The Pandora Papers Spark Pandemonium and Potential Policy Change

Pandora’s box is a fictional artifact of Greek mythology. (Merriam-Webster). Pandora, the owner of the box, was told never to open the box. Id. However, she did anyway. Id. When she took the lid off the box, out swarmed all the troubles of the world, never to be recaptured. Id.

The recently revealed and appropriately named Pandora Papers have brought this Greek myth into a modern context, except evidence of global inequity swarmed out of the “box” in 2021. The Pandora Papers shocked many by describing how the ultra-rich hide money overseas to evade taxes. (Kelly Phillips Erb, Bloomberg Law). More surprising is the scale of the operation and how many well-known global figures participated in such dealings. . .

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SEC Enforcement, Trending TopicsRace to the BottomRyann Patton
Regulatory Gap Provides Opportunity for Crypto Fraud

Stefan Qin could face more than seven years in prison for fraudulently operating his hedge fund which allegedly derived profits from price gaps between cryptocurrencies on global exchanges. (Chris Dolmetsch, Bloomberg Law, Southern District of NY). In 2016, Qin dropped out of college to form the Virgil Sigma Fund. (Alexander Osipovich and Jeong Eun-Young, Wall Street Journal). Expectations were high for Qin, previously a high school math whiz, to dominate the cryptocurrency world with his price-monitoring algorithm called Tenjin. Id. . .

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SEC Enforcement, Featured TopicRace to the BottomEmily Sexton
Beware of Big Promises in a Rapidly Changing World: Behind the Elizabeth Holmes Trial

The ongoing federal prosecution of fallen biotech wunderkind Elizabeth Holmes showcases the dangers investors—along with patients and doctors—face as companies make encouraging promises in a climate of rapidly emerging technology. Elizabeth Holmes dropped out of Stanford University and founded Theranos, Inc. (“Theranos”) in 2003 seeking to “revolutionize the blood-testing industry.” (Sara Randazzo, The Wall Street Journal; Eric Mack, CNET; Daniel Thomas, BBC News). The Silicon Valley firm claimed to be developing technology that required a smaller draw of blood than traditional lab tests and touted the convenience of using its test kits compared to sending samples into lab centers. (Eric Mack, CNET). After crafting partnerships with healthcare and consumer giants Walgreens Boots Alliance and Safeway, Inc., Theranos’ valuation skyrocketed to a peak of approximately $10 billion. (Sara Randazzo, The Wall Street Journal; Zaw Thiha Tun, Investopedia). Then, in 2015, a whistleblower alerted the Wall Street Journal to Theranos’ allegedly deceptive practices. (Sara Randazzo, The Wall Street Journal). . .

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SEC EnforcementRace to the BottomReid Melton
Will the SAFE Act Provide Much Needed Safety in the Wild West of Cannabis Finance?

Every movement needs a leader, and it seems the cannabis industry has found one in U.S. Representative Ed Perlmutter of Colorado. He is the sponsor of the Secure and Fair Enforcement Banking Act of 2021 (“SAFE”), a legislative bill that would provide cannabis businesses with improved access to mainstream banking services. (Kyle Jaeger, Marijuana Moment). In April, the House approved SAFE by a vote of 321 to 101. (The Office of Representative Ed Perlmutter). SAFE now sits in purgatory while the U.S. Senate debates its merits. (Christopher Butler, Boston.com). This post examines the impact SAFE would have on the cannabis industry in the context of the industry’s current standing in the realm of public opinion and under current legal structures. . .

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Cannabis RegulationRace to the BottomWill Rigali
Yield Farming: Should Average Investors Prepare for Harvest?

“DeFi” is short-form for decentralized finance, a method of executing financial transactions without the middlemen—brokerages, exchanges, banks, and other intermediaries. (Devine, US News). An understanding of yield farming cannot be achieved without first understanding the term DeFi. In the purest sense of the term, DeFi “must have no centralized control but run autonomously on a blockchain through the use of smart contracts.” Id. These smart contracts are “bits of code that perform actions once certain conditions have been met,” self-executing when specific outcomes occur. Id. Generally, DeFi has come to be known as the term for “any application or business that uses blockchain technology or cryptocurrency to create alternative financial products.” Id. One practice catching the attention of the SEC is yield farming, a method of lending crypto currency to which the SEC believes federal securities regulations apply. (Kharif, Bloomberg Law). . .

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DeFi, CryptocurrencyRace to the BottomConrad Kranz