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Coinbase asks court to toss SEC suit, former FTX compliance officer accused of paying off insiders

Coinbase asks court to toss SEC suit, former FTX compliance officer accused of paying off insiders
Brian Armstrong's Coinbase keeps going toe to toe with the SEC.

Happy Thursday!

Coinbase is pushing back against the SEC’s lawsuit. In the TradFi-meets-blockchain news, Mastercard is making strides in blockchain with the test launch of its Multi-Token Network. The FTX drama continues to unfold as the bankrupt exchange’s former compliance officer is facing legal action regarding alleged insider payments. Meanwhile, MicroStrategy adds more Bitcoin to its holdings. Lastly, ARK Invest is trying to up its position in the race for a Bitcoin ETF.

Let’s delve into the details of each story.

Coinbase asks court to toss SEC suit

Coinbase is challenging a lawsuit from the Securities and Exchange Commission, arguing in a New York federal court that the digital assets it lists aren’t “investment contracts” and hence, not securities subject to SEC regulation.

According to Coinbase, any investment contract related to these tokens occurred earlier between token creators and initial buyers. The company cited a “fair notice defense,” suggesting the government can’t prosecute without adequately informing about the relevant law. Coinbase referenced SEC Chairman Gary Gensler’s previous comments indicating a lack of legal authority to regulate crypto prior to 2021, and the SEC’s acknowledgment of a “regulatory gap” in the field.

A ruling on Coinbase’s dismissal request is expected by late 2023, but the case is more likely to be decided at the summary judgement stage in 2024, reports Fortune.

MicroStrategy keeps on ‘stacking sats’

Bitcoin maximalist Michael Saylor’s software company MicroStrategy, the biggest publicly-listed holder of Bitcoin, acquired 12,333 Bitcoin for approximately $347.0 million, according to an announcement from the company. The average price at which these Bitcoins were purchased was $28,136 per Bitcoin.

This recent acquisition adds to MicroStrategy’s existing holdings, bringing their total Bitcoin reserves to 152,333 Bitcoin. The company bought them at an average cost of $29,668 per Bitcoin, with a cumulative investment of around $4.52 billion.

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MasterCard wants devs to jump on its permissioned blockchain

Mastercard is getting more involved in blockchain technology by launching a test version of its Multi-Token Network (MTN), reports Fortune.

The goal is to attract developers to build on Mastercard’s “Ethereum-based” blockchain, controlled and maintained by the payments giant. MTN will be a platform for testing pilot applications with financial institutions, fintech companies, and central banks in the United Kingdom during the summer.

Former FTX compliance officer accused of paying off insiders

FTX is facing a lawsuit from its own lawyers, reports CoinDesk.

The legal action accuses the company’s former compliance officer, Daniel Friedberg, of paying off insiders who had knowledge of alleged criminal activities by FTX executives.

The complaint alleges that Friedberg acted as a “fixer” and used large sums of money to silence potential whistleblowers who threatened to expose the exchange’s misuse of user funds.

The lawsuit charges Friedberg with various offences, including legal malpractice, breach of fiduciary duty, corporate waste, and fraudulent transfers.

“Friedberg had a duty to place the interests of Alameda, FTX…above the interests of himself and the other FTX insiders who were indiscriminately siphoning funds from those entities,” FTX lawyers argued.

ARK Invest enhances Bitcoin ETF filing to compete with BlackRock

ARK Invest adds surveillance-sharing agreement to SEC filing for Bitcoin ETF, aiming to gain an edge in the race with BlackRock, says Decrypt.

The agreement involves sharing information to prevent market manipulation. ARK’s previous ETF application was rejected due to concerns over market manipulation. The SEC recently approved the first leveraged Bitcoin futures ETF.

What we’re reading around the web:

Azuki ‘Elementals’ mint mishap highlights the fragile state of the NFT market CoinDesk

Julius Baer heads to Dubai in first expansion of crypto ambitions beyond Switzerland Bloomberg

Why did Citadel-backed EDX list Bitcoin, Ethereum, Litecoin, and Bitcoin Cash?Decrypt