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Elon Musk hits at SEC, DOJ amid suit to force testimony in Twitter probe

Coin Telegraph
Elon Musk hits at SEC, DOJ amid suit to force testimony in Twitter probe
60 Minutes

Elon Musk claims the SEC and DOJ are abusing their regulatory powers for personal and political gain to receive punitive action.

Elon Musk has called for a “comprehensive overhaul” of the United States Securities and Exchange Commission hours after the regulator sued Musk alleging he failed to testify in its probe relating to his $44 billion Twitter (now X) purchase last October.

The SEC is investigating if Musk’s purchase triggered securities laws and an Oct. 5 filing by the regulator in a California District Court seeks to compel Musk to comply with an earlier SEC subpoena.

In an X post the same day Musk suggested the SEC — along with the U.S. Department of Justice — should instead be the ones probed.

“A comprehensive overhaul of these agencies is sorely needed, along with a commission to take punitive action against those individuals who have abused their regulatory power for personal and political gain.”

“Can’t wait for this to happen,” Musk added, in response to a post outlining the various actions the U.S. government has taken against Elon Musk-led companies.

Asked by an X user if such a probe would ever happen, Musk responded: “I estimate the probability at 100%.”

The SEC said it subpoenaed Musk in May 2023 and required him to provide testimony at the regulator’s San Francisco office on Sept. 15, which Musk initially agreed to, the filing reads.

Two days prior, Musk “abruptly” notified the SEC he wouldn’t make an appearance and made several “spurious objections,” the SEC said.

The regulator said it tried to negotiate an alternative time and place for Musk’s testimony in “good faith” but its efforts were met with Musk’s “blanket refusal.”

The SEC also claimed Musk’s objections lacked legal merit.

“None of Musk’s objections has any legal validity, and he has no justifiable excuse for his non-compliance with the SEC’s subpoena.”

X is among the most popular social media platforms for the cryptocurrency community with one heated topic of discussion being the SEC’s regulatory approach to the crypto industry.

Related: The ‘Elon effect’ shows how opinion leaders shape the fintech market

Musk has been looking to integrate cryptocurrency payments on X in recent months having obtained a currency transmitter license from Rhode Island’s regulator in late August.

Musk has taken shots at the SEC in the past, previously making his stance on the regulator clear in a December 2018 interview with 60 Minutes:

“I do not respect the SEC. I do not respect them.”

Magazine: Hall of Flame: Peter McCormack’s Twitter regrets — ‘I can feel myself being a dick’

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Elon Musk to rebrand Twitter to X, but Crypto Twitter has other ideas

Coin Telegraph
Elon Musk to rebrand Twitter to X, but Crypto Twitter has other ideas
Coin Telegraph

One pitch from Axie Infinity’s co-founder said to keep Twitter but have a crypto wallet named X for spending and creator tipping.

Twitter users, along with the avid crypto community, may soon see a very different version of the social media app — which is set to ditch its iconic blue bird logo for an “X” as part of a major rebrand.

Crypto Twitter hasn’t been particularly thrilled with some of the changes, however.

In a series of tweets on July 23, Musk hinted that the platform will be rebranded to “X” as early as Monday, an early step in its eventual transformation to an “everything app.”

The rebrand could involve changing Twitter’s color scheme to black, the removal of Twitter’s blue bird logo, and a name change to X, according to Musk’s various tweets and a poll.

The website used to access the social media platform may also change, with Musk confirming that X.com, the online address for his 1999-founded financial services start-up that sold to PayPal, now redirecting to Twitter.

According to the Wayback Machine, Prior to the change, x.com was a mostly blank website that simply displayed the letter "x." Prior to that, it had redirected to Musk's Boring Company website. The website URL also had a long stint in the early 2000s pointing to PayPal and even had a stint displaying eBay's corporate site. 

In March, Musk also established the tech firm X Corp. as Twitter’s parent company partly to realize his vision for the WeChat-like app.

Crypto Twitter calls rebrand decision ‘insane’

However, not many Crypto Twitter users have been thrilled with the proposed changes. Twitter has been a stronghold for the crypto community with over 1 billion tweets about crypto between 2020 and 2022 according to a March Hypebeast report.

Trust Machines marketing chief Dan Held said Twitter was “iconic,” adding Musk was “insane” to rebrand to X.

Others have been resistant to the proposed X rebrand. Crypto blogger Tiffany Fong said she’s “still callin it twitter” which podcast host Peter McCormack agreed with.

There were, however, some supportive of the idea saying the super-app has been Musk's vision since leaving PayPal and point to Musk's October tweet that implicitly said his Twitter purchase was the accelerant to creating X.

Others have been pitching their own ideas on how Musk should move ahead with X. Axie Infinity co-founder Jeff “Jiho” Zirlin said to keep the Twitter name but add a crypto wallet called X to allow users to spend and tip platform creators.

Related: Twitter to impose daily limits on DMs for unverified accounts

Meanwhile, in a July 23 post, Twitter chief Linda Yaccarino added more clues about X, saying it would have “unlimited interactivity,” support multiple media formats, and feature payments and banking — a feature that Musk has reportedly said he wants to support crypto.

Without specifying how Yaccarino said the upcoming app would also be powered by artificial intelligence, though Musk has previously said AI would be used to detect manipulation of public opinion.

The rebrand comes as Musk admitted on July 15 that Twitter’s advertising revenue had dropped by 50% and the firm had a heavy debt load, although it’s unknown over what timeframe the revenue drop occurred.

Magazine: Tokenizing music royalties as NFTs could help the next Taylor Swift

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Back to extreme greed past K? 5 things to know in Bitcoin this week

Back to extreme greed past $65K? 5 things to know in Bitcoin this week

Jack Dorsey courts controversy by claiming ETH is a security

Coin Telegraph
Jack Dorsey courts controversy by claiming ETH is a security
block

Since Binance and Coinbase were sued for offering unregistered securities, the longtime Bitcoin advocate has tweeted posts promoting a focus on BTC development.

Long-time Bitcoin (BTC) advocate Jack Dorsey has found himself in a Twitter war with several crypto industry pundits after he responded with “yes” to a question asking if Ether (ETH) was a security.

The comment caught the attention of Udi Wertheimer, a Bitcoin Ordinals developer at Taproot Wizards, who inferred Dorsey was a “clown” in a tweet on June 6.

In response, Dorsey tweeted, “ETH is not a security? Teach me wizard,” which prompted Wertheimer to share a five-year-old video of the United States Securities Exchange CommissionChair Gary Gensler stating that ETH was now “sufficiently decentralized” and wasn’t a security.

However, Gabor Gurbacs, strategy adviser to stablecoin issuer Tether and investment management firm VanEck, weighed in on Wertheimer’s comment, stating that Ethereum’s recent transition to proof-of-stake may have re-triggered securities laws.

The online scuffle comes in light of the SEC filing lawsuits against cryptocurrency exchanges Binance and Coinbase on June 5 and 6 for allegedly offering tokens considered to be unregistered securities.

Dorsey also tweeted and implied approval of a screenshot of a post by Coinbase CEO Brian Armstrong in 2015, where he referred to altcoins as a “distraction” and that Coinbase should instead “be focused” on Bitcoin.

Dorsey continued on his pro-Bitcoin tweeting streak and retweeted a video of Jack Mallers — CEO of Bitcoin Lightning application Strike — calling out Armstrong for choosing to prioritize altcoins over building on Bitcoin and the Lightning Network.

Related: Jack Dorsey tips pro-crypto candidate Robert Kennedy to win presidency

When Dorsey was in charge of Twitter in 2021 the company sold 140 Ethereum-based nonfungible tokens (NFTs) but he rejected investing in Ether at the time.

Dorsey also downplayed Ethereum’s development in August 2021 when he claimed that Ethereum alone wouldn’t be able to disrupt big tech.

Dorsey recently provided funding and became an advocate for Nostr, a decentralized “Twitter killer” network that integrates Bitcoin Lightning-based payments on the “Damus” platform.

Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?

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US regional bank shares sink despite Fed calling banking system ‘sound’

Coin Telegraph
<div>US regional bank shares sink despite Fed calling banking system 'sound'</div>
Coin Telegraph

PacWest Bancorp was the hardest hit bank after-hours on Wednesday, falling over 50% following a reported plan to explore strategic options.

Share prices of several United States regional banks tanked in after-hours trading Wednesday, despite Federal Reserve Chairman Jerome Powell calling the banking sector “sound” and “resilient" just hours before.

One such regional bank, PacWest Bancorp, fell a whopping 52.5% in after-hours trading after Bloomberg reported that the bank would explore strategic options on May 4. It has been seen by some as another bank to potentially fall amid a U.S. banking crisis. 

The bank is reportedly considering a sale or capital raising, Bloomberg said, citing people familiar with the matter.

The share price of PacWest fell over 50% after hours on Wednesday. Source: Google Finance

Meanwhile, Western Alliance Bancorp (22.4%), Metropolitan Bank (16.2%) and HomeStreet (7.8%) were among the other hardest-hit regional banks.

Metropolitan Bank once offered services to crypto firms but closed its digital asset vertical in January because the firm wasn’t content with how the cryptocurrency industry was developing.

Western Alliance Bancorp also integrated blockchain-based payment solutions for its client base from the firm’s blockchain and digital asset branch.

Powell's attempt to quell concerns about the banking sector came as he announced that the Federal Reserve would hike interest rates another 25 base points:

“Conditions in [the banking] sector have broadly improved since early March and the U.S. banking system is sound and resilient. We will continue to monitor conditions in the sector. 

Powell added they are "committed to learning the right lessons from this episode," and we’ll work to prevent events like these from happening again.”

First Republic Bank’s collapse was the second biggest bank failure of late, which first surfaced on April 26 when the news about a government receivership broke out, causing the bank’s share price to plummet 20% in hours.

Several members on Crypto Twitter have mocked Powell for stating that conditions in the banking sector “have broadly improved” since early March.

Related: The Fed has little ammo left as $30K Bitcoin price becomes key battle line

Will Clemente, the founder of digital asset analysis firm Reflexivity Research, mocked Powell to his 680,300 Twitter followers by stating the collapse of now five banks — SVB, Silvergate, Signature, First Republic and PacWest — “sounds like a very sound and resilient banking system…”

Twitter user, “zerohedge” made fun of Powell by noting to its 1.6 million followers that over $500 billion has been wiped out from “bank failures” in the past month alone.

PacWest Bancorp’s 52% fall is set to wipe out about $340 million from its market cap, which was $772 million at Wednesday’s close, according to Google Finance.

Magazine: Magazine: Unstablecoins: Depegging, bank runs and other risks loom

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Back to extreme greed past K? 5 things to know in Bitcoin this week

Back to extreme greed past $65K? 5 things to know in Bitcoin this week

Gary Gensler links crypto with cash in viral 2018 video — Crypto Twitter reacts

Coin Telegraph
Gary Gensler links crypto with cash in viral 2018 video — Crypto Twitter reacts
Coin Telegraph

The 2018 MIT professor Gary Gensler didn’t think most ICOs triggered U.S. securities laws.

The crypto community is calling out the hypocrisy of Gary Gensler, the head of the United States securities regulator, after a 2018 video emerged of him stating that cryptocurrencies are on par with commodities or cash and are not securities.

The video came from a “Blockchain and Money” class in the Fall Semester of 2018 taught by Gensler, a former professor at the Massachusetts Institute of Technology (MIT) before he became chair of the Securities and Exchange Commission (SEC).

On the topic of initial coin offerings (ICOs), Gensler said that "three-quarters of the market are not ICOs or not what would be called securities" and named the U.S., Canadian and Taiwanese markets as the "three jurisdictions that follow something similar to the Howey Test."

"Three-quarters of the market is non-securities, it's just a commodity, cash,crypto,” Gensler then said.

While Gensler briefly acknowledged that ICOs may spark a securities debate, he concluded that “three-quarters of the market is not particularly relevant as a legal matter.”

Several members of the crypto community were stunned by Gensler’s remarks.

Coinbase CEO Brian Armstrong commented a mere “Wow” in response to an April 26 Twitter post shared by cryptocurrency researcher “zk-SHARK.”

Erik Voorhees, the founder of crypto trading platform ShapeShift asked "When does someone get arrested for fraud?" in an April 25 Twitter post to his 658,900 followers.

Farokh Sarmad, the founder of Web3 podcast Rug Radio called Gensler “disgusting” in a tweet to his 346,200 followers, while a systems engineer, named “JD” called on the SEC Chair to provide an explanation behind the change in opinion.

Not everyone saw eye to eye though.

Related: Gary Gensler refuses to answer if ETH is a security: SEC hearing

U.S. lawyer Preston Byrne explained that professors and law enforcers work in “different capacities” and Gensler shouldn’t be held to the same views he had back then.

Another U.S. lawyer, Jonathan Schmalfeld, who specializes in blockchain technology, challenged Byrne’s opinion by stating that Gensler’s interpretation of the Howey Test shouldn’t change by virtue of his capacity. The response prompted a second explanation from Byrne:

“I mean when I talk with clients about this stuff there are three answers, what I think the law is, how I think enforcers will interpret it, and what the law ought to be. Right now he’s limited to giving only one of those answers by virtue of his position.”

Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?

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Video of SEC chair praising Algorand resurfaces after recently deeming it a security

Coin Telegraph
Video of SEC chair praising Algorand resurfaces after recently deeming it a security
Adam Cochran

Members of the crypto community have called out the SEC Chairman for “shilling” Algorand.

A four-year-old video of United States Securities an Exchange Commission (SEC) chair Gary Genser giving praise to smart contract platform Algorand (ALGO) is circulating on Twitter following the SEC declaring ALGO is an unregistered security.

In the video, Gensler referred to Algorand as a “great technology” while he was contemplating whether a “high performance” smart contract network would be capable of integrating an Uber or Lyft-like application on its platform.

ALGO is one of six tokens that Gensler claimed was an unregistered security in the SEC’s lawsuit against crypto trading platform Bittrex on April 17 that took issue with the Algorand Foundation's initial coin offering (ICO) of ALGO in June 2019.

Cryptocurrency researcher Mason Versluis was one of the first to highlight the video in an April 17 tweet criticizing Gensler for “shilling” ALGO, with others calling out the SEC chair for his apparent hypocrisy.

Gensler’s praise of Algorand was heard by an audience at a Massachusetts Institute of Technology (MIT) “Fintech Beyond Crisis” conference held on April 25, 2019.

Gensler worked as a Professor of Global Economics and Management at MIT prior to becoming the SEC’s chair, he acknowledged former MIT colleague and Algorand founder Silvio Micali in the speech — who appeared to be in the crowd.

The video sparked Cinneamhain Ventures partner Adam Cochran to question the long-standing advice from Gensler for crypto firms to register with the regulator.

"Surely if there is a path to register, a world renown MIT professor who personally knows the Chairman of the SEC can figure it out," Cochran tweeted on April 17.

Fox Business reporter Eleanor Terrett expects Gensler to be questioned over his Algorand comments in his upcoming testimony before the U.S. House Committee on Financial Services on April 18.

Other critics choose to mock the situation at hand, highlighting the price decline of ALGO which has seen a 93.8% decline since its launch according to CoinGecko data.

It should be noted that ALGO didn't hit the market until late June 2019, two months after Gensler's speech.

Related: Coinbase and Algorand give divergent reasons for staking reward suspension

Gensler stated in an April 17 tweet that it has been an “honor” to work at the SEC over the last two years and chose to highlight the 1,500 enforcement actions the regulator has undertaken since he's been at the helm.

Gensler was sworn into office as SEC chair on April 17, 2021, after U.S. President Joe Biden’s nomination of Gensler was confirmed by the Senate on April 14, 2021.

Magazine:Unstablecoins: Depegging, bank runs and other risks loom

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Back to extreme greed past K? 5 things to know in Bitcoin this week

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Ethereum researcher says staking reveals IP address sparking privacy concerns

Coin Telegraph
Ethereum researcher says staking reveals IP address sparking privacy concerns
airdrops

A researcher at the Ethereum Foundation said he had “internally” discovered that staking Ether reveals a user's IP address information.

A researcher at the Ethereum Foundation (EF) revealed that the IP addresses of Ether (ETH) stakers are monitored as part of a broader set of metadata, causing the cryptocurrency community to flag Ethereum for privacy concerns.

In an April 12 interview on the crypto podcast Bankless, EF researcher Justin Drake revealed that he learned this information “internally” — presumably at EF.

The metadata Drake referred to is used to track a wide range of things, he explained:

“There’s a lot of metadata, you can look at deposit addresses, you can look at withdrawal addresses, you can look at fee recipients, you can look at IP addresses.”

Drake’s comments appeared to have taken Bankless host Ryan Sean Adams by surprise.

“So it’s a fairly Sybil resistant dataset of your most involved Ethereum citizens?” Adams asked.

“Exactly,” Drake responded.

The conversation was initiated when Drake predicted that “special airdrops” may become available for solo stakers — but not the industry heavyweights:

“Then you can identify, okay, we know who Kraken is, we know who Coinbase is, and we can just not give them an airdrop if the purpose of the airdrop is to airdrop to specific individuals that are running solo validators.”

The conversation caused a stir on Crypto Twitter.

Related: Crypto privacy is in greater jeopardy than ever before — here's why

One Twitter user referred to Ether as the “real surveillance coin,” while another mocked Drake by sarcastically rehashing him: “We can stop censorship by censoring those we don’t like.”

Another described the situation as “central governance to a T.”

To resolve the privacy concerns, one Twitter user suggested Ethereum users take on-chain privacy responsibilities into their own hands by installing a Linux operating system, using a Virtual Private Network (VPN) and storing cryptoassets on a hardware wallet such as Ledger:

It isn’t the first privacy-related statement to have caused a stir in the crypto community either.

ConsenSys, the team behind Ethereum wallet Metamask began collecting IP addresses in November. The policy amendment was made to ensure that the firm could comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) where necessary.

Cointelegraph contacted Drake and the Ethereum Foundation for comment but did not receive an immediate response.

Magazine: ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide

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Back to extreme greed past K? 5 things to know in Bitcoin this week

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After Mocking the Price Model, Crypto Advocates Discuss Bitcoin’s Rainbow Chart Reintegration

Bitcoin.com
After Mocking the Price Model, Crypto Advocates Discuss Bitcoin’s Rainbow Chart Reintegration
Bitcoin
After Mocking the Price Model, Crypto Advocates Discuss Bitcoin’s Rainbow Chart ReintegrationOn a few occasions last year, crypto advocates discussed how a number of price models, leveraged to help predict the future value of bitcoin, ended up failing. However, since bitcoin’s value has increased by 36% over the last month, the price has entered the darkest band of the rainbow chart after breaking below the rainbow […]
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Back to extreme greed past K? 5 things to know in Bitcoin this week

Back to extreme greed past $65K? 5 things to know in Bitcoin this week

Crypto spam bots go silent as Musk promises to prosecute scammers

Coin Telegraph
Crypto spam bots go silent as Musk promises to prosecute scammers
Coin Telegraph

Some users in the crypto Twitter space are already reporting a reduction in the number of scam bots after Elon Musk’s latest changes to the social media platform.

Elon Musk's latest salvo in his war against crypto spam bots on Twitter appears to have made a real impact, with the crypto community reporting a vast reduction in the number of bots responding to their posts. 

In a Dec. 11 post, the Twitter CEO hinted that “bots are in for a surprise tomorrow” and later explained that they've found a small number of people behind a large number of bot/troll accounts and the platform will be shutting down IP addresses of “known bad actors.”

He then followed up by explaining that while scammers might try other methods to circumvent the IP address block, Twitter will be “shutting them down as soon as they show up.”

Shibetoshi Nakamoto, the pseudonym of Billy Markus, co-creator of meme coin Dogecoin (DOGE), told Musk in a Dec. 11 post, “I made a test post and instead of seeing 50 bot replies I only saw one much progress, very hype.”

Other users also went to test Musk’s latest changes. PlanB, a Bitcoin (BTC) analyst and investor, posted a chart to see how many bots would reply. At the time of writing, no responses from bots had shown up in the comments. 

Ethereum co-founder Vitalik Buterin also noted that while “Twitter *seems* to be marginally better to use lately,” he couldn’t tell if there had been a reduction in bots due to Musk.

“No idea how to separate apart stuff Elon did vs crypto-winter vs my brain imagining changes that aren't actually there," he said.

Some have reported that the bot responses still show up on posts, but are very quickly removed by the platform. 

Related: ‘Twitter will do lots of dumb things’ in the coming months: Elon Musk

Twitter spam and scam bots have been a plague on the platform and were seen by Musk as one of his top priorities for Twitter after taking the helm in October.

In his latest post, Musk also hinted that the platform will be aiming to take legal action against scammers on Twitter in the future, though didn’t offer any additional details.

“Twitter will also be moving to prosecute scammers anywhere on Earth,” he said.

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Back to extreme greed past K? 5 things to know in Bitcoin this week

Back to extreme greed past $65K? 5 things to know in Bitcoin this week

Crypto Twitter uses new AI chatbot to make trading bots, blogs and even songs

Coin Telegraph
Crypto Twitter uses new AI chatbot to make trading bots, blogs and even songs
AI

A few simple prompts to a recently released AI chatbot is all Crypto Twitter needs to create trading bots, an investment thesis and a crypto-themed song.

The crypto community appears to be having a ball with ChatGPT, a recently launched Artificial Intelligence (AI) chatbot created by research company OpenAI — using it for a multitude of applications including a trading bot, a crypto blog, and even an original song.

The bot is a language interface tool that OpenAI says can interact “in a conversational way” and can be used to answer questions or assist in making almost anything it’s prompted to create, with some limitations.

A user on Twitter posted their interaction with ChatGPT showing that from a simple prompt the tool created a basic trading bot using Pine Script, a programming language used for the financial software TradingView.

Another user gave the bot instructions to create a trading terminal, with ChatGPT writing code that could display the current orders for the Bitcoin (BTC) and Tether (USDT) trading pair on Binance utilizing the crypto exchange’s Application Programming Interface (API).

Cointelegraph previously tested ChatGPT and found the tool could create an example smart contract. Meanwhile, other users discovered the AI could detect and either assist in patching or exploiting vulnerabilities in smart contracts, however, it was noted the code generated by the bot wasn’t always correct.

Crypto Twitter has not only utilized the AI tool for technical purposes but also for more creative and even business endeavors.

ChatGPT responded with a five-part answer when asked by one user what the blockchain industry needs to do “in order to positively affect society,” Twitter user “Goose Wayne” opined the bot “can write your crypto investment thesis now.”

The co-founder of investment firm Multicoin Capital, Kyle Samani, tweeted his results on asking ChatGPT to write a blog post on how crypto payments will grow in the future, the tool responded with a multi-paragraph article.

Another lengthy opinion article was written by the AI on how Monero (XMR) “improves on Bitcoin’s technology,” with the user who posted the result opining “ChatGPT is going to put a lot of crypto bloggers out of business lol.”

Related: Al tech aims to make metaverse design accessible for creators

Meanwhile, some Twitter users have used the tool to create music, Web3 entrepreneur Jay Azhang posted a “song about losing money in crypto” written by the bot:

Multiple other examples of ChatGPT’s use have been posted to Twitter, from its answers on how to choose a good crypto project, grow a Twitter audience within the nonfungible token (NFT) community, and even an email where it acts as a crypto hedge fund warning users it’s illiquid because of the collapse of FTX:

The tool is free for now as its “a research release” according to OpenAI CEO Sam Altman, but that may not last for long as he said in a Dec. 5 tweet that the costs to run the tool are “eye-watering” and will have to be monetized “somehow at some point.”

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Back to extreme greed past K? 5 things to know in Bitcoin this week

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