Coinbase filed a lawsuit against the Securities and Exchange Commission (SEC) seeking a writ of mandamus. The company has been urging the SEC to establish clear rules for the offer, sale, registration, and trading of digital asset securities, aiming to provide fair notice to all market participants and facilitate global resolution through consolidated judicial review. Coinbase argues that despite numerous efforts, including a rulemaking petition, meetings, and supplemental comments, the SEC has not taken any action on Coinbase's request or provided feedback on its proposals.

Coinbase's July 2022 rulemaking petition called for clarity in several areas, such as the identification of digital assets that are securities, registration of issuers, exemptions and mandatory disclosures, and registration of exchanges. Coinbase notes that over a thousand entities and individuals have filed comments supporting their call for regulatory clarity. Despite these calls clarity, Coinbase maintains the the SEC has instead opted ramp up efforts to regulate retrospectively through enforcement actions and even threatened Coinbase with such actions. Crypto Criminal Defense Lawyer Blog 

Yet more than nine months (and counting) after Coinbase submitted its origi- nal petition, the SEC still has taken no action on Coinbase’s petition or provided any feedback on Coinbase’s proposals.24 Instead, it has ramped up efforts to regulate retrospectively by bringing enforcement actions—and has now threatened one against Coinbase. On March 22, 2023, the SEC served a Wells notice on Coinbase alleging (among other things) that unspecified portions of Coinbase’s listed digital assets are unregistered securities—even while the Commission still refuses to ad- dress Coinbase’s rulemaking petition asking the agency to open a path to registration for digital assets that the Commission believes to be securities. writ of mandamus

An indictment was unsealed on April 24th in Miami charging two U.S. citizens and a South African national with conspiring to manipulate the market for HYDRO, a virtual asset created by the Hydrogen Technology Corporation. Two other individuals were also charged in separate charging documents for their roles in the scheme filed in the Southern District of Florida. 

Back in September 2022, the SEC filed a complaint against HYDRO.  SEC Press Release On April 20, 2023, the SEC settled with HYDRO. On April 24, 2023, the DOJ returned an indictment charging defendant’s with conspiracy to commit wire fraud as well as conspiracy to commit securities price manipulation.  Crypto Criminal Defense Lawyer Blog

A pretrial hearing is scheduled today in the Nathaniel Chastain “insider trading” criminal case. As I previously blogged, this case is currently scheduled for a jury trial on April 24, 2024. In keeping with the court’s scheduling order, the parties filed a slew of pretrial motions on April 13th, including proposed jury instructions. Cryto Criminal Defense Lawyer Blog 

Back in June of 2022, the U.S. Attorney for the S.D.N.Y. returned an Indictment charging Chastain, a former product manager at OpenSea with wire fraud and money laundering in connection with a scheme to commit insider trading in Non-Fungible Tokens, or “NFTs,” by using confidential information about what NFTs were going to be featured on OpenSea’s homepage for his personal financial gain. The Indictment specifically alleges that from in or about June 2021 to in or about September 2021, Chastain engaged in “insider trading” of Non-Fungible Tokens (“NFTs”).

On motion of particular interest is the defense’s motion in limine to exclude the government from mentioning the term “insider trading” before the jury during the trial (Doc. 81)

On April 3, 2023, the Department of Justice (DOJ) announced the seizure of over $112 million in virtual currency connected to alleged cryptocurrency investment scams. The DOJ authorized seizure warrants for six virtual currency accounts following allegations that these accounts were used to launder proceeds from various cryptocurrency confidence scams. The targets reportedly engaged in long-term relationships with victims met online, persuading them to invest in fake cryptocurrency trading platforms. The funds sent for these supposed investments were funneled to cryptocurrency addresses and accounts controlled by scammers and their accomplices. Crypto Criminal Defense Lawyer 

On April 17, 2023, the SEC announced that it “charged crypto asset trading platform Bittrex, Inc. and its co-founder and former CEO William Shihara for operating an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Bittrex, Inc.’s foreign affiliate, Bittrex Global GmbH, for failing to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex.” SEC Press Release 

“Today’s action, yet again, makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity," said SEC Chair Gary Gensler. "As alleged in our complaint, Bittrex and issuers that it worked with knew the rules that applied to them but went to great lengths to evade them by directing issuer-applicants to ‘scrub‘ offering materials of information indicating that certain crypto assets were securities. Further, Bittrex, as alleged, failed to register and comply with U.S. securities laws as an exchange, broker-dealer, and clearing agency. Cosmetic alterations did nothing to change the underlying economic realities of the offerings and Bittrex’s conduct. Today we’re holding Bittrex accountable for its non-compliance." Crypto Criminal Defense Lawyer Blog