⚖️ In transparency we trust

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The banks are coming, the banks are coming!

JPMorgan took a huge step forward with crypto yesterday when it announced that it was launching a deposit token, JPMD, on Base. 

But that’s not all. JPMorgan also met with the SEC’s Crypto Task Force to chat about capital markets migrating to public blockchains, of all things. 

Funny how quickly everything has changed. Speaking of, I’m excited to share the following exclusive…

🎖️ Honesty is the best policy

I think it’s pretty clear where I stand on transparency in this industry. And I think it’s pretty clear where Blockworks stands. But in case it’s not, this announcement should be pretty dang telling.

Blockworks is introducing the Token Transparency Framework. The framework sets criteria for projects to make certain disclosures about, well, their token. Blockworks Research teamed up with Cosmo Jiang of Pantera, Theia’s Felipe Montealegre, and Louis Thomazeau of L1D.

As I’m coming from a TradFi background, this type of framework is exactly the move the industry should look to make, in my humble opinion. We’re constantly discussing institutional interest and demand, and have even tried to break down why there isn’t more retail activity. 

If executed correctly, the Token Transparency Framework brings a certain amount of transparency to crypto that just hasn’t yet existed. Not unless you have connections to insiders or onchain data, that is. 

“Tokens have all types of problems that, frankly, equities don't have right now…Tokens are great — they're fantastic. We're all in this industry to some extent because we love the possibility of tokens. But right now in its current form, if you're an investor in token, to deal with all of these concerns, you as a token investor have insufficient legal protections,” Montealegre explained on the Empire podcast this morning. 

Thomazeau added that tokens are a “great way to incentivize different types of behaviors” from trading to interacting with a product. But unlike equity holders, token holders aren’t entitled to things like shareholders rights. 

I’m not trying to go too far down the rabbit hole of tokens vs. equity, but as a journalist, I think the transparency is key to improving the overall health of the industry. After all, we’ve already seen plenty of bad actors exploit the shadows for questionable purposes. And don’t get me started on FTX.

The idea is to sum up certain criteria in a filing, similar to a disclosure one might see from a public company. There are 18 criteria such as supply schedules, foundation token allocations and market maker and exchange listing agreements.

The data will be consolidated into four buckets: Project and team, Token supply and allocation, Financial disclosure, and Transactions and market structure. 

Based on all of that, an overall transparency score is then calculated which, well, is exactly what it sounds like. It’s not meant to be a quality measure, but instead ranks the projects on how forthcoming they were with information. 

Projects already signed on include Jito and Raydium.

Blockworks Research’s Dan Smith put it succinctly: The goal is to ”create a tool where projects could simply communicate this set of information to the market, and then let the market decide on that.”

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• Iranian crypto exchange Nobitex was hacked for over $80 million. 

• The Senate passed the GENIUS act in a 68-30 vote on Tuesday.

• Ink, the Kraken-incubated L2, is plotting to launch and airdrop INK tokens.

From RWAs to modular infra, AI agents to mobile-first consumer apps, the builders making it real are heading to Brooklyn.

Permissionless IV is the definitive gathering for crypto's technical founders and builders.

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