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| Take a look at the hits from today's Inside Cryptocurrency briefing: - The top U.S. securities regulator and Coinbase's latest confrontation in court,
- A 24% drop in the number of blockchain developers worldwide,
- The European Union's provisional agreement aimed at forcing crypto companies to conduct stricter due diligence on customers, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | The U.S. Securities and Exchange Commission (SEC) and Coinbase, the largest U.S. crypto exchange, have recently met in a court hearing to share their oral arguments with U.S. Judge Katherine Polk Failla. During the hearing, Coinbase's legal team said buying cryptocurrency on an exchange is more like collecting Beanie Babies, a line of stuffed toys, than investing in a stock or bond. More: - The SEC filed a lawsuit against Coinbase in June last year, accusing the exchange of allowing users to trade numerous tokens that were actually unregistered securities.
- In the latest hearing, Coinbase requested Judge Failla to dismiss the lawsuit, arguing that tokens listed on its exchange are not securities subject to the SEC's jurisdiction since buyers do not gain any rights as part of their purchases.
- The exchange pointed out that the situation resembles the difference between buying Beanie Babies toys and buying stock in Beanie Babies' manufacturer.
- In response, the SEC's lawyers argued that crypto investors actually invest in the network behind the tokens when they buy cryptocurrencies.
- Judge Failla ended the hearing without ruling.
- The SEC faced different rulings in its cases against Terraform Labs, the firm behind the collapsed Terra ecosystem, and the blockchain-based payment protocol firm Ripple.
- Judge Jed S. Rakoff ruled that Terraform Labs sold unregistered securities, labeling the firm's native tokens as securities, while Judge Analisa Torres ruled that Ripple's native token, XRP, is not a security when sold to the general public.
Zoom Out: - The SEC classifies all cryptocurrencies other than Bitcoin (BTC) as securities in light of current chair Gary Gensler's approach, claiming jurisdiction over the crypto market.
- Within the past year alone, many other crypto firms, including Binance, Gemini, Kraken, and Bittrex, also came under increased scrutiny by the SEC over alleged securities law violations.
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| 2 | | 
What the numbers say: The crypto data platform CoinGecko has recently ranked the traditional fashion brands by their number of NFT collections. Popular sportswear brand Adidas took the lead on the list, with 12 collections in total. In the top five, the brand was followed by Nike, Puma, Gucci, and Yves Saint Laurent, respectively. Givenchy, Prada, Moncler, Louis Vuitton, and Coach also made the top 10 with two to three collections. The research report pointed out that 21 of the top 50 fashion brands worldwide have NFTs, and luxury brands embrace digital collectibles less extensively. Relevance: Most traditional fashion brands launched their first NFT collection in 2021 or 2022. The increased adoption in these years mainly stemmed from the massive popularity the NFTs gained in 2021. The trading volume of NFTs increased to $17B in 2021, up from just $82M in the previous year. This massive popularity caused many mainstream brands to jump on the bandwagon, launching their own NFT collections. However, the market later experienced a massive decline in its key metrics in the following year. In mid-2022, NFT sales declined by over 90% compared to 2021 as investors lost confidence in digital assets amid an emerging crypto winter. 2023 also hosted a similar market downturn in the industry, though the NFT market saw a recovery in the last quarter of the year. Brands that should care: Many traditional fashion brands partnered with leading crypto, NFT, and blockchain firms, such as Polygon Labs, SuperRare, and RTFKT, to launch their NFT collections. | | | |
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| 3 | | The member states of the European Union (EU) and the European Commission, the governing body of the EU, have reached a provisional agreement that would force crypto companies to conduct stricter due diligence on customers to combat money laundering and terrorism financing. The agreement aims to harmonize rules throughout the bloc, eliminating potential loopholes used to launder illegal funds. More: - As part of the new rules, crypto asset service providers will have to conduct tougher checks when settling transactions over €1,000 (~$1,090).
- The agreement will also add measures to deal with risks related to transactions with self-custodial wallets that allow users to manage their private keys, providing complete control of their assets.
- The rules will apply to financial institutions, banks, real estate agencies, asset management services, casinos, and merchants, as well as crypto asset service providers.
- The new regulation still needs to be approved by the bloc's legislative body, the European Parliament (EP), and 27 member states to come into force.
Zoom Out: - On the other hand, the EU has increased its efforts to establish a regulatory framework for the crypto market over the last few years.
- Last year, the EP approved the region's long-awaited crypto regulations, Markets in Crypto Assets (MiCA), with a final vote after three years of development.
- The EU's banking watchdog, the European Banking Authority (EBA), also recently extended its anti-money laundering and counter-terrorism financing rules to cover the region's crypto companies.
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| 4 | | The data analyzed by The Bitcoin ESG Forecast has pointed out that the sustainable energy usage in Bitcoin (BTC) mining operations hit a new all-time high. The report showed that the Bitcoin network now uses sustainable energy in 54.5% of its total energy consumption for mining. More: - The 54.5% rate makes the Bitcoin mining industry the top sector in the use of sustainable energy, with the highest usage compared to any other industry.
- The figure also represents a 3.6% increase experienced during 2023.
- The Bitcoin ESG Forecast used data from its Bitcoin Energy and Emissions Sustainability Tracker (BEEST) model for the analysis.
Zoom Out: - In mining operations of cryptocurrencies based on the proof-of-work (PoW) model like Bitcoin, computers have to perform complex algorithms to create new coins.
- The process requires massive amounts of computing power and electricity, which could be harmful to the environment.
- Amid the heightened concerns about the adverse environmental effects of Bitcoin mining, several crypto-related firms, including Marathon Digital and Tether, invested in sustainable crypto mining operations in countries with rich renewable energy resources.
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| 5 | | Seychelles-based crypto exchange OKX has expanded its partnership with the popular Formula 1 (F1) team McLaren Racing, securing a visible and high-profile branding space on the team's race cars. As part of the expansion, OKX's logo will appear on the side pods of McLaren Racing's car for 20 of the 24 races of the 2024 F1 season. More: - OKX's chief marketing officer (CMO), Haider Rafique, said the expansion mainly stemmed from the increased brand awareness they have gained through the partnership.
- Rafique also added that they want their collaboration with McLaren Racing to be decades-long and generational and aspire today's kids to associate OKX and Web3 with F1 and McLaren Racing.
- Side pods are generally considered the most visible spot on F1 race cars, which makes them a prime advertising space.
- OKX did not disclose the financial details of the expanded sponsorship deal.
- The exchange first signed a sponsorship agreement with McLaren Racing in May 2022 to make its logo appear on the racing team's car throughout the 2023 season.
- As part of the partnership, the firm also previously held exclusive physical events that brought the team's fans and drivers together, allowing the fan base to access its products.
Zoom Out: - Over the last several years, crypto has gained massive popularity in F1, as many other crypto-related firms, including Kraken, Crypto.com, Bybit, Mysten Labs, OpenSea, Stake, and Tezos, signed deals with racing teams.
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| 6 | | The data compiled by the crypto-focused venture capital (VC) firm Electric Capital has shown that the number of active crypto and blockchain developers declined by 24% from the end of 2022 to the end of 2023. The firm's report pointed out that just over 22,000 developers currently operate in the industry. More: - The report attributed the decline mainly to the crypto winter triggered by the collapses of the previously third-largest crypto exchange, FTX, and the multi-billion-dollar Terra ecosystem in 2022.
- More than 52% of the developers leaving the blockchain space in 2023 were new developers with one year or less experience in crypto.
- On the other hand, the number of developers with one to two years of experience saw only a 1% decrease, while the number of developers with more than two years of experience notably increased by 33% within the same period.
- The geographic diversity of blockchain developers has also grown as the U.S.-based coders started representing 26% of all crypto developers worldwide, down from 40% a year earlier.
- However, the share of blockchain developers based in non-Western regions, such as Asia, Africa, and Latin America, has grown from 18% to 36% during the same period.
- Meanwhile, European countries hosted the highest number of crypto developers, making up 34% of the total.
- Ethereum has become the blockchain that attracted the most developers, with over 8,000 builders operating on the network.
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- Former U.S. President Donald Trump has stated that he would never allow the issuance of a central bank digital currency (CBDC) in the U.S. if he is elected in the 2024 presidential race.
- Tether, the issuer of the largest stablecoin USDT, has disclosed that it purchased an additional $380M of Bitcoin (BTC) in Q4 2023, bringing its total Bitcoin holdings to 66,465.
- José Simeón Cañas Central American University's annual survey has revealed that 12% of the population in El Salvador, where Bitcoin (BTC) is a legal tender, used Bitcoin to pay for goods and services at least once in 2023.
- The team behind Nifty Island, a new social multiplayer game integrated with NFTs, has officially launched the public beta version of the game.
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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