The Real Reason Why the SEC Might Be Going After Ethereum - Ep. 627
On March 20, Fortune reported that the SEC was investigating the Ethereum Foundation and was looking for legal ways to label ETH as a security.
Sam Enzer, partner at Cahill Gordon & Reindel, and Greg Strong, partner at DLx Law joined Laura to discuss everything about the investigation and its implications.
The guests speculate about the hidden motivations behind the SEC's investigation and discuss the likelihood of the approval of spot Ether ETFs. They also discuss the recent ruling in the SEC vs Coinbase case, where the judge dismissed claims that Coinbase's wallet was acting as an unregistered brokerage, but allowed the rest of the suit to proceed.
Lastly, they touch on the devastating impact on the crypto industry if the SEC were to win a case alleging ETH is a security and what they are looking out for in the next couple of weeks and months.
Show highlights:
Whether the investigation into the Ethereum Foundation is confirmed and why the SEC would do this
Why Sam Enzer believes that the SEC would be "utterly wrong and ridiculous" in alleging ETH is a security
Whether the number of people working on Ethereum could make the argument that it is decentralized
How would the SEC justify that ETH is a security and whether the Foundation is running Ethereum’s managerial efforts
Whether the SEC is looking for evidence to deny spot ether ETFs
Why SEC chair Gary Gensler has changed his mind on many of his previous stances regarding crypto assets and whether he's acting in good faith
The ongoing battle between the SEC and the CFTC and the need for Congress to regulate the industry
What the possible outcome of this investigation could be, and whether we'll have a court case soon
What the impact would be if ETH were classified a security
Whether Prometheum could launch its platform offering custody of ETH as a security before an SEC designation
Why Sam believes that the spot ETH ETFs will be denied on May 23rd
How the SEC has already made up its mind even before gathering the facts, according to Sam
Whether the recent judgment on Coinbase's case affects the potential case against the EF
Whether Ethereum transactions are security transactions, and the difference between primary and secondary sales
What to expect in terms of regulation and enforcement actions in the short term, given the number of cases at the moment
Thank you to our sponsors!
Polkadot
Guests:
Sam Enzer, Partner at Cahill Gordon & Reindel
Previous appearances on Unchained:
How 'a Criminal Choice' Got Sam Bankman-Fried a 25-Year Prison Sentence
Why the SEC’s Case Against Coinbase Is So Significant for Crypto
Why SBF’s Testimony So Far Has Likely Already Doomed Him
Another Bad Week for Sam Bankman-Fried in His Criminal Trial
Why These Lawyers Say It’s Over for SBF-But His Only Hail Mary Is to Testify
SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case
SBF’s Lawyers Could Be Annoying the Judge How Might That Impact the Trial?
Greg Strong, partner at DLx Law
Previous appearance on Unchained: Why These Lawyers Say It's Over for SBF-But His Only Hail Mary Is to Testify
Links
Ethereum Foundation investigation:
Fortune: SEC probing crypto companies in Ethereum investigation as hopes for ETF dim
CoinDesk: Ethereum Foundation Faces Inquiry From a Government; Fortune Says SEC Investigating ETH
Unchained: Ex-CFTC Commissioner Says ETH Can Be Both a Commodity and a Security
Unchained: SEC Investigating Ethereum Foundation Regarding Proof-of-Stake Transition: Report
Ethereum’s security status
Unchained: Ex-CFTC Commissioner Says ETH Can Be Both a Commodity and a Security
Fortune: SEC’s Gensler seen telling hedge funds that Ethereum and Litecoin are ‘not securities’ in 2018 video
CNBC:
SEC Chair Gary Gensler on potential Crypto regulation: It's within the securities laws
SEC Chair Gary Gensler discusses potential crypto regulation and stablecoins
For more details and links, visit Unchained
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Why These Lawyers Say It's Over for SBF--But His Only Hail Mary Is to Testify - Ep. 557
Samson Enzer, partner at Cahill Gordon & Reindel, and Greg Strong, partner at DLX Law, dissect the second week of the criminal trial of Sam Bankman-Fried. At this point, the prosecution’s star witness, former Alameda Research CEO Caroline Ellison, has testified, as well as another prominent insider, co-founder Gary Wang. Both Enzer and Strong believe that it’s already over for the defense, but agree that the only thing that could turn it around is testimony from SBF himself—but that runs the risk of the defendant significantly increasing his sentence.
Find out how they thought the more salacious details of Ellison’s testimony, concerning alleged bribes to Chinese government officials, would affect the jury, and why Enzer believes introducing that testimony may have been risky for the government.
Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or your favorite podcast platform.
Show highlights:
Whether the prosecution gave the defense any fodder for its failed entrepreneur theory
How SBF and Ellison’s romantic relationship could affect the jury’s deliberations
The jury’s reaction to Ellison saying SBF’s belief was that “don’t lie, don’t steal” didn’t fit into his philosophy of utilitarianism
Why the defense didn’t object to the mention of alleged bribes to Chinese government officials the first time
Why the defense attorney complained about photos shown of SBF and his hair
How the jury might react to the testimony involving alleged Chinese government bribes, Thai prostitutes, and Saudi prince
How Ellison crying in her testimony could affect the jury
Why the defense didn’t ask Ellison about not hedging
Why the cross-examination of Gary Wang was limited in its success for the defense
What caused a moment of tension between Zac Prince and the defense
Why Greg and Sam think SBF shouldn’t testify, but believe it’s his only, very risky, chance
If convicted, how many years do they think SBF’s prison sentence will be?
Thank you to our sponsors!
Crypto.com
LayerZero
Popcorn Network
Guests:
Sam Enzer, partner at Cahill Gordon & Reindel.
Previous appearances on Unchained:
SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case
SBF’s Lawyers Could Be Annoying the Judge. How Might That Impact the Trial?
Greg Strong, partner at DLx Law
Links
Previous coverage by Unchained on the trial of Sam Bankman-Fried:
How Heated Sidebars During the SBF Trial Could Impact the Jury’s Decision
SBF Trial, Day 1: Possible Witnesses Include FTX Insiders, Big Names in Crypto, and SBF’s Family
SBF Trial, Day 2: DOJ Says Sam Bankman-Fried ‘Lied’ While Defense Claims His Actions Were ‘Reasonable’
SBF Trial, Day 3: Why a True Believer in FTX Flipped Once He Learned One Fact
SBF Trial, Day 4: SBF’s Lawyers Annoy Judge Kaplan, While Wang Reveals Alameda’s Special Privileges
Sam Bankman-Fried Trial: Here's Everything That Happened So Far
SBF Trial, Day 5: SBF's Defense Finally Found Its Legs, But Can It Counter Caroline Ellison?
SBF Trial, Day 6: Caroline Ellison Recalls 'The Worst Week of My Life'
SBF Trial, Day 7: In SBF Trial, Did the Defense Lose Its Opportunity With the Star Witness?
SBF Trial, Day 8: Former BlockFi CEO Adds Credibility to Fraud Charges
SBF’s Lawyers Could Be Annoying the Judge. How Might That Impact the Trial?
Did Sam Bankman-Fried Have Intent to Defraud FTX Investors?
Here’s How Sam Bankman-Fried’s High-Stakes Trial Could Play Out
SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case
The High-Stakes Trial of Sam Bankman-Fried Begins: What to Expect
Go deeper into the trial:
Unchained:
In the SBF Case, Elite Corruption Is What’s Really on Trial
Cooperating Witnesses in the SBF Trial May Get Little to No Prison Time
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New Order in SEC vs. Ripple Over XRP Is a Win for Crypto: What Happens Now? - Ep. 518
The SEC and Ripple have been locked in a legal tug of war for years, stirring up waves of controversy and debate in the crypto community. Finally, Judge Analisa Torres has given an order establishing that XRP buyers trading on exchanges were not, in fact, engaging in a securities transaction, a decision that could have far-reaching implications for the industry. Lewis Cohen, co-founder of DLx Law, unpacks the details of this pivotal case and what it might mean for the future of cryptocurrency regulation.
Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform.
Show highlights:
why the SEC lawsuit against Ripple has such historical significance in the crypto industry
how Judge Torres split the case into two categories
why the 'programmatic buyers' did not meet the four prongs of the Howey test
why the institutional sales constituted an investment contract
what makes the Ripple case different from the Kik and Telegram cases
whether the new ruling by Judge Torres will have an impact on how other crypto projects deal with their offerings
why, in the event of an appeal, Lewis expects a Second Circuit decision to take at least one year
whether Judge Torres' decision will impact the ongoing cases against crypto exchanges like Coinbase
why Lewis thinks the XRP order will not change the likelihood that spot bitcoin ETFs get approved
how there's no way to deal with information asymmetries in digital assets now
Thank you to our sponsors!
Crypto.com
Railgun DAO
Ondo Finance
Arbitrum Foundation
Guest
Lewis Cohen, Cofounder DLx Law
Previous appearances on Unchained: The Lummis/Gillibrand Crypto Bill: Is the ‘Ancillary Token’ Approach the Best
Links
Previous coverage of Unchained on the Ripple case:
The SEC's Lawsuit Against Ripple and 2 Execs: What You Need to Know
Ripple's XRP: Why Its Chances of Success Are Low
CoinDesk: Ripple, Crypto Industry Score Partial Win in SEC Court Fight Over XRP
The Ineluctable Modality of Securities Law: Why Fungible Crypto Assets Are not Securities
Paradigm Files Amicus Brief in SEC’s Lawsuit Against Ripple
The Block: Lummis, Gillibrand to introduce revised comprehensive crypto bill
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The Lummis/Gillibrand Crypto Bill: Is the 'Ancillary Token' Approach the Best Way? - Ep. 361
Lewis Cohen, lead attorney at DLx Law LLC, joins to discuss the recently proposed Lummis-Gillibrand bill, the Responsible Financial Innovation Act, which he helped shape. In this episode, we cover:
how Lewis was impressed by Gillibrand’s and Lummis’s offices’ hard work and bipartisanship
how the bill creates a new definition for an “ancillary asset” with split oversight responsibilities between the CFTC and the SEC
how the bill proposes a test of managerial centralization as a determinant of disclosure requirements for digital assets
his response to criticism that the ancillary token approach is more complicated than need be and gives too much power to the SEC
why the bill didn't adopt an approach more similar to something like SEC Commissioner Hester Peirce’s token safe harbor proposal
how Lewis would respond to SEC Chair Gary Gensler’s contention that the vast majority of digital assets are securities
how Cohen is concerned about legislation or regulation impinging on basic freedoms to transact by over-applying securities regulation
what kind of SEC disclosures will be required for “ancillary assets” and the requirements for projects to be able to cease mandatory disclosure
how the bill defines stablecoins
whether the requirement for stablecoins to maintain reserves means the end of algorithmic stablecoins or whether they will just be called something else
how the bill handles DAOs and how legislation in this area must be delicate
why Lewis believes the proposal is a “bright spot” for thoughtful US legislation and bipartisanship
why he doesn’t see the bill being adopted in the current Congress
Thank you to our sponsors!
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021
Ava Labs: https://avax.network
EPISODE LINKS
Lewis Cohen
DLx Law LLC: https://dlxlaw.com/
Twitter: https://twitter.com/NYcryptolawyer
LinkedIn: https://www.linkedin.com/in/lewis-cohen-a3211410/
Lummis-Gillibrand Proposal (Responsible Financial Innovation Act)
Legal Memo from DLXLaw : https://dlxlaw.com/wp-content/uploads/2022/06/DLX_FSV-summary_RFIA_060722.pdf
Lummis-Gillibrand Section by Section Overview (summary by bill authors): https://www.gillibrand.senate.gov/imo/media/doc/Lummis-Gillibrand%20Section-by-Section%20%5bFinal%5d.pdf
Responsible Financial Innovation Act (full text): https://www.gillibrand.senate.gov/imo/media/doc/Lummis-Gillibrand%20Responsible%20Financial%20Innovation%20Act%20%5bFinal%5d.pdf
Blog post intro (by Senator Kirsten Gillibrand) : https://gillibrandny.medium.com/the-responsible-financial-innovation-act-218a764abd6c
Commentary:
CoinDesk recap: https://www.coindesk.com/policy/2022/06/07/key-us-senators-introduce-bill-outlining-sweeping-plan-for-future-crypto-rules/
Fortune on what the bill means for algo stablecoins: https://fortune.com/2022/06/08/algorithmic-stablecoins-terra-luna-crypto-regulation-senate-bill-lummis-gillibrand/
JW Verret's critique: https://twitter.com/JWVerret/status/1534165678831325191?s=20&t=nIWYdZKJzXsr-SVK7F_W9w
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