Golden Morning Post | SEC Releases Crypto Accounting Announcement Illegal MakerDAO Transfers $250 Million to Protect DAI Anchor

Headlines

▌****U.S. Government Accountability Office: SEC violated relevant laws when issuing crypto accounting announcements

The U.S. Government Accountability Office (GAO) issued a statement saying that the SEC did not comply with the Congressional Review Act in advancing its controversial crypto accounting announcement. On March 31, 2022, the SEC issued Employee Accounting Bulletin No. 121 (SAB 121), which provides explanatory guidance on how covered entities should interpret and disclose their custodial obligations to protect crypto assets held by users of their platforms.

The GAO said the SEC did not file a report to Congress or the Comptroller General under the Congressional Review Act (CRA), which requires agencies to file reports on the rule to the House of Representatives, the Senate, and the Comptroller General before it goes into effect, and provides for a congressional review process in which Congress may not approve the rule. According to the GAO, Congress will have the power to review or veto within 60 days.

It is reported that SAB 121 requires financial companies that hold customers' crypto assets to record these assets on their own balance sheets. The crypto industry and U.S. Republican lawmakers argue that this undermines the willingness of regulated banks to act as crypto custodians and that it treats crypto assets differently than others.

It's unclear what action the SEC will take in response to the GAO's findings.

▌****MakerDAO Transfers $250 Million from Coinbase to Secure DAI Anchoring

After DAI's USDC reserves, which need to be at least over $200 million to be considered safe, fell near $60 million earlier today, MakerDAO transferred $250 million from Coinbase to DAI's Pegged Stability Module (PSM) to maintain the peg.

It is reported that PSM is a collateral pool that allows users to mint USDC in exchange for DAI at a 1:1 ratio and arbitrage DAI back to the US dollar. If the PSM's reserves are depleted, the price of DAI may be higher or lower than $1.

Quotes

As of press time, according to CoinMarketCap data:

BTC was last traded at $34,651.6, with an intraday change**+1.11****%**;

ETH last traded at $1,815.94, with an intraday change**+1.37****%**;

BNB was last traded at $226.43, with an intraday change**+0.90****%**;

XRP was last traded at $0.5994, with an intraday change**+0.79****%**;

DOGE was last traded at $0.0682, with an intraday change**+1.53****%**;

ADA last traded at $0.1931, with an intraday change**+1.24****%**;

SOL was last traded at $38.40, with an intraday change**+6****.32****%**.

POLICY

▌SEC: Government Accountability Office's conclusions do not affect the status of the crypto accounting announcement itself

The U.S. Government Accountability Office (GAO) today released the results of an investigation finding that the SEC's failure to send its crypto accounting bulletin, SAB 121, to Congress in accordance with official rules is a failure to comply with the Congressional Review Act (CRA). In response, the SEC said: "The GAO's opinion expresses its view that SAB 121 is a 'rule' of the CRA." This opinion does not otherwise affect the status of SAB 121. ”

It is reported that SAB 121 requires financial companies that hold customers' crypto assets to record these assets on their own balance sheets and reserve capital for these assets. The crypto industry and U.S. Republican lawmakers argue that this undermines the willingness of regulated banks to act as crypto custodians, and that the announcement is inconsistent with the way crypto assets are treated with other assets.

▌** The CFTC paid $16 million to whistleblowers this year, most of which involved cryptocurrencies**

The U.S. CFTC paid $16 million to whistleblowers this year, and the information provided by these whistleblowers led to successful enforcement actions, most of which involved cryptocurrency. U.S. Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero said in an Oct. 31 statement that most of the reports received this year have involved cryptocurrency, which she claims is "an area where fraud and other illegal practices continue to be widespread." And with the rise of cryptocurrency, more and more retail customers are subject to the CFTC's jurisdiction.

▌****Chairman of the U.S. Financial Services Commission: SEC's crypto accounting announcement is "ultra vires" and needs to be reviewed by Congress

U.S. Financial Services Commission Chairman Patrick McHenry and U.S. Senator Cynthia Lummis jointly issued a statement saying that the SEC's Employee Accounting Bulletin 121 (SAB 121) issued on April 11, 2022, greatly harms consumers and clearly exceeds the SEC's authority.

McHenry said: The Government Accountability Office confirms many suspicions: SAB 121 is subject to congressional review, a rule that will impose a host of new requirements on financial institutions and other companies to include digital assets on their balance sheets as liabilities for the corresponding assets. Ultimately, this will prevent institutions and companies from providing custody services, making it impossible for Americans to safely and securely host their assets. SAB 121 was drafted with zero input from prudential regulators and the public, and now Congress must step in to stop this harmful rule.

"I have serious concerns about the impact of this announcement on consumer protections, and ensuring that well-regulated financial institutions are able to provide safe custody of Americans' financial assets is my top priority, setting an extremely dangerous precedent," Lummis said. I plan to use the Congressional Review Act in the coming weeks to block this provision.

▌****The chairman of the SEC congratulates the 15th anniversary of the release of the Bitcoin white paper

SEC Chairman Gary Gensler posted on the X platform to congratulate Satoshi Nakamoto on the 15th anniversary of the release of the groundbreaking Bitcoin white paper, which opened the era of cryptocurrency. Any cryptocurrency firm that deceives investors should start complying with securities laws.

Blockchain Applications

▌****Web3 community building platform Galxe will launch AI assistant Galxe AI

Galxe, a Web3 community-building platform, has announced the launch of Galxe AI, an interactive AI assistant that helps users learn about Web3 projects. Galxe has partnered with AI developer Alva to integrate OpenAI's GPT-3.5 Turbo into the Galxe platform, allowing users to ask chatbots questions about various projects and NFT collections supported by the network, which Galxe AI is scheduled to go live in December.

▌****Venus Protocol Community Votes to Approve Proposal to Integrate with LayerZero

LayerZero Labs announced on the X platform that its proposal for Venus Protocol to integrate LayerZero has been approved. The proposal proposes that Venus integrate LayerZero in three phases, first, it is proposed that Venus DAO adopt LayerZero's OFT standard, secondly, it will integrate a cross-chain governance module powered by LayerZero, and finally, Venus Protocol will realize the vision of a full-chain money market by integrating LayerZero.

▌******Solana's GameShift game development tool launches beta

Solana Labs has announced the beta release of GameShift, a new platform designed to make it easier for game developers to build blockchain-powered experiences on the Solana network.

GameShift, which was first released in July, provides a unified API that handles the complexities of the blockchain behind the scenes, allowing developers to focus on game creation. The platform is powered by Solana Labs and supported by ecosystem partners Crossmint, Coinflow, and Metakeep.

▌**********Polyhedra Network is building zkBridge on Arbitrum for secure and efficient interoperability**

According to the official announcement, Polyhedra Network is building zkBridge on Arbitrum to bring secure and efficient interoperability. zkBridge supports the fast settlement of cross-chain transactions from Arbitrum One and Nova to other networks through a decentralized assisted verification network. The zkBridge and Arbitrum Stylus integration simplifies the creation of smart contracts and increases efficiency. Arbitrum Stylus promotes user-friendly use of zk proofs, enhances security through private contracts, and enhances zk oracles to transform smart contract interactions.

Cryptocurrency

▌****Insider: BlackRock spot bitcoin ETF may be backed by market maker giants such as Jane Street and Jump Trading

If regulators approve the BlackRock spot bitcoin ETF, some of the world's largest market-making firms could get involved to provide liquidity to the source. Market makers are essential for ETFs. They are responsible for creating and redeeming new shares of an ETF, and their role is to tie their price to the price implied by the value of the ETF holdings.

Trading giants Jane Street, Virtu Financial, Jump Trading and Hudson River Trading have entered into talks with BlackRock about a market-making role, according to BlackRock slides viewed by people familiar with the matter.

▌****Coinbase will suspend trading of Moss Carbon Credit (MCO2) tokens

Coinbase has announced that it will suspend trading of the Moss Carbon Credit (MCO2) token on November 14, 2023 at around 2:00 PM ET, based on the results of the recent listing review. Trading on Coinbase.com (Simple and Premium Trading), Coinbase Exchange, and Coinbase Prime will be suspended. The platform has converted the MCO2 order book to a limit mode, where limit orders can be placed and cancelled, and matching may occur.

▌******Bitfinex: Rising Bitcoin liquidity may signal continued price recovery

Bitfinex analysts said that the increase in liquidity in the Bitcoin market over the past four months is an encouraging sign of continued price recovery. The increase in liquidity gives traders confidence that they can find buyers for the asset they hold, reducing investment risk and indicating increased demand for the asset, analysts said, adding that this is welcomed by high-priced traders and institutions who prefer an asset class that can provide exposure and exit without high spreads.

David Lawant, head of research at Flacon X, also sees Bitcoin's increased liquidity as a positive sign for digital assets.

▌************Senator Lummis: Crypto assets account for less than 1% of the world's illegal financial activities every year

U.S. Senator Cynthia Lummis posted on Platform X that an inaccurate report last week claimed that Hamas had raised nearly $100 million through crypto assets, but in reality, the figure was less than $500,000. Chainalysis' detailed report found that crypto assets account for less than 1% of the world's illicit financial activities that exceed $2 trillion annually. In the wake of reports that Binance and Tether were engaged in illegal activities, I wrote to encourage the DOJ to complete the investigation, follow up on evidence, and consider criminal charges, as whoever did the illegal activities is illegal.

Lummis said that there is no doubt that crypto assets are not a problem, bad actors exist in various fields, and the future of crypto assets in the United States is brighter than ever.

▌************ Bitwise Analysts: Spot Bitcoin ETF Could Bring Up to $100 Billion in Inflows Over the Next Five Years**

Ryan Rasmussen, an analyst at asset management firm Bitwise, said in an interview that spot bitcoin ETFs could bring in inflows of up to $50 billion to $100 billion over the next five years and "could have a huge impact on the price of bitcoin."

He also said that the SEC is expected to approve ETF applications as early as the December holiday this year, and Bitwise is one of many applicants.

▌************** Solana's market capitalization ranking has rebounded to seventh place, up 62% in October**

According to data released by Santiment, Solana has rebounded to seventh place in terms of market capitalization, up 62% in October. In addition, nearly 2% of all discussions related to the top 100 tokens on social media are related to the SOL token, and SOL trading volume has risen significantly.

Important Economic Dynamics

▌The probability that the Fed will keep interest rates unchanged this week is 98.4%

According to CME's "Fed Watch": the probability that the Fed will keep interest rates unchanged in the range of 5.25%-5.50% this week is 98.4%, and the probability of raising interest rates by 25 basis points to the range of 5.50%-5.75% is 0.0%. The probability of keeping interest rates unchanged by December is 72.1%, the probability of a cumulative rate hike of 25 basis points is 26.7%, and the probability of a cumulative rate hike of 50 basis points is 0.0%. (Golden Ten Data APP)

Golden Encyclopedia

▌Blockchain oracle

Blockchain oracles act as a bridge between the blockchain and the outside world, allowing smart contracts to access off-chain data. An oracle is a third-party service tool that obtains, verifies, and transmits external information to a smart contract running on a blockchain. Without oracles, smart contracts are confined to the world of on-chain data and have no access to external information.

**Disclaimer: As a blockchain information platform, the content of the articles published by Golden Finance is for informational reference only and is not intended as actual investment advice. Please establish the right investment philosophy and be sure to raise your awareness of risks. **

Source: Golden Finance