With Congress in August recess, it was a slow week as far as Web3 legal developments go. Which was a welcome respite after the flurry of activity in July and what is expected to be an equally fast paced September. There was nothing that warranted Major Story attention, but that gives time to catch up on all the super informative submissions to the SEC Crypto Task Force, the expansion of the DUNA corporate structure for DAOs, and an update on where crypto policy has scored so far this year under the new administration.
Here’s everything that happened last week in Web3 legal:
OTHER STORIES
Uniswap DUNA Proposal: Uniswap is proposing the use of a DUNA corporate wrapper for its existing token governance structure. The DUNA structure from Wyoming created last year was certainly a way to show Wyoming was serious about courting crypto businesses, but it was largely designed due to Corporate Transparency Act concerns which seem less of a concern currently (but certainly could pop up again). So seeing an extremely sophisticated team like Uniswap make this proposal to be the first major DUNA is certainly something worth monitoring (fwiw, I believe NounsDAO, which also has a great legal team, converted to a DUNA as well).
Crypto IPOs Continue: Bullish, a crypto exchange not available to U.S. customers, was the latest crypto company to blow past IPO projections, with a market cap of $10 billion the day after its IPO when it was previously priced at half that. Eventually, bankers are going to start pricing these higher so more of the money raised goes to the company raising that money rather than day 1 traders, but in the meantime it’s not a bad time to start trying to get crypto IPO allocations.
Bitcoin Reserve Update: I don’t think anything really changed, but Treasury Secretary Bessent issued a statement and then needed to clarify regarding the U.S. proposed Bitcoin strategic reserve? Effectively, the plan is still the same for the U.S. to not sell seized Bitcoin and also to explore other budget neutral options to compile more to be held in reserve.
Monero 51% Attack: A single validator set now controls over 51% of Monero’s hashrate meaning it effectively controls the entire blockchain. Monero is a major privacy coin, so will be interesting to see if this results in a reorganization.
Stablecoin Chains: Both Circle and Stripe announced they were launching their own L1 EVM-compatible blockchains for institutional stablecoin demand. People are debating if this is good or bad for ETH (pointing to the intranet during the rise of the internet, which ended up scaling internet adoption and eventually all linking up to the internet). As long as they don’t prevent bridging, I already use a range of assets across a range of blockchains so this doesn’t change anything for me and the more general blockchain payments infrastructure the better.
ETH Developer Held in Turkey: This was a wild story to unfold about an ETH developer who was held in Turkey and could have faced criminal detention but for his many connections getting him out of the country. He donated a half million to Roman Storm’s defense in the wake of the event, having an acute understanding of what it means to be held potentially criminally liable for developing software.
SEC Submission Updates: I like to go through the Crypto Task Force Written Submissions page to peruse writings from attorneys I know/respect and steal their ideas to sound smart. Some of my recent favorites include: this awesome background on Decentralized Oracle Networks; the Blockchain Associations’ request for NFT presumptive guidance; this Digital Chamber crypto lending comment letter and attachment on crypto lending (which I was lucky enough to provide minor assistance in preparing); and this a16z letter regarding tokenized securities. Also, the Digital Chamber put out an awesome reference of all the letters prepared on their behalf, including the letter prepared by Polsinelli.
Do Kwon Plead Guilty: Three years after the Terra/Luna collapse which was pivotal in creating a crash of 3AC and FTX, the founder Do Kown has plead guilty to two counts of federal fraud. He will face up to 25 years in jail.
Coincenter Crypto Policy Scorecard: Really liked this crypto policy scorecard put out by Coincenter which show all the industry policy wins in the past 6 months but also highlights the uphill fight still ahead on important privacy issues. DeFi Education Fund also put out their monthly DeFi Debrief which is always worth a read to see the state of industry policy goals.
Google Terms Snafu: Google play store made some term changes a month ago that for whatever reason became the main story on crypto twitter for a day last week, causing Google to quickly clarify the terms were poorly phrased and not intended to require self-custody wallet software providers to need money transmitter licenses to be available to U.S. consumers.
Banks Big Mad About Stablecoins: A banking industry group is asking the Senate to put more restrictions on stablecoins as a part of the market structure bill. The arguments are essentially “we are upset the stablecoin business model is better than fractional reserve banking” from what I can tell? Idk, seems like “stop letting exchanges give money to their customers so bank executives don’t have to take a pay cut” isn’t the strongest argument…
Recovery Firm Scam: The FBI put out a warning against “Recovery Firms” which pose as legitimate service providers for scam victims but end up just re-victimizing those victims. Maybe they should send this to the Roman Storm prosecutors who had their first witness in the trial against the developer testify to the hearsay/false statements of such a scam business.
Fed Ends Crypto Supervision: The Federal Reserve started a program in 2023 to enhance oversight over banks offering blockchain-enabled products and services. Which effectively stopped banks from offering those services because it is never a good idea for a business to have a regulator overseeing them more. That program came to an end last week which seems in line with other banking regulatory changes to allow greater integration of FinTech into TradFi.
Hyperliquid Founder Interview: In both this recent interview and his prior interview with the Unchained folks, I have been impressed with the coms training Hyperliquid Founder Jeff Yan clearly has had in avoiding misstatements which could lead to regulatory problems. Something every founder should watch if nothing more than to see what effective presentation and on-point messaging looks like.
CONCLUSION
If you have any questions or would like me to write about anything else, let me know on Twitter (X?) or Farcaster. As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.
Outro/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 tl;dr overviews and insights into the biggest stories from the past two weeks. I post the weekly updates on my personal blog every Tuesday, where I also provide links to more obscure legal developments and otherwise discuss industry trends and stories. 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.
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