🚀 US House Subcommittee to Hold Hearing on SEC's Approach to Digital Assets
#USHouse #Subcommittee #SEC #DigitalAssets #Hearing #GaryGensler #FinancialTechnology #Inclusion #Enforcement #HoweyTest
According to Odaily, the U.S. House Subcommittee on Digital Assets, Financial Technology, and Inclusion has announced a hearing titled 'Bewildered and Confused: Breaking Down the SEC's Politicization of Digital Assets.' The hearing is scheduled for September 18 and will feature testimonies from former SEC Commissioner Dan Gallagher and Michael Liftik, who served in various roles at the SEC for nearly a decade, including attorney, senior advisor, and acting head of enforcement.
The subcommittee's leadership has criticized SEC Chairman Gary Gensler for prioritizing and advancing an enforcement and regulatory agenda that they claim is detrimental to the digital asset ecosystem. They argue that Gensler's stance on digital assets as securities under the Howey Test has been inconsistent and that there are disagreements among SEC members regarding this issue.#USHouse #Subcommittee #SEC #DigitalAssets #Hearing #GaryGensler #FinancialTechnology #Inclusion #Enforcement #HoweyTest
🚀 OpenSea Faces Class-Action Lawsuit Over Alleged Unregistered Securities Sales
#OpenSea #classactionlawsuit #NFT #unregisteredsecurities #SEC #BoredApeYachtClub #HoweyTest #investmentcontracts #cryptocurrency #lawfirm
According to Cointelegraph, two OpenSea users have filed a class-action lawsuit in the United States against the NFT marketplace, alleging it sells unregistered securities contracts. Anthony Shnayderman and Itai Bronshtein filed the suit on September 19 in a Florida federal court, claiming that NFTs they purchased on OpenSea, including those from the Bored Ape Yacht Club collection, are worthless due to their illegal nature.
The plaintiffs pointed to OpenSea’s recent disclosure of a Wells notice from the Securities and Exchange Commission (SEC), which they argue indicates that OpenSea may be liable for facilitating the exchange of unregistered securities. A Wells notice is a warning that the SEC has conducted an investigation and may bring an enforcement action against the recipient. The lawsuit also references successful SEC actions against NFT projects Stoner Cats 2 and Impact Theory, where the regulator deemed the NFTs as unregistered securities sales.
Shnayderman and Bronshtein argue that the Howey test, which defines securities, shows that the NFTs they bought on OpenSea were investment contracts under US securities laws. They allege that these NFTs represented an investment in a common enterprise with a reasonable expectation of profits derived from the efforts of others. The suit claims that OpenSea’s NFT listings were deceptive and misled the plaintiffs into purchasing worthless and unlawful unregistered securities. It also alleges that OpenSea breached a user warranty by failing to moderate its exchange for unregistered securities.
Additionally, the plaintiffs accuse OpenSea of unjust enrichment by charging fees and accepting funds from the sale of unregistered securities. In a statement, Adam Moskowitz, managing partner of The Moskowitz Law Firm and counsel for Shnayderman and Bronshtein, emphasized the need for a well-regulated environment for selling NFTs. He expressed a willingness to work with OpenSea to develop a better process for both consumers and the crypto industry. OpenSea has not yet responded to a request for comment.#OpenSea #classactionlawsuit #NFT #unregisteredsecurities #SEC #BoredApeYachtClub #HoweyTest #investmentcontracts #cryptocurrency #lawfirm
🚀 US House Committee Questions SEC Leaders On Digital Asset Regulations
#USHouseCommittee #SEC #DigitalAssets #CryptoRegulation #GaryGensler #Blockchain #HoweyTest #Peirce #Uyeda #NFT #Omakase #RegulationByEnforcement
According to Blockworks, members of the US House Financial Services Committee questioned leaders of the Securities and Exchange Commission (SEC) on Tuesday, seeking explanations about the agency’s agenda and rulemaking practices, particularly concerning digital assets. The hearing, titled “Oversight of the Securities and Exchange Commission,” marked the first time since 2019 that all five SEC commissioners appeared together before the Committee. SEC Chair Gary Gensler was joined by Commissioners Caroline Crenshaw, Jaime Lizárraga, Hester Peirce, and Mark Uyeda.
Committee Chair Patrick McHenry, R-N.C., criticized Gensler, stating that his legacy would be defined by transforming the SEC into a rogue agency. Gensler clarified that the commissioners, although appearing together, do not represent the agency's collective opinions. When asked about the status of crypto tokens as securities, Gensler reiterated that the agency uses the Howey test to determine if an asset class is being offered to the public.
Other Committee members were less focused on the SEC’s dealings with crypto, suggesting that the notion of creating specific digital asset regulations might be unnecessary. Rep. Brad Sherman, D-Cali., mentioned that while clarity could be provided, an additional statute to clarify that crypto is a security might not be needed. Commissioners Peirce and Uyeda, known for their pro-crypto stance, often issue dissenting opinions on blockchain-related enforcement actions. Peirce criticized the SEC’s “regulation by enforcement” strategy, calling it inefficient and unclear.
Peirce and Uyeda recently co-authored an opinion disagreeing with the SEC’s action against Flyfish Club, a private social club in Manhattan that launched an NFT project to sell memberships in 2021 and 2022. The SEC claimed Flyfish violated securities laws by leading NFT investors to expect profits. Peirce and Uyeda likened the SEC’s approach to a Japanese dining experience, Omakase, where the directive “I’ll leave it up to you” can be disastrous in the hands of a crypto-obsessed commission.#USHouseCommittee #SEC #DigitalAssets #CryptoRegulation #GaryGensler #Blockchain #HoweyTest #Peirce #Uyeda #NFT #Omakase #RegulationByEnforcement
🚀 SEC Appeals Ripple Lawsuit Ruling
#SEC #Ripple #XRP #cryptocurrency #lawsuit #JudgeTorres #appeal #securities #HoweyTest #digitalassets
According to Cointelegraph, the United States Securities and Exchange Commission (SEC) has filed a notice of appeal in the Ripple lawsuit on October 2, seeking to overturn Judge Analisa Torres’s earlier ruling.
Legal experts had anticipated the regulatory agency’s appeal of Judge Torres’s 2023 verdict, which determined that secondary sales of Ripple’s XRP (XRP) did not constitute securities sales. Judge Torres ruled that XRP was not a security in itself because the digital assets did not meet all the conditions listed in the SEC’s Howey test to classify a financial asset as an investment contract.
As a result, secondary sales cannot be labeled as unregistered securities sales, according to Torres. However, she also clarified that early sales from the Ripple founders to institutional investors did constitute securities sales due to the manner in which the sales were conducted. At the time, the ruling was considered a significant victory for Ripple Labs and the broader cryptocurrency industry.
This is a developing story, and further information will be added as it becomes available.#SEC #Ripple #XRP #cryptocurrency #lawsuit #JudgeTorres #appeal #securities #HoweyTest #digitalassets
🚀 SEC Chair Gensler Discusses Bitcoin's Role and Regulatory Framework
#SEC #GaryGensler #Bitcoin #cryptocurrency #regulation #HoweyTest #digitalcurrencies #fraud #financialsystem
According to PANews, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler expressed his views on Bitcoin and other cryptocurrencies during an event at New York University School of Law. Gensler stated that he believes Bitcoin and other digital currencies are unlikely to become widely used as payment methods. Instead, he sees them more as stores of value. He referenced historical and monetary theories, noting that nations typically prefer to use a single currency. Gensler also criticized fraudulent activities within the crypto industry, highlighting that many industry 'leaders' are either imprisoned or facing extradition as of 2024. He asserted that the existing Howey Test is sufficient to regulate crypto assets, dismissing the need for an additional regulatory framework.#SEC #GaryGensler #Bitcoin #cryptocurrency #regulation #HoweyTest #digitalcurrencies #fraud #financialsystem
🚀 SEC Chair Gary Gensler Criticizes Crypto Industry At NYU Event
#SEC #GaryGensler #CryptoIndustry #Cryptocurrency #Bitcoin #Ether #Regulation #HoweyTest #InvestmentContract #Fraud #CryptoCommunity #NYU
According to CoinDesk, SEC Chair Gary Gensler delivered a critical speech on the cryptocurrency industry at NYU School of Law in Manhattan on Wednesday. Gensler, known for his cautious approach, provided expansive comments on the state of the crypto sector, expressing skepticism about the use of cryptocurrencies like bitcoin and ether for payments. He referenced historical economic practices, suggesting that economies function better with a single nation-issued currency.
Gensler's remarks included strong criticisms of the crypto industry, labeling it as rife with fraud and scams. He controversially claimed that many of the industry's leading figures are either incarcerated or facing extradition, a statement that does not align with the current status of many prominent industry leaders. Despite acknowledging the presence of fraudsters, Gensler's broad generalization was met with disagreement from the crypto community.
On regulatory matters, Gensler reiterated the application of the Howey Test, a legal standard from 1940, to determine whether tokens are securities. He emphasized the importance of identifying a central enterprise in token issuances, suggesting that most tokens would likely meet the criteria of an investment contract. However, his comments offered little clarity or hope for regulatory adaptation to new technological and market conditions.
Gensler's tenure as SEC Chair has been marked by a stringent stance on crypto regulation, drawing criticism from industry participants. SEC Commissioner Mark Uyeda described Gensler's leadership as detrimental to the crypto sector. As Gensler's term progresses, his recent expansive remarks may indicate an awareness of his potential departure from office.#SEC #GaryGensler #CryptoIndustry #Cryptocurrency #Bitcoin #Ether #Regulation #HoweyTest #InvestmentContract #Fraud #CryptoCommunity #NYU
🚀 FINRA Updates Website With New Section On Crypto Assets
#FINRA #CryptoAssets #Securities #SEC #CFTC #FTC #HoweyTest #RevesTest #InvestorAlert
According to PANews, the Financial Industry Regulatory Authority (FINRA) has updated its official website to include a new section dedicated to crypto assets. While the term 'crypto asset securities' is not explicitly mentioned, it is referenced in a link to a 2023 investor alert from the Securities and Exchange Commission (SEC). The update highlights that certain crypto assets or transactions may meet the definition of securities.
The newly added page provides detailed information on various types of crypto assets and their trading methods. It also outlines the associated risks and offers links to resources from regulatory bodies such as the SEC, the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC). FINRA emphasizes that determining whether a crypto asset or transaction qualifies as a security should be based on the definitions provided by federal securities laws. The Howey Test and Reves Test are among the standards that may be used to make this determination.#FINRA #CryptoAssets #Securities #SEC #CFTC #FTC #HoweyTest #RevesTest #InvestorAlert
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🚀 Utah Judge Denies Appeal In SEC Lawsuit Against Crypto Mining Promoter
#Utah #SEC #CryptoMining #Fraud #Lawsuit #GreenUnited #InvestmentContracts #HoweyTest #JudgeAllen #Bitcoin #CryptoNews
According to Cointelegraph, a federal judge in Utah has rejected an appeal to dismiss a lawsuit filed by the Securities and Exchange Commission (SEC) against a promoter involved in an alleged fraudulent crypto mining operation. The scheme reportedly amassed $18 million through deceptive practices. On November 26, Judge Ann Marie McIff Allen denied Kristoffer Krohn’s appeal against her earlier decision from September 23, which allowed the SEC's lawsuit against Green United LLC to proceed. Judge Allen stated that Krohn did not present sufficient grounds for an appeal, emphasizing that there was no substantial disagreement on the legal principles involved in her previous ruling.
Krohn had argued for the dismissal of the lawsuit, claiming that the SEC failed to prove that the "Green Boxes" offered by Green United were investment contracts, as alleged in the regulator's complaint. He further contended that the SEC had misapplied elements of the Howey test, which is used to determine what constitutes a security. However, Judge Allen refuted Krohn's arguments, stating that he selectively used terms from different definitions without providing any legal precedent to support his interpretation. The judge maintained that Krohn's arguments lacked legal foundation and did not warrant an interlocutory appeal.
The SEC's lawsuit, filed in 2023, accuses Green United executives of orchestrating a fraudulent crypto mining scheme. The operation allegedly collected $18 million from investors between April 2018 and December 2022 by selling investments in "Green Boxes" and "Green nodes," which the SEC claims were purported to mine Bitcoin. In addition to Krohn, Green United founder Wright Thurston has also sought to have the lawsuit dismissed, though the outcome of his request remains pending.#Utah #SEC #CryptoMining #Fraud #Lawsuit #GreenUnited #InvestmentContracts #HoweyTest #JudgeAllen #Bitcoin #CryptoNews
🚀 SEC Prioritizes Addressing 2018 Hinman Speech Amid Market Confusion
#SEC #HinmanSpeech #TokenAlliance #DigitalCommerce #Cryptocurrency #HoweyTest #MarketConfusion #PolicyChange #DeFi #ExchangeDefinition #InvestorProtection
According to Odaily, a recent meeting between the Token Alliance of the Chamber of Digital Commerce and staff members of U.S. SEC Commissioners Hester Peirce and Mark Uyeda highlighted the need to address the handling of the 2018 Hinman speech. The Token Alliance emphasized that this issue should be a top priority for the Corporation Finance division due to its lack of relevance to the Howey Test, which has led to market confusion and an "improper creation of winners and losers."
The SEC's priority list for each department is outlined in a timeline from the first to the 90th day of the new administration under President Trump. This list identifies policy changes that the industry believes could foster a new, more positive relationship between cryptocurrency market participants and the agency. Among the key first-day priorities are initiating a review of all existing crypto-related investigations, Wells notices, and ongoing litigation, with a focus on suspending cases that do not involve actual fraud or harm to investors. Additionally, the withdrawal of SAB 121 and the issuance of a rescission order in the Federal Register are highlighted, along with the formal withdrawal and reconsideration of the proposed amendment to Rule 3b-16, which seeks to expand the definition of "exchange" to include DeFi protocols.
Notably, the Chamber of Digital Commerce expressed satisfaction with the open dialogue with the commissioners' teams, indicating a willingness to engage in ongoing discussions.#SEC #HinmanSpeech #TokenAlliance #DigitalCommerce #Cryptocurrency #HoweyTest #MarketConfusion #PolicyChange #DeFi #ExchangeDefinition #InvestorProtection
🚀 Better Markets Supports SEC in Ripple Lawsuit Over XRP Classification
#BetterMarkets #SEC #Ripple #XRP #HoweyTest #Securities #InvestmentContracts #AmicusBrief
According to Odaily, the nonprofit financial markets organization Better Markets has filed an amicus brief in support of the U.S. Securities and Exchange Commission (SEC) in its ongoing lawsuit against Ripple. The document presents three distinct arguments asserting that XRP meets the criteria of the Howey Test. Better Markets emphasizes that the nature of these securities remains unchanged when investors purchase them on trading platforms. The organization argues that the district court's ruling lacks support from the statutory definition of securities. It contends that the previous ruling in favor of Ripple conflicts with the Supreme Court's definition of investment contracts in the Howey case. This amicus brief was submitted a week after Gary Gensler appealed the decision, which questioned the retail aspect of XRP. Better Markets also argues that the district court overlooked the economic realities of Ripple's issuance and sale of XRP tokens, as well as investors' ability to understand the connection between Ripple's actions and profit expectations. The organization recommends that the court overturn the ruling that XRP sales to retail traders on exchanges do not constitute investment contracts.#BetterMarkets #SEC #Ripple #XRP #HoweyTest #Securities #InvestmentContracts #AmicusBrief
🚀 SEC Sets Deadline For Decision On XRP ETF Proposal
#SEC #XRP #ETF #Grayscale #NYSE #Ripple #cryptocurrency #Solana #Litecoin #Dogecoin #HoweyTest #finance #investing #LTC #DOGE
According to CoinDesk, the Securities and Exchange Commission (SEC) has established a timeline to decide on the approval of an exchange-traded fund (ETF) that tracks the price of XRP. This development follows the SEC's acknowledgment of a 19b-4 filing submitted by the New York Stock Exchange (NYSE) and asset manager Grayscale. This marks the first instance of the SEC responding to a filing concerning the crypto asset XRP, initiating a 240-day period for the Commission to reach a decision.
The SEC has previously acknowledged applications for other crypto-focused ETFs, including those for Solana (SOL), Litecoin (LTC), and Dogecoin (DOGE). However, the acknowledgment of the XRP ETF filing is particularly noteworthy due to the SEC's ongoing legal battle with Ripple, the company behind XRP. The SEC filed a lawsuit against Ripple in December 2020, accusing it of violating U.S. securities laws by selling XRP as an unregistered security. In August 2023, Ripple achieved a partial victory when a federal judge ruled that XRP is not a security when sold on secondary markets.
The SEC appealed the case on January 15, just days before U.S. President Donald Trump took office, arguing that Ripple's sale of XRP met the criteria of the Howey Test, a standard used to determine what constitutes a security. Nate Geraci, President of the ETF Store, commented on the SEC's decision to acknowledge the filing, suggesting it sends a significant message. Meanwhile, Bloomberg ETF analysts James Seyffart and Eric Balchunas have predicted a 65% likelihood of the XRP ETF being approved by the end of 2025. They also forecasted higher approval chances for a Litecoin ETF at 90%, followed by Dogecoin at 75% and Solana at 65%. All pending ETF applications for these assets are expected to receive a decision by October.#SEC #XRP #ETF #Grayscale #NYSE #Ripple #cryptocurrency #Solana #Litecoin #Dogecoin #HoweyTest #finance #investing #LTC #DOGE
🚀 SEC Clarifies Stance on Proof-of-Work Mining Activities
#SEC #ProofOfWork #Mining #CryptoAssets #ProtocolMining #CoveredCryptoAssets #InvestmentContract #HoweyTest
According to BlockBeats, the U.S. Securities and Exchange Commission (SEC) has issued a statement regarding certain Proof-of-Work (PoW) mining activities. This move aims to provide greater clarity on the application of federal securities laws within the crypto asset sector. The SEC's Division of Corporation Finance has expressed its views on activities conducted on PoW networks, commonly referred to as 'mining.'
The statement specifically addresses the mining of crypto assets that are closely linked to the procedural functions of public, permissionless networks. These crypto assets are obtained through participation in the network's consensus mechanism or by maintaining the network's technical operations and security. The SEC refers to these as 'Covered Crypto Assets' and the mining activities on PoW networks as 'Protocol Mining.'
Under the Securities Act Section 2(a)(1) and the Exchange Act Section 3(a)(10), the term 'security' is defined by listing various financial instruments, including 'stocks,' 'notes,' and 'bonds.' Since Covered Crypto Assets do not fall under any of the explicitly listed financial instruments in the definition of 'security,' the SEC's analysis of certain transactions involving these assets in the context of Protocol Mining is based on the 'investment contract' test established in the U.S. Supreme Court case SEC v. W.J. Howey Co. The Howey Test is used to evaluate arrangements or instruments not explicitly mentioned in the statutory provisions, focusing on their 'economic reality.'#SEC #ProofOfWork #Mining #CryptoAssets #ProtocolMining #CoveredCryptoAssets #InvestmentContract #HoweyTest
🚀 Paradigm and Partners Address Senate's Cryptocurrency Legislation
#Paradigm #Cryptocurrency #Senate #Legislation #TokenSecurities #CLARITYAct #AncillaryAssets #CryptoIndustry #HoweyTest #DecentralizedTokens #FinancialRights
According to PANews, Dan Robinson, General Partner and Head of Research at Paradigm, announced on the X platform that his team, along with Multicoin Capital, Chainlink, Electric Capital, Galaxy, Ribbit Capital, and Tribe Capital, has submitted a letter to the Senate Banking Committee regarding the proposed cryptocurrency market structure legislation. The Senate's draft differs from the House-passed CLARITY Act, particularly on the regulation of token securities. Paradigm believes the Senate's 'ancillary asset' approach is more favorable for the crypto industry. Both legislative proposals are seen as improvements over the Howey Test system, which is considered difficult to apply and potentially counterproductive. The Senate's draft is noted for its simplicity, avoiding the imposition of rigid frameworks on decentralized tokens and protocols. It includes exclusion clauses to prevent misuse, specifying that assets with certain financial rights are not considered ancillary assets.#Paradigm #Cryptocurrency #Senate #Legislation #TokenSecurities #CLARITYAct #AncillaryAssets #CryptoIndustry #HoweyTest #DecentralizedTokens #FinancialRights
🚀 SEC and CFTC Release Joint Guidance on Digital Assets
#SEC #CFTC #数字资产 #证券法 #GaryGensler #HoweyTest #监管 #数字资产发行 #市场参与者 #监管指导
The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly issued new guidance on the application of securities laws to digital assets. According to NS3.AI, this update is seen as an improvement over the previous approach under SEC Chair Gary Gensler. However, it still leaves some ambiguity, particularly concerning the Howey Test and the regulation of secondary-market trading. The guidance aims to clarify regulatory expectations for digital asset issuers and market participants, but questions remain about its impact on the evolving digital asset landscape.#SEC #CFTC #数字资产 #证券法 #GaryGensler #HoweyTest #监管 #数字资产发行 #市场参与者 #监管指导
🚀 SEC's Crypto Guidance Leaves Key Regulatory Standards Unclear, Say Lawyers
#SEC #Crypto #Regulation #HoweyTest #Ripple #Lawyers #Guidance #TokenTrades #XRP
Lawyers from Gibson, Dunn & Crutcher have expressed concerns over the latest joint crypto guidance issued by the SEC. According to NS3.AI, while the guidance marks an improvement over previous language, it still fails to clarify essential regulatory standards. The lawyers highlighted that the guidance does not adequately define the contractual obligations required under the Howey Test. Additionally, it does not clearly align with the standards set by the Ripple case for secondary market token trades.#SEC #Crypto #Regulation #HoweyTest #Ripple #Lawyers #Guidance #TokenTrades #XRP