Magnet Crypto Review | The weekly roundup of all things blockchain

Issue #46

Written by Magnet Capital | Jun 20, 2023 12:00:00 AM

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US1.10T, up (1.2%) from last week.

Below is the weekly performance of the top crypto and NFT assets. 

 

News Headline Highlights

 Crypto Asset Project Updates

  • Ethereum scaling solution Polygon (MATIC) announced the upcoming launch of Polygon 2.0, which addresses “topics like the future of the Polygon PoS chain, the utility and evolution of the Polygon token, and the transition to greater community governance of the protocol and treasury”. 
  • Uniswap Labs, the entity behind the largest decentralised crypto exchange by volume, released draft code for Uniswap V4. The new code features “hooks” or plugins that allow developers to create custom liquidity pools. 
  • Tether (USDT) experienced a short lived de-peg late last week when historical financials were released to Coindesk, obtained under a Freedom of Information Law request from the New York Attorney General’s (NYAG) suit against Tether in 2021. The documents showed Tether kept funds in four banks, two investment management firms, two gold depositories, a gold broker and Bitfinex in March 2021. It also had funds in commercial paper and other securities issued by various entities, including the Qatar National Bank, Barclays Bank, Deutsche Bank, Emirates NBD Bank and Natwest Group.
  • Generative artist Dmitri Cherniak's Ringers #879 (NFT), often referred to as “the Goose”, sold at a Sotheby’s auction for $5.4 million and a full price of $6.2 million inclusive of Sotheby's buyer's premium.

Regulation Station

  • House Republicans Rep. Warren Davidson (R-OH), and House Majority Whip Tom Emmer (R-MN), introduced the SEC Stabilization Act that would restructure the SEC and remove Chairman Gary Gensler. GOP lawmakers point to what they say is Gensler’s "long series of abuses that have been permitted under the current SEC structure".
  • As part of a lawsuit, a number of emails detailing internal SEC commentary before ex-SEC Director William Hinman’s 2018 speech on crypto’s designation as a security have been published. The emails indicate multiple SEC staffers did not deem ETH a security as it was offered in 2018. It also shows commentary that staffers believe there might be a “regulatory gap” when it comes to regulation of digital assets. 
    • Magnet quick take: Existing securities regulations are incomplete and not practical to apply to digital assets. As stated in these docs, once a network is sufficiently decentralised there are no “efforts of others” to point to, there is no one to hold responsible for disclosures, etc. We are pro regulation and believe it necessary for digital assets, but applying existing regulation will be ineffective and impractical.
  • Crypto exchange Bitstamp and online brokerage firm Interactive Brokers have been added to the U.K. crypto register. The register is the Financial Conduct Authority's (FCA) list of crypto firms that have met its anti-money laundering and terror financing regulations. 
  • The US Securities and Exchange Commission (SEC) continues to receive push back on its proposed rule to redefine the definition of ‘exchange’ to include decentralised finance (DeFi) protocols. Submissions outlining issues with the SEC’s proposal have been made by Bain Capital, Fidelity, True Ventures, Bloomberg, Coinbase, Circle, MarketAxess, SIFMA, Consensys, Virtu, FlowDesk, Galaxy, Coin Center, Paradigm and many others.
  • House Financial Services Committee Chairman Patrick McHenry (R-NC) announced two SEC oversight hearings for Thursday June 22nd - “Oversight of the SEC” and “Oversight of the SEC’s Division of Trading and Markets”.

The Weekly Deal Room

Metric of the Week

Despite everything that happened to crypto markets in 2022, UBS's 2023 Family Office Report indicates 35% of responders plan to increase their digital asset investment exposure, whilst only 5% plan to decrease.

Source: UBS