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Bitcoin should be going to the moon. So why is it still on the launch pad?
If you were asked to design the ideal market conditions for Bitcoin you could hardly do better than October 2024.
China has begun pumping its economy with $284 billion worth of stimulus spending for consumers, banks, and businesses. The Federal Reserve just slashed its benchmark interest rate by 0.5% as inflation subsided to normal levels.
And the US economy grew at an annualised 3% in the second quarter, which means the Fed will probably make further cuts well into next year.
The sound we should be hearing is the thundering hooves of a bull stampede.
Instead all we have is one big... meh.
Bitcoin has skidded 4.3% since China disclosed its qualitative easing measures on September 25. And the cryptocurrency is up just 1.9% since the Fed cut rates on September 18.
What gives? Whereâs the mojo? Isnât Bitcoin supposed to be rocketing to $100,000?
Digital gold
Analysts point to Iranâs missile attack on Israel this week and the escalation of hostilities in the Middle East as the prime reason why BTC and other cryptocurrencies are so sluggish.
At first glance, this makes sense.
Fears of a regional war in the Middle East are roiling the markets again, and, as often happens in these crises, spooked investors are piling into gold.
The precious metal has gained 29% this year, besting the 25% rise of BlackRockâs Bitcoin exchange-traded fund, IBIT.
But geopolitical turmoil should be equally bullish for Bitcoin, right?
Just last month, BlackRock published a widely-read report hailing Bitcoin as a âunique diversifierâ against fiscal, monetary, and geopolitical risks that impact stocks, bonds, and other traditional assets.
If all those assets swoon, Bitcoin should hold the line, or surge.
Yet this idea that Bitcoin is digital gold, which has been around forever, really doesnât hold up.
When US consumer prices soared to 40-year highs in 2022 and 2023, Bitcoin provided no shelter whatsoever as it tumbled into a bear market. That should have been the moment when Bitcoin proved its worth as an asset wholly untethered from economic dynamics.
Instead, BTC started moving in tandem with Fed monetary policy. Cue the irony.
Cryptoâs holy grail
Now the outlook for Bitcoin is the rosiest itâs been since those dark days of 2022. It isnât just the Fed and China.
On the regulatory front, it looks like crypto will get relief from the three-year-long crackdown led by Gary Gensler, the crypto-doubting chair of the US Securities and Exchange Commission.
Both Donald Trump and, more quietly, Vice President Kamala Harris, have signalled they will take a less aggressive approach to the asset class should they win the White House in November.
Moreover, the quest for cryptoâs holy grail, mass market adoption, is making progress.
Not only did BlackRock, Fidelity, and other Wall Street giants roll out Bitcoin and Ethereum ETFs this year, but a number of stalwarts and fintechs are making key moves.
Just this week, Swift, the banking consortium that controls the $200 billion cross-border payments system, said central banks and commercial lenders can now test transactions of digital currencies on the network.
And Visa became the latest player to join the tokenisation push with the launch of a platform designed to put real world assets onchain.
Will any of this matter? Letâs be honest. Bitcoin is an irrational asset. The crypto market simply doesnât react to signals the way, say, stocks, do. There arenât many fundamentals to latch onto, like earnings.
Everything is so macro now, but even developments on that front, as weâve seen with the recent Fed rate cut, arenât a sure thing.
Yet there is one constant â patience.
Extraordinary performance
In its report, BlackRock pointed out that Bitcoin outperformed all major asset classes in seven out of the last 10 years, and returned 100% on an annualised basis over the last decade.
The cryptocurrency delivered this extraordinary performance even though it was the worst performing asset in the other three years of that decade, with four selloffs exceeding 50%.
In other words, good things come to those who hodl.
Intriguingly, the reportâs authors argue that Bitcoinâs original value proposition remains intact â mounting concerns around US fiscal stability and the global monetary and geopolitical situations will drive buying of BTC.
Hmm. You could probably write a dissertation on why that wonât be the case. But thatâs not the point.
If Bitcoinâs record shows anything, itâs that investors donât need a case. They donât need an argument or fundamentals. And they donât need a rational reason to buy (or sell).
After 15 years, the market has made its peace with Bitcoinâs inscrutability. While efforts to explain its behaviour spring eternal, waiting appears to be the only thing investors can count on.
Just look at this year.
For all worrying in the latter half of 2024, Bitcoin is up 46%. While investors may grouse it should be higher given all the bullish action, thatâs more than twice as good as the S&P 500âČs 20% performance.
Edward Robinson is the story editor for DL News. The opinions expressed in this op-ed column are his own. Contact the author at ed@dlnews.com.
China has begun pumping its economy with $284 billion worth of stimulus spending for consumers, banks, and businesses. The Federal Reserve just slashed its benchmark interest rate by 0.5% as inflation subsided to normal levels.
And the US economy grew at an annualised 3% in the second quarter, which means the Fed will probably make further cuts well into next year.
The sound we should be hearing is the thundering hooves of a bull stampede.
Instead all we have is one big... meh.
Bitcoin has skidded 4.3% since China disclosed its qualitative easing measures on September 25. And the cryptocurrency is up just 1.9% since the Fed cut rates on September 18.
What gives? Whereâs the mojo? Isnât Bitcoin supposed to be rocketing to $100,000?
Digital gold
Analysts point to Iranâs missile attack on Israel this week and the escalation of hostilities in the Middle East as the prime reason why BTC and other cryptocurrencies are so sluggish.
At first glance, this makes sense.
Fears of a regional war in the Middle East are roiling the markets again, and, as often happens in these crises, spooked investors are piling into gold.
The precious metal has gained 29% this year, besting the 25% rise of BlackRockâs Bitcoin exchange-traded fund, IBIT.
But geopolitical turmoil should be equally bullish for Bitcoin, right?
Just last month, BlackRock published a widely-read report hailing Bitcoin as a âunique diversifierâ against fiscal, monetary, and geopolitical risks that impact stocks, bonds, and other traditional assets.
If all those assets swoon, Bitcoin should hold the line, or surge.
Yet this idea that Bitcoin is digital gold, which has been around forever, really doesnât hold up.
When US consumer prices soared to 40-year highs in 2022 and 2023, Bitcoin provided no shelter whatsoever as it tumbled into a bear market. That should have been the moment when Bitcoin proved its worth as an asset wholly untethered from economic dynamics.
Instead, BTC started moving in tandem with Fed monetary policy. Cue the irony.
Cryptoâs holy grail
Now the outlook for Bitcoin is the rosiest itâs been since those dark days of 2022. It isnât just the Fed and China.
On the regulatory front, it looks like crypto will get relief from the three-year-long crackdown led by Gary Gensler, the crypto-doubting chair of the US Securities and Exchange Commission.
Both Donald Trump and, more quietly, Vice President Kamala Harris, have signalled they will take a less aggressive approach to the asset class should they win the White House in November.
Moreover, the quest for cryptoâs holy grail, mass market adoption, is making progress.
Not only did BlackRock, Fidelity, and other Wall Street giants roll out Bitcoin and Ethereum ETFs this year, but a number of stalwarts and fintechs are making key moves.
Just this week, Swift, the banking consortium that controls the $200 billion cross-border payments system, said central banks and commercial lenders can now test transactions of digital currencies on the network.
And Visa became the latest player to join the tokenisation push with the launch of a platform designed to put real world assets onchain.
Will any of this matter? Letâs be honest. Bitcoin is an irrational asset. The crypto market simply doesnât react to signals the way, say, stocks, do. There arenât many fundamentals to latch onto, like earnings.
Everything is so macro now, but even developments on that front, as weâve seen with the recent Fed rate cut, arenât a sure thing.
Yet there is one constant â patience.
Extraordinary performance
In its report, BlackRock pointed out that Bitcoin outperformed all major asset classes in seven out of the last 10 years, and returned 100% on an annualised basis over the last decade.
The cryptocurrency delivered this extraordinary performance even though it was the worst performing asset in the other three years of that decade, with four selloffs exceeding 50%.
In other words, good things come to those who hodl.
Intriguingly, the reportâs authors argue that Bitcoinâs original value proposition remains intact â mounting concerns around US fiscal stability and the global monetary and geopolitical situations will drive buying of BTC.
Hmm. You could probably write a dissertation on why that wonât be the case. But thatâs not the point.
If Bitcoinâs record shows anything, itâs that investors donât need a case. They donât need an argument or fundamentals. And they donât need a rational reason to buy (or sell).
After 15 years, the market has made its peace with Bitcoinâs inscrutability. While efforts to explain its behaviour spring eternal, waiting appears to be the only thing investors can count on.
Just look at this year.
For all worrying in the latter half of 2024, Bitcoin is up 46%. While investors may grouse it should be higher given all the bullish action, thatâs more than twice as good as the S&P 500âČs 20% performance.
Edward Robinson is the story editor for DL News. The opinions expressed in this op-ed column are his own. Contact the author at ed@dlnews.com.
Who is Satoshi? The top four contenders who may be unmasked as Bitcoinâs creator
A new HBO documentary is poised to reveal the identity of Bitcoinâs pseudonymous creator, Satoshi Nakamoto, according to a report in Politico.
If true, it would mark the end of the greatest mystery in financial history.
Satoshi would rank among the worldâs wealthiest people, with an estimated $67 billion in Bitcoin.
As anticipation builds for the show, which is set to be telecast on October 8, a Polymarket betting pool has started that lets users bet on who the documentary will name as Satoshi.
Four frontrunners lead the speculation:
Len Sassaman
A majority of 44% of Polymarket bettors are putting their money on HBO naming Len Sassaman as Satoshi.
Sassaman was an early digital privacy advocate and an experienced cryptographer. He was an active figure in the cypherpunk movement who promoted privacy, decentralisation, and resistance to government surveillance.
Speculation about Sassaman resurfaced in 2021 following a study by a contributor named Evan Leung Hatch.
The study highlighted Sassamanâs cryptographic expertise, his use of British English, and his connections with Hal Finney â another notable Satoshi candidate. It also pointed to Sassamanâs work on privacy technologies that closely resemble Bitcoinâs architecture.
Despite the parallels, Leungâs study was unable to provide conclusive evidence.
Sassaman died in 2011.
Hal Finney
The next most likely candidate, at 20% on Polymarket, is Hal Finney, a renowned cryptographer and early Bitcoin adopter.
He was the recipient of the first-ever Bitcoin transaction from Satoshi Nakamoto and helped test early versions of Bitcoinâs software.
Finneyâs own development of âReusable Proof-of-Workâ inspired Bitcoinâs consensus method.
Finney denied he was Satoshi in 2014. Still, Finneyâs close involvement with Bitcoinâs creation, along with his declining health âhe was diagnosed with ALS in 2009 â has led some to believe that he was behind the pseudonym.
Finney died in 2014.
Adam Back
Blockstream CEO Adam Back also figures in Bitcoinâs origins.
He invented Hashcash, a Proof of Work system that laid the foundation for Bitcoinâs consensus mechanism.
Satoshi Nakamoto referenced Hashcash in the Bitcoin white paper, and Back was one of the first people Satoshi contacted during Bitcoinâs development.
Although Back has consistently denied being Nakamoto, many in the crypto community argue that his technical skills and early influence on Bitcoinâs structure make him a plausible candidate.
Back has also testified against Craig Wright, who falsely claimed to be Satoshi.
Bettors give Back an 8% chance on Polymarket.
Nick Szabo
Nick Szabo, a computer scientist and cryptographer, developed Bit Gold, a precursor to Bitcoin.
His work on timestamped databases and his extensive writing on decentralised currency parallel many of Bitcoinâs principles.
Szaboâs name frequently comes up due to these similarities, and analyses of his writing style have found correlations with Satoshiâs.
Szabo has repeatedly denied being Nakamoto, most notably after a New York Times article cited several cryptographers who claimed he could be the mysterious Bitcoin creator.
Despite this, his involvement with early cryptography projects keeps him in the conversation.
On Polymarket, he holds a 5% chance.
Kyle Baird is DL Newsâ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
If true, it would mark the end of the greatest mystery in financial history.
Satoshi would rank among the worldâs wealthiest people, with an estimated $67 billion in Bitcoin.
As anticipation builds for the show, which is set to be telecast on October 8, a Polymarket betting pool has started that lets users bet on who the documentary will name as Satoshi.
Four frontrunners lead the speculation:
Len Sassaman
A majority of 44% of Polymarket bettors are putting their money on HBO naming Len Sassaman as Satoshi.
Sassaman was an early digital privacy advocate and an experienced cryptographer. He was an active figure in the cypherpunk movement who promoted privacy, decentralisation, and resistance to government surveillance.
Speculation about Sassaman resurfaced in 2021 following a study by a contributor named Evan Leung Hatch.
The study highlighted Sassamanâs cryptographic expertise, his use of British English, and his connections with Hal Finney â another notable Satoshi candidate. It also pointed to Sassamanâs work on privacy technologies that closely resemble Bitcoinâs architecture.
Despite the parallels, Leungâs study was unable to provide conclusive evidence.
Sassaman died in 2011.
Hal Finney
The next most likely candidate, at 20% on Polymarket, is Hal Finney, a renowned cryptographer and early Bitcoin adopter.
He was the recipient of the first-ever Bitcoin transaction from Satoshi Nakamoto and helped test early versions of Bitcoinâs software.
Finneyâs own development of âReusable Proof-of-Workâ inspired Bitcoinâs consensus method.
Finney denied he was Satoshi in 2014. Still, Finneyâs close involvement with Bitcoinâs creation, along with his declining health âhe was diagnosed with ALS in 2009 â has led some to believe that he was behind the pseudonym.
Finney died in 2014.
Adam Back
Blockstream CEO Adam Back also figures in Bitcoinâs origins.
He invented Hashcash, a Proof of Work system that laid the foundation for Bitcoinâs consensus mechanism.
Satoshi Nakamoto referenced Hashcash in the Bitcoin white paper, and Back was one of the first people Satoshi contacted during Bitcoinâs development.
Although Back has consistently denied being Nakamoto, many in the crypto community argue that his technical skills and early influence on Bitcoinâs structure make him a plausible candidate.
Back has also testified against Craig Wright, who falsely claimed to be Satoshi.
Bettors give Back an 8% chance on Polymarket.
Nick Szabo
Nick Szabo, a computer scientist and cryptographer, developed Bit Gold, a precursor to Bitcoin.
His work on timestamped databases and his extensive writing on decentralised currency parallel many of Bitcoinâs principles.
Szaboâs name frequently comes up due to these similarities, and analyses of his writing style have found correlations with Satoshiâs.
Szabo has repeatedly denied being Nakamoto, most notably after a New York Times article cited several cryptographers who claimed he could be the mysterious Bitcoin creator.
Despite this, his involvement with early cryptography projects keeps him in the conversation.
On Polymarket, he holds a 5% chance.
Kyle Baird is DL Newsâ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
When will Bitcoinâs price rebound? Hereâs what BlackRock says
A version of this story appeared in our The Roundup newsletter on October 4. Sign up here.
Howdy! Eric here.
Bitcoin should be on a tear right now.
Thatâs at least according to analysts who predicted a rally to kick off at the start of the week. They had reason to be bullish.
Historically, the final quarter is the $1.2 trillion cryptocurrencyâs best period of the year. Bitcoin has rallied some 90% during the period over the past decade, according to CoinMarketCap analysts.
This year seemed no different.
The Federal Reserve had finally cut interest rates and more are likely to follow. CME Groupâs FedWatch tool put the odds of another 0.5% rate cut at 30% in November and a more modest 0.25% cut at 70%.
Elsewhere, spot Bitcoin exchange-traded funds saw inflows again, and Beijingâs initiatives to supercharge the Chinese economy has unleashed a wave of liquidity into the market.
Even Vice President Kamala Harris had tentatively embraced digital assets, further signalling how Capitol Hill has warmed to crypto.
The stage was set for Bitcoin to skyrocket to new heights.
Then Iran fired missiles against Israel, sparking fears of broader conflict.
Bitcoin trades at just over $61,000, almost 7% down from seven days ago.
Now traders are left with one question: When will Bitcoin rebound?
Before the end of the year, suggests a BlackRock analysis of Bitcoin moves after such events.
As Liam Kelly reported, the asset management giant found that Bitcoin rallied by double digits 60 days after major geopolitical events.
And the factors that analysts say shouldâve catapulted Bitcoin to a new record are still there.
In the meantime, the crisis provides investors with the opportunity to buy Bitcoin on the cheap, says Quinn Thompson, founder of hedge fund Lekker Capital.
Itâs âa no-brainer,â he said this week.
ICYMI
OpenSea axed NFTs that behaved like securities for years before SEC scrutiny
OpenSea has delisted and disabled NFTs deemed to behave like financial instruments, despite mocking regulators going after NFTs for that very reason, Ben Weiss reports.
Satoshi holds $67bn in Bitcoin. Hereâs a ranking of the other top holders
While Bitcoin creator Satoshi Nakamoto holds the most Bitcoin, other holders are catching up, Aleks Gilbert reports.
A Messari crypto conference sponsor is tax dodger who says 99% of Americans shouldnât pay up
Freedom Law School was a sponsor of Messariâs crypto conference. However, attendees took issue with the organisationâs tax-dodging stance.
Post of the week
US congressman French Hill drew attention to Binanceâ executive Tigan Gambaryan, who is still jailed in Nigeria.
Thank you @USAmbUN for stressing the importance of Tigran Gambaryanâs release.
I have repeatedly called for the Nigerian gov to immediately release Tigran and won't stop doing so until he is back safely on American soil. https://t.co/QU39zKsrgO
â French Hill (@RepFrenchHill) October 1, 2024
Eric Johansson is DL Newsâ News Editor. Got a tip? Email at eric@dlnews.com.
Howdy! Eric here.
Bitcoin should be on a tear right now.
Thatâs at least according to analysts who predicted a rally to kick off at the start of the week. They had reason to be bullish.
Historically, the final quarter is the $1.2 trillion cryptocurrencyâs best period of the year. Bitcoin has rallied some 90% during the period over the past decade, according to CoinMarketCap analysts.
This year seemed no different.
The Federal Reserve had finally cut interest rates and more are likely to follow. CME Groupâs FedWatch tool put the odds of another 0.5% rate cut at 30% in November and a more modest 0.25% cut at 70%.
Elsewhere, spot Bitcoin exchange-traded funds saw inflows again, and Beijingâs initiatives to supercharge the Chinese economy has unleashed a wave of liquidity into the market.
Even Vice President Kamala Harris had tentatively embraced digital assets, further signalling how Capitol Hill has warmed to crypto.
The stage was set for Bitcoin to skyrocket to new heights.
Then Iran fired missiles against Israel, sparking fears of broader conflict.
Bitcoin trades at just over $61,000, almost 7% down from seven days ago.
Now traders are left with one question: When will Bitcoin rebound?
Before the end of the year, suggests a BlackRock analysis of Bitcoin moves after such events.
As Liam Kelly reported, the asset management giant found that Bitcoin rallied by double digits 60 days after major geopolitical events.
And the factors that analysts say shouldâve catapulted Bitcoin to a new record are still there.
In the meantime, the crisis provides investors with the opportunity to buy Bitcoin on the cheap, says Quinn Thompson, founder of hedge fund Lekker Capital.
Itâs âa no-brainer,â he said this week.
ICYMI
OpenSea axed NFTs that behaved like securities for years before SEC scrutiny
OpenSea has delisted and disabled NFTs deemed to behave like financial instruments, despite mocking regulators going after NFTs for that very reason, Ben Weiss reports.
Satoshi holds $67bn in Bitcoin. Hereâs a ranking of the other top holders
While Bitcoin creator Satoshi Nakamoto holds the most Bitcoin, other holders are catching up, Aleks Gilbert reports.
A Messari crypto conference sponsor is tax dodger who says 99% of Americans shouldnât pay up
Freedom Law School was a sponsor of Messariâs crypto conference. However, attendees took issue with the organisationâs tax-dodging stance.
Post of the week
US congressman French Hill drew attention to Binanceâ executive Tigan Gambaryan, who is still jailed in Nigeria.
Thank you @USAmbUN for stressing the importance of Tigran Gambaryanâs release.
I have repeatedly called for the Nigerian gov to immediately release Tigran and won't stop doing so until he is back safely on American soil. https://t.co/QU39zKsrgO
â French Hill (@RepFrenchHill) October 1, 2024
Eric Johansson is DL Newsâ News Editor. Got a tip? Email at eric@dlnews.com.
Satoshi-era Bitcoin wallets are suddenly active again. Hereâs whatâs going on
Over a dozen early Bitcoin wallets have sprung back to life amid a new investigation into the identity of the networkâs pseudonymous founder, Satoshi Nakamoto.
In recent months, these wallets, among the first active on the network between 2009 and 2010, have moved a combined $35 million to new addresses and crypto exchanges.
Back then, Bitcoin was little more than a niche cypherpunk project relegated to internet forums, shepherded by its enigmatic creator, Nakamoto.
Normally, such movements wouldnât draw significant attention. Itâs not uncommon for old wallets to move Bitcoin around occasionally.
But the increased frequency of wallet movements, coupled with the recent announcement of a new HBO documentary focusing on Nakamotoâs identity, adds a fresh layer of intrigue.
Who is Satoshi?
The identity of Bitcoinâs creator is one of the internetâs most enduring mysteries.
Several names have been put forward over the years, ranging from early Bitcoin collaborators like the late Hal Finney, smart contract inventor Nick Szabo, and even an international drug dealer called Paul Le Roux.
In March, a UK high court ruled Craig Wright, who had long-claimed to be Nakamoto, was not the creator of Bitcoin due to a lack of supporting evidence.
Itâs not yet known who â if anyone â HBOâs upcoming documentary, âMoney Electric: The Bitcoin Mystery,â will pin as Nakamoto.
Early wallet movements
Still, the excitement has got crypto pundits speculating that the early wallet movements could be connected to information revealed in the documentary.
Due to when these wallets were active on the Bitcoin network, some say they were likely among Satoshiâs earliest collaborators.
On September 20, a group of five wallets transferred a combined 250 Bitcoin, worth $15 million, to new wallets. Those Bitcoin can be traced back to 2009, when the owner of the wallets mined them.
A month earlier, another wallet containing 250 Bitcoin mined in 2010 performed a similar manoeuvre.
Separately, several smaller wallets that had been inactive for over a decade also transferred millions of dollars worth of Bitcoin to new wallets and crypto exchanges Kraken and Binance, in recent months.
Other explanations
But there are other explanations for the early wallet movements.
Although many of the wallets mined Bitcoin during the networkâs early days, they continued making transactions after Nakamotoâs final known message in April 2011.
Considering other crypto wallets confirmed to belong to Nakamoto were not active after this point, itâs unlikely that those wallets belong to the Bitcoin creator.
Another possibility is that some early Bitcoin holders, inactive for years, might now be moving their assets for various reasons, including potential release from legal or personal constraints. However, there is no direct evidence connecting these wallets to criminal activities.
At least 130 individuals were arrested in connection to the drug marketplace, where Bitcoin was the currency of choice, between 2013 and 2015. According to Bureau of Justice statistics, the average sentence for drug trafficking offences is between six and 15 years.
In 2023, the Department of Justice seized $54 million of crypto belonging to convicted Silk Road drug dealer Christopher Castelluzzo.
While serving a 20-year sentence, Castelluzzo talked about how he planned to launder his stash upon his release during recorded prison telephone calls, resulting in the seizure.
Thereâs also a fairly large number of people who mined Bitcoin in its early days, making it difficult to attribute early wallets to any single person.
Posts on Bitcointalk, an early forum for Bitcoin enthusiasts, show that lots of people were mining Bitcoin between 2009 and 2010.
Individuals could still mine Bitcoin successfully using an average off-the-shelf computer up until mid-2010.
âThe Bitcoin Mysteryâ is set to air on HBO on Wednesday, October 9.
Tim Craig is DL Newsâ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
In recent months, these wallets, among the first active on the network between 2009 and 2010, have moved a combined $35 million to new addresses and crypto exchanges.
Back then, Bitcoin was little more than a niche cypherpunk project relegated to internet forums, shepherded by its enigmatic creator, Nakamoto.
Normally, such movements wouldnât draw significant attention. Itâs not uncommon for old wallets to move Bitcoin around occasionally.
But the increased frequency of wallet movements, coupled with the recent announcement of a new HBO documentary focusing on Nakamotoâs identity, adds a fresh layer of intrigue.
Who is Satoshi?
The identity of Bitcoinâs creator is one of the internetâs most enduring mysteries.
Several names have been put forward over the years, ranging from early Bitcoin collaborators like the late Hal Finney, smart contract inventor Nick Szabo, and even an international drug dealer called Paul Le Roux.
In March, a UK high court ruled Craig Wright, who had long-claimed to be Nakamoto, was not the creator of Bitcoin due to a lack of supporting evidence.
Itâs not yet known who â if anyone â HBOâs upcoming documentary, âMoney Electric: The Bitcoin Mystery,â will pin as Nakamoto.
Early wallet movements
Still, the excitement has got crypto pundits speculating that the early wallet movements could be connected to information revealed in the documentary.
Due to when these wallets were active on the Bitcoin network, some say they were likely among Satoshiâs earliest collaborators.
On September 20, a group of five wallets transferred a combined 250 Bitcoin, worth $15 million, to new wallets. Those Bitcoin can be traced back to 2009, when the owner of the wallets mined them.
A month earlier, another wallet containing 250 Bitcoin mined in 2010 performed a similar manoeuvre.
Separately, several smaller wallets that had been inactive for over a decade also transferred millions of dollars worth of Bitcoin to new wallets and crypto exchanges Kraken and Binance, in recent months.
Other explanations
But there are other explanations for the early wallet movements.
Although many of the wallets mined Bitcoin during the networkâs early days, they continued making transactions after Nakamotoâs final known message in April 2011.
Considering other crypto wallets confirmed to belong to Nakamoto were not active after this point, itâs unlikely that those wallets belong to the Bitcoin creator.
Another possibility is that some early Bitcoin holders, inactive for years, might now be moving their assets for various reasons, including potential release from legal or personal constraints. However, there is no direct evidence connecting these wallets to criminal activities.
At least 130 individuals were arrested in connection to the drug marketplace, where Bitcoin was the currency of choice, between 2013 and 2015. According to Bureau of Justice statistics, the average sentence for drug trafficking offences is between six and 15 years.
In 2023, the Department of Justice seized $54 million of crypto belonging to convicted Silk Road drug dealer Christopher Castelluzzo.
While serving a 20-year sentence, Castelluzzo talked about how he planned to launder his stash upon his release during recorded prison telephone calls, resulting in the seizure.
Thereâs also a fairly large number of people who mined Bitcoin in its early days, making it difficult to attribute early wallets to any single person.
Posts on Bitcointalk, an early forum for Bitcoin enthusiasts, show that lots of people were mining Bitcoin between 2009 and 2010.
Individuals could still mine Bitcoin successfully using an average off-the-shelf computer up until mid-2010.
âThe Bitcoin Mysteryâ is set to air on HBO on Wednesday, October 9.
Tim Craig is DL Newsâ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
Why gold is beating Bitcoin ETFs and US stocks â will its rally last?
Gold has been a dark horse in 2024.
While traders have been focused on stock markets like the S&P 500 and spot Bitcoin exchange-traded funds like BlackRockâs IBIT, goldâs returns just surpassed them both.
At $2,660 per ounce, gold has recorded a 29% gain so far this year â around 5% higher than IBIT, which has delivered a 24% gain since its January 11 inception.
By comparison, those investing in the S&P 500 have fared slightly worse, with returns just below 20% so far this year.
âGold has been climbing higher tortoise style,â said Bloomberg Intelligence analyst Eric Balchunas.
The precious metal took another leap this week amid rising tensions between Iran and Israel while Bitcoin dropped.
Geoff Kendrick, global head of digital assets research at Standard Chartered, explained that while gold acts as a hedge against geopolitical risks, Bitcoin is more suited for protecting against issues within traditional finance, such as bank failures or de-dollarisation.
Will it last?
While gold has surged due to geopolitical tensions, history suggests its outperformance may not last.
In the US-Iran escalation of 2020, gold initially outpaced other assets, but Bitcoin rebounded more strongly in the months that followed.
This has been a consistent pattern in recent years, according to JAN3, the developer behind the Aquabitcoin digital wallet.
Bitcoinâs ability to bounce back more sharply than gold has been seen during major events like the COVID-19 pandemic, the 2020 US election, and Russiaâs invasion of Ukraine.
It usually takes about 60 days for Bitcoin to recover after massive geopolitical events, according to a recent report by asset management giant BlackRock.
Bitcoin or gold?
So should investors invest in gold or Bitcoin? Matt Hougan, chief investment officer at asset manager Bitwise, tackled that question in a blog earlier this week.
To him, it is a question of having more return or less risk. Looking at estimates provided by Bitwise, he compared traditional stocks and bonds portfolios that had up to 5% in either Bitcoin or gold.
The simulation was based on data from January 2014 to September 26, 2024.
Portfolios with 5% Bitcoin would have seen a yield of over 208% on the investment, while a similar gold allocation wouldâve yielded just over a 100% return on the investment.
For Hougan, the answer to which of these two assets to invest in was simple: âBitcoin.â
Crypto market movers
Bitcoin gained 2.3% over the past 24 hours to about $61,800.
Ethereum surged 1.7% over the same period to $2,392.
What weâre reading
A Messari crypto conference sponsor is tax dodger who says 99% of Americans shouldnât pay up â DL News
Binanceâs Crypto Market Share Drops to 4-Year Low â Unchained
IMF Urges El Salvador Again to Strengthen Regulatory Framework and Oversight of Bitcoin â CoinDesk
Bitcoin Long-Term Holder Losses âDeceptive,â Says Glassnode â Unchained
SECâs top crypto cop quits a month before election. Is Gensler next? â DL News
Kyle Baird is DL Newsâ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
While traders have been focused on stock markets like the S&P 500 and spot Bitcoin exchange-traded funds like BlackRockâs IBIT, goldâs returns just surpassed them both.
At $2,660 per ounce, gold has recorded a 29% gain so far this year â around 5% higher than IBIT, which has delivered a 24% gain since its January 11 inception.
By comparison, those investing in the S&P 500 have fared slightly worse, with returns just below 20% so far this year.
âGold has been climbing higher tortoise style,â said Bloomberg Intelligence analyst Eric Balchunas.
The precious metal took another leap this week amid rising tensions between Iran and Israel while Bitcoin dropped.
Geoff Kendrick, global head of digital assets research at Standard Chartered, explained that while gold acts as a hedge against geopolitical risks, Bitcoin is more suited for protecting against issues within traditional finance, such as bank failures or de-dollarisation.
Will it last?
While gold has surged due to geopolitical tensions, history suggests its outperformance may not last.
In the US-Iran escalation of 2020, gold initially outpaced other assets, but Bitcoin rebounded more strongly in the months that followed.
This has been a consistent pattern in recent years, according to JAN3, the developer behind the Aquabitcoin digital wallet.
Bitcoinâs ability to bounce back more sharply than gold has been seen during major events like the COVID-19 pandemic, the 2020 US election, and Russiaâs invasion of Ukraine.
It usually takes about 60 days for Bitcoin to recover after massive geopolitical events, according to a recent report by asset management giant BlackRock.
Bitcoin or gold?
So should investors invest in gold or Bitcoin? Matt Hougan, chief investment officer at asset manager Bitwise, tackled that question in a blog earlier this week.
To him, it is a question of having more return or less risk. Looking at estimates provided by Bitwise, he compared traditional stocks and bonds portfolios that had up to 5% in either Bitcoin or gold.
The simulation was based on data from January 2014 to September 26, 2024.
Portfolios with 5% Bitcoin would have seen a yield of over 208% on the investment, while a similar gold allocation wouldâve yielded just over a 100% return on the investment.
For Hougan, the answer to which of these two assets to invest in was simple: âBitcoin.â
Crypto market movers
Bitcoin gained 2.3% over the past 24 hours to about $61,800.
Ethereum surged 1.7% over the same period to $2,392.
What weâre reading
A Messari crypto conference sponsor is tax dodger who says 99% of Americans shouldnât pay up â DL News
Binanceâs Crypto Market Share Drops to 4-Year Low â Unchained
IMF Urges El Salvador Again to Strengthen Regulatory Framework and Oversight of Bitcoin â CoinDesk
Bitcoin Long-Term Holder Losses âDeceptive,â Says Glassnode â Unchained
SECâs top crypto cop quits a month before election. Is Gensler next? â DL News
Kyle Baird is DL Newsâ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
Satoshi holds $67bn in Bitcoin. Hereâs a ranking of the other top holders
Bitcoin distribution is a little more concentrated than it was last year.
Wallets with more than 10,000 Bitcoin account for almost 16% of the tokenâs supply on Wednesday, according to bitinfocharts.com data. Thatâs up from nearly 15% on October 3, 2023.
But thatâs not the whole story.
Many of those wallets belong to businesses that hold Bitcoin on othersâ behalf â think Coinbase, which holds Bitcoin for both retail traders and the crypto curious.
It also holds the asset for many institutions that have launched Bitcoin-based exchange-traded funds this year.
In fact, Coinbase holds almost one million Bitcoin â a stockpile to rival that of the cryptocurrencyâs enigmatic founder, Satoshi Nakamoto, according to blockchain intelligence firm Arkham.
When it comes to single entities, MicroStrategy, the tech firm founded by Bitcoin evangelist Michael Saylor, is among the biggest.
It held more than 252,000 Bitcoin, worth about $16 billion, as of September 19, according to a regulatory filing.
Several world governments also hold stockpiles of Bitcoin confiscated from criminals, with the US being the largest.
Below are the 10 largest holders, who together control more than 17% of the worldâs supply of Bitcoin:
Satoshi Nakamoto: 1.1 million Bitcoin worth $67.6 billion. The Bitcoin creator mined his horde in the months following its launch. At that time, every block mined on the network rewarded 50 Bitcoin apiece.
Coinbase: 973,694 Bitcoin worth $59.8 billion. Spot Bitcoin and Ethereum ETFs in the US have mostly used crypto exchange Coinbase as a custodian â with the exception of Fidelity, which self-custodies, and VanEck, which uses Gemini.
Binance: 663,813 Bitcoin worth $40.8 billion. Despite facing regulatory crises â including a standoff with Nigerian officials that led to the jailing of an executive and former IRS agent â Binance remains the worldâs largest crypto exchange.
BlackRock: 361,518 Bitcoin worth $22.2 billion. BlackRock has jumped head first into crypto this year, launching a Bitcoin ETF and a tokenised money market fund that now holds more than $500 million in US Treasuries. The firm recently published a laser-eyed screed touting Bitcoinâs potential, and CEO Larry Fink has called the cryptocurrency a hedge against optimism.
The rest of the rankings are as follows:
Fidelity Custody: 273,097 Bitcoin worth $16.7 billion.
Grayscale: 256,075 Bitcoin worth $15.7 billion.
MicroStrategy: 252,220 worth $15.5 billion.
The US government: 198,955 Bitcoin worth $12.2 billion.
Bitfinex: 196,504 Bitcoin worth $12 billion.
Kraken: 172,106 Bitcoin worth $10.5 billion.
Aleks Gilbert is DL Newsâ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.
Wallets with more than 10,000 Bitcoin account for almost 16% of the tokenâs supply on Wednesday, according to bitinfocharts.com data. Thatâs up from nearly 15% on October 3, 2023.
But thatâs not the whole story.
Many of those wallets belong to businesses that hold Bitcoin on othersâ behalf â think Coinbase, which holds Bitcoin for both retail traders and the crypto curious.
It also holds the asset for many institutions that have launched Bitcoin-based exchange-traded funds this year.
In fact, Coinbase holds almost one million Bitcoin â a stockpile to rival that of the cryptocurrencyâs enigmatic founder, Satoshi Nakamoto, according to blockchain intelligence firm Arkham.
When it comes to single entities, MicroStrategy, the tech firm founded by Bitcoin evangelist Michael Saylor, is among the biggest.
It held more than 252,000 Bitcoin, worth about $16 billion, as of September 19, according to a regulatory filing.
Several world governments also hold stockpiles of Bitcoin confiscated from criminals, with the US being the largest.
Below are the 10 largest holders, who together control more than 17% of the worldâs supply of Bitcoin:
Satoshi Nakamoto: 1.1 million Bitcoin worth $67.6 billion. The Bitcoin creator mined his horde in the months following its launch. At that time, every block mined on the network rewarded 50 Bitcoin apiece.
Coinbase: 973,694 Bitcoin worth $59.8 billion. Spot Bitcoin and Ethereum ETFs in the US have mostly used crypto exchange Coinbase as a custodian â with the exception of Fidelity, which self-custodies, and VanEck, which uses Gemini.
Binance: 663,813 Bitcoin worth $40.8 billion. Despite facing regulatory crises â including a standoff with Nigerian officials that led to the jailing of an executive and former IRS agent â Binance remains the worldâs largest crypto exchange.
BlackRock: 361,518 Bitcoin worth $22.2 billion. BlackRock has jumped head first into crypto this year, launching a Bitcoin ETF and a tokenised money market fund that now holds more than $500 million in US Treasuries. The firm recently published a laser-eyed screed touting Bitcoinâs potential, and CEO Larry Fink has called the cryptocurrency a hedge against optimism.
The rest of the rankings are as follows:
Fidelity Custody: 273,097 Bitcoin worth $16.7 billion.
Grayscale: 256,075 Bitcoin worth $15.7 billion.
MicroStrategy: 252,220 worth $15.5 billion.
The US government: 198,955 Bitcoin worth $12.2 billion.
Bitfinex: 196,504 Bitcoin worth $12 billion.
Kraken: 172,106 Bitcoin worth $10.5 billion.
Aleks Gilbert is DL Newsâ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.
A Messari crypto conference sponsor is tax dodger who says 99% of Americans shouldnât pay up
The sponsors of Messari Mainnet, a crypto conference in New York City, include a whoâs who of crypto.
There are industry pillars like Coinbase, Circle and Ripple. There are up-and-comers like Pyth and Jito.
And then thereâs Freedom Law School, which paid $40,000 to sponsor the conference, the founder, Peymon Mottahedeh, told DL News.
When attendees walked into the conference hall in Manhattan, the companyâs booth greeted participants in all caps: âPAY NO CRYPTO TAXES EVER.â
Freedom Law School tells customers that they donât have to pay federal income tax. If the US Internal Revenue Service does go after them for tax evasion, the company promises to protect them â for a fee.
For a single taxpayer with a salary of $100,000, it costs approximately $4,500 a year to opt into the âRestore Freedom Plan,â according to the businessâs online estimator.
Mahesh Sashital, a crypto startup founder at the conference, raised his eyebrows at Freedom Law Schoolâs legal proclamations.
âI would never really want to be associated with something like this,â he told DL News.
Messari, though, didnât seem to mind. Freedom Law Schoolâs logo was on their website for the conference. It was plastered across signage at the conference venue. And Peymon Mottahedeh, founder of the business, spoke on the conference floor on Monday about how to not pay taxes.
His presentation was part of his sponsorship package, Eric Turner, the CEO of Messari, told DL News. He declined to comment on the details of the agreement, including the sponsorship amount.
âMessari works with a range of sponsors solving various problems that crypto users face,â Turner told DL News. âRather than trying to be arbiters of solutions, our goal is to create conversations between people in the industry.â
âIf people want to remain ignorant and not look at things with an open mind, thatâs their problem,â Mottahedeh, the founder, told DL News.
âFear notâ
Mottahedeh claims on his website that he hasnât paid federal income taxes since 1993.
In a pamphlet he handed out to attendees at Messariâs conference, he argued that âit has been provenâ that the only people required to pay federal income taxes are residents of Washington and federal workers in the nationâs capital.
But Mottahedeh hasnât had much success in court.
In 2016, the Department of Justice successfully convicted Richard Grant, a member of Mottahedehâs Freedom Law School, for tax evasion. Grant was sentenced to 33 months in prison.
âInstead of using the lawyer we PLEADED with Richard to get, he hired his own lawyer, ignoring our suggestions,â read an entry on Freedom Law Schoolâs website.
And, in 2023, an appeals court reaffirmed a tax courtâs decision that Mottahedeh had evaded paying taxes from 2001 to 2006.
âThe court of appeals did not address anything I said,â Mottahedeh told DL News. âThe briefs were voluminous.â
However, the Freedom Law School wonât let the law or his mortality get in the way of his mission to spread the gospel of tax evasion.
âFear not!â reads a response to a frequently asked question on his website about âWhat Happens if Peymon Dies?â
The Freedom Law School founder has been passing along his secrets of tax evasion to âpassionate activists,â it continued. âYou will not be stuck when Peymon passes away.â
Ben Weiss is a Dubai Correspondent at DL News. Got a tip? Email him at bweiss@dlnews.com.
(Disclosure: Llama Corp, the parent of DL News, provides some of the same services of Messari.)
There are industry pillars like Coinbase, Circle and Ripple. There are up-and-comers like Pyth and Jito.
And then thereâs Freedom Law School, which paid $40,000 to sponsor the conference, the founder, Peymon Mottahedeh, told DL News.
When attendees walked into the conference hall in Manhattan, the companyâs booth greeted participants in all caps: âPAY NO CRYPTO TAXES EVER.â
Freedom Law School tells customers that they donât have to pay federal income tax. If the US Internal Revenue Service does go after them for tax evasion, the company promises to protect them â for a fee.
For a single taxpayer with a salary of $100,000, it costs approximately $4,500 a year to opt into the âRestore Freedom Plan,â according to the businessâs online estimator.
Mahesh Sashital, a crypto startup founder at the conference, raised his eyebrows at Freedom Law Schoolâs legal proclamations.
âI would never really want to be associated with something like this,â he told DL News.
Messari, though, didnât seem to mind. Freedom Law Schoolâs logo was on their website for the conference. It was plastered across signage at the conference venue. And Peymon Mottahedeh, founder of the business, spoke on the conference floor on Monday about how to not pay taxes.
His presentation was part of his sponsorship package, Eric Turner, the CEO of Messari, told DL News. He declined to comment on the details of the agreement, including the sponsorship amount.
âMessari works with a range of sponsors solving various problems that crypto users face,â Turner told DL News. âRather than trying to be arbiters of solutions, our goal is to create conversations between people in the industry.â
âIf people want to remain ignorant and not look at things with an open mind, thatâs their problem,â Mottahedeh, the founder, told DL News.
âFear notâ
Mottahedeh claims on his website that he hasnât paid federal income taxes since 1993.
In a pamphlet he handed out to attendees at Messariâs conference, he argued that âit has been provenâ that the only people required to pay federal income taxes are residents of Washington and federal workers in the nationâs capital.
But Mottahedeh hasnât had much success in court.
In 2016, the Department of Justice successfully convicted Richard Grant, a member of Mottahedehâs Freedom Law School, for tax evasion. Grant was sentenced to 33 months in prison.
âInstead of using the lawyer we PLEADED with Richard to get, he hired his own lawyer, ignoring our suggestions,â read an entry on Freedom Law Schoolâs website.
And, in 2023, an appeals court reaffirmed a tax courtâs decision that Mottahedeh had evaded paying taxes from 2001 to 2006.
âThe court of appeals did not address anything I said,â Mottahedeh told DL News. âThe briefs were voluminous.â
However, the Freedom Law School wonât let the law or his mortality get in the way of his mission to spread the gospel of tax evasion.
âFear not!â reads a response to a frequently asked question on his website about âWhat Happens if Peymon Dies?â
The Freedom Law School founder has been passing along his secrets of tax evasion to âpassionate activists,â it continued. âYou will not be stuck when Peymon passes away.â
Ben Weiss is a Dubai Correspondent at DL News. Got a tip? Email him at bweiss@dlnews.com.
(Disclosure: Llama Corp, the parent of DL News, provides some of the same services of Messari.)
Why crypto-loving Nigerians slashed their use of stablecoins by $14bn
In a sign Nigeriaâs crypto crackdown is making an impact, stablecoin volume fell a whopping 38% in the 12 months ending in July, to $23.6 billion, according to a Chainalysis, a blockchain intelligence firm.
The sharp decline in Nigeriaâs stablecoin utilisation flies in the face of the countryâs ailing economy and devalued currency, the naira.
Nigerians, long big users of crypto, should be piling into dollar-backed stablecoins such as Tetherâs USDT to safeguard their wealth.
Yet Nigeriaâs bitter legal conflict with Binance and the clampdown on crypto exchanges appears to be dampening stablecoin usage.
Racketeering allegations
In February, Nigerian officials accused foreign crypto exchanges, including Binance, OKX, and KuCoin, of foreign exchange racketeering.
These platforms, especially their peer-to-peer services, were flagged for causing a 90% plunge in the nairaâs value against the dollar.
Senior Nigerian officials alleged that swapping stablecoins for naira on those platforms was damaging the economy.
Moreover, Nigeria focused its ire on Binance, which it accused of money laundering and facilitating illegal currency speculation.
In March, it charged Tigran Gambaryan, a US-based compliance executive, with money laundering and has held him in prison without bail for almost seven months. Binance and Gambaryan have rejected the allegations.
Struggling to cope
Last week, Linda Thomas-Greenfield, the US ambassador to the United Nations, implored Nigeriaâs government to immediately release Gambaryan, a former federal investigator.
Meanwhile, Nigerians are struggling to cope with terrible economic conditions. Inflation is soaring, the economy is shrinking, and households and businesses are finding it hard to access stablecoins to protect their wealth from devaluation.
Foreign exchanges, including Binance, have dismantled their little apparatus in the country.
Nigerians are now forced to rely on Telegram groups and other informal P2P dealers to access USDT.
Still, platforms like Noones, a trading platform founded by Ray Youssef, former CEO of crypto exchange Paxful, are trying to fill the void left behind by Binanceâs exit.
Retail users
Despite these challenges, Nigeria still accounted for 40% of Africaâs stablecoin transaction volume in the last year, according to a Chainalysis report released this week.
South Africa was a distant second, recording $14 billion in the period under review.
Nigeriaâs stablecoin adoption continues to be driven not only by retail users but businesses as well.
Still, 85% of its stablecoin volume came from transactions under $1 million, the report stated.
Driven by investors
Nigeriaâs crypto adoption in the last year did result in one notable feat.
Africaâs most populous nation recorded $30 billion in total value received by DeFi services, according to the Chainalysis report.
The achievement marks a major moment as it catapulted Africa to become the worldâs leader in global DeFi adoption for the first time.
In the previous reporting period, Africa ranked third behind India, North America, and Western Europe in DeFi adoption.
According to the report, Nigeriaâs DeFi adoption is largely driven by investors seeking to maximise returns from activities such as crypto lending.
The trend marks an expansion of Nigeriaâs crypto utilisation beyond stablecoin-based payment and remittance into more sophisticated markets.
It also helped drive Nigeriaâs overall crypto transaction volume to reach $59 billion, despite the stablecoin shortfall.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
The sharp decline in Nigeriaâs stablecoin utilisation flies in the face of the countryâs ailing economy and devalued currency, the naira.
Nigerians, long big users of crypto, should be piling into dollar-backed stablecoins such as Tetherâs USDT to safeguard their wealth.
Yet Nigeriaâs bitter legal conflict with Binance and the clampdown on crypto exchanges appears to be dampening stablecoin usage.
Racketeering allegations
In February, Nigerian officials accused foreign crypto exchanges, including Binance, OKX, and KuCoin, of foreign exchange racketeering.
These platforms, especially their peer-to-peer services, were flagged for causing a 90% plunge in the nairaâs value against the dollar.
Senior Nigerian officials alleged that swapping stablecoins for naira on those platforms was damaging the economy.
Moreover, Nigeria focused its ire on Binance, which it accused of money laundering and facilitating illegal currency speculation.
In March, it charged Tigran Gambaryan, a US-based compliance executive, with money laundering and has held him in prison without bail for almost seven months. Binance and Gambaryan have rejected the allegations.
Struggling to cope
Last week, Linda Thomas-Greenfield, the US ambassador to the United Nations, implored Nigeriaâs government to immediately release Gambaryan, a former federal investigator.
Meanwhile, Nigerians are struggling to cope with terrible economic conditions. Inflation is soaring, the economy is shrinking, and households and businesses are finding it hard to access stablecoins to protect their wealth from devaluation.
Foreign exchanges, including Binance, have dismantled their little apparatus in the country.
Nigerians are now forced to rely on Telegram groups and other informal P2P dealers to access USDT.
Still, platforms like Noones, a trading platform founded by Ray Youssef, former CEO of crypto exchange Paxful, are trying to fill the void left behind by Binanceâs exit.
Retail users
Despite these challenges, Nigeria still accounted for 40% of Africaâs stablecoin transaction volume in the last year, according to a Chainalysis report released this week.
South Africa was a distant second, recording $14 billion in the period under review.
Nigeriaâs stablecoin adoption continues to be driven not only by retail users but businesses as well.
Still, 85% of its stablecoin volume came from transactions under $1 million, the report stated.
Driven by investors
Nigeriaâs crypto adoption in the last year did result in one notable feat.
Africaâs most populous nation recorded $30 billion in total value received by DeFi services, according to the Chainalysis report.
The achievement marks a major moment as it catapulted Africa to become the worldâs leader in global DeFi adoption for the first time.
In the previous reporting period, Africa ranked third behind India, North America, and Western Europe in DeFi adoption.
According to the report, Nigeriaâs DeFi adoption is largely driven by investors seeking to maximise returns from activities such as crypto lending.
The trend marks an expansion of Nigeriaâs crypto utilisation beyond stablecoin-based payment and remittance into more sophisticated markets.
It also helped drive Nigeriaâs overall crypto transaction volume to reach $59 billion, despite the stablecoin shortfall.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
Buy the Bitcoin dip, itâs a âno-brainer,â says hedge fund founder
Bitcoinâs plunge is attracting bullish investors eager for bargains.
It âseems like a no-brainer to be bidding this area,â said Quinn Thompson, founder of Lekker Capital, a hedge fund that specialises in using macroeconomic data to trade crypto assets.
Bitcoin plunged this week as jitters about Iranâs attack on Israel and the outlook for the US economy weigh on markets. The price is hovering just above $60,000.
Thompson posted the comments on X, above a Bitcoin chart that analysed the cryptocurrencyâs price since March.
The chart shows âclear invalidation on the back of a 180-degree shift in the macro backdrop from the relative to the three previous similar setups,â he said, referring to technical analysis of Bitcoinâs moving average.
Thompson told DL News in August that a recent shift in the outlook for the US election is also affecting Bitcoinâs price.
Kamala Harris and Donald Trump are now closer in polls than her predecessor, President Joe Biden.
âThat ambiguity is making people weigh other factors that influence Bitcoinâs price, like growth, recession concerns, the Federal Reserve, and liquidity in the system,â Thompson said then.
I don't usually give very short-term views, but seems like a no-brainer to be bidding this area with clear invalidation on the back of a 180 degree shift in the macro backdrop from the relative to the 3 previous similar setups. https://t.co/NzqUSEvKbg pic.twitter.com/1PlviEyf5o
â Quinn Thompson (@qthomp) October 3, 2024
Crypto market movers
Bitcoin dropped by 0.8% over the past 24 hours to about $60,896.
Ethereum dropped 4.1% over the same period to $2,359.
What weâre reading
Three OpenSea execs quit in last three months as troubles mount for NFT marketplace â DL News
Ouch! $BTC took a dive (where to from here?) â Milk Road
Be careful investing in tokens w/ incentivized revenue â Milk Road
Why Bitwiseâs new XRP ETF filing is a bet on Trump election win â DL News
It âseems like a no-brainer to be bidding this area,â said Quinn Thompson, founder of Lekker Capital, a hedge fund that specialises in using macroeconomic data to trade crypto assets.
Bitcoin plunged this week as jitters about Iranâs attack on Israel and the outlook for the US economy weigh on markets. The price is hovering just above $60,000.
Thompson posted the comments on X, above a Bitcoin chart that analysed the cryptocurrencyâs price since March.
The chart shows âclear invalidation on the back of a 180-degree shift in the macro backdrop from the relative to the three previous similar setups,â he said, referring to technical analysis of Bitcoinâs moving average.
Thompson told DL News in August that a recent shift in the outlook for the US election is also affecting Bitcoinâs price.
Kamala Harris and Donald Trump are now closer in polls than her predecessor, President Joe Biden.
âThat ambiguity is making people weigh other factors that influence Bitcoinâs price, like growth, recession concerns, the Federal Reserve, and liquidity in the system,â Thompson said then.
I don't usually give very short-term views, but seems like a no-brainer to be bidding this area with clear invalidation on the back of a 180 degree shift in the macro backdrop from the relative to the 3 previous similar setups. https://t.co/NzqUSEvKbg pic.twitter.com/1PlviEyf5o
â Quinn Thompson (@qthomp) October 3, 2024
Crypto market movers
Bitcoin dropped by 0.8% over the past 24 hours to about $60,896.
Ethereum dropped 4.1% over the same period to $2,359.
What weâre reading
Three OpenSea execs quit in last three months as troubles mount for NFT marketplace â DL News
Ouch! $BTC took a dive (where to from here?) â Milk Road
Be careful investing in tokens w/ incentivized revenue â Milk Road
Why Bitwiseâs new XRP ETF filing is a bet on Trump election win â DL News
SECâs top crypto cop quits a month before election. Is Gensler next?
The US Securities and Exchange Commission said on Wednesday that Enforcement Director Gurbir S. Grewal will leave the agency on October 11.
Grewal, a 21-year agency vet, presided over 100 enforcement actions against crypto companies since 2021. Heâs widely regarded as one of the key architects of the SECâs anti-crypto âregulation by enforcementâ strategy.
âItâs not normal for an SEC Enforcement Director to get disappeared like this â gone on nine daysâ notice with no replacement lined up,â Jake Chervinsky, chief legal officer at Variant, a crypto venture capital firm, said on X.
Sanjay Wadhwa, the Enforcement Divisionâs deputy director, will serve as acting director. Itâs not clear who the SEC intends to promote to the role permanently.
The news comes as Washington warms up to crypto ahead of the US election in November.
Chervinsky couldnât resist taking a shot at the SEC for its widely criticised approach to crypto over the last few years.
âPerhaps the inevitable end to a campaign of unlawful harassment and misrepresentation resulting in many embarrassing defeats in court,â he said.
In 2023, a US court of appeals ruled that the SEC erred by denying Grayscale, the crypto fund issuer, permission to launch a spot Bitcoin ETF.
Then in August, the SEC was mostly unsuccessful in its long-standing claim that sales of crypto payments firm Ripple Labsâ XRP token had violated securities laws.
Is Gensler next?
With Grewalâs departure and political pressure mounting, crypto pundits are speculating on whether SEC Chair Gary Gensler could also leave the agency.
Crypto investor Adam Cochran said on X that the short notice period and absence of a replacement for Grewal indicates that senior SEC staff are jumping ship fast.
âThe writing is clearly on the wall that Gensler is out next term in either administration,â he said.
Former President Donald Trump has said he would fire Gensler immediately, should he return to the White House.
Vice President Kamala Harris, has not commented on Genslerâs tenure. President Joe Biden appointed Gensler as SEC Chair in 2021.
Other Democratic supporters havenât been so restrained on the need for Gensler to go.
âYou leaving is worth a point in GDP growth,â Mark Cuban, the billionaire investor and Harris supporter, posted on X.
In a recent interview on Fox News, Cuban said he would be open to replacing Gensler and heading the SEC should Harris win in November.
Grewal isnât the only SEC chief to leave the agency recently.
In August, David Hirsch, the head of the SECâs cyber and crypto enforcement unit, left to join Washington, DC law firm McGuireWoods.
Tim Craig is DL Newsâ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
Grewal, a 21-year agency vet, presided over 100 enforcement actions against crypto companies since 2021. Heâs widely regarded as one of the key architects of the SECâs anti-crypto âregulation by enforcementâ strategy.
âItâs not normal for an SEC Enforcement Director to get disappeared like this â gone on nine daysâ notice with no replacement lined up,â Jake Chervinsky, chief legal officer at Variant, a crypto venture capital firm, said on X.
Sanjay Wadhwa, the Enforcement Divisionâs deputy director, will serve as acting director. Itâs not clear who the SEC intends to promote to the role permanently.
The news comes as Washington warms up to crypto ahead of the US election in November.
Chervinsky couldnât resist taking a shot at the SEC for its widely criticised approach to crypto over the last few years.
âPerhaps the inevitable end to a campaign of unlawful harassment and misrepresentation resulting in many embarrassing defeats in court,â he said.
In 2023, a US court of appeals ruled that the SEC erred by denying Grayscale, the crypto fund issuer, permission to launch a spot Bitcoin ETF.
Then in August, the SEC was mostly unsuccessful in its long-standing claim that sales of crypto payments firm Ripple Labsâ XRP token had violated securities laws.
Is Gensler next?
With Grewalâs departure and political pressure mounting, crypto pundits are speculating on whether SEC Chair Gary Gensler could also leave the agency.
Crypto investor Adam Cochran said on X that the short notice period and absence of a replacement for Grewal indicates that senior SEC staff are jumping ship fast.
âThe writing is clearly on the wall that Gensler is out next term in either administration,â he said.
Former President Donald Trump has said he would fire Gensler immediately, should he return to the White House.
Vice President Kamala Harris, has not commented on Genslerâs tenure. President Joe Biden appointed Gensler as SEC Chair in 2021.
Other Democratic supporters havenât been so restrained on the need for Gensler to go.
âYou leaving is worth a point in GDP growth,â Mark Cuban, the billionaire investor and Harris supporter, posted on X.
In a recent interview on Fox News, Cuban said he would be open to replacing Gensler and heading the SEC should Harris win in November.
Grewal isnât the only SEC chief to leave the agency recently.
In August, David Hirsch, the head of the SECâs cyber and crypto enforcement unit, left to join Washington, DC law firm McGuireWoods.
Tim Craig is DL Newsâ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
Four OpenSea execs quit in last three months as troubles mount for NFT marketplace
Four key senior executives and a top developer at OpenSea, the beleaguered NFT marketplace, have left the company since July, according to social media posts on LinkedIn and X.
Recent departures include Shiva Rajaraman, the former COO; Justin Jow, former vice president of finance; and Jeremy Fine, former head of business and corporate development.
Rajaraman, Jow, and Fine were part of OpenSeaâs leadership team, or the group of executives who report directly to Devin Finzer, co-founder and CEO of the startup, according to company documents.
The three former executives have moved on to Uber, Scale AI, and OpenAI, respectively.
Karen Kreuzkamp, OpenSeaâs top lawyer, left in August for a position at Tools for Humanity, the company behind OpenAI CEO Sam Altmanâs crypto project Worldcoin.
And â0age,â one of OpenSeaâs key engineers, recently announced that he jumped ship to Uniswap Labs.
âHeâs an amazing protocol developer,â a former employee told DL News, in reference to 0age, who is pseudonymous.
Exec exodus
The recent exodus of executives follows a round of departures last November. OpenSeaâs general counsel, vice president of operations, head of HR, and head of communications each left the company shortly after the startup laid off more than half of its staff that month.
Now, the only members with more than a yearlong tenure on OpenSeaâs leadership team beyond Finzer are Nadav Hollander, the CTO; and Lorens Huculak, co-head of OpenSea Pro, the marketplaceâs platform for experienced NFT traders.
None of the recently departed executives immediately responded to a request for comment, and OpenSea did not return a request for comment.
The departures come as the company faces a moribund NFT market, intense competition from other NFT marketplaces, and regulatory scrutiny.
Total NFT sales reached $304 million in August, an almost 95% decline from the marketâs height in January 2022, according to CryptoSlam.
Meanwhile, competitors like Blur and Magic Eden have eaten into OpenSeaâs share of the shrinking market. Once the go-to locale to buy and sell NFTs, OpenSea ranks only fourth in 30-day trading volume, according to NFT Pulse.
Legal matters
To make matters worse, the company is facing an investigation from the US Securities and Exchange Commission.
In August, Finzer announced that his company had received a Wells notice, or formal communication from the SEC that an entity is subject to potential litigation.
The agency was probing whether NFTs on its platform were unregistered securities, Finzer said.
âWeâre shocked the SEC would make such a sweeping move against creators and artists,â he wrote on X. âBut weâre ready to stand up and fight.â
On the heels of the Wells notice announcement, OpenSea users lodged a lawsuit against the NFT marketplace in September.
The plaintiffs are represented by Adam Moskowitz, a lawyer behind some of the largest class-action lawsuits in crypto.
âConjuring from thin air a purported class action lawsuit based on our disclosure of an SEC Wells notice wonât make the allegations in the complaint true,â an OpenSea spokesperson previously said in a statement to DL News.
Ben Weiss is DL Newsâ Dubai Correspondent. Got a tip? Email at bweiss@dlnews.com.
Recent departures include Shiva Rajaraman, the former COO; Justin Jow, former vice president of finance; and Jeremy Fine, former head of business and corporate development.
Rajaraman, Jow, and Fine were part of OpenSeaâs leadership team, or the group of executives who report directly to Devin Finzer, co-founder and CEO of the startup, according to company documents.
The three former executives have moved on to Uber, Scale AI, and OpenAI, respectively.
Karen Kreuzkamp, OpenSeaâs top lawyer, left in August for a position at Tools for Humanity, the company behind OpenAI CEO Sam Altmanâs crypto project Worldcoin.
And â0age,â one of OpenSeaâs key engineers, recently announced that he jumped ship to Uniswap Labs.
âHeâs an amazing protocol developer,â a former employee told DL News, in reference to 0age, who is pseudonymous.
Exec exodus
The recent exodus of executives follows a round of departures last November. OpenSeaâs general counsel, vice president of operations, head of HR, and head of communications each left the company shortly after the startup laid off more than half of its staff that month.
Now, the only members with more than a yearlong tenure on OpenSeaâs leadership team beyond Finzer are Nadav Hollander, the CTO; and Lorens Huculak, co-head of OpenSea Pro, the marketplaceâs platform for experienced NFT traders.
None of the recently departed executives immediately responded to a request for comment, and OpenSea did not return a request for comment.
The departures come as the company faces a moribund NFT market, intense competition from other NFT marketplaces, and regulatory scrutiny.
Total NFT sales reached $304 million in August, an almost 95% decline from the marketâs height in January 2022, according to CryptoSlam.
Meanwhile, competitors like Blur and Magic Eden have eaten into OpenSeaâs share of the shrinking market. Once the go-to locale to buy and sell NFTs, OpenSea ranks only fourth in 30-day trading volume, according to NFT Pulse.
Legal matters
To make matters worse, the company is facing an investigation from the US Securities and Exchange Commission.
In August, Finzer announced that his company had received a Wells notice, or formal communication from the SEC that an entity is subject to potential litigation.
The agency was probing whether NFTs on its platform were unregistered securities, Finzer said.
âWeâre shocked the SEC would make such a sweeping move against creators and artists,â he wrote on X. âBut weâre ready to stand up and fight.â
On the heels of the Wells notice announcement, OpenSea users lodged a lawsuit against the NFT marketplace in September.
The plaintiffs are represented by Adam Moskowitz, a lawyer behind some of the largest class-action lawsuits in crypto.
âConjuring from thin air a purported class action lawsuit based on our disclosure of an SEC Wells notice wonât make the allegations in the complaint true,â an OpenSea spokesperson previously said in a statement to DL News.
Ben Weiss is DL Newsâ Dubai Correspondent. Got a tip? Email at bweiss@dlnews.com.
Ethereum projects prove more resilient than ventures on Solana and BNB Chain
In the contest to build DeFi projects, Etherem-based startups have the edge on their Solana counterparts.
About a fifth of Ethereum projects closed down over the last two years, according to a report from Lattice, a venture capital fund. Thatâs better than the 26% of Solana projects that foundered.
The researchers looked at blockchains with at least 15 crypto startups that raised funds during 2022.
BNB Chain-based projects were the least likely to remain active, with one-third of teams ceasing operations.
Speculative capital
Lattice said an influx of speculative capital during the bull market drove projects to over-extend themselves.
Many of those projects blamed the brutal market decline caused by events like the Terra ecosystem collapse and the FTX bankruptcy for forcing them to shut down, according to public statements from their founders in their closure notices.
The report also noted that nearly 80% of seed-stage Ethereum-based startups had shipped products since 2022, while just over 60% of Solana projects could say the same.
While Solanaâs price has climbed 32% this year, the report stands as a grim reminder of cryptoâs brutal two years that preceded 2024âČs rally.
Market crash dampened VC interest in follow-ups
Investors poured over $5 billion into nearly 1,200 crypto startups in 2022, a 150% increase from 2021, according to Lattice.
Thatâs lower than DefiLlamaâs figure of $19.5 billion which comes from a broader accounting of crypto VC deals whereas Lattice only considered blockchains where at least 15 projects secured funding.
Nearly 30%, or $1.4 billion, went to seeding Ethereum-based startups while early-stage Solana projects attracted 7%, or $350 million.
The buzz around things like NFTs, the metaverse, and web3 gaming buoyed the influx of capital. Understandably, many crypto entrepreneurs decided to capitalise on those trends, which may have been a mistake.
âChasing narratives can get you rekt,â Lattice Capital Co-Founder Regan Bozman tweeted. â$700 million went into gaming seed rounds but Gaming and Metaverse had some of the highest fail rates and likelihood to be active without anything shipped.â
Gravy train
When the excitement waned from scandals and industry failures, the gravy train ceased to run. That made it harder for startups to raise more money. Only 12% of the 2022 cohort have raised follow-up funds.
While 72% of the teams that bagged funding have launched a product since 2022, 18% have either failed to ship or have shut down.
Ethereum-based startups from the period were the most successful in shipping products as 80% of them did so, compared to only 61% of their Solana-based counterparts.
Things are improving
As previously reported by DL News, VCs are predicted to splash $12 billion to back crypto projects in 2024 with some of that funding likely to go towards seeding new startups.
Lattice identified an uptick in investments in privacy-enhancing technology, artificial intelligence, and DePIN which stands for decentralised physical infrastructure networks.
Earlier this year, global asset manager Franklin Templeton tipped Solana as a leading network for DePIN.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
About a fifth of Ethereum projects closed down over the last two years, according to a report from Lattice, a venture capital fund. Thatâs better than the 26% of Solana projects that foundered.
The researchers looked at blockchains with at least 15 crypto startups that raised funds during 2022.
BNB Chain-based projects were the least likely to remain active, with one-third of teams ceasing operations.
Speculative capital
Lattice said an influx of speculative capital during the bull market drove projects to over-extend themselves.
Many of those projects blamed the brutal market decline caused by events like the Terra ecosystem collapse and the FTX bankruptcy for forcing them to shut down, according to public statements from their founders in their closure notices.
The report also noted that nearly 80% of seed-stage Ethereum-based startups had shipped products since 2022, while just over 60% of Solana projects could say the same.
While Solanaâs price has climbed 32% this year, the report stands as a grim reminder of cryptoâs brutal two years that preceded 2024âČs rally.
Market crash dampened VC interest in follow-ups
Investors poured over $5 billion into nearly 1,200 crypto startups in 2022, a 150% increase from 2021, according to Lattice.
Thatâs lower than DefiLlamaâs figure of $19.5 billion which comes from a broader accounting of crypto VC deals whereas Lattice only considered blockchains where at least 15 projects secured funding.
Nearly 30%, or $1.4 billion, went to seeding Ethereum-based startups while early-stage Solana projects attracted 7%, or $350 million.
The buzz around things like NFTs, the metaverse, and web3 gaming buoyed the influx of capital. Understandably, many crypto entrepreneurs decided to capitalise on those trends, which may have been a mistake.
âChasing narratives can get you rekt,â Lattice Capital Co-Founder Regan Bozman tweeted. â$700 million went into gaming seed rounds but Gaming and Metaverse had some of the highest fail rates and likelihood to be active without anything shipped.â
Gravy train
When the excitement waned from scandals and industry failures, the gravy train ceased to run. That made it harder for startups to raise more money. Only 12% of the 2022 cohort have raised follow-up funds.
While 72% of the teams that bagged funding have launched a product since 2022, 18% have either failed to ship or have shut down.
Ethereum-based startups from the period were the most successful in shipping products as 80% of them did so, compared to only 61% of their Solana-based counterparts.
Things are improving
As previously reported by DL News, VCs are predicted to splash $12 billion to back crypto projects in 2024 with some of that funding likely to go towards seeding new startups.
Lattice identified an uptick in investments in privacy-enhancing technology, artificial intelligence, and DePIN which stands for decentralised physical infrastructure networks.
Earlier this year, global asset manager Franklin Templeton tipped Solana as a leading network for DePIN.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
Bitcoin tends to recover after geopolitical shocks like Iran. Hereâs when BlackRock sees a price ...
Bitcoinâs plunge â then rebound â following Iranâs attack on Israel was predictable.
Asset management giant BlackRock advised cryptocurrency investors in a nine-page report that geopolitical events tend to have such an effect on markets.
While Bitcoin, the top cryptocurrency with $1.2 trillion market, value has yet to fully recover its losses, BlackRock suggests itâs just a matter of time. Bitcoin is trading at $61,190, down 2.3% in the past day, according to CoinGecko.
Released in September, Larry Finkâs laser-eyed Bitcoin screed issued a tried-and-tried-again pitch that Bitcoin, much like gold, is an excellent hedge for events like those occurring in the Middle East today.
Thatâs because a chart from that report shows how Bitcoin rallied double digits 60 days after major geopolitical events, including the US airstrike on one of Iranâs military commanders in 2020 and Russiaâs invasion of Ukraine in 2022.
For example, 60 days after the airstrike, Bitcoin rose 20%, while gold only rose 6%. The S&P 500 fell 7% during the same period.
Stick it on your wall and come back in 60 days https://t.co/uuIW3pW6Bc pic.twitter.com/ipxifRvtyX
â James Van Straten (@btcjvs) October 1, 2024
Thatâs also why BlackRock, the $10 trillion investment firm, which manages the industryâs largest spot Bitcoin exchange-traded fund, recommended a âmodest allocationâ to diversify investor portfolios.
BlackRockâs analysis means that crypto investors must wait until November 30. BlackRock is not alone.
âThese medium-term correlations with risk-on assets may reflect current investor sentiment toward cryptocurrencies,â Jacob Joseph, senior research analyst at CCData, told DL News.
âAs Bitcoin adoption grows and it is increasingly viewed beyond its speculative nature, it has the potential to evolve into a global monetary alternative or a distinct portfolio diversifier, as noted in BlackRockâs latest report.â
Crypto market movers
Bitcoin dropped by 2% over the past 24 hours to trade at $61,196.
Ethereum dropped by 4% to $2,437.
What we are reading:
OpenSea axed NFTs that behaved like securities for years before SEC scrutiny â DL News
How North Korea infiltrated the crypto industry â CoinDesk
EigenLayerâs EIGEN token unlock goes live with $7.2bn FDV â Unchained
Franklin Templetonâs onchain money market fund launches on Aptos â The Block
DeFi reduces crypto thefts by a quarter as total hacks top $2bn this year â DL News
Liam Kelly is a DeFi correspondent at DL News. Reach out at liam@dlnews.com.
Asset management giant BlackRock advised cryptocurrency investors in a nine-page report that geopolitical events tend to have such an effect on markets.
While Bitcoin, the top cryptocurrency with $1.2 trillion market, value has yet to fully recover its losses, BlackRock suggests itâs just a matter of time. Bitcoin is trading at $61,190, down 2.3% in the past day, according to CoinGecko.
Released in September, Larry Finkâs laser-eyed Bitcoin screed issued a tried-and-tried-again pitch that Bitcoin, much like gold, is an excellent hedge for events like those occurring in the Middle East today.
Thatâs because a chart from that report shows how Bitcoin rallied double digits 60 days after major geopolitical events, including the US airstrike on one of Iranâs military commanders in 2020 and Russiaâs invasion of Ukraine in 2022.
For example, 60 days after the airstrike, Bitcoin rose 20%, while gold only rose 6%. The S&P 500 fell 7% during the same period.
Stick it on your wall and come back in 60 days https://t.co/uuIW3pW6Bc pic.twitter.com/ipxifRvtyX
â James Van Straten (@btcjvs) October 1, 2024
Thatâs also why BlackRock, the $10 trillion investment firm, which manages the industryâs largest spot Bitcoin exchange-traded fund, recommended a âmodest allocationâ to diversify investor portfolios.
BlackRockâs analysis means that crypto investors must wait until November 30. BlackRock is not alone.
âThese medium-term correlations with risk-on assets may reflect current investor sentiment toward cryptocurrencies,â Jacob Joseph, senior research analyst at CCData, told DL News.
âAs Bitcoin adoption grows and it is increasingly viewed beyond its speculative nature, it has the potential to evolve into a global monetary alternative or a distinct portfolio diversifier, as noted in BlackRockâs latest report.â
Crypto market movers
Bitcoin dropped by 2% over the past 24 hours to trade at $61,196.
Ethereum dropped by 4% to $2,437.
What we are reading:
OpenSea axed NFTs that behaved like securities for years before SEC scrutiny â DL News
How North Korea infiltrated the crypto industry â CoinDesk
EigenLayerâs EIGEN token unlock goes live with $7.2bn FDV â Unchained
Franklin Templetonâs onchain money market fund launches on Aptos â The Block
DeFi reduces crypto thefts by a quarter as total hacks top $2bn this year â DL News
Liam Kelly is a DeFi correspondent at DL News. Reach out at liam@dlnews.com.
Why Bitwiseâs new XRP ETF filing is a bet on Trump election win
Ripple bulls rejoiced after crypto fund manager Bitwise Asset Management filed for a spot XRP exchange-traded fund in the US.
âYouâve heard of the Fed Put. This is like the Trump Call,â Bloomberg Intelligence analyst Eric Balchunas said of the development late Tuesday on X.
In derivatives markets, call options are-all or-nothing bets on an asset hitting a certain price. If an asset hits the callâs price, it pays out big.
Companies deciding to file for crypto ETF approvals â whether XRP, Solana, or any others â are de facto bets on Donald Trump winning the presidency, Balchunas said.
Thatâs because a Trump win would ensure the departure of anti-crypto Securities and Exchange Commission Chair Gary Gensler.
At a Bitcoin conference in July, Trump promised to fire Gensler if he wins the election.
If Gensler goes, âanythingâs possible,â Balchunas said.
But if Vice President Kamala Harris wins, new crypto ETFs probably wonât get approved.
âThe âcallâ expires worthless,â he said.
XRP is a crypto asset developed, issued, and partially managed by US-based company Ripple Labs. The crypto is pegged to facilitate faster cross-border transactions, and is frequently listed as an upstart competitor to the Swift system.
Bitwise is the only asset manager to file an application for an ETF for XRP.
But itâs not the first time a firm has submitted a filing for a crypto ETF beyond Bitcoin and Ethereum.
In June, asset manager VanEck filed with the SEC for a spot Solana ETF.
Despite the SEC rejecting VanEckâs associated 19b-4 application in August, Matthew Sigel, the firmâs head of digital assets research, said the application âremains in play.â
âStart the clock tickingâ
Since 2020, Ripple has been fighting SEC claims that it raised $1.3 billion by selling XRP as an unregistered security.
A 2023 ruling found XRP isnât a security when traded on public exchanges, but institutional sales violated securities laws by promising profits based on Rippleâs efforts, making them investment contracts under US law.
In the US, securities must be registered to ensure investors get full disclosure and legal protections, which Ripple allegedly bypassed.
In August, the case ended with Ripple ordered to pay a $125 million fine.
Although the judge presiding over the case ruled that secondary sales of XRP on crypto exchanges were not securities offerings, that may not matter for Bitwiseâs XRP ETF application.
âThis isnât about whether the SEC thinks XRP is a security or not,â Katalin Tischhauser, head of investment research at crypto bank Sygnum, told DL News. âThe SECâs stance needs to change on what they regard as an acceptable surveillable market.â
The SEC has previously argued that no spot crypto ETFs can be listed on US exchanges until there is a highly correlated, regulated futures market for the corresponding asset.
Such a market, Tischhauser said, only exists for Bitcoin and Ethereum and no other crypto asset.
Bitcoin and Ethereum are the only crypto assets with regulated futures markets on the Chicago Mercantile Exchange.
Tischhauser said Bitwiseâs XRP ETF application was likely done to âstart the clock tickingâ in the hope that there will be a change in the SECâs stance after the election.
Inevitable?
Bitwiseâs filing comes after Ripple Labs CEO Brad Garlinghouse said after the approval of Ethereum ETFs earlier this year that ETFs for XRP and other crypto assets were âinevitable.â
âPeople donât just want exposure to one commodity,â Garlinghouse said on Fox Business News at the time.
But whether there is enough demand to warrant an XRP ETF isnât clear.
Spot Bitcoin ETFs launched in January exceeded expectations, attracting some $18 billion of fresh capital.
However, the more recent Ethereum ETFs have underperformed, experiencing $572 million of outflows since their July launch.
Investment manager Grayscaleâs XRP Trust has just $1.5 million worth of assets under management, compared to over $73 million in its Solana Trust.
Since the SEC initiated its lawsuit against Ripple Labs, XRP has dropped from the second-biggest crypto asset to the seventh-biggest.
Tim Craig is DL Newsâ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
âYouâve heard of the Fed Put. This is like the Trump Call,â Bloomberg Intelligence analyst Eric Balchunas said of the development late Tuesday on X.
In derivatives markets, call options are-all or-nothing bets on an asset hitting a certain price. If an asset hits the callâs price, it pays out big.
Companies deciding to file for crypto ETF approvals â whether XRP, Solana, or any others â are de facto bets on Donald Trump winning the presidency, Balchunas said.
Thatâs because a Trump win would ensure the departure of anti-crypto Securities and Exchange Commission Chair Gary Gensler.
At a Bitcoin conference in July, Trump promised to fire Gensler if he wins the election.
If Gensler goes, âanythingâs possible,â Balchunas said.
But if Vice President Kamala Harris wins, new crypto ETFs probably wonât get approved.
âThe âcallâ expires worthless,â he said.
XRP is a crypto asset developed, issued, and partially managed by US-based company Ripple Labs. The crypto is pegged to facilitate faster cross-border transactions, and is frequently listed as an upstart competitor to the Swift system.
Bitwise is the only asset manager to file an application for an ETF for XRP.
But itâs not the first time a firm has submitted a filing for a crypto ETF beyond Bitcoin and Ethereum.
In June, asset manager VanEck filed with the SEC for a spot Solana ETF.
Despite the SEC rejecting VanEckâs associated 19b-4 application in August, Matthew Sigel, the firmâs head of digital assets research, said the application âremains in play.â
âStart the clock tickingâ
Since 2020, Ripple has been fighting SEC claims that it raised $1.3 billion by selling XRP as an unregistered security.
A 2023 ruling found XRP isnât a security when traded on public exchanges, but institutional sales violated securities laws by promising profits based on Rippleâs efforts, making them investment contracts under US law.
In the US, securities must be registered to ensure investors get full disclosure and legal protections, which Ripple allegedly bypassed.
In August, the case ended with Ripple ordered to pay a $125 million fine.
Although the judge presiding over the case ruled that secondary sales of XRP on crypto exchanges were not securities offerings, that may not matter for Bitwiseâs XRP ETF application.
âThis isnât about whether the SEC thinks XRP is a security or not,â Katalin Tischhauser, head of investment research at crypto bank Sygnum, told DL News. âThe SECâs stance needs to change on what they regard as an acceptable surveillable market.â
The SEC has previously argued that no spot crypto ETFs can be listed on US exchanges until there is a highly correlated, regulated futures market for the corresponding asset.
Such a market, Tischhauser said, only exists for Bitcoin and Ethereum and no other crypto asset.
Bitcoin and Ethereum are the only crypto assets with regulated futures markets on the Chicago Mercantile Exchange.
Tischhauser said Bitwiseâs XRP ETF application was likely done to âstart the clock tickingâ in the hope that there will be a change in the SECâs stance after the election.
Inevitable?
Bitwiseâs filing comes after Ripple Labs CEO Brad Garlinghouse said after the approval of Ethereum ETFs earlier this year that ETFs for XRP and other crypto assets were âinevitable.â
âPeople donât just want exposure to one commodity,â Garlinghouse said on Fox Business News at the time.
But whether there is enough demand to warrant an XRP ETF isnât clear.
Spot Bitcoin ETFs launched in January exceeded expectations, attracting some $18 billion of fresh capital.
However, the more recent Ethereum ETFs have underperformed, experiencing $572 million of outflows since their July launch.
Investment manager Grayscaleâs XRP Trust has just $1.5 million worth of assets under management, compared to over $73 million in its Solana Trust.
Since the SEC initiated its lawsuit against Ripple Labs, XRP has dropped from the second-biggest crypto asset to the seventh-biggest.
Tim Craig is DL Newsâ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
Inside $25bn DeFi giant Lidoâs plan to win over the finance world
Restaking, one of the buzziest ideas in DeFi this year, has swelled to a $15 billion market.
Itâs huge with so-called DeFi degens, risk tolerant crypto investors who hungrily seek out the highest yields on their assets. In recent months, several DeFi protocols have pivoted to restaking to cash in on the trend.
But Lido, the biggest DeFi protocol with $25 billion of deposits, was strangely absent from the party.
âItâs not a priority,â Kean Gilbert, Lidoâs institutional relations lead, told DL News.
Instead, Lido will focus on catering to institutional investors over DeFi degens by further expanding its flagship product called stETH â a tradable version of staked Ether.
âInstitutions arenât bullish on restaking because itâs not mature yet,â said Gilbert.
Institutional investors refer to small hedge funds, family offices, venture capitalist firms, investment funds and trading firms.
Restaking is a way to repurpose staked tokens â like Ether â to secure other networks and earn their owners additional rewards.
But development is slow. Despite staking protocols like EigenLayer promising users increased yields, the protocol still hasnât implemented this feature.
Expanding stETH
Lido is the biggest so-called liquid staking protocol. It lets investors stake Ether for a 3% annual yield while receiving stETH, a tradable version of their staked Ether they can use in DeFi.
The stETH token already accounts for a whopping 70% of the Ether liquid staking market.
But Lido wants more, and institutional investors are a relatively untapped group of users.
âThe priority is to double down on stETH and liquid staking, and add as much depth as possible,â Gilbert said.
Liquidity is a top priority. Funds and family offices need to know thereâs enough stETH sloshing around to let them exit their positions at a momentâs notice, should the need arise.
âThey want to know how much they can sell, and how long it takes to sell,â Gilbert said.
Analysts have previously pointed to stETHâs declining liquidity as a potential issue. Currently, thereâs only $198 million of stETH liquidity across decentralised exchanges, a 30% drop since the start of the year.
The fear is that if many stETH holders suddenly need to sell their tokens there wonât be enough liquidity for them to do so. This could cause the asset to break its peg from Ether and set off a cascade of liquidations.
The likelihood of such a situation impacting institutions is limited, Gilbert said. Why? Because many of the funds that use stETH do over-the-counter transactions, selling directly to each other bypassing the open market.
âIf people felt there wasnât enough depth there, they definitely wouldnât use it,â Gilbert said.
Segregated pools
Liquidity is one thing. There are other things institutions have to consider, too.
Some are cautious of Lidoâs stETH or other liquid staking tokens due to strict regulatory requirements. A 2023 report from Northstake found that around 1% of deposits to top liquid staking protocols came from illicit sources.
Even though itâs a small amount, it could cause problems for regulated institutions that need to adhere to strict anti-money laundering regulations.
Lido is looking at building out additional features, like segregated staking pools with know-your-customer checks, specifically for institutional clients affected by such regulations, Gilbert said.
To be sure, for many of Lidoâs existing institutional clients, the lack of AML checks hasnât prevented them from using the protocol.
âWe believe Lido is already institutional-grade,â Gilbert said. âAround 25% of our total value locked today is actually institutional capital.â
TVL is a metric that tracks how much crypto is locked up in a DeFi protocolâs smart contracts, or in all DeFi protocols running on a given blockchain.
Looking for leverage
Another consideration is to ensure investors can use stETH in every way they want to.
At the top of many institutional investorsâ wishlists is leverage. Top DeFi lending protocol Aave already has an established market for borrowing and lending stETH.
Lidoâs recent partnership with digital asset software firm Fireblocks gives institutions even more options.
Institutions holding stETH can now use it as collateral on crypto exchange Bybit and crypto derivatives exchange Deribit through Fireblocks.
âWe want to create as much opportunity for stETH holders, from an institutional perspective, to do as many cool things as they possibly can,â Gilbert said.
While giving institutions the option to take on leverage is great for luring them in, there are also downsides.
Leverage has also greased the wheels of every major crypto crash.
Tim Craig is DL Newsâ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
Itâs huge with so-called DeFi degens, risk tolerant crypto investors who hungrily seek out the highest yields on their assets. In recent months, several DeFi protocols have pivoted to restaking to cash in on the trend.
But Lido, the biggest DeFi protocol with $25 billion of deposits, was strangely absent from the party.
âItâs not a priority,â Kean Gilbert, Lidoâs institutional relations lead, told DL News.
Instead, Lido will focus on catering to institutional investors over DeFi degens by further expanding its flagship product called stETH â a tradable version of staked Ether.
âInstitutions arenât bullish on restaking because itâs not mature yet,â said Gilbert.
Institutional investors refer to small hedge funds, family offices, venture capitalist firms, investment funds and trading firms.
Restaking is a way to repurpose staked tokens â like Ether â to secure other networks and earn their owners additional rewards.
But development is slow. Despite staking protocols like EigenLayer promising users increased yields, the protocol still hasnât implemented this feature.
Expanding stETH
Lido is the biggest so-called liquid staking protocol. It lets investors stake Ether for a 3% annual yield while receiving stETH, a tradable version of their staked Ether they can use in DeFi.
The stETH token already accounts for a whopping 70% of the Ether liquid staking market.
But Lido wants more, and institutional investors are a relatively untapped group of users.
âThe priority is to double down on stETH and liquid staking, and add as much depth as possible,â Gilbert said.
Liquidity is a top priority. Funds and family offices need to know thereâs enough stETH sloshing around to let them exit their positions at a momentâs notice, should the need arise.
âThey want to know how much they can sell, and how long it takes to sell,â Gilbert said.
Analysts have previously pointed to stETHâs declining liquidity as a potential issue. Currently, thereâs only $198 million of stETH liquidity across decentralised exchanges, a 30% drop since the start of the year.
The fear is that if many stETH holders suddenly need to sell their tokens there wonât be enough liquidity for them to do so. This could cause the asset to break its peg from Ether and set off a cascade of liquidations.
The likelihood of such a situation impacting institutions is limited, Gilbert said. Why? Because many of the funds that use stETH do over-the-counter transactions, selling directly to each other bypassing the open market.
âIf people felt there wasnât enough depth there, they definitely wouldnât use it,â Gilbert said.
Segregated pools
Liquidity is one thing. There are other things institutions have to consider, too.
Some are cautious of Lidoâs stETH or other liquid staking tokens due to strict regulatory requirements. A 2023 report from Northstake found that around 1% of deposits to top liquid staking protocols came from illicit sources.
Even though itâs a small amount, it could cause problems for regulated institutions that need to adhere to strict anti-money laundering regulations.
Lido is looking at building out additional features, like segregated staking pools with know-your-customer checks, specifically for institutional clients affected by such regulations, Gilbert said.
To be sure, for many of Lidoâs existing institutional clients, the lack of AML checks hasnât prevented them from using the protocol.
âWe believe Lido is already institutional-grade,â Gilbert said. âAround 25% of our total value locked today is actually institutional capital.â
TVL is a metric that tracks how much crypto is locked up in a DeFi protocolâs smart contracts, or in all DeFi protocols running on a given blockchain.
Looking for leverage
Another consideration is to ensure investors can use stETH in every way they want to.
At the top of many institutional investorsâ wishlists is leverage. Top DeFi lending protocol Aave already has an established market for borrowing and lending stETH.
Lidoâs recent partnership with digital asset software firm Fireblocks gives institutions even more options.
Institutions holding stETH can now use it as collateral on crypto exchange Bybit and crypto derivatives exchange Deribit through Fireblocks.
âWe want to create as much opportunity for stETH holders, from an institutional perspective, to do as many cool things as they possibly can,â Gilbert said.
While giving institutions the option to take on leverage is great for luring them in, there are also downsides.
Leverage has also greased the wheels of every major crypto crash.
Tim Craig is DL Newsâ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
Crypto prices tumble with Ethereum below $2,500 as Iran fires missiles at Israel
Investors are fleeing equities and crypto as Israel girds for an attack from Iran.
The worldwide market cap of all cryptocurrencies has fallen about 5.5% since Monday, according to data from CoinGecko.
Ethereum and Solana were the biggest losers among top 10 cryptocurrencies, falling below $2,500 and $150, respectively.
Sirens went off across Israel around 19:30 local time, according to Israeli newspaper Haaretz, with explosions heard in Jerusalem and Tel Aviv.
The missiles launched just hours after news broke that Iran was preparing to strike Israel over its repeated bombing of allied Hezbollah in Lebanon.
The attack has flamed long-running fear that Israelâs campaign against Iranian proxies in the Middle East â a group that includes Hamas in Gaza and the Houthis in Yemen â could lead to direct conflict between the two regional powers.
Lekker Capital founder Quinn Thompson said the prevailing sentiment was that Iran would keep its response relatively muted, given the likelihood that an all-out war would boost the electoral odds of Republican Donald Trump in the United States presidential election in November.
âNonetheless, markets are a discounting mechanism, and even if there is only a 20% chance of a major escalation in the middle east, given how bad of an outcome that is for markets, they must re-rate pricing to reflect that,â Thompson told DL News.
âOn top of this it is a big week for economic data culminating in another jobs report on Friday so itâs also fair to expect some routine hedging ahead of that as it is.â
Stocks fell on Tuesday, with the Nasdaq dropping 1.5% after markets opened. Meanwhile, investors fled to more conservative assets like bonds, the dollar, and gold.
While Bitcoin is often called âdigital goldâ by its proponents, it too suffered losses Tuesday, briefly dropping below $62,000.
Thompson said that was to be expected. In both stocks and crypto, there was a lot of optimism, and many assets were priced too high based on technical indicators, he explained.
Because the market was already overconfident and assets were overbought, according to Thompson, it made them more likely to drop when any bad news hit.
Aleks Gilbert is DL Newsâ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.
The worldwide market cap of all cryptocurrencies has fallen about 5.5% since Monday, according to data from CoinGecko.
Ethereum and Solana were the biggest losers among top 10 cryptocurrencies, falling below $2,500 and $150, respectively.
Sirens went off across Israel around 19:30 local time, according to Israeli newspaper Haaretz, with explosions heard in Jerusalem and Tel Aviv.
The missiles launched just hours after news broke that Iran was preparing to strike Israel over its repeated bombing of allied Hezbollah in Lebanon.
The attack has flamed long-running fear that Israelâs campaign against Iranian proxies in the Middle East â a group that includes Hamas in Gaza and the Houthis in Yemen â could lead to direct conflict between the two regional powers.
Lekker Capital founder Quinn Thompson said the prevailing sentiment was that Iran would keep its response relatively muted, given the likelihood that an all-out war would boost the electoral odds of Republican Donald Trump in the United States presidential election in November.
âNonetheless, markets are a discounting mechanism, and even if there is only a 20% chance of a major escalation in the middle east, given how bad of an outcome that is for markets, they must re-rate pricing to reflect that,â Thompson told DL News.
âOn top of this it is a big week for economic data culminating in another jobs report on Friday so itâs also fair to expect some routine hedging ahead of that as it is.â
Stocks fell on Tuesday, with the Nasdaq dropping 1.5% after markets opened. Meanwhile, investors fled to more conservative assets like bonds, the dollar, and gold.
While Bitcoin is often called âdigital goldâ by its proponents, it too suffered losses Tuesday, briefly dropping below $62,000.
Thompson said that was to be expected. In both stocks and crypto, there was a lot of optimism, and many assets were priced too high based on technical indicators, he explained.
Because the market was already overconfident and assets were overbought, according to Thompson, it made them more likely to drop when any bad news hit.
Aleks Gilbert is DL Newsâ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.
Why the Bitcoin âTrump tradeâ is dead. Hereâs what it means for the price
The stakes are sky high ahead of the US electorateâs vote on November 5.
Bernstein once painted the US election as a choice between Bitcoin reaching $90,000 under Donald Trump or the cryptocurrency plunging to $30,000 with Kamala Harris.
The Wall Street research firm has since changed its tune, sayingâmomentum should continue regardless of election outcome.â
Thatâs a dramatic about-face.
The 180 comes on the back of the industryâs $204 million spending spree to sway crypto-friendly politicians in Washington.
With both Republicans and Democrats now making genial overtures towards the sector, one could argue that theyâve gotten exactly what theyâve paid for.
A crypto election
The amount of money put into the industryâs lobbying efforts â as well as the more than $1 billion placed on election bets on crypto gambling platform Polymarket â highlight the importance of the crypto sector in the election.
Under Joe Bidenâs term as president, Democrats talked up their anti-crypto army; supported the âoff-ramping of crypto companiesâ during the 2023 banking crisis; and endorsed Securities and Exchange Commission Chair Gary Genslerâs anti-crypto campaign, Bernstein noted last week.
The SECâs data shows it has brought some 158 cases against firms and individuals involving crypto. Over half of these were levied under Gensler.
In Trump, crypto pundits saw an end to that campaign. The former president has loudly thrown his weight behind crypto. Among other things, heâs pledged to create a national Bitcoin stockpile, and to send Gensler packing.
That created the origin of the Trump Trade. This summer, the narrative that his winning the White House for a second term would propel Bitcoin gained momentum.
Then Biden bowed out, making Harris his heir apparent. Her campaign saw her quickly overtake Trump in the polls. To some, like Lekker Capital Co-Founder Quinn Thompson, that was the end of the Trump Trade.
They argued that other factors â like the Federal Reserve cutting interest rates or conflict in the Middle East â had a bigger impact than whoever ended up in the Oval Office.
Harris didnât say anything about crypto in the first two months of her campaign, an indicator that she might continue the Biden Administrationâs crypto crackdown.
Thatâs changing. Last week, Harris said that sheâs backing the development of digital assets. While some industry pundits labelled the comments as âhollow words,â they âdid feel some relief with both candidates signalling support,â Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia wrote.
They added, however, that âcrypto market sentiment under a Trump win would be stronger, since it would indicate a fresh policy start and likely broader regulatory support.â
Crypto market movers
Bitcoin dropped by 1.1% over the past 24 hours to trade at $62,901.
Ethereum dropped by 1% to $2,583.
What weâ are reading
Bitcoinâs price seen hitting record as soon as this week: âExpect fireworksâ â DL News
$1.1B Celestia Token Release to Boost Octoberâs Crypto Unlocks to Nearly $2B â Milk Road
BlackRock Exec Says Ethereum Narrative Is Less Easy to Digest: Report â Unchained
MicroStrategyâs Stellar Performance Wonât Lead to S&P 500 Inclusion Anytime Soon â Milk Road
UK regulators open sandbox to unlock a $14tn tokenisation bonanza â DL News
Eric Johansson is DL Newsâ News Editor. Got a tip? Email at eric@dlnews.com.
Bernstein once painted the US election as a choice between Bitcoin reaching $90,000 under Donald Trump or the cryptocurrency plunging to $30,000 with Kamala Harris.
The Wall Street research firm has since changed its tune, sayingâmomentum should continue regardless of election outcome.â
Thatâs a dramatic about-face.
The 180 comes on the back of the industryâs $204 million spending spree to sway crypto-friendly politicians in Washington.
With both Republicans and Democrats now making genial overtures towards the sector, one could argue that theyâve gotten exactly what theyâve paid for.
A crypto election
The amount of money put into the industryâs lobbying efforts â as well as the more than $1 billion placed on election bets on crypto gambling platform Polymarket â highlight the importance of the crypto sector in the election.
Under Joe Bidenâs term as president, Democrats talked up their anti-crypto army; supported the âoff-ramping of crypto companiesâ during the 2023 banking crisis; and endorsed Securities and Exchange Commission Chair Gary Genslerâs anti-crypto campaign, Bernstein noted last week.
The SECâs data shows it has brought some 158 cases against firms and individuals involving crypto. Over half of these were levied under Gensler.
In Trump, crypto pundits saw an end to that campaign. The former president has loudly thrown his weight behind crypto. Among other things, heâs pledged to create a national Bitcoin stockpile, and to send Gensler packing.
That created the origin of the Trump Trade. This summer, the narrative that his winning the White House for a second term would propel Bitcoin gained momentum.
Then Biden bowed out, making Harris his heir apparent. Her campaign saw her quickly overtake Trump in the polls. To some, like Lekker Capital Co-Founder Quinn Thompson, that was the end of the Trump Trade.
They argued that other factors â like the Federal Reserve cutting interest rates or conflict in the Middle East â had a bigger impact than whoever ended up in the Oval Office.
Harris didnât say anything about crypto in the first two months of her campaign, an indicator that she might continue the Biden Administrationâs crypto crackdown.
Thatâs changing. Last week, Harris said that sheâs backing the development of digital assets. While some industry pundits labelled the comments as âhollow words,â they âdid feel some relief with both candidates signalling support,â Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia wrote.
They added, however, that âcrypto market sentiment under a Trump win would be stronger, since it would indicate a fresh policy start and likely broader regulatory support.â
Crypto market movers
Bitcoin dropped by 1.1% over the past 24 hours to trade at $62,901.
Ethereum dropped by 1% to $2,583.
What weâ are reading
Bitcoinâs price seen hitting record as soon as this week: âExpect fireworksâ â DL News
$1.1B Celestia Token Release to Boost Octoberâs Crypto Unlocks to Nearly $2B â Milk Road
BlackRock Exec Says Ethereum Narrative Is Less Easy to Digest: Report â Unchained
MicroStrategyâs Stellar Performance Wonât Lead to S&P 500 Inclusion Anytime Soon â Milk Road
UK regulators open sandbox to unlock a $14tn tokenisation bonanza â DL News
Eric Johansson is DL Newsâ News Editor. Got a tip? Email at eric@dlnews.com.
DeFi reduces crypto thefts by a quarter as total hacks top $2bn this year
It looks like the DeFi community got the message.
In recent years, decentralised finance projects have been a top target for cybercriminals and hackers. And blockchain security experts have been urging the community to be more guarded.
Sure enough, DeFi hacks have fallen by a quarter In the first nine months of 2024 compared to all of 2023, according to data from TRM Labs.
Itâs centralised exchanges and custodians that have been fleeced the most.
Hack hauls
The theft of $2.1 billion in digital assets in the first three quarters of 2024 has already exceeded all of 2023 by 5%, according to TRM Labs.
âWe have essentially seen hack hauls double in 2024, as of September 30, compared to the same period in 2023,â Ari Redbord, global head of policy and government affairs at blockchain intelligence firm TRM Labs, told DL News.
Redbord said crypto hacks were happening at a record-setting pace reminiscent of 2022, where investors lost $3.8 billion.
According to web3 security firm Cyvers, hacking incidents involving centralised exchanges and custodians have grown about 1,000%, to $401 million, over last year.
Most of those losses came from the DMM Bitcoin Exchange breach where suspected North Korean hackes stole a staggering $305 million from the platform.
The TĂŒrkiye-based crypto exchange lost $55 million in June and other affected platforms include Lykke and Rain Exchange.
Private key leakage
Those CEX losses share a common theme â an attack on the platformâs infrastructure that ultimately exposed the private keys of their crypto wallets.
Private keys are alphanumeric text strings used to sign crypto transactions. When exposed, they can be used to steal funds from a victimâs wallets.
CEX platforms either manage their private keys in-house or assign the responsibility to a third-party protocol.
Access control
Regardless of the key management strategy used, access control is a major concern and web3 security experts previously warned of gaps existing in the security models being used by crypto companies.
âAttacks have evolved their tactics to exploit these weaknesses, capitalising on the gaps in access control and leveraging advanced techniques like phishing and social engineering to gain unauthorised access,â Meir Dolev, chief technology officer of web3 security outfit Cyvers, told DL News.
Many CEX hacks from cryptoâs pre-DeFi era bore hints of insider involvement.
Third-party key managers became the solution to rogue employees leaking private keys to hackers.
Still, Dolev said these private key custody protocols can be just as vulnerable.
High-profile hacks
That vulnerability was already a concern from last year as it was the cause of some high-profile hacks including the $41 million stolen from crypto casino platform Stake.
âThe solution to this evolving threat landscape lies in multi-layered security measures,â Dolev said.
âCompanies should not rely solely on third-party services but instead adopt a hybrid approach that combines internal key management practices with robust external solutions.â
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
In recent years, decentralised finance projects have been a top target for cybercriminals and hackers. And blockchain security experts have been urging the community to be more guarded.
Sure enough, DeFi hacks have fallen by a quarter In the first nine months of 2024 compared to all of 2023, according to data from TRM Labs.
Itâs centralised exchanges and custodians that have been fleeced the most.
Hack hauls
The theft of $2.1 billion in digital assets in the first three quarters of 2024 has already exceeded all of 2023 by 5%, according to TRM Labs.
âWe have essentially seen hack hauls double in 2024, as of September 30, compared to the same period in 2023,â Ari Redbord, global head of policy and government affairs at blockchain intelligence firm TRM Labs, told DL News.
Redbord said crypto hacks were happening at a record-setting pace reminiscent of 2022, where investors lost $3.8 billion.
According to web3 security firm Cyvers, hacking incidents involving centralised exchanges and custodians have grown about 1,000%, to $401 million, over last year.
Most of those losses came from the DMM Bitcoin Exchange breach where suspected North Korean hackes stole a staggering $305 million from the platform.
The TĂŒrkiye-based crypto exchange lost $55 million in June and other affected platforms include Lykke and Rain Exchange.
Private key leakage
Those CEX losses share a common theme â an attack on the platformâs infrastructure that ultimately exposed the private keys of their crypto wallets.
Private keys are alphanumeric text strings used to sign crypto transactions. When exposed, they can be used to steal funds from a victimâs wallets.
CEX platforms either manage their private keys in-house or assign the responsibility to a third-party protocol.
Access control
Regardless of the key management strategy used, access control is a major concern and web3 security experts previously warned of gaps existing in the security models being used by crypto companies.
âAttacks have evolved their tactics to exploit these weaknesses, capitalising on the gaps in access control and leveraging advanced techniques like phishing and social engineering to gain unauthorised access,â Meir Dolev, chief technology officer of web3 security outfit Cyvers, told DL News.
Many CEX hacks from cryptoâs pre-DeFi era bore hints of insider involvement.
Third-party key managers became the solution to rogue employees leaking private keys to hackers.
Still, Dolev said these private key custody protocols can be just as vulnerable.
High-profile hacks
That vulnerability was already a concern from last year as it was the cause of some high-profile hacks including the $41 million stolen from crypto casino platform Stake.
âThe solution to this evolving threat landscape lies in multi-layered security measures,â Dolev said.
âCompanies should not rely solely on third-party services but instead adopt a hybrid approach that combines internal key management practices with robust external solutions.â
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
OpenSea axed NFTs that behaved like securities for years before SEC scrutiny
OpenSeaâs disclosure last month that it was being investigated by the US Securities and Exchange Commission sparked outrage in the crypto industry.
âAbsurd,â said Kraken founder Jesse Powell.
âUnamerican,â tweeted Tyler Winklevoss, the CEO of Gemini.
Devin Finzer, the co-founder and CEO of OpenSea, also weighed in.
âWeâre shocked the SEC would make such a sweeping move against creators and artists,â he wrote in response to an SEC letter warning of a potential enforcement action.
Jokes spread online depicting the Mona Lisa, Pokemon cards, and digital sports tickets as the SECâs next potential targets. They mocked the idea that images and artwork could be construed as securities, and subject to federal laws.
But OpenSea, one of the largest global marketplaces for NFTs, has taken actions that suggest it has been aware for years that some NFT collections listed on its site are more than just art, according to three former employees of OpenSea, as well as company documents seen by DL News.
Delisted and disabled
OpenSea has regularly delisted or disabled non-fungible tokens, or NFTs, that may behave like financial instruments. It has targeted âanything which promised returns, had a token, or could be construed as a security in any way,â a person familiar with the practice told DL News.
The company issued a vocabulary guide directing employees to avoid using financial terms such as âbroker,â âshares,â âtradingâ or âexchange,â in their communications, according to one company document.
While crypto leaders may scoff at the idea that NFTs are securities and ridicule Gensler and the SEC, OpenSeaâs longstanding efforts to weed out problematic collections complicates the narrative. Aware of potential problems, the company acted.
A spokesperson for OpenSea declined to comment on questions sent by DL News for this article.
OpenSeaâs tangle with the SEC comes as the venture struggles to recapture the mojo that drove the NFT space to such giddy heights in 2021. OpenSeaâs revenue multiplied more than 18 times between the second and third quarter that year, to $167 million, according to an internal document.
Now, as the popularity of Bored Ape Yacht Club and other NFTs wane, OpenSeaâs monthly volume has plunged about 55% in the last 12 months, to $36 million, according to Dune Analytics.
Through it all, OpenSea has laboured to screen the many NFT collections that have been listed on its platform.
Disabled turtles
In October 2021, OpenSea disabled trading of a collection called DAO Turtles after finding the pixelated images of the shelled amphibians violated its terms of service, according to social media posts by DAO Turtles.
That meant visitors to OpenSea could still see the NFTs, but they couldnât buy or sell them.
OpenSea told DAO Turtlesâ team that NFT collections could not use the platform to carry out financial services such as âlisting, or buying securitiesâ and similar instruments, or fundraising, according to a screenshot of an email.
While OpenSea did not provide any details on precisely why DAO Turtles raised a red flag, the NFTs were more than images on a blockchain.
Owners could collect royalties from future releases, and receive an associated cryptocurrency called Turtleshells, according to an archived version of the projectâs website.
Not just art
Other collections OpenSea delisted or disabled on its site for violating the prohibition on financial assets include Steady Stack, and Yaypegs, said a former employee.
The teams behind DAO Turtles and Yaypegs did not respond to requests for comment. A representative for Steady Stack could not confirm why the collection was delisted.
Non-fungible tokens donât just represent art. Many stand in for physical objects, virtual real estate, and more.
Regulators have been building cases that NFTs can be securities or regulated financial instruments. In May 2023, former OpenSea employee Nate Chastain was convicted in the first-ever NFT insider trading case.
âWe have a strong responsibility to our community, and we take any breach of trust incredibly seriously,â wrote Finzer after Chastain resigned.
And archived versions of OpenSeaâs website show that it hosted three collections that the SEC later slapped with securities-related charges.
The collections â Impact Theory, Stoner Cats, and Flyfish Club â settled with the SEC without admitting or denying allegations.
Terms of service
From the get-go, OpenSea addressed the financial capabilities of NFTs in its terms of service.
âWE ARE NOT A BROKER, FINANCIAL INSTITUTION, OR CREDITOR,â reads the earliest archived copy of its terms of service from August 2018, which was printed in all caps to hammer the point home.
Two years later, in October 2020, OpenSea added clauses that prohibited users from âany financial activities subject to registration or licensing, including but not limited to creating, listing, or buying securities, commodities, options, real estate, or debt instruments.â
âCan you use an NFT to make a securities offering? Absolutely.â
Philip Moustakis, securities lawyer
The marketplace also barred any assets âthat are redeemable for financial instruments or that give owners rights to participate in an ICO or any securities offering.â
ICO is an acronym for an initial coin offering, a token distribution practice the SEC targeted around 2018.
In 2022, the SEC began to send OpenSea information requests, The Verge reported in August. As part of that process, the company received a Wells notice, which is a notification the agency sends to the target of a potential enforcement action. Finzer said in August that OpenSea received the notice ârecently.â
Securities offering
If the SEC sues OpenSea, it would have to show that certain NFT collections the company listed are unregistered securities, said Philip Moustakis, a New York-based securities lawyer at Seward & Kissel.
âCan you use an NFT to make a securities offering? Absolutely,â he told DL News.
Moustakis added that itâs not about the technology, but rather the offering, or the initial sale of objects, which can be pieces of paper, computer code, or even citrus groves.
Generally, the SEC follows legal guidance that an asset is a security if purchasers have a âreasonable expectation of profit from others.â
On September 19, users sued OpenSea for allegedly offering NFTs that behaved like financial instruments.
âNFTs are treated like securities by OpenSea despite being unregistered with the SEC,â said the complaint, which is being managed by Adam Moskowitz, a lawyer behind some of the largest class-action lawsuits in crypto.
OpenSea rejected the claim.
âConjuring from thin air a purported class action lawsuit based on our disclosure of an SEC Wells notice wonât make the allegations in the complaint true,â said an OpenSea spokesperson. âWe refute these allegations and look forward to defending against this baseless lawsuit.â
âWhack-a-moleâ
It fell to OpenSeaâs Trust and Safety compliance team to police the huge volume of content hitting the site day in and day out. The NFT marketplaceâs legal and moderation teams were âdedicated beyond beliefâ and used computer programmes to sift through the flood of content hitting the site, said one former staffer.
âBut if youâre ingesting every NFT on many blockchains, itâs just whack-a-mole,â they said.
In the third quarter of 2023, OpenSea delisted more than 20,000 collections that directed users to websites that were likely steal usersâ crypto, according to an internal document.
âIf youâre ingesting every NFT on many blockchains, itâs just whack-a-mole.â
Former OpenSea employee
The platform also dealt with users attempting to list collections that purported to give purchasers membership to âan exclusive wealth club,â one person said.
And it wasnât always easy to parse whether a user was buying an NFT for the art or for its promised rewards, said another ex-staffer.
(The three former employees asked not to be named because they were not authorised to speak publicly about OpenSeaâs internal policies.)
NFT issuers were not happy when they got flagged.
âWe engaged constantly with people who were mad about their collections not being able to trade because weâd delisted them for potential financial elements,â another former employee said.
Employees in an all-hands meeting were instructed to watch what words they use when talking to each other or the public about NFTs, according to an internal document.
Instead of âprofit,â employees were instructed to say âappreciationâ or âvalue change.â
âFun rideâ
DAO Turtles did promise to âbring valueâ to its holders, according to its site, and OpenSea took action.
When users could no longer buy or sell DAO Turtles NFTs on the platform, the collection cratered.
âOur project has been frozen on OpenSea quite early on, which killed our momentum completely,â wrote the DAO Turtles team in a May 2022 message on Discord.
Almost one year later, DAO Turtles released a video game based on its moribund NFT collection.
âThis brings our story to an end,â wrote the team at the time. âIt was a fun ride.â
Ben Weiss is a Dubai Correspondent at DL News. Got a tip? Email him at bweiss@dlnews.com.
âAbsurd,â said Kraken founder Jesse Powell.
âUnamerican,â tweeted Tyler Winklevoss, the CEO of Gemini.
Devin Finzer, the co-founder and CEO of OpenSea, also weighed in.
âWeâre shocked the SEC would make such a sweeping move against creators and artists,â he wrote in response to an SEC letter warning of a potential enforcement action.
Jokes spread online depicting the Mona Lisa, Pokemon cards, and digital sports tickets as the SECâs next potential targets. They mocked the idea that images and artwork could be construed as securities, and subject to federal laws.
But OpenSea, one of the largest global marketplaces for NFTs, has taken actions that suggest it has been aware for years that some NFT collections listed on its site are more than just art, according to three former employees of OpenSea, as well as company documents seen by DL News.
Delisted and disabled
OpenSea has regularly delisted or disabled non-fungible tokens, or NFTs, that may behave like financial instruments. It has targeted âanything which promised returns, had a token, or could be construed as a security in any way,â a person familiar with the practice told DL News.
The company issued a vocabulary guide directing employees to avoid using financial terms such as âbroker,â âshares,â âtradingâ or âexchange,â in their communications, according to one company document.
While crypto leaders may scoff at the idea that NFTs are securities and ridicule Gensler and the SEC, OpenSeaâs longstanding efforts to weed out problematic collections complicates the narrative. Aware of potential problems, the company acted.
A spokesperson for OpenSea declined to comment on questions sent by DL News for this article.
OpenSeaâs tangle with the SEC comes as the venture struggles to recapture the mojo that drove the NFT space to such giddy heights in 2021. OpenSeaâs revenue multiplied more than 18 times between the second and third quarter that year, to $167 million, according to an internal document.
Now, as the popularity of Bored Ape Yacht Club and other NFTs wane, OpenSeaâs monthly volume has plunged about 55% in the last 12 months, to $36 million, according to Dune Analytics.
Through it all, OpenSea has laboured to screen the many NFT collections that have been listed on its platform.
Disabled turtles
In October 2021, OpenSea disabled trading of a collection called DAO Turtles after finding the pixelated images of the shelled amphibians violated its terms of service, according to social media posts by DAO Turtles.
That meant visitors to OpenSea could still see the NFTs, but they couldnât buy or sell them.
OpenSea told DAO Turtlesâ team that NFT collections could not use the platform to carry out financial services such as âlisting, or buying securitiesâ and similar instruments, or fundraising, according to a screenshot of an email.
While OpenSea did not provide any details on precisely why DAO Turtles raised a red flag, the NFTs were more than images on a blockchain.
Owners could collect royalties from future releases, and receive an associated cryptocurrency called Turtleshells, according to an archived version of the projectâs website.
Not just art
Other collections OpenSea delisted or disabled on its site for violating the prohibition on financial assets include Steady Stack, and Yaypegs, said a former employee.
The teams behind DAO Turtles and Yaypegs did not respond to requests for comment. A representative for Steady Stack could not confirm why the collection was delisted.
Non-fungible tokens donât just represent art. Many stand in for physical objects, virtual real estate, and more.
Regulators have been building cases that NFTs can be securities or regulated financial instruments. In May 2023, former OpenSea employee Nate Chastain was convicted in the first-ever NFT insider trading case.
âWe have a strong responsibility to our community, and we take any breach of trust incredibly seriously,â wrote Finzer after Chastain resigned.
And archived versions of OpenSeaâs website show that it hosted three collections that the SEC later slapped with securities-related charges.
The collections â Impact Theory, Stoner Cats, and Flyfish Club â settled with the SEC without admitting or denying allegations.
Terms of service
From the get-go, OpenSea addressed the financial capabilities of NFTs in its terms of service.
âWE ARE NOT A BROKER, FINANCIAL INSTITUTION, OR CREDITOR,â reads the earliest archived copy of its terms of service from August 2018, which was printed in all caps to hammer the point home.
Two years later, in October 2020, OpenSea added clauses that prohibited users from âany financial activities subject to registration or licensing, including but not limited to creating, listing, or buying securities, commodities, options, real estate, or debt instruments.â
âCan you use an NFT to make a securities offering? Absolutely.â
Philip Moustakis, securities lawyer
The marketplace also barred any assets âthat are redeemable for financial instruments or that give owners rights to participate in an ICO or any securities offering.â
ICO is an acronym for an initial coin offering, a token distribution practice the SEC targeted around 2018.
In 2022, the SEC began to send OpenSea information requests, The Verge reported in August. As part of that process, the company received a Wells notice, which is a notification the agency sends to the target of a potential enforcement action. Finzer said in August that OpenSea received the notice ârecently.â
Securities offering
If the SEC sues OpenSea, it would have to show that certain NFT collections the company listed are unregistered securities, said Philip Moustakis, a New York-based securities lawyer at Seward & Kissel.
âCan you use an NFT to make a securities offering? Absolutely,â he told DL News.
Moustakis added that itâs not about the technology, but rather the offering, or the initial sale of objects, which can be pieces of paper, computer code, or even citrus groves.
Generally, the SEC follows legal guidance that an asset is a security if purchasers have a âreasonable expectation of profit from others.â
On September 19, users sued OpenSea for allegedly offering NFTs that behaved like financial instruments.
âNFTs are treated like securities by OpenSea despite being unregistered with the SEC,â said the complaint, which is being managed by Adam Moskowitz, a lawyer behind some of the largest class-action lawsuits in crypto.
OpenSea rejected the claim.
âConjuring from thin air a purported class action lawsuit based on our disclosure of an SEC Wells notice wonât make the allegations in the complaint true,â said an OpenSea spokesperson. âWe refute these allegations and look forward to defending against this baseless lawsuit.â
âWhack-a-moleâ
It fell to OpenSeaâs Trust and Safety compliance team to police the huge volume of content hitting the site day in and day out. The NFT marketplaceâs legal and moderation teams were âdedicated beyond beliefâ and used computer programmes to sift through the flood of content hitting the site, said one former staffer.
âBut if youâre ingesting every NFT on many blockchains, itâs just whack-a-mole,â they said.
In the third quarter of 2023, OpenSea delisted more than 20,000 collections that directed users to websites that were likely steal usersâ crypto, according to an internal document.
âIf youâre ingesting every NFT on many blockchains, itâs just whack-a-mole.â
Former OpenSea employee
The platform also dealt with users attempting to list collections that purported to give purchasers membership to âan exclusive wealth club,â one person said.
And it wasnât always easy to parse whether a user was buying an NFT for the art or for its promised rewards, said another ex-staffer.
(The three former employees asked not to be named because they were not authorised to speak publicly about OpenSeaâs internal policies.)
NFT issuers were not happy when they got flagged.
âWe engaged constantly with people who were mad about their collections not being able to trade because weâd delisted them for potential financial elements,â another former employee said.
Employees in an all-hands meeting were instructed to watch what words they use when talking to each other or the public about NFTs, according to an internal document.
Instead of âprofit,â employees were instructed to say âappreciationâ or âvalue change.â
âFun rideâ
DAO Turtles did promise to âbring valueâ to its holders, according to its site, and OpenSea took action.
When users could no longer buy or sell DAO Turtles NFTs on the platform, the collection cratered.
âOur project has been frozen on OpenSea quite early on, which killed our momentum completely,â wrote the DAO Turtles team in a May 2022 message on Discord.
Almost one year later, DAO Turtles released a video game based on its moribund NFT collection.
âThis brings our story to an end,â wrote the team at the time. âIt was a fun ride.â
Ben Weiss is a Dubai Correspondent at DL News. Got a tip? Email him at bweiss@dlnews.com.
EigenLayer token kicks off trading â some risks to watch amid the hype
A version of this article appeared in our The Decentralised newsletter on October 1. Sign up here.
GM, Tim here.
EigenLayerâs token hits the market.
Mango Markets settles with the SEC.
How two DeFi founders turned their rivalry into a bromance.
EIGEN token trades
Six months after EigenLayer airdropped its token, holders can finally sell it.
On Tuesday, the Eigen Foundation, the non-profit that manages the EIGEN governance token, upgraded EIGENâs code to make it tradable.
Traders are flocking to EIGEN hoping to profit from the volatility.
Bulls have a decent amount going for them:
Estimates put only 2.5% of EIGENâs supply as available for trading.
EIGEN unlocks for the protocolâs team and investors wonât begin for one year.
The wider crypto market is pumping.
There are also reasons to be cautious:
Whales hold a lot of tokens. The top wallet has over 2.5 million.
Most airdropped tokens this year have failed to rally.
EIGENâs fully-diluted valuation is already over $7 billion.
Tokens that launched at similar high valuations to EIGEN have performed poorly.
The EIGEN tokenâs May launch was marred by controversy.
Recipients criticised the confusing communication surrounding the announcement, the small number of tokens allocated for the airdrop, and the decision to exclude US users.
In response, EigenLayer addressed the confusion and increased airdrop allocations for small users.
SEC ends Mango DAO
The US Securities and Exchange Commission announced Friday a settlement with the companies behind Solana DeFi protocol Mango Markets.
Mango DAO, Blockworks Foundation, and Mango Labs agreed to collectively pay fines of $700,000 without admitting or denying the allegations from the SEC.
The settlement also stipulates the organisations shut down the Mango DAO collective that governs the protocol.
They agreed to destroy their MNGO tokens, to request the removal of MNGO from trading platforms, and to refrain from soliciting any trading platform to allow trading in or offering or selling MNGO.
Separately, pseudonymous Mango DAO member Daffy plans to file a legal complaint against two of the DAOâs leaders â John Kramer and Max Schneider â over alleged fraud.
A DeFi bromance
Stani Kulechov, the founder of Aave, and Rune Christensen, the co-founder of Sky, havenât always seen eye to eye.
Neither have their communities.
But thatâs all in the past, the protocolâs founders told DL News in interviews.
The two DeFi giants are now working closer than ever.
âWe have this DeFi renaissance moment where people are looking back at whatâs been built in DeFi and what actually has legs and fundamentals,â said Kulechov.
âThatâs Aave, and thatâs Sky.â
âItâs about sending a message to the broader space,â said Christensen. âSky and Aave can figure out how to work together.â
This week in DeFi governance
VOTE: Arbitrum DAO increases security with treasury time lock extension
VOTE: Uniswap DAO onboards Forse by StableLab as a data service provider
VOTE: Jupiter DAO decides what to do with 215 million unclaimed tokens
Post of the week
Crypto Twitter sums up EigenLayer and its EIGEN token.
Ah yes, another project using blockchain technology, which nobody can explain the purpose of, valued in the billions of dollars
Bidding
â Sisyphus (@0xSisyphus) October 1, 2024
What weâre watching
Su Zhu and Kyle Davies, founders of disgraced crypto trading firm Three Arrows Capital, have spun up a new memecoin investing fund and launched a token for it.
run it back @threearrowzcap
â æ±æșŻ đ (3/AC) (@zhusu) September 27, 2024
Got a tip about DeFi? Reach out at tim@dlnews.com.
GM, Tim here.
EigenLayerâs token hits the market.
Mango Markets settles with the SEC.
How two DeFi founders turned their rivalry into a bromance.
EIGEN token trades
Six months after EigenLayer airdropped its token, holders can finally sell it.
On Tuesday, the Eigen Foundation, the non-profit that manages the EIGEN governance token, upgraded EIGENâs code to make it tradable.
Traders are flocking to EIGEN hoping to profit from the volatility.
Bulls have a decent amount going for them:
Estimates put only 2.5% of EIGENâs supply as available for trading.
EIGEN unlocks for the protocolâs team and investors wonât begin for one year.
The wider crypto market is pumping.
There are also reasons to be cautious:
Whales hold a lot of tokens. The top wallet has over 2.5 million.
Most airdropped tokens this year have failed to rally.
EIGENâs fully-diluted valuation is already over $7 billion.
Tokens that launched at similar high valuations to EIGEN have performed poorly.
The EIGEN tokenâs May launch was marred by controversy.
Recipients criticised the confusing communication surrounding the announcement, the small number of tokens allocated for the airdrop, and the decision to exclude US users.
In response, EigenLayer addressed the confusion and increased airdrop allocations for small users.
SEC ends Mango DAO
The US Securities and Exchange Commission announced Friday a settlement with the companies behind Solana DeFi protocol Mango Markets.
Mango DAO, Blockworks Foundation, and Mango Labs agreed to collectively pay fines of $700,000 without admitting or denying the allegations from the SEC.
The settlement also stipulates the organisations shut down the Mango DAO collective that governs the protocol.
They agreed to destroy their MNGO tokens, to request the removal of MNGO from trading platforms, and to refrain from soliciting any trading platform to allow trading in or offering or selling MNGO.
Separately, pseudonymous Mango DAO member Daffy plans to file a legal complaint against two of the DAOâs leaders â John Kramer and Max Schneider â over alleged fraud.
A DeFi bromance
Stani Kulechov, the founder of Aave, and Rune Christensen, the co-founder of Sky, havenât always seen eye to eye.
Neither have their communities.
But thatâs all in the past, the protocolâs founders told DL News in interviews.
The two DeFi giants are now working closer than ever.
âWe have this DeFi renaissance moment where people are looking back at whatâs been built in DeFi and what actually has legs and fundamentals,â said Kulechov.
âThatâs Aave, and thatâs Sky.â
âItâs about sending a message to the broader space,â said Christensen. âSky and Aave can figure out how to work together.â
This week in DeFi governance
VOTE: Arbitrum DAO increases security with treasury time lock extension
VOTE: Uniswap DAO onboards Forse by StableLab as a data service provider
VOTE: Jupiter DAO decides what to do with 215 million unclaimed tokens
Post of the week
Crypto Twitter sums up EigenLayer and its EIGEN token.
Ah yes, another project using blockchain technology, which nobody can explain the purpose of, valued in the billions of dollars
Bidding
â Sisyphus (@0xSisyphus) October 1, 2024
What weâre watching
Su Zhu and Kyle Davies, founders of disgraced crypto trading firm Three Arrows Capital, have spun up a new memecoin investing fund and launched a token for it.
run it back @threearrowzcap
â æ±æșŻ đ (3/AC) (@zhusu) September 27, 2024
Got a tip about DeFi? Reach out at tim@dlnews.com.