#76 Binance and CZ Sued by CFTC. Visa and Bitcoin rewards app.
Disclaimer: Everything we write in "The Crypto Insider Report" is an x-ray of the industry as we see it, through the lens of publicly available information. We are not financial advisors.
Binance and CZ Sued by CFTC
Last week, I was writing about how Coinbase was under attack by the SEC. This week, we are witnessing another battle. In one corner, we have Binance - needs no introduction, really. Biggest exchange, Coinbase’s biggest competitor. In the other corner, we have CFTC - the Commodity Futures Trading Commission, aka the other federal entity that regulates markets, alongside the SEC.
Binance has a US exchange - Binance.US, fully regulated and apt to serve US customers. However, because of that, it doesn’t have the full suite of products, like leveraged and future-type products, as those are not regulated within the US. Thus, it also has lower volumes and it’s less appealing to customers. To make sure that US citizens are not accessing the global Binance exchange, the company has to geofence its services - checking where its customers are coming from, and if they are trying to reach the exchange from a region that is not supported, having to turn them down.
The CFTC alleges that Biance has instead advised customers how to trick their own geofencing system in order to be able to access their services from the US. Mainly, through using VPNs - software that tunnels your Internet traffic through some part of the world, making it so that you don’t seem to be coming from the US. On the other side, Binance is saying that they haven’t done such a thing and that they cannot control what people on the Internet are doing, and what are they to do if someone is using a VPN?! Now, the CFTC claims they have access to internal chats (disappearing messages in Signal, at that!) that prove that employees of the exchange have been instructed to do just that.
There are other charges as well, and CoinDesk covers them in detail. However, this is the strongest point. That the company knowingly bent the rules to get US citizens to their platform. And from that, they face charges of offering unregistered Crypto derivatives products and so on. It will be interesting to see this one play out. Some expect the usual fine and then for Binance to carry on.
However, before closing, I want to point out another issue. In the claim the CFTC specifically calls out tokens that US citizens have traded on Binance as commodities. At the same time, the SEC has claimed the same tokens are securities. One can only wonder whether this is not about something bigger than taking down Binance for what they did - the SEC and CFTC have long fought over who gets to regulate what, claiming e.g. that ETH is a commodity (CFTC), as well as a security (SEC). Interesting times!
Mihnea
Visa and Bitcoin rewards app
Back in 2020, Fold, the Bitcoin rewards app, partnered with Visa for credit and debit cards. That was 3 years ago! Should you choose to use Fold, you can get satoshis back for every purchase. You average cashback app but one that pays you in Bitcoin.
And now, the partnership expands: Visa will be the exclusive network partner for Fold’s cards in the EU, LATAM, NA and the Caribbean. Notice Visa dipping their hand again in the cookie crypto jar after basically saying they’ll be slowing down? Crypto’s not an industry you can overlook, even during bear markets. Just think about potential value of accrued satoshi rewards during a bull run - and the influx of people who would switch their regular cashback cards for ones like Fold’s.
And the effort of increasing crypto payments and crypto rewards for payments is on both sides: companies like Visa and Mastercard are dedicated to investing in the sector and merchants are increasingly willing to accept crypto payments. In a survey by Deloitte, 75% of surveyed merchants are planning to implement crypto or stablecoin payments, with the main focus of improving the customer’s experience. And, of course, increase their customer base while being perceived as being innovative.
It’s heartening to see all sides of an industry move towards the same goal. Payment processors, merchants AND customers working together to make crypto’s goal true - being accepted as legal tender and used in transactions. If only we had the legislators on our side as well.
Matei
NFT Tickets: Ticketmaster Ads NFT-gated Feature
There’s no news that NFT tickets are thought to be the future of live events and if you are not yet convinced I will leave here a recent article from NFT NOW that summarizes really well the potential and progress made in this field.
Ticketmaster is one of the early believers and adopters of NFT ticekts, that continues to innovate and implement NFT-based features. Recently, the ticket sales and distribution platform, has launched a feature that allows artists to grant NFT owners special access to events, marking another use case for the evolving technology powering digital collectibles.
Heavy metal band Avenged Sevenfold (A7X) first requested the tool as a way to reward holders of its Deathbats Club NFT collection, launched in late 2021. In addition to presale access, rewards can include specific seats or custom travel packages — at the discretion of the artist. M. Shadows, A7x’s lead singer, outlined his band’s link-up with Ticketmaster in a tweet earlier this month.
“This new capability allows artists to get special access and rewards to specific fans they want to super-serve,” David Marcus, Ticketmaster’s executive vice president of global music, said in a statement. “Artists like Avenged Sevenfold are using Web3 and NFTs to build deeper relationships with their fans, and we’re proud to help foster that connection through live events.”
The launch follows Ticketmaster introducing an offering last August that aimed to give sellers on its platform the ability to issue NFTs before, during or after events. Ticketmaster had already minted more than 5 million NFTs on the Flow blockchain, Dapper Labs said in a blog post at the time. Dapper Labs, the company behind CryptoKitties and NBA Top Shot, created the Flow (FLOW) blockchain in 2019. Ticketmaster also utilized Flow to distribute more than 70,000 commemorative ticket NFTs at Super Bowl LVI in 2022.
Evelyne
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