The Breakdown First Five - Friday, August 18 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. SEC Likely to Approve ETH ETFs

Bloomberg is reporting that the SEC is likely to approve ETH futures-based ETFs later this year. A wave of applications poured in this month from almost a dozen fund managers suggesting that the regulator had privately softened its stance to the ETFs. Previously, all applicants had been told to withdraw almost immediately. The news cites anonymous sources but lines up with analyst speculation.

4. Billion Dollar Money Laundering Raid

Singaporean Authorities have raided multiple properties and arrested 10 people on suspicion of money laundering. Over $1B in luxury goods, cars and properties were targeted for seizure. Also seized were “11 documents related to virtual assets”. At this stage we don’t know how deep the crypto connection was, but this is one of the largest money laundering busts ever for Singapore. Chinese nationals are among the arrests.

3. Loss in Tornado Cash Case

A group of Coinbase-backed litigants have lost in their challenge to Tornado Cash sanctions. The group had claimed that the Treasury had exceeded their authority and applied novel interpretations to sanctions law, allowing them to block smart contracts. The Court found the arguments unconvincing, rejecting the Texas case. An appeal is expected.

2. SEC can File Ripple Appeal

The Court has allowed the SEC to put forward an appeal in the Ripple case. This doesn’t necessarily mean the appeal will go ahead, it just means that the original Judge will entertain an application for the appeal. Ripple had objected to even that measure, but the Judge has decided to hear the regulator’s argument. The SEC will also need to convince the appellate court to hear the case. We still have at least several months before anything serious happens.

1. Flash Crash

Buckling under a deluge of headlines, crypto markets flash crashed on Thursday afternoon. $1B in liquidations made Thursday the most painful day in crypto markets since November. The gap down was filled in but the negative price trend remains intact. Traders scrambled for an explanation, ranging from SpaceX selling to the Evergrande bankruptcy. The more likely explanation is macro, as long-dated bonds shift higher putting the damper on risk assets.

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Thanks for reading -NLW