How OpenSea Could Outsmart the SEC in a Potential Lawsuit 😎
Weekly News Recap: 🚨 Telegram CEO arrest shakes market, 🔄 MakerDAO rebrands to ‘Sky’, and more!
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If the SEC Sues OpenSea, Here’s Why the NFT Platform Could Win Easily
NFT marketplace OpenSea received a Wells Notice from the SEC. Crypto lawyer Preston Byrne explains whether Gensler’s agency has a chance to win a potential case.
The SEC’s latest enforcement action is targeting NFTs, and OpenSea is in the crosshairs. In this episode, crypto lawyer Preston Byrne joins to unpack the implications of the SEC’s Wells Notice to OpenSea and what it might mean for the platform and the broader NFT market. Could Section 230 of the Communications Decency Act provide a unique defense for OpenSea? Preston also dives into other recent SEC moves, including cases against Stoner Cats, Impact Theory, and more.
Lastly, with the 2024 elections looming and political divides sharpening, is the SEC overreaching in its approach to crypto?
Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.
Weekly News Recap
Telegram CEO Arrest Sparks Market Reaction, TON Blockchain Outages
Telegram CEO Pavel Durov was arrested at Paris's Le Bourget airport on Sunday, following a cybercrime investigation by French authorities. According to the Tribunal Judiciaire de Paris, the charges against Durov include providing unauthorized "cryptology" services, facilitating illicit transactions, and other serious allegations such as distributing illegal content and money laundering. Durov, now under judicial supervision and prohibited from leaving France, has undergone multiple interrogations, and an arrest warrant has been issued for his brother, Nikolai Durov.
Durov's arrest had an immediate impact on Toncoin (TON), with the token dropping nearly 20% after the news broke.
In addition to the market downturn, the TON blockchain suffered two outages in recent days. The network issues, which occurred on Tuesday and Wednesday, were attributed to heavy loads from the minting of DOGS tokens. TON Core has been actively working on a solution, urging validators to update their nodes and restart in order to restore block production. The network was back up and running after a few hours on each occasion.
Binance CEO Refutes Claims of Freezing All Palestinian Funds
Binance CEO Richard Teng has denied allegations that the exchange has frozen all assets belonging to Palestinians, a claim made by NoOnes CEO Ray Youssef on X. Teng described the accusation as "FUD," meaning fear, uncertainty, and doubt. He clarified that only a limited number of accounts linked to illicit activities were blocked, and emphasized that Binance, like other financial institutions, adheres to global anti-money laundering regulations. The controversy arose after Youssef shared a letter from Israel’s National Bureau for Counter Terror Financing about an asset seizure order. However, the letter did not specify who the recipient was.
MakerDAO Rebrands to "Sky" Amid Controversy Over Stablecoin Control
MakerDAO, one of the most important and oldest decentralized finance (DeFi) protocols, has rebranded as "Sky" and announced the coming launch of its new USDS stablecoin and SKY governance token on September 18. The rebrand is part of MakerDAO's broader "Endgame" strategy aimed at simplifying the user experience and making the platform more accessible. "Sky represents the complete transformation of Maker," said Rune Christensen, MakerDAO's founder, highlighting the intent of the rebrand to address previous user experience issues.
However, the changes have sparked concerns within the DeFi community. The USDS stablecoin will feature a freeze function allowing assets to be remotely locked, a capability that contradicts DeFi's decentralized principles. While Christensen clarified that the freeze function is optional and will not be active at launch, many DeFi enthusiasts are uncomfortable with its inclusion. AJ Scolaro, a senior analyst at Messari, argued that the feature is necessary for regulatory compliance and the growth of real-world asset-backed stablecoins.
In addition, a journalist from Foresight News was able to acquire MakerDAO's former handle on social media platform X during its rebrand, and plans to keep it for its collectible value and to boost traffic to their website. Discussions with Sky to return the handle are ongoing.
Celsius and FTX Bankruptcy Updates
Celsius has distributed over $2.5 billion in liquid cryptocurrency and cash to approximately 251,000 creditors as part of its bankruptcy plan, covering around 93% of the total claims against the firm’s value. About 121,000 eligible creditors still need to claim their distributions, with most having claims of less than $1,500. The distribution follows the United States Southern District of New York Bankruptcy Court's approval of Celsius's reorganization plan.
In the FTX bankruptcy case, the U.S. Trustee has raised objections to the exchange's amended reorganization plan, criticizing its broad legal protections and unequal treatment of smaller creditors. A group of creditors also filed complaints seeking in-kind distributions to minimize tax burdens. The FTX bankruptcy plan's confirmation hearing is scheduled for October 7.
SEC Lawsuit Against Kraken Can Move to Trial, Judge Rules
A California federal judge has ruled that the SEC's lawsuit against Kraken can proceed to trial. The SEC filed the lawsuit last November, alleging Kraken operated without registering as a broker, exchange, or clearinghouse, violating federal securities laws. U.S. District Judge William Orrick found that the SEC plausibly argued that some cryptocurrency transactions on Kraken could be considered investment contracts under securities laws. While the judge agreed that cryptocurrencies themselves are not securities, he noted that contracts surrounding their sale could be. Kraken's motion to dismiss the case was denied, and both parties must propose a trial schedule by October 8.
In related news, Abra settled with the SEC over charges related to offering unregistered crypto asset securities through its Abra Earn product, agreeing to pay civil penalties without admitting to or denying the allegations.
Base Surpasses 1 Million Daily Active Users
Base, Coinbase’s Ethereum Layer 2 solution, has exceeded one million daily active addresses for the first time, recording 1.05 million of them on Saturday and 1.03 million on Sunday. This represents 71% growth in active addresses over the past 30 days, with the surge positioning Base ahead of other major Layer 2 networks. Base now has more daily active addresses than Arbitrum, Linea, and Mantle combined. The recent introduction of "Basenames," which are unique onchain identities built on the Ethereum Name Service (ENS), has driven activity, with over 200,000 Basenames minted so far.
Fun Bits: Crypto Startup’s Hilarious North Korea Spy Test Goes Viral
A crypto startup has found a creative way to spot potential North Korean spies: asking job candidates to curse North Korea. According to Harrison Leggio, aka Pop Punk on X, the test is simple—ask the applicant to say, "I hate Kim Jong Un, f*** North Korea." When one candidate was asked, they immediately deleted the chat, raising eyebrows.
The internet loved it, with users joking about adopting this "North Korea litmus test" in their own hiring processes. The idea comes amid reports that North Korean hackers, posing as remote workers, are trying to infiltrate tech and crypto firms to fund their regime.