There’s a Rodney Dangerfield joke, “My high school was tough. After they sacked the quarterback, they went after his family.” We’re now seeing a little bit of that toughness directed at Bankman, Fried and Bankman-Fried family members. Over the weekend, a BusinessWeek cover story ran with the headline “How Sam Bankman-Fried’s Elite Parents Enabled His Crypto Empire.” The story itself was not so bad and there’s no smoking gun — it’s 5,000 words of high-powered parents advising their privileged son. Hardly surprising to anyone who’s followed this case or knew of his parents, whom BusinessWeek says, “both renowned Stanford scholars, [they] opened doors for their son and provided a halo effect…
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SEC Chairman Gary Gensler in an official government photo from his service as Chairman of the Commodity Futures Trading Commission. (Photo: CFTC)What Gensler role in Long Term Capital Debacle Tells us about his war on crypto
25th anniversary occasions a look at SEC chair’s small part
This is the 25th anniversary of the September 1998 collapse of Long-Term Capital Management. That was one of the most stunning events in Wall Street history, as the firm allowed its leverage to grow to more than 100 to 1. But it was shocking beyond the sudden evaporation of $4 billion in value—that was a lot of money 25 years ago— but also because the firm had been put together specifically on the basis of its supposed genius for understanding and managing risk. The firm was dominated not by great traders but by intellectual supermen, including Robert Merton and Myron Scholes. Merton and Scholes had won the Nobel prize just…
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Crypto’s Illness: Regulatory Reluctance
Pending court decisions challenge SEC’s failed ‘regulation by enforcement’ strategy
The U.S. crypto industry has been learning a rough lesson in regulatory compliance in the past few months. With fines, cease and desist orders, agency warnings, and traditional finance counterparties withdrawing from the industry, it is becoming increasingly apparent that crypto has a compounding problem. Press play to hear a narrated version of this story, presented by AudioHopper. The origin of this isn’t FTX, Voyager Digital, Terra Luna, or any other of the business failures or frauds of 2022. Those are symptoms of another disease. The sickness that’s causing crypto to fumble in front of U.S. regulators and counterparties goes all the way back to the founding principles of Bitcoin…
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Rohit Chopra, then a Commissioner at Federal Trade Commission, speaks at the World Economic Forum Annual Meeting in Davos-Klosters, Switzerland, January 23, 2020. (Photo: World Economic Forum / Valeriano Di Domenico)Rohit Chopra Backs SEC’s ‘Regulation By Enforcement’ Regime
Agency head wants to bully state AG’s into enforcing CFPB rules
Rohit Chopra, head of the Consumer Financial Protection Bureau, signaled in an interview with American Banker yesterday that his agency may move on an enforcement action relating to cryptocurrencies at the same time that the Securities Exchange Commission is also looking at regulatory action concerning the sector. American Banker’s Kate Berry asked Chopra how concerned he was about “crypto,” stating that “You have complaints from consumers who say their money has been stolen.” Chopra replied, “Well, it’s interesting. Right now, cryptocurrencies are really primarily in the speculative trading markets. There is a question though about what happens when some of that is riding the rails of the Big Tech firms or…
