carVertical

Candace Kelly

The European Union has begun to enforce its Markets in Crypto Assets (MiCA) regulation, with stablecoin provisions now taking effect.&nbsp;



But while this landmark legislation provides crucial safeguarding for consumers and businesses, it also introduces challenging requirements for issuers, such as limits on transactions and strict capital, reserve and redemption requirements.&nbsp;



More than just a step forward in crypto regulation in Europe, MiCA warrants further discussion on ways that other jurisdictions like the United States can build and improve on regulatory requirements.&nbsp;&nbsp;



Crypto sentiment in the US is at an all-time high. With the looming election, both parties are eyeing crypto as a way to demonstrate action and progress. The passage of the Financial Innovation and Technology Act for the 21st Century (FIT21) in the House is a case in point and the product of many conversations asking for greater regulatory clarity.



However, we should not stop here. Perhaps even more so than other jurisdictions, the US must pass stablecoin legislation that addresses the $150 billion global market for dollar-denominated stablecoins.



Many other countries have already recognized the importance of stablecoin legislation: for example, Singapore, the United Kingdom and other countries in the European Union have each enacted some sort of stablecoin regulation. In the US, a bill introduced by Sens. Lummis and Gillibrand in April was the latest attempt at clarity for stablecoins — and with the movement of FIT21, there is still hope that we can get a well-shaped bill across the finish line.



Read more from our opinion section: <a href="https://blockworks.co/news/end-sec-war-on-crypto">It’s time to end the SEC’s war on crypto</a>



A lack of stablecoin regulation at the federal level is concerning. Without clear legislation, US stablecoin issuers will continue to be subject to dozens of state money transmitter laws that are neither uniformly designed nor consistently enforced regarding segregation of clients’ funds and the integrity of assets kept in reserve.



Between industry support and precedent from other countries, it is clear that legislation can and should be passed.&nbsp;



Fortunately, industry and policy leaders already agree on many of the components for sound stablecoin regulation, such as robust issuer requirements that prioritize consumer protection. Establishing clear guidelines can better support US businesses and unlock more opportunities for regular people.&nbsp;



The ability of stablecoins to open new paths for payments, cross-border remittances and financial access cannot be overstated —&nbsp;and many of these use cases are already happening. Solutions built using stablecoins today are created with the everyday user in mind, from facilitating bulk disbursements for humanitarian aid to refugees in Ukraine to enabling safe, cashless payments to workers in rural Colombian towns. Stablecoins provide a global digital asset with price stability, enabling swift, low-cost transfers and easy conversion to local currencies, thus addressing critical financial needs in volatile or underserved regions.



These examples may sound distant to the US reality, calling into question whether the US should even bother with stablecoin regulation. But that would be a mistake. Like it or not, more than 95% of stablecoins in circulation are dollar-denominated, putting the US at the center of the stablecoin debate. In practice, stablecoins are a way for people around the globe to hold digital dollars. That’s why Congress must have a say on stablecoin regulation, especially on how dollar-denominated stablecoins are issued and how its backing reserves are held.



For the US to fully realize the benefits of these new technologies, we need Congress to pass a strong legal framework for stablecoins. Doing so is critical to ensure the US leads the stablecoin debate, so that we’re not left watching from the sidelines.



The time for US stablecoin legislation is now. It will benefit consumers, the industry, America&#8217;s leadership in financial innovation and ultimately the position of the dollar as the global currency of choice.



<hr class="wp-block-separator has-alpha-channel-opacity"/>


<div class="wp-block-post-author-biography">Candace Kelly is the Chief Legal and Policy Officer for the Stellar Development Foundation (SDF), a non-profit organization that supports the development and growth of Stellar, an open-source network that connects the world&#8217;s financial infrastructure. She leads the team responsible for SDF’s legal affairs and the policy team that is focused on bridging the gap between the public and private sectors. Previously, Candace worked for Uber Technologies, Inc., where she helped navigate the company’s response to regulatory investigations and advised on safety, security, privacy, consumer protection, and law enforcement response. Prior to that she served for 17 years at the United States Department of Justice.</div>


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The time for US stablecoin regulation is now 

Felix Jauvin

Casey Wagner

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Welcome to the On the Margin Newsletter, brought to you by Felix Jauvin and Casey Wagner. Here’s what you’ll find in today’s edition:



<ul>
<li>You watched the debate, but did you watch the bond market? </li>



<li>Jerome Powell is in Sintra, but it sounds like he’s more concerned about inflation than getting a tan. We recap his remarks below. </li>



<li>Silvergate Bank may have shut its doors last year, but that doesn’t mean it’s off the SEC’s radar.</li>
</ul>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">As Biden&#8217;s odds of winning implode, so goes the bond market</h2>



Everyone saw the debate. Everyone’s seen the memes. I don’t need to get into that here. But one thing is for certain: The odds of a Republican sweep in the election are soaring.



The probability of a Trump win has one of the largest spreads between two frontrunners that I’ve ever seen:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXeRFhmsjSZSo-x_lyjQ9GUf0TiUnuA33hfwdgzwbwGyx5hz_rzh20n9WnZFd0R-Ye0PgftAljdUeDpXaW-dYyeAgavG4ckTIX3koOr744pDZViA0q0AgWhT959A8S4lXeihVBOIgcJRH6pgsMDdHUmsOB-p?key=rZcIjckoLJ6AAXgwgsGfWg" alt=""/></figure>



And more importantly, the odds of a Republican sweep have now increased substantially:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXe2FEZ4NKSi6O2SH1AEkp5R1gcRyOLAW9m2NYzE_S0YN7bJ3hpbS0RrAz1OetHdtlNCWzeCPnYm4duILVZ4B8nkLSgVxaMZSu9JZ2LdztzGUR9gzw3c88kgzwhx1iW1wy3ZivPZMjzdqfJoy_8INvYF2bmr?key=rZcIjckoLJ6AAXgwgsGfWg" alt=""/></figure>



In terms of market impact, the increasing likelihood of a sweep is what interests me. To start, one thing is certain: Both parties want to spend and print money and run a deficit, but each will do so differently.&nbsp;



<ul>
<li>If Democrats win, expect large fiscal stimulus bills, debt forgiveness and outsized investment in government sectors such as health care. </li>



<li>If Republicans win (especially under Trump), expect major tax cuts for individuals and corporations, a heavier hand in forcing dovish monetary policy and further incentives for corporations through removal of regulatory red tape. </li>
</ul>



Either outcome will lead to increased deficits regardless of where we are in the business cycle. However, what is uncertain is where Congress will end up (a split or a sweep). I believe this is what the market is beginning to wrap its head around.



Like I said, a Republican sweep is looking increasingly likely. This means they will have no issue passing any bill they want, allowing them to easily pursue policy objectives like tax cuts. Sure, a Trump presidency will lead to some executive orders that are friendly to corporations. But for real policy change to occur, he needs control of Congress.



I believe that the increasing odds of a Republican sweep is what set the bond market ablaze this week.



As Biden’s odds of winning the election imploded, so did long end bonds:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXeb9QyAwPnHYjEifL8PIeolSttk8mglcPFB_oxKgYC5-Fs555bl71J8sDDdt2bYSLPKa_et3Y8Yj0WFlLZ5btGDFmCDAmMZO3Rr2zHJqoR0SS9Sc_jd-GF8wrr5aZymabW7qhfqcGx-cSA_Cw1As-4TNgCI?key=rZcIjckoLJ6AAXgwgsGfWg" alt=""/></figure>



As bondholders saw the likely Republican sweep crystalize, they also realized that deficits are going to remain wider, leading to more debt needing to be issued and absorbed. Plus, inflation is likely to remain secularly higher.&nbsp;



In this brave new world of huge fiscal spending, you don’t want to be the sucker holding fixed income that is getting eroded by more debt issuance and higher inflation.



This is a crossing of a Rubicon-type moment as the US global monetary system increasingly resembles an emerging market rather than a global reserve currency one.



Someone who’s been all over this is regular On the Margin Podcast guest Luke Gromen, who tweeted the following:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXfbjqaM8x91fVwinGiuoDtp6o1qbC-ruG7cTWrHpCqFhYGknPASO5j56ONt_70saRXX9vvw0X7G04dFfMYW41-2aq7bn9aEQHqu71Rimr0NkRpiyhB1m-_PI2RN3tVEcjSr6-ufk-j7zwVgeR7BJZoDIYZW?key=rZcIjckoLJ6AAXgwgsGfWg" alt=""/></figure>



Indeed, since the end of the debate, the bond market has sent a clear message: Things are changing, and fast.



— Felix Jauvin



<h2 class="wp-block-heading">$107 million&nbsp;</h2>



The total value of crypto the German and US governments collectively moved on Monday.&nbsp;



German officials moved 1,500 BTC (valued around $95 million), while the US government transferred 3,375 ETH (worth about $12 million), according to analytics firm Arkham Intelligence.



“While this isn’t an indication of immediate selling, it can weaken buyer enthusiasm, contributing to recent sell-side dominance,” analysts from Wintermute said of the moves.



<h2 class="wp-block-heading">Powell’s European summer </h2>



Fed Chair Jerome Powell appeared alongside ECB President Christine Lagarde and Central Bank of Brazil President Roberto Campos Neto during the ECB Forum on Central Banking.&nbsp;



The trio talked inflation, interest rates and just a little bit of politics.&nbsp;



Powell said he expects US inflation to drop to the “mid-to-low” 2% range within a year, i.e., just above the Fed’s target. He added that central bankers need to see further economic data before they can confidently cut rates. When specifically asked about September — which <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">Fed fund futures markets</a> are still eyeing confidently — he was evasive.&nbsp;



“I&#8217;m not going to be landing on any specific dates here today,” Powell said.&nbsp;&nbsp;



“Let me also say that we&#8217;re well aware that if we go too soon, that we could undo the good work we&#8217;ve done in bringing down inflation, and if we go too late, we could unnecessarily undermine the recovery and the expansion… we&#8217;re aware that we have two-sided risks now, more so than we did a year ago,” he added.&nbsp;



Lagarde, unsurprisingly, evaded questions herself, declining to comment on the results of the French election. She did say the ECB is highly attuned to how markets react to political developments. We imagine Powell feels similarly, but he kept his answer diplomatic when asked if a second Donald Trump presidency would threaten central bank independence.&nbsp;



“I am not focused on that at all,” he said. “I worry about getting the job right.”



On a lighter note, Europe does have something we don’t this summer: a Taylor Swift tour. Nomura analysts <a href="https://www.nomuraconnects.com/focused-thinking-posts/swiftonomics-the-economic-power-of-superstar-concerts/#:~:text=In%20the%20US%2C%20Taylor%20Swift's,effect%20is%20probably%20more%20subdued.">say</a> Swift’s US tour last summer generated total consumer spending of $5 billion, almost half of which was retail sales. The <a href="https://www.philadelphiafed.org/-/media/frbp/assets/surveys-and-data/beige-book/2023/230712-bb.pdf">Philadelphia Fed</a> even said the Eras Tour boosted tourism across the region.&nbsp;



Powell can rest easy, though —&nbsp;Swift will be returning for a second US leg in October.&nbsp;



— Casey Wagner



<h2 class="wp-block-heading">Another day, another lawsuit </h2>



If I had a dollar for everytime I wrote “the SEC sued…,” I probably wouldn’t have to keep writing about lawsuits. But I won’t quit my day job just yet.&nbsp;



Yesterday, the SEC announced charges against Silvergate Bank, the crypto-friendly financial institution that collapsed last year.&nbsp;



The securities regulator says Silvergate <a href="https://blockworks.co/news/sec-sues-silvergate-bank-for-misleading-public">misled investors</a> in the aftermath of FTX’s <a href="https://blockworks.co/news/ftx-meltdown-timeline">implosion</a> by intentionally downplaying the impact. The bank was also deceptive about its anti-money laundering and Bank Secrecy Act compliance programs, the SEC alleges.&nbsp;



Also named in the suit were three former Silvergate executives: CEO Alan Lane, Chief Risk Officer Kathleen Freher and CFO Antonio Martino.



Silvergate, without confirming or denying the allegations, agreed to pay $63 million to federal and state regulators, plus $50 million to the SEC in a settlement agreement. Lane and Fraher also settled for $1 million and $250,000, respectively.&nbsp;



These settlements are always interesting. They allow firms to avoid costly and time-consuming litigation without admitting defeat or risking a loss in court.&nbsp;



But in Silvergate’s case, it’s a bit different. The bank is already in liquidation. Plus, the breakdown of the fines means Silvergate is paying $43 million to the Fed and $20 million to California&#8217;s Department of Financial Protection &amp; Innovation.&nbsp;



Silvergate won’t have to pay the $50 million fine the SEC assessed as long as the Fed and California regulators get paid.&nbsp;



Silvergate in March announced it was entering into “voluntary liquidation.” At its peak, Silvergate reported assets of more than $16 billion.&nbsp;



The settlements are all subject to court approval.&nbsp;



— Casey Wagner



<h2 class="wp-block-heading">Bulletin Board</h2>



<ul>
<li>Crypto equities have notched a solid first half of the year. MicroStrategy is up 380%, while Coinbase and Robinhood have gained 329% and 122%, respectively. Crypto mining stocks Hut 8 and Bitfarms are up 86% and 34%, respectively, since the halving. </li>



<li>Circle has received a license to <a href="https://blockworks.co/news/circle-first-stablecoin-issuer-eu-compliant">operate in the EU</a> under the Markets in Crypto Assets (MiCA) regulation. The news comes amid ongoing confusion about how stablecoins would operate in the post-MiCA era. </li>



<li>In case you missed the viral <a href="https://blockworks.co/news/only-a-fool-would-vote-on-crypto-alone">opinion piece</a> Blockworks published on being a single-issue crypto voter, catch up with the Empire Podcast, which recently featured crypto-founder-turned-Trump-ally Ryan Selkis. Listen <a href="https://blockworks.co/news/only-a-fool-would-vote-on-crypto-alone">here</a>, or wherever you get your podcasts.</li>
</ul>



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On the Margin Newsletter: What a Republican sweep would mean for markets

Jack Kubinec

Jeff Albus

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Howdy!



Since it’s national poking fun at the British week: It’s a Chewsday, innit!



And speaking of chewing, a bit more on those pesky sandwiches:



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">Solana’s sandwich attackers are hanging around</h2>



In early June, the Solana Foundation <a href="https://blockworks.co/news/lightspeed-newsletter-sandwich-attacks">blocked a group of validators</a> found to be participating in private mempools that facilitate “sandwich attacks” from receiving a delegation from the foundation’s stake.



The Solana Foundation is a non-profit entity developing the Solana network. It has a sizable stake of solana tokens that it delegates with the goal of diversifying the field of Solana validators. Validators who help facilitate sandwich attacking — or front-running user transactions to manipulate prices and pocket the difference — shouldn’t be recipients of what are essentially grants from the Solana Foundation, the thinking went.



The foundation’s announcement came with a groundswell of anti-sandwich activity: Jito’s DAO proposed to blacklist malicious validators, and Stakewiz began labeling known sandwich attackers, to name a couple examples.



More recently, the popular Solana NFT marketplace Magic Eden introduced “mempool protection” that keeps user buys from being replaced.



But nearly a month later, <a href="https://blockworks.co/tag/solana">Solana</a>’s sandwich attack woes don’t seem to have abated. A <a href="https://sandwiched.me/">dashboard</a> crafted by the data outfit GhostGraph shows these sorts of attacks happening every couple seconds, and the Discord channel where Solana’s validators talk shop is still cloudy on the path forward.



A couple things appear evident from GhostGraph’s dashboard: First, the several sandwich attacks being tracked per minute are memecoin swaps, meaning unsophisticated retail traders are being exploited by more savvy sandwichers. Second, these transactions are being processed through reputable block leaders, which are the validators who create given blocks.&nbsp;



That’s not to say these leaders are bad actors: They may just not realize their block includes sandwich transactions, as a developer <a href="https://discord.com/channels/428295358100013066/689412830075551748/1253413131472994338">pointed</a> out on Discord.&nbsp;



It’s also clear that the Solana Foundation’s un-delegation of stake wasn’t a silver bullet. Practically speaking, it’s difficult to slice out sandwich attackers — and to even find the private mempools where many of them reside.



I’ve heard of some in Solana running transactions with high slippage settings to purposely get sandwiched and identify attackers, but as Jito Labs CEO Lucas Bruder said in Discord, finding and blocking sandwichers is still a “cat and mouse game.”



When I asked the foundation’s ecosystem engineering lead Jon Wong about the difficulty of rooting out all sandwichers, he said “even if this is only an 80% type effort, I think it may be enough to at least dissuade everyone except the most dedicated attackers.”



These dedicated attackers can be quite dedicated though: A MarginFi researcher <a href="https://x.com/HypoNyms/status/1802100776346763406">documented</a> a sandwich bot named “arsc” pocketing $30 million over a couple months via sandwich attacks.



— Jack Kubinec



<h2 class="wp-block-heading">Zero In</h2>



<h3 class="wp-block-heading">$79.55 million</h3>



That’s the market <a href="https://defillama.com/stablecoins/Solana">capitalization</a> of PYUSD on Solana, making PayPal’s stablecoin the third-largest on the network, according to DeFiLlama. PYUSD is the eleventh-largest stablecoin <a href="https://www.coingecko.com/en/categories/stablecoins">generally</a>, per CoinGecko.



In late May, <a href="https://blockworks.co/tag/paypal">PayPal</a> deployed its <a href="https://blockworks.co/tag/stablecoins">stablecoin</a> on Solana to much fanfare but little immediate adoption — the coin had 56 holders two days after launching, we <a href="https://blockworks.co/news/lightspeed-newsletter-paypal-solana-institutional-adoption">reported at the time</a>.



That number has <a href="https://solscan.io/token/2b1kV6DkPAnxd5ixfnxCpjxmKwqjjaYmCZfHsFu24GXo">grown</a> to 652 now, which is bigger but still smaller than the number of subscribers to this newsletter (eat your heart out, PayPal).



PYUSD launched on <a href="https://x.com/KaminoFinance/status/1807762629852643429">Kamino</a> and <a href="https://x.com/JupiterExchange/status/1807767504376471912">Jupiter</a> this week, which will perhaps further grow adoption numbers, though the token was pitched as being focused more on payments than on DeFi.



— Jack Kubinec



<h2 class="wp-block-heading">The Pulse</h2>



Jupiter Exchange, the Solana-based DEX aggregator, is <a href="https://x.com/JupiterExchange/status/1807792180112847237">contemplating</a> an overhaul of its Jupuary event — a yearly token airdrop and community rewards initiative. The first Jupuary, which took place <a href="https://blockworks.co/news/jupiter-airdrop-draws-criticism">in the leadup</a> to a Jan. 31 airdrop, <a href="https://x.com/weremeow/status/1746923653055586716">featured</a> substantial token emissions and community rewards, though some concerns have arisen over high emissions and inflated FDV.



Founder Meow recently <a href="https://x.com/weremeow/status/1807689721973477699">proposed</a> a 30% reduction in JUP token supply, team allocations, and Jupuary emissions to address these issues; the <a href="https://x.com/weremeow/status/1807689721973477699">goal</a> being to streamline the tokenomics of Jupiter&#8217;s core asset, JUP, and foster strong community alignment.



Community sentiment has been mixed, but <a href="https://x.com/web3sven/status/1807692898185441510">many</a> <a href="https://x.com/MummyNinj/status/1807718219769335955">see</a> <a href="https://x.com/scripted_whiz/status/1807693442744467834">the</a> <a href="https://x.com/aboladejohn_/status/1807665225455309057">changes</a> as essential for long-term growth. User @SuperSolana <a href="https://x.com/SuperSolana/status/1807718460308193363">stated</a>, &#8220;We need to be less selfish; the first Jupuary saved a lot of people and gave back to thousands who lost in the bear market.&#8221; While others shared strong opinions on how to reward community engagement, such as, &#8220;Platform usage as in swap volume should definitely be the most ‘rewarded’ activity.&#8221;



Not all feedback <a href="https://x.com/entwolken/status/1807840788749115754">has</a> <a href="https://x.com/matsuokaayane/status/1806862294846148861">been</a> <a href="https://x.com/david_boo11/status/1807677693191749861">positive</a>. User @Oo7Shubh <a href="https://x.com/Oo7Shubh/status/1807680385330868499">expressed</a> skepticism, noting, “If we get the chance to vote, then I will definitely choose NO. Because in terms of circulating supply this will create a huge impact and that&#8217;s what stopping people to buy or hold JUP.&#8221;



A more favorable sentiment was captured by community member @JohnVagabonder, who <a href="https://x.com/JohnVagabonder/status/1808028079496855984">added</a>, &#8220;It reminds me of Christmas, if you&#8217;ve been good all year and not on the naughty list Santa Meow will give you a present in January.&#8221; Others expressed deep trust and belief in the Jupiter team&#8217;s vision, with users like @dynatronix <a href="https://x.com/DynatroniX/status/1807957845130072513">signaling</a>, &#8220;I have such belief, such faith, such trust. Jupuary was the best event in crypto history as I see it. Catdets like myself will never forget it! And the pie will grow!&#8221;



— Jeffrey Albus



<h2 class="wp-block-heading">One Good DM</h2>



A message from Mert Mumtaz, CEO of Helius:


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXdJ-fRt6E8tyo4cbWotymnrm4I5HdstSNE4wIf9lf0MVUBIxboIpJY6klyH90RCeGC1dd1CCgFc39tBInVb6eb5ol5uD-Sw5dGwd7Rvd-7edmZurUyeXQbfb-N0ZysBnfzfTeEtxw6KJP7WDxd9pTbgpbSC?key=ObPorV4ad96Tq5itsfs8Ww" alt=""/></figure></div>


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Lightspeed Newsletter: Solana users are still getting frontrun

Pi Squared, the visionary team on a mission to enable the next generation of verifiable computing, has announced the completion of its seed round, raising $12.5 million. Led by Polychain Capital, the syndicate comprises ABCDE, Bloccelerate, Generative Ventures, Robot Ventures, and Samsung Next, and a cohort of angel investors including Shumo Chu, Harish Devarajan, Justin Drake, Sreeram Kanaan, Csongor Kiss, George Lambeth, Yilong Li, Calvin Liu, Lucian Mincu, Karthik Raju, and Common Prefix.



With its seed round complete the Pi Squared team is ready to deliver on the power and promise of its breakthrough “Proof of Proof” (PoP) concept.&nbsp;&nbsp;&nbsp;



<h2 class="wp-block-heading">PoP sets the foundation</h2>



Pi Squared denotes zero-knowledge (ZK) proofs of mathematical proofs: the mathematical proofs are verified by a small, universal proof checker that yields ZK proofs. In other words, the generated results are ZK proofs of mathematical proofs—hence “Proof of Proof.”



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="460" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png" alt="" class="wp-image-88762" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image-1.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Pi Squared applies to all executions and DA systems across platforms. | Source: <a href="https://docs.pi2.network/proof-of-proof/what-is-pop">Pi Squared</a></figcaption></figure>



Just as TCP/IP underpins the Internet, Pi Squared&#8217;s universal mathematical proof checker heralds Verifiable Computing 2.0.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Our mission is to revolutionize verifiable computing, making it universal for all languages and virtual machines, inherently correct-by-construction, and lightning-fast,” says Grigore Roșu, CEO of Pi Squared and CS Professor at University of Illinois Urbana-Champaign. “This will have many applications, including a universal settlement layer (USL) so all Blockchains, L1s and L2s, can be universal, correct, inter-operable and efficient. It does not end there, our long-term mission is to settle all science and knowledge on USL.”
</blockquote>



This innovation fosters a universal computing space with seamless interoperability for languages and VMs, reduces the trust base for correctness certificates, eliminates the need for error-prone traditional language tools such as compilers and interpreters, and makes language updates as straightforward as plug-and-play.



<h2 class="wp-block-heading">Pi Squared’s compelling initial product</h2>



Pi Squared is using ZK technology in a correct-by-construction and fundamentally unique way to ensure their products are fundamentally reliable and precise from the moment of implementation, ensuring verifiable-computing correctness across all languages and virtual machines.



The first product being built on Pi Squared is the Universal Settlement Layer (USL), a modular blockchain architecture defined by several core characteristics:



Universality



Computations can be expressed in any language or virtual machine without the need for compilers.



Provable correctness



Computations verified by the USL are mathematically proven to be correct, and any external entity can independently verify the correctness of the state of the USL.



Trust Base Minimality



USL exposes any trust assumptions in upper-layer computations for increased transparency, end-user awareness, and eventually minimize the trust base through correctness proofs.



App Interoperability



The USL will support validating interoperability between different application modules and networks (e.g. appchains).



Determinism and reproducibility



The validation is reproducible and independently verifiable by any external entity.



<h2 class="wp-block-heading">The tangible impact of USL</h2>



The Pi Squared team envisions USL to be the language and virtual machine-agnostic layer that enables new apps and improves existing services with its settlement layer.



For the Web3 industry, USL will enable the rise of more cross-chain applications and use cases while improving liquidity access across appchains. It’s a noteworthy development set to make the historically difficult lives of Web3 participants easier—builders and end users alike.&nbsp;



Specific applications enabled by USL include:&nbsp;



<h3 class="wp-block-heading">Rollup-in-a-box</h3>



This service facilitates the creation of L2/L3 rollups and appchains, offering support for multiple programming languages and virtual machines for both off-chain code and on-chain smart contracts.&nbsp;



Users can customize rollups by choosing from a menu of system features. Every rollup created with this service has its transactions settled transparently and uniformly by USL.



<h3 class="wp-block-heading">Multi-chain bridging</h3>



Multi-chain bridging enables rollups and applications on USL to effortlessly bridge tokens on-chain across various chains without the need for off-chain code.&nbsp;



Each side of a bridge operation can utilize a different language to create the minting or freezing transactions, while the on-chain code can be defined using yet another language. USL manages this diversity seamlessly, making it invisible to the upper layers.



<h3 class="wp-block-heading">Cross-chain financial applications</h3>



To provide better staking and borrowing rates, USL enables DeFi applications to transition smoothly between different rollups and appchains by settling transactions on USL, even when involved chains may use different VMs and platforms for execution.



In practice, an example of this occurring is a cross-chain DeFi application staking Ether on Cosmos and using the received <a href="https://blockworks.co/tag/liquid-staking">liquid staking token (LST)</a> as collateral to borrow USDC on Solana.&nbsp;



<h3 class="wp-block-heading">Heterogeneous ZK verification</h3>



Users can leverage USL, via support of various ZK rollups and applications, to use the ZK platform of their choosing. USL validates through a ZK proof verification process when transactions occur using the appropriate ZK backend.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Pi Squared’s proof of proof technology will have a transformative impact across Web3 and beyond,” said Karthik Raju, GP at Polychain Capital. “Pi Squared’s universal ZK circuit will significantly increase the reach and applicability of Web3 for everyone, from builders to end users.&#8221;
</blockquote>



<h2 class="wp-block-heading">Ready to trailblaze</h2>



Pi Squared&#8217;s seed round and innovative Proof of Proof technology position it at the forefront of verifiable computing.&nbsp;



Pi Squared will be presenting and exhibiting at events around EthCC in Brussels next week. Readers can listen to Pi Squared’s CEO, Grigore Roșu, speak at <a href="https://lu.ma/restakingdaybrussels">Restaking &amp; Infra Day</a> as well as <a href="https://lu.ma/l2con?tk=i9zmP8">L2con</a> on July 8th &amp; 9th.



To learn more about Pi Squared, visit the <a href="https://pi2.network/">Pi Squared website</a> and follow their <a href="https://x.com/Pi_Squared_Pi2">X (Twitter)</a> account.



This content is sponsored by Pi Squared and does not serve as an endorsement by Blockworks. The veracity of this content has not been verified and should not serve as financial advice. We encourage readers to conduct their own research before making financial decisions. &nbsp;



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Pi Squared raises $12.5 million to build universal ZK Circuit powered by Proof of Proof

David Canellis

Katherine Ross

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<h2 class="wp-block-heading">Cooking with flywheels</h2>



It’s not always the case that crypto prices make sense. DePIN may eventually change that.



Take Bitcoin. It’s tempting to think that its price might go up or down depending on how many people are using the network.&nbsp;



Sometimes that’s true — both 2017 and 2021 bull runs were preceded by huge growth in the number of active wallets. And the number of transacting addresses often falls almost in tandem with bitcoin’s price, usually after markets peak.



But active Bitcoin addresses <a href="https://public.flourish.studio/visualisation/18588654/">grew</a> throughout most of 2022, the depths of the most recent bear market, even as prices went down. There’s an obvious simple explanation: Some of those active addresses were actively selling, pushing prices down.



All this makes predicting bitcoin prices with onchain activity rather squirrely. You never know if that “active wallet” is posturing to buy or sell on a crypto exchange.&nbsp;



DePIN is showing early signs of more reliable metrics, at least on the surface. Helium, for example, pays users crypto for setting up mobile and IoT hotspots around the world. Over the past year or so, almost 42,000 Helium devices have been <a href="https://dune.com/helium-foundation/helium-makers">deployed</a>.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXfTOUeyedB1e8qnfRyQ1WNT-rs1xZZtFfwIvW1Jm1-8Cjin4w4jVV09Yi8Qd2tLitVfBJCUO4hiMU0vfKJ6B9p53o7prFYRcdDGPQYDkhG46_aGZBoXDn_DEVN9Q8eXVdMLXvGszmkFrbkfTjOxHixjFyc?key=W_Dm-GcH-i1BjPnOk3O8Jg" alt=""/><figcaption class="wp-element-caption">Nothing seems to boost new hotspots more than rising prices</figcaption></figure>



It just so happens that the rate of new Helium hotspot deployments matches the price performance of HNT almost exactly.&nbsp;



DIMO is another. It pays vehicle owners a steady stream of tokens in return for their car-related data.&nbsp;



Almost 5,000 unique owners have opted into DIMO since December 2022, reaching close to 300 new <a href="https://dune.com/dimo_network/dimo-protocol">owners</a> per week as markets topped out earlier this year.&nbsp;



New signups have since declined, along with DIMO’s price.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXcXdkBJar8IxHZkogSbqyw1p78jkTEYhL3CbUeqAbuPpY40EKiCz_KV0q2SdC8tirX4eL8JfElDwXo-SR215pCE1EDWHk_1JoCxrVgT-wfXqSEiXyi7bcGoFGt8lVqOG9fQmlprQHwnGSzaKpkma_4mF0u2?key=W_Dm-GcH-i1BjPnOk3O8Jg" alt=""/><figcaption class="wp-element-caption">Looks familiar…</figcaption></figure>



GEODNET, the Real-Time Kinematics project looking to make geo-location more precise with crypto incentives, is following a similar trend.



The project has so far <a href="https://dune.com/geodnet_console/geod-console">onboarded</a> almost 7,400 “sky miners” — small satellites on rooftops and other high places that collect real-time space weather data — over the past two years or so.&nbsp;



Aside from a major uptick in the second quarter of 2023 as GEOD’s price bottomed out, the price of its native token has risen alongside the number of new satellite miners coming online.&nbsp;



Some of the correlation can be explained by the operation <a href="https://www.vaneck.com/us/en/blogs/digital-assets/matthew-sigel-geodnet-why-were-bullish/">spending</a> 80% of its revenue on buying back GEOD and burning it, with about $500,000 removed from circulation to date (~2% of its current market cap).



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXf9d7PrAlprM8zo3ahDJv3PimIH7ld1F8bBvMhfOndfQMbOscsE8CtHvHdtir2JFEy8oRQU9Paohesix5QhSL2UWsUS8EUtspMRFG7HOY7bUeEyuKZKSRbiOIA8rxnApaBfHOjNcUJIZjGqepmqXkAJKl_7?key=W_Dm-GcH-i1BjPnOk3O8Jg" alt=""/><figcaption class="wp-element-caption">GEODNET has so far paid out nearly $8 million tokens for mining the sky</figcaption></figure>



Modeling DePIN token prices on how many users are building out the infrastructure looks promising, but frustratingly, it’s a chicken-and-egg problem.



Did rising prices drive users to add devices to the respective networks? Were new sign-ups scared off when markets corrected? We might never know.



What the correlation does suggest is that ‘number-go-up’ could still be the primary driver of infrastructure growth in DePIN, as is tradition in crypto.&nbsp;



DePIN’s ties to the physical world may only get it so far, for now.



— David Canellis



<h2 class="wp-block-heading">Data Center</h2>



<ul>
<li>Weekly Helium <a href="https://tokenterminal.com/terminal/projects/helium">revenues</a> have leveled out after falling for most of this year, currently sitting at about $32,000.</li>



<li>DePIN tokens overall are currently worth $26.6 billion, per <a href="https://coinmarketcap.com/view/depin/">CoinMarketCap</a>, down from $40 billion in March.</li>



<li>BTC and ETH are flat on the day and up 2% in the past seven days, now $62,700 and $3,450 respectively.</li>



<li>Global stablecoin supplies have <a href="https://defillama.com/stablecoins">risen</a> over $1 billion month on month to $161.7 billion but have shed around $300 million in the last week.</li>



<li>Blast processed over 25% of all DEX derivatives <a href="https://defillama.com/derivatives/chains">volume</a> last week amid its airdrop, handling $11.24 billion. Its volumes have since normalized but are still ahead of Arbitrum.</li>
</ul>



<h2 class="wp-block-heading">Circling back</h2>



We’ve <a href="https://blockworks.co/news/privacy-coins-sacrificed-so-crypto-could-run">previously chatted</a> about the staggered Markets in Crypto Assets (MiCA) rollout over in Europe. The first part has arrived and it&#8217;s mostly focused on stablecoins.



In case you missed the hoopla leading up MiCA’s implementation, or Circle’s big announcement yesterday, the stablecoin issuer seems excited about the new rules.



CEO Jeremy Allaire said the framework legalizes stablecoins in a Monday press conference. Through this, the stablecoin issuer can now issue both USDC and EURC in the EU.&nbsp;



In a press release accompanying Circle’s announcement that it was the first EU-regulated stablecoin under the new provisions, Allaire added that the rules unlock “the enormous potential of digital assets to transform finance and commerce.”



Per Chainalysis <a href="https://www.chainalysis.com/blog/mica-stablecoin-regime-challenges-part-1/#:~:text=Transaction%20volumes%20show%20that%20stablecoins,Regulation%20(MiCA)%20takes%20effect.">data</a>, onchain transaction volume reached $10 trillion last year. Stablecoins made up 60% of that volume. Clearly that’s no small sum, and points to how widely used and accepted stablecoins have become. To put that number further into perspective, bitcoin only represented 10% of onchain volume in 2023.



(I want to quickly note that I’m focusing on the big stablecoin issuers, but other European-specific issuers have also become MiCA compliant.)



With that being said, let’s take a look at Tether. CEO Paolo Ardoino seems a tad more hesitant about the new regulations, at least in comparison to Allaire. However, there’s no doubt that such regulations do encourage growth, he noted.



“Tether commends EU regulators for their efforts in establishing a framework for crypto assets. While the effects of these new regulations will take time to manifest, there remain important aspects of the regulation which we continue to believe could render the job of a stablecoin issuer extremely complex but also make EU-licensed stablecoins vulnerable and riskier to operate,” Ardoino told me.&nbsp;



His point is a valid one, though. Chainalysis highlighted that regulation emphasizes the need for issuers to really pay attention to onchain analytics, so they can better understand the use cases for their stablecoins.



“This sort of data can provide insights into holders, balances, and transactional behavior, offering a degree of transparency on the usage of particular tokens on an aggregate-basis, as well as at the transaction-level,” the firm wrote.&nbsp;



“This allows issuers to have a real-time view of active wallets holding their tokens, including holder behavior (i.e. exchange vs. personal wallets, duration of holdings), overall transaction volume across multiple blockchains, and alerts for transactions involving sanctioned entities or jurisdictions.”



Ardoino said more discussions are warranted to better understand and implement the technical aspects of this regulation.&nbsp;



“While Tether is optimistic about MiCA’s long term implementation, it remains crucial that stablecoin regulatory policies enacted are balanced, protect consumers, and nurture growth in our emerging industry,” he said.&nbsp;



Change is hard, but here’s to hoping that MiCA is able to succeed in uniting regulators across the EU. And perhaps the US could learn a lesson or two.



— Katherine Ross



<h2 class="wp-block-heading">The Works</h2>



<ul>
<li>Bitcoin miner Northern Data is mulling an IPO for its AI and data center business segment, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-07-01/northern-data-weighs-ai-unit-us-ipo-at-up-to-16-billion-value">reported</a>.</li>



<li>Binance.US is “confident” in its legal battle against the SEC, the company <a href="https://x.com/BinanceUS/status/1807905912231022593">said</a> on X.</li>



<li>The Bahamas is prepping regulations requiring commercial banks to provide access to its CBDC, Reuters <a href="https://www.reuters.com/technology/bahamas-regulate-banks-offer-cbank-digital-currency-2024-07-01/">reported</a>.</li>



<li>The SEC <a href="https://blockworks.co/news/sec-sues-silvergate-bank-for-misleading-public">filed</a> a suit against and a settlement with FTX-linked (and now defunct) Silvergate Bank.</li>



<li>The German government continues to send millions in bitcoin to exchanges, per Arkham <a href="https://platform.arkhamintelligence.com/explorer/entity/germany">data</a>.</li>
</ul>



<h2 class="wp-block-heading">The Riff</h2>



Q: Are stablecoins still crypto&#8217;s killer app?



Probably.



I’m not one to say definitively one way or another because there are so many unknowns in this world (can you tell I went to Las Vegas and didn’t spend a dime gambling?) but I think the use cases for stablecoins are strong. I mean, just scroll up and look at the Chainalysis data I mentioned above.



There’s always going to be something sexier and unique in crypto that people hail as the next killer app, but if we’re just looking at utility and overall use, then I think stablecoins have this race locked down.&nbsp;



— Katherine Ross



The maxi suppressed inside of me would say Bitcoin is the ultimate crypto app: uncensorable digital money.



Can’t say the same for tether and USDC. Their respective issuers can freeze whatever balances they like, which they regularly do upon request from law enforcement.



Luckily, crypto has DAI, which doesn’t have that problem. That also makes it uncensorable digital money. So yes, stablecoins are crypto’s killer app…if you don’t count the original.



— David Canellis



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Empire Newsletter: How ‘number-go-up’ fuels DePIN

The Securities and Exchange Commission has filed a lawsuit against Silvergate Bank.&nbsp;



The regulator accused Silvergate, which officially closed and liquidated last year, of misleading clients and investors about the effectiveness of its compliance programs, including its anti-money laundering efforts.



The suit names former CEO Alan Lane, former Chief Risk Officer Kathleen Freher and former Chief Financial Officer Antonio Martino as defendants, in addition to the bank itself.&nbsp;



“SCC, Lane, and Fraher misrepresented the operational and legal risks facing the Bank by falsely stating in SEC filings and other public statements that the Bank had an effective BSA/AML compliance program tailored to the heightened risks posed by its crypto asset customers,” the SEC said in court documents.&nbsp;



Read more:<a href="https://blockworks.co/news/us-congressional-research-crypto-risk"> US Congressional research finds perception of crypto risk spurred bank withdrawals</a>



The bank, the <a href="https://blockworks.co/tag/sec">SEC</a> continued, claimed to have “conducted extensive due diligence and transaction monitoring related to those customers, including one of its now most notorious customers, <a href="https://blockworks.co/tag/ftx">FTX</a> (the crypto asset trading platform that <a href="https://blockworks.co/news/ftx-meltdown-timeline">imploded in November 2022</a>) and FTX’s related entities.” But the program was “inadequate.”



The <a href="https://blockworks.co/tag/silvergate">Silvergate</a> staff were able to trace $9 billion worth of transfers from FTX-related entities in the review that happened less than a week after the collapse.



“​​Most troubling to the BSA staff was the trend of funds that flowed from FTX’s custodial accounts — which held FTX customer funds — to a series of non-custodial FTX-related entities’ accounts, followed by transfers of these funds to other third parties — either through the SEN or to accounts external to the Bank,” lawyers for the SEC wrote.



Following the review, Lane allegedly made a false or misleading statement in a letter posted to his LinkedIn and Twitter accounts, claiming that the bank took the BSA “very seriously” but the SEC said it never did its due diligence on FTX.



Lane was also accused of providing “false or misleading” information to Congress when asked about the relationship between the bank and FTX.&nbsp;



“Had Lane’s Response to the Congressional Letter accurately depicted the facts at the time, it would have contradicted prior public statements by Silvergate, and investors would have learned of the deficiencies in the Bank’s BSA program and could have appreciated the risks of investing in SCC stock,” the SEC said.



Per the filing, Martino allegedly sent a “deceptive” letter to the San Francisco Fed claiming that Silvergate was “well-capitalized” as of Jan. 19, 2023. The bank <a href="https://blockworks.co/news/silvergate-intends-wind-down-operations">would go on to fail</a> just a few months later in March.



The former executives and the bank are accused of violating the Securities Act and Exchange Act.&nbsp;



The SEC’s suit seeks to prevent Lane, Fraher and Martino from “serving as an officer or director of any company that has a class of securities registered under” certain parts of the Exchange Act.&nbsp;



In a <a href="https://www.sec.gov/newsroom/press-releases/2024-82">press release</a> following the suit, the SEC said that Silvergate settled with the regulator. As part of the deal, the defunct bank would pay $50 million. Both Lane and Fraher also opted to settle. Both face “permanent injunctions, five-year officer-and-director bars, and civil penalties of $1 million and $250,000 respectively” pending court approval.



Martino didn’t settle with the SEC, however.



“I am deeply committed to the highest standards of integrity and transparency in financial reporting, as has been the case over the course of my 30+ year career,” Martino said in a statement to Blockworks. “The allegations made by the SEC are unfounded and irresponsible, and I look forward to presenting my case in court and clearing my name.&#8221;



Updated July 1, 2024 at 4:40 pm ET: Added statements from SEC press release.



Updated July 1, 2024 at 4:29 pm ET: Added comment from former Silvergate CFO. 



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SEC accuses Silvergate of misleading the public after FTX collapse

Ben Strack

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Welcome to the On the Margin Newsletter, brought to you by Ben Strack and Casey Wagner. Here’s what you’ll find in today’s edition:



<ul>
<li>Binance notched a small win in its suit with the SEC last week. Here’s what else the opinion said. </li>



<li>Why the US ether ETF launches will come after Independence Day.</li>



<li>We are days away from a big holiday weekend, but the economic calendar is still packed.</li>
</ul>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">Binance’s little win</h2>



Like Coinbase did in March, Binance notched a small win in its legal battle with the SEC Friday.&nbsp;



You may remember the securities regulator <a href="https://blockworks.co/news/coinbase-binance-suits-different">sued both</a> Coinbase and Binance in June 2023. Legal teams from each exchange tried to get the cases tossed, but neither effort was terribly successful.&nbsp;



In an opinion published late Friday evening, DC District Court Judge Amy Berman Jackson allowed the SEC’s case against Binance to mostly continue.&nbsp;



Jackson opted to fully dismiss count two: the SEC’s claim that Binance sold its BUSD stablecoin as an investment contract. Counts one and three — alleging that Binance offered and sold BNB, Simple Earn and BNB Vault as unregistered securities — are also partially dismissed.&nbsp;



The remaining 10 counts will proceed, Jackson ruled.&nbsp;



You are welcome to read the full <a href="https://storage.courtlistener.com/recap/gov.uscourts.dcd.256060/gov.uscourts.dcd.256060.248.0_1.pdf">89-page opinion</a> for yourself, but here is the CliffsNotes version:&nbsp;



<ol>
<li>The SEC’s allegations relating to BUSD “do not align with the prongs of the Howey test,” the court ruled. </li>
</ol>



<ol></ol>



In its initial complaint against Binance, the SEC claimed BUSD buyers had reasonable expectations of profits from the token (a key principle of the Howey test). But Judge Jackson disagreed, stating the SEC failed to demonstrate a clear link between the token’s value and the success of the platform as a whole.&nbsp;



“As for the ‘common enterprise’ element, the most the SEC can say is ‘the proceeds from investor purchases of BUSD were purportedly pooled in reserves, and Binance earned [50%] of the investment returns on those pooled assets,’” Jackson wrote.&nbsp;



But BUSD holders were never under the impression there was any profit sharing, the court added, so the charge was dismissed.&nbsp;



<ol start="2">
<li>Binance’s defense that there can’t be an investment contract without a real contract doesn’t hold up, the court said. </li>
</ol>



Binance’s legal team argued in January that without a physical contract, an investment contract cannot exist. Judge Jackson was having <a href="https://blockworks.co/news/binance-sec-hearing-motion-dismiss">none of this</a> back then, and her opinion apparently remains the same.&nbsp;



“The notion that a contractual relationship is required has been consistently rejected by other district courts faced with [cryptocurrency] cases in recent years,” Jackson wrote.&nbsp;



Court precedent, Jackson said, states that investment contracts can be an implicit understanding rather than a formal agreement.&nbsp;



<ol start="3">
<li>Secondary BNB sales are not investment contracts, the court said. </li>
</ol>



If you saw any headlines or X posts hailing this opinion as a “big win” for crypto, they were probably talking about the court’s ruling on secondary sales.&nbsp;



Judge Jackson ruled the SEC did not sufficiently prove that secondary BNB sales were investment contracts.&nbsp;



The ruling is not at all a loss for crypto; but it’s also not a major win. Jackson was obviously careful with her language.&nbsp;



“The SEC is not alleging or asking the court to find that the thing in question — the BNB token — is a security,” Jackson wrote. “Its allegation is that during the ICO and after, it was offered as, or sold as, a security.”&nbsp;



Jackson is letting the other claims about tokens listed in the SEC’s original complaint stand for now, so we’ll see if her opinion changes down the line. Because of Jackson’s skepticism about the SEC’s general approach to classification, perhaps the industry isn’t celebrating prematurely after all. 



— Casey Wagner



<h2 class="wp-block-heading">$61 million</h2>



The total outflows from ETH investment products last week, according to data from CoinShares.&nbsp;



It marks the largest weekly capital exit from ETH funds since August 2022, a Monday CoinShares <a href="https://blog.coinshares.com/volume-189-digital-asset-fund-flows-weekly-report-5265d50f2769">report</a> notes.



Roughly the same asset amount ($58 million) left such products the week prior. The latest money exiting these funds has pushed net outflows for ETH investment vehicles negative year-to-date, making it the worst-performing asset on the net flows front.&nbsp;



The price of ETH was down 7% from a month ago, as of Monday afternoon. The asset is still up about 53% since the start of the year.



<h2 class="wp-block-heading">Patience is a virtue</h2>



The US spot ether ETF proposals will need at least a few more days to bake, sources say.&nbsp;



They’ll be ready to serve up to investors soon, though. We know you’ve been hearing that for several weeks now, but it remains true.&nbsp;



A person close to the filings confirmed to Blockworks Monday that the SEC has suggested some more S-1 revisions. The original <a href="https://www.theblock.co/post/302687/sec-returns-s-1-forms-to-ethereum-etf-issuers-with-at-least-one-more-round-to-go-source">report</a> came after a source <a href="https://blockworks.co/news/ether-etf-issuers-await-sec-final-approval">told me</a> issuers could get a launch date from the SEC “at any point” given the “light” last round of registration statement edits.&nbsp;



Issuers are set to address the latest SEC comments and resubmit to the regulator by July 8 — <a href="https://x.com/EricBalchunas/status/1806810886109331520">squashing</a> hopes of pre-Independence Day approval.



The source called the suggested fixes (that they know of) “tiny and immaterial.” A second person familiar with the process added that the latest comments are “reasonable.”



The SEC may have intentionally slowed down the process during the holiday week, the first source guessed. Or, they added, the regulator may be looking to keep issuers “on the same pace” if one has more substantial amendments to make.&nbsp;



The regulator is likely to allow all the ETH funds to launch at <a href="https://blockworks.co/news/sec-should-let-vaneck-launch-eth-etf-first">the same time</a>.



There’s one more detail we learned. The SEC is not requiring an S-1 with every final detail filled in (i.e. management fee) on July 8. This means there will be at least one more flurry of registration statements after that date.&nbsp;



In other words, if the SEC is happy with the July 8 documents, it could quickly turn around and request a last round of filings before giving issuers the coveted “effective” date.



A spokesperson for the regulator declined to comment.



All is to say, it’s possible for the ether ETFs to launch sometime next week. Or it could drag on a bit longer.



— Ben Strack



<h2 class="wp-block-heading">On Our Radar</h2>



Happy Monday! We have an abbreviated holiday week with markets closing early on Wednesday, shut down Thursday and back open Friday. Hopefully you’re one of the lucky ones with an extra long weekend. Either way, here’s what we’re watching this week:



<ul>
<li>Fed Chair Jerome Powell is scheduled to <a href="https://www.ecb.europa.eu/home/html/index.en.html">speak</a> Tuesday morning at the European Central Bank (ECB) Forum on Central Banking in Portugal. We’ll be listening for his comments about last week’s PCE print, the labor market and, of course, how both impact plans for rate cuts. </li>



<li>Initial jobless claims come out Wednesday. First-time unemployment filings dropped 6,000 to a seasonally adjusted 233,000 for the week ended June 22 — though that was during a holiday week, which tends to boost volatility. Hopefully we see the trend continue as a sign the labor market is as strong as the Fed would like. </li>



<li>We’ll also get the minutes from the FOMC’s last meeting on Wednesday. We already have the projections for June, but the minutes will give us even more insight into how individual members are thinking about the rate cut schedule. Markets will be closed by the time the minutes drop.</li>
</ul>



— Casey Wagner



<h2 class="wp-block-heading">Bulletin Board</h2>



<ul>
<li>The IRS late Friday released its final regulations for crypto brokers. So-called “custodial brokers” — those who “take possession of the digital assets being sold by their customers” — must report all sales and exchanges of digital assets. See the updated 1099 form <a href="https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-requiring-broker-reporting-of-sales-and-exchanges-of-digital-assets-that-are-subject-to-tax-under-current-law-additional-guidance-to-provide-penalty-relief-address">here</a>. </li>



<li>After VanEck <a href="https://blockworks.co/news/vaneck-files-for-solana-etf">filed</a> for a Solana ETF last week, SOL’s cumulative volume delta (which measures net buying and selling) hit $29 million, according to a <a href="https://research.kaiko.com/insights/sol-etf-applications-fall-flat">report</a> from crypto research firm Kaiko. The filing’s impact on SOL is still minimal compared to how <a href="https://blockworks.co/news/sec-approves-ether-etf-proposals">19b-4 approval</a> of the impending ETH ETFs impacted ether, but it’s an area to keep your eye on nonetheless. </li>



<li>The US Marshals Service will be using Coinbase Prime to custody and trade <a href="https://blockworks.co/news/usms-coinbase-prime-contract-custody-trade-crypto">forfeited</a> digital assets, the exchange <a href="https://x.com/faryarshirzad/status/1807804641867944343">announced</a> Monday. A new government business agreement in the midst of a <a href="https://blockworks.co/news/coinbase-lawsuit-sec-fdic-foia-dispute">massive legal battle</a> with the SEC is always a fun development.  </li>
</ul>



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Howdy!



It’s a cold world out there, but the return of fast food meal deals has been giving me joy lately. Over the weekend, I stopped by Taco Bell to get their new $7 meal, which came with a chalupa, taco, burrito, chips, and a drink — what value! McDonalds’ new $5 combo isn’t bad either.



There are always reasons to smile. Anyways:



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">One market maker to rule them all</h2>



Stablecoins are like the liquidity lifeblood of crypto — helping assets on- and off-ramp to protocols. They also carry the promise of real-world transactions, from remittances to Coinbase’s USDC Pizza <a href="https://www.instagram.com/coinbase/p/C7Slu3etoXv/?img_index=1">promotion</a> in New York City.



At first glance, Solana’s stablecoin volume appears to have fallen off a cliff during June. In the past two weeks, Solana USDC and USDT transfer volume has been at its lowest point in 2024, according to Blockworks Research.&nbsp;



Weekly volume was around $43 billion after topping $500 billion three different weeks in May.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXeKCub7kjrmbe1rq7kT-8K0WPUuhx1xdy2NzOal-UY73TPwo3K2ieT9uNTMpxUhDmvaF8HBQdn9kVJEFbXO73SjyxI4TsAPp6A3-7B6aaJS3Dph65FFjgTTc_RmpuecbJY-tv1Gsv5BXd278kmZr6eqZMJP?key=TsMvo_kR49ac61S3lOE_pg" alt=""/></figure>



The drop-off was largely caused, it seems, by a single market maker on the Solana DEX Phoenix changing its strategy.



Blockworks Research data shows a single wallet address — carrying out market making activities on Phoenix — accounted for nearly 50% of Solana stablecoin transfer volume in May and part of June. I confirmed with Phoenix Developer Ellipsis Labs that this single Phoenix market maker was responsible for the large transfer volume.&nbsp;



Phoenix is a Solana decentralized exchange and onchain orderbook — which discovers the price of assets onchain as opposed to on offchain venues like Binance, for instance.&nbsp;



This orderbook — which is basically a list of all pending buy and sell orders on the exchange — confirms and settles trades quickly in part because Solana is built to be fast. The exchange is enabled by market makers which place buy and sell orders to ensure the orderbook stays liquid enough to support trading.



As part of high-frequency trading, which is the sort of thing Phoenix hopes to enable, market makers will quickly place and cancel orders to make sure their prices are in line with the rest of the market, an Ellipsis Labs spokesperson said. This one market maker (whose contract address is <a href="https://solscan.io/account/8YwbFQYfoXQfDr9PgnKph6me9jirXdjnEZe6fDnJU4mM">here</a>) appears to have been placing and canceling trades in such a way that they would deposit and withdraw their entire USDC balance repeatedly.



This drove up the USDC transfer volume on the Solana network as a whole and — at first blush — made Solana’s stablecoin usage appear far higher than it actually is.&nbsp;



When this market maker stopped moving so much USDC around, Solana may have lost nearly 50% of its daily stablecoin transfer volume. In an email, Ellipsis said trading volume is a much more useful metric than transfer volume in measuring economic activity.&nbsp;



The inflated numbers were <a href="https://x.com/CarryWorm/status/1751006207521816906">pointed</a> out as early as January, when a video was making the rounds showing Solana’s stablecoin volume dwarfing other blockchains. It was <a href="https://x.com/WazzCrypto/status/1805731528023957778">brought</a> up again last week when the stablecoin transfer volume decreased suddenly.



I asked Sphere Labs’ Arnold Lee about the lower Solana stablecoin figures.



“I&#8217;d say they are used fairly significantly, just overshadowed by the insane activity on Phoenix,” Lee said of stablecoins on Solana.



“That said, we see the majority of stablecoin activity on Tron/BSC because stablecoins are most relevant outside of the West, and Tron/BSC have the most local presence (lindy) and ancillary infrastructure (eg. Huobi, Binance) despite being significantly slower and more expensive,” Lee added.



Following Ethereum, Tron and BSC have the second- and third-largest stablecoin market capitalizations, at 35% and 3% of the total, <a href="https://defillama.com/stablecoins/chains">according</a> to DeFiLlama.&nbsp;



Solana is in sixth, trailing Ethereum layer-2s Arbitrum and Base.



— Jack Kubinec



<h2 class="wp-block-heading">Zero In</h2>



The prospect of spot solana ETFs didn’t do much to close the price gap between SOL and ETH, it turns out.



Kaiko’s weekly data debrief examined market sentiment following SOL ETF filings from VanEck and 21Shares. It largely found that traders were unenthused. The ETH to SOL ratio, which shows how many SOL one ETH is worth, trended relatively flat during the SOL ETF news cycle. In other words, the two assets performed roughly the same.&nbsp;



Solana outpaced ether starting in March, but the script flipped following the SEC’s approval of spot ether ETFs. ETH has slowly widened the gap since.&nbsp;&nbsp;



<img loading="lazy" decoding="async" width="624" height="343" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXdZKGOtvDPq3u2LzJ1QRG41wa3fB1S_R8vLTsho-9dYRuYIYWFS9GVbX6z--IKExJBWrWjFaF4jwRuiyFswt9z0Mxtin8BtTLuE_LCX026Cw8aEIoVIkkvsqx7qzzH-dwjxlEC4owHtqhhdoMjvdswqe_s8?key=TsMvo_kR49ac61S3lOE_pg">



Kaiko chalked up the market’s indifferent reaction over the ETF filings to doubts about the approval of spot SOL ETFs. This likely stems from the asset&#8217;s lack of a sizable futures market, and the SEC’s prior assertion that SOL is a security.



— Jack Kubinec



<h2 class="wp-block-heading">The Pulse</h2>



Helius Labs CEO Mert Mumtaz sparked some light debate on Sunday, <a href="https://x.com/0xMert_/status/1807597605649584301">tweeting</a> that the crypto industry should focus on scaling existing apps rather than developing new ones. He argued that scaling these apps to handle 1,000,000x demand is crucial for growth.



Responses varied. @fearthewave_eth skeptically <a href="https://x.com/fearthewave_eth/status/1807601546273669416">remarked</a>, &#8220;if they [are] so useful&#8230; they shouldn&#8217;t have any issue scaling.&#8221; @crackberrypi highlighted concerns about market concentration, <a href="https://x.com/crackberrypi/status/1807599291990487357">adding</a> &#8220;Sounds like a monopoly.&#8221; Some responses were outright dismissive. The ironically named @ProfOptimist <a href="https://x.com/ProfOptimist/status/1807653669011132452">joked</a>, &#8220;Name 1 app&#8221; while the more appropriately titled @timetofud <a href="https://x.com/timetofud/status/1807725459142021309">noted</a>, &#8220;mostly all these apps are for gambling.&#8221; @doompr0ntweets <a href="https://x.com/doompr0ntweets/status/1807601226625814722">asked</a>, &#8220;Aside from video games, what apps in crypto are useful outside of crypto?&#8221;



Others seemed to take the suggestion more seriously. @jayantkrish and @itechnologynet <a href="https://x.com/jayantkrish/status/1807771660449419270">emphasized</a> the importance of user experience in achieving scale, with the latter noting that retail users <a href="https://x.com/itechnologynet/status/1807660610840048116">prioritize</a> UI/UX over fancy features. Others <a href="https://x.com/ElangovanKamesh/status/1807661481615638597">warned</a> against neglecting new, disruptive projects, and <a href="https://x.com/1stCoastCrypto/status/1807601617769726312">raised</a> concerns about potentially missing out on groundbreaking innovations by halting funding for new apps.



Speculative discourse aside, there are ample resources to do both. The crypto industry&#8217;s superpower has long been its funding capability. And anyway, isn&#8217;t it more in line with the crypto ethos to diversify across different approaches, rather than risk a single point of failure?



— Jeffrey Albus



<h2 class="wp-block-heading">One Good DM</h2>



A message from Eugene Chen, co-founder of Ellipsis Labs:


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXeXIlELhJ1B81Bv96-OxDupV0sVoq_KcomKeRDTdWtm3L-bin0xSRiBxvn9Dlgsf0jqcoWYxDtGqkfCsYLccQlsPerJ58IsWiTQHCIkZo9rjMh1CdEvWve_BvaTzNfv4CvBUMBaYGhhqeSOanwJZmJsmO4?key=TsMvo_kR49ac61S3lOE_pg" alt=""/></figure></div>


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Lightspeed Newsletter: Solana’s stablecoin transfer volume drop-off

Henry Duckworth

Global food supply chains face significant challenges: They&#8217;re often inefficient, costly and lack transparency. This creates an environment where farmers may not always receive fair compensation for their hard work, while consumers can face higher prices.



It&#8217;s a systemic problem that needs a systemic solution, and that solution stares us right in the face: agricultural trade tokenization.&nbsp;



Despite this technology&#8217;s immense potential, adoption in the agricultural industry has been slow. Many organizations hesitate to embrace change, citing concerns about complexity and regulatory uncertainty.



The true value of trade tokenization lies in its ability to solve real, tangible problems that have plagued the agriculture industry for decades. Eliminating intermediaries can increase transparency, reduce settlement times and lower costs.



But while some in the industry argue that the current system, though imperfect, is familiar and predictable, the benefits of <a href="https://blockworks.co/tag/tokenization">tokenization</a> far outweigh the short-term challenges of adoption.



<h2 class="wp-block-heading">Pitfalls of current supply chains</h2>



Right now, our food supply chains are a black box. They&#8217;re opaque, convoluted and rife with inefficiencies. On average, agricultural trade suffers from settlement times <a href="https://www.wto.org/english/tratop_e/agric_e/ag_imp_exp_charts_e.htm">of 3-7 days and fees ranging from 6-10%</a>. That&#8217;s unacceptable.



It&#8217;s not just about numbers. The system&#8217;s lack of transparency breeds mistrust and enables bad actors to manipulate prices and engage in fraudulent activities. Ultimately, it is the farmers and consumers who bear the brunt of this inequitable system.



Tokenizing the trade can change all that. By bringing agricultural trade transactions on-chain, we can create a transparent, efficient and trusted ecosystem that benefits everyone.



Imagine a world where you can trace your food from farm to fork — knowing exactly where it came from and how it was produced. Imagine a world where farmers can get fair prices for their produce — without intermediaries taking a 40% cut. Imagine a world where consumers can trust the food they buy — knowing that it was produced sustainably and ethically.



The benefits of tokenization don&#8217;t stop there. Smart contracts on high-throughput blockchains like Solana can automate transactions, reduce settlement times and minimize fees. This increased efficiency can lead to cost savings that can be passed on to farmers and consumers. Such systems also lower the barriers to entry and create easier access to markets for smaller producers and farmers.&nbsp;



Moreover, tokenization lays the groundwork for future innovations like fractional ownership and investment in agricultural assets. In time, small-scale farmers could tokenize their land or crops, allowing them to access capital and participate in the global food system more equitably.&nbsp;



In the current world, small-scale farmers often face a dilemma: They either have to sell a significant part of their business to a single company to raise capital, or they struggle to secure funding. However, with the possibility of tokenizing their assets, small-scale farmers can sell small portions of their business to interested parties while remaining the majority holders and retaining control over their business.&nbsp;



<h2 class="wp-block-heading">Addressing the skeptics</h2>



Of course, realizing the full potential of trade tokenization in agriculture won&#8217;t be easy.



Many farmers and agricultural organizations feel they lack the technical expertise to navigate this new system. They worry about the resources required to adopt and use these new technologies.



There are also questions about regulation and legal frameworks. The legal status of tokenized assets is still evolving, and some organizations seem wary of investing in a system that lacks clear regulatory guidelines.



However, these concerns should not deter us from pursuing the transformative potential of trade tokenization onchain. The industry doesn&#8217;t have to navigate this transition alone.



By collaborating with blockchain experts, policymakers and educational institutions, we can create a supportive ecosystem that helps agricultural organizations embrace this technology with confidence.



We need to invest in educational initiatives to make the benefits of tokenization accessible to all participants, regardless of their technological background.



We also need a supportive regulatory environment that recognizes the potential of tokenization and provides clarity around its legal and tax implications. Policymakers must strike a balance between fostering innovation and protecting the interests of all stakeholders.



The potential rewards of tokenization are too significant to ignore, and authorities are now <a href="https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=409284">getting onboard</a>. By tokenizing agricultural trade, we can take a significant step towards a food system that is more transparent, efficient and equitable. A system that benefits farmers, consumers and the planet.



<hr class="wp-block-separator has-alpha-channel-opacity"/>


<div class="wp-block-post-author-biography">Harry Duckworth, a law graduate, embarked on a unique journey that led him to become the youngest trader at global commodities giant Trafigura. He then went on to set up desks for several hedge funds worldwide, accumulating over a decade of experience in trading, hedge funds, and emergent technologies. 

Through his work, he became fascinated by the revolutionary power of blockchain tech soon after the inception of Bitcoin. Years later he founded AgriDex International, to provide digital marketplaces and supply chain information for all participants in the global food chain. </div>


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Agriculture needs blockchain

Circle has received a license to operate in the European Union under the Markets in Crypto-Assets (MiCA) regulation.



This act, which partially went into effect on Monday, is designed to provide a comprehensive legal framework for the crypto industry, enhancing investor protection, promoting innovation, and ensuring financial stability across the EU.



The global stablecoin issuer is the first to fully comply with the new set of regulations, which are based on stablecoins. 



According to Circle, it was able to become compliant under its Electronic Money Institution License, which it obtained from the French banking authority.&nbsp;



Under the license, <a href="https://blockworks.co/tag/circle">Circle</a> can issue USDC and EURC in the <a href="https://blockworks.co/tag/eu">EU</a>. Additionally, Circle can offer Circle Mint, which allows users to directly access Circle’s stablecoins.&nbsp;



“Since our founding, Circle has sought to build durable, compliant, and well-regulated infrastructure for <a href="https://blockworks.co/tag/stablecoins">stablecoins</a>, and our adherence to MiCA, which represents one of the most comprehensive crypto regulatory regimes in the world, is a huge milestone in bringing digital currency into mainstream scale and acceptance,” said Circle CEO Jeremy Allaire.



Read more: <a href="https://blockworks.co/news/privacy-coins-sacrificed-so-crypto-could-run">Privacy coins sacrificed so crypto could run</a>



The new rules have posed some challenges to stablecoin issuers, which have to now seek compliance with regulators. Last month, <a href="https://blockworks.co/tag/binance">Binance</a> said that it would start cracking down on “unauthorized” stablecoins as the new set of rules took effect.&nbsp;



Tether CEO Paolo Ardoino’s previously spoken out about his concerns regarding the new regulations.&nbsp;



&#8220;These requirements could not only render the job of a stablecoin issuer extremely complex but also make EU-licensed stablecoins extremely vulnerable and riskier to operate. As with any regulatory framework of this scale, further discussions on the technical implementation standards are crucial to providing clarity to the market over certain provisions,&#8221; Ardoino <a href="https://www.theblock.co/post/302764/eu-crypto-traders-urged-to-convert-non-compliant-stablecoins-to-regulated-ones-as-mica-framework-takes-effect">told</a> The Block.



Tether did not immediately return a request for comment on the Circle announcement.&nbsp;



Following the Circle announcement, Binance CEO Richard Teng said that Circle’s compliance “marks a positive step forward.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Happy to share that USDC is now a Regulated Stablecoin in the EEA! USDC will continue to be available within <a href="https://twitter.com/hashtag/Binance?src=hash&amp;ref_src=twsrc%5Etfw">#Binance</a> product offerings for our EEA users. USDC becoming a MiCA-compliant e-money token (EMT) marks a positive step forward for the crypto ecosystem in the EEA… <a href="https://t.co/MSdRfW3yBG">https://t.co/MSdRfW3yBG</a>&mdash; Richard Teng (@_RichardTeng) <a href="https://twitter.com/_RichardTeng/status/1807794746859102340?ref_src=twsrc%5Etfw">July 1, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



&#8220;Achieving <a href="https://blockworks.co/tag/mica">MiCA</a> compliance through our French EMI license is a significant step forward, not just for Circle, but for the entire digital financial ecosystem in Europe and beyond,&#8221; said Dante Disparte, chief strategy officer at Circle.



Updated July 1, 2024 at 12:49 pm ET: Modified headline to clarify that Circle is the first global stablecoin issuer to become compliant.



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Circle becomes first global stablecoin issuer to become compliant under new EU laws

The United States Marshals Service picked Coinbase Prime to custody and provide trading services for certain crypto seized by the arm of the Department of Justice.&nbsp;



According to a blog post, Coinbase Prime will hold large-cap digital assets for the USMS.&nbsp;



“The USMS conducted a competitive due diligence process that evaluated a range of solutions, ultimately choosing Coinbase due to our strong track record and ability to securely provide institutional-grade crypto services at scale,” the post said.



Per an awards <a href="https://sam.gov/opp/9ea963fb74f140b48f69b9b926fb51c7/view">notice</a> from the DOJ on the government’s website for awards management, Coinbase Prime will receive $32.5 million for it.&nbsp;



The USMS first <a href="https://sam.gov/opp/c7ce250733cf4d5c9ccd072adde93acb/view">posted</a> the contract earlier this year. The goal, the site said, was to find a partner that could “streamline” handling crypto for the USMS.&nbsp;



“The US Marshals Service (USMS) department of Justice (DOJ), on behalf of the Asset Forfeiture Division (AFD) has a requirement for managing and disposing of large quantities of popular cryptocurrency assets, known as Class 1 cryptocurrencies,” the listing said.&nbsp;



The US government has a history of <a href="https://blockworks.co/news/doj-moves-silk-road-bitcoin">using Coinbase to sell crypto</a>. Coinbase created a law enforcement program back in 2014, the company said, which points to its “longstanding history” of working with the government.&nbsp;



“Growing the crypto economy means promoting safe and efficient markets, and these partnerships are critical to our mission,” the blog post continued.



However, the exchange has also been targeted by an arm of the government. The Securities and Exchange Commission filed a suit against Coinbase last summer alleging that it acted as an unregistered broker and exchange while <a href="https://blockworks.co/news/sec-sues-coinbase">offering and selling unregistered securities</a>.&nbsp;



The regulator and the publicly traded company have been locked in a legal battle since last spring after the latter <a href="https://blockworks.co/news/sec-serves-coinbase-in-latest-alleged-crypto-securities-violation">received a Wells notice</a> about the lawsuit (which was then filed in late June.)



Despite the suit, the US government has continued to use <a href="https://blockworks.co/tag/coinbase">Coinbase</a> to offload crypto, including bitcoin, per <a href="https://platform.arkhamintelligence.com/explorer/tx/0f3f9a7c01d85c5747a3ae6cc9621cc30360390c4b681c1f95573e6bbcffed4f">data</a> from Arkham Intelligence.



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USMS awards Coinbase Prime a multi-million dollar contract

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<h2 class="wp-block-heading">The big question</h2>



I’ve combed through pages and pages of legalese so that you (hopefully) don’t have to.



Friday saw two different filings: The SEC’s expected suit against Consensys and Judge Amy Berman Jackson’s tossing of most of Binance’s motion to dismiss in the SEC’s case against the exchange.



I want to focus on the former today specifically because of staking.&nbsp;



ICYMI (though I don’t know how you would have, honestly) the SEC finally filed its formal suit against Consensys, one of the main pillars of Ethereum ecosystem development. Consensys, in its own suit against the SEC, said it received a Wells notice focused on staking and swaps, which basically teased what the SEC could say in a filing against the firm.



The filing Friday also shows that the SEC targeted Ethereum staking services Lido and Rocket Pool. Both of which are used by Consensys’ flagship app MetaMask for its staking services.&nbsp;



Interesting timing, considering the SEC had effectively given up its fight to claim ETH as a security only earlier this month by ending a separate investigation into Consensys and approving the 19b-4’s for ETH ETFs.



The SEC is clearly going after staking, and it’s not just Consensys that’s caught in the crossfire. A slew of the hopeful ETH ETF issuers added staking language to their registration statements earlier this year, but have since removed that language following their back-and-forth conversations with the SEC.&nbsp;



Even the two registration statements from VanEck and 21Shares for potential solana ETFs didn’t include staking language.&nbsp;



To be clear, this isn’t the first time that the SEC has targeted staking. We saw it last summer in its suit against Coinbase and it <a href="https://www.sec.gov/news/press-release/2023-237#:~:text=In%20February%20of%20this%20year,Elizabeth%20Goody%20and%20Jennie%20B.">settled with Kraken</a> over staking services last year.



Last summer, Coinbase ended staking services in some states after some state regulators said the services violated multiple securities laws.



But prior to that, Chief Legal Officer Paul Grewal penned a post explaining why Coinbase doesn’t believe that staking meets the expectations of Howey and is therefore not a security.&nbsp;



In a nutshell, he argued that with Coinbase’s staking services, users retain ownership of the staked asset at all times, the assets are staked on decentralized networks and there’s no reasonable expectation of profits.&nbsp;



The SEC, according to the Friday filing, however disagrees with that last point directly.



“The Lido and Rocket Pool staking programs are each offered and sold as investment contracts and, therefore, securities. Specifically, as described in more detail below, investors make an investment of ETH in a common enterprise with a reasonable expectation of profits from the managerial efforts of Lido and Rocket Pool, respectively,” the SEC wrote.



“In Coinbase and Consensys lawsuits, SEC spins staking services as ‘programs’ where stakers allocate funds to a pool managed by an operator w/ discretionary authority who deploys the funds to earn returns for stakers. This is a warped characterization of technical services,” Michael Selig, a partner at Wilkie Farr &amp; Gallagher, <a href="https://x.com/MikeSeligEsq/status/1806834455962652760">posted</a> on X.&nbsp;



And I’ve only just focused on staking. There are other troubles: The SEC also alleged that Consensys operates as an unregistered broker by offering token swaps directly through MetaMask.



These allegations echo a part of the Coinbase suit, except that Judge Katherine Polk Failla handed the firm a little win earlier this year when she said that Coinbase didn’t act as an unregistered brokerage in its own offering.&nbsp;



Consensys, for its part, seems very confident that it’s ready to take on the SEC, much like Coinbase has been. And this is where I remind you that the Consensys suit fell right into that timeline <a href="https://blockworks.co/news/consensys-sec-lawsuit-debate">I previously wrote about</a>. If the same schedule repeats, it’s pretty likely that we see suits against both Robinhood and Uniswap sometime this summer.&nbsp;



To [offer to] stake or not to [offer to] stake is now the question on everyone’s mind. Unless you’re the SEC, of course.



— Katherine Ross



P.S. David and I need your help. <a href="https://empire-31ed59.beehiiv.com/forms/81e8b876-5f2b-4428-9a77-21803dcf3a5d">Fill out this survey</a> and help us produce journalism tailored to you and your interests.



<h2 class="wp-block-heading">Data Center</h2>



<ul>
<li>There’s almost 33.29 million ETH ($115 billion) staked to the blockchain, almost 28% of the supply.</li>



<li>About 25% of ETH staked is <a href="https://dune.com/hildobby/eth2-staking">through</a> centralized exchanges, led by Coinbase with 4.3 million ETH ($14.9 billion) and followed by Binance and Kraken.</li>



<li>DEX <a href="https://defillama.com/dexs">volumes</a> have fallen for three months in a row, reaching $152.22 billion in June, down from $179.31 billion in May.</li>



<li>BTC and ETH are both up 2% today, sitting at $62,740 and $3,460, respectively.</li>



<li>ENS is the top-end’s best <a href="https://www.coingecko.com/">performer</a>, gaining 21% over the past 24 hours and 41% in the past week. A new <a href="https://x.com/ensdomains/status/1804221687766093953">update</a> for the domain name protocol is on the horizon.</li>
</ul>



<h2 class="wp-block-heading">Layer cake</h2>



A layer-2 a day keeps the Ethereum killers away.



Yet another L2 was announced late last week: MegaETH, a proposed blockchain network that could process transactions in real-time, or at least, fast enough to rival Web2 internet infrastructure.



The team hopes to have a testnet live within a few months, with a mission of producing a network handling 100,000 transactions per second and responding to requests in milliseconds.



“Our goal is to push the performance of Ethereum L2s to hardware limits, bridging the gap between blockchains and traditional cloud computing servers,” says the team.



Ethereum manages about 13 transactions per second while existing L2s Optimism, Blast and Base top out after a few hundred. So, if MegaETH can figure out how to do what it says, then it would truly be a gamechanger.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1576" height="1132" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=1024&amp;h=1024" alt="" class="wp-image-88685" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=1576 1576w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=358 358w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=363 363w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=305 305w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/Screenshot-2024-07-01-at-14.34.26.png?w=80 80w" sizes="(max-width: 1576px) 100vw, 1576px" /><figcaption class="wp-element-caption">There are lofty goals and then there’s MegaETH’s target</figcaption></figure>



MegaETH’s <a href="https://blockworks.co/news/vitalik-buterin-backs-megalabs-raise">$20 million seed round</a> was led by Dragonfly Capital with participation from a slew of other VCs, alongside Ethereum co-founders Vitalik Buterin and Joseph Lubin and EigenLayer’s Sreeram Kannan.&nbsp;



The network is set to utilize both the Ethereum mainnet and EigenLayer’s proof-of-concept data availability layer, EigenDA, to streamline consensus and execution.



At this point, some layer-2 fatigue can be forgiven. There are now 58 <a href="https://l2beat.com/scaling/summary">different</a> Ethereum L2s live with another 53 in the can, and even an additional 17 layer-3 projects operating in their orbit.&nbsp;



It’s that extensive and well-funded development ecosystem that makes Ethereum so compelling. But while ETH has lost about 12% against bitcoin over the past year — meaning it was better to hold bitcoin than ether over that period — tokens tied to Ethereum rivals haven’t done so hot against ETH.



Nearly two dozen native cryptocurrencies for blockchains are out to eat Ethereum’s lunch. Only six have outperformed ETH since their launch: ton, solana, injective, fantom and bnb.&nbsp;



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1519" height="1133" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png" alt="" class="wp-image-88687" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png?w=1519 1519w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png?w=345 345w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png?w=350 350w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png?w=294 294w, https://blockworks-co.imgix.net/wp-content/uploads/2024/07/image.png?w=80 80w" sizes="(max-width: 1519px) 100vw, 1519px" /><figcaption class="wp-element-caption">TON’s market cap is still much smaller than SOL and BNB’s, which accounts for some overperformance</figcaption></figure>



An honorable mention goes to sei, which has boosted its ETH ratio by 1.7% since its launch last August.



ETH ratios for the other 15 have, on average, lost 75% since their first trading day. Algorand, internet computer, hedera, cosmos, cronos and stellar have all lost over 85%.&nbsp;



So, while it’s fun to talk about which network could be the first to flip Ethereum, it might pay to remember the speed at which new networks — and funding — are thrown at Ethereum’s scaling challenges. One might eventually stick.



— David Canellis



<h2 class="wp-block-heading">The Works</h2>



<ul>
<li>The SEC’s case against Binance can mostly proceed, a judge <a href="https://www.bloomberg.com/news/articles/2024-06-29/bulk-of-sec-case-against-binance-zhao-can-proceed-judge-rules">ruled</a>.</li>



<li>Sentiment for bitcoin ETPs seems to be changing, Coinshares <a href="https://etp.coinshares.com/knowledge/market-activity/fund-flows-01-07-24">noted</a> in its flows report.</li>



<li>Sony Group bought Amber Exchange in Japan, marking its official entrance into the crypto space, Wu Blockchain’s Colin Wu <a href="https://x.com/WuBlockchain/status/1807569214359969968">reported</a>.</li>



<li>Also in Japan, Metaplanet <a href="https://x.com/Metaplanet_JP/status/1807656500187316612">added</a> 20 bitcoin to its stash for roughly $1.2 million.&nbsp;</li>



<li>Pump.fun’s cumulative revenue surpassed $50 million, The Block <a href="https://www.theblock.co/post/302734/pump-funs-cumulative-revenue-crosses-50-million">reported</a>.</li>
</ul>



<h2 class="wp-block-heading">The Riff</h2>



Q: What’s the most important thing on crypto’s horizon?



On a technical level, new clients for Ethereum and Solana from Paradigm and Jump Crypto are arguably the most critical developments for Web3 over the short term. 



Both offerings are set to move the needle on throughput, decentralization and overall buildability. All things that would help speed up the process of DeFi eating TradFi, as well as boost the odds that crypto produces new killer apps.



At the social level, the US election in November is no. 1. Crypto has yet to take center stage, but it feels inevitable that it will, at some point, even if fleeting.&nbsp;



Prepare for things to get weird before they get better.&nbsp;



— David Canellis



All of these legal cases. We have Ripple coming to the very end of its years-long legal battle, both Binance and Coinbase continue to fight after losing their pushes for a motion to dismiss in their respective cases, and now we have Consensys.&nbsp;



Not to mention, as I wrote above, it’s likely we will see suits against both Robinhood and Uniswap in the next few months.&nbsp;



That’s a lot of legal battles focused on intertwined subjects. Crypto needs clarity, that much is painfully obvious. Until we see more of that — either in the courts or through policy — it’ll be hard to move forward and innovate.&nbsp;



I wish I had a better answer for you, but for now we remain tied up in legal limbo.



— Katherine Ross



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Empire Newsletter: The SEC still has it in for Consensys

ETF powerhouse State Street Global Advisors is finally entering the crypto ETF arena as it looks to make up ground in the sector by offering differentiated products.



While SSGA certainly has the brand recognition to compete with rivals, investor appetite for the type of funds it plans to offer remains to be seen.&nbsp;



The $4 trillion-plus asset manager said last week it would be linking up with crypto-focused Galaxy Digital to launch “the next generation of digital asset-based strategies.”&nbsp;



Read more: <a href="https://blockworks.co/news/on-the-margin-newsletter-crypto-etf-filing-frenzy">On the Margin Newsletter: Crypto ETF filings are only ramping up</a>



An initial <a href="https://link.mail.beehiiv.com/ss/c/u001.ZaVO_gulYIDHwTR9OqetU9mHWq3icYAU4qyFvFvCbyaaifEsPk5pnbJQ-slnK25xQ-RGD_Cbk8u1NjPmdoEUD7Ho4s99-NtMhR57OC_utW0txLJNmyRkNwKot_RjqIV0yGvy5jcdmkQdFND5R2olz1xBPY1Rf2Hde_qs0e7cdNVjkO3PMdCjfX8Q3pazOSXDQnZYA6p4QZQtlefByMv4HU8S_AG3urMc4J7CNdrCN-QWXqRm33gXs1fj39fpLc3XkdaEEhfFPC-JIaG9-BPtWA/47k/1A5Is_KgT720Q_hvBmoelA/h21/h001.962B2P_SV12s6EzKM6VbYmOpEsnuwROd9Jdc2DqFarE">proposed</a> SPDR Galaxy Digital Asset Ecosystem ETF, for example, would invest in crypto equities and futures contracts, as well as in ETFs that hold spot crypto or futures.&nbsp;



Neena Mishra, director of ETF research for Zacks Investment Research, said it’s difficult to predict the demand for such a fund given recent trends.&nbsp;



“This year, investors totally ignored crypto-related ETFs despite their excellent performance, while piling into spot bitcoin ETFs,” she told Blockworks. “This makes sense, as they had been waiting for pure crypto exposure via ETFs for many years.”



Indeed, the US spot bitcoin ETFs that began trading in January have so far tallied net inflows of roughly $14.5 billion, Farside Investors <a href="https://farside.co.uk/?p=1321">data</a> shows.&nbsp;



Meanwhile, the Amplify Transformational Data Sharing ETF — among the first and largest ETF holding blockchain- and crypto-adjacent equities — has seen nearly $600 million of outflows year to date.&nbsp;



Still BLOK, which launched in 2018, manages about $700 million in assets.&nbsp;



“The proposed [SSGA] fund is actively managed and will adjust its exposure based on macroeconomic conditions; I expect it to be very competitively priced,” Mishra said. “If the product impresses investors with its performance and limits volatility, I won&#8217;t be surprised to see the <a href="https://blockworks.co/tag/state-street">State Street</a> product catching up with BLOK.”



A planned Hedged Digital Asset Ecosystem ETF would be similar to the first fund, but may also invest in covered call options and protective put options on investments held in the portfolio, the Wednesday filing noted.&nbsp;



Additionally, a proposed Emerging Technology Enablers ETF would invest in companies focused on novel tech like blockchain and <a href="https://blockworks.co/tag/artificial-intelligence">AI</a>. These may include bitcoin miners and device manufacturers, as well as energy and infrastructure companies.&nbsp;&nbsp;



“We believe that the digital assets landscape is so much more than the single crypto components and that crypto native companies are best equipped to understand that ecosystem and its correlation with financial markets,” SSGA Chief Business Officer Anna Paglia said in a statement.



<h2 class="wp-block-heading">So far on the crypto ETF sidelines</h2>



Custodial giant State Street is well acquainted with the crypto ecosystem. It <a href="https://blockworks.co/state-street-launches-digital-finance-unit-for-crypto/">launched a digital finance unit</a> in June 2021 and entered into a licensing <a href="https://investors.statestreet.com/investor-news-events/press-releases/news-details/2022/State-Street-to-Develop-Digital-Custody-in-Collaboration-with-Copper.co-03-09-2022/default.aspx#:~:text=State%20Street%20Digital%20will%20leverage,environment%20operated%20by%20State%20Street.">agreement</a> with Copper.co the following year to develop a digital custody offering for institutions.&nbsp;



State Street Bank and Trust plan to offer administrative and accounting services for the new crypto ETFs it develops with Galaxy.&nbsp;



Read more: <a href="https://blockworks.co/news/state-street-sees-significant-opportunity-in-tokenization">State Street Sees ‘Significant Opportunity’ in Tokenization</a>



State Street Global Advisors — ranking third in US ETF assets under management — launched the industry’s first ETF, the SPDR S&amp;P 500 ETF (SPY), in 1993. It offers the largest physically-backed ETF focused on gold, an asset bitcoin is sometimes compared to.



But despite its status as an ETF pioneer, SSGA did not join other firms in launching a spot bitcoin ETF in January. Net inflows into those funds so far total $14.5 billion, with State Street rivals BlackRock and Fidelity seeing the bulk of those.&nbsp;&nbsp;&nbsp;



“We continuously evaluate our lineup of ETFs, and at this time we do not offer a crypto ETF,” a State Street spokesperson told Blockworks earlier this year, declining to comment further.



Read more: <a href="http://v">Big ETF players remain on the sidelines amid possible milestone bitcoin fund approval</a>



SSGA was also not among the issuers that filed for a spot ether ETF. Those funds <a href="https://blockworks.co/news/ether-etf-issuers-await-sec-final-approval">could gain clearance</a> to launch in the coming weeks, if not days. 



With SSGA’s latest announcement, Vanguard is essentially the only asset management titan still <a href="https://blockworks.co/news/vanguard-opposes-platforming-eth-etfs">showing no interest in crypto</a>, in any form. The firm has called the investment case for crypto assets weak, adding that such products don’t fit in “a well-balanced, long-term investment portfolio.”&nbsp;



And yet, financial advisers and other institutional investors are <a href="https://blockworks.co/news/advisers-bitcoin-etfs-client-portfolios">allocating to them</a>.&nbsp;



Ric Edelman, founder of the Digital Assets Council of Financial Professionals, has said big investment firms not offering crypto ETFs are likely to change their minds as demand for BTC and ETH grows.&nbsp;



Mishra agrees that just because SSGA has not yet entered that arena doesn’t mean they never will.



“State Street has taken a cautious approach to entering the digital assets space,” she said. “But I wouldn&#8217;t be surprised to see them file for spot crypto ETFs in the future.”



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Can State Street make up ground in the crypto ETF arena?

<a href="https://trondao.org/">TRON DAO</a> welcomes an unprecedented victory by its founder Justin Sun in the People’s Court of China over a landmark defamation suit filed against the Chongqing Business Media Group (“the Media”). Per court order, the Media has removed all of its false contents and issued a formal statement of apology to Sun, who has long been a target of media misrepresentations.



The Media acknowledged in the <a href="https://rmfygg.court.gov.cn/web/rmfyportal/noticedetail?paramStr=4061707280117934">statement</a> that it had published false and defaming contents without fact-check or evidence, severely damaging Sun&#8217;s reputation. “The rumor-monger has finally published an apology on the People’s Court’s website,” Sun said on an <a href="https://x.com/justinsuntron/status/1805272941468483647">X post</a>. “Although it took two years, justice has arrived.”



The apology came after a two-year legal battle. Following hundreds of hours of fact-finding and a thorough trial, the Chongqing Yubei District Court ruled in the first instance that the Media broke the law and defamed Sun by publishing entirely unverified media contents, including an article and a video. The court ordered the defendant to retract all false contents and issue a public apology to Sun in a national newspaper. Neither party appealed the decision within the stipulated time frame, making the ruling final judgment.



For Sun, the victory serves as a strong rebuttal to numerous widespread rumors and restores his personal reputation. The court reviewed extensive evidence and documentation from both sides before arriving at the verdict. The verdict sends a strong signal to all media outlets: citing unverified sources and spreading unsubstantiated information is likely breaking the law and tarnishing their own reputations.



<h3 class="wp-block-heading">The Buried Truth in a Storm of Media Hysteria</h3>



The case dates back to March 11, 2022 when the Media published an article on its news platform <a href="http://eastmoney.com/">eastmoney.com</a>. The article stated that Sun &#8220;was involved in insider trading,&#8221; &#8220;fled abroad to evade the ICO ban,&#8221; &#8220;engaged in fraud and money laundering,&#8221; and &#8220;was under investigations by the IRS and the FBI,&#8221; among other claims. The baseless article quickly went viral, getting picked up by many other media outlets, and severely damaging the reputations of both Sun and the TRON ecosystem.



These reports cited an opinion piece about Sun published by The Verge in March 2022. That piece included a series of “interviews” with anonymous sources who all vividly described Sun&#8217;s alleged wrong-doings Hollywood-style. While the story was purposefully sensationalized, the author cleverly dropped a disclaimer at the end acknowledging that he could not obtain any comments from any relevant authorities to substantiate any claims in the article. In essence, the opinion piece presented unverified stories and acknowledged them as hearsay.



Similar media peppered their audience with buzzwords like &#8220;money laundering,&#8221; &#8220;insider trading,” &#8220;investigations,&#8221; etc. In their rush to maximize exposure and clicks, these desperate media outlets quickly amplified the article in order to make it go viral in no time. Amid this frenzy, any disclaimers on lack of evidence or unsubstantiated claims were conspicuously and conveniently ignored by the media, either intentionally or inadvertently.



<h2 class="wp-block-heading">Defendant Guilty After Lengthy Two-Year Legal Battle</h2>



During the trial, the People&#8217;s Court of China scrutinized every detail, from the original The Verge article, the Media’s recreated contents, to the interpretations made by all other domestic media during reproduction. The court concluded that The Verge&#8217;s article lacked concrete evidence entirely and the Media&#8216;s report was devoid of any factual basis, which materially violated Sun&#8217;s reputation.



The court underscored that the original article’s authenticity was only confirmed by the author, and it was acknowledged in the article that none of the aforementioned authorities had validated any information presented. In the final verdict, the People’s Court of China ruled that all claims of Sun&#8217;s alleged involvement in insider trading, fraud, money laundering, or any other claimed investigations and other alleged wrong-doings, are entirely unsubstantiated.



During this two-year battle, all false claims made by the Media failed to withstand scrutiny. This lengthy due process has brought the truth to light by using facts and legal measures to debunk misinformation and disinformation. This final judgment rectified the injustices Sun has long endured and presented a legal precedent for the broader blockchain community on how unfounded rumors should be handled and dispelled.



Significance of the court ruling: The Internet is not a legal vacuum, and the doers are safeguarded by law



The final ruling of the case does not hand victory over to Sun alone but also upholds the rights of individuals who are committed to their causes but fall victim to fabricated news coverage with ulterior motives. This ruling has raised the public&#8217;s legal awareness, encouraging victims of untrue news reports to assert their own interests through legal avenues.



On the other hand, this incident also alerts all content disseminators against deceptive and unreliable media sources, especially those tainted with a history of fake and biased contents. This practice runs completely against the professionalism, objectivity, and neutrality that the modern media strive to uphold.



Early in 1988, the &#8220;<a href="https://chinacopyrightandmedia.wordpress.com/1988/01/15/reply-concerning-the-question-of-whether-or-not-newspaper-publishers-should-be-listed-as-defendants-and-how-to-apply-jurisdiction-in-cases-of-infringement-of-the-right-to-reputation/">Reply of the Supreme People&#8217;s Court to the Defendant Status of Newspaper Publishers and the Application of Jurisdiction in Cases of Infringement of the Right to Reputation</a>&#8221; already made it clear that news agencies have verification obligations for the news reports they publish, and both the author and the news agency shall be held legally accountable for a publication&#8217;s infringement of other individuals&#8217; right to reputation, in which case they may be made the co-defendants.



This legal document, among many others, indicates that infringement resulting from the edition and publication of unverified information and articles will incur legal liabilities. If the infringed party is willing to arm themselves with the law and provide concrete evidence in court, it&#8217;s highly likely that the involved media will lose the case.



Sun&#8217;s landmark win is a moment of reckoning for the long-standing rumors floating around the internet. It is also a victory of the rule of law. The ruling has not only safeguarded the legitimate rights of Sun but also discouraged the spread of misinformation and disinformation. While pursuing newsworthy content is the common goal, journalism must adhere to professional ethics by ensuring facts are authentic and accurate.



<h3 class="wp-block-heading">About TRON DAO</h3>



TRON DAO is a community-governed DAO dedicated to accelerating the decentralization of the internet via blockchain technology and dApps.



Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized Web3 services boasting over 100 million monthly active users. The TRON network has gained incredible traction in recent years. As of June 2024, it has over 239.72 million total user accounts on the blockchain, more than 7.91 billion total transactions, and over $20.60 billion in total value locked (TVL), as reported on TRONSCAN. 



In addition, TRON hosts the largest circulating supply of USD Tether (USDT) stablecoin across the globe, overtaking USDT on Ethereum since April 2021. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. Most recently in October 2022, TRON was designated as the national blockchain for the Commonwealth of Dominica, which marks the first time a major public blockchain partnered with a sovereign nation to develop its national blockchain infrastructure.



This content is sponsored by TRON and does not serve as an endorsement by Blockworks. The veracity of this content has not been verified and should not serve as financial advice. We encourage readers to conduct their own research before making financial decisions.  



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TRON founder Justin Sun wins landmark case in the People’s Court of China

Two prominent raises led this week’s funding rounds.



Let’s start with the most recent announcement, which came from the first “real-time blockchain” backed by heavy-hitters such as Vitalik Buterin.&nbsp;



MegaLabs raised $20 million in a seed round backed by Dragonfly. The funds will be dedicated to developing MegaETH. Other investors included Figment Capital and Consensys CEO Joseph Lubin, as well as Jordan Fish (also known as Cobie).



Blockworks podcast hosts Santiago Santos and Mert Mumtaz also participated in the round.&nbsp;



According to a press release accompanying the announcement, MegaETH is “capable of streaming transactions at 100,000 transactions per second with millisecond-level responsiveness. Its near-instant performance unlocks fully onchain applications that can finally match the experience of best-in-class Web2 apps while delivering on the promises of decentralization.”



Read more from our opinion section: <a href="https://blockworks.co/news/layer-3s-future-scalability">Layer-3s are the future of scalability</a>



“Creating hyper-scalable <a href="https://blockworks.co/tag/evm">EVM</a> implementations is a key prerequisite for truly <a href="https://blockworks.co/tag/scaling">scaling</a> Ethereum. I am excited to see brilliant developers taking on this challenge,” <a href="https://blockworks.co/tag/vitalik-buterin">Vitalik Buterin</a> said in a statement shared on Telegram.



MegaETH’s testnet is set to go live this fall.



But it wasn’t the only funding round to hit double-digit raises this week.



Colosseum, a startup accelerator focused on <a href="https://blockworks.co/tag/solana">Solana</a>, announced a $60 million raise which will be put towards early-stage projects.



“The last 15 years of crypto has taught us that the best ideas often arise from the most uncommon corners of the internet. Colosseum’s mission is to ensure more of those ideas are brought into production and accelerate the growth of the onchain economy,” co-founder Clay Robbins <a href="https://blog.colosseum.org/announcing-colosseum-fund-i/">wrote</a> in an announcement.&nbsp;



<h2 class="wp-block-heading">Other notable raises:</h2>



<ul>
<li>Publicly traded bitcoin miner Hut 8 <a href="https://www.globenewswire.com/news-release/2024/06/24/2902828/0/en/Hut-8-Announces-150-Million-Strategic-Investment-from-Coatue-to-Partner-in-Building-Next-Generation-AI-Infrastructure-Platform.html">raised</a> $150 million from Coatue through a convertible note. The firm plans to put the funding towards building out its <a href="https://blockworks.co/news/hut-8-mining-ceo-interview">high-performance computing vertical</a>. </li>



<li>Infrastructure firm Conduit <a href="https://x.com/KAndrewHuang/status/1805632313759514783">announced</a> it raised $37 million in a Series A led by Paradigm and Haun Ventures. </li>



<li>Crossover Markets, a trading technology firm focused on crypto, <a href="https://www.prnewswire.com/news-releases/crossover-markets-raises-12-million-series-a-funding-round-led-by-illuminate-financial-and-drw-venture-capital-302182278.html">raised</a> $12 million in a Series A round led by Illuminate Financial and DRW Venture Capital.</li>
</ul>



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Funding Wrap: Vitalik Buterin backs MegaLabs in its seed raise

GSR named two new co-CEOs as it looks to innovate what it considers to be a turning point for the crypto space.



Rich Rosenblum and Xin Song will each take on chief executive duties starting July 1, the crypto trading firm and liquidity provider said Wednesday.&nbsp;



CEO Jakob Palmstierna will transition to a president role and will lead GSR’s client franchise.&nbsp;



Rosenblum, a former <a href="https://blockworks.co/tag/goldman-sachs">Goldman Sachs</a> pro, co-founded GSR. Song came to GSR in 2019 and built out the company&#8217;s Asia business.



“The industry is at an inflection point and we must remain agile and innovative in how we serve our clients today while also proactively positioning ourselves for the future,” GSR Chair Cristian Gil said in a statement.



In another crypto executive update, <a href="https://blockworks.co/tag/jump-crypto">Jump Crypto</a> President Kanav Kariya said he was leaving the firm.&nbsp;



Read more: <a href="https://blockworks.co/news/sec-terraform-labs-ust-depeg">Jump Crypto president pleads the Fifth when asked about alleged Do Kwon bribe</a>



Kariya, who had served in the crypto company’s president post for nearly three years, noted in a Monday X <a href="https://x.com/KanavKariya/status/1805245324610371761">post</a> that he has not yet committed to a new role.



“As for what’s next, I plan to stay engaged with the portfolio companies I’ve been most involved with and hopefully take some time to process the unbelievably eventful few years we’ve had,” he said.&nbsp;



Richard Chen, a general partner at seed-focused crypto venture fund 1confirmation, is also leaving his company after six-plus years there.



“So what’s next?” he said on X. “I’m starting something new and excited to share the details with you all soon.”



<h2 class="wp-block-heading">Other notable developments</h2>



<ul>
<li>Point72 Ventures, the asset manager founded by billionaire Steve Cohen, laid off its fintech and crypto-focused team as part of a shift to AI, Forbes <a href="https://x.com/alexrkonrad/status/1806333497847771389">reported</a>.</li>



<li>Crypto exchange Coinme added Robert Villaseñor as its chief legal and compliance officer. He was most recently general counsel, corporate secretary and chief administrative officer for MoneyGram International.</li>
</ul>



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the On the Margin newsletter</a>.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

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