Since its launch in 2009, Bitcoin has ballooned into an asset currently fluctuating around a $1.34 trillion market cap and has inspired the creation of thousands of tokens ranging from utility tokens like Ethereum’s “ETH” to stablecoins like “USDC.” (CoinMarketCap; Edan Yago, Forbes). Unlike traditional currencies, which depend on a central authority such as a bank or government to validate and record transactions, cryptocurrency (“crypto”) operates on a decentralized blockchain that allows for secure, direct transactions that are verified through a distributed ledger and network consensus. (Stephanie Susnjara, IBM). Despite these legitimate uses, the Securities and Exchange Commission (“SEC”) has warned that some tokens serve as vehicles for “pump and dump” schemes, in which fraudsters spread false information to drive up a coin's price before selling their holdings, leaving other investors with a loss. (SEC). One such scheme came to light in 2024, when Shane Hampton (“Hampton”) was convicted at a federal jury trial of conspiracy to commit securities price manipulation and wire fraud for his role, alongside Hydrogen Technology (“Hydrogen”) CEO Michael Kane (“Kane”), in manipulating the price of the HYDRO token. (DOJ). Now on appeal to the Eleventh Circuit, Hampton and Kane argue that HYDRO was not an “investment contract” because its value derives from its utility within Hydrogen’s ecosystem as opposed to any profit derived from the efforts of others. (Carolina Bolado, Law360). This post briefly unpacks Hydrogen’s scheme and Hampton’s conviction before focusing on the appeal, arguing that however the Eleventh Circuit rules, its holding will primarily reach well-documented organizations while smaller, anonymous pump-and-dump schemes remain far more difficult to prosecute.

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Texas Senate Bill 13 ("SB 13"), enacted in June 2021 and authored by State Senator Brian Birdwell, was among the first U.S. laws targeting Environmental, Social, and Governance ("ESG") investing practices. (Mollie Duckworth, Latham & Watkins LLP). At its core, SB 13 prohibited Texas public entities from investing in or contracting with companies deemed to "boycott" the fossil fuel industry. (Texas Policy Research). ESG policies “aim to promote sustainable and responsible business practices” in addition to the previously paramount financial bottom line. (Deloitte). ESG practices trace their roots back to the early 1960s, led by social activists and religious groups seeking to spark corporate responsibility on ethical investing. (Thomas J. Billitteri, CQ Press). Sustainability pioneers like John Elkington popularized the “triple bottom line,” or the ideas that corporations must account for their societal and environmental impacts in addition to their profitability. (John Elkington, Harvard Business Review). Today, ESG practices are performed across industries, focused on issues, “ranging from human capital and compensation issues, to climate change, deforestation, and water and waste management, to supply chain management.” (Jurgita Ashley, Harvard Law School Forum on Corporate Governance). In the energy context, ESG policies condition investing on environmental and social criteria, threatening states like Texas by disfavoring their core oil and gas industries based on ideological grounds. (Ayden Runnels, The Texas Tribune). Thus, the law represented a “high profile” effort to combat ESG practices that the Texas Senate viewed as a threat to the state’s energy sector. (Texas Policy Research). This discussion explores SB 13’s implications, the recent ruling of its unconstitutionality, and the market’s incipient response to SB 13’s discontinued enforcement.

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