🎤 1 big thing: Crypto's last stand 

Mainnet logo on a window overlooking media equipment and a conference stage

🇺🇸 2. Ramaswamy woos crypto

▶️ 3. Catch up quick 

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🏆 4. Culture hash: Crypto conference savant

🗽The Mainnet conference kicked off in New York. The theme: Fighting back. Plus, what folks on the ground are saying. 

Holler if you're in town for the conference. 📧 crypto@axios.com

Today's newsletter is 1,113 words, a 4-minute read.

This newsletter was edited by Pete Gannon and copy edited by Chris Speckhard.

Are y'all at Mainnet? What's the best thing you've heard so far? —B & C. 

Crypto

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Follow how cryptocurrency and blockchain are upending markets and the regulatory shifts. With Brady Dale.

Axios Crypto

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📣 1 big thing: Coinbase CEO donates $1 million to super PAC

CEO Brian Armstrong being interviewed by Messari CEO Ryan Selkis at Mainnet in New York.

🎈 2. Charted: Maker rising

💡 3. What's this? Chronicle, an on-chain data startup

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🏃 4. Catch up quick 

TGIF: Coinbase CEO Brian Armstrong puts his money where his mouth is. Plus, Maker rising. 

Remember to send us your thoughts: crypto@axios.com

Today's newsletter is 668 words, a 2.5-minute read.

What a week! FWIW we get the feeling next week will be even busier. —B & C.

🇺🇸 1 big thing: Crypto heads to D.C. 

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🥬 2. Charted: What crypto devs make 

💪 3. Crypto jobs report 

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🏎️ 5. Culture hash: Don't call him BitBoy 

With a looming government shutdown, crypto goes to D.C. Plus, how crypto works. 

Today's newsletter is 1,009 words, a 4-minute read.

Business partnerships gone wrong is a tale as old as time in crypto. —B & C. 

⚖️ 1 big thing: Number go sideways (which is fine)

Photo illustration of Sébastien Derivaux surrounded by the Steakhouse FInancial logo, falling coins, and abstract patterns. 

💵  2. Charted: Sovereign holders of U.S. Treasurys 

📝 3. The Fed's paper on tokenization 

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📢 4. Catch up quick 

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🐋 5. Culture hash: A BTC whale 

GM! Today we check in a little on the MakerDAO mafia. Plus, the biggest holders of U.S. Treasurys.

Questions, comments? Hit us up at 📧 crypto@axios.com

Today's newsletter is 1,052 words, a 4-minute read.

Here's a new WSJ podcast on Sam Bankman-Fried. We expect lots o' SBF content as everyone gears up for the trial next week. —B & C. 

🥸 1 big thing: Unregulated ramps

🍰 2. Charted: Arbitrum leftovers

🎁 3. Celsius bankruptcy's end

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🚴 4. Catch-up quick 

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Top coins

5. 🥫 Culture hash: Kick the can

Bloomberg ETF analyst tweets about SEC's delayed decision on spot bitcoin ETFs

Wednesday is about taking the shirt off your back and getting a loan off it. Plus, wen spot bitcoin ETF. 

Today's newsletter is 1,112 words, a 4-minute read.

So how many of y'all are watching the Gary hearing? Maybe you caught the crypto policy advertising blitz. —B & C. 

National

The New York Department of Financial Services is raising the bar for exchanges listing and delisting tokens, adding to the spectre of more stringent crypto regulation coming at the state level.

Why it matters: New York's crypto licensing regime has a reputation for being amongst the most stringent — critics have said it's thwarted crypto business growth there, advocates say it could've prevented major catastrophes like FTX.

What's happening: New guidance and processes from the state on Monday detail how crypto firms are expected to evaluate coin listings before they are adopted, based on the agency's previously provided framework.

The additional focus on token delistings would suggest NYDFS wants to institute a more orderly way for those processes to occur in light of the spate of enforcement actions that require them. 

Zoom in: The new proposed guidance would apply to regulated crypto platforms in the state including Coinbase, eToro NY, Robinhood Crypto and SoFi Digital assets, as well as others regulated by the BitLicense. 

"We appreciate the chance to weigh in on this proposal — public engagement is a critical step in bringing further clarity to the entire industry," Paul Grewal, chief legal officer at Coinbase tells Axios. 

What's next: The proposed guidance is open for public feedback until October 20, 2023.  

Following the comment period, DFS will review all feedback and issue final guidance; licensees are required to submit a de-listing policy by January 31, 2024.

What we're watching: Whether the new rules will allow crypto firms to be able to operate in the state, or whether it will further alienate industry proponents from setting up shop.

Go deeper: New York regulator could set world standard for crypto

Editor's note: This story was updated with comment from Coinbase and additional information throughout.

New York regulator could set world standard for crypto

More stringent New York crypto regulation could be coming

The state's crypto licensing regime has a reputation for being amongst the most stringent.

Illustration of the Statue of Liberty holding an arrow cursor instead of a torch. 

Cryptocurrencies

The New York Department of Financial Services is raising the bar for exchanges listing and delisting tokens, adding to the spectre of more stringent crypto regulation coming at the <a class="gtmContentClick" data-vars-link-text="state" data-vars-click-url="https://www.axios.com/2022/09/01/california-poised-to-regulate-crypto" data-vars-content-id="009fa254-615a-4c2e-8fd0-8f446e3e3790" data-vars-headline="More stringent New York crypto regulation could be coming" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/09/01/california-poised-to-regulate-crypto" target="_self">state</a> level.Why it matters: New York&#x27;s crypto licensing regime has a <a class="gtmContentClick" data-vars-link-text="reputation" data-vars-click-url="https://www.axios.com/2023/04/06/crypto-nydfs-harris-bitlicense" data-vars-content-id="009fa254-615a-4c2e-8fd0-8f446e3e3790" data-vars-headline="More stringent New York crypto regulation could be coming" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/04/06/crypto-nydfs-harris-bitlicense" target="_self">reputation</a> for being amongst the most stringent — critics have said it&#x27;s thwarted crypto business growth there, advocates say it could&#x27;ve prevented major catastrophes like FTX.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The more blockchain gets packaged up in Wall Street trimmings, the more folks may end up using the technology without even knowing it.

Driving the news: Goldfinch, a decentralized finance protocol, is making an effort to register with the Securities and Exchange Commission — as an investment adviser.

What he's saying: "We are going down a more regulated path," Goldfinch co-founder Blake West tells Axios, adding that the company started working with regulators just last month.

"We can be like a robo advisor for the private credit realm."

Be smart: Robo advisors are online platforms that offer investors portfolio construction at a fraction of the cost of human advisers.

Asset management giants like Vanguard have them, as do fintechs like Acorns and Sofi. Think of them as another channel for sales.

💭 Our thought bubble: Maybe this is how decentralized finance (DeFi) survives the crackdown, by carving out a space between fintech and crypto to deliver digital assets to the masses in regulated investment wrappers.

Established asset managers like BlackRock, Fidelity and others are already stepping into the breach from the other side.

Context: Goldfinch, which runs on the Ethereum blockchain, has been trying to sever crypto's reliance on crypto, bootstrapping small, non-crypto businesses in emerging markets into the global economy via undercollateralized crypto loans.

It revamped its site to smooth the user experience, using authentication techniques that are more consumer-friendly, like Face-ID.

"We want to be going to a more mainstream investor, someone who doesn't have to be a crypto native or a degen," West says.

Yes, but: Goldfinch still needs to get the nod from the SEC before it becomes a robo advisor, and the agency lately has been on something of an everything crackdown that includes investment advisers.

The bottom line: DeFi doesn't necessarily have to uphold crypto-punkian ideals.

"There is a bucket of permissionless finance, privacy, no regulation whatsoever, which is a thing that's long been in existence in crypto, which I'm empathetic to and support to a degree," West said.

"There's this other bucket within DeFi where crypto is trying to create a global interoperable system. It's a language that all the different siloed financial systems can speak. That version is compatible with regulation."

Go deeper: Decentralized finance pioneers announce a mutual fund

Decentralized finance pioneers announce a mutual fund

A DeFi protocol wants to become an investment adviser

Photo illustration of Blake West surrounded by the Goldfinch logo and abstract shapes

Goldfinch co-founder Blake West. Photo illustration: Gabriella Turrisi/Axios. Photo: Courtesy of Goldfinch

The more blockchain gets packaged up in Wall Street trimmings, the more folks may end up using the technology without even knowing it.Driving the news: Goldfinch, a <a class="gtmContentClick" data-vars-link-text="decentralized finance" data-vars-click-url="https://www.axios.com/2021/04/17/crypto-industry-decentralized-finance" data-vars-content-id="a8c006ba-77f4-49e9-9e06-8f20053fcfdc" data-vars-headline="A DeFi protocol wants to become an investment adviser" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2021/04/17/crypto-industry-decentralized-finance" target="_self">decentralized finance</a> protocol, is making an effort to register with the Securities and Exchange Commission — as an investment adviser.

Bittrex US will likely have money left over by the end of its bankruptcy proceeding, because its customers aren't claiming what's theirs.

Why it matters: Distinct for its high number of low-balance accounts, the case serves to highlight that being a claimant in a crypto bankruptcy requires a good amount of effort and personal data — and for many, the reward may not justify the price.

Driving the news: The deadline for some 1.6 million customers to claim their crypto on the Bittrex US and Bittrex Malta exchanges passed on Aug. 31.

Only 35,972 customers — less than 3% identified by the court — actually did, walking away with a total value of $143.76 million, according to a status update hearing on Wednesday.

That's notable, because Bittrex, the U.S. unit of the international parent Bittrex Global, was not insolvent. It said loudly and clearly that it intended to return 100% to customers in-kind via its Chapter 11 proceeding.

That means all of its customers could have pulled out their crypto and walked away.

What they're saying: "Low levels of engagement" from customers could be attributed to inactive accounts and accounts holding small sums, according to Patty Tomasco, a partner at Quinn Emanuel and bankruptcy legal counsel for Bittrex.

Of the remaining customers, 77% of balances were under $100, Tomasco said. Most have been inactive for a year or more.

"Anecdotally I've been monitoring Bittrex Twitter and Bittrex Reddit where customers were engaging more. The sentiment is 'I don't want to give you all this information [for $35].'"

How it works: To conduct a platform withdrawal, customers had to provide a current address and contact information as well as "Know Your Customer" info and accept the 2022 updated Terms of Service.

KYC info included an email associated with the account, DOB, social security or EIN numbers along with a driver's license or passport number.

Zoom in: One customer tells Axios that the process to withdraw funds was "frustrating."

That person, a Finland-based Michigan transplant who requested anonymity because they work in crypto, estimates they had $300 or so in crypto in a long-inactive account but that the "communication was super slow and disjointed."

They gave up trying to get their identity verified to withdraw their funds after several back-and-forth emails, which were viewed by Axios.

On the bright side, the requirements could've stifled scammers — good for everyone, the person said.

Of note: Other folks who expressed similar difficulties with getting support for account verification via X (formerly Twitter) tell Axios that they were able to successfully withdraw their funds in the end.

State of play: When the judge presiding over the bankruptcy hearing Wednesday asked what happens with unclaimed customer funds, Tomasco said it would go toward paying other claims as well as regulatory fines which were "significant."

Flashback: Bittrex exited the U.S. in late March citing regulatory challenges and filed for bankruptcy in May.

The SEC sued the exchange between its exit and bankruptcy and settled with the company in August.

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network sued the company in October 2022 over violating sanctions and anti-money laundering obligations.

Quick take: Bittrex landed in hot water over KYC requirements but will ultimately benefit from them, too.

What that did to protect its customers remains to be seen.

Go deeper: Coinbase, Binance suits a "big step" in SEC's crypto crackdown

Coinbase, Binance suits a "big step" in SEC's crypto crackdown

Crypto customers leave money on the table in Bittrex bankruptcy

Being a claimant in crypto bankruptcy proceedings requires effort and personal data — and for many, the reward may not justify the price.

Illustration of hands reaching for a gold coin, cut into pieces like a pie.

<a class="gtmContentClick" data-vars-link-text="Bittrex US" data-vars-click-url="https://www.axios.com/2023/04/17/sec-complaint-crypto-exchange-bittrex" data-vars-content-id="abf95478-471b-4756-94b7-c6adbe99b598" data-vars-headline="Crypto customers leave money on the table in Bittrex bankruptcy" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/04/17/sec-complaint-crypto-exchange-bittrex" target="_self">Bittrex US</a> will likely have money left over by the end of its bankruptcy proceeding, because its customers aren&#x27;t claiming what&#x27;s theirs.Why it matters: Distinct for its high number of low-balance accounts, the case serves to highlight that being a claimant in a crypto bankruptcy requires a good amount of effort and personal data — and for many, the reward may not justify the price.

For publicly-traded companies, the risk of holding crypto on their balance sheets was that they could only realize losses on them — but that's no longer the case.

Driving the news: The Financial Accounting Standards Board, which sets accounting standards for U.S. public and private companies, voted this past Wednesday to set a new rule on cryptocurrency accounting and disclosure that requires businesses to recognize losses and gains, immediately.

Why it matters: Bitcoin won't be a drag on balance sheets — welcome news for the 40-odd publicly traded companies holding $5.7 billion worth of them, per BitcoinTreasuries.net.

Flashback: Until now, there haven't been specific accounting rules for crypto.

Businesses treated them as intangibles, which for companies like MicroStrategy meant valuing its bitcoin holdings at the lowest price for the given reporting period — resulting in huge losses on coins bought during better times. 

Under this accounting treatment, gains on bitcoin were only reported when sold.

Details: The FASB is set to formally announce the new standard before the year's end, and the new rule is expected to go into effect for the 2025 calendar year.

Companies have the option to adopt it earlier.

Quick take: Bitcoin won't just go down on balance sheets anymore.

FASB writes accounting rules for crypto — at last

As proposed, crypto gains and losses will be recognized immediately.

Illustration of a calculator with bright green text reading "crypto" on the screen.

For publicly-traded companies, the risk of holding crypto on their balance sheets was that they could only realize losses on them — but that&#x27;s no longer the case.Driving the news: The <a class="gtmContentClick" data-vars-link-text="Financial Accounting Standards Board" data-vars-click-url="https://www.fasb.org/Page/PageContent?PageId=/reference-library/ballots.html&amp;bcpath=tfff" data-vars-content-id="ebb328a6-3046-40e4-845a-c8cdaafe9546" data-vars-headline="FASB writes accounting rules for crypto — at last" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.fasb.org/Page/PageContent?PageId=/reference-library/ballots.html&amp;bcpath=tfff" target="_blank">Financial Accounting Standards Board</a>, which sets accounting standards for U.S. public and private companies, voted this past Wednesday to set a new rule on cryptocurrency accounting and disclosure that requires businesses to recognize losses and gains, immediately.Why it matters: Bitcoin won&#x27;t be a drag on balance sheets — welcome news for the 40-odd publicly traded companies holding $5.7 billion worth of them, per <a class="gtmContentClick" data-vars-link-text="BitcoinTreasuries.net" data-vars-click-url="http://bitcointreasuries.net/" data-vars-content-id="ebb328a6-3046-40e4-845a-c8cdaafe9546" data-vars-headline="FASB writes accounting rules for crypto — at last" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://bitcointreasuries.net/" target="_blank">BitcoinTreasuries.net</a>.Flashback: Until now, <a class="gtmContentClick" data-vars-link-text="there haven&#x27;t been specific" data-vars-click-url="https://www.axios.com/2022/07/29/the-risk-of-bitcoin-on-a-public-companys-balance-sheet" data-vars-content-id="ebb328a6-3046-40e4-845a-c8cdaafe9546" data-vars-headline="FASB writes accounting rules for crypto — at last" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/07/29/the-risk-of-bitcoin-on-a-public-companys-balance-sheet" target="_self">there haven&#x27;t been specific</a> accounting rules for crypto.<ul><li>Businesses treated them as intangibles, which for companies like MicroStrategy meant valuing its bitcoin holdings at the lowest price for the given reporting period — resulting in huge losses on coins bought during better times. </li><li>Under this accounting treatment, gains on bitcoin were only reported when sold.</li></ul>Details: The FASB is set to formally announce the new standard before the year&#x27;s end, and the new rule is expected to go into effect for the 2025 calendar year.<ul><li>Companies have the option to adopt it earlier.</li></ul>Quick take: Bitcoin won&#x27;t just go down on balance sheets anymore.

New York has quietly but dramatically shortened its list of pre-approved cryptocurrencies that regulated entities can readily exchange or custody on behalf of clients.

Driving the news: New York Department of Financial Services on Monday announced new standards for crypto exchanges, detailing new processes for listing and delisting coins — with it came an updated list of coins pre-approved by the state.

Of note: The new list features only the two largest cryptocurrencies — bitcoin and ether — and six stablecoins, compared to the two dozen that were on the list previously.

For any coins not on the shortened list, firms will have to go through the state's normal process of getting approval.

The big picture: The state's BitLicense is known for being tough on crypto, and the latest update of approved coins suggests that it's getting tougher. 

What they're saying: DFS declined to explain the list's reduction when asked by Axios.

Flashback: Those regulated under New York's BitLicense regime were allowed to use coins on the designated list, and were asked to inform the agency before beginning their use.

The prior NYDFS list included aave, the basic attention token, bitcoin, Binance's namesake BUSD as well as bitcoin cash, dogecoin, litecoin, omiseGo and xrp. 

New guidance appears to add specifics, asking licensees using coins from the list to alert DFS 10 days prior. 

Be smart: Most trading on exchanges involves bitcoin and ether, but when the market is stronger, smaller tokens have greater volatility and some of the most successful traders profit off those larger shifts.

For comparison, there are about 240 cryptocurrencies listed on Coinbase.

What we're watching: Comments from the crypto firms that have seen their coins vanish from the list. 

New York cuts list of pre-approved cryptocurrencies as it raises standards

The new list features only the two largest cryptocurrencies — bitcoin and ether — and six stablecoins, compared to the two dozen that were on the list previously.

New York has quietly but dramatically shortened its list of pre-approved cryptocurrencies that regulated entities can readily exchange or custody on behalf of clients.Driving the news: New York Department of Financial Services on Monday <a class="gtmContentClick" data-vars-link-text="announced new standards" data-vars-click-url="https://www.axios.com/2023/09/18/crypto-new-york-regulator-token-listing" data-vars-content-id="f7bad7b4-e048-47f3-8c9c-e28f2987efa9" data-vars-headline="New York cuts list of pre-approved cryptocurrencies as it raises standards" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/09/18/crypto-new-york-regulator-token-listing" target="_self">announced new standards</a> for crypto exchanges, detailing new processes for listing and delisting coins — with it came an <a class="gtmContentClick" data-vars-link-text="updated list" data-vars-click-url="https://www.dfs.ny.gov/virtual_currency_businesses" data-vars-content-id="f7bad7b4-e048-47f3-8c9c-e28f2987efa9" data-vars-headline="New York cuts list of pre-approved cryptocurrencies as it raises standards" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.dfs.ny.gov/virtual_currency_businesses" target="_blank">updated list</a> of coins pre-approved by the state.

Crystal Kim

Stories

A DeFi protocol wants to become an investment adviser

New York cuts list of pre-approved cryptocurrencies as it raises standards

More stringent New York crypto regulation could be coming

Crypto customers leave money on the table in Bittrex bankruptcy

FASB writes accounting rules for crypto — at last

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