Larry Florio
@larryflorio
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gc @1kxnetwork // things @thing3_xyz // tweeting into the void
Joined February 2009
@DOGE Can you share links to the studies or at least their proposals? Even valid and important research and sound silly if gibbed down to a bullet. eg “study to see if moldy bread cures numerous fatal illnesses” is a good gist for the discovery of penicillin.
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BREAKING: CRA passes 70-27 with 19 Dems joining!. Bye bye broker rule!. Enormous victory for software developers, DeFi, and crypto in general!!.
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Once again, it looks like the current @SECGov regime is playing favorites & picking winners, whispering guidance to select companies instead of publicly sharing it. We deserve to know what they're saying, so I submitted 9 FOIA requests on their actions related to SAB 121. 🧵 /1.
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Another day, another nice court citation for crypto!. Today, the class action lawsuit against @Uniswap and others was dismissed. Why? In part because misuse of software doesn't itself create liability for the devs
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Very excited to share that I’ve joined @1kxnetwork as General Counsel, where I’ll be working with and supporting some of the most innovative projects in crypto while continuing to advocate for tech-compatible policies and creating public goods /1.
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Some of you know I’m pretty committed to the development of web3 and new ways of coordinating. In that spirit, I want share the latest version of my open source DAO Contributor Agreement - I encourage everyone to use, fork, pull or otherwise improve this.
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@josephdelong @laurashin Because there’s a few immediate repercussions. Every crypto exchange is an unlicensed securities exchange. Including Coinbase, prior to its IPO. That means that either the SEC permitted violating the SEC’s own rules to go public, or the law is actually subjective. He loses either.
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Ok, I’m sorry, but did the SEC just claim jurisdiction over any activities that use the internet??. Is there any precedent for using this as a jurisdictional basis? Not a rhetorical question, I seriously want to/need to know
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Judge Failla just announced that she will issue an oral decision on defendants' motion to dismiss in US v. Storm this afternoon at 4:30PM ET. This is the US criminal action against the creators of Tornado Cash. This could be a hugely important decision for all tech companies 🧵.
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If your lawyer thinks their templates and forms are some sort of secret sauce or trade secret, you might want to evaluate other options. More open source lawyering coming this week.
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It's days like today, I'm really glad I didn't go on @Unchained_pod and insist over & over to @laurashin and @RSSH273 that everyone is insane and the ONLY reasonable conclusion is that if there's a securities tx for a token, then the token is itself a security & will be forever.
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The Fifth Circuit today held that the Tornado Cash smart contracts are not “property” of a foreign national or entity. Huge deal for lots of reasons, but not least of which is that we’re one step closer to legal recognition of digital public infrastructure!. “Perhaps Congress.
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SEC Releases New Crypto Disclosure Guidelines. The SEC’s Division of Corp Finance just dropped clarity on crypto asset securities. Key focus: investor protection via detailed biz descriptions, risk factors, and technical specs. 🧵.
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Adding @MilbankLaw to the list of firms I’ll never hire.
This has gotta stop. Abusing government power to attack an industry then landing at a white-shoe law firm where you pitch clients at cocktail receptions w/ jetliner views saying, "I can protect you from the guys like me in government, who are doing to you what I did to crypto."
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The SEC should not be crypto’s primary regulator. The SEC regulates securities. Crypto is not primarily securities. The CFTC should not be crypto’s primary regulator. The CFTC regulates derivatives. Crypto is not primarily derivatives.
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I'm sorry did I just listen to an SEC lawyer say in federal court that federal securities laws aren't premised on being able to be complied with?. The @coinbase oral argument is wild today.
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🚨 SEC Clarifies Stance on PoW Mining . The SEC’s CorpFin division stated that proof-of-work mining (self-mining or pool participation) does not qualify as securities transactions under the Howey Test. No registration required for these activities. 🧵.
HOT OFF THE PRESS. SEC statement that most PoW mining is not subject to securities law.
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I’m only about 40 pages through the 434 page 💀 custody rule release put out by the @SECGov today, but a few initial thoughts . (tldr this is a huge change and a ton of even medium sized managers are going to struggle, as will major players like Carta).
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if you're a lawyer active in crypto and you aren't trying things without clear precedent, not sure you're doing it right.
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Open Source isn't just for devs. In one of the shadowy cryptolawyer chats, it came up that some states (eg Nevada) don't have the same minority shareholder rights that Delaware does. One example of this is a fairness review. The tldr on that is that transactions involving.
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another banger:. the court asserting that the SEC seems focused on picking off individual crypto industry participants and not providing rulemaking or clear guidance.
I'm sorry did I just listen to an SEC lawyer say in federal court that federal securities laws aren't premised on being able to be complied with?. The @coinbase oral argument is wild today.
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I’ve heard that @CFTC had people at @consensus2024 taking pictures of booths and people’s name badges. Can anyone confirm? Or maybe @CFTC will deny?.
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A big problem with the SEC's position in the Galois Capital settlement order is that the custody violation is for tokens "offered & sold as securities". Like I mentioned with @laurashin last week, this is a shift from "tokens are securites". Why does it matter here? 🧵.
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Under the US Constitution, even the very most guilty perpetrators of the most hideous, vile acts imaginable are entitled to a lawyer. But apparently a lawyer representing VC backed startups isn’t even entitled to a bank account anymore. Who’s being protected?.
Just got our second straight bank rejection for our law firm for having crypto clients. These companies are all VC backed and the money is coming from their bank and going back to our bank. Our clients have it so much worse than this too. Going on my villain arc. Fuck the banks.
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It is with a bittersweet mix of emotions that I wanted to let you all know that today is my last day at @SyndicateDAO . /1.
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Congress: Chair Gensler, do believe this animal is a dog or a goldfish?. Gensler: I believe the answer is clear, but you don't want me opining on any particular animal. Congress: We actually want exactly that. Gensler: We know that dogs need to come into compliance. 🐶🐟😵💫.
Intermediaries for investment contracts are required to comply with securities laws & register with @SECGov. Instead, many crypto platforms are contending that their investment contracts are something else. The law cares about what something actually is, not what you call it.
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Had a great time discussing the SEC action against Galois Capital and CFTC action against Uniswap Labs with @laurashin this week. We unfortunately continue with the ongoing attempts to shadowban digital assets in the US, but no one is going away.
🚨 Uniswap and Galois Capital settle with regulators, but what does this mean for the future of DeFi? @LarryFlorio breaks down: . 🕵️ The SEC shifting language from “crypto asset securities”.⚖️ Is the SEC making compliance nearly impossible? .
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Remember that time crypto got useful guidance from a US regulatory body addressing fundamental & long-standing questions instead of non-admission settlements and existential crises outside of the normal rule-making process?. No, neither do I.
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Honored to be participating in the next SEC crypto roundtable. This one is focused on custody - a critical topic for all participants in the sector. Crypto is unique among asset classes, with different market dynamics & risks than trad assets. Regs should treat it as such.
The SEC's Crypto Task Force announced the agenda and panelists for its April 25 roundtable. Additional details and link to register for in-person attendance:
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One of the major lessons I remember from school is that if you are constantly saying something is obvious, clear, accepted as part of your premise, then it’s probably none of those things .
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DAOs to the left of me, corporations to the right and here I am, stuck in the middle with you.
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The Gensler regime considering enforcement against OpenSea in 2024 really just undermines their own narrative more than anything. You’re going after a project whose business model hasn’t changed in 4+ years? Who are you protecting? Why didn’t they deserve “protection” in 2021?.
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🧵 Big week in crypto legal news! . Let’s dive in:. First, the OCC clarified that national banks can now engage in crypto activities like custody, stablecoin ops, and use of blockchain tech without needing prior regulatory approval. A major shift easing past restrictions.
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The 2nd Circuit issued an opinion on the lawsuit against @Uniswap @UniswapFND (and some investors). some 🔥 analysis in here. DEX swaps "are more analogous to overarching user agreements than to securities transactions conducted by traditional broker dealers". there's more 👇.
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@josephdelong @laurashin Why on earth would he ever want to deal with THAT many questions and all the permutations of them when he can just not answer and keep picking winners and loses while pushing the whole industry offshore.
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With the timeline going wild over * waves hands* all this, I thought it was a good opportunity for another open source contract snippet. Today’s commit: a contract provision that expressly prohibits a service provider from sniping, frontrunning etc.
I’m committing to open sourcing at least one thing each month this year. Some may be full templates, others might be snippets, but it’ll be at least once a month. Ask your lawyers — if they’re making money off open source software, why aren’t they also open sourcing.
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The US wasted 4 years on a bad faith assault against innovation. We're finally starting to course correct, but it will take time. I made a summary video of what those years of crypto regulation in the US amounted to
We're tearing down Garry Gensler's corrupt legacy in real-time. Banks will now be able to custody crypto.
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I had a conversation earlier with some people about this action. These 11th hour actions are *never* a sign of good faith or fair dealing. My POV on how the Helium network(s) run is that if you have a hotspot, you're basically being paid in tokens to provide a service. It's.
as some of you have seen, the SEC has decided to sue us and @helium literally as they are walking out of the door. the last gasp of a failed crusade against crypto companies in the US. naturally, none of the claims hold any water at all. the SEC has wasted two years of our time.
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Forever Stamps may be one of the earliest utility tokens, but how would they fare under a securities analysis?. Stray musings in a brief 🧵.
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EU regulators just made a CRUCIAL call on blockchain miners/validators under MiCA – excluding them from market abuse oversight. Why? Forcing them to police transactions would break blockchain’s neutral infrastructure. BIG win for credible neutrality 🧵.
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I’ve heard Teresa Goody Guillen’s name floated by a few people recently for SEC chair and I’ve had the pleasure of working with her and her team. She would be an incredible choice for chair. Practical and hard charging, she’d be my top pick. Believe it or not, I don’t want a.
SCOOP: Teresa Goody Guillén, a former @SECGov lawyer who now represents crypto firms, is among the candidates President-elect Trump is considering to lead the agency, people familiar with the situation said. @christinenews reports.
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Don’t buy Ladan’s crocodile tears apology tour for one second. She spent years pushing this industry offshore and attacking people who even then just wanted to find a way to comply despite the system being rigged against them . No way should she now be financially rewarded for.
🚨NEW: Former @SECGov enforcement lawyer Ladan Stewart talks about her experience being on both sides of the battle between the agency and the #crypto industry. “When you come to this side and you realize that there are people who really want to find a way to work with
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The other day, someone asked me what type of law cryptolaw is most like. I said all of them, plus some systems theory, behavioral economics, computer science, and group therapy.
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"Think about a football game without referees. Teams, without fear of penalties, start to break the rules.". Sorry @GaryGensler, but in 1999 the NFL rules changed to let teams challenge the refs when there as a bad call. 🧵.
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Custody isn’t the most exciting topic in crypto, but it’s critically important. We need regulations that recognize crypto’s unique capabilities and risks. Self-custody is fundamental to crypto . Remember - not your keys, not your coins.
1/ Today’s SEC Roundtable, "Know Your Custodian: Key Considerations for Crypto Custody," will feature discussions on the future of crypto custody, compliance, and investor protection. Several BA members will contribute their deep industry expertise to the conversation:. Jason.
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The @SECGov just issued a major clarification on meme coins 👀. tl;dr most memecoins aren’t securities under federal law. What does that mean?.➡️ No registration required. ➡️ No investor protections under securities laws. But there’s a catch (thread👇).
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With the current SEC regime, you're damned if you do, damned if you don't. If you run a token through a Broker-Dealer just in case it could be deemed a security, you are effectively stipulating that you believe it's a security and the SEC will refer to that and you lose if you.
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‘Twas the day before Xmas & all over Twitter.Some ppl were happy but most were obv bitter.Seed phrases were stored in [redacted] with care.In hopes that their bags a hacker won’t snare.
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I’m going to start saying this to opposing counsel - you are involved in nothing creative or beautiful, wild or romantic.
. those cogs in the regulatory state who go to work each day with dead eyes, and weak hearts. Their soul knows that they are involved in nothing creative or beautiful. They are involved in nothing wild or romantic. But many of you are. Embrace it, cherish it, and build on it. .
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I’m committing to open sourcing at least one thing each month this year. Some may be full templates, others might be snippets, but it’ll be at least once a month. Ask your lawyers — if they’re making money off open source software, why aren’t they also open sourcing.
Open Source isn't just for devs. In one of the shadowy cryptolawyer chats, it came up that some states (eg Nevada) don't have the same minority shareholder rights that Delaware does. One example of this is a fairness review. The tldr on that is that transactions involving.
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I get asked a lot who I think the primary US regulator for crypto should be. It should be the FTC. Consumer protection, anti fraud and establishment of market practices are all the (non-securities, non-derivative) digital asset industry needs.
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He’s back!! So excited that @JacobRobinsonJD is kicking Law of Code off again, and honored to jam with him on the recent SEC stablecoin guidance.
Thrilled to be restarting the Law of Code podcast this week — with less hair but just as great guests (like @larryflorio). The first episode covers the SEC's Statement on Stablecoins. Here's a snippet:
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Macadamia nuts are the best nuts in the world. Pistachios are a close second. People in crypto are third.
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icymi there's been a lot of talk lately about the DCCPA and whether the US should be regulating the front ends (apps & interfaces) that interact w blockchain protocols. I think part of the problem with that approach is that not all front ends are the same. let's 🏊♂️ out on a 🧵.
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the commissioner that proposed a decentralization safe harbor for projects AND posted the proposal on github is now leading the charge on US crypto regs. let that sink in.
*SEC LAUNCHES CRYPTO TASK FORCE LED BY COMMISSIONER PEIRCE. *SEC CRYPTO TASK TO ESTABLISH CLEAR REGULATORY FRAMEWORK.
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Completely agree. LLCs are already - by design - incredibly flexible. They're basically legal entity clay, you can mold them more or less however you want. There are plenty of use cases where I don't think LLCs are a good idea for DAOs, but they def have their moments.
While passed with good intentions, these DAO LLCs are just “opinionated” LLCs that create additional burdens with no apparent benefits. They have also created confusion among non-lawyers (and tbh, many lawyers, too) as to whether standard entity types can work for DAOs.
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Gatekeeping for the sake of gatekeeping in ladder-pulling BS. Case in point: giving someone free stock in the US is considered a securities offering & requires a registration statement or an exemption (like being accredited). I’m sorry but this is nonsense & protects no one.
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your outie knows that SAFE means the YC form and not just any pile of word salad with “Simple Agreement for Future Equity” at the top
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Sorry if I seem evasive when you ask me what we’re building at @SyndicateDAO but tbh when you’re redefining the future of capital it’s hard to tl;dr.
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Huge win for crypto AND the rule of law 🚀 . The SEC can’t just yolo lawsuits at people trying to act in good faith with black box reasoning.
We just won our petition for a writ of mandamus at the Third Circuit. Rebuking @SECGov for its order denying our rulemaking petition, the Court held that the "SEC’s order was conclusory and insufficiently reasoned, and thus arbitrary and capricious, we grant Coinbase’s petition.
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Had such a great time talking with @JacobRobinsonJD last week about @delphia @thing3_xyz @LeXpunK_Army and why there's nowhere as fun to practice law as here in crypto & web3.
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So now we have an SEC rule that the SEC itself likes so little that they are whispering to "preferred vendors" how to avoid needing to comply with it This is not how industries are supposed to be regulated /4.
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@josephdelong @laurashin Tons of companies hold ETH, including public ones. And including Fidelity. They’d all take a hit and so would their investors. Gensler loses credibility on his message of investor protection (again).
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While I’m not yet sharing where this next adventure begins, I will say that I’ve had Sinatra stuck in my head a lot lately. LFG!. /fin.
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Another day, another crypto law update from DC. Earlier today Acting SEC Chair Uyeda made a speech mostly focused on Treasury markets, but with one major takeaway for crypto. Removal of the shadowban of crypto protocols in the new ATS rules. Uyeda says it best himself: "it was a.
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If you want to know what it looks like when a court is frustrated with a regulator, it looks like this. The Voyager decision from SDNY Judge Wiles is packed with lines like this.
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Incredibly disappointing that @JoeBiden vetoed the repeal of this nonsensical, anti-business, anti-future, anti-average person rule over BIPARTISAN support. Do people realize how rare bipartisan support on an issue is these days? That’s how bad this rule is.
1/ Today, despite bipartisan support, Pres Biden vetoed the repeal of SAB 121, the SEC’s punitive, anti-crypto accounting guidelines. We’re disappointed that the admin chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121.
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I look forward to receiving responses to the 9 Freedom of Information Act requests I submitted to the SEC, and sharing that information with others. The SEC has forgotten how to build in the open, but we'll remind them. /6.
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SAB 121 is a rule (the SEC says it's just a casual suggestion, but @usgaolegal found that it's a rule that illegally violated the rulemkaing process - that makes it very hard for public companies to hold crypto for clients. This is bad for everyone. /2.
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In one of the mysterious cryptolawyer chats someone asked me how I would fix token warrants and crypto fundraising. Here’s what I said:. ezpz, just fix accredited investor rules, pass comprehensive crypto legislation and tax reform that clarifies the tax treatment of airdrops,.
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giving the CFTC jurisdiction over spot crypto markets is like saying they should regulate butcher shops or grocery stores because you buy and sell commodities there.
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Not really a spicy take but expect to see more M&A in crypto over the next 12-18 months than we’ve probably seen in the last 5+ years. Some stuff making me think this 🧵.
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CMV: Any US lawyer willing to write a definitive opinion on the security status of a token in this environment is not someone you want writing that opinion.
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A special thanks to @SH_Brennan @xethalis @MarcGoldich and @_DanLeonardo for their input and suggestions on the requests. Advocacy for innovation and defense against favoritism is always best when people work together to remind the government that this is a public state. /F.
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Anyone that says they’re tech neutral doesn’t understand the tech and isn’t neutral. If I find out any of my outside counsel characterizes themselves as such that’s when they’ll permanently become my former outside counsel.
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The SEC has voluntarily dismissed its appeal in the dealer rule lawsuit – a big win for the crypto industry thanks to the efforts of @BlockchainAssn & @CryptoFreedomTX. A few takeaways:.- Courts remain critical checks on regulatory overreach .- United industry pushback WORKS.-.
1/ Today marks a complete victory for us – and the broader industry – in our lawsuit against the SEC over the dealer rule. The SEC voluntarily dismissed its appeal of the lawsuit over the dealer rule brought by us and @CryptoFreedomTX.
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seeing a lot of people saying that the SEC's Wells notice (this means the SEC plans on bringing an enforcement action) against @Uniswap means that the war on DeFi is starting. have you not been paying attention for the past 3 years? the war on DeFi alwayshasbeen.gif.
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@josephdelong @laurashin It also means that any twitter personality, podcast host, blogger that’s been touting ETH over the years & is even holding ETH at the same time might be violating laws around securities research or other B-D regs.
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Not the biggest headline fight, but a huge deal here. An SEC rule that has to do with how companies need to account for crypto on their books was just overturned by Congress! . This is a big symbolic victory. here's a pro-crypto summary for context:
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I sometimes become a bit reflective on Sunday nights as I get ready for the week ahead. Where are we? Where are we going? What can we do to make that an easier path, or at least a more effective one? . No good answers here, but they’re all probably securities.
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What are some groups trying to bring more BIPOC and women into tech and web3? . Asking for literally anyone trying to build a better world.
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If the SEC won't willingly regulate in the open, it's on us to force their hand. If there are ways of avoiding the draconian requirements of SAB 121, shouldn't everyone know? The SEC has plenty of longstanding ways of sharing this sort of guidance, they just don't want to. /5.
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endless shoutouts to @lex_node @SH_Brennan and @LeXpunK_Army for the incredible amount of work that was put into the @_SEAL_Org Whitehat Safe Harbor. there was no way this ships without their long hours of work. crypto is safer thanks to you 🫡.
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it’s a frustrating moment when you realize the top 5 most annoying deals you’ve worked on have all involved the same law firm.
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A self-regulatory organization for crypto (like FINRA and the NFA) with multi-agency delegation to avoid SEC-CFTC turf wars has been on my policy vision board for years. Not to say this is that, but dare to dream.
BREAKING: Trump economic transition team members tell @FoxBusiness there will be some restructuring of the relationship between @SECGov and @CFTC that clears up ambiguities in the enforcement of stable-coin regs and regs involving margin requirements for futures. Yes inside.
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I’ve said it before but it begs repeating, accredited investor rules are in dire need of reform. The net worth test is one of the most ridiculously gameable standards and no one even talks about it. We need Canada-style % thresholds and/or a qualifying test.
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Today @1kxnetwork co-signed this letter letter urging Congress to overturn the misguided DeFi broker rule. This rule misclassifies non-custodial wallets as “brokers,” threatening innovation, privacy, and U.S. leadership in decentralized finance. Let’s break it down. 🧵.
1/ It’s time for Congress to repeal the DeFi-killing broker rule, passed in the final days of the Biden administration – here’s what we’re doing about it and why this rule is so harmful. 🧵.
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What will be the first DAO to engage with a major sports franchise?. I don't mean a centralized company that offers crypto-related services, I mean the decentralized community. The PEOPLE. We're at the moment. Who wants to make history?. LFG 🌕.
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SEC RWA/Tokenization Roundtable part 2. "just bc it has endured for a long time doesn't mean its legitimate" - Angela Walch. I agree, Angela. Just because legacy market structure has been around for a while doesn't mean it's the only valid option.
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the law isn't static, it isn't immutable. anyone who think their present understanding of the law is the way things are and always will be maybe needs a hard refresh to clear their cache. life changes, technology changes, modes of interactions change. society leads the law.
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@josephdelong @laurashin He’d need to discuss whether ETH has always been a security, or if it became one. Was it the ICO? The Merge? Shappella?. Regardless of the moment, it means that something can BECOME a security. Begs the question of whether the opposite can happen too.
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Big news! @coinbase and @SECGov both dialing their lawsuits with prejudice!. Dismissing with prejudice means that a future SEC can’t bring against on these grounds (absent a violation in the future). @iampaulgrewal and his team better be taking a well deserved victory lap.
[🌲] COINBASE AND SEC DISMISS LAWSUIT WITH PREJUDICE: FILING.
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Summary of the SEC’s argument in the order against Galois Capital today:. FTX Trading wasn’t a Qualified Custodian, but we won’t tell you where it failed the QC definition. Some tokens where “offered and sold” as securities, but we won’t tell you which, when, or how. 🤔🤷♂️.
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if you're in favor of innovation & against regulation by enforcement, you should 100% be on #TeamCoinbase today. if you think Coinbase hasn't be preparing for this day, get ready for a surprise. $4.4B in cash as of 12/31. LFG.
1/ Today Coinbase received a Wells notice from the SEC focused on staking and asset listings. A Wells notice typically precedes an enforcement action.
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If you didn't think the Gensler regime at the SEC was acting in bad faith, this next level absurdity probably won't convince you . But if this doesn't convince you, then I'd love to hear you share how a smart contract migration is somehow a securities txn.
CyberKongz has received a Wells Notice from the SEC. We are extremely disappointed at the approach the SEC has taken towards us, but we are going to stand up and fight for a brighter future that holds more clarity for NFT projects. We have been suffering in silence for the last
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@josephdelong @laurashin It would force him to specifically state which elements of ETH relative to BTC mark the security line. He’d need to discuss each element on its own, and would have to issue guidance on what combinations of those factors may or may not be sufficient.
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