Appold Market Watch - Week ending 28 June 2024

Market Update & Industry News - Week ending 28 June 2024

🔷 The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against global Ethereum developer Consensys, alleging the offer and sale of securities as an unregistered broker through their products’ MetaMask Staking and MetaMask Swaps. This follows the recent announcement that the SEC dropped its case against Consensys, which claimed Ethereum was a security.  

Appold view: Consensys’ fight with the SEC continues as a new battlefront opens up. Having the word “Swaps” in the “Metamask Swaps” offering has probably not helped, as this term is commonly associated with regulated capital markets activities. 

🔷 The U.S. Department of the Treasury finalised a rule requiring digital asset brokers, exchanges and payment processors to report new information on their users’ sales and exchanges to the Internal Revenue Service (IRS) to crack down on tax evasion. The rule is set to be phased in starting next year for the 2026 tax year and could generate up to $28b in new tax revenue.

Appold view: This was inevitable since the initial announcements in 2023. The steps will be phased in from 2025 through 2027, by which time intermediaries will be fully and comprehensively reporting to the IRS. 

🔷 Investment manager VanEck filed Form 8-A for its spot Ether (ETH) exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission, causing speculation of imminent approval of ETH ETFs. VanEck also filed to list the first US Solana spot exchange-traded fund, the new VanEck Solana Trust, which aims to offer investors exposure to Solana, known for low fees and high transactional capacity.

Appold view: The understanding is that they plan to list on the CBOE’s BZX equities exchange. An imminent approval of ETH ETFs may be a little optimistic, but a summer approval wouldn’t seem an unreasonable estimate. A Solana spot ETF could be significantly further down the line. 

🔷 Global alternative asset manager Investcorp and tokenisation of real-world assets specialist Securitize announced a partnership to develop fund tokenisation opportunities. The two firms will explore tokenising funds within Investcorp’s Strategic Capital Group (ISCG), which has $1.5b AUM.

Appold view: A potentially good case study for the tokenisation of alternative funds. The strategy will initially focus on tokenising a fund which specialises in acquiring minority interests in alternative asset managers. 

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