📝 Field Notes #40: Grab Speeds into NFTs as SEC Slams the Brakes

Grab brings NFTs to 180m users. SEC charged 2nd NFT project backed by Mila Kunis. The race for ETFs heats up. DeFi under regulatory fire. The hottest Web3 loyalty start-ups, charts & more.

Sep 15, 2023

Hey, it’s Marc. Welcome to my weekly, obsessively curated insights on crypto & Web3 to help you filter out the noise. ✌️ PS: I’ve got free ad spots. Hit me up!

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"Don't bend; don't water it down; don't try to make it logical; don't edit your own soul according to the fashion. Rather, follow your most intense obsessions mercilessly." – Franz Kafka

📚 Top 5 Reads

The ROI on Web3 Loyalty. By Connor Kelley. Link
Being Onbrand, Onchain. By Karen Shen. Link
NFT ownership: What does that actually mean? By Studio Legal. Link
SEC Enforcements Against NFTs – Are You Next? By James Gatto. Link
“Why we are here?” – Permissionless opening talk (video). By Erik Voorhees. Link

🚨 Top 5 Stories That Caught My Eye

✨ Web3 + NFTs

🚗 Grab enters Web3, bringing NFTs to 180m users (sort of)

The "Uber of Southeast Asia" has enabled the Polygon-based NFT wallet as an in-app feature accessible to users in Singapore last week.
Users can collect NFT vouchers applicable to a (for now) limited selection of services in Singapore related to the upcoming F1 Singapore Grand Prix.
The pilot will run until year-end.

Punchline: After Lufthansa's Uptrip app, this is another example of how NFTs could sneak into the mass market. Unfortunately, the user journey is still too complex and the types of NFTs too limited to be more than an experiment.

🏛️ SEC vs. NFTs Part II

The SEC charged the Mila Kunis-backed NFT project “Stoner Cats” for illegally offering unregistered securities.
According to the SEC, the company behind Stoner Cats promoted royalty-yielding NFTs as profitable investments.
This comes after the SEC’s recent NFT-related enforcement against Impact Theory.

Punchline: This is the second enforcement action by the SEC against an NFT project within weeks. Until now, U.S. regulators have largely ignored NFTs. But the SEC’s arguments potentially apply to a lot of other NFT projects too. This ups regulatory uncertainty for brands.

🔑 Fireblocks & Coinbase empower users with custody control

Crypto custody firm Fireblocks has introduced non-custodial crypto wallet-as-a-service. This gives over 130m end users using apps like Revolut complete control over their assets. It also permits gated access to specific dApps if necessary. Link
Coinbase also launched a non-custodial Web3 wallet for its institutional clients. Link

Punchline: Following the blow-ups of various crypto firms last year, power shifts back to the users. Fireblock's service may appeal to brands keen to limit risk and ease user recovery.

🌎 Crypto & Macro

🍉 The summer of ETFs gets hotter

This week, Franklin Templeton, a global investment firm with $1.45tn in assets under management, joined the race for the first spot Bitcoin ETF in the U.S. Link
Ark Invest and 21Shares have applied for a spot Ether ETF.

Punchline: A U.S. spot Bitcoin or Ether ETF would let investors cheaply and easily enter the crypto market. The SEC's next deadline to respond to an application is Oct. 16 2023.

🔥 DeFi Under Regulatory Fire

The International Organization of Securities Commissions (IOSCO) issued nine policy recommendations to address DeFi. IOSCO is a global body with significant influence. The drafting of the report was led by the SEC. Link
Recently, the Commodity Futures Trading Commission (CFTC) in the US has charged three separate companies with offering illegal derivatives trading. Link
On top of that, two Tornado Cash developers were arrested for money laundering. Link

Punchline: U.S. regulators are zeroing in on DeFi. Meanwhile, IOSCO's recommendations are likely influenced by the SEC. They usually have a significant impact on the regulation of securities markets around the world.

🧠 AI

Meta is working on a powerful new AI model intended to match OpenAI's GPT-4 that it aims to launch in 2024. Link

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💰 Money Moves

Animoca Brands raised $20m for its Mocaverse project. Link
KBank, Thailand's No. 2 bank, launched a $100m KXVC fund targeting Web3, AI and deep tech startups in Asia-Pacific. Link
Layer N raised a $5m seed round led by Founders Fund. It aims to scale financial applications on Ethereum with a hyper-performant layer 2. Link