USDOrders & Courts This Week: SEC Probes Coinbase, Ripple Settlement Denied
SEC Investigates Coinbase Over Potential User Count Misstatements
The SEC is investigating Coinbase for possibly overstating user numbers in past filings, focusing on its "verified user" metric that once exceeded 100 million but was ceased in reporting. The inquiry, stemming from the Biden administration, assesses whether this count misled investors, despite Coinbase acknowledging that it could inflate unique customer figures due to multiple accounts. Coinbase has replaced this metric with “monthly transacting users” for better insights. Meanwhile, they face a $400 million exposure from data breaches and are preparing for an S&P 500 debut, even as the SEC maintains a focus on corporate disclosure enforcement.
Judge Denies SEC and Ripple's Request for Indicative Ruling in Legal Dispute
U.S. District Court Judge Analisa Torres has denied the SEC and Ripple's joint request for an indicative ruling on their settlement agreement in a prolonged legal dispute, labeling it "procedurally improper" due to ongoing appeals. The parties sought this ruling to lift an August 2024 injunction against Ripple and reduce penalties from $125 million to $50 million. Both Ripple and the SEC aimed to solicit a limited remand from the appeals court to finalize their agreement and withdraw cross-appeals. Ripple's Chief Legal Officer, Stuart Alderoty, reaffirmed that the order does not alter Ripple’s prior legal victories.
DOJ Moves Forward with Tornado Cash Co-Founder Roman Storm's Trial, Drops Some Charges
Tornado Cash co-founder Roman Storm's trial is set for July 14, 2025, after the U.S. Attorney's Office for the Southern District of New York dropped part of the charges against him. Storm faces charges related to money laundering, unlicensed money transmitting, and conspiracy to violate the International Emergency Economic Powers Act. The DOJ's approach has shifted under the Trump administration, focusing on harm to investors and crimes rather than regulatory violations. Critics, including Peter Van Valkenburgh of Coin Center, argue that the remaining charges are legally ambiguous and should also be dismissed, citing the principle of lenity.
Crypto CEO's Family Escapes Kidnapping Attempt in Paris Amid Rising Threats
A kidnapping attempt occurred in central Paris targeting the daughter of a crypto CEO and her 2-year-old child on May 13, 2025. Three masked assailants tried to force them into a van, but the child's father intervened, preventing the abduction. The motive is suspected to be financially driven due to their crypto connections, part of a disturbing trend of rising crypto-related kidnappings globally. In France, at least three such incidents have been reported this year. Law enforcement agencies warn that organized criminals are increasingly targeting individuals with substantial digital asset holdings.
Telegram Closes Thousands of Channels Linked to $8.4B Xinbi Crypto Crime Marketplace in Colorado
Telegram has shut down thousands of channels linked to the Xinbi Guarantee, a Colorado-based crypto marketplace suspected of facilitating over $8.4 billion in illicit transactions using Tether's USDT since 2022. The U.S. Treasury designated Huione Group, another major marketplace, as a primary money laundering concern. Xinbi and Huione are responsible for a combined $35 billion in illicit activities, including money laundering and scams. Xinbi offers services such as fake IDs and satellite internet equipment used by scam operations. The marketplace's incorporation in the U.S. adds a layer of perceived legitimacy, despite its ties to Southeast Asian cybercrime.
Haowang Guarantee, World's Largest Illicit Marketplace, Shuts Down After Telegram Intervention
Haowang Guarantee, the world's largest illicit online marketplace, has announced its closure following a crackdown by Telegram, which removed thousands of related channels. Processing over $27 billion in USDT transactions, Haowang primarily catered to Southeast Asian customers, including crypto scammers and illicit actors. It utilized USDH, a stablecoin issued by the Huione Group, to facilitate transactions and evade sanctions. The Treasury Department's FinCEN identified Huione Group as operating a major money laundering enterprise, with at least $4 billion in illegal proceeds linked to North Korean cyber crimes. Telegram’s actions also impacted Xinbi Guarantee, another illicit platform.
Twelve Charged in $263M Crypto Racketeering Scheme; Suspects Lived Lavishly on Stolen Funds
Federal prosecutors have charged 12 individuals in a crypto racketeering scheme that allegedly stole over $263 million. Arrests occurred in California, while two suspects reside in Dubai. The defendants face multiple charges including racketeering conspiracy and money laundering. The scheme, active from October 2023 to March 2025, began through online gaming friendships and involved sophisticated methods of theft like hacking and phishing. The lavish lifestyle funded by stolen funds included extravagant nightclub expenses and luxury cars. Notably, the enterprise continued operations even during arrests, with one suspect coordinating activities from pretrial detention. The investigation is ongoing.
Alabama Man Sentenced to 14 Months for Hacking SEC Account to Post False Bitcoin ETF Approval
Eric Council Jr., a 26-year-old from Alabama, was sentenced to 14 months in prison for hacking the SEC's social media account to post a false announcement about the approval of spot bitcoin ETFs. This occurred just before the SEC's official approval in January 2024, causing bitcoin prices to surge by over $1,000. He pleaded guilty to conspiracy to commit aggravated identity theft and access device fraud in February. U.S. Attorney Jeanine Ferris Pirro emphasized the harm his actions caused to market integrity, warning that such schemes threaten financial security and that perpetrators will face legal consequences.
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