- Binance director Tigran Gambaryan underwent an eight-month ordeal in Nigeria.
- Tornado Cash developer Alexey Pertsev has been convicted in a closely watched crypto privacy case.
- Crypto fell significantly during the 2024 US elections.
A version of this story appeared in The advice newsletter of December 23. Register here.
Hi! Ed here. What a year in terms of regulations!
It started with Binance in February, when Osato Avan-Nomayo announced that Nigerian officials had arrested two Binance executives.
Nigerian central bank officials have accused Binance of undermining its fiat currency, the naira. Binance, the world’s leading crypto exchange, has rejected the allegation.
Yet it was Tigran Gambaryan, a former US federal agent who headed Binance’s financial crime compliance unit, who became a pawn in the battle.
No sooner had Gambaryan and his colleague Nadeem Anjarwalla arrived to settle the dispute than they were arrested and detained in a government “guest house”.
Osato’s stories detail how Anjarwalla managed to escape and how Gambaryan was accused of money laundering and imprisoned despite having no strategic decision-making power within the company.
As Gambaryan’s health deteriorated in prison, U.S. officials pleaded with the Nigerian government to release him. In October, Nigerian prosecutors relented and Gambaryan’s ordeal ended.
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In the meantime, Alexey Pertseva developer of Tornado Cash, the cryptocurrency mixer, was facing his own criminal crucible.
Inbar Preiss reported how Dutch prosecutors charged Pertsev, a Russian living in the Netherlands, with money laundering due to his failure to stop bad actors from using the platform to hide their illicit gains.
The case of Pertsev, who pleaded not guilty, has become a bellwether for the privacy of cryptocurrencies. The Dutch court found Pertsev guilty and sentenced him to more than five years in prison.
Although he is appealing the verdict, two of Tornado Cash’s co-defendants are on trial on similar charges in the United States.
A US appeals court ruled last month that sanctions should not apply to smart contracts, a ruling that will make the issue an important test in 2025.
THE US presidential race dominated crypto regulatory and legal news in the second half of the year.
Joanna Wright explained how the crypto lobby matched its rhetoric with serious money and, after the election, wasted no time in amassing a $78 million campaign war chest for future elections.
Jo’s must-see profile on crypto “truth teller” Molly White shed light on crypto campaign spending.
As for Gary Genslerhe will not chair the Securities and Exchange Commission much longer.
The regulator said he would resign the day Trump visits the White House. With it came a period where cryptography was questioned like never before.
Gensler argued that most digital assets were no different from stocks or bonds and should be governed by the same laws.
To this end, in 2023, the SEC sued Coinbase, Kraken and Binance. It continued its crackdown this year and targeted a large number of companies to force them to deal only in registered securities and be regulated like traditional companies.
The industry rejected Gensler’s “regulation by enforcement” approach. And now, as the Biden administration gives way to the Trump team, many of these cases remain open.
And crypto executives are hoping that Paul Atkins, Trump’s nominee to head the SEC, will withdraw the litigation and end the drama of the Gensler era.
In 2025, most crypto regulatory measures will likely be transferred to other countries, especially the European Unionwhich implements its landmark law on the regulation of crypto-asset markets.
But the United States will likely emerge as a more attractive entrepreneurial destination.
The crypto industry raised around $200 million during the 2024 election cycle and will likely enjoy this return on investment.
ICYMI
Story of the week
Ultra-fast computers that exploit quantum mechanical phenomena have long posed a theoretical threat to the encryption that underpins much of the $3.8 trillion crypto industry. How long will it be before it is able to hack crypto wallets? Tim Craig reports.
Article of the week
David O. Sacks, the Trump-appointed “crypto czar,” describes the makeup of the president-elect’s pro-tech cabinet.
Some important announcements today from President Trump on his technical team! I look forward to working with:
— Michael Kratsios – Director of the White House Office of Science and Technology Policy (OSTP) and Assistant to the President for Science and Technology.
— Dr. Lynne… https://t.co/zai4a61VVC– David Sacks (@DavidSacks) December 22, 2024
Edward Robinson is the story editor for DL News. Contact the author at ed@dlnews.com.
