Why the SEC Lawsuit Against Consensys May Hold Little Ground - Ep. 671
In this episode, crypto lawyers Kayvan Sadeghi and Sam Enzer delve into the SEC's lawsuit against Consensys, which focuses on MetaMask's swaps and staking services, and explore the implications of the SEC's stance on MetaMask acting as a broker-dealer, and the classification of its staking product as a security.
They discuss how recent rulings on Coinbase and Binance challenge the SEC's claims, and whether differing judicial opinions could lead to the Supreme Court.
Also, they talk about the potential impact of the Supreme Court striking down Chevron deference for crypto regulation.
Show highlights:
00:00 Intro
01:22 The key claims in the SEC's lawsuit against Consensys and how they relate to MetaMask's swaps and staking services
03:42 How recent Coinbase and Binance rulings challenge the SEC's claims against Consensys
09:29 Whether differing judicial opinions on whether wallets with private keys act as brokers could end up being decided by the Supreme Court
12:55 How the SEC will substantiate its claims that MetaMask acts as a broker-dealer and that its staking product is a security in Texas legal briefings
17:42 Why a token itself is not considered a security, according to Sam, and how this distinction affects secondary market transactions in the SEC's case against MetaMask
22:14 What Lido and Rocket Pool can do in response to the SEC tangentially naming their liquid staking tokens as securities
31:27 How the SEC and Consensys lawsuits will proceed, and whether conflicting rulings could arise from their parallel tracks
36:35 The key distinctions in the Binance case compared to those of Coinbase and Kraken, and how the Binance ruling might impact future crypto cases
50:08 What Chevron deference means and how its removal impacts crypto
56:49 How the elimination of Chevron deference affects current crypto cases and legislative gridlock
Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com
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Guests:
Kayvan Sadeghi, partner at Jenner & Block
Sam Enzer, partner at Cahill Gordon & Reindel
Previous episode of Unchained with Sam and Kayvan: SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case
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SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case - Ep. 551
The high-stakes trial of Sam Bankman-Fried is set to begin on October 3, and the FTX founder and former CEO will have to answer for his role in the cryptocurrency exchange’s downfall, which led to billions in losses. Both the prosecution and defense are currently preparing for what is set to be a significant milestone for the crypto industry. Kayvan Sadeghi, partner at Jenner & Block and Sam Enzer, partner at Cahill Gordon & Reindel, discuss the differences between a civil and criminal trial, what the jury selection process might look like, and what arguments the prosecution and defense might use to support their cases.
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:
The difference between a civil and criminal trial and why it's difficult for the defense to prepare while Sam Bankman-Fried is in jail
Whether SBF was offered a plea deal and if so, why he didn't take it
What the process of vetting jurors looks like and what both sides are looking for
What a pre-opening jury charge is and why Judge Lewis A. Kaplan might choose to use it
The importance of intent when it comes to SBF’s charges
The pros and cons of the defense using the argument that the FTX founder was receiving poor legal advice
What charges SBF is facing and whether the defense or prosecution has the upper hand
How the opening statements of both the prosecution and the defense might play out
Whether SBF will be put on the stand and why that could be a "dangerous" move, according to Sam
How the defense could respond to testimony from key witnesses like Caroline Ellison or Gary Wang
How Judge Kaplan being a "tough sentencer" could impact SBF’s jail sentence, according to Sam
Thank you to our sponsors!
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LayerZero
Popcorn Network
Guests:
Kayvan Sadeghi, partner and co-chair of Fintech & Crypto Assets at Jenner & Block
Previous appearance on Unchained: Why the SEC vs. Ripple Order Is Now About 2 Things: Coinbase and Congress
Samson Enzer, partner at Cahill Gordon & Reindel.
Links
Previous coverage from Unchained on Sam Bankman-Fried and FTX:
Here’s How Sam Bankman-Fried’s High-Stakes Trial Could Play Out
Why FTX Might Try to Claw Back Funds From Retail Customers
How Much Prison Time Is FTX’s Sam Bankman-Fried Facing?
Why the Legal Process for FTX and Sam Bankman-Fried Could Take Years
The Chopping Block: SBF Wants to Win in the Court of Public Opinion. Will He?
Jesse Powell and Kevin Zhou on How FTX and Alameda Lost $10 Billion
Sam Bankman-Fried on How to Prevent the Next Terra and 3AC
Details of the trial:
Unchained: FTX: The Exchange That Brought Down the Industry
CoinDesk:
Here's the Sam Bankman-Fried Trial Schedule
The SBF Trial: How Did We Get Here?
Here’s How FTX Founder Sam Bankman-Fried’s Trial May Play Out
Forbes: Sam Bankman-Fried Could Face 'Very Long Sentence,' Judge Says Before Denying Release
SBF’s defense team:
Unchained: Sam-Bankman-Fried Files New Request for Temporary Release Before Trial
CoinDesk:
U.S. Department of Justice Opposes Sam Bankman-Fried's Latest Move for 'Temporary Release'
Key witnesses:
Unchained: SBF’s Expert Witnesses Barred From Testifying at Trial
Reuters: Who is Caroline Ellison, a key witness set to testify against Sam Bankman-Fried?
NYT: Prosecutors Detail Evidence Against Sam Bankman-Fried - The New York Times
CoinDesk:
All of Sam Bankman-Fried's Proposed Expert Witnesses Should Be Barred From Testifying: DOJ
Judge Blocks Sam Bankman-Fried's Proposed Witnesses From Testifying
Business Insider: Sam Bankman-Fried is being sent to jail after a judge revoked his bail over alleged witness tampering
Jury selection:
CoinDesk: Sam Bankman-Fried Can Ask DOJ Witnesses About Drug Use
Cointelegraph: Sam Bankman-Fried’s political donations can be surfaced in trial, rules judge
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Why the SEC vs. Ripple Order Is Now About 2 Things: Coinbase and Congress - Ep. 520
XRP isn’t itself a security; it depends on how it’s sold. So said a federal judge last Thursday in the SEC vs. Ripple case and the implications are significant. Jake Chervinsky, chief policy officer at the Blockchain Association, and lawyer Kayvan Sadeghi, partner at Jenner & Block, join the show to discuss two major ramifications. One: U.S. District Judge Analisa Torres dealt a major blow to the legal theory underpinning the SEC’s case against Coinbase. Two: This order really “lights a fire” under U.S. lawmakers to act on a pair of crypto bills in Congress.
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 this is an “extraordinary victory” for the industry, according to Jake
whether Judge Torres made the right decision
how the SEC could seek an interlocutory appeal to halt the case, though it’s unlikely
what are the pending items in the case that need to be resolved
why the order that Judge Torres issued is not a final judgment
why it is more important to look at the transaction, not at the nature of the asset, to determine whether something should be deemed a security
whether the SEC has the authority to call digital assets securities
the significance of the “major questions doctrine”
how the order in the Ripple case will affect other cases like the Coinbase one
whether exchanges should re-list XRP
why this case could be instrumental in steering the direction of crypto regulation in the U.S.
whether other crypto tokens like SOL or MATIC should feel relieved with this new ruling
why Jake says that this case will speed up the chances of crypto legislation getting passed
what the differences are between the current crypto bills that are being proposed
whether SEC Chair Gary Gensler should recuse himself from enforcement actions in the crypto industry
Thank you to our sponsors!
Crypto.com
Arbitrum Foundation
TOKEN2049
Guests:
Jake Chervinsky, chief policy officer at the Blockchain Association
Previous appearances on Unchained: The Chopping Block: Jake Chervinsky on How the SEC Has Lost Credibility
All Things Crypto Regulation With Jake Chervinsky
Everything You Need to Know About the Looming Battle Over Privacy in Crypto
Can Crypto Be a Force in the Midterms? Yes, Say Kristin Smith and Jake Chervinsky
Kayvan Sadeghi, partner at Jenner & Block and co-chair of the fintech and crypto assets practice.
Links:
Previous coverage of Unchained on the Ripple case:
New Order in SEC vs. Ripple Over XRP Is a Win for Crypto: What Happens Now?
The Chopping Block: Should XRP Holders Really Be Rejoicing?
The SEC's Lawsuit Against Ripple and 2 Execs: What You Need to Know
Ripple's XRP: Why Its Chances of Success Are Low
SEC vs Ripple: Judge Rules XRP Sold on Exchanges Is Not a Security
CoinDesk:
Ripple, Crypto Industry Score Partial Win in SEC Court Fight Over XRP
Ripple Labs Ruling Throws U.S. Crypto-Token Regulation into Disarray
The Washington Post: Ripple ruling threatens SEC’s crypto regulation push
Chair Gensler Must Recuse Himself From Digital Asset Enforcement Decisions - Blockchain Association
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