SEC reviews Ripple ruling, US bill seeks control over DeFi, and more: Hodler’s Digest, July 16-22
Top Stories This Week
Chair Gensler says SEC reaction to Ripple decision is mixed, still under consideration
U.S. Securities and Exchange Commission Chair Gary Gensler has commented publicly about the recent ruling on the agency’s suit against Ripple, saying the SEC is “still looking at it and assessing that opinion.” Gensler declined to comment further on the case, but said the commission is pleased with the court’s decision stating that XRP was a security when sold to institutional investors, but disappointed with the non-security ruling for retail investors and other XRP distributions. Comments made by the regulator on July 21 in a lawsuit hinted that it might appeal the decision. In the crypto community, however, some believe it is unlikely to happen as the SEC benefits from the “current confusion.”
Bipartisan bill to regulate DeFi, crypto security risks introduced into US Senate
A bipartisan bill was introduced into the U.S. Senate, tightening regulations and sanctions requirements for decentralized finance (DeFi). The bill would subject DeFi operations to the same requirements as “other financial companies, including centralized crypto trading platforms, casinos, and even pawn shops.” The proposal also makes “anyone who controls that project” liable for the use of the DeFi service by sanctioned persons. The bill also set new requirements for operators of crypto kiosks (or ATMs) to prevent their use in money laundering. Kiosk operators would be required to verify the identities of both counterparties in a transaction.
Altcoins ‘bled’ as Bitcoin gained dominance in Q2: CoinGecko
The second quarter of the year has been a solid one for Bitcoin’s performance as its market dominance gained against altcoins, which “bled” throughout the period, according to CoinGecko’s industry report. Bitcoin (BTC) and Ether (ETH) continued to build their market share over the past months, while Binance Coin (BNB), XRP (XRP), and Cardano (ADA) suffered double-digit losses over the quarter. DeFi tokens were hit particularly hard during the quarter, with Uniswap (UNI), Chainlink (LINK) and Lido (LDO) taking double-digit losses as well. The top five metaverse and play-to-earn tokens by market cap also marked losses up to 40%.
Multiple spot crypto ETF applications go to Federal Register in step toward SEC approval
Applications from several firms for a spot Bitcoin exchange-traded fund (ETF) have been published in the Federal Register, moving them one step along in the U.S. SEC process. According to the records, applications from BlackRock, Fidelity, Invesco Galaxy, VanEck and WisdomTree were officially registered. Publishing the applications gives the SEC a window of opportunity to accept or reject the request, extend the time allowed or open the application for public comment. The SEC has an initial window of 45 days to reach a decision, but the commission has the option of extending the process for up to 240 days — until March 2024 — for final approval or denial.
Robert F. Kennedy Jr. vows to back US dollar with Bitcoin if elected president
Democratic presidential candidate Robert F. Kennedy Jr. has promised to progressively back the United States dollar with Bitcoin if he is elected president. Kennedy said during an event that backing the U.S. dollar with what he called “hard currency,” including gold, silver, platinum or Bitcoin, could help to re-stabilize the American economy. Kennedy explained the process would be gradual and that, depending on the plan’s success, he’d adjust the amount of backing for the dollar. Additionally, Kennedy declared he would make Bitcoin-to-U.S. dollar conversions exempt from capital gains taxes in an attempt to spur investments in the country.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $29,883, Ether (ETH) at $1,894 and XRP at $0.78. The total market cap is at $1.2 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Maker (MKR) at 32.18%, XDC Network (XDC) at 24.19% and Stellar (XLM) at 20.88%.
The top three altcoin losers of the week are Rocket Pool (RPL) at -14.95%, GMX (GMX) at -10.93% and Lido DAO (LDO) at -7.90%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Read also
Most Memorable Quotations
“For me, the lack of protection for retail investors underscores the fierce urgency around passing a market structure bill to protect the average American consumer.”
Ritchie Torres, New York Representative
“Japan, Korea, China, all these places are pushing Web3 in a really big way because they see that as an opportunity to break away from basically U.S.-dominant technologies.”
Yat Siu, co-founder of Animoca Brands
“Backing dollars and U.S. debt obligations with hard assets [gold, silver, platinum or Bitcoin] could help restore strength back to the dollar.”
Robert F. Kennedy Jr., U.S. Democratic presidential candidate
“Based on Metcalfe’s law model, fair value for Bitcoin is around $55K. So I think we drift upwards toward that level.”
Mark Yusko, chief investment officer at Morgan Creek Capital
“[The Ripple ruling] has made our argument more compelling and more urgent, meaning that we can’t just rely on enforcement to get the kind of investor protection standards we need.”
Timothy Massad, former chair of the U.S. Commodity Futures Trading Commission
“The Commission benefits from the current confusion and losing these issues on appeal would jeopardize its entire enforcement agenda. So I’d be surprised if the SEC tried to appeal now.”
Kathryn Haun, CEO of Haun Ventures
Prediction of the Week
Bitcoin Bollinger Bands echo move that ended in 40% January gains
Bitcoin is lining up a burst of volatility that could rival its 40% January gains, on-chain data suggests.
BTC price has acted in a tight range for an entire month, using $30,000 as a focal point for sideways behavior, putting both bulls and bears to the test. According to popular analyst Aksel Kibar:
“Seems like $BTCUSD is exhausting many trader’s patience,” he wrote on July 21, before adding that this “is usually the condition you see before strong moves. Not sure about the direction though. I will stick with my well-defined boundaries. I know that increased volatility is around the corner. Capture the directional move.”
According to Bollinger Bands behavior, a classic volatility indicator, this move should come sooner rather than later as it’s printing a telltale sign that the days of rangebound BTC price action are at an end.
FUD of the Week
Crypto firms and influencers may need to start including disclaimers on crypto memes to stay compliant with advertising laws in the United Kingdom. The country’s Financial Conduct Authority (FCA) released, on July 17, a proposed guidance on social media financial promotions that targets promotional memes and financial influencers — or “finfluencers.” The FCA considers crypto a high-risk investment. Per the FCA’s proposal, crypto can be advertised to retail investors at large, but there are requirements such as including risk warnings and a ban on investment incentives.
Uniswap founder Hayden Adams’ Twitter account was compromised on July 20. His account released a tweet to its more than 254,000 followers falsely claiming that the platform’s Permit2 contract had been “affected by an unknown exploit” and users’ tokens were at risk, encouraging them to click on a malicious link. The “Web3 Security Alerts” channel on Telegram detected the scam attempt and reported that Adams had also been blocked from his accounts with MetaMask and Coinbase Wallet.
Couple behind Bitfinex money laundering scheme reach plea deal with US prosecutors
Two people accused of having laundered billions of dollars worth of Bitcoin connected to the 2016 Bitfinex hack have reached a plea agreement with authorities in the United States. The pair had been charged with money laundering conspiracy and conspiracy to defraud the U.S., and they are expected to forfeit digital assets connected to the case. Crypto exchange Bitfinex was hacked in August 2016, with roughly 119,754 Bitcoin stolen.
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Politics
Concessions to welfare reforms to be revealed after Labour backbench rebellion forces government retreat
Changes to welfare reforms, forced on the government by rebel Labour MPs, are being revealed today ahead of a crucial vote.
The original bill restricted eligibility for the personal independence payment (pip) and cut the health-related element of universal credit (UC).
The government, which insisted welfare costs were becoming unsustainable, was forced into a U-turn after 126 Labour backbenchers signed an amendment that would have halted the bill at its first Commons hurdle.
Explainer: What are the welfare concessions?
While the amendment is expected to be withdrawn, after changes that appeased some Labour MPs, others are still unhappy and considering backing a similar amendment to be tabled today.
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Starmer defends welfare U-turn
Here are the main changes to the UC and pip bill:
• current pip claimants will keep their benefits; stricter eligibility requirements will only apply to new claims from November 2026
• a review of the pip assessment, which will have input from disabled people
• existing recipients of the health-related element of UC will have their incomes protected in real terms
Work and Pensions Secretary Liz Kendall said in a statement that the legislation now aims to deliver a “fairer, more compassionate system” ahead of the second reading and vote on Tuesday.
“We must build a welfare system that provides security for those who cannot work and the right support for those who can. Too often, disabled people feel trapped, worried that if they try to work, they could lose the support they depend on.
“That is why we are taking action to remove those barriers, support disabled people to live with dignity and independence, and open routes into employment for those who want to pursue it.
“This is about delivering a fairer, more compassionate system as part of our Plan for Change which supports people to thrive, whatever their circumstances.”
Work and Pensions Secretary Liz Kendall insists welfare reforms will create ‘a fairer, more compassionate system’. Pic: PA
On Saturday, Sir Keir Starmer said fixing the UK’s welfare system was a “moral imperative”. The government claimed cuts to sickness and disability benefits would shave £5bn off the welfare bill and get more people into work.
The Resolution Foundation believes the concessions could cost as much as £3bn, while the Institute for Fiscal Studies warned that the changes make tax rises more likely.
Read more:
Starmer’s most damaging U-turn yet
Liz Kendall defends welfare retreat
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Health Secretary Wes Streeting told Sky News that welfare bill changes have put Labour in a much better position ahead of tomorrow’s vote.
On Sunday Morning with Trevor Phillips, Mr Streeting said: “There were things that we didn’t get right, we’ve put right, and there’ll be a debate about future amendments and things, I’m sure, as it goes through in the usual way.”
Talking to Sky News about the welfare reforms, Health Secretary Wes Streeting said there were things Labour ‘didn’t get right’
On the same programme, shadow work and pensions secretary Helen Whately repeatedly refused to say whether the Conservatives would back the bill, but would review the proposals after the minister’s statement later.
“We have said that if there are more savings that actually bring the welfare bill down, if they’ll get more people into work, and if they commit to using the savings to avoid tax cuts in the autumn, which looks highly unlikely at the moment, then they have our support.”
The Liberal Democrats plan to vote against the bill and have called for the government to speed up access-to-work decisions to help people enter the workforce.
Wes Streeting has suggested he is confident the government will now win a crunch vote on welfare cuts after Sir Keir Starmer made a number of concessions to prevent a damaging rebellion.
The health secretary told Sunday Morning With Trevor Phillips the alterations to the controversial welfare bill meant those in receipt of benefits now had “peace of mind”.
Asked whether he was confident the government would now win a vote on the reforms scheduled for Tuesday, Mr Streeting said: “Yes.
“I think the changes that were made this week have put us in a much better position, not just on the vote on Tuesday, but on the substance of the package – because as a result of the changes, it means anyone watching this morning who’s in receipt of PIP, Personal Independence Payments, now has the peace of mind of knowing that their situation is protected.”
It comes after the prime minister carried out the most significant U-turn of his premiership at the end of the week in order to quell a growing rebellion over his welfare package.
More than 120 Labour MPs had signalled they were prepared to vote down the bill next week after they signed an amendment that would have stopped its progress through parliament – citing concerns about the impact on the most vulnerable and the lack of proper consultation with disabled groups.
The scale of the rebellion – and the fact it spanned all wings of the party – alarmed Downing Street and led to Sir Keir making a number of changes to diffuse the anger.
Originally, the bill set out to tighten the eligibility criteria for PIP – money that is given to people, some of whom are in work, who have extra care or mobility needs as a result of a disability.
People who claim it are awarded points depending on their ability to do certain activities, such as washing and preparing food, which influences how much they will receive.
Currently claimants need to score a minimum of eight points across a range of tasks to qualify for the daily living element (there is a mobility element that is not affected by the plans). Under the new rules people will need to score a minimum of four points in at least one activity to qualify.
However, the changes made by Sir Keir mean existing PIP claimants will now be exempted from the stricter new criteria.
Alterations to Universal Credit, another type of benefit, mean that the health top-up will only be cut and frozen for new applications, as opposed to existing ones.
Read more:
What are the concessions to the welfare bill – and will MPs back it?
Welfare has been Starmer’s most damaging U-turn yet
Mr Streeting declined to say whether he thought those who decide to vote against the bill should lose the party whip, which would force them to sit as an independent MP in the Commons.
He said it was “not my decision”, but added that there was an “expectation that Labour MPs vote for the whip”.
In a series of interviews over the weekend, the prime minister acknowledged there had been some mishandling of the welfare debate and said he was “heavily focused” on world affairs before he was forced to U-turn on his welfare bill.
In a piece in The Sunday Times, Sir Keir said he was occupied with the G7 and NATO summits and the escalating tensions in the Middle East for much of the past two weeks.
“Getting it right is more important than ploughing on with a package which doesn’t necessarily achieve the desired outcome,” he said, adding that all the decisions made were his and that “I take ownership of them”.
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