Hello! Ed here!

It’s over. Officially.

The first sign the US Securities and Exchange Commission’s crypto crackdown was well and truly finished came on February 11 when the agency asked a court to pause its enforcement action against Binance and Changpeng Zhao, its co-founder and former CEO. 

On Friday, Coinbase did its rival one better when it said that the top US finance regulator agreed — in principle — to drop its case altogether.

The day before, the SEC had said it was shuttering its major crypto cases pending a review of the sector by a new task force led by Commissioner Hester Peirce. 

The agency also ended its effort to get platforms that enable the trading of cryptocurrencies to register as dealers, Kyle Baird reported.

Crypto critics acknowledged the obvious.

“Buckle up, get the popcorn, and get ready for the SEC funeral,” John Reed Stark, the former chief of the agency’s Office of Internet Enforcement and industry sceptic, wrote on Thursday.

So what’s next? Probably nothing.

For all the talk about task forces and reviews, the SEC will most likely wait for Congress to act on a bevy of crypto bills under consideration. 

Two in particular have caught the eye of crypto founders and investors as potential landmarks, Andrew Flanagan reported.  

A stablecoins bill would establish legal definitions and rules for dollar-pegged cryptocurrencies. 

And a market structure bill would lay out jurisdictional responsibilities on digital assets for the SEC and the Commodity Futures Trading Commission. 

The two agencies’ turf battles have long sowed confusion for investors and asset management firms. Now both regulators are expected to be led by pro-crypto allies. 

This month, President Donald Trump nominated Brian Quintenz, a former commissioner and alum of Andreessen Horowitz, the Silicon Valley VC firm, to head the CFTC.

Paul Atkins, a Washington lawyer and onetime SEC commissioner, is expected to win Senate approval to lead that agency. 

All of this adds up to quite the victory for Coinbase and the rest of the crypto industry. If the SEC would have won its case, Coinbase would have been forced to delist every cryptocurrency that had not been vetted and registered by the agency. 

Now CEO Brian Armstrong doesn’t have to worry about that monumental risk anymore.

Still, crypto is fraught with other perils. 

On Friday, hackers executed what is believed to be the biggest crypto heist ever by plundering more than $1.5 billion in Ether from Bybit, the Dubai-based exchange, Aleks Gilbert reported.

As speculation flew that North Korean hackers were behind the theft and fears mounted about crypto’s vulnerability, Coinbase’s shares outpaced a broader market selloff with an 8% plunge.

ICYMI

• Stablecoins poised to be ‘new payment method’ if they clear these hurdles, says Fed researcher

  Chris Colson is obsessed with how Americans are paying for stuff. As the Federal Reserve Bank of Atlanta’s payments guru, he labours deep in the belly of the bank’s research department. So when data began flooding his office that retailers were turning to stablecoins he perked up.

• Sam Bankman-Fried says he’s a victim of political bias in jailhouse interview

  FTX executives who cooperated with prosecutors got lenient sentences because they were Democrats, disgraced CEO Sam Bankman-Fried suggested in a recent interview with the New York Sun.

• FTX repayments hit jurisdictional roadblocks as creditors clamour to reinvest

  FTX has officially begun chipping away at the massive task of reimbursing creditors after its high-profile collapse at the end of 2022.

Story of the Week

Milei memecoin decried as ‘hypocrisy’ in Buenos Aires’ crypto cafés

In Buenos Aires, the crypto community is fuming.

“This is a joke,” said an Argentine crypto lawyer. “Disaster,” said a crypto employee. “Hypocrisy,” said another.

But it was not unexpected. “It’s Argentina, man,” said one industry supporter.

Post of the Week

Following the Bybit exploit, Taylor Monahan, the security guru at MetaMask, penned an illuminating thread comparing all-time hacks and heists.

Comment of the Week

The SEC’s extraordinary rollback of its crypto enforcement programme drew astonished observations from onetime officials.

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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