SEC opts not to appeal Grayscale case, potentially paving the way for the first Bitcoin ETF in the U.S. Plus, insights into Mastercard's CBDC tokenization.
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SEC Won’t Appeal Loss in Grayscale Decision

SEC Won’t Appeal Loss in Grayscale Decision

SEC opts not to appeal Grayscale case, potentially paving the way for the first Bitcoin ETF in the U.S. Plus, insights into Mastercard's CBDC tokenization.

Date:
Oct 14, 2023
| Issue
#
126

Welcome to the final edition of Datawallet Daily for the week. As always, we've curated the must-know crypto stories from the last 24 hours just for you:

Before we explore today's most impactful crypto news, let's kick things off with a snapshot of the market's latest movements.

SEC won’t appeal loss in Grayscale decision

In a significant development, the U.S. Securities and Exchange Commission (SEC) has decided not to appeal its court loss against Grayscale regarding its Bitcoin trust's conversion into an ETF. The regulator's decision was viewed as an encouraging sign for the Grayscale Bitcoin Trust (GBTC), possibly setting the stage for the creation of the first Bitcoin ETF in the U.S. This news had an immediate impact on the cryptocurrency market, sending Bitcoin's price soaring above $27,000.

The SEC had faced criticism from the D.C. Circuit Court of Appeals for its "arbitrary and capricious" denial of Grayscale's application earlier this year. The court argued that the SEC had approved trading of Bitcoin futures funds but rejected Grayscale's similar application, calling for consistent treatment.

This decision comes as a relief for Grayscale, which applied to convert its GBTC fund into an ETF back in October 2021. GBTC has been trading at a discount to its Bitcoin holdings for some time, and its conversion into an ETF is expected to close this price gap due to the ETF's creation-redemption model. The SEC's next steps regarding Grayscale's application remain uncertain, but the agency's recent inaction suggests a more favorable climate for crypto ETFs in the U.S.

Mastercard tokenizes CBDCs across blockchains

Mastercard made an announcement on October 12th, stating that they have developed a solution to enable the tokenization or "wrapping" of Central Bank Digital Currencies (CBDCs) on different blockchains. This technology not only enhances security but also allows consumers to engage in transactions across various blockchains.

The initiative was part of the central bank digital currency pilot project led by the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC). The project's main objective was to explore the potential use cases for a CBDC in Australia.

A crucial aspect of this new solution is its focus on security. Through this collaboration, Mastercard ensured that only authorized entities can possess, utilize, and redeem the pilot CBDC. This measure aims to preserve the integrity and authenticity of CBDC transactions.

UST de-pegging event blamed on Citadel Securities

Terraform Labs has lodged an accusation against Citadel Securities LLC, a market-making firm based in the United States. According to the allegation, Citadel intentionally destabilized the TerraUSD (UST) stablecoin in May 2022, with Terraform Labs claiming that this was not a result of algorithmic failure but rather a deliberate and coordinated effort.

The primary objective of the UST stablecoin is to maintain a 1:1 peg to the U.S. dollar. This is achieved by ensuring a balance between its supply and demand through an arbitrage strategy. In instances where UST traded above $1, the protocol incentivized users to mint UST and burn its counterpart token, LUNA. This approach aimed to decrease the Terra price of UST by increasing its supply while simultaneously increasing the price of LUNA by reducing its supply.

Crypto gaming investments down 38% from Q2

Despite ongoing challenges in the wider crypto and gaming markets, the emerging blockchain gaming industry continues to attract significant venture capital investment. A recent report from crypto data firm DappRadar reveals that blockchain games received around $600 million in funding during Q3 2023.

This figure represents a 38% decrease compared to the $973 million invested in crypto gaming during Q2 2023. In total, the industry has secured approximately $2.3 billion in funding this year. However, it's important to note that this amount is only 30% of the total raised in the previous year, indicating that there is still significant room for growth in the sector.

Other breaking news

Wrapping up

Wrapping up today's Datawallet Daily, the SEC's decision not to appeal its loss against Grayscale has buoyed hopes for a U.S. Bitcoin ETF, sending BTC prices skyrocketing. Meanwhile, Mastercard aims to revolutionize CBDCs with cross-blockchain tokenization. Terraform Labs accuses Citadel Securities of destabilizing their UST stablecoin, and investment in crypto gaming sees a Q3 dip. Stay tuned for more insights and developments shaping the crypto world. We'll see you on Monday next week!