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tl;dr
LBRY Inc. loses to the SEC, which is unhelpful to the crypto industry.
Market Snap
Market Wrap
Yesterday’s announcement by Binance of an industry recovery fund continues to exert a calming influence over markets, which is no bad thing. As far as I have seen, contagion from the FTX fiasco is limited to one hedge fund which kept about 90% of its now-frozen client assets at FTX. If only they had read the CCC warning to flee FTX just hours before withdrawals from FTX were halted they might have acted sooner.
Occasional Series — Self-custody
I am very pleased that you have all taken to heart the CCC advice to move cryptos off centralised cryptocurrency exchanges and into self-custody, preferably facilitated using a Ledger Nano X.
How do I know this? Glassnode says so:
“In direct response to the failure of FTX, #Bitcoin investors, of all wallet cohorts, have made a distinct behavioural shift towards self-custody.
From Shrimp, to Whales, #Bitcoin onchain balances are on the rise 🔵
Read more in The Week On-chain 👇
https://glassno.de/3UvSNb0”
Accompanied by this graph:
Curious Cryptos’ Commentary — LBRY Inc.
Last week the SEC (Securities and Exchange Commission) won a lawsuit against LBRY Inc. that the sale of its native coin LBRY fell foul of securities laws. Specifically, LBRY Inc. failed to register the sale of LBRY as a securities offering.
The full ruling can be seen here:
https://fingfx.thomsonreuters.com/gfx/legaldocs/mopakmakkpa/SECURITIES%20LBRY%20ruling.pdf
Reuters succinctly summed this up as follows:
“U.S. District Judge Paul Barbadoro in Concord, New Hampshire ruled that no reasonable jury could reject the SEC’s claim that LBRY offered the credits as an investment in its content distribution network.”
This is obviously cheering news for one Gary Gensler, Chair of the SEC, who has been put increasingly under pressure for aggressively expanding the SEC’s remit and responsibilities.
On the other hand, this is not good news for the crypto industry. The CCC is all in favour of targeted regulation that fosters innovation and development. I become ever more convinced that this will not be the outcome for those cryptos that do get designated as securities rather than commodities.
Jeremy Kauffman. LBRY CED, agrees with me, saying that the decision “threatens the entire U.S. cryptocurrency industry” as it potentially leads us down a path that all cryptos bar BTC are securities.
This development ramps up the heat on the SEC vs XRP (Ripple) case, for which the data gathering process is almost complete, and the judge will soon go away to contemplate on his response, due in a few months’ time.
Compliance Stuff
Trigger alert warning — if any reader feels that they are “literally shaking” (as claimed by a Durham student who cannot emotionally cope with a different point of view) after reading my commentary, then I can only suggest you don’t read, or don’t shake. It’s up to you.
Cryptos — none of my commentary should be seen as a recommendation to get involved in cryptos. I might be talking complete nonsense without knowing it. Any crypto investments must be viewed as extremely high risk and treated as if they are worth zero until sold.
Stocks — just to make it clear this is not a stock advisory service. The CCC team does not provide financial advice in any way at all. Any reference to asset prices in this commentary are there to simply give context to the commentary and to give colour to the performance of certain stocks related to cryptos.
For the avoidance of doubt, this newsletter is not an incitement to buy cryptos, buy stocks, or even to sell family members in the hope of buying cryptos or stocks.
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