Examining the intersection of cryptocurrency and government

Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De.

The SEC approved and then almost immediately halted Grayscale's effort to convert one of its products into an exchange-traded fund. This is likely for administrative reasons, rather than political ones.

Pause

(Nikhilesh De/CoinDesk)

The narrative

The SEC halted Grayscale's launch of a multi-asset exchange-traded fund, at least for now.

Why it matters

The crypto industry is watching itself become an even greater part of the broader financial system, with new product launches accessible to the general public. Grayscale is set to launch another product, whenever the SEC gets around to lifting its stay.

Breaking it down

The Grayscale Digital Large Cap Fund (GDLC) will, if it launches, be an exchange-traded fund that offers the public exposure to multiple cryptos in one product. Disclosure: The fund is based on CoinDesk Indices' CoinDesk 5 Index.

The SEC's commissioners stayed the product's launch, but that stay seems to be administrative rather than political, individuals familiar told CoinDesk.

Read the full story here.

Stories you may have missed

Why Doesn't the U.S. Have a Bitcoin Reserve, Yet?: Jesse Hamilton dug into where the U.S. federal government is with regard to the national bitcoin stockpile/reserve called for by President Donald Trump earlier this year.
Senator Seeks to Waive U.S. Taxes on Small-Scale Crypto Activity in Big Budget Bill: Sen. Cynthia Lummis proposed an amendment to the reconciliation bill that would create a de minimis tax exemption for crypto transactions and change how proceeds from mining and staking are taxed.
Congress' Budget Bill Advances From Senate Without Crypto Tax Provision: The amendment never saw a vote.
Crypto Tax Proposal That Didn't Make it to Trump's Budget Bill Pushed on Its Own: So Sen. Lummis has introduced it as a standalone piece of legislation.
NY Bankruptcy Judge Gives Celsius the Green Light to Pursue $4.3B Lawsuit Against Tether: Celsius survived a motion to dismiss in ongoing litigation against Tether. There's still many procedural steps left to go before this case is resolved, however.
Ripple Applies for Federal Bank Trust Charter, XRP Jumps 3%: Ripple said it had applied for a federal bank charter with the Office of the Comptroller of the Currency.
Circle Applies for National Trust Bank Charter: Circle said it had applied for a federal bank charter with the Office of the Comptroller of the Currency.
'Like Ordering McDonald's:' Malta's MiCA Fast-Track Draws Oversight Concerns: Ian Allison and Camomile Shumba looked at Malta's approach to issuing Markets in Crypto Assets (MiCA) licenses to crypto companies.

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This Week

This week

All eyes are on the House, which had to work its way through the reconciliation bill before it could get to the crypto stuff. As of 5:00 p.m. ET on Thursday, July 3, the House does not have any votes scheduled for next week, suggesting the crypto bills — stablecoins and market structure — will have to wait a while longer.

Elsewhere

(NPR) The Department of Justice's "leadership is directing its attorneys to prioritize denaturalization in cases involving naturalized citizens who commit certain crimes," NPR reported.
(NPR) The Department of Homeland Security has created "a searchable national citizenship data system."
(The Washington Post) The House and Senate both passed a revised tax and budget bill this week after multiple all-nighter sessions.

Today's Post

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social.

You can also join the group conversation on Telegram.

See y’all next week!

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