🏛️Kraken Investigated by the Treasury Department - TWJ #195

No precedent required.

Hi folks,

In this write-up, I cover how most crypto projects are not focusing hard enough on implementing a sustainable business model. As an industry, we need to do better and brainstorm new concepts for projects to make money without resorting to predatory pseudo-ponzinomics machinations. I don’t claim to have all the answers, but the first step in solving a problem is to admit that there is one.

Unsustainable Crypto Business Models

Here are the quick takeaways:

• Founders need to expand their business acumen and learn about non-crypto businesses.

• Understand which business model is a race to the bottom and which is sustainable in the long term.

• There are hard-to-solve important problems that require deep research work, which might never become good businesses.

• The open-sourced, fork-able, and decentralized nature of crypto makes it challenging to predicate your business model on a mechanism that’s copiable.

• Selling tokens for revenue might be controversial, but it is one of the current working models.

In today’s issue:

The crypto market is flat with its total market cap above ~$900 billion. Ethereum Classic (ETC) has been the best performer in the top 100 in the past 7-d. Today, the FED is expected to increase the benchmark rate by 75bps.

In other news, Kraken is suspected of violating sanctions, Ark Invest dumps Coinbase, and Uniswap is discussing Fee Switch.

We’re continually improving our content, please reach out if you have ideas or want us to recap another market segment.

- Curated by Marco Manoppo (@manoppomarco)

📰Market News

⎆Kraken Is Suspected of Violating Sanctions

The US-based crypto exchange is undergoing investigation by the Treasury Department on whether or not the exchange allowed users from Iran to use its platform.

Ari Paul ⛓️ @AriDavidPaul

The next ~2 years gonna be a massive bull market for legal fees. Coinbase is the "frontliner" for all exchanges with the SEC. But treasury department is far more dangerous, no "precedent" needed. What crypto exchange unlikely to face the same?

nytimes.comKraken, a U.S. Crypto Exchange, Is Suspected of Violating SanctionsThe Treasury Department is investigating whether the crypto exchange allowed users in Iran to buy and sell digital tokens, said people with knowledge of the matter.

⎆Ark Invest dumps Coinbase

Cathie’s Wood Ark Invest dumps Coinbase shares for the first time in 2022. The timing aligns with the SEC’s probe into Coinbase on whether or not the exchange has listed 9 digital assets that can potentially be described as securities. Ark sold about $75M or slightly over 1.41 million of COIN shares.

PiQ  @PriapusIQ

👀 Cathie Wood's Ark Invest Offloads Over 1.4M Coinbase Shares as $COIN Price Falls Coinbase shares have taken a big hit following disappointing results and a report that the company is being investigated by the U.S. Securities and Exchange Commission. coindesk.com/markets/2022/0…

⎆Uniswap Is Discussing Fee Switch

The world’s largest decentralized exchange is currently undergoing discussion on whether or not it should turn on the long-touted fee switch that will accrues value back to UNI token holders. If turned on, this will reduce Liquidity Providers’ revenue from 0.3% of the transaction fee to 0.25%, redirecting the 0.05% to UNI token holders.

Some people will argue about whether or not this will make LP move funds to different DEXs when in reality the gargantuan elephant in the room is whether this can be done without inviting more problems from the SEC. Stop. Pretending.

👨🏻‍💻Decentralized Finance (DeFi)

• OP Labs Introduces Drippie

• Aurora Launches VOTE Token

• Daniele Esta is Back

• Harmony Proposes Minting 4.97 Billion Tokens

🏛Governance - Active Proposals

• Reflexer Ungovernor - Fixing 3 year Sablier stream for DAO Member (fixes proposal #3)

🦮NFT & Metaverse

• HARTi and Mitsui Sumitomo Roll out NFT Insurance Coverage for Claims

• NFT Projects Lost $22M to Largely the Same Hackers on Discord: Reports

• Biggie Smalls’ Estate Goes Crypto With Music License NFTs

Top Sales (Last 24-h); Source: https://dappradar.com/nft

📈Deal Flow & Capital Raise

• Crypso - $3M Seed Round

• Mighty Action Heroes - $10M Seed Round

• Launch House - $10M Web3 Fund

⚖️Regulatory Update

• Kraken Under Investigation for Alleged Sanctions Violations: Report

• South Korean Authorities Launch Probe Into Bitcoin’s ‘Kimchi Premium’

• CFTC Announces New Tech Innovation Office to Oversee Crypto

• CFTC Poaches Pantera Capital’s Legal Counsel

• Bipartisan Bill Seeks to Eliminate Taxes on Crypto Transactions Under $50

• EU Banking Regulator Worries It Can’t Find the Staff to Regulate Crypto

• Japan Ministry of Economy Launches Web3 Policy Office

📚Noteworthy Reads

• Shivsak’s Thread on The Future of NFTs

• Miles Deutscher’s Thread on The Future of $LDO and $ETH? 

• Durden’s Read on Comparing the Profitability of DEXs

Feel free to reach out to manoppomarco@gmail.com — feedbacks and constructive criticisms are much appreciated.