Melega Crypto News Recap: Grayscale’s SEC Victory; NFTs As Securities; Bitboy Crypto Sacks Ben Armstrong; and More (August 27–September 02)

Hey, crypto champs! This is MelegaSwap, the world’s leading decentralized ecosystem. Welcome to the latest edition of the weekly cryptocurrency news roundup, where we will uncover the most interesting news about the crypto market from August 27 to September 2, 2023.

5 min readSep 4, 2023

Just like last week, when the crypto market remained relatively quiet in terms of price movements, Bitcoin has only dipped by 0.05% over the past seven days. However, it experienced a notable surge, climbing from $26,000 to well above $28,000 following Grayscale’s legal victory against the SEC, only to subsequently return to its current price of $25,900.

The previous week brought a slew of intriguing cryptocurrency regulatory developments, though some were less favorable. In addition to the major stories covered in this crypto news roundup, a New York court officially categorized Bitcoin and Ethereum as commodities, dismissing a lawsuit against Uniswap. This marks a positive development for the entire crypto community.

Should we anticipate further positive developments in terms of regulatory clarity for cryptocurrencies or the approval of a Bitcoin spot ETF? This post delves into some stories that may offer insights into what we can expect in the near future.

TOP CRYPTO NEWS RECAP (AUGUST 27 — SEPTEMBER 2, 2023)

Grayscale wins SEC lawsuit for Bitcoin ETF review
DOJ is trying to stop SBF’s expert witnesses from testifying
SEC charges NFT project with securities law violations
Ben Armstrong is no longer part of “BitBoy Crypto.”
Former SEC Official Suggests Criminal Investigation in Binance Case Due to Document Sealing
US SEC postpones its decision on Bitcoin ETFs.

Grayscale wins SEC lawsuit for Bitcoin ETF review

Grayscale Investments has won a lawsuit against the U.S. Securities and Exchange Commission (SEC) for its refusal to review its application for a Bitcoin exchange-traded fund (ETF). The SEC had previously rejected Grayscale’s application, arguing that the Bitcoin market was not sufficiently regulated to support an ETF.

However, a federal judge ruled that the SEC’s decision was arbitrary and capricious, and ordered the agency to review Grayscale’s application within 60 days.

DOJ is trying to stop SBF’s expert witnesses from testifying

The U.S. Department of Justice (DOJ) seeks to disqualify all seven expert witnesses in the Sam Bankman-Fried (SBF) trial. According to the DOJ, SBF’s experts lack sufficient disclosure and may mislead. They argue the witnesses’ testimony might not relate to the case, citing that there are already experts on issues like FTX’s code, among others.

The DOJ says there is no need for separate ‘expert’ witnesses when factual witnesses suffice. If granted, this affects witnesses including Lawrence Akka, a barrister; Thomas E. Bishop, with tax expertise; Brian Kim, a digital forensics expert; Joseph M. Pimbley, a derivatives specialist; Professor Bradley Smith, a campaign finance expert; Dr. Peter U. Vinella, a financial industry expert; and Professor Andrew Di Wu, a blockchain specialist.

Meanwhile, SBF’s team also contests a financial analysis expert’s testimony proposed by the prosecution, arguing it may not be allowed.

SEC charges NFT project with securities law violations

On August 28, 2023, the SEC took action against a Los Angeles entertainment company for an unregistered sale of non-fungible tokens (NFTs), totaling $29.9 million in value. These NFTs, known as Founder’s Keys, were offered as investment contracts, promising investors substantial returns. The SEC’s move highlights their focus on NFT issuer marketing.

The Company promised NFT holders various benefits, including access to exclusive content, discounted NFT purchases, and even educational courses. The SEC found fault with statements suggesting high returns and the Company’s efforts being integral to profits.

The Company settled without admitting wrongdoing, agreeing to pay $500,000 in fines, disgorge $5,120,718.27 in gains, and pay prejudgment interest of $483,195.90. They must also destroy the implicated NFTs.

Notably, two SEC commissioners dissented, questioning whether this case warranted enforcement and how NFTs should be treated in general.

Ben Armstrong is no longer part of “BitBoy Crypto.”

A screenshot shared by Bitcoin author Jason A. Williams reveals the exit of Ben Armstrong from “Hit Network/BJ Investment Holdings,” including BitBoy Crypto. Armstrong confirmed the move, hinting at internal conflict. The reason behind his departure remains unclear, with some linking it to his involvement with meme coins, but there is no solid proof yet.

However, Hit Network cites “substance abuse” and “financial damage” for parting ways with Armstrong, a claim he denies. Armstrong was previously involved in a class-action lawsuit related to the FTX promotion and had a history of controversial statements and actions on social media.

Former SEC official suggests criminal investigation in Binance case due to document sealing

The U.S. SEC has made an unusual move in its case against Binance, filing a sealed motion with more than 35 exhibits. This step has sparked speculation, with many suggesting it’s to avoid interfering with a larger DOJ investigation or due to sensitive forthcoming charges.

However, legal experts, crypto enthusiasts, and experts—including a former SEC official, John Reed Stark—believe this sealed motion could relate to money laundering allegations or other criminal misconduct. It’s a significant development, with over 35 exhibits in play, hinting that something substantial is on the horizon.

US SEC postpones its decision on Bitcoin ETFs

The U.S. Securities and Exchange Commission (SEC) has pushed back decisions on spot Bitcoin exchange-traded fund (ETF) applications from major firms, including BlackRock, WisdomTree, and Invesco Galaxy, until October. This delay dashed hopes for a swift crypto market recovery, causing Bitcoin to drop below $26,000. Ethereum, Litecoin, Bitcoin Cash, and many other top coins also took hits, while a few of them saw modest gains.

The SEC’s delay, likely due to the recent Grayscale ruling, suggests a growing possibility of a spot Bitcoin ETF approval this year, signaling a potential shift in the crypto market.

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