Terraform Labs vs US SEC - The WAGMI Journal #6
Regulatory arbitrage in crypto and walking the DeFi fine line
In today’s issue:
The market is relatively steady for BTC and ETH while prominent layer 1 is going back to full incentivization season with massive development funds — as well as trying to figure out the appropriate actions to follow EIP-1559 and have a more attractive/competitive tokenomics. Additionally, Mastercard-BAKKT launches crypto tools for clients, Venmo launches its crypto wallet, and Terra’s Do Kwon confirmed that he was served with an SEC subpoena.
Based on our readers’ suggestions, we are working to add:
a section tracking top projects (primarily DeFi) governance proposals/activities
a section showing open interest and other trading-related metrics 24-h changes
a section showing newly released projects
Please reach out if you have any other ideas or would like us to recap a segment of the market on a daily basis.
- Curated by Marco Manoppo (@manoppomarco)
📰Market News
⎆Terra’s Do Kwon Was Served by SEC
During the Messari’s Mainnet conference last month, there was a rumor that somebody received a subpoena from the SEC. As of Friday, it was confirmed that Do Kwon, the CEO of Terraform Labs (primarily known for $LUNA) was the one who received it.
Do is currently suing the US SEC as shown by a court filing. The issue at hand seems to be about Mirror Protocol, a DeFi platform under Terraform ecosystem which offers synthetic exposure to US equities.
Synthetic exposure towards equities, primarily US-based equities, has been one area where a lot of investors (including notable VC partners) believe that there is indeed a long-term need and product-market fit (it’s extremely difficult to get exposure to US equities for residents of emerging markets); but is extremely tricky to implement.
The development of Terraform Labs vs SEC will be crucial at determining the outcome of any synthetic-related DeFi products in the near future. Governments need to be extremely clear with what DeFi platforms can and can’t do, otherwise, it will promote regulatory arbitrage, causing expensive battles of capital and time, which is not productive for innovation.
⎆Venmo Crypto Wallet Draws Tons of Users
One of the most popular fintech apps that arguably pioneered cross-bank money transfer for millennials to split their blue bottle coffee bills is getting into crypto. This move is not surprising given the moves that Stripe, Robinhood, and many other adjacent fintech companies have done in the past few months. PayPal, which owns Venmo, has also launched its separate crypto-related services.
⎆Mastercard and Bakkt Roll Out Crypto Tools
Card juggernaut Mastercard has partnered with the world’s most popular, respected, and widely used crypto exchange, BAKKT (pls get the joke sir) to expand its crypto-related services. The initiative aims to primarily target partner banks and fintech firms, helping partners roll out crypto investment tools and branded crypto debit-credit cards that are integrated with Mastercard’s loyalty products.
👨🏻💻Decentralized Finance (DeFi)
Harmony Invites Developers with $300 Million Treasury Fund
Near Protocol Offers $800M in Grants in Bid for DeFi Mindshare
Binance Smart Chain Proposal Would See an Ongoing Burn Like Ethereum’s EIP-1559
BitGo Integrates Stacks, Bringing Bitcoin DeFi to Institutions
Reactivated Ethereum Pools Trigger a 78% Surge in Thorchain Price
🦮NFT & Metaverse
SuperRare Posts Best Month as Single-Edition Ethereum NFT Prices Soar
Dapper Labs: NFTs Getting 'Very Little Resistance' From Pro Sports Leagues Now
Fidenza Artist Sells $7M in NFTs That Aren’t Yet Minted
Playboy Launches New NFT Project, Rabbitars
The NFT Magazine Project Plans to Drop a Periodical in the Form of an NFT on Ethereum
Barron’s Article on NFT
The Economist Article on NFT
Top Sales (Last 24-h); Source: https://dappradar.com/nft
📈Deal Flow & Capital Raise
Morpho Labs - $1.35M Seed Round
PlaceWar - $1.8M Seed Round
PolkaPet - $3.1M Seed Round
Sino Global Capital - $200M VC Fund
⚖️Regulatory Update
Terra’s Do Kwon Was Served by SEC, New Lawsuit Shows
Trump Banking Regulator Determined Banks Should Be Allowed to Trade Crypto
CFTC Reportedly Investigating Decentralized Prediction Platform Polymarket
Spanish Banks Are Preparing to Offer Crypto Services: Report
After Cryptocurrencies, China Cracks The Whip On NFTs
Nigeria Set To Unveil The ENaira
Kazakhstan to Limit Power for Crypto Mining to 100 MW Nationwide
European Investor Initiates ICC Arbitration Proceedings Against Binance, Seeking $140 Million
📚Noteworthy Reads & Watches
For the first week (and maybe a few after), this newsletter is intended for friends and family as we’re sharpening our value offering and content.
Feel free to reach out to manoppomarco@gmail.com — feedbacks and constructive criticisms are much appreciated.
DISCLAIMER:
All the information presented on The WAGMI Journal publication and its affiliation is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, and any other forms of advice. Writers, authors, and contributors of The WAGMI Journal may hold any assets mentioned in the issue.