This week in crypto we’ve seen a Bitconnect promoter sentenced to jail, Ian Balina finally getting a date with the SEC, Jesse Powell leaving his position at Kraken and much more. But which were the toppest of the top stories? Eyes down…
No. 3 – Meta 1 Scammers Get $22.6 Million Penalty
It started as the world’s worst whitepaper and, two and a half years later, it has ended in a $22.6 million penalty from the Securities and Exchange Commission (SEC). Meta 1, the project that claimed to be a “coin for humanity “ when it was in fact stealing from its investors, has been under the SEC’s microscope since early 2020, and this week its founders discovered what the agency had in store for them – a $22.6 million penalty.
Meta 1 claimed to be all cryptocurrencies to all men, promising a valuation of $50,000 per coin right about now and the world’s fastest blockchain, all backed by over $10 billion in gold and fine art reserves. And people bought it – over 800 of them, in fact, leading to Meta 1’s execs netting over $15 million which they funnelled through various bank accounts and spent on household bills, debts and cars.
Founder Richard Dunlap and his partner Nicole Bowlder were recipients of over 98% of the total penalty, although the odds of them paying up are slim – Dunlap once tried to get out of a car loan by saying that money itself wasn’t legitimate, and the pair have already denounced the authority of the SEC and the court system.
Good luck SEC.
No. 2 – Ian Balina FINALLY Targeted by SEC
Ask anyone who was around the crypto world in 2017 who Ian Balina is and they will respond with a wry smile and a chuckle. They may even reference his ‘spreadsheet’, which helped make some people millionaires and lost others small fortunes.
Balina was known as the king of the ICO back in 2017, somehow managing to get himself known as the man who could ensure that an ICO sold out. If Balina was a supporter, and if the project was in the green section of his ICO spreadsheet, then the crypto world would fight to get a piece of it.
However, the fact that Balina was taking bonuses to promote the projects and not announcing it has finally caught up with him, with the SEC pinning him down on his promotion of Sparkster. It may only be one of the dozens he took money from, but it’s the principle that counts – especially if he roped you into buying a token on its exchange listing before it dumped.
No.1 – Jesse Powell Stepping Down as Kraken CEO
Jesse Powell is one of the old school of Bitcoiners – someone who sees it as a middle finger to the authorities rather than a chance to make a fortune. This has translated into how he has run Kraken, the exchange he launched as a direct experience of working on the Mt. Gox hack fallout in 2011 – if you didn’t align with his political views then you either had to keep quiet or leave.
His treatment of regulations has been similarly cavalier – he has been accused of ignoring sanctions and serving Iranian users, and last year advised those holding crypto to take them off exchanges to avoid the possibility of them being seized.
After 11 years at the helm, during which time the crypto landscape has changed significantly, Powell will step aside to be replaced by the much more corporate COO Dave Ripley. This will likely signal a shift in the way Kraken does business and deals with regulators, and as a result we could see the last of a dying breed make way for the crypto’s inevitable future.
Honourable Mentions
This week we also learnt that:
- There will be no quickfire settlement in the SEC vs Ripple case, despite both sides asking a judge to issue a settlement
- Binance has joined the race to buy Voyager Digital, adding its name to FTX and other suitors
- A key promoter of Bitconnect in the U.S. has been handed a 38-month prison sentence for his role in perpetuating the scam
We’ll be back next week for another review of the week’s top crypto news.
