A U.S. judge has agreed to a settlement between the SEC, Do Kwon and Terraform Labs.

The settlement involves a $4.5 billion penalty and a ban on trading "crypto asset securities."

A U.S. District Court judge has agreed to a settlement between the Securities and Exchange Commission (SEC), Terraform Labs and its former CEO, Do Kwon, which would have them pay billions in penalties as well as virtually ban them from the crypto industry, according to the court filings.

The settlement approved by Judge Jed Rakoff of the Southern District of New York (SDNY) involves Terraform Labs Kwon paying $4.5 billion in disgorgement and civil penalties while being permanently banned from buying and selling "crypto asset securities," including Terra ecosystem tokens. It's unclear if this also applies to other cryptocurrencies.

This settlement is below the SEC's first offer of $5.3 billion but much higher than the $1 million civil penalty that Terraform first proposed.

Kwon, still in custody in Montenegro awaiting a decision on his extradition, did not appear at the trial where the settlement was reached.

Terraform Labs is currently in Chapter 11 bankruptcy protection, its CEO Chris Amani testified at the trial, and has approximately $150 million in assets on hand.

The native token of the Holograph protocol is down over 60% after an exploit allowed an attacker to mint 1 billion HLG

On-chain data suggests that the wallet acc01ade.eth was involved with the exploit, and a Github page lists an individual with the same handle as a contributor to HLG.

The native token of the Holograph protocol (HLG) was down as much as 60%, according to CoinGecko data, after a malicious actor ran an exploit that allowed them to mint 1 billion HLG tokens.

The Holograph Operator contract has been exploited by a malicious actor, enabling the hacker to mint 1 billion additional HLGThe team has patched the initial exploit & is working with exchange partners to lock the malicious accountsThe team has launched an investigation & is…

— Holograph (@holographxyz) June 13, 2024

"The team has launched an investigation & is in the process of contacting law enforcement," the protocol posted on its X page.

The Holograph protocol enables a single contract address across all EVM blockchains, which ensures consistent tokenization, seamless interoperability, and secure cross-chain asset transfers, according to a description on its website.

At current market prices, the 1 billion HLG that the exploiter absconded with is worth slightly more than $6.7 million.

On-chain data suggests that the ENS wallet acc01ade.eth was involved in the exploit. A Github page suggests that they are also a contributor to the project.

A X page with the same name describes itself as a "super shadowy coder" based in Paris. The account did not respond to a request for comment by CoinDesk.

At Consensus 2024, held in Austin, there was an exclusive RIA & FA Day session. Approximately 120 financial advisors spent the day learning about digital assets, engaging with industry thought leaders and networking with peers.

The energy was positive, and the conversations meaningful, with investors' interest in this asset class growing. Although the event was closed-door, key themes are worth sharing. Thank you to Adam Blumberg, one of the day's contributors, for highlighting trends and takeaways in today’s newsletter.

- Sarah Morton

You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.

Consensus 2024: A Breakthrough for Financial Advisors and Crypto Integration

Consensus 2024 marked a significant milestone for the crypto industry, driven by positive legislative developments and the approval of an Ethereum ETF. The atmosphere was electric, with enthusiasm reaching new heights.

FA/RIA Day: A Focused Learning Experience

Thursday was dedicated to financial advisors and registered investment advisors (FA/RIA), drawing approximately 120 professionals keen to explore integrating crypto into their practices. The day was filled with insightful discussions, networking opportunities and expert guidance.

The recent ETF approvals and bullish price trends have piqued the interest of more advisors and investors, creating a fertile ground for knowledge-sharing and growth.

Prioritizing Practical Integration Over Technical Jargon

The primary objective of FA/RIA Day was to provide actionable insights on incorporating crypto into financial practices. Instead of delving into the technical intricacies of blockchain and price movements, the focus was on practical application within a financial advisory context.

Education: The Cornerstone of Crypto Adoption

A recurring theme was the crucial role of education. Advisors must understand the available options, strategic allocation, investment theses, regulatory landscape and compliance requirements.

Equally important is the need to educate investors. Despite growing awareness of bitcoin and crypto, a significant knowledge gap persists. Effective education equips advisors to discuss crypto allocations confidently and have informed conversations with clients.

Exploring Investment Options

Panel discussions covered a range of investment options, including direct ownership, custody through SMA platforms, ETFs and investments in public companies like MicroStrategy and bitcoin mining companies.

Each option has its pros and cons.

While direct ownership embodies the ethos of crypto, it introduces compliance and administrative challenges that many advisors prefer to avoid.

ETFs provide price exposure to the underlying asset without the complexities of custody and reporting, making it easier for advisors to allocate within any account type, integrate investments into AUM and reporting, and facilitate rebalancing, as do public company investments.

Conversations and Portfolio Allocations

Understanding crypto is one thing; fitting it into a portfolio is another. Advisors shared their experiences in client conversations and their strategies for crypto allocation.

These discussions often involve setting realistic expectations, aligning with clients’ investment goals and conducting thorough risk assessments to gauge tolerance for volatility.

We heard that generally, advisors allocate 2-5% of a portfolio to crypto, categorizing it as an Alternative Investment. ETFs have enabled advisors to discuss the benefits of rebalancing and its positive impact on portfolio performance.

Advisors must also determine the most suitable accounts for crypto holdings, whether taxable or non-taxable, such as IRAs.

Navigating Compliance and Regulation

Crypto's intersection with politics in the U.S. adds a layer of complexity. Positive legislative momentum was evident just before Consensus, with several Democrats supporting pro-crypto regulation.

A conference highlight was a keynote chat by CFTC Commissioner Summer Mersinger, who outlined the CFTC's perspective on crypto regulation and its implications for financial advisors. The need for regulatory clarity remains paramount as advisors navigate this evolving landscape.

Conclusion

Consensus 2024 underscored the growing integration of crypto in financial advisory practices. By focusing on education, practical application and regulatory insights, advisors are better equipped to meet the rising demand for crypto investments and guide their clients through this dynamic asset class.

- Adam Blumberg, Interaxis

Keep Reading

Stock trading app Robinhood announced it has entered into an agreement to acquire crypto platform Bitstamp for $200 million.

U.S. spot bitcoin ETFs now hold a combined $63 billion of AUM, six months after the first U.S. listing.

A recent report published by the world’s largest bank, the Industrial and Commercial Bank of China (ICBC), likened bitcoin to gold and ether to digital oil.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Cryptocurrency markets remained under pressure during U.S. trading hours on Thursday, continuing a pullback that began a day earlier when the Fed signaled it only expected to cut rates once this year.

The price of ether {{ETH}} for a led a mid-morning bounce after U.S. Securities and Exchange Chairman Gary Gensler – in testimony at a Senate hearing – said he expected spot ether ETFs to have received full approvals from his agency by the end of the summer.

The news sent ether higher by 1%, but it turned out to have been a selling opportunity, with the price reversing more than 3% just one hour later. At press time, ether was changing hands at $3,440, down 5% over the past 24 hours. The broader CoinDesk 20 Index was lower by 4.9% over the same period.

Also lower by nearly 5% was the price of bitcoin {{BTC}}, which was trading near a one-week low of $66,300.

Markets began heading south on Wednesday afternoon after the Federal Reserve's hawkish policy meeting results. The U.S. central bank held its benchmark fed funds rate range steady at 5.25%-5.50%, but surprised with its updated projections suggesting an expectation for just one 25 basis point rate cut in 2024. Rate futures markets, meanwhile, had been pricing in two to three 25 basis point moves this year.

Failing to improve the macro mood in crypto was U.S. economic data Thursday morning suggesting a continued softening in both the inflation and the economy. The May Producer Price Index (PPI) fell 0.2% against expectations for a rise of 0.1%. On a year-over-year basis, PPI was higher by 2.2% versus forecasts for 2.5%. There were also initial jobless claims which rose to nearly a one-year high of 242,000 versus expectations of 225,000.

"$66K seems like equilibrium," said well-followed analyst Skew in an X post, who along with others is trying to decode a market that won't go sustainably higher despite a lot of recent bullish news: improving inflation data, a Bitcoin-friendly presidential frontrunner in Donald Trump, spot ETH ETF approvals, and other risk asset markets (namely U.S. stocks) ripping to new all-time highs.

Microsoft is building huge AI data centers in Arizona and Wisconsin to provide the infrastructure for powering this transformational technology. And AI is hot — literally.

Such data centers put a severe strain on power grids by requiring vast amounts of electricity. By 2026, one estimate forecasts AI will consume about 40 gigawatts (GW) of the projected 96 GW in global power demand from data centers, up from a total demand of 49 GW in 2023. This energy use generates a lot of heat and requires a lot of water to cool down data servers. With an estimated usage of 56 million gallons of water a year from Microsoft's data center in Goodyear, Arizona alone, the local desert communities risk running out of water to accommodate their new power hungry neighbors.

On the other hand, while often criticized as an “energy hog,” Bitcoin mining is actually an amazing way to help make power grids more stable and efficient. This is due to a Bitcoin miner’s ability to adjust energy usage in near real-time.

To keep a power grid at the correct frequency, grid operators must “balance” the power grid by adjusting energy production to match user demand. This process is called “load following.” Historically, increasing and decreasing energy production was the only real-time response action grid operators had available to them. But now, during periods of high or low electricity demand, Bitcoin miners can quickly adjust their power consumption to create a second, real-time response action that grid operators can use to establish balance.

Since renewable energy production fluctuates with the weather and is difficult to ramp up or ramp down to establish grid balance, Bitcoin mining is proving to be a scalable and economically feasible variable load solution. This new grid balancing pattern, made possible through Bitcoin mining, has now paved the way for use by new, larger and less flexible AI power consumers.

But why can't AI simply adjust its energy usage in real-time also? Bitcoin miners’ energy usage has a unique aspect compared to AI data centers. The Bitcoin network is a constant customer that is not adversely affected by miners throttling down or turning off their equipment. However, if an AI data center turns off some of its servers to throttle down AI compute, customers are adversely affected.

This flexibility makes Bitcoin mining an effective way to stabilize power grids – especially in helping manage electricity consumption from large AI data centers – because it can quickly respond to fluctuations in electricity supply and demand.

We see states like Oklahoma embracing this model by encouraging Bitcoin mining and its power grid benefits. On May 30, the state senate passed a bill to make the sales of machinery and equipment used for commercial mining tax exempt if the miner provides an adjustable load to the local power producer.

Texas, Scandinavia and Iceland

Texas has invested heavily in wind energy production, leading to periods that put extra strain on power grids because energy supply often exceeds local demand (especially at night).

By increasing their activity during off-peak hours, Bitcoin miners consume this surplus of excess electricity generated from wind energy that would otherwise remain unused due to lack of demand during these periods. Their energy consumption stabilizes the delicate balance between electricity supply and demand and helps prevent the grid from becoming overloaded, which can lead to disruptions such as blackouts.

During a destructive winter storm in February 2021, Texas experienced severe power outages because it couldn’t meet the sudden surge in electricity demand. Bitcoin miners there were able to shut down their operations quickly, reducing their load and helping to stabilize the power grid during this crisis.

Scandinavia is another region where wind turbines dot the landscape. Here wind energy is produced in excess during off-peak hours and would otherwise be wasted due to lack of immediate demand and storage solutions. Bitcoin mining facilities are dynamically using this surplus, providing a sizable demand while helping maintain equilibrium and overall efficiency within the grid.

In Iceland, where geothermal and hydroelectric power production is abundant, Bitcoin mining operations have become integral to the energy market. The country’s renewable energy sources generate more electricity than its population can reasonably use. Bitcoin miners consume this excess electricity, providing a flexible, consistent demand that supports the nation’s renewable energy industry.

Making Renewable Energy More Viable

Bitcoin miners’ stabilizing effect on power grids has another interesting benefit: improving the financial viability of renewable energy projects. How?

Wind and solar often provide lower-cost electricity compared to fossil fuels like coal, which is a crucial factor for Bitcoin miners seeking to maximize profitability. However, renewables often face challenges due to the intermittency of their power generation and the gap between supply and demand. For example, solar panels produce the most energy during the day when demand is relatively low, while wind turbines may generate more power at night.

But by providing a constant and predictable demand, Bitcoin miners can bridge this gap and ensure a steady revenue stream for wind farms in Texas and Scandinavia and hydropower plants in Iceland. (Norway generated a whopping 98% of its energy from renewable resources in 2020, including 92% from hydropower). In addition, this positive financial impact from Bitcoin miners helps make renewable energy projects more economically attractive and can encourage the use of sustainable, clean energy solutions worldwide.

The Road Ahead

Bitcoin mining, AI data centers, and renewable energy projects intersect and provide good opportunities for innovation in energy management. Smart grid software that uses real-time data analytics to optimize electricity production and distribution will eventually integrate seamlessly into Bitcoin mining operations. This integration will further enhance power grid efficiency and reliability, especially in areas of rapidly growing populations and where big AI data centers are located.

Global energy production and distribution is incredibly complex, competitive, and highly subject to political, economic, and regulatory forces. So the ability of Bitcoin miners to stabilize and optimize power grids – especially in regions with significant renewable energy resources and/or energy-intensive AI data centers – makes them invaluable partners in the expansion of renewable energy production and overall energy management.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

The crypto boom in the final months of 2017 woke up millions of people to the idea that you could get rich from your phone. In December alone, three million people downloaded the app for Coinbase, the main American crypto exchange. Coinbase had been much smaller and less popular than Robinhood, but in December, it got about six times more downloads.

Nathaniel Popper is the author of "The Trolls of Wall Street: How the Outcasts and Insurgents Are Hacking the Markets" (from which this article is excerpted) and "Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money." He has worked as a reporter for The New York Times, The Los Angeles Times and The Forward.

A month later, as the newly assembled crowds watched the value of bitcoin {{BTC}} and many other digital tokens plunge in January of 2018, those who had not lost their shirts completely went looking for an alternative place to direct their freshly awakened hunger for speculative excitement. TD Ameritrade reported that trading activity in January was up 48% from a year earlier, with the fastest growth coming from Millennial customers. It didn’t hurt that stocks had gone up alongside bitcoin. The benchmark S&P 500 index finished 2017 up 22%, its ninth positive year in a row.

Robinhood had missed the bitcoin boom, only announcing an expansion into crypto trading at the end of the bubble. But the company managed to have perfect timing for what came next. In December 2017, the start-up had announced it was about to begin allowing customers to trade options contracts. As it had with stocks, Robinhood eliminated the commissions that other brokers charged for options trading. The announcement had been largely ignored at the time because of the focus on crypto. But in January, attention quickly turned to the new capabilities opened up by Robinhood.

“Lost 5k in crypto, ready to lose another 5k trading options — where do I start to begin my path to autism?” one characteristic post asked in early 2018.

This was something of a replay of early 2015 when WallStreetBets had suddenly whirred to life in the wake of Robinhood’s initial launch. Now, after struggling in the shadow of crypto, WallStreetBets was again overflowing with newcomers eager to try out Robinhood’s latest offering.

“I’ve never seen an influx of noobs like there is right now,” one Reddit old-timer wrote. “It’s obviously because of RH.”

But this new burst of activity on WallStreetBets was viewed with much more suspicion than the previous one. Jaime had started the subreddit as a result of his interest in the alluring complexity of options. But after going through numerous bouts of losing, he realized, with the help of outsquare, that the odds were stacked against small-time investors in the options markets.

See also: Robert Alice Made NFT History, Now He's Writing About It

“If I have but a single regret of starting this wonderful community it is the incessant obsession and poor understanding of options,” Jaime wrote in a cautionary post.

Options, he wrote, are “incredibly stupid ways of throwing perfectly good money down the dark bowels of Wall Street.”

Trading options doesn’t necessarily look dangerous on its face. In the most basic terms, an option is just a way to bet on the future value of a stock without having to buy that stock. But there are lots of devilish risks buried in the intricate structure of options. The most obvious danger with options is that, unlike stocks, they expire on a specific date. If the stock price did not do what you had bet it would do by that date, you lose all the money you put in.

Due to the binary, win-or-lose nature of options, they are often referred to as the lottery tickets of the financial markets. If you own a stock and the price falls, it generally still has some value and you can wait for it to recover. But with an option, if your bet goes south, you are left with nothing — and that is indeed how it usually ends. The inherent risk of options is multiplied by the fact that most opions are pegged to the price of 100 shares of the underlying stock. This means they can go up much faster than the actual stock — an attractive feature for the risk-seeker — but they can go down just as fast.

Jordan had disagreed with Jaime on other things, but when it came to options, they found common ground. Like Jaime, Jordan warned users to stay away from options unless they had a very clear idea of what they were doing.

“options will make your dick fly off” was how Jordan put it. “it’s scientifically proven.”

But these voices of caution and the early posts about losses only seemed to rev up the appetite for risk on the subreddit. One user mentioned losing 93% of his portfolio. Right below that, another user quickly one-upped him with perverse pride: “To the guy who posted his 93% loss. This is a real 90% loss.” The post showed a picture of the Robinhood home screen with a line descending sharply from $22,000 to $2,000 in less than a month.

See also: 10 Great Novels About Money (and Crypto)

In 2018, WallStreetBets once again began to attract media coverage, and the articles took note of both the growth of the subreddit — which was up to 300,000 members by mid-2018—and the bizarre penchant members seemed to have for losing money. The first magazine profile of the website, in Money, was titled: “Meet the Bros Behind /r/WallStreetBets, Who Lose Hundreds of Thousands of Dollars in a Day — and Brag About It.”

The WallStreetBets regular featured at the top of the story was a 24-year-old programmer who had found options trading on Robinhood after making a small killing on crypto. He then managed to lose $180,000 in a matter of days on a single bet on Facebook stock.

Jaime had embraced many of the earlier questionable developments on WallStreetBets. But when the reporter for Money reached out to him, he expressed his discomfort. He said that he had founded the site with the goal of creating a “serious forum for learning” and emphasized that he was “not a huge fan of the memes.”

There was lots of talk about the strange imperviousness to losing money on the subreddit, and there would be for years to come. Jordan engaged with one member who said he had assumed the so-called loss porn was “an obscene joke,” before he realized that “it seems when asked seriously they really prefer losing money.”

Jordan explained his belief that the attitudes on the site were a coping mechanism. “People lose a bunch of money, they come laugh about it with others who lost a bunch of money, and everyone is happy. What’s better, to lose money and be bitter, or to lose money and feel like you fit in with the other guys? People take the path of least resistance emotionally.”

This rationale, though, seemed to hit on only one of the many factors that showed up in WallStreetBets posts in the course of 2018 to explain the rising penchant for extreme risk-taking.

One reason that many people gave for their willingness to bet on crypto and options was the precarious financial situation many of them had found themselves in — and their desire for a quick solution. Millennials were carrying unprecedented levels of student debt; in 2018, the average student-debt load of young Americans was more than twice what it had been back in the 1990s. For recent graduates trying to stay on top of the interest payments, the allure of a financial Hail Mary was obvious, especially when they looked at the escalating value of real estate and contemplated the difficulty of ever purchasing their own homes. One novice in 2018 pointed to these issues to explain his own decision to dive in.

“Hey guys, I’m $10,000 in debt and I’m thinking about day-trading stocks to overcome my financial woes! But first, how do you trade options?”

Once people got going, the internal feedback loop that got kicked off by trading often sucked them in further. The excitement of watching your portfolio go up stimulates the same neurotransmitters associated with other addictive activities, creating jolts of dopamine that can quickly generate a desire for more. Researchers have found that young men — the core audience on WallStreetBets — are particularly prone to this sort of addictive behavior and that fast-moving options play on these dynamics more than stocks. There were countless posts from people who said they found themselves almost helpless as they chased the high and ended up losing both their profits and the original money they put in.

“Options are like heroin,” one user explained. “You try a little bit once and nothing hits the same ever again.”

This got particularly problematic for the many young men who had been diagnosed with attention deficit hyperactivity disorder, ADHD, as was the case for more and more young men in America. People with ADHD generally do not produce enough dopamine or they have difficulty processing it, which often leads them to seek out activities that will create more of the pleasure-producing hormone. Jaime was one of many people in the early chat room who talked about his ADHD diagnosis. He observed that this seemed to be at least partly responsible for his attraction to both alcohol and trading, and research indeed shows that people with ADHD are much more vulnerable to gambling addictions.

Robinhood played on all these instincts in its young customers in a way that no other brokerage firm had ever done before. The company added lots of little special effects that increased the dopamine-inducing qualities of the app, most famously showering users with digital confetti whenever they bought or sold a stock. The company also took away many of the little reminders of risk and the points of friction that other brokerage firms put in front of customers before they completed a trade; friction that allowed customers to take a beat and consider whether the trade was a wise one. Natasha Dow Schüll, an academic expert on gambling, later pointed out that Robinhood used many of the same tactics that Las Vegas casinos employed to get their customers to forget their losses and place another bet.

But long before Robinhood showed up with its gamified version of options trading, young men were coming to WallStreetBets seeking the kind of risk and drama that the subreddit put on display, even when it involved losing money. Social media had, of course, played a role in this. Researchers have found that young men are more willing to take bigger risks when they are in the company of other young men, and the crowds on Reddit certainly egged each other on.

For the average young denizen of 4chan who was stuck at home without a job or friends, the internet was a place to do stupid things to create a little excitement and achieve a few minutes of online fame. Losing money was often the easiest path to achieving these goals. Dale Beran, the 4chan expert, argued that the site had long before developed a culture that elevated failure to a kind of art form.

See also: What's at the Intersection of Crypto and AI? Perhaps Murder

“It is a culture of hopelessness, of knowing ‘the system is rigged,’” Beran argued.

The nihilistic attitude on WallStreetBets was made manifest by the image of the tendies, the preferred way to describe any winnings a trader managed to eke out of the markets. The term, which came from 4chan, referred to the chicken tenders a young basement dweller might get from his mom as a reward for good behavior. If your portfolio was just so many chicken nuggets that your mom could always replenish, who cared if you lost a few? This attitude came out when a trader who went by a crude username shot to fame by making over half a million with Robinhood options and then, just as loudly, making it all disappear.

“At The End of the Day, Money is Just Paper,” he wrote in the post announcing his biggest losses.

Jordan got asked about these bizarre dynamics when the latest reporter showed up, this one from Vice. “One thing I always notice about chan sites is this underlying nihilism,” the reporter, Roisin Kiberd, said. “Even way before the alt right and pepe and trump stuff. So I was wondering if that’s present on WSB too. Like, burn it all, lose your money.”

Jordan initially responded by pointing to the contagious, addictive nature of trading. “I think of trading like getting leprosy,” he told the reporter. “Once someone has the bug you have no idea if they’ll make it. Sometimes it costs them an arm and a leg.”

But he acknowledged that losing had become a central element of the community dynamic. “At the end of the day we’re just a bunch of guys at varying levels of seriousness trying to make it in something that people will tell you is impossible. Helps to have company,” he said. “Nobody wants to sit at their computer alone for years.”

Jordan had continued to struggle to make any money from his own efforts in the markets, despite all the advice he had gotten from lakai and outsquare. He knew that his nervous energy haunted his best trades.

“patience has been like the hardest part of this shit for me

“how often are you right but you don’t wait for it to go sideways and then do what you expected,” he said in the chat room.

“no patience no money,” lakai chimed in.

“I tried copying lakai,” Jordan told the others.

“you just can’t

“you end up being one of those cargo cult people

“waving your hands hoping a 747 will land.”

Jordan took long breaks from trading and spent more time playing video games with his fellow moderators or coming up with new bots to deal with the problems cropping up on the growing subreddit. As traffic to the site grew, Jordan, lakai, and a rotating cast of moderators developed an increasingly complex set of rules and structures to make the deluge of content navigable. Reddit’s system of elevating posts with more upvotes provided a basic order. But as WallStreetBets began to attract hundreds of posts every day — and thousands of comments — things could easily get out of whack unless the moderating team kept a careful watch.

Lakai and the other moderators created systems so that it was easier to find particular genres of content on the subreddit. They used labels — or flair, as they were known on Reddit—to distinguish the more serious posts with due diligence, or DD, from the so-called loss-porn and meme posts. Jordan created increasingly sophisticated bots to ensure the rules were followed. But they inevitably made errors, and a lot of the work fell to Jordan and a few others who would manually go through the queues to ensure the wrong posts hadn’t been deleted or allowed through.

In addition to doing the digital grunt work and coding, Jordan also brought a very human touch to the job. Unlike outsquare and Jaime, who moderated with a light hand, Jordan constantly roamed the comment sections beneath posts, giving advice and prodding the guys on the site to be smarter. He would jump in to point out obvious trading mistakes and chide people when they acted as though losing money were the point of the game rather than a regrettable side effect:

“You’re not ‘doing it right’ when you post massive losses and go ‘hurr am I one of the boys now’? It’s like a bunch of morons saw some veteran traders comparing battle scars and decided to cut themselves so they could join the conversation and get attention.”

See also: Crypto Author Jimmy Song Talks About His Little Bitcoin Book

He also stepped into the role that outsquare had played in the early chat room, a sort of gruff therapist. He went into action toward the end of 2018 when a post showed up that underscored the real-world damage that could result from the attention-seeking pursuit of riches.

“I broke down crying on the subway today,” one of the recent losers wrote. “I saved up $5k in 2 months working as a busser. Grew my portfolio to around $11k quit bussing and lost it all trading options and will have to find work again in a shitty restaurant. I have no future. I have no education or skills. I work as a shitty busser and i’m 23. It’s pathetic. I have no girlfriend and never have had one. I don’t know what to do or how to make money to escape this shitty cycle. I’m ending it all by 25.”

Jordan pinned this post and his own response to the top of the site. “I’m gonna leave this one up so OP” — an acronym for original poster — “can see that WSB cares about him even if we look like a bunch of assholes most of the time.”

Jordan urged the guy to take a break from trading and try to look at things from a different perspective: “Don’t throw away your most precious and irreplaceable asset because you lost some money. You’re in your 20s, even if you died at 60 most of your life is still ahead of you. You’d be surprised what reality can serve up that you might never have expected.”

When the commenters below expressed their gratitude to Jordan for his sympathetic intervention and the work he was putting in, he did not let it go to his head: “I am trying to do good by the sub even though I’m just a dork on the internet with an ego too.”

But soon enough, there were indications that Jordan’s hopes for the subreddit were coming true. The gathered multitudes were learning lessons from their mistakes, and from one another.

This excerpt provided by HarperCollins Publishers was lightly edited for house style.

The Biden administration recently re-introduced a proposed that would place a 30% tax on all “cryptocurrency miners” – a move that represents an ideological witch hunt against a rapidly growing industry (see my previous comments).

The move, part of the government's budget proposal for the upcoming fiscal year introduced in March, is in stark contrast to recent, pro-crypto statements from former President Donald Trump, who just this week called for the U.S. to dominate the bitcoin mining sector. It remains to be seen whether the crypto mining excise tax will come into effect (or whether Trump will deliver on his aggressive crypto policies if elected), though in recent weeks many have begun to argue that President Biden may be softening on the industry.

See also: Trump's Appeal to Bitcoin Miners Is a Wakeup Call for Crypto to Stay Apolitical | Opinion

It has to be stated that implementing a blanket 30% federal tax on digital asset mining will kill the sector and wipe out billions of dollars of investor value in the United States, and very likely in Canada as well, given how the current Canadian federal administration closely follows U.S. precedents on regulation.

Taras Kulyk is founder and CEO of SunnySide Digital.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

In the “land of the free,” this type of heavy handed Stalinesque central planning directive screams in the face of the democratic ideals (ironically) that are supposed to be espoused by the current White House administration. First, they came for your digital mining and you did nothing…

The fine print on Biden’s proposed tax

The egregious mining tax, implemented despite the billions of dollars invested in the sector, is part of his budget proposal for the fiscal year 2025, which aims to address environmental concerns and regulate the digital asset mining industry. The proposal suggests that the tax would be phased in over three years, starting at 10% in the first year, increasing to 20% in the second year and reaching the full 30% in the third year. This tax is prejudicing digital mining, exclusively, not data centers generally.

The administration argues that the tax is necessary to combat the environmental impacts of cryptocurrency mining, including its high energy consumption and the potential to raise energy prices for communities hosting mining operations, in the face of the well established research that this line of concern is the exact opposite of economic reality and operational impact for power utilities.

While I'm not a lawyer, and these arguments should be taken with a grain of salt, it’s important to note that it is likely unconstitutional for a presidential administration to tax a specific industry's energy usage. There is simply no precedent for it.

By targeting a specific industry with an energy consumption tax, the government could be seen as violating a number of clauses, including The Commerce Clause in Article I, Section 8, Clause 3 of the U.S. Constitution, the Equal Protection Clause found in the 14th amendment, the Due Process clause found in the Fifth Amendment to the U.S. Constitution or under the statute of unintended consequences.

Moreover, there are ethical implications at play beyond any potential unconstitutional overreach. This type of deception has become far too commonplace and is something the U.S. founding fathers were aware of and tried to prevent via the Constitution itself.

How to kill an emerging industry 101

The Biden administration's proposed tax would impose a significant financial burden on digital mining companies, very likely making their operations economically unviable. As these companies already face intense competition and tight margins, this tax would only exacerbate financial struggles and lead to material investor losses.

As a result, many mining firms would likely be forced to shut down or relocate to other countries with more favorable tax policies, leading to job losses and reduced economic activity in the United States.

Moreover, the proposed tax would disproportionately affect smaller digital mining operations, which may not have the resources to absorb the additional costs or move to other jurisdictions. This would create an unleveled playing field, favoring larger, more established mining companies and stifling competition and innovation in the sector as well as increasing centralization for larger operators.

If this administration’s goal is to hurt small businesses, stifle innovation and develop a reputation for reducing economic activity in the U.S, then they are right on track.

Environmental concerns and the ineffectiveness of the tax

The Biden administration claims that the proposed tax is necessary to address the environmental impact of bitcoin mining, as it consumes significant amounts of electricity. However, this argument overlooks the fact that many mining operations already use renewable energy sources and are actively working to reduce their carbon footprint.

Furthermore, the proposal does not take into consideration use of methods like methane flaring, which reduces the CO2-equivalent emissions by about 63% when compared to traditional methods of flaring methane, and landfill mining, which in one year has the same effect of planting five million trees and letting them grow for 10 years. Bitcoin mining has been proven to strengthen grids and even reduce energy costs for local communities.

In fact, imposing a tax on energy consumption could discourage these efforts and incentivize miners to use less environmentally friendly sources of power overseas. What will happen is a mass exodus of miners out of the U.S., which has the most renewable energy makeup, and shift them overseas where fossil fuels are more predominantly used.

The fact is, about 90% of carbon emissions come from outside the United States. Because tackling "environmental concerns" is a global problem, they would only be contributing to the problem by their own logic.

So what should the government do? Nothing. Let the free market reign. Bitcoin miners are the dung beetles of energy. They go to where the energy is cheapest, and because of the upfront operational expenses of fossil fuel miners and low operational expenses of renewables, it’s easy to see why the majority of mining comes from renewable sources to begin with.

Global competition

The bitcoin mining industry is highly competitive, with countries such as China, Russia and Canada vying for dominance. The proposed tax would undermine the United States' position in this global race, as it would make the country a less attractive destination for mining operations. This could result in a significant loss of investment, talent and technological advancements, ultimately weakening the United States' role in the digital economy.

One lesson learned after China banned bitcoin mining in 2021 was the resilience and adaptability of the bitcoin mining industry. Despite the ban, bitcoin mining operations found new homes in countries with more favorable regulatory environments and access to renewable energy sources. This demonstrated that the Bitcoin network is not geographically confined and can adjust to regulatory changes.

Additionally, the shift to more sustainable energy sources highlighted the potential for bitcoin mining to contribute positively to the global energy transition

Moreover, the tax could also have broader implications for the cryptocurrency industry as a whole. By targeting bitcoin mining, the Biden administration may inadvertently discourage innovation and investment in the industry, which could have far-reaching consequences for the country's technological development and competitiveness.

You can’t ban mining, you can only ban yourself

In summary, the Biden administration's proposed tax on bitcoin mining would have severe negative consequences for the industry and the broader digital economy in the United States, and therefore its own initiatives.

See also: Bitcoin Miners Show Muscle Pushing Back Against a Warrantless EIA Survey

It would impose a significant financial burden on mining companies, discourage sustainable mining practices and undermine the country's competitiveness in the global market. This type of measure is more aligned with oppressive countries like China or what the USSR was like, and it is incredibly disheartening to see from the United States.

Just like the industry rallied to defeat the unconstitutional EIA survey, we should put the same attention here. You can’t ban Bitcoin mining, you can only ban yourself.

The European Banking Authority published the final version of draft technical standards on prudential matters for firms to comply.

The technical standards are part of the European Union's Markets in Crypto Asset legislation.

The European Banking Authority (EBA) published on Thursday the final draft technical standards on prudential matters for firms to comply with under the Markets in Crypto Assets (MiCA) legislation.

The wide-ranging package of bespoke rules for the crypto sector, MiCA was passed last year. The legislation comes with rules for crypto companies and stablecoin issuers.

The EBA's standards set out a criteria for stress testing programmes and spells out the liquidity requirements of reserve assets as well as a recovery plan that issuers need to develop and more.

"Issuers of asset referenced tokens are required to conduct stress testing based on plausible financial stress scenarios, and competent authorities will be able to increase the amount of own funds requirements of an issuer of asset-referenced tokens having regard to the risk outlook and stress testing results," the recently published package read.

The draft technical standards were developed in close cooperation with bloc of 27 nations other bodies the European Securities and Markets Authority (ESMA) and the European Central Bank (ECB).

FlowBank, an online Swiss bank that offered customers exposure to crypto, has been shut down and put into bankruptcy by Switzerland’s financial regulator.

The Swiss Financial Market Supervisory Authority (FINMA) announced its decision to shutter FlowBank on Thursday, saying the lender “no longer had sufficient capital for its operations as a bank” and that minimum capital requirements had been “significantly and seriously breached.” FINMA also said that there are “well-founded concerns that the bank is currently over-indebted,” with “no prospect” of a restructuring.

In a letter to customers posted on FlowBank’s website, the bank said FINMA’s decision to shut it down had been made yesterday. Walder Wyss, a top Swiss law firm, has been appointed by FINMA to serve as bankruptcy liquidators for the bank.

FlowBank launched in 2020 and had extensive crypto ties, including partial ownership by crypto asset manager CoinShares which, in 2021, purchased a 9% stake in the bank for $11.8 million. After CoinShares’ investment, the bank began offering its customers the ability to buy, sell and hold crypto and other tokenized assets directly from their FlowBank accounts.

Earlier this year, it was reported that Binance, the world’s largest crypto exchange, would allow larger traders to hold their crypto assets at FlowBank or Sygnum, another crypto-friendly Swiss bank.

According to a document posted on FINMA’s website, FlowBank customers with up to 100,000 Swiss francs (approximately $111,710) in deposits are considered protected, and will receive their money back within seven working days.

The future of customers’ crypto deposits, however, is less clear. FINMA has said that it is up to the liquidator whether the cryptocurrencies are classified as custody assets that will be treated like securities in the bankruptcy process, or whether they will be treated as “claims on the bank.”

FlowBank could not be reached for comment. All webpages for the bank route to the letter informing clients about the bank’s shutdown. The bank’s Twitter account has been deactivated.

U.S. Securities and Exchange Commission Chair Gary Gensler said that the final approvals for exchange-traded funds (ETFs) trading Ethereum's ether {{ETH}} should be finished this summer, he told senators in a budget hearing on Thursday.

Gensler told a subcommittee of the Senate Appropriations Committee in a hearing justifying the market regulator's budget that the process is going smoothly after the initial approval of a group of ETFs. The agency had previously granted the initial round of applications but he said the final registration requirements – filings known as S-1s – are now being handled at the "staff level."

Once those filings are approved, the new ETFs can be listed, opening the wider markets to easy-to-trade funds that hold actual ether, much like the earlier establishment of bitcoin spot ETFs that hold {{BTC}}.

When asked directly whether ETH is a commodity, Gensler didn't respond with a yes or no, maintaining the uncertain position his agency has held on that asset. At the same hearing, when asked whether it's a commodity, Commodity Futures Trading Commission chief Rostin Behnam responded, "Yes."

Read More: SEC's Gensler Shrugs About New Crypto ETFs Strolling Through His Agency's Gates

People in the know on the issuance of social influencer Andrew Tate’s daddy (DADDY) meme tokens are apparently sitting on $45 million in unrealized value, wallet tracking service Bubblemaps alleged in an X post.

While wallets directly connected to Tate have not sold any DADDY tokens since their issuance on June 9, some other wallets seemingly purchased 30% of the token’s supply before it was promoted widely on X.

“On June 9th at 21:24 UTC, @DaddyTateCTO sent 40% of the $DADDY supply to @Cobratate,” BubbleMaps posted. @Cobratate is Tate’s official X account. “But here's the catch: 11 wallets, funded through Binance with nearly identical amounts at the same time, bought 20% of $DADDY on June 9th, before @DaddyTateCTO's first tweet.”

Two other clusters tracked by Bubblemaps hold another 10% of the token’s supply, worth $30 million at current prices.

5/ Two other clusters, holding 10% of the total supply, are connected through wallet 4SfQWh.Both clusters bought before Andrew Tate’s first tweet and are currently holding $16M at the current price.https://t.co/nC7Q0jLDxW pic.twitter.com/3F9yNslFVO

— Bubblemaps (@bubblemaps) June 12, 2024

As such, trading pools of the tokens have just over $2.4 million in available liquidity, meaning the positions cannot be realized for their entire value as of Thursday.

Tate’s own wallet, which has not sold tokens as of Thursday, holds $65 million worth of the tokens at current prices.

This is the first crypto token the controversial social media star appears to be directly involved in—an association that helped move the token to a $240 million market capitalization just three days after going live. DEXTools data shows that prices are up 55% in the past 24 hours.

DADDY is the latest in a line of celebrity-backed tokens that have started to make rounds in the meme coin ecosystem. Unlike previous instances where celebrities were marketing projects or protocols, these tokens are actively issued, backed, and promoted by famous personalities, mainly on X.

In May, American media personality Caitlyn Jenner and rappers Iggy Azalea, Trippie Redd, Lil Pump, and Davido all launched tokens using the Solana-based Pump Fun application. Most of those launches are down 90% from highs.

Commodity Futures Trading Commission, Commissioner Christy Goldsmith Romero is expected to get nominated to be the next Federal Deposit Insurance Corporation Chair.

Kristin Johnson, another Democratic commissioner, will also be nominated for the role of Assistant Secretary for Financial Institutions at the Treasury Department, at the same time.

She has been outspoken when it comes to crypto, once commenting that the mood in Washington was to "get it right," when it came to regulation.

The White House is expected to nominate U.S. Commodity Futures Trading Commission Commissioner Christy Goldsmith Romero as the next Federal Deposit Insurance Corporation (FDIC) chair and Kristin Johnson to a senior Treasury post, media outlets have reported.

Goldsmith Romero, one of the CFTC's three Democratic commissioners is expected to have her first hearing on July 8, Reuters said on Thursday.

She is the sponsor of a Technology Advisory Committee that includes members stablecoin issuer Circle, blockchain analytics firm TRM Labs and Cryptocurrency custody firm Fireblocks. The committee was created to protect U.S. citizens from cyber attacks, ensure "responsible development of digital assets," Goldsmith Romero said at the time.

She has been outspoken when it comes to crypto, once commenting that the mood in Washington was to "get it right," when it came to regulation.

Goldsmith Romero will replace Martin Gruenberg, who is stepping down in response to a report that stated that the FDIC had to make changes to address widespread sexual harassment and other misconduct, published last month. The report recommended that new officials be appointed to change the FDIC's culture.

The FDIC is an independent body created by the U.S. Congress that is meant to help maintain stability in the financial system. The FDIC's inspector general said the body had not given banks clear enough guidance when it came to crypto in October last year, following the failure of some crypto banks. The FDIC was expected to give clearer guidance and support to banks this year. The agency has also come down on various crypto companies for making false claims about customer protections.

Johnson, another Democratic commissioner, will also be nominated for the role of Assistant Secretary for Financial Institutions at the Treasury Department, at the same time, a source told Reuters. Johnson has come out and said that Binance's CFTC penalties were heightened because of the regulators prior warnings for crypto firms to comply.

CoinDesk sent a comment request to the CFTC, FDIC, and the Treasury.

Crypto markets have seen $12 billion of net inflows year-to-date, the report said.

The bank said that the majority of the $16 billion inflow into spot bitcoin ETFs likely came from existing digital wallets on exchanges.

JPMorgan said it was skeptical that the pace of inflows will continue for the rest of the year.

Digital assets have seen $12 billion of net inflows year-to-date, and if flows continue at the same pace the number could grow to $26 billion by the end of the year, JPMorgan (JPM) said in a research report on Wednesday.

Spot bitcoin {{BTC}} exchange-traded funds (ETFs) have led the way, attracting $16 billion of net inflows, the report said. This number, when combined with Chicago Mercantile Exchange (CME) futures flows plus capital raised by crypto venture capital funds, increases the total inflow into digital asset markets this year to $25 billion.

Still, not all of these inflows are new money entering the crypto space. “We believe there has likely been a significant rotation away from digital wallets on exchanges to the new spot bitcoin ETFs,” analysts led by Nikolaos Panigirtzoglou wrote.

This rotation is evidenced in the drop in bitcoin reserves across exchanges since the spot ETFs launched in January, which is estimated at 0.22 million bitcoin or $13 billion, the bank said.

“This implies that the majority of the $16 billion inflow into spot bitcoin ETFs since launch likely reflects a rotation from existing digital wallets on exchanges,” the authors wrote. Using this assumption reduces the net flow into digital assets year-to-date to $12 billion from $25 billion, the bank said.

This $12 billion net inflow is stronger than last year but is notably lower than during the bull run of 2021/2022, the report added.

Given how high the bitcoin price is relative to miners’ production cost or relative to the cost of gold, JPMorgan said it is skeptical that inflows will continue at the same rate for the rest of the year.

Read more: Crypto Mainstream Adoption Has Increased in Recent Months, Canaccord Says

Memecoins embody the “Wild West” image of DeFi. Thanks to the stratospheric success of tokens like Dogecoin (DOGE) and Shiba Inu (SHIB), the memecoin market collectively boasts a market cap of $54.4 billion – a number that would’ve seemed outrageous when these assets first emerged. And yet here we are.

As recently as March, memecoin trade volumes hit levels last seen just prior to the last crypto bubble’s implosion in 2022. This resurgence highlights a familiar trend: traders are easily swept up in hype and FOMO, to the extent that they make impulsive investment decisions based on pure instinct and greed. In Digital Asset Valuation Framework, the team at HashKey Capital and I set out the case for applying fundamental valuation frameworks and high-level technical analysis to navigate the market’s inherent volatility and avoid the pitfalls of memecoin mania.

Without putting too fine a point on it, now more than ever we must deploy robust frameworks and exercise cold-eyed judgment to discern genuine value in this most turbulent of markets. This is doubly true for institutional investors looking to gain a sustainable edge and long-term value accretion in digital assets.

The Importance of Fundamental Analysis

In any financial market, there are times when speculative hype can overshadow rational investment strategy. See the dot-com bubble, subprime mortgage meltdown, and countless other examples.

In crypto, speculative hype is on steroids, propelled by endless chatter on socials and a sense that the next moonshot token is right under your nose. Financial Times correspondent Joshua Oliver has written a new book about this phenomenon (“Hype Machine”) focused largely on Sam Bankman-Fried and the cautionary tale of FTX.

See also: Dan Kuhn - In Defense of Meme Coins

Fundamental analysis provides the necessary grounding to understand the intrinsic value of a digital asset, beyond the smokescreen of publicity and propaganda disseminated by clever marketers, hubristic project founders, self-motivated airdrop farmers and the rest.

Critical factors to consider when weighing up the merits of a Web3 investment include the project team’s track record, the underlying technology used, the practical use cases of what is being built, and tangible evidence of real-world adoption.

This kind of old-school, meat-and-potatoes analysis enables investors to look beyond brief bursts of market excitement and evaluate the long-term viability of a project. It’s an approach based less on short-term trading gains and more on sustainable value creation. That said, many projects with zero long-term viability can still enrich some investors.

Beyond Memecoins

The allure of memecoins is understandable, even setting aside the incessant media buzz and viral marketing. Although often ridiculed for their lack of substantive value, memecoins have surprised the world with their performance. A staggering 12,000% increase in the value of DOGE in the first five months of 2021 is just one example of this (although the price had fallen by 80% by mid-December). More recently, Dogwifhat and Pepe have produced similar results – the former helped liquid fund Stratos post a 137% return in Q1.

While memecoins typically lack fundamental value and utility, their fortunes wane according to the conviction of traders who participate in speculation. That doesn’t mean one can simply will a memecoin into value, however. Engaging in memecoin markets without thorough analysis and a clear understanding of the risks involved is effectively gambling, not investing.

The importance of fundamental analysis – particularly in these volatile markets – cannot be overstated. These tools empower investors to make decisions based on meticulous research and solid evidence, rather than a reckless impulse to chase the next improbable moonshot

Meaningful valuation frameworks – including those that can be used to value memecoins, too – can help provide a more grounded understanding of market dynamics in times of volatility. By using these techniques, we can all see the hype for what it is – “fairy dust,” to quote McConaughey’s wired character in “Wolf of Wall Street,” that might be magical for a lucky few, but ineffective for nearly everybody else.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

I asked someone the other day why he was building in crypto. His response: "To make a lot of money. Why else?" Jaded. I used to brush those people off to the side thinking they just don't get it.

Last month, I was selected to talk at the New Voices stage at Consensus 2024 about public goods funding, a tiny niche of crypto that I had dedicated the majority of my Web3 career to pursuing. I knew so much about this topic and was eager to share it with the world. But as I started writing it all down on paper, it all felt too intangible. Do any of us get it?

Sophia Dew, tech lead at the Public Goods Network, was a speaker on the “New Voices” track at Consensus 2024.

I started drafting my talk, explaining how money powers incentives and therefore powers how world-changing innovation enters the world. When government funding for research took off in the 1950s, it led to breakthroughs in science, medicine and technology. Similarly, the growth of venture capital over the past few decades, led to the acceleration of startups and innovative companies. My argument: crypto is powering a bottoms-up scalable way of distributing funding into areas that need it most. At least, this is the hope. However, trying to find mainstream, tangible examples has been few and far between.

Of course, that's not to say there aren't any. I know several passionate projects that are making this a reality, such as GainForest, tackling deforestation through a transparent and automated system that distributes funding directly to locals who show proof of conservation efforts. Or VoiceDeck, enabling journalists to receive retroactive funding through community-driven decision making. I was part of several quadratic funding rounds on Gitcoin that distributed millions of dollars in matching funds to projects based on the number of unique donors. These projects inspired me for what blockchain could do for the world. Yet, at the same time, I was disheartened that this was just a tiny, tiny, tiny sliver of what the focus of this industry is all about.

I spent the latter half of last year leading the technical development and adoption of Public Goods Network, a Layer 2 blockchain aimed at creating sustainable and durable funding for public goods through sequencer fees. We were competing with a lot of other blockchains to incentivize builders, fill up blockspace, and grow out our ecosystem. The most effective tactic available was money. Ecosystems were racing to allocate capital in the hopes of increasing the overall value of the chain.

Some of these programs were effective — such as Optimism’s RetroPGF. This mechanism retroactively funds the most impactful projects based on the collective wisdom and decision making of the community. RetroPGF was the first large-scale, mainstream funding mechanism I witnessed of how crypto is now powering a coordinated, transparent, and tamper-proof way of distributing funding into areas that need it most.

In my opinion, this was a crazy-successful experiment. Each round was run like a scientific experiment, with hypotheses and control variables, so that they get better and better at accurately assessing and rewarding impact every time. Soon after, other blockchain ecosystems followed suit, such as Filecoin and Celo, who ran RetroPGF rounds for their communities earlier this Spring.

As exciting as this was, I still wondered why the main adopters of these funding mechanisms were other blockchain ecosystems. Was everything this niche of crypto doing just for improving blockchain grant programs?

My answer: yes and no.

Public goods funding mechanisms are typically dismissed as simply DAO tooling or a social good initiative. However, in the race to scale and capture market share, these mechanisms have become a competitive advantage. Blockchain ecosystems are dogfooding these novel tools and protocols at an unprecedented speed. As these open-source tools get better, it becomes easier for any ecosystem (not just blockchains) to fund what matters to them.

Onchain ecosystems are made up of thousands of people from all around the world who are designing novel forms of economic and governance structures around their shared goals. This is a big deal. For the history of humankind, these systems were designed top-down. But now, blockchain enables bottoms-up global networks to design systems that align with their values.

We are building technology that has the potential to completely revolutionize how capital flows through society and how power and money is concentrated. While right now, blockchain-based funding mechanisms are still in their infancy, as the industry matures, we will begin to see ecosystems rivaling the size of nation-states, rally incentives and allocate capital towards areas that need it most.

To those trying to grow an ecosystem, I encourage you to run experiments and share your learnings publicly. Collective knowledge is how we as an industry can realize these goals faster.

To outside speculators, I urge you to thoroughly examine the governance and economic models powering these blockchains. Are tokens being distributed in ways that benefit an entire ecosystem, or just a centralized group of decision makers? Understand the levers and drivers that power these systems and recognize that your decisions have an impact on how they are designed.

I know when people talk about blockchains potential for rewriting economies and governance systems, it's often dismissed as an intangible and futuristic goal. But it’s not — it’s happening right now. And, it's being supercharged through some healthy blockchain competition.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

The fundraise included a grant from the Foundation and external investment by Electric Capital.

Nuffle Labs will use NEAR to offer rollups via NEAR's Data Availability (NESR DA) and Fast Finally Layer (NFFL) products.

NEAR Foundation, the non-profit steward of the blockchain ecosystem of the same name, has formed Nuffle Labs with $13 million in funding.

The spinout is aimed at advancing NEAR's modularity and bringing more decentralized development to the ecosystem, according to an emailed announcement on Thursday.

"As an independent entity, Nuffle Labs will now be able to make agile decisions, ensuring that NEAR Modular products remain competitive," the announcement said. "Strategically positioned between the NEAR Foundation, Ethereum, and EigenLayer ecosystems, Nuffle Labs will leverage strengths from multiple platforms to enhance efficiency and resilience in the NEAR ecosystem."

The fundraise included a grant from the foundation and external investment by Electric Capital. Also participating were Canonical Crypto, Fabric Ventures, Robot Ventures, Caladan and Lyrik Ventures.

Nuffle Labs will use NEAR to offer rollups via NEAR's Data Availability (NESR DA) and Fast Finally Layer (NFFL) products.

Read More: Near Protocol's Token Almost Doubles in a Week, Ahead of Nvidia's AI Conference

Film.io aims to bring filmmakers and fans closer to the creative process by forming blockchain-based communities.

Launched in 2022 by Consensys, VillageDAO harnesses the power of Web3 communities to provide customer support and service to dApp users and developers.

Ethereum developer Consensys has announced that Film.io, a startup that uses crypto power to democratize the Hollywood studio system, will be the first partner to join VillageDAO, a smart contract framework and service provider for Web3 communities, formed within ConsenSys back in 2022.

Ethereum brings together a vast ecosystem these days, and decentralized autonomous organizations (DAOs) have had the power to ignite that community and drive various projects and fundraising ideas of all sorts.

A clear target for some degree of decentralization, the Hollywood studio system is a highly evolved series of gatekeeping intermediaries and the result is a world where storytelling and creativity is systematically stifled, points out Bryan Hertz, co-creator of Film.io.

“Film.io is a decentralized community that filmmakers can build around their own film project and really choose their own path,” said Hertz in an interview. “They can seek funding, distribution, as well as assistance from the community in developing their project, whether it's improving the idea or even getting assets recreated, like movie posters or things like that, doing it In a decentralized way.”

From a Film.io perspective, Hertz said he sees film projects with budgets ranging from half a million dollars to $30 million-plus, which he expects to increase as more studios come on board the platform.

VillageDAO, originally incubated within Consensys back in 2022 and now planning a life of its own, can offer a brand like Film.io a better managed environment than the likes of Discord, said Consensys managing director Dror Avieli.

“Discord is a great tool to some degree, but it can quite quickly become a kind of Wild West where you encounter many different levels of behavior and quite a bit of chaos,” said Avieli in an interview. “We believe in creating an environment with better technology, better procedures and better funding, and overall better community management and support.”

As VillageDAO’s first official partner, Film.io will have a designated white-label portal on the

VillageDAO platform: The Film.io Village. To kick off the partnership, Film.io, and VillageDAO are rolling out a “Community Expert'' certification program that allows Film.io members to support the existing community and assist in onboarding new users, the companies said.

This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

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Bitcoin held its ground above $67,000 during the European morning following the Fed's hawkish interest rate projections on Wednesday. The U.S. central bank left rates unchanged on Wednesday and predicted just one reduction this year, which sent bitcoin lower. Following a dip toward $67,000 during the Asian morning, BTC ticked back upward swiftly before trading between $67,200-$67,800. At time of writing, bitcoin is sitting above $67,900, up 0.16% 24 hours ago. The CoinDesk CD 20, meanwhile, is down 0.34% in that time. Ether has fluctuated either side of $3,500, currently 1.1% down in the last 24 hours.

Paxos has laid off 65 people, amounting 20% off its staff, according to a report by Bloomberg. CEO Charles Cascarilla said that the layoffs “allows us to best execute on the massive opportunity ahead in tokenization and stablecoin" and the company is in a "very strong financial position to succeed." Paxos intends to gradually discontinue its settlement services in commodities and securities. Instead, it will concentrate more on asset tokenization and stablecoins, Bloomberg reported. Paxos has a balance sheet of around $500 million, according to disclosures from its various stablecoins. However, the company took a hit last year when the New York Department of Financial Services forced it to stop minting Binance's BUSD in early 2023, which had a market cap of $16 billion at its peak.

Curve’s CRV token plunged 30% in early Asian trading hours as some loan positions supposedly tied to its founder, Michael Egorov, started to automatically liquidate, leading to sudden selling activity. Data tracked by Lookonchain and Arkham show Egorov’s addresses have taken out a cumulative loan of nearly $100 million worth of stablecoins, mostly crvUSD, against $140 million in CRV collateral. A Debank profile tracking Egorov’s wallet shows he has borrowed from Inverse, UwU Lend, Fraxlend, and Curve’s LlamaLend using CRV tokens as collateral. Total holdings across tracked wallets are down 50% in the past 24 hours. In the early Asian hours, several loans were repaid on Inverse and Llamalend with FRAX, DOLA, and CRV tokens.

Chart of the Day

The chart shows the number of CRV held in wallets tied to centralized exchanges spiked 57% early Thursday to record highs above 480 million.

The rise shows investor intention to sell Curve's CRV token, which traded 30% lower at press time.

Source - CryptoQuant

- Omkar Godbole

Trending Posts

MicroStrategy Proposes $500M Convertible Notes to Boost Bitcoin Stash

Australia's Treasury to Include Stablecoin Rules in Crypto Bill Draft, ASIC's Warning For Crypto Entities

ERCOT CEO: Texas' Power Grid Needs Larger Increase Than Expected to Handle AI, Bitcoin Mining

MicroStrategy proposes $500 million debt sale to boost BTC stash.

The Nasdaq-listed firm currently holds 214,400 BTC.

Nasdaq-listed business intelligence firm and bitcoin holder MicroStrategy (MSTR) announced Thursday that it intends to offer $500 million aggregate principal amount of convertible senior notes due 2032, proceeds of which will be used to acquire additional bitcoin and on other corporate affairs.

The notes will be unsecured, senior obligations of MicroStrategy, and interest will be paid semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024. The offering is subject to market conditions, and there is no guarantee about when or on what terms it may be completed. Subject to certain conditions, the company may redeem for cash all or a portion of the notes on or after June 20, 2029.

Individuals believed to be qualified as institutional buyers by Rule 144A of the Securities Act of 1933 will be eligible for the private offering.

MicroStrategy currently holds 214,400 BTC worth over $14 billion and is the highest public-listed bitcoin holder. The company began accumulating the leading cryptocurrency in 2020, adopting it as a reserve asset.

Australia's regulators are looking to include stablecoin legislation into its legislative bill for the digital assets sector.

A representative of the Australian Securities and Investments Commission said they had held meetings with regulators like the SEC about their legal positions on crypto.

Australia's regulators have provided rare updates on their plans for the digital assets sector, including plans to introduce a draft framework for stablecoins and hinted that more enforcement is on its way against unlicensed entities during an event in Sydney on Wednesday.

The event, Digital Assets: Anchoring the Digital Economy, was hosted by Blockchain Australia, the nation's policy body for the industry.

Australia's Treasury previously announced plans to release draft legislation to cover licensing and custody rules for crypto asset providers by the end of 2024. Now, that draft could include a framework to regulate stablecoins.

"The digital asset platform reforms have been allocated a drafting spot with The Office of Parliamentary Counsel (responsible for drafting and publishing Australian laws) that would see the exposure draft released before the end of this year," said Chris Adamek, director of the Australian Treasury's digital asset policy unit.

"Within that drafting slot, there are various reforms and each has a different priority to the payments reforms, which would include our proposed framework for regulating stablecoins sit within that same slot, and they'll be sort of done one after the other. Given that overlap, reps (representatives) are hoping that both of them will be released at the same time."

The Australian Securities and Investments Commission (ASIC) said it was assisting the government in providing advice to colleagues in the Treasury and that it was having regular meetings with peers across the world including the EU, Singapore, Malaysia, Hong Kong, and North America to understand more about the cases they have filed against digital asset firms.

"We are actively monitoring cases overseas and interacting regularly with our overseas peers," said Dr Rhys Bollen, senior executive leader of digital assets at ASIC. "We had an hour on the phone with the SEC this morning talking about some of the work that they're doing and what we can learn from that. We have run half a dozen (cases) already that interact with the digital assets and crypto assets base and we do have more."

Additionally, ASIC's representative said it has and will provide guidance but it is also subject to the law, warning crypto entities to fall in line with the precedents set in the recent cases it has filed against crypto entities in front of an audience of industry goers.

"When did you last review the tokens that you list on your platform? When was the last time you reviewed the products and services that you are making available? How recently have you consulted with your lawyers about where the law currently sees the most current understanding based on cases over the last six months or so. If you haven't done that in the last four months you need to consider where you are," Bollen said.

Bollen also said ASIC would be appealing recent judgements that, at least in part, were in favor of crypto entities such as Block Earner and BPS Financial Pty Ltd (BPS). In recent times, ASIC has sued Binance Australia and social investing platform eToro, while major banks of the nation have imposed partial restrictions on crypto citing scams.

Blockchain Australia has now rebranded to become the Digital Economy Council of Australia (DECA) and will include a membership category for banks.

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