October 8, 2021 · 4 min read
The Weekly Wrap-Up Friday 8th Oct
The latest DeFi and Crypto news - Every Friday
Gary Gensler Scrutinised For Approach to Crypto Regulation
Senior Republican Believes Gensler Overstepped The Mark
Chairman of the US SEC Gary Gensler
On Thursday (7th Oct), Senior Republican Tom Emmer criticised Chairman of the US Securities and Exchange Commision Gary Genser for his stance on cryptocurrency. The representative from Minnesota stated that he did not believe the SEC should be involved with cryptocurrencies and that Gensler was perhaps “overstepping his authority.” The criticism comes largely in response to threats made by Gensler that cryptocurrencies should be considered securities. Emmer stated:
I disagree with Gensler strenuously when he suggests that almost all of these tokens are securities. I think the vast majority of cryptocurrency offerings are actually currencies or commodities. The SEC is not involved.
Compound’s Woes Continue
Additional $70M Wrongly Awarded To Lenders
Last week, crypto-lending platform Compound mistakenly made some $80M worth of lender-rewards available to be claimed, as a result of a bug introduced to the platform’s smart contract in an update. On Monday (4th Oct), an additional $70M worth of comp tokens were mistakenly made claimable. The ‘pool’ of comp tokens (which had already been wrongly made claimable and drained by lenders) was accidentally replenished - making an additional 202,472.5 comp tokens (roughly $67m) available to claim. The delay in fixing the catastrophic bug is reportedly due to the platform’s necessity for all proposals to be voted on over a number of days. If approved, the proposal then takes an additional week to be implemented - a delay which could prove even more costly for the platform.
Bitcoin Reaches 5 Month High
BTC Hits Highest Price Since El-Salvador Approval
On Wednesday (6th Oct), the price of BTC jumped some 8.5% and is continuing to rise - currently sitting at $55,947. The cause of the increase was the US SEC’s approval of an ETF (exchange-traded fund) that tracks companies which derive the majority of their profits from Bitcoin-related activities such as lending or mining. The ETF held by Volt Equity is not actually a crypto ETF, but rather an ETF of companies engaged in crypto-related activities. As of yet, this is as close as the Securities and Exchange Commision has come to approving a crypto ETF - which would have enormous implications for both the DeFi industry and cryptocurrency valuations.
Tether and Bitfinex CEO Disappears
Jan Ludovicus van der Velde Deletes Twitter Account.
Tether and Bitfinex CEO: Jan Ludovicus van der Velde (Image: Bitrates)
On Thursday (7th Oct), the twitter account belonging to the CEO of both Tether and Bitfinex was deleted. The move comes amidst scrutiny surrounding the nature of Tether’s reserves. A Bloomberg investigation into the source of Tether’s reserves found them to be of dubious security - and that a portion of it was held in Chinese debt. The last tweet from the account read:
Another financial enslaved dying magazine trying to come up with some #Tether FUD in order to bring in some bucks and delay its extinction for a few more days, stay tuned…. #dinosaurs
- in reference to the Bloomberg investigation.
US Department Announce New Crypto Enforcement Unit
Officials Crack Down On Crypto-Crimes
On Thursday (7th Oct), the US Department of Justice (DoJ) announced the creation of a new enforcement unit for the prevention and investigation of crypto-related criminal activity. The unit is set to be initially led by Assistant Attorney General Kenneth Polite Jr and will be named the National Cryptocurrency Enforcement Team (NCET). This comes after Biden issued sanctions two weeks ago against OTC crypto-broker Suex for its facilitation of ransomware transactions. US officials would seem to be taking a firm stance on cryptocurrency being utilised for criminal activity. However, some might interpret the distinction being made between legitimate and illegal crypto-activity by US officials as being to the benefit of the crypto industry as a whole.