2019/block.one-093019-506.pdf
Katherine Wu’s annotated settlement: https://static1.squarespace.com/static/5ac136ed12b13f7c187bdf21/t/5d92c33d937a3466c0c723a9/1569899329538/33-10714.pdf
SEC action on Nebulous: https://www.sec.gov/enforce/33-10715-s
Jake Chervinsky tweet storm on the settlement: https://twitter.com/jchervinsky/status/1179162527541993472?s=20
Marco Santori tweet storm on the settlement: https://twitter.com/msantoriESQ/status/1178811671621591040?s=20
Crypto Rating Council: https://www.wsj.com/articles/cryptocurrency-exchanges-including-coinbase-to-rate-digital-assets-11569835801
CRC ratings thus far: https://twitter.com/lawmaster/status/1178627290676301824?s=20
Articles from this week’s news recap:
Paypal to Back Out of Libra Association: https://www.ft.com/content/6af11092-e5fd-11e9-9743-db5a370481bc
Visa, Mastercard, Other Libra Association Members Jittery: https://www.wsj.com/articles/visa-mastercard-others-reconsider-involvement-in-facebook-s-libra-network-11569967023
Federal Advisory Doesn’t Like Libra: https://www.bloomberg.com/news/articles/2019-09-30/bankers-advising-fed-board-describe-libra-as-a-monetary-threat
SEC press release about the order: https://www.sec.gov/news/press-release/2019-202
The order itself: https://www.sec.gov/litigation/admin/2019/33-10714.pdf
Larry Cermak of The Block on the order: https://www.theblockcrypto.com/post/41612/dont-ask-for-permission-hire-good-lawyers-and-then-ask-for-forgiveness
Letter from House Reps re digital dollar: https://static.coindesk.com/wp-content/uploads/2019/10/Foster-Hill-US-Crypto.pdf
Crypto Rating Council: https://www.wsj.com/articles/cryptocurrency-exchanges-including-coinbase-to-rate-digital-assets-11569835801
Cermak tweet storm: https://twitter.com/lawmaster/status/1178622451451867136?s=20
Blockchain executive departures: http://thein.fo/9a4fd2f9cab44d7d
LedgerX-CFTC dispute: https://www.coindesk.com/ledgerx-claims-personal-animus-drove-ex-cftc-chair-to-stall-approvals
Tweets by Paul Chou directed at the CFTC: https://twitter.com/paul_l_chou/status/1177689857763807235?s=20
https://twitter.com/paul_l_chou/status/1177690348883197953?s=20
https://twitter.com/paul_l_chou/status/1177693761050157058?s=20
https://twitter.com/paul_l_chou/status/1177694467043680256?s=20
https://twitter.com/paul_l_chou/status/1177711475760218113?s=20
https://twitter.com/paul_l_chou/status/1177715093251018752?s=20
https://twitter.com/paul_l_chou/status/1177722516497928192?s=20
https://twitter.com/paul_l_chou/status/1177724302927581185?s=20
https://twitter.com/paul_l_chou/status/1177724477439971328?s=20
Paul Chou’s tweet storm: https://twitter.com/paul_l_chou/status/1178328955859951617?s=20
Explanation of the Fairwin Ponzi: https://medium.com/@PhABC/the-collapse-of-fairwins-125m-ponzi-scheme-61a66b273420
Martin Koeppelman graph on Fairwin: https://twitter.com/koeppelmann/status/1178781425585328129/photo/1
Fun Bits:
Bloomberg interview with Jered Kenna: https://www.bloomberg.com/news/articles/2019-10-03/an-early-bitcoin-millionaire-loses-his-love-for-the-industry
My Forbes story on how Kenna lost his Bitcoin: https://www.forbes.com/sites/laurashin/2016/12/20/hackers-have-stolen-millions-of-dollars-in-bitcoin-using-only-phone-numbers/
Abuse and Ethical Lapses: What Happened When Justin Sun Acquired BitTorrent - Ep.146
Coinbase in Turmoil: Why Employees Walked Out - Ep.145
Why NFTs Are Attracting Everyday People to Crypto - Ep.144
The First Crypto Bank: What Kraken Financial Will Do and How - Ep.143
How SushiSwap Proved That Liquidity Is Not a Moat - Ep.142
SushiSwap Takes On Uniswap: Which Should Win and Why? - Ep.141
Joseph Lubin on How JPMorgan's Quorum Will Fit In at ConsenSys - Ep.140
AMA With Laura: The Greatest Innovation in the Industry Right Now - Ep.139
Andreas Antonopoulos on Why the ETH Supply Debate Is 'Silly' - Ep.138
$5 Billion in AUM: Why Growth at Grayscale Exploded in the Last Quarter - Ep.137
Dmitry Buterin, Vitalik's Father, on Ethereum at 5 Years Old - Ep.136
'Twitter Will Be Fun Today': The College-Age Kids Who Hacked Into Twitter - Ep.135
Why Stablecoin Growth Over 5 Years Doubled in 4 Months - Ep.134
Will Coinbase Do a Token Offering When It Goes Public? - Ep.133
How This New Supply Metric Makes Buy Signals Clearer - Ep.132
How You Can Double Your Money -- Or Lose Everything - Ep.131
Why COMP 5xed on Day 1 and What This Means for a DeFi Bull Market - Ep.130
Why 'Cryptocurrency Would Not Exist Without Black People' - Ep.129
'Look for Opportunities' to Increase Diversity in Crypto - Ep.128
What Patoshi Is and How It Affects Craig Wright - Ep.127
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