Along with Jess Meyers and the team at Brown Rudnick, I’m honored to represent in his ongoing mission to speak truth to power.
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Palley
@stephendpalley
Partner, , Personal account. Not legal advice. Word inventoor. May change my mind. "I contain multitudes."
The Dumpster on Colesville Rd.Joined June 2014
Palley’s Tweets
BREAKING: SEC sues John McAfee for lying about eating his own schnitzel on national t.v.
now do dollars
11th Circuit Court of Appeals reverses trial court decision in Bitconnect case and holds that peddling shitcoins in a non-targeted way on the interwebs (YouTube, Twitter etc) exposes promoters to liability from purchasers of unregistered securities.
Prisons are filled with criminals who used fiat currency for illegal and unregulated purposes without doing AML/KYC and without regard for law, decency or bank regulations. The argument that bitcoin is bad because criminals use it isn't a serious one.
if it wasn't clear before, it is should be now: the SEC, under Gensler, intends to completely shut down any crypto-related businesses in the United States, including exchanges and any other on/off ramp to fiat.
Reading the SEC Complaint, it's hard not to reach the conclusion that Ripple was and is the Enron of cryptocurrency companies. A lot of hand-wavey public bullshit and behind the scenes it was all market making and price manipulation, and no real market or product.
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I was extremely skeptical but based on some calls I’ve had recently am increasingly persuaded that bitcoin mining is already and will continue to be a huge driver for innovation and investment in renewable energy sources like wind and solar.
guy who was treasury secretary just a few months ago raises $2.5 billion for fund while other high-level officials join v.c. firms in typical revolving door fashion but, sure, set your sights on DeFi.
So basically Facebook is trying to solve problems that Bitcoin can already solve.
Without Facebook.
If we’re getting to the point where the salutary consumer protection purpose of circa 1930s securities laws no longer protect consumers but are instead a ring fence for the wealthy and powerful maybe it’s time to rethink how those laws are applied and (bear with me!) change them.
Next week FDA is going to be releasing guidelines for self-hosted leather wallets.
BREAKING in Kleiman v. Wright case. Motion to Compel GRANTED yesterday in strongly worded order. The tl;dr is below. Excerpts follow.
I’m sorry but requiring people to carry health certificates and proof of viral immunity for safety/security is un-American, a slippery slope towards totalitarianism, and a great way to trade freedom for security and soon have neither. Hell no.
if you are trading something called bonk via a VPN on an exchange owned by a guy who calls himself his excellency, what could possibly go wrong
Anyone who calls themself a "software engineer" should be required to be licensed, have a graduate degree in engineering & carry at least $1 million in professional liability insurance.
And certain types of software should only be sold if approved by a software engineer.
Securities laws that prevents Americans from getting what is essentially free money are laws that have lost their way and their reason for being.
🎇BREAKING: Federal court DENIES Craig Wright's motion for summary judgment completely.
🔥🔥Kleiman lawsuit over more than a billion dollars in bitcoin over heads to trial.
🧐🧐🧐It's a 93 page decision! I'm going to tweetify the tasty bits, so strap in. 👇
Unregulated peer to peer money is an existential threat to all governments.
Why? Simple. To govern is to control. Money that doesn't allow centralized issuance or control strikes directly at this.
This fight has only begun.
Freedom money won't be free.
ok for real, the absolute fuck is going on here? twitter.com/mdudas/status/
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heuristic: if one of the responses to "this looks like a fraud" is "it's too complicated for you to understand" there's a good chance it's a fraud.
I am dying
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Somebody asked me today if I'd like to speak at their conference in Rhode Island this summer on fintech at a reduced fee of $10,000 and I thought that seems fair for a day's work but then it turned out they wanted me to pay them and there is a sucker born every minute apparently.
New one count California federal court lawsuit alleges Coinbase violated state unfair competition laws by selling XRP, alleged to be an unregistered security, and taking commissions from the sale.
Wait. So people went to a 15,000 person conference in Miami without getting vaccinated and got Covid? Geniuses.
BREAKING: CFTC sues Bitmex, Arthur Hayes "to enjoin their ongoing illegal offering of commodity derivatives to U.S. persons, their acceptance of funds to margin derivatives transactions from individuals and entities in the U.S., & their operation of a derivatives trading platform
DeFi is at an historical inflection point.
The legal status of these alternative financial rails will be resolved for short/mid-term purposes in the next 2 to 3 years, maybe sooner.
A thread. 1/n
The United States is slowly awakening to the realization that universal health care is a national security issue.
lol the people who think that getting hit with a $100 million jury verdict for conversion (stealing) is a win.
I find it amazing that some otherwise intelligent people can’t accept that bitcoin is here to stay. Accept that you were wrong and move on.
A story in 3 acts (or, Mr. Wright's very bad days).
We'll cover this in today's Crypto Caselaw Minute but the tldr is that things aren't going well for Wright in federal court in Florida. As we noted previously about this case, federal judges see through smoke screens fast.
To be clear, the jury didn’t decide that Craig is Satoshi. It wasn’t asked this question and this was never an issue for the jury to decide and there’s no precedent that this case creates for others. That isn’t how this works.
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the jury was clear, they believe Craig is solely Satoshi...this money will go to a company Craig controls. This is a total loss for plaintiff and for the funders trying to block truth. Its also a loss for the next cases coming as these cases all create precident for Craig.
people who make blanket accusations about crypto being no good for anything other crime would have half a millennia ago been against the printing press because it allowed for the mass distribution of new ideas and dissent
I frequently disagree with people who I like and respect. Imagine being friends only with people who think and believe the exact same thing as you. How yawn would that be?
The world's most successful people wake at 2 am after sleeping in a cold bath and eat a tub of pickled herring with sweet butter on black bread.
Looks like my law-firm will soon be joining the ranks of those accepting bitcoin payments.
Name an ICO project that really needed a token for anything other than fund-raising.
So if you're an adult and you legitimately lost money because of advice that a 17 year old named "Crypto Nick" gave you ... let's just say that blaming Nick is not your best litigation strategy.
what is baffling to me BAFFLING is how anyone who believes in the value proposition of creating magical internet money OUT OF THING FUCKING AIR can be opposed to the idea of minting the coin
Ponzi schemes are an investment fraud where a promoter repays old investors w/ new investor $$, pretending that repayment is from legit commercial activity when the only purpose of the enterprise is to substitute new money for old.
Bitcoin is, for the love of Pete, not a ponzi.
just received a notice from my bank that they are blocking purchases of steak with credit or debit card because they don't think this keto thing is good for me.
A word of caution: that order in the Ripple case is a partial summary judgment from a single district court judge.
While persuasive, it's not binding precedent on other courts and will likely be appealed and could be reversed
don't yolo into anything based on that decision
Naive attempts by regulators to shut down truly decentralized protocols will end up being a fruitless game of regulatory whack-a-mole that will reveal both an inherent mismatch between circa 1930s securities law regimes and a powerlessness to make meaningful impact.
When the NSA and CIA first contacted me about creating bitcoin back in 2006/7, I was initially reluctant, but then they explained the shit-posting opportunities and I was like hell yeah I am all in.
BREAKING: SEC issues new guidance that says your momma is also a security.
I hate to ruin everyone's crypto doom tweeting but had back-to-back calls today with a bunch of people who were building really cool stuff last month and are still doing it today, and for whom the late financial wreck and ruin is just background chatter.
I have great respect & admiration for reporters & news media in general, which is perhaps unusual these days, but if you are reporting a jury found that “Craig is Satoshi” or the Defendants won, you are lazy at best, a lousy reporter, & should find a new line of work.
Craig Wright files a motion asking court to keep his list of bitcoin addresses secret because if people see them they will be able to provide further evidence that he is full of crap.
This motion should be denied.
I don't love PayPal but it's absurd to downplay the significance that an int'l payment rails w/ 300 mm+ users now openly embraces and facilities use of bitcoin. Doesn't really matter if payments are settled in cash.
We're seeing the end of "only criminals use bitcoin" theme.
It’s intellectually inconsistent to say that bitcoin is a scam controlled by a few for their own benefit without saying the same thing about modern industrial capitalism.
I am actually totally fine with the dollar being replaced by a dog meme coin.
Maybe — and hear me out here! — people who don’t know what a consensus mechanism is are not really in a great position to make laws about ‘em.
To put in in perspective, when you get yelled at by a federal judge and threatened with handcuffs in a contempt hearing after a court supervised re-opened depo and your lawyers are told to instruct you to answer questions, it's not going well for you.
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a purported 2012 trust doc with font files copyrighted 2015
If you are an elected official and traded on inside Corona information and didn’t tell the public you should go to prison and then straight to hell.
Some Conclusions
1. XRP = a security
2. Craig Wright ≠ Satoshi
3. Bitcoin ≠ a Ponzi
4. Crypto prices are manipulated
5. Tether, prolly corrupt
6. Ayn Rand is tedious
7. Money Printer go brrrrrr is good
8. The Howey test makes sense
9. Herring = good
10. Hindsight isn't 20/20
it would be the most baby boom generation thing in the world to claim that they actually won WWII despite not even being born yet
So I didn’t realize that #mintthecoin coin was serious and having read up on it seems like a genius answer to a stupid political problem.
"Ripple created XRP, they own most of it and it was issued after company formation. Open-and-shut determination."
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Cryptocurrency is the first money in the world that is governed entirely by memes and not the aesthetic-poetic apparatus of drunk bankers. This alone should give you pause.
The biggest mistake that the SEC made in the post-ICO cleanup was letting a multi-billion dollar ICO off the hook with a $24 million penalty.
The message that this sent was that it's OK to play chicken with regulations and the consequences are minimal.
We hear this every day.
Twitter has exposed how many intelligent people don't actually understand anything much at all and actually aren't really that intelligent.
Imagine if the CEOs of a couple of major grocery chains communicated publicly via twitter about refusing to sell a particular herring brand because they disagreed with herring company CEO's stated position about the origin of herring.
Imagine if after Enron we banned accounting or after Madoff we banned investing or money
while the idea of "buying the constitution" seemed gross to me for a bunch of reasons, the fact that scores of unaffiliated strangers from around the world could pool the equivalent of $40 million+ in a couple of days without using banking rails is undeniably astonishing.
What's going to happen to Craig Wright now -- having apparently broken an agreement to settle in principle, after stringing the other side & Court along for 2 months -- is that he'll end up with a massive judgment against him & will lose every single motion in the case.
It took me a while to get bitcoin. Part of the reason is the stories people tell about it, and who some of the people telling those stories are.
Once I was able to separate the narrative from the technology, the clouds cleared.
an opinion I have grudgingly mostly accepted: securities and financial surveillance laws as currently enforced in the US create a regulatory moat for incumbent wealth.
When a court cites Sir Walter Scott's "oh what a tangled web we weave when first we practice to deceive" in denying your motion you had a really bad day.
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JUST IN: Federal court denies Craig Wright’s Motion to Dismiss, calls out multiple conflicting sworn statements by him (via @stephendpalley)
theblockcrypto.com/2019/08/15/fed
There was an important ruling in the In Re Ripple lawsuit last week in California federal court.
Tl;dr: XRP sure sounds like a security.
My bet is that the Court will ultimately reach the same conclusion.
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[OP-ED] XRP is probably a security, don’t @ me (via @stephendpalley) theblockcrypto.com/genesis/57366/
The government doesn't need more data about you.
It already has too much.
for XRP to survive, Ripple needs to cut a deal w/ SEC & not persist in the risible delusion of ultimate success in the US Supreme Court & substitute the Ripple Test for the Howey Test. There are 600 million reasons why I am right.
If they care about bag holders, that's the path.
Centralized decentralized finance is one of the most idiotic terms I have ever heard.
That is all.
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So. Careful with your tweeting and your YouTubing, crypto-influenzas.
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This reversal means people like Trevon James ("you didn't lose all your money/you lost all your money") are potentially liable to people who lost money in the Bitconnect Ponzi.
people have been conditioned to think that being irresponsible and not caring about others is their god given right.
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10 days later, my Magical Blue Mask Exemption Bracelet still works like a charm. Every time.
People have been conditioned to believe anything... might as well make it work to my advantage.
either our securities laws + regulators modernize to deal with/accommodate the seismically profound impact crypto & distributed systems will have on people's lives or these gatekeepers will become irrelevant, overcome & outgunned by tech.
adapt or die also applies to the state.
insane, overly broad, octupusine, unsalvageable, unconstitutional, kill it with fire.
Hard to see how his lawyers stay on in the case if this is true. Also hard not to see how he doesn’t get defaulted, held in contempt and (potentially) referred for a perjury prosecution.
Dear millenials -- they will never really retire and if they do they will spend all of their money on chin lifts and weed and Woodstock revival shows and then their healthcare and they will live forever which is great but mom and dad ain't gonna leave you shit.
Love,
GenX twitter.com/twobitidiot/st
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I'm getting a ton of inquiries from people who can't get their crypto off of platforms.
If this happens to you immediate options aren't great.
Superman ain't gonna save you.
Be careful where you leave your funds.
Exchanges aren't banks.
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My read from afar is that as expected Wright is fucked.
seriously, imagine thinking that being ruled, in essence, a thief who stole $100 million is a good thing