Consensys has taken a bold step in challenging the U.S. Securities and Exchange Commission's (SEC) classification of Ethereum (ETH) as a security.

In a lawsuit filed on Thursday in a Texas court, Consensys contests the SEC's regulatory stance on ETH, asserting that Ethereum lacks the fundamental attributes of a security. The lawsuit arises amidst growing scrutiny from the SEC, evidenced by recent reports of the agency subpoenaing companies associated with the Ethereum Foundation. While SEC Chair Gary Gensler has refrained from explicitly categorizing ether as a security, the agency's actions have raised concerns within the blockchain community.

Consensys alleges that the SEC has targeted its MetaMask software, citing a Wells notice received earlier this month, signalling the agency's intent to pursue enforcement actions. However, Consensys maintains that MetaMask serves merely as an interface, facilitating interaction with the Ethereum network, rather than engaging in securities transactions.

Seeking legal intervention, Consensys petitions the court to affirm that ETH does not constitute a security and accuses the SEC of procedural violations. This legal confrontation follows a series of clashes between Consensys and the SEC. In April 2022, Consensys received an enforcement letter regarding MetaMask, followed by another letter in September 2022 concerning alleged violations through MetaMask Staking products. Subsequently, the SEC issued multiple subpoenas to Consensys, intensifying scrutiny on its ETH transactions.

Highlighting inconsistencies within the SEC's stance, Consensys references a pivotal 2018 speech by William Hinman, then Director of the Division of Corporation Finance at the SEC, suggesting that bitcoin and ether were not securities. Additionally, Consensys cites statements from Commodity Futures Trading Commission Chair Rostin Behnam, affirming ether's classification as a commodity.

Stripe Moves To $USDC🧾

Stripe, the fintech behemoth, is making a calculated return to the cryptocurrency sphere after a six-year hiatus. 

The company announced on Thursday its decision to reintroduce crypto payments, commencing with the acceptance of USDC stablecoins. This marks a significant shift for Stripe, which withdrew support for Bitcoin in 2018 citing its volatile nature.

Initially, Stripe will facilitate crypto payments exclusively in USDC stablecoins, operating on platforms such as Solana, Ethereum, and Polygon. This strategic move aligns with the company's larger agenda to broaden its financial services toolkit by integrating competing payment providers, a milestone announced during their recent Connect developer conference.

Stripe's co-founder and president, John Collison, emphasized the evolution of transaction settlements, comparing them to Christopher Nolan films regarding length and budget. The decision to reintroduce crypto payments with stablecoins reflects a more stable and user-friendly approach. This move underscores Stripe's cautious dance with cryptocurrency over the years. Despite its disruptive ethos within fintech, the company has trodden carefully, acknowledging the transformative potential of blockchain while prioritizing stability and sensibility in its financial operations.

Stripe's journey with crypto began in 2014 with Bitcoin trials, only to retreat in 2018 due to its volatility. In 2019, Stripe joined the Libra Association, spearheaded by Facebook, before retracting its support later that year. The company's reentry into crypto in 2022, with Twitter as a marquee customer for USDC payouts, signals a nuanced approach to leveraging blockchain technology.

As Stripe evaluates further integration of stablecoins and explores additional platforms, its latest foray into crypto payments reflects a calculated balance between innovation and stability, underscoring its commitment to navigating the evolving landscape of digital finance.

Hong Kong Fastforwards $BTC & $ETH ETFs Trading🇭🇰

Hong Kong is set to usher in a new era of crypto investment as it greenlights the trading debut of six spot ETFs on April 30, as reported by Bloomberg analysts.

These ETFs, consisting of three spot bitcoin and three spot ether offerings, provide investors with an avenue to speculate on the prices of these leading cryptocurrencies without direct ownership.

The approval comes after Hong Kong gave the nod earlier this month to several spot bitcoin and ether ETFs managed by prominent entities such as China Asset Management, Harvest Global, Bosera, and HashKey. China Asset Management, the largest issuer among the three, boasts substantial assets under management exceeding $55 billion in mainland China and $3.6 billion in Hong Kong.

In contrast to the "cash-only" classification of spot bitcoin ETFs in the U.S., Hong Kong's newly listed funds adopt an "in-kind" model. This approach, highlighted by BitMEX research, streamlines the creation process, potentially reducing costs for investors. Rebecca Sin, an ETF analyst at Bloomberg, notes that this decision by Hong Kong's regulator aims to differentiate its offerings and expand accessibility for investors holding bitcoin and ether.

While Hong Kong's spot crypto ETF market may initially be smaller than its U.S. counterparts led by financial giants like BlackRock and Fidelity, the approval signals a significant stride towards establishing the region as a digital-assets hub. Bloomberg ETF analysts anticipate these ETFs to amass approximately $1 billion in assets under management within the first year or two, a substantial increase from previous projections.

Stop Missing Crypto News Anon 🚨👋

We know the market is starting to look even more interesting than ever, however…DON’T IGNORE THE NEWS📰

Get your FREE fix of frequent accurate, user-focused & rapid news from RR 👇

EigenLayer Topping TVL Talks : $15bn🚀

EigenLayer's Ethereum restaking protocol has achieved a significant milestone, with its total value locked (TVL) surpassing $15 billion following the removal of caps.

This surge in TVL comes on the heels of EigenLayer's highly anticipated launch on April 9, which enabled actively validated services to commence operations.

The platform offers users the ability to stake both native ether and liquid staked ether, which is then utilized to secure other protocols within the Ethereum ecosystem.

Recent updates to the project include a reduction in the minimum stake required for operators on its data availability layer EigenDA, from 320 ETH to 96 ETH. This adjustment has facilitated the launch of six new actively validated services, including AltLayer, Brevis, Eoracle, Lagrange, WitnessChain, and Xterio, each addressing different needs within the Ethereum ecosystem.

EigenLayer's pre-launch buzz attracted attention from industry giants such as Google, Coinbase, and HashKey, with their cloud divisions participating as project protocol operators. Sreeram Kannan, the founder of EigenLayer, emphasized the platform's role in enhancing the utility of ETH as collateral for economic security. As more ETH becomes available as collateral, the incentive to utilize ETH as the risk asset increases, reinforcing EigenLayer's position as a vital component of the Ethereum ecosystem.

A Week At RR🗓️

Check out this week’s content published to stay up to date with the latest research trends & crypto talking points👇

RR Files🗂️

Wondering what we are reading this week at RR?

Worry no further!

Thanks for reading!❤️

Don't forget to check out last week's issue for more insightful content👇