For years, a battle has raged over the crypto industry that prevented it from finding a rhythm.

No, it’s not the Bitcoin vs. Altcoins debate. Not even the never-ending arguments about which Layer 1 is best.

It’s the argument between the SEC and the CFTC over whether crypto is a security or a commodity. And with a new, historic “Memorandum of Understanding (MoU)” between the SEC and the CFTC, we’ll finally (hopefully) get some clarity about it!

The MoU’s impact: By agreeing to joint rulemaking and shared enforcement, the two agencies are effectively clearing the path for institutional money to flow without fear of a random lawsuit from a rival agency.

SEC = Securities and Exchange Commission
CFTC = Commodity Futures trading Commission

Both commissions have wanted to put crypto in their own lanes, which has led to a whole lot of confusion and lawsuits (by the SEC) and not very much progress.

For context, a security is an investment that passes the “Howey Test”:

The above is how a lot of tokens start, but after launching, a lot of people argue that many cryptos “mature into commodities,” which are materials or products used in commerce. Tokens are often used to pay gas fees or for storage, and (this is key) they don’t have anyone running the show because they’re decentralized. That makes crypto fail point 4 of the Howey Test, thus making it a commodity… or so the argument goes.

In the same day, Coinbase CEO Brian Armstrong and Binance Co-Founder CZ pronounced that the biggest users of crypto will be AI agents.

Why? Because “They can't open a bank account, but they can own a crypto wallet,” according to Armstrong.

While we think this is incredibly bullish in the long term, it gives us mixed feelings about AI, robots, and the likely irreversible technological changes that our world is hurtling towards. But we’re not sure it matters, because it seems like AI agents will begin to use crypto more and more whether we like it or not.

I mean, Alibaba’s AI agent just recently started mining crypto during training… unprompted.

But, if nothing else, AI agents trading crypto back and forth means that crypto’s greatest potential use case ever is still before us. And that’s something to get excited about.

If you know about Pump.fun, you know it’s 1) the #1 source of Solana memecoins, 2) quite controversial for not delivering on airdrop promises, and 3) it’s one of the most successful crypto businesses out there from a revenue standpoint.

As proof: Pump.fun just became the first platform on Solana to reach $1B in cumulative revenue. That’s a huge deal.

Potentially an even bigger deal: public domain records show that Pump.fun now has subdomains “referencing Ethereum, Base, BSC, and Monad,” according to The Block. The platform has also removed “Solana” as its home from its Twitter profile.

The real potential story under the surface, though, is what this might mean for Solana. As Rasmr puts it above, if Pump.fun goes multi-chain, Solana will actually have to compete with the others for memecoin dominance.

We really appreciate you reading our newsletter, and we’d love to hear your feedback.

It feels like crypto keeps taking one step forward, two steps back in DC, but look at the big picture: the current regulatory environment is still so much better than it was a couple of years ago.

Though sometimes we still feel nostalgic for good old Gary Gensler memes.

Same time next week? Sounds good.

Until next time,
- The Chain Team

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