Morning Minute | Biden Admin Targets Crypto Wallet Makers in Final Push
TylerD's Market Summary
Biden Admin Targets Crypto Wallet Makers in Final Push
The anti-crypto Biden admin has a week left in power.
And it appears they are going out swinging.
What Happened?
The Consumer Financial Protection Bureau (CFPB), led by Biden appointee Rohit Chopra, proposed a new rule to classify crypto wallet providers like MetaMask and Phantom as financial institutions.
The impact is that this change would make them liable for fraudulent or erroneous transactions conducted by their users.
For example, if user Joe Smith clicks a phishing link and loses $5,000 from his MetaMask wallet, under this new rule, MetaMask could be liable.
The proposal is part of Chopra's final efforts before the Biden administration ends.
The move is viewed by some as consistent with Senator Elizabeth Warren's long-standing skepticism of crypto, as Chopra is closely aligned with her policies.
What Are They Saying?
Chopra commented on the new rule: "When people pay for their family expenses using new forms of digital payments, they must be confident that their transactions are not tainted by harmful surveillance or errors."
But critics reacted strongly, likening the rule to holding hammer manufacturers accountable for misuse of their tools.
MetaMask's Bill Hughes sarcastically mocked the proposal: "Hacked because you… believed that fashion model in Malaysia needed 5,000 bucks to fly to see you? Don’t worry your wallet might have to cover it"
Joey Krug of Founders Fund criticized its impracticality, saying "This is like holding a hammer manufacturer (who in many cases gives hammers away for free) liable for the misuse of a hammer."
Why It Matters
This policy could set a significant precedent, but its future seems doubtful.
The incoming Trump administration, known for its pro-crypto stance, is expected to oppose such regulations.
Additionally, a 2020 Supreme Court ruling allows the president to dismiss the CFPB director without cause, making Chopra's efforts unlikely to last.
For now, crypto wallet providers appear safe from immediate regulatory burdens.
🚚 What is happening in NFTs?
Here is the list of other notable headlines from the day in NFTs:
- ETH NFT leaders were mostly red, led by Azuki; Punks even at 35.8 ETH, Pudgy -8% at 22.85, BAYC -6% at 14.15 ETH, Azuki +12% at 14.1 ETH
- Karma (+35%) and CyberBrokers (+33%) led notable top movers
- The Azuki ecosystem jumped 10-12% across the board after the Anime tokenomics were released, featuring 50.5% to the community, 75%+ unlocked at open and several partner communities including Kaito and Hype stakers
- BTC NFT leaders were mostly red; Bitcoin Puppets -15%, NodeMonkes -4%, OMB -3%, Quantum Cats +3%
- The Runes leaders were very red; DOG -15% at $460M mc, PUPS -15% at $60M, BDC -5% at $26M, GIZMO -5% at $8M
💰 Token, Airdrop & Protocol Tracker
Here's a rundown of major token, protocol and airdrop news from the day:
- Kern Protocol announced an airdrop for users of multiple protocols including Jupiter, Solend, Drift and Jito, as well as top holders of PENGU, BONK, AI16Z, FARTCOIN & more
- Abstract announced its Abstract Syndicate powered by Echo, where select Abstract builders will have access to showcase their apps to accredited investors
- Quai Network allows any Kaito user with 20+ Smart followers to claim tokens on testnet
🤖 AI x Crypto
New section dedicated to headlines in the AI sector of crypto:
- Overall market cap fell 20% to $10.9B, with most leaders down anywhere from 10%-20%
- Leaders: VIRTUAL (-19%), ai16z (-15%), FARTCOIN (-10%), FAI (-27%) and AIXBT (-17%)
- Top movers include KEKE (+25%) and CGPT (+7%), the only coins in green on the list
- DeFai is close to flipping DeFi in mindshare as the hottest new sub-sector of AI
- New token HOLO from HoloZone aims to create a framework for the "most advanced AI Agents," and executed a 24/7 Showcase on X spaces this weekend; it ran to $35M in debut before falling to $15M
- Shaw teased ai16z v2 coming later this week
- AICC debuted late Friday evening, soaring to $300M in the first hour before settling in the $100M-$150M range over the weekend (now $77M)
- HardwAIre DAO announced its plans to launch as they look to decentralize AI innovation via community-owned compute power
- The Bully team shared a progress update, including a call for those interested in joining the team, recent demos from its intern AI agents, and gearing up for the Dolion launchpad launch later this month
- AVB's Tim Cotten shared a roadmap for AVB and the Inori Network, working towards a Q4 Inori Testnet launch and confirming that AVB holders would get airdropped Inori tokens
- Story Protocol dropped a "getting started guide" for deploying AI agents onto its IP blockchain
- Zerebro published an overview of its entire ecosystem
- Virtuals debuted its SDK with key benefits including openness, customization, plugins and more
- An AI agent gained control over its own Abstract Global Wallet for the first time over the weekend
🌎 Macro Crypto and Web3
A few other Crypto and Web3 headlines that caught my eye:
- Crypto majors fell hard overnight, down 4-6% with Bitcoin losing $92k support; BTC -4% at $90,700, ETH -6% at $3,050, SOL -6% at $176, XRP -6% at $2.37
- Most alts down 6-10%, AI sector down 20%
- A new CFPB rule would make wallet makers like Consensys liable for customer losses or erroneous transactions
- Senator Lummis is set to lead a Senate sub-committee on Digital Assets
- North Dakota & New Hampshire drafted legislation for their own Strategic Bitcoin reserves
- Heritage Distilling became the latest company to adopt BTC, though subject to approval before implementation
- Memecoin majors are red this morning down 5-10%; DOGE -6%, SHIBA -7%, PEPE -9%, PENGU -11%, BONK -10%, WIF -6%, MOG -10%
- CONCHO was the memecoin runner of the night, jumping 1300% to $20M ($35M at peak)
- Moonpay announced a sponsorship of UFD founder Ron, which led to UFD soaring 80% to $230M over the weekend
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