Scenius Sync (Issue #117)

Friend.Tech No More? Prediction Market Court Victory, Mastercard Enables Non-Custodial Crypto Spending, EtherFi Visa Cash Card on Scroll & EigenLayer Season 2 Stakedrop

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 💪

---

---

Essential News 🗞

1. Kalshi Cleared to Offer Congressional Prediction Markets in Victory Against CFTC

   • Kalshi, a U.S.-regulated prediction market platform, won its federal lawsuit against the Commodity Futures Trading Commission over a plan to offer contracts on which party will control each house of Congress after the November election. Although the CFTC could appeal, Kalshi, which had been locked out of this year's election betting boom while the case was pending, can now grab a sliver of that action in the last two months before the election. Prediction markets are popular in crypto circles, and although Kalshi does not use cryptocurrency, the crypto industry has been watching the case closely; VC firm Paradigm filed a friend-of-the-court brief supporting the plaintiff. This year's prediction market breakout success, Polymarket, runs on crypto rails and is riding high on excitement about election betting. In August, the site logged over $470 million in volume, a record, according to Dune Analytics data; the lion's share of that was traded on election contracts.

2. Friend.Tech team renounces control of smart contracts following stagnant growth

   • Friend.Tech, the Web3 social network that saw users trade tokens for 'keys' to the feeds of influential individuals, has been effectively shuttered barely one year after its initial and successful launch.  Friend.Tech's developers called a function on the platform's smart contracts early on September 8 which transferred their control to Ethereum's null address, effectively locking the current system in place and preventing further changes. "No fees from either smart contracts or [the website] currently go to the friend.tech dev team multisig," the team clarified in its announcement post on X. While the platform will seemingly continue to function, the revocation of control makes the implementation of new features unlikely, if not impossible. 

3. Robinhood to settle $3.9 million penalty with California DOJ over past crypto withdrawal restrictions

   • Robinhood’s cryptocurrency arm has settled an investigation into its past practice with a $3.9 million penalty as it failed to allow customers to withdraw crypto from 2018 to 2022. In a statement released Wednesday, California’s Department of Justice said that Attorney General Rob Bonta has secured the $3.9 million settlement with Robinhood Crypto. The investigation concluded that customers could not withdraw their cryptocurrency and were forced to sell it back to Robinhood to exit the trading platform. “Robinhood misled customers by advertising it would connect to multiple trading venues to ensure customers receive the most competitive prices between the venues, which was not always true,” the California DOJ said.

4. Crypto-Fan Deaton Gets Chance to Battle Elizabeth Warren for U.S. Senate

   • A prominent lawyer in crypto legal circles, John Deaton, has won the Republican nomination in the Massachusetts Senate race, and he'll now face Sen. Elizabeth Warren. Sen. Warren, who is arguably the most influential crypto critic in Congress, has a massive money advantage and has beaten past Republican challengers easily.

5. SEC charges and settles with crypto-focused Galois Capital over custody issues

   • The U.S. Securities and Exchange Commission has charged and subsequently settled with crypto-focused investment advisory firm Galois Capital over issues with how it held client assets. The charges involved a private fund that mostly invested in crypto, the SEC said in a statement on Tuesday. “By failing to comply with Custody Rule provisions, Galois Capital exposed investors to risks that fund assets, including crypto assets, could be lost, misused, or misappropriated,” said Corey Schuster, co-chief of the SEC Enforcement Division’s Asset Management Unit, in a statement. “We will continue to hold accountable advisers who violate their core investor protection obligations.” Galois did not admit or deny the SEC's findings and agreed to cease and desist from future violations of the Advisers Act and agreed to pay $225,000 in penalties. 

   • Response on X from Galois’ here.

---

Innovation & Adoption 💡📈

1. Ether.Fi to Launch Visa 'Cash' Card on Scroll Network

   • Ether.fi, best known for its liquid restaking service, wants to change all that with a new blockchain-based credit card, Ether.fi Cash. It announced on Monday a plan to work with Scroll, a layer 2 network on Ethereum, to bring the credit card to market. Ether.fi Cash would enable users to spend fiat while using their crypto assets as collateral, allowing people to hold onto crypto and earn yield while making everyday purchases. The card is currently in use internally at Ether.fi and will start shipping out to pre-order customers on Sept. 16.

2. Mastercard enables non-custodial crypto spending in new partnership

   • Global payment giant Mastercard is expanding its support for non-custodial cryptocurrency wallets in a new collaboration that enables users spend crypto stored via self-custody. After piloting a crypto debit card with the major self-custodial MetaMask wallet in August, Mastercard’s new partnership with the European crypto payments infrastructure provider Mercuryo will further connect traditional finance and crypto. In the collaboration, Mastercard has enabled a new euro-denominated debit card that allows users to spend cryptocurrencies like Bitcoin stored onself-custodial wallets at more than 100 million merchants in the Mastercard network.

3. Japan’s Largest Power Company Tepco is Mining Bitcoin Using Renewables

   • Tokyo Electric Power Company (TEPCO), Japan's largest electricity provider, has begun mining Bitcoin through its subsidiary Agile Energy X using excess renewable energy that would otherwise be wasted, as per reports from Asahi.

4. EigenLayer to Distribute 86M Tokens to Stakers, Node Operators

   • Restaking protocol EigenLayer will distribute 86 million EIGEN tokens to users that have interacted with the platform as a part of "season 2 stakedrop," it said in a blog post. Stakers and node operators will receive 70 million tokens, while ecosystem partners and the EigenLayer community will receive 10 million and 6 million respectively, with distribution due to start on Sep. 17. The tokens equate to around 5% of EIGEN's total supply, which will be 1.67 billion tokens at launch.

5. Tether's $100M Investment in LatAm Agriculture Firm May Be a Tokenization Play

   • Tether, issuer of the $118 billion market cap stablecoin USDT, and its latest investment in a Latin American farming giant may not have much in common at first glance, but both companies share ambition in tokenization of real-world assets. The stablecoin giant invested $100 million to acquire a 9.8% stake in Adecoagro SA (AGRO), a Luxembourg-based agricultural conglomerate that is listed on the New York Stock Exchange, according to an August filing to the U.S. Securities and Exchange Commission.