⚖️ Coinbase Sues The SEC

GM Defiers!

Coinbase has decided to sue the SEC after getting no response to a 2021 petition on crypto regulations. Ether is down 12% since hitting an 11-month high after the successful Shapella upgrade. Meanwhile, an obscure smart contract is contributing to congestion on Ethereum.

✍️ In today’s newsletter:

• Coinbase takes the legal route to get answers from the SEC
• Markets fizzle after 5-week run
• XEN token accounts for a large chunk of Ethereum transaction fees

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🎬 WATCH

Watch our video on the latest from the world of memecoins. And check out our podcast with Nick Johnson, the founder of the Ethereum Name Service (ENS).

Crypto Regulation

Coinbase Sues SEC In Bid For Regulatory Clarity

TLDR Coinbase has filed a petition in federal court to demand clear rules for the cryptocurrency industry, claiming that the Securities and Exchange Commission (SEC) has failed to respond to a rulemaking petition it submitted in July 2021. The filing comes after the SEC served Coinbase with a Wells Notice last month, which typically precedes a formal lawsuit alleging securities law violations.

SO WHAT The legal action by Coinbase highlights the ongoing struggle between the crypto industry and regulators for clarity in rules and guidelines. Many in the industry argue that a clear regulatory framework would allow for more efficient and effective allocation of capital in financial markets and create new opportunities for investors. However, critics accuse regulators like the SEC of using enforcement actions to establish regulatory precedent rather than providing clear regulatory guidance.

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Markets

Crypto Markets Plummet As Shapella Euphoria Fades

TLDR Crypto markets have been trading lower due to regulatory and macroeconomic risks resurfacing, and Ether’s relative underperformance could be attributed to stakers withdrawing and selling their ETH after the Shapella upgrade. Decentralized exchange PancakeSwap’s CAKE token has dropped 24% in the past week.

SO WHAT Another 25bps rate hike is expected at the US Federal Reserve’s next meeting, and US regulators continue to take aim at crypto. The ongoing debate over CAKE emissions highlights the importance of community governance in decentralized projects and the potential impact it can have on token prices.

Gas Guzzler

XEN Token Accounts For 11% of Ethereum Gas Consumption

TLDR XEN Torrent, a relatively unknown project, has been consuming a significant amount of gas on the Ethereum network, accounting for over 11% of the transaction fees paid in the past 24 hours. It’s deployed on 10 blockchains, and its token is up nearly 500% in a month.

SO WHAT XEN’s approach to adoption may challenge the notion that crypto must be fully integrated into stalwart DeFi projects like Aave and Uniswap, and suggests there is potential for growth beyond the self-referential culture that has dominated the space. However, the unconventional approach also raises questions about its viability and whether it can sustain its growth long-term.

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🌍 ELSEWHERE

• Voyager to return assets to customers via direct distributions after Binance.US bails (Twitter)
• FTX debtors expected to earn $50M from selling LedgerX (PR Newswire)
• Binance to launch liquid staking ETH token (Binance)