SEC vs. Senators: The Battle for Crypto's Future
SEC vs. Senators: The Battle for Crypto's Future
JPMorgan Innovates in Blockchain Payments While Ripple Navigates Regulatory Waters and FTX Faces Legal Reckoning
Welcome to the latest edition of Coinfeeds Daily Digest, your go-to source for the most recent developments in the crypto markets.
Today's edition is brimming with stories that touch on the regulatory showdowns in the halls of Congress to the individual stories that make the markets so compelling and unpredictable.
In our lead story, U.S. Senator Bill Hagerty calls out SEC Chair Gary Gensler for his approach to crypto regulation, igniting what could become a significant political and legislative battle. Elsewhere, Ripple finds itself on firmer ground as the regulatory environment begins to shift, while an Ex-FTX Executive pleads guilty to criminal charges, casting a shadow over the industry.
We also delve into the personal side of crypto, exploring the cautionary tale of a young investor who suffered significant losses by overleveraging his investments. On the innovation front, JPMorgan is working on a blockchain-based payment system that could revolutionize the way we think about digital transactions. Click here to explore today's trending news on coinfeeds.io.
Market Update
News
Hagerty vs. Gensler: A Crypto Clash in Congress
U.S. Senator Bill Hagerty has expressed concern over the approach of the U.S. Securities and Exchange Commission (SEC) towards the crypto sector. He accused SEC Chair Gary Gensler of stifling innovation in the crypto industry and creating a hostile environment for companies looking to invest and expand in the sector. Hagerty also criticized U.S. banking regulators for creating a climate that makes banks wary of crypto connections. He suggested that Congress should approach crypto legislation incrementally, rather than attempting a comprehensive approach. Hagerty's comments came as he previewed the potential ire lawmakers may have for Gensler as Congress returns from its summer break.
In a related development, Caroline Pham, a member of the Commodity Futures Trading Commission (CFTC), has proposed a limited pilot program for regulating cryptocurrencies in the U.S. The program would support the development of compliant digital asset markets and tokenization. It would include registration and eligibility requirements, risk management, product and contract terms, and other requirements such as disclosures and reporting. Pham's proposal is aimed at fostering a more conducive environment for the growth of the crypto industry.
However, the proposal may face hurdles due to the CFTC's current leadership, which has not shown a pro-industry stance. The CFTC is led by Chairman Rostin Behnam, a Democratic appointee, who hasn’t embraced an industry-friendly approach. Meanwhile, Hagerty has called for more hearings to scrutinize the actions of SEC Chair Gensler, suggesting that the Democrat-controlled panel should schedule more hearings to specifically examine what Gensler and the SEC are doing to the U.S. crypto sector.
Young Investor Loses $80,000 in Crypto
Ethan Nguonly, a 22-year-old software engineer, lost about $80,000 by investing in crypto on margin between November 2021 and June 2022. His losses include $30,000 of his original investment and an estimated $50,000 in unrealized gains. Nguonly had made significant crypto investments in bitcoin and ethereum of around $40,000, plus a few hundred dollars in altcoins. However, as bitcoin's price increased, he decided to buy more on margin. When the crypto market reversed, his losses were amplified. Nguonly advises against investing money one doesn't have and warns against overleveraging in speculative investments.
JPMorgan Explores Blockchain-Based Payment and Settlement System
JPMorgan Chase & Co. is reportedly exploring a blockchain-based digital payment and settlement system, according to Bloomberg. The banking giant has developed much of the infrastructure for the project, which requires a digital deposit token, but awaits regulatory approval to proceed. The proposed system could speed up transactions and reduce costs, with the deposit token representing a digital version of a customer's deposits. It could be used to send funds to users of a different bank or settle tokenized securities. The firm could launch the project for corporate clients within a year after obtaining approval.
Ripple CTO Says 'Tide is Turning' on U.S. Regulatory Environment
Ripple CTO David Schwartz believes that the US regulatory environment for cryptocurrencies is changing, following a court ruling that Ripple's XRP token is not a security. The ruling could set a precedent for other crypto-related lawsuits brought by the US Securities and Exchange Commission (SEC). Schwartz noted that the SEC's case against Ripple had cost the company business deals and led to the delisting of XRP from several exchanges. However, he suggested that the wider industry is now experiencing the regulatory scrutiny that Ripple faced from the SEC in 2020.
Ex-FTX Executive Pleads Guilty to U.S. Criminal Charges
Ryan Salame, a former executive at cryptocurrency exchange FTX, has pleaded guilty to federal criminal charges related to the exchange's collapse. Salame, who was co-chief of FTX Digital Markets, is accused of playing a key role in the exchange's political fundraising operations. His guilty plea comes ahead of the trial of FTX founder Sam Bankman-Fried, who is accused of orchestrating a multibillion-dollar fraud leading to FTX's bankruptcy. Other former FTX leaders have also pleaded guilty to criminal charges and are expected to testify against Bankman-Fried.
Coinbase Targets Regulatory Clarity in International Expansion Plan
Coinbase, a cryptocurrency exchange, has announced plans for international expansion, focusing on acquiring licenses in major financial jurisdictions with clear rules for the crypto industry. The company's near-term priorities include the European Union, U.K., Canada, Brazil, Singapore, and Australia. Despite previous statements about possibly relocating from the U.S. due to regulatory uncertainty, CEO Brian Armstrong has clarified that this is not currently a consideration. The company is also planning to expand its derivatives offering and establish partnerships with banks and payment providers.
Crypto Whale Loses $24M in Staked Ethereum to Phishing Attack
A cryptocurrency investor lost $24 million in staked Ethereum due to a phishing attack on the liquid staking provider Rocket Pool. The investor lost the entire balance of Lido Staked ETH (stETH) and Rocket Pool ETH (rETH) in two transactions. The stolen assets were subsequently swapped for 13,785 Ether (ETH) and 1.64 million Dai (DAI) tokens. A significant portion of the DAI has already been transferred into the cryptocurrency exchange FixedFloat. The victim enabled token approvals to the scammer by signing "Increase Allowance" transactions.
MicroStrategy's Large Bitcoin Impairment Losses Have Given a False Impression: Berenberg
MicroStrategy will be able to report its Bitcoin holdings quarterly without recognizing impairment losses if Bitcoin's price drops, following a change in reporting rules by the Financial Accounting Standards Board (FASB). Since adopting its Bitcoin acquisition strategy in 2020, MicroStrategy has reported $2.23 billion of cumulative impairment losses. The change will allow companies to use fair-value accounting, showing gains and losses immediately on their income statements. The new rules are expected to take effect as soon as 2025, but companies can apply them earlier.
Basketball Title Rumble Kong League and Stance Launch In-Game and IRL HyperSocks
Web3 basketball game Rumble Kong League has teamed up with apparel brand Stance to launch a collection of in-game NFT HyperSocks, alongside IRL counterparts. The partnership, which includes a collaboration with NBA superstar Paul George, will see the Rumble Kong League universe extend beyond the game and into the real world, with the launch of IRL socks featuring the same designs seen in-game, along with an AR filter showcasing the game.
Binance Boosts Bitcoin, Ether Trading in Argentine, Brazilian, South African Currencies With Fee Promotion
Binance, a leading cryptocurrency exchange, is expanding its zero-fee trading promotion to include Argentine, Brazilian, and South African currency spot trading pairs. This will allow users to trade Bitcoin, Ether, and Tether's USDT stablecoin with the Argentine peso, Brazilian real, and South African rand without incurring any maker fees. This move comes as Binance faces legal and regulatory challenges in the US and Europe, and as crypto trading volumes have hit their lowest levels since 2019. The exchange is focusing on emerging markets, where crypto adoption is high.
LBRY Decides to Fight: Blockchain Firm Files Notice of Appeal Against SEC
Blockchain-based file-sharing and payment network LBRY has filed a notice of appeal against a federal judge ruling that sided with the Securities and Exchange Commission (SEC). The SEC had sued LBRY in March 2021, claiming that its LBRY Credit token was sold as a security under the 1933 Securities Act. The court barred LBRY from offering unregistered crypto asset securities and ordered it to pay a $111,614 civil penalty. LBRY's appeal comes amid several high-profile crypto industry victories against the SEC.
As always, stay tuned for more updates in crypto!