US court approves settlement against Binance, firm to pay $2.7B to CFTC

December 18, 2023 Coin Telegraph

Coinbase disputes SEC’s crypto authority in final bid to toss regulator’s suit

October 25, 2023 Coin Telegraph

Coinbase says the SEC’s definition of an investment contract isn’t in line with U.S. securities laws.

The United States Securities and Exchange Commission overstepped its authority when it classified Coinbase-listed cryptocurrencies as securities, the exchange has argued in its final bid to dismiss a lawsuit by the securities regulator.

In an Oct. 24 filing in a New York District Court, Coinbase chastised the SEC, claiming its definition for what qualifies as a security was too wide and contested that the cryptocurrencies the exchange lists are not under the regulator’s purview.

“The SEC’s authority is limited to securities transactions. Not every parting of capital with a hope of gain qualifies, and trades over Coinbase are only securities transactions if they involve ‘investment contracts.’ The transactions at issue here do not.”

Coinbase claimed the SEC has undertaken a “radical expansion of its own authority” and claimed jurisdiction “over essentially all investment activity,” which only Congress is entitled to do under the major questions doctrine.

In an Oct. 24 X post, Coinbase chief legal officer Paul Grewal echoed the claims, saying the SEC’s definitions have “no limiting function at all.”

By arguing that any purchase in which the buyer hopes for an increase in value constitutes an investment contract-and therefore a security-the SEC is attempting a radical expansion of its own authority. Only Congress can do that as the major questions doctrine makes clear. 2/3
— paulgrewal.eth (@iampaulgrewal) October 24, 2023

Coinbase’s recent filing comes in response to the SEC’s Oct. 3 rebuttal where it asked the court to reject Coinbase’s dismissal motion, iterating its belief that various cryptocurrencies Coinbase listed were investment contracts under the Howey test.

The SEC sued Coinbase on June 6, claiming the exchange violated U.S. securities laws by listing several tokens it considers securities and not registering with the regulator.

Coinbase filed the motion for judgment on June 29 arguing the SEC was abusing its power and violating Coinbase’s due process rights.

Judge Katherine Polk Failla, who oversees the case, may ask Coinbase and the SEC to appear in court for oral arguments and then issue judgment on the case, dismiss it, or move for it to be heard in front of a jury.

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SBF’s lawyers want to quiz jurors on crypto, altruism and ADHD

September 13, 2023 Coin Telegraph

Alameda Research

U.S. prosecutors, meanwhile, want to ask prospective jurors their beliefs on how cryptocurrency should be regulated.

Potential jurors in the upcoming criminal trial of former FTX CEO Sam Bankman-Fried could be asked their thoughts on crypto, effective altruism and attention-deficit disorder as his lawyers want to weed out those they consider unsuitable.

In court filings on Sep.11, Bankman-Fried’s lawyers and United States prosecutors separately filed their lists of proposed questions they wish to ask prospective jurors in the trial slated for Oct. 3.

Bankman-Fried wants to know if prospective jurors have invested in cryptocurrency, and if so, if they lost money or otherwise have a negative opinion on the industry.

In another question, the FTX co-founder is interested to know whether a juror would attribute a crypto firm’s failure to its owners, and if so, why.

*Cryptocurrency-related questions proposed by Bankman-Fried’s lawyers to prospective jurors. Source: CourtListener*

Bankman-Fried also wants prospective jurors' thoughts on “effective altruism” — a charitable philosophical movement which Bankman-Fried built his reputation on.

Other questions concern if jurors think it’s “wrong” to donate large sums of money to political candidates and lobbyists to further their own interests along with detailing any personal or professional experience with an ADHD-medicated person.

As part of standard procedure, Bankman-Fried intends to ask if prospective jurors have read about him, have formed an opinion on his guilt or innocence or if they’ve expressed an opinion about Bankman-Fried, FTX or Alameda Research.

U.S. prosecutors wish to ask prospective jurors on their familiarity with FTX and its affiliates, whether they or a friend or family member have invested or worked in the crypto space and what role they believe the U.S. government should play in regulating the industry.

Prosecutors also want to ask whether jurors have ever lost money from an investment due to fraudulent conduct.

On Sept. 12, U.S. District Court Judge Lewis Kaplan denied Bankman-Fried’s request for temporary release ahead of his Oct. 3 trial, ruling that a poor internet connection inside the prison wasn’t a sufficient ground to grant his release.

Bankman-Fried pleaded not guilty to all seven fraud-related charges regarding his involvement in FTX’s collapse in November. He faces a separate criminal trial on additional charges in March next year.

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NFT app Rebase co-founder accused of going ‘rogue’ in suit by partner

April 19, 2023 Coin Telegraph

Breach of Contract

An apparent business partner of Rebase's co-founder claims he was pushed out of the firm and funds he owned were moved from a joint crypto wallet.

The co-founder of the nonfungible token (NFT) project Rebase is facing a lawsuit from his apparent business partner accusing him of going “rogue” by stealing $2 million from a joint crypto wallet and ousting an apparent co-founder out of the firm.

An April 17 filing in a United States District Court in California from Krzysztof Gagacki, who says they’re the co-founder of Rebase, made eight separate complaints against the firm's other co-founder Edmond Truong.

Gagacki is demanding a jury trial for breach of contract, breach of fiduciary duty, defamation and trademark infringement.

While it is unclear exactly when the professional relationship between the two deteriorated, Gagacki alleged Truong breached a partnership contract on Oct. 27. 2022 by misappropriating $2 million into a separate wallet owned and controlled by Truong without his consent.

Gagacki claims to own a 50% share of the funds and says Truong refuses to provide him with the private keys to the digital wallet.

Krzysztof Gagacki, co-creator of https://t.co/oBDvtTLDqk and the "Cy-B3lla" Bella Hadid NFT project, sued his co-founder today for allegedly stealing $2,000,000 and "going rogue." pic.twitter.com/I3DTFR6ZhM
— Rob Freund (@RobertFreundLaw) April 18, 2023

In the filing, he claims Troung “ousted” him from the business by presenting himself to third parties as the “sole owner” and “decision maker” for Rebase.

Gagacki further alleges that Troung is stating Gagacki is no longer “employed” at the firm after things had “gotten a bit out of hand.” A LinkedIn account owned by Gagacki does not list an employment history at Rebase.

Truong also allegedly “intentionally interfered” with several prospective deals that Gagacki had been working on for the firm in addition to making several defamatory statements to the firm’s business contacts about Gagacki.

Gagacki claims these statements have had a “disastrous effect” on his reputation.

One of the deals involved American celebrity Bella Hadid, who featured in the firm’s Cy-B3lla NFT project but then refused further collaboration after it was made apparent to her that the two business partners clashed heads, the filing claimed.

Truong also allegedly seized a Twitter account relating to Hadid’s NFT collection which Gagacki claims to have the trademark rights for with his other company, IOVO AG:

“[Truong] has also commandeered the @REBASEgg and @cybellaxyz Twitter accounts. Specifically, [Truong] has changed the password for these accounts and is actively denying Mr. Gagacki access.”

Another claim mentioned by Gagacki was Truong’s unauthorized pursuit to issue a Rebase token on the Ethereum layer 2 scaling solution Arbirtrum.

If a token is issued, there may have serious ramifications for Rebase, the filing explained:

“If a Rebase app token is listed on any major cryptocurrency exchange, the market value of the tokens, which will be minted on the Arbitrum network and offered to the public, could reach many times over the Rebase app’s last round valuation of $150,000,000.”

According to the firm’s Twitter account, Rebase is set to integrate on Arbitrum on April 21:

Save the Date ⏲️

April 21st, 2023. Rebase is coming to Arbitrum! #RebaseonARB

The First AR Adventure and M2E App on $ARB pic.twitter.com/9QsMBsAlfe
— Rebase (@REBASEgg) April 11, 2023

The firm’s $150 million valuation has come on the back of venture capital funding from Animoca Capital, Anti Fund Investment Fund, LLC, DeFiance Capital and the now-bankrupt Three Arrows Capital.

Cointelegraph contacted Gagacki, Truong and Rebase but did not receive an immediate response.

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