Ethereum Foundation Staff Slashed 🔪
Plus: Lee-nient crypto regs coming to Korea
In this week’s edition of The Context, we talk about South Korea’s incoming pro-crypto prez, the SEC and staking, and staff cuts at the Ethereum Foundation.
[Crypto v. Crypto 🥊]
Two pro-crypto candidates battled it out in a snap South Korean presidential election.
What Media Said 🧑💻**:**
The two main candidates “unveiled comprehensive crypto-friendly platforms that could fundamentally reshape South Korea's financial sector,” said Blockhead. Winner Lee Jae-myung “proposed the most ambitious crypto reform agenda, including legalizing spot cryptocurrency exchange-traded funds (ETFs), allowing the country's massive $884 billion National Pension Service to invest in digital assets, promoting the widespread adoption of Korean won-backed stablecoins, and streamlining regulations to prevent capital flight.”
Lee plans to ease regulations, an urgent issue because of the country’s “high retail crypto participation,” wrote Martin Young (Cointelegraph). “South Korea has one of the world’s most active crypto markets, and daily trading volumes on crypto exchanges sometimes exceed the country’s major stock indexes, with user numbers recently surpassing 16 million.”
PR Perspective 🔎**:**
The “crypto hub” narrative might sound cliche, but that doesn’t mean countries and candidates aren’t actively thinking about how they can win over the digital asset sector.
[A Solid Foundation? 🪨]
The Ethereum Foundation announced its Protocol Research & Development teams would be restructured into a new team, Protocol—and that “some members…won’t be continuing with the Ethereum Foundation.”
What Media Said 🧑💻**:**
The EF “is repositioning the group around three main priorities: scaling Ethereum’s base layer, expanding blobspace (a key part of its data availability strategy), and improving user experience,” explained Margaux Nijkerk (CoinDesk). This is a response to “ongoing criticism” that the EF lacks a strategy to stay ahead of Solana and other layer-1 blockchains.
Lots of changes for the EF. Just last month it welcomed researcher Hsiao-Wei Wang and Nethermind founder Tomasz Stańczak as co-executive directors, as former head Aya Miyaguchi transitioned into a new role as president, wrote Naga Avan-Nomayo (The Block).
“The Ethereum Foundation's efforts at restructuring with Protocol aim to bridge a perceived gap between research and actual implementation,” said Vince Dioquino (Decrypt). “Previous upgrades, such as [last month’s] Pectra, faced several hurdles: testnet failures earlier this year delayed the rollout by weeks as developers scrambled to patch bugs.”
PR Perspective 🔎**:**
This story, which was catnip for industry trade publications but too arcane for mainstream media, generated fairly predictable headlines about staff layoffs. This despite the announcement’s focus on a new name and priorities. If your restructuring negatively impacts people, expect outlets to emphasize that part. Nonetheless, the EF’s moves were still positively reported, with publications framing them as a direct response to longstanding community concerns.
[What’s at Stake 🪧]
The SEC held up proposed exchange-traded funds (ETFs) from Rex Financial and Osprey Funds that included Solana and Ethereum staking. (Both networks remain secure by rewarding users for locking up their SOL or ETH, similar to how someone might earn interest on a savings account. But the SEC has never approved an ETF that allowed investors to earn rewards.)
What Media Said 🧑💻**:**
Although the issuers said they got initial approval from the SEC, “US regulators are now raising concern the vehicles may not legally qualify as ETFs at all under federal securities law,” wrote Bloomberg. The problem isn’t with staking per se, but that Rex-Osprey aren’t legally investment companies.
They tried to structure themselves as C-corporations to get around some SEC rules. This “likely won’t help or hurt other issuers’ efforts” to include staking, explained Ben Strack (Blockworks). According to analysts, this is more about asset issuers seeing how much risk a suddenly pro-crypto SEC will allow.
PR Perspective 🔎**:**
The SEC goes on the record as still being a regulator—that is, it’s not just going to rubber stamp everything involving crypto now that the administration is pro-innovation. And Rex Financial and Osprey Funds get a bit of publicity. You decide whether the placement in Bloomberg and elsewhere is worth it.
[Tweet of The Week]
Credit: @rektmando
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The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).
The team: Founder Samantha Yap and consulting editor Jeff Benson, Andrew Wickerson, Nathalie Larrea, Meghna Dembla, Samvidha Sharma, Trisha Goswami and Shajar Qureshi. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.
This newsletter is prepared by YAP Global, an international PR Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and brands through impactful storytelling. Find out more about us here.