SEC Lawyers Resign After Debt Box Scandal

The Breakdown First Five - Tuesday, April 23, 2024

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

5. SNB Should Consider Bitcoin

A Swiss Bitcoin advocacy group has called on the Swiss central bank to add Bitcoin to their reserves. The group will present their views to the SNB committee at a meeting this week. They said the move is intended to start a debate on how to “protect [Swiss] sovereignty and neutrality” using the nation's monetary policy. Luzius Meisser, president of Bitcoin Suisse said the move would mark the SNB’s independence from the ECB and strengthen neutrality.

4. $5.3B Terraform Judgement Request

The SEC has asked the court to impose a $5.3B penalty against Terraform Labs and its founder Do Kwon. A jury had already found them liable for securities fraud. Under the SEC’s proposal, Kwon would be personally liable for $100M of the penalty, while the rest is $420M against Terraform and a $4.7B disgorgement of profits. The SEC said Kwon had shown no remorse and additional violations are “not only possible but likely are already occurring”. They asked for the court to send an “unequivocal message” that brazen misconduct will not be tolerated. 

3. NYSE Going 24/7

The New York Stock Exchange has surveyed market participants on their views of 24/7 trading. There’s already a range of options for after hours stock trading, but this move would make it more widely accessible. Reactions were generally that sleep deprived traders don’t need more reasons to stay up late, but with algorithmic trading taking over do automated traders even need to rest? The move is likely a response to the rise of crypto markets and rival 24/7 venues. 

2. IMF Studies Bitcoin

The IMF has released an in-depth study on Bitcoin’s use in cross border remittances. The study found that Bitcoin was used more frequently in countries with “capital flow restrictions.” Further, Bitcoin is used as a savings tool in countries with high inflation. The UN noted that the US is an outlier, with low Bitcoin adoption relative to capital flows, so a US-centric view of Bitcoin is likely to be misleading. 

1. SEC Lawyers Resign

Two SEC lawyers who led the Debt Box litigation have resigned rather than being terminated. The scandalous case featured misleading evidence in what the judge called a “gross abuse of power.” With two attorneys now finished at the agency, commentary focused on whether more heads should roll over the case. The current implication seems to be that the scandal was isolated to two regional litigators, rather than a symptom of agency wide culture.