Unchained - Hester Peirce's Former Counsel on Terra 2.0, XRP and a Bitcoin Spot ETF - Ep.356

Starting point is 00:00:00 Hi, everyone. Welcome to Unchained, your no-hype resource for all things Crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto seven years ago, and as a senior editor at Forbes, was the first Main Tree Moody reporter to cover cryptocurrency full-time. This is the May 27th, 2022 episode of Unchained. Hey, builders, looking for one of the best scaling solutions in crypto? That's easy. Avalanche's breakthrough subnet design,

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Starting point is 00:01:19 UNC. If you're trying to break into Web3 or help build it, you'll want to come to Graph Day from June 2nd through the 5th in San Francisco. Get your ticket and at Thegraph.com slash graphday. Today's guest is Coy Garrison, partner at Steptoe-on-Johnson, and until recently, SEC Commissioner Hester Perce's right-hand man at the Securities and Exchange Commission, serving as her counsel. Welcome, Coy. Thanks for having me, Laura.

Starting point is 00:01:47 It's great to be here. So apologies, everyone. As I am traveling and did not bring the crucial cord necessary to hook up my nice mic to my computer. So you are listening to basically the best sound that I could come up with on short notice. Since I imagine listeners are not very familiar with your background, why don't you start by describing what your crypto-relevant work history is thus far? Yeah, absolutely. So I spent the last nine years or so at the SEC, and crypto has been a very large part of my portfolio. You know, my journey started back in 2014. I was a young, young staff attorney, and due to my youth, a filing was

Starting point is 00:02:28 plopped on my desk by my boss saying, here's the Winkle Boss Bitcoin Trust. I don't know what a Bitcoin is, but you're young, you can figure it out. So from there, I was off to the races and became the go-to person in the building for the Bitcoin ETP filing applications and really learn the industry through those filings. I had the pleasure of working as director of Division of Corporation Finance, Bill Hinman's counsel for about a year and a half, where we saw a lot of crypto not only ETP applications, registered coin offerings, but then, of course, his famous ETH speech. And then for the last three years, I've had the absolute pleasure of working for Commissioner Perce, advising her on all crypto matters and working with her on her safe harbor

Starting point is 00:03:14 proposals and really trying to push the agency into a more pro-innovation stance. And so I've been blessed with a lot of great opportunities at the SEC and am excited to join this talented Stepto team. And can I ask why it is that you decided to leave the SEC at this particular time? Absolutely. Yeah. You know, it's a, I really think it's a pivotal moment for crypto regulation. I think the attention that it is getting in Washington is tremendous. It's, it has matured so much since from the time when I first got involved and started working here. You know, it's been a passion of mine from when I was within the building to try to get the agency to be more open, to be more facilitating and accounting. accommodating and collaborative. And, you know, I think the opportunity to come out now when this really matters now, because we're coming up and deciding which agency has jurisdiction

Starting point is 00:04:07 over what activities. And it's really important to get it right. So for the opportunity to come out, advise clients on how to how to best proceed was just one that I could not pass up. So I would say at this point in time for the last couple of years, the SEC and the crypto industry have kind of been in this sort of impasse. How would would you describe the current state of affairs when it comes to the SEC's regulation of crypto? Sure. It's a very tense, tense time, right? You have, Chair Gensler has been, has been quite clear in his position on crypto and has said repeatedly that he believes the platforms need to come in and register. He's said repeatedly that he believes most tokens and ICOs are,

Starting point is 00:04:50 in fact, securities offerings. And then on the other hand, you clearly don't see platforms registered. really don't see tokens registered as securities offerings at the SEC. So there's clearly a difference of opinion. You know, I think moving forward, it's frustrating. The agency could be doing things in a number of different avenues, right? Commissioner Purse has been advocating for a long time to get a rulemaking put on the agenda so that you can have an open discussion with the public, with the industry, with all interested parties to move something forward. The other approach, of course, is using your enforcement division and bringing cases against people you think are not in compliance. So far, the SEC has relied mostly on the enforcement side. And so that's where the industry is

Starting point is 00:05:35 and face to kind of grapple with how do you move forward with enforcement inquiries while at the same time trying to come up with the regulatory path. And recently, the SEC did announce that they were going to expand the regulatory division. What do you think of that move amidst their I guess, other moves or a lack of other moves. So I believe the crypto unit or cyber and crypto unit, I'm sure I'm flubbing the name is within the enforcement division. And so they're adding, doubling that staff. So that certainly signals that they are expanding the enforcement team to be looking at crypto issues. You know, I think I'm always an optimist and always look for encouraging words.

Starting point is 00:06:18 And I've noticed picked up on some nuances and chair Gensler's public remarks in the last a couple weeks when he's talking about telling the platforms that they should come in and register, he mentioned exemptive authority and a willingness to discuss with folks what about the rule system, you know, doesn't work. And I think that's progress. I take that as a good sign, perhaps as a tacit acknowledgement, that the existing rule book does not permit all of the current activities in the crypto industry. And so, you know, once we get folks that are willing to accept that and discuss that, I think some productive conversations can be had about how can you meaningfully operate under the existing regulatory regime and make appropriate tweaks while still

Starting point is 00:07:00 achieving, you know, the appropriate mission or investor protection goals that the agency has. So the previous SEC chairman, Jay Clayton, was perceived as being anti-crypto when his successor, the current chair, Gary Jensler, took up the role. How would you say the agency's stance on crypto changed, if at all? It's easy to kind of contrast and compare different chairs, right? And they certainly have different individual personalities and agendas and priorities for their agendas. But I think the more important thing to look at is the fact that the crypto world has evolved so much when Chairman Clayton was at the agency. You know, that was at the beginning, really, the ICO boom.

Starting point is 00:07:44 It was brand new to policymakers in Washington at the time. The industry has evolved. It's grown quite a bit. It's become a lot more established. It's, it has its own, you know, you watch CNBC and you see the tickers for crypto on there. So Cher Gensler is coming in in a different world. He's coming in with a different set of realities. But, you know, I think it's important not to get too caught up in the personalities of whoever's at the helm and really focus on we have an existing regulatory regime. How is the best way to move forward? How, you know, you have to comply with the existing regulatory regime. So finding a way to be able to do that. working with whoever is in the agency is what's most important. Commissioner Perse did recently tell CNBC that she believes the SEC has, quote, dropped the regulatory ball. She said, we're not allowing innovation to develop and experimentation to happen in a healthy way. And there are long-term consequences of that failure. Would you agree with that statement? Yes, absolutely.

Starting point is 00:08:39 I think Commissioner Perth is spot on. It is a shame because there are many things the SEC could be doing to work more collaboratively to provide guidance. You could be really encouraging requests for no action letters. You could be really soliciting input for what exemptive authorities should be exercised to allow folks to register for allow certain activities to fall squarely within our jurisdiction. But regrettably, the agency has taken an enforcement first approach, and that's the tack they have decided to take. And, you know, it's not all that essentially, you know, that doesn't fall on the hardworking people of, the agency. You know, there's a lot of smart people that have been thinking about crypto for some time at the agency. And when they are empowered by leadership to actually engage, I think there will be

Starting point is 00:09:27 meaningful engagement. So excited that, you know, there's always a prospect eventually to meaningfully engage with them and move the ball forward. So when you were working at the SEC, what were the arguments for not beefing up the other areas in terms of the way crypto is being regulated? Sure. I mean, there's, you know, there's plenty of different positions people can take, right? It's differences, opinions about what's going on in this world and in these activities and whether there's any harm being done to investors. The SEC is also a very large agency that has many different responsibilities. Crypto is but a small, tiny part of the SEC. It gets an outsized part of the attention in, certainly in this world, but in the media, but the agency is, you know,

Starting point is 00:10:14 overseeing the capital markets in the market. United States. So they have quite a few other things to be doing and limited staff resources. So, you know, I think there's a couple different factors at play. So in a moment, we're going to talk about a few of the specific areas that the SEC could be or is regulating. But first, a quick word for the sponsors who make this show possible. In just a year and a half since launching on Maynet, Avalanche has built a vibrant community of builders, leaders, and innovators, expanding what's possible in Web3. And the real superpower of Avalanche is in its groundbreaking scaling design. Subnets. Subnets are the future of Web3 scaling, empowering anyone to build custom, app-specific

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Starting point is 00:13:16 Get your ticket at thegraph.com slash graph day. Back to my conversation with Kloy. Obviously, at the moment, there's a lot of talk about stable coins for numerous reasons. I think one of the main questions is just how they, should be regulated or who the natural regulator is. And obviously there are multiple different styles of stable coins. But what is your take on which agencies per view they would fall under? That's a very live and hot question right now that's being debated both in the halls of Congress and within the independent agencies throughout Washington. Personally, I think there's a strong,

Starting point is 00:13:54 strong case to be made that very much more appropriate for some banking regulator perhaps. But I think that's, you know, that decision is up to Congress and up for, debate and to be determined. You know, you raise a good point that each stable coin is structured differently and as different incentives, different methods of business operations. It's going to be like everything else, which the industry always hates. It's a facts and circumstances analysis, but it is one of the encouraging areas in Washington that there is a lot of attention and has been for quite some time now that I'm hopeful that if there is one area in the crypto world where an agreement can be made and hopefully, you know, progress be made on the hill, it could be in fact

Starting point is 00:14:31 stable coins. And one of the big recent events in crypto and in the stable coin world was the implosion of the Terra Luna ecosystem. And obviously that's had huge ripple effects in the industry. What's your take on how a stable coin like Terra should be regulated? Yeah, you know, it's always a shame when you see people lose money and lose, you know, in a project fail. It's part part of the system. Not everything's going to succeed, but you hate to see it. You know, it's a prime example of how Washington pays attention to things like this.

Starting point is 00:15:12 A very large high-profile crash is significant. And so you have to be careful. You hope that a regulatory action or a legislative action isn't an overreaction and doesn't, you know, that this situation, we got to hope that it's not hijacked for other ideological or political. means or desires and hope that, you know, focus on strong policy of what do we care about here? Is it the protection of those that bought in? Is it the transparency of how the program works? Is the transparency of reserves for stable coins? What are the policy objectives that we're trying to achieve? And let's stay focused on that. I think those are the conversations that are going to be most beneficial and not getting caught in the weeds of the drama of individuals or

Starting point is 00:16:00 personalities in any specific, you know, situation. Yes, a lot of drama and very strong, in particular one personality in this case. Speaking of that issue, you know, right now Tara is trying to revive itself and there is this Terra 2.0 proposal that has been approved by the community and now it looks like a bunch of exchanges will be listing this token. And the main proposer of it is the person who by and large has been seen as the leader of of the Terraluna ecosystem, Doe Kwan. And so, you know, I know that with the Bill Hinman speech around EF, that decentralization

Starting point is 00:16:39 was one of the key factors, how do you think the SEC would look at this kind of situation when it comes to this decentralization angle? Sure. You know, I think this is where those facts and circumstances always come up, right? A lot of, and I'll speak more broadly, just in general, a lot of projects use the term decentralization and there's clear skepticism coming from the SEC of whether decentralized entities are in fact decentralized or is there a central party? Is there an individual? Is there an entity behind the scenes that are really calling the shots? And I think projects have to think about that.

Starting point is 00:17:12 You know, that's a fair question for the regulators to be asking. And you have to evaluate what exactly how are decisions made? Who's controlling the purse strings? What are, you know, what are those factors? So I think, you know, it's fair that projects should take an honest look and draw a distinction between how they're marketing themselves and how they're actually operating and making sure that's that's an alignment. That's an important thing to be thinking about. And so in this case where even though it was that Doquan proposed it since he couldn't unilaterally sort of impose this new chain and the community how to approve it with that, I guess, give it the characteristic of decentralized for that reason? Or what's your take on that?

Starting point is 00:17:53 Well, yeah, I mean, it's going to depend on a lot of factors in my mind, right? I would think, I'm not familiar enough with the protocol to know how the proposals work, how many folks are required to approve it, who's affiliated that's approving it, all those types of questions would immediately jump to mind. But one of the beautiful things about crypto in general is that, and our capital markets, quite frankly, is that people get to decide where they want to put their money. And transparency about what people are doing with that money and how they intend to use it and what they're intending to build is something that's quite easy with,

Starting point is 00:18:27 crypto. And it's something that we should embrace that the capital markets regulators in the U.S. should embrace and really lean into because it's, you know, individual decisions about where to put your money is up to you as an American. And that's something that we need to honor and protect here in the U.S. So it's, you know, something we shouldn't be afraid of. So as we mentioned, you were working with Bill Hinman at the time that he made his speech saying that EF was decentralized in his view. And that has actually been called into question under Chair Gensler. And I was wondering if you could talk a little bit about kind of what the thinking was that went into that speech saying that ETH was decentralized and whether or not you think any factors have

Starting point is 00:19:11 changed to call into question now whether or not it truly is decentralized. Sure. Yeah. So, you know, I think it's very important to remember the securities law analysis under Howie and everybody knows how we now and how he test. I won't go into details. It's, incredibly flexible and incredibly fact-sensitive, right? And so the Bill Hinman Ether speech was an attempt at acknowledging that the facts do change as the product evolves, right? As something is when it is sold, a certain set of promises might attach to an asset when it is sold and might make it a security.

Starting point is 00:19:47 But over time, those promises might fall away and it might become a non-security and just a different asset. that acknowledgement, I think, is still very valid and still very real. You know, I think it's a ongoing analysis that, you know, people are, people can raise questions all the time. It's part of the deal. But at the end of the day, that that core concept, I think, is very alive and accurate that the security label shouldn't have to follow an asset at all times. If there are no promises surrounding the asset, then it's curious to me how something could be in an investment contract. And so in your view, nothing has materially changed about Ether to call in a question whether

Starting point is 00:20:28 or not is a commodity at this point, meaning that you have a different view from Chair Gensler? Sure, no, I'm not familiar enough with his thinking. I'm not here to speak for Chair Gensler exactly why he's thinking or how he's doing his analysis. But, you know, I think it's just fair to say that the analysis is the same. The analysis has always been the same. The law has not changed. And I think we're all operating from the same law, which is a good, good starting point. And in a similar vein, there's another crypto asset, XRP, that has been going through a very long drawn-out case with the SEC, which has charged it with being a security and with Ripple as issuing securities. What is your take on what might happen in that case?

Starting point is 00:21:16 You know, sadly, I can't speak on it based on my work at the SEC, but like everybody else, I'll be watching to see how it unfolds. Okay. And I think the other big topic that people are wondering about when it comes to the SEC is why it is that the SEC has so far only approved Bitcoin Futures ETFs and not Bitcoin spot ETFs, which are seen as a superior or at least a financial instrument that's more in line with what consumers expect when they buy such an ETF. Why do you think that that has not been approved yet?

Starting point is 00:21:49 Yeah, it's a source of great frustration for folks in the industry and for me personally. I think the test that the commission has laid out is there. So we know what the test is and what needs to be met. It's just that the commission has not felt that that test has or threshold has been met. So essentially what folks are trying to do in these applications is they're trying to demonstrate that they can design the, rules surrounding the ETP to prevent fraud and manipulation. And the way you do that essentially, and I'll just summarize at a high level here, is you establish that you have a surveillance sharing agreement with a regulated market of significant size. And you have to demonstrate that that

Starting point is 00:22:32 regulated market is where somebody that wants to commit fraud would actually have to go to commit fraud. Right. So to pinpoint the question, the question is you have a regulated futures market. But if someone wants to commit fraud in the Bitcoin spot market, would they have to play in the futures market? And that's the question. And that's where academic research comes into play. That's where a lot of different analyses have to be shown. And that's just where the disagreement is. And so that's a battle that goes on.

Starting point is 00:23:02 And it's something that, you know, I know there's other applicants in the hopper and there's a continual line that we'll all be awaiting to see who can convince the agency. All right. Well, it has been such a pleasure having you on Unchain. Thanks so much for coming on the show. Thanks for having me. Don't forget. Next up is the weekly news recap. Stick around for this week in crypto after this short break. Thanks for tuning into this week's news recap. Terra 2.0 is on the way. On Wednesday, Terraform Labs co-founder Doe Kwan's plan to revive Terra was approved. The on-chain vote finished with 65.5% of the total in support. Only 13% voted against while 21% abstained.

Starting point is 00:23:52 In accordance with the plan, Terra will fork into a new chain without UST, the Algo stable coin that caused the collapse of the entire system. The current chain will be renamed Terra Classic, and the current native token will be called Luna Classic, or LUNC. As for the new chain, it will be called Terra, and will have a supply of 1 billion Luna used as the native token, which will be distributed amongst current Luna and UST holders, both pre-collapse and post-collapse.

Starting point is 00:24:22 The distribution's goal is to make Terra a fully community-owned chain, tweeted Tara's official Twitter account. In that vein, neither the Terraform Labs, TFL, or the Luna Foundation Guard, LFG wallets, will receive any airdropped Luna tokens. The proposal allocates a large proportion of the token distribution to provide runway for existing Terra-DAP developers and to align the interest of developers with the long-term success of the ecosystem, they added. The new blockchain will be launched today, Friday the 27th, as per the proposal. This moment will be called the genesis of the blockchain, and the new Luna tokens will be distributed accordingly.

Starting point is 00:25:05 In other Terra-related news, South Korean authorities want to be. to introduce more regulations around crypto exchanges. When exchanges violate rules, they should be held legally responsible to ensure that the market functions well without any troubles, said Representative Sung Il Jong of the ruling people power party. South Korean authorities are taking action to freeze assets from the Luna Foundation Guard, according to KBS, the country's nationwide broadcaster. They are asking exchanges to block LFG from withdrawing assets. However, as this request is not backed by law, it is not clear what these exchanges will do. YG and Merit Circle Dow tussle over tokens.

Starting point is 00:25:49 A few days ago, a member of the Merit Circle Dow made a proposal to remove the tokens promised to yield Guild Games for seed investment by refunding their initial contribution due to an alleged lack of help coming from YG. In this way, the Dow hopes to terminate its financial obligations to YG. For context, Eild Guild Guild Games and YTG co-founder Gabby D. Zahn, originally invested 175,000 USDC in Merit Circle at a price of 3.2 cents per token, giving them roughly 5.5 million MC tokens in total. The token is now trading at around $1, so the $175,000 investment is now worth more than $5 million. The proposal was made by a Dow member called Honeybarrel.

Starting point is 00:26:37 The Merit Circle Dow needs seed investors who are adding value, they said in the government's proposal. They, YG, are competitors who are only interested in extracting value and profit from the Dow, and their actions go against the ethical principles that Merit Circle upholds. After the accusations, YG posted an official statement in response to Merit Circle's proposal, explaining that in September 2021, YG entered into a simple agreement for future terms. tokens or SAFT with Merit Circle LTD to participate in their seed investment round. There were no conditions in the SAFT that relate to value ad services. It only called for the investment of capital, YG said. YG also pointed to many of the contributions they've made to

Starting point is 00:27:25 Merit Circle, including introductions to multiple funds and angels during the seed round, support during negotiations, help obtaining media coverage, as well as governance and support to the Merit Circle Operations team. We have always looked to be collaborative, not combative, with our partners. This is the basis of strong partnerships, Y2G said. As of today, no decision has been made and the Merit Circle doubt is still debating the topic. Scandal around Malady's creator causes price slump. Charlotte Fang, the founder of Malady's NFT, one of the most popular NFT projects of 2022 by volume,

Starting point is 00:28:02 admitted to an association with a racist digital community, which appears to, to have led to a major drop in the Malady NFT price. Malady Maker is an NFT collectible created by Ramilla Collective. It is categorized as an anime-inspired NFT avatar project and consists of 9,691 unique digital items released in August 2021 on Ethereum. Last week, a defy developer under the pseudonym of 0X-NGMI, or not going to make it, accused Charlotte Fang

Starting point is 00:28:35 of being associated with Mia, an online racist community that spreads hate against Jews, black people, homosexuals, and even women. Fang came clear on Twitter and admitted that he was indeed a Mia and that the accusations against him were accurate. Fang expressed his apologies for trying to hide his past

Starting point is 00:28:54 and also tried to unlink Malady from Mia. Mia has nothing to do with Malady Maker and should stay that way, so I'll be stepping down from the team from here, he said. The price floor of the Malady Project sank approximately 80% over the last seven days, from 1.2Eth to 0.25Eth, according to data from NFT price floor. That being said, the floor price fall of milades appears to be part of a bigger trend in crypto right now. For example, Cryptopunks hit a new year low in floor price of 45.58th,

Starting point is 00:29:27 or around $85,000. Less than a year ago, it was trading at more than 120th, which at the time was valued at almost $500,000. Uniswap reaches $1 trillion in lifetime volume. Uniswap hit a significant milestone this Tuesday. The decentralized exchange, or Dex, passed $1 trillion in cumulative trading volume over its lifetime, as announced on Twitter. Uniswap was initially built on Ethereum, but has since been deployed in layer 2s and side chains, such as optimism, arbitram, and polygon, with plans of expanding to NOSIS chain and moon beam network. According to DeFi Lama, Uniswap is the second largest decks in the cryptocurrency ecosystem by total value locked, with almost $6 billion of TVL. However, by trading volume, Uniswap is the largest decks, followed by Pants CakeSwap.

Starting point is 00:30:21 However, it is still way behind centralized exchanges, such as Binance or FTX. According to Coin Gecko, UNISWP had $1 million of trading volume in the past 24 hours, while Binance and FTCS had $12 million and $2 million in daily trading volume over the same period. Despite the milestone, the UNISWP token has not been performing very well. It is currently trading at around $5.50. For context, a year ago, it hit an all-time high of $44.90. All defy tokens have been suffering large drawdowns. The DFI Pulse Index, or DPI, which tracks a basket of DFI tokens, is down 85% from its all-time high in May of 2021. Andresen raises $4.5 billion for crypto investments. Despite the market downturn, Andresen Horowitz, or A16Z, one of the largest crypto vCs, announced a new fund of $4.5 billion to invest in crypto and blockchain startups. Of that, $1.5 billion will go to seed investments and $3 billion to venture investments.

Starting point is 00:31:32 This is the fourth crypto fund that the firm has raised, totaling over $7.6 billion in funds for Web3. According to a post by Chris Dixon, General Partner at A16Z, they are going to use the funds to invest in promising Web3 startups at every stage. Dixon thinks we are now entering the golden era of Web3 and that blockchains will power the next major computer cycle. The current bear market didn't stop the fund from being raised. Bar markets are often when the best opportunities come about, when people are actually able to focus on building technology rather than getting distracted by short-term price activity, said Ariana Simpson, a general partner at A16C, to CNBC. Arthur Hayes avoids prison. Arthur Hayes, former Bitmec CEO, was sentenced to two years probation after being charged with violating the United States.

Starting point is 00:32:24 Bank Secrecy Act, stemming from his days as the CEO of Bitmex when he did not run the proper anti-money laundering laws required by the U.S. government to help prevent crime and corruption. The U.S. Attorney's Office for the Southern District of New York found that Hayes and his co-founder, Benjamin Delo, were guilty of willfully failing to establish, implement, and maintain an anti-money laundering or AML program at Bitmex. Even though the charges faced by Hayes carried a maximum sentence of 10 years in prison, he managed to dodge incarceration and was sentenced to six months of home detention and two years of probation. In addition, he will have to pay a fine of $10 million. I deeply regret that I had a part in this criminal activity, said Hayes in the courtroom.

Starting point is 00:33:09 Crypto takes main stage at Davos and in Oslo. Cryptocurrencies and digital assets were among the hottest topics discussed at the World Economic Forum's annual meeting in Davos, Switzerland. Looking to encourage wider and faster adoption, plenty of crypto executives and representatives showed up at the meeting, such as Jeremy Aller, CEO and co-founder of Circle Internet Financial. However, not everyone was in favor of crypto in Davos. Kristina Georgieva, from the IMF, compared the case of UST to a pyramid scheme and said that Bitcoin may be a coin, but not money.

Starting point is 00:33:45 European Central Bank president Christine Lagarde said, cryptocurrencies are not currencies at all during an interview for Radio Davos. On a funnier note, last Sunday, there was a stall offering free pizza to the meeting attendees to celebrate Bitcoin Pizza Day, the commemoration of the first purchase ever made with Bitcoin. Also this week, the Oslo Freedom Forum, which I had the honor of attending, organized by the Human Rights Foundation, brought together activists and bitcoiners from around the world. The programming featured a full-fledged financial freedom track. which covered issues such as whether Bitcoin is compatible with democracy and included workshops

Starting point is 00:34:23 which taught lessons such as how to download and use a Bitcoin wallet. I had the privilege of interviewing a Chinese distant artist, Barrio Tso, who has turned to NFTs to help evade the Chinese government's pervasive censorship regime. Overall, it was a fantastic week, as always, full of inspiring stories and innovative ideas on how to use technology to further the cause of human rights. Time for fun bits. Seth Green's NFT will not make prime time. Seth Green, an American actor and producer,

Starting point is 00:34:59 suffered a fishing scam and was robbed of several NFTs. Among those was a bored ape, which was set to star in its own animated show. By the way, the NFT had his own name, Fred Simeon. However, as Green no longer has the commercial rights to this NFT, he is not able to make the show. The new holder of the digital asset, an anonymous collector who goes by Dark Wing 84, owns the commercial usage rights, according to Daniel Dubin, a tax and litigation attorney

Starting point is 00:35:31 at Alston Bird LLP. In an interview with crypto entrepreneur Gary Vaynerchuk, Green said, I bought that April in July 2021 and have spent the last several months developing and exploiting the IP to make it into the star of this show. The news caught the attention of Preston Byrne, a tech lawyer who said, the rules are not clear and that NFT platforms slash art sellers should know better and owe their users

Starting point is 00:35:56 better terms than YGELAB has done with the BayyC collection. Thanks so much for joining us today. To learn more about COI and the SEC's regulation of crypto, check out the show notes for this episode. If you're not yet subscribed to the Unchained Daily newsletter, which comes out Monday through Friday, go to Unchainedpodcast.com and sign up right on the homepage.

Starting point is 00:36:15 Unchained is produced by me, Laura Shin, both of my Anthony Yun, Daniel Nuss, Mark Murdoch, Shashonk, and CLK transcription. Thanks for listening.

Unchained - Hester Peirce's Former Counsel on Terra 2.0, XRP and a Bitcoin Spot ETF - Ep.356

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