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1/ BREAKING: The U.S. Chamber of Commerce has just filed a brief in the @Coinbase v. SEC case, calling out the SEC for acting "unlawfully" in the digital asset space. This is The U.S. Chamber of Commerce--not the Chamber of Digital Commerce. This is a Big Deal. Here's why...

In an aggressive move, @Binance has gone on offense against the SEC in the federal court case. Lawyers for the @Binance defendants have filed a motion accusing the SEC of engaging in unethical conduct. This is a big deal. Let me explain...

Here’s me--blowing the lid off the phony “$250 Million Bond” for SBF. If this gets enough attention, maybe the judge would reconsider the lenient bail terms. Hats off to @Coindesk for having the guts to print it. coindesk.com/consensus-magaz…

SEC v. @Coinbase update We now have the transcript of the pre-motion conference held on Thursday. Things went worse for the SEC than was initially reported. The Judge explicitly aligned herself with Coinbase on a key argument. That is unusual for a first appearance. More...

SEC v. Coinbase, Big Update: Six Securities Law Scholars File Devastating Amicus Brief in Support of @Coinbase. Law Professors from Yale, Univ. of Chicago, UCLA, Fordham, Boston University and Widener filed an amicus brief last night that Absolutely Shreds the SEC's "investment contract" theory. The amicus brief brilliantly traces the history of the meaning of "investment contract" before, during & after passage of the federal Securities Act in 1933. Here are the Scholars' conclusions: 1. "By 1933, the state courts had converged around a standard for interpreting the term 'investment contract' to mean a contractual arrangement that entitled an investor to a contractual share of the seller's later income, profits, or assets." 2. After the Howey decision in 1946, the "common thread [for investment contracts] remains . . . that an investor must be promised, by virtue of his or her investment, an ongoing contractual interest in the income, profits, or assets of the enterprise." 3. "Every 'Investment Contract' identified by the Supreme Court Involves a contractual undertaking to grant a surviving stake in the enterprise." ___________________________________________ Bottom line: In my opinion, this Amicus Brief delivers the coup de grace to the SEC's argument that crypto tokens trading on secondary markets are investment contracts. storage.courtlistener.com/re…

1/ BREAKING: SEC sues Binance HEADLINE: The SEC complaint identifies 10 tokens it deems to be unregistered crypto asset securities. The target list includes some of the biggest names in crypto: $SOL, $ADA, $MATIC, $FIL, $ATOM, $SAND, $MANA, $ALGO, $AXS, and $COTI. more...

Because I worked as a securities lawyer for 30 years representing Wall Street firms... People ask me: "What is likely to happen to Sam Bankman-Fried?" And I say, I have seen this movie before. In 2011. It was called the "MF Global Scandal."

BREAKING: SEC sues @Coinbase The SEC alleges that Coinbase has acted as an illegal unregistered securities exchange since 2019. But, In April of 2021, the SEC approved Coinbase going public with a listing on NASDAQ. And, In May of 2021, SEC Chairman Gary Gensler testified before Congress that, under current law, the SEC has NO REGULATORY AUTHORITY over crypto exchanges. The SEC should lose this case.

1/ If the SEC follows through on its threat to sue @Coinbase, I believe the SEC will lose. The SEC's case has a fatal flaw. And the problem is entirely of @GaryGensler's own making. Let me explain...

If the @SEC were to deny all spot $BTC ETFs, the applicants would immediately sue and the D.C. Court of Appeals would again rule that the SEC was “arbitrary & capricious.” The SEC gave every reason they had for denying Grayscale—and lost. I expect multiple approvals on Jan. 10.

1/ The stakes just keep getting higher for the ruling in SEC v. @Ripple. Here's why. If Judge Torres rules that $XRP tokens trading on secondary markets are Not Securities--it would undermine the entire basis for the SEC's case against @Coinbase and much of the @Binance case.

I just read the full statement from Coinbase's top lawyer about the Wells Notice from the SEC. The thing that immediately jumps out is this: Coinbase (very reasonably) asked the SEC staff to tell them which specific tokens the SEC contends are securities. The SEC refused to tell them. This, my friends, is absolutely nuts! The ENTIRE POINT of the Wells Notice process is to allow the Defendant a chance to prepare a written rebuttal to the charges against them and, hopefully, head off a meritless lawsuit. But the SEC has refused to tell Coinbase what tokens they claim are securities! How do you rebut that? This is literally the plot of Franz Kafka's book, The Trial.

BREAKING: SEC and @Binance agree on Order securing U.S. customer assets. I would put this in the win column for the @Binance defendants. The consent order is very close to what Binance offered to the SEC at the outset. The important thing is--this is a consent decree and not a Temporary Restraining Order. Why does that matter? This means the Judge will Not make an early determination that the SEC has a "substantial likelihood of success on the merits" if the case were to proceed to trial. The case will move forward with no early court determination that $BNB (or any other asset on Binance platforms) is likely to be a security. Good job by the @Binance legal team. And, in the end, the SEC acted reasonably in coming to this agreement. sec.gov/files/litigation/com…

Senator Cynthia Lummis (R. WY) just filed an Amicus Brief supporting @Coinbase's motion to dismiss the SEC's complaint. @SenLummis is Co-Sponsor of the Lummis-Gillibrand crypto regulation bill. Sen. Lummis' brief argues that: 1. Congress has not granted the SEC authority to regulate crypto assets. 2. Defining the contours of crypto regulation in this country is a job for Congress and not the SEC. 3. The SEC's claim that virtually all crypto assets are securities "exceeds the SEC's authority, encroaches on Congress's lawmaking, and contravenes the separation of powers." And putting a new spin on the "regulation-by-enforcement" term, Senator Lummis declares that "the SEC cannot legislate by enforcement." Excellent work by the lawyers at Jenner & Block. Well said. Well done. 👇 storage.courtlistener.com/re…

5/ Bottom line: The Court will give these arguments advanced by the U.S. Chamber of Commerce serious attention. And The largest, most influential, business organization in the U.S. has just declared it stands with crypto.

Digging deep into the transcript of the pre-motion conference in SEC v. @Coinbase. One of my favorite quotes from the Judge: "What is the difference between those that are not [securities] and those that are? And how has that been communicated by the SEC to the investing public and to those involved in the space so that they know that this type of asset may implicate the securities laws and some other cryptoasset may not?" The SEC lawyer answers (paraphrasing)--all they need to do Judge is read the 1946 Howey case about the orange groves. Obviously unpersuaded by the absurd answer, the Judge tries again: "I am just trying to figure out how folks involved in the industry can know that a particular crytoasset with which they are involved is or is not going to be found at some later date by the SEC to be a security." Exactly. This judge gets it.

The judge in the Debt Box case has issued an 80 page opinion sanctioning the SEC for egregious misconduct in the case. The opinion is devastating to the SEC as an institution and to the particular lawyers who committed the misconduct. The judge made it crystal clear that the SEC lawyers did not make an error--they lied intentionally. In an opinion that will surely be cited by litigants across the country for years to come, the judge found that: "The critical evidence the Commission offered to obtain and defend the ex parte TRO lacked any basis in fact, yet the Commission nonetheless advanced that evidence in deliberately false and misleading ways." The SEC engaged in a "gross abuse of the power entrusted to it by Congress." The SEC "undermined the integrity of the judicial process." The judge has ordered the SEC to pay the attorneys' fees of the defendants in the case. This is a sad day. The SEC was once a great institution, respected around the globe for its competence and integrity. Now is a time for accountability. The judge found that the SEC engaged in a gross abuse of the power entrusted to it by Congress. Will Congress do anything about this?

Huge Congratulations are in order to a lot of people who fought this long hard battle against the SEC. 1. @Ripple @bgarlinghouse and @chrislarsensf for refusing to give the bully their lunch money. It is impossible for people who haven't been through something like this to fully understand the psychological toll it takes. 2. Ripple General Counsel @s_alderoty for resolutely coordinating the defense. 3. All of the Lawyers for the defendants, @Debevoise @PaulWeissLLP @ClearyGottlieb. This is a landmark ruling and a career capping achievement. 4. @JohnEDeaton1 fighting in the trenches (without pay) for the #XRPArmy all the way. Makes his fellow Marines proud. Devil Dog, through and through. 5. Brad Kimes @DigPerspectives for never giving up, never losing his enthusiasm. 6. And many, many more in the #XRPCommunity who proved they would never give up even when they had no allies in the greater crypto community.

4/ The Chamber declares: "The SEC's actions are not just harmful policy; they are unlawful..."

1/ Here's what you should know about the @Coinbase suit against the SEC. This will move fast--unlike the @Ripple case. This case begins in the appellate court, not the trial court. There will be no discovery (depositions and document exchange), just briefing and a hearing.

This is is a huge win for Larsen, Garlinghouse and the XRP community. 1. While the court rules that some of Ripple's "Institutional Sales" of XRP were investment contracts and thus, the sale of unregistered securities, 2. Ripple's sales of XRP to "Programmatic Buyers" through Exchanges to anonymous buyers were NOT investment contracts. 3. Ripple's other distributions of XRP to employees as compensation or to 3rd parties to develop applications for XRP or XRP Ledger are NOT investment contracts. 4. Larsen and Garlinghouse's sales of XRP are NOT investment contracts.

I have a Theory about the SEC’s unexplained delay in dismissing the @Ripple case. It might not be the SEC. It could be that @Ripple is negotiating hard to get the SEC to agree to vacate some or all of Judge Torres’ decision. The Torres decision was unquestionably GREAT for $XRP holders, BUT The (a) finding of securities law violations and the (b) injunction (with attendant “bad boy” provisions) are not so great for Ripple. This is particularly true if Ripple is considering a future exempt securities offering or IPO. I believe the SEC would have accepted a settlement—where both sides dismiss their appeals and the SEC takes the $125 million penalty—in a heartbeat. So, it makes sense (to me at least) that Ripple could be negotiating for a better deal than that. This is all pure speculation on my part. I could be wrong. Wouldn’t be the first time,

3/ The Chamber makes 3 arguments. 1. Regulatory uncertainty is killing innovation in the U.S. 2. The SEC is destabilizing the digital assets regulatory environment. 3. The SEC is violating Constitutional Due Process and Fair Notice rights. And the topper is...

Time to say Goodbye Gary! Nov. 8, 2016: Trump elected Nov. 14, 2016: Mary Jo White (SEC Chair) announces her resignation Nov. 3, 2020: Biden elected Nov. 16, 2020: Jay Clayton announces resignation Nov. 5, 2024: Trump elected Nov. __, 2024: Hey @GaryGensler, we're waiting

BREAKING: SEC v. @binance hearing Judge does Not enter SEC's requested asset freeze order. Judge encourages parties to try to come to an agreed compromise order and report back on Thursday. The judge, apparently, caught on that there was no actual emergency. I am told the judge pressed the SEC lawyers on whether they had any actual evidence of @BinanceUS customer assets being moved overseas. They had none. Round 1 to @Binance and @cz_binance

The SEC lawyers argued repeatedly (and successfully) in the @Coinbase hearing that: Digital asset + Ecosystem = Security But now they acknowledge that $ETH (a digital asset + ecosystem) is NOT a security. So, now what? Never mind?  Just kidding?  Do over? It's embarrassing.

SEC v. @Coinbase case update. The SEC submitted a letter to the judge yesterday responding to Coinbase's request for permission to file a motion for judgment on the pleadings. Here's what you should know...

2/ The U.S. Chamber is a highly influential organization representing companies in all industries across the U.S.--not just crypto. The brief opens with: "As it stands today, nobody knows for certain which digital assets, if any, are 'securities' under federal law." Exactly!

I just finished reading Judge Torres' 57-page ruling on the admissibility of expert testimony in SEC v. Ripple. As a trial lawyer who handled a number of securities cases in the Southern District of New York, I have 5 takeaways from the Judge's Order.

My take on the SEC Hearing. I have to say @GaryGensler looked and sounded like a beaten man to me. @PatrickMcHenry set it up perfectly. It was absolutely humiliating for Gensler to have to sit there and listen to his colleagues rip him (for valid reasons) from 3 feet away. That is a punishing experience for any leader of any organization. Finally, it just keeps getting clearer that young @RepRitchie from the Bronx is a superstar in the making in the Dem party. It is our good fortune that he happens to be a strong advocate for digital asset innovation.

As expected, it looks like Binance will back out of the "deal" to acquire FTX. coindesk.com/business/2022/1…

BREAKING. Kamala Harris has just posted her policy positions on her website. There is no mention of digital assets, crypto or blockchain technology anywhere. So, now we know. kamalaharris.com/issues/

IT’S OFFICIAL !!! The voters of Massachusetts GOT IT RIGHT! . @JohnEDeaton1 is the Republican nominee for the U.S. Senate seat currently held by @SenWarren. We celebrate tonight, then tomorrow starts the sprint to victory on Nov. 5!

1/ Shocking New Case Filed by the SEC The SEC has just filed a case alleging that: Selling crypto mining equipment and offering hosting services for the equipment constitutes an "investment contract" under Howey. Yes. You read that right. Here's what you need to know. 👇

Has anyone else noticed that the attacks on Judge Torres and her @Ripple decision have been pretty tame, all things considered? No mean tweets from @SenWarren No apparent mobilization of the "Anti-crypto Army" No scathing editorial in the @nytimes This makes sense because...

The Great Mystery of the 21st Century--Who is Bitcoin Creator "Satoshi Nakamoto?" The United States Government claims to know the answer--but isn't talking. So, today I sued the U.S. Government to find out exactly what it knows. 🧵👇

SEC v. @Coinbase first hearing update. Lawyers for both sides had their first hearing before the judge handling the case. Reports from the court proceeding are mainly positive for Coinbase. Here's what you should know...

It's noteworthy that these allegations of misconduct are signed by Bill McLucas and George Canellos--both of whom served as head of the SEC's Division of Enforcement. Accusations of unethical conduct coming from these lawyers will definitely reverberate in the halls at the SEC.

New SBF Indictment. This indictment alleges that SBF lobbied members of Congress and "other high-level government officials to promote cryptocurrency regulation that would favor his business and personal interests." This may make Gary Gensler a witness. Which means SBF's lawyers would be able to cross-examine Gensler under oath at trial.

4. Judge Torres was appointed to the federal bench by President Barack Obama. This has all helped to lower the temperature around this important ruling. Nobody believes Judge Torres is out to help the "crypto bros." She just applied the law, without fear or favor. Well done.

"XRP, as a digital token, is not in and of itself a 'contract, transaction, or scheme' that embodies the Howey requirements of an investment contract." --Judge Torres

Would not have missed this night for the world. @JohnEDeaton1 truly is the People’s Champion!

Judge Torres has issued her ruling on remedies in @Ripple. 1. $0 disgorgement as expect because no losses shown by the SEC. 2. $125 million in civil penalty for securities violations in sales to institutions. 3. Injunction restraining @Ripple from further violations of Section 5 of the Securities Act. This is a small fraction of the damages the SEC was seeking in the case. My guess is both sides will appeal.

It’s not just the SEC. The Federal Reserve leads the Operation Chokepoint 2.0 crackdown on crypto. Custodia Bank @custodiabank has sued the Fed because it failed to approved Custodia's application for a Fed "master account." A Fed "master account" is essentially a bank account for banks, allowing banks to use the Fed system for check clearing, wire transfers and ACH payments. Federal law requires the Fed to grant a master account to any federal or state chartered depository institution. Custodia is a Wyoming chartered depository institution. It usually takes 5-7 business days for the Fed to approve a master account. Custodia waited with no response from the Fed to its master account application for 20 months.  So, Custodia was left with no option but to sue the Fed. The Fed then denied Custodia’s application for a master account 8 months after the lawsuit was filed. (Yes, this does sound exactly like how the SEC treated @Coinbase's petition for rulemaking.) Custodia has turned up some fascinating details in the discovery it has conducted against the Kansas City Fed and the main Fed in DC. A tangled web indeed: In connection with Custodia's application for a master account, the Kansas City Fed conducted a comprehensive examination of Custodia and submitted its Report of findings to the main Fed in DC. What happened with that Report tells you all you need to know about how our government is treating crypto. Capital After a comprehensive investigation, the Kansas City Fed's Report concluded that Custodia’s capital was “adequate.”  Without any additional investigation, the Fed in DC changed the Report to say there was a “lack of a robust capital requirement framework” at Custodia. Risk Management The Kansas City Fed concluded that Custodia had “strong risk management” practices. The Fed in DC changed the Report to say there were “significant risk management gaps.” Liquidity The Kansas City Fed concluded that “liquidity risk was relatively low” at Custodia.  This makes sense because, unlike banks that use a "fractional reserve" business model to lend out deposits, Custodia uses a "fully reserved" model--meaning it retains liquid reserves covering over 100% of the deposits it takes in. Notwithstanding its hyper-conservative liquidity model, the Fed in DC changed the Report to say there were “insufficient liquidity risk management processes” at Custodia. Management Experience The Kansas City Fed concluded that the experience of Custodia's management team was “impressive” and “extensive.”   The Fed in DC changed the Report to say there was a “lack of collective depth of relevant banking experience” at Custodia. The Report, “revised” by the Fed in DC to say the opposite of what the Kansas City Fed had concluded, was used as the basis for denying Custodia's application for a master account. It is obvious from the documents uncovered in discovery that the process was rigged because the Fed objected to Custodia’s plan to provide banking and digital asset services to individuals and businesses involved in crypto. To their credit, the @BlockchainAssn and the Attorney General of Wyoming filed amicus briefs in support of Custodia's recent motion for summary judgment. Fighting the Fed is the quintessential David v. Goliath battle. Fortunately, Caitlyn Long @CaitlinLong_ the CEO of Custodia, is a fighter.  But Caitlin is not just fighting for Custodia, she is fighting for all of crypto and the principle of financial freedom.

This @CGasparino column is a great example of why I oppose censorship. I believe everyone should be able to read Gasparino's ill-informed and nonsensical column attacking Judge Analisa Torres' decision in the Ripple case. Gasparino calls the Harvard educated Judge Torres "acutely witless," and he describes her decision as "absurd" "weird" "bizarre" "madness" and "dangerous." Gasparino cites anonymous "securities law experts" for the idea that Judge Torres "ruled that small investors don't deserve the same type of protections as some dude working at a hedge fund." This is, of course, false. If billionaire Charlie Fink of Blackrock buys XRP on the secondary market--it's still not a securities transaction. This is readily apparent from the decision. Gasparino then attacks Judge Torres' law clerks, arguing that they don't understand how stocks work. But it's Gasparino who misses the critical distinction between stock and crypto tokens. You do not acquire equity in a company when you buy a token. Unlike stock, crypto tokens do not carry with them any rights against the issuing company or project. That's why a token like XRP is not a security. Judge's don't get to clap back when they are subjected to baseless attacks by politicians or columnists like @CGasparino. It is the the responsibility of lawyers and the American Bar Association @ABAesq to respond forcefully when defamations are launched against the judiciary.

6/ Read the full brief here. uschamber.com/assets/documen…

If Joe Biden had (a) fired @GaryGensler and (b) issued something like Trump’s EO on Digital Asset innovation last summer, Things might have turned out differently for Democrats on November 5. Instead, they chose to follow @SenWarren’s lead, Right over a cliff. A lesson there.

What is an investment contract? If I buy a share of the Dallas Mavericks from @mcuban--that's a securities transaction. But if I buy season tickets to the Mavs games with the expectation of making a profit from reselling those tickets on the secondary market--that's Not an investment contract. This is true even though-- 1. My money goes directly to the Mavericks enterprise. 2. The Mavericks owe me contractual duties to play the games and have my seats available. 3. The profitability of my investment in the tickets depends "solely on the efforts of others"--namely Mark Cuban, the players & coaches and supply/demand dynamics of the secondary market. As the amicus brief of the Six Securities Scholars in the @Coinbase case makes clear-- I do not enter into an investment contract when I invest in those season tickets because I do not gain contractual rights to the "income, profits or assets" of the Mavericks. IF accepted by the courts, the analysis of the Six Securities Scholars has profound implications for the legal status of crypto assets in the U.S. since the issuers of those tokens almost never grant rights to the income, profits or assets of the underlying enterprise. 👇

The New York Department of Financial Services @NYDFS removed $XRP from its Greenlist AFTER Judge Torres ruled that the XRP token is not a security.   I wanted to find out why.   So here’s what I did about it. 👇 (Via @DigPerspectives )

SEC v. @Coinbase update. The lawyers for Coinbase have come out with an interesting opening move in the case. Warning: This is going to get complicated. Instead of filing a typical motion to dismiss under Rule 12b, Coinbase has informed Judge Failla that it intends to file a “motion for judgment on the pleadings” under Rule 12c. What's the difference? On a motion to dismiss, a judge may only consider the factual allegations in the Complaint and any documents attached to, or referenced in, the Complaint--nothing else. On a motion for judgment on the pleadings, by contrast, a judge may consider other pleadings filed in the case, which would include the defendant’s Answer to the Complaint. So, back to Coinbase. Coinbase had a deadline of August 7, 2023 to file its response to the SEC’s complaint. Instead of waiting until August, Coinbase filed a 177 page Answer to the Complaint last night--40 days before the deadline. Coinbase included in its Answer a lengthy “Preliminary Statement” spelling out its legal arguments for dismissal of the case. The Answer is also loaded with links to a host of documents and transcripts to support Coinbase's arguments including, for example: -the Bitcoin Whitepaper; -Coinbase's S-1 Registration Statement; -transcript of Chairman Gensler's May 6, 2021 Congressional testimony; -remarks from Hester Peirce; -transcript of Binance TRO hearing; and even -the famous Hinman emails. It is somewhat unusual to find all of this material included in an Answer. Typically an Answer just goes through each paragraph of a complaint and "admits" or "denies" them and then lists affirmative defenses. Coinbase appears to be using this creative strategy to get documents helpful to its cause in front of the Judge through the Answer. A conference with the judge is set for July 13, to determine whether Coinbase will be permitted to proceed with its motion for judgment on the pleadings at this time. This is typically a formality and permission is granted unless there is some very good reason offered by the other side. Here is Coinbase's letter to the Court requesting permission to file the motion for judgment on the pleadings and establish a briefing schedule for the motion. storage.courtlistener.com/re…

I could not be prouder to call @JohnEDeaton1 my friend. He is the Man in the Arena, against impossible odds. No fear. Never quit. Legend. 👇

How many times do they have to learn this lesson? DO NOT UNDERESTIMATE A UNITED STATES MARINE!

We just got confirmation, from an insider, that regulators are executing a plan to kill crypto. Barney Frank told Bloomberg Radio today that: 1. Signature Bank was shuttered because the regulators "wanted to send a message to get people away from crypto." 2. "We [Signature Bank] were singled out to be the poster child for that message." Whatever you think of his politics, Barney was always candid. He just said out loud what the administrative state has been trying to keep quiet. bloomberg.com/news/articles/…

The ruling that XRP is not itself an investment contract is a significant blow to the SEC's case against @Coinbase and the other crypto exchanges. While Judge Torres' decision is not "binding precedent" it is extremely well reasoned and will be cited in all motions to dismiss.

I believe the SEC is in deep trouble with some of its crypto cases in light of its determination that $ETH is a commodity. The SEC argued repeatedly at the hearing on @Coinbase's motion to dismiss that crypto tokens that operate within an "ecosystem" are securities. I believe the SEC will have difficulty explaining how $ETH, which operates within a giant ecosystem, is a commodity, but $SOL and $ADA are securities when traded on @Coinbase. @Coinbase is due to file a Reply Brief tomorrow on its Petition to Certify Interlocutory Appeal. It would not surprise me if they also filed a request for rehearing of their motion to dismiss in light of the fact that the SEC now concedes that $ETH is a commodity. Not legal advice. It's just an @X post.

SEC v. @Coinbase Update V (last) The long awaited hearing is over. As expected, there was no ruling from the Judge. There were no knockout blows delivered by either side and, frankly, not a lot of high points over the course of the 5 hour hearing. The Judge was the star of the show. She was exceptionally well prepared. She had drafted 14 pages of questions for the hearing. She understood the terminology and the technology. She is the kind of Judge you want to handle a case of this magnitude. There was some interesting banter about the relative merits of Judge Rakoff's ruling in the Terraform Labs case and Judge Torres' decision in @Ripple. Both Judges work in the same building with Judge Failla. But the Judge gave nothing away in terms of how she viewed the reasoning of each of those cases. There was a general consensus that tokens are not "in and of themselves securities" but the SEC argued, nonetheless, that transactions of tokens on secondary trading platforms like Coinbase can still constitute sales of investment contracts. The SEC lawyers were better prepared than when they were caught flat footed in July and were generally effective making their case. The lead lawyer for Coinbase, William Savitt of Wachtel Lipton, was methodical in his approach to answering the Judge's questions. Each side was given a few minutes of summation time to say whatever they wanted at the end and, in that space, Savitt definitely stepped up his game and finished with some very strong closing points. I watched the Judge carefully. She is either genuinely undecided about how to rule or she is a great actor. The one message I took away was she is uncomfortable with the idea of dismissing the case on the basis of the Major Questions Doctrine. My guess (and it's just a guess) is she is going to allow the case to go forward to discovery, like the Ripple case. But, I continue to believe, as noted in my pinned tweet, that Coinbase will ultimately win the case in the end. Congress, of course, could put a stop to the whole thing with adoption of comprehensive crypto legislation but that won't happen this year. I expect the Judge will issue her written decision on the motion within the next 3 months. Not legal advice. You get what you pay for.

Hey @GaryGensler, thanks for the tip. One follow up question, What's a "crypto asset security" and where can I find the definition in a statute or the Code of Federal Regulations? Or did you just make up the term? --Asking, again, for a few million investors.

The #XRPArmy & @Ripple must be losing their minds right now. Finally, FINALLY!! People are realizing what they have been saying for years! Again, much respect to @bgarlinghouse, @s_alderoty and team for refusing to hand over their lunch money to the bully all these years.👇

IF @JohnEDeaton1 decides to run against Elizabeth Warren, John absolutely could pull off the upset that would shock the world. Anyone who doubts U.S. Marine Major Deaton's determination hasn't read his book Food Stamp Warrior, yet. The key question is--can John get the financial support he would need to get his message out? Many crypto investors have made enormous profits over the last 12 months. Will they step up?

1/ As a securities trial lawyer, I have cross-examined many conmen and financial fraudsters over the last 30 years. @andrewrsorkin will have his chance to question SBF on Wednesday. Here are 6 questions I would ask--but doubt he will.

SEC v @coinbase Update IV In an unusual move, the Judge dispensed with any prepared arguments from either side and instead went straight to questioning the lawyers. The first 2 hours was spent exclusively questioning of the SEC lawyers. The SEC lawyers were better prepared than they were at the initial pre-motion conference several months ago. The questioning started with staking, then went to how Howey applies to crypto, and finished with the Major Questions Doctrine. The Judge is super sharp on these issues and asked very precise questions she had prepared in advance. The Judge said she had not decided anything—had an open mind on these issues. The Judge repeatedly referenced the amicus briefs filed in support of Coinbase. She said she found particularly significant that Senator Lummis has filed a brief saying that Congress needs to decide the issues in this case, including how crypto assets will be classified and which agency will ultimately have authority to regulate in this area. Coinbase’s lawyers are now up for questioning from the Judge. I would expect a couple more hours at least. Back later.

2/ After he was confirmed to his post as Chairman of the SEC, Gensler testified to Congress, on May 6, 2021, that: THE SEC DOES NOT HAVE AUTHORITY FROM CONGRESS TO REGULATE CRYPTO EXCHANGES. Watch this 👇

SEC v. @Coinbase, Update The hearing on Coinbase’s Motion for Judgment on the Pleadings will be held on Wednesday, Jan 17. There are four possible outcomes, with potential permutations to each. 👇

This is incredible. The SEC says it regrets any confusion it “may have invited” by inventing the term “crypto asset security.” But this was the logical and foreseeable consequence when they embarked on a “make it up as you go along” enforcement strategy. Where’s the apology for destroying American companies, damaging our reputation for innovation and crushing U.S. investors?

Given the extensive legal analysis of claims and defenses that went into these rulings, I believe the Judge is probably close to issuing a decision on the summary judgment motions. The full decision on admissibility of expert testimony is available here. dropbox.com/s/auy95flzerbdsx…

Halting Operation Chokepoint 2.0 is Not Enough. A special investigator, like @JohnEDeaton1 (with subpoena power), is needed to: 1. Identify who was involved; 2. Determine whether laws were broken; 3. If so, prosecute the perpetrators; and 4. Issue a public report. Simple. @DavidSacks @PamBondi

I would suggest that @GaryGensler block some time on his calendar to sit for depositions—for the next DECADE. I have never seen an SEC Chair this mixed up in the underlying facts of cases brought by the SEC. Nothing close.

The SEC seems to have a hard time keeping its story straight on crypto. Let’s take a closer look at statements by SEC lawyers at the recent @Coinbase and @Binance hearings. SEC v. @Coinbase (Jan. 17): Court:  “You’re saying that as to these 12 or 13 tokens, when they were initially issued, these tokens were themselves securities?” SEC:  “Yes, your Honor.”  (p. 17) SEC:  “Let me just clarify… the token itself is not the security.”  (p. 21) SEC v. @Binance (Jan. 22): Court:  “Do you agree that there is a difference between the coins, the subject of the investment contracts, and the contracts themselves?” SEC:   “Yes, Your honor.  The crypto asset, as we briefed…is simply a line of code…” (p. 66) SEC:  “The token itself represents the investment contract.” (p. 92) Court:  “Well, I’m not sure I have heard from the SEC before that the token represents the investment contract.”  (p. 93) SEC:  “…the asset itself embodies the investment contract.  And we maintain a consistent position with respect to that.”  (p. 94) SEC:  “I would disagree with the premise that the SEC has contradicted itself.” (p. 125) So, to summarize, According to the SEC, the crypto token itself is a security and it is not a security, and those two statements are not contradictory.

Bottom line: This is just the beginning. @Binance is clearly going on offense. The @Binance lawyers are signaling to the SEC that they will be in for a real fight--just like the @Ripple case.

I'm no political strategist, but It seems like raising an Anti-Crypto Army to attack your fellow Americans just because they wanted to invest some of their own money in crypto... might not have been the world's greatest political strategy. Back a winner. @DeatonforSenate

Judge: "You [SEC] may say that they [Coinbase] and I [the Judge] are reading too much into the issuance of the S-1." Here again the Judge aligns herself with Coinbase. This is a significant tell and not a good one for the SEC. Prediction: It gets worse from here for the SEC.

New Crypto Regulation Bill. Senators Lummis (R. WY) & Gillibrand (D. NY) have introduced comprehensive legislation to regulate the crypto asset space. This is a revised version of a Bill the Senators introduced last year. Here are 3 key takeaways...

This is a Big Deal. Crypto Freedom Alliance of Texas just sued the SEC seeking a declaration that crypto assets traded on secondary markets are NOT securities. And they’ve brought the Big Guns. Paul Clement, former US Solicitor General—has handled over 100 cases before the Supreme Court. Everybody, get your Amicus Briefs ready.

1/ There's something off with the FTX bankruptcy. And it's happening tomorrow. Here's what you should know.

If you live in Massachusetts you should vote for @JohnEDeaton1. Deaton has done more for crypto freedom than all other candidates combined. His opponent @SenWarren (founder of the Anti-Crypto Army) believes you should be debanked if you make investment choices she disapproves.

Note: The SEC & @Ripple do not need permission from any court to dismiss their appeals. My GUESS is we will see dismissals of both appeals soon because the lawyers for both sides had to have anticipated this outcome—that Judge Torres would not vacate her prior ruling.

It's Official! New Era at SEC Has Begun. The SEC website confirms there are officially three Commissioners at the SEC, with the departures of Gensler and Lizarraga. The SEC is authorized to take action on any matter with a quorum of 3 and a 2-1 vote. sec.gov/about/sec-commission…

IT’S OFFICIAL! Let the word go forth, To friend and foe alike, USMC Major @JohnEDeaton1 has entered the arena. Get ready, Biggest Victory Party Ever November 5, 2024. Massachusetts will, once again, lead the way to a new birth of Freedom in this Great Nation. All Aboard!

Now that @JohnEDeaton1 has soundly defeated Warren in the first debate, there's ONLY ONE QUESTION-- Will crypto industry players finally step up to support John? Where are: Fairshake SuperPAC @standwithcrypto @coinbase @brian_armstrong @Scaramucci @mcuban @saylor @TimDraper @novogratz @twobitidiot @ErikVoorhees @elonmusk @billfour @balajis @MarkYusko @pmarca @APompliano ? It's not too late. Who will step up?

GOOD PEOPLE OF MASSACHUSETTS… Hear this. @JohnEDeaton1 is anti-censorship and pro-border security. Sen. Elizabeth Warren is pro-censorship and anti-border security. Vote November 5, 2024 Easiest decision in the history of decisions.

@Binance has accused the SEC of violating Court rules by making statements outside of court that are: 1) false; 2) designed to harm @BinanceUS's customers; and 3) likely to taint the jury pool. Binance asks the Court to order the SEC to comply with the applicable Court rules.

What's the weirdest part of @GaryGensler's message? Think about it . . . NO APOLOGY for the harm done. None.

@Binance argues that, when questioned by the judge repeatedly, the SEC attorneys were unable to point to any evidence that @cz_binance had diverted or commingled customer assets. @binance argues the SEC has violated not only Court rules, but also the SEC's own Code of Conduct.

This is very well written--a short and interesting read if you are so inclined. 👇 storage.courtlistener.com/re…

This tracks with what @s_alderoty previously reported publicly. Both sides are, for the first time, representing to the Court that an agreement-in-principle has been reached. There is no reason to believe there will be any problem getting Commission approval for the deal.

This is weird. The SEC's Form C is dated October 16. The court's file stamp on the document is October 17. We should find out soon whether the 2nd Circuit concludes that the SEC has missed the deadline.

So this is weird: I have received numerous threatening emails from American Banker magazine demanding that I take down my tweet from July 2023 and remove the link to my column published by American Banker. My column was critical of Gary Gensler's regulation-by-enforcement campaign against crypto. Just one problem. I bought a license from American Banker permitting me to republish my column on social media. So, I'm not taking it down.👇

Hello world! I am officially out of the X penalty box. A BIG THANK YOU! To @DigPerspectives & many others in the @X and #XRPCommunity who amplified my letter to @elonmusk & @lindayaX asking to #FreeDAI (@digitalassetbuy) & unsuspend my account. Thank you all for your support!

Senator Elizabeth Warren is a proven champion of Big Government. @JohnEDeaton1 is a proven champion of the People. It really is that simple.

SEC v. @Ripple update. There's a lot of debate about what the SEC will do next in the Ripple case. I believe there are at least 4 options under consideration...

Big CONGRATULATIONS to the XRP Community, @bgarlinghouse, @s_alderoty & @JohnEDeaton1 for fighting the good fight and prevailing at long last. As Freddie Mercury said (paraphrasing): You are the Champions my friends. No time for losers, Cause you are the Champions, Of the World!

Update on @Ripple damages. The SEC's Reply Brief does not add anything meaningful to the argument about no victims/no disgorgement. The SEC relies on one district court case (SEC v. iFresh) that held the "pecuniary harm" requirement is satisfied when a stock price is artificially inflated. The SEC reasons that any Institutional buyer who received less of a discount on the $XRP than others effectively paid an inflated price--hence pecuniary harm. In my view, the iFresh decision is a misreading of the 2nd Circuit holding in Govil on disgorgement. And, interestingly, the judge who wrote the iFresh decision designated it "NOT FOR ELECTRONIC OR PRINT PUBLICATION." While no longer the rule today, when I was a young lawyer it was improper to cite a decision with a "not for publication" designation. It is the weakest possible authority for anything. Is it possible that Judge Torres goes with the iFresh reasoning and finds that the Institutional Investors in @Ripple suffered pecuniary harm? Yes, it's possible. But not likely, imo.

Ripple Appeal Update. I COULD BE WRONG BUT, I believe the deadline for the SEC to file the Form C passed at midnight last night. This could indicate: (a) a screw up by the SEC; (b) a technical glitch with the electronic filing system; (c) a decision by the SEC to abandon its appeal; or (d) an agreement with @Ripple to drop both appeals. (c) seems unlikely to me because an appellant (SEC) would almost never unilaterally abandon an appeal where a cross-appeal has been filed without first reaching an agreement with the cross-appellant (Ripple) that they would also drop their cross-appeal. Otherwise the appellant (SEC) faces the worst of all worlds--only downside exposure from the cross-appeal. My calculation of the deadline follows from a recognition that the Notice of Appeal was filed on October 2. The filing date is what matters under the federal appellate rules. Intervening holidays and weekends don't change the deadline. Ramifications: The Form C itself says that failure to file it by the deadline means the appeal will be dismissed. The Second Circuit's local rules, however, say that failure to file the Form C by the deadline means the appeal may be dismissed. Not legal advice. If I got any of this wrong, I will repost this with a correction.

Everybody knows Judge Torres' decision in Ripple is important. How important? The Ripple decision, and proceedings in the Ripple case, are cited 13 times by @Coinbase in its motion to dismiss the SEC's case. The Ripple fight benefits all of crypto.

Today @Coinbase sued the SEC & FDIC to get to the bottom of the government's Operation Chokepoint 2.0 attack on the crypto industry. This is supposed to be what we pay Congress to do. Let's put an end to the corruption. Send in the Marines. Send @JohnEDeaton1 to the Senate.

Your turn. @JohnEDeaton1 represented thousands of $XRP holders in the @Ripple case and helped change the course of crypto history. He was paid nothing. If every $XRP holder (in the U.S.) contributed $100 to John's campaign, you too could change the course of history. John will continue the fight for Freedom in the Senate. But he can't get there without your help. Please do whatever you can. Here's the link: secure.winred.com/johndeaton…

Apparently it is the “real” Daniel Friedberg appearing on Zoom. Judge refuses to allow Friedberg to testify through Zoom. Judge says the Friedberg declaration is also procedurally improper. So, it is now clear where this is going to end up.

It's on. Respect to @s_alderoty, @bgarlinghouse and the whole @Ripple legal team. The crypto industry and pro-innovation politicians need to gear up to support @Ripple with amicus briefs.

Well, now we know. The delay in resolution of the @Ripple case was indeed attributable to the @Ripple legal team negotiating hard for a MUCH better deal than a simple mutual dismissal of the appeals. According to @s_alderoty, the deal: (a) gives the SEC only a $50 million penalty (a $75 million discount from what Judge Torres ordered!); and (b) the SEC has agreed to ask Judge Torres to lift the injunction she ordered. This is a great deal for @Ripple and explains the delay in the resolution. 👇

Gary Gensler converted the SEC into a political weapon. The SEC has much work to do to restore its credibility. I believe it has the right leadership now to do so. Dismissing the @Ripple case & releasing the IG report on Bill Hinman are essential steps in that rehabilitation.