[News Brief] Apr 22, morning | SEC Reviews New Regulatory Framework for On-Chain Financial Markets Including DeFi

The U.S. Securities and Exchange Commission (SEC) is considering new rules for on-chain financial markets and related software applications, according to Odaily.

SEC Chair Paul Atkins said software protocols such as those used in DeFi do not fit neatly into the existing regulatory categories of exchanges, brokers, or clearing agencies. He explained that a single protocol can simultaneously perform trade execution, collateral management, liquidity routing, and settlement functions.

The remarks were interpreted as a sign that the SEC is taking a more open approach toward the digital asset industry. The agency is also reviewing potential exemptive relief for tokenized securities and efforts to clarify the classification framework for digital assets.

According to SoSoValue data, U.S. spot Bitcoin ETFs recorded total net outflows of $146 million on May 8 Eastern Time.

The largest net outflow came from Fidelity’s FBTC, which saw $97.6041 million leave the fund. FBTC’s cumulative net inflows stand at $11.134 billion.

During the same period, the largest net inflow went to Morgan Stanley’s ETF MSBT, which attracted $5.7385 million. MSBT’s cumulative net inflows total $194 million.

As of the time of reporting, total net assets of spot Bitcoin ETFs stood at $106.611 billion, representing 6.67% of Bitcoin’s total market capitalization. Cumulative net inflows were $59.34 billion.

According to Whale Alert, 2,751 BTC was transferred from Coinbase to an anonymous wallet.

The transfer was worth about $220.57 million. Large BTC transfers out of exchanges may be interpreted as changes in custody arrangements or possible over-the-counter transactions.

According to PANews, the Venezuelan government has once again emphasized a nationwide ban on cryptocurrency mining in response to the energy crisis.

Authorities said power generation reached 15,579 megawatts on May 7, the highest level in nine years, citing extreme heat and rising electricity demand driven by economic growth.

The government stated that there is an “absolute nationwide ban on digital mining” and warned that violators may face legal penalties. Authorities also said they have prepared a monitoring plan to enforce the ban.

The chief counsel of the SEC’s crypto task force said legislation on Bitcoin and crypto market structure would strengthen the SEC’s efforts to clarify market regulation.

The source was Bitcoin Magazine. The remarks came as discussions continue in the U.S. over how to organize the regulatory framework for digital assets. The market structure bill is focused on clarifying oversight authority and regulatory standards for digital assets.

According to Odaily, LayerZero Labs said its internal RPC was attacked by the Lazarus Group over the past three weeks, compromising the actual source of its Decentralized Verifier Network (DVN), while external RPC providers were also hit by DDoS attacks.

The incident is believed to have affected 0.14% of applications and approximately 0.36% of asset value. LayerZero Labs said assets are currently safe and that more than $9 billion has been processed cross-chain through the protocol since April 19.

To strengthen security, LayerZero Labs said it will discontinue its 1/1 configuration DVN service and shift default routing to multi-DVN configurations of at least 3/3 or 5/5. Regarding past cases involving improper use of hardware wallets by multisig signers, the company said it removed the signer involved, replaced the wallets, and developed a custom multisig system called Onesig.

According to SoSoValue data, spot Ethereum ETFs posted total net inflows of $3.5747 million on May 8 Eastern Time.

The product with the largest inflow was BlackRock’s ETHB, which accounted for the full day’s total net inflow of $3.5747 million. ETHB’s cumulative net inflows stand at $82.7645 million.

As of the time of reporting, total net assets of spot Ethereum ETFs stood at $13.732 billion. ETF net assets accounted for 4.94% of Ethereum’s total market capitalization, while cumulative net inflows reached $12.087 billion.

Whale Alert said 25,000 ETH was moved from Binance to Ether.fi.

The transfer was worth about $57.978554 million. The large transfer of ETH from an exchange to an external platform is drawing attention over whether it was intended for holding or staking.

According to Odaily, on-chain analytics firm CryptoQuant said recent gains in Bitcoin could lead to increased profit-taking in the market.

CryptoQuant said Bitcoin has risen more than 20% since early April, but it still views the move as a “bear market rally.”

It added that a short-term holder profitability indicator has remained above 1, suggesting investors have continued taking profits since mid-April. However, it noted that even if selling pressure increases, it may take time before any actual price correction appears.

According to PANews, on-chain analyst Ai Yi said F2Pool co-founder Wang Chun withdrew 7,461 ETH from Binance about five hours ago and deposited it into Spark.

The amount was worth about $17.27 million. Exchange outflows are often interpreted as a sign of reduced selling pressure, though the actual purpose of the transfer has not been confirmed.