![]() Vitalik Buterin, the creator of the Ethereum network, recently coauthored a white paper that laid out the ground work for possibly the next big thing in Web3: soul bound tokens (SBTs). While Coinbase filed a motion to dismiss the case, the recent rout in the cryptocurrency markets will likely not be helpful in their efforts, and we expect the litigation in this space to intensify.Īs a further sign that government is stepping up its enforcement efforts in the crypto arena, the Department of Justice has charged a former manager at OpenSea with NFT insider trading. The Howey Test standard will no doubt be challenged in the class action suit filed against Coinbase claiming that 79 of the tokens listed on the platform are unregistered securities. Known as The Howey Test, it entails an investment of money in a common enterprise with an expectation of profits derived from the efforts of others. ![]() To determine whether an asset is a security, regulators and courts apply a four-part test developed in a 1946 Supreme Court ruling over orange groves. While the SEC has been slow to provide any specific guidance, its enforcement actions have made it clear that many crypto tokens should be listed as securities and exchanges should be registered. Crypto issuers and trading platforms claim tokens are in essence commodities, such as gold, which have no federal regulator. Regulation is clearly a hot topic in the crypto space and we’ve been keeping our eye on several lawsuits filed in the US which may result in a precedent on how cryptocurrencies are classified. The venture capital firm is hoping to capitalize on opportunities during the bear market.Ĭryptokicks by RTFKT and Nike REGULATORY UPDATE This is on top of the new $4.5 billion fund launched by company Andreessen Horowitz for investments in crypto and blockchain companies. At the same time, Binance, yet another crypto exchange, announced its venture arm raised $500 million for a fund dedicated to investing in Web3 start-ups. The collapse of terraUSD “stablecoin” (valued at some point at $60 billion) last month is still reverberating through the market. This announcement follows upon an earlier earnings miss by competitor Coinbase whose revenues fell by 27% year-on-year. While day-to-day volatility continues, Bitcoin has stabilized around the $30,000 mark in recent days.Ĭrypto and fintech companies remain under pressure with the Gemini exchange announcing a 10% staff cut, citing a contraction phase in the industry, or “crypto winter,” further compounded by macroeconomic and geopolitical turmoil. Traditional equity markets and crypto have been largely in sync during the recent weeks reacting to a mixed bag of economy statistics and Fed notes indicating consensus for 50 bp rate hikes in June and July.
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