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NYX Professional Makeup thinks the online beauty community is ready for disruption. The L’Oréal brand’s solution? DAOs.

The subsidiary of the beauty behemoth has been looking at the web3 space for the past two years and believes that consumers are already moving “pretty organically” from online to on-chain. 

That belief informed NYX’s decision to launch GORJS earlier this year, a DAO that looks to fund 3D digital art based on the beauty sector. NYX claims that it’s the first such DAO to have this focus.

“The best part of [web3] is that there is a community,” said NYX global president Yann Joffredo in an interview with The Block. “DAOs are actually a community of people that share values that have the same vision or philosophy.”

Branded buzz

From Porsche to Paramount to even Donald Trump — brands dipping their toes into web3 technologies is hardly new.

“There were a lot of initiatives and a lot of them were buzzworthy,” Joffredo said about fashion brands launching NFT collections. “How does that carry over time? A lot of brands haven’t thought through the utility of those NFTs so far.”

But creating a DAO, a decentralized structure that gives native token holders the ability to vote on proposals and what projects it chooses to fund, is arguably more of a long-term play than a non-fungible fizzle.

It requires the careful fostering of a passionate online community, navigating a sometimes-chaotic Discord channel (the de facto social media platform for DAOs) and the technical know-how to decentralize decision making.

GORJS does have some help in that department — it operates alongside an advisory board that includes The Sandbox’s Sebastien Borget and Ready Player Me CEO Timmu Tõke.

The DAO issued 1,000 NFT passes to fund the DAO’s treasury, which will be used to finance projects created by the first team of artists funded by the project.  

Holders of the cheekily named “FKWME PASS” are also entitled to governance tokens, which allow them to vote on future projects that GORJS will house. Airdrops and early access to GORJS-participating creators’ NFT projects are also part of the package.

“Let’s make it clear, NYX is not in it for the money, at least for now,” said Joffredo, noting that any revenue earned with the sales of the NFT passes flowed back into the GORJS treasury.

A focus on community

Instead, it taps into the brand’s broader focus on community. Founded in 1999, NYX initially was used by up-and-coming makeup artists unable to afford high-end brands.

It’s since relied upon a combination of influencer marketing and a focus on inclusive marketing to appeal to different diverse communities, with a focus on groups ignored by the traditional beauty industry.

Now, it’s hoping that DAOs are the next step in that. In a first for a L’Oréal-owned company, NYX established an entire department for web3 and the GORJS DAO.

The question is, after the year that crypto had last year, do consumers even want web3?

Joffredo stumbled slightly in his answer but was adamant that consumers, either through gaming or loyalty programs, are likely encountering web3 without knowing it.

There is also some data to back up the idea that NYX’s bet on DAOs isn’t misguided.

Last year, unlike NFT trading volumes or metaverse land price sales, the assets under the management of DAOs held steady at around $12 billion, with monthly member counts growing threefold to 6 million by November.

That’s even as the industry encountered a myriad of troublesome times with major firms declaring bankruptcies and crypto prices fluctuating amid a turbulent macroeconomic environment.

A learning process

Joffredo recognizes the firm has a lot to learn. The brand president, who has yet to download crypto’s favorite messaging app, Telegram, admitted that some of the daily goings on in the DAO were “exciting but very time-consuming.”

Likely used to the laser-fast pace of crypto, some members are even questioning the speed at which GORJS is operating, he said.

“We’re learning as we speak,” he said. “To be fair, we’re not a web3-based company but we’re very well supported by the community but also the initial advisory team.”

Aside from contending with the enthusiasm of its members, Joffredo is looking ahead to the unveiling of its first project.

On April 20, it will give an OpenSea debut to its first batch of digital art produced by NFT creators the organization has funded, titled the “GORJS Genesis Collection.” Royalties for both primary and secondary sales will be split between the artists and the DAO’s treasury, so that it can fund future projects. 

While initial artists were handpicked for their web3 prowess, the NYX president seemed most excited at the prospect of bridging the world of real-life beauty creators with NFT artists.

Joffredo said that the next step for the DAO is to provide technology to help NFT creators leverage the expertise of real-life beauty creators to improve their skin textures or the effect of makeup in their 3D digital creations.

Those digital art creators could then onboard those more familiar with concealer than crypto into the world of NFT art.

“We’re really here to support NFT creators and to seed a new generation of creators because that’s what the brand stands for,” he 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.

The Sandbox, a blockchain-based metaverse company, released a warning regarding a security breach.

The company explained in a blog post on Thursday that an unauthorized third party accessed an employee’s computer and sent a fraudulent email to the platform’s users.

The fraudulent email was titled “The Sandbox Game (PURELAND) Access,” sent on Feb. 26. and contained links that could install malware on a user’s computer if clicked on. This malware would give the third party control over the user’s computer, allowing access to their personal information. The company has stated that the third party only had access to the single employee’s computer and was unable to access any other service or account of The Sandbox.

The only data the attacker had access to was email addresses of The Sandbox users, the company said. So far, no financial loss has been reported.

The Sandbox warned users to be wary of potential phishing attacks following the breach, telling targeted users “not to open, play, or download anything from the hyperlinked website.” It also recommended that users strengthen their passwords, implement two-factor authentication, and avoid clicking on suspicious links.

Phishy business

The project has taken quick action to address the issue, including emailing users who may have received the fraudulent email, blocking the employee’s accounts and access and resetting all related passwords with two-factor authentication. The employee’s laptop was also reformatted, and the company said it was working to improve its security policies and practices.

This breach is the latest in a string of email-phased phishing attempts aimed at stealing crypto assets or extracting information of crypto users. Just recently, the email system of domain name registrar Namecheap was breached, resulting in a widespread fake phishing campaign which told users to upgrade crypto wallets.

There have been times when hackers have been able to steal large sums of money with these types of phishing email campaigns. For example, in February 2022, a bad actor stole about $2 million worth of NFTs from OpenSea users by tricking them into signing a malicious transaction sent via an email link.

© 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 metaverse could be next in EU competition regulators’ crosshairs, said antitrust chief Margrethe Vestager on Thursday — with concerns about Meta’s dominance at the top of the docket. 

“It’s already time for us to start asking what healthy competition would look like in the metaverse,” Vestager said at a conference, according to a Reuters report. 

Vestager noted that there is already a political debate about the attention paid to digital markets, with all jurisdictions moving forward at different speeds. “We will not get the same legal framework,” she said, adding: “And maybe that is not a bad thing. Because that will allow us to hone our toolkits in the process of mutual learning.”

Meta, formerly Facebook, has made an audacious play to grab market share in this emerging tech area, putting billions on the line to develop hardware and software. It is the market’s leading producer of virtual-reality headsets. The company reported a $4.3 billion loss in the fourth quarter of last year for its metaverse division, Reality Labs. The division lost $3.3 billion in the same quarter a year ago.

© 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.

Bitcoin mining stocks tracked by The Block were mostly lower on Wednesday, with six gaining and the other 13 declining.

Bitcoin rose 1.6% to $23,530 by market close.

Here is a look at how the individual miners performed today:

© 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.

Silvergate Capital Corporation told the U.S. Securities and Exchange Commission that it may be “less than well-capitalized” and said it was “reevaluating its business” in a filing with the agency. Shares plummeted after the close.

Silvergate, a large bank for fintech and crypto, said it would not be able to file its annual financial report on time. It noted that it expected to “record further losses related to the other-than-temporary impairment on the securities portfolio.”

“The company is currently in the process of reevaluating its businesses and strategies in light of the business and regulatory challenges it currently faces,” Silvergate said.  It also told the SEC it could not file its annual financial report on time because it needed more time for analysis, auditing and to “record journal entries related to subsequent events.” 

Silvergate said it does not think it can complete all the information required by March 16 for the report due for the fiscal year that ended on Dec. 31.

Shares fall

Shares in the crypto-friendly bank traded down after hours, dipping over 30% to $9.10 by 5:45 p.m. EST, according to TradingView data. Shares have been falling since the beginning of the year, as links to the collapsed FTX exchange and a run on deposits in the fourth quarter damaged the bank’s reputation. 

SI chart by TradingView

KBW analysts led by Michael Perito downgraded the stock to market perform from outperform this week, citing “increasingly limited visibility.” 

“Our market perform rating reflects increased patience, particularly after the bounce back in the shares off the lows of nearly $10,” the analysts said. The expected 10-K “could possibly include some incremental year-end commentary.” 

Silvergate remains one of the most shorted stocks on Wall Street, according to NYSE data via MarketWatch. Around 71% of outstanding shares were sold short as of Feb. 15.

Moody’s said on Feb. 17 that the bank was well capitalized, although it faced “the potential for further unanticipated shocks to erode capital given elevated regulatory and legal risks and constrained profitability.”

“The company is also facing challenges in preserving its funding and liquidity profile as it looks to reduce its reliance on brokered deposits and Federal Home Loan Bank funding,” Moody’s wrote. “In addition, continued large outflows of deposits from crypto centric firms could further adversely impact the bank’s financial condition.”

© 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 Official Committee of Unsecured Creditors in the Celsius bankruptcy case said a proposed sale to NovaWulf Digital Management is “the best” option, according to a new court filing.

Smaller creditors would receive 70% of their money back under the proposed deal, while larger creditors would receive tokenized shares in a new entity managed by NovaWulf. Celsius filed for bankruptcy protection last year and owes billions to its creditors. 

“While the committee will consider all options until a plan is confirmed and has become effective, the committee also believes that the NovaWulf Transaction is the best, actionable alternative at this time,” the filing said. 

Celsius drew nine takeover bids and 40 expressions of interest, court documents say. The new owners plan to inject between $45 million and $55 million into the business and add new divisions, like private wealth and trade finance.

The independent examiner in the Celsius bankruptcy filed a bombshell report in January detailing operational failures, market manipulation and improper use of customer assets to fund customer withdrawal requests. 

© 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 U.S. Treasury, Federal Reserve and White House officials “will begin to meet regularly” to talk about a possible central bank digital currency, said Nellie Liang, undersecretary for domestic finance at Treasury, in a speech delivered to the Atlantic Council in Washington. 

The Treasury-led CBDC working group will study the issue further and complement the Fed’s ongoing research into a digital dollar. Treasury recommended the working group in one of the digital asset policy papers it released last September. 

Liang emphasized that the working group does not necessarily signal a shift in U.S. policy over a digital dollar, with the Fed still in a lead research role.

“The Fed has also emphasized that it would only issue a CBDC with the support of the executive branch and Congress, and more broadly the public,” said Liang. 

A CBDC could be either retail or wholesale, Liang said. A wholesale CBDC would be accessible to financial institutions that are already eligible for central bank accounts. A retail CBDC would be a complement to cash, and not replace it.  

“Full consideration of these issues for a possible CBDC – wholesale, retail, or both – will take some time to complete, but the Working Group plans to provide interim public updates,” Liang said.

The Fed has said it would only issue a CBDC if it had support from the executive branch, Congress and the public, though several Fed leaders have made public remarks indicating that a push for a digital dollar is not imminent. One of the Fed’s most-engaged leaders on the digital dollar issue, Lael Brainard, is now the National Economic Council director, a top White House advisory position to President Joe Biden.

© 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.

Roobet, a crypto casino offering 3,000-plus games and a fully featured sportsbook, added Snoop Dogg to its C-suite. The rapper joins as, presumably, the first-ever chief ganjaroo officer.

Don’t rush to LinkedIn in search of a similar role, though. Snoop Dogg (né Lion) is merely partnering with Roobet, which Raw Entertainment owns, to help the firm reach its goal of furthering the future of the online entertainment industry. The partnership is just Snoop’s latest venture into crypto. He has long been a proponent of blockchain technology and web3.

There are suspicions that Snoop Dogg may be a prolific NFT collector who uses the name of Cozomo De’ Medici. The Dogg does, for sure, have own NFT collections. In August, Snoop Dogg performed with Eminem in the Yuga Labs metaverse at MTV’s infamous Video Music Awards (VMAs).

Snoop and Roobet are “reimagining the way the worlds of entertainment and iGaming intersect, combining Snoop’s three decades of industry expertise in show business and Roobet’s innovation and passion for pursuing fun on the digital frontier,” the company said in a statement.

“You already know what happens when the Dogg is on it,” said Snoop, who was previously known as Snoop Lion after a trip to Jamaica inspired him to convert to Rastafarianism. He went back to Snoop Dogg after a few years. 

Roobet is doing “something different,” the rapper added. “Together, we’re gonna change the game and do it better than it’s ever been done.”

“Turns out, I’ve been a kangaroo this entire time,” said Snoop Dogg.

Snoop Roo, anyone?

© 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.

© 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 U.S. is behind on getting its regulatory act together while the rest of the world embraces crypto, according to Coinbase CEO Brian Armstrong.

The executive, in an interview on Bloomberg TV, also defended Coinbase’s staking product as not being a security and reiterated that the company is prepared to defend that in court if necessary, though they prefer to work collaboratively with regulators. 

He also noted that crypto isn’t going anywhere. 

“A lot of traditional financial services firms are integrating this technology,” Armstrong said. “Everybody from JPMorgan, Visa and Mastercard, Franklin Templeton they have projects and teams internally working on how to integrate crypto into their services.”

The CEO backed the overall concept of stablecoins, but noted that not all of them pass muster with the company, pointing to the recent delisting of Binance USD after Paxos was told by the New York Department of Financial Services to stop issuing the coin.

“My number one priority this year is the policy environment,” Armstrong said. “The rest of the world has actually embraced crypto. We’ve seen all the major financial hubs, Singapore, Hong Kong and London, and the EU just passed comprehensive crypto legislation … We need a clear rule book so that this industry can be built here.”  

© 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.