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Welcome to The Node! It's Election Day! This is Ben Schiller to take you through the latest crypto news. In today's news: CoinDesk's Nik De previews the races where crypto is on the ballot; Semler Scientific adds 47 BTC to its treasury, mimicking MicroStrategy; CZ and Binance file a motion to dismiss; Chainlink, UBS Asset Management, Swift complete a tokenized funds pilot. The Takeaway: After the Biden Administration's opposition, crypto needed a political friend this cycle. But aligning with Trump is a big gamble, I argue.👇 |
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There are a number of House and Senate races that this industry is closely watching, whether because a candidate has expressed views about crypto legislation or because industry groups have put money into ousting incumbents — or both. In the Senate, the industry, largely through the Fairshake super political action committee and its affiliated PACs, has pumped nearly $80 million into a handful of races, with half of this — $40 million — going to unseat Ohio Democratic Senator Sherrod Brown, the current chair of the Senate Banking Committee, and support Republican challenger Bernie Moreno; that race is largely even, according to 538's aggregation of polls. Some $20 million has gone to directly supporting Democratic Senate candidates: Ruben Gallego, a congressman from Arizona running to succeed Senator Kyrsten Sinema, who isn't seeking reelection, and Elissa Slotkin, a representative from Michigan running to succeed Senator Debbie Stabenow, who is retiring. Gallego currently leads against Republican Kari Lake, according to 538. Ditto for Slotkin against Republican Mike Rogers. Another $10 million indirectly supported Democratic Representative Adam Schiff in his bid for California's Senate seat, by running ads against fellow Democratic Representative Katie Porter during the primary. Schiff won the primary, and now enjoys a sizable lead against Republican Steve Garvey, per 538. Another $10 million or so has gone toward Republican Senate candidates (in addition to Moreno). Representatives John Curtis (Utah) and Jim Banks (Indiana), and Govenor Jim Justice (West Virginia) have all received roughly $3 million apiece. These races also appear to be much less competitive than Michigan or Arizona. CoinDesk is also closely watching the Senate races in Massachusetts, where attorney John Deaton is challenging Elizabeth Warren, perhaps the Senate's biggest crypto skeptic, and Pennsylvania, where former Bridgewater Associates CEO David McCormick is challenging Bob Casey. Democrats currently enjoy a very slim majority through the fact that the Senate's independent members currently caucus with them. Senator Joe Manchin (West Virginia.) is retiring and his seat is almost certainly flipping to a Republican. In Montana, Senator Jon Tester, a Democrat, is facing a tight race against challenger Tim Sheehy. In Nebraska, Senator Debra Fischer, a Republican, is similarly facing a tight race against challenger Dan Osborn (an independent). Republicans are favored to take the majority in the Senate, at least for the next two years. |
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Medical device company Semler Scientific (SMLR) disclosed modest additional bitcoin (BTC) purchases alongside its third quarter earnings results Monday evening. The firm as of Nov. 4 holds 1,058 bitcoin, having purchased 47 BTC for $3 million since its most previous acquisition disclosure in late August. In total, Semler has spent $71 million on its bitcoin buys and those 1,058 tokens are worth roughly $71.4 million at bitcoin's current price of $67,500. "We are capitalizing on the opportunity to maximize stakeholder value by accumulating bitcoin," said Eric Semler, chairman of Semler Scientific. "We plan to continue to purchase bitcoin with cash from operations and with cash proceeds from our sales under our ATM program. In addition, we are exploring additional financing opportunities that will enable us to acquire even more bitcoin." The company's $50 million at-the-market stock sale program became effective on Aug. 13 and since then Semler has sold 86,734 shares, raising about $2.5 million. |
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CZ Files Motion to Dismiss |
Lawyers representing Binance and former CEO Changpeng “CZ” Zhao have made a fresh attempt to dismiss the Securities and Exchange Commission (SEC) lawsuit against them. On Monday, they filed a motion to dismiss an amended complaint submitted by the SEC last month. Their filing argues that the amended complaint pays “lip service” to an earlier court ruling that crypto assets are not in and of themselves securities but “refuses to accept the logical conclusion of that ruling—that secondary market resales of the assets long after they were first distributed by their developers are not ‘securities’ transactions.” “Instead, the SEC’s Amended Complaint continues to insist that virtually all transactions involving crypto assets—including blind secondary market resales of tokens—are securities transactions because some buyers might hope the assets will increase in value,” it said. It also slammed the SEC for a lack of clarity on regulation when it comes to virtual assets. “The SEC still refuses to articulate any standard for courts, litigants, or market participants to know which crypto-asset transactions qualify as investment contracts, and which do not,” it stated. “And the SEC continues to choose winners and losers arbitrarily, recently abandoning with no explanation its claim that transactions involving Ether—the second most common crypto asset, after Bitcoin—are investment contracts.” The SEC initiated the lawsuit against Zhao and three companies, BAM Management U.S. Holdings, BAM Trading Services and Binance Holdings in June 2023. The case is separate to the criminal charges brought against Zhao and Binance Holdings by the Department of Justice. |
Phemex CEO Analyzes the Formula Behind Meme Coins’ Success Industry veteran Federico Variola discusses the future of crypto utility, centralized exchanges and SocialFi A lot has happened in the crypto space since Phemex CEO Federico Variola last visited this space, and he continues to keep his project focused on the road ahead. Those latest innovations align with the evolution of meme coins, the future of social finance and the limits of exchange decentralization. Continue reading here. |
Chainlink, UBS, Swift Team Up |
Blockchain company Chainlink, global financial messaging platform Swift and the asset management unit of Swiss bank UBS said they successfully wrapped up a pilot testing the ability to settle and redeem fiat cash from tokenized funds. The project, completed as part of the Monetary Authority of Singapore's (MAS) Project Guardian, showcased how Swift's infrastructure can facilitate off-chain cash settlements for tokenized funds. It also demonstrates how tokenization and blockchain can work to improve, not replace, Swift, which connects over 11,500 financial institutions in more than 200 countries. As Singapore and other jurisdictions around the world offer more tokenized funds, the ability to gain quick and efficient access to cash — which is what the multitrillion dollar traditional finance (TradFi) industry wants to settle in — is important. "I think this shows where we're going with our work with Swift and how it can be useful for various parts of the financial services industry," Sergey Nazarov, co-founder of Chainlink, said in an interview. Nazarov said the pilot enables the huge market of TradFi investors to subscribe to tokenized funds via a Swift transfer they are already familiar with, and not a stablecoin, central bank digital currency (CBDC) or other digital asset. "We've been emphasizing for years the need for the large institutional market, where most of the world's value currently resides, to flow into the blockchain industry. We're now helping facilitate this shift in a reliable, technical and secure way," Nazarov said. As part of the pilot, Swift’s system, combined with Chainlink’s platform, also facilitated the automatic minting and burning of UBS tokenized fund tokens. |
The Takeaway: The Big Trump Gamble |
By Ben Schiller This year, crypto finally got its pol and his name is Donald J. Trump. For years, this industry has struggled to find a voice in politics, someone who can channel its liberation ideology and bring its ideas to a wide audience. Now that guy is Trump. He stands on a stage at the Bitcoin Conference, in Nashville, and says how much he likes crypto people. He announces a Bitcoin Strategic Reserve. He promises to free Ross Ulbricht. He hands out burgers at PubKey, in NYC. He even forms his own DeFi project, World Liberty Financial, complete with an insider-y governance model (what better way to signal one’s fidelity to crypto than that?)
Trump says and does all the things crypto wants to hear and he attracts millions in donations as a result. The loudmouths go to bat for him, culture warriors in performative hatred. He occupies political space that the Biden Administration and the Harris campaign could have occupied if they weren’t so craven to the Warren Wing. He says all the right things, because Trump is the master of saying what people want him to say. He fits perfectly with crypto’s goals, because his politics are adaptable to any situation and crypto was desperate for a friend.
I’ll confess that all this makes me personally uncomfortable, not because I have any great love for Kamala Harris, but because Trump has a long track record of being a fair-weather friend. He could just as easily take an entirely opposite view of crypto, if it suits him, and he has. I’m worried about crypto’s embrace of Trump because I find it hard to believe that Trump shares principles that attracted me to crypto. Here, then, are three reasons why we should be wary of the Trump relationship, including that he frequently changes his mind, that it could alienate voters, particularly women, who didn't vote for Trump, and that people will identify crypto with non-crypto parts of Trump's agenda. Read the rest. |
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