🍗 Kentucky-fried crypto

“The Avengers of Ethereum” have a new treasury vehicle that’s set to manage $1.5 billion of ether. 

The Wall Street Journal first reported the new company, The Ether Machine. Kraken, Pantera and Electric Capital were among the investors. 

Andrew Keys, who called the group the Ethereum Avengers in an interview with the WSJ, was an early member of Consensys. In fact, most of the team — per the announcement — is ex-Consensys. 

Other leaders of the new entity include David Merin, who will take the helm as CEO, and Jonathan Christodoro, formerly of Icahn Capital, was named as vice-chairman. 

The strategy is three-fold per its own post: Generate alpha, catalyze the ecosystem, and build infrastructure solutions. 

Now to see how it stands out in a very crowded space.

⛏️ Digging deeper

Crypto Week, in the end, was a roaring success. 

President Donald Trump signed the GENIUS bill at the end of last week, which not only means that he signed the first stablecoin-focused legislation into law, but it’s also quite a significant crypto milestone. 

But it’s not the end. There are still two other pieces of legislation making their way through the DC process currently: the CLARITY Act and the anti-CBDC bill. 

Paradigm’s Alexander Grieve explained on the Empire podcast this morning that he thinks GENIUS was “a baseline” for Congress, and was pretty easy for legislators to understand. 

Sidenote: a fun anecdote from Grieve is that “one of the unsung heroes of the GENIUS lobbying fight was a very plucky group of KFC franchisees who blanketed the Hill and talked about how stablecoins can drive down the cost of payments and interchange.

One of the recurring topics that comes up in my conversations with folks, and a sentiment I know I’ve expressed multiple times in this newsletter, is how GENIUS is one of the key puzzle pieces that institutions have been waiting for to make their own moves.

Bank of America, which first expressed its desire for a stablecoin a few months ago, reiterated its position in an earnings call last week. Then we also had Charles Schwab’s CEO talking about stablecoins on its earnings call. 

But the thing about GENIUS is that it doesn’t just open the door for anyone to issue a stablecoin. 

For example, we probably won’t see the likes of Libra, the project announced by Facebook before it pivoted to Meta and all that jazz. 

Basically, Grieve explained, if “financial services isn’t core to your business, then you cannot be an issuer,” according to the new legislation. 

“ If those types of companies want to do anything in this space, they're going to leverage stuff that others have already built. And so you'll still have that kind of segregation between the customer and the issuer themselves.”

That’s not to say we won’t see non-financial firms looking for — and probably finding — workarounds to this in what both Grieve and Jito Labs CLO Rebecca Rettig noted as “creative lawyering,” but it at least sets a bar. 

At the end of the day, GENIUS sets the momentum for the other two pieces of legislation, and Rettig noted that she’s interested in seeing what happens with the CLARITY bill in the “next month or so.”

We’re so back.

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📅 October 13-15 | London

• Another M&A announcement: Sanctum acquired Ironforge. 

• Chainalysis warned that wallet theft in Europe and the Middle East is on the rise.

• Thailand’s SEC is tightening the country’s ICO rules by implementing investor tester mandates.