SEC Floats ‘Innovation Exemption’ for DeFi Platforms

Hi! In today’s edition:

• 🪄 SEC may ease up on DeFi

• 💸 ETH staking hits historic high

• 🥇 BlackRock’s Bitcoin ETF smashes record

• 🆕 New ETFs chase Circle’s monster IPO

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DeFi Platforms Could Get ‘Innovation Exemption,’ SEC Chair Says

U.S. Securities and Exchange Commission Chair Paul Atkins says the agency is developing a policy to provide an "innovation exemption" for decentralized finance platforms, aiming to ease regulatory barriers and support the growth of blockchain-based financial systems.

At a recent crypto roundtable entitled "DeFi and the American Spirit," Atkins said he had directed SEC staff to consider changes to agency rules that would allow issuers and intermediaries to administer onchain financial systems more freely.

The exemption policy would enable entities under the SEC’s regulatory purview to roll out onchain products and services to market more quickly, provided they met certain conditions. 

Atkins emphasized that software developers should not be held responsible for how decentralized tools were used, drawing a distinction between writing code and regulated financial activity, even arguing that regulating the publication of code would infringe on Constitutional First Amendment rights.

Staked ETH Hits All-Time High of $100B Onchain

The amount of staked Ethereum has reached a new record high of 34.65 million ETH, representing about 28.7% of the current circulating supply, according to data compiled by pseudonymous data cruncher @hildobby on a Dune dashboard. The figure corresponds to more than $100 billion staked onchain.

The rise in staked ETH comes as the price of the No. 2 cryptocurrency by market capitalization surged above the $2,700 mark — a two-week high, despite being far from its all-time high of more than $4,891.

Increased ETH staking has also been reflected in a significant drop in ETH sent to centralized exchanges, indicating that large holders are increasingly choosing staking over active trading. 

The shift has resulted in a structural scarcity of liquid ETH, which could potentially stabilize prices and reduce volatility. 

BlackRock’s IBIT Becomes Fastest-Ever ETF to Top $70B

BlackRock’s iShares Bitcoin Trust (IBIT) has become the fastest exchange-traded fund to surpass $70 billion in assets under management, reaching the milestone in just 341 trading days since its launch in early 2024.

IBIT’s pace of asset growth is five times faster than that of the previous record holder, the SPDR Gold Shares ETF, which took 1,691 trading days to reach that level.

IBIT’s holdings now stand at $71.9 billion, with 661,457 BTC, making it the biggest institutional holder of Bitcoin globally, exceeding the holdings of major crypto exchanges and other entities.

Consistent inflows into the world’s largest asset manager’s flagship bitcoin ETF puts it on pace to surpass the sum supposedly held by Bitcoin’s pseudonymous creator, Satoshi Nakamoto, by next year.

ProShares and Bitwise File for CRCL-Tracking ETFs After Massive Circle IPO

Stablecoin issuer Circle’s hugely successful IPO saw its shares surge from their $31 offering price to as high as $138.57, a near quadrupling in the stock’s value.

ETF issuers ProShares and Bitwise spotted the opportunity to file for new ETFs tied to Circle’s stock, capitalizing on strong investor interest in packaged exposure to the firm’s rapid growth and stablecoin-based business model.

Leveraged ETF specialists ProShares’ proposed fund — the ProShares Ultra CRCL ETF — will aim to deliver double the daily performance of Circle’s stock, using swaps and other derivatives.

Meanwhile, Bitwise’s fund — the Bitwise CRCL Option Income Strategy ETF — will use a covered call strategy, holding CRCL shares while regularly selling call options against them.

Both filings were submitted on June 6, with a target launch date of Aug. 20, pending U.S. Securities and Exchange Commission approval. 

News of the filings sparked a further 17% surge in Circle’s stock price.

• 🇵🇾 The X account of Paraguay’s president, Santiago Peña, was hacked on Monday to make false claims that bitcoin would become legal tender and that the country would issue BTC bonds, prompting an official denial from the presidency.

• 🇺🇸 The U.S. Senate will vote on the GENIUS Act on Wednesday after Majority Leader John Thune filed cloture, potentially advancing a bill that mandates full backing and audits for stablecoins over $50 billion and grants enforcement power over foreign issuers.

• 🕵️ U.S. prosecutors on Monday charged crypto CEO Iurii Gugnin with laundering more than $500 million for sanctioned Russian banks using tether and shell companies, accusing him of falsifying documents and having ties to Russian intelligence.

• 🇰🇷 South Korean lawmaker Min Byeong-deok today proposed a bill introducing stablecoin licensing and capital requirements, fulfilling President Lee Jae-Myung’s campaign pledge to support a won-based stablecoin market and broaden oversight of crypto asset activities.

• 🇫🇷 Heavyweight French bank Société Générale plans to launch a U.S. dollar-pegged stablecoin named USD CoinVertible on Ethereum and Solana through SG-Forge, with BNY Mellon holding reserves, marking the first such move by a major European lender under MiCA regulations.

• 🔥 Plasma raised $500 million in five minutes during a public token sale to fund its Bitcoin-based Ethereum virtual machine-compatible sidechain aimed at zero-fee stablecoin transactions, far exceeding its original $50 million target.

• 🧠 Turnkey, a crypto infrastructure startup founded by ex-Coinbase staff, raised $30 million in a Bain-led series-B funding round to grow its team and expand its modular wallet platform powering over 50 million embedded wallets.

• 💸 OpenLedger committed $25 million through its OpenCircle launchpad to fund decentralized artificial intelligence protocol development, offering shared ownership to contributors of code, data, and computing resources.

• 🪙 The Blockchain Group launched a $342 million at-the-market share issuance program with TOBAM to boost its bitcoin treasury, following last week’s $68.7 million BTC purchase that brought its holdings to 1,471 BTC.

• 🔐 Strategy added 1,045 BTC for $110.2 million at an average price of $105,426 using funds from its STRK and STRF preferred stock sales, lifting its total holdings to 582,000 BTC worth more than $62 billion.

• 💰 KULR is aiming to raise up to $300 million through an at-the-market share sale to fund more bitcoin purchases, research and development, and working capital after accumulating 920 BTC and leasing mining rigs that have already generated 10 BTC.

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