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The legislation would have capped the industry’s participation in demand response programs.

Former Coinbase employee Ishan Wahi reached a settlement with the U.S. Securities and Exchange Commission over insider trading charges related to the front-running of token listings by Wahi and others.

As part of the settlement, filed in a federal court in Seattle on Tuesday, Wahi agreed to be interviewed in connection with other SEC investigations and actions. Coinbase disclosed in late March that the SEC gave notice of an investigation into the company’s digital asset listings, staking-as-a-service, institutional trading and wallet services.

Wahi’s cooperation agreement with the SEC applies to his own case “and any related judicial or administrative proceeding or investigation commenced by the Commission or to which the Commission is a party,” meaning he could cooperate in the separate investigation.

Coinbase has not been accused of any wrongdoing in Wahi’s insider trading case, but the SEC alleged in its initial complaint against Wahi last year that the tokens at the center of the insider trading allegations were unregistered securities, meaning the SEC could try to hold Coinbase liable for facilitating the sale of unregistered security investments for the tokens that the company ultimately listed. 

Wahi already pleaded guilty to criminal charges and was sentenced to two years in prison. As part of his civil agreement with the SEC, he also gave the money he made from insider trades.

“The federal securities laws do not exempt crypto asset securities from the prohibition against insider trading, nor does the SEC,” said SEC Enforcement Director Gurbir Grewal in a statement announcing the settlement.

Last month, Coinbase preempted possible SEC action by suing the agency to give it a response to a petition for crypto-specific rules. The SEC is fighting that lawsuit.

Both current SEC Chair Gary Gensler and former SEC Chair Jay Clayton have warned for years that the vast majority of digital assets are securities under U.S. financial laws and therefore subject to existing registration and financial disclosure requirements for security investments, like stocks and bonds.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The country reportedly backed out of plans to build a “national crypto exchange,” its latest sign of indecision.

The U.S. Securities and Exchange Commission settled charges with a former Coinbase product manager and his brother tied to 2022 allegations of insider trading on certain cryptocurrencies listed by Coinbase, the regulator announced Tuesday.

The exchange halted Australian dollar bank transfers early May.

Bybit has announced that it will be exiting the Canadian market starting as soon as May 31 due to recent regulatory developments in the country, adding to several other exchanges that pulled out from the country.

After former FTX CEO Sam Bankman-Fried challenged criminal charges filed against him after he was extradited from the Bahamas, the U.S. Justice Department is seeking a specialty waiver from the Bahamas to allow parts of the case to proceed. 

Prosecutors have filed several superseding indictments containing new criminal against Bankman-Fried since was extradited from the Bahamas in December.

Bankman-Fried has pleaded not guilty to criminal charges, including bank fraud, and awaits an October trial. 

The FTX founder recently objected to some of the criminal charges filed against him, arguing that the government “improperly” added “several new, unrelated charges without first obtaining the express consent of the Bahamian government.”

The U.S. government disagreed in a court filing in the U.S. District Court for the Southern District of New York. 

“There is no basis for dismissal of any counts at this stage of the proceedings because the United States’ treaty with the Bahamas does not place limits on charging a defendant with new offenses post-extradition,” the Justice Department said.

Although prosecutors argue that Bankman-Fried cannot object to the charges based on his extradition, they noted that the Bahamian government can stop parts of the case from moving forward. The government said it has notified the Bahamas of the additional charges and is seeking a specialty waiver from the country.

“The country’s response will be dispositive,” the Justice Department said. “The government will proceed on the new charges in the S5 indictment if the Bahamas consents to trial on these charges, and will not proceed on those counts if the Bahamas denies the government’s request.” 

The DOJ was responding to Bankman-Fried’s attempt to toss out four charges: Conspiracy to commit bank fraud, conspiracy to operate an unlicensed money-transmitting business, conspiracy to make unlawful political contributions and defraud the Securities and Exchange Commission and conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. 

The former FTX boss, who did not comment, has moved to dismiss 10 of the 13 criminal charges against him. A judge is scheduled to hear arguments on the issue on June 15.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A possible 30% excise tax on energy usage by cryptocurrency mining is not in the debt ceiling deal being teed up for a vote in the U.S. House of Representatives.

The 99-page debt deal posted on a House committee website also does not include language to apply wash trading tax rules to digital assets, or other crypto-related tax measures that the Biden administration has proposed.

The Biden administration floated the measures in March, as part of its annual budget proposal, with the application of wash trading rules being the largest estimated revenue-raiser for the federal government, with the Treasury Department asserting that it would bring in nearly $24 billion over 10 years.

Congressional and White House negotiators reached a preliminary agreement to raise the amount of debt the U.S. can issue before ceasing federal spending. The deal includes caps on non-defense federal spending, rather than tax raises, though it still faces votes in the House and Senate, and some skepticism on both the political right and left.

The mining energy excise tax intended to lower energy consumption by instituting a tax equivalent to 30 percent of the electricity costs of crypto mining companies, with a phase-in over three years starting at 10 percent in its first year.

“The increase in energy consumption attributable to the growth of digital asset mining has negative environmental effects and can have environmental justice implications as well as increase energy prices for those that share an electricity grid with digital asset miners,” the March budget proposal reads. “Digital asset mining also creates uncertainty and risks to local utilities and communities, as mining activity is highly variable and highly mobile.”

The mining proposal would have only raised an estimated $3.5 billion over ten years for the federal government, a negligible amount compared to the $31.4 trillion in current U.S. debt and multi-trillion dollar annual spending levels.

Crypto measures in Biden’s annual budget proposal would be a drop in the bucket for the overall deal, with estimated revenue of approximately $35 billion over ten years compared to a deal expected to cut hundreds of billions to over a trillion in government spending and would raise the debt ceiling into 2025.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The new token standard allows traders to burn their ERC-721 NFTs and transfer them to Ordinals on the Bitcoin network.