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Crypto Weekly News Recap: Snoop Dogg Had an Anon NFT Account -- Which Has $17 Million in NFTs

Plus: Twitter enables Bitcoin tipping, and Tom Brady wishes he could be paid in crypto.

Laura Shin

Sep 24, 2021

This week in the crypto world, regulatory news was top of mind. SEC Chair Gary Gensler gave a Q&A to The Washington Post in which he seemed to set his sights on crypto exchanges and on stablecoins as areas where we might expect to see activity from the SEC going forward. (The latter was confirmed in a New York Times article titled, "Regulators Racing Toward First Major Rules on Cryptocurrency," published on Thursday.)

I discuss these issues in my podcast with Nik De, managing editor for global policy and regulation at CoinDesk. I also covered them in a Medium article, "The Reason Crypto Regulation Is Turning Out to Be So Difficult," which raises the questions of how, if regulations traditionally target intermediaries, they should handle decentralized systems that remove intermediaries. We'll see what the news is next week, as it encompasses the end of the SEC's fiscal year, and is usually a time when we see a lot of enforcement actions and settlements from the agency.

Other than that, here are the other top crypto stories for the week.

The US Treasury Sanctioned a Crypto Exchange for the First Time

Suex, a cryptocurrency exchange based primarily in Russia, has been sanctioned by the United States Treasury for allegedly facilitating transactions for ransomware attackers.

The Treasury’s Office of Foreign Assets Control (OFAC) believes that Suex was involved in eight ransomware variants. Furthermore, OFAC alleges that 40% of known volume on Suex was associated with addresses linked to bad actors. According to Chainalysis, the blockchain analytics company that helped OFAC in this case, Suex deposit addresses “received over $160 million in Bitcoin from ransomware actors, scammers, and darknet market operators.”

The exchange is now officially listed on OFAC’s Specially Designated Nationals and Blocked Persons list, barring US residents and businesses from interacting with the firm.

The move comes shortly after a Wall Street Journal article last Friday reported Treasury’s intent to target crypto-ransomware payments with sanctions.

Twitter Rolls Out Verified Avatars and Bitcoin Tips

According to Decrypt, Twitter began rolling out Bitcoin payment features yesterday. Users will have multiple avenues to hand out Bitcoin tips. For normies, Square’s Cash App and Go Fund Me will let users send BTC via a more conventional route. For hard-core Bitcoiners, Twitter will allow users to utilize Strike, a Lightning Network-based payment app, to send tips. Bitcoin tips went live starting Thursday on all iOS devices.

In addition to Bitcoin tips, Twitter shared plans to explore NFTs for authentication -- think blue checkmarks but for NFTs. Said Twitter executive Esther Crawford, "We're interested in and in basically making it somehow visually clear that this is an authenticated avatar and then give you some interesting info and insight about the provenance of that NFT ....”

Binance Is Under Investigation for Insider Trading

Bloomberg reported last Friday that US officials at the Commodity Futures Trading Commission are investigating the world’s most popular exchange for possible insider trading and market manipulation. According to Bloomberg, the CFTC is looking into whether Binance or its staff took advantage of its customers to generate profit. Citing anonymous sources, Bloomberg says that the CFTC has contacted “potential witnesses” as part of its inquiry.

For now, Binance is not formally accused of committing any wrongdoing and it is unclear if the investigation will lead to any actions from the regulator. The exchange is already under investigation by the Internal Revenue Service and Department of Justice, as well as the CFTC.

Robinhood Users Will Soon Have Crypto-Wallet Capability

Robinhood is planning to roll out its highly anticipated crypto wallet and transfer features starting in October. With wallets, users will be able to transfer ETH, BTC, DOGE, and other supported tokens off-platform. Security features like identity verification, multi-factor authentication, and email and phone verification will be implemented for storing crypto on Robinhood.

According to Christine Brown, chief operating officer at Robinhood Crypto, the trading platform will slowly launch its crypto wallets, with only a small group of customers testing the Alpha program next month. More customers will be able to join later through a waitlist. At publishing time, there are at least 115,000 users on the initial waitlist -- which is less than one percent of the 13 million crypto traders on Robinhood.

Perhaps a reason for the low waitlist number can be attributed to the fact that Robinhood crypto traders are Dogecoin dominant. In Q2, 62% of crypto revenue came from Dogecoin trading alone. However, data from BitInfoCharts shows that Dogecoin is not widely used in actual blockchain transactions, despite its popularity on Robinhood. Dogecoin facilitates far fewer daily transactions than Bitcoin or Ethereum. For example, on Wednesday, Dogecoin executed 16,000 transactions, while Bitcoin executed 275,000 and Ethereum saw 1.17 million, respectively.

It will be interesting to see if Robinhood’s new wallet feature will affect such numbers going forward.

The Evergrande News Was Not Grand for the Crypto Market

As concerns surrounding Evergrande, the heavily indebted Chinese property giant, caught momentum, Bitcoin and Ethereum, along with traditional and crypto markets, took a big hit on Monday and Tuesday.

Bitcoin dropped to $40,835, while Ethereum dipped below $3,000 for the first time since early August. According to Decrypt, over $1.2 billion in crypto futures were liquidated in just 24 hours. In traditional markets, the Dow Jones Industrial Average ended Monday down 600 points.

The dip was most likely related to negative sentiment regarding Evergrande’s balance sheet, which showed over $300 billion in debt, an amount that some analysts believed the company would not be able to pay back. However, on Wednesday, Evergrande agreed to settle interest payments on a domestic bond, calming the tumultuous market.

The total crypto market cap jumped 6% on Wednesday, according to data from CoinMarketCap.

Celsius Is Receiving the BlockFi Treatment From State Regulators

State regulators in New Jersey, Texas, and Alabama are looking into Celsius, a crypto lending platform. Specifically, the states seem to believe that Celsius interest-earning accounts, where customers stake crypto assets in return for yield, should be considered securities.

To sum up the allegations:

  1. The Alabama Securities Commission ordered Celsius to explain how it is not violating securities laws. Celsius now has less than 30 days to respond to Alabama’s regulator and explain why a cease and desist order should not be issued.

  2. In Texas, regulators announced a hearing in February to discuss a cease and desist for Celsius’s interest-earning program.

  3. New Jersey’s Bureau of Securities ordered Celsius to halt operations concerning interest-earning accounts within the state.

A Celsius spokesperson told CoinDesk: “We are disappointed these actions have been filed and wholeheartedly disagree with the allegations being made that Celsius has not complied with the law...Given our commitment to regulatory adherence, we look forward to addressing this matter quickly.”

The move against Celsius comes about two months after BlockFi, another crypto lender, encountered similar orders from New Jersey, Alabama, Texas, Vermont, and Kentucky. However, on Tuesday, New Jersey’s Bureau of Securities postponed BlockFi’s ban date until September 30th.

Investors Are Throwing Money at NFT Platforms

Two NFT companies, Dapper Labs and Sorare (disclosure: the latter is a sponsor of my show), announced raises with valuations in the billions.

Dapper Labs, the company behind NBA Top Shot and Flow blockchain, closed a $250 million funding round valuing the company at $7.6 billion -- nearly tripling its last valuation of $2.6 billion in March 2021.

In addition to the funding round, Dapper also announced a partnership with LaLiga, Spain’s top soccer league. The deal will be similar to Dapper’s collaboration with the NBA via Top Shot. La Liga will have its own marketplace on Dapper’s Flow blockchain, where NFT moments and highlights with varying degrees of rarity will be bought and sold.

The Dapper Labs’ news comes right on the heels of two similar announcements from Sorare, an Ethereum-based NFT fantasy soccer game. On Tuesday, Sorare announced a raise of $680 million, valuing the NFT company at $4.3 billion. The latest funding round was led by Softbank. Sorare also signed an exclusive partnership deal with LaLiga to issue NFTs for its players less than two weeks ago.

Regarding the overlap between Sorare and Dapper, Dapper Labs CEO Roham Gharegozlou believes there is room for both platforms. He told CoinDesk, “Companies like Sorare can be complementary to us,” adding, “They’re much more focused on fantasy, while video is very important to us, and sets us apart.”

In related news, the ties between sports and crypto continue to grow stronger. Here are two examples:

  1. Crypto.com (disclosure: a current sponsor) announced a new deal with the NBA’s Philadelphia 76ers to become the team’s official jersey patch sponsor. Crypto.com will also be featured prominently inside the Wells Fargo Center arena. In addition, Crypto.com will release a set of official 76er NFT collectibles through its marketplace.

  2. Tom Brady, arguably the greatest football player of all time, is interested in being paid in crypto. "I'd love to request that to get paid in some crypto and, you know, to get paid in some Bitcoin or Ethereum or Solana tokens,” said Brady. “I think it's an amazing thing that's happening in the world,” he added.

This Crypto Account Is Snoop Dogg

“I am @CozomoMedici,” tweeted the rapper Snoop Dogg to his 19 million followers on Monday.

Who is Cozomo de’ Medici? He/she/it is a pseudonymous crypto account with 43,000 followers and an NFT collection valued at $17.3 million. Cozomo’s OpenSea profile currently holds 9 CryptoPunks, 10 Meebits, and a handful of pieces from Art Blocks. Before revealing his identity, the account was fully pseudonymous -- with no ties to Snoop Dogg.

For now, it appears that Snoop Dogg wants to keep Cozomo’s anon-vibe intact.

“Those who are curious to [know] my identity will soon know it,” Cozomo tweeted. “Those who do not care, or simply prefer to not know the source of my vast fame and fortune, may simply not research. I will keep this account focused on NFTs, and not mention this again here.”

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