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It’s finally Friday. 

Safe travels to those heading home from the Digital Asset Summit, or for anyone commuting from anywhere outside their house (fine, safe travels from your desk to your couch too). 

A lot happened this week — doesn’t a closing bell sound kind of nice right about now?

Too bad this is crypto and we’re always on, baby. Let’s just hope for very little volatility this weekend. 

See you bright and early Monday.

⛏️ Mining the fine print

The SEC has spoken: certain mining activities — specifically proof-of-work mining, a key element of bitcoin — don’t fall under US securities rules. 

“It is the Division’s view that participants in Mining Activities do not need to register transactions with the Commission under the Securities Act or fall within one of the Securities Act’s exemptions from registration in connection with these Mining Activities,” the SEC said in a statement yesterday.

The prevailing sentiment about the news: hooray for clarity! 

“This announcement is another indication that the SEC intends to provide regulatory clarity regarding crypto assets,” Pillsbury’s Daniel Budofsky said.

However, commissioner Caroline Crenshaw (the only Democratic commissioner) was not too pleased by her agency’s statement. 

Her critique is that the statement sounds nice, but she’s cautious that some people might read too much into it and assume that they’re in the clear if there is a way for the Howey test to be successfully applied to their operation. 

“The statement leaves us exactly where we started: with a facts and circumstances application of Howey. For the sake of investors, other market participants, and the markets themselves, I hope that readers do not mistake it for something more than it is,” she noted. 

While I get her caution — crypto loves to jump to conclusions before talking to a real lawyer — the statement seems to give enough clarity on what actually doesn’t stand up to the Howey test. 

“By stating that proof-of-work mining activities (including solo and pool mining) are not securities transactions, the SEC is paving the way for growth in this segment of the crypto industry. What is particularly interesting is how the SEC has framed this under the Howey test, showing that they have not fully abandoned their traditional framework for evaluating when digital assets constitute securities,” Budofsky told me. 

The big takeaway — nitty-gritty details aside — is that we continue to get much-needed clarity. 

Pair that with the potential passing of crypto-specific legislation in Congress by August and it’s hard to keep the bullish attitude at bay.

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After watching hours of DAS panels of institutions being bullish on crypto, I have one thought: VC isn’t dead. 

I’m somewhat joking, but I think there are some really strong takeaways about the current state of venture capital in crypto. 

And they didn’t all come from the venture capitalists themselves!

Take, for example, the Empire round-up filmed live on stage. It featured Avara’s Stani Kulechov, Skale’s Jack O’Holleran and, of course, Santiago Santos and Jason Yanowitz. 

Empire starts at the 1:19:40 mark. 

One of the topics they discussed was the size of raises today, with Yanowitz asking whether mega-raises — or funding rounds over $150 million — are here to stay.

O’Holleran said that huge funding rounds “paint yourself into a corner.”

“ It's a little counterintuitive thinking, Oh, give me all the cash and more ownership. But the reality is we see this in the market today, where that valuation is if you start here and it just goes here, that's not a good look. It's not good for the decentralized efforts of the community,” he added.

O’Holleran said that he actually becomes a “little bit pessimistic” when the mega raises come in, and I get it (though to be clear, I just get more nosy). 

It’s honestly why, in my role in the space, I prefer covering smaller raises, which I’m sure y’all have noticed. I don’t always think it’s a bad thing to go out and raise a ton of money if it’s necessary, but I think the smaller raises give you a real inside baseball look at what the firm’s trying to build. 

O’Holleran said that he thinks the “right amount” when talking about larger raises would be around $50 million. That makes sense — it’s enough money to have a nice cushion and it’s not too much money that’ll start “flying around” and not be used well, to O’Holleran’s points. 

Kulechov seemed to agree, noting that it’s all about the resources.

And now you know. 

The other part of my takeaway comes from a different panel: Do VCs still matter? 

Blockworks Research analyst Boccaccio was joined by Dragonfly’s Haseeb Qureshi and 6MV’s Mike Dudas and had the two defend venture capital. 

(Sidenote: Whoever put Qureshi on a panel with Dudas deserves all the praise because those two had so much chemistry it was hard not to be amused.)

While Qureshi very quickly answered the panel's big question — telling Boccaccio “I’m a VC…I still matter” — I thought Qureshi’s later point that VCs are a resource for the firms they invest in to be an important point — and one, perhaps, that gets lost in the critiques of VC. 

Now, I know this sounds overly supportive of VCs. I’m mindful that there are still a lot of reasons to be cautious of how they influence the space and temp check whether they’re actively helping the industry. This newsletter isn’t seeking to give them a hall pass by any means, just so we’re clear.

Anyway, after talking about the fact that — specific to crypto — folks who got in early on a token or who follow a project closely sometimes demand a token-go-up scenario without always acknowledging the project is working on more than just price action. 

“The value of VC is that we get it...we understand what you're building and we can actually help,” Qureshi noted. 

Dudas later noted that the truth is also important when being a crypto VC. As he later put it on X:

Both Qureshi and Dudas cautioned that not all VCs are good VCs — a salient point to remember. 

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Last week, I asked: If you had to pick, what’s the narrative you’re most interested in?

50% of you are “all about that ETH,” while a few of you are really digging the death of memecoins. 

I’m calling out the one person who said that they’re too cool for narratives. Are you really even in crypto?

This week, I’m wondering: