The biggest crypto news and ideas of the day |
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U.S. crypto legislation can happen this year, Senate Majority Leader Chuck Schumer (D-N,Y,) said Wednesday at the first major event in which crypto insiders have come out for Vice President Kamala Harris as their favored presidential contender. "We all believe in the future of crypto," Schumer said at an online event hosted by Crypto4Harris. "Congress has a responsibility to provide common sense and sound regulation on crypto, and we need your support to make sure that any proposal is bipartisan." In Harris' absence, several Democratic lawmakers and prominent supporters stood in and shared assurances during the virtual town hall that she would pave the way for new U.S. crypto regulations. Crypto4Harris is among a handful of fledgling efforts aiming to drum up crypto-world backing for Harris after months in which former President Donald Trump seemed to be cementing himself as the industry's pick. Harris hasn't made any policy statements about digital assets in the U.S., and her campaign hasn't formally embraced crypto support, though campaign officials were said to be listening in at the opening online event. |
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Eigen Labs Drove Airdrops to Staff |
Transparent blockchains were pitched as an antidote to Wall Street-style backroom deals. They've instead paved the way for a new class of insiders. Many regard EigenLayer as one of the most promising projects in the sprawling Ethereum blockchain ecosystem. The app provides what it calls a "credibly neutral" platform for building blockchain apps and keeping them safe from theft and cyberattacks. Such neutrality, however, comes with a major caveat: Employees at Eigen Labs, the company behind EigenLayer, have accepted millions of dollars in payouts from some of the other projects that rely on its technology, raising the question of potential conflicts of interest, a CoinDesk investigation found. One team told CoinDesk that it sent each Eigen Labs employee a portion of its new cryptocurrency as a “thank you.” Each employee’s allocation was eventually worth $80,000. Another team said it was sent a list of wallet addresses by Eigen Labs and felt pressured to pay up – or risk imperiling the relationship with a company that could make or break its business. Eigen Labs employees ultimately claimed payouts worth nearly $5 million at peak values – just under $1 million at press time – amid the crypto market's summer slump. Some of the highest-ranking employees who claimed tokens now work at the Eigen Foundation, a non-profit that awards grants to projects that use EigenLayer's technology. Eigen Labs and the Eigen Foundation quietly banned payouts to their employees this year, acknowledging the practice might create conflicts of interest, or at least the impression of them. |
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Chaos Labs, a New York crypto startup known for its suite of on-chain risk management tools, has raised $55 million in a Series A funding round led by the venture capital firm Haun Ventures. The influx of capital comes as Chaos Labs, founded in 2021, looks to expand its platform, designed to address the growing need for automated risk management in decentralized finance (DeFi). The project has tripled its customer base in the past year, helping more than 20 protocols including Aave, GMX and Jupiter to secure, monitor and grow their products, according to a statement. The funding round attracted a mix of familiar faces and new backers, with participants including F-Prime Capital, Slow Ventures and Spartan Capital, alongside larger investors like Lightspeed Venture Partners, Galaxy Ventures and PayPal Ventures. Chaos Labs was also backed by angel investors such as Solana’s Anatoly Yakovenko and Phantom’s Francesco Agosti. While DeFi protocols continue to grow in popularity, their susceptibility to market volatility and risk remains top-of-mind for many investors, particularly those from the traditional financial world. Chaos Labs is positioning itself as a key player in tackling these challenges by offering real-time data and risk assessment tools, areas where DeFi tends to lag behind centralized finance. |
Bitcoin Miners Less Profitable in July |
Bitcoin (BTC) mining was slightly less profitable in July than the previous month as the price of the world's largest cryptocurrency fell over 6% while the network hashrate remained stable, investment bank Jefferies said in a research report on Thursday. Hashrate is a proxy for competition in the industry and mining difficulty. The bank cut its Marathon Digital (MARA) price target to $17 from $22 while maintaining a hold rating on the shares. The stock fell 0.7% to around $15 in pre-market trading. U.S.-listed mining companies produced a larger share of bitcoin in July than June, accounting for 21.1% of the total network versus 20.7% in May, the report said. August will be a more difficult month for the miners as the price of bitcoin has dropped about 5% while the network hashrate has started to grow again, the report added. |
Takeaway: Schumer Shakes Up Crypto Politics |
The big news from the Crypto4Harris town hall Wednesday night is that Senate Majority Leader Chuck Schumer is going to try to pass a crypto bill through the upper chamber by the end of the year. "Congress has a responsibility to provide common sense and sound regulation on crypto, and we need your support to make sure that any proposal is bipartisan," he told the online group, which was assembled to prove that Democrats are “engaged” on crypto issues this election year.
Of course, the background here is that Democrats… haven’t exactly been engaged on crypto for a long time. The Biden Administration has said little publicly on the issue but has quietly backed a host of crypto-unfriendly actions through the Department of Treasury and, by proxy, the Securities and Exchange Commission. Senator Elizabeth Warren (D-Mass.), a close ally of SEC Chair Gary Gensler, is widely seen to have driven the administration crypto policy, which has involved a host of aggressive enforcement actions against the industry, while offering few clear guidelines as to what is and isn’t permissible when dealing in digital assets in the United States.
So, to see Schumer make time on his schedule, appear at the Crypto4Harris event and make a legislative commitment is, to use a Biden phrase, a BFD. Even if that effort may not become law (because it’s an election year and few ideas become law, ever), such action from a high-ranking Democrat is striking. A month ago, before Donald Trump gave his very pro-Bitcoin speech in Nashville, it’s not clear that Schumer even had a legislative wishlist on crypto. The organizers of the Crypto4Harris event were certainly happy with how the evening went. “We succeeded in spotlighting our big tent and showing that crypto is not just the loudest MAGA crypto bros you see online,” G Clay Miller, one of the organizers, told CoinDesk in an interview. (Miller, a former Senate staffer, has a job in the crypto industry working for a leading digital assets advisory firm, but says his political work is separate.)
Miller said 15,000 people registered ahead of the town hall and that 1,000 were in attendance at any one time.
The organizers’ main goal was to show the outside world that Democrats were interested in getting things done on crypto, despite the Biden administration’s record. It was also to send a “loud message” to the Harris campaign that crypto was paying attention to what the vice president was, and wasn’t saying, on the issue. Miller said campaign staffers listened in and were impressed with what they heard.
The big question is what it will take for Democrats to prove to crypto folk that they are serious about a “policy reset.” It’s unclear at this stage exactly what might be included in Schumer’s bill. But bipartisanship seems at least possible.
Patrick McHenry (R-N.C.), who heads the powerful House Financial Services Committee and has been a leading voice for crypto legislation in this Congress, tweeted support for Schumer this morning.
Matthew Graham, a prominent crypto VC, also gave cautious support, echoing others. Custodia Bank's Caitlin Long said she was willing to reserve judgment on who might lead policymaking in a Harris administration. But Jake Brukhman, founder and CEO at CoinFund, was more skeptical: “I saw a lot of politicians on this call, and a few industry people (mostly legal)... but I didn’t see ANYONE resembling the crypto company founders of the 100+ companies we have in our portfolio at @coinfund_io,” he tweeted. And many of those who supported Trump outright were dismissive, including David Bailey, the BTC Media CEO who brought the former president to Nashville recently.
It’s hard to know where we’ll end up: Will there really be a Schumer-led bill this year? Will Harris support the work of groups like Crypto4Harris (she hasn’t said anything officially yet)? Will those in crypto who supported Trump as their only option now gravitate back toward Harris, whom they might support on other issues? Who knows?
What we do know is that D.C., Democrats are at least paying attention this year. They realize they have to do something on crypto policy. And it seems likely that the crypto vote, which until recently was all for Trump, might now be split.
The industry might even have something resembling a choice in November.
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