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| Here is a quick look at the hits from the week's first Inside Cryptocurrency newsletter: - Coinbase's demand for court review of the U.S. Securities and Exchange Commission's rulemaking petition denial,
- FTX's amended reorganization plan,
- The Oracle Red Bull Racing Formula 1 team's new NFT collection, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | Coinbase, the largest U.S. crypto exchange, has asked the court to review the U.S. Securities and Exchange Commission's (SEC) denial of a rulemaking petition filed by the platform in 2022. The petition mainly urged the agency to establish a regulatory framework for the crypto market, arguing that existing securities laws are inadequate for regulating the nascent industry. More: - In April this year, Coinbase also had to ask the court to force the SEC to respond to its rulemaking petition since the regulator had not provided any response for months.
- Ultimately, the SEC's five-member committee denied the petition in a 3-2 vote on Dec. 15, stating that it fundamentally disagreed that current securities regulations and laws are unworkable for the digital asset industry.
- In response, Coinbase's chief legal officer, Paul Grewal, said no one looking fairly at the crypto industry thinks that the law is clear or there is no more work to do.
- The exchange's latest legal motion also defined the SEC's decision as arbitrary, capricious, and an abuse of discretion, seeking the court review of the denial.
- On the other hand, the SEC classifies all cryptocurrencies other than Bitcoin (BTC) as securities in the light of current chair Gary Gensler's approach, claiming jurisdiction over the digital asset market.
- Gensler also previously stated several times that existing securities rules are clear, and firms offering digital asset services to U.S. customers should simply follow them, so there is no need for new crypto-specific regulations.
- In a recent statement, the SEC Chair further argued that Coinbase accepted the SEC's authority over the crypto market by asking the agency to create new rules for the sector.
Zoom Out: - Earlier in 2023, Coinbase entered another legal battle with the SEC when the regulator filed a 101-page complaint against it over alleged securities law violations.
- Within the past year alone, many other crypto exchanges, including Binance, Kraken, Gemini, and Bittrex, also faced increased scrutiny by the SEC.
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| 2 | | 
What the numbers say: Crypto data platform CoinGecko's historical data has shown that the popular dog-themed cryptocurrency BONK, launched in December 2022 as a joke after the collapse of the crypto exchange FTX, experienced an over 9,100% increase in its trading volumes. The figure surged to as much as $1.72B in December, up from $18.7M at the beginning of the month. The token also saw around 580% jump in its price within the last 30-day period while its market cap increased to $1.3B from the $234M level in early December. Relevance: The massive increase in BONK's key metrics was mainly triggered by the success of the Solana blockchain, where the token was based. The network has become one of the most successful blockchains that have managed to exit from the downward trend created by last year's prolonged crypto winter. The network's native token, SOL, also outperformed many cryptocurrencies in 2023, gaining more than 600% in value since the beginning of the year. The investor interest in the Solana network and its native token also positively impacted several other Solana-based tokens, including BONK, by creating optimism around the ecosystem. Brands that should care: The upward trend in the BONK token also caused a sudden increase in the sale numbers and prices of Solana Labs' Saga phone since its owners can receive BONK tokens for free through an exclusive airdrop. Following the massive jump in the token's value, the crypto-focused smartphone's sales prices reached as much as $5,000 on eBay. The phone was initially put up for sale for $1,000 in May, and its price was later cut to $599. The surge in Saga phone's sales is also expected to mark a reversal for the device's fate since Solana founders started weighing its future due to disappointing sales in early December. | | | |
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| 3 | | Bankrupt crypto exchange FTX's new management has filed an amended reorganization plan to repay its creditors and end its bankruptcy case. The new plan will be sent to creditors for a vote in 2024 and later presented to U.S. Bankruptcy Judge John Dorsey for final approval. More: - The plan proposes valuing the creditors' digital asset claims based on the crypto prices on Nov. 11, 2022, the day FTX filed for bankruptcy.
- This provision is expected to result in creditors losing millions of dollars in potential gains because the crypto market increased its market cap from around $856B to $1.6T since FTX's bankruptcy, recovering healthily.
- However, FTX pointed out that the amended plan would create the best and most equitable economic outcome for all creditors and stakeholders in the bankruptcy case.
- If approved, the reorganization plan will see FTX distributing billions of dollars to its creditors and former customers in cash after liquidating its crypto assets.
- On the other hand, the plan did not answer some of the most important questions, including how much creditors can expect to receive back or whether FTX will relaunch its collapsed crypto exchange.
- In April this year, an FTX attorney revealed that the company was assessing the possibility of restarting the exchange with its stakeholders.
- The firm's new management later outlined its plans for a potential relaunch in September, underlining that it expects the ultimate plan to be confirmed within Q2 2024.
Zoom Out: - FTX, previously the third-largest crypto exchange, filed for Chapter 11 bankruptcy in November 2022, with all the 130 entities under the roof of FTX Group.
- The downfall followed the claims that the former CEO, Sam Bankman-Fried (SBF), used customer funds in FTX to compensate for losses at the sister company Alameda Research.
- In early November, SBF was found guilty of all the seven criminal charges brought against him by U.S. prosecutors, including money laundering and misappropriation of customer funds, after a month-long trial process.
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| 4 | | Fairshake, a pro-crypto political action committee (PAC), has announced that it raised a total of $78M from its backers to support crypto- and blockchain-friendly candidates in the 2024 U.S. presidential election. The committee has already spent $1.2M on television advertising campaigns in the U.S. More: - The PACs collect campaign contributions from members and donate those funds to campaigns for or against certain candidates, ballot initiatives, and legislation.
- However, these committees are prohibited from sending money directly to candidates.
- Fairshake mainly aims to direct the next U.S. election, financially supporting leaders who champion the innovation of blockchain and crypto.
- The group's supporters include some leading venture capital firms, such as ARK Invest and Andreessen Horowitz (a16z), along with popular crypto companies like Ripple, Circle, Coinbase, Kraken, and Messari.
- In an official statement, the committee said a clear regulatory and legal framework is needed to allow the blockchain economy to realize its full potential.
- On the other hand, crypto has become an important material for election campaigns in the U.S. over the last several years due to its rising popularity and the lack of a regulatory framework for the market in the country.
- Some presidential candidates, including Vivek Ramaswamy and Robert F. Kennedy Jr., have made digital assets one of the key issues in their campaigns to receive support from the industry.
Zoom Out: - Stand With Crypto, a nonprofit campaign launched by Coinbase for crypto advocacy, also recently announced that it raised $2M from 80,000 people since its launch in August, with half of the funding coming from Coinbase CEO Brian Armstrong.
- The organization plans to use donations to grow its website's functions to influence crypto policies.
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| 5 | | Taiwanese regulators have recently warned residents against betting on the results of the upcoming presidential election in Taiwan using crypto-powered betting platforms. The warning was issued amid an ongoing investigation by the prosecutors. More: - The local reports pointed out that some Taiwanese citizens placed bets on the outcome of the presidential election on Jan. 13, 2024, on the decentralized betting platform Polymarket.
- Polymarket allows users to bet on upcoming events through crypto.
- Taiwanese prosecutors launched an investigation on the issue and summoned several individuals for questioning.
- Participating in election-related gambling activities violates the Election and Recall Act in Taiwan.
- The law confronts potential violators with a maximum of six months in prison, detention, or a fine of up to 100,000 New Taiwan dollars (~$3,188).
Zoom Out: - Last year, the U.S. Commodity Futures Trading Commission (CFTC) also initiated legal proceedings against Polymarket, accusing the platform of operating an unregistered or non-designated facility since June 2020.
- At the time, Polymarket had to pay a $1.4M fine to settle the CFTC's charges.
- During the 2020 U.S. presidential election, the platform broke a new record in activity, surpassing $10M in trading volumes.
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| 6 | | Popular Formula 1 (F1) team Oracle Red Bull Racing has launched a new NFT collection to commemorate and celebrate the most successful season in its history. The launch of the digital collectibles followed the achievements of the team's drivers, Max Verstappen and Sergio Pérez, who ranked first and second on the 2023 season's standings, respectively. More: - The team pointed out that the NFTs would help fans remember this successful year.
- The digital collectibles will feature unique art designs created by the award-winning design studio Automobilist in collaboration with motorsport fans.
- The NFTs, minted on the Sui blockchain, will be put up for sale on the Dubai-headquartered crypto exchange Bybit.
- The launch came around five months after Oracle Red Bull Racing signed a multiyear sponsorship deal with Mysten Labs, the firm behind the Layer-1 blockchain network Sui.
- As part of the agreement, Sui has become the official blockchain partner of Oracle Red Bull Racing.
- The team also previously partnered with Bybit and the open-source blockchain Tezos.
Zoom Out: - Mysten Labs was founded by former executives of tech giant Meta's now-abandoned blockchain project, Diem.
- Over the last several years, crypto has gained massive popularity in F1 as many other crypto-related firms, such as OKX, Kraken, and Crypto.com, signed deals with racing teams.
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- Recent court filings have shown that the defunct crypto exchange FTX spent nearly $53,000 every hour on bankruptcy lawyers and advisers for the last three months before Oct. 31.
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- Seychelles-based crypto exchange OKX's NFT marketplace has surpassed its major rivals, including OpenSea, Blur, and Magic Eden, in the 24-hour trading volume.
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 | 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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