Issue #57

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US1.09T, flat (-%) from last week.

Below is the weekly performance of the top crypto assets. 

News Headline Highlights

• Grayscale won a significant legal battle against the SEC for the industry in the push to launch a Bitcoin ETF. The District Court of Colombia voted 3-0 in favour of Grayscale, deeming the SEC’s “denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products”.
• The US Securities and Exchange Commission (SEC) has delayed making a decision on all spot bitcoin exchange-traded fund (ETF) applications until October. These included applications from BlackRock, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise and Valkyrie Digital Assets. Magnet Quick Take: this was expected. The SEC has a history of delaying Bitcoin ETF decisions until the last possible moment. Even despite losing the case against Grayscale, the timeframe between result and decision to delay was too narrow. We expect they cannot delay indefinitely this time around given the mounting weight against them.
• Binance, the world’s largest cryptocurrency exchange, is reevaluating its business in Russia as it faces legal risks in the country. According to a Binance spokesperson, the exchange is weighing different options for its Russia operations, including a full withdrawal from the market.
• Less than 6 months after launching, Robinhood’s crypto wallet is adding “custody, send and receive support for Bitcoin and Dogecoin”, in addition to enabling Etheruem swaps. Prior to this, the wallet was a custody wallet for a handful of Ethereum based tokens.

 Crypto Asset Project Updates

• As the bitcoin halving nears, the hash price for bitcoin, the amount of revenue a miner should anticipate per petahash per second of hashing power, has plummeted from a yearly high in early May to near 5-year lows. Miners were netting around $127 a day per petahash per second (PH/s) on May 8. As of Monday, Aug. 28, a miner can only expect $59 a day with each PH/s they have, according to data aggregated by Hashrate Index.
• PEPE, the third largest meme coin, experienced a sharp drop in price last week as rumours of a rug pull circulated. Large quantities of PEPE tokens from the projects’s developer multi-sig wallet were moved to crypto exchanges following several team members colluding to steal the assets. In total, 16 trillion tokens (of 26 trillion in the multi-sig) worth$15m were stolen.
• Paypal’s USD stablecoin (PYUSD) is now trading on Coinbase.

Regulation Station

• Swiss crypto-focused SEBA Bank received an approval-in-principle from Hong Kong's securities regulator that takes it only one step away from offering virtual asset services in the Asian financial hub.
• The Securities and Exchange Commission (SEC) has settled their first securities charge against an NFT issuer. Impact Theory, who raised  ~$30m, was charged with "conducting an unregistered offering of crypto asset securities". The SEC claimed the company "encouraged potential investors to view the purchase of a Founders Key as an investment into the business, stating that investors would profit from their purchases if Impact Theory was successful in its efforts", which implied an investment contract.
  • It is noteworthy that two of the five SEC Commissioners, Hester Peirce and Mark Uyeda dissented on the case.
• A New York court has dismissed a class action lawsuit against Uniswap, claiming that Uniswap Labswas liable for scam tokens that transacted on the decentralised exchange. Judge Katherine Polk Failla wrote, “Due to the Protocol’s decentralized nature, the identities of the Scam Token issuers are basically unknown and unknowable, leaving Plaintiffs with an identifiable injury but no identifiable defendant”.
• German lawmaker Stefan Berger is leading new legislation to underpin a digital euro. Berger was responsible for introducing the EU’s landmark Markets in Crypto Assets (MiCA) regulation through the Parliament, and will now take a similar role on the central bank digital currency (CBDC).
• Ripple has filed its opposition to the SEC’s Motion to Certify Interlocutory Appeal. In August, the SEC appealed the court's ruling that XRP tokens sold on secondary markets were not securities.

The Weekly Deal Room

• DeForm, a web3 marketing firm, raised $4.6m in a Seed Round led by Kindred.
• FirstMate, a platform for NFT creators and admins to own more of their relationship with their collectors, raised $3.75m in a private funding round led by Dragonfly Capital.
• Stroom Network, a Bitcoin liquid staking solution for the Lightning Network, raised $3.5m in a Seed Round led by Greenfield.
• Tako Protocol, an open social recommendation infrastructure protocol for Web3 social networks, raised $2m in Pre-Seed Funding from DWF Labs, Mask Network, UOB Venture, Signum Capital and others.