SEC’s Response to Coinbase and EU’s Landmark Crypto Regulation Approval

05.24.2023

Market Overview: 

Crypto Round up

The crypto markets experienced a decline in prices as ongoing discussions surrounding the US debt ceiling dominated the news. Trading volumes dropped by 40% compared to the 30-day average (According to the Coinbase orderbook analytics), reflecting the market’s caution during this period.

The Ethereum development team recently issued a final report addressing the “finality SNAFU” that occurred. The report aims to provide insights and solutions to the issues encountered, ensuring the continued stability and growth of the Ethereum network.

Renowned author Michael Lewis, known for his book “The Big Short,” has announced progress in writing his upcoming book focused on SBF, the CEO of FTX. Lewis is nearing completion of the book, which is expected to shed light on the fascinating story behind SBF and his contributions to the crypto industry.

US President Biden has expressed opposition to a debt deal that could potentially benefit crypto traders. Given the impending threat of a US default, the President’s stance on the matter adds an additional layer of uncertainty to the market.

Sotheby’s, the prestigious auction house, recently held an auction featuring a rare NFT collection from 3AC. The auction generated an impressive $2.4 million in sales, highlighting the continued interest and value of NFTs in the art world.

According to coindesk, the demand for tokenized Treasury Bonds has been surging, as crypto investors seek to explore traditional finance avenues and capitalize on potential yields. We believe this growing demand indicates a desire to bridge the gap between the crypto and traditional financial sectors. 

SOURCE: (https://www.coindesk.com/markets/2023/05/19/demand-for-tokenized-treasury-bonds-soars-as-crypto-investors-chase-tradfi-yield/)

Unfortunately, the Tornado Cash DAO fell victim to an attacker who manipulated voting procedures, resulting in a significant 40% drop in the value of the TORN token. This incident serves as a reminder of the importance of robust security measures within the crypto ecosystem.

NFT Market News:

NFT Integration in the Food Industry: The Wow Bao Initiative

Customer loyalty programs in the food industry may look a lot different in the future due to the integration of NFTs. Asian street food chain, Wow Bao, has executed a unique move by transforming their traditional point-based rewards system into an NFT-backed platform built to be Web2 friendly.

According to NFTEvening this initiative, termed “CollectaBaos”, allows patrons to purchase a year-long membership for $99, providing them access to a range of benefits including a 10% discount, complimentary meals, and exclusive merchandise.

The integration of NFTs in Wow Bao’s business model extends beyond conventional loyalty incentives that you would normally expect. Unique NFT mints grant holders access to exclusive experiences such as special events, cooking classes, and personal interactions with the CEO. Additionally, previews of new culinary offerings will be exclusively available to NFT holders. This strategic move, if proven effective, could shift the way restaurants interact with customers, illustrating the potential of NFTs to augment customer engagement, collect valuable data, and foster loyalty.

In what we believe to be the most important aspect of this move, Wow Bao has made a conscious effort to refrain from using technical jargon in customer communications to try to make the shift more easily palatable to a mainstream audience . With this in mind Wow Bao makes it so that purchasing a CollectaBao does not necessitate a crypto wallet, thereby lowering the entry barrier for consumers. This approach showcases the potential of NFTs to transform traditional business operations without necessitating a learning curve for its customers, providing valuable insights and more accurate data around their customers, while causing less of an interference in normal business operations. Although the potential benefits from the change are exciting, it will be interesting to see if this strategy will work over the long term as many times NFT integrations can come with unforeseen circumstances.

Latest News:

WELCOME FRIENDS: Hundreds of institutions and prominent individuals have invested directly in crypto, adopted the value thesis, or started building technology to support digital assets since Wave started tracking these developments in late 2020. Now the rise of the Metaverse, Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and Decentralized Autonomous Organizations (DAOs) is driving mainstream adoption of blockchain technologies everywhere we look. We’re continuing to keep track of it every week here:

• LG Electronics has filed a patent application for its blockchain-based smart TV, which allows users to trade nonfungible tokens (NFTs).

REGULATORY ROUNDUP: We’re living through the era of regulatory recognition of digital assets. The legislation, litigation, and regulation happening today will dictate the entire future of our industry, and we have a historic chance to shape those changes by staying informed and exerting political influence.

• The SEC has finally responded to Coinbase’s rulemaking petition, a petition that seeks answers to 50 specific questions concerning digital asset regulation (See Top Story #4 from a few weeks ago for extra context). The SEC’s response has urged courts to deny Coinbase’s recent request for clearer rules, stating “Coinbase’s preference for faster or different regulatory action by the commission does not entitle it to extraordinary relief from this court.” Coinbase expressed its disappointment in the SEC’s apparent lack of urgency for implementing appropriate crypto rules and is expected to respond over the coming days.
• The European Union’s landmark crypto regulation has passed its final legislative hurdle, with the unanimous approval of European finance ministers. Members of the EU’s Economic and Financial Affairs Council (EcoFin) adopted the Markets in Crypto Assets (MiCA) with no objections in a meeting on Tuesday.
• Hong Kong’s Securities and Futures Commission (SFC) will begin accepting applications for crypto trading platform licenses on June 1. The regulator has agreed to allow licensed virtual asset providers to serve retail investors, provided that operators assess understanding of the risks involved.

Disclaimer: The views and opinions expressed herein are those of the author alone and do not represent Wave Digital Assets LLC or any of its affiliates (collectively, “Wave”). The author and/or Wave may hold investment positions in some of the assets discussed. Nothing in this material or linked information should be interpreted as an offer or recommendation to buy, sell or hold any security or other financial product. This material is not intended to provide accounting, legal or tax advice. Certain information contained herein has been obtained from third-party sources, has not been independently verified and should not be viewed as being endorsed by Wave. Such information is believed to be accurate as of the date of its publication. No representation or warranty is made, express or implied, with respect to the accuracy or completeness, and readers should not place undue reliance on the information contained or linked to herein. Certain statements in this material provide predictions and there is no guarantee that such predictions are currently accurate or will ultimately be realized. Past performance is not indicative of future results.

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