Out with a bang



The filing deadline for 13Fs was yesterday.



Millennium Management disclosed a huge position in BlackRock’s bitcoin ETF, holding roughly 20 million shares worth over $844 million. 



Millenium also disclosed holdings in Fidelity, Grayscale, ARK and Bitwise, leading with nearly 13 million shares of Fidelity’s ETF. It owns roughly three million Grayscale shares, a mere 634,000 shares of Ark and 1.1 million shares of Bitwise’s ETF.



This makes Millennium the top holder of IBIT, but there’s a catch. 



The thing is that this disclosure only shows the holdings on March 31. And I say that because Millennium is a multi-strategy hedge fund. 



This isn’t to discount the sizable position they racked up — nearly $2 billion in bitcoin ETFs with $64 billion of assets under management — but this isn’t as straightforward as, say, Wisconsin. This kind of fund isn’t the buy-and-hold type, and could have shorted or sold off the position by now.



Read more: Yes, Vanguard’s new CEO supported BlackRock’s bitcoin ETF launch



Sorry for the cold water there, but it’s easy to see such large numbers and get excited despite the fact that the reality is more complicated. However, I’d say that we still saw impressive holdings from an array of investment managers that are holding and some that may have just dipped their toes into the bitcoin ETF waters. 



Let’s go back to Wisconsin. Earlier this week, the State of Wisconsin’s Investment Board (SWIB) bought 2.4 million shares of IBIT and over one million shares of GBTC. The board manages the Wisconsin Retirement System and State Investment Funds. It’s also more of a, shall we say, HODLer than a fund like Millennium. 



Crypto Twitter went nuts about the filing, and rightly so. This is the kind of disclosure that can be used to see how investment managers are approaching bitcoin ETFs. 



Outside of the flashy names, there were a handful of very interesting disclosures. For example,

Empire Newsletter: Taking stock of who's buying which bitcoin ETF

Gary Gensler’s Securities and Exchange Commission has made a name for itself with its hostility towards cryptocurrency. Time after time, over the last few years, his agency has repeatedly thrown up roadblocks to the common-sense regulation of digital assets and overstepped its regulatory authority.



One of the SEC’s most detrimental actions on digital assets came in the form of a seemingly innocuous memo known as Staff Accounting Bulletin 121 (or SAB 121). SAB 121 is significant because it requires publicly traded banks to place digital assets on their balance sheet. This change contradicts a basic rule of bank custody: that bank custodial assets are always held off-balance sheet. 



As a result, banks are staying on the sidelines. These highly regulated institutions have successfully offered custodial services to the traditional financial system for decades. They are the experts in their field, and keeping them out of this market is making Americans less safe.



The recent approval of the bitcoin ETPs revealed a problem: The bitcoin within these ETPs is not held by banks, and most have the same custodian. 



If Chair Gensler wishes to protect retail investors, he should take this problem seriously. Whether you love crypto or hate crypto, digital assets are here to stay. We need to ensure American investors receive the same protections they would with any other asset class.



The content of the Bulletin is a problem, but the process is arguably even worse. First, Gensler’s SEC issued this bulletin without conferring with the banking regulators — an obvious misstep. Then, they attempted to circumvent the customary regulatory process by issuing a bulletin rather than a rule. Their process foul was so egregious that even the nonpartisan Government Accountability Office threw a flag on it, declaring that SAB 121 is effectively a rule for the purposes of the Congressional Review Act.



Last week, the US House of Representatives had the chance to change the

It’s time to overturn SAB 121

The US Senate plans to vote on Joint Resolution 109 on Thursday, and sources on and around Capitol Hill say they believe the measure will draw enough Democrat support to pass. 



Joint Resolution 109, which passed the House of Representatives last week with bipartisan support, aims to invalidate the Security and Exchange Commission’s controversial Staff Accounting Bulletin (SAB) 121. 



SAB 121, introduced in March 2022 and enacted the following month, states that digital asset custodians should report a liability and “corresponding assets” on their balance sheets for all custodied cryptocurrencies. 



While not an official agency rule, which would have required a public comment period, SEC staff said that SAB 121 is intended to guard against the “significant risks and uncertainties associated with safeguarding crypto assets.” 



In the Republican-controlled House, 21 Democrats voted in favor of passing the resolution. In the Senate, the resolution needs a simple majority to pass, meaning at least two Democrats and all Republican Senators would have to vote in favor. 



Four people familiar with the matter told Blockworks that multiple Democratic senators intend to vote in favor. 



Longtime crypto advocate Sen. Kirsten Gillibrand, D-N.Y., told Blockworks that she will vote in favor of Joint Resolution 109 on Thursday. 



“The rule was issued without proper consultation with the respective regulatory agencies or Congress and without going [through] a proper notice and comment period,” Gillibrand said. 



“More importantly, it imposes an accounting approach that deviates from established standards, forcing financial institutions to count their customers’ digital assets as their own. This will limit options for consumers and leave them with less, not more consumer protection in cases of bankruptcy.” 



Gillibrand last year co-signed a bipartisan letter along with Sen. Cynthia Lummis, R-Wyom., and House Financial Services Committee Chair

Senate predicted to overturn SAB 121 in vote Thursday, Hill sources say

Howdy!



Web3 is helping pay for both my coffee and my cell phone plan. The latter is the subject of today’s newsletter. 



Who said the millennial lifestyle subsidy was dead? 



— Jack Kubinec







How high can Helium float?



It’s been more than five months since Helium Mobile debuted its nationwide cell plan, one of the most ambitious applications of what crypto folks call DePIN (decentralized physical infrastructure) to date. 



For $20 a month, Nova Labs, the developer behind the Helium Network, began offering US residents unlimited data plans. 



Helium Network participants run hotspot nodes that emit cellular coverage, and they’re paid in Solana-based MOBILE tokens for operating these miniature cell towers. In places where no Helium data is available, Nova Labs purchases coverage from T-Mobile. 



The product has gained nearly 90,000 subscribers since its launch, including this newsletter writer. Nova Labs CEO Amir Haleem told me these growth numbers are solid when put in context.



“It looked like in all of last year, AT&T, Verizon, and T-Mobile only added something like 300-400,000 subscribers combined,” Haleem said, adding that Helium Mobile hopes to reach 300,000 subscribers by the end of the year. 



Publicly available data seems to tell a different story: AT&T, Verizon, and T-Mobile each reported millions of new subscribers last year. Nova Labs did not immediately return a request for comment on the discrepancy. 



As a user, I’ll say Helium’s coverage has been as good as any of my past cell carriers. Recently, I enabled discovery mapping, where Helium Mobile pays MOBILE tokens in exchange for location data in order to determine where it needs to create more coverage. On my first day, I earned $0.78-worth of MOBILE — or roughly ½ of a slice of pizza, in New York terms. 



But there’s a question that’s followed the Helium Network for a while now: Can this make money? Nova Labs added another revenue stream in January

Lightspeed Newsletter: Helium eyes the big guys

Two brothers accused of orchestrating an attack last year on Ethereum trading bots have been indicted by the US government. 



The Department of Justice unsealed charges against Anton Peraire-Bueno and James Peraire-Bueno on Wednesday.



The pair are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering after the brothers allegedly tried to “exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds.”



Both were arrested on Tuesday and will face judges in Massachusetts and New York. 



The April 2023 exploit targeted bots that seek profit by essentially trying to front-run transactions on the network. Maximum extractable value, or MEV, referring to the maximum value that can be obtained during transaction block production beyond rewards and fees. 



Read more: Ethereum Validator Goes Rogue, Frontruns MEV Bots for $25M



The Peraire-Bueno brothers sought to “lure” MEV bots from the traders they allegedly targeted by “proposing at least eight specific transactions that…the defendants knew would cause the” targeted bots to include the lure transactions in the bundles, the indictment said. The exploit took advantage of a since-patched code vulnerability in the MEV-Boost software. 



“In each of these eight bundles, the victim traders effectively bought substantial amounts of particularly illiquid cryptocurrencies…for approximately $25 million of various stablecoins.” 



“Through the Exploit, which is believed to be the very first of its kind, Anton Peraire-Bueno and James Pepaire-Bueno manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain. In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims’ cryptocurrency,” a DOJ press

DOJ charges 2 brothers tied to $25M attack on MEV bots last year

Vanguard has said it doesn’t believe in crypto’s investment case, and it doesn’t allow bitcoin ETFs to trade on its platform.



But the fund giant’s new CEO, Salim Ramji, led BlackRock’s ETF business as the company spurred an industry double-take with its bitcoin ETF filing last year. 



So something’s got to give, right? 



Maybe not soon, but ultimately yes, according to Ric Edelman, founder of the Digital Assets Council of Financial Professionals (DACFP).



Ramji was BlackRock’s global head of iShares and index investing before leaving the world’s largest asset manager in January. He started his career leading the firm’s corporate strategy and moved on to become its head of US wealth advisory.



Vanguard said Tuesday that Ramji would succeed Tim Buckley as chief executive on July 8. The firm had revealed in February that Buckley was set to retire by the year’s end.  



Though Ramji left BlackRock the month that US spot bitcoin ETFs gained Securities and Exchange Commission clearance, he was of course involved in the lead-up.



Fast-forward four months, and BlackRock’s iShares Bitcoin Trust (IBIT) has so far led the category with $15.5 billion of net inflows. IBIT trails the segment’s largest fund — the Grayscale Bitcoin Trust ETF (GBTC) — by less than $1 billion in assets under management. 



Read more: Strong start, slowing demand: The first 4 months of US spot bitcoin ETFs        



In a July 2023 interview on Bloomberg TV, Ramji said the company was “incredibly excited” about blockchain technology given its ability to remove considerable “friction” across the financial ecosystem.



The then-BlackRock executive likened the planned bitcoin product to its physical gold ETF — the iShares Gold Trust (IAU) — launched in 2005.



“The gold is held in custody in a vault, which is remote from us, but it’s now easier to transact in gold using our gold ETFs,” he said at the time. “We’re applying that same

Yes, Vanguard’s new CEO supported BlackRock’s bitcoin ETF launch

Circle’s looking to move across the pond. 



The USDC issuer confirmed to Blockworks that its parent company filed the “required paperwork with the High Court of the Republic of Ireland to redomicile the company to the US.”



Bloomberg first reported the news.



Earlier this year, Circle revealed that it confidentially filed for an initial public offering in the US in January of this year. The approach is common and has been used by other companies such as Airbnb and Uber. 



Read more: Circle confidentially files for US IPO



“The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to take place after the [Securities and Exchange Commission] completes its review process, subject to market and other conditions,” the press release said at the time. 



This isn’t the first time that Circle’s expressed interest in a US IPO, though the move from Ireland could suggest that the company is pursuing the traditional approach to going public. 



Circle had previously expressed interest in going public through a special-purpose acquisition company or SPAC. The route — which requires the private company looking to go public to merge with an existing publicly listed shell company — was popular throughout 2021 and 2022. 



While the S-1 filed with the SEC hasn’t been publicly released yet, it shows that the company is pursuing the more traditional IPO model this time around. 



Per SEC rules, potential investors won’t be able to publicly view the S-1 filed with the regulatory agency until 15 days before the company starts its roadshow. This changes, however, to 15 days prior to the registration date if a company chooses to not pursue a roadshow.







Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Circle says it plans to ‘redomicile’ company in the US

We find ourselves in a strange interregnum for crypto policy in the United States. 



On one side, Securities and Exchange Commission Chair Gary Gensler is ramping up an all-out war against the crypto industry, accelerating enforcement actions and saber-rattling, perhaps in anticipation of being replaced after November's elections. The aim seems straightforward: Let’s do as much damage to crypto while we have the chance. 



On the other side, a growing bipartisan group in Congress is working, ploddingly, towards new crypto-focused legislation in an acknowledgment that the current status quo is untenable. 



The slow and steady legislative pace gives Chair Gensler the chance to be the fox in the crypto henhouse while our lawmakers are occupied with other jobs on the farm. 



The insatiable campaign against crypto undermines the work that Congress has done so far to address crypto’s long-standing regulatory quagmire. It’s time the farmers regain control and flush the fox out.



Indeed, Congress has made notable progress towards addressing key regulatory issues, even if their efforts remain imperfect and incomplete. Some of the pieces of draft legislation could prove a net positive for the crypto ecosystem with considered revisions. Rep. Patrick McHenry and Rep. Maxine Waters' yet-to-be-released stablecoin bill has garnered decent bipartisan support and could reach a House floor vote this session. McHenry's FIT21 bill on crypto market structure is headed for a full-House vote at the end of May.  



Just last week, a bipartisan House coalition repealed the SEC's punitive SAB 121 accounting rules for crypto — a clear rebuke of Gensler's aggressive tactics, and a sign there is Congressional appetite to move quicker than the typical glacial speed they are accustomed to with core crypto issues. 



These moves demonstrate that lawmakers at least seem to grasp that if they don't act soon to rein in Gensler's crusade, they may end up protecting just a rump of

It’s time for Congress to protect the crypto henhouse

Robinhood’s European crypto branch launched Solana staking.



The feature will offer roughly 5% APY at launch, though that could vary as staking rewards change, Robinhood Crypto general manager Johann Kerbrat told Blockworks in an interview. 



This puts Robinhood Crypto a tick below Coinbase, which offers an estimated reward of 5.42% for Solana stakers. The Phantom wallet offers Solana staking with an APY as high as 7.58%.



The firm chose Solana for its first staking product because SOL’s one of the most popular tokens among its EU customers, and staking on Solana is simpler than on Ethereum, Kerbrat said.



Read more: Robinhood’s crypto trade volume rose 10% in February



(Bitcoin is the most-held crypto among EU customers, Robinhood said in a press release.)



Kerbrat mentioned that the company was drawn to Solana’s shorter bonding period — the amount of time it takes before newly-staked assets begin earning yield. Solana’s bonding period is roughly two days, while Ethereum’s varies from a few days to a few weeks.



When asked if Robinhood Crypto would add staking for additional assets — like Ethereum — in the future, Kerbrat said “we are definitely thinking about it,” but declined to go into specifics. 



Robinhood Crypto launched in December as a crypto trading app in the European Union. The entity is registered and regulated in Lithuania, according to a Robinhood blog post. The company’s crypto arm noted that its app is highly downloaded by users in Poland, Italy and Lithuania.



Read more: Robinhood looks to jumpstart crypto trading revenue via EU expansion



Robinhood Crypto lists 33 tokens, as opposed to Robinhood’s US trading app, which only offers 15 crypto assets — even fewer in New York and Texas. 



SOL and Solana memecoins including BONK and DogWifHat are available in the EU but not the US.



Robinhood’s US arm delisted Solana — among other cryptocurrencies alleged by the US Securities and Exchange

Robinhood enables Solana staking for customers in Europe

Hiya!



Markets may be down slightly, but that’s not the main thing bumming me out today. Last night, I took a train all the way up to Queens just to see the Mets blow a 9th-inning lead. What even is a “Phillie?”



Anyways, let’s talk Solana.







Pandora’s Box of L2s



Solana’s lack of layer-2s has long been a point of pride for some Solana supporters. 



Rather than relying on a fragmented and expanding network of blockchains to scale à la Ethereum, why not just move to a blockchain fast and cheap enough to keep everyone in the same building?



But since fast things can always be faster, and cheap things cheaper, the layer-2 bug appears to be coming for Solana. 



Zeta Markets announced a $5 million raise Tuesday, partially to build a DeFi layer-2 on Solana. Electric Capital led the round, which added to the $8.5 million Zeta Markets raised in a 2021 seed round led by Jump Capital. 



Zeta Markets currently runs a regular derivatives DEX — the fifth-largest on Solana, according to DefiLlama. By adding a layer-2 to the mix, it wants to make its DEX as fast as a CEX.



Zeta Markets founder Tristan Frizza told me that he’s always been a “monolithic chain maxi,” but when you’re letting traders take big leverage on derivatives, market makers want to see some really low latency.



“Solana does what, 400 millisecond block times? But these guys are used to like 10 milliseconds on Binance,” Frizza said.



Off-chain centralized exchanges can basically figure out the price of assets faster than decentralized exchanges, which are slowed down by the underlying blockchain’s throughput. In some cases, savvy arbitrageurs can exploit the momentary differences in price — to the detriment of DEX liquidity providers. 



So, there are justifiable reasons beyond snake oil sales for why Solana would want to build layer-2s. Still, it bears notice that Solana co-founder Anatoly Yakovenko — who invested in this Zeta Markets round — appeared

Lightspeed Newsletter: Solana caught the layer-2 bug

On-chain social network infrastructure Lens is getting a new home.



The new Lens Network will build upon the work of the original Lens Protocol as one of zkSync’s ZK Stack hyperchains.



Lens Lab develops the protocol under the umbrella of Avara, which also built DeFi giant Aave.



But Avara CEO Stani Kulechov told Blockworks that the non-financial use cases of crypto — citing identity and online social interactions — have the potential to be even bigger.



“The way I think about finance and social [spaces] is that there are a lot of people who have financial capital, but everyone on the planet has social capital — the content we create, the relationships we create and the identities we interact with,” Kulechov said.



Read more: Web2 social media kinda sucks. So why aren’t people using Web3 platforms?



The ZK Stack chain will serve as a “central hub” for Lens, which, according to a blog post released Tuesday, will “seamlessly integrate with other EVM and non-EVM blockchains.”



A testnet release of the new network is still months away. The current version of Lens has been operational on Polygon’s PoS chain since May 2022.



The modular, open-source ZK Stack framework, based on the zkSync Era code, will provide Lens with horizontal scaling, connecting as many Lens chains as needed by zk bridges, according to Matter Labs CEO Alex Gluchowski.



“You can add one billion users and you will not lose any of the properties of verifiability,” Gluchowski told Blockworks. “Every single transaction of those millions and billions of users will be verified by every single Ethereum validator — which is the magic of zk,” he said.



Lens pioneered on-chain social infrastructure, but was initially conceived and developed at a time when zk rollup technology was still seen as years away from production at scale.



Read more: ZkSync launches rival to Optimism’s OP Stack



“We want to build something that enables open and fair social

Lens Network to migrate to zkSync

A Bloomberg headline recently claimed that "more than 90% of stablecoin transactions aren’t from real users,” sparking concern about the authenticity of transactions within the blockchain ecosystem. 



This isn’t the first time that the digital assets industry has faced scrutiny about an apparent lack of authenticity in transactions. Last year, the SEC accused Binance.US of inflating trading volumes. Way back in 2019, a study by Bitwise found that 95% of spot bitcoin trading volume by unregulated exchanges was faked. Both findings have their detractors.



This isn’t the first moral panic around crypto’s legitimacy, and it won’t be the last.



However, a deeper dive into this “more than 90%” figure reveals a more nuanced narrative. A narrative, in fact, that oversells the fraudulent nature of crypto and severely undersells the transformative nature of blockchain technology.



The cited source for this headline, a collaboration between Allium and VISA, introduces a dashboard that attempts to differentiate between "organic" stablecoin transactions initiated by end consumers and businesses versus transactions orchestrated by computer programs. 



This differentiation, while well-intentioned, fails to grasp the unique execution model of blockchain technology.



Blockchain technology operates on a fundamentally different paradigm compared to traditional payment rails. At its core, blockchains are decentralized, immutable ledgers maintained by a network of nodes. Transactions on blockchains are executed through smart contracts, which are self-executing agreements with contract terms directly written into code.



Unlike centralized payment systems where transactions are initiated and validated by trusted intermediaries, blockchain transactions are triggered by external actions interacting with smart contracts. These actions can be programmatically executed by automated processes — commonly referred to as bots — without the need to extend any trust