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🚨CFTC Charges DeFi Derivates Protocols

The Defiant

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The CFTC has taken action against the derivatives protocols Opyn, Zeroex, and Deridex, ordering each of the Delaware-based companies to cease operations. The protocols are accused of offering illegal derivatives to U.S. persons, receiving fines of $250,000, $200,000, and $100,000 respectively.

Institutional asset managers Ark Invest and 21Shares teamed up to file for a spot Ether ETF in the United States. The move comes after a U.S. court sided with Grayscale in the firm's appeal against the SEC's rejecting its spot Bitcoin ETF application.

Ethereum is trending inflationary during September so far, with a lull in activity flipping Ether's burn rate negative after a largely deflationary opening eight months of the year. More than 3,500 entered circulation over the past seven days.

A DeFi user took out a $1.1M loan against an NFT representing a collection of designer tee shirts as collateral on the Arcade lending protocol. The lender can redeem the NFT to take possession of the shirt collection from an escrow company in the event of default, with the collection recently receiving a $2.5M valuation from Sotheby's.

Also. Metamask launched a new feature allowing U.S., U.K., and certain European users to sell crypto and receive fiat sent to their PayPal account. However, users are complaining that the service incurs heavy fees.

✍️ In today’s newsletter:

  • DeFi derivatives teams face CFTC's wrath
  • Ark Invest and 21Shares submit spot Ether ETF filing
  • On-chain activity slump sends ETH inflationary
  • NFT-backed by designer shirts backs $1.1M DeFi loan
  • MetaMask's 'sell' feature cops flak for high fees

📈 Markets in last 24 hrs:

TickerValue24h
BTC$25,753 -0.12%
ETH$1,633 -0.01%
S&P 500$4,451 -0.32%
GOLD$1,918 -0.03%
Arch WEB30.74pts +0.95%
FINANCE0.77pts 0.85%
INFRA0.69pts 1.42%
CONSUMER0.85pts 0.67%
Arch WEB3

Learn more about Arch Indices here.

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Watch our video recapping the volatility in the crypto markets over the past three years. And check out our podcast with Paolo Ardoino , the CTO of Tether, the controversial leading stablecoins issuer.


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Regulation

CFTC Fines Opyn, ZeroEx and Deridex

TLDR The U.S. Commodity Futures and Trade Commission has charged three popular DeFi derivatives protocols. The CFTC said Opyn, Zeroex, and Deridex — protocols maintained by Delaware-based companies — illegally offered unlicensed derivatives to U.S. persons.

SO WHAT The CFTC levied six-figure fines against each company, asserting that transactions executed via smart contracts are subject to U.S. laws. The actions also comes as the SEC's aggressive campaign of regulation-by-enforcement is facing challenges in the U.S. court system.

READ MORE: CFTC Fines Opyn, ZeroEx and Deridex


Business

Ark Invest and 21Shares Apply For Spot ETH ETF

TLDR Cathie Wood's Ark Invest and crypto ETP issuer 21Shares joined forces to file for a spot Ethereum ETF application. If approved, the fund would be the first spot ETF greenlit by U.S. regulators.

SO WHAT Analysts are tipping it may only be a matter of time before a spot crypto ETF is approved in the United States, with Grayscale's appeal against the SEC's decision to reject its Bitcoin ETF bid recently receiving court backing. Unlike existing futures ETFs, a spot crypto ETF would hold its underlying digital asset.

READ MORE: Ark Invest and 21Shares Apply For Spot ETH ETF


Ethereum

Ether Turns Inflationary As On-chain Activity Slides

TLDR More than 3,500 ETH was added to Ethereum's supply this week as the network's on-chain activity continues to fall. Transaction fees fell to their lowest level since January, with users paying less than $2,60 for simple token transfers.

SO WHAT Ethereum appeared to be making good on its deflationary promise after transitioning to Proof of Stake 12 months, with Ether's supply consistently falling during 2023 amid high on-chain activity. However, the protracted NFT bear market and an end to the recent memecoin trading frenzy pushed Ethereum's burn rate into the negative during an entire week for the first time this year.

READ MORE: Ether Turns Inflationary As On-chain Activity Slides


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DeFi

Arcade Facilitates $1.1M Loan Against Supreme T-Shirt Collection

TLDR The DeFi lending protocol Arcade facilitated a $1.1M loan backed by a boxed collection of Supreme t-shirts. In the event of default, the lender can redeem an NFT for the apparel collection — which Sotheby's valued at $2.5M just a few years ago.

SO WHAT The unconventional loan offers a novel take on the tokenization of real-world assets. While many web3 teams are looking to RWAs for low-risk treasury applications, the loan demonstrates how DeFi protocols can empower individuals to bring assets on-chain.

READ MORE: Arcade Facilitates $1.1M Loan Against Supreme T-Shirt Collection


Privacy

MetaMask ‘Sell’ Feature Enables Ethereum Users To Cash Out

TLDR MetaMask, the popular Ethereum wallet from Consensys, launched a new feature allowing users to sell their crypto fiat by partnering with prominent crypto payments firms. The service is currently live in the U.S., U.K., and select European countries, with users receiving fund via their PayPal account.

SO WHAT While the new service introduces a convenient fiat ramp, may users are complaining of excessive fees associated with the feature. One user reported paying 9% in fees for a £65 transaction.

READ MORE: MetaMask ‘Sell’ Feature Enables Ethereum Users To Cash Out


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🌍 ELSEWHERE

  • U.S. Fed’s Vice Chair Barr Says CBDC Decision Still a ‘Long Way’ Off ( CoinDesk)
  • SBF’s top FTX executive Ryan Salame pleads guilty, forfeits $1.5B ( NY Post)
  • Thodex cryptocurrency boss jailed for 11,196 years in Turkey for fraud ( BBC)