UseTheBitcoin Weekly News Roundup (APR 29th – MAY 3rd, 2024)

Stay in the loop with our weekly crypto digest as we get you up to speed on the hottest trends and events in the crypto space.

Here’s what happened in crypto this week:

BNY Mellon Reports Owning Shares Of Multiple Bitcoin ETFs

The United States’ oldest and largest custodian bank, BNY Mellon, has officially reported its entry into Bitcoin (BTC) investing via exchange-traded funds (ETFs). In a recent SEC filing, the company revealed its stakes in Bitcoin spot ETFs managed by BlackRock and Grayscale.

This move hints at a notable shift in the traditional finance (TradFi) sector towards welcoming cryptocurrency as a viable investment avenue, specifically among institutional investors.

Republic First Bank Officially Collapses And Seized By Regulators

The Federal Deposit Insurance Corporation (FDIC) announced it had seized the Philadelphia-based Republic Bank. Fulton Bank will take over and agree to assume all failed bank deposits substantially and buy all its assets. The bank’s failure is expected to cost the deposit insurance fund $667 million.

This event has spurred discussions among crypto enthusiasts and investors, with some seeing bank failures as a compelling argument for adopting cryptocurrencies as a more stable financial option.

Consensys Sues The SEC To Defend The Ethereum Ecosystem

Consensys, a major backer of the Ethereum blockchain, filed a lawsuit against the Securities and Exchange Commission to defend the Ethereum ecosystem. The crypto firm claims the SEC is seeking to regulate Ethereum as a security even though ETH bears none of the attributes of a security, and that it participated in regulatory overreach.

The lawsuit revealed that Consensys received a Wells Notice from the SEC earlier this month. In that notice, the agency said it intended to bring an enforcement action against Consensys for allegedly violating federal securities laws through its MetaMask swaps and staking products.

According to the filing, the SEC believes Consensys acts as a broker and offers and sells securities even though the software does not hold customer assets or carry out transactions. In a blog post, Joseph Lubin the CEO of Consensys and one of Ethereum‘s co-founders, called the lawsuit an important step towards preserving access to the Ethereum blockchain.

SEC Chair Gary Gensler Believed Ethereum Was A Security For At Least A Year

With the ongoing regulatory question regarding Ethereum (ETH), new court filings reveal that the US Securities and Exchange Commission (SEC) has investigated the second-largest cryptocurrency since 2023.

The revelation comes following Consensys filing an unredacted complaint against the agency. The company filed the redacted version of the lawsuit last week in response to a Wells notice detailing the SEC’s plans to sue the firm for failing to comply with federal securities laws.

Specifically, the SEC has reportedly built a case to challenge ETH’s security status for over a year, and the agency’s director of the Division of Enforcement, Gurbir Grewal, approved the investigation order in March of last year. The order of investigation allowed the regulator to issue subpoenas and gather witness testimony under oath.

Vitalik Buterin: Ethereum’s Proof-of-Work Was ‘Quite Centralized’ And A ‘Temporary Stage’ Until Proof-of-Stake

Ethereum co-founder Vitalik Buterin responded to reports of community members bemoaning the switch from the old proof-of-work model to a proof-of-stake consensus.  This comes in response to concerns raised by community members who believe the PoS model concentrates power and validation. Specifically, his response directly reacted to an X post from American entrepreneur Amanda Cassatt.

Amanda Cassatt, the founder and CEO of Web3 marketing studio Serotonin, tweeted that several Ethereum proponents were dissatisfied with the network’s current state.

Buterin concurred with Cassatt, admitting that PoW also exhibited “quite a bit of centralization.” However, he argued that this issue received less scrutiny when PoW was the dominant consensus mechanism. To substantiate his claim, Buterin provided a graph depicting the dominance of mining pools during Ethereum’s PoW era.

Australia Set To Approve Spot Bitcoin ETFs This Year

According to a Bloomberg report, the Australian Securities Exchange (ASX) is expected to approve the country’s first spot Bitcoin exchange-traded funds (ETFs) before the end of 2024.

The move follows the recent spot Bitcoin ETF approvals in the US and Hong Kong. In January, the US Securities and Exchange Commission (SEC) approved eleven US spot Bitcoin ETFs, attracting over $200 billion in volume within three months.

Meanwhile, Hong Kong’s first spot Bitcoin and Ethereum ETFs began trading on April 30th after receiving regulatory approval from the Securities & Futures Commission (SFC) last week.

Hong Kong’s Spot Bitcoin And Etherhereum ETFs Falls Below Expectations After Launch

Crypto ETFs made their debut in Hong Kong this week. In two full days of trading, the debut has been soft with trading volume much lower than expected. 

The Bitcoin spot ETFs accounted for only $8.5 million. In comparison, the Ethereum spot ETFs made up the remaining $2.5 million despite optimism that their first day of trading would bring in at least $100 million in cashflows.

Wait, Ethereum spot ETFs? Ether ETFs are allowed in Hong Kong’s market because regulators there do not have the same concerns about Ethereum as US regulators about it being a security. Experts say that an Ethereum spot ETF in the US likely won’t be listed for a while because the SEC has not clearly stated whether it sees Ethereum as a security.

Binance Founder Changpeng Zhao (CZ) Sentenced To 4 Months In Prison

Binance founder and former CEO Changpeng Zhao (CZ) has been imprisoned for four months for breaking US anti-money laundering laws.

The former chief executive’s sentence was significantly less than the three years federal prosecutors had been seeking him. The defense had asked for five months of probation, but the sentencing guidelines called for 12 to 18 months of prison.

In November 2023, Zhao struck a deal with the US government to resolve a multiyear investigation into Binance and stepped down as the company’s CEO as part of the settlement. Though he no longer runs the company, Zhao is widely reported to have an estimated 90% stake in Binance.

Federal Reserve Pauses Interest Rate Hikes, Remains At 5.25%-5.50%

The Federal Reserve signaled that US borrowing costs will likely remain higher for longer as it wrestles with persistent inflation across the world’s biggest economy. After Wednesday’s meeting, the Federal Open Market Committee (FOMC) said there had been “a lack of further progress” towards its 2% inflation goal in recent months and that rate cuts will be delayed until the second half of this year.

Tether Reports Record-Breaking Profits Of $4.52B In Q1 This Year

USDT stablecoin issuer Tether Holdings revealed a record net profit of $4.52 billion in the first quarter of 2024. The firm also released additional information on its reserve allocations as of its latest attestation. According to Tether’s attestation report, this represents a significant increase from the $7.01 billion worth of equity recorded at the end of December 2023.

The USDT stablecoin issuer has been subject to several controversies with two major concerns revolving around transparency and regulatory compliance. To raise the area of transparency, Tether has declared its net equity for the first time in history, an all-time high of $11.37 billion as of March 31st, 2024.

Final Thoughts

So that’s it for this week!

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Have a fantastic week ahead!


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