USDCoinbase Wins, Robinhood Settles $45M: Crypto's Biggest Legal Moves This Week
Coinbase Wins Court Ruling Against SEC, Pressuring Regulator for Clearer Crypto Rules
The US Court of Appeals for the Third Circuit granted Coinbase a partial victory in its legal battle against the Securities and Exchange Commission (SEC). The court criticized the SEC's dismissal of Coinbase's 2022 petition for clearer crypto regulations, labeling its reasoning as “arbitrary and capricious” based on the Administrative Procedure Act. While not mandating the SEC to initiate rulemaking, the court emphasized that the regulator must provide a comprehensive rationale for its decisions, highlighting constitutional concerns over due process and fair notice to crypto companies.
This ruling exposes the SEC's ongoing ambiguity regarding which digital assets are classified as securities, creating a climate of uncertainty within the industry. The decision has been welcomed by legal experts and industry leaders as a significant precedent for future crypto legal cases, reinforcing the need for regulatory clarity in the evolving digital asset landscape.
Robinhood Settles SEC Violations for $45M Amidst Surge in Crypto Trading Activity
Robinhood has agreed to pay $45 million to settle civil penalties related to securities law violations uncovered by the SEC. The settlement, detailed on January 13, 2025, includes $33.5 million from Robinhood Securities LLC and $11.5 million from Robinhood Financial LLC, as the SEC identified issues such as inaccurate trading reports, poor cybersecurity, and inadequate fraud prevention from 2019 to 2022. Key violations included delays in reporting suspicious transactions and insufficient protections against identity theft.
Additionally, Robinhood Securities faced scrutiny over fractional share trading and stock lending. Despite these issues, Robinhood's crypto operations, which are not implicated in this settlement, showed significant growth, with $119 billion in trading volume and $38 billion in digital assets under custody reported as of November 2024. The company also expanded its crypto offerings to include tokens like Solana and Cardano, increasing available digital assets to 20 in the U.S.
Supreme Court Allows Class Action Against Binance Over Unregistered Token Sales
The U.S. Supreme Court has denied Binance and founder Changpeng Zhao's petition to review a lower court ruling, allowing a class-action lawsuit to proceed. Investors allege that Binance illegally sold unregistered tokens that subsequently lost significant value. The initial ruling stated that U.S. securities laws apply, as transactions occurred on U.S. servers despite Binance's lack of a physical U.S. headquarters.
The lawsuit, filed by Chase Williams in April 2020, claims Binance operated as an unregistered securities exchange. Legal challenges for Binance escalated following a SEC lawsuit in mid-2023, and a subsequent $4.3 billion settlement with the U.S. Department of Justice for money laundering violations in November 2023. Binance faced further litigation, including a class action in Canada and a lawsuit from the FTX bankruptcy estate for $1.8 billion. Zhao himself served four months in prison for money laundering-related charges but was released in September 2024.
Tether Relocates HQ to El Salvador After Securing Digital Asset License
Tether, a stablecoin issuer, announced its relocation from the British Virgin Islands to El Salvador after obtaining a digital asset service provider license. The decision, made on January 13, 2025, aims to leverage El Salvador's progressive regulatory environment and Bitcoin-savvy community. Tether's CEO, Paolo Ardoino, emphasized the move as a commitment to financial freedom and innovation through decentralized technologies. Previously, Ardoino and COO Claudia Lagorio became naturalized citizens and acquired real estate in El Salvador in 2024.
Since President Nayib Bukele's Bitcoin adoption initiative began in 2021, the crypto industry has actively engaged with local businesses. The Salvadoran government holds over 6,000 BTC, valued at over $550 million. Despite praising Bitcoin's positive impact, Bukele expressed that benefits fell short of expectations. While lauded for reducing crime rates, his administration faces criticism for alleged human rights abuses and detentions of dissenters.
Telegram-Linked TON Blockchain Shifts Focus to U.S. Growth Under Trump Administration
The Open Network (TON), a blockchain project associated with Telegram, is set to emphasize growth in the US under the administration of President-elect Donald Trump. The TON Foundation, under newly appointed president Manuel Stotz, aims to position the US as a major market for TON, recognizing its potential as a crypto hub fostering retail adoption of digital assets. Stotz, an influential digital asset investor and founder of Kingsway Capital Partners, will lead this initiative, replacing Steve Yun while remaining on the board.
The move indicates a significant shift as TON, which originated as the "Telegram Open Network," seeks advancement after Telegram's withdrawal in 2020 due to legal challenges with the SEC. With the foundation officially established in Switzerland in 2023, TON's journey continues, involving community-driven efforts and incorporating Toncoin into Telegram's ecosystem, showcasing its relevance in the evolving blockchain landscape.
This article has been refined and enhanced by ChatGPT.
