#8: SEC Crackdown Continues 🔨
Newsletter Content:
📰 Main Topic: Regulation Crackdown
📈 Quote + Weekly Price Recap: See Below
🚨 Top Stories: SEC takes on Kraken & Paxos / Corporate Trademarks / Microsoft drops Metaverse team / Shopify reveals new blockchain tools
📖 Thread / Read of the Week: Intro to Stablecoins
📊 Visual of the Week: Smart Contracts 101
🔭 This Week: Inflation Data
A few weeks ago I introduced the idea of staking and the benefits it brings to a network and its respective participants. (If you missed this I linked the article at the bottom)
This week the SEC took another shot at the crypto industry by targeting Kraken’s staking service and shutting it down immediately on the basis of “unregistered securities”.
The main issue here is that a security in the eyes of the SEC is a very loose term and the wording could arguably be applied to many assets that don’t immediately jump out as securities.
Through the eyes of the Howey Test, here are the characteristics of a security:
There is an investment of money
In a “common enterprise”
There is an expectation of profit
This profit is derived from the efforts of others
There has been a longtime debate over whether some or all cryptocurrencies fall under this vague definition. Contrary to popular belief, regulation (or regulatory clarity) is very welcome by the crypto community.
The lack of proper clarity has led to:
Institutions waiting on the sidelines to enter the space
Credible companies forced to move or incorporate overseas
Disasters (FTX, Celsius to name a few…)
Limiting innovation & insane legal fees for those complying
Quote of the Week:
“Yesterday’s home runs don’t win today’s games.” - Babe Ruth
Price Performance:
Top Stories:
Crypto Exchange Kraken to Shut Staking Service, Pay 30M Fine in SEC Settlement (CoinDesk)
SEC to Sue Paxos Over Binance’s Stablecoin - BUSD (WSJ)
After taking a shot at staking services, the SEC has aimed it sight at stablecoins, through Binance’s BUSD (which confusingly is issued by a company named Paxos).
Paxos has halted the creation of new BUSD (while continuing to allow redemptions) and strongly disagrees with the view of the SEC. This is an emerging story and I will continue to update you as Paxos takes on the big bad Gary Gensler.
Shopify Releases New Blockchain-based tools: (Coin Telegraph)
Shopify continues to dive head first into helping brands explore Web3 and offer their consumers superior experiences through an enhanced member’s reward program.
These new features allow merchants and brands:
To utilize NFTs to verify membership for exclusive discounts, benefits and rewards
Allow consumers to access all benefits without revealing any personal info
“Sign in with Ethereum” feature (just as you see “Sign in with Google” now)
Note: Shopify had 450M buyers and $80B of orders on its platform in 2021
Microsoft Discontinues Its Industrial Metaverse After Four Months (Binance)
Big tech companies continue to retrace their metaverse efforts. Someone let Meta and Zuckerberg know…
Big Week for Corporate Trademarks:
Some big names filing trademarks around the space this week:
Sam’s Club - Blockchain Software / NFTs / Financial Services
Nationwide - Metaverse Insurance / Metaverse Investment Services
Kay, Jared, Zales - Virtual Jewelry / Virtual Stores
Jameson - Virtual Bars & Experiences / NFTs
Rihanna launched an NFT collection granting royalties to a hit song
Thread / Read(s) of the Week:
Visual of the Week:
This Week:
Tuesday (2/14): CPI (Consumer Inflation Data)
Wednesday (2/15): Elon Musk speaking at World Government Summit
Thursday (2/16): PPI (Producer Inflation Data)
If you missed the newsletter covering staking, you can check it out here: