Welcome to Law Decoded, your weekly digest of all the major developments in the field of regulation. There was some substantial good news for crypto last week, but the prevailing storyline is still the unfolding of FTX. While the extradition of the failed exchange’s founder Sam Bankman-Fried seemed pretty logical from the beginning of the saga, last week, the 30-year-old got the first official call: The Texas State Securities Board (SSB) invited the former CEO to attend the hearing on the alleged sale of unregistered securities on Feb. 2. SSB’s director of enforcement Joe Rotunda hopes to get a Cease …

Several crypto firms are facing a probe from the United States Federal Trade Commission (FTC) over possible deceptive or misleading advertisements relating to cryptocurrencies. According to a Dec. 6 report from Bloomberg, FTC spokeswoman Juliana Gruenwald said the watchdog is investigating “several firms for possible misconduct concerning digital assets.” Gruenwald did not provide further details about which firms were the subject of the investigation or what had triggered the probe. However, deceptive advertising and promotion have been a trending topic in the U.S. this year. In October, reality TV star Kim Kardashian was fined by the United States Securities and …

Maxine Waters, chair of the United States House Financial Services Committee, has called out former FTX CEO Sam Bankman-Fried for announcing on social media he intended to testify after “learning and reviewing what happened” at the exchange. In a Dec. 5 Twitter thread, Waters cited Bankman-Fried’s numerous media interviews in the wake of FTX’s bankruptcy as evidence that his information was “sufficient for testimony” before the committee. Waters will preside over a hearing investigating the collapse of FTX on Dec. 13, in which committee leadership said they expected Bankman-Fried and other individuals associated with the events around the exchange’s downfall …

The crypto borrowing and lending platform Nexo plans to gradually cease operations in the United States “over the coming months,” according to a blog post on Dec. 5. Nexo has stated that the decision to leave the U.S. is “regrettable but necessary.” Today we are announcing the regrettable but necessary decision that Nexo will be phasing out its products and services in the United States due to a lack of regulatory clarity. — Nexo (@Nexo) December 5, 2022 In the post, Nexo said that it has been talking to U.S. regulators for 18 months in an attempt to determine how …

One of the most powerful moments in a new crypto user’s journey happens the first time they send a sizable amount of money to their private wallet. It’s an awe-inspiring, serious moment — and it’s a little scary to experience the power and personal responsibility of the technology firsthand with your own real money. A second powerful moment occurs when the same user is introduced to a block explorer, looks up their address and sees that same transaction there on the blockchain for all to see. There are competing visions of what Bitcoin (BTC), Ether (ETH) and other cryptocurrencies will …

Sam Bankman-Fried, the former CEO of now-bankrupt cryptocurrency exchange FTX has declined to testify before the United States Congress until he’s “finished learning and reviewing what happened.” Rep. Waters, and the House Committee on Financial Services: Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain. I'm not sure that will happen by the 13th. But when it does, I will testify. https://t.co/c0P8yKlyQt — SBF (@SBF_FTX) December 4, 2022 Bankman Fried’s unwillingness to testify before the Congress slated for Dec. 13, despite a barrage of media …

The most talked about crypto lawsuit involving the United States Securities and Exchange Commission (SEC) and Ripple is approaching its conclusion after a two-year-long battle. On Dec. 2 the SEC and Ripple both filed redacted replies to each other’s opposition to motions for summary judgment. Ripple argued in its motion document that the SEC has failed to prove that its offering of XRP between 2013 and 2020 was an offer or sale of an “investment contract” and therefore a security under federal security laws. Ripple concluded the document by stating that “the court should grant Defendant’s Motion and should deny …

2022 is nearing an end and might go down as one of the most eventful years for the crypto industry owing to the prolonged winter that had wiped more than 70% of the market cap from the top and the barrage of crypto firms imploding. This was mainly due to internal mismanagement and unchecked decision-making process. Among all the ups and downs, one thing has remained clear — retail customers have lost a significant amount of money due to a lack of regulatory oversight. While lawmakers in the United States promised to bring crypto under regulatory purview many times this …

As a crypto CEO, I know how often our sector is misunderstood and criticized. Sometimes, the criticism is deserved because we have not always done our part to shine a light on the utility and use cases powering positive change. But other times, it’s based on the assumption that all players in this industry are the same, which is just not true. Recently, skepticism reached new heights with the epic crash of FTX, one of the largest crypto exchanges in the world — and perhaps the largest-ever example of the need for regulatory oversight. Given the positioning of FTX, it …

Cryptocurrency exchange Binance is working with accounting firm Mazars as part of its proof-of-reserve (PoR) audits triggered by the fall of FTX. Mazars, the accounting firm that worked for former United States President Donald Trump’s company, was appointed as an official auditor to conduct a “third party financial verification” as part of Binance’s PoR updates, The Wall Street Journal reported on Nov. 30. The accounting firm is reportedly already reviewing all Binance’s publicly shared information on Bitcoin (BTC) PoR and will also be verifying future updates and tokens, a spokesperson for Binance reportedly said. “The first verification update for BTC …

One of the leading figures convicted of being behind the $100 million crypto “Ponzi” scheme, EmpiresX, has just been handed an over four-year jail sentence by a United States court. The sentencing was handed to Joshua David Nicholas, the “head trader” of purported crypto platform EmpiresX, who is nowset to serve a 51-month prison sentence along with three years of supervised release for his role in the fraudulent scheme. It follows a Sept. 8 guilty plea from Nicholas for conspiracy to commit securities fraud. According to the Department of Justice (DOJ), over a two-year period, Nicholas made claims the platform …

Sherrod Brown, chair of the United States Senate Banking Committee, has called on Treasury Secretary Janet Yellen to work with financial regulators and lawmakers on comprehensive crypto legislation “in the wake of FTX’s implosion.” In a Nov. 30 letter to Yellen, Brown requested the Treasury Secretary coordinate with regulators to address crypto based on recommendations from the Financial Stability Oversight Committee, or FSOC. The committee chair cited crypto exchange FTX’s “alarming fraud”, liquidity crunch, and bankruptcy as an example of financial risk that should not “spillover into traditional financial markets and institutions.” “I ask that you coordinate with the other …