The promoters listed in the lawsuit are: talent manager Guy Oseary, digital artist Beeple, Madonna, Paris Hilton, Jimmy Fallon and related entities, Justin Bieber, Gwyneth Paltrow, Serena Williams, Diplo, Post Malone, Snoop Dogg, Kevin Hart, the Chainsmokers, Steph Curry, Future, The Weeknd, DJ Khaled, and Adidas.
Class action lawsuit against Jimmy Fallon, Paris Hilton, Justin Bieber, Gwyneth Paltrow, and others accuses them of undisclosed NFT promotions
Paris Hilton and Jimmy Fallon talk up their Bored Apes in an excruciating segment of The Tonight Show in January 2022 (attribution)A class action lawsuit against the company behind Bored Apes and its executives, those on the board of "Ape DAO", a whole host of celebrity promoters and brands, and the MoonPay service has accused the group of a scheme to employ celebrities to promote Bored Ape NFTs and ApeCoin without proper disclosures. The suit goes on to claim that MoonPay, a service known for brokering big-ticket celebrity crypto purchases, was used to obfuscate payoffs, and itself benefitted from the publicity earned from brokering these deals. The suit alleges that each of the "promoters" were compensated in some way, either through direct payments or via financial stake in MoonPay.
Kraken pays over $360,000 to settle violations of sanctions against Iran
The US cryptocurrency exchange Kraken settled charges from the Office of Foreign Assets Control (OFAC) alleging that they had violated sanctions against Iran. In the agreement, Kraken will pay $362,158.70 for the potential civil liability, and agree to commit $100,000 in various compliance controls.
The OFAC investigation was first revealed in July, in reporting from the New York Times.
- Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and Payward, Inc. ("Kraken"), U.S. Department of the Treasury
Class action lawsuit filed against celebrities who promoted FTX
A class action lawsuit has been filed against Sam Bankman-Fried and a slew of celebrities who helped to promote FTX as a safe place to hold and trade crypto. Defendants include Tom Brady, Gisele Bündchen, Steph
Curry, Shaquille O'Neal, David Ortiz, Naomi Osaka, and Larry David.
The suit alleges that the celebrities violated the anti-touting provisions of securities laws by failing to disclose the nature, scope, and amount they were compensated to promote the platform.
Federal judge rules that LBRY sold tokens in violation of federal securities laws
LBRY is a blockchain-based social network and video sharing protocol that was described by a researcher at The International Centre for the Study of Radicalisation and Political Violence as "the new YouTube for the far-right" in 2021.
In March 2021, the SEC sued LBRY over their LBC tokens, which were used for paid streaming, tipping, and as rewards for using the platform inviting other users. On November 7, 2022, a federal judge of the District Court for the District of New Hampshire ruled that "because no reasonable trier of fact could reject the SEC's contention that LBRY offered LBC as a security, and LBRY does not have a triable defense that it lacked fair notice, the SEC is entitled to judgment." The judge granted the SEC's motion for summary judgment, meaning the case will not go to trial.
U.S. Attorney convicts individual in 2012 theft from the Silk Road, announces seizure of over 50,000 Bitcoin priced at more than $1 billion
The U.S. Attorney's Office for the Southern District of New York announced that they had convicted James Zhong with wire fraud pertaining to his 2012 theft of around 50,000 Bitcoin from the Silk Road online marketplace. Zhong pled guilty to one count of wire fraud.
The government has filed a motion in the case against Ross Ulbricht, the founder and operator of the Silk Road who is serving life in prison, seeking to retain the seized Bitcoin. At the time of seizure in November 2021, the Bitcoin were notionally worth $3.36 billion. On the date the charges were announced, they would be notionally worth $1.06 billion.
- "U.S. Attorney Announces Historic $3.36 Billion Cryptocurrency Seizure And Conviction In Connection With Silk Road Dark Web Fraud", U.S. Attorney's Office for the Southern District of New York
Texas regulators are investigating FTX and Sam Bankman-Fried for possible securities violations
Joseph Jason Rotunda, Director of the Enforcement Division of the Texas State Securities Board, submitted a filing to the ongoing Voyager bankruptcy case. FTX is the highest bidder among companies who have made offers to buy the assets of Voyager.
According to Rotunda, there is an ongoing investigation by the TSSB into whether FTX has been offering unregistered securities to United States residence in the form of yield-bearing accounts. He alleged that FTX's claimed attempts to segregate US users to the separate FTX.US exchange, the software makes no apparent attempt to do so, and offered yield-bearing accounts to customers who had signed up with a U.S. address — potentially in violation of securities laws.
Rotunda submitted the filing in the Voyager bankruptcy case to argue that FTX should not be permitted to buy Voyager's assets until they have been determined to be compliant with securities law. He wrote, "[FTX yield-bearing] products appear similar to the yield-bearing depository accounts offered by Voyager Digital LTD et al., and the Enforcement Division is now investigating FTX Trading, FTX US, and their principals, including [FTX CEO] Sam Bankman-Fried."
Bittrex fined $29 million for sanctions violations
The U.S. Treasury Department announced fines against Bittrex, a U.S.-based cryptocurrency exchange. The Office of Foreign Assets Control (OFAC) announced a $24 million penalty against the company, and the Financial Crimes Enforcement Network (FinCEN) announced a $29 million fine. Both groups form parts of the Treasury Department. FinCEN said it would credit the fine to be paid to OFAC towards the total fine they imposed, meaning Bittrex will pay $29 million in total. According to the Treasury Department, the fines are the largest they've ever imposed on a virtual currency platform.
The OFAC sanction was imposed due to 116,421 reported sanctions violations in which Bittrex failed to prevent people in Crimea, Cuba, Iran, Sudan, and Syria from using their service. In total, these prohibited individuals performed more than $263 million in transactions on the platform.
The FinCEN fine was imposed due to "willful violations" of the Bank Secrecy Act's requirements pertaining to anti-money laundering (AML) and suspicious activity reports.
U.S. SEC is investigating Bored Apes creator Yuga Labs
According to a scoop in Bloomberg, the United States Securities and Exchange Commission has been probing whether NFTs from Yuga Labs should be considered securities regulations, and may be in violation of federal law.
Yuga Labs is the company behind the Bored Apes NFTs and spinoff projects (Mutant Apes, and Bored Ape Kennel Club), and in March also acquired the blue-chip NFT collections CryptoPunks and Meebits.
A probe does not necessarily mean that Yuga has violated the law, but such an investigation could have major ramifications for the world of NFTs.
Eight state regulators file enforcement actions against Nexo
Crypto lending service Nexo was hit with a barrage of cease-and-desist lawsuits from eight states: California, Vermont, Oklahoma, Kentucky, Washington, South Carolina, New York, and Maryland. Several of them also tacked on fines, with Washington levying a hefty $1 million against the company, and Maryland fining them $5,000 per violation.
Nexo had previously been warned to stop offering services in New York state and to register under securities regulations, but hadn't done so. Several states called into question Nexo's "real-time audit", which they describe as bogus. Kentucky also noted in their lawsuit that when the company's holdings of their own $NEXO token was taken out of the equation, the company appears to be insolvent.
IRS gets permission for summons to go after taxpayers who didn't report crypto transactions
The IRS was granted authorization to issue a "John Doe summons", which will require M.Y. Safra Bank to provide them with information on U.S. customers who may have failed to report taxable cryptocurrency transactions. This summons is specifically aimed at customers who used sFOX, a crypto broker that used M.Y. Safra Bank's services. The IRS was also previously authorized to serve a John Doe summons on sFOX directly.
The press release stated, "Based on its recent experiences with cryptocurrencies, the IRS has strong reason to believe that many virtual currency transactions are not being properly reported on tax returns."
- "IRS Obtains Court Order Authorizing Summons For Records Relating To U.S. Taxpayers Who Failed To Report And Pay Taxes On Cryptocurrency Transactions"U.S. Attorney's Office, Southern District of New York