1 July

SEC investigating banks' disclosures on guns, climate change: report | The Hill

Grayscale Sues SEC Over Bitcoin ETF Application Rejection

“The SEC rejected Grayscale’s application earlier Wednesday, citing concerns about market manipulation, the role of Tether in the broader bitcoin ecosystem and the lack of a surveillance-sharing agreement between a “regulated market of significant size” and a regulated exchange, echoing concerns the regulator has expressed for years in rejecting other spot bitcoin ETF applications.

In the filing, Grayscale simply asks the U.S. Court of Appeals for the District of Columbia Circuit to review the SEC’s order. Essentially, the company will argue that the SEC has to allow products that are like other products already trading, in this case bitcoin futures ETFs. Verrilli told reporters earlier in June that the SEC’s approval of futures ETFs indicate the underlying market must be seen as reliable.

Grayscale supports and believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation – and we are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot bitcoin ETFs from coming to the U.S. market.”

JPMorgan Says Crypto Market Deleveraging Cycle Won’t Be Lengthy

“While it is hard to assess how much more deleveraging still needs to happen, the bank said, its indicators suggest the process is already well advanced. Multiple failures among companies in the industry should not surprise given the backdrop of deleveraging and the 70% drop in digital asset market capitalization since November, the report says.

The failure of 3AC is a manifestation of this deleveraging process, the note says, adding that the process seems well advanced, ‘making the bottom formation process in crypto markets more volatile.’ Bitcoin (BTC) miners are another source of stress for crypto markets, JPMorgan said, given the pressure to sell their tokens to deleverage or to cover the cost of their operations.

JPMorgan identifies two reasons to suggest that the cycle may not be very protracted: Stronger crypto companies with more robust balance sheets are stepping in to help contain contagion, and the continued healthy pace of venture capital (VC) funding, an important source of capital for the digital assets ecosystem.“

EU Agrees on Landmark Crypto Authorization Law, MiCA

“European Union (EU) policymakers have struck a deal on landmark legislation to regulate crypto assets and service providers throughout the bloc’s 27 member nations. The legislative package sets up requirements for crypto issuers to publish a kind of technical manifesto called a “white paper,” to register with the authorities and to keep proper bank-style reserves for stablecoins.

Lawmaker Ernest Urtasun tweeted that the deal would include a cap on large stablecoins that become widely used as a means of payment, meaning that they can’t exceed 200 million euros of transactions per day.

MiCA has been broadly welcomed by the industry because it can increase credibility, promote adoption by conventional banks and offer crypto companies a single license to operate across the bloc.

Those who are in this space are thinking of being innovative will now do it in a way that sits within our regulation rather than in the Wild West.

The legislative deal comes as U.S. lawmakers consider rules of their own, particularly for the stablecoin market. It also follows hot on the heels of controversial anti-money laundering measures that the EU agreed to impose on crypto service providers Wednesday.”

Facebook Begins Testing Ethereum and Polygon NFTs on Profiles

“Meta, formerly known as Facebook, has begun rolling out NFTs for some U.S. creators on its flagship social network. Facebook is starting with Ethereum and Polygon NFTs but will soon add support for NFTs on Solana and Flow.

According to the post, users will have a “digital collectibles” tab on their Facebook profiles where they can showcase their NFTs. Users will be able to connect their cryptocurrency wallets to their Facebook profiles. They’ll also be able to turn their NFTs into Facebook posts. Collectors will also be able to share their NFTs as augmented reality stickers.”

Banks’ Bitcoin Holdings Should Be Capped, Basel Committee Proposes

“For the riskiest class of crypto assets, which includes those that aren’t backed by conventional reserves or asset-pegged stablecoins that aren’t satisfactorily stabilized, there would be an exposure limit set at 1% of Tier 1 capital, or the core capital held in a bank’s reserve. For large banks like JPMorgan Chase (JPM), 1% of Tier 1 capital can amount to billions of dollars.

This would imply, for example, no large exposure limits on cryptoasset where there is no counterparty, such as bitcoin.

The Committee seems to have softened its position on crypto holdings where the bank is able to insure against its risk after a receiving a barrage of complaints that its previous approach was too cautious. Under the new plan, lighter rules would apply to cryptos that have an equivalent liquid derivative such as an exchange-traded fund, given the possibility to “hedge” exposures.

The committee is seeking comments on the plans by the end of September.”

Bitcoin Drops to Nearly $19K as Fed Renews Inflation Warnings

“The asset dropped 5.5% in the past 24 hours, and is on track for a record 40% monthly decline. Speaking at the ECB meeting, Powell said he was more concerned about the challenge posed by inflation than about the possibility of higher interest rates pushing the U.S. economy into a recession.

Is there a risk we would go too far? Certainly, there’s a risk. The bigger mistake to make – let’s put it that way – would be to fail to restore price stability.

About a week ago, his comments suggested rate hikes could soften before next year.”

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