Bankless Weekly: SEC and FBI launch attack on cryptocurrencies

Author: David C Source: bankless Translation: Shan Ouba, Golden Finance

1.SEC and FBI attack cryptocurrencies

This week, the way the US government intervened in the cryptocurrency industry has sparked controversy.

The U.S. Securities and Exchange Commission (SEC) considers Ethereum a security and takes legal action against it, and Consensys filed a lawsuit this week to fight back against the SEC's overregulation. Previously, Consensys disclosed that they had received a Wells Notice from the SEC, claiming that MetaMask operated as an unregistered securities exchange.

It seems that everything happened this week, and the Federal Bureau of Investigation (FBI) also issued a warning urging Americans to only use cryptocurrency services registered as money service institutions (MSBs) under federal law - that is, self-custody services are not included.

Recently, the US government seems to have stepped up its regulation of cryptocurrencies and privacy, and even the court has called its actions in cryptocurrency cases "abuse of power."

2. Franklin Templeton's on-chain fund

Franklin Templeton, known for its laser eyes and WIF hat on Twitter, announced the launch of an on-chain money market fund on Thursday. Franklin OnChain, a $380 million U.S. government money fund, is now live on the Stellar and Polygon blockchains, with its BENJI token representing a direct claim on government securities, cash, and repurchase agreements. 3. DOJ wants CZ to serve 3 years in prison Former Binance CEO Changpeng Zhao’s legal woes continue to escalate, with the U.S. Department of Justice pushing for a three-year prison sentence over allegations of sanctions violations and anti-money laundering failures against the exchange. While CZ’s defense claimed ignorance of the specific transactions flagged, prosecutors argued that his negligence led to major compliance failures for which he must be held accountable. In response, CZ issued a heartfelt apology letter expressing his commitment to correcting Binance’s compliance deficiencies. In addition, 161 letters from family, friends, and influential figures (such as the former U.S. ambassador to China and members of the ruling family of the United Arab Emirates) supported his request for a reduced sentence.

4. Stripe announces upcoming USDC payments

This week, fintech giant Stripe announced its re-entry into the crypto payments space, showcasing its upcoming support for USDC on Solana, Ethereum, and Polygon. Stripe aims to position cryptocurrencies as a viable medium of exchange (Solana, *ahem*) by increasing transaction speeds and reducing costs, underscoring its belief in crypto’s maturing infrastructure and its potential to simplify online payments. The move marks a significant endorsement of the role of stablecoins as a bridge between Tradfi and cryptocurrencies.

5️. Renzo’s ezETH token suffers severe decoupling

In a dramatic turn of events, Renzo’s ezETH token has experienced a dramatic 80% decoupling from its intended ETH parity, highlighting the fragility of the Liquidity Rehypothecation Token (LRT). It occurred shortly after Renzo announced its upcoming airdrop, which appeared to destabilize investor confidence, causing the token to plummet resulting in a liquidity crunch. While prices have largely recovered since then, the decoupling highlights the inherent risks of a nascent, re-hypothecation ecosystem that, in some cases, is highly leveraged.