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Weekly News Recap: Tether's record profit, Artists sue SEC over NFTs, Pump.Fun's revenue surge, and more!
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Is It a Good Idea for the US Government to Stockpile Bitcoin?
Presidential candidates Donald Trump and RFK, Jr., as well as Senator Cynthia Lummis have proposed the U.S. establish a strategic Bitcoin reserve. George Selgin of the Cato Institute unpacks their various proposals.
In this episode, George Selgin, senior fellow at the Cato Institute, discusses the recent proposals by Donald Trump, Robert F. Kennedy Jr., and Senator Cynthia Lummis for the U.S. government to establish a strategic bitcoin reserve. George provides his insights into the differences between these proposals, their potential implications, and why he believes the government should not be investing in Bitcoin or other assets.
Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.
Weekly News Recap
Tether Records $5.2 Billion Profit in First Half of 2024
Tether, the issuer of stablecoin USDT, announced on Wednesday a net profit of $5.2 billion for the first half of 2024 as part of its second-quarter financial attestation conducted by BDO, an independent accounting firm. The report confirms the accuracy of Tether’s financial statements and reserves.
In the second quarter, Tether recorded a net operating profit of $1.3 billion. The company’s reserves included $97.6 billion in U.S. Treasuries, placing it 18th among global holders of U.S. debt, ahead even of countries such as Germany and Australia.
As of June 30, 2024, Tether's consolidated net equity reached nearly $12 billion. The company faced a $653 million unrealized loss due to falling bitcoin prices, partially offset by a $165 million gain in gold investments. The second quarter also saw Tether issue over $8.3 billion in USDT. The company maintains substantial reserves and a consistent revenue base from traditional asset investments.
Meanwhile, CoinDesk reported that Tether’s main competitor Circle, the issuer of stablecoin USDC, has a valuation of around $5 billion in the secondary market ahead of its planned IPO, down from a $9 billion valuation in 2022.
Artists Sue SEC Over NFT Regulatory Clarity
Artists Jonathan Mann and Brian Frye filed a lawsuit against the SEC on Monday, seeking clarity on whether NFTs are considered securities. The lawsuit aims to prevent costly legal battles and fines for digital artists who use blockchain technology.
Mann and Frye argue that NFTs, which can include visual art, music, and videos, should not be classified as securities simply because they exist on a blockchain. Mann criticized SEC Chair Gary Gensler's stance, saying it’s "ludicrous" to consider blockchain-based art as securities.
The lawsuit also references past SEC actions, such as cases against Impact Theory and Stoner Cats, in which NFT projects were deemed unregistered securities. The artists hope their legal action will push the SEC to provide clear guidelines for the digital art industry. Attorney Jason Gottlieb emphasized that art is a reflection of human creativity, protected by the First Amendment, and should not be burdened by securities regulations.
Pump.Fun Generates Record $25.6 Million in July Revenue
Pump.Fun, a Solana-based token launchpad for memecoins, reported a record $25.6 million in revenue for July, up 16% from June. The platform, launched in February 2024, has seen consistent growth, driven by the popularity of "fair-launched" memecoins that avoid presales and team allocations.
In July, the launch of NEIRO, inspired by the new Shiba Inu adopted by the owner of DOGE's Kabosu, contributed significantly to the revenue spike. NEIRO quickly reached a market cap of $33.5 million. Pump.Fun's cumulative revenue now stands at $77.8 million, with projections suggesting it could reach $336 million by year-end, highlighting the ongoing demand for memecoin creation services.
California DMV Digitizes 42 Million Car Titles on Blockchain
California's Department of Motor Vehicles (DMV) has digitized 42 million car titles using the Avalanche blockchain network to streamline the title transfer process and reduce fraud. Developed in partnership with Oxhead Alpha, this new system allows vehicle titles to be transferred in minutes via a mobile app, eliminating the need for in-person visits.
The digitization initiative aims to enhance efficiency and security, creating a transparent and tamper-proof record of vehicle ownership. John Wu, president of Ava Labs, highlighted the benefits in a blog post, stating, "Blockchains maximize efficiency, maintain compliance, and protect consumer data."
This project represents one of the first steps in California's broader plan to integrate blockchain technology into government operations, promoting automation and improved public services.
BitClout Founder Faces Fraud and Securities Charges
Nader Al-Naji, founder of the crypto social media platform BitClout, was charged with wire fraud and selling unregistered securities by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). Arrested on Saturday, Al-Naji, also known on social media as "Diamondhands," allegedly raised $257 million from BitClout’s token sales and misappropriated $7 million for personal expenses, including renting a Beverly Hills mansion.
The SEC's complaint highlights Al-Naji's attempts to disguise BitClout as a decentralized project in order to evade regulations. His family members are also named in the lawsuit for receiving investor funds. If convicted, Al-Naji faces up to 20 years in prison for wire fraud.
Do Kwon Set to Be Extradited to South Korea
Montenegro's court of appeals has confirmed an earlier ruling from a lower court saying that Terraform Labs co-founder Do Kwon should be extradited to South Korea, instead of the U.S. Kwon has been in custody in Montenegro since March 2023 after being arrested for trying to use a fake passport to fly to Dubai.
After South Korea submitted its extradition request to try Kwon for his role in the $40 billion collapse of the Terra/LUNA ecosystem in May 2022, the U.S. followed with a similar request. Kwon’s extradition now awaits final approval from Montenegro's minister of justice. No extradition date has been set.
Mt. Gox Transfers $2.2 Billion in Bitcoin to New Wallet
The bankrupt crypto exchange Mt. Gox has transferred 33,960 BTC, worth about $2.2 billion, to a new wallet, according to Arkham. This move reduced the exchange's main wallet balance from 142,000 BTC to 32,899 BTC. Arkham suggests that the new wallet likely belongs to BitGo, one of the five exchanges collaborating with the Mt. Gox Trustee to repay creditors.
In July, the Mt. Gox Trustee initiated repayments to 17,000 creditors in bitcoin and bitcoin cash, with distributions occurring on July 5, 16, 24, and 31 via Kraken, Bitstamp, SBI VC Trade, Bitbank, and BitGo. Some creditors have reported withdrawal issues arising from verification requirements.
Compound Goes Through Governance Dispute
The Compound lending protocol went on a rollercoaster ride this week. The issues began when a whale known as Humpy and a group of COMP holders called the Golden Boys proposed creating a yield-bearing protocol called goldCOMP. The proposal faced significant opposition, however, due to concerns over vote manipulation and centralization.
Instead of proceeding with goldCOMP, Humpy and the Golden Boys agreed to a counter-proposal to develop a new staking product that would distribute 30% of existing and new market reserves annually to staked COMP holders, with control maintained by the Compound DAO. The counter-proposal addresses concerns about excessive control by Humpy and the Golden Boys.
Humpy subsequently agreed to withdraw Proposal 289, which had narrowly passed and would have allocated $24 million in COMP tokens to goldCOMP. The resolution, endorsed by key stakeholders like Wintermute and OpenZeppelin, has restored market confidence, with COMP prices rising by 5% after falling significantly when the Humpy and the Golden Boys first made their proposal.
Terra Blockchain Halted After $4 Million Token Theft Exploit
The Terra blockchain was halted for approximately four hours on Tuesday due to an exploit that resulted in the theft of tokens valued at around $4 million. The attacker exploited a known vulnerability in the IBC hooks module, which allows cross-chain token transfers and contract calls.
The Terra team announced the halt on X, stating that block production would resume only after validators deployed an emergency patch, which was deployed 3 hours later. Security firm Beosin reported that the attacker stole 60 million ASTRO, 3.5 million USDC, 500,000 USDT, and 2.7 BTC.
The ASTRO token's value plummeted by 55% following the exploit. Terra developers missed including the IBC hooks patch in a recent upgrade, which led to the breach. The blockchain resumed operations after implementing the emergency fix.
Fun Bits: Trump’s Bitcoin Sneakers Are the Latest Craze
In a true Trump fashion twist, a website linked to Donald Trump has released limited-edition Bitcoin-themed sneakers. The bright orange high-tops, priced at $500, sold out instantly and are now popping up on eBay for up to $2,500. Who knew crypto could be so stylish?
The shoes are marketed as celebrating "the future of finance,” as well as Trump's leadership, making them a must-have for Bitcoin fans and Trump enthusiasts alike. And if high-tops aren't your thing, you can still snag a pair of orange or black low-tops for $299.
The launch came right after Trump's speech at the 2024 Bitcoin Conference in Nashville, where the former President promised to support Bitcoin if elected. Now fans can show their support with every step — just be careful not to trip over the price!