On Monday, the experimental currency Ore won $50,000 from a Solana Foundation-supported hackathon focused on identifying Solana’s “next wave of high-impact projects.”



“High-impact” presumably refers to Ore’s potential for making a positive change to Solana’s adoption figures. But so far, Ore’s impact has been more like a gut punch: The project halted mining in mid-April after the avalanche of network usage from mining the currency made it difficult for Solana users to get their transactions included in blocks.



Ore is an experiment in using the proof-of-work security mechanism on the Solana blockchain. PoW systems essentially pay miners native currency rewards in exchange for computing power that makes blockchains difficult to attack. Bitcoin is secured in this fashion, in contrast to Solana, which combines a system called proof-of-history with proof-of-stake, Ethereum’s chosen consensus mechanism. 



Read more: Solana price falls further as Ore suspends mining on the network



Ore rewrote a more egalitarian version of the Bitcoin protocol as a Solana smart contract, the project’s pseudonymous creator Hardhat Chad explained in a demo video. Unlike Bitcoin, which gives 3.125 bitcoin to the fastest miner to return a certain cryptographic hash every ten minutes, Ore is set up where multiple miners can win a sliver of the network’s block rewards. An average of one ORE is created every minute, split between successful miners.



For many in Solana’s speculation-loving ecosystem, the idea of “Bitcoin on Solana” was simply too juicy to pass up, and Ore mining transactions drove up activity and soon clogged the network. One miner posted about “blindly sending millions” of transactions every second in hopes that some would land.



Amid the flurry of usage, Solana users saw more and more of their transactions being dropped rather than included in blocks, and Solana developers rushed to patch the overloaded network. Perhaps mercifully,

Solana congestion culprit Ore wins $50K from hackathon

A crypto bull market, coupled with the still-uncertain regulatory environment is going to create the perfect storm for increased enforcement actions, US Commodity Futures Trading Commission Chairman Rostin Behnam said. 



“We find ourselves with a growing market, growing capital [and] investments, growing market capitalization, and I think a renewed interest by a lot of the entrepreneurs,” Behnam said Monday during a discussion at the Milken Institute’s Global Conference in Los Angeles. 



“From my standpoint, as a regulator, we're going to probably see in the next six to 18 months or six to 24 months another cycle of enforcement actions.” 



Without action from Congress and increased regulatory transparency, Behnam added, agencies are going to lean more heavily on lawsuits. 



Read more: Bank Secrecy Act vs crypto: A new DOJ lawsuit revives old tactic



“If you actually count the number of [Congressional] working days between now and the election…it’s really not that much time,” Behnam said when asked about the odds of any of the crypto-related bills making it to the floor for a vote in the House and Senate. 



“Getting legislation done these days is difficult,” he added, but noted that there is “momentum” and “desire” from lawmakers to close some of the regulatory gaps around crypto, particularly with regards to stablecoin legislation. 



Behnam’s comments come days after retail trading platform Robinhood announced it received a Wells notice from the US Securities and Exchange Commission. Securities regulators plan to proceed with an enforcement action relating to cryptocurrencies traded on the exchange, Robinhood said in a filing Saturday. 



“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our US crypto business,” Dan Gallagher, Robinhood’s

CFTC’s Behnam warns crypto industry that more enforcement actions are coming 

Hong Kong’s newly launched spot crypto ETFs might help us predict what ether ETF demand could look like in the US. 



Or not. 



Either way, the new funds offer a jumping-off point, so to speak, for considering the current differing investor appetites for ETH and BTC and how that could evolve.



The Securities and Exchange Commission approving spot bitcoin ETFs in January offered exhilaration during a month often marred by the holiday hangover. 



Many wondered what the demand for these long-awaited products would amount to out of the gate, and long-term. Another common question after the industry’s regulatory victory: When will we see spot ether ETFs? 



After all, ether is the second-biggest crypto asset by market capitalization, with its $370 billion market cap nearly a third of bitcoin’s $1.25 trillion. US issuers started trying to launch spot ETH products as far back as 2021.



Not to mention ether has a regulated futures market, and (whaddya know) the SEC already approved ETFs that hold ETH futures contracts. Those launched last October.



Though the regulator is set to rule on spot ether products sometime this month, it remains unclear when the SEC could ultimately allow those to trade. 



Read more: Ether ETFs coming in May? Here’s why many are bearish



But aside from the launch timeline, the other question is what demand will be if and when they do debut. 



Between ether futures ETF asset bases, US spot bitcoin fund flow data and the seed capital for Hong Kong bitcoin and ether offerings, perhaps we start to paint a picture. 



Or maybe crypto-related fortune telling — even with data inputs — is a fool’s game.



Trying to make sense of the numbers anyway 



Hong Kong’s six new spot crypto ETFs — three bitcoin funds and three ether funds — opened $292 million worth of seed capital, according to Farside Investors data.   



The bitcoin funds attracted significantly more of the initial capital, with ether ETF day one assets

What Hong Kong crypto ETFs may tell us about US ETH fund appetite

The Grayscale Bitcoin Trust (GBTC) converted to an ETF nearly four months ago. 



It took that long for the fund to see its first day of net inflows. 



That unprecedented event occurred on Friday, when GBTC saw $63 million in net money enter the ETF, according to Farside Investors data. 



Read more: Why tracking bitcoin ETF flows matters. And why it doesn’t.



GBTC had suffered net outflows for 78 days before that — piling up to equal $17.4 billion.



Just don’t expect the GBTC inflows to become a regular thing, one segment observer says.



“It’s difficult to discern what might be behind the flows into GBTC,” said Nate Geraci, president of The ETF Store. “ETF buyers are an extremely diverse group with varying motivations. That said, I would be surprised if the inflows become a trend.”



Part of the reason it will have a hard time consistently attracting new money? Its cost, Geraci noted.



Industry watchers have attributed GBTC’s constant asset spillage to the fund’s fee of 1.5% — a much higher level than its 10 competitors in the US. 



Beyond the fee, bankrupt lender Genesis was among those offloading its GBTC holdings, contributing to the asset exodus from the fund.   



And still, Grayscale holds the assets under management lead in the category. GBTC manages roughly $18.1 billion in assets, while BlackRock’s iShares Bitcoin Trust (IBIT) is close behind with about $16.9 billion.



Grayscale has defended its higher fee, previously pointing out GBTC’s “market-leading liquidity, tight spreads, high trading volumes and a decade-long track record of operational success.”



“While GBTC can still hang its hat on ample liquidity and tight spreads, there are now competing products which can boast the same,” Geraci told Blockworks. 



The crypto asset manager also filed to set up the Grayscale Bitcoin Mini Trust (BTC), which would cost a fraction of GBTC’s price. The company has not yet revealed a final proposed expense

Bitcoin ETF snapshot: GBTC surprise helps end sector’s seven-day outflow run

Take it to court!



Crypto’s long been regarded as the “Wild West” and one of the biggest reasons that the comparison still sticks — despite how far the market has come since Satoshi’s days — is because of the regulation via enforcement approach that some government bodies have taken (looking at you, Gary Gensler).



But now it looks like the Department of Justice is trying to join the Securities and Exchange Commission’s ranks, at least when it comes to unlicensed money transmission. 



The DOJ is alleging, in two separate cases, that wallet developers should be charged with the violation. 



As CoinCenter’s Peter Van Valkenburgh pointed out last week, this approach marks a change for the DOJ. Since roughly 2013, the stance from other arms of the government had been that developers and users of non-custodial wallets weren’t transmitters. 



But it looks like the DOJ has changed its mind, at least in the Tornado Cash and Samourai Wallet cases.



Read more from our opinion section: Samourai Wallet matters more than your memecoins



CoinCenter broke down the historical context, highlighting that FinCEN — the Treasury’s financial enforcement bureau — said in 2013 that crypto could be a value “that substitutes for currency” but that it’s not inherently a currency or “funds.”



FinCEN’s 2019 guidance also backed this up. 



“The person participating in the transaction to provide additional validation at the request of the owner does not have total independent control over the value,” the agency wrote at the time.



Van Valkenburgh said the Tornado Cash developers — the DOJ is taking aim at Roman Storm and Roman Semenov in this case — and the Samourai Wallet founders didn’t have “any actual control over the cryptocurrency that users of the tool owned.”



Read more: Tornado Cash arrests spur privacy debate



“Under clear and long established FinCEN guidance and under any common sense reading of the underlying

Empire Newsletter: The DOJ's about-face on money transmitters

… independent investment advisory firm.






Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The future of tokenization? Permissioned blockchains

Robinhood Crypto has received a Wells notice from the SEC, according to a Monday disclosure. 



Robinhood, according to an 8K disclosure, said that the US securities regulator had probed “among other topics, RHC’s cryptocurrency listings, custody of cryptocurrencies, and platform operations.”



The company received the notice Friday. The SEC uses Wells notices to inform investigation subjects about pending enforcement actions. 



According to Robinhood, the stock and crypto trading app company faces an enforcement action stemming from alleged violations of the Securities Exchange Act. 



“The potential action may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities,” Robinhood said. 



The company said it had cooperated with the SEC’s investigation so far. 



“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business,” Dan Gallagher, Robinhood’s chief legal and compliance officer said in a statement. 



“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law,” Gallagher continued. 



A spokesperson for the SEC told Blockworks that the regulatory doesn’t comment “on the existence of nonexistence of a possible investigation.”



The firm is set to announce earnings on Wednesday.



Read more: Robinhood reports crypto revenue of $43M in Q4



Robinhood’s reveal represents the latest Wells notice issued by the SEC to a firm that does

Robinhood discloses Wells notice over its crypto business

Antonio Villaraigosa, the former mayor of Los Angeles, has been hired as a policy adviser for Coinbase.



Villaraigosa, who served as the mayor of LA between 2005 and 2013, will join the cryptocurrency exchange’s global advisory council.



Faryar Shirzad, the chief policy officer at Coinbase, wrote in a post on X that Villaraigosa will advise the leadership team at Coinbase to advance “economic freedom around the world.” 



“When 18% of America is underbanked, including 25% of Black & Hispanic households, it means the traditional financial system doesn't work for everyone. It's time to update the system,” Shirzad wrote.



According to the LA Times, Villaraigosa will not lobby on behalf of the global exchange but will only advise the company on developing a fair and robust regulatory framework so that it can provide services for US-based customers, noting that crypto participants “need regulatory protection.”



Paradigm special counsel leaves 



Rodrigo Seira, the special counsel of the crypto-focused venture capital firm Paradigm, has resigned and returned to Cooley LLP, a law firm where he previously worked.



Seira served at Paradigm for two and a half years and helped spearhead the company’s policy lab. He was also a founding member of blockchain and crypto-focused law firm DLX Law.



Former Citibank executive joins BitGo



Brett Reeves, a former Citibank executive who has been in the banking industry for over two decades, will join BitGo, a scalable wallet solution, to expand EMEA Sales.



Reeves most recently held the position of head of business development at Bequant, a digital asset prime broker. He previously held roles at Citibank, Nomura and Standard Chartered Bank in Singapore.







Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Hiring roundup: Former LA mayor joins Coinbase

Coinbase’s layer-2 blockchain Base has welcomed the second iteration of its Onchain Summer, where it will be inviting builders and creators to bring more users onto the blockchain.



To mark the initiation of the event, Base will be hosting a month-long online hackathon beginning June 3 with 200 ETH (~$613,200). worth of rewards to be distributed to finalists. 



In total over the Summer, over 600 ETH (~$2 million) will be offered to creatives in the form of grants, prizes, and gas credits. 



Base launched its mainnet in August last year with Optimism’s OP stack and has quickly become one of the most popular L2s today. According to L2Beat, it currently has a TVL of $5.52 billion and an estimated total market share of 14.18%.




Onchain summer is back.We’re inviting builders, creators, brands, and artists to co-create Onchain Summer with us, and Base and our partners are offering over 600 ETH ($2 million) in prizes, grants, and gas creditsWhat are you building?https://t.co/MykF3JSh1i— Base 🛡️ (@base) May 2, 2024




According to a blog post by Base, the previous Onchain Summer saw over 700,000 mints from over 268,000 different wallets and collaborated with companies such as Coca-Cola, FWB, Parallel, anotherblock, and others.



NodeMonkes becomes the most popular Bitcoin NFT



NodeMonkes has become the most popular Bitcoin NFT by market capitalization, with a total market cap of 3,979 BTC ($246 million) and a floor price of $24,603, according to CoinGecko. 



The collection consists of 10,000 8-bit digital collectibles designed to feature animals, predominantly monkeys. Its market cap briefly surpassed that of Bored Apes in March this year and is the 7th most traded NFT in the past 24 hours. 



Another Bitcoin NFT worth noting is Bitcoin Puppets, which surpassed NodeMonkeys in 24-hour trading volume. Bitcoin puppets currently have a market capitalization of 3,230 BTC (~$199 million) and a 24-hour sale price of 0.31 BTC (~$19,200).



One

Web3 Watch: Base kicks off Onchain Summer 2.0

Venture capital firm Andreessen Horowitz (a16z) has privately purchased $90 million worth of Optimism’s OP token.



According to Unchained Crypto, the investment will be subject to a two-year vesting period and is one of the largest crypto investments that the venture capital firm has made to date. 



The purchase was made prior to a16z’s most recent fundraise, during which the venture capital giant disclosed that it had secured $7.2 billion to invest in American Dynamism, Games, Apps, Infrastructure, and Growth.



Read More: A16z raises $7.2B



Ex Revolut exec secures $6.5M for new hybrid exchange



Ruslan Fakhrutdinov, former head of crypto ops at Revolut, has secured $6.5 million to create his own new hybrid exchange, x10.



X10 has the typical features of a centralized exchange, but also offers full-custody and settlement on-chain, enabling its users to perform DeFi perpetuals trading with fast latency and throughput.



“We want to give our users and traders the best of both worlds. Imagine the features and the speed of Coinbase or Binance but with full self-custody,” Fakhrutdinov said in a press release reviewed by Blockworks. 



Fakhrutdinov added, “The FTX situation, where users only got back a third of their funds, serves as a wake-up call for the industry. It urges us to reinforce trust and efficiency in crypto trading through on-chain trade settlement, validation, and self-custody.”



Other notable fundraises this week:




STYLE Protocol secures $2.5 million to fuel interoperability among digital worlds



AI infrastructure company Wisdomise concludes $9.5 million funding round to accelerate product and community development



Wasabi lands $3 million in a seed round led by Electric Capital








Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Funding Roundup: a16z made a $90M bid on Optimism

Imagine spending countless hours upgrading your race car in your favorite game, fine-tuning every detail and unlocking new features as you play to make it both beautiful and blazingly fast…only to lose it forever when you stop playing the game. 



What if you could truly own and monetize your in-game creations? Enter the world of tokenized user-generated content (UGC).



Throughout history, humans have prized self-expression and individuality. And in the gaming sphere, this desire has reached new heights with the rise of UGC. Games like Roblox and Minecraft — which average hundreds of millions of players monthly — have revolutionized the industry by empowering players to create worlds, characters, and experiences.



Yet, one key aspect is missing in the majority of these types of games: true ownership. 



While players can create and share content, they have little control over how it’s used or monetized. They spend hours making worlds and upgrading in-game items that add massive value for a studio, driving player retention and enjoyment, without benefiting from the rewards. 



Think about it. The average Fortnite player spends a whopping ten hours a week playing, and some of the most popular builds in the game are player-created. Epic Games (its creator) is directly benefiting from the time these players put into playing and building in the game.



How can we address this challenge and empower players with real ownership and fairer rewards for their creations? 



Tokenization offers a transformative solution.



By representing in-game assets as unique non-fungible tokens (NFTs) on the blockchain, players can assert ownership rights and track their creations’ provenance securely. Smart contracts can automate royalty payments, ensuring fair compensation for player contributions. 



To demonstrate this further, imagine if my daughter’s Lego car creation was tokenized. By creating a digital token or NFT of the car, she can formally certify it as

Gaming needs tokenization

Those keeping tabs on the crypto industry (this writer included) have been quick to refresh pages of daily bitcoin ETF flow data and digest them.



News headlines have kept segment observers up to date on the money going into, and more recently leaving, these funds. 



The pent-up angst over the U.S. Securities and Exchange Commission’s long term refusal to approve spot bitcoin ETFs left many speculating about the potential investor capital these products would attract out of the gate. 



There were also considerations about whether this demand would be enough to spur further interest, in order to draw both retail and institutional investors, along with their capital, into the crypto space.



We now have the initial data to answer some of these pressing questions.



On day one, the funds tallied trading volumes of $4.5 billion, and $655 million of net inflows. By two months in, after the category welcomed $1 billion in assets on March 12 alone, the funds’ inflows amounted to $11.1 billion.



The total stands at about the same level today as momentum has slowed in recent weeks.   



Continued GBTC outflows have coincided with stalled demand for the category’s most consistent flow-gatherers: BlackRock’s iShares Bitcoin Trust (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC). 



And in an unprecedented turn Wednesday, 10 of the funds — including those by BlackRock and Fidelity — each saw outflows, spurring a $564 million exodus on the day.



Read more: BlackRock, Fidelity bitcoin ETFs bleed Wednesday, joining GBTC



With this background established, we can now zoom out to examine the broader implications of bitcoin ETF flows.



Bitcoin ETF flow impact 



Because bitcoin is a speculative investment, inflows and outflows typically dictate price moves, said Bryan Armour, director of North America passive strategies research at Morningstar.  



After all, bitcoin ETFs actually buy and hold bitcoins. The number of bitcoins in circulation will