Silvergate Settles with SEC and Regulators

Plus Circle Gains EU License for Stablecoin Issuance

Author

Nathaniel Whittemore
July 02, 2024

The Breakdown First Five - Tuesday, July 2, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

Silvergate Settles with SEC and Regulators

5. ETF Inflows Return

After a few rough weeks, Bitcoin ETF inflows are starting to look much more healthy. We’ve now seen five trading days in a row of new inflows. Last week was relatively minor, but Monday’s flows surged back to $130M, the biggest day in three weeks. Alongside solid spot flows, leveraged Bitcoin futures ETFs also had a fairly big influx over June, suggesting that traders are getting extra long on the dip. 

4. Coinbase Signs US Marshals

Coinbase has signed a $32.5M deal with the US Marshals Service to provide custody and advanced trading for seized crypto. The DOJ division tasked with liquidating seized property wanted to streamline their process and needed a platform with experience across multiple large cap crypto assets. The US Government crypto portfolio is worth around $13B, with the vast majority in Bitcoin.

3. Polymarket Records $100M Month

On the back of a disastrous debate, Polymarket recorded their first ever month with $100M in volume. The four year old predictions market has seen a massive surge in usage this year as the election inches closer. June volumes focused on political markets, with $111M wagered on the outcome of the Presidential election. The real time political odds have now become a staple of alternative media coverage. 

2. Circle Gains EU Licensing

Circle has become the first global stablecoin issuer to become licensed in the EU. A new French subsidiary will handle European issuance of USDC and all issuance of EURC under the new MiCA rules. Circle says that USDC will remain fungible across regions. Regulators approved the license just in time for new rules to come into effect, with many exchanges concerned they would be left without stablecoins. 

1. Silvergate Settles

Bankrupt Crypto-friendly bank Silvergate has settled lawsuits from the SEC, the Federal Reserve and California state regulators. They will pay $63M in fines and directors are barred from public corporate office. The complaints outline a lack of compliance surrounding the internal SEN settlement network with claims that $1T of transactions were not monitored. The SEC claims the compliance risk was known but was not disclosed to investors.