UNCHAINED: Are All Crypto Funds Basically Engaging in Illegal Activity Now?

Uniswap Labs and Galois Capital have settled with the CFTC and the SEC, respectively, but crypto lawyer Larry Florio says these small settlements could set bad precedents for the rest of the industry.

The SEC and CFTC’s recent actions against Uniswap and Galois Capital could mark a turning point in crypto regulation. With both firms settling on relatively low fines, are we witnessing regulators establish precedent for a broader crackdown on the industry? 

In this episode, Larry Florio, general counsel at 1kx, delves into the implications of these settlements, the frustrations asset managers face with regulatory compliance, and whether the SEC’s approach could push the crypto industry into a corner. Will these actions set a precedent for more aggressive enforcement ahead?

Show highlights:

Why the SEC's action against Galois Capital highlights a shift in language, focusing on tokens "offered and sold as securities"What a qualified custodian is and why the SEC's action against Galois punishes them for using FTX, which could have fit one definition of a qualified custodian if it hadn’t been perpetrating a fraudHow the SEC demands crypto fund managers comply with regulations on qualified custodians while also limiting qualified custodians in cryptoWhether the SEC is effectively banning crypto funds by requiring compliance with impossible rulesHow the SEC penalized Galois for giving affiliates better liquidity terms than outside investorsHow SEC Commissioner Mark Uyeda’s call for clarity on "crypto asset securities" reflects the industry’s frustration with the lack of clear guidelines from the SECWhy the CFTC's fine against Uniswap for alleged leveraged transactions may set a precedent for future enforcement actionsHow Commissioner Summer K. Mersinger's dissent highlights the unfairness of punishing Uniswap despite their proactive compliance, according to LarryWhether the New York Attorney General’s subpoenas to VCs about Uniswap signal a renewed adversarial approach to regulating DeFiThe timing of these actions, along with the SEC’s Wells notice to OpenSea

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Guest

Larry Florio, general counsel at 1kx

Unchained Podcast is Produced by Laura Shin Media, LLC. Distributed by CoinDesk.

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