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Source: Yahoo Finance, Compilation: TAXDAO
The road of cryptocurrencies has ushered in challenges, and American legislators and judicial agencies have stepped up the supervision of the industry in March and April this year.
From the perspective of ordinary investors and the entire economy, all this is a good thing.As previously written, the value of cryptocurrencies from Bitcoin to dog coins is very vague, so that they can easily be used by people.”Separate” out.
The term “cryptocurrency” may only appear recently, but its highly questioned transactions fully conform to the framework that the court used to identify securities in the past 80 years.
The value of cryptocurrencies can be placed anywhere.They do not generate income like bonds, and their prices cannot be linked to liquid markets like listed companies’ securities.So far, no one has explained what is the use of cryptocurrencies except to pay the scammer who holds the database or computer system.
A few days ago, CHANGE Healthcare, a medical transaction processor owned by UNITED Health Group, received the second request to pay the ransom with cryptocurrency.The company paid $ 22 million ransom to save information including payment data and medical records of thousands of patients.
The hacking of the CHANGE Healthcare database interrupted the national medical reimbursement payment, and even forced some medical service providers to lay off or completely close due to the shortage of funds.
The new ransom requirement obviously comes from a ransomware organization. The organization believes that they have been deceived by their partners in the first extortion. These partners may have escaped with their initial ransom.
Crazy March of cryptocurrencies
Of course, the most striking blow was the judgment of Sam Bankman-Fric, Sam Bankman-Fric, who was convicted on March 28. He was convicted in October last October for seven frauds related to the closing with the FTX cryptocurrency exchange.
Federal judge Lewis Kaplan sentenced Bankerman-Fried for 25 years and ordered the confiscation of more than $ 11 billion.Kaplan observed that SBF had almost no regrets on his crimes.Kaplan said that without this long sentence, SBF “may do something very bad in the future, which is not a trivial risk” to prove the rationality of this long sentence.
Not only that, the day before SBF’s sentence, federal judge Katherine Polk Failla made a ruling that the ruling may have a deeper impact on the cryptocurrency industry.The Failla approves the US Securities and Exchange Commission to continue to filed a lawsuit, accusing the cryptocurrency broker and exchange giant Coinbase for securities transactions without permission.
The important thing about Failla’s ruling is that she immediately rejected the argument of Coinbase, that is, cryptocurrencies are new types of assets that do not belong to the SEC jurisdiction -in short, they are not “securities”.
Cryptocurrency promoters have been put forward the same arguments in court and the Hall of the Congress. They urged legislators to formulate a new regulatory structure for cryptocurrencies -preferably the existing rules and regulations issued by the US Securities and Exchange Commission and the Commodity Futures Commission CommitteeLoose.
Coincidentally, SBF also said in the meeting of the Congress of the Congress. At that time, he was regarded as the last seemingly honest cryptocurrency promoter, and later discovered that he illegally misappropriated the assets of customers to fund his company.
Failla watched this debate, “the” cryptocurrency ‘term may only appear recently, “she wrote,” but the questioned transactions are completely in line with the framework of the court used to identify securities in the past 80 years. “
Failla also slammed the cryptocurrency gang and rejected the argument of Coinbase, that is, the case should belong to the category of the “major problem principle”.The “major issue principle” is an informal rule that requires supervision measures if it involves “major economic and political significance”, it must be clearly authorized by Congress.Coinbase said that because Congress has not promulgated regulations specifically for cryptocurrencies, the SEC lawsuit should be rejected.
The judge’s view of this argument is frustrating.She pointed out, “Although the cryptocurrency industry is indeed huge and important, it is far from becoming a” part of the US economy “with a huge economy and political significance.” Cryptocurrencies are fundamentally unable to “Other industries are compared. “” She wrote, including the US energy industry and the traditional securities industry itself.
Failla’s ruling was made after another ruling made by the Federal Court of New York. The judge in the ruling regarded cryptocurrencies as securities.In this case, Judge Edgardo Ramos refused to reject SEC’s allegations of Cameron Winkelvoss and Tyler Winkelvoss, Gemini Trust CO., and cryptocurrency loan agencies, Genesis Global Capital.
The US Securities and Exchange Commission accused that Gemini concentrated customers’ encrypted assets lent it to Genesis and promised to customers to return a high return to an unregistered securities.As for COINBASE cases, cases of the US Securities and Exchange Commission will continue to be tried.
Both rulings tend to deny the ruling made by the New York Federal Judge Analisa Torres in the SEC’s law enforcement operations for XRP crypto token developers.Torres believes that in some cases, this token may not be securities.However, her ruling was covered by a series of rulings from her colleagues. The ruling believed that cryptocurrency marketers and exchanges were engaged in unregistered securities transactions, and this was illegal.
Cryptocurrency April
Yu Bo in March continued until April.On April 5th, the New York Federal Jury ruled that the Terraform Labs and its CEO and major shareholder DO Kwon were responsible for the “large -scale cryptocurrency fraud case” called SEC.The case involves Terraform’s so -called stable currency UST, which is a cryptocurrency linked to the US dollar.Do Kwon did not appear in court to hear the judgment.He was detained in Heishan, and the US and South Korean authorities were competing for his extradition.
TerraForm claims that if the value of the US currency falls below $ 1, it will automatically “self -repair” through the software algorithm.This happened in May 2021.According to the US Securities and Exchange Commission, when contemporary currency did return to the value of $ 1, Terraform and Kwon boasted that price recovery was a victory for “decision -making during market volatility.”
In fact, the algorithm has nothing to do with this.According to the trials that began at the end of March, TerraForm has received secret assistance from the trading company Jump Trading. The company may invest tens of millions of dollars to support the USD and may obtain more than $ 1 billion in profits from the transaction.The US Securities and Exchange Commission stated that it failed to disclose the arrangement to investors that violated the law.
SEC said that Kwon and TerraForm also lied to the public, saying that South Korean financial company Chai, which is similar to Venmo, is using Terraform to process transactions. In fact, CHAI has stopped using Terraform in 2020.
The agency claims that these deception behaviors depict the steady view of Terraform, but in May 2022, when the UST was separated from the US dollar again and could not be recovered, the scene was fell apart.The US Securities and Exchange Commission stated that the value of the USSTA has actually fallen to zero, “the total market value of more than $ 40 billion has been lost … and set off a stir in the encrypted asset industry.”
TerraForm has bankruptcy and has not yet raised any allegations to Jump Trading.
More stringent supervision?
These incidents should stop American legislators to think about how to supervise cryptocurrencies.At the hearing held by the Senate Bank, Housing and Urban Affairs Commission, Sherrod Brown, the chairman of the committee, warned that cryptocurrencies pose a potential threat to national security.
Brown said: “The reason why bad actors turn to cryptocurrencies is not because they see advertising and believe in hype.” “They use it because they know this is a solution.In the case of your customer rules or suspicious transactions), it is easier to transfer funds in the dark, and we must ensure that the cryptocurrency platform complies with the same rules as other financial institutions. “
Wally Adeyemo, deputy minister of Finance, supplemented Brown, he urged the Congress to issue reform measures proposed by the Ministry of Finance to strengthen sanctions on “providing convenient foreign digital assets providers for illegal finance”.
At the same time, Elizabeth Warren, a Senate Senate in Massachusetts, may be the most uncompromising person on the Capitol Mountain -point the spearhead to the stable currency, urging the House Financial Service CommitteeThe rules of banking industry.
She warned that, given that stablecoins and similar products may “destroy consumer protection and the security and stability of the banking system”, any so -called reform “may enlarge and consolidate these risks, rather than alleviate them.”
What promotes politicians to be keen to promote an asset category that does not have any value except fraud or theft?As usual, it is money -green, foldable.
Cryptocurrency promoters have been increasing lobbying in Washington. According to data from the regulatory agency Open Secrets, cryptocurrencies spent nearly $ 20 million for lobbying in the first nine months of 2023.
With the promotion of new regulatory methods, especially the promotion of Republicans of the House of Representatives, and this year is the year of election, more expenses seem to be coming.This is a situation of win -win and double losses. Politicians and cryptocurrency promoters are expected to win, while ordinary investors and the entire economy may fail.
