Growth in Web3 Social Media, Music NFTs, & Liquid Staking

Welcome back everybody. It’s been another exciting week in crypto and we’re pleased to bring you the next edition of The Blockchain Review. SBF was arrested in the Bahamas, Elizabeth Warren continues her plight against blockchain, but Donald Trump has seemingly changed some of his opinion of the technology and launched his first ever NFT collection on Polygon. 

SBF had been scheduled to testify to the House Committee on Financial Services earlier in the week by remote video. Between the submission of his planned written testimony and the scheduled hearing, however, he was arrested by Bahamian authorities. He’s now pending extradition to face eight federal indictments in the US and the maximum sentence for all indictments would be 115 years in prison.

In the planned testimony SBF was set to blame others for the downfall of FTX, but prosecutors are instead alleging he’s responsible for orchestrating a years-long fraud using platform customers’ money, money laundering and campaign finance violations with donations to political parties. These are unlikely to be the only charges filed against SBF either, and more could come from state level or other sources. The indictments also mention ‘individuals known and unknown’ so it’s likely other people will also be implicated as well.

Now Elizabeth Warren and Roger Marshall have proposed the Digital Asset Anti-Money Laundering Act to directly target the blockchain industry. Two years ago FinCEN proposed similar rules but it was never finalized after many people in the industry spoke out against them. This bill would finalize those originally suggested requirements and then direct FinCEN to enforce them.

The catch-all bill would treat all blockchain network users as money service businesses and require them to have KYC and AML procedures with anybody they dealt with. This wouldn’t just be for businesses but also individuals with self-hosted wallets who would also be required to have these bank and financial institution level practices. That would be totally impractical for most and the implication would be to push the individual further towards Centralized Exchanges, or towards DeFi which is equipped to perform like a bank.

It’s a critical time because with all the implosions that have happened this year it’s like they sense their moment to try and get this passed. As has been said in the past it’s likely that a set of sweeping rules would stifle innovation and discourage developers and individuals from participating in anything to do with blockchain.

At least we’ve got some more positive news though that a previous critic of Bitcoin, Donald Trump, has just launched his own Digital NFT collection! For years Trump was calling Bitcoin a scam and love him or hate him it’s a representation of the interest in NFT’s from increasingly varied quarters. 

Some entities may be less inclined to embrace the idea of cryptocurrency often due to the regulatory uncertainty, but do embrace NFTs and see the potential for enhancing their marketing and community building activities. You can now add Trump to the long list of brands like Starbucks, Prada and Disney that have all launched NFT collections or projects in 2022, despite the depths of the bear market. 

We’ll always provide you with our research to help with your education. We’ll keep close track of the main developments and evolution of the niches in blockchain so that you get the best of the new knowledge. When you’ve finished reading your report then please remember to fill out the feedback form, your research is valued and we’re always open to suggestions.