BTC flares up

The Washington, D.C., Circuit Court today ruled in favor of Grayscale in its lawsuit challenging the SEC’s decision to disallow the conversion of Grayscale Bitcoin Trust (GBTC) to an exchange-traded fund (ETF) which is expected to have potential ramifications for the door to such vehicles being thrown open. Bitcoin quickly shot up 5% from $26K to above $27K on the news.

XDC Network is today’s top performer. Its native XDC tore off a 19% gain since this time yesterday. The 45th-largest digital asset seems to be surging on the back of recent momentum tied to this past weekend's XDC Blockchain Innovation Conference showcasing the strides that the network, billed as an EVM-compatible chain with enforceable smart contracts, has taken trying to digitally transform trade finance.

A quirky, relatively sizable institutional asset class, the trade finance tent comprises a rich tapestry of collaborative use cases involving banks, investors, importers, exporters, goods, crops, raw materials, freighters, containers and an array of participant risk mitigation strategies.

Most Top 40 digital assets (in terms of total market capitalization) are slightly green over the past 24 hours. A few are slightly red. And then there’s Hedera Hashgraph, down 4.5%.

The decline comes ahead of a token unlock event later this week. Some 1.15 billion HBAR tokens (3.48% of total circulating supply, or $64 million dollars' worth) are set for release on Thursday, per TokenUnlocks.

The last HBAR unlock, at the end of May, saw some 1.3 billion tokens enter circulation. At that time, HBAR was about a nickel. By August 15, HBAR had risen to nearly seven cents while its market capitalization topped $2 billion. Over the past two weeks, however, HBAR fell 27%. HBAR is No. 31 on the CoinGecko list of largest coins by market cap.

An unlock connotes the end of a lock-up for a certain group of token holders, such as early investors and project members, prevented, for a period of time, from selling, so as to avert a scenario in which there is an overabundance of sell pressure.

Sui is another project gearing up for an increase in circulating supply. CoinDesk, citing TokenUnlocks, says that Sui, often labeled as a rival to Solana, plans to increase its allocation of tokens earmarked for staking subsidies from 967,740 to 1 million.

SUI, the 94th-largest digital asset, per CoinGecko, is straddling 51 cents after falling 6% in the past 24 hours.

While neither admitting nor denying any wrongdoing – but definitely making some history – a little-known entertainment company, Impact Theory, on Monday agreed to pay $6 million in financial penalties to settle charges brought by the U.S. Securities and Exchange Commission which accused the company of conducting an unregistered securities offering in the form of non-fungible tokens (NFTs). It’s being called a landmark case and could be only the start of a coming squall of similar enforcement actions, market observers say.

The SEC claimed that, in Q4 of 2021, Impact Theory rolled out a three-tiered project, known as "Founder’s Keys." It was offered and sold to investors by way of an ambitious pitch that included phrases such as "trying to build the next Disney" and "tremendous value," and, per the SEC, represented investment contracts – and therefore constituted securities – resulting in securities laws violations.

“Impact Theory encouraged potential investors to view the purchase of a Founder’s Key as an investment into the business,” the SEC said in a press release.

Two commissioners, Hester Peirce and Mark Uyeda, issued a dissenting statement: “The NFTs were not shares of a company and did not generate any type of dividend for the purchasers,” they said, questioning the SEC’s utilization of the Howey test to determine whether NFTs could be deemed as investment contracts. “We do not routinely bring enforcement actions against people that sell watches, paintings or collectibles," Peirce and Uyeda said.

Their views underscore the kinds of deeper, broader questions the SEC should consider tackling before bringing any additional individual NFT-related cases, the commissioners added.

As for Forkast Labs' Yehudah Petscher, the NFT strategist isn't anticipating any quiet period.

“Expect more projects to have charges filed against them in the near future," Petscher said.