Grayscale wins lawsuit against SEC, while the agency settles first NFT case and Friend.tech hype crashes

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If you’ve been dreaming about bitcoin spot ETFs, it’s time to talk to someone outside of the crypto world. This is coming from someone who literally had a dream about them this week. Pray for me.

There were cheers throughout the crypto community this week as Grayscale won its lawsuit against the SEC in regards to its bitcoin spot ETF application. While there’s still a 45-day review period, many believe this is a step in the right direction.

Although this was a win for the digital asset firm, the SEC was also making headlines separately for its suit against an NFT project, which was fined $6 million.

Meanwhile, in decentralized social media land, the Friend.tech hype — which I covered and highlighted community skepticism about — has fallen as daily transactions plummeted. Details below.

This week in web3

As appeals court rules in favor of Grayscale, a bitcoin spot ETF could be on the horizon
Grayscale’s legal head says bitcoin spot ETF approval is a ‘matter of when, not if’
SEC settles first NFT enforcement case, fines LA media company $6M
Friend.tech gets unfriended: Daily transactions drop 95% as hyped decentralized social app loses steam
MoonPay launches venture arm to invest in web3 infra, gaming and fintech
Bitcoin startups remain undercapitalized as funding drought drags on

The latest pod

For this week’s new episode, Jacquelyn interviewed Craig Salm, chief legal officer at Grayscale Investments.

Grayscale is a digital asset investment firm that aims to provide products and services, like its Grayscale Bitcoin Trust (GBTC), to institutional and individual investors. The company was founded in 2014 and is one of the world’s largest digital asset currency managers. It currently owns 3.4% of outstanding bitcoin, “worth tens of billions of dollars,” according to a recent legal filing.

As mentioned above, the firm was making headlines this week after the D.C. Circuit Court of Appeals ruled in favor of Grayscale in a lawsuit against the U.S. Securities and Exchange Commission (SEC) on the matter of a bitcoin ETF. This ruling is in response to the SEC denying Grayscale’s application to convert its GBTC product into a bitcoin spot ETF in June 2022.

We discussed why the ruling matters for Grayscale and its GBTC investment vehicle; as well as what it could mean for the crypto ecosystem and other firms like BlackRock, Citadel and Fidelity that also filed applications for bitcoin spot ETFs.

We also talked about the SEC’s argued difference between bitcoin futures ETFs, which have been approved by the agency, and bitcoin spot ETFs, which have not been approved by the agency.

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Follow the money

NFT-focused startup FirstMate raised $3.75 million in a round led by Dragonfly Capital
Web3 engagement platform Raleon raised $3.8 million in a seed round
Coral Finance obtained $500,000 in capital from Momentum Capital
Web3 infrastructure startup Ironmill raised $2.6 million in funding
Builder DAO raised $2 million in a round led by Sequoia China and Seven X Ventures

This list was compiled with information from Messari as well as TechCrunch’s own reporting.