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wBTC Governance Shifts to Justin Sun Partnership

Plus SEC Subpoenas Crypto VCs in Token Sales Probe

Author

Nathaniel Whittemore
August 12, 2024

The Breakdown First Five - Monday, August 12, 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.

wBTC Governance Shifts to Justin Sun Partnership

5. Exchanges Back Prediction Markets

Political prediction markets are running hot but the CFTC wants to shut them down. Multiple crypto firms have opposed the new rule which would ban political markets. Other categories under fire are ultra-broad “gaming”, war and assassination. Coinbase claims the heavy handed approach is misguided and the CFTC should go back to the drawing board to come up with a policy that “promotes innovation while protecting the public interest.”

4. BTC Options Refiled

The CBOE along with other minor exchanges have withdrawn and refiled SEC applications to list Bitcoin ETF options. It’s now been more than 6 months since the ETFs went live. Most ETFs have options available within weeks or even days. We haven’t heard from the NYSE or the Nasdaq at this stage, but it seems as though something is shaking loose at the SEC. 

3. Celsius Sues Tether

Bankrupt crypto lender Celsius is suing Tether for wrongful liquidation. They claim that Tether sold off over 57,000 Bitcoin that was held as collateral without providing an opportunity to meet the margin call. Tether is characterizing the lawsuit as a “shakedown” and will vigorously defend the case. They claim that Celsius chose not to post additional collateral or close out $815M in loans. To add insult to injury, Celsius are claiming the current market value of the Bitcoin, $2.4B.

2. VC Firms Subpoenaed

At least three crypto venture firms have been subpoenaed by the SEC according to DL News sources. The regulator has asked for a complete record of token sales contracts. The investigation seems to be focused on VC firms that act as “statutory underwriters” rather than investors, existing primarily as an intermediary between token projects and retail investors. 

Some say this is a fishing expedition, others think the investigation has merit. 

1. Sun Wrapped Up

Bitgo announced that wBTC will transition to be governed by a new joint venture with Justin Sun. The benefits are being touted as multi-jurisdictional custody, with keys now being held in Hong Kong and Singapore as well as in the US. The downsides are that a critical piece of DeFi collateral is now being entrusted to Justin Sun. Bitgo claim this is a nothingburger, with Sun having no access to funds. MakerDAO doesn’t trust the move, with a proposal to end support for wBTC.