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NFL Rivals, a free-to-play game from Mythical Games, has managed to score over a million downloads despite debuting amidst a harsh crypto environment and in the off-season of the NFL itself.

The U.S. Securities and Exchange Commission could have acted deliberately when it brought charges against Coinbase hours before its chief legal officer was set to testify before Congress, according former Commodity Futures Trading Commission Chair Christopher Giancarlo.

Giancarlo said that, from his experience in leading a federal agency, the move appeared to be “deliberate.”

“That’s politics,” Giancarlo said Thursday at an event in New York. Giancarlo was CFTC chair from 2017 to 2019. 

The SEC accused the crypto exchange on June 6 of willfully violating federal securities laws when it listed unregistered securities and offered its staking program. Hours later, Coinbase Chief Legal Officer Paul Grewal appeared before the House Agriculture Committee to testify. 

Crypto regulation 

At that hearing, Grewal said it was “disappointing, but not surprising that the SEC has decided to bring legal action against Coinbase today, the day of our testimony before this committee’s critical hearing on creating a workable framework for digital asset regulation.”

The SEC did not immediately respond to a request for comment when asked about Giancarlo’s comment. SEC Chair Gary Gensler has called on crypto exchanges to register with the agency, and has said the agency is ready to help them come into compliance. 

Giancarlo was also asked about the prospects of various bills to regulate crypto floating in the House. 

“I think there is a very good chance that these bills pass the House this year,” Giancarlo said. He was less optimistic about a bill passing through the Senate. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The bankruptcy claims exchange from Kyle Davies and Su Zhu – the founders of failed hedge fund Three Arrows Capital – has also issued Justice Tokens that offer exposure to defamation lawsuits.

Crypto custody firm Prime Trust has “a shortfall in customer funds” and was unable to meet all withdrawal requests this month, the Nevada Department of Business and Industry said Thursday.

Tk

BlackRock head of strategic ecosystem partnerships Joseph Chalom thinks institutional adoption of tokenization might be slower than expected in the short term, “but in the long term it will be monumental in shaping our ecosystem.”

“We need to work with good actors, and with good infrastructure, that becomes self-reinforcing, then the money and adoption will come,” he said Thursday at an event in New York. His comments followed a flurry of excitement after the asset management firm filed for a spot bitcoin EFT with the U.S. Securities and Exchange Commission last week. 

Chalom said BlackRock has been engaged in numerous conversations with both traditional and crypto-native clients, focusing on tokenization and its partnership with Circle. Chalom added the industry needs to coalesce around certain assets and prioritize real-world use cases.

Decentralized finance

When it comes to decentralized finance, however, Chalom was less optimistic in terms of widescale institutional adoption.

“We go to jail if we don’t know who we are trading with, we can only participate in ecosystems who are well regulated and understood,” he said.

Chalom acknowledged the potential of DeFi in the long term, specifically highlighting the importance of smart contracts and deep liquidity pools. But he expressed concerns over the unresolved issue of digital identity, which he identified as a significant obstacle for institutional participation.

“There is always the anti-money laundering issue, the KYC issue,” he said. “We need a clear understanding of who is in these pools.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A hawkish Bank of England rate hike and the latest U.S. jobless claims stirred markets little. A crypto executive writes that approval of a spot bitcoin ETF is “almost certain.”

The Commodity Futures Trading Commission brought its first “romance scam” case on Thursday after it found a company misappropriated $1.3 million in customer funds that were intended to be used for digital asset trading.

At least 29 customers transferred funds to California company Justby International Auctions to trade digital assets and forex on “supposedly legitimate trading platforms,” the CFTC said in the complaint. But those funds were not used to trade, and Justby CEO Cunwen Zhu instead used some of the funds for his personal use and transferred the majority to others involved, the agency said. 

The CFTC said “solicitors” reached out to customers on social media and “pretended to befriend or romance the customers” in an effort to have them open accounts.

“As people sought to escape the isolation of the pandemic and form a connection to others online, fraudsters saw a new venue to prey on and to take advantage of the public,” CFTC Director of Enforcement Ian McGinley said in the statement.

The alleged scheme

From April 2021 through March 2022, Zhu and Justby accepted and misappropriated $1.3 million from customers, according to the CFTC. 

“Solicitors established a rapport with the Scheme Customers by messaging them frequently, sharing purported pictures of themselves in expensive locales or with expensive items such as luxury cars,” the CFTC said in the complaint. “The Solicitor always claimed to be a highly successful trader and usually attributed their success to an ‘uncle’ or an ‘insider’ who provided them with inside knowledge.”

Customers were also given false records “to maintain the pretense that they were engaged in actual trading,” the agency said.

The agency is seeking restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, trading bans, and a permanent injunction against further violations of CFTC regulations. 

Zhu was also charged with one count of wire fraud in the Middle District of Florida back in April, the CFTC said. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

While other industries like entertainment and loyalty programs have the potential to onboard millions of new users into Web3, gaming provides fertile ground for the seeds of mass adoption. Gamers are already familiar with virtual currency and understand how to buy and earn in-game assets. And while there are nearly 8 billion people in the world, over 3 billion of us play video games pointing to a considerable amount of the population primed for a gamified digital future.

From creating rich NFT ecosystems to integrating crypto payments into existing models, entertainment giants, talent agencies and creative networks continue to find new ways to organically weave in Web3.