Crypto Crime

[Munkish]

SEC’s Gensler Says Crypto Exchanges Trading Against Clients

Speaking in an interview with Bloomberg News, Gensler said he’s concerned that crypto exchanges aren’t putting up proper walls between different parts of their businesses such as custody, market-making, and offering a trading venue. He said the “commingling” of services may not be in clients’ best interests.

“Crypto’s got a lot of those challenges-- of platforms trading ahead of their customers,” Gensler said. “In fact, they’re trading against their customers often because they’re market-marking against their customers.”

The securities regulator also raised issues with stablecoins, digital assets that are typically pegged to the dollar or another fiat currency. The three largest stablecoins -- Tether, USD Coin, and Binance USD -- are all affiliated with exchanges, Gensler said in the interview.

“I don’t think that’s a coincidence,” he said. “Each one of the three big ones were founded by the trading platforms to facilitate trading on those platforms and potentially avoid AML and KYC,” he added, referring to anti-money laundering and know-your-customer controls.

https://finance.yahoo.com/news/sec-chie ... 37972.html

What about cutting off the buying of certain stocks (GameStop comes to mind) in order to make your clients' positions in those stocks tank and help your hedge fund friends? That was done by many stock trading platforms like ETrade and others.

[tdtwedt]

https://web3isgoinggreat.com/?id=crypto ... nzi-scheme

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https://web3isgoinggreat.com/?id=fbi-ch ... with-fraud

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The SEC has already sued Terraform Labs. It has every reason to investigate UST, lawyers say

The Securities and Exchange Commission is likely already investigating what happened to UST over the past week, two former SEC lawyers tell The Block.

“The SEC is already on the scene as they are investigating the Mirror protocol,” said Philip Moustakis, who left the SEC’s enforcement division for law firm Seward & Kissel in 2019, in conversation with The Block.

https://www.theblockcrypto.com/amp/post ... awyers-say

[tdtwedt]

Coffeezilla, the YouTuber Exposing Crypto Scams

So far, there have been relatively few prosecutions in the world of crypto. “The lesson, if you’re a cynical person, is to commit fraud on the blockchain,” Findeisen told me. I asked him whether he considered his videos to be in the genre of white-collar true crime. “I guess I always think of true crime as: the guy gets locked up at the end,” he said. “And a lot of my stories feel incomplete. Because the reporting happens, right? And then they just continue doing what they do.”

https://www.newyorker.com/news/letter-f ... ypto-scams

[tdtwedt]

U.S. issues charges in first criminal cryptocurrency sanctions case

The Justice Department has launched its first criminal prosecution involving the alleged use of cryptocurrency to evade U.S. economic sanctions, a federal judge disclosed Friday.

https://www.washingtonpost.com/dc-md-va ... sanctions/

[tdtwedt]

https://web3isgoinggreat.com/?id=class- ... o-collapse

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Crypto Might Have an Insider Trading Problem

Public data suggests that several anonymous crypto investors profited from inside knowledge of when tokens would be listed on exchanges.

Coinbase, Binance and FTX each said they had compliance policies prohibiting employees from trading on privileged information. The latter two said they reviewed the analysis and determined that the trading activity in Argus’s report didn’t violate their policies. Binance’s spokesperson also said none of the wallet addresses were linked to its employees.

Coinbase said it conducts similar analyses as part of its attempts to ensure fairness. Coinbase executives have posted a series of blogs touching on the issue of front running.

https://www.wsj.com/articles/crypto-mig ... 1653084398

[SilverDoge]

The SEC has already sued Terraform Labs. It has every reason to investigate UST, lawyers say

The Securities and Exchange Commission is likely already investigating what happened to UST over the past week, two former SEC lawyers tell The Block.

“The SEC is already on the scene as they are investigating the Mirror protocol,” said Philip Moustakis, who left the SEC’s enforcement division for law firm Seward & Kissel in 2019, in conversation with The Block.

https://www.theblockcrypto.com/amp/post ... awyers-say

Michael Saylor provides a good takeaway from the LUNA-UST debacle:

[tdtwedt]

Lagarde Calls For Crypto Crackdown, Says They're "Based On Nothing"

European Central Bank President Christine Lagarde has taken aim at cryptocurrencies, arguing in an interview on Dutch television that they’re essentially “worth nothing” as they lack underlying assets “as an anchor to safety” while calling for them to be regulated.

In January, Lagarde called for global regulation of Bitcoin, telling Reuters in an interview at the time that the digital currency had been used for money laundering and arguing for rules that would close related loopholes.

Bitcoin “is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity,” Lagarde told the outlet in an interview at the Reuters Next conference.

https://www.zerohedge.com/markets/lagar ... ed-nothing