Ribbit Meme

Molly Jane Zuckerman

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Earlier this week, the US State Department <a href="https://blockworks.co/news/state-department-bounty-for-onecoin-crypto-queen">upped the reward money</a> from $250,000 to $5 million for information about missing OneCoin promoter Ruja Ignatova.



Better known as the Crypto Queen, Ignatova has either been on the run since 2017, when she took a plane to Greece and was never seen in public again — or was murdered by the Bulgarian mafia sometime after, probably on a yacht in the Mediterranean.



But regardless of where Ignatova may be in this world or the next, her multi-billion dollar OneCoin crypto scam is definitely over. Two other higher-ups in the OneCoin family — co-founder Karl Sebastien Greeword and former legal chief Irina Dilkinska — are serving twenty years and four years respectively, with each also paying $300 million and $111 million in fines.



Justice might not be fully served, but it has definitely had a very nice start. So why would the US up her reward by a magnitude of 20? Especially after <a href="https://www.bbc.com/news/articles/c2llvlx2ez9o">last year’s BBC special</a> that found pretty convincing evidence that Ignatova fell victim to the selfsame Bulgarian mafioso hired to protect her.



Read more from our opinion section: <a href="https://blockworks.co/news/eminem-cryptocom-advertisement-silly">Eminem’s new crypto ad fails to capture the moment, lets it slip</a>



There’s no doubt that the US loves to prosecute crypto criminals, and that’s not necessarily a bad thing. Despite the countless op-eds that we have run about the Securities and Exchange Commission’s overreach into the crypto sector, it’s generally considered good when people who break the law are punished for breaking the law. Just look at <a href="https://x.com/therealZNO/status/1804587631780520097">some</a> of the <a href="https://x.com/JustinBrannan/status/1804739087892463627">reactions</a> to sassy headlines about the cop who arrested Justin Timberlake for drunk driving.



However, something about the latest price jump for information about Ignatova (a previous increase brought the original reward from $100,000 to the next quarter of a million number) feels just a little bit off.&nbsp;



Yes, finding the people behind the massive crypto scams that hurt the livelihood of thousands of people all over the world is definitely a righteous cause. But the crypto industry and the scams that grow out of it right now are so wildly different from the large scale Ponzi schemes of 2017, so much smaller and more insidious, that this latest OneCoin news bump feels a bit like the prosecutors are falling behind the times.&nbsp;



Catching one of the people behind a multi-billion dollar crypto scam from 2017 would be a great way to ensure that justice has been brought to that scam’s victims, but I can’t help thinking about all of the ways that several million dollars could help US law enforcement prevent the types of crypto scams that are active at this moment.&nbsp;



Ransomware attacks, SIM swapping, complex DeFi rug pulls, a seemingly <a href="https://www.coindesk.com/policy/2024/03/21/north-korean-crypto-hackers-have-stolen-3b-since-2017-says-un-security-council-report/">never-ending stream</a> of North Korean crypto cyber hacks — I can’t claim that I know for sure that the US is dropping the ball in its prosecution of these more difficult-to-solve crypto crimes, but I do know that they have definitely fumbled before. Remember its highly teased press announcement of the huge crypto scam prosecution that ended up being over an <a href="https://blockworks.co/news/doj-busts-crypto-exchange">exchange that nobody had ever heard of</a>?



If the US does catch the Crypto Queen from this new, higher bounty, more power to it. And if some other crypto scam emerges that is actively hurting people right now, I hope the US also puts the equivalent of $5 million of effort into stopping it before it gets to the multi-billion dollars worth of fraud — not after.



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I don’t care much about tech, I don’t care a whole lot about finance, either. I care about writing stories and watching weird things unfold. And that’s why I’ve ended up in crypto. But because I’m missing that passion for what crypto and blockchain are all about — finance, tech, privacy, yadda yadda — I’m going to write instead about what I am actually interested in. Everything about crypto that has very little to do with crypto. That’s what this column will be about. All the tangential stories that come out of the blockchain and crypto space, what I think about them, and how I navigate it all as a skeptical former Russian literature major. It’s precisely my perch as an outsider that lets me do what I do: Opine on all sides of any crypto issue, no strings attached, no skin in the game. If you want to talk crypto with me, let’s go off topic.



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OneCoin’s Crypto Queen should be old news

Ben Strack

Casey Wagner

Today, enjoy the On the Margin newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the On the Margin newsletter</a>.



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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>With US ETH ETFs still imminent, plans for SOL funds (and others) steal headlines.   </li>



<li>The Supreme Court’s Chevron decision and what it means for crypto.</li>



<li>This week’s macroeconomic wrap-up and what you may have missed.</li>
</ul>



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



<h2 class="wp-block-heading">Exchange-traded frenzy</h2>



The SEC’s January approval of spot bitcoin ETFs was a big hurdle cleared, as US crypto fund plans have only ramped up from there.&nbsp;



You probably know about the <a href="https://blockworks.co/news/ether-etf-issuers-await-sec-final-approval">imminent launches of US spot ETH funds</a>. A source told Blockworks that issuers could hear from the SEC “at any point” about a listing date for those given the “light” last round of registration amendment revisions.



Industry watchers now wonder whether the agency will let those S-1s go effective prior to July 4, or if it will take a bit more time.



But in some ways that seems like old news, as US spot solana ETF plans have stolen some headlines.



VanEck — a firm already with a spot bitcoin ETF (and a planned ETH product) — <a href="https://blockworks.co/news/vaneck-files-for-solana-etf">led the charge</a> on that front via a Thursday <a href="https://www.sec.gov/Archives/edgar/data/2028541/000162828024030249/vanecksolanatrusts-1.htm">filing</a> in the US. The proposal <a href="https://blockworks.co/news/how-us-canada-solana-fund-filings-differ">differs from a planned SOL fund</a> submitted by 3iQ in Canada last week and could be <a href="https://blockworks.co/news/us-spot-crypto-etf-approvals-outlook">tough to get past regulators</a> at this point.&nbsp;&nbsp;



Still, 21Shares joined the paperwork party by <a href="https://www.sec.gov/Archives/edgar/data/2028834/000121390024057001/ea0208625-s1_21shares.htm">filing</a> for a US solana ETF of its own on Friday. The company has a Solana Staking ETP trading in Europe with $850 million in assets.&nbsp;



“While including a crypto token in a CME futures contract has legal precedent, it should not be the sole criterion for ETF eligibility,” 21Shares legal head Andrew Jacobson said in a statement.



It’s probably worth mentioning too that ETF powerhouse State Street Global Advisors said Wednesday it was partnering with Galaxy Digital to launch “the next generation of digital asset-based strategies.”



The firms together filed for three funds, including a Digital Asset Ecosystem ETF that would invest in crypto equities and futures contracts, as well as in ETFs that hold spot crypto or futures.&nbsp;



SSGA’s entrance is certainly something to watch, particularly if they end up choosing to launch spot crypto products. The company has plenty of brand recognition and its physically backed gold ETF (GLD) is the largest of its kind, with roughly $62 billion in assets.&nbsp;



Even before the SOL and SSGA fund filings, Hashdex revealed plans (on June 18) for a fund that would hold both BTC and ETH.&nbsp;



Not to mention the SEC is still <a href="https://www.sec.gov/files/rules/sro/nysearca/2024/34-100390.pdf">considering</a> a planned spot bitcoin ETF that <a href="https://blockworks.co/news/climate-conscious-bitcoin-etf">combines BTC exposure with carbon credit futures</a>. Oh, and a separate fund <a href="https://www.sec.gov/Archives/edgar/data/1924868/000199937124007814/stkd-485apos_062624.htm#stkd485bposa001">proposed</a> Wednesday would invest in futures and ETFs related to both bitcoin and gold.



Bottom line, the crypto-related ETF stack on the SEC’s desk is sizable — and likely to get bigger.&nbsp;



US spot ETH and SOL ETFs may have seemed like an utter fantasy in early 2023. But BlackRock would enter the spot bitcoin fund race mid-year. Grayscale then won a lawsuit, the SEC cleared ether futures ETFs and, last month, <a href="https://blockworks.co/news/sec-approves-ether-etf-proposals">approved the 19b-4s for spot ETH ETFs</a>.&nbsp;&nbsp;



To some, the SEC giving its blessing to a SOL ETF might feel like a pipe dream, and maybe it is (at least in the near-term). But it’s hard to deny we appear to be in a new era of crypto ETF innovation.&nbsp;



If the SEC filings webpage isn’t among your bookmarked tabs, you might want to add it. 



— Ben Strack



<h2 class="wp-block-heading">0</h2>



The number of crypto mentions <a href="https://blockworks.co/news/markets-react-to-presidential-debate">during the Thursday debate</a> between President Joe Biden and former President Donald Trump.&nbsp;&nbsp;



Questions unsurprisingly focused on arguably more pressing issues like the economy, immigration, abortion, foreign policy, etc.&nbsp;



Lies were told. Trains of thought were lost. Questions were successfully evaded. Despite Trump <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-bitcoin-mining-meeting">seeming to embrace crypto</a> in recent weeks and many Democrats showing more support for a space the party appeared to previously collectively oppose, the topic didn’t make the cut on last night’s stage. 



Crypto remains an important political issue to many, with <a href="https://blockworks.co/news/grayscale-survey-crypto-voters-2024-election">55% of voters surveyed by Grayscale </a>expressing concern about elected officials not understanding the technology.



<h2 class="wp-block-heading">Chevron doctrine is Chevr-OFF </h2>



In a 6-3 decision Friday, the Supreme Court reduced the authority of federal agencies. The ruling overturns the so-called Chevron doctrine, <a href="https://www.law.cornell.edu/supremecourt/text/467/837">established</a> by Chevron v. Natural Resources Defense Council in 1984.&nbsp;



The doctrine has for the last four decades required courts to defer to the knowledge of federal administrators and agency leaders.&nbsp;



Those opposed to the precedent argue that it allows federal agencies to extend their reach beyond what Congress grants. Supporters say the doctrine allows experts to fill in gaps around specific issuers and help protect their respective interests.&nbsp;



​​“Because the Supreme Court has overturned the Chevron doctrine, courts are deemed to be the proper forum for deciding matters of law — including statutory and regulatory ambiguities,” Dorsey &amp; Whitney partner Joseph Lynyak said. “However, courts around [the country] may be inundated with private parties who may now litigate and relitigate an agency interpretation, including creating conflicting decisions by lower courts.”



The ruling is especially interesting to the crypto industry, which has long maintained that agencies like the SEC are <a href="https://blockworks.co/news/state-ags-warn-sec-kraken">overstepping</a> <a href="https://blockworks.co/news/sec-overreach-failure-debt-box">their</a> <a href="https://blockworks.co/news/uniswap-responds-to-sec-wells-notice">authority</a> by attempting to establish rules, usually through litigation and <a href="https://blockworks.co/news/sec-2023-crypto-enforcement-actions">enforcement actions</a>.&nbsp;



“​​In the absence of specific legislation granting and clearly outlining regulatory authority over crypto, federal regulators are attempting to adapt their existing statutory authorities to cover crypto-related activities,” crypto advocacy group The DeFi Education Fund <a href="https://www.defieducationfund.org/post/redefining-boundaries-in-administrative-law-how-the-loper-bright-decision-could-reshape-crypto-regu">said</a> Friday. “This approach is problematic because these authorities are ill-suited for the task, their application is unclear, and their authority is questionable.”



We’ll be curious to watch over the weekend how agencies and lawmakers continue to respond to the decision.



— Casey Wagner



<h2 class="wp-block-heading">Did You Notice</h2>



We made it to Friday! Here’s a recap of this week’s economic events and what they mean:&nbsp;



<ul>
<li>The headline economic figure this week was definitely Friday’s PCE reading. It’s the Fed’s preferred inflation gauge and it came in right along with expectations. Prices are still increasing (2.6% annually in May), but more slowly than they have been in over three years. The report was enough to give <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">Fed fund futures</a> markets renewed hope that a September rate cut might just be in the cards after all. </li>



<li>As we talked about in <a href="https://blockworks.co/news/on-the-margin-newsletter-fed-policy-unemployment">Tuesday’s newsletter</a>, the metric to be watching right now is jobs data. <a href="https://www.dol.gov/ui/data.pdf">Initial jobless claims</a> dropped 6,000 to a seasonally adjusted 233,000 for the week ended June 22, the Labor Department said Thursday. There was a public holiday that week — which tends to impact the data — so take it with a grain of salt. Recurring applications however rose to the highest level since 2021. If unemployment increases, it could push the Fed to cut earlier than expected. </li>



<li>In a shock to no one, headlines headed into next week’s holiday weekend are going to be dominated by last night’s first presidential debate. We will need at least two more business days to digest all the <a href="https://x.com/netcapgirl/status/1806720985686556824">memes</a>. In all seriousness, the main questions now are: 1. When will Trump announce his running mate, and who will it be? and 2. Are Democrats going to try for an eleventh-hour switch-up and replace Biden? </li>
</ul>



— Casey Wagner



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



<ul>
<li>The SEC <a href="https://blockworks.co/news/sec-lawsuit-against-consensys-securities">filed a suit against Consensys</a> Friday, making good on a promise from months ago when the agency <a href="https://blockworks.co/news/consensys-files-lawsuit-against-sec">served the crypto firm a Wells notice</a>. The SEC alleges the company failed to register as a broker and offered and sold unregistered securities. </li>



<li>Though we already mentioned crypto did not surface during last night’s presidential debate, industry players are still showing support for Trump. Kraken co-founder Jesse Powell took a page from the Winklevoss twins’ book by saying Friday he donated <a href="https://x.com/jespow/status/1806569144294556146">$1 million</a> to Trump’s campaign. This is, of course, over the individual contribution limit, so maybe Powell <a href="https://blockworks.co/news/on-the-margin-newsletter-crypto-super-pac-elections">donated to a super PAC</a> — or else he’s probably getting a refund. </li>



<li>Thanks for reading along this week; we hope you have a great weekend! If you’re looking for more OTM content to tide you over until Monday, check out our weekly roundup podcast episode tomorrow morning on <a href="https://www.youtube.com/@BlockworksHQ/videos">YouTube</a> (or wherever you get your podcasts).</li>
</ul>



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On the Margin Newsletter: Crypto ETF filings are only ramping up

Macauley Peterson

Here’s a fun thought experiment. After watching last night’s debate, how much more (or less) likely do you think it is that President Biden drops out of the race?



Turns out there’s a Polymarket for that.



Polymarket is a decentralized prediction market platform operating on the Polygon PoS blockchain, where users can bet on various events by buying and selling shares of different outcomes. The price of each share represents the probability of the event occurring, and users profit if they accurately predict the outcome. When the event concludes, the shares corresponding to the actual outcome are paid out at $1 each, while all other shares become worthless.



The <a href="https://polymarket.com/event/will-biden-drop-out-of-presidential-race">market</a> for “Biden drops out of presidential race?” currently has $7.4 million committed, with 33% favoring “Yes.” That’s up from 19% just a day ago, illustrating what speculators — putting up real money — currently think about the state of the race.



Read more: <a href="https://blockworks.co/news/polymarket-funding-backed-by-vitalik-buterin">Polymarket gets backing from Vitalik Buterin, Founders Fund in $70M raise</a>



The Yes camp was briefly as high as 47% earlier in the day. That spike has subsided, but not by much, even as Biden’s advisors were <a href="https://x.com/kaylatausche/status/1806675665845903645">quoted</a> saying he fully intends to stay in the race and debate Trump again in September. 



As of recent polling data, a hypothetical two-way race between Vice President Kamala Harris and Trump shows the former president with about a six point lead nationally.



Yet, Polymarket’s overall <a href="https://polymarket.com/event/presidential-election-winner-2024">odds</a> for Harris being elected now stands at just 4%.



There’s an apparent disconnect here.



Only once in American history has the presumed Democratic presidential nominee, following the primary contests, been replaced. That was in 1968, when Senator Robert F. Kennedy was assassinated after winning the California primary.



Vice President Hubert H. Humphrey, who had not actively competed in the primary elections, became the Democratic nominee.



With the 2024 primaries over, the process of selecting a new nominee in the run-up to the August Democratic National Convention would likely involve significant party negotiations and strategic considerations. But Vice President Harris would have to be considered a strong contender, should President Biden release his delegates.



Given the Polymarket odds and polling statistics, the probability of an eventual President Harris should logically be quite a bit higher.



Read more: <a href="https://blockworks.co/news/memecoin-elections-biden-vs-trump">If elections were settled with memecoins, Biden would win by a landslide</a>



Polymarket odds tend to skew in favor of <a href="https://blockworks.co/tag/donald-trump">Trump</a> (presumably due to his <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-sec-and-solana-etp">pro-crypto politics</a>) compared to national polling, but his current 64% chance on the platform is an outlier.



Rasmussen Reports, which is known to have a historical tendency to skew slightly more Republican compared to other polling organizations, shows Trump leading Biden by nine percentage points, with 49% support for Trump and 40% for Biden.​



Although it’s likely many of these markets are inefficient, the main presidential election market has attracted $193 million in bets, which is certainly nothing to cough at.



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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>.



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Biden debate performance shakes up Polymarket odds

Jack Kubinec

Jeff Albus

Today, enjoy the Lightspeed newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to the Lightspeed newsletter</a>.



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Howdy! 



I had a whole intro ready to go about Taco Bell, but then news broke that 21Shares filed for a solana spot ETF, so I would be remiss not to touch on that.



From my initial read-through, the filing is very similar to the VanEck spot ETF filing <a href="https://blockworks.co/news/lightspeed-newsletter-spot-solana-etf-filing">we covered yesterday</a>, and many of the same potential questions are likely to apply.



Check back Monday for that promised Taco Bell intro.



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<h2 class="wp-block-heading">US presidential debate sends candidate coins tumbling</h2>



One X poster <a href="https://x.com/EasyEatsBodega/status/1806396409111048427">quipped</a> that last night’s televised US presidential debate was going to be the Super Bowl for memecoins.&nbsp;



In this particular Super Bowl, both teams appear to have lost: BODEN and TREMP, the candidate-themed memecoins with Microsoft Paint-level artwork, both entered nosedives immediately after the debate began at 9 pm, according to CoinGecko. Other Trump-themed tokens like MAGA and TRUMP saw similar price action.



If you’re going to tell a story from this, it’s perhaps that market participants weren’t thrilled with either candidate’s performance, though things went worse for President Joe Biden — who is facing ongoing <a href="https://www.nytimes.com/2024/06/27/us/politics/biden-debate-democrats.html">calls</a> to exit the race post-debate; his memecoin fell more dramatically than Donald Trump’s (on this last point, my condolences, Mr. President).&nbsp;



Nigel Eccles, CEO of BetHog and co-founder of FanDuel, told me he suspects BODEN’s price fell so dramatically because if Biden drops out, “the meme dies” too.&nbsp;



Pump.fun shows a race to capture the next meme if Biden were to exit the race: Potential replacements like Vice President Kamala Harris and California Governor Gavin Newsom have seen several memecoins spring up with their likeness in recent days.



But the most lucrative emotion last night may have been disappointment. The only debate-themed memecoin to make it to Moonshot’s “finalized” section was “CNNSUCKS.”



“CNN is hosting the worst presidential debate in history. LET&#8217;S PUMP THIS UP!,” the token’s description read.&nbsp;



(It’s also worth noting that crypto garnered nary a mention in the debate despite the Trump campaign’s recent overtures to the industry. You could imagine TREMP seeing much more favorable price action had Trump talked about <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-bitcoin-mining-meeting">boosting US-based bitcoin mining</a>, for instance.)



It’s a fool’s errand to make too much of memecoins, but trading these tokens speaks to a larger belief among some in crypto that Web3 markets are a fairer and more efficient truth-seeking tool than things like voting or polls. <a href="https://blockworks.co/news/metadao-is-making-markets-into-its-government">Futarchy is one example</a>. Polymarket is another.



But wherever you go there you are, as they say, and it turns out that human complexity plays into these markets as well.



Polymarket bettors plowed more than $1 million into whether Barron Trump was <a href="https://blockworks.co/news/donald-trump-djt-token-solana">involved with the DJT memecoin</a>. UMA, Polymarket’s oracle system for resolving markets, <a href="https://x.com/0xKeef/status/1806001297365331969">settled</a> on the answer that Barron Trump was not involved with the token.&nbsp;



Another prediction platform, SX Bet, <a href="https://x.com/SX_Bet/status/1806038889511170346">put</a> up a market for whether Polymarket would refund bettors who voted “yes.”&nbsp;



Despite UMA’s <a href="https://x.com/UMAprotocol/status/1805378053536891330">pledge</a> to resolve the contentious vote “onchain in a trustless, decentralized manner,” Polymarket <a href="https://x.com/Polymarket/status/1806479362377814378">said</a> yesterday on social media that its oracle was wrong, Barron’s involvement was “conclusive,” and it would refund the market’s “yes” voters&nbsp;



As the presidential election draws closer, there’s bound to be more silliness in this realm of so-called PolitiFi. Perhaps be advised before taking any of it too seriously.



— Jack Kubinec



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



<h3 class="wp-block-heading">27% and 17%</h3>



That’s roughly how much BODEN and TREMP fell in the hour and a half the two candidates spent debating last night.&nbsp;



Post-debate reviews seem to have been kinder to TREMP though, as the asset retraced slightly overnight, while BODEN continued to decline.&nbsp;



BODEN is now trading at its lowest point since just after its CoinGecko price listing began in early March. TREMP has also fallen from recent highs, but not quite so dramatically.



— Jack Kubinec



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



If there&#8217;s one thing that seems to bring crypto users together, it&#8217;s dogs.



On Tuesday, X user @CannaCrypto420 <a href="https://x.com/CannaCrypto420/status/1805263909898895508">shared</a> a heartfelt post about how tokens he had claimed during the Jupiter Exchange airdrop had helped to save his service dog&#8217;s life. After a drunk driver hit his dog, Kilo, he used the funds he received in February to cover the emergency care and surgery costs. As of the most recent update, Kilo <a href="https://x.com/CannaCrypto420/status/1806543580942553245">appeared</a> to be doing well with his recovery, with his owner stating “I can tell the therapy is helping.”



The story seems to have resonated, with <a href="https://x.com/TommyEgan357/status/1805595364738646173">many</a> <a href="https://x.com/_cryptoTomNook/status/1805609822533890366">users</a> <a href="https://x.com/FunkyZ00/status/1805572933596676215">rallying</a> to share photos of their own dogs and to offer support. Some asked for his Solana address, ostensibly intending to send additional tokens to help with ongoing expenses.



User @wizzyknows <a href="https://x.com/wizzyknows/status/1805594193630302591">posted</a>, &#8220;This is why crypto is amazing. Jupiter really helped so many people.&#8221; Follower @215NFTS <a href="https://x.com/215NFTS/status/1805460871918780798">commented</a>, &#8220;Airdrop well spent!! A no brainer… I would empty my crypto bag and my bank account for my dogs… you&#8217;re a good man.&#8221; Meanwhile, @vpiphany <a href="https://x.com/vpiphany/status/1805481702296289773">noted</a>, &#8220;Life-changing money looks different for everyone. I&#8217;m glad it allowed you to save your friend.&#8221;



Is it a cliché? Sure, but only because it&#8217;s true: Some things are simply more important than money.



— Jeffrey Albus



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



A message from Nigel Eccles, CEO of BetHog and co-founder of FanDuel:


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXcq70AYqi6i3grkpM6N2AWMjPxX3z0k044cGTLgPyp1h0Uqhys5uEw5s7OdAtkG7BQcLS8t5ipHtb1d5zEMF4nedjZDHVCI6Q9kp94XIQ9aI0bF1I0316CqvRLdCqtdL8rKYkOuiPe0gpFJeBh7g6EZbRqG?key=_y-uqV8n2FF-9d8aUUYpUQ" alt=""/></figure></div>


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Lightspeed Newsletter: Candidate coins BODEN, TREMP slumped during the debate

Katherine Ross

The Securities and Exchange Commission filed a suit against Consensys Software on Friday.



The SEC is <a href="https://storage.courtlistener.com/recap/gov.uscourts.txnd.389154/gov.uscourts.txnd.389154.1.0.pdf">alleging</a> that the company failed to register as a broker as well as offering and selling unregistered securities. 



The lawsuit didn’t come as a surprise to Consensys, which said that it “fully expected” the SEC to “follow through on its threat to claim our MetaMask software interface must register as a securities broker.”



“The SEC has been pursuing an anti-crypto agenda led by ad hoc enforcement action. This is just the latest example of its regulatory overreach — a transparent attempt to redefine well-established legal standards and expand the SEC’s jurisdiction via lawsuit. We are confident in our position that the SEC has not been granted authority to regulate software interfaces like MetaMask. We will continue to vigorously pursue our case in Texas for ruling on these issues because it matters not only to our company but the future success of Web3,” a spokesperson told Blockworks.



In its suit, the <a href="https://blockworks.co/tag/sec">SEC</a> targeted MetaMask Swaps. The firm, through Swaps, has “brokered over 36 million crypto asset transactions — including at least 5 million transactions in crypto asset securities” since 2020, the SEC argued.



The regulator also alleges that Consensys “holds itself out as a place to buy and sell crypto assets (which include crypto asset securities), recommends trades with — as Consensys itself puts it — the ‘best’ value, accepts investor orders, routes investor orders, handles customers assets, carries out trading parameters and instructions on the customer’s behalf, and receives transaction-based compensation.”



Read more<a href="https://blockworks.co/news/consensys-sec-lawsuit-debate">: Is the SEC weighing a lawsuit against Consensys?</a>



“By its conduct as an unregistered broker, Consensys has collected over $250 million in fees,” the suit claims.&nbsp;



On top of Swaps, the regulator is also targeting Staking.



“Indeed, Consensys developed and deployed MetaMask Staking for the specific purpose of offering and selling the Lido and Rocket Pool staking program investment contracts,” the SEC said.



Following that, the regulator claims that Lido and Rocket Pool <a href="https://blockworks.co/news/eth-not-security-howey">are unregistered securities</a>.



“Consensys’s unregistered offer and sale of the Lido and Rocket Pool securities, as to which it also acts as an unregistered broker, violates the federal securities laws […] Indeed, registration statements provide investors with material information about the securities offering and the issuer’s business and financial condition, so that investors can make informed investment decisions,” the SEC claimed.&nbsp;



Specifically, the regulator is making the argument that Consensys acted as an “underwriter” for Lido and Rocket Pool through its offerings.



The claims by the SEC Friday line up with what Consensys has previously said that the SEC <a href="https://blockworks.co/news/consensys-files-lawsuit-against-sec">alleged in its Wells notice</a>. According to a lawsuit filed by Consensys against the SEC earlier this year, the SEC targeted MetaMask Swaps in an investigation, warning Consensys that it <a href="https://blockworks.co/news/consensys-sec-lawsuit-debate">may pursue legal action</a>.



Last summer, the SEC filed suits against both Coinbase and Binance. The regulator alleged that the two <a href="https://blockworks.co/news/the-sec-says-these-crypto-assets-are-securities-their-reasoning-is-wrong">also offered and sold unregistered securities</a>.



The SEC also alleged that Coinbase and Binance operated as unregistered brokers (as well as unregistered exchanges). The SEC specifically <a href="https://blockworks.co/news/coinbase-dismissal-denial-staking-and-securities">targeted Coinbase’s staking service</a> as well. Despite an attempt by Coinbase to dismiss the suit, the regulator’s claims moved forward in a court earlier this year, with Judge Katherine Polk Failla finding that the SEC “sufficiently alleged that Coinbase offers and sells the Staking Program as an investment contract.”



Updated June 28, 2024 at 1:48 pm ET: Added comment from Consensys.



Updated June 28, 2024 at 1:19 pm ET: Expanded on SEC allegations against Consensys.



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SEC files lawsuit against Consensys

Prices in May increased at the lowest annual rate in more than three years, the personal consumption expenditures price index showed Friday.&nbsp;



Core PCE, which excludes volatile food and energy prices, came in at 2.6% higher from a year ago. It’s the lowest increase since 2021.&nbsp;



Overall PCE was unchanged between April and May, while the core figure increased 0.1%. The readings are in line with analyst expectations.



Markets seem to have reacted to the print well. US equities trended higher Friday morning following a boost in futures late Thursday evening as the first presidential debate wrapped. The S&amp;P 500 and Nasdaq Composite indexes were up 0.3% each at time of publication.&nbsp;



Read more: <a href="https://blockworks.co/news/on-the-margin-newsletter-housing-market-economy">On the Margin Newsletter: Where’s the economy headed? The housing market will tell you</a>



Fed fund futures showed renewed hope that the Federal Reserve will <a href="https://blockworks.co/news/on-the-margin-newsletter-btc-price-movement-dip">begin the rate cutting cycle</a> in September, with markets showing a 60% likelihood, according to <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">data</a> from CME Group.&nbsp;



“Should inflation continue to behave itself, and incoming data fall in line with the [Federal Open Market Committee]&#8217;s forecasts through the summer, the first 25 [basis point] cut remains on the cards as soon as September,” Michael Brown, senior research strategist at Pepperstone, said. “This is particularly true if cracks emerging in the labor market, such as yesterday&#8217;s continuing jobless claims print rising to its highest level since November 2021, were to result in a significant rise in unemployment, and/or a negative nonfarm payrolls print, before said meeting.”



Bitcoin and ether slipped on Friday afternoon in New York, losing 1.4% and 1%, respectively, at time of publication. Both cryptocurrencies bounced late Thursday night as President Joe Biden and former President Donald Trump faced off. Bitcoin gained as much as 1.1% during the broadcast, while ether ticked 1.5% higher. 



Crypto analysts remain focused on the status of spot <a href="https://blockworks.co/tag/ether-etfs">ether ETFs</a> in the US. Prospective issuers are <a href="https://blockworks.co/news/ether-etf-issuers-await-sec-final-approval">working through the revision process</a> for their S-1 forms with the Securities and Exchange Commission, which could be the final step before the products start trading.



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US equities edge higher, cryptocurrencies slip as inflation cools, market reacts to debate 

Though VanEck’s proposal for a US spot solana ETF came just days after a SOL fund filing in Canada, the two are very different.



The Canadian proposal by asset manager 3iQ may have an easier path to approval, while the fate of VanEck’s product could depend on a change of precedent (and administration) within the Securities and Exchange Commission.



Toronto-based 3iQ revealed plans last week to bring the first solana exchange-traded product (ETP) in North America. The offering, if permitted by the Ontario Securities Commission, would trade on the Toronto Stock Exchange.



Read more: <a href="https://blockworks.co/news/lightspeed-newsletter-solana-etp-pitch">Lightspeed Newsletter: North America’s first solana ETP pitch is here</a>



But the 3iQ product is a closed-end fund, meaning it would offer a fixed number of shares. The VanEck Solana Trust’s authorized participants, meanwhile, would continuously create and redeem shares <a href="https://blockworks.co/news/on-the-margin-newsletter-housing-market-economy">based on market demand</a>.&nbsp;&nbsp;&nbsp;



Put another way, the <a href="https://blockworks.co/tag/vaneck">VanEck</a> fund would operate like the ETFs many investors are more accustomed to — mirroring the spot bitcoin funds launched in January or the spot ETH funds expected to come to market <a href="https://blockworks.co/news/ether-etf-issuers-await-sec-final-approval">as soon as next week</a>.



3iQ’s Solana Fund would be a bit “more similar” to Grayscale Trust products, Bloomberg Intelligence analyst James Seyffart <a href="https://x.com/JSeyff/status/1803907308541612419">said</a> on X. Both Seyffart and Chris Matta, president of 3iQ Digital Assets, noted that Canadian closed-end funds include a mechanism that keeps premiums and discounts from straying too far from the net asset value. The 3iQ fund’s shares would also trade on the Toronto Stock Exchange rather than OTC Markets Group (where Grayscale Solana Trust shares are listed).



<h2 class="wp-block-heading">Chance of approval?</h2>



Matta told Blockworks last week that solana has hit a “stage of maturity” that spurred 3iQ’s filing — pointing to SOL’s roughly $60 billion market cap, for example. But he added that regulators would likely favor the closed-end structure first because a regulated futures market for solana doesn’t exist yet. The CME Group offers futures markets for BTC and ETH.



This prevents authorized participants (typically regulated banks in Canada) from hedging their exposure during the creation and redemption process, Matta said.



“Frankly, I think that’s why there haven’t been filings in the US for solana ETFs,” he told Blockworks last week.&nbsp;&nbsp;



3iQ launched similar funds focused on BTC and ETH in 2020 before Canada’s first spot bitcoin and ether came to market the following year.&nbsp;



“Historically, other closed ended vehicles have converted to ETFs when regulators could get comfortable, so that’s something that can be considered in the future,” Matta added in a June 20 X <a href="https://x.com/chriscryptonite/status/1803925389930270843">post</a>.



But VanEck is going straight for the traditional ETF structure.



Read more: <a href="https://blockworks.co/news/vaneck-files-for-solana-etf">VanEck kicks off solana ETF bid in the US</a>



It is worth noting that, unlike the 3iQ fund, the VanEck product would not stake its SOL holdings. Despite the omission of <a href="https://blockworks.co/tag/staking">staking</a> — a feature the SEC signaled it was not comfortable with during the ether ETF proposal process — it would appear the VanEck solana product indeed has an uphill battle ahead.



Industry watchers told Blockworks last month they didn’t expect the current precedent (the SEC needing to see regulated futures markets before approving spot products for that asset) to change in the near-term.



Read more: <a href="https://blockworks.co/news/us-spot-crypto-etf-approvals-outlook">Why more US spot crypto ETF approvals may be unlikely in the near term</a>



A win by Donald Trump in November’s US presidential election — and a possible subsequent <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-sec-and-solana-etp">SEC shake-up</a> — could change that down the line.



<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">I suspect VanEck would keep this in regardless of SEC request &#8212; especially since they must know already this is an auto denial under Gensler. It&#39;s a long tail bet on election/regulatory environment that may pay off big. I&#39;ll be watching to see if anyone else jumps in. Though a…&mdash; Scott Johnsson (@SGJohnsson) <a href="https://twitter.com/SGJohnsson/status/1806326037879406955?ref_src=twsrc%5Etfw">June 27, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Also, SEC Chair Gary Gensler has acknowledged bitcoin as a commodity (rather than a security). The agency left the status of ETH pretty unclear until last month’s spot ether ETF <a href="https://blockworks.co/news/sec-approves-ether-etf-proposals">19b-4 proposal approvals</a>.&nbsp;



The <a href="https://blockworks.co/tag/sec">SEC</a> labeled SOL an <a href="https://blockworks.co/news/the-sec-says-these-crypto-assets-are-securities-their-reasoning-is-wrong">unregistered security</a> in lawsuits against Coinbase and Binance last year — a fact likely to complicate the fate of the VanEck product for now. 



Matthew Sigel, VanEck’s head of digital assets research, argued in an X <a href="https://x.com/matthew_sigel/status/1806313241431138434">post</a> that “SOL’s decentralized nature, high utility, and economic feasibility align with the characteristics of other established digital commodities.”



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How the solana fund filings in the US, Canada differ

David Canellis

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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



<h2 class="wp-block-heading">Power grab</h2>



To paraphrase Tony Montana: In crypto mining, first you get the power, then you get the Antminers, then you get the bitcoin.



AI has flipped all of that on its head. Tech companies fueled with loads of cash — including OpenAI, Meta, Microsoft and Google — are competing to <a href="https://www.businessinsider.com/ai-data-centers-land-grab-google-meta-openai-amazon-2023-12">snatch</a> up as much <a href="https://therealdeal.com/national/2024/01/14/google-buys-500-acres-for-data-centers-in-kansas-city/">land</a> and as many data centers as possible.&nbsp;



If training AI models is a gold rush, juicy gigawatts are the shovels. So for bitcoin miners, as well as former Ethereum miners still sitting on stores of GPUs, the Scarface roadmap to success now goes: land, power, lucrative data center deals with Big Tech.



Core Scientific’s multibillion-dollar deal to service AI-centric cloud computing provider CoreWeave is the most obvious indicator of where things are going.



CoreWeave initially offered $1 billion to buy CORZ outright upon realization it was technically one of the largest data center operators in the US. Core Scientific is <a href="https://investors.corescientific.com/news-events/press-releases/detail/78/core-scientific-announces-new-contract-with-coreweave-for-delivery-of-approximately-70-mw-of-additional-infrastructure-to-host-high-performance-computing-operations">contracted</a> for 1.2 gigawatts of power and has enough infrastructure to direct nearly half that toward high-performance computing use cases like AI.&nbsp;



(For scale, Meta is working to add an <a href="https://sustainability.fb.com/energy/">additional</a> 9.8 gigawatts of renewable power to US energy.)



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXf5Nztz0YaylCPmgMRZjjg8cUiZSzqQuVwYlQ_OUkyAhNe9xlmvgkymyABoqvg8uC8WqsKnDxDNdhSDte0tP0JxGYt4NFHRrET67wM830YGs1M7IrmfsK87vGVOrcTd1xXijoqDQxSR6532V1CyEjajgcT2?key=woTdNCro9zatrimeEri7YA" alt=""/><figcaption class="wp-element-caption">Bitcoin miners followed the price of bitcoin right up until the purple band at the right end of the chart (halvings are marked by dotted lines)</figcaption></figure>



Back in March, it was fairly <a href="https://blockworks.co/news/bitcoin-mining-stocks-crypto-rally">obvious</a> that markets were repricing mining stocks lower in anticipation for the halving two months later.&nbsp;



The halving would immediately double the cost of BTC production, and overall, miners shed about 25% of their market capitalization in five weeks. All while bitcoin rallied 45% and hit new all-time highs.



That marked the first time miners had decoupled from bitcoin in any meaningful way since at least before the last halving, in 2020.



Now, two months after the halving, the market capitalization of bitcoin miners as a cohort are still trending the opposite.&nbsp;



Core Scientific, TeraWulf and Hut 8 are trading in close correlation with NVDA these days — up. Valuations for other miners including Marathon, CleanSpark and Riot are trending sideways, while bitcoin has retraced.&nbsp;



Bitcoin miners transforming into AI power providers could be the new norm, especially with such positive market reaction.&nbsp;



There are lots of things that are unknown about the future of AI, however. And for what it’s worth, Bitcoin will be just fine. Publicly-listed miners currently control up to a quarter of Bitcoin’s total hash rate — computing power that’s dedicated to mining the chain.&nbsp;



High hash rate makes it prohibitively expensive to cause chaos with a 51% <a href="https://www.investopedia.com/terms/1/51-attack.asp#:~:text=A%2051%25%20attack%20is%20an%20attack%20on%20a%20blockchain%20by,other%20miners%20from%20completing%20blocks.">attack</a>. But even if all public miners were to switch off their rigs and pivot to only AI, effectively pulling off any hash rate attacks would be just as unrealistic.



What’s clear is that Bitcoin’s convergence with the AI industry has only made running large-scale mining operations in 2024 much more interesting from a shareholder perspective, and potentially, far less susceptible to BTC market cycles.



— David Canellis



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



<ul>
<li>Bitcoin’s hash rate is down 20% since just before the halving, but still <a href="https://bitinfocharts.com/comparison/bitcoin-hashrate.html#1y">up</a> from where it was at the start of the year.</li>



<li>User fees paid to bitcoin miners are set to <a href="https://tokenterminal.com/terminal/projects/bitcoin">reach</a> $100 million this month, up from $64 million in May.</li>



<li>Runes and Ordinals activity is <a href="https://dune.com/cryptokoryo/runes">falling</a> again, currently making up around 10% of all Bitcoin transactions, down from over half after the halving.</li>



<li>BTC is up 0.7% over the past day to $61,550. ETH has added 1.3% to $3,450.</li>



<li>GPU marketplace token AKT is leading the <a href="https://www.coingecko.com/">front page</a> today, up nearly 19%, followed by AVAX and DOT with 7%.</li>
</ul>



<h2 class="wp-block-heading">Time is money</h2>



Miners may not be as tied to bitcoin as they once were, but maybe that’s exactly what investors want.&nbsp;



Outside of the aforementioned Core Scientific-CoreWeave deal expansion, Hut 8 also <a href="https://blockworks.co/news/hut-8-mining-ceo-interview">announced funding</a> to further venture into AI.&nbsp;



Since the initial Core Scientific announcement, the market cap for 14 of the biggest bitcoin miners has increased by $4 billion, a 22% jump, JPMorgan analysts noted.&nbsp;



The <a href="https://blockworks.co/news/empire-newsletter-miner-wall-street-ai-revenue">last time I talked about bitcoin miners and AI</a>, we were fresh off of the Bitcoin halving. It was evident even then that miners and AI were far more tied than they had been previously, and that there was a serious opportunity for that particular intersection.



Even before the funding and partnerships came in, Benchmark analyst Mark Palmer could see the writing on the wall for who would be the most involved when it comes to AI.&nbsp;



Core Scientific and Hut 8 were two of the companies he named as best positioned for the AI demand.&nbsp;



But there’s also Iris Energy, which has caught the attention of JPMorgan. Analysts Reginald Smith and Charles Pearce noted last week that Iris is the “best positioned to take advantage of the HPC/AI opportunity as the company has excess power capacity and isn’t wedded to bitcoin mining.”



They have three reasons for this: It’s already running GPUs, it can build data centers on time (and already has), and it has enough power on-site. Unlike a company such as Riot, which has remained pretty focused on mining — and is <a href="https://blockworks.co/news/riot-nominates-bitfarms-board-directors-takeover">engaged in a hostile takeover</a> of Bitfarms.



Merely comparing the miners that have previous AI exposure versus the heavyweights (Riot and Marathon) shows how the AI play could boost the market cap of these companies.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXeTHiNtHH4TcTEcYM9tTG9A4x2_j5uS9-WhDmzzto3gKCrjGgPRT4jsLbzOXf8DdzK6sqvHuf2ODHzzcg9sECyDthbz7LbBrR5Vd4y0rEkwC8sO-URVO4v2RwjSKV0XiAO4LWMZ6PjDuRRGK_05V14oeB0?key=woTdNCro9zatrimeEri7YA" alt=""/><figcaption class="wp-element-caption">JPMorgan analysts compared the market caps of 14 miners, some of which are already engaged in the AI play</figcaption></figure>



Anyway, AI and miners are a bit of a match made in heaven currently, for those who are seriously interested in quickly getting data centers off the ground. JPMorgan noted that the current timeline for a high-performance computing center is three to five years, but the increased demand for AI could stretch that even further.&nbsp;



While retrofitting the miners facilities may not be the cheapest option, it could represent the most timely one.&nbsp;



“Bitcoin mining facilities are much cheaper to build than HPC-grade data centers. As a result, it can be expensive, and time consuming, to retrofit a mining site to host GPUs,” JPMorgan wrote.&nbsp;



“That said, time is money, and with access to power taking as long as five years, hyperscalers are willing to pay-up for access to energized facilities. Core Scientific estimates it costs between $5 million and $7 million to retrofit their bitcoin mining facilities into a HPC-grade data center, and does not plan to operate bitcoin mining and HPC compute in the same facility (i.e., building).”



If critics were worried about the energy use of bitcoin miners pre-AI, I can’t imagine they’re going to be thrilled about the energy use when some facilities are converted to data centers.&nbsp;



Or maybe it’ll take some of the pressure off the miners that stay true to their original business model.



— Katherine Ross



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



<ul>
<li>Coinbase announced a <a href="https://www.coinbase.com/blog/coinbase-stripe-team-up-to-increase-global-adoption-of-crypto">partnership</a> with Stripe, with the latter adding support for Base to its suite of crypto products.</li>



<li>VanEck <a href="https://blockworks.co/news/vaneck-files-for-solana-etf">filed</a> a registration statement for a spot SOL ETF, becoming the first firm to file for a potential solana ETF in the US.&nbsp;</li>



<li>A GSR <a href="https://www.gsr.io/reports/is-solana-eft-next/">report</a> looked into the possibility of a solana ETF launching in the US.&nbsp;</li>



<li>Bitcoin miner CleanSpark is <a href="https://blockworks.co/news/cleanspark-btc-miner-acquires-griid-infrastructure">acquiring</a> GRIID for $155 million in an all-stock deal.</li>



<li>Point72 is shifting its strategy to AI, laying off its fintech investment team, Forbes <a href="https://www.forbes.com/sites/emilymason/2024/06/27/billionaire-steve-cohens-point72-ventures-lays-off-fintech-team-in-pivot-towards-ai/">reported</a>.</li>
</ul>



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



Q: Is AI coming for our jobs?



Crypto is an industry built on “this time will be different.” AI is grounded in much the same.



Social media and Big Tech started out great but soon warped our brains, turning us all into dopamine-addicted rats. Proponents reckon AI won’t follow that trajectory.



What’s increasingly likely is that AI will be everywhere, in everything, all around us, but it will still be kinda shitty, just like most other technology we use today.&nbsp;



For sure, some jobs will be automated away. Hopefully, the dirty and dangerous jobs are the first ones to go.



My advice: Learn what AI can’t do well and figure out how to exist within that gap. When it closes for good, you’ll know it’s time to find something new.



— David Canellis



Maybe I’ll eat my words in 10 years, but right now I’m a skeptic. I think some jobs are unfortunately ripe for the picking for AI (ironically, it seems <a href="https://www.foxbusiness.com/technology/openai-cto-says-ai-may-replace-some-creative-industry-jobs-were-replaceable">focused on the more creative fields</a>… at least right now) but I don’t think the tech is there to pose a real threat.



Sure, if you want half-assed work, then AI might be your tech. Look at the way journalists are <a href="https://www.404media.co/email/18c1328f-ac22-4786-8157-981a9eafe2fc/?ref=daily-stories-newsletter">playing around with AI writing articles</a> for example.&nbsp;



But it <a href="https://www.theatlantic.com/technology/archive/2024/06/chatgpt-citations-rag/678796/?gift=iWa_iB9lkw4UuiWbIbrWGXLYTdlNrO9CeBd7btD-nTo&amp;utm_source=copy-link&amp;utm_medium=social&amp;utm_campaign=share">lacks the ability to properly source</a>, which — for those of you not heavily focused on the media environment — is incredibly important.



I think David’s right that we’ll see AI far more in our daily lives (ugh) and it might make aspects of our day-to-day existence better too, but most of our jobs are safe. For now at least.



— Katherine Ross



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Empire Newsletter: Bitcoin miners turn to AI for a boost

Felix Jauvin

Today, enjoy the On the Margin newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the On the Margin newsletter</a>.



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



<ul>
<li>Why a look at the housing market offers incredible insight into where the economy is headed.</li>



<li>A US solana ETF proposal is on the table, though getting SEC approval is another story.</li>



<li>Coinbase probably had enough litigation on its hands. But why not add a couple more suits?</li>
</ul>



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



<h2 class="wp-block-heading">The slowdown finally hits housing</h2>



They say that housing is the business cycle. And it makes sense! Think about all the components that fall into the process of building and selling a home:



<ul>
<li>Labor: Many people are needed to build a house. Carpenters, electricians, architects, etc.</li>



<li>Commodities: A lot of resources are needed to build a house. Lumber, metals, energy, etc.</li>



<li>Mortgage rates: A mortgage is often the largest expense on an individual’s balance sheet every month. Moreover, that expense is extremely sensitive to changes in interest rates. That is, unless you’re American and were smart enough to lock in a 30-year fixed mortgage at generational lows a couple years ago.</li>



<li>Land value: It is one of the few things we cannot make more of. People need to live somewhere and sleep under a roof every night.</li>
</ul>



Simply put, analyzing the housing market provides an excellent mirror into the health of land, labor and capital — the three tenets of an economy. By understanding the linkages between the three, you can get a pretty good idea of where the economy is headed:



<ol>
<li>As mortgage rates rise, the interest payments on new mortgages, refinanced mortgages and variable mortgages rise. As this occurs, consumers who were previously able to afford their mortgage on the margin now may be squeezed, forcing them to downsize and list their house. Further, no one wants to buy houses during this time given that rates are rising.</li>



<li>The supply of available housing to purchase therefore increases, making it a “buyer’s market.” Additionally, fewer new homes are being constructed, which leads to a downcycle in homebuilders (in both resource use and labor requirements).</li>



<li>Eventually, as the supply of available housing grows — much like an NFT project where everyone is listing at the floor hoping to get liquidity — all it takes is a few owners to undercut the floor price to trigger a downward spiral in prices. </li>



<li>As this downward spiral in house prices occurs, the equity that many people anchor their wealth to these days (often directly through something like a home equity line of credit) gets impaired, leading to a lower consumption, especially on discretionary items. This leads to a ratcheting down of economic growth until a recession occurs. </li>
</ol>



See? It’s a mirror of a classic business cycle.



Looking at the housing market in the US today, it feels like we’re seeing a regime shift.



Due to the fact that so many Americans have been sitting on their sub-3% 30-year fixed rate mortgage, it took longer than most expected to go from step 1 to step 2. But we are getting there now.&nbsp;



New home sales came in at -11.3% this week — versus an expected -0.2%. A huge miss! 



With that, we are seeing inventory pile up as sales crater.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXf8NPmqYqD5jj5WTrfh16w-eqkFr_oCEpGMXTokaovIVrZLgFwfR3ebQQTGzc4eSyp2DQ63qTRxGs1c3x2Sf79PeNifT_O8sjmuQNZ06Abgv1uPunun5xfyNtoZL_qghiCkJJx3b_Q7yDmiiCorHMsAn0f7?key=Xd5Iv-QH--DuVZmhB0wrug" alt=""/></figure>



From there, we look to see when step 3 will arise. Looking at the National Home Price Index, not a whole lot is happening quite yet.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXd0v9-KE0Xewbqt9ZplUbOrjKE_Irn0A9wKlrou4h9fP5xGSK4a7ZzsiRBL2CMdT2Y4t6Z1NFkYvf275DjfJz0IQ_qQxBll-JLzneN7IFh0sMkfXyRTv_p_tuzb2-JElg4psaoGx5YnJZi253WdqDDB-kZQ?key=Xd5Iv-QH--DuVZmhB0wrug" alt=""/></figure>



Aside from its impact on housing prices, this miss in new home sales also has implications for home building labor and therefore the unemployment channel.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXdOHu-b9Oo7rp180FXsSvH7-SJbWqCv7q7eMkJ5Tdx6BLhSJjxz70YWfjWSYyHgCCOswvwrF8EhEPinFwybyBbb0s7-_ygBJtI-vwGZaKhhHLHJsbWANAAWf1odsKiprVXGqHljQdNQeQzSnJ34ktXGndc?key=Xd5Iv-QH--DuVZmhB0wrug" alt=""/></figure>



If new home sales continue to slow down, layoffs in the sector will bump up the unemployment rate, which (as <a href="https://blockworks.co/news/on-the-margin-newsletter-fed-policy-unemployment">previously explained</a> through the Sahm rule) is key to understanding the Fed reaction function.



— Felix Jauvin 



<h2 class="wp-block-heading">$155 million</h2>



The value of bitcoin miner CleanSpark’s pending all-stock deal to acquire GRIID Infrastructure.&nbsp;



Still subject to GRIID shareholder approval, the <a href="https://blockworks.co/news/cleanspark-btc-miner-acquires-griid-infrastructure">pending transaction</a> sets up the chance for CleanSpark to build its presence in Tennessee. The company ultimately seeks to have more than 400 megawatts (MW) of infrastructure in the state, matching the type of expansion it has executed in Georgia. The merger would mark one of the first significant <a href="https://blockworks.co/news/post-bitcoin-halving-miner-mergers-acquisitions">M&amp;A deals</a> between public companies in the sector after April’s Bitcoin <a href="https://blockworks.co/news/bitcoin-halving-2024-occurs">halving</a>.



Unlike Riot Platforms’ apparent <a href="https://blockworks.co/news/riot-nominates-bitfarms-board-directors-takeover">ongoing attempt</a> to acquire rival miner Bitfarms, the CleanSpark-GRIID agreement is not of the so-called hostile takeover variety.



<h2 class="wp-block-heading">VanEck aims high with new SOL ETF filing</h2>



With US spot ether ETF launches imminent, fund group VanEck is now also <a href="https://blockworks.co/news/vaneck-files-for-solana-etf">eyeing</a> a solana product.&nbsp;



The investment firm’s Thursday <a href="https://www.sec.gov/Archives/edgar/data/2028541/000162828024030249/vanecksolanatrusts-1.htm">filing</a> for a spot SOL ETF comes a week after Canada-based 3iQ revealed plans to bring North America’s first solana ETP (if permitted by the Ontario Securities Commission) to the Toronto Stock Exchange.&nbsp;



To be clear, the proposed products are different.



3iQ’s planned fund is closed-ended, meaning it would offer a fixed number of shares. It also seeks to stake its solana holdings. While VanEck’s fund would not stake the SOL it holds, its authorized participants would continuously create and redeem shares based on market demand.



Put another way, the VanEck fund would be akin to the types of ETPs many American investors are used to (like the spot BTC funds and <a href="https://blockworks.co/news/ether-etf-issuers-await-sec-final-approval">imminent</a> ETH ETFs). The 3iQ product would only be a step in that direction.



Chris Matta, president of 3iQ Digital Assets, said last week he did not expect regulators to allow an open-ended solana ETF yet given there is no regulated solana futures market (like CME offers with BTC and ETH).



“Frankly, I think that’s why there haven’t been filings in the US for solana ETFs,” he noted.



Other industry watchers agree, <a href="https://blockworks.co/news/us-spot-crypto-etf-approvals-outlook">telling Blockworks</a> last month they didn’t expect the current precedent (the SEC needing to see regulated futures markets before approving spot products for that asset) to change in the near-term.



A Trump win in November and possible subsequent <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-sec-and-solana-etp">SEC shake-up</a> could change that down the line.



Also, while SEC Chair Gary Gensler has acknowledged bitcoin as a commodity (rather than a security), the agency left the status of ETH pretty unclear until last month’s spot ether ETF 19b-4 proposal <a href="https://blockworks.co/news/sec-approves-ether-etf-proposals">approvals</a>. But you might remember the SEC labeling SOL <a href="https://blockworks.co/news/the-sec-says-these-crypto-assets-are-securities-their-reasoning-is-wrong">as a security</a> in lawsuits against Coinbase and Binance last year.



Matthew Sigel, VanEck’s head of digital assets research, argued in an X <a href="https://x.com/matthew_sigel/status/1806313241431138434">post</a> that “SOL’s decentralized nature, high utility, and economic feasibility align with the characteristics of other established digital commodities.”



We have our eyes peeled to see if other US issuers follow VanEck’s lead with similar filings. If not, that likely signals they believe the regulatory uphill battle is currently too great. 



 — Ben Strack



<h2 class="wp-block-heading">Coinbase racks up its legal bills </h2>



As if it didn’t have enough litigation on its hands, Coinbase is initiating legal action against the SEC and the Federal Deposit Insurance Corporation.&nbsp;



The lawsuits, filed in Washington DC Thursday, come after Coinbase and its consultancy firm, History Associates Incorporated, were denied a series of Freedom of Information Act (FOIA) requests in 2023. History Associates is the plaintiff in both lawsuits and Coinbase is listed as an interested party.&nbsp;



The SEC and FDIC unlawfully withheld the requested information, according to Coinbase. Now, the exchange is asking the court to force the federal agencies to produce the documents. Neither the SEC nor the FDIC returned Blockworks’ request for comment.&nbsp;



The FOIA requests — filed by History Associates on behalf of Coinbase last year — were for documents pertaining to the SEC’s views on Ethereum. That includes copies of the so-called “pause letters” the FDIC sent to supervised financial institutions asking them to stop engaging in digital asset-related activities.&nbsp;



The SEC and FDIC in their denials of the FOIA requests cited federal exemptions intended to protect information that could threaten national security or would harm an ongoing investigation. Coinbase and History Associates say both agencies improperly cited exemptions as a reason to keep information private.&nbsp;



As a journalist, I get it. It’s pretty rare to have a FOIA request granted, especially from the SEC. It’s an interesting case with some potentially big implications; we might see the SEC and FDIC release these documents, or see a new precedent set around FOIA policies.&nbsp;



This is now Coinbase’s third legal entanglement with the SEC. The crypto exchange <a href="https://blockworks.co/news/coinbase-appeals-sec-rulemaking-petition">sued</a> the securities regulator after the SEC denied Coinbase’s formal petition for rulemaking in 2022. That case is now in the US Court of Appeals for the Third Circuit.



The SEC sued Coinbase in June 2023 for alleged securities violations. Coinbase <a href="https://blockworks.co/news/judge-rules-against-coinbase-sec-dismissal">mostly lost</a> its petition to toss the lawsuit in March, and the case has proceeded to the discovery phase.



I think the true sign of a bull market is a trifecta of lawsuits. Coinbase’s legal bills must be through the roof. 



— Casey Wagner



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



<ul>
<li>State Street Global Advisors and Galaxy Digital said Wednesday they are linking up to launch “the next generation of digital asset-based strategies.” An initial <a href="https://www.sec.gov/Archives/edgar/data/1516212/000119312524169018/d849788d485apos.htm">proposed</a> Digital Asset Ecosystem ETF would invest in crypto equities and futures contracts, as well as in ETFs that hold spot crypto or futures.</li>



<li>The Supreme Court on Thursday <a href="https://www.supremecourt.gov/opinions/23pdf/22-859_1924.pdf">ruled</a> 6-3 to allow defendants sued by the SEC to have a jury trial in federal court, as opposed to in-house adjudication. It’s the latest decision from the conservative-majority court that challenges the powers of federal agencies. </li>



<li>More than $570 million was lost to hacks and fraud across the Web3 ecosystem during the second quarter of 2024, according to a new <a href="https://immunefi.com/research/">report</a> from security services platform Immunefi. The figure is a 112% increase from the second quarter of 2023, researchers said.</li>
</ul>



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On the Margin Newsletter: Where’s the economy headed? The housing market will tell you

Elliot David

Bitcoin and crypto are quickly becoming a campaign issue in the 2024 election. And so we now find ourselves at a critical juncture where bitcoin could either become a bipartisan issue or fall victim to the pitfalls of hyper-politicization.&nbsp;



Writing about the politics of bitcoin, I think it is only fair to identify myself as a progressive, though I have worked for both President Clinton at his Foundation’s Islands Energy Program and President Trump at the US Department of Energy. Through my work, I&#8217;ve come to understand that bitcoin has intrinsic value for everyone, regardless of political affiliation.&nbsp;



Today, however, the challenge lies in ensuring that bitcoin&#8217;s potential isn&#8217;t overshadowed by political maneuvering.



Recently, President Trump has incorporated a “pro-bitcoin” stance into his stump speeches, signaling a notable shift in his political strategy. Now reports suggest that President Biden is also engaging with crypto stakeholders in order to explore how he too can appeal to the burgeoning bitcoin/crypto enthusiast community.&nbsp;



This newfound political interest from both ends of the spectrum presents a unique opportunity — and a significant risk.



Bitcoin is a neutral technology, much like the internet. It holds immense potential to reshape our financial systems, offering a permissionless and open monetary system. However, its future depends heavily on how we craft policy around it, and more crucially, how it is perceived by people across the ideological spectrum. This policy-making process should be inclusive, measured and aimed at unlocking bitcoin&#8217;s potential for all, rather than being swayed by the political winds of the moment.&nbsp;



I believe that bitcoin can either help unify our politics or become another battleground.&nbsp;



Thought leaders in the bitcoin and crypto space have voiced concerns over the current administration&#8217;s anti-industry stance. They argue that the clear moves by the administration to stymie bitcoin and crypto in the US — like by vetoing the bipartisan FIT21 bill — make engagement fruitless.



While these concerns are valid, it is crucial to recognize the danger of imbuing bitcoin with political ideologies. Doing so risks alienating a significant portion of the population, namely progressives and those identifying on the left, who might otherwise find value in this technology. Instead, bitcoin advocates should strive to keep the technology&#8217;s inherently neutral stance, focusing on its potential benefits across the political spectrum.



Read more from our opinion section: <a href="https://blockworks.co/news/only-a-fool-would-vote-on-crypto-alone">Only a fool would vote on crypto alone</a>



Bitcoin adoption is not just inevitable — it is essential. But rushing to embrace any candidate who offers superficial support for bitcoin without a thoughtful and inclusive approach can lead to shortsighted policies that may hinder its long-term potential. Instead, a slow, deliberate and inclusive policy-making process will better serve bitcoin&#8217;s growth and integration into our financial systems.



We must also remember that policy is not inherently an existential threat to bitcoin; rather, it is the social adoption of bitcoin that will define its future. If we truly believe in bitcoin as a revolutionary financial system, we must strive to make it inclusive. This means reaching out to historically excluded groups such as women and youth to ensure they feel welcome in the bitcoin community. Building a diverse and inclusive bitcoin ecosystem will help foster broader acceptance and integration, making the technology more resilient and robust.



In my role with the Sustainable Bitcoin Protocol, a global initiative focused on bringing transparency and sustainability to the bitcoin mining industry, I see firsthand the importance of responsible and inclusive approaches to technology. Our efforts to prove the sustainability and positive impact of bitcoin mining are part of a broader movement to ensure that bitcoin&#8217;s growth benefits everyone, not just a select few.



​​The climate movement serves as a poignant example of how crucial issues can become gate-kept by partisan divides, undermining collective action. Some conservatives and right-leaning individuals perceive climate change efforts as intrinsically tied to liberal agendas. In part, this is a deliberate politicization that has complicated bipartisan success despite the shared threat posed by climate inaction. This polarization stymies progress on what should be a consensus and bipartisan effort, though we may disagree on exactly what solutions to implement.&nbsp;



In the context of bitcoin, we must avoid a similar fate. By maintaining its neutrality and fostering inclusive, bipartisan dialogue, we can ensure that bitcoin&#8217;s transformative potential benefits everyone, transcending political boundaries.



By educating the public and fostering a deeper understanding of bitcoin, we can help demystify the technology and build a more informed and inclusive community. Recent initiatives like the Bitcoin Voter Project, which aims to support education and awareness about bitcoin, are crucial examples in this regard.



As we navigate this pivotal moment, it is imperative to avoid the trap of politicizing bitcoin. Instead, we should focus on its potential to bring positive change to our financial systems. This requires a bipartisan approach, one that values thoughtful policy-making over political expediency.&nbsp;



We should remember that politicizing bitcoin is like putting a party flag on the moon — it&#8217;s a disservice to its universal potential.



The future of bitcoin hinges on our ability to ignore our impulses and desire for our “tribes” to win, and follow the better angels of our nature in order to transcend political divides. We must be wary of politicians who offer superficial support without a genuine commitment to inclusive and sustainable growth. Bitcoin is more than just a technology — it is a movement towards a more open and equitable financial system. Let us ensure that this movement is not co-opted by partisan politics but remains a beacon of hope and progress for all.&nbsp;



Bitcoin isn&#8217;t about left or right; it&#8217;s about forward.



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


<div class="wp-block-post-author-biography">Elliot is the Head of Climate Strategy at Sustainable Bitcoin Protocol, where he is helping unlock Bitcoin&#8217;s clean energy potential by bridging sustainable miners and climate-conscious investors. In his role at Sustainable Bitcoin Protocol, Elliot educates policymakers and NGOs on Bitcoin’s relationship with the energy system. He is a climatetech operator focused on alleviating energy poverty, bridging the digital divide, and promoting financial inclusion through technologies such as Bitcoin. Elliot was previously a Schwarzman Scholar and has served in the military, US Department of Energy, Clinton Foundation, and more. </div>


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Bitcoin isn’t right or left — it’s forward

Restaking pioneer EigenLayer has demonstrated remarkable success in attracting capital — effectively acting as a &#8220;black hole&#8221; for ether — and has become one of the largest DeFi protocols in the process.



But Symbiotic’s entrance into the shared security space with a “stake anything” design is poised to shake things up.



Since <a href="https://blockworks.co/news/eigenlayer-deploys-on-ethereum-mainnet">launching</a> on Ethereum mainnet just over a year ago, <a href="https://blockworks.co/tag/eigenlayer">EigenLayer</a> had sucked in about 5.4 million ETH, worth $20 billion <a href="https://defillama.com/protocol/eigenlayer?denomination=ETH">at its peak</a> in early June. The protocol began raising deposit caps aggressively in early 2024, and accepting more flavors of ether.



By March, deposits had increased from under 1 million ETH to approximately 3 million. This growth rate continued even after the launch of Karak, an alternative multi-asset restaking model designed to enhance staking yields.



Read more: <a href="https://blockworks.co/news/universal-restaking-layer-andalusia-labs">Karak wants to introduce ‘universal restaking’ for everyone</a>



Taking the concept further, newcomer Symbiotic supports any <a href="https://app.blockworksresearch.com/glossary/#erc-20-token">ERC-20</a> asset as collateral for restaking. This level of customization options, and a flexible restaking model, enables developers to use a wide variety of assets to secure their applications.



Ethena’s native token ENA, along with the staked version of its synthetic dollar, sUSDe, which earns yield through ether staking and the futures basis trade, yesterday became the first non-ETH-based assets to be restaked on Symbiotic.



The new sUSDe vault on Mellow Finance, which provides infrastructure to Symbiotic risk curators, rapidly hit its $40 million cap, and the ENA vault is about half full after the first day of deposits.



Both Mellow and Symbiotic were supported by <a href="https://blockworks.co/podcast/empire/6cc9a6fa-dfcb-11ee-a5dd-4f9a9a4a49ad">Cyber Fund</a> and are part of the <a href="https://research.lido.fi/t/lido-alliance-an-ethereum-aligned-ecosystem/7475">Lido Alliance</a>, and other Mellow vaults only accept Lido staked ether (<a href="https://blockworks.co/price/steth">stETH</a>), for now.&nbsp;



The Ethena vaults have three curators: MEV Capital, Re7 Labs and K3. Laurent Bourquin, a general partner at MEV Capital, says he expects liquid restaking tokens (LRTs) to be accepted as deposits in Symbiotic vaults as well.



“The main big difference is the [agnosticism] of Symbiotic in the sense that you can also let EigenLayer LRTs to come to Symbiotic,” Bourquin told Blockworks, “so you will have double slashing, hence a double yield tranche.”



Other liquid staking and restaking providers are eager to jump in the pool too, agrees Sunand Raghupathi, co-founder of both Veda Protocol and <a href="https://blockworks.co/news/sommelier-defi-strategy-vaults-now-live-on-arbitrum">Seven Seas Capital</a>, though not necessarily as Bourquin sees it.



“Two days after Symbiotic announced their launch —&nbsp;and, behind the scenes, they were clearly working with Mellow to build restaking infrastructure — through Veda we were actually able to launch a LRT on Symbiotic,” Raghupathi told Blockworks.



Read more: <a href="https://blockworks.co/news/symbiotic-seed-round-shared-security">Symbiotic aims to be the Uniswap of shared security</a>



Veda partnered with EtherFi on its “<a href="https://etherfi.gitbook.io/etherfi/liquid/super-symbiotic-lrt-vault">Super Symbiotic</a>” vault, which accepts a variety of ether derivatives — including EtherFi’s eETH — and converts them to stETH for use in Symbiotic.



Technically, Symbiotic could accept eETH itself, which would effectively be double-restaked — first in EigenLayer and then in Symbiotic — but that’s not what EtherFi does. If a user supplies eETH, it is first removed from EigenLayer.



As Misha Putiatin, co-founder of Symbiotic has noted, double restaking would be inherently risky.



“We can&#8217;t stop people from double restaking, if networks accept that, we can&#8217;t do anything about that,” Putiatin said, adding they have no plans to incentivize such behavior, however.



MEV Capital’s Bourquin thinks double restaking is inevitable.



“I think now it&#8217;s first of all FOMO — fear of missing out — from the LRTs to still being there first,” Bourquin said. “So let&#8217;s say the risk is put a bit aside for now for the simple reason that slashing doesn&#8217;t even exist yet on EigenLayer — we are talking about risk that will be there at the end of the summer.”



Although EigenLayer accepts deposits which can be delegated to Actively Validated Services (AVSes), none of these are yet live with slashing conditions in place, which will eventually put depositors’ capital at greater risk.



Ultimately, Bourquin sees the flexibility of Symbiotic as a clear plus.



“We are really bullish on Symbiotic because it avoids the hyper-centralization of LRTs into one or two or three names,” Bourquin said.



EtherFi <a href="https://blockworks.co/news/etherfi-eigenlayer-liquid-restaked-token">started as an EigenLayer restaking protocol</a> but has branched out to become a trusted brand in other areas — for instance, launching Liquid, a stablecoin vault which is managed by Seven Seas and earns high yields through myriad DeFi avenues such as liquidity provisioning, lending optimization and peg arbitrage.



By allowing its users to participate in Symbiotic, EtherFi can retain them within its ecosystem, capturing a portion of the capital flows. This approach provides an alternative to swapping out of eETH via on-chain liquidity pools, which could otherwise pressure the derivative&#8217;s stability.



Read more: <a href="https://blockworks.co/news/renzo-liquid-staked-eth">What was behind the run on Renzo’s liquid restaked ETH?</a>



Even if the amount of eETH declines as a result, EtherFi retains those users through its brand and frontend, the argument goes.



“The EigenLayer view is that most assets should not be used for this,” Raghupathi said. “We&#8217;ve spent a long time discovering that ETH is in some sense the king of secure assets.”



Symbiotic’s view is market forces should determine what is or isn’t suitable collateral for AVS staking.



EigenLayer does have plans of supporting dual staking, using ETH and a bespoke cryptoasset together, but Symbiotic’s permissionless design enables that today, Raghupathi said.



“Anyone can spin up markets on Symbiotic, and so you&#8217;re going to see a much larger diversity of tokens that are being used to secure AVSes on Symbiotic than you see in EigenLayer which is very, very ETH focused.”



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Does Ethena portend a Symbiotic edge over Eigen?

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Howdy!



Lightspeed was the pace at which I had to skim a 100+ page regulatory filing this morning. The forbidden combo of pre-11 am coffee and Celsius were the only way this newsletter got filed on time.



But when Solana sees big news, we want to be the place you’ll find the most in-depth take:



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<h2 class="wp-block-heading">What to know about spot solana ETFs</h2>



This morning, the New York-based asset manager VanEck became the first American firm to file for a spot solana ETF. For an overview of the news, <a href="https://blockworks.co/news/vaneck-files-for-solana-etf">I recommend this story</a> from my colleagues Katherine Ross and Ben Strack.&nbsp;



But for all the excitement and price-pumping surrounding VanEck’s filing, solana’s pathway to a spot ETF looks differently from bitcoin or ether’s — specifically as pertains to its unlock schedule, staking demand, and political backdrop.



VanEck’s case for a spot SOL ETF largely hinges on its <a href="https://x.com/matthew_sigel/status/1806313241431138434">case</a> that solana is a commodity, and not a security. Interestingly, this could be complicated by the fine print in FIT21, a digital asset framework bill that <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">passed the US House</a> and is awaiting a vote in the Senate.&nbsp;



FIT21 <a href="https://x.com/0xpibblez/status/1806327034857083329">says</a> digital commodities must have only been distributed to end users in the prior year. This wording is somewhat vague, but Blockworks Research analyst Spencer Hughes told me this criteria sounds to him like a requirement for all tokens to be fully vested.



And, the educated reader will note, roughly 20% of solana tokens are still <a href="https://solanabeach.io/">vesting</a>, according to Solana Beach. Solana token unlocks are set to <a href="https://www.gelato.sh/stake">continue</a> until 2028, according to gelato.sh.



So, Solana’s locked tokens could be a hang-up. The lack of staking rewards is a question, too.&nbsp;



Like its ether ETF, VanEck’s solana ETF would not stake its holdings to earn extra yield. But staking is much more common on the Solana network than on Ethereum. 65% of the <a href="https://solanabeach.io/">total</a> SOL supply is staked, as <a href="https://www.coinbase.com/earn/staking/ethereum#:~:text=30%20days%20ago%2C%20the%20reward,being%20staked%2C%20is%2027.31%25.">opposed</a> to 27% of Ethereum. Around 12.5% of staked SOL is <a href="https://www.gelato.sh/stake">locked</a>, according to gelato.sh, but the difference is still notable.&nbsp;



Demand for VanEck’s spot SOL ETF would hinge on investors being willing to forfeit staking yield — which currently <a href="https://www.coinbase.com/earn/staking/solana#:~:text=The%20current%20estimated%20reward%20rate,rate%20for%20Solana%20was%206.00%25.">sits</a> at 5.7% on user-friendly Coinbase. Brian Rudick, senior strategist at GSR, told me this may be a moot point.



“A lot of people make a big deal about a lack of staking with the US spot ETFs, since it introduces an opportunity cost,” Rudick said, but countered that single digit yield doesn’t matter much given how volatile solana is.



Rudick penned a well-timed report on Solana’s ETF odds ten minutes before VanEck’s filing went public this morning. In it, he <a href="https://www.gsr.io/reports/is-solana-eft-next/">argues</a> that decentralization and demand will determine which crypto gets an ETF next.



On the demand front, many <a href="https://x.com/intern/status/1806315475342651773">say</a> Solana would need to prove itself with a CME futures market before regulators would approve spot ETFs. Bitcoin and ether both had futures markets before spot ETF approval, something solana currently lacks.



Solana futures trading successfully could also quell regulators’ fears of market manipulation, a notion that VanEck digital assets research head Matthew Sigel <a href="https://x.com/matthew_sigel/status/1806337176679965139">called</a> “stupid.” Sigel noted that other commodity ETFs were approved without futures markets, and issuers could watch for market manipulation together with crypto exchanges.



Solana’s decentralization could also be a sticking point for regulators. Solana’s nakamoto coefficient, or number of entities who would need to collude to disrupt the blockchain, is <a href="https://nakaflow.io/">listed</a> as around 20 on some venues, but Helius’ Mert Mumtaz has <a href="https://x.com/0xMert_/status/1801072488853475474">argued</a> the real figure is closer to seven.



Elixir chief operating officer Tim Wang argued that decentralization is “less of a concern.”



“[I]t&#8217;s unlikely anyone at the SEC understands the nuances of ‘sufficiently decentralized’ and takes a stance on what that means between ETH and SOL,” Wang wrote.



Of course, this is all overshadowed by the coming US presidential election and the Trump campaign’s pledge to take a friendlier approach to crypto than the Biden administration has. While a second Trump presidency <a href="https://blockworks.co/news/trump-gary-gensler-sec-post-election-outlook">would not necessarily</a> spell an immediate end to the Gensler SEC regime, <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-sec-and-solana-etp">the common view</a> in crypto is that the Trump administration would push for more favorable crypto policy.



Investors were happy to brush off the myriad uncertainties this morning though as SOL erased two weeks of losses in half an hour on the ETF news. Solana was <a href="https://www.coingecko.com/en/coins/solana">trading</a> at around $148 at press time.



— Jack Kubinec



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



It was a morning to forget for Solana shorts:



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXfjzICmy98YsSyuJkVxLmLbjMDywHj1Bw4xs47BfWlYhUAZb34AdwHpzecBUw4knmmrDtc6F427ilOv3CNl1Rkgl5lJ-2m1Ta8V1WCqc738K4dyBRK7tKKloF_nL7nkOzOO5Paaq4YPOUfwX24fTJ1z4QtH?key=TztkR2Jp6dHze9DiWXNsAA" alt="" style="width:840px;height:auto"/></figure>



Solana short liquidations — where a price increase forces traders holding short positions in futures markets to close their positions at a loss to prevent their accounts from falling into negative equity​ — spiked on exchanges at around 9:00 am as news of VanEck’s spot SOL ETF filing went public, according to Coinglass data. Roughly $4.4 million in shorts were liquidated between 9:00 and 9:10.



The $6.83 million in short liquidations since 8:00 pm last evening is already the highest daily total since late May, when markets pumped on ether ETF news.



— Jack Kubinec



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



VanEck&#8217;s announcement of its spot solana ETF was met with a mix of euphoria and skepticism from the online crypto world. Many in the community <a href="https://x.com/0xGreggy/status/1806314607952400717">have</a> <a href="https://x.com/GSR_io/status/1806317298153611372">eagerly</a> <a href="https://x.com/BESTBK/status/1806319191450071396">awaited</a> a SOL ETF following the recent approval of bitcoin and ether ETFs. However, the lack of a solana futures market and existing regulatory challenges <a href="https://x.com/cmsholdings/status/1806318790554403109">pose</a> significant hurdles.



VanEck seems to believe it can <a href="https://x.com/vaneck_us/status/1806313337866645783">overcome</a> these issues by highlighting Solana&#8217;s scalability, low fees, and robust security, arguing that SOL should be treated as a commodity. Matthew Sigel, VanEck’s head of digital assets research, <a href="https://x.com/matthew_sigel/status/1806313241431138434">emphasized</a> Solana&#8217;s decentralized nature and high utility.



Adam Cochran, founder and general partner at Cinneamhain Ventures and a seasoned blockchain investor, <a href="https://x.com/adamscochran/status/1806317792100012263">expressed</a> skepticism on Twitter, noting that the <a href="https://x.com/adamscochran/status/1806328709219012875">absence</a> of solana futures and ongoing SEC claims make approval unlikely. He pointed out that CME futures are typically a <a href="https://x.com/adamscochran/status/1806319890346774806">prerequisite</a> for ETF approval, which solana currently lacks. Cochran warned that filing prematurely could give the SEC more ammunition against the crypto industry.



Responses to Cochran&#8217;s <a href="https://x.com/DickeyNate/status/1806320816398676414">position</a> <a href="https://x.com/Evan_ss6/status/1806323901502238762">were</a> <a href="https://x.com/kale_abe/status/1806323595636846863">mixed</a>. Some agreed, <a href="https://x.com/JLHeartsCrypto/status/1806315409622147277">citing</a> regulatory risks, while others saw VanEck&#8217;s move as a strategic push to <a href="https://x.com/0xAngler/status/1806332155137610040">set</a> legal precedents. The general sentiment on social media <a href="https://x.com/Kdot1337_/status/1806320755870974180">was</a> <a href="https://x.com/postmodernronin/status/1806328667850539272">cautiously</a> <a href="https://x.com/zatakster/status/1806330391688806576">optimistic</a>, with users hoping this filing could eventually lead to broader acceptance and innovation in crypto ETFs.



— Jeffrey Albus



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



A message earlier this week from Nick Ducoff, head of institutional growth at the Solana Foundation:


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXcgcMN3nnUVz64f1bfrzB9gwGBNFlazPkfmyvFnFeDjCSBakCwjpPOE8npGHY7UkQDtUA6dBTh3mpOjlnM_Jh2uPhVPy64lm0qetpUOY3JYI1Jseg3U6yvLOUDbgvNoJsj_xnj9G6Bpz0QrjnnOhS3tJAUd?key=TztkR2Jp6dHze9DiWXNsAA" alt=""/></figure></div>


Updated June 27, 2024 at 7:22 pm ET: Updated to reflect that Ducoff’s message in One Good DM was not in reference to the ETF news.



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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>.



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Lightspeed Newsletter: The SOL ETF filing breakdown

Bitcoin mining giant CleanSpark continues acting upon its acquisition ambitions, this time agreeing to buy GRIID Infrastructure.



The Las Vegas-based miner is set to acquire all issued and outstanding GRIID stock in a deal valued at roughly $155 million, the company said Thursday.&nbsp;



CleanSpark is set to add 20 megawatts of available power immediately as part of a hosting agreement signed in tandem with the merger. The company plans to use the business combination to help it build out its presence in Tennessee, where most of GRIID’s mining capacity resides.



&#8220;This acquisition would give us a clear and steady path over the next three years to accomplish in Tennessee what we proudly achieved in Georgia over the past three years,” CleanSpark CEO Zach Bradford said in a Thursday statement.&nbsp;



Read more: <a href="https://blockworks.co/news/post-bitcoin-halving-miner-mergers-acquisitions">Buyers and sellers: How bitcoin miners are thinking about post-halving M&amp;A</a>



That includes building out more than 400 MW backed by long-term power contracts, the CEO added. <a href="https://blockworks.co/tag/cleanspark">CleanSpark</a> expects to eclipse 100 MW in Tennessee by the end of the year and 200 MW the following year — before hitting the final target in 2026.



Bradford has said in recent months that the company would be an active acquirer in the space around April’s Bitcoin halving.&nbsp;



CleanSpark <a href="https://blockworks.co/news/cleanspark-site-acquisition-bitcoin-halving">bought three facilities in Mississippi</a> in February for roughly $20 million and committed in May to spend about $19 million to acquire 75 MW worth of <a href="https://blockworks.co/tag/mining">mining</a> sites in Wyoming.&nbsp;&nbsp;



More recently, the miner said it would <a href="https://blockworks.co/news/btc-miner-cleanspark-buys-more-mining-facilities">buy five more bitcoin mining facilities</a> in Georgia for nearly $26 million.&nbsp;



Read more: <a href="https://blockworks.co/news/riot-nominates-bitfarms-board-directors-takeover">Riot nominates directors for Bitfarms board as part of takeover saga</a>



Though approved by the companies’ director boards, the transaction is subject to GRIID shareholder approval and is expected to close in the third quarter.&nbsp;&nbsp;



Unlike Riot Platforms’ ongoing attempt to acquire rival miner Bitfarms, this merger agreement is not of the so-called hostile takeover variety.&nbsp;



&#8220;I am incredibly excited for the opportunity for GRIID to join the CleanSpark team,” GRIID CEO Trey Kelly said in a statement. “Together, we will achieve rapid growth in the Tennessee Valley.”



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



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.

CleanSpark set to acquire GRIID as part of Tennessee build-out

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox.&nbsp;<a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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<h2 class="wp-block-heading">Big Farma</h2>



It was the Blast of times, it was the <a href="https://www.youtube.com/watch?v=no_elVGGgW8">Blurst</a> of times.



The long-awaited airdrop for degen-friendly Ethereum layer-2 Blast has so far gone slightly better than NFT marketplace Blur’s did.&nbsp;



Both projects were conceived by the same developer, Tieshun Roquerre, better known as Pacman. Blast’s chief selling point is that it can provide native ETH yield through <a href="https://docs.blast.io/building/guides/eth-yield">rebasing</a> while Blur <a href="https://decrypt.co/147427/did-blur-really-crash-nft-market">overhauled</a> NFT markets by enabling higher frequency trades.



BLAST is currently sitting not far from its first trade price, giving it a $430 million market cap with $2.5 billion of fully diluted value. Not as high as some anticipated, but still in the top 200.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1577" height="1134" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=1024&amp;h=1024" alt="" class="wp-image-88518" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=1577 1577w, https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=357 357w, https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=363 363w, https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=305 305w, https://blockworks-co.imgix.net/wp-content/uploads/2024/06/unnamed.png?w=80 80w" sizes="(max-width: 1577px) 100vw, 1577px" /><figcaption class="wp-element-caption">Blast’s weekly active addresses hit an all-time high before the airdrop, close to half a million. Blur meanwhile has never seen more than 70,000 weekly traders</figcaption></figure>



While there were the usual <a href="https://www.bankless.com/blast-airdrop-farmers-arent-happy">grumbles</a> from airdrop farmers, at least Blast’s token has been somewhat stable… for now.



BLUR was otherwise extremely volatile when it first hit certain exchanges on Valentine’s Day last year. As recounted by <a href="https://blog.kaiko.com/blurs-big-debut-dfc1f8a6c1eb">Kaiko</a> at the time, its first trade price was $0.10 on Huobi, where it immediately surged to $10, a price quickly mirrored by markets on OKX.



BLUR hit Uniswap three minutes later. DEX traders had meanwhile priced it at $0.29. Coinbase joined in after another 20 minutes, where it changed hands for $0.88.&nbsp;



It took a full hour after its first trade for markets to agree that BLUR was worth less than a dollar.



While some divergence between markets for BLAST has occurred — CoinGecko reports BLAST is currently trading 14% below an all-time high of $0.02918 — it’s got nothing on BLUR’s 100x pump to 95% dump.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXdWPzZZBMgY_mi76Pa7u558AAdHjgaey4FN9hkqXybqGHOl9rEWm6NsXnZymhA9bUS4KyobAWlNOGwlLdcg7fCmrRYe1dXsUan_GDRVwU_g8-5_CWaRVDSW5OO29xaEbDiAgJGG2KY_kAZRDYzoR73VzG-C?key=6Ka-dzssiDTXif4UMOsStQ" alt=""/><figcaption class="wp-element-caption">Blast’s points program was apparently so popular that it quickly rose to Ethereum’s no. 2 layer-2 for TVL — but has since been eclipsed by Base</figcaption></figure>



But anything could happen to BLAST from here. It’s launching amid a tough time for crypto markets in general, one which <a href="https://blockworks.co/news/airdrop-branding-layerzero-zro-token-launch">hasn’t been so kind</a> to airdropped tokens, especially ones with low floats and high fully-diluted values.



It’s tempting to look at what’s happened to BLUR for hints. BLAST and BLUR, both governance tokens, do share incentive mechanics but they’re different platforms serving different use cases, so it doesn’t make complete sense to compare the two directly.&nbsp;



BLUR will inevitably be tied to the ebbs and flows of NFT market activity, while BLAST is more-or-less chained to the layer-2 scaling narrative surrounding Ethereum.



Still, continuous token unlocks and vesting schedules seem to have weighed on BLUR, at least far more than any airdrop claim windows.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXc5r0fP6W8oPI1wVjx-xV8RvbyIs9IU2sEiHMkzGgKxnyy-V22KQCMUtim3Myo1Zt5iREG52WqSTU4rBL9cQdyzdFXDWS8-shAkB25e-V4pyFw2e3chP2i5Z3XO-dj1TIutr1MGM7-8-Ui19FF1l0RQBOM?key=6Ka-dzssiDTXif4UMOsStQ" alt=""/><figcaption class="wp-element-caption">If you exclude the initial pump on Huobi, BLUR is down over 75% on its first Coinbase trade price</figcaption></figure>



BLUR’s circulating supply has inflated from 364.2 million at launch to over 1.7 billion today. And while it recovered earlier this year from last June’s major 40% supply unlock, it has since retraced.



BLAST has a very <a href="https://token.unlocks.app/blast">similar</a> unlock schedule. Right now, about 17.2 billion tokens are in circulation. By this time next year there will be 42.7 billion, almost three times as many.&nbsp;



Best case scenario is that the market picks up again between now and then — bringing in enough liquidity to absorb those meaty emissions.&nbsp;



Either way, BLAST is on track to fulfill arguably its most degenerate use case: testing the limits of what crypto will take in terms of tokenomics and supply inflation.



— David Canellis



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



<ul>
<li>Nearly 300,000 addresses have claimed the BLAST airdrop so far, with over 90% of the liquid allocation sent out. Additional vested supply is designated for the top 1,000 whales.&nbsp;</li>



<li>The average address received 25,182 BLAST ($638) and the median brought home 844 BLAST ($21.40), per a Dune <a href="https://dune.com/knight_in_kight/blast-airdrop">dashboard</a>.</li>



<li>While Blur’s user count may be down, it still <a href="https://dune.com/hildobby/ethereum-nfts">makes</a> up over half of daily NFT trade volumes. OpenSea contributes about 16.5% right now.</li>



<li>BTC and ETH continue trading sideways at just under $61,700 and $3,400 a piece.</li>



<li>Buzzy DeFi tokens are <a href="https://www.coingecko.com/">correcting</a> hardest out of the top-100 this week, with BEAM, PENDLE and ENA down over 13%.</li>
</ul>



<h2 class="wp-block-heading">Not dead yet</h2>



Ah, airdrops.



Instead of focusing on a single project, I want to zoom out and talk about the state of airdrops as it stands.&nbsp;



Airdrops, so far this year, have distributed $4 billion. To put that number in comparison, airdrops reached a high of $4.3 billion last year.&nbsp;



Yet it’s not all rainbows and butterflies and people don’t seem thrilled. Sentiment for airdrops seems to have hit a new low (and maybe that’s not a surprise given the current state of bitcoin, ether and altcoins).&nbsp;



K33 analyst David Zimmerman doesn’t necessarily think they’re dead, but they’re definitely wounded. In a research report Wednesday, he focused on the outrage around airdrops.



I asked him how teams could address some of the classic issues surrounding airdrops, and he had two main suggestions: 1) Teams should be more honest and clear about criteria, and 2) allocate more to the users who have been loyal and used the product.&nbsp;



“If airdrop criteria are clearly and explicitly communicated (and adhered to) while teams make a point of rewarding users that take the risk to use the product, things would be more balanced,” he said. “Let’s not forget there have been billions in DeFi hacks and these protocols are nothing without the users (and their capital), so users should be rewarded accordingly.”



The negative sentiment around airdrops may be justified, but perhaps there’s something deeper at play here.&nbsp;



“The reason the backlash is so loud right now has little to do with fairness. It is much simpler than that — the outrage is so loud because the broader altcoin market has been trending down and their portfolios have taken big hits,” Zimmerman wrote.&nbsp;



“Market participants are no longer willing to engage in airdrop farming because the integrity of the implicit protocol-user agreement has been soiled at a time when the market is hitting people’s personal portfolios, resulting in outrage.”



Sure, teams may be able to improve the airdrop programs, but is it worth it when the trust is already broken?&nbsp;



If Zimmerman had his way, he’d like to see the market have a simultaneous product and token launch, he told me.&nbsp;



“If we got this combined with the cessation of the low-float high FDV tokenomics model that many projects like to launch with, that would be better for both users and the health of the industry,” he said.



It’s going to be “tricky” to make improvements, so why not go back to the tried-and-true way of doing things, he further argued.



To circle back on my original question on the lifespan of the airdrop meta, no one should worry about their death any time soon.&nbsp;



Zimmerman expects to keep seeing them pop up in various forms over the next couple of years. If the big VC-backed projects stop implementing the points programs, however, then it may be time to prepare for the funeral.&nbsp;



“I don’t expect this even though I would like to see it happen,” Zimmerman added.



Until then, I look forward to the <a href="https://x.com/0xWenMoon/status/1806041093907354101/video/1">memes</a> <a href="https://x.com/Chilearmy123/status/1805988683562234149/video/1">from</a> Crypto <a href="https://x.com/aulijk/status/1805987059405926560/video/1">Twitter</a> around every airdrop.



— Katherine Ross



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



<ul>
<li>Coinbase disclosed lawsuits against both the SEC and FDIC this morning, Blockworks’ Casey Wagner <a href="https://blockworks.co/news/coinbase-lawsuit-sec-fdic-foia-dispute">reported</a>.</li>



<li>State Street and Galaxy Asset Management <a href="https://www.businesswire.com/news/home/20240626420207/en/State-Street-Global-Advisors-and-Galaxy-Asset-Management-Join-Forces-to-Introduce-Investors-to-The-Next-Evolution-of-Digital-Asset-Investing">announced</a> they’re teaming up to offer users exposure to crypto companies.</li>



<li>A Florida man was <a href="https://www.justice.gov/opa/pr/man-convicted-violent-home-invasion-robberies-steal-cryptocurrency">convicted</a> of home invasions where he and a group of people would kidnap residents to steal their bitcoin and other crypto.</li>



<li>Abra reached a <a href="https://www.reuters.com/technology/crypto-firm-abra-reaches-settlement-with-us-states-operating-without-licenses-2024-06-26/">settlement</a> with US states for operating without a license and will refund customers $82 million.&nbsp;</li>



<li>Worldcoin alternative RariMe, offered by Rarimo, <a href="https://x.com/Rarimo_protocol/status/1806277081854042621">launched</a> this morning.&nbsp;</li>
</ul>



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



Q: What does the airdrop trend say about crypto?



It only shows the lengths crypto will go to avoid the SEC.



OK, it’s probably true that protocols and their cryptocurrencies would be better off in the hands of actual users. And airdrops scaled to points programs do get supplies to those people, even if some percentage leave once the incentives run out.



It used to be that supplies were largely distributed to the general public through initial coin offerings, which tend to be viewed as securities offerings by the SEC. You’d send ETH, for example, in return for a token allocation.



Airdrops, especially ones tied to onchain activity, are essentially initial coin offerings, except instead of ETH, users invest time and energy into the related protocol. 



After all, there’s nothing in the Howey test about Sybil farming.



— David Canellis



That crypto’s creative.



No, but really. Take a look at what led us here: Folks claimed crypto was on death’s door after the FTX/Terra fiascos, the entire market’s changed, and — to David’s point — regulators aren’t so friendly (or clear).&nbsp;



I’m inclined to think that airdrops may not exist in the same way in a year or two, because they don’t currently benefit the loyal users they’re supposedly intending to reward. I think this is a temporary solution to a larger problem.&nbsp;



Whether or not the market can return to its traditional offerings, as Zimmerman said he’d like it to, is still unknown. But I applaud the creativity (both from the teams executing the airdrops and Crypto Twitter for the snark and memes).



If we’re not going to see altcoin szns in the next cycles, then crypto has to find some way to pad the portfolios of eager investors without forcing them into memecoins to make a quick buck.



— Katherine Ross



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Empire Newsletter: What the airdrop meta says about crypto

VanEck filed for a spot solana ETF with the US Securities and Exchange Commission on Thursday morning.&nbsp;



The VanEck Solana Trust ETF still needs approval from the SEC. It would track the performance of solana’s price, according to the filing, and the ETF would be listed on the Cboe BZX exchange if approved.



“The Trust provides direct exposure to SOL and the Shares of the Trust are valued on a daily basis using prices drawn from a carefully evaluated group of trading platforms selected by MarketVector, which utilizes the CCData Centralized Exchange Benchmark data to construct the MarketVectorTM Solana Benchmark Rate,” the filing said.&nbsp;



The firm said that there has “yet to be definitive regulatory guidance on whether and how registered broker-dealers can comply with these rules with regard to transacting in or holding spot SOL.”



Notably, VanEck is signaling that SOL should be treated as a commodity, even though the SEC named SOL an <a href="https://blockworks.co/news/the-sec-says-these-crypto-assets-are-securities-their-reasoning-is-wrong">unregistered security in lawsuits</a> against Coinbase and Binance last summer.



In a post on X, Matthew Sigel — VanEck’s head of digital assets research — said that SOL operates like bitcoin and ether and is “utilized to pay for transaction fees and computational services on the blockchain. Like ether on the Ethereum network, SOL can be traded on digital asset platforms or used in peer-to-peer transactions.”



“SOL’s decentralized nature, high utility, and economic feasibility align with the characteristics of other established digital commodities, reinforcing our belief that SOL may be a valuable commodity with use cases for investors, builders, and entrepreneurs looking for alternatives to the duopoly app stores,” he continued.



<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">I am excited to announce that VanEck just filed for the FIRST Solana exchange-traded fund (ETF) in the US. Some thoughts on why we believe SOL is a commodity are below. Why did we file for it? A competitor to Ethereum, Solana is open-source blockchain software designed to… <a href="https://t.co/XwwPy8BXV2">pic.twitter.com/XwwPy8BXV2</a>&mdash; matthew sigel, recovering CFA (@matthew_sigel) <a href="https://twitter.com/matthew_sigel/status/1806313241431138434?ref_src=twsrc%5Etfw">June 27, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



VanEck is the first US firm to file for an ETF linked to solana in the United States. Over in Canada, 3iQ <a href="https://blockworks.co/news/lightspeed-newsletter-solana-etp-pitch">made a bid</a> last week to launch the first solana exchange-traded product (ETP) in North America. That product would list on the Toronto Stock Exchange, if approved.



That 3iQ proposal “kicks off the formal conversations” on solana with Canada’s Ontario Securities Commission (OSC), 3iQ Digital Assets president Chris Matta told Blockworks at the time.



Notably, the 3iQ offering would be a closed-end product, meaning it would offer a fixed number of shares. That differs from the ETPs many in the US are familiar with (such as the spot bitcoin ETFs) that create and redeem shares based on market demand.



The SEC is set to formally approve the registration statements of the <a href="https://blockworks.co/news/sec-approves-ether-etf-proposals">proposed ether ETFs </a>sometime this summer. However, SEC Chair Gary Gensler has previously voiced his skepticism about other crypto ETFs outside of ETH and bitcoin.&nbsp;



US spot bitcoin ETFs <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">launched </a>in January. The products have collectively notched $14.4 billion of net inflows, with BlackRock’s iShares Bitcoin Trust (IBIT) leading its competitors in terms of managed assets.



SOL is up 8% on the news.



Ben Strack contributed reporting.



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VanEck kicks off solana ETF bid in the US

After failing to have Freedom of Information Act (FOIA) requests granted, Coinbase is initiating legal action against the US Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC), the company announced Thursday.&nbsp;



In 2023, Coinbase hired consultancy firm History Associates Incorporated to assist in retrieving records from the SEC and FDIC. Both requests were denied, History Associates said, and the firm is now suing both agencies in an effort to force them to hand over the documents.&nbsp;



In both suits, History Associates is the plaintiff, and Coinbase is named as a related party. 



On behalf of Coinbase, History Associates in July 2023 submitted a FOIA request to the SEC. The agency asked for documents relating to the SEC’s “views on Ethereum and the status of ETH,” according to the complaint.&nbsp;



The SEC in October 2023 denied the request, stating that they were unable to “locate or identify any information responsive to the request,” the complaint states. After History Associates appealed the decision, the SEC later said the files did exist, but they were protected under exemption rules. 



History Associates and Coinbase argue that these exemptions do not apply and the court should require the SEC to release the information.&nbsp;



In a separate FOIA request, which was also denied, Coinbase and History Associates sought documents relating to any investigation involving <a href="https://www.sec.gov/files/litigation/admin/2020/33-10755.pdf">Enigma MPC</a> and Etherdelta founder <a href="https://www.sec.gov/news/press-release/2018-258">Zachary Coburn</a>. Both parties were served cease and desist orders for alleged securities violations.&nbsp;



“The SEC’s rationale for withholding documents from investigations that concluded in settlements years ago is tailor-made to frustrate the legitimate purposes for which Coinbase sought the Coburn and Enigma MPC documents in the first place—to understand the view of the law that underlies the SEC’s enforcement blitzkrieg against the digital-asset industry,” the complaint reads. “The SEC’s stonewalling violates its FOIA obligations.”&nbsp;



Read more: <a href="https://blockworks.co/news/coinbase-appeals-sec-rulemaking-petition">Coinbase moves forward with appeal of SEC’s rulemaking petition denial</a>



In November 2023, History Associates, also at Coinbase’s direction, submitted a FOIA request to the FDIC seeking copies of all so-called “pause letters” the agency sent to supervised financial institutions. The FDIC’s Office of Inspector General confirmed these letters, which asked institutions to “pause all crypto asset-related activities,” existed in an October 2023 report.&nbsp;



The FDIC denied the FOIA request in January 2024 and again last month after History Associates appealed, the complaint states. Coinbase and History Associates say the agency is in violation of federal disclosure requirements and asks the court to force the FDIC to hand the documents over.&nbsp;



Coinbase is now involved in three separate legal battles with the SEC. Coinbase <a href="https://blockworks.co/news/coinbase-appeals-sec-rulemaking-petition">sued the securities regulator</a> after the SEC denied Coinbase’s formal petition for rulemaking in 2022. The case is now in the US Court of Appeals for the Third Circuit.



The SEC sued Coinbase in June 2023 for alleged securities violations. Coinbase <a href="https://blockworks.co/news/judge-rules-against-coinbase-sec-dismissal">mostly lost its petition to toss the lawsuit</a> in March, and the case has proceeded to the discovery phase.



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