Brave new world
The crypto sector has entered a new era
Ex-FanDuel founder aims new crypto casino at sector enthusiasts.
In Loose change: AGs file SEC complaint, Gensler replacements gather.
Tim Heath says Trump victory will have a major impact on crypto’s future.
And a16z Crypto foresees a new era of crypto entrepreneurialism.
I hope I see you on the other side.
Eccles cake
In crypto we trust: For Nigel Eccles, the former founder of FanDuel and now the co-founder of crypto-based betting and gaming companies BetHog and BetDEX, the split between a crypto-embracing Trump campaign and the froideur displayed by the outgoing Biden administration is stark.
“It’s hard to think of a nation where the two sides were so fundamentally opposite,” he said.
“The Biden admin was so unbelievably bad for the crypto industry. They put a chilling effect on entrepreneurs and investment.”
Those were the days my friend: Almost wistfully, he noted the crypto world was previously “pretty much bipartisan, albeit generally libertarian.”
But the freeze-out on the part of the Biden administration changed all that and pushed the crypto crowd towards the Republicans and, specifically, a crypto-embracing Donald Trump. “Trump embraced that,” Eccles added.
What happens next will be informative. Eccles noted institutional mistrust of crypto largely comes down to ideas around regulatory nervousness about an asset class that defies convention.
But he suggested concerns about money laundering and crypto were overblown.
“One of the great misunderstandings is that crypto is good for money laundering,” he said. “But that’s wrong: it’s awful for money laundering. Cash is far worse.”
Predicting the future: Similarly embraced by Trump supporters was the rise of prediction markets in the final weeks of the campaign.
Eccles went on X when the chain-enabled Polymarket first hit the headlines to question whether the enthusiasm for the election market would translate once the presidential vote was concluded.
“I’ve been using Polymarket for three years and I’ve always been very impressed with them,” he said. “I knew it would be huge.”
“But my biggest question now is, what are the next markets?”
It’s beginning to look a lot like Christmas: He pointed out the interest generated by the presidential four-yearly cycle makes the prediction markets “something like the Christmas tree market.”
“You do well according to the calendar,” he added.
Leap year: “You do very well one year in four and then you are trying to find markets in between.”
Vertically challenged: He noted the challenge is to look for other verticals. “The two best options are, one, sports and, two, financial products,” he said. The second route is the one Kalshi appears to have taken.
The other route of sports is, obviously, “very competitive,” but notably Polymarket has previously made mention of Oscars betting.
However, Eccles is skeptical. “It’s reasonably widely watched but people don’t really have strong views on it.”
Slotting in: Equally as competitive as sports betting is the burgeoning crypto casino space where BetHog is squarely aimed. Eccles makes the counterintuitive point that slots are perhaps “not the crypto audience’s thing.”
That is why BetHog is working on building its own games, which will be aimed at the younger male demographic and which have elements of competition and social built in.
“That’s the opportunity,” he said.
Uncharted territory: Out of necessity, BetHog’s first steps will be decidedly in the offshore mode of all crypto betting and gaming operators, only with the exclusion of the UK and the US.
But Eccles said “step 2” would be to consider territories where it can look at coming onshore.
Here, he said BetHog would be following the example of Stake.com, which has now got licensed footprints in Colombia and most recently Italy.
“It’s not a dealbreaker if we can’t bring our products in without crypto,” he added.
Prediction News is a next-gen media and data company dedicated to coverage of prediction trading markets, and the go-to source for data, tools, analysis, stories and news in this space.
Loose change
Moment of Truth: President-elect Donald Trump’s Truth Social is in advanced talks to buy Bakkt, a cryptocurrency trading venue owned by Intercontinental Exchange, as it pushes to expand beyond online conversation. In the FT.
Action men: A group of attorneys general from 18 states have launched a legal action against the SEC, accusing the US financial regulator of unlawfully expanding its jurisdiction without congressional approval and thus stifling innovation.
“The SEC has not respected this allocation of authority,” the complaint stated.
It added that the SEC has sought to “unilaterally wrest regulatory authority” away from the states through its enforcement actions against crypto-based companies.
Who you gonna call? Meanwhile, the race to replace Gary Gensler at the head of the SEC is on, with Dan Gallagher, chief legal officer at Robinhood, reportedly the front-runner.
Gallagher was an SEC commissioner from 2011 to 2015 under the Obama administration. During his tenure, he established himself as a vocal advocate for lighter regulatory oversight.
Other names in the frame include Paul Atkins, CEO of Patomak Global Partners; Mark Uyeda, a current SEC commissioner; and Hester Pierce, a long-time ally to the crypto industry.
Heath’s top Trump
We’ve only just begun: The response of the crypto world to the US presidential election result also saw crypto entrepreneur Tim Heath take to LinkedIn to suggest the evident market excitement indicated the market believes the incoming administration will “make large strides” in the area.
“Could these early signs be just the beginning?” wrote Heath.
Tech speak: Heath added that “we cannot ignore the fact the US election result will have major implications for tech in the US, not least AI and crypto,” with Elon Musk wielding “significant influence” and serving as a “voice for the tech community.”
“Never in our history has the US tech industry had as much influence as it does today,” Heath added.
“It is imperative that this influence translates to positive benefits for the international community and fosters greater entrepreneurship in the US and beyond.”
A big hug: Heath noted the clear implication was there would be less regulation, a “firmer embrace of crypto and other technologies” and a greater push for efficiency as being a central component of the forthcoming Trump administration.
“Putting aside political views, there must be opportunities for the sector in the next four years, especially for entrepreneurs willing to navigate the choppy waters of changing politics and regulation,” he said.
Clear thinking
The time has come: One way of characterizing the likely regulatory backdrop for crypto in the years to come is that the sector will now have “clarity.”
This was the message from a blog written by Miles Jennings, Michele Korver and Brian Quintenz, legal and policy experts at venture capital giant a16z Crypto.
Published in the wake of the election result, the team said the “future of crypto in the US is bright” and that it was now the “perfect time to build here.”
It’s getting hot in here: The blog suggested one direct result of the election would be a flood of “hot takes” about what will happen from a legislative and regulatory perspective.
The “vast majority” will just be noise, the team suggested. But with the caveat that it might be too early to tell “how everything will shake out,” the significance of this moment was clear.
“We’re very optimistic that the government will now foster innovation, accelerate progress and enable the crypto ecosystem to thrive in the US,” they wrote.
Throwing off the shackles: This future will be multi-faceted, the blog predicted, with a panoply of benefits likely to flow from a completely unshackled crypto sector.
This includes what they said would be the democratization via blockchain of AI and games.
The experts said entrepreneurs within the sector should now “feel empowered” to explore the potential of blockchain, including tokens.
But, they cautioned, it should be remembered that the “fundamental regulatory principles applicable to blockchain systems remain unchanged.”
That is, the mantra of ‘where there is trust, there is regulation’ still applies.
Entrepreneurs, then, should continue to focus on removing centralized aspects or dependencies on trust within projects “as these are the areas that continue to attract regulatory scrutiny.”
The good, the bad and the ugly: The team said they “expect a future where these clear rules will make it easier to identify and shut down bad actors” such as FTX. “This will both protect consumers and rebuild trust and confidence in the technology.”
This is in contrast to the situation that has previously applied, whereby the sector saw regulation by enforcement but with “no regulatory clarity.”
This both “blocked good actors and allowed bad actors, which actively harmed consumers and unfairly eroded trust in the space.”
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