Trump courts Bitcoin miners as corporate Bitcoin holdings grow, and Terraform Labs settles with SEC

June 17, 2024
Francisco Memoria

DATA from CryptoCompare shows that the price of Bitcoin dropped by around 5.5% over the past week after failing to remain above the $70,000 mark, with the sell-off leading to a low under $65,000 before a slight recovery saw BTC move to $66,000.

Ethereum’s Ether, the second-largest cryptocurrency by market capitalisation, dropped by nearly 5% over the week as well amid a wider cryptocurrency market sell-off, seeing a low below the $3,400 mark before recovering to now trade at around $3,525.

Headlines in the cryptocurrency space this week partly focused on former US President Donald Trump’s approach to the cryptocurrency space, which involved a meeting with a group of Bitcoin miners this week at his Mar-a-Lago estate.

During the meeting, the Presidential candidate expressed his understanding of cryptocurrency and, according to those in attendance, said he’d be an advocate for cryptocurrency miners’ interest in the White House. On his social media platform Truth Social, Trump has recently declared Bitcoin mining could be “our last line of defense against a CBDC [Central Bank Digital Currency]” and voiced his desired for all remaining Bitcoin to be “MADE IN THE USA”.

Trump’s campaign efforts have been increasingly focusing on Bitcoin and digital assets as he connects with new voter demographics. The Presidential candidate has recently sought counsel from tech magnate Elon Musk, and vowed at a Libertarian Party convention to commute the sentence of Silk Road founder Ross Ulbricht, while his campaign has started accepting cryptocurrency donations via Coinbase Commerce.

Meanwhile, a Coinbase study has revealed that Fortune 100 companies increased their Web3-related projects by 39% year-over-year to a new high in Q1, while 56% of Fortune 500 firms have said they are actively developing blockchain-based initiatives.

Terraform Labs and CEO Do Kwon to Pay $4.5 Billion in SEC Settlement

To settle civil fraud charges brought by the U.S. Securities and Exchange Commission (SEC) the entity behind the collapsed Terra blockchain, Terraform Labs, along with its former CEO Do Kwon, agreed to pay a combined $4.5 billion and be permanently barred from buying and selling cryptocurrency securities.

The regulator accused Terraform Labs and Kwon of misleading investors about the stability of the ecosystem’s stablecoin TerraUSD (UST), which was designed to maintain a 1:1 peg with the U.S. dollar but became nearly worthless during the ecosystem’s collapse in May 2022, triggering a wider crypto market downturn and leading to an estimated $40 billion in losses for investors.

Over the week the SEC also started reviewing an application for a spot Ethereum exchange-traded fund (ETF) from asset manager ProShares, with its filing coming after the SEC approved 19b-4 filings from eight other spot Ether ETFs.

The regulator will need to approve these ETFs’ S-1 registration statements before trading can begin, and its Chairman Gary Gensler has said that these filings are being held at the “staff level.” Gensler said that final approvals for spot Ether ETFs could be granted by summer’s end.

The SEC has been active in the cryptocurrency space and identified several cryptocurrencies as securities in lawsuits against Binance and Coinbase. The performance of these tokens, as analyzed by CCData, has been mixed.

Twelve assets identified as securities by the regulator saw price increases, with Solana and NEAR Protocol seeing 668% and 311% rises since the lawsuits, while assets including DASH and Voyager Token lost 35% and 32% of their value respectively.

MicroStrategy Plans $700M Debt Offering to Expand Bitcoin Holdings

Nasdaq-listed business intelligence firm MicroStrategy has over the week announced the pricing of a $700 million debt offering due in 2032 to fuel further Bitcoin purchases, having raised the offering from $500 million to $700 million to meet investor demands.

The debt, in the form of convertible senior notes, will be sold in a private offering to qualified institutional investors and will carry a 2.25% annual interest rate. They mature in June 2023, and MicroStrategy retains the option to redeem them early under specific circumstances after June 2029.

Meanwhile, Nasdaq-listed Semler Scientific a leading developer of technology products for healthcare providers, purchased an additional 247 bitcoins, amounting to $17 million in cash to bring its total BTC holdings to 828 coins acquired at an aggregated $57 million.

Similarly, Japanese investment firm Metaplanet purchased an additional ¥250 million ($1.6 million) worth of Bitcoin, taking its total BTC holdings to 141, worth around $9.4 million. MicroStrategy remains the largest corporate holder of Bitcoin with 214,400 BTC on its treasury worth around $14 billion.

Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.