Welcome to The Wise Guy,
Where we take cryptocurrency seriously, but we also know how to have a good time.
That’s why we’ve curated the crème de la crème from not one, not two, but FIVE newsletters.
MilkRoad, Defiant, Messari, Bankless, and CoinDesk Node.
Defiant’s Top Story
SEC Drops Lawsuit Against Ripple Executives
After more than 30 months, the SEC has decided to drop its lawsuit against Ripple’s executives. The judge overseeing the case ruled that Ripple illegally sold $729 million worth of XRP to accredited investors. This comes after the court previously stated that XRP does not inherently qualify as a security. As a result, XRP experienced a 7.5% price increase in the past 24 hours.
New York AG Files Lawsuit Against Gemini, Genesis, and DCG
New York Attorney General Letitia James has filed a lawsuit accusing Gemini, Genesis, and Digital Currency Group (DCG) of defrauding 230,000 users out of $1 billion in assets. The lawsuit alleges that the companies made false claims about their Genesis Earn product, concealing their precarious financial situation. The NYAG is seeking a permanent ban on these companies conducting business in New York.
ConsenSys Founder Faces Lawsuit from Former Employees
26 former employees of ConsenSys, a major Ethereum development firm, have filed a lawsuit against founder Joe Lubin. They claim they are owed equity in the company and allege that Lubin divested ConsenSys, transferring assets into a new entity, thereby devaluing their shares. ConsenSys denies these claims, describing the lawsuit as a desperate attempt to extract assets.
Reddit Mods Accused of Insider Trading
Moderators on Reddit are facing accusations of insider trading. Observers noticed that MOON, the token used in the r/CryptoCurrency subreddit, began to be sold before the announcement that Reddit would be discontinuing its tokenized rewards campaign. Blockchain analysts also identified large MOON sales linked to Reddit moderation staff. This incident serves as a setback to mainstream adoption of web3 technology.
Lido Community Contemplates Exiting Polygon
The Lido community is discussing the possibility of leaving the Polygon ecosystem. They cite issues like poor revenue and uncertainty surrounding Polygon’s 2.0 upgrade roadmap as reasons for considering an exit. This discussion comes after a recent decision by Lido governance to leave Solana, estimating a $0.5 million loss operating on that network.
Taproot Version 0.3 Enables Stablecoin Issuance on Bitcoin
The latest release of Taproot from Lightning Labs aims to facilitate the issuance of stablecoins and other web3 assets on the Bitcoin network. By enabling multi-asset capabilities, Taproot is helping Bitcoin move further into the world of decentralized finance (DeFi). This follows other initiatives to bring Ethereum-style innovation to Bitcoin, such as the proposed BitVM and the trading of Bitcoin-based memecoins earlier this year.
Messari’s Desk
In this week’s crypto policy newsletter, we have some interesting developments to discuss. First, Senator Elizabeth Warren led a letter to the White House, urging the Administration to take action against the use of cryptocurrency by terrorists. The letter was signed by 28 Senators and 76 Representatives, but it’s worth noting that only two Republicans signed on.
Next, the Financial Crimes Enforcement Network (FinCEN) proposed a rule that would require certain financial institutions to report details of transactions involving cryptocurrency mixing, which they suspect involve illicit activities. This proposed rule is open for public comment for 90 days.
In addition, the Treasury sanctioned 10 individuals and entities, including a crypto exchange and its owner based in Gaza, for their links to financing Hamas. It’s an example that shows the authority and ability of the Administration to detect and penalize terrorists using crypto for funding.
These developments indicate that illicit finance concerns related to crypto are being taken seriously by policymakers. The letter from Senator Warren and the proposed rule by FinCEN are likely to fuel discussions and debates in future hearings and negotiations.
Bankless’ Desk
First up, US Senator Elizabeth Warren is continuing her anti-crypto crusade. She’s making a big deal about crypto-based terror financing, using it as evidence that the entire industry is corrupt. She wrote a letter, signed by over 100 lawmakers, urging top security officials to clamp down on crypto financing for terror groups. However, a report from crypto analytics firm Chainalysis points out that claims of crypto’s role in terror financing are overblown. While some terrorist organizations may use crypto, it’s just a small portion of their overall financing methods.
In other news, Uniswap Labs made an announcement that didn’t sit well with the community. They revealed a new 0.15% swap fee for certain tokens on their platform. Founder Hayden Adams justified this fee as necessary for funding further development. However, users weren’t happy about it, especially since there hasn’t been much support for a protocol fee that benefits UNI token holders.
Here’s a bizarre story for you: fake news caused a frenzy in the crypto markets. Cointelegraph misreported that a spot BTC ETF had been approved, causing prices to soar and $65 million in shorts to be liquidated. The truth eventually came out, but the incident sparked discussions about the potential bullishness of a spot BTC ETF and pushed prices higher.
Next, a crypto initiative by Reddit took a hit. Their blockchain-based Community Points project, which aimed to reward users who contributed positively to specific subreddits, got discontinued. Regulatory concerns played a part in this decision, and it was further tarnished by Reddit moderators selling off tokens before the announcement, causing prices to crash.
And finally, some good news for Ripple Labs execs. The SEC dismissed its claims against Chris Larsen and Brad Garlinghouse, marking another win for Ripple. Back in July, a judge ruled that XRP wasn’t classified as an investment contract, which has been beneficial for Ripple’s legal battles.
MilkRoad
Guess who’s back to throw shade at cryptocurrencies? That’s right, Elizabeth Warren. She’s on a mission to regulate crypto out of the country, and she’s pulling out all the stops.
In her latest move, she’s trying to link crypto to terror financing, citing reports that Hamas raised millions through Bitcoin donations. But here’s the thing, experts have already debunked these claims. While some terrorist organizations may use crypto for funding, it’s a tiny fraction of the overall illicit transactions. So, Warren’s crusade seems a bit overblown, don’t you think?
In other news, Uniswap Labs, the folks behind the popular frontend, announced a new swap fee of 0.15% for certain tokens.
This decision didn’t sit well with token holders, especially UNI holders who have been waiting for a protocol fee that benefits them. Some savvy traders can still avoid the fee by using the Uniswap protocol directly, but it’s definitely caused a stir in the community.
Now, let’s talk about fake news. A misreported tweet claiming that a spot BTC ETF had been approved caused quite the commotion in the crypto markets. Prices spiked, shorts got liquidated, and then reality hit. The SEC even subtweeted the publication responsible for the false information. But despite the rollercoaster ride, it did get people talking about how a BTC ETF could be a game-changer.
Moving on, Reddit had to pull the plug on its blockchain-based Community Points experiment. The initiative aimed to reward users who contributed positively to certain subreddits. Unfortunately, regulatory concerns and high resource requirements forced the shutdown. And to make matters worse, some Reddit moderators sold off tokens before the announcement, which raised some eyebrows.
On a positive note, Ripple Labs execs Chris Larsen and Brad Garlinghouse can breathe a sigh of relief. The SEC dismissed its claims against them, giving Ripple another win in their ongoing legal battle. It’s definitely been a rollercoaster week in the crypto world, but that’s what keeps things interesting, right?
CoinDesk’s Best Story
First up, Tether, the controversial stablecoin, has announced that it will start publishing “real-time data” on its USDT reserves by 2024.
This move comes shortly after Paolo Ardoino took over as CEO from Jean-Louis van der Velde. Tether’s dominance has been on the rise lately, outpacing competitors like USDC and BUSD. In its recent quarterly attestation, Tether revealed that it holds $3.3 billion in excess reserves, some of which they have started investing in bitcoin and bitcoin mining.
Shifting the focus, the federal judge overseeing the criminal case against Sam Bankman-Fried, Judge Lewis Kaplan, has an important decision to make. The U.S. Department of Justice and Bankman-Fried’s defense team have submitted proposed jury instructions. Once witness testimony wraps up, Judge Kaplan will determine which instructions to adopt, considering the seven charges Bankman-Fried is facing.
On another note, Binance, the beleaguered crypto exchange facing legal challenges from regulators, has reportedly onboarded new service providers for euro payments. After losing the ability to process euros when its former service provider cut ties, Binance has now secured “regulated and authorized fiat partners” to facilitate deposits and withdrawals in euros. The specific names of these partners are yet to be revealed.
In the world of ETFs (exchange-traded funds), there’s some exciting news. A U.S. Appeals Court is expected to formalize its decision to overturn the U.S. Securities and Exchange Commission’s denial of Grayscale’s bitcoin trust application to become an ETF. This decision will solidify Grayscale’s win.
Additionally, Coinbase’s chief legal officer expressed hope for the approval of spot market bitcoin ETFs, a sentiment echoed by JPMorgan analysts who believe these financial products could hit the market within a few months. Interestingly, worldwide searches for “spot bitcoin ETF” are currently at their peak, indicating a high level of interest.
Twice weekly crypto goodness, coming your way! Catch us every Monday, Tuesday and Friday. And hey, don’t forget to check us out on Wednesdays for all the latest AI news – because why limit yourself to just one kind of intelligence?
