Coinbase Turns Up the Heat on SEC

Meanwhile, SBF chucked in jail

Author

Nathaniel Whittemore
August 14, 2023

The Breakdown First Five - Tuesday, August 14 2023

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

Prompt: an 1890s political cartoon of a group of lawyers linked arm-in-arm demonstrating in front of a courthouse

5. SBF Goes to Jail

Fed up with SBF’s habitual line-stepping, the Court has ordered that he sit in jail to await trial. After walking right up to line on his bail conditions, Sam finally went too far by releasing Caroline’s journal to the press. He’ll wait behind bars until his October 2 trial date in the Brooklyn MDC, which the judge noted was “not on anyone's list of five star facilities.” DOJ said that although he was more “subtle in his methods than a mobster doesn’t mean it was benign.”

4. ARK Delayed

The SEC has deferred a decision on the first spot Bitcoin ETF to come up for approval. The ARK ETF will be put off until November when the SEC can elect to delay until January. The SEC has asked for additional comments on the filing, including the surveillance sharing agreement which is common across all spot BTC applications. All eyes are now on the Grayscale lawsuit to force the SEC’s hand. A decision is expected any day now, but that’s been true for weeks.

3. Uniswap Dev Sacked for Rug

A Uniswap developer known as AzFlin has been sacked for allegedly rugging a memecoin. The princely sum that induced them to throw away that coveted spot on a top class DeFi project? A mere 14 ETH. The dev said they had used their own money to establish the token and were “entitled to do as I please with it.” Uniswap founder Hayden Adams disagreed, jettisoning AzFlin immediately. The self-proclaimed “top 0.1% fiver dev” seems to have no regrets.

2. Kyle Davies Not Contemptuous

Disgraced 3AC founder Kyle Davies has avoided contempt charges with one neat trick. Davies previously claimed that he renounced US citizenship and no longer recognized the jurisdiction of US courts. Commentators were incredulous, but the judge found this argument compelling, denying the contempt motion. Davies is no longer considered to have been properly served with the bankruptcy lawsuit, so it’s unclear how the $3.5B case will proceed.

1. Friends of Coinbase

Coinbase has been supported in their fight against the SEC by a brace of heavy-hitting amicus or ‘friend of the court’ briefs. Chief among them were six highly accredited law professors who took time off from writing securities law textbooks to tell the Court why the SEC is incorrect. They argued the SEC has been stretching the definition of ‘investment contracts’. Senator Cynthia Lummis also filed to say the SEC is exceeding its congressional mandate.

Thanks for reading -NLW