This Is How Bad The SEC Was šŸ˜±

Proof the SEC will lie to kill crypto, Mastercardā€™s new Crypto Credential, and GameFiā€™s latest: Torque Drift 2 goes blockchain and Crypto Unicornsā€™ massive airdrop. šŸš€

Author

Jonathan Morgan
May 29, 2024

OVERVIEW

This Is How Bad The SEC Was šŸ˜± 

Bitcoinā€™s dominance is dropping, but the altcoin market is flattening out and even showing some hints of breaking out soon. Otherwise, itā€™s been fairly quiet. šŸ”“ 

In todayā€™s Litepaper, weā€™re looking at the SEC crypto case you may have never heard of - SEC vs. Debt Box ($DEBT). Weā€™re going deep into the case, starting from the beginning and to its conclusion.

Also on deck: Mastercardā€™s ($MA) game-changing move in crypto, some exciting GameFi news with Torque Drift 2ā€™s blockchain integration, and Crypto Unicorns' ambitious airdrop on Ethereum Layer 3 Xai. šŸ“°

Before we dive in, hereā€™s todayā€™s crypto market heatmap:

And hereā€™s a look at cryptoā€™s total and altcoin market cap YTD:

NEWS
The SEC Is Willing To Lie To Kill Crypto: Proof šŸ˜” 

The SEC vs. Debt Box ($DEBT) might be the most important SEC vs. Crypto case you never heard of. But itā€™s one of the most important - possibly even more important than the $XRP vs. SEC case. šŸ‘Øā€āš–ļø 

On August 3, 2023, the SEC charged 18 Utah defendants for allegedly running a fraudulent scheme with Debt Box, a cryptocurrency investment platform. They claimed these folks had conned investors, promising sky-high returns while pocketing the cash. It should've been a slam dunk.

What followed is the definition of an abuse of power. Here's the timeline:

August 2023

SEC obtained a TRO (temporary restraining order) and asset freeze against Debt Box. The SEC claimed that $720,000 had been sent overseas to evade seizure, a claim later revealed to be falseā€”the funds were actually transferred within the U.S. Judge Shelby had a nose for bullshit. šŸ’© 

October 11, 2023

The SEC filed to dismiss the case without prejudice. Yes, you read that correctly - the people who want to prosecute the 'bad guys' wanted to dismiss the case. Well, what does dismiss the lawsuit without prejudice mean?

Imagine you're playing a game of hide-and-seek, and the seeker is the SEC. They tell everyone, "I totally saw Timmy behind the tree!" But when everyone checks, Timmy wasn't there, and the seeker just made it up. Now, everyone is upset. So, the SEC asks, "Can we start the game over, and pretend I didn't mess up?"

That's what the SEC didā€”they got caught fibbing and wanted a mulligan. The judge denied the request in November 2023. šŸ˜† 

December 14, 2023

Judge Shelby wasn't messing around on December 14, 2023, when he issued a show cause order to the SEC. He called them out for playing fast and loose with the facts to snag a TRO and asset freeze against Debt Box.

Shelby demanded they explain their shenanigansā€”misrepresenting evidence and acting in bad faithā€”putting them on notice that such conduct wasn't flying in his courtroom. šŸš« 

March 18, 2024

On this date, a judicial beatdown of the SEC occurred. It was a beatdown like no other. Like the Kansas City Chiefs playing against a junior-high football team. Or a house of cards in a hurricane. Or Loki when the Hulk smashed him into the concrete many, many times.

The SEC dun fucked up. šŸ˜² 

Like giving your diabetic mom the regular super-sized Coke and not the diet Coke, and you forgot to pack her insulin kind of fucked up.

From Judge Shelby's March 18, 2024 decision, here are the SECā€™s misdoings:

  1. The SEC lied about evidence to secure a temporary restraining order (TRO) and asset freeze. They falsely claimed that $720,000 was sent overseas to prevent it from being seized, which was later proven false as the funds were transferred within the U.S.

  2. The judge accused the SEC of a "gross abuse of the power entrusted to it by Congress," undermining the integrity of the judicial process.

  3. The SEC's actions were described as being in "bad faith," including presenting critical evidence in deliberately false and misleading ways.

  4. Specific criticism was directed at SEC attorney Michael Welsh for knowingly making false statements during the TRO hearing and attempting to cover up these misstatements rather than correcting them.

  5. The judge sanctioned the SEC, requiring them to pay attorneys' fees and costs incurred by Debt Box, emphasizing the need for accountability and suggesting personal liability for the SEC lawyers involved.

  6. The SEC and its attorney, Michael Welsh, failed to correct false statements made during the TRO hearing and instead subtly shifted their language to cover up the misconduct.

  7. The SEC's actions constituted a serious breach of ethical standards, including their handling of the case and the manner in which they pursued legal actions against Debt Box.

  8. The SEC was criticized for abusing the TRO process by presenting false evidence to obtain the TRO and asset freeze, which misused this powerful legal tool.

  9. The SEC's strategy and conduct during the case were deeply flawed, involving misleading the court and demonstrating a lack of strategic soundness and professional integrity.

  10. The SEC's actions caused significant negative impacts on Debt Box, including reputational harm and unnecessary legal expenses. The judge acknowledged these consequences.

  11. The judge pointed out a lack of proper oversight within the SEC that allowed such misconduct to occur, suggesting systemic issues within the agency.

  12. The SEC's actions violated the trust placed in them by the judiciary. The SEC, as a regulatory body, is expected to uphold the highest standards of honesty and integrity, which they failed to do in this case.

End Results

SEC attorneys Michael Welsh and Joseph Watkins were forced to resign in February 2024. šŸ¤Æ 

On May 28, Judge Shelby ordered the SEC to pay nearly $2 million to Debt Box for attorney fees and other costs related to the restraining order.

For the SEC, the Debt Box case will forever be an example for future crypto defense attorneys to prove the agency is militantly and disproportionately aggressive to the crypto space.

Let's hope the SEC can learn from this spectacular failure and abuse of the public trust.šŸŒŖļø 

NEWS
Mastercard's New Crypto Credential šŸŒ

Mastercard ($MA) just dropped Mastercard Crypto Credential - a new service that makes sending and receiving crypto as easy as sending an email. šŸŒ

Crypto users on Bit2Me, Lirium, and Mercado Bitcoin can now use simple Mastercard Crypto Credential aliases instead of those migraine-inducing blockchain addresses. This service, live as of today, simplifies secure blockchain transactions between Latin America and Europe.

Users in Argentina, Brazil, Chile, France, Guatemala, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Switzerland, and Uruguay can now send cross-border and domestic transfers in multiple currencies and blockchains. ā›“ļø 

Building Trust and Security

Mastercard Crypto Credential verifies users and confirms that the recipientā€™s wallet supports the transferred asset, taking the guesswork out of crypto transactions. Through metadata exchange, it ensures you know which assets or chains are supported by your recipient, bringing more certainty to every transaction.

Plus, it supports the Travel Rule for cross-border transactions, ensuring transparency and keeping things above board. Mastercard plans to extend its use cases to NFTs, ticketing, and other payment solutions as the market demands. ā™£ļø 

How It Works

  • User Verification: Exchanges verify users based on Mastercard Crypto Credential standards.

  • Alias Creation: Verified users get a simple alias for sending and receiving funds across supported exchanges.

  • Transaction Verification: Mastercard Crypto Credential checks if the recipientā€™s alias and wallet are compatible with the digital asset and blockchain.

  • Protection: If thereā€™s a mismatch, the sender gets a heads-up, and the transaction doesnā€™t go through, protecting everyone from potential losses.

With this launch, Mastercard is making crypto transactions easier, safer, and a whole lot more user-friendly. šŸš€

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GAMEFI
Airdrops, Racing, and Pixels šŸ•¹ļø 

Torque Drift 2 Blockchain Integration

Torque Drift 2 just turbocharged its game with blockchain integration. Now, you can own, trade, and sell in-game assets like your tricked-out drift car. This isn't just about racing anymore; it's about investing in your virtual garage. Player engagement? About to skyrocket. šŸš—

Crypto Unicorns' Airdrop on Ethereum Layer 3 Xai

Mark your calendars for June 15 - Crypto Unicorns is kicking off a "play-to-airdrop" campaign next month as it jumps from Polygon ($MATIC) to Arbitrumā€™s ($ARB) layer-3 Xai ($XAI) network. Founded in 2021, it's got land-based battles, jousting, and party games, with its NFTs pulling in around $35 million in trading volume. During the migration, the game will be paused and unplayable, but it'll be back in a month, ready for the airdrop frenzy.

Players will be able to earn points by hatching a Shadowcorn egg, breeding unicorns, or evolving babies. Your points place you in tiers, deciding your token rewards. A player snapshot taken recently gives the most active users a "small headstart" in the competition. While the migration is on, asset transfers, purchases, and sales are frozen. šŸ¦„

Param Labs and Pixelverse Team Up for Kiraverse

Param Labs, the brains behind Pixel to Poly, is joining forces with Pixelverse for a cross-IP gaming venture. Pixelverse, the cyberpunk-themed browser game, is bringing its characters into Kiraverse, Paramā€™s shooter game. With Pixelverse's 500,000 monthly users now jumping into Kiraverseā€™s battlefield, expect a whole lot more action.

Kiraverse, already spiced up with GameStop ($GME) and ImmutableX ($IMX) partnerships, is in Open Beta and ready to blow your mind with intense battles, digital asset ownership, and killer customization options. šŸŒ

NEWS
Crypto News In Three Sentences šŸ“°

āš½ Ronaldo's NFT Play with Binance 

Cristiano Ronaldo launched a career-highlight NFT collection with Binance ($BNB), aiming to merge sports with blockchain tech. Fans can now own unique digital memorabilia of the football legend. From Binance.

šŸ“ˆ Cathie Wood: El Salvadorā€™s GDP Could Skyrocket 

Cathie Wood predicts El Salvadorā€™s GDP could 10x in five years thanks to its Bitcoin ($BTC) and AI initiatives. She believes these technologies will drive massive economic growth. El Salvador is betting big on digital innovation to transform its economy. CoinSpeaker has more.

šŸ’ø Ripple Drops $25M More on Crypto Super PAC 

Ripple ($XRP) has thrown another $25 million into the crypto Super PAC, FairShake, bringing its total to $50 million. This hefty donation aims to push pro-crypto legislation. Ripple is clearly determined to influence favorable crypto policies. More from CoinDesk.

šŸ¶ Memecoins Bump Cardano from Top 10 

Cardano ($ADA) got knocked out of the top 10 cryptocurrencies by market cap due to the latest memecoin frenzy. Dogecoin and Shiba Inu are riding high on investor hype. This shake-up shows just how wild and speculative the crypto market can be. From Cointelegraph.

šŸ’° Gemini Earn Users Rejoice: Crypto Returned 

Gemini Earn customers are getting all their crypto back, now worth over $2 billion. This significant recovery comes as users receive 100% of their assets, which have appreciated since 2022. It's a major win for crypto lending recovery efforts. Decrypto has more.

šŸ“‰ Tron Challenges Ethereumā€™s DeFi Dominance 

Ethereumā€™s ($ETH) grip on DeFi is slipping as Tronā€™s ($TRX) stablecoin activity surges. Tron is quickly grabbing market share, threatening Ethereumā€™s lead. The DeFi landscape is set for a shake-up as more players jump into the fray. More from CryptoSlate.

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