Gary Gensler: Staking Crypto falls under the SEC

Gary Gensler: Staking Crypto falls under the SEC

Good morning, and welcome to Protocol Fintech. This Tuesday: Gensler vs. Ether, AmEx hiring, and Opendoor stumbles.

off chain

Bankruptcy experts may soon need to be blockchain analytics experts as well. The judge in the Celsius case recently agreed Appointment of an independent examiner. One issue that person might want to consider includes CEO Alex Mashinsky’s holdings of CEL, a Celsius token issued as a reward to depositors. one critic Claims to track suspicious transactions To a governor apparently controlled by Mashinsky and his wife. The case could also raise new issues about how separate the company and the token are. Watch this space (and those wallet addresses).

– Owen Thomas (E-mail | Twitter)

Could Gensler put ether to sleep?

Gary Gensler just gave Ethereum an early Halloween scare. The head of the SEC spooked the second largest cryptocurrency ecosystem by suggesting that the merger might have turned his ether token into a security.

Gensler did not mention Ethereum or ether by name. But his recent remarks about how staking features are consistent with the definition of security comes on the heels of Ethereum’s major shift from Proof of Work to Proof of Stake. They quickly sparked speculation that the regulator – who had long argued that most cryptocurrencies should be regulated as securities – was pooling ether with the rest.

Staking holders are expecting a return. Certainly, staking, which is a mainstay of DeFi, looks like a system in which “the investing public expects profits based on the efforts of others”, making the product offer security, Gensler to reporters After testifying before the Senate Banking Committee last week.

  • During the hearing, Gensler reiterated his opinion that Bitcoin is not a security, unlike the “vast majority” of other cryptocurrencies. He argued that the largest cryptocurrency “does not have a group of people in the middle. So the investing public is not betting on someone in the middle.”
  • Gensler’s views on ether, the most traded token after bitcoin, were not entirely clear. in His 2018 lectures at MITCompared to bitcoin, he said, “Ethereum is a bit more centralized and has more leadership,” with co-founder Vitalik Buterin playing a key role with “a kind of follower of the founders.”
  • His predecessor on the Securities and Exchange Commission, Jay Clayton, explained that Ether was not considered safe It dates back to 2019. Many speculated that Gensler would follow suit. So his comments on staking last week took the Ethereum community by surprise. Ether price It fell 11% after Gensler’s comments went viral.

What is Gensler really saying? Ether’s price bounced back again as investors and the Ethereum community realized that the SEC Chairman’s comments weren’t that clear. But that in and of itself could be a problem.

  • Kathy Yoon, MPCH’s chief legal officer, argued that “calling ether safe after all this time, even after changing the consensus mechanism, is a long way off.”
  • Crypto entrepreneur Alex Donmou noted that the SEC chief “doesn’t talk about him.” [ether] being security” but was addressing “staking derivatives” with a focus on crypto markets such as Coinbase, in a tweet. “Let’s not panic yet,” Danmo said.
  • Yoon noted that the confusion speaks to a larger issue. She told Protocol that the Securities and Exchange Commission, under Gensler’s oversight, “has consistently said that no guidance or clarification from the commission is needed because the law has been settled,” but crypto firms and investors grapple with a lot of uncertainty.

Discovering the SEC’s thinking on cryptocurrency has always been difficult. Yun said the regulator is making “big, big statements.” But besides pursuing “enforcement actions based on very specific facts and circumstances,” Gensler’s team “did nothing to dig deeper into their thinking process and how they apply existing laws and rules,” she said. There is a little clarity and a lot at stake.

– Benjamin Pimentel (E-mail | Twitter)

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on the money

NASDAQ is entering the field of cryptocurrency custody. a New group on the stock exchange Dedicated to digital assets will begin offering custody services for bitcoin and ether to institutional investors.

A long-awaited bill targeting Visa and Mastercard fees has been submitted to the House of Representatives. The legislationIts proponents hope to boost competition and cut costs by allowing merchants to route more credit card payments over networks that the two payment giants do not operate.

Meanwhile, American Express is looking for tech talent. AmEx Looking for software engineersprogrammers and developers as part of a 1,500-person hiring spree.

On the protocol: The Treasury wants to hear your comments on cryptocurrency.

New data shows that Opendoor has been hit hard by the downturn in the housing sector. Buyer He lost 42% of his transactions in August.

Ripple is pressing the court to decide on the lawsuit brought against it by the SEC. in separate movements, Both Ripple and SEC A federal judge has called for a ruling that cryptocurrency XRP violated federal securities laws or dismissed the lawsuit.

Cryptocurrency market maker Wintermute Hacked 160 million dollars. DeFi CEO, Evgeny Gaevoy, He said The company remained “capable of meeting its financial obligations” and its central market was not affected.

he heard

Crypto payments are It’s no longer hotat least among clients c. B. Morgan Chase. “We saw a lot of demand from our customers, let’s say until six months ago,” Takis Georgakopouloshead of global payments for the bank, told Bloomberg Television. “We see very little at the moment.”

Fintech reviews Didn’t fall down enough To start a real boom in mergers and acquisitions. “Unfortunately, we haven’t seen the valuation adjustments that happen in the public market type of business on their way to the private market,” AvidXchange Executive Director Michael Praeger Axios Pro said.

deal flow

San Francisco data infrastructure provider Goldsky raised 20 million dollars In the seed round. Felicis and Dragonfly Capital co-led the tour.

New York’s Cavaney raised the lease in exchange for owning fintech $18 million In a Series B funding round. The round was led by Third Prime, joined by former Series A investors.

Launched Majority App, a mobile banking app for immigrants to the United States $30 million In equity in Series B financing along with $7.5 million in debt financing. Valar Ventures led equity financing, with participation from existing investors.

Lifting Yellow Card Financial, a Nigerian Cryptocurrency Exchange 40 million dollars In Series B financing. Polychain Capital topped the round, coming almost one year after Series A.

Raised Ethic, a startup investment company that helps users align investments with their values 50 million dollars In a Series C funding round. Jordan Park led the tour with the participation of partners Nyca, Sound Ventures, Kapor Capital and others. The Duke and Duchess of Sussex entered the A Partnership with ethic company last year.

Message from VERSAPAY

When AR automation focuses on making your team more efficient, you leave out one key factor: the customer experience. Find out why financial leaders are taking a more collaborative approach to augmented reality in our exclusive survey of 1,000 C-suite CEOs.

learn more

Thanks for reading – see you tomorrow!

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