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Wild Bitcoin, Ether Price Swings Amid Spot ETH ETF Decision Triggers $350M LiquidationsCrypto prices endured wild swings on Thursday as traders anxiously awaited a U.S. regulatory decision to list spot-based ether exchange-traded funds. Read more: Ether ETFs Clear Major Hurdle, Though SEC Hasn't Cleared Them for Trading Yet Within a nerve-wracking hour leading up to the eventual approval, ETH first tumbled to $3,500 at around U.S. traditional market closing time, then surged to near $3,900 as the first unconfirmed reports of an approval appeared to eventually settle above $3,800 following the confirmation. Bitcoin {{BTC}} saw a similarly hectic episode sinking to the low-$66,000s, then spiking to $68,300 before paring gains below $68,000. However, ETH performed stronger, advancing 1.5% over the past 24 hours, compared to BTC's almost 3% decline during the same period. The broad-market CoinDesk 20 Index was down 1.6% during the day. Amid the volatile episode, liquidations across all leveraged crypto derivative positions soared to over $350 million during the day, the most since May 1, CoinGlass data shows. Liquidations happen when an exchange closes a leveraged trading position due to a partial or total loss of the trader’s initial money down or "margin" – if the trader fails to meet the margin requirements or doesn't have enough funds to keep the trade open. The lion's share of the wiped-out positions were longs betting in rising prices, worth roughly $250 million, suggesting that over-leveraged traders were caught off-guard by the sudden price plunge. ETH traders took the biggest hit, with $132 million of liquidations, followed by $70 million in BTC derivatives liquidations.

Wild Bitcoin, Ether Price Swings Amid Spot ETH ETF Decision Triggers $350M Liquidations

Crypto prices endured wild swings on Thursday as traders anxiously awaited a U.S. regulatory decision to list spot-based ether exchange-traded funds.

Read more: Ether ETFs Clear Major Hurdle, Though SEC Hasn't Cleared Them for Trading Yet

Within a nerve-wracking hour leading up to the eventual approval, ETH first tumbled to $3,500 at around U.S. traditional market closing time, then surged to near $3,900 as the first unconfirmed reports of an approval appeared to eventually settle above $3,800 following the confirmation.

Bitcoin {{BTC}} saw a similarly hectic episode sinking to the low-$66,000s, then spiking to $68,300 before paring gains below $68,000. However, ETH performed stronger, advancing 1.5% over the past 24 hours, compared to BTC's almost 3% decline during the same period. The broad-market CoinDesk 20 Index was down 1.6% during the day.

Amid the volatile episode, liquidations across all leveraged crypto derivative positions soared to over $350 million during the day, the most since May 1, CoinGlass data shows.

Liquidations happen when an exchange closes a leveraged trading position due to a partial or total loss of the trader’s initial money down or "margin" – if the trader fails to meet the margin requirements or doesn't have enough funds to keep the trade open.

The lion's share of the wiped-out positions were longs betting in rising prices, worth roughly $250 million, suggesting that over-leveraged traders were caught off-guard by the sudden price plunge. ETH traders took the biggest hit, with $132 million of liquidations, followed by $70 million in BTC derivatives liquidations.
SEC Approves Spot Ether ETF Listing, Still Needs to Approve Issuers' FilingsThe Securities and Exchanges Commission (SEC) on Thursday approved 19b-4 forms filed by issuers looking to launch a spot ether exchange-traded fund (ETF), marking a key step forward in bringing the fund on the market, according to an order that was published on the SEC's website before being pulled down. The form approval is just the first of two major steps the SEC needs to take before any spot ether ETFs can actually begin trading. S-1 forms, which are necessary to publicly offer new securities, also need approval. Self-regulatory organizations such as exchanges have to file the 19b-4 forms in case of a rule change, while issuers file the S-1 forms. In a statement, a Grayscale spokesperson confirmed the regulator had approved its 19b-4. "At Grayscale, we appreciate the opportunity to engage constructively with regulators as they review spot Ethereum ETFs, and we remain optimistic about the potential of bringing Ethereum further into the US regulatory perimeter in the ETF wrapper," they said. Potential issuers include BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Ark/21Shares and Invesco/Galaxy. “A week ago I would’ve said you were a little crazy to think that these ETFs were going to get SEC approval,” said James Seyffart, ETF analyst at Bloomberg Intelligence ahead of the decision. Although the approval of the 19b-4 filings suggests that regulators are willing to allow issuers to bring a spot ether ETF on the market, it doesn’t guarantee that they will ultimately approve the final S-1 forms filed by all issuers. “There is likely to be a gap before we see S-1 approvals and these ETFs begin trading. My guess is that this will take at least a week, but likely more. If history is any guide it could be much longer and be measured in months. But I personally think the gap will be measured in weeks. Everyone is just guessing right now though.” Seyffart said. Regulators sent a shock wave through the industry on Monday when reports came out that issuers were asked to update their 19b-4 filings ahead of the SEC’s deadline to approve or deny one of the issuers, VanEck’s filing. The odds that the SEC would approve the filing were very low given the lack of engagement from the regulator in the weeks before. An SEC spokesperson said the agency would not comment beyond what's in the order published Thursday. UPDATE (May 23, 2024, 21:30 UTC): Adds additional information, including SEC statement.

SEC Approves Spot Ether ETF Listing, Still Needs to Approve Issuers' Filings

The Securities and Exchanges Commission (SEC) on Thursday approved 19b-4 forms filed by issuers looking to launch a spot ether exchange-traded fund (ETF), marking a key step forward in bringing the fund on the market, according to an order that was published on the SEC's website before being pulled down.

The form approval is just the first of two major steps the SEC needs to take before any spot ether ETFs can actually begin trading. S-1 forms, which are necessary to publicly offer new securities, also need approval.

Self-regulatory organizations such as exchanges have to file the 19b-4 forms in case of a rule change, while issuers file the S-1 forms.

In a statement, a Grayscale spokesperson confirmed the regulator had approved its 19b-4.

"At Grayscale, we appreciate the opportunity to engage constructively with regulators as they review spot Ethereum ETFs, and we remain optimistic about the potential of bringing Ethereum further into the US regulatory perimeter in the ETF wrapper," they said.

Potential issuers include BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Ark/21Shares and Invesco/Galaxy.

“A week ago I would’ve said you were a little crazy to think that these ETFs were going to get SEC approval,” said James Seyffart, ETF analyst at Bloomberg Intelligence ahead of the decision.

Although the approval of the 19b-4 filings suggests that regulators are willing to allow issuers to bring a spot ether ETF on the market, it doesn’t guarantee that they will ultimately approve the final S-1 forms filed by all issuers.

“There is likely to be a gap before we see S-1 approvals and these ETFs begin trading. My guess is that this will take at least a week, but likely more. If history is any guide it could be much longer and be measured in months. But I personally think the gap will be measured in weeks. Everyone is just guessing right now though.” Seyffart said.

Regulators sent a shock wave through the industry on Monday when reports came out that issuers were asked to update their 19b-4 filings ahead of the SEC’s deadline to approve or deny one of the issuers, VanEck’s filing.

The odds that the SEC would approve the filing were very low given the lack of engagement from the regulator in the weeks before.

An SEC spokesperson said the agency would not comment beyond what's in the order published Thursday.

UPDATE (May 23, 2024, 21:30 UTC): Adds additional information, including SEC statement.
Is the House’s FIT21 Bill Really the Legislation That Crypto Needs?The House voted 279 to 136 on Wednesday to pass the much heralded Financial Innovation and Technology for the 21st Century Act (FIT21), which has been cast as a major win for the industry considering this is the furthest any crypto-focused legislation has made it thus far in the U.S. The bill, which saw support from the vast majority of Republicans as well as 71 Democrats, will now head to the Senate – though likely not this year. 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. This is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond. You can subscribe to get the full newsletter here. If passed, the bill would set up a regulatory framework for digital assets, helping to define when a certain token is a security or commodity. While the bill is largely thought to increase the Commodity Futures Trading Commission’s oversight of crypto, the Securities and Exchange Commission would likely continue to play a significant role in regulating the industry. While many have said the bill is something of a turning point for crypto in the U.S., not everyone thinks it will pan out as expected. “It does not even shift agencies; SEC would still have huge power. It provides for a dual regulatory regime, split between SEC and CFTC. It does this by giving the CFTC authority it never had--regulatory authority over a spot commodities market,” crypto legal expert Gabriel Shapiro said on X. “Man we have been psyopped so bad on this FIT21 thing.” “There has never before been a spot commodities market that is *regulated*...we are just handing this authority over wholesale to the CFTC and hoping they are not insane fascists like Gary (but he used to be head of CFTC lol),” he added. In other words, the bill is essentially a way for the government to sanction activities that the industry has already been doing without permission, and potentially sets up an agency to interfere with what are supposedly free and open markets. It was a point echoed by Stephen Palley, another leading legal voice in crypto, who said he does “not like [it] at all.” “It needlessly creates more jurisdiction for CFTC over spot and a walled garden for incumbents, among other things. But you dipshits kept asking for new laws,” Palley, a partner at Brown Rudnick, added. Somewhat ironically, Shapiro and Palley’s criticisms seem to line up with Maxine Waters (D-CA), the ranking Democrat on the House Financial Services Committee, who said it was the one of the worst bills she's ever seen. In addition to potentially stretching the resources of the CFTC, which only has around 700 employees compared to the SEC’s 4,500, it may also undermine other legislative efforts – like the stablecoin bill Waters worked on alongside House Financial Services Chair Patrick McHenry (R-NC). See also: CFTC Commissioner Summer Mersinger on Overzealous Crypto Regulation and the Need for Legislative Action "Let me let you [in] on a secret that the big crypto doesn't want you to know even under this bill," Waters said. "The CFTC does not get enough authority to regulate crypto in this bill." Likewise, SEC Chair Gary Gensler has said the effort would create more confusion and regulatory gaps than it closes. Gensler has said for years that the law is clear, and that there should not be bespoke rules for crypto. Regardless, many in the crypto industry have seen the bipartisan vote as a symbolic vote for crypto itself, perhaps a harbinger of a better future. The move comes just days after the House and Senate voted to repeal a controversial SEC accounting rule, which itself was seen as a sign that sanity will ultimately prevail. If there is a silver lining, many experts think FIT21 is likely to die on the vine. TD Cowen, for instance, said a few weeks ago the bill stood "no chance of becoming law in this Congress.” So maybe this is one psyop worth celebrating?

Is the House’s FIT21 Bill Really the Legislation That Crypto Needs?

The House voted 279 to 136 on Wednesday to pass the much heralded Financial Innovation and Technology for the 21st Century Act (FIT21), which has been cast as a major win for the industry considering this is the furthest any crypto-focused legislation has made it thus far in the U.S. The bill, which saw support from the vast majority of Republicans as well as 71 Democrats, will now head to the Senate – though likely not this year.

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. This is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond. You can subscribe to get the full newsletter here.

If passed, the bill would set up a regulatory framework for digital assets, helping to define when a certain token is a security or commodity. While the bill is largely thought to increase the Commodity Futures Trading Commission’s oversight of crypto, the Securities and Exchange Commission would likely continue to play a significant role in regulating the industry.

While many have said the bill is something of a turning point for crypto in the U.S., not everyone thinks it will pan out as expected.

“It does not even shift agencies; SEC would still have huge power. It provides for a dual regulatory regime, split between SEC and CFTC. It does this by giving the CFTC authority it never had--regulatory authority over a spot commodities market,” crypto legal expert Gabriel Shapiro said on X. “Man we have been psyopped so bad on this FIT21 thing.”

“There has never before been a spot commodities market that is *regulated*...we are just handing this authority over wholesale to the CFTC and hoping they are not insane fascists like Gary (but he used to be head of CFTC lol),” he added.

In other words, the bill is essentially a way for the government to sanction activities that the industry has already been doing without permission, and potentially sets up an agency to interfere with what are supposedly free and open markets.

It was a point echoed by Stephen Palley, another leading legal voice in crypto, who said he does “not like [it] at all.”

“It needlessly creates more jurisdiction for CFTC over spot and a walled garden for incumbents, among other things. But you dipshits kept asking for new laws,” Palley, a partner at Brown Rudnick, added.

Somewhat ironically, Shapiro and Palley’s criticisms seem to line up with Maxine Waters (D-CA), the ranking Democrat on the House Financial Services Committee, who said it was the one of the worst bills she's ever seen. In addition to potentially stretching the resources of the CFTC, which only has around 700 employees compared to the SEC’s 4,500, it may also undermine other legislative efforts – like the stablecoin bill Waters worked on alongside House Financial Services Chair Patrick McHenry (R-NC).

See also: CFTC Commissioner Summer Mersinger on Overzealous Crypto Regulation and the Need for Legislative Action

"Let me let you [in] on a secret that the big crypto doesn't want you to know even under this bill," Waters said. "The CFTC does not get enough authority to regulate crypto in this bill."

Likewise, SEC Chair Gary Gensler has said the effort would create more confusion and regulatory gaps than it closes. Gensler has said for years that the law is clear, and that there should not be bespoke rules for crypto.

Regardless, many in the crypto industry have seen the bipartisan vote as a symbolic vote for crypto itself, perhaps a harbinger of a better future. The move comes just days after the House and Senate voted to repeal a controversial SEC accounting rule, which itself was seen as a sign that sanity will ultimately prevail.

If there is a silver lining, many experts think FIT21 is likely to die on the vine. TD Cowen, for instance, said a few weeks ago the bill stood "no chance of becoming law in this Congress.” So maybe this is one psyop worth celebrating?
U.S. House Passes Bill Banning Federal Reserve From Issuing a CBDCThe U.S. House of Representatives voted largely along party lines to prevent the Federal Reserve from issuing a central bank digital currency. The CBDC Anti-Surveillance State Act, introduced by Majority Whip Tom Emmer (R-Minn.), seeks to block the U.S. central bank from continuing efforts toward the development of a digital dollar. Republicans expressed concerns that a U.S. CBDC could be used to control Americans. Democrats said during debate before Thursday's vote that the concerns were overblown and a ban would block public sector innovation and research. Overall, 213 Republicans and three Democrats voted for the bill, while 192 Democrats voted against it. Thursday's vote count is a far cry from a vote the day before, when 71 Democrats joined 208 Republicans in voting for the Financial Innovation and Technology for the 21st Century Act, a crypto market structure bill that would give the U.S. Commodity Futures Trading Commission greater spot market authority over digital assets and spells out how another key U.S. markets regulator, the Securities and Exchange Commission, can approach the sector. Industry participants hailed Wednesday's vote, the first for a bill focused solely on crypto market issues, as a sign that the sector was finally receiving recognition as being significant. "The House passage of FIT21 represents a watershed moment and badge of Congressional validation for the crypto industry in the United States," said Kristin Smith, who heads up the Blockchain Association, an industry lobby group. Nicole Valentine, the director of FinTech at the Milken Institute, similarly called the passage a "welcome step." However, both the market structure and the anti-CBDC bills seem headed toward similar fates in the Senate – going nowhere – given that half of congress does not have a counterpart for either piece of legislation. Read more: U.S. House Approves Crypto FIT21 Bill With Wave of Democratic Support

U.S. House Passes Bill Banning Federal Reserve From Issuing a CBDC

The U.S. House of Representatives voted largely along party lines to prevent the Federal Reserve from issuing a central bank digital currency.

The CBDC Anti-Surveillance State Act, introduced by Majority Whip Tom Emmer (R-Minn.), seeks to block the U.S. central bank from continuing efforts toward the development of a digital dollar. Republicans expressed concerns that a U.S. CBDC could be used to control Americans.

Democrats said during debate before Thursday's vote that the concerns were overblown and a ban would block public sector innovation and research. Overall, 213 Republicans and three Democrats voted for the bill, while 192 Democrats voted against it.

Thursday's vote count is a far cry from a vote the day before, when 71 Democrats joined 208 Republicans in voting for the Financial Innovation and Technology for the 21st Century Act, a crypto market structure bill that would give the U.S. Commodity Futures Trading Commission greater spot market authority over digital assets and spells out how another key U.S. markets regulator, the Securities and Exchange Commission, can approach the sector.

Industry participants hailed Wednesday's vote, the first for a bill focused solely on crypto market issues, as a sign that the sector was finally receiving recognition as being significant.

"The House passage of FIT21 represents a watershed moment and badge of Congressional validation for the crypto industry in the United States," said Kristin Smith, who heads up the Blockchain Association, an industry lobby group.

Nicole Valentine, the director of FinTech at the Milken Institute, similarly called the passage a "welcome step."

However, both the market structure and the anti-CBDC bills seem headed toward similar fates in the Senate – going nowhere – given that half of congress does not have a counterpart for either piece of legislation.

Read more: U.S. House Approves Crypto FIT21 Bill With Wave of Democratic Support
Are Sideline Skeptics Crypto’s Biggest Enemy or Greatest Strength?Blockchain technology and its user base might be growing apart. As the industry has made leaps and bounds in progress over the past five years in terms of its technical capabilities and financial acumen, it’s hard to say that its audience has evolved the same way. This article is part of CoinDesk's Web3 Marketing package. 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. Roy Blackstone is creative director of SHADOW WAR. Sure, you have far fewer scammers and self-proclaimed wunderkinds percolating through the ecosystem than before thanks to the last bear market. But the hyper-online troll and commentator culture is still the public face of the crypto industry to many. Across online platforms, social media outlets, and industry conferences, voices continually seek to influence the trajectory of crypto and help HODLers navigate the market’s turbulent waters. Amid the noise of opinions, however, a critical question must be addressed: Are these critics merely sideline observers, or do they hold concrete power to drive progress within the industry? As crypto sheds its fringe status, it’s time to reckon with its cottage industry of critics and influencers. Balancing contributions and critiques Every industry has a set of commentators—from sports to entertainment to politics—and each sector has pundits armed with words, ideas, and a varying degree of influence and credibility. However, for an internet-native industry like crypto which relies on digital forums for communication, online communities play a pivotal role in shaping perceptions, influencing decision-making, and driving overall market trends. The blockchain industry's growth offers newcomers a chance to explore emerging financial tools and decentralized finance. While it has gained positive traction, the pool of builders still remains relatively small. The crypto landscape is filled with many participants with little to no experience in tech or finance but who are still eager to contribute their perspectives and support to this expanding space. As such, platforms like X, Telegram and Discord, alongside crypto influencers, have become the lifeblood of many Web3 projects – and feedback can propagate across the internet, reaching a vast audience in a matter of moments. Elon Musk is an evergreen example, with his posts on X about cryptocurrencies consistently having a noticeable impact on the market. So clearly, there is an amplified influence from outside voices on the trajectory of crypto and associated projects. The benefits? Social platforms have become grounds for new projects to grow by authentically inserting themselves into crypto discussions. TAG Heuer, for example, used X to launch the luxury watch brand’s move into Web3. As a result, NFTs rose to fifth on the list of interest of the brand’s followers on X from 13% before the launch. This shows how brands looking to enter the Web3 space turn to user-first platforms like X to establish a presence where their target audience congregates rather than relying solely on traditional marketing methods. With that said, in a niche industry like crypto, its inherently online culture makes it exceptionally susceptible to trolls – and the more ridiculous or outrageous their ridicule, the greater the potential to frustrate. Since crypto communities are tribal, they often become emotionally and financially invested in their favorite blockchain network or project, making them automatically defensive or resistant to critiques that challenge their interests. It effectively applies “stan culture” to a very real financial and technological ecosystem. But does that mean every crypto critic is just a troll in disguise? Minimizing the trust gap When it’s constructive, criticism catalyzes progress—and crypto has proven no different. Constructive criticism and discussion can foster innovation, drive collaboration and help newcomers navigate its terrain. Well-run organizations can leverage constructive criticism to tackle complex challenges as collaborative efforts are powered by shared knowledge. The ecosystem benefits from the critical eye of commentators, distinguishing real innovation from projects that blow smoke. One way to address negative feedback about the industry is to put business founders in front of their audience. Engaging in open dialogue and discussions with critics is a productive way to ensure information circulating online is factual and not based on skeptics' feelings towards the project. Virtual AMA (ask me anything) sessions through platforms such as Telegram, Reddit, X and YouTube allow project leaders to interact with community members, address pain points, and showcase their value. Sharing goals and updates about projects directly with the public fosters loyalty and a positive brand experience. Even now, we’re witnessing the benefits of constructive criticism, as the common critique of crypto’s unprofessionalism and negligence has been addressed and piqued the interest of institutional players. This shift in the regulatory interest of financial institutions is evidence that crypto builders should listen to and acknowledge their users' feedback. The more developers can embrace grounded critiques from their community, even from outsiders, the faster the ecosystem will mature and expand. Criticism produces a torrent of responses, often obscuring the subject's underlying merits and exacerbating the industry's volatility. A concerted effort towards education, streamlined processes, and robust security is necessary to usher the next wave of crypto enthusiasts into the mainstream. By fostering familiarity and trust, the crypto ecosystem can transcend its reputation, paving the way for widespread adoption and growth.

Are Sideline Skeptics Crypto’s Biggest Enemy or Greatest Strength?

Blockchain technology and its user base might be growing apart. As the industry has made leaps and bounds in progress over the past five years in terms of its technical capabilities and financial acumen, it’s hard to say that its audience has evolved the same way.

This article is part of CoinDesk's Web3 Marketing package. 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.

Roy Blackstone is creative director of SHADOW WAR.

Sure, you have far fewer scammers and self-proclaimed wunderkinds percolating through the ecosystem than before thanks to the last bear market. But the hyper-online troll and commentator culture is still the public face of the crypto industry to many. Across online platforms, social media outlets, and industry conferences, voices continually seek to influence the trajectory of crypto and help HODLers navigate the market’s turbulent waters.

Amid the noise of opinions, however, a critical question must be addressed: Are these critics merely sideline observers, or do they hold concrete power to drive progress within the industry? As crypto sheds its fringe status, it’s time to reckon with its cottage industry of critics and influencers.

Balancing contributions and critiques

Every industry has a set of commentators—from sports to entertainment to politics—and each sector has pundits armed with words, ideas, and a varying degree of influence and credibility. However, for an internet-native industry like crypto which relies on digital forums for communication, online communities play a pivotal role in shaping perceptions, influencing decision-making, and driving overall market trends.

The blockchain industry's growth offers newcomers a chance to explore emerging financial tools and decentralized finance. While it has gained positive traction, the pool of builders still remains relatively small. The crypto landscape is filled with many participants with little to no experience in tech or finance but who are still eager to contribute their perspectives and support to this expanding space.

As such, platforms like X, Telegram and Discord, alongside crypto influencers, have become the lifeblood of many Web3 projects – and feedback can propagate across the internet, reaching a vast audience in a matter of moments. Elon Musk is an evergreen example, with his posts on X about cryptocurrencies consistently having a noticeable impact on the market. So clearly, there is an amplified influence from outside voices on the trajectory of crypto and associated projects.

The benefits? Social platforms have become grounds for new projects to grow by authentically inserting themselves into crypto discussions.

TAG Heuer, for example, used X to launch the luxury watch brand’s move into Web3. As a result, NFTs rose to fifth on the list of interest of the brand’s followers on X from 13% before the launch. This shows how brands looking to enter the Web3 space turn to user-first platforms like X to establish a presence where their target audience congregates rather than relying solely on traditional marketing methods.

With that said, in a niche industry like crypto, its inherently online culture makes it exceptionally susceptible to trolls – and the more ridiculous or outrageous their ridicule, the greater the potential to frustrate. Since crypto communities are tribal, they often become emotionally and financially invested in their favorite blockchain network or project, making them automatically defensive or resistant to critiques that challenge their interests.

It effectively applies “stan culture” to a very real financial and technological ecosystem. But does that mean every crypto critic is just a troll in disguise?

Minimizing the trust gap

When it’s constructive, criticism catalyzes progress—and crypto has proven no different. Constructive criticism and discussion can foster innovation, drive collaboration and help newcomers navigate its terrain.

Well-run organizations can leverage constructive criticism to tackle complex challenges as collaborative efforts are powered by shared knowledge. The ecosystem benefits from the critical eye of commentators, distinguishing real innovation from projects that blow smoke.

One way to address negative feedback about the industry is to put business founders in front of their audience. Engaging in open dialogue and discussions with critics is a productive way to ensure information circulating online is factual and not based on skeptics' feelings towards the project.

Virtual AMA (ask me anything) sessions through platforms such as Telegram, Reddit, X and YouTube allow project leaders to interact with community members, address pain points, and showcase their value. Sharing goals and updates about projects directly with the public fosters loyalty and a positive brand experience.

Even now, we’re witnessing the benefits of constructive criticism, as the common critique of crypto’s unprofessionalism and negligence has been addressed and piqued the interest of institutional players.

This shift in the regulatory interest of financial institutions is evidence that crypto builders should listen to and acknowledge their users' feedback. The more developers can embrace grounded critiques from their community, even from outsiders, the faster the ecosystem will mature and expand.

Criticism produces a torrent of responses, often obscuring the subject's underlying merits and exacerbating the industry's volatility. A concerted effort towards education, streamlined processes, and robust security is necessary to usher the next wave of crypto enthusiasts into the mainstream. By fostering familiarity and trust, the crypto ecosystem can transcend its reputation, paving the way for widespread adoption and growth.
U.S. Supreme Court Loss for Coinbase Leaves Company With Mixed RecordCoinbase took a loss in its latest Supreme Court argument on a very narrow point about arbitration. Bad news for Coinbase doesn't translate directly to anything in the digital assets sector. The U.S. Supreme Court ruled against Coinbase Inc. (COIN) in its dispute over which legal agreement should hold sway when parties are under two distinct contracts and the first of them calls for arbitration, finding the company's case was "unpersuasive" and that the courts need to work those questions out when they arise. The matter was far removed from the company's cryptocurrency business, but arbitration issues have been increasingly important in the technology sector in general. This particular case arose over a dispute about whether an arbitration clause in an initial contract should have controlled what happened in a subsequent contract tied to a Dogecoin {{DOGE}} sweepstakes competition the exchange held in 2021 "The question whether these parties agreed to arbitrate arbitrability can be answered only by determining which contract applies," according to the Thursday opinion written by Justice Ketanji Brown Jackson. "When we home in on the conflict between the delegation clause in the first contract and forum selection clause in the second, the question is whether the parties agreed to send the given dispute to arbitration – and, per usual, that question must be answered by a court." That wasn't what Coinbase had hoped to hear. The company didn't immediately respond to a request for comment on the ruling. "Coinbase contends that our approach will invite chaos by facilitating challenges to delegation clauses," Jackson wrote in the court's opinion. "We do not believe that such chaos will follow." The loss in this second highly technical case leaves Coinbase with a mixed record at the Supreme Court, having won its previous dispute over another arbitration matter. "Some you win. Some you lose," its chief legal officer, Paul Grewal, said in a post on X. "We are grateful for having had the opportunity to present our case to the Court and appreciate the Court's consideration of this matter." Because the scenario outlined in this case is narrow and unusual, it "will have limited applicability in arbitration-related jurisprudence going forward," said Richard Silberberg, an arbitration lawyer with Dorsey & Whitney and a director of the New York International Arbitration Center. "The unanimous SCOTUS decision that a court, not an arbitrator, must decide whether the parties’ first agreement was superseded by the second was hardly surprising," he added, because previous rulings had pointed in that direction. Bottom line, according to Rollo Baker, a founding partner with Elsberg Baker & Maruri: "The decision makes clear that where parties have two agreements, one that calls for arbitration and a later-executed agreement that calls for court resolution, it is not ‘unmistakably’ clear that the parties intended arbitrability to be resolved in arbitration," he said in an emailed statement. While this case wasn't at the core of crypto, the Supreme Court is widely expected to eventually resolve the industry's legal battles with U.S. regulators, though it may take years for any of these cases to even appear before the high court. Read More: Coinbase Argues an Arbitration Case in U.S. Supreme Court as Crypto Makes Its Debut UPDATE (May 22, 2024, 17:50 UTC): Adds comment from Coinbase executive.

U.S. Supreme Court Loss for Coinbase Leaves Company With Mixed Record

Coinbase took a loss in its latest Supreme Court argument on a very narrow point about arbitration.

Bad news for Coinbase doesn't translate directly to anything in the digital assets sector.

The U.S. Supreme Court ruled against Coinbase Inc. (COIN) in its dispute over which legal agreement should hold sway when parties are under two distinct contracts and the first of them calls for arbitration, finding the company's case was "unpersuasive" and that the courts need to work those questions out when they arise.

The matter was far removed from the company's cryptocurrency business, but arbitration issues have been increasingly important in the technology sector in general. This particular case arose over a dispute about whether an arbitration clause in an initial contract should have controlled what happened in a subsequent contract tied to a Dogecoin {{DOGE}} sweepstakes competition the exchange held in 2021

"The question whether these parties agreed to arbitrate arbitrability can be answered only by determining which contract applies," according to the Thursday opinion written by Justice Ketanji Brown Jackson. "When we home in on the conflict between the delegation clause in the first contract and forum selection clause in the second, the question is whether the parties agreed to send the given dispute to arbitration – and, per usual, that question must be answered by a court."

That wasn't what Coinbase had hoped to hear. The company didn't immediately respond to a request for comment on the ruling.

"Coinbase contends that our approach will invite chaos by facilitating challenges to delegation clauses," Jackson wrote in the court's opinion. "We do not believe that such chaos will follow."

The loss in this second highly technical case leaves Coinbase with a mixed record at the Supreme Court, having won its previous dispute over another arbitration matter.

"Some you win. Some you lose," its chief legal officer, Paul Grewal, said in a post on X. "We are grateful for having had the opportunity to present our case to the Court and appreciate the Court's consideration of this matter."

Because the scenario outlined in this case is narrow and unusual, it "will have limited applicability in arbitration-related jurisprudence going forward," said Richard Silberberg, an arbitration lawyer with Dorsey & Whitney and a director of the New York International Arbitration Center. "The unanimous SCOTUS decision that a court, not an arbitrator, must decide whether the parties’ first agreement was superseded by the second was hardly surprising," he added, because previous rulings had pointed in that direction.

Bottom line, according to Rollo Baker, a founding partner with Elsberg Baker & Maruri:

"The decision makes clear that where parties have two agreements, one that calls for arbitration and a later-executed agreement that calls for court resolution, it is not ‘unmistakably’ clear that the parties intended arbitrability to be resolved in arbitration," he said in an emailed statement.

While this case wasn't at the core of crypto, the Supreme Court is widely expected to eventually resolve the industry's legal battles with U.S. regulators, though it may take years for any of these cases to even appear before the high court.

Read More: Coinbase Argues an Arbitration Case in U.S. Supreme Court as Crypto Makes Its Debut

UPDATE (May 22, 2024, 17:50 UTC): Adds comment from Coinbase executive.
Wake Up, Web3: Your Marketing Is Fueling a Bot EpidemicWeb3 marketing has one fundamental problem: it focuses mainly on hype and disregards true users. This happens because big rewards have become the core of Web3 marketing. But boosting vanity metrics through giveaways isn’t what Web3 marketing, or what we call MarketingFi, is and should be about. This op-ed is part of CoinDesk's Web3 Marketing Week. Right now, projects are distributing their marketing budgets to everyone who will come and like their Twitter post and give them a follow — think of quests like Galxe. This trend is a spark of potential that MarketingFi has yet to bring to market: instead of offering rewards to everyone for small actions, MarketingFi brings rewards to engaged users. Instead of giving small rewards to a lot of users (and bots and Sybil attackers), MarketingFi means larger rewards for users who bring quality to projects through participation in marketing activities. Similar issues persist in the current state of Web3 KOL marketing — the second largest (after airdrops) and fastest-growing Web3 marketing trend. Currently, projects that conduct KOL rounds often onboard shillers with botted numbers who build and bring initial hype but don’t bring true users towards whom marketing budgets should be diverted. Why? Because they want to ‘make hype quick’ and have no way of measuring the actual impact of their campaigns. Shillers (because, let’s be honest, they are not real KOLs) bring the hype, cost projects tens of thousands, and pass rewards and marketing budgets on unengaged users who leave the project as soon as it's out. Yet, in the data-powered MarketingFi, true KOLs have the potential to bring larger rewards and marketing budgets to audiences that will build projects further. But we need to employ analytics first, weed out the shillers, and bring larger incentives to the right creators. So what exactly is MarketingFi, and how can Web3 get there already? MarketingFi means data-driven marketing decisions in an ecosystem where users are more than customers — they are co-creators and co-owners. A significant shift in Web3 marketers’ thinking is necessary to make MarketingFi a standard. Projects must stop considering traditional business-user relationships and start seeing it as a collaborative co-ownership ecosystem. Think: “If my users hold my tokens, they want me to do the right marketing because my project’s growth benefits them - how can I pass my marketing budget onto them so they help me onboard more quality users?”. How do we find these engaged users, i.e., co-owners and collaborators? Look at your off- and on-chain data and bring significant incentives, rewards, and airdrops to those with the most quality. Give the community the tools and budgets to act. 70% of most airdrops go to bots Currently, Web3 is in the midst of the Airdrop Summer. New airdrop campaigns with elements of social farming are popping up left and right. Budgets and rewards for these campaigns are enormous, generating interest, hype, and hope. Such airdrops are a classic example of giving rewards to the wrong crowd: users lured by the reward complete a series of social tasks (and sometimes a couple of on-chain tasks) to possibly receive an airdrop. Many don’t realize these users are often bots, airdrop hunters, or Sybil attackers — not the quality audience projects their communities want to onboard. Our recent study at Cookie3 showed that up to 70% of an airdrop is frequently passed onto bots and Sybil attackers. Are airdrops killing Web3 then? No. Airdrops are excellent, but only when they attract quality users — i.e. when they are done right. Some projects slowly wake up to the idea, understanding that getting large numbers quickly doesn’t outweigh the benefits of onboarding quality users who stick. A great example is Layer Zero, which laid the rules for self-reporting Sybil activity. Solutions that help project leaders and marketers exclude bots from an airdrop already exist in a market (like Cookie3 Airdrop Shield, which uses AI to determine bots-based activity). Now, a mindset shift is needed and an understanding that short-term success and hype aren’t worth the long-term retention sacrifice. How to implement this change? Using data insight to exclude bots from the airdrop and giving more tokens to a smaller group potentially builds sustained hype and growth for the project. KOLs or shillers? What about KOL marketing and KOL rounds? How to work with KOLs who bring quality audiences in? Which KOLs should be given marketing budgets to pass on to their audiences and ensure collaborative ecosystem growth? Marketers must find ways to determine which KOLs bring quality users rather than further inflating the empty numbers. How? Employing analytics to see how users are converting from KOL promotion, which KOLs bring the most quality users, and working with KOLs who result in a desired conversion is one of the best ways to weed out the best KOLs aiding in quality marketing. As this becomes a standard, more data on KOL quality will be available across the market, raising the overall quality of Web3 KOL marketing. At Cookie3, we are working on implementing such a solution with Cookie3 Affiliate, helping projects set straight terms and rules for onboarding KOLs onto KOL rounds, measuring actual conversion and quality impact, and offloading parts of the allocation to $COOKIE stakers, i.e., bringing engaged users wanting to explore new projects early on. Despite Web3 marketing being different from Web2, one thing Web3 marketers must learn from traditional marketing — looking at numbers and knowing that an engaged and converted user is worth a thousand times more than a potential user or new non-quality follower. Only then should the Web3 element of MarektingFi kick in, and, in a true Web3 fashion, marketers should decentralize their budgets by passing them onto determined quality users as co-owners and collaborators, bringing sustained long-term growth. Web3 markets need to wake up and realize that results-driven does not mean vanity metrics. Results driven in Web3 must be understood as data-powered decisions, community-driven campaigns, and long-term success building through directing budgets to users who bring quality to projects. 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.

Wake Up, Web3: Your Marketing Is Fueling a Bot Epidemic

Web3 marketing has one fundamental problem: it focuses mainly on hype and disregards true users. This happens because big rewards have become the core of Web3 marketing. But boosting vanity metrics through giveaways isn’t what Web3 marketing, or what we call MarketingFi, is and should be about.

This op-ed is part of CoinDesk's Web3 Marketing Week.

Right now, projects are distributing their marketing budgets to everyone who will come and like their Twitter post and give them a follow — think of quests like Galxe. This trend is a spark of potential that MarketingFi has yet to bring to market: instead of offering rewards to everyone for small actions, MarketingFi brings rewards to engaged users. Instead of giving small rewards to a lot of users (and bots and Sybil attackers), MarketingFi means larger rewards for users who bring quality to projects through participation in marketing activities.

Similar issues persist in the current state of Web3 KOL marketing — the second largest (after airdrops) and fastest-growing Web3 marketing trend. Currently, projects that conduct KOL rounds often onboard shillers with botted numbers who build and bring initial hype but don’t bring true users towards whom marketing budgets should be diverted. Why? Because they want to ‘make hype quick’ and have no way of measuring the actual impact of their campaigns.

Shillers (because, let’s be honest, they are not real KOLs) bring the hype, cost projects tens of thousands, and pass rewards and marketing budgets on unengaged users who leave the project as soon as it's out. Yet, in the data-powered MarketingFi, true KOLs have the potential to bring larger rewards and marketing budgets to audiences that will build projects further. But we need to employ analytics first, weed out the shillers, and bring larger incentives to the right creators.

So what exactly is MarketingFi, and how can Web3 get there already?

MarketingFi means data-driven marketing decisions in an ecosystem where users are more than customers — they are co-creators and co-owners. A significant shift in Web3 marketers’ thinking is necessary to make MarketingFi a standard. Projects must stop considering traditional business-user relationships and start seeing it as a collaborative co-ownership ecosystem. Think: “If my users hold my tokens, they want me to do the right marketing because my project’s growth benefits them - how can I pass my marketing budget onto them so they help me onboard more quality users?”. How do we find these engaged users, i.e., co-owners and collaborators? Look at your off- and on-chain data and bring significant incentives, rewards, and airdrops to those with the most quality. Give the community the tools and budgets to act.

70% of most airdrops go to bots

Currently, Web3 is in the midst of the Airdrop Summer. New airdrop campaigns with elements of social farming are popping up left and right. Budgets and rewards for these campaigns are enormous, generating interest, hype, and hope. Such airdrops are a classic example of giving rewards to the wrong crowd: users lured by the reward complete a series of social tasks (and sometimes a couple of on-chain tasks) to possibly receive an airdrop. Many don’t realize these users are often bots, airdrop hunters, or Sybil attackers — not the quality audience projects their communities want to onboard. Our recent study at Cookie3 showed that up to 70% of an airdrop is frequently passed onto bots and Sybil attackers.

Are airdrops killing Web3 then? No. Airdrops are excellent, but only when they attract quality users — i.e. when they are done right. Some projects slowly wake up to the idea, understanding that getting large numbers quickly doesn’t outweigh the benefits of onboarding quality users who stick. A great example is Layer Zero, which laid the rules for self-reporting Sybil activity.

Solutions that help project leaders and marketers exclude bots from an airdrop already exist in a market (like Cookie3 Airdrop Shield, which uses AI to determine bots-based activity). Now, a mindset shift is needed and an understanding that short-term success and hype aren’t worth the long-term retention sacrifice. How to implement this change? Using data insight to exclude bots from the airdrop and giving more tokens to a smaller group potentially builds sustained hype and growth for the project.

KOLs or shillers?

What about KOL marketing and KOL rounds? How to work with KOLs who bring quality audiences in? Which KOLs should be given marketing budgets to pass on to their audiences and ensure collaborative ecosystem growth?

Marketers must find ways to determine which KOLs bring quality users rather than further inflating the empty numbers. How? Employing analytics to see how users are converting from KOL promotion, which KOLs bring the most quality users, and working with KOLs who result in a desired conversion is one of the best ways to weed out the best KOLs aiding in quality marketing.

As this becomes a standard, more data on KOL quality will be available across the market, raising the overall quality of Web3 KOL marketing. At Cookie3, we are working on implementing such a solution with Cookie3 Affiliate, helping projects set straight terms and rules for onboarding KOLs onto KOL rounds, measuring actual conversion and quality impact, and offloading parts of the allocation to $COOKIE stakers, i.e., bringing engaged users wanting to explore new projects early on.

Despite Web3 marketing being different from Web2, one thing Web3 marketers must learn from traditional marketing — looking at numbers and knowing that an engaged and converted user is worth a thousand times more than a potential user or new non-quality follower. Only then should the Web3 element of MarektingFi kick in, and, in a true Web3 fashion, marketers should decentralize their budgets by passing them onto determined quality users as co-owners and collaborators, bringing sustained long-term growth.

Web3 markets need to wake up and realize that results-driven does not mean vanity metrics. Results driven in Web3 must be understood as data-powered decisions, community-driven campaigns, and long-term success building through directing budgets to users who bring quality to projects.

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.
No, a Sponsored Labeled Crypto Press Release Is Not an Alternative to Editorial CoveragePress release distribution services, or newswires in short, have been a staple of the marketing industry for years, used by thousands of businesses as their go-to option for spreading the word. Recently, crypto-focused distribution services have gained a lot of traction in the blockchain space, pitching themselves as a "cheaper" way for projects to gain visibility through sponsored press releases during the dark days of crypto winter, when marketing budgets were tight. 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. Crypto's latest spell in the doldrums, which endured from the end of 2021 until the middle of 2023, meant that most projects didn't have the luxury of spending thousands of dollars on promoting themselves, and so the idea of a press release being syndicated to dozens of websites in a single click was attractive. But is this shotgun-style approach really the most effective method of getting the PR and building the credibility and trust that your project so desperately needs? Far more 'misses' than 'hits' Anyone who knows how press release distribution actually works will understand why using them is often a bad idea. While press release distribution services have partnered with dozens of crypto news outlets and can guarantee sponsored labeled placements on these websites, the quality and credibility of that coverage is questionable at best. Compared to a bland list of syndicated headlines, an intriguing and personalized pitch is a million times more likely to get journalists' attention With these services, press releases are generally just "syndicated", meaning that, although they will indeed be published by dozens of news sites, including crypto-focused ones, they'll often end up published in a non-editorial “backyard” section of the website that gets a lot less eyeballs. The actual content will just be a duplicated version of the original press release, with no editorial review, no analysis, no opinions or unique interpretation of what's happening. Just a sponsored labeled press release, with a regulatory requirement to disclose that it's basically just a paid ad, which generates neither the credibility or trust projects are seeking. Here's an example of how it looks on one of the more popular crypto news sites. In this case, it's a crying shame because a $15 million funding round is actually a newsworthy story and could well have been picked up by an editorial reporter. But because it's automatically syndicated, editors will see little point in writing up a unique article when it has already been published. In my opinion, the company that chose the paid distribution route made a big mistake, but it's far from alone in making such an error. There are numerous examples of newsworthy stories in the crypto industry suffering a similar fate. But aren't these releases also distributed to a broader pool of crypto journalists, you might ask? Surely someone will want to pick it up and cover it editorially, right? Earned media is the way to go If you're looking for compelling coverage of your news on a reputable site that's perceived to be trustworthy, then a direct pitch to a seasoned reporter is the way to go. When your news is covered by a real journalist, it creates a sense of authenticity, conveying the idea that your story is worth the attention of readers. A media pitch involves communicating directly with a journalist or editor in order to convince them that you have a bona-fide story people actually want to read. The actual pitch is really just a short message that's intended to pique their interest in your news and encourage them to write about it. It can be an effective tool for experienced marketers, who understand that journalists are very busy and receive dozens of such pitches every day. As such, their pitches are generally very concise and direct, highlighting the key points of the news and explaining why it's of interest. They'll also be personalized for the specific journalist or publication in question, demonstrating why it should interest their audience. Compared to a bland list of syndicated headlines, an intriguing and personalized pitch is a million times more likely to get journalists' attention. And because readers will know it was written by a journalist, the resulting story will create far more believable PR. That said, it's important to realize that not every story merits a direct pitch. Self-promotional company announcements with no news hook whatsoever, such as airdrops, non-fungible token (NFT) drops, token sales and listings, probably won't interest reporters as these are barely newsworthy. So if you absolutely have to get the word out, then a press release distribution service might be worth a shot for an announcement of this kind, or take the owned media route. But otherwise, no.

No, a Sponsored Labeled Crypto Press Release Is Not an Alternative to Editorial Coverage

Press release distribution services, or newswires in short, have been a staple of the marketing industry for years, used by thousands of businesses as their go-to option for spreading the word.

Recently, crypto-focused distribution services have gained a lot of traction in the blockchain space, pitching themselves as a "cheaper" way for projects to gain visibility through sponsored press releases during the dark days of crypto winter, when marketing budgets were tight.

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.

Crypto's latest spell in the doldrums, which endured from the end of 2021 until the middle of 2023, meant that most projects didn't have the luxury of spending thousands of dollars on promoting themselves, and so the idea of a press release being syndicated to dozens of websites in a single click was attractive.

But is this shotgun-style approach really the most effective method of getting the PR and building the credibility and trust that your project so desperately needs?

Far more 'misses' than 'hits'

Anyone who knows how press release distribution actually works will understand why using them is often a bad idea.

While press release distribution services have partnered with dozens of crypto news outlets and can guarantee sponsored labeled placements on these websites, the quality and credibility of that coverage is questionable at best.

Compared to a bland list of syndicated headlines, an intriguing and personalized pitch is a million times more likely to get journalists' attention

With these services, press releases are generally just "syndicated", meaning that, although they will indeed be published by dozens of news sites, including crypto-focused ones, they'll often end up published in a non-editorial “backyard” section of the website that gets a lot less eyeballs. The actual content will just be a duplicated version of the original press release, with no editorial review, no analysis, no opinions or unique interpretation of what's happening. Just a sponsored labeled press release, with a regulatory requirement to disclose that it's basically just a paid ad, which generates neither the credibility or trust projects are seeking.

Here's an example of how it looks on one of the more popular crypto news sites. In this case, it's a crying shame because a $15 million funding round is actually a newsworthy story and could well have been picked up by an editorial reporter. But because it's automatically syndicated, editors will see little point in writing up a unique article when it has already been published. In my opinion, the company that chose the paid distribution route made a big mistake, but it's far from alone in making such an error. There are numerous examples of newsworthy stories in the crypto industry suffering a similar fate.

But aren't these releases also distributed to a broader pool of crypto journalists, you might ask? Surely someone will want to pick it up and cover it editorially, right?

Earned media is the way to go

If you're looking for compelling coverage of your news on a reputable site that's perceived to be trustworthy, then a direct pitch to a seasoned reporter is the way to go. When your news is covered by a real journalist, it creates a sense of authenticity, conveying the idea that your story is worth the attention of readers.

A media pitch involves communicating directly with a journalist or editor in order to convince them that you have a bona-fide story people actually want to read. The actual pitch is really just a short message that's intended to pique their interest in your news and encourage them to write about it. It can be an effective tool for experienced marketers, who understand that journalists are very busy and receive dozens of such pitches every day. As such, their pitches are generally very concise and direct, highlighting the key points of the news and explaining why it's of interest. They'll also be personalized for the specific journalist or publication in question, demonstrating why it should interest their audience.

Compared to a bland list of syndicated headlines, an intriguing and personalized pitch is a million times more likely to get journalists' attention. And because readers will know it was written by a journalist, the resulting story will create far more believable PR.

That said, it's important to realize that not every story merits a direct pitch. Self-promotional company announcements with no news hook whatsoever, such as airdrops, non-fungible token (NFT) drops, token sales and listings, probably won't interest reporters as these are barely newsworthy. So if you absolutely have to get the word out, then a press release distribution service might be worth a shot for an announcement of this kind, or take the owned media route.

But otherwise, no.
Crypto for Advisors: Bitcoin ETF Vs Direct OwnershipThe arrival of spot bitcoin ETFs in the US has driven a lot of interest and inflows, especially from institutions. As client interest grows, advisors are hearing more questions from their clients about whether they should own the underlying asset directly or if ETF ownership is suitable for them. D.J. Windle, founder and portfolio manager of Windle Wealth, created the “advisors guide” to help navigate these questions. Miguel Kudry, CEO of L1 Advisors, answers questions about ETH ETFs. Will they be the same or different? –S.M. You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday. To ETF or Not to ETF As digital assets continue to gain traction, financial advisors are increasingly encountering questions from clients about the best ways to invest in bitcoin. Two primary options dominate the conversation: investing in a spot bitcoin Exchange-Traded Fund (ETF) and buying bitcoin directly. This article aims to provide financial advisors with a detailed comparison of these investment vehicles, addressing key aspects such as management, custody, trading, and tax implications to inform both advisors and their clients better. Management Bitcoin ETF A spot bitcoin ETF is managed by professional fund managers who handle the buying, selling and custody of bitcoin, simplifying the investment process for investors who may be unfamiliar with the technical aspects of cryptocurrencies. This professional management reduces the burden on investors but comes with management fees that can reduce overall returns over time. Additionally, investors do not have control over the underlying bitcoin, as decisions are made by the fund managers. Direct Bitcoin Ownership When clients buy bitcoin directly, they own the cryptocurrency outright, providing a level of control and flexibility that ETFs cannot match. Direct ownership eliminates the need for paying ongoing management fees, but investors must manage their own purchases, sales, and custody, which can be complex and time-consuming. Mismanagement can lead to significant losses, especially for inexperienced investors as managing bitcoin holdings can require specialized knowledge. Custody and Security Bitcoin ETF ETFs typically utilize institutional-grade custody solutions provided by third-party custodians, which often employ advanced security measures such as cold storage and multi-signature wallets. This reduces the risk of theft and loss, but investors rely on third-party custodians, introducing counterparty risk. Advisors and their clients also do not have direct control over the custody arrangements, which can be a concern for those who prioritize control. Direct Bitcoin Ownership Direct bitcoin ownership requires investors to manage their own custody solutions, ranging from using digital wallets to storing private keys. This offers greater control but also increased responsibility for securing the assets. Poor security practices or lost private keys can result in irreversible loss of funds. Advisors should educate clients on best practices for protecting their Bitcoin, such as using hardware wallets and enabling two-factor authentication. Trading and Liquidity Bitcoin ETF Bitcoin ETFs are traded on major stock exchanges, providing high liquidity and ease of trading during regular market hours. This regulated market offers additional investor protections. However, trading is limited to stock exchange hours, unlike the 24/7 crypto market. Markets often move a lot outside of traditional exchange hours and advisors or clients wouldn’t be able to do anything about it. Also, ETF shares may trade at a premium or discount to the net asset value (NAV) of the underlying bitcoin. Direct Bitcoin Ownership Bitcoin can be bought and sold on various cryptocurrency exchanges, providing access to a global market that operates 24/7. This offers high liquidity, and investors buy and sell at market prices without premiums or discounts. However, the liquidity and trading experience can vary significantly across different exchanges, and some may charge higher fees for transactions and withdrawals. For advisors, many may not want to manage client funds with a trading day that is 24/7. That puts a large responsibility to ensure you are paying attention when you may otherwise not be. Tax Implications Bitcoin ETF Investing in a bitcoin ETF can have different tax implications compared to holding bitcoin directly. ETFs may offer more straightforward tax reporting, as they are treated like other securities. This can simplify tax reporting for investors, and certain ETFs may offer structures that provide tax advantages, such as deferring capital gains taxes. However, selling ETF shares may incur capital gains taxes, which can impact overall returns. Direct Bitcoin Ownership Holding bitcoin directly involves different tax considerations, particularly around capital gains and losses. The tax treatment can be complex and time-consuming, with specific rules on reporting and calculation. Direct ownership allows investors to manage their capital gains and losses directly, potentially optimizing their tax strategies. However, tax reporting can be complex and burdensome, requiring careful compliance and often the consultation of a tax professional and/or software to track the transactions. Advisors may need to work closely with tax professionals to ensure compliance and optimize tax outcomes. Using Institutional Platforms For clients seeking direct bitcoin ownership without the complexities of self-management, institutional platforms through advisors who manage crypto offer a viable alternative and potentially the best of both worlds. These platforms provide professional management, similar to ETFs, but with the added benefit of direct ownership. Holding bitcoin in many different account types, such as a Trust, IRA, and Corporate Account, can make estate and tax planning a bit easier with more flexibility in account types that are a little harder to access when owning the individual coins on a hard wallet. However, this convenience comes at a cost, as these institutions often charge cold storage fees to secure the bitcoin holdings in offline wallets, adding an extra layer of security but also increasing overall costs. So what now? Choosing between a spot bitcoin ETF and buying bitcoin directly involves weighing the pros and cons of each method. Financial advisors should help the client decide what is most important to them when it comes to their exposure to bitcoin. And often, it boils down to just that: exposure. For some clients, exposure is enough, in which case the ETF may be the best option. It’s quick and easy to grab that exposure. For others, having direct ownership of these assets may be of utmost importance, in which case the advisor should help the client decide if they have the knowledge to handle self-custody or if paying for institutional custody and all its benefits is in their best interest. - D.J. Windle, founder and portfolio manager, Windle Wealth Ask an Expert Q: What are some key differences between the bitcoin and ether ETFs, and how they differ from owning the underlying asset? In both cases, owning the underlying asset enables full portability, 24/7 liquidity, and the ability to do things on Bitcoin or Ethereum crypto rails (namely global payments, Decentralized Finance, and more). However, the ETH ETF now introduces a key aspect that advisors should consider. Unlike bitcoin, ether can become a yield-bearing asset by staking it to help secure the Ethereum network. It is very unlikely that the first ETH ETFs offer any staking rewards to investors for a number of regulatory and operational reasons of the issuers. Today, owning and holding ether directly (and for that matter, any other yield-bearing digital asset) is the only way to access these staking rewards, so advisors should consider this when talking to clients about Ether. These staking rewards become income-generating opportunities that investors with considerable ETH exposure should, at the very least, consider, or at the very least, understand that they are leaving on the table if they only hold the asset in ETF form. Q: How should advisors think about the entire spectrum of custody options? Custody is not a one-size-fits-all solution. In TradFi, advisors typically work with more than one custodian to address their firm's and client's full needs. Digital asset custody is even more nuanced, and advisors would do well to adopt a hybrid approach to custody options. Different custody options cater to different investor profiles. Some clients may have higher exposure to digital assets than others. Some may be already self-custody and want to incorporate those into their financial planning or advisory relationship. Others may want exposure through direct ownership via a qualified custody solution. For others, spot ETFs and other publicly traded vehicles may offer enough exposure. Advisors should also be prepared to support their client’s evolving needs and interests. The price volatility and performance of digital assets usually makes investors lean in and become more educated. Oftentimes, it also makes them prone to adopt new forms of custody as their level of sophistication, risk appetite, and overall knowledge of the space increase. Q: Unlike bitcoin (BTC), ether (ETH) can be staked to help secure the Ethereum network and generate income from staking rewards. Do custody options impact an investor’s ability to access such rewards? Advisors should be aware that the custody or investment vehicle used to own or invest in ETH very much impacts an investor’s ability to generate rewards from staking or the net fees they keep in their wallets. Spot ether ETF applicants ditched all staking language from their S-1 filings, meaning that ETH ETF investors will not see any rewards from staking. Qualified custodians effectively operate as walled gardens when it comes to staking. Some offer staking solutions by running their own staking infrastructure and operating the staking programs on behalf of investors who can opt-in to stake their ETH and typically pay the custodian or the staking operator a percentage of rewards. Self-custody enables investors to access a wide range of staking solutions that can be custodial or non-custodial, depending on whether they send their ETH to a third party to be staked or they sign transactions on-chain to stake ETH or mint any of the so-called Liquid Staking Tokens. - Miguel Kudry, CEO, L1 Advisors Inc. Keep Reading U.S. spot bitcoin ETFs continued their streak of positive inflows on Monday. Standard Charter now forecasts that the U.S. ether ETFs will be approved this week. Grayscale announced their new CEO, who was formerly with Goldman Sachs. 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.

Crypto for Advisors: Bitcoin ETF Vs Direct Ownership

The arrival of spot bitcoin ETFs in the US has driven a lot of interest and inflows, especially from institutions. As client interest grows, advisors are hearing more questions from their clients about whether they should own the underlying asset directly or if ETF ownership is suitable for them. D.J. Windle, founder and portfolio manager of Windle Wealth, created the “advisors guide” to help navigate these questions.

Miguel Kudry, CEO of L1 Advisors, answers questions about ETH ETFs. Will they be the same or different?

–S.M.

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

To ETF or Not to ETF

As digital assets continue to gain traction, financial advisors are increasingly encountering questions from clients about the best ways to invest in bitcoin. Two primary options dominate the conversation: investing in a spot bitcoin Exchange-Traded Fund (ETF) and buying bitcoin directly. This article aims to provide financial advisors with a detailed comparison of these investment vehicles, addressing key aspects such as management, custody, trading, and tax implications to inform both advisors and their clients better.

Management

Bitcoin ETF

A spot bitcoin ETF is managed by professional fund managers who handle the buying, selling and custody of bitcoin, simplifying the investment process for investors who may be unfamiliar with the technical aspects of cryptocurrencies. This professional management reduces the burden on investors but comes with management fees that can reduce overall returns over time. Additionally, investors do not have control over the underlying bitcoin, as decisions are made by the fund managers.

Direct Bitcoin Ownership

When clients buy bitcoin directly, they own the cryptocurrency outright, providing a level of control and flexibility that ETFs cannot match. Direct ownership eliminates the need for paying ongoing management fees, but investors must manage their own purchases, sales, and custody, which can be complex and time-consuming. Mismanagement can lead to significant losses, especially for inexperienced investors as managing bitcoin holdings can require specialized knowledge.

Custody and Security

Bitcoin ETF

ETFs typically utilize institutional-grade custody solutions provided by third-party custodians, which often employ advanced security measures such as cold storage and multi-signature wallets. This reduces the risk of theft and loss, but investors rely on third-party custodians, introducing counterparty risk. Advisors and their clients also do not have direct control over the custody arrangements, which can be a concern for those who prioritize control.

Direct Bitcoin Ownership

Direct bitcoin ownership requires investors to manage their own custody solutions, ranging from using digital wallets to storing private keys. This offers greater control but also increased responsibility for securing the assets. Poor security practices or lost private keys can result in irreversible loss of funds. Advisors should educate clients on best practices for protecting their Bitcoin, such as using hardware wallets and enabling two-factor authentication.

Trading and Liquidity

Bitcoin ETF

Bitcoin ETFs are traded on major stock exchanges, providing high liquidity and ease of trading during regular market hours. This regulated market offers additional investor protections. However, trading is limited to stock exchange hours, unlike the 24/7 crypto market. Markets often move a lot outside of traditional exchange hours and advisors or clients wouldn’t be able to do anything about it. Also, ETF shares may trade at a premium or discount to the net asset value (NAV) of the underlying bitcoin.

Direct Bitcoin Ownership

Bitcoin can be bought and sold on various cryptocurrency exchanges, providing access to a global market that operates 24/7. This offers high liquidity, and investors buy and sell at market prices without premiums or discounts. However, the liquidity and trading experience can vary significantly across different exchanges, and some may charge higher fees for transactions and withdrawals. For advisors, many may not want to manage client funds with a trading day that is 24/7. That puts a large responsibility to ensure you are paying attention when you may otherwise not be.

Tax Implications

Bitcoin ETF

Investing in a bitcoin ETF can have different tax implications compared to holding bitcoin directly. ETFs may offer more straightforward tax reporting, as they are treated like other securities. This can simplify tax reporting for investors, and certain ETFs may offer structures that provide tax advantages, such as deferring capital gains taxes. However, selling ETF shares may incur capital gains taxes, which can impact overall returns.

Direct Bitcoin Ownership

Holding bitcoin directly involves different tax considerations, particularly around capital gains and losses. The tax treatment can be complex and time-consuming, with specific rules on reporting and calculation. Direct ownership allows investors to manage their capital gains and losses directly, potentially optimizing their tax strategies. However, tax reporting can be complex and burdensome, requiring careful compliance and often the consultation of a tax professional and/or software to track the transactions. Advisors may need to work closely with tax professionals to ensure compliance and optimize tax outcomes.

Using Institutional Platforms

For clients seeking direct bitcoin ownership without the complexities of self-management, institutional platforms through advisors who manage crypto offer a viable alternative and potentially the best of both worlds. These platforms provide professional management, similar to ETFs, but with the added benefit of direct ownership. Holding bitcoin in many different account types, such as a Trust, IRA, and Corporate Account, can make estate and tax planning a bit easier with more flexibility in account types that are a little harder to access when owning the individual coins on a hard wallet. However, this convenience comes at a cost, as these institutions often charge cold storage fees to secure the bitcoin holdings in offline wallets, adding an extra layer of security but also increasing overall costs.

So what now?

Choosing between a spot bitcoin ETF and buying bitcoin directly involves weighing the pros and cons of each method. Financial advisors should help the client decide what is most important to them when it comes to their exposure to bitcoin. And often, it boils down to just that: exposure.

For some clients, exposure is enough, in which case the ETF may be the best option. It’s quick and easy to grab that exposure. For others, having direct ownership of these assets may be of utmost importance, in which case the advisor should help the client decide if they have the knowledge to handle self-custody or if paying for institutional custody and all its benefits is in their best interest.

- D.J. Windle, founder and portfolio manager, Windle Wealth

Ask an Expert

Q: What are some key differences between the bitcoin and ether ETFs, and how they differ from owning the underlying asset?

In both cases, owning the underlying asset enables full portability, 24/7 liquidity, and the ability to do things on Bitcoin or Ethereum crypto rails (namely global payments, Decentralized Finance, and more). However, the ETH ETF now introduces a key aspect that advisors should consider. Unlike bitcoin, ether can become a yield-bearing asset by staking it to help secure the Ethereum network. It is very unlikely that the first ETH ETFs offer any staking rewards to investors for a number of regulatory and operational reasons of the issuers. Today, owning and holding ether directly (and for that matter, any other yield-bearing digital asset) is the only way to access these staking rewards, so advisors should consider this when talking to clients about Ether. These staking rewards become income-generating opportunities that investors with considerable ETH exposure should, at the very least, consider, or at the very least, understand that they are leaving on the table if they only hold the asset in ETF form.

Q: How should advisors think about the entire spectrum of custody options?

Custody is not a one-size-fits-all solution. In TradFi, advisors typically work with more than one custodian to address their firm's and client's full needs. Digital asset custody is even more nuanced, and advisors would do well to adopt a hybrid approach to custody options. Different custody options cater to different investor profiles. Some clients may have higher exposure to digital assets than others. Some may be already self-custody and want to incorporate those into their financial planning or advisory relationship. Others may want exposure through direct ownership via a qualified custody solution. For others, spot ETFs and other publicly traded vehicles may offer enough exposure. Advisors should also be prepared to support their client’s evolving needs and interests. The price volatility and performance of digital assets usually makes investors lean in and become more educated. Oftentimes, it also makes them prone to adopt new forms of custody as their level of sophistication, risk appetite, and overall knowledge of the space increase.

Q: Unlike bitcoin (BTC), ether (ETH) can be staked to help secure the Ethereum network and generate income from staking rewards. Do custody options impact an investor’s ability to access such rewards?

Advisors should be aware that the custody or investment vehicle used to own or invest in ETH very much impacts an investor’s ability to generate rewards from staking or the net fees they keep in their wallets. Spot ether ETF applicants ditched all staking language from their S-1 filings, meaning that ETH ETF investors will not see any rewards from staking. Qualified custodians effectively operate as walled gardens when it comes to staking. Some offer staking solutions by running their own staking infrastructure and operating the staking programs on behalf of investors who can opt-in to stake their ETH and typically pay the custodian or the staking operator a percentage of rewards. Self-custody enables investors to access a wide range of staking solutions that can be custodial or non-custodial, depending on whether they send their ETH to a third party to be staked or they sign transactions on-chain to stake ETH or mint any of the so-called Liquid Staking Tokens.

- Miguel Kudry, CEO, L1 Advisors Inc.

Keep Reading

U.S. spot bitcoin ETFs continued their streak of positive inflows on Monday.

Standard Charter now forecasts that the U.S. ether ETFs will be approved this week.

Grayscale announced their new CEO, who was formerly with Goldman Sachs.

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.
Plume, Layer-2 Blockchain for Real-World Assets, Pulls $10M in Seed Funding From Haun, GalaxyAs blockchain vies for mainstream acceptance this week in the halls of the United States Congress, a growing number of compliance-oriented crypto projects are hopeful that a more favorable regulatory environment could soon lead to a surge in blockchain-based RWAs, or real-world assets. One such startup, Plume, has raised $10 million in seed funding for what it says will be the first layer-2 blockchain purpose-built for RWAs. The round was led by Haun Ventures and included participation from Galaxy Ventures, Superscrypt, A Capital, SV Angel, Portal Ventures and Reciprocal Ventures. Plume's Ethereum-based blockchain is pitched as a one-stop shop for easily bringing off-chain assets onto blockchains, meaning the protocol helps people navigate the morass of paperwork, custodial requirements and other legwork required to bring things like real estate, art and certain kinds of financial instruments onto blockchains. "The RWA industry is one of the fastest-growing verticals in crypto today but there remains a critical gap – to date there has not been a permissionless blockchain equipped with fullstack RWA infrastructure to deploy any asset class compliantly," the company explained in a statement shared with CoinDesk. "The robust DeFi ecosystem on Plume enables users to do everything with RWAs – from earning yield, borrowing/lending, trading and speculating with leverage." Plume's underlying technology is based on Arbitrum Nitro – a framework for building layer-2 "rollup" chains that write transactions to Ethereum quickly and with low fees. The tech should make it simple for the chain to interoperate and swap assets across other chains in the Arbitrum Orbit ecosystem – a constellation of other rollups built using the same framework. "When we started talking to protocols, everyone said the same thing: 'It takes us anywhere between six months, a year, a year and a half, two years to actually get this asset on-chain before we can even write a single line of code for our protocol,'" Plume co-founder Chris Yin said in an interview with CoinDesk. "That's just a ridiculous way to do things – it's just duplicative work across every single protocol. We say, let's standardize that." On Plume, "you have a very comprehensive set of features to actually tokenize an asset – meaning setting up your entity, filing the stuff, taking custody of the assets, doing wallets, automatic set-up, cap table management, on/off-ramping, [know-your-customer] – all of those things are baked in," said Yin. "We just take these products, we integrate them and put a nice UI on it and make sure that it's nicely modular." According to Yin, Plume currently has more than 80 projects deploying real-world assets onto its private test network. "Everything from collectibles, private credit, real estate – all these things are deploying on Plume," he said. Yin says Plume plans to open up its testnet to the public within "a month or so," with a full release to follow later on.

Plume, Layer-2 Blockchain for Real-World Assets, Pulls $10M in Seed Funding From Haun, Galaxy

As blockchain vies for mainstream acceptance this week in the halls of the United States Congress, a growing number of compliance-oriented crypto projects are hopeful that a more favorable regulatory environment could soon lead to a surge in blockchain-based RWAs, or real-world assets.

One such startup, Plume, has raised $10 million in seed funding for what it says will be the first layer-2 blockchain purpose-built for RWAs. The round was led by Haun Ventures and included participation from Galaxy Ventures, Superscrypt, A Capital, SV Angel, Portal Ventures and Reciprocal Ventures.

Plume's Ethereum-based blockchain is pitched as a one-stop shop for easily bringing off-chain assets onto blockchains, meaning the protocol helps people navigate the morass of paperwork, custodial requirements and other legwork required to bring things like real estate, art and certain kinds of financial instruments onto blockchains.

"The RWA industry is one of the fastest-growing verticals in crypto today but there remains a critical gap – to date there has not been a permissionless blockchain equipped with fullstack RWA infrastructure to deploy any asset class compliantly," the company explained in a statement shared with CoinDesk. "The robust DeFi ecosystem on Plume enables users to do everything with RWAs – from earning yield, borrowing/lending, trading and speculating with leverage."

Plume's underlying technology is based on Arbitrum Nitro – a framework for building layer-2 "rollup" chains that write transactions to Ethereum quickly and with low fees. The tech should make it simple for the chain to interoperate and swap assets across other chains in the Arbitrum Orbit ecosystem – a constellation of other rollups built using the same framework.

"When we started talking to protocols, everyone said the same thing: 'It takes us anywhere between six months, a year, a year and a half, two years to actually get this asset on-chain before we can even write a single line of code for our protocol,'" Plume co-founder Chris Yin said in an interview with CoinDesk. "That's just a ridiculous way to do things – it's just duplicative work across every single protocol. We say, let's standardize that."

On Plume, "you have a very comprehensive set of features to actually tokenize an asset – meaning setting up your entity, filing the stuff, taking custody of the assets, doing wallets, automatic set-up, cap table management, on/off-ramping, [know-your-customer] – all of those things are baked in," said Yin. "We just take these products, we integrate them and put a nice UI on it and make sure that it's nicely modular."

According to Yin, Plume currently has more than 80 projects deploying real-world assets onto its private test network. "Everything from collectibles, private credit, real estate – all these things are deploying on Plume," he said.

Yin says Plume plans to open up its testnet to the public within "a month or so," with a full release to follow later on.
Fantom Foundation Creates Sonic Foundation, Labs for New Sonic ChainThe foundation behind the layer-1 Fantom Opera blockchain shared Thursday that it's forming the Sonic Foundation and Sonic Labs to be the main bodies supporting Sonic, a new layer-1 blockchain with a layer-2 bridge that connects to Ethereum. Fantom Opera is its a standalone network that focuses on decentralized finance, while the new Sonic chain is supposed to link the Ethereum ecosystem with a layer-2 bridge. Sonic will have the "ability to withdraw funds on Ethereum independently," and will generate a proof "for every asset bridged from Ethereum to Sonic chain," said Michael Kong, CEO of Fantom Foundation, in an email to CoinDesk. Sonic will be "greatly superior in terms of speed and security compared to the Fantom chain. Over time, we anticipate that users and developers will fully migrate to the Sonic chain," Kong added. According to a press release from the Fantom Foundation, Sonic Foundation will be responsible for the governance of the Sonic ecosystem as well as its treasury. Sonic Labs will focus on decentralized applications and the community for the Sonic network. The Fantom team also shared that once the Sonic chain goes live, expected sometime this year, the network will have its own native token, $S, “which will be 1:1 compatible with Fantom’s existing $FTM token after a recent governance vote codifying the two tokens' interoperability.” Alongside the news about the new Sonic entities, Fantom shared that it closed a $10 million funding round led by Hashed, which will go towards growing Sonic’s ecosystem and product. Sonic Foundation and Sonic Labs will not officially start working until the Sonic chain is up and running. “I'm incredibly grateful to our investors for their belief in our vision for Sonic and for our dedicated team for their hard work and commitment to ensuring a smooth rebranding process,” said Kong in the press release. “We will continue our legacy of efficacy, transparency, and loyalty to our community in this next stage of the protocol. ” Read more: Fantom Seeks Money Back From Multichain’s $200M Exploit

Fantom Foundation Creates Sonic Foundation, Labs for New Sonic Chain

The foundation behind the layer-1 Fantom Opera blockchain shared Thursday that it's forming the Sonic Foundation and Sonic Labs to be the main bodies supporting Sonic, a new layer-1 blockchain with a layer-2 bridge that connects to Ethereum.

Fantom Opera is its a standalone network that focuses on decentralized finance, while the new Sonic chain is supposed to link the Ethereum ecosystem with a layer-2 bridge. Sonic will have the "ability to withdraw funds on Ethereum independently," and will generate a proof "for every asset bridged from Ethereum to Sonic chain," said Michael Kong, CEO of Fantom Foundation, in an email to CoinDesk.

Sonic will be "greatly superior in terms of speed and security compared to the Fantom chain. Over time, we anticipate that users and developers will fully migrate to the Sonic chain," Kong added.

According to a press release from the Fantom Foundation, Sonic Foundation will be responsible for the governance of the Sonic ecosystem as well as its treasury. Sonic Labs will focus on decentralized applications and the community for the Sonic network.

The Fantom team also shared that once the Sonic chain goes live, expected sometime this year, the network will have its own native token, $S, “which will be 1:1 compatible with Fantom’s existing $FTM token after a recent governance vote codifying the two tokens' interoperability.”

Alongside the news about the new Sonic entities, Fantom shared that it closed a $10 million funding round led by Hashed, which will go towards growing Sonic’s ecosystem and product.

Sonic Foundation and Sonic Labs will not officially start working until the Sonic chain is up and running.

“I'm incredibly grateful to our investors for their belief in our vision for Sonic and for our dedicated team for their hard work and commitment to ensuring a smooth rebranding process,” said Kong in the press release. “We will continue our legacy of efficacy, transparency, and loyalty to our community in this next stage of the protocol. ”

Read more: Fantom Seeks Money Back From Multichain’s $200M Exploit
Gensler Says 'Stay Tuned' on U.S. SEC's Decision on ETH ETFWASHINGTON, D.C. — U.S. Securities and Exchange Commission Chair Gary Gensler declined on Thursday to preview his agency's decision on ether {{ETH}} exchange traded funds (ETFs), though he advised observers to "stay tuned." Though he'd reiterated that the court decision on ETFs had caused his agency to "pivot" in its thinking, when asked by CoinDesk on Thursday about what the agency is preparing to do in response to the specific applications on this much-anticipated crypto decision, he largely demurred. "I don't have anything on this particular filing," Gensler said outside an Investment Company Institute event in Washington. "We do it within the law and how the courts interpret the law, and that's what I'm deeply committed to," he said, after having noted on stage at the event that the agency had responded to the D.C. Circuit Court of Appeals decision rejecting the SEC's approach toward spot bitcoin {{BTC}} ETFs earlier this year. The SEC, after weeks of limited engagement, asked exchanges supporting spot ether ETF applications to refile their 19b-4 forms with universal language earlier this week. Those forms were submitted to the SEC by Tuesday, and the exchanges began publishing them online that night. The SEC also appears to have begun engaging with the would-be issuers themselves, as companies like Fidelity and Grayscale filed updated S-1 forms this week. The SEC has to make a final decision on at least one spot ether ETF application by the end of the day Thursday. Based on these forms, it appears the SEC is uncomfortable with the idea that ether ETF issuers might stake any assets. Industry participants previously told CoinDesk that while the SEC's moves this week don't guarantee approval of the ETFs, they make it more likely that the ETFs will be approved. "[The] DC Circuit took a different view, and we took that into consideration and pivoted," Gensler said on Thursday. Gensler also reiterated Thursday that his agency would keep working on its opposition to the crypto bill that passed the House of Representatives on Wednesday. "We'll continue to engage," he said. "It's just a field where the token operators – without prejudging any one of them – aren't making the disclosures that investors really could benefit from and are required by law." "We've seen leaders in this field find themselves on a pathway to jail or extradition," he added. And when asked about Congress seeking to reverse his agency's crypto accounting policy, Staff Accounting Bulletin No. 121 (SAB 121), he argued that the agency meant it as guidance at a time when failing crypto firms were having to treat customer assets the same as their own in bankruptcy. "The crypto that these companies have said they took as custody actually because part of the bankruptcy estate," Gensler said. "That's what we were addressing back in 2022," he added, saying it was "just" an accounting bulletin. Read more: SEC's Gensler Going Rogue in Solo Quest to Stop U.S. Crypto Legislation?

Gensler Says 'Stay Tuned' on U.S. SEC's Decision on ETH ETF

WASHINGTON, D.C. — U.S. Securities and Exchange Commission Chair Gary Gensler declined on Thursday to preview his agency's decision on ether {{ETH}} exchange traded funds (ETFs), though he advised observers to "stay tuned."

Though he'd reiterated that the court decision on ETFs had caused his agency to "pivot" in its thinking, when asked by CoinDesk on Thursday about what the agency is preparing to do in response to the specific applications on this much-anticipated crypto decision, he largely demurred.

"I don't have anything on this particular filing,