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 SENDS GRAYSCALE BITCOIN ETF MATTER BACK TO SEC: A D.C. appeals court has issued its final determination in the dispute between Grayscale Investments and the Securities and Exchange Commission over whether the company could establish an exchange-traded fund based on bitcoin, Bloomberg’s Sabrina Willmer reported Monday. The mandate sends the matter back to the SEC and puts into effect the court’s ruling from August, during which it overturned the commission’s dismissal of Grayscale’s proposal to convert its trust into an ETF. Judge Neomi Rao called the SEC decision “arbitrary and capricious” as the regulator failed to explain why it approved similar products. (read more)

GENESIS PREPARES FOR ‘NO DEAL’ LIQUIDATION: Crypto lender Genesis Global said a fraud lawsuit by New York Attorney General Letitia James could lead to a bankruptcy liquidation that does not settle its claims against parent company Digital Currency Group, Reuters’ Dietrich Knauth reported Wednesday. James sued the crypto firms and former partner Gemini Trust, alleging they defrauded investors of over $1B through a program called Gemini Earn, and is seeking to ban all three firms from the New York financial investment industry. Genesis attorney Sean O’Neal said the company intends to propose a “no deal” bankruptcy plan to distribute available crypto assets to customers and establish a process to preserve litigation claims against DCG and others.  “It’s not an easy decision, but it is an obvious decision,” he told U.S. Bankruptcy Judge Sean Lane. “That was forced upon us by the New York Attorney General’s complaint.” (read more)

BITFARMS INCREASES HASHRATE TO 6.3 EH/S: Bitfarms (BITF) announced Monday that it has fully energized the first phase of its farm in Baie-Comeau, Quebec, increasing its total operating capacity to 240 MW and its hashrate to 6.3 EH/s. “By fully energizing Baie-Comeau, we increased our corporate operating capacity with cost-effective and clean hydro power and achieved our 6.3 EH/s goal,” said CEO Geoff Morphy. “This efficient facility leverages our operating and design expertise. We will continue to manage our balance sheet prudently to be positioned to capture growth opportunities both before and after the next bitcoin halving, expected in mid-April 2024.” Bitfarms acquired Baie-Comeau in July 2023, with the plan to reach 11 MW by the end of Q3 and add another 11 MW when power is made available, which is expected in 2H24. Production initiated with 3 MW and increased to about 5 MW consistently throughout August. In early October, Baie-Comeau added 6 MW, fully energizing the initial 11 MW phase. (read more)

SOLUNA, BIT DIGITAL ENTER HOSTING PARTNERSHIP: Soluna Holdings (SLNH) announced Wednesday a twelve-month 4.4 MW hosting contract with Bit Digital (BTBT) at Soluna’s Project Sophie in Kentucky. The contract will fill capacity at the data center that is becoming available as the current customer’s contract begins to roll off in November 2023. John Belizaire, CEO of Soluna Computing, commented, “Earlier this year we shifted our business model to offer hosting to industry leaders. Bringing on top notch mining companies like Bit Digital is extremely exciting and we look forward to partnering.” The company expects the Bit Digital hardware to be online by early November. (read more)

U.S. SAYS SOME CRYPTO FIRMS NEGLECTING TO STOP ILLICIT FINANCE: U.S. Deputy Treasury Secretary Wally Adeyemo said some digital asset firms are not doing enough to stop the flow of illicit finance, a topic which has faced renewed scrutiny following the Hamas attacks, Reuters’ Elizabeth Howcroft and Andrew Macaskill reported Friday. Adeyemo said the “vast majority” of financial institutions want to aid in stopping terrorist financing, but “there are those, especially in the digital asset space, who wish to innovate without regards to its consequences, including protecting against illicit finance…Our expectation is that financial institutions and digital asset companies and others in the virtual currency ecosystem take steps to prevent terrorists from being able to access resources. If they do not act to prevent illicit financial flows, the United States and our partners will.” (read more)

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital, Coinbase (COIN), 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 rose roughly 14% this week to $33,981 in U.S. dollars, according to CoinDesk.