The Scenius Sync (Issue #35)
Paxos In SEC Crosshairs over BUSD, Kraken US Staking Shutdown in SEC Settlement, Bitcoin NFTs Gain Momentum, & FWB Launches a Social Networking App
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Essential News 🗞
Crypto Firm Paxos Faces SEC Lawsuit Over Binance USD Token
The SEC issued a letter, known as a Wells notice, indicating it intends to sue stablecoin issuer Paxos, which is behind the Pax dollar (USDP) and Binance USD (BUSD) tokens, over the latter stablecoin. The SEC is alleging that BUSD, the third largest stablecoin, is an unregistered security, according to the report. For its part, Paxos issued a statement indicating that it will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary
Crypto Exchange Kraken Ends Staking Program in $30 Million SEC Settlement
Kraken will pay $30 million to settle SEC allegations that it broke US securities rules with its crypto-asset staking products and will discontinue them for US clients as part of the agreement with the regulator. The SEC alleged that Kraken’s staking service was an illegal sale of securities in a lawsuit filed in federal court Thursday. The settlement could have a sweeping impact on the industry because Coinbase, Binance and other crypto exchanges have waded into the products to diversify revenues.
Coinbase Hits Back At SEC Over Staking as a Service
Cryptocurrency exchange Coinbase is defending its staking services after the SEC’s action against Kraken. “Coinbase’s staking services are not securities. We will happily defend this in court if needed,” CEO Brian Armstrong said in a tweet on Sunday, posting a blog that explains his rationale. In the blog, Coinbase’s chief legal officer Paul Grewal writes that staking is not a security under the Securities Act, nor under the Howey Test.
Restrictive Crypto Rules for EU Banks Confirmed in Published Legal Draft
Banks in the European Union would have to treat crypto as the riskiest kind of asset and disclose exposures while awaiting more detailed rules. The proposed risk weight of 1,250% offers little incentive for banks to hold crypto, as – unlike other assets such as mortgages – banks would have to hold capital to match the amount of crypto they have. Before passing into law, the EU member governments meeting as the Council and the parliament must agree on the proposals.
CFTC, SEC Cases Against SBF to be Pushed Back Until Criminal Case Ends
Civil cases brought by U.S. regulators against former FTX CEO Sam Bankman-Fried can be pushed back until after a criminal case concludes, a judge decided Monday. SBF faces criminal charges such as defrauding customers and violating campaign finance laws.
Innovation & Adoption 💡📈
Ordinals Gain Momentum With 76,000 NFTs Minted to Bitcoin
Despite pushback from Bitcoin purists, Ordinals—the NFT-like project on the Bitcoin blockchain—shows no signs of slowing, as over 76,400 inscriptions have been created to date. The number of Ordinals spiked on February 9, 2023, exceeding 20,800 inscriptions for the day, according to data from Dune.
Launched last month, Ordinals is the latest project aiming to bring NFTs into the Bitcoin ecosystem. What distinguishes Ordinals from earlier projects is that the digital assets are inscribed directly onto satoshis, the lowest denomination of a Bitcoin, without needing a sidechain or token.
Major Paris Art Museum, Centre Pompidou, to Exhibit CryptoPunks, Autoglyphs NFTs & LACMA Art Museum Acquires NFT Collection With CryptoPunk, Art Blocks
Centre Pompidou, Europe's largest modern art museum, will showcase the digital works as part of its first exhibition focused on NFTs. The new exhibition will examine the relationship between art and the blockchain.
On this side of the pond, the famed Los Angeles art museum accepted a donated collection of NFTs that’s potentially worth millions of dollars. Interestingly, the LACMA announcement avoids prominently using the term “NFT,” which stands for non-fungible token as the acronym has a stigma amongst some Web3 skeptics and mainstream audiences, opting to call it “blockchain art” or “on-chain art” (or similar) to avoid the controversial NFT tag.
Uniswap DAO Completes Vote for Proposed BNB Deployment
Uniswap DAO has concluded the final vote to deploy Uniswap v3 on the BNB Chain with the vote passing (66% in favor) amid intense debate among delegates about crypto-bridging solutions. Delegates with major voting power including Ethereum software company ConsenSys and Compound Finance founder Robert Leshner voted in favor of the proposal. Meanwhile, venture capital giant Andreessen Horowitz voted against the proposal, deploying 15 million votes in the process.
Reddit Has Given Away Over a Million Super Bowl NFTs on Polygon
Reddit’s NFL promo has pushed its Collectible Avatars total to nearly 10 million NFTs minted since last summer. The project is a prime example of an effective Web3 on-ramp, as the discussion platform has delivered millions of free NFTs to users in recent months.
Friends With Benefits DAO Releases Social Networking App
Popular decentralized autonomous organization (DAO) Friends With Benefits (FWB) is rolling out a social networking application, the group announced Thursday on Twitter. While FWB built its initial community through a token-gated channel on Discord, its app will help streamline communication through a decentralized, members-only platform. FWB said in a blog post that the app aims to build genuine relationships by allowing members to connect with each other, read governance proposals and discover upcoming in-person events.