Decentralized Diaries for the Week of 5/13/24

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With the elections coming (in November), both sides of the political spectrum have differing views on how crypto firms should operate.  That said, the SEC continued its fiery actions while allegations of improper behavior continued to trail crypto exchanges. 

In the headlines:

  • Institutional interest in crypto continued to rise;
  • Tokenization is coming, like it or not;
  • Jack Dorsey made a bold prediction (read on to find out);
  • The Bitcoin Lightning Network is taking center stage;
  • Plus, privacy coins are going to the fringes (fast);
  • And much more!

As always, these are your decentralized diaries!


Bitcoin Tests Support Levels at $62k

Bitcoin dropped from a $64,390.46 high. The top crypto token continues to try and find support at $62,771.76 after hitting a $60,208.78 low (as of 5/13/24). The altcoins are also moving similarly. 

Ethereum (ETH) is currently at $2,965.10, Solana (SOL) at $145.74, Avalanche (AVAX) at $33.15, Polkadot (DOT) at $6.70, and Chainlink (LINK) at $13.49. 

The Crypto Drama on Capitol Hill Continued

Both sides of the aisle on Capitol Hill hit back at each other. Things got heated during a May 7 House Financial Services subcommittee hearing. 

Capital Markets Subcommittee Chair Rep. Ann Wagner (R-MO) stung the SEC over its actions in the Debt Box case. Rep. Brad Sherman (D-CA) responded by indicating that the regulator fired the lawyers implicated in the case. 

Fireblocks Unveiled New York-Regulated Trust Company Formation Plans

Boutique crypto custody firm Fireblocks revealed plans to establish a New York-based Trust company in May. Pending final regulatory approval by the New York Department of Financial Services (NYDFS), the firm will offer cold custody services to American residents. 

Additionally, Fireblocks plans to create a global crypto custody program in several jurisdictions, including the United Kingdom, the United Arab Emirates (UAE), Thailand, Australia, and Singapore. 

Several Financial Institutions Revealed their Bitcoin ETF Exposure in SEC Filings

Institutional exposure to the cryptocurrency space continued to rise. Several firms revealed their Bitcoin ETF exposure in their filings. Filings from JPMorgan Chase, Susquehanna International Group, LLP (SIG), and Wells Fargo showed an increasing foothold.

In related news, ARK Invest and 21Shares amended their filed application for an Ethereum Spot ETF to exclude staking activities, a sign that the consensus mechanism could (potentially) hinder the approval process. 

BlockFi Unveiled Closure Plans 

Bankrupt crypto exchange BlockFi on May 9 announced the final closure of its doors and the shutdown of its website. Additionally, eligible clients will be able to withdraw their assets via Coinbase. Former customers without Coinbase accounts will receive cash. 

Key Players Tested a Blockchain-Powered Tokenization Network

According to a May 8 Bloomberg report, several key players in the American financial system, including Visa, Mastercard, Citi, Wells Fargo, US Bancorp, and others, collaborated to test a tokenization ledger that enables blockchain settlements. The “Regulated Settlement Network” mimics dollar settlements for different securities.

WSJBinance Allegedly Ignored the Market Manipulation Activities of VIPs

A May 9 investigative report by the Wall Street Journal unveiled (alleged) preferential treatment by premier crypto exchange Binance per internal investigations involving (potential) market manipulation. 

According to the report, a member of its internal investigation team got fired after discovering (potential) market manipulation behavior by DWF Labs, a high-profile client. 

In contrast, Binance only made moves against the Justin Sun-linked Tron Foundation after moves from the SEC accusing Sun and affiliated entities of market manipulation and wash trading in 2023.

Sun denies all allegations and is currently in court against the SEC. 

CCData: The Six-Month-Rise in Centralized Exchange Trading Volumes Dropped in April

According to crypto market infrastructure provider CCData, the six-month bull run in trading volumes fell 43.8% in April to $6.58 trillion from $11 trillion in combined volume in March and $8 trillion in February.  

Kraken Pushed to Dismiss the SEC Lawsuit 

The ongoing legal battle between cryptocurrency exchange Kraken and the SEC continued, with the former filing a motion to dismiss. Kraken’s attorneys argued in their latest filing that the regulator did not identify any investment contracts on its platform. 

Also, the defense argued that the agency failed to satisfy the conditions of the Howey Test. In related news, in a May 7 brief, the SEC labeled Ripple’s planned stablecoin as an “unregistered crypto asset.” 

The SEC (also) brushed aside Ripple’s promises to adhere to American securities laws, citing its licenses in other jurisdictions as evidence of its intentions to continue breaking the law. Furthermore, the regulator asserted that the $1 billion penalty requested against Ripple is consistent with similar cases. 

During a May 10 WorldClass podcast, Ripple CEO Brad Garlinghouse sounded the alarm about the American government’s intentions to investigate Tether. Garlinghouse iterated that the crypto industry could have disruptions if authorities pursue Tether. 

Jack Dorsey-Bitcoin will Reach $1 Million by 2030

During a May 9 Pirate Wires interview, former Twitter CEO Jack Dorsey said that Bitcoin prices will reach $1 million in 2030 (and beyond). The Square founder also indicated that Bitcoin will go “beyond” his initial prediction. 

Additionally, Dorsey iterated that the team at Bluesky, his latest social network, were making the same mistakes he and others made at Twitter (now known as “X”). He also noted a need for more decentralization in the new social media network. 

Monero‘s Largest Peer-to-Peer Platform Revealed November Closure Plans

Following similar events, LocalMonero, the largest peer-to-peer marketplace for the Monero (XMR) blockchain, will close its doors in the fall. According to a May 7 post on its website, LocalMonero has ended operations, new signups, and ads. Trading activities will (be) stopped on May 14. Also, the platform advised users to withdraw their funds before November 7.