Jay-Z Brings Bitcoin to BK

June 10, 2022 / Unchained Daily / Laura Shin

Daily Bits✍️✍️✍️

Jay-Z and Jack Dorsey unveiled a Bitcoin education program in a Brooklyn housing project.
Custodia Bank sues Federal Reserve over ‘unlawful’ application processing delay.
Anchorage Digital seeks to create cross-exchange custodynetwork.
Optimism hacker sends 1 million OP tokens to Vitalik Buterin.
Bitcoin mining activity diminished in Texas amid heatwave and grid stress.

Today in Crypto Adoption…

Bloomberg adds over 40 tokens to its terminal offering.
Deloitte publishes survey claiming 75% of retailers considering crypto payments within 24 months.
Kava introduces Earn, an interface to aggregate its mint, swap, and lend DeFi products for a simpler user experience.
Russian legislators introduce bill to ban crypto payments.

The $$$ Corner…

Solana Ventures sets up $100 million GameFi/DeFi fund in Korea.
Data-based investment firm Delphia raises $60 million Series A round.
Orderly raises $20 million for its DEX protocol on Near.
PartyDao raises $16.4 million in a round led by a16z.
NFT price tracker Floor raises $8 million in a Series A round.
Discord gamification role playing game Tatsumeeko raises $7.5 million for web3 pivot.
Coinbase targets strategic investment in Zipmex, nixes acquisition.

What Do You Meme?

What’s Poppin’?

SEC Investigating Terraform Labs Over UST Marketing

Bloomberg reported yesterday that the SEC is investigating marketing activities undertaken by Do Kwon and Terraform Labs related to TerraUSD, also known as UST, the now-defunct “decentralized algorithmic stablecoin” that collapsed last month. According to Bloomberg’s source, the SEC will be attempting to determine whether UST marketing violated several federal US investor-protection laws. In response to the news, Terraform Labs said it was unaware of SEC action related to UST marketing, and the SEC declined to comment.

Also this week, court documents published by the U.S. Second Circuit on June 8th made clear that Terraform Labs and its cofounder Do Kwon will be required to comply with an existing SEC subpoena related to the ongoing investigation of Terra’s Mirror Protocol. Kwon had initially been served with the subpoena upon his arrival at Messari’s Mainnet conference in New York in September 2021, where he was a speaker.

In response to that subpoena, Terraform Labs lawyers had argued that the SEC lacked jurisdiction over the entity due to Terraform’s lack of “sufficient contacts” with the US. Terraform Labs is legally incorporated in Singapore. TFL also argued that the SEC violated its own Rules of Practice when it served the subpoena by handing a copy to Kwon in person.

The court ruled that the SEC was in line with its own rules and did have jurisdiction in the case because Terraform Labs had US employees and had previously stated that 15% of its users resided in the country.

Investigations are also being undertaken by Korean authorities. According to the Financial Times, the Seoul Metropolitan Police Agency has said it is looking into allegations that employees of Terraform Labs embezzled an undisclosed amount of the organization’s bitcoin holdings.

Daniel Shin, Terraform Labs co-founder, has denied allegations, saying to the Financial Times, “There was no intention of deception as we just wanted to innovate the payment settlement system with blockchain technology.”

For his part, TFL CEO Do Kwon wrote in a Twitter thread on Thursday that he and his team were looking to be “more proactive” about getting the “right information out there.” Mr. Kwon encouraged media to reach out to TFL through its official media inquiry channel, suggested that media coverage check purported “experts” against GitHub commit history, and called attention to TFL’s lack of direct engineering involvement with Terra 2.0.

On The Pod…

The Lummis/Gillibrand Bill: Is The ‘Ancillary Asset’ Approach the Best Way? — Ep. 361

Lewis Cohen, lead attorney at DLx Law LLC, joins to discuss the recently proposed Lummis-Gillibrand bill, the Responsible Financial Innovation Act, which he helped shape.

In this episode, we cover:

how Lewis was impressed by Gillibrand’s and Lummis’s offices’ hard work and bipartisanship
how the bill creates a new definition for an “ancillary asset” with split oversight responsibilities between the CFTC and the SEC
how the bill proposes a test of managerial centralization as a determinant of disclosure requirements for digital assets
his response to criticism that the ancillary token approach is more complicated than need be and gives too much power to the SEC
why the bill didn’t adopt an approach more similar to something like SEC Commissioner Hester Peirce’s token safe harbor proposal
how Lewis would respond to SEC Chair Gary Gensler’s contention that the vast majority of digital assets are securities
how Cohen is concerned about legislation or regulation impinging on basic freedoms to transact by over-applying securities regulation
what kind of SEC disclosures will be required for “ancillary assets” and the requirements for projects to be able to cease mandatory disclosure
how the bill defines stablecoins
whether the requirement for stablecoins to maintain reserves means the end of algorithmic stablecoins or whether they will just be called something else
how the bill handles DAOs and how legislation in this area must be delicate
why Lewis believes the proposal is a “bright spot” for thoughtful US legislation and bipartisanship
why he doesn’t see the bill being adopted in the current Congress

Book Update

My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!

You can purchase it here: http://bit.ly/cryptopians