The Securities and Exchange Commission (SEC) in the United States has taken a significant step in its regulatory oversight of digital assets by issuing subpoenas to companies involved with Ether, the native cryptocurrency of the Ethereum network. This move marks an important development in the ongoing scrutiny of the cryptocurrency industry.
The SEC’s investigation has extended to the Ethereum Foundation, the non-profit organization responsible for developing the Ethereum blockchain. The outcome of this investigation could potentially give the SEC the authority to classify Ether as a security, which would have a significant impact on its status in the cryptocurrency ecosystem.
Hints of the investigation were found on the Ethereum Foundation’s GitHub platform, indicating that it may also be under scrutiny from state authorities. Additionally, several US-based companies have reportedly received requests from the SEC to provide documents and financial records related to their dealings with the Ethereum Foundation, suggesting that the regulatory inquiry is wide-ranging.
In other news, bankrupt crypto lender Celsius is making efforts to recover $2 billion from major customers who withdrew from the platform just before its bankruptcy in July 2022. A Celsius bankruptcy oversight committee is reaching out to customers who withdrew more than $100,000 before the platform’s downfall, with the goal of using any returned funds to compensate customers who did not withdraw in time.
The committee is offering affected customers a favorable settlement rate to encourage cooperation, while also threatening litigation for non-compliance. Customers who choose to settle will have their digital assets adjusted based on their value in July 2022, during the crypto bear market.
The SEC is facing sanctions from a US district court for its actions that were deemed to be in “bad faith” during a lawsuit against Debt Box. The court criticized the SEC for misleading the court about evidence it obtained to secure a temporary restraining order and asset freeze against Debt Box. Judge Robert J. Shelby specifically called out the SEC for misrepresenting evidence, particularly regarding a $720,000 transfer that was incorrectly claimed to have been sent overseas when it was actually a domestic transaction.
Binance, a popular crypto exchange, has announced a reward program offering up to $5 million for reports of potential insider trading or corruption within the exchange. This announcement comes in response to allegations of insider trading surrounding the listing of the Solana-based memecoin Book of Meme (BOME). Community speculation arose when a significant purchase of BOME tokens was made on a decentralized exchange prior to the listing, leading some to question the possibility of insider involvement.
In an effort to address these allegations, Binance is taking steps to address concerns raised within the community, emphasizing the importance of transparency and integrity in the cryptocurrency market.
In a separate development, lawyers representing former FTX CEO Sam “SBF” Bankman-Fried have criticized the proposed maximum sentence of 50 years in prison for their client. They argue that such a sentence reflects an outdated view of punishment and does not accurately reflect the severity of Bankman-Fried’s alleged crimes. The legal team has challenged the government’s portrayal of Bankman-Fried, asserting that it distorts reality and unfairly portrays him.
As the legal proceedings continue, stakeholders closely monitor developments in Bankman-Fried’s case and the potential implications for the broader cryptocurrency industry.
These recent developments highlight the increasing regulatory scrutiny and legal challenges faced by participants in the cryptocurrency industry. From the SEC’s efforts to classify Ether as a security to the legal battles and allegations surrounding prominent figures and exchanges, the crypto market is navigating the complexities of regulatory compliance and investor protection. As stakeholders await further clarity and resolution, the implications of these developments extend throughout the broader financial ecosystem.