The securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended or with any other regulatory authority of any State or other jurisdiction of the United States or Canada and (i) may not be offered, sold or delivered within the United States or Canada, or to, or for the account or benefit of any U.S. Person or Canadian, and (ii) may be offered, sold or otherwise delivered at any time only to transferees that are Non-United States Persons and Non-Canadians.

June 7, 2022

OpenSea, Crypto mining laws, MakerDAO

Welcome to Swarm Markets’ media memo. This weekly update provides comments from Swarm Markets’ co-founders, Philipp Pieper and Timo Lehes, on key industry news that has caught our eye, plus our own developments. 

Comments available on the following news items:

  • OpenSea insider trading charges filed, crypto is under the microscope
  • New York State mining moratorium bill is a warning from the future
  • Swarm partners with MakerDAO to offer additional yield on liquid staking

OpenSea insider trading charges show crypto is being scrutinised – Philipp Pieper

Prosecutors in Manhattan have filed charges against a former product manager from OpenSea for insider trading. It sets a huge precedent in the NFT market and also within crypto more broadly, especially as the assets themselves are currently unregulated.

The lesson here is that much of existing laws and regulation do already have provisions to manage and enforce compliance upon firms and individuals within the crypto space. The criminal accusations in this case are actually pretty clear cut. 

The issue in the crypto space isn’t the lack of regulation per se, it’s the lack of joined up thinking and guidance on much of that regulation. Definitions in many regions for what pertains to assets and essentially how the state views crypto assets are still too vague. 

This is causing major players to avoid entering the space, such as the Bank of America, whose CEO recently said they won’t touch the space without the right regulation in place. 

We’d never advocate for an overbearing presence of regulators in the space, but it needs to be there as part of the conversation as to how businesses in the sector move forward from episodes such as this from OpenSea, and how investors, consumers and companies are better protected against bad actors in future. 

New York State moratorium bill is a warning from the future gone wrong – Philipp Pieper

A New York State assembly member, Anna Kelles, has published a bill that limits certain types of crypto-asset mining. Its publication should be a wake up call to the sector that if it doesn’t engage seriously with concerns from regulators and policymakers, then they will have rules made for them.

The bill itself targets those miners that use energy-intensive methods such as proof-of-work consensus mechanisms, which mine bitcoin and ether (for now). Staking is the new mining as ESG is stimulating investor interest in proof-of-stake networks. 

Last week, Swarm launched its own institutional-grade liquid staking tokens that are DeFi compatible. We’re making it easier for people to have a tradable position on their staked assets, giving institutions an entry point in the price discovery process for proof-of-stake networks.

The sector needs to begin moving forward on critical issues such as energy consumption, or else face the wrath of lawmakers willing to force their hands on it. 

First DAI pools available for liquid SOL – Timo Lehes

We’re pleased to announce a world first with MakerDAO, the largest DeFi protocol by total value locked. Liquidity pools with its stablecoin, DAI, and our liquid SOL staking token, the native token of Solana, are now available on the Swarm platform.

Both retail and institutional investors can add their DAI and liquid SOL to the pool to generate yield from swap fees and additional platform rewards. 

In a low-paradigm environment, investors across the spectrum are looking for ways to make their idle assets work harder for them. Putting them into pools on a compliant DEX is just one option, now at their disposal.