SEC’s seen your Apes

Good morning! Welcome to The Daily Moon. Damien Hirst is really into NFTs. The UK’s richest living artist set fire to his artworks worth $10 million over a live stream. They’ll now only exist in their NFT avatar. It’s a social experiment that Hirst is doing to popularise digital art. Soon, he’ll burn everything.

The markets stayed volatile. Bitcoin was just above $19,000 while Ethereum was at $1,295 levels. Nasdaq fell in early trade. Back home, Sensex and Nifty had marginal gains.

Bored Apes=Stocks?

Remember Bored Apes? Just last year, a Bored Ape NFT was sold for $2.7 million. Turns out, the US Securities and Exchange Commission was watching its sales all this while. And now there’s an investigation. The regulator wants to find out if Yuga Labs’ Bored Apes Yacht Club NFTs and ApeCoin are legit.

What is the SEC's worry?SEC is the securities regulator and any financial product that resembles stocks needs its approval. It will probe whether Yuga Labs’ BAYC NFTs were sold and traded like stocks. Because if they were, then Yuga has violated laws.

In the recent past, there have been several tokens termed “security” by the SEC. Ripple’s XRP is one of them and there’s an ongoing lawsuit to resolve the matter. Crypto developers don’t want tokens to be regulated like stocks because every decision would need SEC approval.

What about ApeCoin?Yuga Labs launched ApeCoin in March 2022. It was airdropped to all BAYC NFT owners. This is also part of the current SEC investigation. For ApeCoin investors, this has turned out to be bad news. The token’s price has fallen ~7% since Tuesday.

What’s Yuga saying?Yuga Labs has downplayed it. It said that regulators only want to understand how web3 works and that the company will “cooperate” and “partner” with them.

Now what?These are anxious times for BAYC and ApeCoin investors. If the NFTs and crypto are classified as securities, Yuga will have to apply for permission to sell them. Trades could be halted till then.

Mango Under Attack

The dust hasn’t even settled on the BNB Chain hack, and another one has happened. DeFi platform Mango Markets lost $100 million from a hack. The attacker manipulated the system to take loans.

What exactly happened?Mango is a DeFi platform on the Solana blockchain where users can deposit crypto and take loans. Token prices are auto-fed on the blockchain. The hacker exploited a bug in the system to change token prices. Let’s break it down:

1. The hacker bought 483 million Mango tokens at $0.03 using USDC collateral.

2. The hacker changed the Mango token’s price to ~$0.91.

3. A $116 million loan was taken based on the price manipulation.

But here’s the twist. The hackers tried to teach Mango a lesson. They said the funds will be returned if Mango repays its bad debt within the protocol.

What happens next?Mango doesn’t have assets to give loans. For now, it has disabled deposits as a safety measure. The hackers promised to keep their word if Mango kept theirs.

Has BTC Found the Bottom?

Something interesting has been happening with Bitcoin for the past month or so. The largest cryptocurrency has remained at around $19,000 levels in that time frame. There have been some deviations, but not a lot.

Announcements that would earlier move the charts crazy have had little to no impact. Are BTC’s volatile days over? It would seem so. While crypto prices remain in bear territory, big moves only happen when there is an economic data release.

Institutions are game More institutions are holding Bitcoin. That’s a sign that things aren’t all that volatile. Here are some names:

1. Google said Tuesday it will allow some customers to pay for cloud services in cryptocurrencies early in 2023.

2. BNY Mellon launched a Digital Asset Custody Platform in the US.

3. Nasdaq is also said to be getting into crypto custody services.

Keeping a watchTraders still want clear signals from the market. The inflation data is on this week’s watchlist.

Metaverse’s B2B Switch

Ever since Mark Zuckerberg convinced himself that the metaverse is a thing, nothing seems to have changed. But there have to be ways to justify the rebranding, right? That's why he’s turned to B2B.

Firing on all frontsMeta is betting its fortunes on B2B partnerships. Accenture, Adobe, Autodesk, and Microsoft are on the list. The technology company wants businesses to spend $1,499 on a VR headset to set up offices in the metaverse.

It seems everyone bet big on the metaverse, and as we told you yesterday, there aren’t many takers. There aren’t many options left except creating new use cases. Meta’s even open to startups building their VR applications on Meta Horizon Workroom. Second time lucky?

And that’s it for today. If this email was forwarded to you, please consider subscribing. It’s free. We’ll never show you an ad or charge you for this. We swear.

Who are we? This newsletter’s ambition is to educate (and to entertain). The world of money is changing everyday and we want to help you decode what’s happening in the world of crypto, public markets in the US and India.