Launch of crypto payment products and NFT initiatives; Crypto Market Data Published; DOJ files charges alleging cryptocurrency Ponzi scheme | Baker Hostetler

Launch of new crypto payment products, reports publish crypto market data

Of Robert A. Musiala Jr.

A recent press release announced that MetaMask, the popular Ethereum (ETH) Network crypto wallet provider, will integrate its self-custodial wallets with a major US fintech firm. According to the press release, the integration will allow US MetaMask users to purchase ETH from the fintech firm within the MetaMask wallet application. The press release includes instructions on how to access the new feature using the MetaMask mobile app. In other payments news, according to recent reports, Bermuda-based Jewel Bank has launched a stablecoin, Jewel USD (JUSD), which will be backed 1-to-1 by US dollar reserves. JUSD will reportedly launch on the Polygon Network.

A major US bank recently published research on “Dynamics and Demographics of US Household Crypto Asset Use.” The research reports four key findings: (1) Most crypto users made their first transactions during peaks in crypto asset prices; (2) Use of crypto is broader and deeper for men, Asian individuals, and younger, higher-income individuals; (3) Crypto holdings for most individuals are relatively small, but nearly 15 percent of users have net transfers of over one month’s salary into crypto accounts; and (4) Most individuals transferring money to crypto accounts did so when prices of crypto assets were significantly higher than recent levels, and those with lower incomes likely bought at high prices relative to higher incomes. The research also found that roughly 13 percent of the US population has held cryptocurrency at some point, up from 3 percent before 2020.

A major US cryptocurrency exchange recently published its Transparency Report, which seeks to “provide customers with data on requests for their information that [the exchange] receive[s] from government agencies and law enforcement” and “provide some insight into law enforcement and regulatory trends around the world.” The report cited, among other things: (1) the exchange received a total of 12,320 requests from law enforcement during the reporting period, representing a 66 percent increase from the previous period; (2) 57 percent of the requests were from foreign law enforcement agencies; (3) 80 percent of the requests were from the United States, the United Kingdom, Germany, and Spain; (4) six countries increased the number of requests by more than 100 percent from the previous period; and (5) the overwhelming majority of requests received both globally and in the U.S. were from law enforcement agencies in connection with criminal enforcement matters.Separately, the same exchange announced that its main brokerage platform recently completed SOC 1 Type 2 (SOC 1) and SOC 2 Type 2 (SOC 2) exams .

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NFT initiatives launched by Marketplace and Watch Manufacturer

Of Christopher Lamb

In a recent press release, Magic Eden, a Solana-based nonfungible token (NFT) marketplace, announced the launch of a tool that allows creators to enforce royalties on their NFT collections “in response to recent changes in royalty enforcement in the NFT landscape.” According to the press release, “[t]The Open Creator Protocol (OCP) is an open source tool built on top of Solana’s SPL managed token standard” that allows royalty enforcement for new NFT collections that choose to participate. The press release further notes that “Magic Eden will enforce royalties on all collections that adopt the protocol and allow creators to ban marketplaces that have not enforced royalties on their collection.”

In other NFT news, according to recent reports, owners of Bored Ape Yacht Club (BAYC) NFTs can now display their NFTs on a unique watch made by a well-known American watchmaker. Pre-sales of the watches reportedly went live at an invite-only launch party during Art Basel in Miami and are available until December 31.

In a final point of note, a recent survey of gamers found that respondents were five times more interested in games where they could earn bitcoin compared to games where they could earn NFTs. The survey found that while some players oppose NFT integration in games, players are generally more likely to play “Play-to-Earn” (P2E) games where they earn bitcoin than they are to play games where they earn NFT- is.

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DOJ files charges against founders of alleged cryptocurrency Ponzi scheme

Of Robert A. Musiala Jr.

A recent press release from the US Department of Justice announced charges of fraud and money laundering “in two separate indictments against the founders and promoters of two cryptocurrency Ponzi schemes known as IcomTech and Forcount (and later known as Weltsys).” According to the press release, “IcomTech and Forcount were both purported cryptocurrency mining and trading companies that promised to earn their respective victim investors … profits in exchange for their purchase of purported cryptocurrency-related investment products,” but in reality “both schemes used [v]injured party funds to pay others [v]victims, in order to further the schemes and enrich themselves.” According to the press release, IcomTech and Forcount’s promoters have in some cases taken hundreds of thousands of dollars in [v]victim funds, which they took out as cash, spent on advertising expenses for the schemes and used for personal expenses such as luxury goods and real estate.”

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