SEC's Howey WMD 🕸️ EU welcomes crypto 🟢
The web of SEC's Howey Test for crypto. Europe approves new rules for cryptocurrency licensing and funds transfers. Coinbase mulling relocation. How Taylor Swift dodged a $100 Million bullet.
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Gary's WMD - the Howey Test
Gary Gensler, SEC and their Howey Test has been annoying cryptoland for a while now. From Ripple to Coinbase, everyone's in the firing line.
What Test?
Howey Test actually gets its name from a Supreme Court case from way back in 1946 involving the WJ Howey Company and their sale of citrus groves to investors in Florida.
The SEC uses this "Howey Test" to tell the difference between securities and non-securities.
What security?
It's when you put your money into something and expect to get more money back from other people's hard work (DYOR).
Here's the thing
The SEC hasn't quite figured out how to apply this test to today's digital world. It's like they're trying to use a floppy disk in a world of smartphones. Most digital assets seem more like commodities than securities, and some were even designed to avoid being classified as securities.
And unlike the citrus grove investors, who probably weren't interested in munching on oranges, crypto enthusiasts have big dreams for the future. Blockchain, DeFi, NFTs, Metaverse, Gaming and what not!
But … Gensler just wouldn’t agree. Does he ever?
Regulatory Clarity?
Gensler Can’t Give a Simple Yes or No on Ethereum.
Legends say he is still thinking about the right answer #MustWatch
Who is in trouble?
Ripple has been one of the earliest victim of this Howey Test. Starting from the good old days of crypto, 2020.
And the latest Gary grilling had a really nice outcome for XRP:
2% 🔼 reaching a $27 Billion.
WhaleAlert noted huge transactions of 115 Million XRP ($60M)
Bittrex who is just about to leave the US. SEC is now behind the asset trading platform
Charged the exchange for trading: Omisego (OMG), Dash (DASH), Algorand (ALGO), Monolith (TKN), Naga (NGC) and IHT Real Estate Protocol (IHT) tokens.
Also says, Bittrex and CEO advised clients to delete "problematic statements" to avoid regulatory scrutiny.
But Gary, there's a problem, if ALGO was an unregistered security, why call it a "great technology" in 2019?
Bitterex knew this day would come. They received a Wells notice too. Read what they have to say about this.
Why not sponsor us, eh?
TTD Law ⚖️
Crypto gets a EU 🟢
The European Parliament has approved new rules for cryptocurrency licensing and funds transfers.
Lawmakers in the EU voted
517-38 in favour of a new crypto licensing regime, MiCA, with 18 absentions, making it the first major jurisdiction in the world to introduce a comprehensive crypto law.
529-29 in favour of a separate law known as the Transfer of Funds regulation, which requires crypto operators to identify their customers in a bid to halt money laundering, with 14 abstentions.
Stuff you should know.
The regulations aim to increase transparency and security in the crypto market, and require companies to obtain a license to operate in the EU.
The rules also require crypto exchanges and wallet providers to implement anti-money laundering measures and report suspicious transactions.
The regulations establish a framework for cross-border payments, allowing for faster and cheaper transfers within the EU.
The new rules will come into effect in 2024.
What are they saying
Stefan Berger, the lawmaker who led negotiations on the law.
The rules put the EU at the forefront of the token economy. The European crypto-asset industry has regulatory clarity that does not exist in countries like the US. The sector that was damaged by the FTX collapse can regain trust.
TTD Blockquote 🔊
Brian Armstrong, Coinbase CEO
“Anything is on the table, including relocating or whatever is necessary.”
Is what Armstrong said after former U.K. Chancellor George Osbourne asked whether he could see Coinbase leaving the US at Fintech Week in London.
What is Coinbase stance?
The lack of regulatory clarity is blocking the growth of the cryptocurrency industry in the US, and that other countries are moving ahead with more supportive regulations.
The company is committed to working with regulators to create a clear regulatory framework, but that if this does not happen, the company may have to relocate to a more supportive jurisdiction.
Crypto's Captain America has all them wheels moving.
TTD Taylor 👩🎤
Taylor Swift pulled out of a $100 million sponsorship deal with Sam Bankman-Fried's FTX. She was the only one to ask about unregistered securities. Both Tom Brady and Stephen Curry are being sued for endorsing the now-bankrupt crypto exchange.
Swift's dad used to work for Merrill Lynch, so she knows her stuff when it comes to money. She even had discussions with FTX about selling tour tickets as NFTs, but the deal was "too expensive from the beginning."
TTD Expose 🤯
Soulja Boy cranking out scams
On-chain detective @zachxbt has revealed that American rapper Soulja Boy made 73 promotions and 16 NFT drops on Twitter.
So? Many of which were scams.
O dear.
Soulja has allegedly been promoting several NFT projects that have been deemed fraudulent by the crypto community
The list: RapDoge, Orion, The Life Token, SaferMars, Flokinomics, and ParrotsDAO … #MustRead👇
The US has cranked up the head on celebrities over their promotion of NFTs and other crypto tokens without proper disclosure.
TTD Surfer 🏄
Tribe Capital, a venture capital firm, is reportedly considering a bid for FTX crypto exchange as it plans to restart its operations.
The Voyager Unsecured Creditors Committee (UCC) and the US government have reached a resolution that will allow the proposed Binance US acquisition transaction to move forward.
Space and Time, a UK-based geospatial data company, has added blockchain data to Microsoft's Azure Marketplace.
Australia has more Bitcoin ATMs than the whole of Asia. It has 46 Bitcoin ATMs, compared to Asia's 44. The US leads with 1,525 machines, while Europe has 1,335.
US-based Kraken has secured a key approval from the Central Bank of Ireland, allowing it to operate in the country as a regulated entity.
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