24th March 2025 > > US regulation.

tl;dr

The Spring Sprint will bring regulatory clarity to the US.

Market Snap

Market Wrap

A pleasant start to the week with $90k back in sight once more. With probably the worst of the news about the Trump Tariff Wars now in the price of all risk assets, there is scope potentially for better news ahead.

Curious Cryptos’ Commentary – The Spring Sprint

The recently formed SEC’s Crypto Task Force – one of Trump’s early Presidential Orders following his re-election – held its first roundtable open to the public on Friday. Titled as “The Spring Sprint Toward Crypto Clarity”, the inaugural session’s topic was “How We Got Here and How We Get Out – Defining Security Status”:

https://www.sec.gov/newsroom/meetings-events/how-we-got-here-how-we-get-out-defining-security-status

In the title alone we can already see the dramatic turn-around that is about to be unleashed on crypto regulations, for it acknowledges the current situation is unacceptable and untenable all thanks to Gensler, Warren, and her anti-liberty and anti-freedom army. The sunny up lit lands are just around the corner.

Opened by SEC Commissioner and all-round crypto heroine Hester Pierce, her comments were as upbeat and positive as one would expect, reinforcing that the SEC will now work in constructive partnership with the crypto industry.

These public roundtables are an opportunity for the Crypto Task Force to both express its opinions and its work-in-progress publicly, and to receive feedback. With a report due in June covering a range of topics from regulation to the feasibility or otherwise of a US Strategic Bitcoin Reserve (spoiler alert – yes) the coming months’ roundtables will give us a clear steer on what the initial report will conclude.

Meanwhile, here are two action points that Hester and her team should address with urgency.

Curious Cryptos’ Commentary – The first job

On Friday (https://www.curiouscryptos.com/post/27th-february-2025-interregnum-1-1-1) we saw that MiCA and the German financial regulator BaFin had outlawed algorithmic stablecoin USDe, the heart of the ENA ecosystem, from Germany, and by extension the whole of the EU (the other countries’ regulators are not going to argue with the Germans on this financial matter). USDe utilises the cash and carry trade and is guaranteed to one day implode at a time when the financial markets generally are going through one of their periodic bouts of deleveraging.

Now Sonic Labs is about to launch its own algorithmic stablecoin which is also guaranteed to crash and burn at some stage. How do I know this you ask? It will be offering a yield of 23% at launch to holders, a return that is multiples of the yield on offer from cash and cash-like instruments. Andre Cronje, co-founder of Sonic Labs, made this rather worrying statement:

“Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement.”

His team have not “cracked” algo stable coins. The PTSD is a reference to the sudden destruction of the LUNA/Terra ecosystem, brought down by another supposedly unbreakable algorithmic stablecoin.

Hester and her team must legislate against any stablecoin that is not more than 100% backed by cash and cash-like instruments with at least a monthly audit of the assets held by a regulated custodian. No other options come anywhere near being acceptable.

Feedback so far is that Hester is very much in agreement with the CCC.

Curious Cryptos’ Commentary – The second job

Yesterday Trump described the Trump meme coin (in which his family has a large financial interest) as the “Greatest of them all” leading to an immediate 10% bump in the price.

There are two obvious problems with this.

Firstly, the demeaning of the office of the President of the United States with such activity will cause lasting damage to the moral guardianship that the US leads on for the world (Russia, China, Iran, or the UN, anyone?).

Secondly, price action of this nature brings crypto markets into disrepute, whether legal or not.

Hester and her team must somehow navigate this tricky area. Personally, I do not know what the solution looks like, but a solution must be found. I have full confidence that is what Hester will achieve.