blockchain tipsheet

debates and crypto

Axios postulated yesterday about how the presidential debates will play out and where digital assets may make an appearance.

Noting digital assets momentum in the political sphere, Axios’ Brady Dale writes, “Much to everyone’s surprise, both candidates for U.S. president appear to be taking the topic of cryptocurrency seriously as an election issue, but only the challenger has made clear statements about the topic from the stump.” Dale sees President Joe Biden as the one to watch: “If he makes politician-like non-statements about cryptocurrency, then nothing has changed.”  Read more.

more tips:

• • Winklevoss Twins Donate $2 Million in Bitcoin to Trump to Fight Biden’s ‘War on Crypto’ – Decrypt

what you should know: The debates are scheduled for next Thursday, June 27, and then September 10. Continue reading “One Week Until Presidential Debates; Marathon Digital Creating Heating For Localities”

Circle attempts IPO

In advance of an expected initial public offering (IPO) by Circle, which is the issuer of the USDC stablecoin, financial publication Barron’s says it has reviewed documents showing the SEC has “signaled unease about the [Circle’s] core product, a stablecoin, and raised other concerns.”

Barron’s obtained the information via “a public records request for information related to Circle’s attempted SPAC merger [in 2021]. The records include correspondence between the SEC’s Division of Corporation Finance and Circle.” In addition to disclosure concerns (that the USDC stablecoin could be a security) expressed by the SEC at the time, the regulator “also had heightened concerns about whether Circle should be considered an ‘investment company’ and go through a different registration process.” Read more (subscription).

more tips:

• • Circle’s Stablecoin to Benefit From EU Rule Shift, Analyst Says – Bloomberg

what you should know: If Circle can make it through the gauntlet of the registration process, having access to the public markets and driving investment in innovative crypto-related products would appear to be a huge potential benefit to the industry – let alone Circle.

number go way up

Bernstein predicts spot Bitcoin ETFs near approval at major wirehouses; maintains $200,000 target by 2025 end – The Block Continue reading “SEC Records Receive Scrutiny As Circle Prepares For IPO; Senators Chime In On FDIC Chair Nomination”

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. Continue reading “SEC Changes Its Mind on Ethereum Token; Scams Infiltrate Crypto Campaign Donation Websites”

SEC departure

David Hirsch, who was in charge of the Securities and Exchange Commission’s (SEC) Crypto Asset and Cyber Unit in the Division of Enforcement, announced on LinkedIn yesterday he’s leaving the agency.  Among his stops at the SEC, Mr. Hirsch served from 2020-2022 as Counsel to SEC Commissioner Caroline Crenshaw (D).  No word on where he’s going next, as he concludes on LinkedIn, “While it is hard to leave an agency that has given me so much, I am very excited for the next set of challenges. I look forward to sharing more about that soon…” Read more on The Block.

more tips:

• • Mr. Hirsch did not leave for memecoin company pump[.]fun even though a tweet on X fooled some.

what you should know: This marks another recent, high profile departure from the SEC. On May 17, the SEC announced the departure of its policy director Heather Slavkin Corzo. Is there more going on at the SEC than the unending ebb and flow of movement between the public and private sector at the securities regulator? Continue reading “Another Executive Departs SEC; Trump Donations Inspiring Biden Crypto Connection”

Administration joins crypto

A representative from the Biden Administration is scheduled to join an upcoming panel discussion with Mark Cuban according to Bitcoin Magazine, yet another indication that the Administration is looking to “make nice” with crypto and its voters.

Rep. Ro Khanna (D, CA) is spearheading the effort and “is set to host a Bitcoin and blockchain roundtable in Washington D.C. in early July, according to a private email sent by Khanna’s Office,” according to Bitcoin Magazine.

Bitcoin Magazine continues, “Khanna’s Office described the upcoming meeting as ‘the most significant meeting between policymakers and innovation leaders in blockchain to date.'”

Read about it.

what you should know: Beyond enforcement-focused Treasury officials, this is as close as the Biden Administration has come to a pro-crypto stage since White House National Security Council Director Carole House was part of the White House in 2022 and took part in Consensus.

light-touch regulation

Another story about campaign donations from crypto interests was in Bloomberg on Friday.  Titled, “Crypto Titans’ $160 Million War Chest Threatens Senate Democrats,”  the piece says funds will ultimately be used to favor “light-touch regulation of the embattled industry.”  Bloomberg goes on to say that “the staggering sum makes the crypto industry one of the most influential players in federal campaign finance,” though it doesn’t say where other industries land on the campaign finance leaderboard. Read more. Continue reading “Rep. Khanna Brings Biden Administration To Digital Assets Stage; More Campaign Funds For ‘Light Touch Regulation’”

Senate hearing – CFTC and SEC

Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam and Securities and Exchange Commission (SEC) Chair Gary Gensler appeared simultaneously at yesterday’s Senate Appropriations Subcommittee on Financial Services and General Government hearing on their respective 2025 budgets. See the hearing page.

Sen. Chris Van Hollen (D, MD) – the Subcommittee Chair – and Sen. Bill Hagerty (R, TN) – the Ranking Member – oversaw the one-and-a-half hour hearing.

Senate hearing – prepared testimony

With 12 mentions of “digital assets” in his prepared testimony, CFTC Chair Behnam made clear he’s still angling for the spot market controls he’s long-desired for his agency over digital assets. He said in part, “The lack of legislation addressing the regulatory gap over the digital commodity asset spot market has not hindered the public’s enthusiasm for digital assets, and I continue to believe Congress must act…” Read Chair Behnam’s prepared testimony.

In his opening statement, SEC Chair Gensler focused less directly on digital assets but repeated his claim that crypto markets were “the Wild West” and represent a dearth of compliance with the law. Read the Chair’s opening remarks  – and read his prepared testimony here. Continue reading “Senate Hearing Pits SEC Against CFTC; CFTC Commissioners Tapped By White House”