Decentralized Diaries for the Week of 2/12/24


How far can things explode in the cryptospace?

  • That’s a question for another day because prices are going through the roof despite regulatory pressures;
  • That said, the analysts at JP Morgan have a (somewhat) complicated view of the cryptospace (analysts always do);
  • BlackRock is singing the Bitcoin gospel from the hills (where is Aladdin?);
  • Plus, the crypto drama on Capitol Hill returned in earnest.

As always, these are your decentralized diaries!

Breaking: Bitcoin is on a Bull Run

The bulls are back in season, with Bitcoin prices swooping from a $42,298.3 low to a $48,796.38 high. Right now, things are swinging, with prices hitting a $49,883.65 green candle (as of 2/12/2024).

The altcoins are going there too.

Ethereum (ETH) is currently at $2,615.28, Solana (SOL) is at $110.08, Avalanche (AVAX) is at $41.03, Polkadot (DOT) at $7.34, and Chainlink (LINK) at $20.63.

JP Morgan: USDT Poses Compliance Risks to the Cryptospace

Analysts at JP Morgan, the banking behemoth, warned about regulatory and compliance issues surrounding Tether’s USDT, the world’s largest stablecoin.

In a research note, the analysts iterated that Tether’s “lack of regulatory compliance and transparency” posed risks to the digital asset markets. Also, the analysts gave Circe, the USDC issuer, the thumbs up per compliance.

In related news, a 2024 survey by the banking giant of over 4,000 market participants showed that institutional interest in the digital asset space is low, with 78% of respondents having no plans to trade crypto tokens.

Janet Yellen Called for Stricter Crypto Legislation

On February 8, in her testimony before the Senate Banking, Housing, and Urban Affairs Committee, Janet Yellen, the Treasury Secretary, called for stricter digital asset and AI legislation.

The testimony is a part of the Financial Stability Oversight Council (FSOC) annual report. Also, Yellen noted that emerging technologies are (extremely) complex. Yellen said that the new technologies could create gaps in financial systems while calling for increased vigilance.

BlackRock‘s Rick Rieder-Bitcoin Holds Potential

According to WSJ’s “Take On the Week”, BlackRock may (just) have gotten started with its Bitcoin plans. Rick Rieder, chief investment officer at BlackRock, stated during the interview that Bitcoin could be a part of a bigger picture at BlackRock. He said, “Time will tell whether it’s going to be a big part of the asset allocation framework.”

With a massive rise in interest, adoption could also go the same way. Rieder added, “I think over time, people become more and more comfortable with it.”

Bitget: Digital Assets Under Custody Increased 250% in Four Months

Things are looking up in the digital asset custody sector with increased opportunities. A recent report by Bitget, a spot cryptocurrency exchange, showed that digital assets under custody rose by 250% in four months, with custodian accounts nearly doubling since November. Also, Bitget identified expectations of Bitcoin ETF approval as the primary reason for the surge.

Bitwise Revealed its Bitcoin ETF Addresses

Bitwise, a leading digital asset management firm, unveiled its Bitcoin ETF Holdings’ wallet addresses. Also, Bitwise indicated that it based the decision on the transparency ethos of the Bitcoin community.

The firm is the first spot Bitcoin ETF to make the move.

The SEC Charged TradeStation Crypto for Making an Unregistered Offer and More

According to a February 7 press release, the SEC charged TradeStation Crypto, a Florida-based firm, for not registering a crypto sale offer alongside a promise to pay interest to investors. TradeStation agreed to a $1.5 million penalty payment. Also, the crypto company agreed to pay $1.5 million in fines to state regulators.

In related news, the regulator delayed its decision on the Invesco Galaxy Ethereum ETF application, citing legal and policy issues.

Also, the SEC voted 3-2 to implement a new framework that requires market participants with a pattern of crypto purchases and sales (to provide liquidity) to register. Trades below $50 million are exempt.

The enforcement action takes (special) aim at the DeFi sector.

Prosecutors Charged a Kansas-Based Former CEO with Fraud

Prosecutors at the US District Court of Kansas in Wichita charged Shan Hanes, the former CEO of Heartland Tri-State Bank, with embezzling customer funds. Hanes, a former community bank advocate, was charged with stealing approximately $43 million from the institution to fund crypto purchases.

US Senators Hit Back at the SEC for its Actions in the Debt BOX Case

Things were pretty hot for America’s top financial regulator, with six Senators expressing concern regarding its actions in the Debt BOX case. In a letter to Gary Gensler, the SEC Chair, the Senators expressed concern about the situation, iterating that the agency undermined public trust with such episodes.

Senators who signed the letter include Sen. J.D Vance (R-Ohio), Sen. Thom Tillis (R-NC), Sen. Bill Hagerty (R-TN), Sen. Cynthia Lummis (R-WY), and Sen. Katie Boyd Britt (R-AL).

In related news, in a February 7 Politico interview, Rep. Maxine Waters (D-CA) indicated that a stablecoin deal was in the works per legislation. Additionally, Rep. Waters indicated she spent months negotiating with Patrick McHenry (R-NC), the House Financial Services Committee Chair.