Last week’s biggest crypto news at your fingertips 🙌

Last week, the crypto world saw the SEC being forced to open up about its crypto regulation plans (or lack of them), North Carolina joining Florida in pushing back against a US digital dollar, and an NFT inside trader found guilty in a US-first 😳

SEC Must Respond to Coinbase Petition

The United States Court of Appeals for the Third Circuit ruled last week that the Securities and Exchange Commission (SEC) must respond to a petition lodged by Coinbase last year that demanded clarity from the agency over how it treats regulation of the digital asset market. Coinbase sued the agency two weeks ago to force it to answer questions over its regulation plans, and this ruling could prove to be the first step on the path towards a resolution, one way or the other.

In July last year, Coinbase filed a petition with the SEC requesting that it “propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods, including potential rules to identify which digital assets are securities.” The petition, which also demanded an answer to 50 specific questions regarding digital assets, added that the US lacks a “clear and workable regulatory regime” which has resulted in the country giving up the first-mover advantage in the digital asset space that it has held for over a decade.

The SEC, true to much of its conduct when it comes to the crypto space, ignored the petition, leading to Coinbase taking the agency to court two weeks ago to force it to “share its decision” in the words of Coinbase Chief Legal Officer Paul Grewal. The Third Circuit last week with Coinbase, telling the agency has until May 14 to file its response. Above all, Coinbase is looking for a simple answer: is crypto regulation coming? If the response is ‘yes’ then Coinbase will have something to hold the SEC to, but if it is told ‘no’ then further legal action is assumed, as the current situation of regulation through enforcement is untenable.

North Carolina Joins the Anti-CBDC Movement

North Carolina last week joined Florida in formally opposing a potential US Central Bank Digital Currency (CBDC) by passing a bill that would ban government entities in the state from accepting any such currency. House Bill 690, introduced last month, passed unanimously with 118 House members voting in favor and none against it. Florida Governor Ron DeSantis has already vowed to keep a CDBC out of the state over privacy fears.

House Bill 690 was initially called “An Act To Prohibit Payments In Cryptocurrency To The State” when it was introduced, but on May 2 the wording was changed to swap “cryptocurrency” for “central bank digital currency.” The revision defined this as “a digital currency, a digital medium of exchange, or a digital monetary unit of account issued by the US Federal Reserve System or a federal agency that is made directly available to a consumer by such entities.”

Talk of a digital dollar has been gathering pace more and more in the past year, leading to some state-level lawmakers trying to get ahead of any federal decisions. Through a CBDC, a government would theoretically be able to trace and block any payment a holder wishes to make to another person or a company, ushering a level of control that many in the US are already comparing to China, where the digital yuan is allowing the government to do just that.

Florida governor DeSantis proposed his own legislation in the state last week, saying that CBDCs will represent the “weaponization of the financial sector” by the federal government.

NFT Inside Trader Found Guilty

Nate Chastain, a former executive at NFT exchange OpenSea, was last week found guilty of insider trading through the medium in a first for the US. Chastain, who was arrested in June last year following suspicious wallet activity that was eventually linked to him, pleaded not guilty to one charge of wire fraud and one of money laundering but was found guilty by a jury, leading to an inevitable spell behind bars.

Chastain was outed in September 2021 when it was discovered that he was behind a crypto wallet that was buying up NFTs right before they were added to OpenSea’s front page, exposure which resulted in a spike in prices. He is said to have made around $50,000 from the enterprise before he was rumbled and quit, presumably before he could get fired.

Chastain was arrested six months after his departure from Opensea, although he found an unlikely ally in his former boss, Opensea CEO Devin Finzer, who said that there was a “misframing of it (his activities) as insider trading”, adding that because the company didn’t view NFTs as financial assets, the term should not apply.

The SEC didn’t agree and charged Chastain with wire fraud and money laundering, to which he pleaded not guilty, with his lawyer arguing that the agency was just using the case to try and regulate NFTs as securities. What other arguments also didn’t fly, and Chastain was found guilty in the first such case involving digital assets in the US. He will be sentenced later this year.

🚀 Trending stories

• Creditors of the bankrupt Voyager Digital exchange could start getting their payouts in the “next few weeks” according to the creditors’ committee.
• US President Joe Biden last week proposed the Digital Asset Mining Energy (DAME) excise tax which would see proof-of-work miners face a tax equal to 30% of the cost of the electricity they use in their activities.
• Former Coinbase CTO Balaji Srinivasan has settled his famous $1 million Bitcoin bet having revealed that the purpose was to raise awareness of the state of traditional banking in the US.

Jordan Huxley

Born on a blockchain with “HODL” as a middle name, the crypto-savvy Jordan Huxley guides our readers through the digital world of crypto with insightful guides and informative content, unveiling the power of crypto in his own, unique way. Get the latest updates on blockchain-related tech, advancements, news, and events with Jordan and our team of crypto gambling gurus on the Punt Casino Blog.