Thoughts tagged "law"

Short thoughts, notes, links, and musings by . RSS

taking psychic damage reading the lawsuit by Justin Sun’s Bit Global against Coinbase

COINBASE’S NONEXISTENT LISTING “STANDARDS” 62. While Coinbase claims to have made the decision to delist wBTC to adhere to the company’s “listing standards,” the truth is that Coinbase has virtually no standards for what can be listed at all. Around the same time that it was delisting wBTC, Coinbase has onboarded various “memecoins” which unlike wBTC have no inherent value other than demand created by their memetic potential as jokes. The decision to allow users to trade these memecoins makes clear that Coinbase did not delist wBTC because of any listing standard, but because Coinbase coveted wBTC’s market share and wanted it for itself. 63. On November 13, 2024, Coinbase announced that it was listing a memecoin called PEPE, named after a controversial picture of a cartoon frog which has been identified as a hate symbol and/or a “racist frog.” The coin is promoted to “Dank Meme Enjoyoors” with an official website that purports to perform an “Autism Test” on their computers to ensure that the user’s autism is over 9,000 before proceeding.17

i have to respect the argument that “memecoins... unlike wBTC have no inherent value other than demand created by their memetic potential as jokes”. your honor, wBTC’s lack of inherent value is for a different reason entirely

Celsius CEO Alex Mashinsky has entered a guilty plea in his criminal fraud trial, which was scheduled to begin in about two months. His Celsius cryptocurrency platform collapsed in July 2022 after it couldn't meet customer withdrawal demands. Its failure was particularly devastating because it had actively marketed itself to customers as safer than banks, regularly telling customers that "banks are not your friends". Many people believed that because Celsius was based in the US, it was carefully regulated and therefore safe.

Alex Mashinsky wearing a "banks are not your friends" t-shirt onstage at WebSummit 2021

Letters written to the judge in the bankruptcy case revealed the extent of the devastation to people around the world, some of whom had their entire life savings or retirement money on the platform. I published some excerpts back in July 2022.

These Celsius letters to the bankruptcy judge should be required reading for anyone who thinks that the only victims of crypto collapses are degens out there gambling on memecoins.

They thought they were insured from losses (and some believed Celsius had FDIC insurance like a bank would). Some of them only had money in stablecoins, which themselves make big promises about reliability. They believed US regulators wouldn't let this happen.

These letters are a big reason why I don't have a lot of patience for people who react to crypto scams with "they should have known better" or "they had it coming".

It's interesting to me that the Fifth Circuit only considered "control" at the smart contract level, and does not seem to consider the role of validators in their opinion. A substantial portion of ETH blocks are built with relays that censor transactions with OFAC-sanctioned contracts, and it seems to me there is now an open question as to whether validators that use non-censoring relays could be sanctioned directly.

The software codes here—the twenty Tornado Cash addresses for immutable smart contracts—are tools used in providing a service of pooling and mixing the deposited Ether prior to withdrawal. Indeed, the immutable smart contract provides a “service” only when an individual cryptocurrency owner makes the relevant input and withdrawal from the smart contract; at that point, and only at that point, the immutable smart contract mixes deposits, provides the depositor a withdrawal key, and, when provided with that key, sends the specified amount to the designated withdrawal account. In short, the immutable smart contract begins working only when prompted to do so by a deposit or entry of a key for withdrawal. More importantly, Tornado Cash, as defined by OFAC, does not own the services provided by the immutable smart contracts. A homeowner may own the right to trash-removal services and a client may own the right to legal services performed by a lawyer, but neither the homeowner nor the client owns the person performing the trash-removal services or the lawyer—for good reason. Similarly, Tornado Cash as an “entity” does not own the immutable smart contracts, separate and apart from any rights or benefits of the services performed by the immutable smart contracts.76 

(Not saying they should, just remarking on the fact that it seems to have gone completely unaddressed.)

Of course this was a concern already, but what with the Treasury focused on the Tornado Cash contracts, it was less central than I suspect it might be soon. This strategy would be somewhat in keeping with legal theories around other "malicious" code, where it's broadly speaking legal to write a devastating computer virus, but a whole lot less legal to run one.

The drumbeat of legal threats signals a potentially ominous trend for journalists during Trump’s second term in office. Litigation is costly and time-consuming. Most news organizations will look to settle rather than face months—more likely years—of discovery and depositions, plus significant legal fees.
“It is both conscious and unconscious. Journalists at smaller outlets know very well that the costs for their organization to defend themselves could mean bankruptcy. Even journalists at larger outlets don’t want to burden themselves or their employees with lawsuits. It puts another layer of influence into the journalistic process,” [Anne Champion] said.

Perhaps the CJR editors decided it went without saying, but it feels worth mentioning that — if Trump’s appointments go as planned — he will have the entire judicial branch to bring to bear on journalists, not just his wacky lawyer neighbor.

Legal letter follows complaints aimed at CBS News, the Washington Post, and the Daily Beast. 

FTX's Ryan Salame has returned to Twitter for the first time since FTX collapsed — hours after he was sentenced to 7.5 years in prison for his role in the FTX fraud and for his illegal campaign contributions 💀

Ryan Salame @rsalame7926 · 18m Yah terrible tweet, like the worst. I get it, I've cringed reading it nearly every day since I found out half of ftx customers money was somehow missing. Quote Ryan Salame @rsalame7926 · Nov 6, 2022 It’s so powerful learning who your friends are! Very excited to grow with them in the long term. It’s not hard to genuinely figure out who cares about customers and who doesn’t if you look past the insanity Ryan Salame @rsalame7926 · 39m Who should I do the first public interview with? Top vote wins. Ryan Salame @rsalame7926 · 2h hot damn, this is going to get interesting quickly Ryan Salame @rsalame7926 · Nov 6, 2022 It’s so powerful learning who your friends are! Very excited to grow with them in the long term. It’s not hard to genuinely figure out who cares about customers and who doesn’t if you look past the insanity Ryan Salame reposted SBF @SBF_FTX · Nov 6, 2022 1) A huge thank you to everyone who has supported us--we're excited to keep climbing together.  And especially to those who stay level headed during crazy times.  We deeply appreciate it.

Sam Bankman-Fried has filed his notice of appeal. This comes shortly after a request that he remain at MDC Brooklyn until his appeal has been fully briefed, to allow him better access to his counsel than he would have if moved to a federal penitentiary closer to his family in California.

Criminal Notice of Appeal - Form A NOTICE OF APPEAL United States District Court Southern District of New York DATE FILED: 4/11/2024 United States Docket No. 1:22-cr-00673-LAK Lewis A. Kaplan (District Court Judge) Samuel Bankman-Fried Notice is hereby given that Samuel Bankman-Fried appeals to the United States Court of Appeals for the Second Circuit from the judgment entered in this action on April 1, 2024 This appeal concerns: Conviction & Sentence Defendant found guilty by trial Offense occurred after November 1, 1987? Yes Date of sentence: March 28, 2024 Bail/Jail Disposition: Committed Appellant is represented by counsel? Yes If yes, provide the following information: Defendant's Counsel: Alexandra A.E. Shapiro Shapiro Arato Bach LLP Counsel's Address: 1140 Avenue of the Americas, 17th Floor, New York, NY 10036 Counsel's Phone: (212) 257-4881 Assistant U.S. Attorney: Nicolas Roos AUSA's Address: United States Attorney's Office, SDNY One Saint Andrew's Plaza, New York, New York 10007 AUSA's Phone: (212) 637-2421
Re: United States v. Samuel Bankman-Fried, 1:22 CR 673 (LAK) Dear Judge Kaplan: VIA ECF Honorable Lewis A. Kaplan United States District Judge Daniel Patrick Moynihan United States Courthouse 500 Pearl Street New York, NY 10007 Defendant Sam Bankman-Fried was sentenced on March 28, 2024, primarily to 25 years imprisonment, to be served, if possible, near his family’s home in California. (ECF 424). Mr. Bankman-Fried respectfully requests, pursuant to Rule 38(b)(2) of the Federal Rules of Criminal Procedure, that the Court supplement its recommendation to the Bureau of Prisons (“BOP”) by issuing the attached proposed order recommending that the BOP allow him to remain at the Metropolitan Detention Center in Brooklyn to facilitate access to his appellate counsel pending the filing of the briefs in his anticipated appeal. Rule 38(b)(2) provides that “[i]f the defendant is not released pending appeal, the court may recommend to the Attorney General that the defendant be confined near the place of the trial or appeal for a period reasonably necessary to permit the defendant to assist in preparing the appeal.” Fed. R. Cr. Proc. 38(b)(2). See e.g., United States v. Carl, No. 07-CR-29-P-S, 2008 WL 4615556 (D. Me. Oct. 16, 2008) (issuing similar order). The government informs us that they take no position on this request. Respectfully submitted, /s/ Marc L. Mukasey