The Ledger: Ethereum vs. SEC, Tether vs. Bitcoin, Ripple vs. Stellar

It’s a dazzling afternoon by the water in lower Manhattan—the Hudson River is glistening in the sun, the yachts are glinting in the marina—and yet one light outshines it all: Anthony Di Iorio’s shoes.

The cofounder of Ethereum has the whitest white sneakers I’ve ever seen, so scuff-less and out-of-the-box smudge-less that my first question is just how? We are outside, after all. Wearing a solid navy blue baseball cap, tinted-blue hexagonal aviators and an equally white hoodie when we met this past Tuesday, Di Iorio explains: The secret is a travel shoe cleaning kit—plus a bottomless collection of white sneakers, permitting him to switch out for a new pair every month.

An ancient Mexican clock hangs on his necklace—a gift from EOS cofounder Brock Pierce. Surrounded by a small entourage that includes a bodyguard in a suit and coiled earpiece, Di Iorio, whose cryptocurrency fortune is estimated at as much as $1 billion, looks so much like a celebrity that a couple of tourists approach me after our lunch. Who was that guy I was interviewing—was he famous? they wanted to know. Not wishing to dox Di Iorio or his whereabouts to strangers, I simply replied, “Oh, he’s in the cryptocurrency industry.”

Just saying the words felt like a throwback to another time, another day when cryptocurrency prices weren’t plunging, when people weren’t talking about Bitcoin exchange hacks, mining scams and app store bans. The following day, the Bitcoin price fell to its lowest point all year, $6,261.

And then it occurred to me: This weekend marks six months since Bitcoin hit $20,000 on December 17, 2017; we’ve now slid nearly 70% of the way back down. Even the memory of that exuberant run-up got a face full of cold water this week when the New York Times published the findings of a new study that attributed 50% of Bitcoin’s rise last year to market manipulation.

Not that Di Iorio, founder and CEO of blockchain company Decentral (which makes the Jaxx cryptocurrency wallet) is fazed. Nor does he have any shame in telling a reporter that he purposely pays little attention to news, though he observes that there’s been “a lot more negative sentiment in the media” this year, largely to do with regulatory threats to crack down on cryptocurrencies.

Di Iorio had spent part of last week on Capitol Hill, meeting with roomfuls of regulatory officials and lawmakers, trying to ease them away from black-and-white definitions for categorizing cryptocurrencies, and coaxing them to see things through his vision of the future. “To recognize the potential of this technology is going to be bigger than the Internet,” says Di Iorio. “Nothing’s going to stop it. The cat’s out of the bag.”

Indeed, the U.S. Securities and Exchange Commission seemed to rely partly on the cat-out-of-the-bag argument Thursday when it announced that it had ruled Ethereum out as a security, saving the cryptocurrency from a catastrophic regulated fate that Marc Andreessen himself sought to prevent. Despite the resemblance between Ether’s original token sale to a securities offering, “the present state of Ether, the Ethereum network and its decentralized structure” make it virtually impossible to put it back in the bag, the SEC acknowledged: “As a network becomes truly decentralized, the ability to identify an issuer or promoter to make the requisite disclosures becomes difficult, and less meaningful.”

If Di Iorio had any indication about the SEC’s plans, he didn’t let on—other than to take notice of a clue the night before: Coinbase had announced it would add Ethereum Classic, forked out of the Ethereum blockchain, to its cryptocurrency exchange. Coinbase, which has been careful not to list any cryptocurrencies that might be a security, would likely only add Ethereum Classic if it was sure Ethereum and its kin had officially escaped the label.

Meanwhile, New York regulators also awarded their sixth-ever BitLicense to Xapo, the second such license issued in the span of a month—a new record pace for the agency, whose molasses-like approval pipeline I wrote about in my last installment of this newsletter. My prediction then that more BitLicense approvals are on their way down the pike now seems to be coming to fruition.

And though it may be June, I can almost hear the jingle bells ringing again, harking back to the holiday season ’17 rally. I remembered the mug I’d ordered on Amazon on impulse while shopping for a birthday gift for a friend earlier this year (naturally, I went with the Bitcoin money clip). It makes me happy every time I open the cabinet. “I’m dreaming of a crypto Christmas,” the mug says.

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