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๐๐ฝ Hello everyone, gm gm, WELCOME BACK to another edition of the Overpriced JPEGs newsletter, where weโre catching you up on web3, NFTs, and the greater world of emerging tech.
A lot went down this week in web3, but in the world of Overpriced JPEGs, nothing was quite as momentous as our very own Carly tying the knot!
Congrats to the happy couple!!
I also wanna send a virtual hug to the incredibly talented Jonathan Mann (aka Song A Day Mann) who delivered big time when I asked him to create a custom song in honor of the newlyweds. You absolutely nailed it - โCarly & Zachโ is such a bop ๐ถ
And lastly, before we jump in, thank you to everyone whoโs been supporting my hometown of Hawaii as we work to rebuild after the fires that devastated Maui. Weโve got a small, but strong web3 community here in the islands and a few locals have teamed up on a low-cost open editiโโon mint benefiting relief efforts. The art is by FOMO MOFOโs Jasper Wong and 100% of the mint will go directly toward recovery efforts. Mahalo nui loa. ๐
If youโre new here, we welcome you to join 140,434 bright + avid readers by subscribing here:
๐ฅ Feeling the Impact
The SEC once again came out swinging for crypto, this time taking their biggest shot yet at our precious JPEGs, charging Impact Theory with offering unregistered securities when it sold three tiers of โFounderโs Keysโ for ~$30M from Oct. - Dec. 2021
Impact Theory is founded by Tom Bilyeu, who we had on the pod back in March of last year and earlier this year when Carly interviewed him in person at VeeCon
Thereโs a couple things to note here: One is that the SEC is clearly trying to make examples of people and businesses they view as low-hanging fruit in the cryptosphere
That includes celebrities like Kim Kardashian, executives at high-profile web3 businesses (see: Nate Chastain), or in the case of Impact Theory, an NFT project that raised tens of millions of dollars in the hopes of building โthe next Disneyโ
The other is that the SEC is giving us a roadmap to identifying potential landmines for NFT projects wanting to avoid a similar fate. It should go without saying, but founders who repeatedly use language implying a return on โinvestmentโ by delivering โtremendous valueโ will draw a bigger target on their backs. What we didnโt see coming, though, is that collecting royalties may also trigger heightened scrutiny.
The bad news is, under these guidelines, a lot of projects fit the bill. The good news is, the SEC has their hands full and likely lacks the resources to go after each and every one.
In the meantime, Impact Theory has settled the charges and now owes $6.1M in fines, refunds to โinvestors,โ and must destroy the NFTs under their control and disable royalties on the remaining collection
Two of the five SEC commissioners issued this dissent, highlighting the agencyโs premature overreach into an area in which theyโve otherwise refused to provide guidance
โThe handful of company and purchaser statements cited by the order are not the kinds of promises that form an investment contract. We do not routinely bring enforcement actions against people that sell watches, paintings, or collectibles along with vague promises to build the brand and thus increase the resale value of those tangible items.โ
- Commissioners Hester M. Peirce and Mark T. Uyeda
๐ค Tipping the (Gray)scales
The SEC won the round against Impact Theory, but they also took one on the chin this week when a Washington appellate court called the commissionโs review of Grayscaleโs spot Bitcoin ETF app โarbitrary and capricious,โ and ordered a review of the applicationย
Crypto markets rallied 5 to 10% on the news and short sellers were squeezed to the tune of $120 million in liquidationsย
Ohio Congressman Warren Davidson - who recently introduced legislation to remove Gensler from office and restructure power in the embattled agency -ย jumped on the opportunity to renew the call to #FireGaryGensler
So how will the ruling impact the outlook for the stack of spot Bitcoin ETF applications piling up on Garyโs desk? Well, it depends on who you ask.
Bloomberg analysts are optimistic, raising their estimated odds of an approval by year-end from 65% to 75%ย
Columnist Aaron Brown thinks itโs good news for large traditional asset managers, but not necessarily Grayscaleย
And Financial Timesโ Brooke Masters says the crypto community should curb its enthusiasm: โThe story of the watchdogโs efforts to tame what it sees as a financial wild west still has some room to runโ
The clock is ticking on a number of these applications - six apps have deadlines beginning this weekend - so stay tuned, we should be getting some clarity soon
In the meantime, weโll just have this catchy Song A Day Mann track commemorating the moment stuck on repeat
๐ข Over 140,000 crypto natives, web2 business leaders, and web3 builders rely on Overpriced JPEGs for the latest insights and trends in NFT technology.ย
If youโd like to showcase your brand in front of a well-educated, high income audience, complete this form and weโll get in touch.ย
๐น And in non-SEC Related News โฆ
Ben โBitBoy Cryptoโ was fired from his namesake company, which is obviously terrific news for the space, but all we want to know is whoโs going to replace him in the crypto โApprentice meets Shark Tankโ reality show?!
Global film & TV studio Miramax is leaning heavily into web3 with a couple of projects that span blockchain, metaverse, and content creation
Keepers are NFT avatars that give holders commercial rights to their Keeper across film and media, AAA video games, and metaverse environmentsย
Memory Palaces is a short film shot in UnrealEngine being billed as โa new way to secure your digital identity in mixed reality and a vision for an open metaverseโ
After a couple weeks of up only, activity on Friend Tech is down a lot and the team is clearly feeling the heat. In a decidedly non-crypto move, Friend Tech tweeted out that theyโd be penalizing disloyal users by taking points away from users who flock to competitor or copycat apps.ย
The backlash from CT was swift, as was co-founder Racerโs since-deleted apology note, which weโve preserved for you below ๐๐พ
Yuga Labs keeps stacking its A-team: Former Nike, Adidas, and Coach exec Michael Ghory joins as VP of Apparel and Lifestyle; and Ape holder / dev Coffee joins the engineering team
Polygon released a toolkit for devs to build customizable chains using the companyโs ZK tech; every chain would be interoperable and together would form a โValue Layerโ
Hashdex is the latest to file an application for a spot Bitcoin ETF, but with a unique twist
Consensys unveils โBuilder Nightsโ initiative, aimed at cultivating collaboration, innovation, and growth in web3 by spotlighting builders and their contributions to the spaceย
Robinhood enables in-app swaps on Ethereum; extends wallet support for BTC and DOGE
X acquired a license to integrate crypto payments into the platform
Popular meme coin PEPE tanked after some of the devs went rogue and sent $16M worth to exchanges and reduced the number required on the multisig from 5 to 2
๐ web3 + NFTs
Animoca Brands issued its end-of-year investor update for 2022 including key financial highlights, capital raises, acquisitions and leadership changes
Todayโs the deadline for ApeCoin holders to vote on a proposal supporting an AR-powered social media scavenger hunt with bigtime $APE rewards
Foundation launched Moments, a new way for creators to host solo shows, exhibitions, or seasonal collections within Worlds
Decentralized social app Farcaster moved from the Goerli Ethereum testnet to the Optimism mainnet
FirstMate unveiled the beta launch of its marketplace website builder aimed at NFT creators seeking to build their own digital storefronts; also raises $3.75M round
Doodles gets a brand refresh with a new hand-drawn logo and introduces a Crocs collab bundle that comes with a pair of Classic Clogs, Doodles-themed Jibbitz charms, and a redeemable โCrocs Boxโ NFT
VeeFriendsโ Burn Island Eruption 9 is now live
Beeple extends invite to Punks event at his Charleston studio to non-holders โinterestedโ in one day holding a Punk
OpenSea introduced new ERC standards and published a roadmap for redeemable NFTs
Cryptoys launches Mickeys and Friends collection; teases new physical merch
๐ Brands + Biz
Courtyard.io launched the tokenized Pokemon collection, Grails That Got Away, on Polygon: Each $49.99 pack gets you a single graded Pokemon card from the late 90s, which is physically vaulted at Brinkโs
Walmart partners with People of Crypto Lab to launch Cultureverse, an immersive experience in Spatial that pays tribute to hip hopโs early visionaries
Limewire is launching a creator studio on Polygon where users can create AI-generated music with Limewire- and partner-owned content
Accessories brand Claireโs teamed up with metaverse game publisher Super League to create user-generated content avatar wearables on Roblox
ALTS by Adidas is giving holders who used their Vending Machine a chance to enhance their traits at no additional cost
Dropbox is killing its unlimited storage plan, in part blaming crypto mining
๐ค AI + Metaverse
US Copyright Office is seeking public input on 3 AI and copyright issues: How AI models should use copyrighted data; whether AI-generated material can be copyrighted w/o a human; and how copyright liability would work with AI
Google created SynthID, a AI-detection watermark tool thatโs imperceptible to the human eye
AI could prove to be more energy intensive than cryptocurrency, hereโs how to mitigate the impact
Gemini, the new flagship AI model from Google, boasts 5x the computing power and is a serious threat to ChatGPT
Jasmine Maietta is a former professional athlete and the founder of Round21, a modern sports brand with an emphasis on arts and culture. Sheโs had high-profile collabs with Britney Griner and the U.S. Womenโs National Team and web3 partnerships with the likes of BAYC and Nouns. She and Carly discuss the new creator economy, how she views the role of NFTs and web3 in marketing, and why sports merch is in dire need of a rebrand. Plus, find out how she fared as the first NFT company ever to pitch on Shark Tank!
Carly and Gavin rewind the week with another meaty recap. Theyโre revisiting the royalties convo after OpenSeaโs latest set of announcements, chiming in on Nate Chastainโs conviction, and Carly bites the bullet on Friend Tech. Catch it all here!
Got something to share with our readers? Leave a comment below or connect with me @hawaiianft on Twitter or @sparkitysparkz on Threads ๐ค๐พ
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SEC's Deep Impact
Loved the OPJ newsletter this morning Jacy, especially the shout out to Round21 and Carly's interview with Jasmine. I also found the piece on Google's SynthID interesting and think this is progress in the ever fast evolving world of AI.