A highlight from 668:SECs AI Dragnet and Ripples Courtroom Win
Why do tacos get their own day of the week? Is it because Mondays are so rough, we need a Tuesday filled with beefy tortillas shared with good friends? If so, why don't we have Wellington Wednesdays stroganoff Saturdays, and heck, beefball Mondays? Then Mondays would just be another reason to enjoy our favorite beef with our favorite people. Together, we bring more. Beef, it's what's for dinner, funded by beef farmers and ranchers. Good evening, and welcome to the Crypto Overnighter. I'm Nick Ademus, and I will be your host as we take a look at the latest cryptocurrency news and analysis. So sit back, relax, and let's get started. And remember, none of this is financial advice. And it's 10 p .m. Pacific on Wednesday, September 13th, 2023. Welcome back to the Crypto Overnighter, where we have no sponsors, no hidden agendas, and no BS. But we do have the news, so let's talk about that. Tonight, we dig into the SEC's AI surveillance plans led by Gary Gensler. What does that mean for privacy and regulation? Ripple scores a point in court, but what's the real cost? OneCoin's co -founder faces 20 years behind bars, a reminder to always do your due diligence. Craig Wright dodges criminal sanctions, but raises questions about legal loopholes in crypto. North Korea's Lazarus Group makes another appearance, this time targeting Coinex for a cool $55 million. And finally, Coinbase is lighting up Bitcoin transactions by integrating the Lightning Network. Gary Gensler confirmed the U .S. Securities Exchange Commission uses artificial intelligence for financial surveillance. This revelation came during a Senate oversight hearing on September 12th. Gensler stated that the SEC uses AI technologies to monitor the financial sector for signs of fraud and manipulation. The SEC has not issued a formal public declaration detailing the use of AI. Gensler also faced criticism for the SEC's rulemaking pace and duration of comment periods. He remains adamant that crypto trading platforms should adhere to rigorous U .S. securities regulations. The SEC chair argues that most crypto tokens will likely pass the investment contract test. Gensler cited noncompliance with securities laws in the crypto industry, leading to the agency's enforcement approach. He also mentioned that the SEC has filed approximately 750 enforcement actions in the last year. Gensler warned that AI's ability to generate deepfake content poses a genuine threat to financial markets. He defended the SEC's key rulemaking initiatives amid heavy pushback from lawmakers. The SEC aims to bring DeFi under its jurisdiction, stating that existing rules also apply to the crypto sector. The SEC's adoption of AI for financial surveillance is a significant development. It's a clear signal that the regulatory body is doubling down on its efforts to monitor and control the crypto space. This move aligns with Gensler's consistent stance that the crypto industry should fall under the same regulatory frameworks as traditional financial markets. The use of AI could potentially tighten the noose around crypto activities, making it more challenging for traders and investors to operate freely. While the technology can be a powerful tool for detecting fraud and manipulation, it also raises concerns about privacy and the extent of government surveillance. Gensler's warning about the potential for AI -generated deepfake content adds another layer of complexity. It suggests that the SEC is not only looking to regulate, but also to protect the market from new types of threats. However, Gensler's approach has not been without its critics. The pace of rulemaking and the lack of clarity have drawn ire from both the crypto community and lawmakers. The SEC's aggressive enforcement actions, totaling around 750 in the last year, indicate a strategy of regulation by enforcement, which many find to be problematic. Now, if you're worried about Big Brother and C3PO teaming up to watch your every move, don't forget to hit that like button and subscribe. So now, let's pivot from surveillance to legal battles. Ripple is scoring in court. What does that mean for crypto and regulation? Ripple is in the midst of a legal battle with the SEC. The SEC initially accused Ripple of violating federal securities laws by selling its native cryptocurrency, XRP, without registering it as a security. Ripple CEO Brad Garlinghouse and President Monica Long have been vocal about their intent to fight the SEC all the way through. The company has already spent over $100 million defending the case. A significant ruling came in July when US District Court Judge Analisa Torres stated that XRP was not necessarily a security. This opened the doors for Ripple to expand its business not just in the US, but globally. The SEC requested permission to file an interlocutory appeal against this ruling, but as for now, the request has yet to be decided upon. Ripple is also focusing 80 % of its hiring efforts outside the US, targeting markets like Singapore, Hong Kong, the UK, and Dubai. The ongoing Ripple vs SEC case is a test for the crypto industry's relationship with regulators. Ripple's refusal to back down sends a strong message to the SEC and other regulatory bodies that the crypto industry will not be bullied. The SEC's actions here are part of a broader crackdown on the crypto industry. Frankly, I see it as an overreach of authority. The recent court ruling in favor of Ripple has not only given the company a legal upper hand, it also provided a glimmer of hope for the broader crypto ecosystem. It challenges the SEC's narrative and could set a precedent for other cases. The fact that Ripple is planning to focus its hiring outside the US is a clear sign of how regulatory uncertainty is driving crypto innovation away from the US, a point that should concern US policymakers. The case is shaping up to be a defining moment for crypto regulation in the US. It could have far reaching implications for the industry at large. And really, this whole thing is about the future of crypto regulation and the limits of governmental oversight. A point for Ripple, but at what cost? Make sure you're following us to stay updated on this legal thriller. But speaking of costs, some people are paying dearly. From courtrooms to prison cells, let's delve into the dark underbelly of crypto scams with OneCoin's co -founder, Carl Greenwood.