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    S.E.C. Declares Memecoins Are Not Subject to Oversight

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    The agency said the novelty digital assets were not securities, a month after President Trump issued his own memecoin.The Securities and Exchange Commission said on Thursday that so-called memecoins — novelty digital assets — are not subject to regulatory oversight because they are not considered securities.The determination could have big ramifications for the crypto industry and President Trump, who issued his own memecoin days before his inauguration.The S.E.C.’s policy on memecoins is consistent with the light regulatory approach that Mr. Trump promised to take toward the crypto industry during his campaign.Mr. Trump and his family firmly embraced digital currencies last year by teaming up with a new digital assets company, World Liberty Financial. The memecoin the president introduced during pre-inaugural festivities in January, called $Trump, spurred controversy because it swung wildly in value and generated hefty trading fees for Mr. Trump.The S.E.C.’s policy statement did not refer to Mr. Trump’s memecoin or any other specific digital novelty item. But the commission clearly acknowledged the risk to investors who put money into such products, even as it said it would not regulate them.“Although the offer and sale of memecoins may not be subject to the federal securities laws, fraudulent conduct related to the offer and sale of memecoins may be subject to enforcement action or prosecution by other federal or state agencies,” said the statement, from the S.E.C.’s division of corporation finance.In reaching its conclusion, the S.E.C. employed a nearly century-old Supreme Court decision to determine that a memecoin should not be considered an investment contract and therefore subject to regulatory oversight.Under Gary Gensler, who served as S.E.C. chair under President Joseph R. Biden Jr., the regulator had used that same Supreme Court case to argue that most digital assets are securities and subject to regulation.The S.E.C., apparently worried that traders and speculators could use its rationale to evade regulation, said it would look closely at any new product that tried to label itself a “memecoin.”The agency has moved quickly to dismantle the aggressive approach taken by Mr. Gensler in regulating cryptocurrencies. His enforcement actions angered the crypto industry and led many of its investors to contribute mightily to the campaign of Mr. Trump, who at one time was a crypto critic.Also on Thursday, the S.E.C. officially moved to dismiss its enforcement lawsuit against Coinbase, one of the nation’s largest crypto firms. The S.E.C. also has told a number of crypto companies that it was ending investigations into their activities.The S.E.C. also said in a court filing this week that it was trying to reach a settlement in a civil fraud case it filed against Justin Sun, a crypto investor. Mr. Sun also is an adviser to World Liberty and a significant investor in its digital token. The charges against him do not involve his investment with World Liberty. More

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      Nikola, Electric Truck Maker, Files for Bankruptcy

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      The company, which once enjoyed a surging stock price, struggled to turn its plans for electric and hydrogen trucks into a viable business.Nikola, an electric vehicle start-up that had once hoped to become the Tesla of heavy trucks, filed for bankruptcy protection on Wednesday.Founded in 2015, Nikola promised to develop long-haul semi trucks powered by hydrogen and electricity, and listed itself on the stock exchange in 2020 before it had sold a single vehicle. Its share price surged briefly as individual investors and some Wall Street firms clamored to bet on companies that they thought could replicate Tesla’s success and its soaring stock price.Investors’ short-lived enthusiasm for Nikola made its founder, Trevor Milton, and other early investors wealthy. But before long, significant doubts emerged about Mr. Milton’s claims about the company’s technology and orders from customers. He was soon ousted, and later convicted on fraud charges.In recent quarters, Nikola had begun delivering small numbers of electric trucks but far too few to make money. Late last year, the company said it had $200 million in cash and $270 million in long-term debt. Its stock plunged in early February on reports that the company was nearing a bankruptcy filing.The company said in a release it had about $47 million in cash on hand, and intended to continue “limited” service and support for trucks out on the road. The bankruptcy filing listed liabilities of between $1 billion and $10 billion, and put the number of creditors it owes at between 1,000 and 5,000.Nikola is one of several fledgling electric vehicle companies that have struggled to turn their ideas into actual cars and trucks.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Elon Musk and DOGE vs. Regulators

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      The billionaire has needled government agencies, armed with potential influence over their budgets. But some of these organizations are also looking into his interests.Elon Musk’s attacks on the agencies that regulate his businesses are raising questions about conflicts of interest.Eric Lee/The New York TimesMusk vs. regulatorsElon Musk remains perhaps the most consequential figure in President-elect Donald Trump’s orbit, with a commission for cutting government spending headed by him and Vivek Ramaswamy — widely known by its acronym, DOGE — promising huge reductions.Federal regulators have become prominent targets for Musk and his allies. But those agencies are continuing to scrutinize the tech billionaire’s interests, raising questions about conflicts.“The SEC is just another weaponized institution doing political dirty work,” Musk posted on X on Thursday, joining a flurry of right-wing attacks on the agency. The impetus for the ire: an appeals court ruling that Nasdaq can’t require diversity on the boards of companies that list on the exchange, a longtime bugbear of conservatives.Ramaswamy wrote on X of the commission: “When an agency like the SEC is so repeatedly & thoroughly embarrassed in federal court for flouting the law, it loses its legitimacy as a law enforcement body.”That comes after Musk took aim at the I.R.S. last month, when he polled his X followers about what to do with the tax authority’s budget. The overwhelming response: “Deleted.”But the S.E.C. is renewing scrutiny of Musk. He disclosed on X that the regulator had given him an offer to settle an inquiry into unspecified charges. A letter from Alex Spiro of Quinn Emanuel Urquhart & Sullivan, Musk’s lawyer, claimed that the agency had given them 48 hours to accept or face punishment, as part of an “improperly motivated campaign.” Spiro’s letter also revealed that the commission had reopened an investigation this week into Neuralink, Musk’s brain-implant start-up.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      F.B.I. Searches Home of Shayne Coplan, Polymarket Founder

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      The search involving Shayne Coplan, the founder of Polymarket, known for its presidential election odds, was part of a criminal investigation, three people said.The F.B.I. carried out a search on Wednesday morning at the New York City home of Shayne Coplan, the founder of the betting website Polymarket, three people with knowledge of the matter said.The raid was part of a criminal investigation by the F.B.I. and the U.S. attorney’s office for the Southern District of New York, one of the people said. The investigation appears focused on whether Mr. Coplan, 26, ran Polymarket as an unlicensed commodities exchange, allowing users in the United States to place bets in violation of a settlement with the U.S. government, the person said. Polymarket rose to prominence this fall for offering odds on the presidential election.The F.B.I. seized Mr. Coplan’s electronic devices, including a phone, the person said.A law enforcement official confirmed that F.B.I. agents had conducted “court-authorized law enforcement activity” at Mr. Coplan’s address early Wednesday, but declined to elaborate.Election betting is a murky legal area in the United States. In 2022, Polymarket agreed to stop offering its services to U.S.-based users after settling with the Commodity Futures Trading Commission for operating without registration. The company paid a $1.4 million fine.After the settlement, it was an “open secret” that users in the United States could still gain access to the site with virtual private networks, a former employee previously told The New York Times. On social media, Polymarket’s customers exchanged tips on how to get around the prohibition.Polymarket soared in popularity during the presidential campaign. While polls showed a close race, the site’s odds gave former President Donald J. Trump a large advantage over Vice President Kamala Harris.A spokesman for the company said the F.B.I. raid was “obvious political retribution by the outgoing administration.”In a post on X, Mr. Coplan said the Biden administration was making “a last-ditch effort to go after companies they deem to be associated with political opponents.”A spokesman for the U.S. attorney’s office declined to comment.Some details of the investigation were reported earlier by Bloomberg and The New York Post. More

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      Carl Icahn, Activist Investor, Faces Intense Scrutiny From Wall Street

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      The value of the 88-year-old activist investor’s stake in his own company has fallen by nearly $20 billion. Mr. Icahn said that he was “absolutely not selling.”Chief executives of public companies have long feared Carl C. Icahn. The 88-year-old investor made a name and billions for himself by questioning the decisions and strategies of corporate leaders and agitating for change at companies like Apple, RJR Nabisco and Netflix.But now Mr. Icahn is under intense scrutiny from Wall Street investors, who are rapidly selling his company’s stock. In the past year and a half, shares of Icahn Enterprises, his publicly traded investment company, have dropped more than 75 percent, losing nearly $20 billion of value. After dropping more than 30 percent since mid-August alone, it now trades at about $11 a share, its lowest level in more than two decades.Mr. Icahn owns roughly 86 percent of the shares, so he has personally lost billions of dollars, too.“There’s a confidence game and he’s lost the confidence of investors,” said Don Bilson, who focuses on activist investing as the head of event-driven research at Gordon Haskett Research Advisors.Some Wall Street investors are now worried that the stock’s continuing fall could threaten the health of the entire company and that it could be forced to sell companies it holds. Icahn Enterprises holds a mix of public stocks, real estate and other investments, according to interviews with Mr. Bilson and several other market watchers.Investors have been questioning whether Mr. Icahn himself has been selling his stock. He has taken out personal loans using his stock as collateral. Banks that offer these loans typically have strict requirements related to the value of a company. A sharp drop in a stock price could force a lender to sell shares.

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      Icahn Enterprises share price
      Source: FactSetBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Biotech Exec Gets 7 Years in Prison for False Claims About Rapid Covid-19 Test

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      Prosecutors said Keith Berman falsely claimed he had invented a blood test that could detect Covid-19 in 15 seconds. His lawyer said he had put “genuine effort” into developing such a test.The former chief executive of a biotechnology company who, during the early days of the pandemic, falsely claimed that he had invented a blood test that could detect Covid-19 in 15 seconds was sentenced on Friday to seven years in prison for securities fraud, federal prosecutors said.From February 2020 to December 2020, the former executive, Keith Berman, 70, of Westlake Village, Calif., engaged in a scheme to defraud people into investing in his company, Decision Diagnostics Corporation, by claiming the test could detect Covid using a finger prick sample of blood, prosecutors said.In March and April 2020, Mr. Berman issued 12 “false and misleading” news releases describing the rapid Covid test, which his company called GenViro, prosecutors wrote. Decision Diagnostics’ stock price jumped by more than 1,500 percent during the period, prosecutors said.In reality, prosecutors said, Mr. Berman had “privately confided in a friend the test could not actually detect Covid-19.”Prosecutors accused Mr. Berman, the sole director of the publicly traded medical device company, of capitalizing on people’s fears about the pandemic in an effort to resuscitate the company’s fortunes.Mr. Berman’s scheme resulted in about $28 million in investor losses, prosecutors said. Mr. Berman was indicted in December 2020, and he pleaded guilty in December 2023 to securities fraud, wire fraud and obstruction of an official proceeding.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Why No One in Politics Wants to Talk About the Sam Bankman-Fried Scandal

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      The fallout from the crypto controversy is widely spread — and it has hit both parties.Back in May, months before Sam Bankman-Fried’s cryptocurrency exchange imploded seemingly overnight, he suggested that he might be willing to spend as much as $1 billion in political donations during the 2024 presidential election.It was an astronomical sum to throw around — Bankman-Fried later called it “a dumb quote on my part” — but at the time, the crypto kingpin was still an object of curiosity rather than ridicule.Billboards with his frizzy-haired visage popped up in Manhattan; journalists examined his growing political empire and his “schlubby” personal style. Endless articles were written about “effective altruism,” his utilitarian-tinged philanthropic philosophy. At one point, Forbes pegged his net worth as high as $26.5 billion; Fortune ran a cover, cringe-inducing in hindsight, asking, “The Next Warren Buffett?”It’s hard to quickly sum up the extent of the influence operation Bankman-Fried, 30, and his associates built during his meteoric ascent. My colleagues have described it as “a network of political action committees, nonprofits and consulting firms” that “worked to court politicians, regulators and others in the policy orbit.”Last week, Bankman-Fried was arrested in the Bahamas, and a federal grand jury indicted him on eight charges that include wire and securities fraud and money laundering, along with conspiracy to commit those offenses. He has agreed to be extradited to the United States as soon as Wednesday, a decision one of his lawyers said defied “the strongest possible legal advice.” Bankman-Fried has denied wrongdoing.The extraordinary financial scandal has also become a sticky political morass, sucking in dozens of lawmakers and groups. Prosecutors also accused Bankman-Fried last week of defrauding the Federal Election Commission by running what’s known as a straw-donor scheme — making political contributions under someone else’s name.Bankman-Fried’s contributions, Damian Williams, the U.S. attorney for the Southern District of New York, said last week, “were disguised to look like they were coming from wealthy co-conspirators when in fact the contributions were funded by Alameda Research,” a hedge fund closely tied to Bankman-Fried’s cryptocurrency exchange, FTX, “with stolen customer money.”FTX, under new management, said on Tuesday that it wanted to recoup that money, and is threatening legal action if the cash is not returned voluntarily. It’s not clear how much is considered stolen, but Bankman-Fried and his associates poured at least $70 million into various campaigns over 18 months.In 2022, Bankman-Fried donated about $40 million to various candidates and political committees, overwhelmingly to Democrats. Those donations were “mostly for pandemic prevention,” Bankman-Fried has insisted. But a less lofty aim of his influence-peddling, clearly, was to shape federal regulations in his company’s favor.Before his arrest, Bankman-Fried told Tiffany Fong, a YouTube journalist, that he had also donated about the same amount to Republicans in ways, he suggested, that would not necessarily pop up in federal campaign finance reports.What to Know About the Collapse of FTXCard 1 of 5What is FTX? More