Legal intrigue was the theme of the week, keeping Crypto Twitter perched on the edge of its seat—booing and cheering in equal measure.
On Monday, a federal judge declined to dismiss the Securities and Exchange Commission’s (SEC) ongoing lawsuit against Coinbase, finding most of the regulator’s key arguments “plausible” and generally concurring that the SEC has jurisdiction over much of the crypto industry.
Coinbase’s leadership quickly dismissed the ruling as expected and clarified that it in no way meant the crypto exchange had lost—only that the case was now proceeding towards trial.
But legal experts were clearly surprised that the case’s judge—who at one point appeared persuaded by Coinbase’s arguments—found so much of the logic underpinning the SEC’s arguments to be sound.
The buzz around the ruling got big enough that even Edward Snowden weighed in—dismissing it as meaningless and predicting that other rulings, political developments, and legal structures in the United States will eventually force the SEC to drop its enforcement campaign against huge swathes of the crypto industry.
Of course, the biggest legal news of the week came on Thursday, when disgraced FTX founder Sam Bankman-Fried was sentenced to 25 years in federal prison for his involvement in criminal fraud at his crypto exchange.
Details from the sentencing hearing were principally filtered from the Manhattan courtroom where it took place into the world via a single Twitter account—InnerCityPress—which often live tweets the transcripts of trials in New York City.
The transcript of Bankman-Fried’s sentencing was replete with gems that instantly went viral—from the former billionaire’s defense attorney praising him as “a beautiful puzzle” to the case’s judge, Lewis Kaplan, excoriating the crypto founder’s testimony as the worst he’s seen from a defendant in almost 30 years on the bench.
Many crypto users ravenously consuming live tweets of the sentencing hearing were clearly more accustomed to tracking ever-fluctuating crypto prices, than tuning into hours-long legal proceedings. Almost two hours into the hearing—which saw Bankman-Fried, his attorney, an FTX victim, and Judge Kaplan all give lengthy speeches—some Twitter users hit their limit, desperate for the headline announcement of the length of the defendant’s sentence.
Soon enough, the news came. And when it did, Crypto Twitter was split—between those who had hoped Bankman-Fried would have received a more draconian sentence and others who found 25 years in a likely rough federal prison to be an adequate punishment for a first-time non-violent offender.
Unmistakably, though, Bankman-Fried’s sentencing was a historic—and cathartic—milestone for the crypto industry, one that was quickly immortalized in a typically dark and provocative creation by the digital artist Beeple.
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