🐻 Is crypto staking canceled?!

Happy Monday crypto nerds 😎! It was a busy week in crypto with a mix of SEC FUD and pop culture moments. Ultimately, the FUD took over and the market finally dipped back down after riding on a mini-high for the past few weeks.

There are A LOT of juicy stories to get through this week so let’s dig in 💪!

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In this issue:

📣The big story of the week. The SEC cracks down on crypto securities, but is it justified?

🚀The good. CryptoPunks are coming to a Paris museum and the Super Bowl brings hype to NFTs by Reddit and Rihanna.

🐻The FUD. 3AC wants to take your money again, an Italian heist steals $4 million from a crypto investor and a $6.5 million crypto Super Bowl ad fails.

📣The big story of the week

The SEC cracks down on crypto securities but is it justified?

The SEC (Securities and Exchange Commission) has been notorious for being confusing and indirect about its crypto regulations. What do you want? What do you really mean? Just tell us straight up!

The situationship has now gotten even messier with the SEC’s crackdown on crypto staking services. It all started when Brian Armstrong (Coinbase CEO) tweeted a rumor that the SEC could be getting rid of staking in the US.

People brushed it off at first. No proof? No truth 🤷‍♀️.

But turns out, he was right and we were wrong 😵‍💫. Just a day later, Kraken exchange announced that they will be halting their staking services for US clients following a hefty $300 million fine issued by the SEC for failing to register their staking-as-a-service program.

So you’re saying that all Kraken had to do to avoid this $300 million fine was to fill out a form on the SEC website? Hard to believe that it’s that easy to get on good terms with the SEC.

What is staking?

It’s s-t-a-k-e 👏, not the juicy s-t-e-a-k 🥩 as explained by Gary Gensler, the top G of the SEC in a video describing how crypto staking works.

Crypto staking is how proof-of-stake blockchains such as Ethereum, Solana and Cardano operate. Participants can lock up their assets to help secure the networks and validate transactions in exchange for rewards.

Staking makes up a MAJOR chunk of the crypto industry with nearly $50 billion of Total Locked Value (TVL) across all chains. More importantly, Ethereum takes a HUGE piece of that pie with nearly $30 billion in TVL.

Uh oh, did you say Ethereum?

You heard that right. The crackdown on Kraken is now raising major concerns about what it could mean for other proof-of-chain networks, particularly Ethereum.

Meanwhile, Coinbase continues to affirm that their crypto staking service is not the same as Kraken.

With all this said, is this actually good or bad 🤔?

Here’s the thing, the SEC’s job is to protect retailers. Especially after the LUNA, FTX, Celsius, Nexo, etc. debacles, people have been calling for stronger regulation to rebuild consumer trust.

But whenever that actually happens, the market reacts negatively with FUD. I guess both the SEC and the crypto community don’t really know what they want out of their relationship 🤷.

🚀The good

If you’re heading to Paris this spring, you can look forward to seeing masterpieces like the Mona Lisa and CryptoPunks. Centre Pompidou, one of the largest modern museums in Europe will be launching a new NFT exhibition featuring 18 digital artworks.

Reddit is killing the NFT avatar game 🔥. In collaboration with the NFL, Reddit released a collection of official Super Bowl NFT avatars that received nearly 1.5 million mints. How were they able to get such mainstream success? By being free. 

Popstar sensation Rihanna also created a huge uproar at the Super Bowl when she revealed her (second) baby bump during her halftime performance of B*tch Better Have My Money. But did you know that Rihanna also just sold a fraction of the streaming royalty rights to that song to 300 NFT holders? Investors must be feeling real good after that performance 💸.

🐻The big, bad FUD

Not all crypto x Super Bowl initiatives were successes though. Most (if not all), crypto projects don’t have the budget to pay millions for a Super Bowl ad this year, except Limit Break, a web3 gaming startup. The ad featured a QR code that was supposed to lead to a free mint, but instead, it pointed viewers to follow the project’s CEO. Way to spend $6.5 million for Twitter followers 😂.

Like straight out of an Italian heist movie, a crypto investor shares his story of losing over $4 million to an organized crime group in Rome posing to be web3 investors. Basically, don’t trust VCs?

Remember the 3AC crypto hedge fund dudes that overleveraged their customer’s assets and went bankrupt following the LUNA collapse? Well, they’re back and they want to take your money again with a new, “next-level level CEX” (centralized exchange) called OPNX. Did they not get the memo that CEXes aren’t really hot anymore? 🤦‍♀️

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