Scenius Sync (Issue #107)

Chevron Overturned, IRS Finalizes Rule For Brokers But Punts on DeFi, Circle Snags First Stablecoin License Under MiCA, Another SOL ETF Filing, & Pudgy Parent Acquires Frame To Build Layer 2

Scenius: The intelligence and the intuition of a whole cultural scene. The communal form of the concept of genius.

Welcome to The Scenius Sync.

Our mission with this concise publication is twofold:

1. Share the essential stories driving the crypto industry and markets.

2. Highlight innovative applications and mainstream adoption of crypto and blockchain technology.

If you find this newsletter valuable, please subscribe and share The Scenius Sync with your network 💪

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Essential News 🗞

1. IRS finalizes controversial tax reporting rule for brokers, punts decision on DeFi

   • The Internal Revenue Service released late Friday the final version of its controversial “broker rule” guidance, delaying a decision that could later affect non-custodial platforms. Crypto lobbyists feared ambiguous language in earlier drafts would harmfully impact many parts of the crypto industry from wallet providers to decentralized exchanges. Rules pertaining to “unhosted wallets” and related non-custodial software are still under review. “Good news: They agree that custodial brokers are, well, brokers,” Coin Center Chief Communications Office Neeraj Agrawal said in a post on X. “Our concern is whether or not a self-custodial application (like a DEX) that is just code with no central authority would be considered a broker too.”

2. US Supreme Court ruling to overturn Chevron gives crypto industry a win, pundits say

   • The U.S. Supreme Court's decision to overturn the Chevron doctrine — a 40-year-old court decision that defers to federal agencies to interpret the law how they see fit — could prove to be beneficial to the crypto industry. The Supreme Court justices voted 6-3 on Friday to overturn that doctrine. The opinion was led by Chief Justice John Roberts. When asked about the Supreme Court decision’s impact on crypto, Majority Whip Tom Emmer said it would have a direct impact on SEC Chair Gary Gensler.

   • More coverage from CoinDesk here as well as why, according to TD Cowen, the Supreme Court's decision could complicate legislative efforts, here.

3. SEC returns S-1 forms to Ethereum ETF issuers, with at least one more round to go

   • The SEC has returned the S-1 forms to prospective Ethereum ETF issuers with light comments, asking them to fix the issues and refile. They will need to go through at least one more round before they go effective, a source says.

4. Judge upholds 'bulk' of SEC case against Binance but nixes secondary sales charge, among others

   • A federal judge mostly rejected Binance’s attempt to throw out the SEC’s charges against the exchange and its founder in a widely-anticipated lawsuit separate from the Department of Justice case that has already landed Binance founder Changpeng Zhao in prison.  Binance’s BUSD and Simple Earn programs got a thumbs-up from the court, however, which found that neither offering constituted an investment contract. The charge related to secondary sales of BNB was also notably dropped, in a ruling citing a previous decision about the cryptocurrency Ripple. 

5. Silvergate Bank agrees to settle after SEC says the crypto-friendly bank made false statements about AML procedures

   • The U.S. SEC sued Silvergate Capital Corporation, pointing to transfers with FTX and accusing the crypto-friendly bank of making false statements to the public about its anti-money laundering procedures. The crypto-friendly bank, which liquidated and shuttered its doors last year, was sued on Monday, according to a complaint filed by the SEC. The SEC also named the bank's CEO Alan Lane, former COO Kathleen Fraher and former CFO Antonio Martino.

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Innovation & Adoption 💡📈

1. Circle Snags First Stablecoin License Under EU's New MiCA Crypto Rules

   • Circle became the first global stablecoin issuer to secure an Electronic Money Institution (EMI) license, a prerequisite to offering dollar- and euro-pegged crypto tokens in the European Union (EU) under the Markets in Crypto Assets (MiCA) regulatory framework. The license gives the company, whose USDC trails behind rival Tether's market-leading USDT, pole position in grabbing market share among the 27-nation trading bloc's 450 million people.

     Stablecoins are a key piece of infrastructure in the digital asset market, facilitating trading on exchanges and, increasingly, used for transactions and remittances. Circle's $32 billion USDC is the second-largest stablecoin and the gap to market leader Tether's $110 billion USDT has been widening.

   • In related news, EU crypto traders urged to convert non-compliant stablecoins to regulated ones as MiCA framework takes effect

2. 21Shares files S-1 for spot Solana ETF in the US

   • 21Shares is the second firm in as many days to file to launch a SOL exchange-traded fund in the U.S. Like VanEck, the firm also believes Solana’s native token should be treated as a commodity. The SEC’s Enforcement Division has already said SOL is a security — which may be a serious roadblock to launching these funds, experts say.

3. Sony gets ready to launch crypto exchange in Japan with acquired Amber platform

   • Japan’s multi-industry conglomerate Sony is getting ready to launch a cryptocurrency exchange subsidiary by revamping local trading platform WhaleFin which it acquired last year, according to a Monday press release on PR Times. WhaleFin has been renamed to S.BLOX Co., which plans to collaborate with Sony Group’s other businesses to generate additional value for its crypto trading services, according to the statement. 

4. Crypto’s Mainstream Adoption: Polymarket Sees Over $200 Million in Election Bets

   • As the US Presidential election approaches, Polymarket, a decentralized prediction platform, is capturing mainstream attention with over $200 million in wagers on the election’s outcome. This surge in activity marks a pivotal moment for cryptocurrency’s integration into mainstream financial practices as some believe that Polymarket shows the formula for crypto’s mainstream success.

5. Pudgy Penguins parent firm Igloo Inc. acquires Frame

   • Igloo Inc., the parent firm behind the popular NFT project Pudgy Penguins, acquired the on-chain creator economy platform Frame. The terms of the deal were not revealed. The purpose of the acquisition is to develop Abstract Chain, a Layer 2 network designed for on-chain culture and communities, Igloo Inc. CEO Luca Netz explained on the social media platform X. The Frame team will now join Igloo. "By combining forces, we will provide the infrastructure and distribution necessary to usher crypto into the consumer crypto revolution," Netz added.