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Securities and Exchange Commission Chair Gary Gensler expressed skepticism about the crypto marketplace when asked about pending applications for spot bitcoin exchange-traded fund applications in a televised interview on Thursday.

Though he made clear he would not make a direct statement until the full five-member commission could consider the recent wave of filings, spurred by investing giant BlackRock and largely based around surveillance sharing agreements with Coinbase, Gensler raised concerns about general fraud and manipulation in the crypto industry when asked for his thoughts about the ETF applications in an interview with Bloomberg Television.

“There’s a lot of noncompliance in this field,” Gensler said, remarking on the combinations of different market functions that can occur on crypto trading platforms that are prohibited in traditional financial exchanges for conflict of interest and investor protection reasons. “The platforms themselves, where trading is occurring of various crypto tokens, though some of it comes under the securities laws, currently they’re not necessarily compliant with those time-tested protections against fraud and manipulation.”

The comments may signal that regulatory hurdles related to concerns about transparency and manipulation in the underlying market likely remain for bitcoin ETFs, despite renewed investor enthusiasm. The SEC notably filed a major enforcement case against Coinbase last month over several parts of the company’s business, and in a separate lawsuit accused Binance, the world’s largest crypto trading platform, of secretly betting against its own customers, among other allegations.

Still quiet on legislation, Ripple appeal

Gensler declined to directly answer questions about his thoughts about digital asset-related legislation advancing this week on Capitol Hill, though he repeated his long-held belief that existing securities laws are clear for the industry, despite what the commission chair sees as widespread breaking of those laws. 

The SEC head has repeatedly said he prefers to keep his conversations with elected officials private. Two congressional Republicans working on digital asset legislation publicly pressed Gensler for “productive engagement” on their legislative efforts last week, while the SEC has been seen to be slow-walking requested technical assistance on a complicated crypto market structure bill voted on this week by two House committees. Gensler, meanwhile, has drawn public criticism from the industry that wants to see new rules more tailored to its assets.

Though SEC lawyers previewed their likely argument in the event of an appeal of the split decision in their case against Ripple Labs over XRP earlier this month, Gensler also demurred when asked about the case, repeating a longstanding policy of not commenting on specific ongoing enforcement actions.

Staff needs to present their case to the majority Democrat commission for a vote in order to formally make the appeal, though SEC lawyers told a judge in the same federal court district as the Ripple decision to ignore that ruling after it was invoked in a separate enforcement case involving Terraform Labs and the company’s former head Do Kwon in a clear signal that appeal is likely.

“The capital markets really wouldn’t work without cops on the beat and rules of the road,” said Gensler in Thursday’s interview. “We’re part of these well-regulated markets.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Competition among blockchains to grab some of the RWA market, new lending pool from Credix that supports Colombian farmer, the first-ever tokenization under Spain’s new laws, how the U.K’s regulations may lead to the country becoming a tokenization hub, and more for the week ending July 27, 2023.

The House Agriculture Committee advanced the Financial Innovation Technology for the 21st Century Act, a day after the House Financial Services Committee did.

The House Agriculture Committee advanced legislation to overhaul how crypto markets are regulated in the U.S., a day after the House Financial Services Committee did the same.

The bill becomes the most significant piece of digital asset legislation to advance this far in Congress. Now that committees debated, amended and advanced the unusual cross-jurisdictional effort, the legislation is likely to be voted on by the entire House of Representatives in the near future. Uncertainty remains in the Senate though, and the Securities and Exchange Commission appears to be skeptical of the effort.

The historic step came amidst tenser debate at the House Financial Services Committee over a separate, but related bill that had been expected to garner more bipartisan support.

Market opening

House Republicans, as well as industry advocates, have worked to gain as much support from Democrats as possible in order to give the market structure bill, titled the ‘FIT for the 21st Century Act’, enough momentum for it to be considered despite skepticism in the Democrat-majority Senate.

The market bill appeared to have more Democratic support in the Agriculture Committee, though the measure was advanced by a voice vote, making it hard to quantify how much bipartisan support there was. But multiple Democrats offered amendments to tweak the bill that were accepted by Republican Agriculture Committee Chair Glenn “GT” Thompson and other Republican members of the committee, who hold a small majority on both the panel and in the full House of Representatives.

“The legislation marks a significant milestone in the House Committee on Agriculture’s efforts to create a much-needed digital asset regulatory framework that protects consumers and investors while promoting American leadership in finance and technology,” said the Pennsylvania Republican at Thursday’s committee meeting.

In addition to granting more power and funding to oversee crypto spot markets for so-called digital commodities, bitcoin being the most notable, by the Commodity Futures Trading Commission, the bill also would direct regulators to create a clear pathway for a digital asset to transition from being a security investment to a commodity, with less disclosure requirements for the latter. The bill also would allow a process for streamlined, securities-style capital raises through digital asset offerings, and adds $120 million to the CFTC’s budget for three years by redirecting it from the Securities and Exchange Commission.  

Thursday’s debate and amendment process at the House Agriculture Committee was significantly less tense than either Wednesday’s debate of the same bill, or a concurrent debate over the stablecoin bill in the House Financial Services Committee. The bill had an unusual two committee debate and amendment process due to shared jurisdiction over the two different types of asset markets, and respective regulatory agencies, at play: securities and commodities.

Stablecoin debate more uneasy

Bipartisan talks over a comprehensive framework for payment stablecoins, seen as a connected effort to the market bill because of the role stablecoins often play in shifting investments from one cryptocurrency to another, broke down in a very public way at the same time as the Agriculture Committee’s meeting. The stablecoin effort was also seen as more driven by recent market events, as talks around the issue began last summer following the Terra/Luna collapse.

Democrats raised concerns that the bill would allow tech companies like Meta and Amazon to issue their own stablecoins and cut out federal regulation of the digital assets.

Rep. Maxine Waters, D-Calif., the top Democrat on the committee, called the current Republican-led draft of the bill under consideration “deeply problematic and bad for America” during Thursday’s meeting.

Republicans sought input from the New York Department of Financial Services, seen as one of the stauncher state-level regulators, on the main sticking point, a provision that allows states to approve stablecoin issuance, to attempt to counterbalance concerns over the state licensing option.

The Biden administration has issues with the provision, according to statements made at Thursday’s tense committee meeting on the bill. Traditional financial industry players like banks and credit unions also raised similar concerns in correspondence last week. House Financial Services Committee Chair Patrick McHenry, R-N.C., fired back that they could also benefit from the legislation.

As his own committee recessed from the tense stablecoin debate, McHenry informed members that the Agriculture Committee approved its portion of the joint market bill a few minutes earlier, by the expedited voice vote. In contrast, debate and amending of the same bill occupied the financial policy panel for much of Wednesday, only for six Democrats to end up joining Republicans in the recorded vote.

“I don’t seek to emulate the Ag Committee in many ways, but man, oh man, was that sweet,” quipped McHenry.

A recorded vote on the stablecoin bill is scheduled for later Thursday.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Worldcoin could onboard “billions of users” into crypto, said CoinFund.

The Morgan Creek Capital Management founder said that bitcoin will reach $300,000 by Bitcoin’s 2028 halving.

The circulation of Maker’s DAI stablecoin has shrunk by a third over the past year.

Prices of Azuki NFTs have decreased 65% since the Elementals launch in June, according to data from Nansen. 

On June 26, the day before the Elementals drop, Azuki prices were hovering around 15 ETH ($28,250). In the month that followed, the floor price plummeted to 5 ETH ($9,724) as of July 27. 

Azuki trading volume also fell 78% this month.

Azuki Elementals drop

Azuki launched a new NFT collection called Elementals on June 27 that saw 10,000 anime-inspired avatars airdropped to existing Azuki brand holders. Another 10,000 were to be offered up from sale, but the collection sold out before the public had a chance to buy an NFT.

Azuki acknowledged missteps in the launch, stating “we missed the mark.” Despite the community controversy, the Elementals drop netted Azuki $51 million in sales — the highest trading volume for the collection since May of 2022. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Hosted bitcoin mining provider Sazmining, which uses 100% renewable energy to power machines, is expanding into South America with a new facility in Paraguay. 

Scheduled to open in September, the facility leverages surplus electricity generated by the Itaipu Dam, one of the world’s largest hydroelectric projects with 20 turbines capable of generating 14 gigawatts.

The new center will offer hosting for 350 user-owned mining rigs at a rate of 4.7 cents per kWh — less than 30% of the average U.S.-based costs, making it one of the lowest energy cost facilities in the bitcoin mining industry, Sazmining said in a statement.

The expansion positions Paraguay as an “ideal location” for sustainable bitcoin mining and provides a means for the country to monetize surplus electricity generated, Sazmining added.

“By leveraging the surplus electricity, bitcoin mining effectively transforms what was once a loss into a profitable venture for the entire country,” Sazmining President and COO Kent Halliburton said. “Paraguayan politicians and the local power provider, ANDE, have embraced this new development, actively participating in electricity-for-Bitcoin transactions.”

“Sazmining’s larger goals are focused on fostering a more sustainable and forward-looking future by investing in electrical infrastructure that will continue to serve Paraguay for generations,” Halliburton added.

Transforming surplus energy into profit, renewably

The Itaipu Dam dates back to 1971 — coincidentally an interesting year for bitcoin enthusiasts as that’s when U.S. President Richard Nixon suspended the convertibility of the dollar for gold.

Paraguay originally joined forces with Brazil to build the dam and Brazil financed the project. Paraguay, however, was left with excess power beyond its needs, and it sold the excess electricity to Brazil at a loss.

The rise of the bitcoin mining industry and the new facility will enable the country to transform the loss into a profitable venture, Sazmining said.

Sazmining is a fully non-custodial service, meaning customers’ bitcoin rewards are sent directly from the mining pool to their private wallets, with the company only earning revenue when their clients do. Sazmining said this incentivizes all parties to optimize the efficiency of mining operations, as demonstrated by the cost-effectiveness of the eco-friendly Paraguay facility, alongside its on-site maintenance and dedicated security.

The Paraguay mining center will become Sazmining’s second such venture, having previously launched a hydro-powered facility in Wisconsin in January.

More than 50% of bitcoin mining now uses renewable energy, according to a report from ESG analyst and co-founder of CH4 Capital Daniel Batton. Previous reports from the Bitcoin Mining Council, a voluntary bitcoin mining forum first convened by MicroStrategy co-founder Michael Saylor, showed similar figures.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Last week, Web3 wallet Suku teamed up with Polygon to release a free open-edition NFT collection – during which users minted over 50,000 NFTs on Twitter.