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Marco Santori Profile picture
Marco Santori
@msantoriESQ
Chief Legal Officer @krakenfx Not your lawyer. Assumptions, opinions, prevarications and predictions are mine, not my employer's.
2 subscribers
Aug 23 • 10 tweets • 2 min read
Today, the Federal Court for the Northern District of California ruled, as matter of law, that none of the tokens trading on Kraken are securities.

This is a significant win for Kraken, for the principle of clarity and for crypto users everywhere. It also confirms Kraken’s long-standing position that it does not list securities. 1/ 2/ Furthermore, the Court found the SEC’s self-serving invention of the “crypto asset security” concept to be “unclear at best and confusing at worst.”
May 10 • 8 tweets • 2 min read
Last night, @krakenfx fired back at the SEC with its final brief in the motion to dismiss the SEC’s complaint.

The SEC had its opportunity to tell the Court what, precisely, is the investment contract that supposedly trades on Kraken.

But they couldn't. 1/🧵 2/ Instead of identifying a contract, the SEC argued there are investment-like “expectations” and “investment concepts” in the air and those should be good enough.
Mar 1 • 23 tweets • 3 min read
Last week: You read @krakenfx's motion to dismiss the SEC’s case against crypto.

Today: You’re reading about “a regulatory power grab,” how “the SEC has appointed itself crypto regulator“, and that ”the SEC… puts consumers at risk”

But wait. That’s not Kraken talking. That’s eight State Attorneys General in a new, explosive court filing.

Here’s what just went down.

(Tell your lawyer to read this thread👇) 2/ Kraken has long advocated for clear, concise rules for digital asset exchanges from Congress. There are multiple bills pending right now on both sides of the hill.
Jan 4, 2021 • 15 tweets • 3 min read
Kraken has published its response to the Treasury’s midnight rule on self-custodied wallets. The response is not short. It is not polite. It concludes with an important message:

Regulating crypto companies punishes the regulator.

How? Read on. 1/

blog.kraken.com/post/7379/krak… Regulating a traditional bank is easy: If a proposed regulation forces the bank to provide the information the regulator wants, then implement the regulation and collect the information. EZPZ. /2
Dec 21, 2020 • 13 tweets • 2 min read
WAP

Weak
Administrative
Procedure

Others have objected on procedural grounds. I want to explain why the proposed rule is itself shameful:

It outlaws sending money to the poor.

blog.kraken.com/post/7286/finc…

Kraken blogged. I share further thoughts in this thread👇 1/ 2/ The story of this rulemaking actually starts in 2013, when Jennifer Shasky Calvery (then FinCEN Director) first suggested publicly that a VCTR – a virtual currency transaction report – would be valuable in fighting financial crime.
Dec 7, 2020 • 13 tweets • 3 min read
🚨🚨🚨 1/ If true, this is amazing. Unprecedented. This would represent the first ever transmogrification of a token from a security to a non-security, where the journey was explicitly blessed by the SEC. 2/ "Dude I don't care about a new internet or staxxx or whatever"

You should. The question of how a utility token can enter the world a security but then become a non-security has been open - painfully open - for years. SEC just blessed one very specific answer.
Nov 20, 2020 • 18 tweets • 3 min read
1/ 🚨 BREAKING: US Office of the Comptroller of the Currency proposes rule prohibiting large banks from discriminating against "legal but disfavored" customers like oil & gas biz, independent ATM operators and of course...

crypto companies. 2/ Crypto OGs know the single greatest impediment to widespread adoption has been and continues to be the lack of access to banking services.

In its early days, Bitcoin was caught up in Operation Chokepoint, and crypto more broadly is still caught up today
Sep 16, 2020 • 31 tweets • 8 min read
🚨🚨🚨*BREAKING*🚨🚨🚨

@Krakenfx just won approval to create America’s first crypto bank.

World, please meet Kraken Financial. Kraken Financial, world.

Wait, a what? Kraken is a BANK?! How did this even happen?!

Allow me to threadeth. 👇 2. It all begins on this island call Yap

Heh, actually it begins in Delaware! You might remember from back in 2016 the Delaware Blockchain Initiative, an effort to build a bridge between a US state and the crypto industry.
Jul 13, 2020 • 17 tweets • 3 min read
1/ BREAKING 🚨 popular crypto app Abra charged by and settles with SEC for offering securities swaps. This is interesting for a few reasons. Short thread follows.
sec.gov/news/press-rel… 2/ According to the SEC's order, Abra was offering Robinhood-like securities trading, except there were no actual stocks under the hood.

Users would simply bet on the price movement of the stock without actually owning it (or owning an entitlement to it)
Feb 6, 2020 • 19 tweets • 5 min read
1/ 🚨BREAKING🚨: SEC Commissioner @HesterPierce today publicly proposed a safe harbor for token sellers building decentralized networks.

It is an elegant solution to the most complex legal challenge of this crypto era.

Thread is go.👇 @HesterPierce 2/ The proposal seems straightforward: So long as you, dear token seller, comply with the securities laws in selling the token initially, you've got 3 years to get the network off the ground, during which SEC won't come after you.

Could it really be that simple? Read on.
Jan 28, 2020 • 7 tweets • 2 min read
1/ For the first time in a long time, I'm at a traditional-investor-focused crypto event. Been a long time not because I don't like them or don't see ROI, but because they'd become more rare post-2017. Are we seeing the beginning of a renaissance? Some interesting perspectives... 2/ for example, this slide by @ARKInvest laying bare the cultural canyon between east and west coast crypto views
Oct 9, 2019 • 21 tweets • 3 min read
🚨 BREAKING 🚨

1/ IRS releases long-awaited guidance on crypto forks and airdrops.

It is not good.

Begin thread send tweet 👇 2/ The new guidance covers two circumstances: airdropped coins and forked coins. Sadly, it seems to confuse the two, assuming that airdrops and forks often occur at the same time or are otherwise functionally related.
Sep 30, 2019 • 21 tweets • 5 min read
1/ 🚨SEC drops the hammer on Block.one. Does this mean EOS is a security now? Why is the penalty so small compared to the size of the ICO? Must exchanges de-list? Can I really do two tweet tempests in a single day? Answers below👇 2/ Today, SEC published its order instituting Cease and Desist Proceedings against Block one, the creators and sellers of the EOS token. SEC says the token was a security.
Sep 30, 2019 • 20 tweets • 3 min read
1/ Today, a group of exchanges and custodians got together to fill a gap left by US laws. It's the Crypto Ratings Council. Here's a short thread to tell you what to think about it. Don't you dare think differently. 2/ The goal of the council is apparently to create a Hot or Not for the Howey Test. The Council will take notice of your crypto and publicly rate it, according to a proprietary framework, on a scale of likelihood of security status. Whether you want it to or not.
Jul 25, 2019 • 21 tweets • 6 min read
🚨 BREAKING: SEC Issues second-ever no-action letter to the seller of a token ...which doesn't seem to have even a single indicator of security status except that it happens to be a token wait why did we need a no-action letter for this 1/ 2/ Today, Pocketful of Quarters was granted no-action relief for an ERC-20 token designed solely as an in-game currency. Quarters are a stable medium of exchange with no investment characteristics. They aren't used to raise money and cannot be transferred out of a closed system.
May 9, 2019 • 32 tweets • 8 min read
1/ 🚨🚨🚨 Today, the US Treasury published MASSIVE new guidance on crypto regulation. It has *major* implications for wallets, exchanges, ICO issuers, dApps, DEXes... OH MY 🚨🚨🚨 (um I'm gonna tweet about it) 2/ The best way to understand this official guidance is the following: FinCEN cares deeply about your financial privacy, so long as nothing is private from FinCEN.
Apr 3, 2019 • 20 tweets • 4 min read
1/ 🚨🚨🚨 SEC Publishes its long-awaited guidance on ICOs, the Howey Test, and everything else. A "baby steps" no-action letter released as well. Thread below for analysis 👇 2/ OK first before we get into it - the no action letter is for a company that sells tokens redeemable for travel on private jets. Private. Jets.
Mar 12, 2019 • 7 tweets • 1 min read
1/ Clayton didn't say that "Ether is no longer a security." He said he agreed with Hinman's *explanation* of when a token is no longer a security. 2/ Hinman can say stuff like that but for the Chairman to say it in a letter to Congress is another matter entirely. It would be construed as binding, and the SEC isn't trying to have that.
Feb 14, 2019 • 21 tweets • 4 min read
1/🚨 The SEC just fought back in the Blockvest case and won big time. The issuers' Lawyers literally quit during the motion. 2/ It is *very* rare for a federal court to reconsider an order. Here, the SEC argued the court missed one of its arguments made the first time around. The court considered it this time, and found it persuasive.
Feb 9, 2019 • 7 tweets • 2 min read
1/ Fundamentals 2/ Fundamentals
Jan 23, 2019 • 21 tweets • 3 min read
1/ 🚨🚨🚨BREAKING: UK Securities regulator rejects the SEC's "fully decentralized" test for utility tokens in new guidance, says utility tokens are not securities within their jurisdiction, regardless of functionality. 2/ (obviously worth a triple siren)