SEC charges crypto entrepreneur Justin Sun with fraud      

The Securities and Exchange Commission (SEC) has charged crypto asset entrepreneur Justin Sun and his companies, Tron Foundation Limited, BitTorrent Foundation Ltd, and Rainberry Inc, for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT). The SEC alleges that Sun and his companies offered and sold TRX and BTT as investments through multiple unregistered “bounty programs” and unregistered monthly airdrops to investors, violating Section 5 of the Securities Act.  

The complaint also alleges that Sun fraudulently manipulated the secondary market for TRX through extensive wash trading and orchestrated a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation. Eight celebrities were also charged for illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation. 

SEC consults on EDGAR digital submissions     

The proposed amendments would require the electronic filing, submission, or posting of certain forms, filings, and other submissions that national securities exchanges, national securities associations, clearing agencies, broker-dealers, security-based swap dealers, and major security-based swap participants make with the Commission. The proposed amendments would also make certain amendments regarding the Financial and Operational Combined Uniform Single (“FOCUS”) Report to harmonize it with other rules, make technical corrections, and provide clarifications.  

SEC Chairman Gary Gensler said: “We live in a digital age. In 2023, one might think that all filings to the Commission already could be made electronically. That’s not yet true. Today, we have the important opportunity to require electronic filing for nearly all of the remaining paper filings required under the Exchange Act. I believe the proposal, if adopted, would save both registrants and the Commission time and resources.” 

“Head of Legal and Compliance” charged in $400 million crypto laundering   

According to the allegations from the IRS, Irina Dilkinska was the purported Head of Legal and Compliance for OneCoin, but instead of ensuring that OneCoin complied with the law, she assisted in the creation and management of shell companies to launder OneCoin proceeds and to hold property belonging to OneCoin’s co-founder, Ruja Ignatova. Dilkinska helped co-conspirator Mark Scott launder approximately $400 million in OneCoin proceeds through a series of fake Cayman Islands investment funds operated by Scott. Dilkinska used a company named B&N Consult EEOD to disguise the transfer of millions of dollars as purported “investments” into Scott’s funds. 

OneCoin was a fraudulent cryptocurrency marketed and sold through a global multi-level-marketing network. The company, which began operations in 2014 and was based in Sofia, Bulgaria, claimed that it had over three million investors who invested over $4 billion worldwide in the fraudulent cryptocurrency. 

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The FCA has updated its Office for Professional Body Anti-Money Laundering Supervision (OPBAS) guidance with its findings from research into Trust and Company Service Providers (TCSP).  

The updated guidance states: “Evidence has shown that TCSPs can be exploited to allow millions to be laundered through the UK’s financial system. Our report aims to help legal and accounting professional bodies improve their supervision of their respective sectors, as they play a crucial role in preventing financial crime. 

We will continue to work with the wider financial crime community to make sure the findings contained in this report help deliver a stronger and more consistent standard of TCSP supervision.” 

The Commodity Futures Trading Commission has issued an order simultaneously filing and settling charges against DARMA, LLC, a registered commodity pool operator and commodity trading advisor located in Puerto Rico, for violating CFTC regulations for supervision and reporting. 

Specifically, the order finds DARMA failed to diligently supervise its fund administrator’s activities, resulting in its failure to accurately prepare and distribute timely pool statements to pool participants. It also resulted in its failure to file its annual audited pool financial statement (AFS) with the National Futures Association (NFA) in a timely manner. 

The CFTC order requires DARMA to pay a $150,000 civil monetary penalty and to cease and desist from further violations of CFTC’s regulations, as charged. 

The UK’s Financial Ombudsman Service has published new data on the number of complaints received about individual businesses between 1 July and 31 December 2022. Between those dates, the FOS received: 

• 50,346 new banking and credit complaints in H2 2022, compared to 44,200 in H1 2022. 
• 19,346 new general insurance/pure protection complaints in H2 2022, compared to 17,530 in H1 2022. 
• 4,160 new mortgages and home finance complaints in H2 2022, compared to 3,658 in H1 2022. 
• 3,842 new decumulation life and pension complaints in H2 2022, compared to 4,193 in H1 2022 
• 2,227 new investment complaints in H2 2022, compared to 2,427 in H1 2022.