Crypto wrap: Support for Coinbase in SEC case and Worldcoin defends regulatory position

Crypto actors vocalize support for Coinbase, Worldcoin defends position, Grayscale witnesses major ETF outflow.

The Crypto Council, a global alliance that supports crypto regulation, has filed an Amicus Brief in support of Coinbase in its case against the SEC.

“The SEC has attempted to enshrine an arbitrary and baseless enforcement policy without giving interested parties an opportunity to contribute meaningfully to the rules the SEC now claims governs their actions,” the Council says.

“The US is losing its role as a leader in the global digital assets financial system, unfortunately taking a back seat as other countries embark toward the technological frontier.”

The Crypto Council for Innovation

“This results in good actors forced to decipher the SEC’s evolving views based on public statements by officials, litigation filings, and (sometimes contradictory) judicial rulings in enforcement actions. The SEC’s refusal to engage in substantive rulemaking perpetuates an unworkable regulatory blackhole, which fails to provide a viable path to compliance for the digital assets industry.”

The Council highlights the harm done to digital assets industry participants in the US, and the flight abroad to countries that offer the needed regulatory guidance, an issue repeatedly highlighted by key industry players.

“The US is losing its role as a leader in the global digital assets financial system, unfortunately taking a back seat as other countries embark toward the technological frontier,” the Council added. “This will deprive American consumers of access to digital assets, their diversification, decentralization, and manifold benefits.”

The council called the SEC’s behavior “arbitrary and capricious”, saying it is a violation of the Administrative Procedure Act.

Tech investment firm Paradigm also voiced its support. Coinbase has been at the forefront of pushing for clearer comprehensive regulation on crypto, with CEO Brian Armstrong making repeated statements hinting the damage that could be done to innovation and tech in the US.

Worldcoin insists it complies with regulation

Following a ban by Spanish authorities, OpenAI-funded project Worldcoin has spoken out on its compliance with global regulations.

Referencing a separate post from January, the company said it is designed to be fully compliant with:

  • Europe’s General Data Protection Regulation (“GDPR”).
  • The Argentine Personal Data Protection Law (“PDPL”).
  • The Mexican Federal Law on the Protection of Personal Data held by Private Parties and related regulations.
  • The Singaporean Personal Data Protection Act (“PDPA”).
  • The Hong Kong Personal Data Privacy Ordinance (“PDPO”).
  • The Japanese Act on the Protection of Personal Information Act No. 57 of 2003 (“APPI”).
  • The South Korean Personal Information Protection Act (“PIPA”).

In response to concerns about its handling of biometric data, the company said iris biometrics were never bought or exchanged for money at any part of the Worldcoin project. The company also said it is open sourcing its component parts.

Earlier this month, the Spanish Data Protection Agency (AEPD) ordered a precautionary measure against Tools for Humanity Corporation, which does business as Worldcoin, to halt the collection and processing of personal data being carried out in Spain and to block the data already collected.

Record Grayscale bitcoin ETF outflow

Grayscale’s CEO Michael Sonnenshein told CNBC on Monday that fees on its flagship bitcoin ETF will come down over time, following a $12 billion outflow since ETFs launched in January.

Grayscale’s GBTC saw an outflow of $643m on Monday, which market commentators believe to be partly attributable to the collapse of FTX, which had holdings of GBTC worth around $1 billion.

Sonnenshein also said fees would be reduced.

“We have seen this in countless other exposures, countless other markets, you name it, where typically when products are earlier in their lifecycle, when they’re new to be introduced, these [fees] tend to be higher,” Sonnenshein said.

“And, as those markets mature, and as those funds grow, those fees tend to come down, and we expect the same to be true of GBTC.”

GBTC management fees currently stand at 1.5%, at the higher end of the scale compared with other bitcoin ETFs.