Spell it out: A.P.P.R.O.V.A.L.
SEC sparks Ether ETF speculation, US crypto bill, Rivalry’s esports-betting token, Chiliz’ Far East deals
SEC signals future approval for Ether ETFs.
US crypto bill clears House, a win for lobbyists.
In Loose change: Mt. Gox moves, UK election nixes stablecoin effort.
Esports-focused operator launches $RVLRY token.
Chiliz opens up the Far East with duo of deals.
Just say there's nothing holding you back.
Is this a ‘yes’?
To approve or not to approve, that is the question: A seemingly arcane debate over what exactly is meant by the word ‘approval’ accompanied the news that the SEC appeared to pivot towards allowing Ether ETFs, after the regulator signed off on proposals to allow the CBOE, Nasdaq and the NYSE to list products tied to the second-biggest cryptocurrency.
A market on Ether ETFs being given approval by May 31 went live on Polymarket on January 9.
Stop the steal: Despite Bitcoin ETFs getting the nod earlier this year, there was widespread pessimism over the SEC following up with Ether ETF approval as recently as earlier this month. But the sudden SEC move immediately sparked optimism that the market would be settled with a resounding ‘yes’.
Yet, with $13m at stake, Bloomberg’s James Seyffart posted on X that the SEC has technically at this point only allowed investment firms Grayscale, BlackRock, Fidelity and VanEck to proceed with submitted and amended plans to offer spot Ethereum ETFs.
“TO BE CLEAR: This does not mean they will begin trading tomorrow,” he wrote.
Is this it? The Polymarket confusion reflected the trading in Ether, which fell up to 3% on Friday and followed up with a near 2% drop on Tuesday. However, in the YTD Ether outstrips Bitcoin, up nearly 63% vs. 55%.
Whoop: Ether does better in 2024 than Bitcoin
Where does it go from here? The potential opened up by Ether ETF approval is hard to gauge, with many commentators skeptical it will emulate the success of Bitcoin ETFs, which have proven to be the most successful ETF launches of all time.
Responding to the news last week, Ripple CEO Brad Garlinghouse posted on X that it “feels like hell has frozen over.”
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Meanwhile, in the House
Loaded gun: The US House of Representatives has passed controversial legislation that proposes a new regulatory framework for crypto assets, the first major piece of crypto law to clear either chamber of Congress.
The Financial Innovation and Technology for the 21st Century Act (FIT21), which aims to clarify the legal status of cryptocurrencies and tokens, sailed through with bipartisan support.
However, influential regulators – namely SEC head honcho Gary Gensler – warned FIT21 exposes investors to “immeasurable risk.”
Gensler said the plans would “create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts.”
Ghost writers in the sky: FIT21 is a joint bill produced by the House Agriculture Committee and the House Financial Services Committee. It also aims to legally clarify how the SEC and Commodity Futures Trading Commission (CFTC) oversee crypto.
How it proposes this has caught the eye of commentators, who noted the term ‘digital commodity’ is used for assets that do not meet the bill’s definition of a security, placing those assets under the CFTC’s remit.
While not a soft touch, the CFTC does not have the reach, staffing, fear factor or funding of its big brother, the SEC.
The SEC is currently suing several major exchanges over the selling of crypto tokens, which it claims are securities and should be registered and licensed as such.
Money well spent: Shifting responsibility away from the trigger-happy SEC would be a major win for the crypto lobbyists, who have drawn attention from mainstream media for their charm offensive blitz on Congress; since 2020 their ranks have more than quadrupled to 270.
An investigation by The Washington Post revealed three super PACs formed by crypto executives and investors have raised about $85m to spend on 2024 political lobbying, and they have been busy plying lawmakers with cash.
While the lobby push helped FIT21 clear the House, it faces an uphill struggle in the Senate.
President Joe Biden has outlined his objections, but has not indicated he will veto the legislation, which some pro-crypto figures view as a win.
Poll positions
Vote early, vote often: A Harris poll suggested a third of US voters would consider a candidate’s position on crypto before deciding which way they will vote. The survey, which was undertaken on behalf of Bitcoin ETF provider Grayscale, found that 77% of those asked believed a presidential candidate should have an “informed perspective” on crypto matters.
Grayscale’s head of research Zach Pandl said the findings showed American voters “indicate a heightened interest in supporting candidates well-versed in the emerging technologies.”
Recall, during Coinbase’s recent Q1 earnings call, CEO Brian Armstrong said the exchange was keen on “activating the crypto voter base to elect pro-crypto candidates in this upcoming election.”
Loose change
Mt. Gox movements: Bitcoin suffered a 3% fall in trading yesterday, May 28, after traders monitored transfers from wallets connected to the failed Mt. Gox exchange ahead of the likely reimbursement of $9bn to creditors due at the end of October.
Departure gate: Regulatory pressure has forced the closure of a Hong Kong-based cryptocurrency exchange, days before a new licensing regime enters force across the region. Gate.HK failed to meet the requirements that will be enforced starting June 1 by the Hong Kong Securities and Futures Commission, adding that it needed a “major overhaul” of its trading operation.
All crypto exchanges in Hong Kong must acquire an operational license or exit the market.
Hub and smoke: A snap general election means the UK is heading to the polls on July 4, ending the parliamentary session and abandoning efforts to establish a stablecoin regulatory regime. Ministers were preparing secondary legislation that would create a stablecoin regulatory framework for the country’s financial services watchdog to oversee.
Those proposals will now gather dust alongside plans for the ‘Britcoin’ digital pound and the government’s non-existent Cryptoasset Engagement Group.
Experts said it may be 2025 before the stablecoin regulation reappears before lawmakers, casting a shadow over the country’s bid to become a global crypto hub.
Rivalry launches token
Youth vote: The CEO of the till now fiat-only esports-focused betting operator Rivalry said his company recognizes it exists on the “internet of 2024” not 2015 and pointed out that crypto has “solved” the knotty issue of payments for all types of entities, whether regulated or unregulated.
Go Nutz: Steven Salz was speaking after his company announced it will launch its own token in the second half of this year.
The $RVLRY token will be available to users via the Play-2-Farm mechanic and they will be able to earn Nutz – which they can exchange for Rivalry tokens – by being active on the site.
Salz said the token was an acknowledgement that there was a “division in online gambling, and the gap is getting wider” between the formative crypto-gambling space and the fiat-only sector.
“The internet of 2024 understands that businesses can be owned and operated anonymously, that the authorities have lost the ability to shut them down and that crypto has permanently solved the payment issue.
“Crypto is literally better than any other payment system,” Salz added. “It’s way faster. It never goes down. There’s no outages ever. It processes 24/7 and it credits instantaneously.”
Never gonna give you up: The sector needs to “acknowledge that this technology exists and it’s never gonna go away,” he added. “It’s only going to get more effective and it’s going to get so much more competitive.”
The younger demos are already voting with their mobile devices via such channels as Telegram Casino.
“We’ve seen these other products get so competitive,” he added.
He added that the $RVLRY token would not just reward current users but would also act as a way to onboard them into the crypto arena. “We want to take our existing global user base and get them more crypto-familiar and get them more comfortable with it,” Salz said.
“Rewarding behavior with tokens rather than fiat currency helps to bridge Rivalry from web2 to web3,” he added. “It’s a reason to be involved.”
“The entire brand is built around understanding of living with this technology, community and ecosystem.”
More tokens
GameOn: The mobile-first, next-gen fantasy sports gaming company has announced the launch date for its $GAME token. Designed and developed by Sportsology, it will be available on the major exchanges next Monday, June 3.
The launch event will be supported by LALIGA, PFL and Karate Combat, as well as web3 partners Arbitrum and OpenSea.
Chiliz Far East token strategy
Great Eastern: Chiliz, the blockchain provider behind the Socios fan tokens, has signed two significant new partnerships that open up “massive target markets” of Japanese and South Korean markets, including “large and significant” developer communities in both countries.
The deals announced last week include a joint venture between Chiliz and Japan’s SBI Digital Asset Holdings, and a separate partnership with South Korean-based payments outfit Naver Pay.
The validator: Sources close to Chiliz pointed out the deals provide regulated and registered market entries into both territories for its fan tokens. In the case of SBI, it will become the first Japanese business to operate as a node validator on the Chiliz chain.
“This is part of the Chiliz strategy to grow the distribution channels available for fan tokens, through centralized exchanges, in addition to the token being available via Socios.com,” the source added.
“It is a key differentiator for why many other sports web3 projects have failed,” the insider noted. “They don’t have the scale of distribution that Chiliz has built with fan tokens.”
On the naver naver: The partnership with Naver Pay forms part of the fintech’s strategic aim of integrating cutting-edge web3 technologies to support its own global expansion.
Build it and they will come: Chiliz believes that adding local partners in this way not only brings in millions of new consumers and potential users, but also represents a “massive vote of confidence and legitimacy for the Chiliz chain.”
Moreover, they also potentially open up “large and significant developer communities” in countries that are “looking for the right chain/protocol to build on.”
Recall, Socios has agreements with many of Europe’s top football clubs, including Arsenal, AC Milan, Manchester City, FC Barcelona, Inter Milan and Paris Saint-Germain.
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