Here’s What You Missed in Crypto This Week

As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.

COURT OVERTURNS BITCOIN ETF RULING: A three-judge appeals panel for the U.S. Court of Appeals for the District of Columbia wrote in an order dated August 29: “The Securities and Exchange Commission recently approved the trading of two bitcoin futures funds on national exchanges but denied approval of Grayscale’s bitcoin fund. Petitioning for review of the Commission’s denial order, Grayscale maintains its proposed bitcoin exchange-traded product is materially similar to the bitcoin futures exchange-traded products and should have been approved to trade on NYSE Arca. We agree. The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products. We therefore grant Grayscale’s petition and vacate the order.” (COIN) and the industry. Grayscale indicated that it was reviewing the Court’s ruling and aims to share future steps as soon as possible, the firm said. (read more)

MORE COMPETITION FOR COINBASE: Mizuho analyst Dan Dolev said on Tuesday he thinks the perceived positive momentum for the legal battle between Coinbase and the SEC likely drove the majority of the 16% move in the stock intra-day after an appeals court sided with Grayscale. However, the firm is “less enthused” as it argues that the launch of a bitcoin ETF “further commoditizes” bitcoin trading in the U.S. The firm, which is of the view that heightened competition in an asset category that is already seeing less retail engagement will likely drive pricing pressure over time, kept an Underperform rating and $27 price target on Coinbase shares. (read more)

CELSIUS, US BITCOIN CORP SIGN HOSTING DEAL: U.S. Data Mining Group, dba US Bitcoin Corp, announced Thursday that it has secured a deal with Celsius Network to host an initial 8,500 miners with an estimated sticker hashrate of 820 petahash at the USBTC Alpha Site. Asher Genoot, USBTC President, said, “The opportunity to manage the Celsius assets marked a defining milestone. As we drive forward in conjunction with Fahrenheit, we’re embarking on a new chapter that builds upon that success. The synergy between USBTC, Celsius, and Fahrenheit represents our commitment to redefining the mining industry. Together with Fahrenheit, we envision a future where Bitcoin mining is not just profitable but sustainable and industry-advancing.” On February 7, USBTC announced an all-stock merger of equals with Hut 8 Mining (HUT). (read more)

BITCOIN DEPOT EXPANDS RETAIL FOOTPRINT: Bitcoin Depot (BTM) announced Thursday the expansion of its BDCheckout program into Iowa and Louisiana through its ongoing partnership with InComm Payments. Initially launched in 2022, BDCheckout is an app-based experience facilitating a way for users to load cash to their Bitcoin Depot digital wallets right at the cash register. Through Bitcoin Depot’s partnership with InComm, BDCheckout is now available at 246 total locations in Iowa across a variety of convenience store partners such as Kum & Go, Kwik Trip and Pilot Travel Centers. BDCheckout is also expanding into 166 locations in Louisiana. (read more)

SEC CHARGES IMPACT THEORY OVER NFT ‘SECURITIES’: The Securities and Exchange Commission on Monday charged Impact Theory, a media and entertainment company, with conducting an unregistered offering of crypto asset securities in the form of purported non-fungible tokens. Impact Theory raised approximately $30M from hundreds of investors, including investors across the United States, through the offering. According to the SEC’s order, from October to December 2021, Impact Theory offered and sold three tiers of NFTs, known as Founder’s Keys, which Impact Theory called “Legendary,” “Heroic,” and “Relentless.” The order finds that Impact Theory encouraged potential investors to view the purchase of a Founder’s Key as an investment into the business, stating that investors would profit from their purchases if Impact Theory was successful in its efforts. Among other things, Impact Theory emphasized that it was “trying to build the next Disney,” and, if successful, it would deliver “tremendous value” to Founder’s Key purchasers. The order finds that the NFTs offered and sold to investors were investment contracts and therefore securities. Accordingly, Impact Theory violated the federal securities laws by offering and selling these crypto asset securities to the public in an unregistered offering that was not otherwise exempt from registration. Without admitting or denying the SEC’s findings, Impact Theory agreed to a cease-and-desist order finding that it violated registration provisions of the Securities Act of 1933 and ordering it to pay a combined total of more than $6.1M in disgorgement, prejudgment interest, and a civil penalty. The order also establishes a Fair Fund to return monies that injured investors paid to purchase the NFTs. Impact Theory agreed to destroy all Founder’s Keys in its possession or control, publish notice of the order on its websites and social media channels, and eliminate any royalty that Impact Theory might otherwise receive from future secondary market transactions involving the Founder’s Keys. (read more)

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase, Core Scientific (CORZ), Greenidge Generation (GREE), Marathon Digital (MARA), MicroStrategy (MSTR), Riot Platforms (RIOT), Stronghold Digital Mining (SDIG) and TeraWulf (WULF).

PRICE ACTION: As of time of writing, bitcoin was roughly flat this week at $25,974 in U.S. dollars, according to CoinDesk.