Snapshot Web3

September 8, 2023

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Regulatory and Legal News

Taiwan Invites International Opinions To Set Virtual Asset Guidance

Taiwan seeks global input for regulating virtual assets. Proposed guidelines include improved transparency, security, and investor protection. The aim is to foster a thriving digital asset industry, with potential collaborations between local and licensed service providers.

LBRY decides to fight: Blockchain firm files notice of appeal against SEC

LBRY, a blockchain-based file-sharing network, is appealing a judge's ruling in favor of the SEC. The court had ordered LBRY to pay a civil penalty and cease unregistered offerings of crypto securities. Despite previous plans to wind down, LBRY's appeal signals a potential shift in its position. This move coincides with recent victories for the crypto industry against the SEC.

Digital Asset Regulation in Australia Faces Uncertainty as Senate Debates Key Bill

The fate of Australia's Digital Assets (Market Regulation) Bill is uncertain as it faces Senate debate. Senator Bragg warns of potential risks to investors if the bill is rejected. The Senate Committee's recommendation for rejection stems from concerns about regulatory compatibility. Bragg attributes the setback to partisan politics. Clyde & Co.'s Liam Hennessey suggests the rejection may be tied to a separate regulatory process. Despite the delay, Hennessey believes the bill's input will still influence crypto regulation. The bill addresses stablecoins, exchange licensing, and custody requirements, awaiting a Senate vote.

CFTC Goes After Opyn, Other DeFi Operations in Enforcement Sweep

The CFTC has charged three DeFi operations, Opyn, ZeroEx, and Deridex, with offering illegal derivatives trading using blockchain-based protocols and smart contracts. The companies must cease this activity and pay penalties ranging from $100,000 to $250,000. Opyn also faced additional accusations related to registration and compliance. While the companies cooperated in the investigation, one CFTC commissioner expressed concerns about the use of enforcement actions in these cases.

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Innovation and Launches

BREAKING: JPMorgan is Developing a Blockchain-Based Deposit Token for International Payments

JPMorgan is reportedly developing a blockchain-based deposit token aimed at expediting international payments and agreements. This digital currency would represent a deposit claim against the bank. While much of the necessary infrastructure has been developed, the project is still in early stages and contingent on regulatory approval.

Shibarium Goes Live for Public, SHIB Member Says, But Here Comes Her Warning

Shibarium, Shiba Inu's Layer 2 blockchain, is now open to the public. @LucieSHIB, the project's marketing expert, encourages developers to start building on it. She advises caution regarding potential scammers. Shibarium has achieved notable milestones in a short time, with over a million transactions and half a million mined blocks. Despite recent SHIB price fluctuations, the team remains dedicated to advancing the ecosystem and supporting Shibarium development.

Synthetix DEX launch to join efforts reducing the 'serious friction' in DeFi

Synthetix plans to launch its V3 protocol and Infinex decentralized exchange in Q4, aiming to improve DeFi usability. Infinex will streamline processes for traders, offering a centralized exchange experience on decentralized infrastructure. Initially, there will be no geoblocking or KYC restrictions, with governance decisions left to SNX token holders. Synthetix V3 will introduce permissionless markets for flexible financial engineering. This move aims to reduce friction in DeFi and make it more accessible.

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NFT and Metaverse

Meta Ramps Up Metaverse Hype Ahead of Apple Vision Pro Launch

As Apple gears up for its Vision Pro launch, Meta (previously Facebook) is focusing its efforts on the current applications of the metaverse. Meta's recent ad campaign, "The Impact Is Real," showcases VR's current real-world applications like training for welders, virtual medical practices, and rehab for athletes. Moving away from a futuristic viewpoint, Meta aims to appeal to a wider audience and attract software developers to see VR and AR beyond gaming. This promotional shift is strategic, given Apple's upcoming entry into the VR and AR scene. Despite significant marketing efforts, Meta's Horizon Worlds app and Quest headsets have seen slow adoption rates.

Flipkart introduces Virtual Worlds for a better shopping experience

Flipkart is launching "Virtual Worlds," a shopping metaverse for an immersive buying experience. Set to debut around Diwali, this platform allows sellers to showcase their products in virtual spaces. After a successful 6-day test phase, the company aims to reshape 3D shopping for its vast user base. As Flipkart plans job creation and innovations, its rivalry with Amazon will heat up during the festive sales, potentially offering a glimpse of the new metaverse.

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Scams and Hacks

Stake hack of $41M was performed by North Korean group: FBI

The FBI has confirmed that the $41 million hack on crypto gambling site Stake was orchestrated by the North Korean Lazarus Group. This group is responsible for over $200 million in crypto thefts in 2023. The FBI advised caution regarding the addresses associated with the hack. The Lazarus Group was also linked to other hacks, totaling over $200 million in stolen funds this year.

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Interesting Reads

Cracking Bitcoin’s Future: The November 28th Cycle Theory Unveiled

The November 28th Cycles Theory proposes that Bitcoin’s price behavior operates in 4-year cycles centered around its first halving date on November 28. The theory suggests Bitcoin's price peaks and troughs roughly 21 days around this date every 4 years. After each price bottom, there's a significant rise followed by a mid-cycle price stabilization. The pattern then repeats, with the major bull run culminating in a peak. Predictions include a new bull run starting on November 28, 2024, and subsequent tops and bottoms in 2025 and 2026. While this model offers a systematic approach to predicting Bitcoin's behavior, exact prices and precise timings remain unpredictable.

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Quick Links

CFTC commissioner calls for crypto regulatory pilot program

CFTC Commissioner Caroline Pham is advocating for a limited pilot program to address cryptocurrency regulation in the U.S. Speaking at a Cato Institute event, Pham suggested the program would be akin to state-level regulatory sandboxes and hopes it would provide insights into tokenization within existing laws. She aims for the pilot to include stakeholder discussions, and the drafting and adoption of rules about the risks of crypto. Pham, a commissioner since April 2022, has been pushing for clearer crypto regulations and protective measures for retail investors. This proposal follows legislative attempts to define the roles of the CFTC and SEC in crypto oversight.

UK financial watchdog could give crypto firms until January 2024 for marketing compliance

The UK's Financial Conduct Authority (FCA) is requiring crypto firms to ensure their marketing is transparent and accurate. Though the initial compliance deadline was October 8, 2023, some companies might get an extension until January 8, 2024, to address specific challenges. These regulations apply to online promotions, even if the firm isn't UK-based. Non-compliant firms risk being added to warning lists or losing their online presence. Additionally, crypto companies in the UK must register with the FCA; 42 have already done so.

Aave, Circle, Base become founding members of Tokenized Asset Coalition

Major DeFi players, including Aave, Circle, and Coinbase, have formed the Tokenized Asset Coalition (TAC) to advance blockchain adoption and asset tokenization. Open to like-minded organizations, TAC aims to unify traditional and crypto financial systems by promoting the tokenization of real-world assets. Activities will include member calls, publications, and working groups.

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Funding

Helix raises $2 million to connect crypto investors with private credit yields

Helix, incubated by Helicap, a private credit platform, has raised $2 million in pre-seed funding for its real-world assets protocol. The project aims to facilitate blockchain-based lending to businesses in Southeast Asia. Helix will target crypto businesses with stablecoin liquidity. The protocol is set to launch on Ethereum in Q4 2023, with potential expansion to other chains. The funding will be used for the launch and team expansion. Saison Capital and Superscrypt led the funding round.

Kenyan Fintech Startup Kotani Pay Receives $2 Million Pre-Seed Funding

Kenyan fintech startup Kotani Pay has raised $2 million in pre-seed funding led by P1 Ventures. The funds will be used to expand its services into five African countries, making cross-border remittances easier for the unbanked population. Kotani Pay also offers financial services to refugees and enables fund transfers for feature phone users. Co-founder Felix Macharia highlighted the importance of working with regulated entities for compliance and noted growing interest from central banks in such use cases.

Coinbase Ventures’ Base Ecosystem Fund Backs 6 Onchain Projects

Coinbase Ventures' Base Ecosystem Fund has backed six onchain projects within the Base ecosystem. Selected from over 800 applicants, these projects include Avantis for synthetic derivatives trading, BSX for a decentralized limit order book, Onboard for self-custodial onboarding and offboarding of crypto, OpenCover for DeFi insurance, Paragraph for onchain content creation, and Truflation for automated inflation reporting. Each project focuses on enhancing different aspects of onchain finance and economic freedom.

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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.