Weekly Flip Thru: Crypto Markets React After Fed Delivers Rate Hike, SEC May Claim Ethereum Falls Under Its Jurisdiction
Happy Fall! We’ve gotten past the equinox and days are getting shorter as we barrel toward the end of the year. Time flies, so without any further ado, it’s time for CoinFlip’s Weekly Flip Thru. The headlines we’re taking in stride this week include the most recent Federal Reserve meeting, a spicy hot take from the SEC concerning the world’s second-biggest cryptocurrency, and a new crypto spin on a classic card game.
These are notable crypto news stories for the week of September 26, 2022.
Federal Reserve Fulfills Expectations with Rate Hike to Fight Inflation (Washington Post) More blunt talk and big action came from the United States’ central bank last week in its ongoing efforts to fight runaway inflation. Interest rates were hiked by another 75 basis points, and Federal Reserve Chairman Jerome Powell signaled the Fed’s willingness to enter recession territory as long as it can help tamp down stubbornly high prices for everyday items such as groceries and rent. Financial markets reacted to the rate hike — even though the 0.75 percentage point increase to borrowing rates was telegraphed well before last week’s Fed meeting — and stocks tumbled along with cryptocurrency prices. Bitcoin (BTC) prices fell below $19,000 in the hours after the Fed’s meeting after trading as high as $22,000 a week earlier.
U.S. Securities and Exchange Commission May Be Suggesting All of Ethereum Network Under Its Jurisdiction (Decrypt) OK, lots to unpack with this one. The immediate news is that the SEC filed a lawsuit against a crypto influencer for violating securities regulations during an Initial Coin Offering (ICO) back in 2018. While the lawsuit itself is unsurprising, there’s a spicy nugget of a claim nested within this lawsuit that has some crypto and legal experts bothered. The hot take that’s firing up the world of crypto is the SEC’s possible assertion that, because the largest cluster of computers now running ethereum’s proof of stake network are located in the United States, it now has jurisdiction over all of ethereum. While crypto and legal experts are weighing in with varying opinions on the SECs wording, many members of the crypto community have voiced their disapproval on Twitter.
For a bit of added context, the United States government has been mapping out how it will regulate crypto for much of the past year, with the Biden Administration issuing an executive order focused on crypto in March of 2022. That document essentially told the various government agencies jockeying for the right to oversee crypto to get their various acts together, come up with plans, and submit their reports in the fall of 2022. Now, the time for action is upon Washington officials. SEC Chair Gary Gensler has been making some bold moves to shore up his agency’s claim to be the one government outfit that rules them all when it comes to crypto.
Will this have any immediate impact on ETH? Will it matter to broader crypto regulation at all? Probably not. Remember, this entire debate stems from one paragraph of a lawsuit that is focused on one specific Initial Coin Offering. But some see this move as kind of like that Christopher Nolan movie Inception claiming the SEC wants to plant the idea that they have the authority to oversee this decentralized network of computers running ethereum because most of the computers are located in the United States at the moment. And if that idea is compelling enough in the eyes of the courts, then it may prove to have staying power.
Gaming Company THNDR Launches Solitaire Game That Lets Players Earn Bitcoin (CoinDesk) Who hasn’t played the card game Solitaire at least once in their lives? The universality of the solo card game might be part of what motivated bitcoin game studio THNDR to release Club Bitcoin: Solitaire to the Google Play store and Apple app store. The game allows users to earn bitcoin in the form of in-game rewards and daily prize drawings. This new take on the classic card game creates an on-ramp to bitcoin for a wider audience that might be new to crypto, and other app developers have taken a similar approach in move-to-earn apps, which reward users who meet daily or weekly exercise goals with cryptocurrency.
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