SEC Launches Pie in the Face

Former Employee Of NFT Marketplace Charged In First Ever Digital Asset Insider Trading Scheme

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “In this case, as alleged, Chastain launched an age-old scheme to commit insider trading by using his knowledge of confidential information to purchase dozens of NFTs in advance of them being featured on OpenSea’s homepage. With the emergence of any new investment tool, such as blockchain supported non-fungible tokens, there are those who will exploit vulnerabilities for their own gain. The FBI will continue to aggressively pursue actors who choose to manipulate the market in this way.”

Why SPACS Are Flailing as Market Conditions Shift

Wall Street’s love affair with SPACs is sputtering.

After two hot and heavy years, during which investors poured $250 billion into SPACs, rising inflation, interest rate increases and the threat of a recession are fomenting doubts. Increasingly, investors are withdrawing their money from SPACs, which they’re allowed to do at the time of the merger. With stocks of high-growth companies recently getting clobbered, they have been less willing to bet that SPAC mergers — which often involve risky companies — will be successful.

At the same time, regulators are stepping up scrutiny of SPACs. The Securities and Exchange Commission has opened dozens of investigations into SPACs and is proposing tighter rules. Increased regulation would make SPAC deals less profitable for the big investment banks that arrange these transactions, because they would have to commit more resources to comply. They, too, have begun pulling back.

As Crypto Losses Hit Investors, Litigation Picks Up

“We’re seeing all of the normal kinds of litigation that you would see in more traditional companies,” said Jason Gottlieb, a partner at Morrison Cohen LLP who tracks cryptocurrency litigation.

Mr. Gottlieb said the industry also was attracting an influx of plaintiff and defense lawyers who realize the crypto market is no longer “some obscure backwater for a small gaggle of techno-libertarian nerds. It’s a real business.”

SEC Launches Game Show-Themed Public Service Campaign

The Securities and Exchange Commission’s Office of Investor Education and Advocacy today unveiled a game show-themed public service campaign to help investors make informed investment decisions and avoid fraud. Recognizing that sometimes investing may look and feel like a game, the campaign titled “Investomania” reminds investors to do their due diligence when making investment decisions.

Bored Ape Yacht Club thefts: Here’s how many NFTs have been stolen.

I’ve assembled a lengthy, though surely incomplete, list of stolen apes and related scams. (Keep in mind that ape thefts alone are only a fraction all NFT and crypto thefts over time. It’s an expansive universe! Of scams!) Put on your internet face, whether it’s a bored ape or not, and read on.

DeFi ‘Casino’ May Need New Global Regulator, German Central Banker Says

“To me, DeFi seems more like a casino for tech-savvy speculators,” Wuermeling, a member of the German central bank’s executive board responsible for bank supervision and IT, said in a speech on Thursday.

DeFi “is growing quickly and so might its ties to the rest of finance and the economy…we need to be discussing regulatory options now,” he added, though said there are “still too many hurdles to be cleared” for the technology to become fully mainstream.

“I could imagine having a global forum akin to the Basel Committee on Banking Supervision…that could set global ground rules for digital innovation,” Wuermeling said, referring to the international organization that sets capital rules for conventional lenders like Deutsche Bank and JPMorgan Chase.

UST debacle will ‘probably be the end’ of algorithmic stablecoins

“It’s unfortunate that the money … was lost, however, it’s not a surprise. It’s an algorithmic-backed, stablecoin. So it’s just a bunch of smart people trying to figure out how to peg something to the dollar,” Reeve Collins, the co-founder of digital token company BLOCKv, told CNBC at the World Economic Forum in Davos, Switzerland, last week.

“And a lot of people pulled out their money in the last few months, because they realized that it wasn’t sustainable. So that crash kind of had a cascade effect. And it will probably be the end of most algo stablecoins.”