- Cryptocurrency Exchange Backs Lawsuit Against the U.S. Department of the Treasury
- U.S. Securities and Exchange Commission Chair Gives Speech on Crypto
- SEC Announces Formation of New Office for Crypto Disclosures
Cryptocurrency Exchange Backs Lawsuit Against the U.S. Department of the Treasury (Treasury)
Coinbase announced that it is funding a lawsuit being brought against Treasury, filed in the U.S. District Court in the Western District of Texas. The plaintiffs in the suit are challenging Treasury’s decision to sanction Tornado Cash by arguing that Treasury overstepped its legal authority by sanctioning software rather than an entity or a person pursuant to claims brought under the Administrative Procedure Act (APA). Additionally, the plaintiffs claim that Treasury infringed on their First Amendment right by barring them from using a tool that enabled them to exercise their free speech. Some of the plaintiffs also brought claims under the Fifth Amendment, claiming the blocked status of their property is a violation of their due process rights. The plaintiffs are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP in addition to Parker, Bunt & Ainsworth, P.C.
U.S. Securities and Exchange Commission (SEC) Chair Gives Speech on Crypto
On September 8, 2022, SEC Chair Gary Gensler addressed cryptocurrencies and crypto intermediaries. In the speech, Gensler reiterated that he believes most cryptocurrencies are securities under federal securities laws. Chair Gensler cited to past enforcement actions as examples of the SEC’s clear message that securities laws apply to the crypto space. He did note that there are a few non-security tokens in circulation, citing Bitcoin as an example. As it relates to intermediaries, such as exchanges, broker-dealers, custodians, and lenders in the crypto space, Gensler noted that crypto intermediaries must register with the SEC to ensure investors are properly protected. Gensler stated that the commingling of functions within crypto intermediaries puts investors at risks and creates inherent conflicts of interests.
SEC Announces Formation of New Office for Crypto Disclosures
Cicely LaMothe, the acting deputy director of the SEC’s disclosure operations in the Division of Corporation Finance, announced on Thursday that the SEC plans to open an office dedicated to reviewing public filings related to cryptocurrency assets. “In recognition that the traditional finance companies still need our focus, we’ve decided to create this new office to really address the unique and evolving filing review issues related to crypto assets,” LaMothe said. According to the Block, LaMothe noted that the office is expected to include legal and accounting branches.