Happy Thursday!

In today’s Daily:
– The SEC appeals a previous ruling in its case against Ripple.
– Swift plans live bank trials of digital asset transactions.
– Binance Labs invests in a ZKsync “elastic chain” and more.

Meanwhile, analysts at Standard Chartered and JPMorgan indicate that geopolitical risks could drive investors to bitcoin.

Let’s get started.

SEC Appeals Ripple Case Ruling

The U.S. Securities and Exchange Commission (SEC) is appealing a previous ruling in its case against Ripple, according to a court filing on Wednesday.

• “We believe that the district court decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws and look forward to making our case to the Second Circuit,” an SEC spokesperson told The Block.
• The SEC initially sued Ripple in 2020, accusing the firm of raising over $1.3 billion through unregistered securities sales.
• In August, District Judge Analisa Torres ordered Ripple to pay a $125 million civil penalty, significantly lower than the SEC’s original $2 billion demand. This partially granted the agency’s motion for remedies regarding Ripple’s sale of XRP.
• In July 2023, the same judge ruled that while Ripple’s secondary market sales of XRP did not violate securities laws, direct XRP sales to institutional investors constituted securities investment contracts.

Following the appeal, Ripple CEO Brad Garlinghouse criticized the SEC, asserting that XRP’s non-security status is already law. He stated:
– “Somehow, they still haven’t gotten the message: they lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.”
– “While we’ll fight in court for as long as we need, let’s be clear: XRP’s status as a non-security is the law of the land today — and that does not change even in the face of this misguided — and infuriating — appeal,” he added.

Meanwhile, SEC Enforcement Director Gurbir S. Grewal announced on Wednesday he is leaving the agency after a three-year tenure.

Swift Set to Begin Live Bank Trials of Digital Asset Transactions in 2025

Starting next year, Swift said banks in North America, Europe, and Asia will begin live trials of digital asset and currency transactions over its global messaging network.

• Swift has previously experimented with blockchain transactions, including working with web3 services firm Chainlink as an enterprise abstraction layer to connect to the Ethereum Sepolia test network.
• The experiments demonstrated Swift’s ability to provide one single point of access to multiple public and private blockchain networks, which could also support institutions in creating tokenized assets and developing central bank digital currencies.
• However, next year’s trials mark the first time Swift will move beyond experimenting with blockchain transactions in testing environments to real-world settlements.

Binance Labs Invests in ZKsync ‘Elastic Chain’

Binance Labs has invested an undisclosed sum in Sophon, a ZKsync “elastic chain” Layer 2 network built using Matter Labs’ ZK Stack, ahead of its mainnet and SOPH token deployment next month.

• Concluding in August, the round was structured as a simple agreement for future tokens (SAFT). Seb, Sophon’s semi-anonymous co-founder and CEO and former head of DeFi at ZKsync, told The Block, declining to comment on the project’s valuation.
• The investment brings Sophon’s total funding to over $70 million following its $60 million node sale raise in May and a $10 million seed round earlier this year.
• Sophon aims to create a “culturally rich” web3 ecosystem focused on consumer-facing applications like gambling, ticketing, and social platforms, with funding also aiding team expansion.

Grayscale Launches New Aave Fund

Crypto asset manager Grayscale has launched a new fund called the Grayscale Aave Trust, offering accredited investors exposure to the governance token AAVE.

• Aave is a decentralized finance protocol that enables the borrowing and lending of crypto assets via smart contracts on various blockchain networks, including Ethereum, Base, Avalanche, and Polygon.
• However, the fund is only available to eligible individual and institutional accredited investors through a private placement and is not open to the general public.
• Grayscale has launched several crypto funds, including public spot Bitcoin and Ethereum ETFs over the past year.

Aerodrome Tops $1 Billion in Deposits

Decentralized exchange Aerodrome Finance has exceeded $1 billion in deposits, up from $120 million since January, representing more than half of the total value locked on the Ethereum Layer 2 network Base.

• Aerodrome dominates Base in both total value locked and trading volume, surpassing other DeFi giants on the network like Uniswap and Aave.
• However, Aerodrome’s volume remains lower than DEXs on other chains, such as Uniswap (on Ethereum mainnet) and PancakeSwap (on BNB Chain).

In the Next 24 Hours

• U.S. nonfarm payroll figures will be released at 8:30 a.m. on Friday.
• U.S. FOMC member John Williams will speak at 9 a.m.

Nobody misses a beat with The Block’s daily digest of the most influential events happening across the digital asset ecosystem.