SEC Sanctioned and Probes Ethereum: Law Decoded

A United States district court has issued sanctions against the Securities and Exchange Commission (SEC) for its “bad faith” actions in a lawsuit against Debt Box. The SEC had initially filed a motion to dismiss the case, but Judge Robert Shelby denied it and criticized the SEC for lying to the court about the evidence it presented to obtain a temporary restraining order and freeze Debt Box’s assets. Judge Shelby explained that the evidence provided by the SEC lacked any basis and was deliberately false and misleading. Several advocacy groups have filed briefs supporting an appeal by Coinbase, urging the SEC to establish clear rules for the cryptocurrency industry.

Various organizations, including the Crypto Council for Innovation, the Satoshi Action Fund, the Texas Blockchain Council, Paradigm, Lejilex, and the U.S. Chamber of Commerce, have filed separate documents with the U.S. Court of Appeals for the Third Circuit, arguing that the SEC lacks clear guidelines for market participants in the United States. These filings suggest that without clear rules, companies may be more inclined to leave the country. Despite these concerns, the SEC has asked Congress for an additional $158 million from the federal budget for 2025 to address the significant growth and changes in the market, particularly in the crypto industry.

The commission has also reportedly issued subpoenas to companies related to the classification of Ether (ETH) as a security. Several U.S.-based companies received subpoenas requesting documents and financial records regarding their dealings with the Ethereum Foundation. It is believed that the SEC launched this campaign to classify ETH as a security after the Ethereum blockchain transitioned from proof-of-work to proof-of-stake in 2022.

The International Monetary Fund (IMF) has urged Pakistan’s Federal Board of Revenue (FBR) to impose capital gains tax on cryptocurrency investments as a requirement for receiving $3 billion in bailout funds. As part of the review talks for a stand-by arrangement, the IMF recommended taxing capital gains on real estate assets annually, regardless of whether they are sold or retained. This adjustment would also entail stricter tracking and reporting requirements for property developers, with penalties for noncompliance. The IMF’s aim is to enforce new tax rules in the real estate market.

In Nigeria, a high court has directed Binance Holdings to provide the Economic and Financial Crimes Commission with comprehensive data and information on all Nigerian traders on its platform. The court claims that Binance’s activities in Nigeria involve criminal elements and has initiated criminal proceedings against the exchange for tax evasion. Binance executive Nadeem Anjarwalla reportedly used a fake passport to evade detention, according to local reports. Anjarwalla and his colleague Tigran Gambaryan had been detained in Abuja for several weeks.

The Australian Securities and Investments Commission (ASIC) is working on developing “outcome-based” policies for the crypto sector. ASIC Commissioner Alan Kirkland revealed the regulator’s plan to promote responsible financial innovation and address the regulatory trilemma, which involves balancing consumer protection, market integrity, and encouraging financial innovation. The ASIC aims to enhance oversight to foster trust in crypto and decentralized financial systems. Since 2016, the ASIC has provided informal regulatory assistance to more than 900 entities.

Marrissa Burleigh

Marrissa Burleigh

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