#CFTC charges Breonna Clark, Venture Capital Investments Ltd., a Colorado LLC , w/ fraud & failing to register with the CFTC; alleged defendants solicited U.S. residents to trade forex contracts, #Bitcoin other digital assets via a commodity pool operated by the defendants. /1
Allegedly collected $534,829 from ~72; defendants used at least $418,000 for personal expenses& to make Ponzi-type payments to other pool participants; misled participants about experience, investment track record, sent false statements; /2
CFTC seeks restitution, disgorgement , civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of the CEA; Got help investigating from Govts of Bulgaria, New Zealand, Seychelles, St. Vincent & Grenadines, UK.
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#Illinois Senate Bill SB1887 would drive out #blockchain#node operators, #miners, and #validators, waste judicial resources, and confuse existing law in a quixotic attempt to protect Illinois consumers. Let's examine the mess in a #thread:
as a preface, This is a stunning reverse course for a state that was previously pro -innovation. Instead we now get possibly the most unworkable state law related to #crypto and #blockchain I’ve ever seen. A shocking turn of events for the #tech community in #illinois /2
SB1887 focuses on consumer protection (this is GOOD). But, the manner in which it seeks to protect consumers is to require #node operators ##miners & #validators to do impossible things, or things that create for themselves new criminal & civil liability at pain of fines/ fees /3
CFTC brings first regulatory action against an alegal #DAO, charging #OokiDao with operating an unlicensed FCM; seeking disgorgement, restitution, civil moneyary penalties, trading and registration bans and injunctive relief. Lots to talk about here: /1 cftc.gov/PressRoom/Pres…
allegations in claim against Ooki #Dao characertize it as an "unincorporated association comprised of holder of Ooki Tokens" and legacy BZRX Tokens who have voted those tokens to govern (e.g. to modify, operate market and take other actions w/r/t the Oooki Protocol." /2
This a huge distinction. While the #DAO is itself a named party, it is unincorporated which leads to all sorts of material questions about who can be sued for what. In this case the complaint makes clear that the Dao is those who (a) have tokens and (b) have voted to govern. /3
Important questions for those who may have received blocked property in a #grief#spray#spam attack from blocked #tornadocash#ETH addrsses remain unanswered. #OFAC may give clarity in an FAQ; are a few questions that would be helpful for OFAC to address.1st some background/1
By now all of #crypto knows that #OFAC sanctioned #ETH & #USDC addresses related to #Tornadocash and service providers and many #crypto users are struggling to adapt. Why? /2
We’re dealing with a law designed to regulate legal people & entities, &their property, not quasi-autonomous code used by third parties to transact third party assets to others. Arguably the designation exceeds #OFAC’s statutory authority. That’s an argument for another day. /3
#Dao is another word the #crypto industry uses for ...well... anything. Here's a proposed taxonomy to clarify what we mean when we say #Dao: (a quickie sunday am #thread): /1
@VitalikButerin's seminal work discussing the types of human/tech hybrid ventures that may/will be created using censorship resistant technology tools remains the first stop for this discussion: (blog.ethereum.org/2014/05/06/dao…) /2
@vitalik observes that a #DAO "has the murkiest definition of all... it is an entity that lives on the internet and exists autonomously, but also heavily relies on hiring individuals to perform certain tasks that the automaton itself cannot do." /3
#NYDFS issues USD backed #stablecoin guidance; must be fully backed by an asset reserve; issuer must adopt a clear redemption policy, approved by DFS in writing (!!!) redemption at par in fiat; reserve must be held in custody with /1 dfs.ny.gov/reports_and_pu…
US state/federally chartered depository institutions and/or asset custodians. Reserve must be held in govt treasuries "subject to DFS- approved reqs re: overcollaterialiation." Reserve must be subject to independent audit 1x month by independent CPA under AICPA attestation /2
standards. DFS may also impose obligations regarding cybersecurity and IT standards and evaluate issuer BSA/AML & Sanctions compliance, safety and soundness of the issuing entity; and the stability/integrity of the payment system, as applicable on Issuers. /3
Take aways from the #blockfi settlement with the #SEC (sec.gov/litigation/adm……) 1. BIA were notes under the Reves test; one factor is that there is "no alternative
regulatory scheme or other risk reducing factors exist with respect to BIAs" Congress can of course, set out a /1
an alternative framework that would potentially push these sorts of ventures into a different regulatory classification. 2. the offer and sale of notes is an investment contract. Yes, you can be debt and an investment contract; the pooling of assets is the key factor here. /2
3. Blockfi was a 40 act company; 40% of its assets were investment securities - including loans. /3