🟣 Ineffective Regulations

Crypto Adoption Remains Persistent

Author

Marc-Thomas Arjoon
July 16, 2024

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Welcome back to 0xResearch. Here's what we’ve got for you today:

  • Global regulations overview

  • SAB 121 workaround

  • SEC drops investigation

  • Scroll crosses $1B in value locked

Global Regulations

The Atlantic Council has released an updated version of its global cryptocurrency regulation tracker, providing insights into the evolving regulatory landscape for digital assets worldwide. The tracker examines the legal status and adoption rates of cryptocurrencies across 60 countries, revealing that approximately half have fully legalized this asset class, while others have opted for partial or complete bans.

Interestingly, the data suggests that outright bans on cryptocurrencies have not been particularly effective in curbing their adoption, as usage remains high even in countries with restrictive regulations. This highlights the growing global interest and demand for cryptocurrencies, despite the varying approaches to regulation adopted by different nations. The tracker serves as a valuable resource for understanding the complex and dynamic regulatory environment surrounding cryptocurrencies on a global scale.

SAB 121 workaround

Staying on the topic of regulations, the SEC's rule on how banks account for customer crypto assets, SAB 121, may not be strictly enforced. A Bloomberg report suggested that some banks and brokerages can avoid reporting these assets on their balance sheets, seemingly with the SEC's approval if they provide adequate protection for the assets.

This development is significant because industry groups have strongly opposed SAB 121, even getting a bill passed in Congress to overturn it, but the bill was vetoed by President Biden.

It seems the SEC may be quietly allowing exceptions to SAB 121, potentially rendering the rule ineffective. This was one of the possible outcomes predicted by crypto lawyers earlier this year.

SEC drops investigation

Continuing with regulatory-related news, the SEC has concluded its three-year investigation into the Stacks blockchain and Hiro Systems, the company behind it, without taking any enforcement action. This news marked a significant development for the Stacks ecosystem.

Stacks made history in 2019 as the first-ever project to complete an SEC-qualified offering before the SEC initiated an investigation into Stacks and Hiro in June 2021. This positive outcome is considered a major win for the cryptocurrency industry, as it demonstrates a growing understanding and acceptance of decentralized blockchain projects by regulators.

— Marc-Thomas Arjoon (X: @marcarjoon | Farcaster: @marcarjoon)

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Scroll Value Locked:

The value locked on Scroll has increased by ~20% over the last week and has now crossed the $1B mark. This made it the eighth Ethereum L2 to reach this milestone as it surpassed Starknet in ninth place with $725M.

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap v2 and v3, Curve, Convex and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495 billion in value locked, doubling Uniswap's Base deployment.

Arbitrum recently released three proposals with the potential to drastically change the future of the DAO and its treasury. These proposals tackle ARB staking, MEV revenue collection and possibly increasing the gas fees.

The SEC has signaled a timeline to issuers that could lead to a July 23 launch for the ETH funds, people close to the process told Blockworks.

PayPal has unequivocally made a name for itself as a crypto adopter among fintech giants.

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.