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Ripple is celebrating a new order from US Magistrate Judge Sarah Netburn amid the firm’s ongoing dispute with the Securities and Exchange Commission (SEC).

The legal fight between Ripple and the SEC dates back to December 2020, when the US securities regulator filed suit against the distributed ledger tech company and alleged that it conducted an unregistered securities offering by selling XRP. Ripple has fought the case, maintaining that XRP is not a security and that the SEC’s guidance on which tokens constitute securities has failed to clarify rules of the road for crypto firms.

In an April 11 decision, Netburn denied the SEC’s request to reconsider its order compelling the agency to produce documents and communications related to a speech by previous SEC director William Hinman, which included remarks on why he didn’t consider bitcoin and ether to be securities.

Previously, the SEC argued that the speech consisted of Hinman’s personal views on crypto rather than reflecting an agency-wide policy.

Then, in an attempt to keep notes, drafts and deliberations on that speech from reaching the courtroom, the SEC argued that the speech actually reflected agency policy, and therefore any emails or communications related to it could be protected under the deliberative process privilege (DPP). The DPP allows areas of the government to claim immunity to discovery or disclosure if the communications are about internal processes.

Netburn, however, took issue with the SEC’s sudden perspective shift on Hinman’s speech. 

“The SEC seeks to have it both ways, but the Speech was either intended to reflect agency policy or it was not,” said the order. “Having insisted that it reflected Hinman’s personal views, the SEC cannot now reject its own position. The Speech was not an agency communication, and the deliberations as to its content are not protected by the privilege.”

In the court’s view, Hinman’s speech constituted his personal views, meaning the communications related to it aren’t protected under the DPP. The SEC will have to produce communications related to the speech. 

Ripple CEO Brad Garlinghouse is celebrating the latest court decision. In a fireside chat with CNBC at Paris Blockchain Week, Garlinghouse said the lawsuit has gone “exceedingly well, and much better than I could have hoped when it began about 15 months ago.”

“I think it’s very clear that in the United States the laws have not been clear, and for the SEC to go back in time and say ‘you should’ve known all along,’ it’s a hard case,” he told CNBC in a separate interview today. “What we’re seeing in the court process, which does continue to play out, is a judicial process that does seem to recognize some of this.”

© 2022 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.

Quick Take

• As part of a new transparency initiative, Coinbase released a roster of tokens that it was considering listing.
• The new efforts were in part a response to earlier accusations of insider trading on small-cap tokens in advance of listing. 
• Ethereum network data suggests that the owners of some crypto addresses may have known those considerations were soon to be made public.

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Meta is beginning to allow creators to sell virtual experiences and digital items on its free virtual reality game Horizon Worlds, the company announced earlier this week.

But the reaction from creators and people within the NFT community has largely been negative since the announcement.

What appeared to be a step in the right direction to empower users to build their own worlds and make money from such efforts was met with backlash because of the sizable cut the company will take from creators.

Meta will take almost half of each transaction, a Meta spokesperson confirmed to CNBC. The 47.5% cut from each transaction will include a hardware platform fee of 30% for sales through the Meta Quest Store. Horizon Worlds will charge another 17.5% fee on top of that.  

“The future of work is giving Meta 47.5% of your salary, apparently,” tweeted punk 6529, an NFT art collector and commentator.

The feature will initially only be available to a handful of creators to sell merchandise and experiences. “For example, someone could make and sell attachable accessories for a fashion world or offer paid access to a new part of a world,” said a statement from the company.

Others commented that the high fee won’t deter people from trying it out but might prompt other companies to follow the lead. Currently, other NFT marketplaces like OpenSea and LooksRare, take a small percentage of each transaction, at just 2.5% and 2%, respectively.

The news comes months after Zuckerberg had highlighted how the company would focus on making the metaverse more accessible to creators by criticizing the 30% fee that Apple charges developers on transactions. 

“Imagine selling a nft and meta taking a 47.5% fee THEN to rub salt in the wound having to pay tax on top of the profits,” tweeted one NFT creator, highlighting that creators will be left with little after the sales. 

“We think it’s a pretty competitive rate in the market,” Vivek Sharma, Meta’s VP of Horizon, told The Verge. “We believe in the other platforms being able to have their share.” 

According to a February tweet from the company, the platform had 10,000 worlds in the process of being created. And as of February, the company had 300,000 users, according to The Verge.

While it’s unclear if Meta will budge from the high transaction fees in light of the public response (The Block has contacted Meta for comment and will update this report if we hear back), the company is already working on its next move. Meta will be bringing Horizon Worlds to mobile phones later this year and is discussing the possibility of bringing it to gaming consoles, Sharma said.

© 2022 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.

Hours after announcing a $41.4 billion cash offer to buy Twitter, Elon Musk explained his motivation on a TED conference stage on Thursday.

The Tesla CEO said that Twitter is a de facto town square and that it should be an inclusive arena for free speech.

“My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he said in a conversation with the head of TED Chris Anderson. “The civilizational risk is decreased the more we can increase the trust of Twitter as the public platform.”

Musk said that his intent was not to “monopolize” Twitter but also made it clear that he did have the funds to buy the social media company.

“I could technically afford it,” he said. “But this is not a way to sort of make money. (…) I don’t care about the economics at all.”

Musk argued that the Twitter algorithm should be open source in order to avoid any type of “behind the scenes manipulation.”

His vision also includes adding an edit button (possibly for a limited amount of time after tweeting) and eliminating the spam and scam bots on Twitter.

“If I had a dogecoin for every crypto scam I saw…” he said in between laughs.

In an SEC filing, Musk said that if his offer was not accepted he would “need to consider [his] position as a shareholder.”

The tech billionaire recently bought a 9.2% stake in the company and days later said that he would not be joining the board.

© 2022 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 Texan securities regulator has issued an emergency cease and desist order to a metaverse investment scheme it has accused of being fraudulent

The Texas Securities Commission is accusing Sand Vegas Casino Club, Martin Schwarzberger and Finn Ruben Warnke of illegally offering non-fungible tokens (NFTs) to create virtual casinos in metaverse venues like Sandbox, Decentraland, Infinity Void and NFT Worlds.

The Alabama Securities Commission has filed a simultaneous cease and desist as well. 

Those named in the order have advised their followers that their Gambler NFTs and Golden Gambler NFTs are not regulated as securities and securities laws do not apply to NFTs. The Texas Securities Commission disagrees.

The commission claims the 11,111 Gambler NFTs constitute a fraudulent securities offering. Those who purchase the tokens receive a portion of the profits generated from the metaverse casinos they fund, which become sites for avatars to play casino games like poker using cryptocurrencies.

Those named in the cease and desist allegedly advertised the tokens as a means to turn a profit for investors, according to the order. They claimed holders would likely receive between $102 and $2,040 per NFT per month, among other claims. The Commission also alleges the group used other marketing strategies, like targeting social media influencers, webcasts, AMAs, airdrops and virtual lotteries through social media with prizes like Apple products and a Tesla car. 

“The Respondents are not registered to sell securities in Texas, and the Gambler NFTs and Golden Gambler NFTs are not registered or permitted for sale in Texas,” said the Texas Securities Commission in a statement.

© 2022 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 US government drew a connection between the North Korean hacking unit Lazarus Group and last month’s exploit of the Axie Infinity’s Ronin sidechain network.

The Treasury Department included the Ethereum address 0x098B716B8Aaf21512996dC57EB0615e2383E2f96 in a sanctions list update. The address had previously been flagged on EtherScan as “reported to be involved in a hack targeting the Ronin bridge.”

Currently, the address holds 147,753.03 ETH, worth roughly $444 million at current market value.

As reported at the time, the exploit resulted in the loss of 173,600 ETH and 25.5 million worth of the stablecoin USDC. One of the largest exploits of its kind to date, the event drove global headlines.

Sky Mavis, the creator of Axie Infinity, released details on the exploit in the days following the event, pledging to beef up its security approach, and later raised $150 million to repay the losses to hack victims.

Lazarus has been connected to other cyberattacks in the crypto industry in the past. In March 2020, the Treasury Department moved to sanction individuals believed to have helped launder crypto funds stolen by Lazarus group members.

This is a developing story.

© 2022 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.

After releasing the first Amazon shareholder letter since taking over Jeff Bezos’ role as CEO in July of 2021, Andy Jassy says that the international online retail platform Amazon could potentially sell non-fungible tokens in the future. 

“I think it’s possible down the road on the platform,” Jassy was quoted as saying in an interview with CNBC. 

Jassy adds that he doesn’t own bitcoin or NFTs and doesn’t think Amazon is close to adding crypto payment options in the future, but he believes crypto will become more significant over time. 

Should Amazon adopt NFTs onto its platform, it would compete with the likes of other online retailers like eBay, which began selling NFTs in May of 2021.

Despite showing no concrete plans to add digital assets to its e-commerce marketplace in the near future, Amazon appears intent on adding web3 technology into its business model. 

In July of 2021, Amazon opened a position for a digital currency and blockchain product lead to help build out a Web3-focused strategy and product roadmap, The Block previously reported.

The company still has open positions for blockchain-focused roles such as a senior product manager for the Amazon Web Services (AWS) Blockchain team. 

© 2022 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.

Quick Take

• Arweave is a decentralized data storage protocol that is content-agnostic and designed to provide scalable and permanent on-chain storage in a sustainable manner.
• The blockweave data structure and Proof-of-Access consensus mechanism form the foundations of the Arweave network’s data layer.
• Mechanisms like blockshadows, wildfire and storage endowment keep the network fast, responsive and sustainable.
• The permaweb is a decentralized web interface for hosting both traditional and decentralized applications on top of the Arweave network.
• Arweave has experienced massive growth recently, driven by the deployment of SmartWeave decentralized applications and the need for censorship resistance.

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Terraform Labs has gifted 10 million LUNA ($880 million) to the Luna Foundation Guard to help boost the stability of the stablecoin UST.

The funding will likely go toward the foundation’s goal of acquiring additional collateral — so far in the form of bitcoin (BTC) and avalanche (AVAX) — to underpin UST. It may also be partially burned to help maintain UST’s peg to the US dollar.

Terraform Labs is the development firm behind the Terra blockchain and the UST stablecoin. It founded the Luna Foundation Guard, a Singapore-based non-profit, in January and tasked it with maintaining the stability of Terra’s algorithmic stablecoins and to buy all reserve assets for UST on behalf of the Terra stakeholders. 

Currently LUNA, a free floating cryptocurrency that’s the native token of the Terra blockchain, is used to keep UST’s peg to the dollar. A burning mechanism is used to stop UST’s price going above a dollar. On the flip side, if it drops below the dollar, traders can arbitrage the difference. Critics have said — and betted — that this is an unsustainable strategy, since it relies on the declining reserves of LUNA to keep its peg. 

For this reason, the foundation is attempting to pivot toward a model where UST’s reserves are made up of high ranking cryptocurrencies, like bitcoin. In recent months, the foundation has built up a large treasury of cryptocurrencies as collateral for UST. The foundation has purchased 42,406 BTC, worth $1.7 billion. It also announced plans to acquire $100 million in AVAX — the native token of the Avalanche blockchain.

Do Kwon, CEO of Terraform Labs and also the foundation’s director, stated last month the foundation was looking to buy bitcoin in the near term to the tune of $3 billion and had the funds ready. Over the long run, Kwon said the foundation eyes a reserve target of $10 billion in bitcoin — both from manual market buy-ins and Terra’s seigniorage process, where a portion of the protocol fees continuously accumulates bitcoin. 

Today’s transaction saw the 10 million LUNA ($880 million) changing hands from Terraform’s wallet address (on the Terra blockchain) to a crypto address owned by the foundation at 6:10 am UTC. The foundation then transferred out a large majority of the funds, some 7.8 million LUNA ($660 million), to another wallet.

This is not the first time Terraform Labs has given a large sum of LUNA to the foundation. In March 2022, Terraform Labs sent 12 million LUNA tokens ($1.1 billion) to the foundation. At the time, Terraform CEO Do Kwon, said that some of those 12 million LUNA tokens were burned to mint UST and the remainder was added to the foundation’s stablecoin reserves.

In today’s case, Terraform Labs or its CEO, has yet to make a comment on why it donated such a large sum to the foundation. We have reached out to the Luna Foundation Guard and will update this article should we hear back.

© 2022 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.

Ethereum Push Notification Service (EPNS), a decentralized communication layer for the crypto space, has raised $10.1 million in a Series A funding round to expand its Web3 messaging capabilities beyond the Ethereum blockchain.

Cryptocurrency infrastructure outfit Jump Crypto led the funding round with participation from Tiger Global, ParaFi, Polygon Studios and Wintermute. Other investors included Sino Global Capital, Harmony Foundation and Zebpay, among others.

According to Thursday’s announcement, the EPNS Series A puts the project’s valuation at about $131 million. The project raised $1.41 million in seed funding in late 2020.

The EPNS team said it will use the newly raised capital to pursue its goal of becoming the “de-facto communication layer for Web3.”

“We are already testing our multichain notifs on Polygon testnet. We are excited for a true multi-chain experience where a user, no matter what network they are on (Ethereum, Polygon or Solana), is able to receive communication from any other network where EPNS is deployed,” Richa Joshi, EPNS co-founder, told The Block.

EPNS is a Web3 communication protocol that aims to enable on-chain communication. The project also helps users receive push notifications for alerts like Ethereum Naming Service (ENS) domain expiration, vault liquidation on Oasis and various on-chain snapshots among others.

The project has delivered more than four million notifications over than 44,000 subscribers since launching in April 2020, the announcement said.

© 2022 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.