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Michael Bacina and Luke Misthos of the Piper Alderman Blockchain
Group bring you the latest legal, regulatory and project updates in
Blockchain and Digital Law.
Reserve Bank of Australia hiring for Central Bank
Digital Currency
The Reserve Bank of Australia recently posted a job
advertisement for a Central Bank Digital Currency team.
This exciting development comes hot on the heels of the
RBA’s submission to the Bragg
Inquiry, citing 4 year old research, that “the case for
issuing a CBDC for use by households has not been
established”.
However the RBA has been more upbeat on a CBDC for wholesale
market participants to take advantage of:
-
Speed, cost and robustness of payments; -
Atomic transactions; and -
Programmable money.
The RBA has also conducted several projects to test out
distributed ledger technology for wholesale market participants,
involving major players such as the Commonwealth Bank, National
Australia Bank and Perpetual in those tests.
The new job
advertisement states:-
We are researching whether there is a case for a CBDC in
Australia, and if so, how it might be designed and what benefits
and other implications it would have. This work is contributing to
one of the RBA’s strategic focus areas on supporting the
evolution of payments in Australia.
A cross-disciplinary team will be established to conduct this
research, with a view to:
-
Designing research projects aimed at improving the RBA’s
understanding of the case for and implications of a CBDC; and -
Considering different technical solutions for an Australian
CBDC
Given the supplementary submission made by the RBA to the Bragg
Inquiry this would seem to include both retail and wholesale CBDC
opportunities. This exciting employment opportunity is now taking
applications, and since there are a wealth of projects around the world already ahead of
Australia in the CBDC race, there will be plenty of material and
real world data to research as Australia moves closer to a
wholesale or retail CBDC.
Going Bananas: Sotheby’s Latest NFT Auction
Generates USD$26 Million
Bored Ape Yacht Club (‘BAYC‘) has
teamed up with Sotheby’s for a two-lot sale of their Bored Ape
Yacht Club non-fungible tokens
(‘NFT’s‘), a range of
computer-generated monkey and dog themed avatars. The sale was held
from September 2 to September 9 and included the 101 ‘Bored Ape
Yacht Club’ NFT’s as well as 101’Bored Ape Kennel
Club’ NFT’s.
The Kennel Club NFTs, marketed as pets to the tapes, sold for
USD$1,835,000 while the apes climbed to an eye-watering
USD$24,393,000. The buyer will not only receive six ‘mutant
serums’ to generate new ape NFT’s but will also take
control of their intellectual property, according to the very brief
terms of sale on BAYC’s website.
Purchasing gives the owner promised access to exclusive club
benefits and offerings. As we’ve mentioned,
NFT’s are digitally unique, one of a kind tokens that are
not-to-be repeated. The collectable tokens have become a means by
which artists and musicians can sell their work while ensuring the
digital security offered by blockchain technology.
Sotheby’s has been at the forefront of digital currency
exchanges and NFT’s, having auctioned
the first ever created NFT earlier this
year.
Projects like BAYC have grown in popularity this year along with
NFTs generally. The computer generated apes showcase distinct
features programmed from over 170 possible traits with some being
more sought after than others; earlier this week one NFT sold for 740 Ether (USD $2.9
million).
Yung Labs, the developers of the BAYC NFT’s, recently sold
10,000 Mutant Apes in a single hour (for around 3 Ethereum each)
and airdropped a further 10,000 vials of ‘mutant
serums’. The M1, M2 and Mega mutant serums allow owners to
generate new apes by exposing their original work to a vial. This
comes after the company sold 10,000 original ape NFT’s in April
for around USD$200 each.
Many large businesses have sought to ride the NFT wave through offerings or
even buying NFT’s
themselves. The secondary market for BAYC
NFT’s has increased dramatically since the original drop and
shows no signs of slowing down.
Judge Not Cutting Ripple Slack Over Internal
Messages
In the ongoing lawsuit between Ripple and the Securities and
Exchange Commission (SEC), Ripple Labs has been
ordered by United States Magistrate Judge Netburn to produce over 1
million Slack messages which they overlooked for earlier
production. The Commission believes the messages contain vital
company communications which may assist them in determining whether
Ripple sold unregistered securities.
The lawsuit, which has been ongoing since the end of
last year has pivoted once again. Earlier this
year, Ripple fired back at the SEC
and was granted access to the regulator’s internal
communications, which may be relevant as Ripple had
engaged with the SEC around their XRP sale.
Ripple provided some messages last month but the SEC argued
these were incomplete. Ripple denied this claim initially but then
conceded there was a data processing mistake that resulted in the
company only being able to produce a few messages, and more than 1
million were missing.
Ripple also sought to argue that the cost to retrieve the
message (estimated at US$1M) was unfair and unreasonable but Judge
Netburn responded, outlining the importance the messages may have
to the case:
Any burden to Ripple is outweighed by its previous agreement
to produce the relevant Slack messages, the relative resources of
the parties, and the amount in controversy
Some key take-aways from the recent developments in this case
are:
-
care should be exercised with how company communications are
stored, so that they can be produced with as little additional cost
as possible; and -
companies should be aware of their record keeping obligations
under the jurisdictions in which they operate.
In particular, companies operating in Australia have
record-keeping requirements under the Corporations Act
2001 (Cth) (the Act) which includes
keeping appropriate financial records that correctly record and
explain transactions and the company’s financial position.
Financial records must be retained for a period of 7 years and
failure to do so is an offence under section 286 of the Act.
A Vast Step Forward for Hopeful Crypto
Customers
Vast, a United States bank with Federal Deposit Insurance
Corporation (FDIC) insurance and a Federal Reserve
charter, has become the first in the country to offer Bitcoin
services.
Bitcoin, Ethereum, Cardano, Filecoin, Litecoin, Orchid, Algorand
and Bitcoin Cash are available to buy, sell and hold directly from
an FDIC-insured checking account if you are a customer of Vast
Bank.
The landmark feature was approved by the Office of the
Comptroller of the Currency (OCC) and discussed
with the Federal Reserve. The news was not taken well by some,
theNew York Times
writing that cryptos move into the banking sector
‘elicits alarm’ in Washington. The article, which focuses
on crypto loans and the difficulty regulators face was swiftly
countered by Founder and CEO of AvantiBT, Caitlin Long.
Regarding disclosure & transparency, #DeFi platforms do a far
better job than either centralized #crypto intermediaries or
traditional financial institutions do. Indeed, the transparency
(information symmetry available) to users in most of #DeFi is one of its best
attributes.
Banks which are subject to federal regulations are in a good
position to provide crypto services to customers who may not have
time, interest or confidence in trading with current institutions.
The growing popularity of cryptocurrency and a greater
understanding of blockchain technology has allowed Vast to expand
into this space.
Vast Bank CEO Brad Scrivner said in
an Forbes interview:
A Gallup poll, and our own internal surveys, showed us that
more than 60 percent of individuals are at least interested in
crypto – what I like to describe as ‘crypto curious’. But
they’re also saying we want to have a bank involved with our
custody of cryptocurrency.
The approval and operation of crypto’s on Vast’s network
will be closely monitored and its success has the potential to spur
on other banks to do the same.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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