Daily Digest - 16 February 2023

Headlines

▌Encrypted market maker GSR has laid off at least 5% of its staff again

According to people familiar with the matter, cryptocurrency market maker GSR has implemented further layoffs, affecting 5% to 10% of its employees. Two of the sources said the cut was closer to 5%, not 10%. However, according to another person familiar with the matter, some employees also resigned voluntarily due to reasons such as lower than expected bonuses in January.

Policies

▌The U.S. SEC proposal may prohibit investment advisors from hosting assets in encryption companies

The U.S. Securities and Exchange Commission (SEC) will propose a rule that would effectively require registered investment advisors to store digital assets outside of the cryptocurrency industry. The rules, due to be proposed by the U.S. Securities and Exchange Commission on Wednesday, would expand the agency's existing rule requiring investment advisers to place client funds and securities in "qualified custodians" for safekeeping. The new version, if approved, would add protection requirements for any assets entrusted to investment advisers, including cryptocurrencies.

Cryptocurrency

▌Fox Entertainment "Masked Singer" program launched NFT access control experience

Fox Entertainment and its Web3 arm Blockchain Creative Labs are launching a new token-gated fan experience for the network’s hit singing competition show “The Masked Singer.” Holders of an NFT dubbed "The Masked Singer Star" will be able to "watch exclusive content from behind-the-scenes and confessions of this season's contestants." Fox said in a statement that the NFT will cost around $50 and will be in limited supply, 1,050 to be exact. Fans need to scan the QR code and then participate in interactive activities, such as voting for the contestants they think will advance, to win the opportunity to buy NFT. By doing so, participating fans will be able to "upgrade their loyalty pass" and become eligible to purchase NFTs, unlocking additional exclusive content. The media company said fan votes would not affect the show's outcome. Fox’s Blockchain Creative Labs has teamed up with cryptocurrency infrastructure company MoonPay to help launch a new token-gated fan experience.

▌The proportion of Ethereum blocks meeting OFAC compliance requirements has dropped to 48%

MEV Watch data shows that the proportion of Ethereum blocks meeting the compliance requirements of the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has dropped to 48%, hitting a three-month low. However, this figure rose sharply to 79% in the two months to November 21 last year.

▌USDC Issuer Circle Refutes SEC Enforcement Action FUD

Following the SEC crackdown on Kraken last week and its subsequent threat of action against BUSD issuer Paxos, rumors have been flying about Circle being next. Crypto Twitter was awash with unfounded claims that Circle had been issued a Wells notice by the SEC. A Wells notice is a threat of legal action giving the firm time to formulate a response, in this case, justify that a stablecoin is not a security (which is pretty obvious). However, Chief Strategy Officer and Head of Global Policy at CirclePay, Dante Disparte, refuted the rumors on Feb. 15.