The lawsuit, filed by former congressional staffer Joe Kent in the U.S. District Court for the Eastern District of New York in October 2021, alleged the DeFi platform violated New York state’s gambling laws by “allowing people to evade financial regulations and scam consumers,” according to the original complaint. Kent, who previously worked for crypto skeptic Sen Elizabeth Warren (D-Mass), filed the suit as an apparent test case as legislators explored avenues to pursue legal actions against DeFi actors.

But the messaging surrounding the suits makes the SEC’s recent moves seem reactive, political and frankly, just beneath the bluster, weak. Specifically, the SEC seems to be trying to put Coinbase and Binance into the same bucket as the frauds of 2022, such as Luna, Celsius and above all FTX. The SEC has been widely viewed as giving FTX deferential treatment before it was revealed as a massive fraud, so now it’s demonstrating that it really can be a hard-nosed regulator – it’s just doing so a couple of years late, and to the wrong targets.

That being said, Whittemore imagines that in the Web3 space specifically, AI could be used to quickly summarize crypto-adjacent news. “CoinDesk is the destination website for a lot of people in Web3,” says Whittemore. But CoinDesk is not the destination for all business or financial news. So for areas outside of its core competence, why not use AI as a service to the readers? What happens to the S&P 500 is not exactly CoinDesk’s bailiwick, but it’s of interest to most in the space. So Bloomberg or Wall Street Journal articles could be summarized and then linked to by AI, says Whittemore, as these are “sort of orthogonal to their interests, but relevant.”

Ironically, permissionless decentralized applications (dapps) leave significant groups of users unable to participate. Regulated entities such as asset managers or allocators are generally not able to do business with “bad actors” (terrorists, financial criminals, etc.). In a completely permissionless environment, the participants are unknown, and, therefore, the “bad actor” risk cannot be addressed. Hence, know-your-customer (KYC) checks and the assessment of the potential money laundering risk are important steps to building trust in the digital asset ecosystem and broadening institutional adoption of Web3 opportunities.

Bitcoin (BTC) quickly bounced back after tumbling to a three-month low of less than $25,500 on Tuesday following news that Coinbase (COIN), had been sued by the U.S. Securities and Commission Exchange (SEC) on allegations of violating federal securities law. This followed a similar suit against Binance on Monday. Already on its heels following the Binance suit, bitcoin sank further on the Coinbase action before recovering throughout the day to again top $27,000. It’s retreated a bit overnight Wednesday to the current $26,800, still up 4% over the last 24 hours. “The price action is certainly encouraging and shows the market remains confident on the outlook for the space despite attempts to slow it down by way of a path to regulation that has been less than clear,” said LMAX Digital in a morning note. The Coinbase lawsuit also listed 13 tokens which could be deemed as securities, including Cardano’s ADA, and Polygon’s MATIC, both of which are down 5% over the past 24-hours.

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I am not going to bore you by quoting chapter and verse on broker-dealer registration requirements. I also won’t go into a detailed Howey analysis on many of the coins mentioned in the complaint – including Solana, ADA, Matic, Filecoin, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO. The important thing here is that the SEC is seeking, as a remedy, a permanent injunction against Coinbase from operating an unlicensed exchange. If they can get one of the tokens to stick and win at trial, they may be able to shut down Coinbase’s core business completely.

The broader crypto market also regained ground since Monday, albeit somewhat less than BTC. ETH, the second largest crypto by market value, was recently changing hands at slightly below $1,900, up 4.5% from Monday, same time. ADA and SOL, the tokens of the smart contract platforms Cardano and Solana, recently rose more than 1% a day after plunging more than 8% and 10%, respectively. Binance’s BNB native token was also in positive territory, while Polygon’s MATIC was down 1%. The SEC listed those tokens and nine others as unregistered securities in the two lawsuits.

“The SEC respectfully submits that this relief is necessary on an expedited basis to ensure the safety of customer assets and prevent the dissipation of available assets for any judgment, given the Defendants’ years of violative conduct, disregard of the laws of the United States, evasion of regulatory oversight, and open questions about various financial transfers and the custody and control of Customer Assets – including by Defendants who claim they are not subject to the Court’s jurisdiction – as described in the Complaint, Memorandum of Law, and supporting materials,” an SEC filing said.

The new collection of “a few hundred” digital trunks will open for registration on June 8 to consumers based in the U.S., Canada, France, the U.K., Germany, Japan and Australia. Select customers can then purchase the NFTs on June 16 for €39,000, or about $42,000. As part of the token’s utility roadmap, holders will receive a physical replica of their digital Treasure Trunk, which will also unlock access to upcoming Louis Vuitton products and immersive events. According to a press release, the brand plans to release limited products and experiences “at regular intervals” throughout the year.