CFTC Wins Lawsuit Against Ooki DAO, Solana Foundation and Polygon Labs Argues Against Securities Classification
Market Update
- Equity markets edged higher ahead of a key week where investors await key inflation data and the Federal Reserve's interest rate decision. May's CPI data comes out tomorrow, while the next FOMC meeting is on Wednesday. $SPX and $QQQ are trading 0.2% and 0.5% higher than Friday's close, while $NDAQ is down ~11% after announcing a $10.5b acquisition of Adenza, a software provider for banks and brokerages in a cash-and-stock deal. Digital asset markets have been mostly ranging since Saturday's early dump, with $BTC and $ETH trading 0.5% and 0.9% lower in the past day. Coins listed in the SEC's suit have been performing the worst in the past week, with $SAND, $MANA, $AXS, $CHZ among the lot with weekly losses larger than 30%.
- The Commodity Futures Trading Commission (CFTC) has won its lawsuit against the decentralized autonomous organization (DAO) Ooki DAO, which was alleged to have offered unregistered commodities. The decision resulted in Ooki DAO paying a $643,542 penalty, ceasing operations permanently, and shutting down its website. This lawsuit marks one of the first instances where a government agency has successfully targeted a DAO and its token holders. More importantly, the lawsuit has set a precedent against the prevailing belief in the DeFi industry that such entities are insulated from regulatory scrutiny due to their decentralized nature. The CFTC previously won a 2022 lawsuit against Tom Bean and Kyle Kistner, founders of the bZeroX protocol that was Ooki DAO's predecessor, resulting in a $250k fine.
- In related news, the Solana Foundation and Polygon Labs have publicly disagreed with the U.S. Securities and Exchange Commission's (SEC) characterization of SOL and MATIC, respectively, as securities. The SEC made this claim in its lawsuit against Binance and Coinbase, also labeling 21 other digital tokens as securities. Polygon Labs contended that MATIC was developed and deployed outside the U.S. and has always been integral to securing the Polygon network. Ooki DAO's ruling described above may form a legal precedent over the penalization of centralized bodies contributing towards specific crypto projects. The SEC's categorization has already had repercussions, with the fintech app Robinhood announcing it will remove support for SOL, MATIC, and Cardano's ADA later in June.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Hedera Hashgraph's break of support last Monday under $0.0462 was a technical negative, and points to a good likelihood of a complete retest of former lows. Volume spiked on the decline this past Saturday, 6/10/23, suggesting that additional weakness might happen down to $0.0355 before this can stabilize. Gains back over $0.05 are necessary for a bullish stance, as this would allow $HBAR to recoup the prior support broken along with exceed the downtrend which has been intact since early April. Overall, this still looks a bit premature to expect a bottom, but would be attractive from a risk/reward perspective on any drop back down under $0.04. Relative Strength index (RSI) has officially dropped to oversold levels, but the big uptick in volume on this weekend's decline likely indicates that lows remain a bit early.
Daily Important Metrics
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All metrics as of June 12, 2023 10:50 AM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $501B | $25,825 | ↑ 0.23% | ↑ 56% | |
 ETH | $209B | $1,737 | ↓ -0.44% | ↑ 45% | ↓ -11% |
 ADA | $9.8B | $0.2806 | ↑ 5.25% | ↑ 14% | ↓ -42% |
 DOGE | $8.5B | $0.0611 | ↓ -0.96% | ↓ -13% | ↓ -69% |
 SOL | $6.1B | $15.30 | ↑ 0.41% | ↑ 55% | ↓ -1.28% |
 MATIC | $6.0B | $0.6461 | ↑ 4.20% | ↓ -15% | ↓ -71% |
 DOT | $5.4B | $4.52 | ↑ 1.41% | ↑ 4.06% | ↓ -52% |
 LINK | $2.7B | $5.14 | ↑ 0.27% | ↓ -7.42% | ↓ -63% |
 NEAR | $1.1B | $1.20 | ↑ 0.46% | ↓ -5.88% | ↓ -62% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -43% | $13.30 | ↓ -1.75% | ↑ 60% | ↑ 4.58% |
| BITW | ↓ -55% | $10.05 | ↓ -2.62% | ↑ 87% | ↑ 31% |
| ETHE | ↓ -56% | $7.40 | ↓ -5.13% | ↑ 55% | ↓ -0.43% |
| BTCC | ↓ -0.02% | $4.74 | ↓ -2.27% | ↑ 56% | ↑ 0.54% |
News
THOUGHTS AND OPINIONS
The Block Polygon Labs responds to SEC’s claim MATIC is a security Polygon Labs claims it did not target the U.S. at any time while ensuring MATIC was available to a wide group of persons. The post P... |
The Block Solana Foundation ‘disagrees’ with SEC’s claim SOL is a security The Solana Foundation explicitly "disagrees" with the U.S. Securities and Exchange Commission's characterization of SOL as a security. ... |
REGULATION
Coin Telegraph Nigeria regulator halts Binance operations: Report According to Nigeria's securities regulator, Binance is neither registered nor regulated in the country, making its op... |
The Block CFTC wins Ooki DAO case, setting precedent that DAOs can be held liable The case sets a precedent that DAOs can be sued as a singular entity, rather than the government needing to identify and serve every member. ... |
Coin Telegraph Hong Kong legislator invites Coinbase to the region amid SEC scrutiny Hong Kong fosters a favorable environment for industry growth amid its active regulation and dedication to becoming a ... |
FUNDRAISING AND M&A
CoinDesk Blockchain-Based, AI Compute Protocol Gensyn Closes $43M Series A Funding Round Led by a16z The capital infusion comes as interest in AI surges. Gensyn said it would use the money to accelerate the launch of the protocol and expand its workforce. |
PRODUCT UPDATES AND PARTNERSHIPS
CoinDesk Crypto.com Winding Down U.S. Institutional Business Singapore-based crypto exchange Crypto.com will no longer be offering its service to institutional clients in the U.S. due to “limited demand,” the company anno... |
WEB 3.0
Decrypt.co Ava Labs Launches Avalanche Arcad3 to Help Game Studios Enter Web3 Avalanche Arcad3 is connecting traditional game publishers with crypto firms to help bring legacy IP into the fledgling Web3 gaming space. |
HACKS, EXPLOITS, AND SCAMS
The Block Lending protocol Sturdy Finance drained of $800,000 in security attack Sturdy Finance, a decentralized lending protocol, fell victim to a security attack today, which led to a loss of 442 ether or about $800,000. ... |
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