The Breakdown First Five - Friday July 28 2023

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Gensler Skeptical on ETF

SEC Chair Gary Gensler has again declined to comment on specific pending ETF filings, but can’t help but continually comment about them. When asked about ETFs on Bloomberg, Gensler said that Crypto platforms are “not necessarily compliant with those time-tested protections against fraud and manipulation”. Comments are being read as an indication surveillance-sharing agreement may not be enough to gain approval.

4. Binance Files Dismissal

Binance have filed a motion to dismiss in their case against the CFTC. They said the regulator has no jurisdiction as most of the allegations relate to offshore activities. Binance is being sued for offering unregistered derivatives in the US, but the allegations largely concern general management conduct at the firm. Binance claims it had already begun to restrict access in the US by the time the facts in the case arose.

3. Grayscale Urges Fair Treatment

Grayscale has written to the SEC asking for fair treatment between ETF applicants. They argued that only approving a few would give those selected applicants an “unfair advantage”. Their main concern was a shifting of the goalposts since Blackrock applied. To that end, they called a surveillance-sharing agreement with Coinbase brings nothing new to the table and shouldn’t be a reason to discriminate.

2. Sequoia Cuts Down Crypto Fund

Sequoia Capital trimmed the size of their Crypto fund by over 65%. As well as downsizing the fund to $200M, the firm also conducted a round of layoffs including the partners who worked on the FTX deal. The firm wrote off that entire $150M investment. Sequoia will continue to invest in Crypto, but will refocus on early stage startups, taking in much less capital from each limited partner to finance their Crypto funds.

1. Stablecoin Shenanigans

The House Financial Services Committee held a grueling 12 hour hearing on Stablecoin legislation. McHenry opened by explaining that the White House had scuttled negotiations at the last moment, but the bill was still defiantly pushed forward. Dems obstructed the process at every turn, using procedure to delay the hearing to a painful degree. Finally, at 10pm, the bill was passed with support from 5 Democrats. The bill will now move to a full vote in the House.

Thanks for reading -NLW