Around The Block – MAR 24 Week in News

Introduction

In this recap of the crypto world, we will explore the events and news that had the most significant impact in the past week of March 20th. Our focus will be on the following developments:

Big Brother has Eye on Florida Governor

Florida Governor Ron DeSantis announced this week that he plans to introduce a bill that would ban the use of any central bank digital currency (CBDC) in Florida. He dramatically did this by standing behind a podium with a sign attached to it that read, “Big Brother’s Digital Dollar. 

He further said that “a federally controlled central bank digital currency is the most recent way the Davos elites are attempting to backdoor woke ideology like environmental, social and governance into the United States financial system, threatening individual privacy and economic freedom.” He also states that it is another method by which the Biden administration can surveil and control.

It begs whether DeSantis knows something the general public doesn’t know or is simply misinterpreting the FedNow program from under a tinfoil hat. He often mentions a federally controlled digital currency that allows them to monitor and control consumer activities. However, the new program coming in July needs to introduce new money. It’s a real-time payment, and settlement service developed to provide instant payment processing 24 hours a day, seven days a week, 365 days a year. The primary goal of FedNow is to modernize the U.S. payment infrastructure, offering financial institutions of all sizes access to a safe and efficient instant payment system. It moves U.S. dollars; that’s it for the time being.

Currently, the stance the Federal Reserve has concerning CBDCs is available online on their website. If anything, they are proceeding with caution. Expectedly, they weigh the pros and cons to ensure it will “best serve the needs of the United States by being privacy-protected, intermediated, widely transferable, and identity-verified.”

The Arbitrum airdrop hype continues

Arbitrum’s token ($ARB) continues to be the focus of many crypto enthusiasts as they try to make money on the recent airdrop. With over a whopping 2B in volume within the last 24 hours, it’s undoubtedly on the mind of many. In typical fashion, those who received the airdrop tried to capitalize off the initial trading, which dropped the price from the high of $8.67 to around $1.30, where it has been bouncing around since the steep decline.

Adding to the buzz, blockchain researchers “Looksonchain” discovered that nearly 1,500 wallets that obtained the airdrop had been consolidated into just two wallets. This discovery has prompted both questions and skepticism. The combined value of these wallets is estimated to be around $3.3 million. Some individuals actively pursuing airdrops as a hobby view this feat as impressive (dubbing the holders’ super airdropped or ‘airdrop gods’), while others express suspicion about the situation. Additionally, it was reported that earlier today, hackers managed to deplete some vanity wallets of their $ARB tokens, amounting to a loss of approximately $500,000.

SEC continues the hunt. Coinbase gets a turn

Coinbase was handed a Wells Notice on March 22nd. The news resulted in a 20% decline in the stock price (NASDAQ:COIN) by the following morning.

A Wells Notice is a formal notification issued by the U.S. Securities and Exchange Commission (SEC) to an individual or entity, informing them that the SEC intends to initiate enforcement proceedings against them for alleged securities law violations.

The Wells Notice received provided insufficient details for Coinbase to address. SEC staff indicated that potential securities law violations had been identified but provided little detail. They asked that the SEC specify which assets on the platform are considered securities but have yet to receive a response. Moreover, this Wells Notice follows multiple registration proposals submitted by Coinbase to the SEC over several months, which the SEC has consistently ignored.

Coinbase is prepared to face a legal battle for a good reason. The SEC insists that cryptocurrency companies must adhere to regulations, but the counterargument is that clear guidelines still need to be established. A lawsuit would force the SEC to provide explicit instructions to crypto businesses. The hesitancy to do so may stem from uncertainty about how to draft regulations that maximize control from the onset. Should the SEC make any missteps now, the crypto industry could exploit loopholes, necessitating adjustments from the SEC and potentially exposing an underlying agenda.

“We are confident in the legality of our assets and services, and if needed, we welcome a legal process to provide the clarity we have been advocating for and to demonstrate that the SEC simply has not been fair or reasonable when it comes to its engagement on digital assets.”

Immutable & Polygon – a new power couple

When one of the top gaming platforms in web3 partners up with one of the leading layer two blockchain protocols, expect great things. 

Immutable X is a groundbreaking, carbon-neutral layer-2 scaling solution for Ethereum, designed explicitly for NFTs and gaming. It enables lightning-fast transactions and zero gas fees and ensures a more sustainable and accessible environment for digital artists, collectors, and gamers.

Polygon, formerly known as Matic Network, is a famous blockchain scaling and infrastructure development platform. The Polygon network was designed to help Ethereum scale by offering faster and cheaper transactions while maintaining its compatibility with Ethereum.

Many business leaders and game developers will see this collaboration as an obvious choice for web3 gaming. In the fast-moving world of NFTs and cryptocurrencies, people often get disappointed when waiting for a game’s release. Teams should avoid questions about game release dates, beta testing, and actual launches. Having a faster time-to-market through this partnership will surely please everyone.

“By combining the #1 web3 gaming platform – currently serving hundreds of game studios and millions of players – with Polygon’s best-in-class zkEVM technology, we are building an Ethereum-centric gaming ecosystem that is poised to take web3 mainstream and bring digital ownership to millions of people around the world,” said Robbie Ferguson, Immutable President, and Co-Founder. “Billions of dollars of skins are sold each year with no rights for players – we’re changing that, so players are in control, and ownership is the expectation.”

Do Kwon is found and arrested in Montenegro?

Interpol has confirmed the arrest of Kwon Do-hyeong (Do Kwon) in Montenegro. Kwon, a South Korean national, is the founder of the collapsed crypto company behind TerraUSD stablecoin and $LUNA and is wanted in South Korea and the United States on fraud and other charges. The value of both coins plummeted in May 2022, erasing about $40 billion from the crypto market and causing panic across the speculative sector. Interpol’s national central bureau in Seoul confirmed Kwon’s identity through a fingerprint match.

Kwon was apprehended at the Podgorica airport with counterfeit documents and is wanted by several countries, including the USA, South Korea, and Singapore. While running Terraform Labs, he was based in Singapore and was believed to be hiding in Serbia after leaving Singapore via Dubai. A South Korean court issued an arrest warrant for Kwon in September following fraud accusations by investors in the country after the collapse of his company. He has been charged with fraud and violations of South Korea’s capital markets law but claims the charges are “politically motivated.” The collapse of TerraUSD and Luna sparked the “crypto winter,” from which the industry has struggled to recover.