SEC Subpoenas Crypto VCs

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Good Morning.

The KOLs are talking about Sui on the timeline, huge discussions about WBTC custodian-ship over the weekend, and some FUD on Jupiter dumping meme tokens. All this seriously happened over the weekend?

In Today's Email:

• What Matters: SEC targets VCs 🎯 

• Product: Ripple USD (RLUSD) 💵 

• Charts: Polymarket’s $1B volume & asset classes valuations 📈

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WHAT MATTERS

SEC Subpoenas Crypto VCs

State of play: According to a report by DL News, the US SEC has subpoenaed at least three crypto VCs for violations of federal securities laws.

• One subpoena was titled "In the matter of certain crypto asset offering intermediaries."

• According to the source, at least two other crypto VCs received nearly identical document requests.

• The subpoenas demanded contracts for all token deals the investors have made, added the source.

• In July, Ari Paul, CIO of BlockTower Capital, stated on a podcast that the SEC is investigating crypto VCs.

• Paul suggested the SEC's investigation is due to suspicions that VCs might be marketing tokens.

All this happened while, Elizabeth Warren had urged the CFTC to finalize a rule banning political prediction markets — which is facing opposition from Gemini, Robinhood, and Coinbase. Dragonfly Capital's GC has also stated that the CFTC is not a gambling or election regulator, arguing that jurisdiction over election event contracts should be determined by a court.

What’s next: Seems like the current administration, or dare I say the Dems, war on crypto is not softening up anytime soon.

For builders and investors: As the industry matures, operators (including builders and investors), need to be more buttoned up when conducting businesses.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

PRODUCT OF THE WEEK

Ripple USD (RLUSD)

Ripple recently announced that it has begun the beta testing of Ripple USD (RLUSD) on the XRPL and Ethereum mainnet.

• RLUSD is valued 1:1 to the USD and 100% backed by USD deposits, short-term US government treasuries, and other cash equivalents.

• The reserve assets will be audited by a third-party accounting firm, and Ripple will publish monthly attestations.

• The mainnet version of Ripple USD is also available on Ethereum and will expand to more blockchains and DeFi protocols over time.

• Ripple USD is not available for purchase or trading at this time.

• Ripple will use both RLUSD and XRP in its cross-border payments solution.

Other cool products:

• CRONA, a P2E with NFT on TON.

• TENAMINT, a sports gaming platform.

• Ta-da, a sustainable “To-Earn" platform.

• OpenSeason, a shooter game X crypto's cultural icons.

• VIA Labs, a dev tool to scale across multiple blockchain networks.

CHARTS OF THE WEEK

Polymarket Crosses $1B in Betting Volume

Credits to OurNetwork for the original report.

State of play: Polymarket has seen over $1B in bets from 5.6M transactions. In July, $387M was bet on various markets with the Euros, US elections, and crypto ETFs contributing most of the volume.

• US elections dominate Polymarket, with 210 markets featuring President Joe Biden and $48M in bets.

• Additionally, 11K bettors placed $24M on topics like crypto ETFs.

• Elizabeth Warren and other Democrats are urging the CFTC to finalize a rule banning political prediction markets.

Our take: This number would continue to go up until November 2024.

Valuations of Global Asset Classes

Credits to House of Chimera for the original chart

State of play: The chart presents a comprehensive analysis of the valuations of key global asset classes. Crypto sits as the asset class with the smallest valuation, constituting only 0.9% of the market listed in the chart.

• Derivatives Market: Dominates with a valuation of $1.2Q, accounting for 57.30% of the global asset market.

• Real Estate Market: Substantial at $379T, representing 18.10% of the total.

• Funds: Includes mutual, hedge, and pension funds, totaling $145T or 6.92%.

• Commodities: Valued at $131T, making up 6.26% of the market.

• Debt Markets: Comprise $128.3T or 6.13%, including bonds from various issuers.

• Equities: Account for $109T or 5.21%, encompassing stocks from global exchanges.

• Cryptocurrencies: The smallest at $1.8T, constituting 0.9% of the market.

Our take: The fact that crypto makes up only 0.9% of global asset valuations suggests significant growth potential.

QUICK BITES

• Tether plans to double its workforce.

• NEAR pushes ‘signatures’ on mainnet.

• Thailand launches crypto regulatory sandbox.

• Harris takes the lead over Trump on Polymarket.

• BitGo CEO speaks on Justin Sun’s WBTC involvement.

• Hong Kong crypto ETFs face systemic market obstacles.

• ETH burn rate drops to lowest levels as gas fees hover at 2 gwei.

• SEC delays decision on Hashdex’s combo Bitcoin & Ethereum ETF.

• Celsius targets Tether, Compound, & Netanyahu's family in lawsuits.

• Canto plans to restart the network after the consensus issue outage.

NOTEWORTHY READS & MEME

• 0xKyle’s read on sector performance watchlist.

• Balaji’s read on why crypto for Harris is a Dem scam.

• ASXN’s read on Polymarket: an election-driven success story.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.