Q3 2023: Five stories that shaped cryptocurrency
Quarterly retrospective covering July 1–September 30, 2023. Dated September 30, 2023. Stories selected for market impact, policy significance, and consequences for cryptocurrency infrastructure.
1. Ripple receives a mixed ruling on XRP sales
A federal judge issued a closely watched ruling on July 13 distinguishing between different types of Ripple’s XRP transactions. The court found that the institutional sales at issue constituted unregistered investment-contract offerings, while the programme of exchange-based sales did not meet the same test on the record before it. The decision was significant because it examined the circumstances of transactions rather than treating every sale identically. Its mixed outcome shaped the debate over token regulation while leaving further proceedings and other legal questions unresolved. Source: Reuters, July 13.
2. Grayscale wins its challenge to the SEC’s ETF rejection
The D.C. Circuit ruled in Grayscale’s favour on August 29 in its challenge to the SEC’s refusal to allow conversion of the Grayscale Bitcoin Trust into a spot Bitcoin ETF. The result required the agency to revisit its decision and intensified scrutiny of the different treatment of spot and futures-based products. For investors, it materially changed expectations about a route to a U.S. spot fund. The ruling was a victory in the review of an agency decision, rather than an automatic authorisation for every pending Bitcoin product. Source: Grayscale announcement filed with the SEC, August 29.
3. PayPal launches its dollar stablecoin
PayPal announced PayPal USD on August 7, introducing a dollar-denominated stablecoin issued by Paxos. The company described PYUSD as backed by dollar deposits, short-term U.S. Treasuries, and similar cash equivalents, with redemption and transfer features for eligible users. The launch brought a major consumer-payments brand into stablecoin issuance and distribution, extending the conversation beyond trading balances on cryptocurrency exchanges. Its importance was the connection between an existing payments network and blockchain-based dollars, with adoption depending on user access, integrations, and the usefulness of the available payment flows. Source: PayPal, August 7.
4. Base opens its mainnet to the public
Base announced on August 9 that its mainnet was open to everyone, following earlier developer access and preparations for public bridging. The Coinbase-incubated Ethereum layer-two network aimed to support applications using lower-cost execution while remaining connected to Ethereum’s ecosystem. Its public launch was an infrastructure milestone that brought another well-funded participant into the competition among scaling networks. For builders and users, the relevant questions shifted from announced plans to live applications, bridging arrangements, operating costs, and the network’s evolving technical and governance dependencies. Source: Base, August 9.
5. A Vyper flaw exposes Curve liquidity pools
Several Curve pools were affected by an exploit on July 30 involving malfunctioning reentrancy protection in particular versions of the Vyper compiler. The incident showed that a vulnerability in a development tool could affect multiple deployed contracts, even when their source code appeared to use a standard safety mechanism. It also created pressure on liquidity providers and renewed attention to dependencies shared across DeFi applications. The lesson for the quarter was the importance of examining compiler versions, deployed bytecode, and system-wide exposure alongside the logic of individual contracts. Source: CertiK incident analysis.