Welcome to this week’s edition of Digest, delivered to you by Hodl fm! This week, we are delving deep into the heart of today’s most pressing and intriguing crypto and blockchain news stories. No need for delay, so let’s dive in!
Grayscale to SEC: “Let’s Talk Bitcoin ETF”
Just when you thought the news around Bitcoin EFTs couldn’t get any spicier, Grayscale decided to turn up the heat. Remember last week when we talked about Grayscale winning their court battle over the Bitcoin ETF drama? Well, they’re back at it.
For those who missed the memo, Grayscale is a giant in the digital currency investment space, holding the reigns of one of the largest Bitcoin funds out there.
Grayscale basically called the SEC and said, “Remember that time you denied our Bitcoin ETF conversion? Well, the Appeals Court sure does!” On September 5, Grayscale’s legal squad dropped a letter on the SEC’s desk, essentially asking: “What’s the holdup, sirs?”
Drawing attention to the recent court ruling that swayed in Grayscale’s favor, they pointed out a little fact: there’s no legal basis left for the SEC to block their Bitcoin ETF conversion. Grayscale’s lawyers wrote, “Now that the Court of Appeals has spoken, there is no available rationale…” You get the gist. “Why the delay, SEC? Put your game face on and let’s get this conversion going!”
Speaking of delay, Grayscale dropped another truth bomb – pointing out that their fund conversion application has been chilling in the pending tray for nearly three times longer than the SEC’s own rules allow. Someone get the SEC a calendar!
And if all this wasn’t enough to get the SEC’s attention, Joseph A. Hall, wrapped it all up with: “We believe the Trust’s nearly one million investors deserve this fair playing field as quickly as possible.”
Since that court ruling, the GBTC discount has done a U-turn from nearing a negative 50% to settling at a slightly more respectable 19.9%. Here’s to hoping the SEC gets the memo and we see some ETF action soon.
From Fed Governor to Vice Chair: Philip Jefferson
Let’s talk about our man of the hour, Philip Jefferson. Serving as a Fed governor since 2022, Jefferson is no stranger to the workings of the Fed. This week, he secured a new title, as the U.S. Senate confirmed him as the Federal Reserve’s vice chair. Taking the helm alongside Chair Jerome Powell, Jefferson is now set to shape monetary policy until 2036. The Senate’s stamp of approval came through a confident 88-10 vote on September 6.
What of it? Well, who sits where at the Fed can influence everything from your savings interest rate to how the country feels about blockchain. Jefferson’s appointment is only part of the changing face of the Fed. Lael Brainard, the predecessor to this vice chair role, resigned back in February. The Senate also has its eyes set on other key positions. Names like Fed Governor Lisa Cook and former U.S. Department of Labor Chief Economist, Adriana Kugler, are floating around for potential long-term roles, both potentially serving until 2037.
With cryptocurrencies pushing boundaries and making waves in traditional financial sectors, it’s essential to watch these changes at the Fed. Even if the central bank isn’t diving into the digital dollar pool right now, the evolving leadership will be crucial in determining future policies. And when you have 2024 presidential hopeful Ron DeSantis ready to bar the central bank from issuing digital currencies, the plot thickens.
In a nutshell, as Chair Jerome Powell navigates his term till 2028 with opinions on stablecoins and interest rate hikes, Jefferson’s ascent is another chapter in this ever-evolving financial narrative. Worth keeping an eye on.
China’s Love-Hate Relationship with Crypto
If we were to draw an analogy between crypto and relationships, China’s stance on crypto would be the equivalent of ‘it’s complicated’ status on a social media profile. Meanwhile, we, the curious guys closely following the outcome of this relationship, would be stalking them the best way we can, and that’s exactly what we’ve been doing.
Starting from the top, let’s dive into the latest developments from China. Chinese courts, in what can be seen as a plot twist, have now recognized cryptocurrencies as legal property. That’s right, in a country where crypto trading and mining are banned, digital assets now have a recognized legal status. This came through a report from the People’s Court in China, which, in essence, says: “While you can’t really trade or mine crypto, if you do have some, it’s protected as your property.”
But let’s hodl our horses before thinking China’s warming up to crypto, there’s a dark cloud on the horizon. The nation isn’t just sticking to its 2021 ban on crypto trading and mining. It’s also meting out harsh punishments to those found violating its regulations. A former Communist Party official has just received a life sentence for taking bribes connected to supporting crypto mining operations. Xiao Yi, the official in question, supposedly helped companies mask their mining activities by posing as data analytics businesses.
Yet, amidst this crackdown, China’s People’s Court has delivered another unexpected angle. The court suggests that crypto holdings shouldn’t be seized and that digital asset-related crimes should have distinct treatment compared to traditional property infractions.
As for Hong Kong, it’s straying from Beijing’s playbook, with the region moving towards a more crypto-friendly stance by licensing crypto exchanges. This has led to speculation. If Hong Kong’s crypto experimentation turns out to be a success, could this influence the broader policy in mainland China?
The intrigue continues, and for those of you keeping score at home: China’s relationship with crypto remains as complex and multi-layered as always. Stay tuned for the next twist in this love-hate (mostly hate) relationship.
Paris Hilton and a16z Spark a New Battlefront in AI Copyright Wars
Story Protocol, a tech firm from the hills of San Francisco, just secured a hefty sum of $54 million, and leading this funding crusade are venture capital giant Andreessen Horowitz and Paris Hilton’s 11:11 Media.
The fight against AI-generated copyright infringements continues with the alliance of Andreessen Horowitz (a16z), Samsung, and Hilton’s venture, investing in the new-age blockchain-based IP ownership platform, Story Protocol.
Closing a $54-million funding round on Sept. 7, Story Protocol attracted investments from several industry heavyweights. With the rapid evolution of generative AI and its increasing tendency to “remix” content, the platform aims to stand as a bulwark against the tidal wave of AI-facilitated fakes. Utilizing blockchain technology, it aims to be an IP ownership repository for content spanning text, images, and audio. Co-founder Seung-yoon Lee elaborated on the imminent explosion of AI remixes, predicting a significant rise in the next couple of years. “In a world of total abundance catalyzed by generative AI, blockchain technology presents the perfect solution for transparent provenance tracking and fair attribution,” he added.
Final Words
That’s a wrap for this edition! As always, we remain your vigilant observers, bringing you updates from the frontlines. Until our next rendezvous, stay curious, stay informed, and keep hodling!
