And no, she didn’t rule that crypto mining devices were securities.

The U.S. Securities and Exchange Commission’s (SEC) lawsuit against Green United can proceed to trial, a Utah judge ruled Monday.

Last March, the SEC accused the Utah-based operation of scamming investors out of $18 million by selling them phony crypto mining equipment via a multi-level marketing scheme in which the company’s affiliates received a portion of the proceeds from each of the $3,000 “Green Boxes” they sold.

According to the SEC’s complaint, investors were told that the so-called Green Boxes were specialized crypto miners that mined GREEN tokens on the Green Blockchain – which they allegedly claimed supported a “public global decentralized power grid” – and could generate 40% to 50% monthly returns. Investors never physically received their equipment, and were told that the machines would be remotely hosted at a Green United-controlled data center.

In reality, the Green Blockchain didn’t exist, but the Green Boxes did – sort of.

Green United’s founder, Will Thurston (who, along with promoter Kristoffer Krohn, is also named as a defendant in the lawsuit), allegedly used the money investors gave him for the phony Green Boxes and used it to buy S9 Antminers – commercially-available bitcoin mining machines – which he then used to mine bitcoin for himself. According to the SEC, investors didn’t see any of the actual bitcoin (BTC) their purchases mined, but instead received periodic distributions of worthless GREEN tokens created by Thurston on the Ethereum blockchain.

Though Green United’s lawyers attempted to have the case dismissed, U.S. District Court Judge Ann Marie McIff Allen ruled that the SEC has “sufficiently alleged a security in the form of Green Boxes” to allow the case to proceed to trial, as well as its allegations of fraud.

The ruling caused something of a stir in online crypto circles, with at least one large X account claiming (in a since-deleted post) that the “SEC says crypto mining devices are securities.”

“This is wrong. Remain calm,” responded Neeraj Agrawal, director of communications at crypto lobbying group Coin Center. “This has no bearing on managed crypto mining. It’s garden variety ‘cloud mining’ scamming.”

The judge’s Monday ruling makes no mention of the real S9 Antminers – or bitcoin – Green United was allegedly buying with investor funds.

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Third-party tokens are digital assets alleged to be unregistered securities by the SEC that were issued by various companies not named Binance.

The U.S. Securities and Exchange Commission (SEC) may be dropping it’s charges against so-called third-party tokens, such as Solana’s SOL and Polygon’s MATIC, which have been part of its case against Binance, according to a court filing early Tuesday morning.

According to the filing, the SEC has already informed the defendants, Binance and affiliated entities (namely Binance.US and founder Changpeng Zhao), that it “intends to seek leave to amend its complaint, including with respect to the ‘Third Party Crypto Asset Securities’… “obviating the need for the Court to issue a ruling as to the sufficiency of the allegations as to those tokens at this time.”

The issue of third party tokens came to a head in a hearing on July 9 when attorneys for Binance said they interpreted Judge Amy Berman Jackson’s June 28 ruling on Binance’s motion to dismiss the SEC’s case as moving third-party tokens out of the case, CoinDesk reported earlier. The Judge made it clear that this was not her intention.

Third-party tokens are digital assets issued by various companies apart from Binance, that were listed by the crypto exchange. The 10 tokens named in the complaint are SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI. The SEC alleged that these tokens are unregistered securities.

Tuesday’s filing was a court ordered joint response to the positions of both sides on how to proceed further. It was expected that the judge would review what role third-party tokens may play in the SEC’s ongoing case against Binance. Instead, the SEC appears to have changed its position and is now intending to drop that part of its allegations.

This development has resulted in the defense wanting to see the amended complaint before allowing the process of discovery.

“Until defendants have a set of proposed amended allegations in front of them, it is premature and unreasonable for the SEC to expect them to agree to conduct merits discovery for claims on which the SEC may soon seek leave to amend its allegations,” the filing said.

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The U.S. regulator closed its investigation into “Ethereum 2.0,” Consensys said.

The price of ether (ETH) rose after Consensys received letters from the U.S. Securities and Exchange Commission (SEC) saying the regulator had ended its investigation into the technology incubator company and was not going to recommend an enforcement action against it.

The SEC told Consensys, whose products include the MetaMask wallet, it was not bringing any enforcement actions in a pair of letters sent to its law firms on Tuesday. In a blog post, Consensys said the SEC was “closing its investigation into Ethereum 2.0.”

The letters had the subject line “Re: In the Matter of Ethereum 2.0 (C-08950),” but did not otherwise explicitly mention the blockchain associated with the second-largest cryptocurrency by market capitalization.

“We have concluded the investigation in the above-referenced matter,” one letter said. “Based on the information we have as of this date, we do not intend to recommend an enforcement action by the Commission against your client, Consensys Software Inc.”

The letter said that while it’s announcing the conclusion of an investigation, that should not be taken to mean there will never be an enforcement action.

“The Commission is instructing its staff that in cases where such action appears appropriate, it may advise a person under inquiry that its formal investigation has been terminated. Such action on the part of the staff will be purely discretionary on its part for the reasons mentioned above. Even if such advice is given, however, it must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation of that particular matter,” the letter said, citing a Wells Notice explainer on the SEC website.

A second letter echoed the language about concluding an investigation, while also saying it did not agree with any factual statements or legal conclusions expressed by Consensys’ own attorneys in a letter sent to the regulator asking about ETH’s status as a security given the SEC’s approval of certain spot ether exchange-traded fund application filings.

Consensys sued the SEC in April, alleging that the regulator was investigating whether Ethereum, post-merge, might be a security.

Ether rose as much as 2.6% after a Consensys post on X, data from TradingView show. It is up around 3% over the last 24 hours, according to data from CoinGecko. The CoinDesk 20 Index (CD20), a measure of the broader crypto market, has added 1.2%.

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The regulator proposed increases to all supervision fees as the government blamed crypto for recent economic woes.

Nigeria’s securities watchdog proposed a 400% increase to registration fees for crypto firms as the country cracks down on the sector, according to a notice published Friday.

The proposed amendments to the rules for crypto issuers, exchanges and custody platforms include increases to all supervision fees. Instead of a 100,000 naira ($64) application fee and a 30 million naira registration fee, the Securities and Exchange Commission (SEC) now wants 300,000 naira with every application and hopes to charge crypto firms a 150 million registration fee.

The proposals come as the Nigerian naira weakens to record lows against the dollar, with the government blaming the crypto industry for facilitating illegal capital outflows. Earlier this month, reports surfaced that the SEC was updating its guidelines for crypto service providers in the country.

While the government may have taken action against several crypto firms, officials have singled out exchange platform Binance, accusing it of setting the naira exchange rate. Nigeria has detained two Binance executives and is reportedly considering hefty penalties against the firm.

The SEC also proposed doubling the minimum paid-up capital (non-borrowed capital) requirement for interested crypto service providers to 1 billion naira.

The proposals “to rearrange” the rules are to “provide clarity to the market as well as to incorporate suggestions from industry stakeholders particularly with regards to the recent engagements with the [central bank of Nigeria],” the SEC said.

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In May 2023, the SEC settled charges with Ishan Wahi and Nikhil Wahi in what it has called the “first-ever insider trading case involving cryptocurrency markets.”

In an insider trading case involving Coinbase’s former product manager Ishan Wahi, his brother Nikhil Wahi, and their friend Sameer Ramani, a U.S. court ruled on March 1, that the trading of certain crypto assets on a secondary market, which Coinbase is, are securities transactions.

“The court’s analysis remains the same even to the extent Ramani traded tokens on the secondary market,” the ruling said. “… Each issuer continued to make such representation regarding the profitability of their tokens even as the tokens were traded on secondary markets. Thus, under Howey, all of the crypto assets that Ramani purchased and traded were investment contracts.”

The court took this critical position in a default judgment against Ramani. A default judgment is given when the defendant fails to respond to a court summons or does not appear in court.

“Ramani appears to have fled the country to avoid criminal prosecution for the actions alleged in this case,” the filing said.

In May 2023, the SEC settled charges with Ishan Wahi and Nikhil Wahi in what it has called the “first-ever insider trading case involving cryptocurrency markets.”

However, while this or some action against Ramani was expected, the judgment assumes extra significance because the crypto industry and Coinbase (COIN) have been arguing that cryptocurrencies are not securities and hence, do not fall under the SEC. The SEC Chair Gary Gensler has often argued that most cryptocurrencies fit the definition of securities and that crypto exchanges need to register with the SEC.

This is also not the first time a U.S. court has adjudicated whether sales of certain cryptocurrencies are unregistered securities, whether on secondary platforms like exchanges or not.

In July, Federal District Judge Analisa Torres ruled that while Ripple violated federal securities laws in selling XRP to institutional investors directly, it had not done so by making XRP available to retail customers through programmatic sales to exchanges.

However, in Dec. 2023, Judge Jed Rakoff disagreed with Judge Torres in the Terraform Labs case.

The court ruled to prohibit Ramani from future violations, a civil penalty of twice the amount of proceeds Ramani is calculated to have gained, which was a total of $1,635,204, and disgorgement of the identified proceeds amounting to $817,602. However, the court denied the SEC’s request to impose prejudgment interest.

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A statement from B. Riley said it was unaware of any such investigation from the U.S. Securities and Exchange Commission (SEC).

Investment bank B. Riley is under an undisclosed investigation from U.S. authorities for its deals with Brian Kahn, an alleged co-conspirator in a U.S. Department of Justice criminal case, according to a Bloomberg report, citing people familiar with the matter.

A statement from B. Riley said it was unaware of any such investigation from the U.S. Securities and Exchange Commission (SEC) but that it would cooperate fully if an investigation were to materialize. The report is “parroting baseless allegations that have been publicly made for months by short sellers intent on harming the Firm,” the statement added.

Recently, B. Riley has made big investments in the bitcoin mining space. In September 2023, bitcoin (BTC) miner Iris Energy (IREN) signed a deal to sell up to $100 million in equity to B. Riley, and in March 2023, a federal judge overseeing bitcoin miner Core Scientific’s (CORZ) Chapter 11 bankruptcy process approved a $70 million loan from B. Riley Commercial Capital to help the company get back on its feet.

Brian Kahn remains unidentified. However, the Bloomberg report cited a person familiar with the matter to say that Kahn is the CEO of Franchise Group Inc. In November 2023, a man named John Hughes, co-founder of hedge fund Prophecy Asset Management pleaded guilty to committing securities fraud to the tune of $294 million against clients and admitted that one of two co-conspirators was the CEO of a multibillion-dollar retail franchise company without officially naming Kahn.

According to the report, Kahn has been a “longstanding client” of B. Riley, and the bank had helped him lead a “management buyout of Franchise Group, or FRG, a retail company based in Delaware, Ohio.” Additionally, Nomura, a major Japanese financial group, had “led a $600 million lending syndicate for B. Riley to help finance Kahn’s takeover,” the report said, citing loan documents.

Nomura is backing several crypto-related entities, including Komainu and Ledger. The report further said Nomura isn’t the focus of the probe, which is in its early stages.

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Default judgements typically occur when the opposing party fails to take certain action, either failing to attend a trial or meet certain deadlines for filing documents.

The U.S. Securities and Exchange Commission (SEC) has been awarded a default judgment against Thor Technologies and its founder David Chin on charges of conducting a $2.6 million unregistered offering of crypto asset securities, according to court documents.

The judgement on Wednesday from a San Francisco district court and a subsequent SEC announcement on Thursday come nearly a year after the SEC brought charges against Thor Technologies on December 21, 2022.

Default judgments typically occur when the opposing party fails to take certain action, either failing to attend a trial or meet specific deadlines for filing documents.

The SEC had charged Thor and Chin for offering and selling “Thor Tokens” to fund a business of a software platform for gig economy workers and companies. The offers and sales of Thor Tokens were not registered with the SEC and were marketed as an investment opportunity, the SEC said. In April 2019, Thor announced it was shutting down its operations due to “many regulatory challenges.”

The court has barred Thor and Chin from participating in any crypto asset securities offering and ordered a disgorgement of $744,555 with prejudgment interest of $158,638.06. The order does not prevent Chin from purchasing or selling securities, including crypto-asset securities, for his own personal account.

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The court’s decision weakens the SEC’s stance that the securities law is clear and no separate clarity is required for digital assets, the report said.

The U.S. district court ruling that Ripple’s XRP token should not be considered a security if sold via an exchange or through programmatic sales, is a landmark judgment for crypto, broker Bernstein said in a research report Thursday.

Bernstein notes that the court did rule that institutional sales of XRP violated securities law. Still, this was a major verdict, which removes the overhang on XRP and the holders of the token who bought it through exchanges, the report said.

The ruling reduces the “securities overhang on tokens sold on exchanges,” and is a “major relief for all tokens sold on secondary platforms,” analysts led by Gautam Chhugani wrote.

The court’s decision emphasizes the need for a separate digital assets framework, and given its interpretation it is clear that the “Howey test cannot be straight applied to tokens on exchange platforms, and thus the context of the transaction matters,” the note said.

“This weakens the U.S. Securities and Exchange Commission’s (SEC) stance that the securities law is clear and no separate clarity is required for digital assets, given the contextual interpretation required in every case,” the analysts wrote.

Bernstein says this is a landmark judgement and significantly shifts the “regulatory cloud over the crypto industry”, and it expects institutional investors who have steered clear of digital assets due to regulatory challenges to reconsider the asset class.

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The date for the court hearing is much earlier than expected, prompted by a “creative” defense tactic by Coinbase – it filed its response 40 days before the deadline of August 7, 2023.

The U.S. Securities and Exchange Commission (SEC) will present its response to Coinbase’s (COIN) first legal defense on July 13, according to a court order on Thursday.

The date for the hearing is now much earlier than expected, prompted by a “creative” defense tactic employed by Coinbase, where in the exchange filed its first response 40 days before the deadline of August 7.

According to the rules, the SEC had to file a response to Coinbase’s defense by July 3. The SEC asked for an extension of three business days owing to the July 4 holiday weekend, which was granted by the court.

Additionally, the court converted the pre-trial conference to a pre-motion conference and pushed it forward to July 13 at 14:00 UTC from August 24. A pre-motion conference is an application made by the prosecutor or defense attorney, requesting the court make a decision on a certain issue before the trial.

In response to the SEC’s complaint, Coinbase has argued that many of the tokens highlighted in the SEC’s case fall outside the Commission’s purview.

Coinbase used creative defence strategy

“Coinbase has answered the SEC’s complaint with numerous defenses, including that this action violates due process and constitutes an abuse of discretion. But there is a more fundamental problem with the SEC’s case— one that the Chair recognized two years ago and that entitles Coinbase to judgment on the pleadings now: The subject matter falls outside the SEC’s authority,” Coinbase’s counsel said in a recent letter to the court.

The exchange’s tactic to advance the case via a motion for judgment on the pleadings by filing its response 40 days early is not seen as unusual in cases like this but is a “creative strategy,” one legal expert said. The exchange’s move is designed to “get documents helpful to its cause in front of the Judge through the Answer,” said MetaLawman, a lawyer and Twitter legal commentator in a tweet thread.

“On a motion to dismiss, a judge may only consider the factual allegations in the Complaint and any documents attached to, or referenced in, the Complaint–nothing else,” explained MetaLawMan. “On a motion for judgment on the pleadings, by contrast, a judge may consider other pleadings filed in the case, which would include the defendant’s Answer to the Complaint.”

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The regulator agreed to forego the payment, owed as part of a settlement of charges against BlockFi, to maximize and speed up payments to investors.

The U.S. Securities and Exchange Commission (SEC) has agreed to forego a $30 million fine from bankrupt crypto lender BlockFi until after investors are repaid, a court filing from Thursday shows.

The sum is what’s left over from a $50 million penalty owed to the SEC by BlockFi to settle charges of failing to register with the regulator for the offering and sale of its crypto lending product. The platform agreed to the settlement in February 2022 but filed for bankruptcy in November following the collapse of crypto exchange FTX.

The regulator asserted its claims should be counted as part of “general unsecured claims” in the ongoing Chapter 11 bankruptcy proceedings, but agreed to forego the payment “in order to maximize the amount that may be distributed to investors and avoid delay in such distribution,” according to the agreement reached on June 22.

The SEC was likely among the first creditors in line to receive payment from BlockFi, Sasha Hodder, founder of Hodder Law, a firm that specializes in crypto law, told CoinDesk in November.

“The customers are really at the bottom of the list here,” Hodder said at the time.

In May, a New Jersey bankruptcy court judge said BlockFi customers can be repaid $300 million in funds held in custodial wallets on the platform. While the bankrupt estate has presented a reorganization plan to the court due for a hearing in July, BlockFi has said $1 billion in claims against fallen crypto enterprise FTX and its sister trading firm Alameda will be the “largest driver” of fund recoveries for customers and creditors.

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