Crazy World of Crypto: FTX and silent crypto exposure

Anjali C. Das
Anjali C. Das | Wilson Elser Moskowitz Edelman & Dicker, LLP

Anjali Das has been instrumental in the unprecedented growth of Wilson Elser’s cybersecurity & data privacy capabilities in terms of both the number of dedicated cyber attorneys and areas of cyber expertise.

Live Video-Broadcast: March 9, 2023

Crazy World of Crypto: FTX and silent crypto exposure

$95.00 1 hour CLE

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Program Summary

The objective of this program is to provide legal practitioners, companies, and corporate counsel with a basic knowledge of the crypto ecosystem, analyze the fall of FTX, examine the current state of U.S. regulation of the crypto markets (including position of the SEC, CFTC, and OCC), and address potential “silent crypto” exposure under traditional insurance policies (including D&O, lawyers, accountants, commercial crime, and cyber policies).

This course is co-sponsored with myLawCLE.

Key topics to be discussed:

  • Overview: Blockchain, cryptocurrency, digital assets
  • The fall of FTX
  • (Lack of) U.S. regulatory oversight of crypto markets
  • “Silent crypto” insurance coverage under traditional policies

Date / Time: March 9, 2023

  • 1:00 pm – 2:00 pm Eastern
  • 12:00 pm – 1:00 pm Central
  • 11:00 am – 12:00 pm Mountain
  • 10:00 am – 11:00 am Pacific

Closed-captioning available

Speakers

Anjali C. Das_ Wilson Elser Moskowitz Edelman & Dicker, LLP._FedBarAnjali C. Das | Wilson Elser Moskowitz Edelman & Dicker, LLP

Anjali Das has been instrumental in the unprecedented growth of Wilson Elser’s cybersecurity & data privacy capabilities in terms of both the number of dedicated cyber attorneys and areas of cyber expertise. She is a recognized authority on the key factors of cyber-defense, including incident response, privacy compliance and risk management, regulatory investigations and enforcement actions, and the defense of nationwide Data Breach Class Actions. Co-chair of Wilson Elser’s national Cybersecurity & Data Privacy Practice and a respected member of the firm since 1999, Anjali is in high demand to provide oversight of cyber crisis management and incident response by clients victimized by a data breach, and those that struggle with high-stakes risk.

Under Anjali’s leadership, the Cybersecurity & Data Privacy Practice was recognized by Business Insurance as “Legal Team of the Year” in 2020. In 2021, Anjali was recognized globally as one of the top 25 “Most Inspiring Women in Cyber” by IT Security Guru and named one of the “Top 40” data breach attorneys in the country by Cybersecurity Docket. She also was recognized by the Professional Liability Underwriting Society (PLUS) for her 22 years of achievement and dedicated service to the insurance industry.

Anjali developed her passion for the interplay of law and business when she earned a master’s degree in business administration at one of the nation’s top business schools while maintaining a full-time legal practice at the firm. Clients benefit from her ability to view legal issues from a business perspective as well as her understanding of how shareholder obligations impact the corporate decision-making process. Anjali’s focused insurance and business background is further enhanced by her experience as in-house claims counsel for a domestic insurance carrier.

Agenda

I. Overview: Blockchain, cryptocurrency, digital assets | 1:00pm – 1:15pm

  • Blockchain technology
  •  Cryptocurrencies
    • Bitcoin, Ethereum
    • Stablecoins
  • Non-fungible tokens (NFTs) and other digital assets
  • De-Fi versus CeFi (decentralized finance v. centralized finance)
  • DAOs (decentralized autonomous organizations)

II. The fall of FTX | 1:15pm – 1:30pm

  • Overview of FTX business
  • Alameda Research
  • Who is Sam Bankman-Fried?
  • What went wrong?
    • Undisclosed use of customer funds to make risky trades
    • Violation of customer Terms of Service agreements
    • Propping up Alameda
    • Lack of liquidity
  • Why didn’t anyone catch this?
    • GAAP financial statements (unreliable)
    • No independent due diligence by the “big guys” (hedge funds, etc.)
    • Allure of money and turning a blind eye
  • Could this have been prevented?
    • CeFi v. DeFi debate
    • Greater regulatory oversight

III. (Lack of) U.S. regulatory oversight of crypto markets | 1:30pm – 1:45pm

  • U.S. Securities and Exchange Commission (SEC)
    • Are cryptocurrencies and other digital assets “securities”?
    • SEC enforcement actions against crypto firms
    • Remarks by SEC Chair Gary Gensler
    • SEC lawsuit against FTX former CEO Sam Bankman-Fried (SBF)
  • Commodity Futures Trading Commission (“CFTC”)
    • CFTC stance that certain cryptocurrencies (including BTC and ETH) are “commodities”
    • Cozy relationship between CFTC and SBF
    • CFTC lawsuit against FTX and SBF
    • CFTC v. SEC as the primary regulator of the crypto markets
  • IRS
    • Crypto and digital assets are “property”
    • Triggers for taxation
    • Enforcement
  • Federal Deposit Insurance Corporation (FDIC)
    • Are crypt assets FDIC-insured?
    • FDIC Guidance
  • Office of the Comptroller of the Currency
    • OCC Guidance on banks’ serving as “custodians” of crypto and digital assets
    • Anti-Money Laundering (AML) and Know Your Customer rules

IV. “Silent crypto” insurance coverage under traditional policies | 1:45pm – 2:00pm

  • D&O and Management Liability Insurance
  • Accountants
  • Lawyers
  • Commercial Crime
  • Cyber