📱 Coinbase’s Smart Wallet: A Path to 1 Billion Onchain Users?
Weekly News Recap: 🇺🇸 Biden vetoes SAB 121 repeal, 📉 FTX settles with IRS, 🚔 CZ begins prison sentence, and more!
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How Coinbase Might Bring 1 Billion People Onchain Using Its Smart Wallet
Coinbase’s “onchain summer” has kicked off with the launch of its new smart wallet. This interview with Luke Youngblood, founding contributor to Moonwell, gives a peek at how it’s sweetening the pot for developers and users alike.
In this episode, Youngblood describes how smart wallets are different from traditional wallets, how they do away with past security issues, and the more minor potential risks that still do exist with smart wallets. He also gives details on the ways that Coinbase is trying to use its smart wallet to get users onchain: making it much easier to transact onchain directly from their Coinbase accounts, subsidizing gas costs for certain dapps, and making sure everything is web-accessible.
Plus, he explains why Moonwell chose Base, how it is branching out to non-crypto native DeFi users, such as populations that only have mobile phones and not desktop computers in geographies like Africa, Latin America, and Asia, and how the DeFi lending protocol differentiates itself from bigger ones that have established a beachhead on Base.
Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Overcast, Podcast Addict, Pocket Casts, Castbox, Amazon Music, or on your favorite podcast platform. Or watch it on YouTube.
Weekly News Recap
President Biden Vetoes SAB 121 Repeal
Last Friday evening, President Joe Biden vetoed a resolution aimed at overturning the SEC’s Staff Accounting Bulletin (SAB) 121, citing consumer and investor protection as his reasons. SAB 121 mandates that banks and financial institutions include customers' digital assets on their balance sheets. Despite the Senate's 60-38 vote to repeal it, Biden upheld the SEC’s guidance.
In his letter to the House of Representatives, Biden stated, "My Administration will not support measures that jeopardize the well-being of consumers and investors." The decision drew criticism from the crypto community and Wall Street, who argue it limits safe custody options for digital assets.
FTX Settles $24 Billion Tax Claim With IRS for $885 Million
Bankrupt crypto exchange FTX reached a settlement with the Internal Revenue Service (IRS) over a $24 billion tax claim. The agreement involves FTX paying $200 million as a priority claim within 60 days of the implementation of its restructuring plan. Additionally, the IRS will receive a $685 million lower priority claim, payable only if funds are available.
The settlement amount is significantly less than the IRS's initial claim, which was contested by FTX's bankruptcy estate last December. This resolution paves the way for FTX to proceed with its plans to distribute recovered funds to creditors, who are expected to receive a substantial portion of their claims in cash.
Speaking of taxes, MicroStrategy and its founder Michael Saylor agreed to a $40 million settlement with the attorney general for the District of Columbia over allegations of evading income taxes while living in the district. Officials say the agreement is the biggest-ever income tax fraud recovery in the district.
Changpeng Zhao Begins Prison Sentence
Changpeng Zhao, the billionaire founder of Binance, started his four-month long prison sentence at a low-security federal prison in Lompoc, California. Zhao, commonly known as "CZ," pleaded guilty to charges of enabling money laundering via his crypto exchange and was sentenced in April.
Despite stepping down as CEO as part of a settlement with the US government, Zhao still holds an estimated 90% stake in Binance. The settlement also required Binance to pay $4.3 billion in fines and forfeitures, with Zhao personally paying a $50 million fine.
Robinhood Plans to Acquire Crypto Exchange Bitstamp, While Kraken Weighs Pre-IPO Fundraise
On Thursday, investing app Robinhood signaled its intention to acquire crypto exchange Bitstamp in a move that would aid Robinhood Crypto in its worldwide expansion. The $200 million cash deal is expected to close in the first half of 2025 and is still subject to regulatory approvals. Founded in 2011, Bitstamp is the crypto industry’s oldest running exchange and has secured over 50 licenses and registrations globally. Johann Kerbrat, crypto general manager at Robinhood, told Unchained that this acquisition move “introduces the first international business to Robinhood” and is “a great move for the company.”
The same day, Bloomberg reported that Kraken is looking to do a $100+ million fundraising round ahead of a possible IPO next year. Although the talks seem to be in a preliminary verbal stage, sources told Bloomberg that Kraken is searching for a “marquee” company to join its board and help lead it through the public offering.
Franklin Templeton Eyeing Crypto Fund
The Information reported Thursday that $1.6 trillion asset manager Franklin Templeton is weighing launching a crypto fund that would invest in digital assets beyond bitcoin and ether and be aimed at institutional investors. The sources cited said the firm was considering different structures, such as an actively managed fund or an index fund, and that it was also looking at potentially offering staking rewards.
Franklin Templeton launched one of the so-called “newborn nine” Bitcoin ETFs, EZBC, which, at 19 basis points, offers the lowest fees. It has proposed offering the same low fee for its spot ether ETF, and also intends to waive fees on the first $10 billion in assets.
Blockchain networks Linea and Cosmos Hub Both Halt Block Production Due to Security Issues
Ethereum Layer 2 network Linea briefly halted block production following a $6.8 million exploit on Velocore, a decentralized exchange (DEX) operating on Linea. The exploit targeted vulnerabilities in Velocore's "Balancer-style CPMM pool contract," specifically affecting its volatile pools, while stable pools remained secure.
The Linea team, alerted by blockchain security firm Hexagate, paused block production for about an hour to prevent further funds from being bridged out by the exploiter. This decision was intended to protect ecosystem participants, despite criticism from decentralization advocates.
During the pause, Linea censored the hacker’s wallet address and prevented the sale of large amounts of ether.
Meanwhile, Cosmos Hub halted block production for four hours on Wednesday to address a security vulnerability discovered during an upgrade. The issue, which was found in the Liquid Staking Module (LSM), could have allowed users to bypass slashing penalties. Validators quickly implemented a patch, and block production restarted once the majority had applied the fix. The new upgrade was introducing a "partial set security" proposal, which aims to lower costs for smaller validators by allowing only a subset of the provider validator set to secure consumer chains.
VanEck Predicts Ether to Reach $22K by 2030
Investment firm VanEck has projected that ether (ETH) will reach $22,000 by 2030, driven by Ethereum’s disruptive capabilities and substantial free cash flows. VanEck's report highlights Ethereum's potential to transform sectors like finance, banking, payments, marketing, and more. The firm also anticipates that the recent approval of spot ether exchange-traded funds (ETFs) will provide institutional investors and financial advisors secure access to this asset. VanEck estimates that free cash flows from holding ether will hit $66 billion by 2030, contributing to the significant rise in its valuation.
Matter Labs Drops 'ZK' Trademark Applications
Matter Labs, the team behind Ethereum Layer 2 scaling solution zkSync, has withdrawn its trademark applications for the term "ZK" following industry backlash. The company initially filed to trademark "ZK" in nine countries, aiming to claim the term associated with zero-knowledge (ZK) cryptographic proofs. However, after intense criticism from other ZK builders and industry leaders, Matter Labs reversed its decision. The controversy arose from concerns that trademarking "ZK" would undermine the open and collaborative ethos of the crypto community.
Simultaneously, Matter Labs is preparing for the zkSync Token Generation Event (TGE), expected to happen sometime this month, which includes a substantial airdrop. The zkSync token, ZK, will have a total supply of 21 billion tokens. What’s interesting (and somewhat worrisome) is that, at current pre-launch prices, a 10% airdrop of the total supply could be valued at over $1.3 billion, almost double zkSync’s current total value locked (TVL) of $883 million.
Over 450,000 Tokens Were Launched on Solana in May
In May, the Solana blockchain witnessed the highest number of new token launches ever recorded, with 455,000 tokens created. This figure more than doubles the 177,000 tokens launched on Ethereum layer 2 network Base and far surpasses the under 20,000 tokens launched on Ethereum and other popular layer 2 networks such as Optimism and Arbitrum.
The surge in token creation includes many memecoins. Celebrities such as Caitlyn Jenner, Iggy Azalea, and Rich The Kid joined the trend, launching their own tokens on Solana, which have experienced plenty of volatility. On Tuesday, rapper Iggy Azalea's MOTHER token hit a $108 million market cap.
Meanwhile, BRETT, a memecoin inspired by Matt Furie’s Boys' Club comic, became the first memecoin to reach a $1 billion market cap on the Base network. Despite facing allegations of insider trading during its rollout, BRETT saw its price jump nearly 130% in the past two weeks.
On Wednesday, Ethereum co-founder Vitalik Buterin expressed dissatisfaction with celebrity memecoins, because of their financialization, and he cited the 2021 Stoner Cats NFT collection as a better example of celebrity involvement in the crypto industry.
BlackRock’s BUIDL Fund Distributes $1.7 Million in Monthly Dividends
BlackRock’s USD Institutional Digital Liquidity (BUIDL) Fund, also known by its ticker BUIDL, has distributed nearly $1.7 million in monthly dividends to fund its holders on Ethereum, marking a 38% increase from the previous month. The distribution saw 11 wallet addresses receive an average of 151,735 BUIDL tokens each.
The largest recipient, Ondo Finance’s crypto wallet labeled "OUSD Instant Manager" on Etherscan, received 700,280 tokens, representing roughly 42% of the total dividend.
The BUIDL fund, with a market cap of $462 million, constitutes nearly a third of the total $1.45 billion tokenized treasury products circulating in the crypto ecosystem.
Galaxy Digital Tokenizes an Over 300-Year-Old Stradivarius Violin
Michael Novogratz’s Galaxy Digital has tokenized a 1708 Stradivarius violin owned by Animoca Brands’ co-founder Yat Siu valued at around $9 million. The rare instrument once belonged to Russia's Catherine the Great and marks a significant advancement in using blockchain technology to unlock the value of unique real-world assets.
According to Galaxy Digital, Siu is using the tokenized violin as collateral for financing. Novogratz highlighted that this move not only preserves the violin's legacy but also sets a precedent for managing and trading high-value assets in the digital economy.
Fun Bits: Eric Wall's Take on Memecoins
In a hilarious post on X, Eric Wall shared his experience seeing Caitlyn Jenner post a promotion for a pump-and-dump coin. After warning others about the scam, only to be dismissed as a "boomer" unfamiliar with Instagram filters, he then spots Iggy Azalea's $MOTHER coin. “Two years ago, I had predicted this,” he says. “Simp queens and memecoins go hand in hand.” Back then, he says, he knew that one day, he would see a simp queen who understands web3. “When Iggy speaks, I hear that it's her. The $MOTHER ticker is genius. When you read it, it says SMOTHER. It's a reference to her twerking ass. It's brilliant. I am baffled, I am amazed.” Unfortunately, our hero ends up sidelined in his attempts to purchase the coin, and he watches in frustration as $MOTHER skyrockets.
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