SEC’s Proposed Custody Rule Sparks Controversy

Last week, the U.S. Securities and Exchange Commission (SEC) found itself in hot water as heavy hitters from the crypto world took to the airwaves and social media, aiming their verbal missiles at the regulator. The deadline for comments on the SEC’s proposed custody rule came barreling down on May 8, and the feedback was nothing short of a tsunami.

According to Miles Jennings, the general counsel at Andreessen Horowitz, the proposal is nothing more than a “misguided and transparent attempt to wage war on crypto.” Strong words, indeed! The Blockchain Association chimed in, asserting that the rule oversteps SEC’s authority, creating an inhospitable environment for advisers engaging with crypto exchanges. They argued it would ultimately jeopardize investors’ assets.

Congress Gets Involved: A Word from Representative McHenry

Even Congressman Patrick McHenry had something to say, penning a letter that accused the SEC of exceeding its limits with this registered investment adviser rule. Seems like lawmakers are rolling up their sleeves to battle this budding regulatory saga.

Coinbase’s Legal Tango with the SEC

Adding fuel to the fire, the SEC’s “legal threat” towards Coinbase in late March has provoked outrage. Coinbase filed a complaint to push back against the charge of “possible securities law violations,” and the U.S. Chamber of Commerce threw its backing behind the crypto exchange. They accused the SEC of whipping up a stormy atmosphere for crypto companies trying to stay afloat in the U.S. market.

Not to be left out, Paradigm, a firm co-founded by Coinbase’s very own Fred Ehrsam, also filed an amicus brief. They warned that regulatory chaos could lead to a potential “de facto ban on digital asset trading platforms.” If that isn’t dramatic enough for you!

EMPOWR Takes on the SEC

In an unexpected twist, watchdog group Empower Oversight Whistleblowers and Research (EMPOWR) decided to file a suit against the SEC. Their goal? To uncover communications between ex-SEC officials and their former or future employers regarding crypto dealings. Talk about keeping it spicy!

EMPOWR’s legal claims point towards potential conflicts of interest and highlighted names like former SEC chair Jay Clayton and other significant players in the regulatory world.

Texas Gives Digital Currency a High Five

In Texas, however, it’s not all bad news for crypto enthusiasts! State legislators recently voted to amend their Bill of Rights, giving a nod to individuals’ rights to use digital currencies as a legitimate medium of exchange. This new measure, specifically Bill HJR 146, states that Texans can trade and contract using digital currencies, cash, and other forms of scrip. A win for U.S. crypto advocates!

Do Kwon’s Legal Jamboree in Montenegro

Meanwhile, across the pond in Montenegro, Terra founder Do Kwon’s bail terms have been accepted. He was charged with document forgery, but the court granted him bail at €400,000 ($436,000) and opted for house arrest instead of imprisonment. Kwon’s ongoing court saga is set for a thrilling start on June 16.

Sam Bankman-Fried’s Legal Maneuvers

Back in the U.S., FTX founder Sam Bankman-Fried is also in legal hot water, pushing to dismiss ten criminal charges against him. He’s aiming for a clean slate on everything except three counts of conspiracy. His lawyers argue that some charges go against the “rule of specialty,” which restricts prosecutions to the original charges for which he was extradited. If only courtroom dramas had a laugh track!