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| 1 | | The U.S. Securities and Exchange Commission (SEC) has requested the court to refuse the demands in crypto exchange Coinbase's petition that aims to force the agency to create a clear framework for digital assets. In the filing, the U.S. regulator said the regulatory changes take time to consider, adding that there is no specific deadline for it to complete the necessary amendments. More: - The SEC's request came nearly 20 days after Coinbase filed its petition in the U.S. Court of Appeals for the Third Circuit.
- The company's latest petition mainly aims to compel the SEC to respond to a previous petition for rulemaking it submitted last year, underlining that the agency did not provide any response for months.
- The rulemaking petition urged the SEC to explain how securities laws apply to cryptocurrencies and create a new legal framework for the crypto market.
- In its latest request, the SEC stated that Coinbase was not harmed because the commission did not respond to the petition and defined the exchange's demand as baseless.
- On his official Twitter account, Coinbase chief legal officer Paul Grewal has pointed out that the SEC's filing marked the first time the agency formally explained its views on whether it should create rules for the crypto industry in court.
- The tension between Coinbase and the SEC started rising in March when the popular crypto exchange disclosed that it was served a legal notice by the agency.
- The SEC mainly claims that Coinbase could violate the securities laws through its exchange and staking services, while the popular crypto exchange complains about the lack of regulatory clarity in the U.S. that it holds the agency responsible for.
Zoom Out: - SEC Chair Gary Gensler has been famous for his strict regulatory approach toward crypto assets over the years and has reiterated his belief that all crypto assets other than Bitcoin (BTC) are securities several times.
- Gensler has also repeatedly stated that existing rules are clear, and crypto firms just reject complying with them, so there is no need for new crypto-specific regulations.
- Over the last several months, many crypto exchanges, including Coinbase, Kraken, Bittrex, and Binance, came under increased scrutiny by the SEC.
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What the numbers say: A recent Bloomberg survey conducted from May 8 to 12 with 637 respondents has shown that the leading cryptocurrency, Bitcoin (BTC), is likely to be one of the top three assets most preferred by retail investors if the U.S. hits the debt ceiling. In the survey, gold, U.S. treasuries, and Bitcoin sat in the first three places, respectively. 11.3% of retail investors said they would buy Bitcoin if the U.S. defaults on debt. Bitcoin was followed by the U.S. dollar, the "Something else" option, the Swiss franc, and the Japanese yen on the ranking. This means that Bitcoin would be a more popular choice for retail investors than the U.S. dollar, the Japanese yen, or the Swiss franc in case of a U.S. debt default. Details: In the survey, Bitcoin has also become the third most popular choice for professional investors after gold and U.S. treasuries, with the same rate of 7.8% as the U.S. dollar. On the ranking built based on the answers of professional investors, the leading cryptocurrency and the U.S. dollar were respectively followed by the Japanese yen, the Swiss franc, and the "Something else" option. Relevance: The survey came amid rising concerns around a potential U.S. debt default. Earlier in May, Treasury Secretary Janet Yellen stated that the U.S. could run out of cash by June 1, defaulting on debt, if the debt limit is not suspended or raised. President Joe Biden also warned that the whole world would run into trouble if the U.S. hits the debt ceiling. What it means: The debt ceiling refers to the maximum amount of money the U.S. government is authorized to borrow as federal debt to meet its legal obligations, including paying military salaries, tax refunds, and Social Security and Medicare benefits. Brands that should care: If the survey results demonstrate their accuracy in case of a debt default, the centralized crypto exchanges, such as Binance, Coinbase, OKX, and Kraken, are expected to see a massive Bitcoin inflow due to the increased investments in the leading cryptocurrency. | | | |
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| 3 | | The European Union's (EU) Economic and Financial Affairs Council, which includes member states' finance ministers, has approved the region's long-awaited crypto regulations, the Markets in Crypto Assets (MiCA), with a vote. The move has made the MiCA one step closer to becoming a law. More: - The bill was voted in favor by the finance ministers of 27 member states.
- The MiCA must be published in the Official Journal of the European Union to become an EU law.
- The legislation is expected to enter into force within a year, making the regulations a law in mid-2024.
- Since some aspects of the regulation regarding the crypto asset service providers will come into effect as of January 2025, the firms will still have one to two years to comply with the new rules.
Zoom Out: - The MiCA was finally approved by the lawmakers at the European Parliament (EP), the legislative body of the EU, with a final vote on April 20 after three years of development.
- The approval marked the first attempt of the European governments to regulate the crypto industry on such a scale.
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| 4 | | Bankrupt crypto lender BlockFi has decided to liquidate its lending platform since a potential sale would not generate enough value for its creditors. The decision was revealed through a document filed with the U.S. Bankruptcy Court in New Jersey, outlining the company’s Chapter 11 restructuring plan. More: - The firm currently owes its top 50 creditors more than $1.3B.
- BlockFi said it had been discussing the sale of its digital assets platform and nearly 660,000 client accounts with potential buyers since January.
- As a result of the discussions, the firm concluded that a sale plan would not generate meaningful value for its creditors.
- The bankrupt lender also underlined that it did not receive offers that would maximize its value from potential buyers due to the recent regulatory changes.
- The documents added that the number of clients who will recover their funds would change based on the results of pending lawsuits against its bankrupt commercial counterparties, including FTX, Alameda Research, Three Arrows Capital (3AC), and Core Scientific.
- BlockFi said the failure or success of these lawsuits would make over $1B difference for clients.
- The restructuring plan was sent to creditors, involving more than 100,000 retail customers, for a vote, and in response, the creditors accused BlockFi of deliberately causing delays in the trial proceedings and using nearly $22.5M of customer funds to purchase a $30M insurance policy.
Zoom Out: - BlockFi filed for Chapter 11 bankruptcy protection in November last year due to the volatility in the crypto market and its exposure to the collapsed crypto exchange FTX.
- The move made the firm one of the several other crypto-related firms, including Celsius Network, Voyager Digital, and FTX, that went bankrupt after a prolonged crypto winter.
- The bankrupt lender also recently obtained approval from a U.S. Judge to repay $297M to Wallet customers with non-interest-bearing accounts.
- The latest court document has shown the firm’s belief that the proposed liquidation plan is the fastest way to return the funds in digital wallet accounts to customers.
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| 5 | | Seychelles-based OKX, the second-largest crypto exchange by trading volume, has rolled out new features embracing Ordinals NFTs and BRC-20 tokens on the Bitcoin network with a recent update. The features will allow users to mint and trade Ordinals NFTs and BRC-20 tokens, which have gained massive popularity over the last several months, using their OKX wallets. More: - The option of trading BRC-20 tokens will be available to users as of this week.
- Customers will also be able to start minting Bitcoin-based Ordinals NFTs and BRC-20 tokens by the end of May.
- The ability to trade Ordinals NFTs, however, will arrive on the platform in June.
- The move came nearly one week after OKX rival Binance, the largest crypto exchange by trading volume, announced that it would add support for Ordinals NFTs to its NFT marketplace later in May.
- The popular NFT marketplace Magic Eden also recently launched a new fully audited NFT marketplace and a creator launchpad for Ordinals NFTs.
Zoom Out: - Ordinals are digital assets permanently attached to a satoshi, or 1/100,000,000 of a full Bitcoin (BTC).
- These NFTs have recently gained massive traction as the skyrocketed inscription numbers caused the daily transactions on the Bitcoin network to reach a new all-time high earlier in May.
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| 6 | | Popular blockchain network Polygon's co-founder Sandeep Nailwal has launched a new Web3 fellowship program dubbed Nailwal Fellowship in collaboration with the venture capital (VC) firm Symbolic Capital, which he helped found. The program will aim to provide financial support for early-stage Web3 builders suffering from slowed investments in crypto startups during the bear market. More: - Nailwal stressed that the program focuses on individuals at a very early stage instead of teams, adding that even individuals without an idea might participate in the program to explore the Web3 space.
- Polygon co-founder will invest $500,000 of his personal capital in 10 builders selected for a cohort each year.
- These 10 builders will each receive $50,000 in grant money, mentorship through Symbolic Capital, and access to the founder and investor networks.
- Any Web3 builder will be able to apply to be a participant in the program through the Nailwal Fellowship's website, regardless of age or location.
- If they wish, those seeking to participate will be able to access in-person coworking and networking opportunities in New York, San Francisco, Dubai, and India.
- Applications will be accepted between May and early June every year.
- The Nailwal Fellowship will then conduct interviews with applicants in late June to determine the 10 participants of that year's cohort that would be active from August to January.
Zoom Out: - In August 2022, Symbolic Capital also launched a $50M fund to support early-stage Web3 projects.
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INSIDE CRYPTOCURRENCY LEADERBOARD (7 DAYS) |
 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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