SBF Behind Bars, FTX Partners Under Fire: Legal Analysis

In recent developments of the ongoing FTX saga, Sam Bankman-Fried, the former CEO of the defunct crypto exchange, has been ordered to remain in jail until the conclusion of his two upcoming trials. The decision came after The New York Times published a report that alleged Bankman-Fried had attempted to intimidate witnesses. With a total of 12 criminal charges against him, Bankman-Fried is set to face trial in October 2023 and March 2024.

The legal troubles have not stopped at Bankman-Fried, as 18 prominent venture capital firms, including Temasek, Sequoia Capital, Sino Global, and Softbank, have been named as defendants in a class-action lawsuit filed in the United States District Court for the Northern District of California. The lawsuit accuses these firms of utilizing their power and influence to enable FTX’s rise to a multibillion-dollar enterprise, referred to as “FTX’s house of cards.”

Further complicating matters, FTX’s former primary legal counsel, Fenwick & West, has also been hit with a class-action suit. The suit alleges that the law firm aided FTX’s alleged multimillion-dollar fraud by setting up shadowy entities, such as North Dimension and North Wireless Dimension, through which misappropriated customer funds were siphoned.

Federal Reserve Imposes New Rules on Banks

In an effort to regulate banks’ involvement with cryptocurrencies and blockchain technology, the U.S. Federal Reserve has expanded its supervisory program. The Novel Activities Supervision Program aims to establish fair practices and limit certain crypto-related activities. This program will subject registered banks to examinations by the Fed Board to ensure compliance with policies and U.S. law.

Jury Trial Date Set for SEC vs. Ripple Suit

The judge overseeing the civil case between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs has scheduled a jury trial to begin in the second quarter of 2024. This case arises from the SEC’s allegations that Ripple conducted an unregistered securities offering through the sale of XRP tokens. While the court previously ruled that XRP is not a security for programmatic sales, the final verdict is still pending. Ripple’s CEO, Brad Garlinghouse, and executive chairman, Chris Larsen, may still be held liable for other violations.

Brazilian Congress Passes Tax Regulations for Crypto

A congressional committee in Brazil has approved amendments to a bill that recognizes cryptocurrencies as financial assets for tax purposes in foreign investments. The revised bill imposes taxes on gains from crypto price fluctuations against the country’s fiat currency and foreign exchange rates. This move is aimed at promoting equal tax treatment since crypto investments abroad currently receive preferential tax treatment.

  • Up to 6,000 Brazilian reais (~$1,200) in overseas earnings will be exempt from taxation under the new regulations.
  • Earnings between 6,000 and 50,000 reais (~$10,000) will be subject to a 15% tax rate.
  • Earnings above 50,000 reais will be taxed at a rate of 22.5%.

Editor Notes: Crypto News and Updates

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