Bad beats

Good morning. Kraken is under investigation for violating US sanctions, El Salvador's bitcoin bets have not paid off, and Meta takes a bath on their metaverse division. All that and more today!

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

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Top 5:

1. Law commission of England and Wales sees crypto as a new type of property. The Commission is an independent body in charge of reviewing and updating laws in the UK and earlier today they published a report recommending that cryptocurrencies and NFTs be treated as property. The Commission's report also argued that new laws should be created to address the unique features of cryptocurrencies in order to "provide a strong legal foundation for the digital assets industry and for users."

2. Kraken under investigation for alleged sanctions violations. US based crypto exchange Kraken is reportedly under investigation by the Treasury Department for allowing Iranian users to utilize the platform's services in violation of federal sanctions. The report from the New York Times suggested that the Treasury would likely fine Kraken, which would be in line with previous actions against crypto companies that have violated federal sanctions. In response to the report, Kraken's Chief Legal Officer issued a statement saying:

Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth. Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues

3. El Salvador buying back debt following bitcoin losses. Amid speculation that the country is nearing default, President Nayib Bukele is trying to buy the dip...in El Salvadoran bonds. The country's sovereign debt bond prices have dropped 75% over the last year and the country's debt rating was downgraded by Moody's in May who cited “bitcoin-related initiatives" as one of the reasons behind the change. The move would reduce the government's debt positions and theoretically reduce the likelihood of broader defaults. President Bukele has purchased 2,381 BTC for $107.15 million and is down around 50% on those investments.

4. Meta’s metaverse division loses $2.8 billion in Q2. The Q2 reading brings total year-to-date losses for Facebook Reality Labs to $5.77 billion. While those numbers are very very big, Mr. Zuckerburg takes the long term view saying, "as the metaverse becomes more important in every part of how we live… I’m confident that we’re going to be glad we played an important role in building this." The group focuses on metaverse specific hardware, software, and content to support Meta's metaverse ambitions.

5. Interest in Ether options rises to record as traders bet on 'Merge'. The number of open positions in the ether options market has reached a record high as bets on the Merge drive a demand for calls. According to QCP, "a few hedge fund names have been large buyers of the ETH calls and the overwhelming demand has brought September volumes up to 100%." The driving force behind the spike in interest was the announcement from Ethereum developer Tim Beiko, that the Merge would tentatively occur during the week of September 19th. Editor's note: I've linked to the below podcast episode before, but if you're interested in playing the Merge, Hal Press of North Rock Digital does a great job breaking down the bull case.

Updates and other stories:
- Wharton School launches metaverse-focused business course...Read More
- UK law commission sees crypto as a new type of property...Read More
- Solana stablecoin Nirvana sinks 90% amid $3.5 million flash loan exploit...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.