5 Things to Know in Crypto Today – Kim Kardashian Grabs the Headlines

Key Insights:

• The Securities and Exchange Commission diverted attention away from the case against Ripple, with Kim Kardashian the latest victim.
• Despite White House efforts, US lawmakers are unlikely to roll out a comprehensive crypto regulatory framework in 2022.
• Fed fear subsided on Monday, with US economic indicators suggesting the Fed could take its foot off the gas.

The Securities and Exchange Commission is Back in the News

Last Thursday, the SEC lost another key Court ruling, tipping the scales of justice in favor of Ripple Lab and the co-defendants. While the SEC v Ripple case has been ongoing since December 2020, the SEC has filed numerous claims and delivered punitive fines.

On Monday, the SEC charged Kim Kardashian for ‘Unlawfully Touting Crypto Security.’

According to the SEC press release,

“Kardashian agreed to settle the charges, pay $1.26 million in penalties, disgorgement, and interest, and cooperate with the Commission’s ongoing investigation.”

The SEC charged Kardashian for touting a crypto asset security on social media without disclosing the payment she received for the promotion. Other celebrities will likely be in the SEC’s sights, with Kardashian now assisting the SEC.

Gary Gensler said,

“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto-asset securities, it doesn’t mean that those investment products are right for all investors.”

Gensler added,

“Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities.”

US Regulatory Framework Makes Slow Progress Despite SEC Activity

The US Financial Stability Oversight Council released a report titled Report on Digital Asset Financial Stability Risks and Regulation.

The FSOC falls under the US Department of the Treasury and is tasked with “identifying risks to the financial stability of the United States; promoting market discipline; and responding to emerging risks to the stability of the United States’ financial system.”

Notably, the report highlights the Council’s focus on digital assets. The FSOC placed the onus on lawmakers to progress regulations on crypto spot trading.

US Treasury Secretary Janet Yellen spoke at the Financial Stability Oversight Council meeting on Monday, concluding,

“In all, these reports provide a strong foundation for policymakers as we work to mitigate the risks of digital assets while realizing the potential benefits. They also provide a valuable addition to the public’s understanding of digital assets.”

On Monday, the United Nations warned of a central bank-induced recession. On Monday, the United Nations released the 2022 Trade and Development Report. The first line of the report setting the tone,

“The world is headed towards a global recession and prolonged stagnation unless we quickly change the current policy course of monetary and fiscal tightening in advanced economies.”

However, the UN report did not reference cryptos specifically, leaving the crypto market to respond favorably to weak US economic indicators.

US Economic Indicators Continue to Dictate Crypto Sentiment

On Monday, the crypto market ended a three-day losing streak. US economic indicators delivered much-needed support. In September, the ISM Manufacturing PMI fell from 52.8 to 50.9. However, the employment and new order sub-components eased bets of another 75-basis point Fed rate hike.

In September, the Employment Index fell from 54.2 to 48.7, with the New Orders Index sliding from 51.3 to 47.1.

The crypto market reaction to the PMI numbers is evident in the hourly chart.

This morning, bets of a 75-basis point Fed rate hike in November eased.

According to the CME Group FedWatch Tool, the probability of a 75-basis point hike stands at 56.1%.  This is down from 62.5% on September 27. The chance of a 50-basis point rate hike is up from 37.5% to 43.9%. Notably, there are no bets of a percentage point hike.

Later today, US JOLTs job openings will also influence ahead of Friday’s nonfarm payroll figures.

Celsius Network (CEL) Auction Date Set for October 17

This morning, Bloomberg reported that Celsius Network (CEL) set a final bid deadline of October 17, with Bankman-Fried considering bidding for assets. If necessary, Celsius Network will hold an auction on October 20.

On Monday, CEL tumbled 17.11% to $1.33824.

SEC v Ripple Progress Stalls After the Thursday Court Overruling

Investors await an SEC reaction to the Court overruling the SEC’s objection to the Court denying the SEC motion to protect the William Hinman speech-related documents under the attorney-client privilege.

In a famous 2018 speech, Division of Corporation Finance, William Hinman, said that Bitcoin (BTC) and Ethereum (ETH) are not securities.

There has been a lack of commentary since Thursday’s ruling, which suggests an appeal is on the cards. The lack of updates also led to an XRP pullback from last Thursday’s high of $0.50938.

An SEC response could come at any time, leaving XRP under pressure for now. This morning, XRP was down 1.59% to $0.45540. The SEC v Ripple case remains the key driver for XRP.