The dramatic arrest of Celsius founder Alex Mashinsky on Thursday adds extra fuel to an already fiery debate over how to treat crypto – and whether 100-year–old laws are sufficient to regulate the likes of Binance and Coinbase.
The action by multiple federal regulators comes as the Securities and Exchange Commission’s alleged authority over crypto comes under judicial pressure, and lawmakers and regulators fight over what new legislation, if any, is needed for the sector.
Mashinsky, who was Celsius’ Chief Executive Officer until September after it filed for bankruptcy one year ago today, has pleaded not guilty to charges including wire fraud and securities fraud, and to manipulating the price of Celsius’ token CEL; his lawyers have told CoinDesk he “vehemently denies” the allegations.
The news came on the same day that a New York court ruled partially in favor of Ripple, saying that the XRP token wasn’t an investment contract when sold algorithmically on exchanges, and hence doesn’t fall under securities law.
That in turn could have implications for a suite of cases which the SEC has taken against Coinbase (COIN), Binance and Bittrex, arguing that they should have registered because tokens traded on those platforms, such as solana (SOL), polygon (MATIC) and cardano (ADA), fall under its purview.
It also comes in the week that lawmakers in Congress sought to again rejig laws to fit digital assets, with a bipartisan bill from Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) focused on giving extra crypto powers to the Commodity Futures Trading Commission (CFTC).
CEL v. XRP
Mashinsky has previously sought to distinguish its own case from that of Ripple, saying that CEL was registered with the SEC. In reality, he appears to have sought an exemption from registration by arguing the token was only used by accredited, financially knowledgeable investors.
That’s not the only difference between the cases. Ripple is formally separate from XRP, but Mashinsky may not have been so careful about links to his own token. According to the SEC filing, “Mashinsky wrote in an internal message that he wanted ‘to be able to talk about CEL just like public companies talk about their stock.’” It alleges that, after Celsius, Mashinsky was the second largest holder of…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
