🕵️ Why Are Regulators Coming After Crypto? 😯

In today's edition: 🎙️ A new pod with crypto lawyers!, ❌ Kevin Zhou's fund, ✅ good news for users of FTX Japan, and more!

February 21, 2023

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New Show Today!…

A settlement with Kraken, a proposed custody rule, and lawsuits against Paxos and Terraform Labs. “This week has been a very long year,” said Polygon Labs Chief Policy Officer Rebecca Rettig. She joins Coinbase Chief Legal Officer Paul Grewal to interpret what’s going on with the SEC. Is it just one big push to cripple the crypto industry? “The fact that we’re all … trying to read tea leaves speaks to a failure in the system that relies upon one-off enforcement actions rather than a public rulemaking process,” said Grewal.

Show highlights:

  • how the implosion of FTX sped up regulatory actions 

  • whether the SEC will go after other staking services

  • why the statement that crypto firms should just register with the SEC is “disingenuous”

  • what seems to be behind the decision to target the BUSD stablecoin

  • whether SEC enforcement actions will be detrimental to innovation in the U.S.

  • what features would make stablecoins securities

  • why the SEC is alleging that the UST stablecoin is a security

  • why “expansion of jurisdiction” is at the heart of the SEC’s proposed crypto custody rules

  • why Paul thinks that forcing crypto innovation offshore could become a national security issue for the U.S.

What’s Poppin’?

Galois Capital has unwound all its positions and said that investors will receive 90% of funds that are not locked on FTX.

Japan-based users will be able to withdraw their stranded fiat and crypto from FTX through Liquid Japan starting today.

Huobi plans to be the first fully regulated exchange in Hong Kong as the region’s financial regulator weighs new criteria for allowing retail investors to trade crypto.

In Other News…✍️✍️✍️

  • Distressed asset funds are purchasing FTX bankruptcy claims for a maximum of 20 cents per dollar in private over-the-counter (OTC) markets. 

  • Karel Kubat, the CTO of Composable Finance, announced his departure due to concerns about transparency and potential "suspicious transactions.”

  • Investors in emerging economies suffered the biggest losses in the crypto market after the collapses of the Terra ecosystem and the FTX exchange, according to a report by the Bank for International Settlements.

  • China is reportedly supporting Hong Kong's proposal to become a crypto hub.

  • A developer forked the code behind Bitcoin ordinals to the Litecoin blockchain, making the Litecoin network's upgrade whitepaper the first NFT on Litecoin.

Today in Crypto Adoption...

  • Fireblocks is testing a combination custody solution that enables its clients to custody their digital assets while trading on exchanges.

The $$$ Corner…

  • Blockchain Infrastructure startup Gateway.fm garnered $4.6 million in a funding round to develop infrastructure tools for web3. 

  • Dragonfly and Naval Ravikant led a $3.4 million seed round for Renegade, a startup building a DEX.

  • Animoca Brands invested in EthSign, a decentralized platform for electronic signatures.

What Do You Meme? 

📈 Your Market Update 📉

  • BTC is down .71%, trading at $24,833

  • ETH is down 2.06%, trading at $1,687

  • BTC dominance: 40.98%

  • Crypto market cap: $1.17 trillion

*All data as of today, 5 am ET

Recommended Reads

  1. Route2Fi on Arbitrum:

  2. Ishan B on tokenized corporate bonds:

  3. Jon Charbonneau on ETH:

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