Financial Regulation Archives - Coin Engineer

SEC Scandal: Gensler Deleted the Most Critical Crypto Messages!

Yeliz Akmaca — Fri, 05 Sep 2025 11:00:21 +0000

The U.S. Securities and Exchange Commission (SEC) confirmed that Gary Gensler messages from nearly a year were permanently deleted. The Office of Inspector General (OIG) reported that these records were lost due to preventable errors by the SEC’s IT department. This period covered some of the most critical events in the crypto market.

OIG found that the deleted messages included discussions on the FTX collapse, Grayscale’s spot Bitcoin ETF case, and major enforcement actions. Some messages also involved senior-level talks with the White House.

Gensler’s Lost Messages Impacted Key Crypto Processes

According to the report, in August 2023, Gensler’s government phone was mistakenly marked as inactive. This action permanently deleted stored texts and system records. The IT department could not explain why the phone disconnected from SEC systems or why the deletion occurred.

Researchers analyzed around 1,500 texts. They determined that 38% were work-related and directly connected to SEC’s critical operations. Examples included discussions on a crypto platform lawsuit in May 2023, a proposed settlement with a global financial firm in June, and an upcoming White House meeting in July.

SEC Faces Criticism

The deleted messages coincided with SEC’s strict enforcement of record-keeping rules across Wall Street. Major banks such as JPMorgan, Goldman Sachs, and Citigroup faced penalties for failing to archive communications via WhatsApp and Signal.

Coinbase General Counsel Paul Grewal emphasized that, despite years of lessons on data protection, SEC leadership failed to preserve crucial communications during a pivotal period. He argued that this was not a simple error but a deliberate loss of evidence related to ongoing cases.

In response, SEC disabled messaging features on most devices, informed the National Archives, launched Capstone record-keeping training for senior officials, and upgraded backup systems.

Ultimately, the lost messages raised serious questions about SEC’s regulatory effectiveness and oversight of the crypto industry.

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Trump Urges Fast Track For GENIUS Bill: ‘Get It To My Desk, ASAP’

Yigit Taha OZTURK — Thu, 19 Jun 2025 08:00:05 +0000

Momentum is building in the U.S. crypto regulatory space as President Trump calls on the House to pass the GENIUS Act without delay. The legislation promises to solidify the country’s position as a global leader in digital assets, especially in the stablecoin sector.

Trump: “NO DELAYS, NO ADD ONS”

After the Senate passed the GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act with a 68–30 vote, Trump posted on Truth Social urging quick House approval.

“The Senate just passed an incredible Bill that is going to make America the UNDISPUTED Leader in Digital Assets,” he wrote. “Get it to my desk, ASAP — NO DELAYS, NO ADD ONS.”

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

With a narrow Republican majority in the House, the final vote is pending — but all eyes are on how swiftly it can reach Trump for final approval.

What Does The Bill Include?

The GENIUS Act aims to establish a clear regulatory framework for stablecoins, including:

Mandatory 1:1 reserve backing
State or federal-level licensing
Anti-Money Laundering compliance
Strict consumer protections
Limits on how reserves can be used (e.g., only for redemptions or low-risk Treasury investments)

These measures are designed to eliminate shadow banking risks and enhance systemic trust in dollar-backed stablecoins.

Controversy Still Looms

Although now progressing, the bill had previously failed a cloture vote in May due to Democratic concerns. Critics like Senator Elizabeth Warren accused Trump and his family of positioning to earn “hundreds of millions” from a proposed USD1 stablecoin if the law passes. Others warned against falling behind globally in crypto adoption and innovation.

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Coinbase Faces Class Action Shock: 2025 Data Breach

Yeliz Akmaca — Mon, 26 May 2025 10:00:08 +0000

Coinbase and two executives are targeted in a new class action lawsuit due to a May 2025 data breach and failure to disclose a breached agreement with the FCA, following a stock price drop. Filed on May 22 in Pennsylvania federal court by investor Brady Nessler, the lawsuit claims compensation for investors harmed by the stock price decline.

Coinbase Data Breach and Stock Losses

On May 15, company disclosed that some customer support representatives were bribed, granting access to internal systems. This incident led to the theft of personal information from approximately 97,000 users, including names, addresses, email addresses, bank details, and identification documents. The attackers demanded a $20 million ransom, which Coinbase rejected, instead offering a $20 million reward for the capture of the perpetrators.

Following the breach announcement, Coinbase’s stock price fell 7.2% to $244. The next day, it rose 9% to $266 but closed at $263.10 on May 23 after a 3.23% drop. This volatility indicates significant investor losses. The lawsuit also names CEO Brian Armstrong and CFO Alesia Haas as defendants, with investors claiming crypto exchange misled them by not disclosing the breaches promptly.

Regulatory Issues in the UK

The lawsuit highlights that Coinbase was fined $4.5 million by the UK’s Financial Conduct Authority (FCA) in 2024 for violating a 2020 agreement by onboarding high-risk customers. Nessler alleges Coinbase failed to disclose this violation during its IPO, claiming it artificially inflated the stock price and misled investors.

Additionally, the company faces other lawsuits, including one in Illinois over improper biometric data collection. The company has not yet issued an official statement on these cases, but these events continue to impact Coinbase’s credibility and market value.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.

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Joint Stablecoin Initiative by Major US Banks

Yeliz Akmaca — Fri, 23 May 2025 12:00:19 +0000

JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo have begun discussions for a joint stablecoin project.

Leading financial institutions in the US are taking action to transform digital finance. This move aims to increase competition against the growth of the cryptocurrency sector and the entry of tech giants into finance.

The banks are collaborating with organizations managing payment systems like Early Warning Services and the Clearing House, which oversee Zelle. The goal is to make payments faster, cheaper, and more secure. Although the talks are not official yet, the strategy planning process is accelerating. The banks may advance or cancel the project depending on customer demands and regulatory frameworks.

Stablecoin and Blockchain Technology

The planned stablecoin will be pegged to the US dollar and operate on blockchain infrastructure. This will speed up international transfers and large transactions at a lower cost. Additionally, blockchain’s transparency and security advantages will enhance financial efficiency. This system aims to bridge traditional finance with the digital economy.

GENIUS Act: New Rules for Digital Finance

The GENIUS Act is an important regulation aimed at establishing the legal infrastructure for the digital dollar. This law grants banks and non-bank financial institutions the authority to issue stablecoins. Publicly traded technology companies can also enter this space under certain rules.

The law provides a comprehensive framework to regulate digital finance. It sets uniform rules for all stakeholders, creating a standardized regulatory structure. It prioritizes security and transparency. Organizations apply the highest security standards to protect customer data and transactions. Banks aim to align the project with US regulatory bodies. During this process, they evaluate technical infrastructure and carefully analyze customer demands. The goal is to maintain the highest security level and meet user needs.

Permission for banks to issue stablecoins
Permission for non-bank financial firms to issue stablecoins
Limited stablecoin permissions for publicly traded tech companies
Proposal for a uniform regulatory framework

For example, Donald Trump launched his own meme coin. In March, his family-connected company, World Liberty Financial, announced plans to issue a stablecoin. These moves are pushing major banks to accelerate their digital strategies. Banks do not want to lose advantages to aggressive and flexible competitors. Many crypto-focused companies are striving to comply with official banking regulations. These firms believe the GENIUS Act will make the process more accessible.

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Japan to Classify Cryptocurrencies as Financial Products!

Yigit Taha OZTURK — Mon, 31 Mar 2025 09:30:31 +0000

Japan’s Financial Services Agency (FSA) is set to introduce legislative changes that will classify cryptocurrencies as financial products, according to Nikkei’s March 30 report. The new regulations could come into effect as early as 2026.

The FSA plans to amend the Financial Instruments and Exchange Act, which would bring cryptocurrencies under insider trading rules similar to those governing stocks. However, it remains unclear how the regulations will differentiate between widely traded cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) and speculative, high-risk tokens such as memecoins.

The FSA’s headquarters is in central Tokyo, just across the street from the Ministry of Finance.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

If approved, crypto companies operating in Japan would be required to register with the FSA. Additionally, it is uncertain how these rules will apply to overseas entities conducting business in Japan.

This move aligns with Japan’s recent pro-crypto stance. Last month, Circle’s USDC stablecoin was approved for use in Japan, and SBI VC Trade became the first company to receive a license for handling stablecoin transactions. Furthermore, Japan is also working on lowering the capital gains tax on crypto earnings from 55% to 20%.

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White House Will Support Rescinding DeFi Broker Rule!

Yigit Taha OZTURK — Tue, 04 Mar 2025 18:00:56 +0000

The Trump administration has announced its support for repealing the IRS DeFi broker rule, which is set to take effect in 2027. If approved by Congress, Donald Trump is expected to sign the resolution into law.

White House Signals Support for DeFi Industry!

David Sacks, the AI and crypto czar in the Trump administration, stated on March 4 that the White House backs legislative efforts to overturn the IRS regulation expanding the definition of “broker” to include DeFi access providers.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

Sacks confirmed via X (formerly Twitter) that the administration supports a resolution introduced by Texas Senator Ted Cruz and Ohio Representative Mike Carey under the Congressional Review Act to repeal the rule.

Senior White House advisers have reportedly recommended that Trump sign the resolution into law if passed by Congress.

Why Is the DeFi Broker Rule Controversial?

The IRS rule aims to classify software providers enabling access to DeFi protocols as brokers, thereby imposing strict reporting obligations on them.

The crypto community argues that such regulations could stifle innovation and undermine the decentralized nature of DeFi. White House support for rescinding the rule sends a positive signal to the DeFi industry.

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Grayscale Files for Polkadot ETF, Expanding Its Portfolio

Yigit Taha OZTURK — Tue, 25 Feb 2025 16:30:43 +0000

Crypto asset management company Grayscale, following its moves for XRP and Cardano ETFs, has now filed for an ETF based on Polkadot‘s DOT token. This filing comes after the SEC adopted a more crypto-friendly approach towards the digital asset industry.

Grayscale Expands Its Portfolio with Polkadot ETF Filing

Grayscale has filed a request through Nasdaq to list and trade shares of the Grayscale Polkadot Trust (DOT). The filing starts a 45-day review period during which the SEC will assess the application. The SEC can approve, reject, or extend the review period.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

Grayscale had previously offered bitcoin and ether ETFs and has now filed to convert its XRP Trust into an ETF. Additionally, it filed for a spot Cardano ETF. These filings come at a time when the SEC has adopted a friendlier stance toward the digital asset space, particularly after it dropped several crypto-related investigations, including those targeting platforms like Robinhood and OpenSea.

Polkadot’s Status and Grayscale’s Role in the Market

Grayscale has never offered a standalone product for Polkadot until now. With this filing, it follows 21Shares, which filed for a spot Polkadot ETF with the SEC last month.

At the time of writing, Polkadot‘s DOT token is trading at $4.4, having lost 6.7% of its value in the last 24 hours, amid a broader downturn in the cryptocurrency market.

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California Revokes Crypto Lending Company BlockFi’s License

Yigit Taha OZTURK — Fri, 08 Nov 2024 19:00:10 +0000

California revoked the license of the bankrupt crypto lending company after a two-year investigation. On November 7, the California Department of Financial Protection and Innovation (DFPI) announced that the company’s license was suspended in November 2022. After two years of audits, the license was permanently revoked.

The company agreed to the license revocation and committed to discontinuing unsafe practices. DFPI reported that the company violated the California Financing Law (CFL). BlockFi gave loans without considering borrowers’ repayment capacity and charged interest before the loans were disbursed. Additionally, the company failed to provide credit counseling and did not meet credit reporting obligations.

DFPI Commissioner Clothilde Hewlett said, “While we encourage innovation in our financial markets, companies must comply with laws and protect consumers to continue operating.”

The bankrupt company will pay a $175,000 fine imposed by California, but the payment has been postponed to prioritize consumer repayments. In May 2024, the company shut down its web platform, and customers can no longer access it.

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The bankruptcy process began after Sam Bankman-Fried‘s FTX exchange collapsed. The company had significant exposure to FTX and its affiliates. BlockFi filed for bankruptcy due to a $400 million credit line with FTX US. Additionally, FTX was one of BlockFi‘s largest unsecured creditors.

By 2024, the company is estimated to owe up to $10 billion to more than 100,000 creditors.

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Trump’s Team Nominates This Person for SEC Chair!

Yigit Taha OZTURK — Fri, 08 Nov 2024 14:00:10 +0000

After Trump’s victory in the presidential election, the race for the next head of the U.S. Securities and Exchange Commission (SEC) has begun. Trump had previously promised to fire current SEC Chair Gary Gensler “on day one,” and now his transition team is focused on selecting a replacement. One name that stands out is Dan Gallagher, Robinhood’s chief legal officer.

Gallagher, who served as a SEC commissioner from 2011 to 2015 under the Republican Party, is now a leading candidate to head the SEC. Currently, he oversees legal, compliance, and corporate affairs at Robinhood. Trump’s team sees Gallagher as the strongest contender for the position. However, the decision is not final, with other potential candidates such as former SEC commissioner Paul Atkins and Robert Stebbins, who served as the agency’s general counsel during Trump’s first term, also being considered.

The appointment of the SEC chair is especially important to the crypto community, which has faced increasing regulation under Gensler’s leadership. Trump had promised a more favorable stance toward the crypto industry, pledging to remove Gensler and replace him with someone more crypto-friendly.

Gallagher’s experience within the SEC and his positive stance on crypto make him an appealing choice. Politico reported that a former SEC official referred to Gallagher as “a natural choice” for Trump. Additionally, in May, Robinhood received a Wells notice from the SEC, indicating potential regulatory action over its crypto business. Gallagher has been leading the defense on this matter.

As the transition process continues, the final decision on the SEC chair is expected within the next few weeks. The crypto sector and investors are hopeful that Gallagher will take the helm at the SEC, seeing him as the most qualified candidate for the job.

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