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Congress Faces Pre-election Budget Vote to Avoid Government Shutdown

Senate Passes Kids Online Safety Measure But House Passage Unclear

Current State of U.S. Economic Sanctions Imposed in Response to Russia’s Invasion of Ukraine – August 29, 2024

Current State of U.S. Export Controls in Response to the Russian Federation’s Invasion of Ukraine – August 29, 2024

In this issue:



<ul>
<li><a href="#payments">Payments Firms Launch Crypto Products, New DeFi Price Indices Announced</a></li>



<li><a href="#private">Private Financial Sector Report Criticizes CBDCs</a></li>



<li><a href="#NFT">NFT Royalties Surpass $1B; Record Label Introduces New Music NFT Platform</a></li>



<li><a href="#DeFi">DeFi Price Oracle Launches Staking; App Enables Blockchain Verified Accounts</a></li>



<li><a href="#US">US Regulators Indicate Enforcement of Digital Assets Is a Priority for 2023</a></li>
</ul>



Payments Firms Launch Crypto Products, New DeFi Price Indices Announced



By <a href="https://www.bakerlaw.com/ShadeQuailey">Shade Quailey</a>



A U.S. fintech company recently announced the launch of a fiat-to-crypto on-ramp, which facilitates fiat-to-crypto payments using “a customizable widget that developers can embed directly into their DEX, NFT platform, wallet, or dApp.” According to a blog post, the fintech company “handles all the KYC, payments, fraud, and compliance, removing the need to integrate multiple third-party services.” The blog post notes that the fintech company has rolled out support for crypto payouts to 67 countries and has entered into partnerships with several crypto projects, including a blockchain-based music streaming platform, an NFT marketplace and a DeFi wallet provider.  



In related news, Bitcoin payments startup Strike recently announced a partnership that will facilitate payments into Africa. The partnership will reportedly enable users to send instant, low-cost transfers to Africa by taking advantage of the Bitcoin Lightning Network, which is a layer-2 payments network built on the Bitcoin Network. According to reports, the feature currently allows U.S. customers to send money to Ghana, Kenya and Nigeria.



In a final recent development, a major U.S. derivatives marketplace and CF Benchmarks, a cryptocurrency index provider, recently announced that they will introduce three new DeFi reference rates and real-time indices for Aave, Curve and Synthetix on Dec. 19. According to a press release, the new benchmarks, “together with Uniswap launched earlier this year … will capture more than 40% of the total value locked in DeFi protocols on the Ethereum blockchain.” The new benchmarks will reportedly use pricing data from several major cryptocurrency exchanges.



For more information, please refer to the following links:



<ul>
<li><a href="https://cryptonews.com/news/crypto-adoption-these-crypto-companies-just-partnered-with-fintech-unicorn-stripe-for-its-fiat-crypto-on-ramp-solution.htm">Crypto Adoption: These Crypto Companies Just Partnered with Fintech Unicorn Stripe For Its Fiat-to-Crypto On-Ramp Solution</a></li>



<li><a href="https://stripe.com/gb/blog/crypto-onramp">An embeddable and customizable fiat-to-crypto onramp</a></li>



<li><a href="https://cointelegraph.com/news/strike-partners-with-bitnob-to-facilitate-cross-border-payments-into-africa">Strike partners with Bitnob to facilitate cross-border payments into Africa</a></li>



<li><a href="https://www.prnewswire.com/news-releases/cme-group-and-cf-benchmarks-to-launch-three-new-defi-reference-rates-and-real-time-indices-on-december-19-301691384.html">CME Group and CF Benchmarks to Launch Three New DeFi Reference Rates and Real-Time Indices on December 19</a></li>
</ul>



Private Financial Sector Report Criticizes CBDCs



By <a href="https://www.bakerlaw.com/JoannaFWasick">Joanna F. Wasick</a>



A report released this week by Team Blockdata outlines significant developments in Central Bank Digital Currencies (CBDCs) and notably illustrates criticism of CBDCs by various stakeholders in the private financial sector. The American Banking Association (ABA), for example, reportedly believes that the issuance of digital currencies should be left to the private sector and that a CBDC issued by the United States Federal Reserve lacks “compelling use cases” and would rewire the banking system. The head of policy for stablecoin issuer Circle Internet Financial is quoted in the report as calling CBDCs a “preposterous idea.” According to the report, other concerns about CBDCs from private stakeholders relate to anonymity and privacy, interoperability, scalability, technological structure, and balance between design and central bank policies.



For more information, please refer to the following links:



<ul>
<li><a href="https://cointelegraph.com/news/report-outlines-reasons-why-stakeholders-are-against-cbdc">Report outlines reasons why stakeholders are against CBDC</a></li>



<li><a href="https://www.blockdata.tech/blog/general/the-state-of-cbdcs-in-2022">The State of CBDCs in 2022</a></li>
</ul>



NFT Royalties Surpass $1B; Record Label Introduces New Music NFT Platform



By <a href="https://www.bakerlaw.com/AmosKim">Amos Kim</a><a href="https://www.bakerlaw.com/VeronicaReynolds"></a>



According to recent reports, NFT Marketplace OpenSea announced that NFT creators have surpassed $1 billion in royalty payments on its platform. These royalties, or “creator fees,” are a percentage of the resale of the artist’s NFT on the OpenSea platform. The royalties earned reportedly “do not include sponsorship revenue, engagement incentives or grants. …” 



In other recent NFT news, according to reports, an American multinational record label has announced a multiyear partnership with Polygon, an Ethereum sidechain network, and LGND Music, an online marketplace for NFT music. Artists signed to this record label will reportedly begin releasing music NFTs through the LGND Polygon-based marketplace, which will offer desktop and mobile applications to access the music NFTs. A report quoted Polygon Studios CEO Ryan Wyatt as stating, “The way that we own and experience music is evolving, by fully embracing decentralized technologies and collectibles.”



For more information, please refer to the following links:



<ul>
<li><a href="https://www.theblock.co/post/190900/opensea-nft-creators-earned-1-billion-royalties">OpenSea says NFT creators earned $1 billion in royalties this year</a></li>



<li><a href="https://decrypt.co/116533/warner-music-group-polygon-music-nfts-lgnd">Warner Music Group to Release Polygon Music NFTs Through LGND Platform</a></li>
</ul>



DeFi Price Oracle Launches Staking; App Enables Blockchain-Verified Accounts



By <a href="https://www.bakerlaw.com/KeithRMurphy">Keith R. Murphy</a>



According to reports, this week Chainlink, a provider of cryptocurrency pricing data and other data for use in smart contracts, introduced staking of its native token, LINK. Within the first 30 minutes selected holders reportedly locked 7 million tokens to secure the oracle network, and within two days the staking pool hit its predefined limit, with approximately $170 million in value staked. The staking pool is reportedly still in beta, and the pool will initially be capped at 25 million LINK, with a plan to scale up to 75 million over time. The protocol is said to be paying stakers 4.75% in annual rewards in the form of LINK tokens. According to a company co-founder, staking allows the company “to scale the system by creating incentives that allow the system to grow.”



In other news, a popular encrypted, cloud-based instant messaging service issued an update on Dec. 6 that reportedly permits users to create accounts utilizing blockchain-based anonymous numbers instead of cell phone numbers. The update also allows users to enable auto-delete timers on messages in new chats, according to a report. The anonymous numbers can reportedly be purchased from a separate, decentralized auction company started by the messaging service’s founder, but that service is not offered to citizens in the United States. 



For more information, please refer to the following links:



<ul>
<li><a href="https://www.coindesk.com/markets/2022/12/07/chainlink-staking-opens-with-initial-51-million-inflow/">Chainlink Staking Opens With Initial $51 Million Inflow</a></li>



<li><a href="https://www.coindesk.com/business/2022/12/08/chainlinks-first-staking-pool-pulls-in-170m-of-link-tokens-hitting-community-limit-after-2-days/">Chainlink’s First Staking Pool Pulls in $170M of LINK Tokens, Hitting Community Limit After 2 Days</a></li>



<li><a href="https://cointelegraph.com/news/telegram-to-allow-no-sim-accounts-via-anon-blockchain-numbers">Telegram to allow no-sim accounts via anon-blockchain-numbers</a></li>
</ul>



US Regulators Indicate Enforcement of Digital Assets Is a Priority for 2023



By <a href="https://www.bakerlaw.com/VeronicaReynolds">Veronica Reynolds</a>



Recent remarks by Himamauli Das, Acting Director of the U.S. Financial Crimes Enforcement Network (FinCEN), at this year’s FinCEN Conference indicate that decentralized finance (DeFi) is likely to be a core focus of the agency’s enforcement efforts in 2023. Referencing the Treasury Department’s digital assets action plan, issued under President Joe Biden’s Executive Order on Ensuring Responsible Development of Digital Assets, Director Das emphasized that FinCEN is taking “a close look” at its anti-money laundering (AML) and countering the financing of terrorism (CFT) frameworks to the extent they pertain to digital assets in order to determine whether additional regulations or guidance are necessary. In particular, Director Das stated that the agency is “looking carefully at decentralized finance and its potential to reduce or eliminate the role of financial intermediaries that play a critical role” in FinCEN’s AML/CFT efforts. In addition, Director Das’s remarks also emphasized FinCEN’s commitment to closely monitor FinTech and RegTech companies engaged in traditional depository lending activity to assess whether there is a need for additional regulation or guidance to address corresponding AML/CFT issues.



Also this week, according to remarks from a U.S. Federal Trade Commission (FTC) spokesperson, the FTC is investigating several crypto firms for potential misconduct related to deceptive or misleading advertisements. This is on the heels of recent enforcement action taken by the U.S. Securities and Exchange Commission against a reality TV star for touting digital assets on social media without disclosing the compensation received for the promotion. According to a report published by the FTC earlier this year, approximately half of all scams related to digital assets in 2021 originated from social media.



For more information, please refer to the following links:



<ul>
<li><a href="https://www.fincen.gov/news/speeches/prepared-remarks-fincen-acting-director-himamauli-das-during-abaaba-financial-crimes">Prepared Remarks of FinCEN Acting Director Himamauli Das During the ABA/ABA Financial Crimes Enforcement Conference</a></li>



<li><a href="https://cointelegraph.com/news/us-consumer-watchdog-probes-crypto-firms-over-deceptive-ads">US consumer watchdog probes crypto firms over deceptive ads</a></li>
</ul>

Crypto Payment Products, DeFi Networks and Price Indices Launch; CBDC Report and NFT Royalty Data Published; FinCEN, FTC Address Crypto Regulation

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