Intro/Disclaimer: Since late 2022, I’ve prepared weekly updates for attorneys at my firm to stay abreast of the latest Web3 legal developments. The biggest stories are included in Bi-Weekly posts on the firm’s BitBlog, where we provide concise tl;dr overviews and insights into how these developments might ripple through the industry. In pursuit of a more thorough and personal discourse, I also share expanded versions of these updates on my personal blog every Tuesday. Here, you’ll find my unvarnished perspectives, offering a deeper dive into the nuances of these legal narratives. Please note, the views and opinions I express, both on BitBlog and my personal blog, are solely my own. They do not reflect the official stance or endorsement of my firm.
After a crazy last week of June, July actually had a relatively tame start with no new major lawsuits or decisions. But there were plenty of other minor stories to keep up on such as Custodia Bank’s continued fight for a federal reserve master account, the sea of change on EU stablecoins with MiCA taking effect, and Mt. Gox payment expectations sending crypto prices into a tizzy.
Here’s everything that happened last week in Web3 legal:
Other Stories
After MiCA stablecoin rules went into effect, it appears that Circle is the only qualified stablecoin issuer with all other stablecoins blocked from most major EU exchanges. Good for Circle getting that sweet sweet regulatory capture, but not sure how great only 1 option is for consumers.
There were a mess of amicus briefings filed in support of Custodia Bank’s appeal of its master account rejection, including briefs filed by the Wyoming Secretary of State and Attorney General, members of the House and Senate Banking Committees, the Digital Chamber of Commerce, former Senator Toomy, and the Blockchain Association. I’ve said it before and I’ll say it again: it’s crazy that the business model of not loaning out customer assets and accepting 100% reserved deposits that happen to be crypto is somehow considered a danger vs. fractional reserve system most banks operate on.
Franklin Templeton published a 7 page paper breaking down their ETH value proposition, and if you don’t think TradFi is buying up your bags during this small market downturn you are not paying attention.
Speaking off, it appears the negative price movement is being fueled by Germany selling off all their Bitcoin and Mt. Gox preparing for repayments? I try not to follow weekly price movements and just stick to my DCA because I like my sanity. But I am using low network activity/gas fees for so much needed wallet clean ups and I would suggest others do as well.
As of today, the Consensys Declaratory Judgment lawsuit in Texas is still going forward on an expedited basis. No word yet on if the recent SEC lawsuit in New York will throw a wrench in those plans.
Coinbase has alerted Judge Failla of the Binance ruling claiming it “further supports Coinbase’s motion for certification” for appeal.
The SEC is going after defunct bank Silvergate and various executives over statements made in the weeks leading up to the bank’s collapse. Nothing like kicking a dead dog to really protect consumers.
Polkadot Foundation is apparently spending at a ~$160 million/year rate. Which can buy a lot of influencers but doesn’t seem like the most efficient use of resources? Wonder if they will announce DOT has morphed again from a software to a meme coin.
Sony is getting into the cryptocurrency exchange business, apparently. Just need to know when I can use my PlayStation to buy crypto to use in Grand Theft Auto.
The U.S. Marshalls Service has now also chosen Coinbase to serve as broker/dealer for their seized digital assets. The irony continues.
SEC Commissioner Uyeda has now taken the role of adding pop shots against the agency’s handling of crypto in unrelated statements. He’s learning from Hester. Love to see it.
Lido is moving to decentralized staking node operations, which is probably smart in wake of SEC lawsuit against Consensys alleging the frontend provider to Lido smart contracts is an unregistered securities broker/dealer.
Loved this article featuring quotes from David Brill regarding “privacy coins” and where they fit into an ecosystem which is trying to ditch the “crypto is only used for crime” narrative while still maintaining financial privacy.
Lol at this Three Arrows Capital wallet buying an NFT because the liquidators in the bankruptcy estate missed the outstanding bid. It’s not their fault, as anybody would have missed this and it’s not like the 3AC folks have been cooperative in showing where their money was in the couch cushions. But still going to be an uncomfortable conversation with the judge.
If you are advertising questionably legal products or services at a conference in the U.S. with plenty of federal authorities in attendance, that’s on you.
One of the arrested Samourai Wallet creators is now out on bail awaiting trial regarding the bitcoin mixing service he allegedly developed. I still don’t know enough of the facts to say one way or the other if this is a legit charge or something similar to Tornado where merely allowing others to be private with their transactions is criminalized.
If the House has enough votes to override the President’s veto of SAB 121 retraction, that is about as strong of a rejection of Warren’s anti-crypto army as one could get. It is unlikely, but I would still like to see some Dems give a vote of no-confidence on this SEC’s handling of crypto.
First person shooter with NFT integrations? I am in.
This was a nifty gathering of a timeline of events leading up to the current status of a U.S. citizen being held prisoner in Nigeria due to being a Binance employee.
Conclusion
If you have any questions or would like me to write about anything else, let me know on Twitter (X?) or Warpcast. As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.
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