July 13 Crypto News – The SEC’s Latest Move, ZAP’s Valuation Soars to $100M, and ETFs’ Impressive Inflow Trend
July 13 Crypto News – In a Form 1-U filing used to report material changes, Hiro stated it was informed on July 9 that the SEC had concluded its investigation into Stacks, and staff do not intend to recommend enforcement action against the developer. The project was founded by Ryan Shea and Muneeb Ali in 2013 while they were students at Princeton University. Formerly known as Blockstack, Hiro previously conducted a $50 million token offering under the SEC’s Regulation A+ framework in 2019. Regulation A+ provides an exemption from registration for small issues up to $50 million a year.
Some Firms Allowed to Skirt Controversial Crypto Accounting Bulletin
The SEC is allowing certain firms to bypass its controversial crypto accounting guidance if they demonstrate proven procedures and technology for customer crypto recovery in bankruptcies, according to a source at the agency.
Since the release of Staff Accounting Bulletin No. 121 (SAB 121) in March 2022, firms have been consulting with the SEC on how to develop new crypto policies and procedures. SAB 121 requires firms that custody crypto to record customer holdings as liabilities, drawing controversy for potentially preventing banks from safeguarding digital assets. Despite President Biden’s veto amid legislative efforts to overturn SAB 121, discussions and modifications to accommodate well-regulated entities offering crypto custody services are ongoing.
Token Distribution Protocol ZAP Reaches $100 Million Valuation
Token distribution protocol ZAP announced it has raised $15.1 million in total funding, reaching a valuation of $100 million, pseudonymous founder and CEO Francis told The Block. The funding includes $900,000 from a seed round in December, $2.1 million from a private round in June, and $12.1 million from an ongoing “vault sale” with the potential to raise up to $50 million.
ZAP’s protocol, built on the Ethereum Layer 2 network Blast, aims to validate user contributions for fair token rewards and expand to more blockchains like Base. ZAP recently launched its “Blast Gigadrops” campaign with a $1 million prize pool, rewarding users for their social and on-chain interactions. It is also developing a “no-code” token launcher for venture-capital-backed projects.
Spot Bitcoin ETFs Log Five-Day Net Inflow Streak
The 11 U.S. spot Bitcoin ETFs reported net inflows of $78.9 million on Thursday, marking the fifth consecutive day of positive flows. BlackRock’s IBIT, the largest spot Bitcoin ETF by assets under management, led the inflows, adding $72.1 million. Fidelity’s FBTC saw net inflows of $32.7 million on Thursday, with Bitwise’s BITB and Ark Invest’s ARKB registering $7.5 million and $4.3 million in net inflows, respectively. Grayscale’s higher-fee GBTC was the only ETF to witness net outflows, with $37.7 million exiting the converted fund. The spot Bitcoin ETFs have generated $880.6 million in net inflows over the past five trading days and more than $15.5 billion since launching in January.
Germany’s Bitcoin Holdings Are Quickly Depleting
Germany has approximately 3,846 bitcoins ($223 million) left to sell after moving a significant portion to exchanges Bitstamp, Coinbase, and Kraken, as well as to market makers and OTC services again on Friday. Since June 18, a German government authority has been gradually offloading 50,000 bitcoins it seized from the online film piracy site Movie2K in January. In total, the German government sent out 5,748.25 bitcoins ($330 million) on Friday and received 500 bitcoins ($28.6 million) back.
Looking Ahead to Next Week
U.S. Fed Chair Jerome Powell is due to speak on Monday. The latest UK and Eurozone CPI inflation figures will be released on Wednesday. The ECB’s interest rate decision will follow on Thursday.
FAQ for Today’s Crypto News
What is the significance of the SEC dropping its investigation into Hiro’s Stacks?
The SEC dropping its investigation into Hiro’s Stacks is significant because it suggests that the regulatory agency did not find sufficient grounds for enforcement action against the project. This can be seen as a positive development for Hiro and similar blockchain projects, as it alleviates potential legal uncertainties and allows them to continue their operations without the looming threat of regulatory penalties.
What is Regulation A+ and how did Hiro use it?
Regulation A+ is an SEC framework that provides an exemption from registration for small securities offerings up to $50 million a year. Hiro, formerly known as Blockstack, utilized this framework in 2019 to conduct a $50 million token offering. This allowed the company to raise funds while complying with regulatory requirements designed to protect investors.
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