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
📰 CFTC Imposes Fines on Opyn, ZeroEx, and Deridex for Unlicensed Derivatives
Hey there crypto enthusiasts! It seems like the U.S. Commodity Futures and Trade Commission (CFTC) is cracking down on decentralized finance (DeFi) derivatives protocols. The CFTC has charged Opyn, ZeroEx, and Deridex, alleging that these platforms illegally offered unlicensed derivatives to U.S. individuals. Each company has been hit with a significant six-figure fine, as the CFTC asserts that transactions executed via smart contracts fall under U.S. laws.
Interestingly, this move comes at a time when the Securities and Exchange Commission’s (SEC) aggressive approach of regulation-by-enforcement is facing its share of obstacles in the U.S. court system. It seems like regulatory battles in the crypto space are heating up on multiple fronts, with the CFTC now making its stance on unlicensed derivatives crystal clear.
📰 Ark Invest and 21Shares Collaborate for Spot Ethereum ETF Application
Exciting news for the Ethereum community! Ark Invest, led by the renowned Cathie Wood, and 21Shares, a popular issuer of crypto exchange-traded products (ETPs), have joined forces to file an application for a spot Ethereum exchange-traded fund (ETF). If approved, this fund would mark a significant milestone as the first spot ETF to receive the green light from U.S. regulators.
Analysts predict that it may only be a matter of time before a spot crypto ETF is approved in the United States. With Grayscale’s recent court victory in their appeal against the SEC’s rejection of their Bitcoin ETF proposal, the path may be clearing for broader crypto market accessibility to traditional investors. Unlike existing futures ETFs, a spot crypto ETF would hold the actual digital asset, offering investors a direct exposure to the underlying Ethereum.
📰 Ethereum Supply Increases as On-Chain Activity Declines
Turning our attention to the Ethereum ecosystem, it appears some interesting trends are emerging. Over 3,500 ETH has entered circulation this week, contributing to a rise in the Ethereum supply. This increase is occurring alongside a decline in on-chain activity. Transaction fees have dropped to their lowest level since January, with users paying less than $2.60 for basic token transfers.
While Ethereum had been on a deflationary trajectory since transitioning to Proof of Stake a year ago, the recent bear market in the NFT space and a decrease in memecoin trading fervor have tipped the scales. Ethereum’s burn rate turned negative for the first time this year, challenging its previous deflationary promise.
📰 Arcade’s Innovative Loan Secured by Supreme T-Shirt Collection
Get ready for an unconventional DeFi lending arrangement! Arcade, a DeFi lending protocol, has enabled a remarkable $1.1 million loan backed by a rare collection of boxed Supreme t-shirts. In the event of a default, the lender will be able to redeem a non-fungible token (NFT) representing the valuable apparel collection—which Sotheby’s appraised at $2.5 million just a few years ago.
Such unique use cases demonstrate the potential of tokenizing real-world assets within the DeFi space. While many teams are exploring the utility of real-world assets for treasury management purposes, this particular loan sheds light on how DeFi protocols empower individuals to bring their assets on-chain, unlocking new possibilities for borrowers and lenders alike.
📰 MetaMask Introduces ‘Sell’ Feature for Ethereum Users Seeking Fiat Cash Out
Attention all MetaMask users! The popular Ethereum wallet from Consensys has released an exciting new feature that allows users to sell their crypto for fiat currency. MetaMask has partnered with prominent crypto payment firms to facilitate this service, which is currently available in the U.S., U.K., and select European countries. Users can receive funds from their crypto sales directly into their PayPal accounts.
While the introduction of this fiat ramp within MetaMask offers convenience to users looking to convert their crypto holdings, some have expressed concerns over the associated fees. Complaints of excessive charges, with one user reportedly paying a 9% fee for a £65 transaction, highlight the need for more accessible and cost-effective fiat on-ramps in the crypto space.
Messari’s Desk
Hello crypto enthusiasts! Exciting news from the Akash Network as they successfully launched the Mainnet 6 upgrade, introducing the world’s first decentralized GPU marketplace. And the timing couldn’t be more perfect, given the global scarcity of GPUs caused by the surging demand for training AI models.
Since its inception, the network’s GPU capacity has been steadily increasing, recently reaching an impressive 130 GPUs. This remarkable growth can be attributed to Foundry, a leading decentralized infrastructure operator known for operating the largest Bitcoin mining pool globally. They have contributed a cluster of 48 NVIDIA A100s, with an additional 16 NVIDIA H100s set to join the network soon.
While Akash’s current GPU count might seem small compared to startups like CoreWeave, which boasts over 45,000 GPUs, the potential of decentralized networks should not be underestimated. Just look at Livepeer with its arsenal of over 70,000 GPUs. Greg Osuri, the founder of Akash, assured the community that they have access to thousands of H100s and A100s, and they are optimizing for an impressive 70-90% utilization rate.
To attract machine learning developers, an abundant supply of GPUs is essential, and that’s where Akash shines. With their recently launched Akash ML on September 6, they offer AI developers GPU spot instances, with plans to provide on-demand access in the future. The attractiveness of Akash ML is not only its competitive pricing, comparable to startups like Lambda, but also the unique advantage of tapping into idle H100 GPUs, a resource currently unavailable with other providers.
Of course, the real challenge lies in whether AI developers will be enticed enough by the allure of premium GPUs at slashed prices to overcome the barriers often associated with the crypto world. From setting up wallets to acquiring tokens, there are hurdles that need to be addressed.
Bankless’ Desk
ARK Files for Spot Ether ETF:
ARK Invest and 21Shares have filed for America’s first-ever spot Ether exchange-traded fund (ETF). This comes as the Securities and Exchange Commission (SEC) is expected to approve Ether futures ETFs by October. The recent court decision favoring Grayscale’s spot ETF application has likely prompted this filing. The odds of a spot Ethereum ETF being approved are high, with Bloomberg analysts placing it at 95% by the end of 2024. Keep an eye out for traditional asset management firms following suit and filing for spot Ether ETFs in the near future.
CFTC Takes on DeFi
The Commodities Futures Trading Commission (CFTC) made headlines this week by filing and settling enforcement actions against three DeFi platforms: Opyn, 0x, and Deridex. These platforms were accused of illegally offering leveraged and margined commodity transactions using digital assets. In addition, Opyn and Deridex faced charges for failing to register with the CFTC and implement proper customer identification programs. The CFTC’s actions have raised concerns about possible enforcement actions against other permissionless DEXs like Uniswap. However, it’s worth noting that a recent court decision dismissed a class action against Uniswap, stating that protocol developers are not liable for others’ misuse of their platforms.
FTX Co-CEO Pleads Guilty
In a surprising development, Ryan Salame, the former co-CEO of FTX Digital Markets, pleaded guilty to criminal charges related to campaign finance violations and operating an unlicensed money transmitter. Salame was charged with making political contributions using funds sourced from Alameda, categorized as loans but not intended for repayment. As part of his agreement, Salame faces up to 10 years in prison and must forfeit assets worth $1.5 billion, including two properties and a Porsche.
Visa Expands Payments Settlement to Solana
Visa, the global payments giant, announced its partnership with Solana to expand its stablecoin settlement capabilities. This collaboration will enable Visa to send USDC payouts on Solana to merchant acquirers, who can then route the payments to their end merchants. Solana was chosen for its high performance and ability to process stablecoin transactions quickly and cost-effectively. This move follows Visa’s successful pilot with Crypto.com, where they utilized USDC for settlement on Visa cards in Australia, with plans to expand to other markets.
Corporate Crypto Reported at Fair Value
The Financial Accounting Standards Board (FASB) unanimously voted to require companies with digital assets to record their holdings at fair value. Previously, crypto assets were treated as intangible assets, which meant that companies had to record impairments if the market value of their crypto holdings dropped but couldn’t record gains when the prices rebounded. The new rules, expected to be published by year-end, will mandate all American companies to adopt this approach by 2025. This decision has been celebrated by Bitcoin advocate Michael Saylor, as it removes a major obstacle to corporate adoption of Bitcoin as a treasury asset.
MilkRoad
Richard Salinas, who happens to be one of the wealthiest people on Earth. With a net worth of approximately $13.5 billion, he’s definitely not your average Joe.
But what’s got everyone buzzing is Ricardo’s recent interview on the popular Coin Stories Podcast. During the conversation, he revealed his liquid portfolio, and let me tell you, it’s a crypto lover’s dream. Here’s a breakdown of what Ricardo Salinas is all-in on:
- Bitcoin: Yep, you guessed it! The OG cryptocurrency holds a significant portion of his portfolio. It seems that even billionaires can’t resist the allure of Bitcoin’s potential.
- Microstrategy: Interestingly, Ricardo has invested in Microstrategy, a software company that has a massive stash of Bitcoin. This is a clever move, as it provides indirect exposure to the king of cryptocurrencies.
- Bitcoin Miners: Not content with just holding Bitcoin, Ricardo also owns stocks in several mining companies. This gives him a slice of the action in the exciting world of Bitcoin mining.
- Oil Companies: Diversification is key, and Ricardo understands this well. He has investments in oil companies, showing that he’s not afraid to explore opportunities beyond the crypto realm.
- Gold Miners: And speaking of diversification, Ricardo’s liquid portfolio also includes investments in gold miners. It’s a classic move to hedge against market volatility and maintain a well-rounded portfolio.
What’s remarkable about Ricardo’s approach is that a whopping 60% of his liquid portfolio is either directly or indirectly tied to Bitcoin. This demonstrates his unwavering belief in the potential of the cryptocurrency.
CoinDesk’s Best Story
🔥 FTX Executive in Hot Water!
In a shocking turn of events, Ryan Salame, the former co-CEO of FTX Digital Markets in the Bahamas, has pleaded guilty to criminal charges. As part of a plea agreement with the U.S. Department of Justice, Salame could face a hefty penalty of over $1.5 billion. However, this extreme amount will only be pursued if Salame fails to pay $5.6 million to FTX debtors and $6 million to the U.S. government. As part of the deal, Salame must also forfeit a 2021 Porsche model 911 and several properties. The charges against Salame include unlawful political contributions and operating an unlicensed exchange, and he could face a maximum sentence of 10 years in prison. It’s worth noting that Salame will not be testifying against FTX founder Sam Bankman-Fried.
🔐 11,196 Years Behind Bars
In a case that has sent shockwaves through the crypto community, the operators of Thodex, a defunct Turkish crypto exchange, have been sentenced to a staggering 11,196 years, 10 months, and 15 days in prison. The founder, Faruk Fatih Özer, along with his sister Serap and brother Güven, faced charges related to the collapse of the exchange, which left approximately 400,000 members unable to access their $2 billion in deposits. Faruk initially fled but was caught by Interpol in August 2022, while Serap and Güven were detained earlier. This landmark case serves as a powerful reminder of the consequences that await those who engage in fraudulent activities in the crypto space.
💔 A Blow to DeFi
The Commodity Futures Trading Commission (CFTC) is tightening its grip on the decentralized finance (DeFi) sector, as it has charged three DeFi operations with offering illegal derivatives trading. Opyn, 0x (ZeroEx), and Deridex have been accused of providing leveraged commodity transactions to retail traders unlawfully.
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?
