SEC Coming for NFTs

Good morning. Ukraine is using tactics previously reserved for DeFi platforms and crypto natives to fund their defense, the SEC is taking a good look at your NFTs, and blockchain infrastructure stays hot. We've got all that and more today! Thanks for reading.

Programming note: we'll be off Friday, but back on Monday - have a good weekend!  

Market Update (as of 8:18am ET):

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Top 5:

1. Ukraine's airdrop tease spurs influx of microdonations. After the Ukrainian government announced an airdrop to addresses that have donated to the government's wallet, a flood of microdonations came pouring in to beat the March 3rd snapshot deadline. Airdrops have historically been an effective strategy to attract users on DeFi platforms and other protocols, but this is definitely the first time they've been deployed on a global stage to fund an ongoing war effort. Since the announcement, unique wallet addresses donating to the government have doubled and total donations now exceeds $40 million. The power of incentives illustrated below:

2. SEC scrutinizes NFT market over illegal crypto token offerings. The Commission is focusing on NFTs that denote ownership of real-world items such as art, collectibles, real estate, etc. Of special interest are fractional NFTs that represent partial ownership of an item and can easily be bought, sold, or traded. The key questions here being: are these NFT securities, and if so were SEC regulations followed when the NFTs were first sold? According to the report from Bloomberg, the SEC's enforcement unit has sent multiple subpoenas to NFT creators and exchanges over the last few months.

3. Crypto company ConsenSys under fire from shareholders demanding audit. The company behind MetaMask is alleged to have shifted valuable assets, including the MetaMask app, from the original entity developing the product to a new entity that had a more favorable ownership structure for founders and management. In August 2020, ConsenSys Mesh (CAG) moved Infura, MetaMask, Truffle, PegaSys and Codefi assets to a separate entity, ConsenSys Software Inc. (CSI), in exchange for 10% ownership of CSI and an offset of a $39 million loan. A year after this transfer, CSI has raised more than $250 million and is valued at $3.2 billion. Shareholders of CAG allege the transfer of assets was illegal and not conducted properly while CAG argues that "business fundamentals and operating environment are entirely different today than at the time of the transaction," thus leading to the drastically higher valuation.

4. Tenderly raises $40 million after 500% revenue growth YoY. The blockchain infrastructure company offers a platform to develop, test, and monitor decentralized applications and smart contracts. Tenderly says they work with the majority of the top 100 ethereum projects and that thousands of developers leverage their product. Competitor Alchemy raised $200 million earlier this year at a valuation of $10.2 billion in another example of the rapid growth in the space.

5. Twitter sleuth thinks Morgan Stanley is piling into GBTC in anticipation of an ETF conversion. It's a logical guess from @MacroScope17, who's never steered me wrong before, but still just speculation. That being said, GBTC is trading at a ~25% below it's NAV so if you think Morgan Stanley may know something retail traders don't you could get bitcoin exposure at a big discount by buying GBTC shares.

Updates and other stories:
- US tax agency moves to dismiss lawsuit by Tezos stakers...Read More
- CME Group to roll out micro bitcoin, ether options...Read More
- Hedge fund Alan Howard backs $7.5M round for ‘Financial NFTs’...Read More

Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN

External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.