27th February 2025 > > Interregnum.

tl;dr

Once again, the SEC backs down, this time in its sham case against Gemini, leading to a very interesting suggestion. US crypto regulation is heading our way, whether you like it or not (we do). Bank of America is teeing up its response to get fully involved in cryptos.

Market Snap

Market Wrap

An overnight low of $82k cannot be described as particularly cheering. Nearly $2.5bn has left BTC spot ETFs in just three days, and nearly $3bn over the week. One of the disadvantages in trying to understand the ETF flows is the difficulty in tracking whether sellers have been short- or long-term holders. My working assumption is that those who are bailing are speculative players, who are probably taking pain by selling. You can be sure the CC Treasury has no intention of joining them.

Occasional Series – Interregnum

You may have noticed that the CCC has not quite been daily as of late, for which there is a very good reason.

Tomorrow, I start traveling to frozen Lake Khövsgöl in Mongolia (https://en.wikipedia.org/wiki/Lake_Kh%C3%B6vsg%C3%B6l) for a 100-mile race at -25 degrees Celsius over four days, starting next Wednesday, and finishing (I hope) the following Saturday. Final preparations over the last fortnight have taken up a lot of my time. If you fancy it next year, you can sign up here:

https://www.ratrace.com/mongol-100

From Sunday I will have no mobile phone or internet connection until I return to Ulaanbaatar, so you will be treated to more than a whole week without me or the CCC.

Look after cryptos in my absence, please.

Curious Cryptos’ Commentary – The SEC & Gemini

Another day, another climbdown by the SEC. This time, the SEC is closing its action against Gemini, the centralised cryptocurrency exchange owned by the Winklevoss twins. The SEC had claimed that Gemini had engaged in offering securities without being registered, a practical impossibility during the reign of terror under Gensler’s tenure.

Though undoubtedly good news, Cameron Winklevoss makes his displeasure known:

“While this marks another milestone to the end of the war on crypto, which already includes the SEC’s withdrawal of the Coinbase lawsuit and the closing of investigations into OpenSea, Robinhood, and UniSwap, it does little to make up for the damage this agency has done to us, our industry, and America.

The SEC cost us tens of millions of dollars in legal bills alone and hundreds of millions in lost productivity, creativity, and innovation. Of course Gemini is not alone. The SEC’s behavior in aggregate towards other crypto companies and projects cost orders of magnitude more and caused unquantifiable loss in economic growth for America.”

Cameron comes up with a novel proposal, which has zero chance of being enacted:

“Everyone involved in these actions should be fired immediately and in a public way. Their names, roles, and the actions they participated in should be posted on the SEC website.”

His reasoning is sound:

“It should not be acceptable to bring the full might of the US government to bear against fledgling companies in a nascent industry and then hide behind a faceless agency or say you were “just doing your job” or “following orders.” These individuals had a choice. They could have asked to be reassigned or resigned. Nobody was forcing them to work at the SEC. Nonetheless, they chose to violate their oath and the agency’s mission to “make a positive impact on the U.S. economy, our capital markets, and people’s lives” and instead aided and abetted an unlawful war against a lawful industry.”

Just imagine, making bureaucrats responsible for their own actions and behaviours? If only.

Curious Cryptos’ Commentary – US legislation

The SEC’s pro-crypto pivot is not enough on its own. The crypto industry needs clarification from a legal perspective on what is allowed, and what is not. With clear rules in place, entrepreneurs and innovators can crack on building those businesses that will provide all those juicy tax dollars to support those bureaucrats who refuse to take responsibility for their own actions and behaviours.

Senator Cynthia Lummis is upbeat about the prospects for such clarity:

"We're on the precipice of finally creating a bipartisan legislative framework for both stablecoins and market structure. I hope we can get both pieces of legislation to President Trump for his signature this year."

Cynthia’s emphasis on a bipartisan approach is most welcome, though given the political allegiances on display during recent votes at state level regarding cryptos, not everyone has got that memo.

As for the timing, Senate Banking Committee Chairman Tim Scott has vowed to get stablecoin and market structure legislation in place within the first 100 days of the new administration, a deadline of 30th April 2025.

We like that target date.

Curious Cryptos’ Commentary – Bank of America

And this is what happens when you propose to create regulatory clarity. Bank of America CEO, Brian Moynihan, is out quickly with his plans:

“It’s pretty clear that there’s going to be a stablecoin (legislation), which is going to (require stablecoins to) be fully dollar-backed. If they make that legal, we will go into that business.”

There will be an explosion of crypto activity in the US in 2025.