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Crypto advocates file brief against SEC’s investor tracking database

The Consolidated Audit Trail would gather a monumental amount of data, and more than it is meant to when it exposes the identity of crypto wallet holders.

The DeFi Education Fund and the Blockchain Association jointly filed an amicus brief in a case brought by two individuals and the New Civil Liberties Alliance (NCLA) against the United States Securities and Exchange Commission (SEC), its chairman Gary Gensler and the Consolidated Audit Trail (CAT). The complaint does not mention cryptocurrency or blockchain, but the organizations argue that the CAT could have a profound negative effect on crypto users.

The CAT is a database that was first proposed in 2010 and became operational in April. According to its website, the CAT “tracks orders throughout their life cycle and identifies the broker-dealers handling them, thus allowing regulators to efficiently track activity in Eligible Securities throughout the U.S. markets.”

The NCLA complaint against the CAT database. Source: Pacer

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NY Attorney General sues crypto trader NovaTech, claims $1B fraud

Two people took in $1 billion in crypto deposits and traded $26 million of it, the suit alleges.

New York Attorney General Letitia James has filed a suit alleging that hundreds of thousands of people lost over $1 billion to two crypto firms with overlapping founders. The suit names cryptocurrency trading company NovaTech, its founders Cynthia and Eddy Petion, defunct cryptocurrency mining company AWS Mining and associated individuals and companies as defendants. 

According to the suit, more than 11,000 New York state residents, particularly members of the New York Haitian community, lost tens of millions of dollars by investing in NovaTech. The suit alleges that NovaTech is a Ponzi scheme that has used religious appeals to attract customers.

NovaTech also misrepresented its licensing and registration status, the suit alleges. The company was registered in St. Vincent and the Grenadines until that country’s Financial Services Authority canceled it in January 2023. The company collapsed in May 2023.

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British Man Who Lost 7,500 BTC Sues for Right to Search Council Landfill

British Man Who Lost 7,500 BTC Sues for Right to Search Council LandfillA British computer expert, who inadvertently misplaced a hard drive containing 7,500 bitcoins, has initiated a legal action to compel the Newport City Council to permit him to search through the landfill where the storage device is believed to be buried. Anticipating a further increase in the value of the cryptocurrency, the expert said he […]

SEC Chair Gary Gensler Ends Tenure a Year Early to Avoid Trump’s Axe

CoinEx crypto exchange sued by New York for failing to register with state

The NY Attorney General is looking for a court order to remove the exchange from the state and wants it to block all internet addresses originating from New York.

Cryptocurrency exchange CoinEx has been sued by the New York Attorney General, Letitia James, alleging the firm falsely represented itself as an exchange due to failing to register as a securities and commodities broker-dealer in the state.

A 38-page petition filed by James in the New York Supreme Court on Feb. 22 alleged CoinEx “engaged in repeated and persistent fraudulent practices” and violated the state’s Martin Act — considered one of the most strict anti-fraud and securities regulation laws in the United States.

She also asserted CoinEx listed various tokens that qualified as “both commodities and securities” naming Amp (AMP), LBRY Credits (LBC), Rally (RLY) and Terra (LUNA).

In a Feb. 22 statement, James said CoinEx is not registered with the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) “as is required under New York law” to sell the tokens.

The Attorney General’s Office created a CoinEx account with a New York-based computer and internet address and alleged it was able to trade on the platform.

“The days of crypto companies like CoinEx acting like the rules do not apply to them are over,” she added.

Related: Rep. Maxine Waters says all US regulators 'better get together on crypto'

The petition also states that CoinEx failed to comply with a Dec. 22, 2022 subpoena sent by the Attorney General’s Office in order to “provide testimony concerning the virtual asset trading activities of its platform.”

“CoinEx was compelled by subpoena to appear for an examination under oath on January 9, 2023, and failed to appear [...] CoinEx’s non-appearance is prima facie proof that CoinEx has engaged in the [mentioned] fraudulent practices.”

In the petition, James is seeking a court order to stop CoinEx from marketing itself as an exchange, prevent it from operating in the state and will order the exchange to geo-block internet addresses and GPS location data originating from New York.

Cointelegraph contacted CoinEx for comment but did not receive an immediate response.

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Free Talk Live Co-Host Ian Freeman Found Guilty in Federal Crypto Trial

Free Talk Live Co-Host Ian Freeman Found Guilty in Federal Crypto TrialAfter close to two years, following the U.S. federal government accusing the Crypto Six of unlicensed money transmission, the case is seemingly coming to an end. According to multiple reports, Keene resident and libertarian activist, Ian Freeman, the last member of the Crypto Six case to be tried, was found guilty on all counts which […]

SEC Chair Gary Gensler Ends Tenure a Year Early to Avoid Trump’s Axe

Judge blocks sale of Jay-Z’s first album and its copyright as an NFT

Damon Dash has slammed the complaint against him from Roc-A-Fella Records, stating that he never minted an NFT and was only attempting to sell his stake in the company.

A New York judge has issued a temporary restraining order to block an alleged attempt from Roc-A-Fella Records Inc (RAF) co-founder Damon Dash to sell a tokenized version of Jay-Z's first album “Reasonable Doubt” along with its copyright.

Dash however has claimed he was only trying to sell his stake in RAF.

Rapper Jay-Z co-founded RAF with Damon Dash and Kareem Burke back in 1996. The record label has split ownership between the three, with the company owning the full copyright to the album in question.

RAF asserted that Dash was attempting to auction off a tokenized version of the album and its copyright on SuperFarm on June 23, an NFT marketplace co-created by crypto YouTuber ElioTrades. While that auction was cancelled the complaint alleges Dash is "frantically" trying to arrange another.

New York District Judge John P. Cronan agreed to halt the sale and restrain Dash from selling the copyright to the album until at least after a July 1 hearing.

A complaint filed on June 18 shows a number of claims against Dash, including breach of fiduciary duty, unjust enrichment, conversion, and replevin. It reads:

“The bottom line is simple: Dash can’t sell what he doesn’t own. By attempting such a sale, Dash has converted a corporate asset and has breached his fiduciary duties."

The complaint cites an announcement from SuperFarm before the auction on June 23, in which the NFT platform said that it is “proud to announce, in collaboration with Damon Dash, the auction of Damon‘s ownership of the copyright to Jay-Z’s first album Reasonable Doubt,” with RAF asserting that the NFT has already been minted on the blockchain.

Related: Beyond the hype: NFTs’ actual value is still to be determined

The plaintiff’s prayer for relief includes nominal damages, punitive damages, the cost of the lawsuit and attorney fees, and the enjoinment of Dash from selling any interest in the album.

Speaking with Rolling Stone on June 22, Dash slammed the complaint, claiming that he never minted the album as an NFT, and was only attempting to sell his stake in the company:

“There hasn’t been an announcement. There wasn’t an announcement at all. Don’t you think that if I made an announcement that I’m selling Reasonable Doubt you would’ve heard about it?”

“What they’re accusing me of is minting a whole album. So if it’s already minted, it’s already on the blockchain, that means it’s already there. It never happened, and they know it never happened,” he added.

SEC Chair Gary Gensler Ends Tenure a Year Early to Avoid Trump’s Axe