SEC cracks down on NFTs. Another Wall Street Billionaire Enters Crypto. Crypto and Wars.

* Prices as of 11:28 PM EST

NFTs

The SEC Won’t Let NFTs Be… 

Doodles

SEC: Should certain NFTs be considered securities subject to regulation? 

Let’s face it…it was just a matter of time before the SEC starting poking their nose around the NFT market. And it’s no surprise, the growth and volume of monetary transactions in NFTs are far outpacing that of the traditional art markets. Money is flying around. According to a recent Bloomberg report which dropped yesterday, the focus of probe is “on whether certain nonfungible tokens, digital assets that can be used to denote ownership of things like a painting or sports memorabilia, are being utilized to raise money like traditional securities”. 

•  Gary Gensler, the Chairperson of the SEC is leading this effort
• The SEC is looking into “Fractional NFTs” (breaking down NFTs into smaller units so they can more easily be bought and sold 
• ~$44 billion of crypto was traded on Ethereum in 2021, up from just $106M in the year before
• The SEC uses the “Howey test” to determine if something is a security

Markets

Citadel, Largest Market Maker for US Options Trading, Will Dabble in Cryptocurrencies

Wall Street Legend and Billionaire, Ken Griffin, teases crypto market making future for Citadel

Why this matters: Remember that old Wall Street guy that snagged the highest bid at the last second and bested the Consitution DAO? Yeah, that was Ken Griffin. He’s the founder of Citadel Securities, which is the largest market maker for US options trading and one of the largest market makers in the world. He recently was quoted saying Citadel will likely engage in market making for cryptocurrencies. This is a big U-Turn for another Wall Street billionaire who admits to being a crypto naysayer, until now.

In a Forbes article yesterday, Griffen said: “…the crypto market today has a market capitalization of about $2 trillion in round numbers, which tells you that I haven’t been right on this call,” and “over the months to come, you will see us engage in making markets in cryptocurrencies.”

Ken joins the growing group of Wall Street billionaires who have flipped their outlooks on cryptocurrencies.

Markets

Russian Invasion of Ukraine Leads to Spike in Bitcoin Volume

Bitcoinist:

“On-chain data shows the Bitcoin market observed its largest daily trading volume since 2021 last week following the start of the Russian invasion of Ukraine.”

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Markets

Is Crypto The Path to Avoid Sanctions for Russia?

Russia and Putin will look for ways around harsh economic sanctions: There are three main workarounds which Russia can use to avoid sanctions: Crypto, Gold, Energy

Energy: Relying on energy sales (massive source of revenue for Russia, and even the US has not sanctioned Russian oil)

Gold: After the barrage of sanctions, Russia has openly said they have restarted buying gold and building their gold reserves, after 2 years of not purchasing any gold.

Crypto: Biden’s administration is working on a specific tactical strategy to ensure Moscow doesn’t use cryptocurrency as a means of avoiding sanctions. This is easier said than done. 

• US Treasury has historically sanctioned SUEX and 25 affiliated cryptocurrency businesses and blacklisted the exchange from the USD financial system, as hackers were using the exchange to launder funds
• Former Treasury advisor, Ari Redbord, said they’ve identified 340+ businesses in Russia that could be used as on and off ramps for crypto

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Tweet of the Day

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