🌪️ Storm's a-brewin'

Gm. 

We made it to Friday, and what a week it’s been, both in the news and in the markets. 

So today I’m giving you a mix of both. We’ll chitchat about the latest developments in Roman Storm’s case, and then I’ve got some market data for you.

Have a great weekend, and I’ll see you bright and early Monday.

⚖️ Off to trial

The Department of Justice will continue its case against Tornado Cash’s Roman Storm. 

Previously, the DoJ said it was going to reconsider, after an internal memo from Deputy Attorney General Todd Blanche said that the department would “stop participating in regulation by prosecution in this space.”

There was a slight change in the case, per the letter, which will drop the charge of Storm allegedly not complying with the money-transmitter business registration rules. 

Storm now faces a trial, and the remaining charges are focused on money laundering. 

ICYMI: Storm is one of the founders of Tornado Cash, which has had a bumpy road with the US government (though it recently received a court win when a judge ruled it can’t be sanctioned again by the government). The DOJ initially charged Storm back in 2023 alongside his co-founder Roman Semenov. 

In the April memo from Blanche, he outright said that the DOJ will focus its cases on the bad actors who are using the various platforms, rather than the platforms or the developers themselves. 

Here’s Blanche’s direct quote: “The Department will pursue the illicit financing of these enterprises by the individuals and enterprises themselves, including when it involves digital assets, but will not pursue actions against the platforms that these enterprises utilize to conduct their illegal activities.”

The DeFi Education Fund noted that the dropped charge is “consistent” with the April memo.

It seems that, even with the changes, this potential trial sets up a tricky situation — with the US just opening up, is there a possible precedent set legally that could impact developers? 

Potentially.

Variant Fund’s Jake Chervinsky said in a post on X that the case “should end, period.”

Back in April, Paradigm chief legal officer Katie Biber wrote, “If developer liability is unlimited and tied to the conduct of unknown third parties, no developers will want to build in America. It destroys the innovation economy here and ships crypto, AI & all nascent tech offshore.”

DEF, in another post, said that the case moving forward with the current charges means that the prosecutors are arguing that Storm “‘[transferred] funds on behalf of the public,’ pursuant to 1960(b)(2), which means the accused must have custody and control over other people’s funds.”

“That is plainly not the case with software devs of noncustodial p2p protocols, and under any fair reading of the law, both charges should be dismissed,” DEF continued. 

So now Storm heads to trial, and this could be a very important one to keep an eye on for the space.

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We’re ending this week on some high notes: Bitcoin’s holding on to six figures, and even ETH’s in the green.

In a note earlier this week, K33 pointed out that the ETHBTC weekly performance was the strongest since 2022. 

“We believe ETHBTC’s consistent weakness over the past few years has led ETH to become a crowded short-leg, exaggerating the price impulse once liquidity fundamentally emerged from the buyside,” analysts wrote. 

But on the BTC front, traders seem to remain more cautious, per CME data. 

While open interest saw a spike earlier this month, it’s since lost that momentum. 

“The daily spike in OI, accompanied by the spike in the basis and the following retracement, suggests that traders quickly jumped the gun, adding fuel to the fire by longing during BTC’s push higher before realizing profits in the following days. For now, exposure remains high compared to April levels but significantly below its December peak,” K33’s Vetle Lunde wrote. 

And now you know.

While we’ve talked about the heavyweights, I want to zoom out and look at the landscape. This week, the app Believe became a popular topic over on CT, and it’s been one I’ve been mulling. 

Basically, the idea is the same as what we’ve heard before. Let’s call them memecoins with a twist. Empire co-host Jason Yanowitz, in this week’s Round Up, called it a “marketing twist,” and that’s also a fair assessment. 

For Believe, the narrative is that venture capitalists should be out of the picture, and it wants projects to raise the necessary funds through a token launch. 

I actually don’t have issues with the premise, but I am curious about the execution. Crypto notoriously has a bit of a short attention span, and once things fall off, they don’t really bounce back. However, if something like Believe can help projects raise some funds to build something unique that may not be a concept VCs are willing to put money behind, then I’m all for it. 

After seeing Zora — and the way that entire scenario played out — I’m even more cautious about folks buying into a project. With Zora, it was all we heard about for almost a week and then it just…stopped. 

I don’t think what happened with Zora is to blame for the short-attention span effect. It felt like there was a short-term push to get the project and the content coin idea into the CT discourse, which was promptly abandoned. 

Long-term, I think there’s definitely merit in memecoins, but perhaps it’s time to quit trying to give them some unique narrative.

Last week, I asked: How bullish are you on the US?

The majority of you are ready for the US to be the crypto capital. Yay!

But that’s not to say emerging markets aren’t important, and clearly they’re near and dear to a lot of folks, given that it was the runner-up. 

This week, I’m wondering: How’re we feeling about memecoins?