Coins in courts

We all knew these days would come, but crypto's fate in the U.S. is being decided in the courts, which have seen a flurry of blockchain-relevant activity.

Why it matters: Some of these actions look to be teeing up more aggressive actions down the line.

Galois Capital

The SEC opted to kick a firm when it's down and really, truly out.

• Galois Capital closed shop amid the FTX debacle. But that didn't stop the agency from suing it for failing to use a registered custodian for its securities under management. The defunct company (unsurprisingly) settled.
• The settlement alleges that Galois held securities for its investors, but it doesn't identify them. (It also alleges some other things, which aren't really crypto-specific.)

Plot twist: It's debatable whether there are any registered custodians for crypto securities. (Some firms might say they are, but the SEC probably wouldn't say either way, outside a lawsuit.)

Friction point: One attorney has argued that the settlement basically puts all crypto funds out of compliance.

eToro

Crypto exchange eToro has been in the space a very long time, first adding bitcoin trading to its platform in 2013.

The latest: In a settlement with the SEC announced Thursday, it's nearly entirely leaving the United States. Its users will only be able to trade bitcoin, bitcoin cash and ether from here on out.

• U.S. users have 180 days to sell off anything else they have on the exchange.

💭 Our thought bubble: The fact that they are allowed to continue trading ether in the U.S. is a big win for the Ethereum world.

• That seems like a sign that the second-largest crypto asset isn't in the crosshairs any longer.

Kalshi

The non-crypto prediction market, Kalshi, sued the CFTC after the agency stopped the startup from offering markets on who would control each chamber of Congress.

• The District Court in D.C. smacked the agency's directive down, saying it wasn't the commodities regulator's job to assess whether or not offerings were in the public interest.

The latest: Kalshi posted the markets, but then had to take them down by order of an appeals court.

Bancor

Bancor was an automated market maker (or decentralized exchange) even before Uniswap. It got sued by investors over a product it built to mitigate losses.

Catch up fast: A court in Texas threw the case out earlier this month.

Yes, but: Despite raising precisely a bajillion dollars in 2017, Bancor has been irrelevant in DeFi for years.

Binance

The SEC amended its complaint against Binance, the world's largest exchange.

Notably, it struck every instance of "crypto-asset securities" in the complaint, stating in a footnote that it's all the expectations around the offering of a token that makes it a security.

In the weeds: It goes into more detail about why it alleges that various tokens traded on Binance are securities, including Binance's BNB token, the fourth most valuable crypto-asset and Solana, the fifth.

👩‍⚖️ What we're watching: More is likely on the way.