Ric Edelman, CBDA

October 17th Court’s Order related to discovery in the SEC v Binance matter specifically disallowed discovery with respect to secondary sales of BNB and ten other tokens, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, COTI – all alleged by the SEC to be securities. The court also reiterated that it had not authorized claims as to the status of secondary tokens to proceed at that moment. And yet, the Binance’s recently filed motion to dismiss the SEC Amended Complaint preemptively laid out arguments as to why secondary tokens sold on Binance are not securities. First, Binance argued that the SEC failed to establish horizontal commonality among secondary purchasers (“economic interdependence does not establish pooling”). Second, it argued that the SEC has failed to allege expectations on the part of secondary buyers of profits resulting predominantly from the efforts of others. Binance took pains to demonstrate that while these Howey test prongs could have been satisfied during the primary sales of tokens, they did not apply to the secondary purchases on the Binance platform. The MTD then proceeded to support these arguments individually for each of the eleven tokens, including BNB. Notably, in a proactive spirit similar to the recent demand by Crypto.com for a declaratory judgment to permanently enjoin the SEC from enforcing the “de facto Rule” against the crypto industry (that all tokens are crypto asset securities), https://lnkd.in/eaQQZpvu, Binance’s MTD included Attachment 22 with a proposed Court Order that dismisses all claims related to secondary token sales with prejudice. #Binance #cryptolitigation #cryptoregulation #motiontodismiss #cryptoassets

2

SEC moves to file Amended Complaint against Binance. 1. Previously Judge Amy Jackson dismissed SEC’s claims as to: (1) secondary sales of BNB, (2) the offers and sales of stablecoin BUSD, and (3) Binance’s offers and sales of Simple Earn program. The Court reasoned that the SEC did not adequately plead facts and circumstances to show that such transactions involved sales of investment contracts. Frustrated by this dismissal, the SEC yesterday moved to amend the complaint to remedy the above pleading deficiencies. The redlined proposed amended complaint can be found here, https://lnkd.in/ewAtaETG. 2. In a nutshell, the SEC is trying to produce more evidence to establish the “efforts of others” prong of the Howey Test and to allege facts with respect to BNB and Simple Earn that “investors were inundated with statements by issuers, in many cases in a coordinated effort with Defendants, that promoted the crypto assets as investment opportunities from which investors could reasonably expect to profit by sharing in the success of the enterprise developed through the efforts of the issuers and other third parties”. So we are back in the muddied waters of often ill-defined “ reasonable investor” expectations about a token. 3. In its MTD decision, Judge Amy Jackson found it necessary to distinguish between the digital coins themselves and the offers to sell them. Furthermore, citing a clear understanding of such a bifurcation by several prior courts, Judge Jackson criticized the SEC for it suggestion that the token is “the embodiment of the investment contract” because it “muddied the issues before the Court, ignored the Supreme Court’s directive that the analysis is supposed to be based on the entire set of understandings and expectations surrounding the offering…” Involuntary, faced with the Court’s critique, the SEC effectively admitted the necessity for such a distinction, and stated that it “regrets any confusion it may have invited in this regard” by using the shorthand reference “crypto asset securities.”  (See Footnote 6 the SEC’s supporting Memo of Law). In actuality, the SEC did not inadvertently “confuse” the terms, rather it has been a consistent position of the agency that tokens themselves are securities. 4. To salvage its Exchange Act claims against Binance and to bolster the argument that secondary sales of ten tokens (SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, COTI) represented sales of investment contracts, the proposed amended complaint also added more than 60 paragraphs of statements intended to show that, through its efforts to develop a secondary market, to enforce due diligence and listing requirements, and to co-promote tokens, Binance enhanced token value and “led crypto asset investors to reasonably expect profits from the expanded presence of the crypto assets on trading platforms”. #Binance #InvestmentContract #Cryptoenforcement #SEC #crypto

16

🌟 **Coin Center vs. US Treasury & IRS: Key Takeaways for Business Owners** Coin Center‘s renewed lawsuit against the U.S. Treasury and IRS could significantly change how digital assets are regulated. Here's a quick breakdown: 1. **Background & Legal Challenge:** - **Coin Center’s Mission:** Advocates for fair cryptocurrency regulations. - **Contentious Reporting Rule:** Coin Center challenges a rule they argue is overly invasive, following a previous lawsuit. 2. **Controversial Tax Reporting Rule:** - **Extensive Reporting:** Requires detailed transaction reports and personal information. - **Privacy Concerns:** Users worry about data privacy and anonymity. - **Compliance Costs:** High costs and potential legal liabilities for non-compliance. 3. **Coin Center's Constitutional Arguments:** - **Fourth Amendment:** Claims the rule violates protection against unreasonable searches and seizures. - **First Amendment:** Highlights potential chilling effects on free speech. - **Lacks Precision:** Unclear guidelines causing unintentional non-compliance. - **Privacy Invasion:** Severe impacts on transaction confidentiality. 4. **Implications for the Crypto Community:** - **Relaxed Requirements:** Potential changes to reporting mandates. - **Increased Privacy:** Stronger privacy protections for transactions. - **Future Precedence:** Could influence upcoming cryptocurrency regulations. 5. **What to Watch For:** - **Court Hearings:** Crucial for the lawsuit's progression. - **Potential Appeals:** Likely to extend legal proceedings. - **Regulatory Adjustments:** Depending on outcomes, rules may need revisions. Coin Center’s lawsuit represents a massive push for fairer regulations and could set future precedents. 🔍 **Next Steps:** Find out how to save on taxes amidst regulatory changes. Reach out to **Together CFO** to minimize your tax burden. **[Set up a call with our team today!](https://lnkd.in/gAa4dwUG

1

Yet another NFT gets hit with the SEC settlement for the alleged violation of the Sections 5(a) and 5(c) of the Securities Act, this time around Flyfish Club NFTs, https://lnkd.in/eTUSzNa3.  Under the settlement and the corresponding cease-and-desist order released today, the company will pay civil penalties of $750,000. The claimed offense is painfully usual: that 1,620 NFTs sold for $14.8 million between December 15, 2021 and January 7, 2022 were unregistered securities. The utility behind the NFT was to provide its owners with an exclusive access to yet-to-be-built restaurant and bar. So, it was a transferrable/sellable/tradeable club membership token. In its decision, the SEC zeroed in on the investment intent of some of purchasers who looked to make a profit by reselling the NFT on secondary market at a higher price (in addition to using it for access as designed). Maybe. But the “efforts of others” prong is hard, and in fact impossible to discern. With the same logic one might say that BTC is a security because its price will keep going higher due to scarcity which Satoshi Nakamoto introduced via a hard cap on its total supply.  Why is BTC still not a security? The SEC Commissioners Hester Peirce and Mark Uyeda strongly dissented against labeling a utility NFT as a security and called the Omakase style ( “I’ll leave it up to you” ) crypto enforcement “disastrous in the hands of a crypto-obsessed Commission”, https://lnkd.in/enF-vDTw. #cryptoenforcement #cryptoregulation #digitalassets #BTC #NFT

7

Michael Saylor is functioning on a different wave length. Will his legacy be as the prophet for Bitcoin. He calls it the worlds first perfect money. We’re long Bitcoin at a minimum out to the end of Trumps presidency. We are doing so by buying into MicroStrategy. In a bull market scenario Bitcoin itself cannot outperform Saylor. Buy MSTR right now and add more shares each time the stock price corrects 10-30%. You have to actively manage your cost base. This isn’t a buy once and hope and prey.

1

CORTMA is concentrating on the crypto business. Robinhood, a trading platform, is purchasing the crypto exchange Bitstamp for a reported price of $200 million. This acquisition marks Robinhood's most significant move yet and will aid its global expansion and growing crypto business. https://lnkd.in/duPvym5r Bitstamp, the 16th-ranked exchange globally, is well-liked in Europe and Asia. This deal will enable Robinhood to compete with Coinbase and Binance directly. The finalisation of the deal is anticipated next year. However, Robinhood is presently dealing with regulatory action from the SEC, which might limit its ability to offer Bitstamp's services to American customers. Delve deeper_ ______ Follow our thinking At a glance:   At Mactur, we provide advisory services on corporate turnarounds (operationalising restructurings and enterprise-wide transformations). At CORTMA, we apply an entrepreneurial ecosystem-based approach to facilitate the lower mid-market (MSME) business transfer. Thank you for choosing my content curation. I hope you find it insightful and enjoyable. ______ #Growth #Marketing #Technology #Ecosystems #Turnarounds #Management #Entrepreneurship #Economy #Strategy #Leadership #Directorship #Data #businessContinuity #CortmaTranferOfSMEs #AI #AGI #BusinessTransformation #CryptoAssets

6

1 Comment

#Tokens aren’t inherently #securities just because they’re tokens. Plain and simple. While certain regulators may not share this view, the crypto community and judges who have opined on this topic generally agree. If all tokens are securities, it would follow that a non-security magically becomes a security by being represented by an alphanumeric string. Doesn't make very much sense. Tokens, however, can be the object of an investment contract, in which case they can be part of a securities transaction and must be analyzed to determine if they have the characteristics of a security. Similarly, tokens can reflect a digital representation of a traditional security—such as equity—in which case they are a security. This means you can't take equity, throw it on the blockchain, and claim it's not a security by virtue of being on the blockchain. That also wouldn't make much sense. There is a separation between a securities transaction of a securities instrument, such as a SAFT or TPA, and the subsequent token (if any). The SAFT/TPA could be a security, while the token could—and often does—represent something distinct, i.e., a utility. Meaning, a securities transaction involving a prospective token or digital asset does not automatically render the token or digital asset a security. It’s the contractual, transactional, or representational context that matters. We need to align on these key principles soon. Doing so will provide clarity, drive innovation, and create more opportunities for U.S. retail.

30

3 Comments

"Powered by Silicon Prairie" Check out how ChainRaise, an SEC/FINRA registered Regulation Crowdfunding portal operator is leveraging our engine to support REG-CF: https://lnkd.in/g92BMX6e They took our open source WordPress plugin and enhanced it to create this beautiful directory and with a click on any offering takes you seamlessly into our private label platform -- all on their own domain! If you scroll down to the bottom of the page you'll see it's powered by us! If you're interested in operating an Investment Crowdfunding portal, don't waste time trying to build one from scratch when you can simply license ours and focus on what really matters: MARKETING "The Silicon Prairie : Where Good Ideas Grow!™"

42

11 Comments

🚀A new Bitcoin bill has been introduced in the U.S. Senator Cynthia Lummis from Wyoming, a well-known cryptocurrency supporter, introduced her Bitcoin bill on July 31. 💸The proposed "Bitcoin Act" aims to add 1 million BTC, worth approximately $64 billion at current prices, to the US government reserves over the next five years. The bill's objective is to: "Ensure transparent management of the federal government's Bitcoin holdings, offset costs using certain Federal Reserve resources, and for other purposes." 💸Also known as the "Innovation, Technology, and Competitiveness Enhancement Act of 2024," the bill justifies choosing Bitcoin due to its demonstrated resilience, widespread adoption, and its role as a medium of exchange and store of value for over a decade. Senator Lummis emphasized the need for "financial leadership" in the digital age. The program plans to purchase 200,000 BTC annually, with acquisitions conducted transparently to minimize market disruption. The Treasury Secretary will have the authority to adjust the purchase schedule based on market conditions. 🛍The minimum holding period for the acquired Bitcoin will be 20 years, with no more than 10% allowed to be sold within any two-year period thereafter. The plan includes establishing a decentralized network of secure Bitcoin storage facilities across the United States, using cold storage to safeguard the assets. These storage facilities will be geographically distributed to minimize the risk of simultaneous compromise. Cutting-edge physical and digital security measures will be implemented, in consultation with the Departments of Defense and Homeland Security. Quarterly reports on the Bitcoin reserves will be provided with public cryptographic proof, and independent third-party auditors will verify the accuracy of these reports. 👀The bill also explicitly states that the government cannot seize or confiscate legally acquired Bitcoin owned by private individuals, reaffirming the rights of individuals and businesses to legally purchase, hold, transfer, or dispose of BTC. #Bitcoin #CryptoLegislation #BlockchainLaw #CynthiaLummis #BitcoinAct #DigitalCurrency #USGovernment #Cryptocurrency #FinancialInnovation #BlockchainTechnology #CryptoRegulation

1

👉 ChatGPT: Selling a call option on Bitcoin, or a Bitcoin ETF, involves agreeing to sell the underlying asset (in this case, Bitcoin or the Bitcoin ETF) at a specified price (the strike price) before or on a particular date (the expiration date). Here's how it works, especially in the context of your scenario: 1. **Holding a Bitcoin ETF Worth $100,000:** Let's say your Bitcoin ETF is worth $100,000. This represents your total investment in Bitcoin through the ETF. 2. **Selling a Call Option at 1%:** If you decide to sell a call option at 1%, it means you are selling the right (but not the obligation) to another party to buy a portion of your ETF holdings at a specified price within a specific time frame. The 1% could refer to the premium you receive from selling the call option. - **Example Scenario:** If Bitcoin's current price is $60,000 per Bitcoin and your ETF is equivalent to 1.67 Bitcoin ($100,000 / $60,000), and you sell a call option with a strike price of $65,000 (a price above the current market value), you are giving someone the right to buy your ETF (or the equivalent Bitcoin) if the price goes above $65,000 before the option expires. 3. **Premium Received:** The 1% could be a premium based on the current value of your ETF. In this case, 1% of $100,000 would be $1,000. This is the amount you receive upfront from selling the call option. This premium is yours to keep regardless of what happens to the ETF's price. 4. **Possible Outcomes:** - **If the Bitcoin Price Stays Below $65,000:** The option expires worthless because the buyer won't exercise the option to buy at $65,000 when the market price is lower. You keep the $1,000 premium, and you still hold your ETF worth $100,000. - **If the Bitcoin Price Rises Above $65,000:** The buyer may exercise the option to buy your ETF at $65,000. In this case, you would sell the portion of the ETF at the strike price, and although you miss out on any gains above $65,000, you still keep the $1,000 premium. **Risks and Considerations:** Selling calls can generate income, but it limits your upside if Bitcoin's price rises significantly. Also, if you sell covered calls (which means you own the underlying ETF), you must be ready to sell your ETF if the option is exercised. This strategy is often used to generate additional income from holdings, especially in a market where you expect the price to remain relatively stable or not to rise too much above the strike price. https://lnkd.in/d7krb6sE ~~~ #finance #web3 #FED #investors #interestrates #crypto #inflation #startups #stocks #wallstreet #IPOs #QT #VCs #bitcoin #Ethereum #ETFs

1

This year, the crypto industry has gained significant traction due to its various benefits for businesses and financial inclusion. Forbes highlights advantages like inflation protection, transaction speed, and diversity. However, there are setbacks, such as cybersecurity issues. Despite these challenges, I believe crypto will continue to improve and advance over the years. What excites me most about this technology is its continuous evolution and the opportunity for experimentation. This process can potentially propel crypto to the forefront as a leading payment method. #Crypto #DigitalAssets #FinancialInclusion

1