SEC tries again for Debt Box suit dismissal with option to refile

May 14, 2024 Coin Telegraph

Crypto Lender Genesis Agrees to $21 Million SEC Fine, Funds to Await Bankruptcy Claim Settlements

March 19, 2024 Bitcoin.com

Cristiano Ronaldo sued for promoting Binance, unregistered securities

November 29, 2023 Coin Telegraph

Binance

The soccer star’s Binance-tied NFTs allegedly promoted investments in unregistered securities on the crypto exchange.

Pro-soccer star Cristiano Ronaldo has been hit with a proposed class-action lawsuit from plaintiffs claiming they suffered losses from his promotion of the now-legally embroiled crypto exchange Binance.

A Nov. 27 filing to a Florida District Court claimed Ronaldo “promoted, assisted in, and/or actively participated in the offer and sale of unregistered securities in coordination with Binance.”

Binance entered a multi-year partnership with Ronaldo in mid-2022 to promote a series of his own nonfungible tokens (NFT), of which he has at least three collections tied to Binance.

The complaint claims users who signed up for Ronaldo’s NFTs were more likely to use Binance for other purposes — including investing in what they claimed were unregistered securities, including Binance’s BNB (BNB) and its crypto yield programs.

“Ronaldo’s promotions solicited or assisted Binance in soliciting investments in unregistered securities by encouraging his millions of followers, fans, and supporters to invest with the Binance platform.”

Ronaldo was a key part of Binance’s growing popularity due to his influence and reach, with 850 million followers across social media, says the complaint. They allege his NFT sales were “incredibly successful” at promoting the exchange, with a 500% increase in searches for “Binance” the week following the initial sale.

Cooking something up with @binance https://t.co/FMAP5GAdxE
— Cristiano Ronaldo (@Cristiano) November 28, 2023

The suit alleges Ronaldo knew or should have known “about Binance selling unregistered crypto securities” as he has “investment experience and vast resources to obtain outside advisers.”

The suit cited Securities and Exchange Commission guidance, which warned celebrities of the need to disclose payments received for promoting cryptocurrencies — which the complaint claims Ronaldo didn’t do.

The class action plaintiffs are Michael Sizemore, Mikey Vongdara and Gordon Lewis, who seek damages and funds to cover legal fees.

Meanwhile, Binance and founder Changpeng “CZ” Zhao is facing their own legal woes, pleading guilty and paying a $4.3 billion settlement to the United States on money laundering charges and running an unregistered money-transmitting business.

Zhao stepped down as CEO and faces up to 18 months in prison. Binance agreed to up to five years of Justice Department and Treasury compliance monitoring.

The SEC has sued Binance claiming — among other charges — that it sold unregistered securities and is reportedly investigating if Binance misappropriated customer funds.

Magazine: NFT Creator: DMT and a Hellboy outfit — How diewiththemostlikes got on SuperRare

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

October 25, 2023 Coin Telegraph

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.

Magazine: Hall of Flame: Crypto lawyer Irina Heaver on death threats, lawsuit predictions

SEC lawsuits squeeze net worths of Coinbase and Binance CEOs

June 7, 2023 Coin Telegraph

Bloomberg Billionare Index

Brian Armstrong and CZ have seen respective net worth losses of 11.8% and 5.1% since the SEC sued Coinbase and Binance.

The net worths of Coinbase CEO Brian Armstrong and Binance CEO Changpeng Zhao (CZ) have suffered heavy blows due to recent lawsuits by the United States securities regulator.

Armstrong’s net worth was slashed by $289 million and Zhao’s by $1.33 billion within a span of 30 hours after the Securities Exchange Commission (SEC) sued Binance on June 5 and then Coinbase on June 6, according to data from the Bloomberg Billionaires Index and Forbes.

Zhao — the richest man in the crypto industry and the 54th richest person overall — had his net worth fall 5.1% to $26 billion this week.

*The SEC’s lawsuit against Binance has contributed to Zhao falling two spots in Bloomberg's Billionaire Index. Source: Bloomberg*

While the Binance CEO’s net worth has rebounded by over 106% this year, he is still down over 73% from his highest net worth of $96.9 billion in January 2022.

*Zhao’s net worth has fallen from nearly $100 billion to $26 billion since January 2022. Source: Bloomberg*

Armstrong is ranked as the 1,409th richest person by Forbes and took the bigger hit from the SEC’s latest action with his net worth falling 11.8% to $2.2 billion.

*Change in net worth of Brian Armstrong since 2019. Source: Forbes*

The Coinbase CEO has managed to reap the rewards of a market rebound this year, with a 61% increase in net worth over that time.

Despite the recent fall, Zhao and Armstrong have seen net worth increases well above the 9% year-to-date returns for others on Bloomberg's rich list.

The SEC sued both Binance and Coinbase alleging the exchanges broke various securities rules, most notably for purportedly offering cryptocurrencies that the regulator considers to be unregistered securities.

Following the suites, a total of 67 cryptocurrencies have now been classed as securities by the SEC.

Binance and Coinbase have both confirmed they will “vigorously” defend the lawsuits laid against them.

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

Crypto Exchange Bittrex Enters Chapter 11 Bankruptcy Protection Following SEC Lawsuit

May 9, 2023 Bitcoin.com

SEC Deems DASH, ALGO, and OMG ‘Unregistered Securities’ in Bittrex Lawsuit

April 18, 2023 Bitcoin.com

Chia Network Files for IPO With the SEC, Eyes Public Listing

April 15, 2023 Bitcoin.com

US officials appeal protections for Voyager execs in Binance.US sale

March 15, 2023 Coin Telegraph

Bankruptcy Court

The DOJ disagrees with the legal protections given to those involved in the Voyager-Binance.US sale saying the court “improperly” exceeded its authority.

United States officials want to remove a provision included in bankrupt lender Voyager Digital’s plan to sell its digital assets to crypto exchange Binance.US that would prevent them from legally pursuing anyone involved with the sale.

In a motion filed on March 14 in a New York Bankruptcy Court, U.S. Trustee William Harrington and other government attorneys argued: “the court improperly exceeded its statutory authority" in approving a the pardoning.

They requested the court's approval of the sale be delayed for two weeks to allow them to file an appeal.

Tomorrow just got interesting. #Voyager #VGX #Binance #Bankruptcy #DOJ pic.twitter.com/23bqIWpX2M
— VGX Heroes (@VGX_Heroes) March 15, 2023

The provision protects those involved in carrying out the sale from being held personally liable for its implementation, which the court approved on March 7 after it was found that 97% of Voyager customers favored the plan, according to a Feb. 28 filing.

While U.S. officials are not objecting to other parts of the proposed sale, they argue the provision would impede the government's “ability to enforce its police and regulatory powers.”

Notice of Expedited Motion for Stay Pending Appeal filed by US Department of Justice in @investvoyager Bankruptcy

Looks like the exculpation provisions (legal protections for certain individuals) is the main thing holding up the dealhttps://t.co/a40FyPcoLa pic.twitter.com/zplip3eJob
— Shingo Lavine (@shingolavine) March 15, 2023

On March 6 the Securities and Exchange Commission (SEC) also objected to the plan, particularly the “extraordinary” and “highly improper” exculpation provision, arguing the repayment token would constitute an unregistered security offering and that Binance.US is operating an unregulated securities exchange.

A hearing on the issue is set to occur on March 15 at 2:00 pm local time.

Based on the latest estimates, the plan is expected to result in Voyager creditors recovering approximately 73% of the value of their funds.

BlockFi execs, Gemini named in proposed lawsuit by a disgruntled investor

March 2, 2023 Coin Telegraph

Blockfi

Gemini is accused of providing BlockFi with custodial services and misleading information to help BlockFi market its alleged unregistered securities.

An investor with nearly $2 million worth of funds frozen in bankrupt cryptocurrency lender BlockFi has filed a class action complaint against its founders, two directors and crypto exchange Gemini.

In a Feb. 28 complaint filed in the U.S. District Court for the District of New Jersey, investor Trey Greene accused the defendants of numerous wrongdoings, including violating the consumer fraud and exchange acts, breaching its fiduciary duties, as well as offering and selling unregistered securities.

“The unregistered securities sold by the BFI [BlockFi] Defendants on behalf of BlockFi were marketed and sold via a steady stream of misrepresentations and material omissions by Prince and Marquez over several years and through intermittent misrepresentations by Defendant Gemini.”

Greene claims he invested over $1.5 million in interest accounts which are alleged to be unregistered securities, and accrued over $400,000 in capital gains and earned interest which was re-invested.

He is currently unable to withdraw the funds, however, after BlockFi froze all withdrawals on Nov. 10, 2022 — the same day FTX filed for bankruptcy.

*Filing of the proposed class action lawsuit. Source: Bloomberg Law*

Greene further claims that he was induced into buying the “unregistered securities” by misrepresentations from BlockFi’s founders Zac Prince and Flori Marquez that the offerings were comparable to federally-insured bank products.

While the Securities and Exchange Commission (SEC) had charged BlockFi with “failing to register the offers and sales of its retail crypto lending product,” on Feb. 14, the filing claims the exchange had “admitted its [interest] accounts were unregistered securities” during the proceedings that resulted in a $50 million settlement on Feb. 15.

Tyler Winkevoss’ Gemini previously held custody over BlockFi’s clients’ crypto holdings through its custodial services, and is alleged to have misrepresented how accessible these funds were to customers.

“Gemini knew of, and acquiesced in, the materially false and misleading statements about the status the safety and accessibility of Plaintiff’s and class members’ assets at Gemini and about the risks of loss. Gemini supplied materially false and misleading information to BlockFi for use in marketing the BIAs [BlockFi interest accounts].”

Gemini is alleged to have breached the exchange act but was not included in the other allegations.

Greene is seeking damages for each of the alleged counts, including "treble damages" for violations of the consumer fraud act, the costs of his lawyers to be covered, a full refund of all funds acquired by the defendants and accrued interest, as well as a judgment preventing similar violations of the consumer fraud act.

Those represented in the class action are any stockholders of BlockFi that purchased their BlockFi unregistered BlockFi Interest Accounts between Mar. 4, 2019 and Nov. 10, 2022

The defendants will be served with a summons, and must respond to the complaint within 21 days of receiving it or be required to pay the full amount demanded by Greene.

Cointelegraph has reached out to Gemini and BlockFi but did not receive a response by the time of publication.

Unregistered Securities

Share this video