Alexey Pertsev Update; Gensler's Article in WSJ; FTX Receives Cease & Desist from FDIC
DEF Weekly Roundup - August 25, 2022
Our last two Weekly Roundups…
Alexey Pertsev Update
A Dutch court ordered that Alexey Pertsev, a Tornado Cash developer, to remain in jail for up to 90 days while awaiting trial, according to CoinDesk. This information is the first definitive update we’ve gotten since Pertsev was first arrested on August 10th, two days after OFAC added Tornado Cash-related smart contracts and wallets to the SDN list. According to CoinDesk’s report, Pertsev has not been charged with a crime. Here’s a link to more information about the situation.
Chairman Gensler Speaks Out
On Friday of last week, SEC Chair Gary Gensler released an opinion piece in the Wall Street Journal titled “The SEC Treats Crypto Liked the Rest of Capital Markets.”
The piece primarily seems to be a response to the instability surrounding crypto lenders like Celsius, BlockFi, Voyager, etc. Chair Gensler explains that if a lender or custodian plans to use a third-party’s or customer’s assets to generate yield, they must disclose how they plan to do so and comply with associated laws.
“Noncompliance isn’t the inevitable result of the crypto business model or underlying crypto technology,” Gensler explains. “Rather, it is as if these platforms are saying they have a choice – or even worse, saying ‘Catch us if you can.’ As I said in a speech last year, ‘Make no mistake: If a lending platform is offering securities, it … falls within SEC jurisdiction.’”
He concluded the piece with his mantra: “I encourage platforms offering crypto lending to come in and talk to SEC staff.”
What does this mean?
For crypto SEC watchers, there’s nothing really new in the op-ed. But it is interesting that Chair Gensler is attempting to make his case in a business-focused mass media outlet as the SEC approaches the end of its fiscal year next month. A “pre-buttal”?
FTX Receives Cease & Desist from FDIC
The Federal Deposit Insurance Corporation (FDIC) sent FTX US a cease-and-desist letter last Friday ordering the crypto exchange to stop making misleading statements about the insurance protections of its customers’ funds.
In an official press release, the FDIC said that “Based upon evidence collected by the FDIC, each of these companies made false representations—including on their websites and social media accounts—stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured.”
The letter refers to a tweet by Brett Harrison, an FTX US executive, that “the tweet appeared to contain false or misleading statements that uninsured products are insured.” Harrison subsequently deleted the tweet and apologized for any potentially misleading information.
What does this mean?
Federal banking regulators continue to have crypto-companies under a microscope, and Twitter can be real life.