Monday, September 26, 2022

The Week in Crypto – Tether, NFTs, Celsius, Keyfi and more!

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By Mark Hunter

3 weeks agoFri Aug 26 2022 09:42:42

Reading Time: 3 minutes

This week in crypto we’ve seen the Bitboy Crypto drop a libel suit after the community supported his opponent, Tether saying it won’t freeze Tornado Cash funds, Celsius counter suing Kefi and more. But what were the diamonds in the rough? Let’s find out…

No. 3 – SEC Regulating NFTs by Enforcement?
The lawyer for accused Opensea inside trader Nathanial Chastain argued this week that the motivation behind the Securities and Exchange Commission (SEC) bringing the case against his client was because it wants to regulate NFTs by enforcement. Chastain is accused of using privileged information about what NFTs were going on Opensea’s front page to buy them up before they listed and sell any resultant pumps, something he denies.

The suggestion of regulation by enforcement was made by former SEC lawyer Alma Angotti, who last month explained how it is possible that NFTs could fall under the umbrella of stocks and securities, and that the SEC may use the Chastain case as a way of setting such a claim in stone.

Chastain’s lawyer David Miller argued in a motion to dismiss the case that the SEC is bringing it in order to “set precedent in the digital asset space”, a move contrary to its previous remarks.

No. 2 – Celsius Issues Retaliatory Lawsuit Against Keyfi
Embattled lending platform Celsius has decided to fight fire with fire and this week launched a retaliatory lawsuit against asset manager Keyfi over misrepresentation and theft of assets. Keyfi sued Celsius in July over claims that Keyfi had mismanaged $2 billion in assets Celsius gave it to trade with, only for it to blow it up during the crypto downturn and then steal millions of dollars of it.

Keyfi said it had done nothing of the sort, but Celsius has put its money where its mouth is (well, where its lawyers mouths are) and backed up its claims with its own lawsuit formally accusing Keyfi of all charges.

Keyfi founder and accused Jason Stone got into a Twitter battle with a crypto researcher this week where evidence was presented that the Ethereum address Keyfi was looking after for Celsius saw funds escaping through Tornado Cash. Stone said that there was no proof that it was him doing that, then said the smart thing to do would have been to make it not look like him, then deleted his side of the conversation.

Yikes.

No.1 – Tether Will Not Freeze Tornado Cash Funds
Tether this week said it would not freeze any tokens caught up in sanctioned Ethereum addresses as a result of the Tornado Cash affair, saying that it only does so when it has been told to by law enforcement. Circle has already frozen 75,000 USD tokens following the sanctioning, but many didn’t realise at the time that this was voluntary.

A statement from Tether hoever confirmed that it was, with the stablecoin maker saying that “no specific request has been put to us related to freezing relevant Tornado Cash addresses”, despite almost daily conversations with law enforcement on a variety of matters.

Tether added that it is occasionally instructed by law enforcement not to freeze coins related to criminal enterprises in order to allow the tracing of the funds, and that doing so voluntarily in this case “might have jeopardized the work of other regulators and law enforcement agencies around the world.”

Yeah, but…did it though?

Honourable Mentions
Other gems from the coalface this week included:

Exchange giant FTX has complied with an FDIC cease-and-desist notice regarding false claims of depistor insurance
Where is crypto on the Wall Street Cheat Sheet? The answer might anger you…
Social media app Changari has ushered in the advent of video NFTs (vNFTs) through its platform, with holders receiving a portion of the creator’s income through the site
Shill for hire Bitboy Crypto has dropped a lawsuit against a Youtbe video maker who outed his practices after the community rallied round him

We’ll be back next week for another review of the week’s top crypto news.

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