Rodrigo
@RSSH273
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lawyer @CooleyLLP, prev. law + policy @paradigm
Joined August 2018
Favorite moment of argument so far:. SEC— “the tokens themselves are not a security”. Failla— “that’s what the folks in the back table think (Coinbase). And they are wondering why we are here”.
Oral arguments for the SEC's case against Coinbase are starting now!. Listen in here: (888) 363-4749, access code 5123533.
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The @SECGov just entered a proposed settlement in their case against Ishan Wahi, the former Coinbase employee, which is a complete surrender and shows the weakness in the SEC's theories about secondary market trading of crypto . This is a meaningful development for the industry.
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Gensler’s SEC wants to brute force crypto into an ill-fitting disclosure framework. In our latest piece, we show why this is a bad policy that fails to give crypto users and investors the info they need, or provide entrepreneurs w/ a viable path to comply.
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Today, we are excited to launch the Paradigm Policy Lab 🚀🧪. Led by @brendanpmalone and myself, the Lab will be a gathering place for academics, policy experts, lawyers, and technologists to study how to address the biggest policy challenges in crypto
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Paradigm filed an amicus brief in the SEC suit vs. Terra and Do Kwon. Paradigm was not an investor in Terra and our brief was filed in support of neither party’s motion—our only interest was to push back against the SEC’s continued attempt to expand its jurisdiction over crypto.
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Today @Paradigm and @a16zcrypto filed a joint amicus brief in @SECGov's case against @coinbase that demonstrates why the SEC’s approach is unsupported by case law and represents a significant and problematic expansion of its regulatory authority.
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SEC continues its carpet bombing campaign against crypto, issuing another Wells to Robinhood. You have to wonder whether at this point Gensler has bit off more than he can chew. Robinhood’s CLO, Dan Gallagher, is a former SEC commissioner appointed by Obama.
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In other words, the SEC completely folded when faced with a spirited defense pushing back on their claims that tokens trading in secondary markets were securities.
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The SEC is having a really hard time making a principled argument that tokens, which they admitted are not securities in and of themselves, should be regulated as securities when they trade.
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Founder of Prometheum is testifying @FinancialCmte hearing on digital assets today. He will argue he represents the “compliant path for crypto” and those asking for updated regs are just scofflaws. However, he is wrong on the law and his approach cannot work as advertised.
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Not in Austin, but can feel the excitement about the Prometheum launch all the way in Miami
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.@SECGov wants to regulate crypto through pronouncements made in proceedings w/ 3rd parties that are practically unchallengeable by those most affected. This is fundamentally unfair. Due process is not upheld when regulators look to score cheap points while the other team is off.
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Just finished recording w/ @laurashin and can confirm this will be a spicy one 🌶️🌶️🌶️.
🎙️ Interviewing Aaron Kaplan of @PrometheumInc and @RSSH273 of @paradigm tomorrow. What should I ask them? 👇🏻.
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Last week, @GaryGensler and @HesterPeirce issued two public statements that show radically different understandings of the application of securities law to crypto. While Comm'r Peirce has proven constructive and shown a willingness to improve regulatory shortcomings, Chairman.
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Today, Paradigm filed an amicus brief in SEC vs. Wahi that rejects the SEC’s expansive and unsupported application of securities laws to crypto secondary markets.
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Today Paradigm filed an amicus brief in support of Coinbase’s lawsuit that seeks to compel the SEC to respond to the company’s pending rulemaking petition.
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CoinBASED just filed suit against the SEC in the 3rd Circuit demanding the SEC respond to their rulemaking petition. CB argues that the SEC has already made up its mind to deny the petition, but is delaying responding formally to avoid judicial review of their decision.
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SEC now trying to argue that crypto is not a significant part of the economy for purposes of Major Question Doctrine. "With all due respect to the crypto industry, it does not meet the economic significance test. They are a rounding error" (e.g., "your size is not size"). "They.
Oral arguments for the SEC's case against Coinbase are starting now!. Listen in here: (888) 363-4749, access code 5123533.
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.@paradigm filed a brief in the suit @NewYorkStateAG brought against KuCoin, which alleged that tokens traded by KuCoin, including ETH, are securities.We highlight the unfairness of the OAG’s tactics, which deprive the most affected parties a chance to defend themselves.
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Much respect to @fund_defi, @millercwl and @amandatums. Their amicus brief clearly made an impact on Judge Failla, who has now cited it three times.
Favorite moment of argument so far:. SEC— “the tokens themselves are not a security”. Failla— “that’s what the folks in the back table think (Coinbase). And they are wondering why we are here”.
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1/ The CFTC’s complaint against Ooki DAO was a mistake that reveals a lack of understanding of crypto and continues the unfortunate trend of regulation by enforcement without the necessary industry guidance or the availability of real options for compliance.
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The Torres Doctrine: crypto assets are not securities in themselves, but can be sold as part of investment contracts that may qualify as securities transactions.
🚨 Needless to say, regulating digital assets through enforcement only had a dreadful day in court last week. In the wake of the resounding decision out of the SDNY Ripple case, @SECGov must reassess its continued assault on the crypto industry. My letter to Chair Gensler:
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Failla--I have "a real fear that the SEC's argument is sweeping too broad" and raises "the specter of collectibles or commodities being regulated as securities." Jokes about being faced with a securities class action about beanie babies 👶. SEC--when you are buying a collectible.
Oral arguments for the SEC's case against Coinbase are starting now!. Listen in here: (888) 363-4749, access code 5123533.
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Today's SEC settlement (i) doesnt admit any legal conclusions about the security status of tokens; (ii) doesnt require Wahi to pay any additional penalties (in addition to those due for separate criminal case); and (iii) includes immaterial injuction not to violate Section 10(b)
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"crypto proponents make not-unconvincing arguments about the securities laws that may convince the Court to narrow Howey". READ: crypto proponents are right on the law.
Crypto proponents make not-unconvincing arguments about the securities laws that may convince the Court to narrow the Howey test. This would not only allow crypto assets to be considered commodities, but also allow the securities laws to, effectively, be considered optional.
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Many DeFi front-ends are just sophisticated block explorers. We don’t think regulating those makes sense.
deleted top tweet & fixing typo: . this was at a DC DeFi demo event for lawmakers and policy wonks put on by Paradigm. it's not just SBF--VCs are begging for D.C. to regulate websites. it would create new biz models for them while killing competition. pulling up the ladder
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Oral arguments for the SEC's case against Coinbase are starting now!. Listen in here: (888) 363-4749, access code 5123533.
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Failla--"I have a lane, the SEC has a lane, Congress has a lane.". "I received an amicus brief from a sitting Congresswoman (Lummis) saying 'dont do this Failla.' I need to take that seriously".
Oral arguments for the SEC's case against Coinbase are starting now!. Listen in here: (888) 363-4749, access code 5123533.
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Suing good actors for failing to "register" while making it practically impossible to register amounts to a shadow ban of crypto. The SEC is supposed to protect investors, the market and facilitate capital formation. These actions dont do any of that. Basta!.
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Should be a fun conversation 🙃.
🎙️ Interviewing Aaron Kaplan of @PrometheumInc and @RSSH273 of @paradigm tomorrow. What should I ask them? 👇🏻.
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@GaryGensler @SECGov The proposal to REdefine "exchange" veers far outside the @SECGov's statutory jurisdiction & violates the Administrative Procedure Act, a key law that protects the American public against autocracy and bureaucratic whim—it should therefore be promptly withdraw.
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Gensler's speech was enraging for many reasons. Not only did he imply that hiring a lawyer is somehow evidence that a project should be regulated under the securities laws, but the whole event seemed designed to intimidate enforcement lawyers from representing crypto projects.
Remarkably, Gensler suggested that a crypto project retaining a lawyer is a security. That’s wrong as a matter of law, not to mention common sense. And it’s a not so subtle and outrageous threat to everyone’s right to consult with counsel.
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.@adamscochran - we agree that standing for crypto *visibly* to the outside world matters given the regulatory fight we are in. Here's what @paradigm has done in the last year: .-> amicus briefs in CFTC vs. Ooki (x2); SEC vs. Ripple; SEC vs. Wahi; TC lawsuits vs. OFAC (x2);.
@gakonst I like your tools and think you’re tech researchers and OS contributors are genuinely the best and make this space better. You all add immense value to this space. That doesn’t mean I can’t be disappointed that when crypto got a bad wrap your leadership scrubbed their brand.
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Great work by @TeamPOSA publishing the updated staking principles. Industry-led efforts at self-regulation are critical while we wait for new regulations . 🧪@paradigm Policy Lab 🧪 was proud to support this effort.
Today we are proud to announce our updated Staking Industry Principles & call on all builders, founders, & technologists in the staking space to align with them to enhance consumer protection, foster responsible innovation, & support the sustainable growth of PoS networks. 👇🧵.
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.@Paradigm filed an amicus brief in the lawsuit that @coincenter and others brought in FL to challenge the government’s sanctioning of @TornadoCash .
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Yesterday, @bankpolicy (BPI) filed a brief in the suit that Tornado Cash users brought against OFAC. The fact that BPI felt the need to go on record in this case is evidence of how threatened TradFi is by crypto. We are certainly entering the “. and then they fight you” stage.
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Fam - it may not feel like it right not, but promise you still need a lawyer.
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We are at a critical juncture in the national discourse about crypto policy. To address the regulatory gaps that have been created by fast developing technology, several serious and thoughtful legislative proposals have been recently put forward by @PatrickMcHenry,.
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Your other lawyer sent you 4 reminders about their Consensus happy hour, where they plan to invade your personal space under the guise of “catching up.” Oh, and have you met their new partner? They just joined from the SEC’s enforcement division and would just LOVE to chat. But
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As a reminder, Wahi, his brother, and a friend were charged by both the SEC and the DOJ for "insider trading" tokens based on confidential information about future listings that Wahi got from Coinbase.
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New rule: I will ask every associate staffed on my matters whether they have a crypto wallet. If they don’t, I will personally help them set one up and send them $100 worth of ETH.
My very controversial take: Lawyers representing crypto companies should learn the first thing about crypto.
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It is painfully obvious that NFT platforms should not be regulated as securities exchanges. Arguing that OpenSea and NYSE should be treated the same is absurd.
OpenSea has received a Wells notice from the SEC threatening to sue us because they believe NFTs on our platform are securities. We're shocked the SEC would make such a sweeping move against creators and artists. But we're ready to stand up and fight. Cryptocurrencies have long.
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Therefore, Prometheum’s ATS won’t be able to trade ANY TOKENS unless projects first register the tokens with SEC. And as we have pointed out, there are effectively no tokens registered with the SEC because the current regime is not a viable option.
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Judge Failla expressing some real skepticism about the SEC's allegations that Coinbase's staking program should be regulated as a security. "this seems the least like investment activity".
Oral arguments for the SEC's case against Coinbase are starting now!. Listen in here: (888) 363-4749, access code 5123533.
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Regardless of whether the rumors of the SEC doing a hard pivot and potentially approving an ETH ETF are true, it’s become EVIDENTLY CLEAR that the agency has totally failed at providing the market with any sense of predictability.
JUST IN: SEC informs exchanges it is leaning towards approving spot #Ethereum ETFs, Barrons reports.
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Thankful for the opportunity to testify this morning at @FinancialCmte hearing on “American Innovation and the Future of Digital Assets: Aligning the U.S. Securities Laws for the Digital Age”. My testimony will make three points:.
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Crypto policy runs the risk of becoming increasingly partisan. it does not need to be so. While crypto has become a favorite punching bag of some progressives, decentralization actually aligns with progressive values . h/t to @sheila_warren and @JBSDC for having the courage to.
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Seeing some great roles open for lawyers that want to join crypto projects. Get at me if you want to explore new opportunities at the forefront of tech and regulation. .
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Can someone please fax this to Aaron Kaplan from @PrometheumInc? . he's the only "crypto" CEO without a twitter handle.
#NEW: Chairman @PatrickMcHenry led Republicans on the Financial Services Committee in letters to @FINRA and @SECGov regarding the shady approval of Prometheum as the only Special Purpose Broker-Dealer for digital assets. 👇 Read more 🔗.
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The SEC's attempt to regulate crypto is fundamentally flawed in (at least) 2 ways:. 1) it fails to achieve the goal of "investor protection"; and. 2) SEC leadership is politically motivated to bring enforcement actions they will not have to see through.
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Friendtech renaming "shares" to "keys" is a good move since it better describes the utility of the tokens . But many of the critiques miss the more important point that calling something a "share" doesn't make it a security.
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Coinbase--For the sale of a token to be a securities transaction, there has to be a statement by the promoter that creates an enforceable promise. That is the irreducible minimum of what can comprise an investment contract.
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Bittrex settlement, like Wahi settlement before it, is effectively a total capitulation by the SEC that makes you wonder why they even brought the case in the first place. For context, SEC sued Bittrex AFTER a 6 yr investigation and once the company had already entered bankruptcy.
Today we announced that crypto asset trading platform Bittrex Inc. and its co-founder and former CEO, William Shihara, agreed to settle charges that they operated an unregistered national securities exchange, broker, and clearing agency.
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I worry that crypto is not out of the woods yet. Gensler strikes me as someone who may file a ton of lawsuits on his way out in a desperate attempt to entrench his flawed policies. Remember how Clayton sued Ripple in his very last day as Chair?.
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Yesterday, the SEC announced the latest enforcement action against an NFT project - the social club @Flyfishclub . As Commissioners Peirce and Uyeda point out in their eloquent dissent titled "Omakase," the Flyfish settlement action "is just the latest dish that undermines trust
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As our comment letter highlights, the SEC’s rulemaking proposal veers far outside its statutory jurisdiction & violates the Administrative Procedure Act, a key law that protects the American public against autocracy and bureaucratic whim—it should therefore be promptly withdraw.
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We hope that @FinancialCmte will see through Prometheus’ mischaracterizations of the law and understand they do not represent a viable path for crypto compliance.
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@RyanSAdams @PrometheumInc @RyanSAdams If you have Aaron on, please also include a REAL securities lawyer that can fact check him on his self-serving allegations.
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In an attempt to make sense of the SEC's approach to crypto regulation, @brendanpmalone and I analyzed each of the SEC's enforcement actions relating to crypto. While we're still parsing the data, a few trends were easy to point out.
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Today, a broad group of state AGs along with @fund_defi filed a lawsuit against the SEC over the agency's failed crypto policies. This first-of-its-kind lawsuit serves a bookend to @GaryGensler 's disastrous tenure at the SEC 👋👋.
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Gensler's overeagerness and belief that regulators are "not pushing hard enough if they arent losing cases" is going to end up not only with big @SECGov defeats, but ultimately unravel the administrative state. I'm eagerly awaiting this outcome.
A must watch. Former SEC Chairman Jay Clayton describes the new and deeply un-American ethos of the @SECGov under @GaryGensler — if we're not losing cases, we aren't suing enough businesses. This is a total abuse of power.
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Since their approval, they have described themselves as the only compliant alternative for crypto asset trading in an industry full of willful lawbreakers. E.g., the cringe interview on @Unchained_pod that is rife with misstatements of law.
@laurashin This episode has a bunch of inaccuracies and is at some points misleading. @laurashin you should consider having someone else on to correct the record. This “securities lawyer” can’t even explain basic concepts like rule 144 🤡 and is only interested in talking his own book.
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While the testimony spends a lot of effort distancing Prometheum from its Chinese investors, it fails to mention a CRITICAL fact:. an ATS cannot facilitate trading for any unregistered securities not offered under a valid exemption—which is exactly what they allege tokens are.
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To be clear — the law hasn’t changed since Gensler argued in front of Congress that there was no regulatory framework for crypto secondary markets. Only thing that changed was Gensler’s political calculus.
Almost feeling sorry for @GaryGensler. Must get so tiring talking out of both sides of your mouth. May, 2021: "exchanges trading in these crypto assets do not have a regulatory framework either at the SEC, or our sister agency, the CFTC". June, 2023: "they know how register"
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.@Paradigm was happy to support this effort by @fund_defi to challenge a troll’s patent being used to sue Maker and Compound. The crypto ecosystem will unite to ensure patent trolls don’t see suing DeFi protocols as a new business line . H/t @amandatums, @millercwl and.
@fund_defi has petitioned the US Patent & Trademark Office for cancellation of a patent claiming invention of oracle-like tech and being used to sue MakerDAO and Compound. We are excited to talk about this project we have been working on the past few months👇
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In crypto, Jan 20 is going to feel like the day after prohibition ended.
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@laurashin This episode has a bunch of inaccuracies and is at some points misleading. @laurashin you should consider having someone else on to correct the record. This “securities lawyer” can’t even explain basic concepts like rule 144 🤡 and is only interested in talking his own book.
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Back on this point, with the Coinbase lawyers this time. Coinbase--"the tokens themselves are not securities; this is common ground". --"but, even though the assets themselves are not securities, transactions in tokens may be investment contracts and therefore securities.".
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Excited to participate in @CoinDesk's #StateofCrypto2023 to discuss the crypto enforcement landscape . Reach out if you're in DC and want to chat crypto law.
.@paradigm's @RSSH273 role as special counsel places him at the forefront of crypto's legal and regulatory landscape. We're excited to have him join us at #StateofCrypto2023 as a speaker. Check out our full lineup: 🔗
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Feels like we are about to witness the great foundation unwind as more and more crypto activity comes back onshore.
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While its clear that we will have a much more crypto-friendly SEC starting next week, the private plaintiffs and class action lawyers will continue to be a big liability for crypto projects. It doesn't matter that the Gary is out -- the law hasn't changed, and the private.
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