DEBT Box urges judge to toss suit as SEC got case ‘badly wrong’

December 6, 2023 Coin Telegraph

The SEC initially misled a court to freeze DEBT Box’s assets, which has since been reversed, and the firm cited the incident as grounds to dismiss the suit.

DEBT Box and other defendants in a Securities and Exchange Commission lawsuit want the case tossed after the court found the agency lied to secure a temporary restraining order against them.

“The SEC got this case wrong. Badly wrong,” lawyers for Digital Licensing Inc., which does business as DEBT Box, told Utah federal court Judge Robert Shelby in a Dec.

The SEC won a temporary restraining order to freeze DEBT Box assets on Aug.

The agency accused the firm of perpetrating a $50 million fraudulent crypto scheme.

“Not only are such allegations false, but they also fail to meet the basic pleading standards,” it wrote in its latest motion.

A Utah federal court reversed the asset freeze on Nov.

The court found the firm didn’t close the bank accounts, and a $720,000 transfer the SEC alleged was sent overseas was actually sent domestically.

*Excerpt from DEBT Box's motion to dismiss. Source: CourtListener*

The SEC “misrepresents the state of law regarding crypto assets” in its “fatally flawed pleading,” DEBT Box said.

CFTC pays whistleblowers $16M this year for mostly crypto tips

October 31, 2023 Coin Telegraph

CFTC pays whistleblowers M this year for mostly crypto tips

Awards

Two of the CFTC’s crypto tipsters scored $15 million alone which brought successful enforcement cases for the regulator.

The United States commodities regulator has paid $16 million this year to whistleblowers who gave information leading to successful enforcement actions with a majority of the tips involving crypto.

In an Oct. 31 statement, Commodity Futures Trading Commission (CFTC) commissioner Christy Goldsmith Romero said most of the tips received this year involved crypto which she claimed was “an area that continues to have pervasive fraud and other illegality.”

Very proud of these offices and their outsized results. As a former IG, I know firsthand how important whistleblowers
are. The CFTC could not fully protect customers and markets w/o them. Click to read about the highest # of tips, crypto tips & environmental fraud tips. https://t.co/C4I9tgnxRU
— Commissioner Christy Goldsmith Romero (@CFTCcgr) October 31, 2023

Two whistleblowers received $15 million alone for their information which led the CFTC to successful enforcement cases in September — however, the regulator didn’t delve into the nature of those cases in its statement at the time.

Romero said whistleblowers are vital to mitigate commodities fraud and that the CFTC wouldn’t be able to “fully protect” customers and markets without them:

“Whistleblowers help identify fraud and other illegality, interpret key evidence, and save considerable Commission resources and time. The faster we can stop fraud, the more we can protect customers from harm.”

Romero acknowledged the efforts of CFTC’s Office of Customer Education and Outreach which teaches people to spot, avoid and report cryptocurrency fraud.

“With the rise of crypto, more retail customers have come under the CFTC’s jurisdiction,” Romero said.

The CFTC has doled out almost $350 million since the program started in 2014. It’s led to over $3 billion in enforcement sanctions ordered in cases tipped off by whistleblowers.

The CFTC won a record $3.4 billion penalty payment in a Bitcoin-related fraud case in April and won its case against Digitex CEO Adam Todd in July who was ordered to pay $16 million in penalties.

In April, Romero iterated that managing the risks associated with cryptocurrency would be crucial to upholding market integrity, national security and financial stability.

She’s advocated integrating stronger identity verification measures saying it would minimize illicit finance in the cryptocurrency market.

As the bear market deepens, more crypto companies will have to lay off employees to keep the lights on.

This creates a new risk: disgruntled former employees often become whistleblowers, especially if they have valuable intel that entitles them to an SEC or CFTC bounty reward.
— Jake Chervinsky (@jchervinsky) December 29, 2018

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

Bitcoin pioneer Hal Finney couldn’t be Satoshi Nakamoto, new analysis suggests

October 23, 2023 Coin Telegraph

Coin Telegraph

The investigator, Jameson Lopp, compiled archived emails from 2010, data from a 10-mile race in California in 2009, and other evidence to make the argument.

Bitcoin pioneer Hal Finney was competing in a 10-mile race at the exact time Satoshi Nakamoto was responding to emails and transacting on Bitcoin, newly surfaced evidence has revealed.

For years, it has been commonly speculated that the late Hal Finney, a computer scientist, was the creator of Bitcoin. He was the first person besides Satoshi to download and run Bitcoin’s software and was the first recipient of Bitcoin. Finney, however, denied the theory until his passing in 2014.

Jameson Lopp, a self-proclaimed cypherpunk and co-founder of Bitcoin custody fi Casa, doesn’t believe the speculation either. In an Oct. 21 blog post, Lopp shared new evidence that casts further doubt on the theory.

Racing to send an email

Lopp’s key evidence revolves around a 10-mile race in Santa Barbara, California on Saturday, April 18, 2009.

According to the race data, Finney competed in the “Santa Barbara Running Company Chardonnay 10 Miler & 5K,” starting at 8 am Pacific time and finishing the race at 78 minutes.

The race, however, coincides with timestamped emails between Satoshi and one of the first Bitcoin developers, Mike Hearn.

Hal Finney was a legendary Cypherpunk, but he was not Satoshi.
Today I present my research to support that claim.https://t.co/gZVQv3QW0B
— Jameson Lopp (@lopp) October 21, 2023

“It turns out that early Bitcoin developer Mike Hearn was emailing back and forth with Satoshi during this time,” explained Lopp, referring to archived emails that Hearn had released publicly in the past.

“What can we determine from all of this? Satoshi sent the email to Mike at 9:16 AM Pacific time - 2 minutes before Hal crossed the finish line.”

“For the hour and 18 minutes that Hal was running, we can be quite sure that he was not interacting with a computer,” Lopp added.

*Hal Finney pictured running the 10 mile race on April 18. Source: PhotoCrazy*

The Bitcoin transaction

Meanwhile, Lopp highlighted on-chain data which further supports his claim.

Hearn’s emails with Nakamoto show that Nakamoto sent Hearn 32.5 BTC in one particular transaction.

Lopp pointed to this transaction that took place on block 11,408, which was mined at 8:55 am California time — 55 minutes into Finney’s race.

Nakamoto confirmed this transaction — in addition to another one involving 50 BTC — in the 6:16 pm email, which Lopp iterates took place while Finney was still running.

Health issues

Meanwhile, analysis has also highlighted that Satoshi was working on code and posting on various forums during a time when Hal Finney’s battle with Amyotrophic Lateral Sclerosis (ALS) had already affected his ability to use a keyboard.

Lopp cited an Aug. 22, 2010 post from Hal Finney’s past wife, Fran Finney, who said the couple attended the 2010 Singularity Summit in San Francisco on Aug. 14-15 and that Finney’s hard-fought battle ALS slowed his typing from a “rapid-fire” 120 words per minute to a “sluggish finger peck.”

Bitcoin is better off with Satoshi's identity remaining unknown. A human can be criticized and politically attacked. A myth will withstand the test of time.
— Jameson Lopp (@lopp) August 12, 2023

During that same time, Nakamoto performed four code check-ins and wrote 17 posts on various forums between Aug. 14-15, 2010, said Lopp.

Lopp also noted several differences in Finney’s Reusable Proofs of Work code compared to the original Bitcoin client code.

However, Lopp also acknowledged there could be objections to the so-called evidence.

Hearn published the emails in 2017 — seven years ex-post facto — and that it was around a time when other Bitcoiners lost trust in him over disagreements on how to scale Bitcoin.

Finney could have also scripted the emails and transactions in advance, or there could have been more than one Satoshi Nakamoto, Lopp said.

However, Lopp argues that Bitcoin’s creation came from a single developer:

“In all my time researching Satoshi, I've yet to come across any evidence suggesting it was a group. If it was a group, then they all operated on the same sleep schedule, consistent across code commits, emails, and forum posts.”

Hal Finney unfortunately passed away in August 2014 as a result of complications with ALS.

Magazine: Big Questions: Did the NSA create Bitcoin?

SBF upset by criminal trial’s late evidence while FTX seeks sale of AI stock

June 7, 2023 Coin Telegraph

Coin Telegraph

3.6 million documents have yet to be produced by prosecutors in the criminal trial of Sam Bankman-Fried according to his lawyers.

Former FTX CEO Sam Bankman-Fried claims prosecutors have missed discovery deadlines for key pieces of evidence required in the defense of a raft of fraud charges.

On June 5, Bankman-Fried’s lawyers told United States District Judge Lewis A. Kaplan in a letter that the government had not turned over all of the contents of five electronic devices that were due for discovery by the end of March.

A laptop and iPhone belonging to former Alameda Research CEO Caroline Ellison and a laptop belonging to FTX co-founder Gary Wang were among the devices.

According to the letter from Bankman-Fried’s attorneys:

“As the trial date is now less than four months away, the defense is concerned that the late production of such voluminous and important discovery will impact the preparation of the defense.”

Bankman-Fried is due to face court on Oct. 2 on a litany of fraud charges, claims of illegal political donations, and bribes to the Chinese government. He does not want to adjourn the trial date and additional motions may be filed “if the newly produced discovery provides grounds for new motions,” according to the letter.

*Excerpt from the letter from Bankman-Fried’s lawyers. Source: CourtListener*

The letter went on to state that the government has also failed to produce information related to FTX debtors. “These late productions have a cumulative effect on the defense’s ability to properly prepare for trial,” it said, before revealing how much is missing:

“The five productions thus far are voluminous, totaling over 3.6 million documents and over 10 million pages.”

The first four productions included around 1.1 million documents and the last one, received by the defense on May 25, includes just fewer than 2.5 million documents “which more than triples the documents in the existing discovery.”

Meanwhile, FTX bankers tasked with bailing out the embattled company are reportedly looking towards cashing out shares in a company that's part of the currently hyped artificial intelligence sector.

On June 6, Semafor reported that Perella Weinberg, the investment banking firm on retainer to the bankrupt exchange, has been “teasing the sale of hundreds of millions of dollars of shares” in AI startup Anthropic to potential investors.

According to FTX balance sheets at the time of its bankruptcy in November 2022, the company held $500 million worth of Anthropic stock which is estimated to be worth much more now the AI boom is in full swing.

Anthropic raised $450 million in its latest Series C funding round on May 23, with a reported valuation of $4.6 billion.

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