SEC Chair Gary Gensler says Bitcoin is not a security

@newsontheblockchain, 27/09/2024

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The global cryptocurrency market capitalization has reached $2.3 trillion, marking a 1.69% rise over the past 24 hours. This growth reflects a strengthening momentum across the market. In terms of trading activity, the total crypto market volume within the last 24 hours stands at $90.23 billion, representing a significant 32.69% increase, indicating a surge in transactions and market interest.

DeFi (Decentralized Finance) currently accounts for $5.14 billion of the total market's 24-hour volume, which equates to around 5.70%. Meanwhile, stablecoins are maintaining their dominant role in market transactions, with a total volume of $82.62 billion, representing a substantial 91.56% of the entire crypto market's 24-hour trading volume.

Bitcoin continues to lead the market with a dominance rate of 56.35%, reflecting a slight increase of 0.14% over the last day, further solidifying its position as the premier digital asset in the crypto space.

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News for today:

US SEC Chairman Gary Gensler, in a recent CNBC interview, stated that Bitcoin is not a security, reaffirming his position on its status. This comes after the SEC, under Gensler's leadership, approved the first crypto-based ETF in the United States earlier this year, allowing eleven issuers, including asset manager BlackRock, to bring the product to market. Despite regulatory challenges faced by the crypto sector, Gensler emphasized that clear regulations exist, and he reiterated that the agency's long-standing stance on securities has been effective. He also stressed the need for investor protection, indicating that entities must adhere to proper disclosures.

• Gensler's Position on Bitcoin: In a CNBC interview, SEC Chairman Gary Gensler stated that Bitcoin is not a security, following the agency's approval of the first US crypto-based ETF, with issuers like BlackRock participating.

• Regulatory Challenges and Clarity: Despite challenges in the crypto sector, Gensler emphasized that regulations are clear, and he highlighted the importance of investor protection, insisting that entities must follow proper disclosures.

The SEC has approved the Bank of New York Mellon Corp (BNY) to custody crypto assets beyond crypto ETFs, as announced by SEC Chair Gary Gensler. The bank, which already manages $2 trillion in crypto assets, has developed a structure to safeguard customer funds in case of bank insolvency, using individual crypto wallets that won't mix with bank assets. The SEC granted a “non-objection” to this plan, and BNY’s approach can be adopted by other banks. BNY is the largest custodian bank globally, holding over $49 trillion in assets.

• The SEC has approved BNY Mellon to custody crypto assets beyond ETFs, with a structure protecting customer funds using individual crypto wallets to prevent mixing with bank assets.

• BNY's approach, which received a “non-objection” from the SEC, can be used by other banks, solidifying its status as the world’s largest custodian bank with over $49 trillion in assets.

Onyx Protocol, a decentralized finance (DeFi) platform based on Compound Finance, experienced a $3.8 million hack due to a known precision vulnerability in its CompoundV2-based code, the same flaw that previously resulted in a $2.1 million loss in October 2023. The exploit, reported by blockchain security firm PeckShield, allowed hackers to manipulate exchange rates and withdraw funds, leading to the loss of 4.1 million VUSD and other cryptocurrencies. In response, the DeFi community, led by security firm Hexgate, emphasizes the need for stricter security measures, especially for protocols using forked code bases, to prevent similar incidents.

• Onyx Protocol suffered a $3.8 million hack due to a repeat vulnerability in its CompoundV2-based code, marking the second exploit in a year and raising concerns about DeFi security.

• The DeFi community advocates for stronger security practices, especially for protocols using forked code bases, with suggestions to prevent token supply from reaching zero to avoid such exploits.

The United States government has sanctioned two Russians and two cryptocurrency exchanges, PM2BTC and Cryptex, due to alleged involvement in illicit finance activities. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) identified PM2BTC as a "primary money laundering concern," with half of its activities linked to illegal operations, including ransomware attacks. Cryptex, registered in St. Vincent and the Grenadines but operating mainly in Russian, reportedly handled over $720 million in transactions related to cybercriminal activities. The State Department is offering a $10 million reward for information leading to the arrest of two individuals involved, Sergey Ivanov and Timur Shakhmametov.

• US Sanctions: The US government sanctioned Russian cryptocurrency exchanges PM2BTC and Cryptex for alleged illicit finance activities, with the Treasury Department identifying PM2BTC as a significant money laundering concern.

• Rewards for Information: The State Department is offering up to $10 million for information leading to the arrest of Sergey Ivanov and Timur Shakhmametov, who are linked to money laundering and fraud operations.

The U.S. Bitcoin ETF market recently experienced a significant surge in inflows, with $105.84 million on September 25th, marking three consecutive bullish days. BlackRock's iShares Bitcoin Trust (IBIT) led the market, accumulating an additional 2,913 Bitcoins valued at $184.38 million. This brought IBIT's total holdings to 359,278 Bitcoins, reinforcing its status as the largest Bitcoin ETF. However, other ETFs experienced mixed results, with Fidelity’s FBTC witnessing significant outflows of $47.4 million, while Ark & 21Shares had $33.2 million in redemptions. On the Ethereum front, spot Ethereum ETFs saw a notable inflow of $43.23 million, with BlackRock’s ETHA leading at $9.38 million.

• The U.S. Bitcoin ETFs saw $105.84 million inflows on September 25th, led by BlackRock's IBIT, which holds 359,278 Bitcoins. Other funds like Fidelity’s FBTC faced substantial outflows.

• Ethereum ETFs also experienced growth, with $43.23 million in inflows, driven mainly by BlackRock’s ETHA, indicating rising investment interest in cryptocurrencies beyond Bitcoin.

U.S.-based Bitcoin ETFs experienced a significant surge in inflows, totaling $105.84 million on September 25, marking a three-day bullish trend. BlackRock's iShares Bitcoin Trust (IBIT) led the market, purchasing 2,913 Bitcoins worth $184.38 million on that day, solidifying its position as the largest Bitcoin ETF with 359,278 Bitcoins under management. While BlackRock recorded consistent growth, other major ETFs like Fidelity's FBTC and Ark & 21Shares’ ARKB saw substantial outflows, with net redemptions of $47.4 million and $33.2 million, respectively. Additionally, Ethereum ETFs also saw strong inflows, with net investments reaching $43.23 million on September 25, highlighting growing interest beyond Bitcoin.

• Bitcoin ETFs: U.S. Bitcoin ETFs saw a $105.84 million inflow on September 25, with BlackRock's IBIT leading, while other ETFs like Fidelity's FBTC and Ark's ARKB experienced significant outflows.

• Ethereum ETFs: Spot Ethereum ETFs surged with $43.23 million in net inflows, indicating increased interest in cryptocurrencies beyond Bitcoin.

Mayor Eric Adams of New York City is facing serious allegations of defrauding taxpayers out of $10 million during his 2021 mayoral campaign, with federal charges including bribery, wire fraud, and soliciting campaign contributions from foreign nationals. Prosecutors allege Adams directed his campaign to accept illegal donations, primarily from wealthy Turkish businessmen, and used "straw donors" to conceal the true sources of the funds. The indictment details how Adams received luxury perks in exchange for political favors and maintained these questionable practices for nearly a decade, even prior to becoming mayor. Despite the charges, Adams remains defiant and has publicly supported the use of cryptocurrency, suggesting New York should accept digital currencies for tax payments.

• Mayor Eric Adams allegedly defrauded New York City taxpayers, accepting illegal donations from wealthy Turkish businessmen and using "straw donors" to hide the sources, resulting in federal charges.

• Adams denies the allegations, continues his mayoral duties, and remains a proponent of cryptocurrency, advocating for its use in New York's tax system.

Worldcoin has been fined $830,000 by South Korea’s Personal Information Protection Commission (PIPC) for privacy breaches involving the misuse of personal data, particularly scanned iris data. The fines were divided between Worldcoin Foundation and its sister organization, Tools For Humanity (TFH), due to failures in user consent forms and inadequate data protection measures. Despite these penalties, TFH expressed satisfaction with the regulatory findings and indicated that they are committed to compliance and expanding their operations in South Korea, having already verified over 6.7 million World IDs globally.

• Worldcoin was fined $830,000 in South Korea for privacy breaches related to the misuse of personal data and inadequate consent forms, with penalties split between the Worldcoin Foundation and Tools For Humanity (TFH).

• Despite the fines, TFH remains optimistic about its compliance with regulations and plans to continue expanding its operations in South Korea, having already verified over 6.7 million World IDs worldwide.

Kamala Harris aims to enhance U.S. leadership in blockchain and artificial intelligence (AI) to ensure economic growth and job creation, emphasizing the importance of innovation while safeguarding consumer interests. In a recent speech, she highlighted the necessity for clear policies to foster new technologies and signaled a shift toward a more supportive stance on digital assets, contrasting with the current administration's stricter approach. Harris's economic plan indicates a focus on encouraging digital innovation, aiming for the U.S. to remain competitive globally in these critical sectors.

• Kamala Harris is advocating for U.S. leadership in blockchain and AI, promoting job creation and economic growth while emphasizing the need for consumer protection and clear policies.

• Her recent shift toward a more supportive stance on digital assets contrasts with the current administration's approach and indicates a focus on fostering innovation in the technology sector.

That’s all for today folks, see you tomorrow. 👋

Disclaimer

The information provided in this overview is based on our data findings and opinions. It is intended for informational purposes only and should not be considered financial advice. Cryptocurrency investments carry significant risk, and it is important to conduct your own research and consult with a qualified financial advisor before making any investment decisions. We are not responsible for any financial losses or gains you may incur as a result of using this information.