Texas regulators have their eyes on one of the most powerful players in the crypto world

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Big crypto news this week came via a Texas court.

FTX, the crypto giant run by arguably the most powerful people in the industry, is being investigated by Texas regulators for selling unregistered securities.

“The Enforcement Division is investigating FTX Trading, FTX US and their principals, including Sam Bankman-Fried,” said Texas State Securities Commission Director of Enforcement Joseph Jason Rotunda.

FTX is not alone here. This month we saw Reuters report that Binance is being investigated by federal prosecutors. Bloomberg said the SEC is investigating Yuga Labs, the company behind Bored Apes Yacht Club, and Three Arrows Capital for “possible violations of the law.”

Crypto critics have long criticized regulators for allowing the industry to grow unhindered. But with the slew of high-profile research we’re seeing now, it looks like there could be a real shift.

John Reed Stark, a crypto critic who formerly headed the SEC’s Office of Internet Enforcement, told me that the FTX investigation is “an extraordinary harbinger of the onslaught of crypto-regulatory enforcement ahead.”

“You don’t mess with Texas,” said Stark, who believes state regulators across the country have gotten ahead of themselves in the fight against crypto. But Stark – who has been highly critical of regulators in the past – says the tide is now turning.

“If the crypto ecosystem isn’t preparing for a US regulatory onslaught, they’ve got their heads in the sand. The FDIC, OCC, SEC, DOL, FBI, US Treasury and IRS have all ramped up their crypto enforcement efforts. And they’re just getting started.”

Leading crypto-skeptic Nouriel Roubini wrote in 2019 that regulators were “asleep at the wheel” when it comes to crypto, so I wanted to see if he still believes that to be true. He sounded less optimistic than Stark.

“Despite the latest research, regulators are still behind the curve,” Roubini told me. “It’s the law of the jungle in crypto.”

There are complaints within the industry that the government has chosen to regulate crypto through enforcement rather than make rules, passing a bill.

“We want rules,” an industry lawyer told me. The meat of it is that the SEC is setting up the same type of case over and over again while failing to address the bigger questions.

“All we get from the SEC is five more cases saying you shouldn’t have issued this as a security in 2016, or Kim Kardashian comes out and makes a big deal out of it like they didn’t already. Floyd Mayweather and Steven Segal got wet for the same thing

Meanwhile, in D.C., bills championing free cryptocurrencies are trickling through the legislative process. Molly Ball broke the latest on DC’s crypto bonanza in an extensive Time Magazine feature.

Through the Ooki Glass

One case that hasn’t received much coverage outside of the crypto press, but is all the buzz in the industry, is the CFTC’s Ooki case.

Ooki, a decentralized autonomous organization, was fined $250,000 by the CFTC in September in its first case against a DAO. The lawsuit claims that anyone who owns an Ooki token could be held liable for the actions of larger groups. This is an entirely new legal theory that is controversial even within the CFTC.

But the high level of interest in the case isn’t really about Ooki, a minor player, but rather about enforcement.

In the absence of specific federal legislation requiring crypto oversight, the SEC and CFTC have been split between DC in what has become a multi-year crypto war. The CFTC has long been the crypto industry’s most supportive of U.S. enforcement agencies, and Sam Bankman-Fried has championed the commission’s oversight as the centerpiece of his crypto-friendly regulatory push.

The crypto attorney I spoke to told me that those who prefer the CFTC over the SEC fall into two camps. The first – let’s call them The Cynics – believe that the CFTC is an underfunded and understaffed agency… and the second camp – The Wonks – believe that cryptocurrencies move closer to existing commodity law.

So now that the CFTC is cracking down on Ooki, the Cynics have had a rude awakening… maybe the CFTC isn’t the pushover they were hoping for.

Yes, the CFTC is doing all that to Ooki.

15 million

President Biden announced the sale of an additional 15 million barrels of oil from the Strategic Petroleum Reserve. That’s the last of the 180 million barrels that Biden announced in March that the government would sell to stabilize gas prices at the time.

The move comes on the heels of OPEC+ output cuts – a move that angered Western officials.

An administration official told CNN that the White House’s plan is to fill the reserve when the market makes it most favorable.


Michael Saylor, the founder of Microstrategy and the dark priest of the church of crypto, emerged in 2020 as perhaps the most ubiquitous bitcoin booster on television.

From Fox News (“Bitcoin is the most certain thing in the world,” Saylor told Tucker Carlson in March) to CNBC to Bloomberg, Saylor was always available to pump bitcoin through its dizzying rise and fall. I interviewed Saylor last year for CNN’s crypto interactive (he’s what we dubbed “Bitcoin Billionaire”).

However, in August, Saylor was named in a lawsuit by the DC attorney general for $25 million in tax evasion. He quickly stepped down as CEO of Microstrategy, and Saylor’s media tour has since stalled. While her Twitter feed remains active with her bitcoin brand identical, Saylor has not made a television appearance, according to the Internet Archive’s Television News Archive, since the news broke.

I emailed Saylor to ask if his TV silence has been a personal choice or if the invitations from online bookers have dried up. Apparently, his tray extends beyond the broadcasting world. We didn’t hear back.

And with that I’ll leave you with Bad Brains’ classic Sailin’ On

(This is, of course, not to be confused with Toots and the Maytals’ excellent Sailing On.)