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U.S. Securities and Exchange Commission Chair Gary Gensler used a Thursday speech to lay out multiple paths for crypto projects to register with the agency. He also took shots at Binance and pushed back on arguments made by Coinbase, both companies the subject of lawsuits the regulator filed earlier this week. 

The prepared remarks reflect Gensler’s strongest public pushback against the crypto industry yet. The SEC chair ran through a list of possible registrations crypto firms could use to come into compliance for the sale of digital assets, though only a handful have to date. 

“We have flexible rules for the disclosures required in registration  statements—Regulation S-K and Regulation S-X—and exemptions from registration, including Regulation A or Regulation D,” Gensler said in remarks prepared for delivery at the Piper Sandler Global Exchange and Fintech Conference in New York. “Thus, crypto security issuers need to register the offer and sale of their investment contracts  with the SEC or meet the requirements for an exemption.”

The SEC chair also pointed out guidance that the agency issued to token projects and intermediaries years before he arrived at the markets regulator. 

“We’ve also provided years of guidance to market participants on what does or does not constitute a crypto asset security, including the DAO report in 2017 and the staff’s ‘Framework  for ‘Investment Contract’ Analysis of Digital Assets’ in 2019,” said Gensler. “More than 100 Commission orders, settled actions, and court decisions also have made clear when the offer and sale of a token is a security, including our actions against Telegram, LBRY, and Kik.”

Coinbase, Binance lawsuits

Gensler referenced the SEC’s recent action against Coinbase and implicitly pushed back on the company’s public arguments that it did not know how to comply with securities law. Coinbase CEO Brian Armstrong spoke at the same conference the day before.

“When crypto asset market participants go on Twitter or TV and say they lacked ‘fair notice’ that their conduct could be illegal, don’t believe it. They may have made a calculated economic decision to take the risk of enforcement as the cost of doing business,” Gensler argued. 

But the SEC chair saved his harshest criticism for Binance. Gensler noted that his agency has internal communications that allegedly show Binance executives knowingly breaking the law. He quoted some of it in the speech. 

“According to our complaint against Binance, as a result of the SEC’s action against Kik, Binance insiders realized that they would need to ‘start prepping everything’ for a subpoena and Wells notice relating to their exchange token, BNB, including a ‘War chest,’” Gensler said.  

Gensler also noted that the SEC believes Binance and Binance.US redirected billions in customer assets to investment vehicles also owned by CEO Changpeng ‘CZ’ Zhao, in an echo of similar allegations made against collapsed crypto exchange FTX and its founder Sam Bankman-Fried. The agency has also accused Binance of lying to customers about where their assets are kept and actively manipulating the market against them. 

© 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.

U.S. Securities and Exchange Commissioner (SEC) Chair Gary Gensler argued there’s nothing special about the assets or exchanges in the crypto sector, and their backers can’t hide behind claims that their tokens provide utility.

Proto-danksharding is at the heart of the package, with other improvements for storage on-chain, as well as minor code changes related to the Ethereum Virtual Machine.

Several key applications will support Arbitrum-based USDC like Aave, Balancer, Camelot, Coinbase, Curve, GMX, Radiant, Trader Joe and Uniswap.

The Ethereum developer is accused of squeezing former employees out of shares held in a previous incarnation of the company. The case, which could have wide-ranging consequences for ConsenSys, reaches its next stage today.

dek tk

Edge & Node, the web3 company and development team behind The Graph protocol, appointed co-founder Tegan Kline as the company’s newest chief executive.

Including an interim CEO, Kline will be the third person to occupy the top job at Edge & Node.

A Wall Street alum with stints at both Barclays and Bank of America, Kline previously served as Edge & Node’s chief business officer after joining the company in 2021. Before assuming an official role at the company, Kline had participated in its fundraising efforts. 

“I led the fundraising round and I was invited to be co-founder of Edge & Node along with the initial founders of The Graph,” Kline said, adding that she has helped raise a total of $77.5 million.

Edge & Node’s primary focus for The Graph

Up until now, Edge & Node’s primary focus has been making sure the technology buttressing the The Graph protocol is ready for “mass migration,” said Kline.

“We’ve had an engineer at the helm from the very beginning and that was very important [initially],” she said, adding that the focus has shifted to migrating as many web3 applications as possible to The Graph infrastructure. “Right now what we need is someone with that business mind … and that’s what I’m good at doing.”

Edge & Node has labelled The Graph a “web3 protocol for organizing and accessing blockchain data.”

“The Graph is the only decentralized indexing and query protocol,” Kline explained. “What that means is The Graph is organizing data that’s on the blockchain. It’s super hard to get, it’s very cumbersome, super expensive, it’s really difficult to get data off the blockchain and to organize that data. The Graph does it in a decentralized way.”

The Graph ecosystem fund

To further clarify, Kline drew a comparison to a web2 giant. “Similar to how Google organizes data so we can easily access that data, that’s what The Graph is doing for over 90,000 developers in the web3 space.”

In early 2022, The Graph took part in the launch of an “ecosystem fund” worth $205 million — which while not constituting a direct investment into the protocol — created a pool of capital earmarked for projects built on the protocol, the company said.

Participants included Digital Currency Group, Multicoin Capital, Reciprocal Ventures and HashKey.

© 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.

The investment bank cut its price target on the stock to $39 from $55.

Berenberg Capital Markets cut its price target on Coinbase shares to $39 from $55 in the wake of a lawsuit filed by the U.S. Securities and Exchange Commission against the crypto exchange earlier this week.

“The reduction in our price target reflects our view that COIN, which we had expected to report weak Q2 23 trading volumes before the SEC filed a lawsuit against it on Tuesday, could see that weakness persist and intensify due to the overhang that the lawsuit has created,” Mark Palmer, an equity research analyst for digital assets at Berenberg, wrote in an emailed note. 

Berenberg is maintaining a hold rating on the company. Shares declined 1.1% in Thursday trading at 10am in New York to $52.67, according to TradingView.

Coinbase lawsuit

The SEC brought the lawsuit against Coinbase on Tuesday for allegedly violating securities law in the U.S. 

“Given the potentially significant impact of the lawsuit’s outcome on COIN’s U.S. operations, we would expect some investors to reduce their exposure to its platform,” Palmer said.

“We are reducing our estimates for COIN to reflect our expectation that the company’s already weak trading volumes will become weaker, and that it will see a reduction in the amount of assets on its platform as a result of the overhang from the SEC’s lawsuit,” Palmer continued.

© 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.

Lens Protocol raised $15 million in a funding round led by IDEO CoLab Ventures to support its quest of delivering decentralized social media.

Other VCs — including General Catalyst, Variant and Blockchain Capital — also participated in the round, as did a few decentralized autonomous organizations, like Flamingo DAO, DAOJones and Punk DAO.

The round also included a raft of well-known angel investors, such as Uniswap CEO Hayden Adams, OpenSea co-founder Alex Atallah, former Coinbase CTO Balaji Srinivasan, Sandbox co-founder Sébastien Borget, NFT artist Emily Yang (pplpleasr), Mirror.xyz founder Denis Nazarov and Polygon co-founder Sandeep Nailwal,

The method of the funding round, whether it was done through equity or tokens, was undisclosed.

“Our vision at Lens is to accelerate the adoption of the next generation of the internet powered by human connection — the people-powered social layer,” said Stani Kulechov, founder of Lens Protocol, in a statement.

“We believe user empowerment will lead us back to the open web, with the addition of ubiquitous social experiences, diverse content, novel monetization models and profitable new businesses that share revenue equitably with users and creators,” he added.

Lens Protocol is a social graph that can be used to build decentralized social media. It offers a way to store social media activity through NFTs and on-chain data. Current social media sites built on Lens include Lenster, Orb and Lenstube.

Lens is also working on a blockchain scaling solution called Bonsai. This will store social media transaction data off-chain while verifying them on-chain.

© 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.