gm (or gd, ge and/or g&t). Coinbase and Gemini are expanding outside the US, while OPNX is trying not to be in Dubai. Meanwhile, the Sui blockchain is live everywhere.
The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).
[tl;dr]
Could Dubai turn down the 3AC?
Coinbase and Gemini look to the futures
Sui set free
[Dubai reprimands OPNX]
Dubai’s Virtual Assets Regulatory Authority formally reprimanded the co-founders and CEO of OPNX for advertising and running its spot and futures exchange in the emirate without licenses. OPNX was formed this year by Su Zhu and Kyle Davies — the co-founders of bankrupt crypto trading firm Three Arrows Capital — along with CoinFLEX founders Mark Lamb and Sudhu Arumugam.
What Dubai Said: We tried to tell them! In its letter, VARA said it had sent two separate cease and desist orders in February and March before filing the reprimand on April 18.
What OPNX Said: CEO Leslie Lamb sought to distance herself from Dubai, telling Bloomberg, “At no point in time have UAE customers been able to open an account on OPNX.” Meanwhile, Su Zhu sought to distance himself from OPNX, saying, “While Kyle and I helped contribute the initial ideas for OPNX, Leslie is very much the CEO and we aren’t involved in day-to-day.”
What Reporters Said 💬: The letter is part of a balancing act intended to improve Dubai’s reputation with the Financial Action Task Force, suggested Bloomberg’s Ben Bartenstein: “The action against OPNX is the latest sign of Dubai regulators taking a stricter approach toward crypto, even as the emirate attempts to position itself as a hub for the industry.”
Why It Matters: 3AC went bust in the first wave of market contagion after Terra collapsed. Zhu and Davies are attempting to have a second life in crypto, eyeing an opening after FTX’s own bankruptcy. Regulatory scrutiny from an ostensibly pro-crypto jurisdiction could make that harder.
[Coinbase/Gemini Go Abroad]
Coinbase and Gemini are getting better publicity for offering crypto futures. The former announced Tuesday the launch of its international derivatives exchange, licensed out of Bermuda. On the same day, Gemini said its own international derivatives platform is live in 30 countries.
What Reporters Said 🔎: “The move represents Coinbase's latest foray into derivative trading, one of the most popular corners of the global crypto market despite being effectively iced out of the U.S., where such activities require hefty oversight,” wrote CoinDesk editor Danny Nelson. It’s not just about diversifying into derivatives, said Bloomberg’s Yueqi Yang — it’s about hedging its bets “amid souring relations with American regulators.”
What Coinbase Said: “Rest assured that Coinbase is committed to the US, but countries around the world are increasingly moving forward with responsible crypto-forward regulatory frameworks to strategically position themselves as crypto hubs.”
What Gemini Said: CEO Tyler Winklevoss told Leo Schwartz of Fortune that Gemini looked abroad after its intention to offer crypto derivatives stateside was stymied by the CFTC: “If we can’t do it in the U.S. right now—dramatically grow our business and bring crypto to folks here—that’s not going to stop us from bringing it globally.”
Why It Matters: Coinbase has turned up the pressure against US regulators recently; last week, it sued the SEC to get more regulatory guidance. Gemini, which initially cultivated a reputation for working with regulators, is now looking to cooperate with other jurisdictions. If the SEC and CFTC don’t pay attention to US-based crypto firms, they’ll seek suitors elsewhere.
[Sui Comes Alive]
For those looking elsewhere for an Ethereum alternative, the Sui blockchain is now live. Developed by veterans of Meta’s abandoned cryptocurrency wallet, Sui says it's easy for developers to build on and that it’s much faster than other layer-1 blockchains — able to do tens of thousands of transactions per second.
What Reporters Said 🔎: In reality, Sui was logging around 18 transactions per second on its first day, wrote Elizabeth Napolitano of CoinDesk. But it’s still early.
While TPS is important, everyone is keeping an eye on an emerging L1 rivalry: “It's the second blockchain to launch from the two Move programming language spinoffs of Meta's Diem project, with Aptos — which launched in October 2022 — being the first,” wrote The Block’s Vishal Chawla.
What Sui Said: Sui Foundation managing director Greg Siourounis said, “For the first time, builders and users have access to a Layer 1 blockchain that allows developers to build freely, without being inhibited by complex infrastructure, and unlocks endless possibilities for users across the world.
Why It Matters: Sui’s creator, Mysten Labs, raised over $300 million in VC funding, as did Aptos, so investors think new blockchains can compete on speed and ease of use. However, despite a slew of layer-1 blockchains coming online in the last few years, none has yet overtaken Ethereum in market dominance and developer involvement.
[Tidbits]
Former OpenSea product manager Nate Chastain was convicted of wire fraud and money laundering for using privileged information to buy NFTs before they came to the marketplace. Story by Blockworks (Katherine Ross)
Rival NFT marketplace Blur introduced buy now, pay later for digital collectables. Story by The Defiant (Owen Fernau)
Curve Finance, a DeFi platform for trading stablecoins, introduced its own stablecoin. Story by CoinDesk (Krisztian Sandor)
[Tweet of the week]
[Events]
Account Abstraction After Hours | 4th May 2023 | London, England
Bright Moments | 5th - 10th May 2023 | Tokyo, Japan
Chinwags #0: Building Future-proof DAOs | 8th - 11th May 2023 | Warsaw, Poland
Blockchain Economy Istanbul Summit | 8th - 11th May 2023 | Istanbul, Turkey
EY Global Blockchain Summit | 9th - 12th May 2023 | London, England
NFT Tallinn | 9th - 10th May 2023 | Tallinn, Estonia
CryptoVsummit | 10th May 2023 | Dubai, UAE
Solana Hacker House | 10th - 14th May 2023 | Taipei, Taiwan
TMRW Conference | 12th - 14th May 2023 | Belgrade, Serbia
BuildETH | 12th May 2023 | San Francisco, CA, USA
ETHGlobal Lisbon | 12th - 14th May 2023 | Lisbon, Portugal
Blockchain Expo | 17th - 18th May 2023 | California, USA
Dubai International Crypto Summit | 17th May 2023 | Dubai, UAE
[DeFi Definitions]
A new occasional segment exploring one particular aspect of DeFi.
This week: “Replicated Security” by Sam O'Donohoe.
The Cosmos ecosystem comprises a network of independent Layer-1 blockchains that are designed to be interoperable with each other. While unique and innovative in design, projects deployed on Cosmos have had to contend with issues such as recruiting validators which is costly and technical. With that in mind, Replicated Security is a shared security system that recently launched on Cosmos’ main blockchain – the Cosmos Hub.
Serving as the central hub, Replicated Security was designed to allow the Cosmos Hub (known as the provider chain) to provide security through its validators to an economic zone of smaller chains (known as the consumer chains). This allows the consumer chain to borrow a validator set from the Hub, and the Hub in exchange receives a percentage of the gas fees as revenue, as part of a flexible security agreement.
This is seen as a huge upgrade for Cosmos as it lowers the barrier to entry for projects looking to deploy within the “ATOM economic zone”, subsequently accruing further value to the wider Cosmos ecosystem. Looking outwards at the wider ecosystem, Replicated Security is set to change the security architecture within this central economic zone.
While Replicated Security was approved by vote back in March 2023, Neutron (a YAP Global client) is slated to become the first-ever consumer chain to deploy through Replicated Security in the coming weeks, signalling a new era of development and utility.
The team: founder Samantha Yap and consulting editor Jeff Benson, Sam O'Donohoe, Ewan Brewster, Tiffany Mac Sherry, Becky Corbel and Delon Chan. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.
This newsletter is prepared by YAP Global, an international P.R. Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and Web3 brands through impactful storytelling. Find out more about us here.