June 8, 2022 / Unchained Daily / Laura Shin
Ethereum’s Ropsten testnet merge slated to happen today.
Department of Justice, in response to President Joe Biden’s executive order, calls for stronger international law enforcement cooperation on crypto.
International activists pen pro-crypto open letter to US congresspeople.
Coinbase launches hub to place former prospective employees whose job offers were rescinded.
Whitehat hacker pwning.eth finds inflation bug on Aurora, receives $6 million bounty.
Today in Crypto Adoption…
Bloomberg reports Citadel, Virtu, Fidelity, and Charles Schwab intend to launch crypto exchange.
Circle launches payments support for USDC on Polygon.
- Budweiser sponsorship comes to Zed Run.
The $$$ Corner…
DEX ApolloX raises seed round with Binance Labs participation
P2P ownership company Findable.net obtains $2.1 million seed investment.
- Solana pixel art NFT metaverse Chillchat secures $6.5 million from 15 investors to close $8.35 million seed round.
What Do You Meme?
Responsible Financial Innovation Regulation
Senators Cynthia Lummis and Kirsten Gillibrand yesterday released The Responsible Financial Innovation Act, their new proposed legislation for regulating digital assets.
The bill creates a new legal classification within the existing securities framework, explicitly carving out a new type of legal asset, an “ancillary asset,” from security classification for regulation instead by the CFTC as a commodity with disclosure requirements to the SEC.
In the text of the bill, ancillary assets are proposed to mean assets which are “not fully decentralized” and which “benefit from” the managerial efforts of others but are not securities as they do not represent debt or equity instruments: they lack “rights to profit”, “liquidation prefs”, or “other financial interests” in going concerns.
Staffers relevant to its drafting said on a call, according to Decrypt, that the “ancillary asset” definition would apply to popular blockchain projects “like Cardano and Solana” as well as the top 200 assets on CoinMarketCap.
SEC disclosures for these ancillary assets would be required twice annually and intended to ensure transparency, for example with respect to token issuance. The CFTC would regulate markets associated with the assets, including spot and derivative markets.
Tokens having achieved “sufficient decentralization” would graduate to a commodities classification (under the CFTC). What constitutes a test for decentralization is not directly covered in the bill, although an “Investigation into Decentralized Financial Markets and Technologies” is proscribed for the Treasury.
Gillibrand said that the purpose of the bill is to “establish a regulatory framework that spurs innovation, develops clear standards, defines appropriate jurisdictional boundaries, and protects consumers.”
Additionally, the bill provides a de minimis exemption for crypto-based profits up to $200 per year and remediates the 2021 infrastructure bill language about brokerage classification. Mining operators would be taxed only on conversion of assets to cash. Stablecoins on deposit at banks would be neither a commodity nor a security.
The Hill described the regulation in its headline as a “big win” for the crypto industry.
- Joe McCann throws water on the cashful hypothesis
- The Defiant on quantitative tightening
- Paradigm’s advice on getting a good job
On The Pod…
Topics covered include:
how Glen got involved in crypto, wrote a book, and came to co-write a paper with Vitalik Buterin
how Puja studied economics and got in touch with Glen in pursuit of a middle ground between left and right politics
what soulbound NFTs are and how they work
how Vitalik’s paper articulated how the concept of the soulbound token could advance decentralized collaboration in web3
how decentralized reputation can enable larger networks of coordination
how identity can be understood through the lens of community participation
how the name ‘soulbound token’ came about
how these tokens could provide a technology for those who value scarcity but disdain speculation
how identity-dedicated tokens could work on a technical level (including recovery)
what is DeSoc and why is it important?
how non-transferable tokens can improve DAO organization, including resolving issues with quadratic funding
how identity-locked tokens can be protected from bots and AI abuse
how these tokens could support community privacy and responsible information disclosure
My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!
You can purchase it here: http://bit.ly/cryptopians