Author: Phil Stafford

Phil is a long-standing Australian journalist with specialised experience in business, finance, travel and popular culture.

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Australia Banking Crypto News ETFs Regulation

Australian Regulator Lays Out Crypto Industry Regulatory Roadmap

The Australian Prudential Regulation Authority (APRA) this week revealed its preliminary risk management expectations for regulated entities dealing with crypto assets, along with a policy roadmap for the next three years.

The roadmap outlines plans to introduce operational risk standards by 2024 and, tentatively, crypto asset requirements and stored value facility standards by 2025. APRA also announced that it would be looking at “possible approaches to the prudential regulation of payment stablecoins, among others”.

Need For Due Diligence and Risk Assessments

APRA, which supervises Australian banking, insurance and superannuation institutions, stressed the need for due diligence and risk assessments in a letter from chairman Wayne Byres.

APRA chairman Wayne Byres. Source: theislanderonline.com.au

In the letter, APRA specifies that regulated entities:

  • consider the principles and requirements of prudential standards when relying on a third party in conducting activities involving crypto assets; and
  • apply clear accountabilities and relevant reporting to the board on the key risks associated with new ventures.

Financial Watchdog Also Bares Its Teeth

Along with APRA’s prescription, the Australian Transaction Reports and Analysis Centre (AUSTRAC) – the country’s financial watchdog – released its own set of guidelines on preventing the criminal abuse of digital currencies. 

This follows a statement released late last year by AUSTRAC in which it directed Australian banks to adopt better systems to deal with assessing risk rather than simply debanking customers. “Businesses vulnerable to exploitation should not automatically have their accounts closed simply to avoid managing risk,” AUSTRAC said at the time.

And in July 2021, the Australian Securities and Investments Commission (ASIC) set out a range of proposals relating to the inclusion of cryptos in exchange-traded products (ETPs), seeking market participants’ input to shape its position within the regulatory landscape.

This week also saw ETF issuer 21Shares announce Australia’s first spot exchange-traded funds.

Categories
Crypto News NFTs Sports

NBA Launches 18,000 Dynamic NFTs Dubbed ‘The Association’

The US National Basketball Association (NBA) this week began minting its Ethereum NFT collection of 18,000 assets, imaginatively titled ‘The Association‘.

Each Association NFT represents a real NBA player in this year’s playoffs, with 75 NFTs of each player from the 16 NBA teams participating. NFT traits will evolve over the course of the playoffs based on each player’s actual performance, meaning that the associated number of dunks, blocks, three-pointers, rebounds or assists will change that player’s image. NFT backgrounds and “frames” will also change based on the player’s team’s performance.

NFTs Free But Gas Fees Apply

According to the NBA website, the NFTs will be free to mint but interested collectors will foot the bill for gas fees on Ethereum. That said, the NBA is reserving some assets for holders of NBA Top Shot NFTs, with a maximum of one per wallet.

Fans qualify on a first-come, first-served basis by joining the NBA Discord group and connecting their digital wallet to the initiative’s website. However, the list is already full.

After the presale minting, the NFT art will be revealed on April 22 and viewable on NFT marketplaces such as OpenSea.

Not every basketball fan is impressed by these developments, with some taking the launch team to task on Twitter:

Others claimed The Association NFTs were already “overallocated”:

NFT Bubble Fit to Burst

Controversy over the NBA’s Association collection echoes the disgruntlement of Australian Football League fans, who this week also took to Twitter to deride the launch of the indigenous code’s NFT marketplace.

Has the NFT bubble burst? Though there are sporadic signs of life in the sports sphere, the consensus is that non-fungible fatigue has well and truly set in.

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Australia Crypto News Metaverse NFTs Sports

Fans Push Back as AFL Launches NFT Marketplace

In the same week that the Australian Football League (AFL) cracked down on players dissenting the on-field decisions of umpires, fans of the indigenous code have registered their own disapproval of the league’s recent move into the NFT space.

Earlier this month, the AFL announced a five-year partnership with Hong Kong-based Animoca Brands to bring both the men’s and women’s leagues into the metaverse. In a unique revenue-distribution deal, players stand to receive 20 percent of the spoils from the sale of NFTs associated with the sport, Australia’s most popular football code in terms of supporter numbers.

NFT Fatigue Seeps into Sports

Star English Premier League team Liverpool FC launched its own NFT collection earlier this month. It was a spectacular failure, with only 6 percent of the offering sold.

Providing further evidence of growing fatigue within the NFT space, AFL supporters have greeted news of the code’s upcoming NFT mint with indifference and derision, if not outright hostility:

A Twitter war of sorts has been declared, with some punters going as far as to express their “embarrassment” on behalf of the AFL’s dalliance with NFTs:

One disgruntled punter accused the “suits” within the AFL of ruining the code:

Too Much, Too Soon?

Perhaps the AFL’s deeper engagement with crypto is happening all too quickly for some supporters of the code. In January this year, the league secured a major sponsorship deal with Crypto.com, worth A$25 million over five years. It’s one of the biggest sponsorships of any kind in Australian sport, eclipsing the AFL’s partnership with major sponsor Toyota, worth A$18.5 million.

Several AFL clubs – including the Sydney Swans, Western Bulldogs and reigning premier the Melbourne Demons – now have direct sponsorship deals involving cryptocurrency companies other than Crypto.com. Late last year, Australian digital assets exchange Swyftx entered a major two-year partnership with the Brisbane Lions.

Categories
Crypto News Ethereum

Ethereum Foundation Treasury Discloses $1.6 Billion in Assets, 80% in ETH

In its first annual financial report, the Ethereum Foundation (EF) has declared that its treasury holds US$1.3 billion in ETH, US$11 million in other cryptocurrencies and US$300 million in non-crypto investments.

As of March 31, 2022, Ethereum constituted 80 percent of the foundation’s holdings, amounting to nearly 0.3 percent of the entire ETH supply.

EF Treasury holdings as at March 31, 2022. Source: ethereumworldnews.com

More Resource Allocations to Third Parties

According to EF director Aya Mayaguchi, the foundation has been supporting third-party allocators as the network matures. “[We believe] that more decentralised funding is important for the future of the Ethereum ecosystem,” she wrote in the report. “We continuously try to allocate resources to third parties that we believe can make better decisions than us within certain domains.”

In announcing the EF report, Miyaguchi tweeted that she would provide more details on the foundation’s vision and principles at an upcoming Devconnect event in Amsterdam:

Layer One R&D Accounts for Almost Half of EF Spending

Last year the foundation spent a total of US$48 million, with layer-one research and development accounting for nearly half that figure (US$21.8 million), including the Ethereum mainnet upgrade and external grants for network stress testing.

The remaining expenditure broke down as follows:

  • Community development accounted for US$9.7 million;
  • developer platform, US$5.9 million;
  • internal operations and support, US$5.1 million; and
  • applied zero-knowledge (ZK) research and development, US$3.6 million.

The proposed Ethereum ‘Merge’, set to transition the network to a proof-of-stake (PoS) consensus model, has been officially delayed until Q3 of 2022.

Categories
Crypto News Crypto Wallets Ethereum Hackers

US Claims North Korean Hackers Behind $625 Million Ronin Breach

North Korean hacking group Lazarus has been blamed for last month’s US$625 million exploit of Ronin Network, an Ethereum sidechain used by play-to-earn crypto game Axie Infinity.

The link was made public on April 15 when US Treasury announced it had added a new Ethereum wallet to its list of sanctions for the Lazarus Group. It’s the same wallet address that Axie Infinity creator Sky Mavis named as the Ronin attacker in late March, as confirmed by Etherscan.

18% of Stolen Funds Already Laundered

Blockchain analytics firms Chainalysis and Elliptic have corroborated that the wallet address is the same used in the Ronin exploit. Elliptic also confirmed that 18 percent of the stolen funds had already been laundered before the Easter weekend. The wallet still holds 147,753 ETH, worth about US$430 million at the time of writing.

“Identification of the wallet will make clear to other VC actors that by transacting with it, they risk exposure to US sanctions,” said a Treasury spokesperson, who added:

There may be mandatory secondary sanctions on persons who knowingly, directly or indirectly, engage in money laundering, the counterfeiting of goods or currency, bulk cash smuggling, or narcotics trafficking that supports the Government of North Korea or any senior official or person acting for or on behalf of that government.

US Treasury spokesperson

‘Critical Chokepoints’ in the War on Hackers

The spokesperson said that anti-money laundering and countering the financing of terrorists were “critical chokepoints” in the war on hackers, and called on the crypto industry to implement these types of safeguards.

According to a Ronin blog post, “We are still in the process of adding additional security measures before redeploying the Ronin Bridge to mitigate future risk.” Redeployment was expected before the end of this month and a full post-mortem would follow at a later date.

Since the attack, Sky Mavis announced a US$150 million funding round led by Binance to help reimburse affected users. Sky Mavis ultimately hopes to recover the stolen funds over the next two years.

Categories
Crypto News Nexo Payments

Nexo’s New Crypto Credit Card Allows Users to Spend Without Selling Their Crypto

Crypto lender Nexo has partnered with Mastercard and peer-to-peer payment startup DiPocket to launch the Nexo Card, a credit facility that allows holders to use their crypto as collateral rather than sell it outright:

Europe Now, Australia (and the Rest of the World) Later

Though currently limited to 29 countries in the European Union as well as the UK, the Nexo Card will eventually be available worldwide, including in Australia. According to Nexo co-founder and managing partner Antoni Trenchev:

This unique product will allow millions of people, first in Europe and then worldwide, to spend instantly without having to give up the potential of their cryptocurrencies, thus offering unprecedented everyday utility for the emerging asset class.

Antoni Trenchev, co-founder and managing partner, Nexo

Nexo anticipates the Nexo Card will be accepted by up to 92 million merchants worldwide where Mastercard is also accepted, allowing investors to spend up to 90 percent of the fiat value of their crypto in seconds without having to part with any of it.

Interest Rate Pegged at Zero

The Nexo Card’s credit line starts and remains at the zero percent annual percentage rate and is the first-of-its-kind crypto-backed Mastercard. It also requires no minimum repayments and incurs no foreign exchange fees for amounts up to 20,000 euros (A$30,000). Like traditional Mastercards, the Nexo Card is available as a virtual as well as a physical card and comes with direct Apple Pay and Google Pay integrations.

“The Nexo Card functions through Nexo’s crypto-backed credit lines, which means that funds for your purchases come from your available credit line while your digital asset portfolio remains intact,” according to a Nexo spokesperson, who added that the collateral is subject to repayments in accordance with Nexo’s terms and conditions.

Late last year, Nexo partnered with Singaporean hedge fund Three Arrows Capital to launch its new NFT-backed lending services, meaning clients can borrow digital assets using NFTs as collateral.

Categories
Crypto News Facebook Gaming Metaverse Virtual Reality

Meta Launches Digital Economy Allowing Users to Sell Virtual Goods for its VR Game

The metaverse may yet be years away in terms of functionality, but that hasn’t stopped Meta (nee Facebook) rolling out the first stages of a new digital economy to underpin its role in that brave new world.

The social media behemoth is already testing features that will enable creators to make money trading virtual items and effects in the company’s virtual reality (VR) game, Horizon Worlds.

According to Meaghan Fitzgerald, Horizon’s product marketing director, creators will be able to trade anything from virtual accessories to VIP access to their own private zone in the metaverse. American participants in the pilot will also be able to earn bonuses from a US$10 million fund set up by Meta to incentivise creators.

Meta May Pocket up to 50% of Bonus Payouts to Creators

Meta says it will reward creators whose virtual worlds prove especially popular among users with monthly bonus payouts. While that program will not be subject to fees, the virtual items marketplace could see Meta take a cut of up to 50 percent.

As it stands, Meta will take a 25 percent cut of the percentage left after the platform fee; with Meta’s Quest Store charging a 30 percent commission, that leaves creators with slightly over half the sale price for each item. Meta evidently thinks that’s a fair thing:

We think it’s a pretty competitive rate in the market. We believe in the other platforms being able to have their share.

Vivek Sharma, VP of Horizon Worlds, Meta

That said, Meta considers Apple’s 30 percent take rate as “too aggressive” for the iPhone ecosystem and has intentionally lowered its mobile rate for certain in-app purchases.

For more on how Horizon Worlds will work, Meta has helpfully supplied a video (see below) featuring VR versions of CEO Mark Zuckerberg and his Horizon team of creators. Try not to be disconcerted by the fact that each avatar only exists from the waist up, yet they require virtual stools to “sit” on:

Amid all this talk of virtual worlds, Zuckerberg announced earlier this month that Meta is exploring the creation of non-blockchain-based virtual currencies, which employees have internally dubbed “Zuck Bucks“. We can now perhaps see where he’s going with this idea.

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Bored Ape Yacht Club Coinbase Crypto Exchange Crypto News NFTs

Coinbase Set to Launch 3 Animated Bored Ape-Themed Short Films

Crypto exchange Coinbase has issued a casting call to all Bored Ape Yacht Club (BAYC) NFT holders who’d like to see their simians featured in an upcoming animated series of short films.

The production, a three-part series titled The Degen Trilogy, designed to tie in with the exchange’s long-rumoured NFT marketplace, has called for submissions up until April 13.

Missed Out? There’s Always Part Two or Three

Ape owners who make the casting cut will receive a licensing fee of US$10,000 in ApeCoin or bitcoin, according to the film’s website, and those who miss out may be eligible for the remaining instalments of the proposed trilogy:

The film is set in the 2020s in a “chaotic” New York City where “for the first time, digital goods and services have outpaced all other indicators as a measure of value in the market”, according to the prologue.

As the old system crumbles, whole new realms spring forth from the ashes. (…) Enter the Degens. A new class of social adept, versed in the constantly re-invented tools of an ever accelerating economy.

Prologue, The Degen Trilogy

Coinbase Admits Project May Not Make Any Money

While Coinbase has said that it is unlikely to profit from the series, any proceeds would be donated to an as-yet unnamed non-profit organisation. The company added that the point of the trilogy is to “reward and connect with our communities through projects that bring the ethos of Web3 to life: collaboration, transparency, and opportunity”.

The first episode will be released at the NFT.NYC conference, scheduled to take place from June 20-23, with parts two and three to follow over the subsequent year. A Coinbase wallet is required to access the film’s website, although not to view the films.

Last week, director Kevin Smith was excoriated on Twitter after announcing his next film would be launched as an NFT. And late last year, BlockbusterDAO announced its intention to relaunch the Blockbuster brand as a film streaming service with future plans for movie financing and production.

With signs of NFT fatigue beginning to set in, it will be interesting to see whether any of these projects gets off the ground:

Categories
Bored Ape Yacht Club Crypto News Mutant Ape Yacht Club NFTs

Bored Ape NFT Owners Launch ‘Bored & Hungry’ Pop-Up Restaurant

Curious punters queued around the block as the world’s first Bored Ape Yacht Club (BAYC)-themed pop-up restaurant opened in Southern California, US, on the weekend.

Bored & Hungry, on 7th Street in Long Beach, Southern California. Source: tubefilter.com

In partnership with Houston rapper Bun B’s Trill Burgers and Belief Burgers, Bored & Hungry calls itself a “smash burger-themed concept” where customers can buy fast food using Ethereum or ApeCoin.

As the proud owner of BAYC #6184, which he bought for US$267,000 on March 1, food entrepreneur Andy Nguyen used his Ape’s IP to create the restaurant’s brand:

NFTs ‘More Than Just a JPEG’

“The goal is to give back to the growing Web3 community and open the doors to those who want to learn more about the NFT world,” Nguyen said. “Our job is to […] show people that you can create a brand/business out of this IP, taking away the stigma of, ‘It’s just a JPEG’.”

Filled with Bored Ape and Mutant Ape images (Nguyen now owns four Apes), Bored & Hungry is on busy 7th Street in Long Beach and will compete with several other fast-food franchises. The grand opening attracted people of various ages, colours and genders, all looking to experience what’s claimed to be the world’s first NFT restaurant (that title actually belongs to New York’s Flyfish Club, founded by Gary Vee).

The commotion also piqued the curiosity of several passersby, some of whom asked what it was about. One wag standing in line was quick to respond with the following soundbite:

Crypto, capitalism, and hamburgers – what could be more American than that?

Bored & Hungry customer

In December, Bored Ape creators Yuga Labs joined forces with Adidas to enter the metaverse, the sports apparel giant having bought its own BAYC NFT in a show of good faith. And what are we to make of last month’s decision by Yuga to acquire the commercial rights to two of the most popular NFT collections on the market, CryptoPunks and Meebits? Watch the NFT space to find out.

Categories
Australia Crypto News Cryptocurrencies Regulation

Australian Opposition Party Called Out for Lack of Clear Crypto Policy

With the starter’s gun for the 2022 Australian federal election having been fired on the weekend, the Labor Opposition party is already dodging bullets about lacking a crypto policy.

Stephen Jones, Labor’s shadow minister for financial services, quickly returned fire by declaring that the Opposition wants stronger consumer protections and regulation of exchanges.

“The broad principles we would take to crypto regulation are safety and transparency,” Jones said. “That inevitably leads to greater regulation of exchanges.”

Jones added that if Labor were to win power from the ruling Liberal-Nationals Coalition, crypto would be considered as part of a broader overhaul of the payments system.

Crypto Should Be at the ‘Centre of the Election’

Last week, expatriate crypto investor Mark Carnegie said that crypto “should be at the centre of the election” because digital currency and blockchain infrastructure were shaping to be an US$8 trillion (A$10.6 trillion) to US$13 trillion industry by 2030.

Carnegie, a venture capitalist currently based in Singapore, told the Australian Financial Review Cryptocurrency Summit that Labor lacked a policy on crypto and “it just shows you the lack of leadership” on the issue.

At the summit, he and former Australian Securities and Investment Commission (ASIC) chairman Greg Medcraft urged Australian regulators to develop a plan that encouraged digital asset technology and investment.

Carnegie accused the government and regulators of moving too slowly on the issue. Jones has since responded by saying that putting crypto under financial services regulation “made sense”, and that he would consult on the precise details if Labor won government.

‘Seven Words is Not a Crypto Policy,’ says Liberal Senator

Pro-crypto Liberal Senator Andrew Bragg (NSW) echoed Carnegie in claiming Labor has “no real policy” in place. “My sense is they’re running a small-target strategy,” Bragg said. “They’re not saying much and my sense is this agenda is at risk and that is very concerning.”

In a return salvo, Jones pointed out that the Coalition had been in government for almost nine years and that it was hypocritical for it to blame Labor for a lack of crypto policy.

The fact that 43 percent of Australians polled in a 2021 Gemini survey said they had invested in crypto says this is an election issue that cannot be ignored.

However, another recent survey revealed that nine in 10 Australian financial advisers had been asked by clients about investing in cryptocurrencies but only a third were willing to allow them to do so.

With the election due on May 21, it’s time for both sides of Australian politics to clearly declare their hands on crypto.