Research Summary
This report discusses the recent actions of the Securities and Exchange Commission (SEC) against crypto and NFT projects, particularly Impact Theory, which was charged with offering unregistered securities. The report also covers the SEC’s review of Grayscale’s Bitcoin ETF application, the firing of ‘BitBoy Crypto’ from his company, and various developments in the world of NFTs and web3.
Key Takeaways
SEC’s Actions Against Crypto and NFT Projects
- SEC Charges Impact Theory: The SEC charged Impact Theory with offering unregistered securities when it sold ‘Founder’s Keys’ for around $30M from October to December 2021. The SEC is seen as targeting low-hanging fruit in the crypto sphere, including high-profile web3 businesses and celebrities.
- Impact Theory Settles Charges: Impact Theory has settled the charges and now owes $6.1M in fines, refunds to investors, and must destroy the NFTs under their control and disable royalties on the remaining collection.
- SEC’s Roadmap for NFT Projects: The SEC’s actions provide a roadmap for NFT projects wanting to avoid a similar fate. Founders who use language implying a return on investment or collecting royalties may trigger heightened scrutiny.
SEC’s Review of Grayscale’s Bitcoin ETF Application
- SEC’s Review Called ‘Arbitrary and Capricious’: A Washington appellate court called the SEC’s review of Grayscale’s Bitcoin ETF application ‘arbitrary and capricious’, and ordered a review of the application. This led to a rally in crypto markets.
- Impact on Other Bitcoin ETF Applications: The ruling could impact the stack of spot Bitcoin ETF applications on SEC Chair Gary Gensler’s desk. Bloomberg analysts are optimistic, raising their estimated odds of an approval by year-end from 65% to 75%.
Other Developments in the World of NFTs and Web3
- ‘BitBoy Crypto’ Fired: ‘BitBoy Crypto’ was fired from his namesake company, which is seen as good news for the crypto space.
- Various NFT and Web3 Projects: The report also covers various developments in the world of NFTs and web3, including Polygon’s release of a toolkit for devs to build customizable chains, Consensys’ ‘Builder Nights’ initiative, and Robinhood’s enabling of in-app swaps on Ethereum.
Actionable Insights
- Monitor Regulatory Developments: Crypto and NFT projects should closely monitor regulatory developments and adjust their practices accordingly to avoid regulatory scrutiny.
- Consider Legal Implications: When launching new projects or initiatives, companies should consider the legal implications and ensure they are in compliance with all relevant regulations.
- Stay Informed About Market Trends: Investors and stakeholders should stay informed about market trends and developments in the crypto and NFT space to make informed decisions.
