The Weekly Wrap: BlockFi v SEC, Sequoia Crypto Fund, BTC mining reduces CO2 emissions

1. BlockFi SEC Settlement

The Facts:

• BlockFi agreed to pay $100 million as part of its settlement with the SEC.
• The settlement comes after the lending firm was charged on terms of failure regarding proper registration of its high-yield Blockfi Interest Accounts (BIAs).
• The SEC categorized BIAs as securities, which they were never registered as. In addition, BlockFi overstated the overcollateralization of its loans, misleading is protection from defaults.

Why it’s important:

• The SEC is catching up on unregistered products categorized as securities, while in this case the market was generally informed about the state of missing registration since the launch of its product in 2019.
• BlockFi will not be able to take in any new assets from investors until its registration of a new crypto lending product.

2. Sequoia Crypto Fund

The Facts:

• The California based Venture Capital firm has designated more than $500 million to its Sequoia Crypto Fund.
• Sequoia intends to signal its commitment to the crypto market and community.
• The fund will be focused on liquid tokens and digital assets with a preference for DeFi protocols.

Why it’s important:

• Sequoia Capital is one of the more prominent VCs establishing itself in the crypto market. Their commitment signalizes the perception of the market and its growing potential.
• The news comes only two weeks after the VC led the $450 million investment round in Polygon.
• Roughly 4 years after the infamous ICO boom, market entries of large financial institutions have become a regular occurrence, showing an equal sign of maturity and opportunity.

3. BTC mining used to reduce carbon emissions?

The Facts:

• Oil giant ConocoPhillips is running at pilot project where gas excess is routed to BTC miners.
• The gas which would have otherwise been burned off (flaring) is sold to a third party, which processes the energy to power its mining operation.

Why it’s important:

• Oil and gas companies have been battling with accidental discoveries of gas formations found when drilling for oil. While oil can easily be transported, gas is dependent on existing pipelines.
• The pilot project seems to be successful since the process reportedly reduces CO2-equivalent emissions by about 63% compared to continued flaring.

In other news

• Hong Kong metaverse ETF. (via forkast)
• Coinbase Super Bowl ad. (Crypto Potato)
• NYSE NFT Marketplace. (Reuters)
• Ukraine legalizes crypto. (Bitcoin Magazine)

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