SEC Changes Its Mind on Ethereum Token; Scams Infiltrate Crypto Campaign Donation Websites

ether is not a security

Late last night, the Securities and Exchange Commission (SEC) seems to have effectively admitted that the Ethereum blockchain network token is not a security – effectively ending (but not confirming, yet) the SEC’s enforcement action against Consensys, owners of the MetaMask wallet, which was signaled by a Wells Notice in late April.

See yesterday’s letter from the SEC to Consensys counsel (PDF).

In a tweet also last night, Consensys said on X, “ETHEREUM SURVIVES THE SEC. Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0. This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.”

Willkie Farr counsel Mike Selig reacted to the news on X, “More confirmation from SEC that ETH won’t be regulated as a security. We’ve yet to see any of the legal reasoning supporting SEC’s recent decisions on ETH but it’s clear the days of ‘everything but BTC is a security’ are over. The door to non-security crypto asset status is open.”

what you should know: The latest SEC employee departure may be directly related to the Ether token decision says Unchained’s Laura Shin. Whatever the case may be, Ether ETF final approval is probably not far behind.

campaign donation scams

In an article titled, “Crypto Scammers Are Targeting Trump’s MAGA Supporters,” Wired reports that the recent decision by former president Donald Trump to accept cryptocurrency donations has resulted in “dozens” of new scam websites. Each purport to accept crypto donations, but – according to analytics firm NetCraft – the traits of the scam can be hard to spot.

Netcraft’s Rob Duncan tells Wired, “‘As a victim, the fact that the real campaign is using Coinbase payments rather than direct cryptocurrencies’ wouldn’t be very obvious, ‘The way it’s been advertised is “Donald Trump’s taking cryptocurrency donations…”‘” Read more in Wired.

more tips:

    • Trumped Up Crypto Scams – Criminals Deploy Trump Donation Scams (Monday) – Netcraft

U.S. mining “arms race”

U.S.-based CleanSpark has acquired five more mining facilities in Georgia to help it continue to mine more Bitcoin, according to Blockworks.  The company is in a never-ending race with all of the world’s Bitcoin miners to yield as many BTC as possible every month.

Blockworks notes the latest competitive figures: “CleanSpark mined 417 BTC in May — the first full month after per-block mining rewards dropped from 6.25 BTC to 3.125 BTC on April 19. That total was behind Marathon (616 BTC) and Core Scientific (447 BTC).” Read more.

more tips:

    • Oil land buyer IPO looks like a crypto play – Axios

House appropriations and SAB 121

The House Appropriations bill for financial services and general government [H.R.8773]  was officially placed on the Union Calendar on Monday as the bill and many of its House Republican “wish list” items meets its Senate appropriations counterpart shortly.

Digital asset highlights in the text of the bill include:

    • “Sec. 558. None of the funds made available by this Act may be used to implement or enforce “Staff Accounting Bulletin No. 121”.”
    • “Sec. 560. None of the funds made available by this Act may be used to carry out an enforcement action related to a digital asset transaction, except for enforcement actions related to fraud or market manipulation, unless (1) the Securities and Exchange Commission has promulgated a regulation that clarifies which digital assets are securities under existing law, or (2) Congress passes legislation that gives the Securities and Exchange Commission regulatory and enforcement jurisdiction over digital assets and it is signed into law by the President.”

what you should know: Though House Republicans are spearheading the digital asset wish list given their majority, the bipartisan support of FIT 21 and the SAB 121 resolution in the House shows that the wish list could attract interest from both sides of the aisle. How far that extends in the Senate remains to be seen – the Senate only voted on the SAB 121 resolution (and passed it).  Ultimately, though, these appropriation stipulations would appear to be destined for the waste bin given the potential for political radioactivity within a bill that needs to pass.

Goldsmith Romero to FDIC – update

In Politico’s Morning Money yesterday, Commissioner Christy Goldsmith Romero (D) of the Commodity Futures Trading Commission (CFTC) is getting some Senate Republican openness for her bid to become the FDIC Chair before the 118th Congress ends in January.

Politico’s Eleanor Mueller quotes Sen. Thom Tillis (R, NC) who says not-exactly-glowingly, “If you take a look at some of the options they put forth for some of the other financial regulators, I’m going in with a more positive sense, to be honest with you. (…) Could be a lot worse; we’ve seen it in the one being replaced, in [current FDIC Chair Martin] Gruenberg.” Read more.

use case – life insurance

It may not be a lot.. but it’s a start.

Infineo, which is putting life insurance on the blockchain, said yesterday that “it has transferred the ‘first-ever’ tokenized life insurance policy on a distributed ledger system,” reports CoinDesk.

According to Infineo’s website, the firm has minted $10.1 million in policies as of press time using the Provenance blockchain.

The pitch: “Tokenized policies live on Infineo’s advanced Policy Ledger System which provides a secure, immutable record of all policies (…). The Ledger maintains up-to-date information on relevant parties, thus reducing the risk of lost policies, while also preventing oversights in asset transfers and actively notifying beneficiaries about their entitlement…” – presumably enabling fast(er) settlement upon death – the reality of the life insurance biz.

more tips:

    • The first-ever tokenized life insurance policy through distributed ledger blockchain technology on the Provenance Blockchain – press release

July crypto bill markup

Last night, Senator Debbie Stabenow (D, MI), the Chair of the Senate Agriculture Committee, told Politico’s ubiquitous Eleanor Mueller about Stabenow’s “cryptocurrency bill”: “I would love to mark it up before the August recess. (…) We’re still working on the substance of it — but I’d like to … as soon as we could.” Read more (subscription).

what you should know: Is the Digital Commodities Consumer Protection Act (DCCPA) back?

Biden war on crypto

Fox Business’ Eleanor Terrett report that yesterday “Former President [Donald Trump was] addressing crypto and BTC during his rally in Racine, Wisconsin” and said, “I will end Joe Biden’s war on crypto. We will ensure that the future of crypto and the future of Bitcoin will be made in America, otherwise, other countries are going to have it.” Read a bit more on X.

still more tips

Martin Shkreli Says He is Behind Trump-Linked DJT as ZachXBT, GCR Start Poking Around – CoinDesk

IMF seen as overstretched in expanding its work, including digital currency – Ledger Insights

Fox Corporation onboards TIME as first publishing partner on Polygon-based Verify Protocol – The Block