Morning Minute | The SEC Is Losing The Crypto Battle

TylerD's Market Summary

🚨 Gary's Bad Day Tops Rough 2-Day Stretch

Crypto is more political than it has ever been.

Likely due at least in part to the $200M that has been donated by Crypto Super PACs this election cycle.

And now, politicians are holding the SEC and Gary Gensler's feet to the fire.

Is it a sign that the tides may be changing?

What Happened?

Gary Gensler and the SEC were grilled at an oversight hearing of the SEC in the U.S. House of Representatives yesterday.

The competence of the commission was in question, and leadership admitted mistakes in their years-long battle with the crypto sector.

Some particularly damning quotes and clips:

• Tom Emmer saying "We could not have had a more historically destructive or lawless chairman of the SEC.”"
• Hester Pierece, the SEC Commissioner, undermined Gary Genser from the start of the hearing and admitted the SEC “should have admitted long ago” that crypto tokens aren’t securities
• Perhaps the most viral clip of all, Rep. Torres asking Gary if Yankees tickets are securities and then asking why NFTs like Stoner Cats are securities, with Gary stumbling through his answer

This came just a day after the SEC was in court with Coinbase and received a lashing from a panel of federal judges.

The judges were very frustrated with the SEC for their lack of regulatory clarity in the crypto sector. 

Notable quotes from the hearing:

“It almost looks, to an outside observer, as if you're going after [crypto] platforms in a way that will crush the industry without really getting into rulemaking.”

“You won't even tell us how the Howey Test applies to Bitcoin or Ether. Those [tokens] have been around for a long time, but you won't take a position in front of us as to whether [Coinbase] is safe, if they deal or don't deal in Bitcoin and Ether.”

The Judges clearly see the issues under the current SEC regime.

Why It Matters

The problems created for the crypto sector by the SEC are more clear than ever.

Judges see the issues and even politicians across both parties see them now.

There is no framework for companies like Coinbase to operate within - how could anyone expect them to comply?

The SEC Commissioner Hester Pierce admitted herself that "regulation by enforcement" was inefficient. 

So what does it mean?

The tides seem like they may actually be shifting. The Federal Government is no longer accepting of how the SEC is policing crypto.

It seems like heads may even roll, and Gary Gensler is clearly on the chopping block.

And this is happening under the Biden administration, which is a positive sign for the future of crypto in the U.S. regardless of which candidate wins the election (many on CT have posited that Crypto is dead in America if Trump loses).

My hot take - Gensler is fired before the election.

Expect green candles if and when that happens...

🚚 What else is happening in NFTs?

Here is the list of other notable headlines from the day in NFTs:

• Bitcoin led NFT trading volume with $3.5M on the day; ETH was next with $3M, and then Solana with $2.1M
• BTC NFT leaders were mixed; NodeMonkes -2% at 0.21 BTC, Puppets -10% at 0.121 BTC, OMB +6% at 0.207, Quantum Cats +2% at 0.277, Pizza Ninjas +16% to 0.16
• The Runes leaders were mostly green with DOG +10% at $286M mc, RSIC -4% at $60M mc, PUPS +27% at $48M, and BILLION DOLLAR CAT +14% to $28M
• ETH NFT leaders mostly chopped; Punks even at 28.4 ETH, Pudgy -1% at 10.6, BAYC even at 11.69 ETH, Azuki -2% at 5.69
• VeeFriends (+20%) and Cool Cats (+17%) were notable top movers
• Solana NFTs were red on the day; Mad Lads -1% at 50 SOL, SMB Gen 2 -2% at 25.3, DeGods -7% at 16.8 SOL, Claynos -9% at 11.7
• Art Blocks Curated announced their 1st ever-physical & digital hybrid project, "Bokeh" by mpkoz, showcasing their new direction as a platform
• ApeCoin DAO's Secretary resigned on Tuesday, citing compensation concern, inactive stewards of the brand, poor communication, a lack of accountability and more

💰 Token, Airdrop & Protocol Tracker

Here's a rundown of major token, protocol and/or airdrop news from the day:

🌎 Around Crypto and Web3

A few other Crypto and Web3 headlines that caught my eye:

• Crypto majors are mixed this morning; BTC +0.5% at $63,660; ETH -1% at $2,620, SOL +2% at $150; SEI (+25%) and SUI (+11%) led alts 
• Memecoin majors were green with DOGE even, PEPE +2%, WIF +5%, BONK +5%, POPCAT +9%, MOG +5%; MOODENG passed $100M for the first time before falling back to $90M mc
• Solana passed all other blockchains in net inflows over the past 3 months with $988M, while ETH saw over $1B in outflows
• The SEC settled with the creators of the TrueUSD stablecoin for $700,000 based on fraudulent and unregistered sales of investment contracts, while postponing its decision on the BlackRock Spot ETH ETF options
• SEC Commission Hester Pierce said that additional banks would be able to custody Bitcoin and crypto soon via an exemption to the SAB 121 rule
• Gary Gensler was grilled by the U.S. House during an oversight hearing of the SEC on Tuesday
• Caroline Ellison was sentenced to 24 months in prison for her involvement in the FTX fraud

🚀 Memecoin Movers 

• $POPDOG (+90%, $13M market cap, SOL)
• $ZACK (+45%, $14M market cap, SOL)
• $KHAI (+44%, $30M market cap, SOL)
• $MOODENG (+30%, 90M market cap, SOL
• $HEHE (+30%, $31M market cap, SOL)

📈 NFT Floor Price Increase (ETH)

• Yogurt Verse (60%, 0.4 ETH Floor)
• Alts by adidas (30%, 0.13 ETH)
• VeeFriends (20%, 0.67 ETH)
• Cool Cats (17%, 0.34 ETH)
• Topia Worlds (15%, 0.43 ETH)

🗓 Upcoming Mints and Events

Today is a slower day of new mints after a fast start to the week.

The highlight is likely Burak and King Xerox teaming up for a free mint "Guardians of Ordinals." 

See the full list and dive in for more details with Swizzy's daily mint monitor. 

• Unite - Genesis NFT (9:00 a.m. ET)
• Burak x King Xerox - Guardians of Ordinals (12:00 p.m. ET)
• Chimpers x Timpers - ARCADEGEN (12:00 p.m. ET)
• BeraWar - Warriors (2:00 p.m. ET)

Enjoy this write-up and/or want to sponsor the Morning Minute? Follow along with me on Twitter @tyler_did_it or reach out via email to tyler.d.warner@gmail.com.