Morning Minute is a daily newsletter authored by Tyler Warner. The views and analyses presented are his own and may not represent those of Decrypt.

Good Morning!

Here are the key highlights of today’s news:

  • Major cryptocurrencies are showing positive movement, with SOL leading the pack; BTC is up 0.5% at $64.4k.
  • The SEC has proposed its first formal regulations for cryptocurrency with the introduction of Regulation Crypto Assets.
  • Vlad Tenev has shared insights on “Tokenized Stocks in America,” urging lawmakers to update securities regulations.
  • Citi is set to offer Bitcoin custody services for institutional clients.
  • Bitcoin ETFs have reported $487 million in net inflows to kick off the week.

🏛️ SEC Proposes First Formal Crypto Regulations for Token Fundraising

For the past ten years, the SEC has managed crypto fundraising primarily through enforcement actions, targeting individual token issuers without providing clear guidelines. This approach is now changing.

Yesterday, the SEC introduced “Regulation Crypto Assets,” marking its first formal attempt at crypto regulation. This framework establishes two routes for token sales that do not require SEC registration.

The first option permits a one-time capital raise of up to $5 million over a four-year span, while the second allows for raises of up to $75 million within a 12-month period, reflecting the Reg A+ Tier 2 mini-IPO framework established by the JOBS Act. Both options necessitate narrative disclosures that resemble whitepapers more than traditional registration statements, with the $75 million tier requiring financial statements and ongoing reporting. Additionally, these rules would override state registration mandates for exempt offerings and certain secondary trades.

A critical safe harbor provision is also included. According to the proposal, a qualifying token would no longer be classified as an investment contract once the issuer has fulfilled or definitively halted all promised managerial efforts. SEC Chairman Paul Atkins links this framework to the Token Safe Harbor concept proposed by Commissioner Hester Peirce in February 2020, which has been a longstanding request from the industry.

This represents a significant departure from the SEC's previous stance. The 2017 ICO boom was effectively quashed when the SEC deemed token sales as unregistered securities offerings, leading to a series of lawsuits. Since then, many projects have developed around this ruling, utilizing structures like Cayman and Swiss foundations, restricting sales to non-U.S. buyers, and creating programs designed to circumvent the classification of sales. These adaptations arose from the absence of a legal option onshore.

Now, with the introduction of clear regulations for token sales in the U.S., an influx of ICOs is anticipated if these proposed rules are enacted.

🌎 Macro Crypto and Markets

  • Major cryptocurrencies are in the green, with SOL in the lead; BTC up 0.5% at $64.5k; ETH up 1% at $1,920; SOL up 2% at $77.40; HYPE down 2% at $58.60.
  • Notable altcoin movers include ZRO (+10%), GNO (+10%), and PUMP (+7%).
  • Oil has risen 1% to $85.80; Gold is down 1% at $4,420.
  • Stock futures are stable as oil prices continue to climb; DOW remains steady, while Nasdaq has dipped 0.2%.
  • Vlad Tenev, CEO of Robinhood, has urged U.S. lawmakers to modernize securities regulations to allow domestic trading of tokenized stocks, highlighting that Robinhood's Stock Tokens cover over 190 U.S. equities in more than 120 countries but are not available for U.S. customers.
  • BitBox issued an emergency firmware update after engineers, aided by frontier AI models, discovered two critical flaws in BitBox02, with no signs of exploitation and no funds lost.
  • Citi is planning to launch Bitcoin custody services later this year as part of its new Custody+ suite, enabling institutional clients to manage both crypto and traditional securities within the same framework.
  • Wyoming's Stable Token Commission has transitioned its FRNT stablecoin from LayerZero to Chainlink CCIP following a security assessment.
  • Cypherpunk Technologies has deployed the largest active Zcash mining operation accounting for approximately 18% of the network's hashrate, funded by a $33.33 million equity investment from Winklevoss Capital.
  • The FBI may have pinpointed the initial attackers responsible for July's Coldcard exploit, as Block's investigation found that the hackers' on-chain activities corresponded with request patterns recorded by a blockchain data provider.

Corporate Treasuries & ETFs

Meme Coin Tracker

  • Meme coin leaders showed positive movement; DOGE up 1%, SHIB up 1%, PEPE up 1%, PENGU up 3%, TRUMP unchanged, BONK up 1%.
  • Robinhood’s chain experienced significant rebounds with Stonkbroker up 14%, PONS up 10%, HMM up 67%, and AI up 50%.
  • Solana leaders included Cyberleek (+23x), 67 (+50%), and Toad (+27%); Ansem continues to decline, dropping another 10% to $240 million.

💰 Token, Airdrop & Protocol Tracker

  • Kaito launched Pulse, a browser extension that integrates users' public Polymarket and Hyperliquid positions into the X timeline, featuring a new attention metric named Aura.
  • Mantle has relaunched its website as a platform for open financial networks, facilitating access to global capital markets.
  • MoonPay added Cash App Pay as a payment option, allowing eligible U.S. customers to purchase crypto directly from their Cash App balance.

🚚 NFT Developments

  • NFT leaders showed mixed results; Punks up 1% at 32.2 ETH, BAYC down 1% at 7.9 ETH, Pudgy down 1% at 3.78 ETH; Stonkbrokers fell 6% to 7 ETH.
  • Hypurrs (+16%) and Fuego (+20%) were among the top gainers.
  • Rektguys announced their new mint, set to mint on OpenSea this Friday at 12 PM ET for a price of 0.02 ETH each.

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