With Ether ETFs in the Works, How Else Might the SEC Pivot on Crypto? - Ep. 653
May 31, 2024
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Guest Jason Gottlieb from Morrison Cohen discusses how the upcoming US elections could impact the SEC's crypto agenda, political pressures influencing SEC decisions, ongoing court battles involving major crypto firms like Coinbase, implications of a possible new SEC chair, and Democrats' outreach to the crypto industry. They also touch on the SEC's credibility, bipartisan support for sensible regulation, and the influence of celebrities like Kaitlyn Jenner in the crypto space.
SEC's approval of Ethereum spot ETFs strengthens crypto defense, but ongoing legal battles remain unsettled.
Celebrity involvement in meme coins on Solana platform sparks controversy, scrutiny, and a surge in market activity.
Deep dives
ETH ETFs approved, but staked Ether could still face SEC scrutiny
The SEC's pending approval of Ethereum spot ETFs seemingly classifies Ether as a commodity by labeling the ETFs as commodity-based trust shares. The approval strengthens the defense of companies like Consensus and Coinbase, who are currently under SEC scrutiny. Sam Enzer of Cahill Gordon and Reindel noted, the SEC in approving these ETFs implicitly acknowledges Ether as a commodity, which is inconsistent with treating it as a security. However, the seeming shift still leaves unresolved issues in the SEC's ongoing legal battles with crypto companies, giving the agency room to scrutinize transactions involving Ether.
Kaitlyn Jenner has been actively promoting her meme coin, Jenner, launched on the Solana-based platform Pump.Fun. Despite this, she publicly criticized Sahil Aurora, who allegedly assisted in the token's launch, accusing him of effing with too many powerful people. Jenner's precise involvement beyond promotion is unclear, sparking speculation about her control over the account. Aurora, also linked to meme coin launches for other celebrities like Rich the Kid, faces multiple misconduct accusations. Solana has seen a surge in celebrity interest, Davido launched Davido on Pump.Fun generating nearly $50 million in volume within 10 hours. Azalea's token, Mother, saw its market cap reach $12.57 million with $98.87 million in trading volume in 24 hours. Both Davido and Azalea expressed a desire to responsibly participate in the crypto community.
Polyhedra and ZK Sync clash over ZK token ticker
A dispute has arisen between Polyhedra and ZK Sync over the ticker symbol ZK, which ZK Sync wishes to use for its upcoming token generation event and airdrop. Polyhedra, which already uses the ticker, accused ZK Sync of spreading misinformation and not engaging directly to resolve the issue. Thought initially planned to use the ticker dollar ZKB, but switched to dollar ZK during its March airdrop. Social media reactions largely support ZK Sync, with some accusing Polyhedra of trying to preemptively claim the ticker. The controversy took a turn on Thursday, with leaders from major zero knowledge projects, including Starkware and Polygon publicly siding with Polyhedra, condemning MatterLab's attempt to trademark ZK in nine countries. Eli Ben-Sasson, CEO of Starkware, called the move an absurd IP grab while Polyhedra co-founder Tianqiang Xi insisted ZK should be accessible to everyone, period.
Mount Gox Cold Wallet transfers 9 billion in Bitcoin
A cold wallet associated with the bankrupt crypto exchange, Mount Gox, transferred $141,664 BTC, worth approximately $9 billion to a new address for the first time in five years. Mount Gox, once a leading crypto exchange, collapsed after multiple hacks between 2011 and 2014, leading to its bankruptcy. The process of repaying creditors has been prolonged, with the latest deadline set for October 31, 2024. Despite the large move of funds, on-chain analysts at CryptoQuant aren't concerned about these coins flooding the market anytime soon. There is no immediate selling pressure for Bitcoin from these movements as the transfers have occurred within the addresses of the same entity, Mount Gox Rehabilitation Trustee, and are not still available to the open market, they wrote in a report.
After some big wins for the crypto industry (and big losses for the U.S. Securities and Exchange Commission), Jason Gottlieb, partner at Morrison Cohen, delves into how the upcoming US elections could reshape the SEC’s crypto agenda, the political pressures influencing SEC decisions, and the potential impact that a new SEC chair could have.
Gottlieb provides insights into ongoing court battles involving major crypto firms like Coinbase and explores the broader political implications of the Democrats' recent outreach to the crypto industry.
Show highlights:
How the sea change in Congress, the White House, and the Biden campaign affects the SEC’s stance on crypto
Whether the SEC's agenda on crypto has changed, following the sudden reversal on ETH ETFs
Whether the SEC is being pressured politically about crypto and how that could affect its actions between now and the election
How the ongoing legal crypto cases are affected by the SEC’s change of tune
What the implications of a possible new SEC chair would be
How the SEC’s credibility was damaged by the Debt Box case
Why Jason thinks Democrats are in an “uncomfortable position” but also believes there’s a lot of common ground with the Republicans with regard to crypto
Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com
02:55 The outlook for the SEC’s efforts after the seeming sea change from the Democrats
06:09 Whether the SEC's agenda has changed, after the sudden reversal on ETH ETFs
09:58 Whether the SEC is being pressured politically and whether that will influence its actions between now and the presidential election
15:30 How the ongoing legal crypto cases are affected by the SEC’s change of tune
19:51 What the implications of a new SEC chair would be on court cases winding slowly through the courts
23:52 How the SEC’s credibility was damaged by the Debt Box case
27:59 Why Jason thinks Democrats are in an “uncomfortable position” but also believes there’s a lot of common ground with the Republicans with regard to crypto