The SEC's NFT Power Grab In DC

Plus witness weirdness in SBF trial

Author

Nathaniel Whittemore
August 29, 2023

The Breakdown First Five - Tuesday August 29 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.

5. Coinbase Zeroed Out

A bug caused users of Coinbase Wallet to experience every crypto investor’s worst nightmare, an unexplained zero balance. The problem has now been fixed and appears to have mostly affected Bitcoin balances. Coinbase did not explain the cause of the problem.

4. Binance Back in Benelux

Binance has found a workaround for a Belgian ban. The exchange was barred from operating in Belgium in June, but will restart services through a Polish subsidiary which is within the European Economic Area. The regulator confirmed the move was legal, but warned users that Poland does not screen crypto directors for “fitness or propriety”

3. Barring Witnesses

The DOJ has said all seven of SBF’s proposed expert witnesses should be rejected by the Court. They said their disclosure filings are insufficient, their experience may be misleading or their planned testimony may not be relevant. Sam’s list of witnesses appeared strange. One witness planning to explain trust law, which is the role of the judge, while two others did not elaborate on their planned testimony beyond general topics.

2. Fed Letter

Three republican lawmakers have written to the Fed asking why they were inserting themselves into stablecoin policy. The irate Congressmen were responding to recent rulemaking which required pre-approval before dealing with stablecoins. They said the Fed’s actions undermined legislative efforts around stablecoin policy and appeared to have no intention of approving any crypto activities within the banking system.

1. Non Fungible Securities

The SEC have concluded their first ever enforcement action against an NFT project. An LA company called Impact Theory has agreed to refund all purchasers and pay a $6.1M fine. SEC Commissioners Hester Peirce and Mark Uyeda issued a scathing dissent, arguing that the regulator does not typically go after collectibles merchants. They gave a list of questions that the regulator should answer using rulemaking should they decide to “approach the topic sensibly.”

Thanks for reading -NLW