Welcome to Law Decoded, your weekly summary of the main developments in the field of regulation.
So, Sam Bankman-Fried, public enemy number one, will not appear before the senators on December 14, because he missed the deadline to respond to a request from the Senate Banking Committee. However, we could witness the appearance of the businessman before Congress even a day before, on December 13.
In response to a thread of tweets from Rep. Maxine Waters, chair of the Financial Services Committee, the former FTX CEO expressed his willingness to testify at a committee hearing in the US House of Representatives. John Ray, who took over as CEO of FTX on November 11 following Bankman-Fried’s resignation, will also be present as a witness.
The House hearing surely won’t be the last time Bankman-Fried faces tough questions from the state. The US Department of Justice (DOJ) is reportedly investigating a possible fraud involving him in diverting funds abroad just days before FTX filed for bankruptcy. According to an anonymous tipster, DOJ officials met with FTX judicial supervisors to discuss the scope of information they needed to further investigate. The DOJ also plans to investigate whether Bankman-Fried illegally transferred funds from FTX to Alameda Research.
And that’s not the definitive list of possible accusations. A watchdog group, Citizens for Responsibility and Ethics in Washington, believes the businessmen made “black money donations.” He has filed the complaint with the Federal Election Commission, accusing Bankman-Fried of “direct and serious violations of the Federal Election Campaign Law” for making anonymous donations to the Republican party during the last election campaign. Bankman-Fried himself publicly admitted this in one of his recent interviews.
Bills on consumer protection and proof of reserves of cryptocurrency exchanges are introduced in the US Congress
United States Representative Ritchie Torres has introduced bills in the House of Representatives to prohibit the misuse of client funds by cryptocurrency exchanges and require them to disclose proof of their reserves to the Commission on Stock and Securities (SEC). The bills are titled the “Cryptocurrency Investor Protection Act” and “Cryptocurrency Exchange Disclosure Act,” and have been referred to the House Financial Services Committee.
Torres also wrote a letter requesting a review by the Government Accountability Office of “the SEC’s failure to protect the investing public from FTX’s egregious mismanagement and misconduct.”
Court sets a new deadline for Celsius’ restructuring plan
Failing cryptocurrency lender Celsius has been granted an extension of its exclusivity period until February 15, 2023. The court approval gives the troubled cryptolender another couple of months to file a restructuring plan under Chapter 11 of bankruptcy protection law. The approval to extend the exclusivity period came after two court hearings on December 6. In a tweet, Celsius said that he requested approval to allow the sale of stablecoins intended to provide liquidity for continued operations. The company hopes to use the extension period to develop a plan for an independent business.
Ripple files its final brief against the SEC
The two-year battle between the SEC and Ripple is drawing to a close, with Ripple having filed its final brief in its case against the US regulator. In his motion, Ripple argued that the SEC has failed to demonstrate that its offering of XRP (XRP) between 2013 and 2020 was an offer or sale of an “investment contract” and therefore a security under the law. federal. Ripple concluded the document by stating that “the court should grant Defendant’s Motion and should deny the SEC’s Motion.”
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