Cryptocurrency

SEC reviews Ripple ruling, US bill seeks control over DeFi, and more: Hodler’s Digest, July 16-22

Top Stories This Week

Chair Gensler says SEC reaction to Ripple decision is mixed, still under consideration

U.S. Securities and Exchange Commission Chair Gary Gensler has commented publicly about the recent ruling on the agency’s suit against Ripple, saying the SEC is “still looking at it and assessing that opinion.” Gensler declined to comment further on the case, but said the commission is pleased with the court’s decision stating that XRP was a security when sold to institutional investors, but disappointed with the non-security ruling for retail investors and other XRP distributions. Comments made by the regulator on July 21 in a lawsuit hinted that it might appeal the decision. In the crypto community, however, some believe it is unlikely to happen as the SEC benefits from the “current confusion.”

Bipartisan bill to regulate DeFi, crypto security risks introduced into US Senate

A bipartisan bill was introduced into the U.S. Senate, tightening regulations and sanctions requirements for decentralized finance (DeFi). The bill would subject DeFi operations to the same requirements as “other financial companies, including centralized crypto trading platforms, casinos, and even pawn shops.” The proposal also makes “anyone who controls that project” liable for the use of the DeFi service by sanctioned persons. The bill also set new requirements for operators of crypto kiosks (or ATMs) to prevent their use in money laundering. Kiosk operators would be required to verify the identities of both counterparties in a transaction.

Altcoins ‘bled’ as Bitcoin gained dominance in Q2: CoinGecko

The second quarter of the year has been a solid one for Bitcoin’s performance as its market dominance gained against altcoins, which “bled” throughout the period, according to CoinGecko’s industry report. Bitcoin (BTC) and Ether (ETH) continued to build their market share over the past months, while Binance Coin (BNB), XRP (XRP), and Cardano (ADA) suffered double-digit losses over the quarter. DeFi tokens were hit particularly hard during the quarter, with Uniswap (UNI), Chainlink (LINK) and Lido (LDO) taking double-digit losses as well. The top five metaverse and play-to-earn tokens by market cap also marked losses up to 40%.



Multiple spot crypto ETF applications go to Federal Register in step toward SEC approval

Applications from several firms for a spot Bitcoin exchange-traded fund (ETF) have been published in the Federal Register, moving them one step along in the U.S. SEC process. According to the records, applications from BlackRock, Fidelity, Invesco Galaxy, VanEck and WisdomTree were officially registered. Publishing the applications gives the SEC a window of opportunity to accept or reject the request, extend the time allowed or open the application for public comment. The SEC has an initial window of 45 days to reach a decision, but the commission has the option of extending the process for up to 240 days — until March 2024 — for final approval or denial.

Robert F. Kennedy Jr. vows to back US dollar with Bitcoin if elected president

Democratic presidential candidate Robert F. Kennedy Jr. has promised to progressively back the United States dollar with Bitcoin if he is elected president. Kennedy said during an event that backing the U.S. dollar with what he called “hard currency,” including gold, silver, platinum or Bitcoin, could help to re-stabilize the American economy. Kennedy explained the process would be gradual and that, depending on the plan’s success, he’d adjust the amount of backing for the dollar. Additionally, Kennedy declared he would make Bitcoin-to-U.S. dollar conversions exempt from capital gains taxes in an attempt to spur investments in the country.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $29,883, Ether (ETH) at $1,894 and XRP at $0.78. The total market cap is at $1.2 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Maker (MKR) at 32.18%, XDC Network (XDC) at 24.19% and Stellar (XLM) at 20.88%. 

The top three altcoin losers of the week are Rocket Pool (RPL) at -14.95%, GMX (GMX) at -10.93% and Lido DAO (LDO) at -7.90%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

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Most Memorable Quotations

“For me, the lack of protection for retail investors underscores the fierce urgency around passing a market structure bill to protect the average American consumer.”

Ritchie Torres, New York Representative

“Japan, Korea, China, all these places are pushing Web3 in a really big way because they see that as an opportunity to break away from basically U.S.-dominant technologies.”

Yat Siu, co-founder of Animoca Brands

“Backing dollars and U.S. debt obligations with hard assets [gold, silver, platinum or Bitcoin] could help restore strength back to the dollar.”

Robert F. Kennedy Jr., U.S. Democratic presidential candidate

“Based on Metcalfe’s law model, fair value for Bitcoin is around $55K. So I think we drift upwards toward that level.”

Mark Yusko, chief investment officer at Morgan Creek Capital

“[The Ripple ruling] has made our argument more compelling and more urgent, meaning that we can’t just rely on enforcement to get the kind of investor protection standards we need.”

Timothy Massad, former chair of the U.S. Commodity Futures Trading Commission

“The Commission benefits from the current confusion and losing these issues on appeal would jeopardize its entire enforcement agenda. So I’d be surprised if the SEC tried to appeal now.”

Kathryn Haun, CEO of Haun Ventures

Prediction of the Week 

Bitcoin Bollinger Bands echo move that ended in 40% January gains

Bitcoin is lining up a burst of volatility that could rival its 40% January gains, on-chain data suggests. 

BTC price has acted in a tight range for an entire month, using $30,000 as a focal point for sideways behavior, putting both bulls and bears to the test. According to popular analyst Aksel Kibar:

“Seems like $BTCUSD is exhausting many trader’s patience,” he wrote on July 21, before adding that this “is usually the condition you see before strong moves. Not sure about the direction though. I will stick with my well-defined boundaries. I know that increased volatility is around the corner. Capture the directional move.”

According to Bollinger Bands behavior, a classic volatility indicator, this move should come sooner rather than later as it’s printing a telltale sign that the days of rangebound BTC price action are at an end.

FUD of the Week 

Crypto firms and influencers may need to start including disclaimers on crypto memes to stay compliant with advertising laws in the United Kingdom. The country’s Financial Conduct Authority (FCA) released, on July 17, a proposed guidance on social media financial promotions that targets promotional memes and financial influencers — or “finfluencers.” The FCA considers crypto a high-risk investment. Per the FCA’s proposal, crypto can be advertised to retail investors at large, but there are requirements such as including risk warnings and a ban on investment incentives.

Uniswap founder Hayden Adams’ Twitter account was compromised on July 20. His account released a tweet to its more than 254,000 followers falsely claiming that the platform’s Permit2 contract had been “affected by an unknown exploit” and users’ tokens were at risk, encouraging them to click on a malicious link. The “Web3 Security Alerts” channel on Telegram detected the scam attempt and reported that Adams had also been blocked from his accounts with MetaMask and Coinbase Wallet.

Couple behind Bitfinex money laundering scheme reach plea deal with US prosecutors

Two people accused of having laundered billions of dollars worth of Bitcoin connected to the 2016 Bitfinex hack have reached a plea agreement with authorities in the United States. The pair had been charged with money laundering conspiracy and conspiracy to defraud the U.S., and they are expected to forfeit digital assets connected to the case. Crypto exchange Bitfinex was hacked in August 2016, with roughly 119,754 Bitcoin stolen.

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Cointelegraph Magazine writers and reporters contributed to this article.

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