This week’s major cryptocurrency news was revealed in a Texas court filing.
Texas officials are looking into FTX, the crypto juggernaut that is run by probably the most powerful individual in the sector, for selling unregistered securities.
According to Joseph Jason Rotunda, head of enforcement for the Texas State Securities Board, “FTX Trading, FTX US, and their principals, including Sam Bankman-Fried, are currently the subject of an investigation by the Enforcement Division.
There are more players here besides FTX. Just last month, Reuters reported that federal authorities are looking into Binance. The SEC is looking into Three Arrows Capital and Yuga Labs, the organisation that runs the Bored Apes Yacht Club, for “a spectrum of probable legal infractions.
Regulators have come under fire from detractors of cryptocurrencies for allowing the sector to expand unchecked. But it seems that a real shift could be on the horizon given the recent wave of high-profile inquiries.
The FTX inquiry is “an astonishing foreshadowing of the crypto-regulatory enforcement blitz that lies ahead,” according to John Reed Stark, a sceptic of cryptocurrencies and former director of the SEC Office of Internet Enforcement.
Stark, who believes state regulators around the nation have been ahead of the curve in cracking down on cryptocurrency, said, “You don’t mess with Texas.” However, according to Stark, who has previously voiced his strong disapproval of regulators, the tide is now shifting.
The crypto ecosystem has its head in the sand if it is not preparing for an assault of US regulatory requirements. The FBI, SEC, DOL, FDIC, US Treasury, and IRS have all stepped up their efforts to enforce laws related to cryptocurrency. And they have only just begun.
He wanted to find out if prominent crypto sceptic Nouriel Roubini still thinks authorities are “asleep at the wheel” when it comes to cryptocurrencies, as he said in a 2019 article. He had a less upbeat tone than Stark.
Despite recent probes, Roubini told, regulators are still far behind the times. In crypto, it’s the law of the jungle.
There are complaints within the sector that the government has decided to regulate cryptocurrency through enforcement rather than rule making, sometimes known as adopting legislation.
We want rules,” a business lawyer rantingly said. His complaint is that the SEC repeatedly enforces the same instances while failing to address the more important issues.
All we get from the SEC is another five cases where they’re telling people that they shouldn’t have issued this as a security in 2016, or they come out and bust Kim Kardashian and make it a big deal as if they didn’t already bust Floyd Mayweather and Steven Segal for the same thing, one person said.
Utilizing Ooki Glass
The CFTC’s Ooki lawsuit is one instance that hasn’t received much attention outside of the crypto press but is the talk of the trade.
The CFTC imposed a $250,000 penalties on Ooki, a decentralised autonomous organisation, in September in the first-ever case involving a DAO. According to the lawsuit, anyone in possession of an Ooki token may be held accountable for the deeds of the bigger group. This is a brand-new legal theory that even the CFTC does not agree with.
In what has evolved into DC’s multi-year crypto turf war, has been divided between the SEC and CFTC in the lack of clear federal law requiring crypto regulation. The CFTC has long been seen by the cryptocurrency business as the more benevolent of the US enforcement agencies, and Sam Bankman-Fried has made commission oversight a key component of his campaign for regulations that are beneficial to the industry.
According to the cryptocurrency attorney, there are two groups of people that favour the CFTC above the SEC. The first group—let’s call them The Cynics—believes that the CFTC is the organisation with the lowest budget and staffing levels. While the second group, known as The Wonks, thinks that current commodity law more closely applies to cryptocurrencies.
The Cynics have been rudely awakened as a result of the CFTC’s aggressive action against Ooki. Perhaps the CFTC won’t be as accommodating as they had planned.
Yes, the CFTC is treating the Ooki in that manner.
