Also today, secretly recorded videos of Kyle Roche — where he bragged about suing crypto firms and claimed juries are "idiots" — continue to haunt him.
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Editor's Note: Kim K Sets Yet Another Precedent
Molly Jane Zuckerman writes...
This time, it has nothing to do with fashion or reality TV or who she is dating.
Instead, as we reported yesterday, it has to do with the fact that she paid $1.26 million in penalties for shilling Ethereum Max to her millions of followers and not disclosing that it was a paid shill.
SEC Chair Gary Gensler's tweet about the case had over 11,000 likes and counting — it's clearly a pressing issue for Crypto Twitter. And most of the retweets of the SEC's Kim K case are along the lines of "well, I guess X, X, and X will also now be getting charged."
The SEC has had a steady stream of cases against ICOs and projects over the past few years, mainly over unregistered securities and the promotion of them to investors. This may be the largest case that they have ever charged, however; not large in terms of money ($1.26 million is nothing for a Kardashian), but large in terms of the coverage of such a public figure getting caught up in a disreputable crypto scheme.
And while this case may set a precedent for other celebrity crypto promoters, there is one, entirely separate angle that Messari's Ryan Selkis apparently couldn't help tweeting. As everyone else in the comments was obsessing over which celebrity crypto guru could get in trouble next, Selkis wrote: "When are you going to stop stealing billions of dollars from investors and approve a spot bitcoin ETF?" Just slightly off message!
Fallout from Kim K fine continues 😬
Twitter is reeling after Kim Kardashian's $1.26 million fine for promoting Ethereum Max on Instagram. Crypto skeptic Peter Schiff claimed the SEC is failing to take action against "real pumpers" — naming Michael Saylor as an example. MicroStrategy's executive chairman is having none of it, though. In reply, he tweeted: "Bitcoin is a commodity, not a security. Advocating a commodity is similar to promoting steel, aluminum, concrete, glass, or granite." Others are claiming that the penalty being paid by Kim K amounts to nothing more than a slap on the wrist. Lawyer Andrew M. Lieb told Newsweek that the settlement is "virtually meaningless" considering the reality TV star has an estimated net worth of $1.8 billion.
Don't call it insider trading, okay? 👀
Former OpenSea product manager Nate Chastain is asking a judge to stop prosecutors from using the phrase "insider trading" when describing the charges against him. He has been accused of "using confidential information about what NFTs were going to be featured on OpenSea's homepage for his personal financial gain." Chastain's legal team argues calling this insider trading is "inflammatory" and "prejudicial" — and argue NFTs "are neither securities nor commodities." A separate motion claims FBI agents asked for the password to Chastain's cell phone during a search of his home, despite telling the judge they wouldn't do this. The defendant now wants any evidence obtained from his device to be suppressed if the case goes to trial.
Kyle Roche was 'uniquely stupid' 😱
Secretly recorded videos of Kyle Roche — where he bragged about suing crypto firms and claimed juries are "idiots" — continue to haunt him. A judge has now declared that his comments were "uniquely stupid." The lawyer has now taken a step back from class action lawsuits launched by his law firm Roche Freedman. But Bitfinex and Tether, who is named in one of these cases, says this isn't enough — and that the law firm should be disqualified altogether. Roche Freedman's other founding partner, Velvel Freedman, is fighting this — and rejects claims that discovery from the trial would be passed on to rival crypto projects. Nonetheless, Freedman appeared to admit that his colleague's remarks were "incredibly stupid."
Mastercard to clamp down on crypto fraud 💳
Mastercard is launching a tool to help banks spot and cut off transactions from crypto exchanges that are susceptible to fraud, according to CNBC. The new system is called Crypto Secure — and apparently uses "sophisticated" artificial intelligence algorithms to gauge how risky interacting with a particular trading platform is. It comes over a year after Mastercard acquired CipherTrace. Banks and fellow card issuers are set to be given a color-coded dashboard that shows whether incoming transactions are low or high risk. While Crypto Secure won't turn down transactions on a merchant's behalf, it's designed to help them make informed decisions. This tool could boost adoption of crypto as a payment method among businesses.
'Discord is garbage,' Beeple declares 😡
Beeple has warned that the URLs to his Discord appear to have been hacked — meaning visitors are being redirected to a fraudulent site. The renowned NFT artist raised the alarm on Twitter, and warned that heading to the malicious page could lead to wallets being drained. He went on to describe Discord as "garbage." Those who frequent Beeple's Discord tend to be collectors of his work — and given how some of his NFTs have sold for tens of millions of dollars, that makes this hack particularly serious. In order to enter the Discord, users may have to connect their Ethereum wallet to prove that they own a piece of digital art that he created. Fraudsters may try to dupe collectors into signing a transaction that opens up their wallets.
