👨🏻⚖️ SEC Says BlockFi Misrepresented Risk to Crypto Depositors In $100M Order
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NEWS The U.S. Securities and Exchange Commission (SEC) alleges that crypto lender BlockFi inaccurately described the level of risk its depositors were exposed to, in an order explaining a $100M settlement between BlockFi and federal and state securities regulators.
RISK “BlockFi made a material misrepresentation to BIA [BlockFi Interest Account] investors concerning the level of risk in its loan portfolio,” the order signed by SEC Secretary Vanessa Countryman stated. “BlockFi made a statement in multiple website posts that its institutional loans were ‘typically’ over-collateralized, when in fact, most institutional loans were not.”
VERIFIABLE The SEC findings illuminate one of the key differences between centralized financial offerings and those made through decentralized finance lending and saving platforms, where the positions and terms for each depositor and lender are verifiable on the blockchains they run atop.
FRAUD In a move that demonstrates how digital assets are being targeted in legal cases, British authorities have seized three NFTs linked to a criminal fraud investigation, according to a Feb. 14 report in the BBC.
SCHEME Her Majesty’s Revenue & Customs (HMRC), the equivalent of the IRS in Britain, seized three NFTs and roughly £5,000 ($7,800) worth of crypto assets as part of investigations into a suspected tax fraud scheme worth £1.4M. The action comes a week after the U.S. Justice Department seized $3.6B in stolen Bitcoin and accused a married couple of laundering the proceeds of a 2016 hack of Bitfinex, a Hong Kong-based crypto exchange.
IMPOUNDED Nick Sharp, deputy director for economic crime at HMRC, said on his LinkedIn page that he believes this is the first time a U.K. law enforcement agency has impounded NFTs. He said the case “shows that [NFTs] can and will be seized when linked to fraud and criminality.”
DOCUMENTATION There are over 4,000 words in the U.S. Securities and Exchange Commission’s rule describing all the documentation that a registered investment advisor needs to maintain.
OBLIGATIONS And more and more venture capital firms investing in the blockchain industry are getting large enough that they have to become registered investment advisors (RIAs), and this dramatically increases their compliance obligations. This has a privacy impact for companies invested in by these firms, to a degree that many entrepreneurs may not yet appreciate.
CRYPTO FUNDS “Books and records requirements that track every trade and investment that you’re doing, that needs to be available to the SEC if they decide to audit you” Adam Tope, a partner at DLA Piper, told The Defiant. “It’s basically just like being any hedge fund.” Tope has been working with all kinds of crypto funds for years now.
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🔗 Federal Judge Releases 'Razzlekhan,' Orders Other Bitfinex Hack Laundering Suspect to Remain in Jail: CoinDesk
A federal judge has ordered one half of the couple accused of laundering the proceeds of a 2016 Bitfinex hack to remain in federal custody until they face trial.
At Coinbase we have an ambitious mission to increase economic freedom in the world.
EF Research team hosting an educational seminar on "DankSharding."
A house in Gulfport auctioned off as a non-fungible token on Thursday sold for $654,310, or about 210 ethereum. It’s a first for U.S. real estate, according to real estate transaction firm Propy.
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🧑💻 ✍️ Stories in The Defiant are written by Brady Dale, Owen Fernau, Samuel Haig, DeFiDad, and yyctrader, and edited by Edward Robinson, yyctrader, and Camila Russo. Videos are produced by Robin Schmidt, Alp Gasimov and Daniel Flynn. Podcast is led by Camila, edited by Alp.
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