Welcome to This Week in Crypto, where we cover the top trending headlines in the cryptocurrency industry. The world of crypto news moves fast, and we’re here to bring it to you for your weekly digest. This week, we’re looking at Coinbase facing possible SEC enforcement, the SEC charging the Tron founder and celebrities, and Do Kwon being arrested. Enjoy this week’s top stories!
Coinbase Receives Wells Notice, Faces Possible SEC Enforcement
Cryptocurrency exchange Coinbase received a Wells notice from the United States Securities and Exchange Commission last Wednesday in reference to multiple services offered in the US. One service of interest is the exchange’s staking services, which have been a hot topic ever since the SEC fined Kraken $30 million in February, causing Kraken to discontinue its staking services. While SEC Chair Gary Gensler has said that crypto companies just need to “come in and talk” to make sure they’re operating legally, Coinbase chief legal officer Paul Grewal reiterated that the exchange met with the SEC more than 30 times in an effort to clear up rules surrounding its operations, but hardly received feedback. In a blog posted yesterday, Coinbase said that they “continue to think rulemaking and legislation are better tools for defining the law for our industry than enforcement actions” and are prepared for any legal action that may ensue. What do you think of the SEC’s actions in this case?
SEC Charges Tron Founder & Celebrities for Violations
Yes, you read that right, another SEC headline. This time the government agency is charging Tron Founder Justin Sun and his related companies with market manipulation, fraud, and violating other securities laws. Sun allegedly artificially increased the trading volume and price of the tronix token (TRX) through thousands of wash trades and profited off of the scheme. Once news broke about the charges, TRX’s price fell 13%. The SEC is also charging several celebrities with illegally touting the TRX token without disclosing that they were compensated for it. Among the celebrities is popular YouTuber Jake Paul, actor Lindsay Lohan, and rapper Miles Parks McCollum (Lil Yachty). Most of the celebrities charged chose to settle, paying upwards of $400,000 in order to not admit or deny charges.
Terraform Labs CEO Do Kwon Arrested in Montenegro
Minister of the Interior of Montenegro Filip Adzic confirmed on Thursday that authorities had detained and arrested Do Kwon, CEO of Terraform Labs and the main suspect in the collapse of Luna Classic and TerraUSD. He was reportedly caught using falsified documents on the way to Dubai. Once the Montenegrin authorities confirmed Kwon’s identity, United States prosecutors in New York charged him with eight counts of fraud, including commodities and securities fraud. Previously in February, the U.S. Securities and Exchange Commission charged Kwon with “orchestrating a multi-billion-dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities.” It’s the beginning of a long process, but it looks like those responsible for the $40 billion implosion will be brought to justice.
