Need to know what happened in crypto today? Here is the latest news on daily trends and events impacting Bitcoin price, blockchain, DeFi, NFTs, Web3 and crypto regulation.
A New York District judge has dismissed a class-action lawsuit against Uniswap. Meanwhile, defunct crypto lending firm BlockFi has applied to a court to request the transfer of “trade-only” assets from its users’ accounts into stablecoins to allow individuals to withdraw them. Shibarium, the new layer-2 blockchain launched by the developers of Shiba Inu (SHIB) has reached a new wallet and transaction milestone just hours after relaunching its bridge to the public.
Judge dismisses class-action lawsuit against Uniswap
Decentralized exchange Uniswap was vindicated from a class-action lawsuit after a judge showed rare understanding of the DeFi marketplace and how it operated.
Judge Katherine Polk Failla of the Southern District of New York dismissed claims of fraud brought forward by six plaintiffs.
The lawsuit was filed in April 2022 on behalf of a “nationwide class of users.” Plaintiffs claimed that Uniswap Labs controlled liquidity pools, including those created by scammers who launched fake tokens on the DEX. The judge claimed that neither the plaintiffs nor the defendants knew the identities of the scammers. Instead of suing the scammers, the plaintiffs were suing the defendants over statements made on social media.
Big Lesson for crypto policymakers and financial regulators (and the administrative state at large):
If you choose to avoid the legal process, if you do not want to engage in good faith rulemaking, the courts will not bail you out. https://t.co/r5RATmiwwq
— Mike Wawszczak (@mikewawszczak) August 30, 2023
“The Court declines to stretch the federal securities laws to cover the conduct alleged, and concludes that Plaintiffs’ concerns are better addressed to Congress than to this Court,” Failla’s order read.
BlockFi asks court for permission to convert trade-only assets into stablecoins
Defunct crypto lending firm BlockFi has applied to a court to request the transfer of “trade-only” assets from its users’ accounts into stablecoins to allow individuals to withdraw them. The request marks another step toward the return of users’ funds, a process that the company began in August.
On Aug. 29, BlockFi filed an application to the United States Bankruptcy Court for the District of New Jersey to authorize the conversion of the so-called trade-only assets into stablecoins. The assets in question — Algorand’s native token,
ALGO — cannot be withdrawn easily, and BlockFi suggests a one-time exchange for Gemini Dollar (GUSD) or another stablecoin.
According to the application, the amount of trade-only assets doesn’t exceed 0.5% of all U.S. wallet assets of BlockFi users. Other trade-only assets, such as Cardano
ADA, Solana , Avalanche AVAX and others, are being separately held by BlockFi International.
The committee of BlockFi creditors, recognized by the court, supported the company’s request.
In 2022, BlockFi became one of several companies that sought Chapter 11 bankruptcy protection in the U.S., along with FTX, Celsius Network and Voyager Digital. In November 2022, it temporarily stopped clients from withdrawing funds. On Aug. 16, the court authorized the company to open withdrawals for the first time in nine months.
The court has also conditionally approved BlockFi’s restructuring plan. The company prioritizes recovering funds from entities including Alameda Research, FTX, Three Arrows Capital, Emergent and Core Scientific. On Aug. 21, BlockFi’s legal team tried to block attempts by FTX to retrieve hundreds of millions of dollars to pay back its creditors.
According to estimates from April 2023, BlockFi owed up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to bankrupt crypto hedge fund 3AC.
SEC’s first deadlines for 7 Bitcoin ETF approvals coming up fast
Over the next six days, the U.S. Securities and Exchange Commission is facing initial deadlines to decide on seven spot Bitcoin (BTC) exchange-traded funds coming after its court defeat to Grayscale Investments.
The SEC’s first deadline to inform investment firm Bitwise on the fate of its ETF will come on Sept. 1. BlackRock, VanEck, Fidelity, Invesco and Wisdomtree will all be awaiting the SEC’s decision for their funds the next day on Sept. 2.
Valkyrie, meanwhile, is set to initially hear back from the SEC on Sept. 4.
In an Aug. 29 Bloomberg interview, ETF analyst James Seyffart said Grayscale’s win “definitely” increases the odds of a successful outcome for the next wave of ETF applicants but the the SEC could delay decisions as it has two more deadlines for each fund before being forced to make a final decision on the 240th-day post-filing.
For those firms still waiting to hear back — the final deadlines for the SEC are all in mid-March next year.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
