- Binance exec Tigran Gambaryan suffered an eight-month ordeal in Nigeria.
- Tornado Cash dev Alexey Pertsev was convicted in a closely watched crypto privacy case.
- Crypto flexed big time in the 2024 US election.
A version of this story appeared in The Guidance newsletter on December 23. Sign up here.
Howdy! Ed here. What a year on the regulatory front!
It started with Binance in February, when Osato Avan-Nomayo broke the news that Nigerian officials had detained two Binance executives.
Nigerian central bank officials blamed Binance for undermining its fiat currency, the naira. Binance, the world’s top crypto exchange, rejected the allegation.
Yet it was Tigran Gambaryan, a one-time US federal agent who headed Binance’s financial crime compliance unit, who became a pawn in the battle.
No sooner had Gambaryan and his colleague Nadeem Anjarwalla landed to sort out the dispute than they were arrested and held in a government “guest house.”
Osato’s stories detailed how Anjarwalla managed to escape custody, and how Gambaryan was charged with money laundering and imprisoned even though he did not have strategic decision-making authority at the company.
As Gambaryan’s health deteriorated in prison, US officials pleaded with the Nigerian government to release him. In October, Nigerian prosecutors relented and Gambaryan’s eight-month ordeal ended.
Meanwhile, Alexey Pertsev, a dev at Tornado Cash, the crypto mixer, was facing his own criminal crucible.
Inbar Preiss reported on how Dutch prosecutors indicted Pertsev, a Russian living in the Netherlands, with money laundering in connection with failing to stop bad actors from using the platform to hide their illicit gains.
The case of Pertsev, who pleaded not guilty, became a bellwether for crypto privacy. The Dutch court convicted Pertsev and he was sentenced to more than five years in prison.
Even as he appeals the verdict, two Tornado Cash co-defendants are facing trial on similar charges in the US.
A US appellate court ruled last month that sanctions should not apply to smart contracts, a decision that will make this issue an important test in 2025.
The US presidential race dominated crypto regulatory and legal news in the second half.
Joanna Wright covered how the crypto lobby matched its rhetoric with serious money, and after the election wasted no time in mustering a $78 million campaign war chest for future elections.
Jo’s must-read profile of crypto “truth-teller” Molly White cast a spotlight on crypto campaign spending.
As for Gary Gensler, he won’t be chair of the Securities and Exchange Commission much longer.
The hard-charging regulator said he will resign the day Trump heads to the White House. With him goes a period when crypto was challenged like never before.
Gensler argued that most digital assets were no different than stocks or bonds and should be governed by the same laws.
To that end, in 2023 the SEC sued Coinbase, Kraken, Binance. It continued its crackdown this year and targeted a raft of companies to force them to deal solely with registered securities and be regulated like traditional firms.
The industry rejected Gensler’s “regulation by enforcement” approach. And now, as the Biden administration gives way to the Trump team, many of those cases remain open.
And crypto leaders hope Paul Atkins, Trump’s nominee to head the SEC, will withdraw the litigation and end the drama of the Gensler era.
In 2025 most crypto regulatory action will probably shift to other nations, especially the European Union, which is implementing its landmark Markets in Crypto-Assets Regulation law.
But the US will probably look like a more attractive entrepreneurial destination.
The crypto industry raised about $200 million in the 2024 election cycle, and will probably like that return on its investment.
ICYMI
- Even Bitcoiners say a US strategic reserve is a bad idea. And it’s looking more likely that, even with Trump in the White House, it’s just not going to happen. The question is, how much was this US crypto stockpile plan baked into Bitcoin’s price?
- BlackRock posted a fun explainer about Bitcoin. But eagle-eyed Bitcoin backers noticed something was off. And now they’re freaking out.
- MicroStrategy has one plan and one plan only: buy Bitcoin. The stock’s gains have been eye-watering. But doubters are starting to sound the alarm.
Story of the Week
Superfast computers that exploit quantum mechanical phenomena have long posed a theoretical threat to the encryption that underpins much of the $3.8 trillion crypto industry. How long until it’s able to crack crypto wallets? Tim Craig reports.
Post of the Week
Trump’s nominated “Crypto Czar” David O. Sacks outlines how the president-elect’s pro-tech cabinet is shaping up.
Some important announcements today by President Trump on his Tech Team! I look forward to working with:
— David Sacks (@DavidSacks) December 22, 2024
-- Michael Kratsios - Director of the White House Office of Science and Technology Policy (OSTP), and an Assistant to the President for Science and Technology.
-- Dr. Lynne… https://t.co/zai4a61VVC
Edward Robinson is the story editor for DL News. Contact the author at ed@dlnews.com.