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Weekly Update: 3rd of July

Hodl Team
Hodl Team
3 July 2024
Welcome to our weekly update, where we provide insights into the latest developments in the digital assets market.

What happened between the 26th of June and the 3rd of July?

  • The Securities and Exchange Commission (SEC) sues software developer Consensys over its Metamask swaps and staking services for failing to register as a broker and offering unregistered securities. Read more

  • US asset managers 21Shares and VanEck file for a U.S. spot Solana ETF, potentially introducing a third digital asset to US traditional financial markets. Read more

  • The Ethereum spot ETF is delayed to mid-to-late-July as the SEC has commented on the S-1 forms and requested resubmissions by the 8th of July. Read more

  • Cryptocurrency exchange Coinbase sues the SEC and the Federal Deposit Insurance Corporation over its Freedom of Information Act requests. Read more

SEC continues legal attack by suing Consensys

On the 28th of June, the SEC filed a complaint in the U.S. District Court in the Eastern District of New York that it was suing Consensys over its Metamask swaps and staking services. Through the eyes of the SEC, Consensys failed to register as a broker as it engaged in offering and selling of unregistered securities in the form of crypto asset staking programs, and acted as an unregistered broker, through its MetaMask Staking service. Consensys has published a statement in which they discuss that they were expecting this move by the SEC and that is just another example of ad hoc enforcement action and regulatory overreach by the agency. The firm further stated that it would fight the case.

The first Solana spot ETF applications are a reality

On June 27th, asset manager VanEck filed for a US Solana spot ETF, stating that the asset should be treated as a commodity. According to VanEck, this financial instrument is designed to make it easier for institutions to invest in Solana, a competitor to Ether. The following day, asset manager 21Shares also filed for the same financial instrument. This development generated excitement and led to a short upward trend for Solana, Ether, and Bitcoin. However, industry experts believe it will take at least a year for such ETFs to become a reality if they meet the SEC's standards for spot ETFs for digital assets.

Ethereum spot ETF experiences delay

The Ethereum spot ETFs have been delayed as the SEC commented on the S-1 forms and requested resubmissions by the 8th of July. This will delay the launch of the financial instruments to mid-to-late July. This is a minor blow for the industry as many previously expected that the ETF would launch on the 2nd of July, so the exact timeline of the eventual launch is uncertain. Although the SEC has indicated that a potential launch could happen this summer, Gary Gensler, the Chair of the SEC, has also stated that a listing could take months and may not happen until September. So, the industry maintains its focus on this progress as it may act as a catalyst for a broader market uptrend.

Coinbase fights back against regulatory agencies

For the past two-and-a-half years, the digital assets market has been under regulatory attack from various agencies such as the SEC. While the industry has won various legal battles such as Grayscale and Ripple, various legal aspects remain unclear for digital assets firms. To tackle this issue, cryptocurrency Coinbase has asked the SEC on multiple occasions to release documents on closed investigations, which may reveal how it first began deciding what digital tokens the agency would consider as securities. However, the agency has denied all requests as it may undermine its law enforcement efforts. As a result, Coinbase is suing the SEC and the FDIC over its Freedom of Information Act requests, which might lead to the release of the closed documents and a better insight into the thought process of the SEC.

In other digital assets news

  • For the past two and a half months, Ethereum’s supply has increased by 112,000 Ether as activity on the network decreased, causing the issuance to surpass its burning mechanisms.

  • Bitcoin and the wider digital assets market may face headwinds as collapsed cryptocurrency exchange Mt.Gox starts repaying 140,000 Bitcoin to its creditors, these creditors have been waiting for 10 years for their assets and are most likely to sell.

 

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