As Crypto Burned Stateside, NFT Believers partied through the night in Lisbon
Only one presenter or panelist appeared to pronounce the US Securities and Exchange Commission’s three-letter acronym during this year’s NFC Lisbon event last week.
“We are obviously aware of the lawsuit against Binance and Coinbase in the US from the SEC,” Sandbox COO Borget said during a brief press event at the famous Carlos Lopes Pavilion in the Portuguese capital.
Built in 1932, the palatial venue would host NFT collectors, Web3-powered raves, and even one of HR Giger’s original “Alien” sculptures for three days.
Despite the event’s distance from Washington DC, where the SEC is based, Borget’s comments made sense.
Just a few days before, the token that powers The Sandbox’s metaverse game was flagged as an unregistered security in the SEC’s actions against both Binance and Coinbase. It wasn’t the only metaverse symbol to fall into the same bucket, either.
Axie Infinity (AXS), Chiliz (CHZ) and Flow (FLOW) were also included. When announced earlier this month, the news rocked the crypto markets, sending listed tokens soaring and casting doubt on the future of the industry at large.
After all, both exchanges host over $10 billion in trading volume per day, per CoinGecko. But oddly enough, at NFC Lisbon, Borgets was one of the only formal acknowledgments of what many have called the most drastic crypto breach yet.
But why?
“The NFT collector and artist do not depend on Binance or Coinbase. They most likely only use it for entry and exit. The dependencies on the NFT market are therefore quite low,” said Miracle’s CEO and co-founder Danilo Cerullo. Decrypt. “While Binance and Coinbase are well-known cryptocurrency exchanges, I honestly don’t know anyone who uses their NFT marketplaces. There are many other platforms and marketplaces that cater specifically to NFT trading.”
He is not wrong. Since its launch, Coinbase’s offering has seen very little traction among collectors and artists, posting just under $4,000 in trading volume in the past 24 hours, per Dune.
For context, Blur, the industry’s current heavyweight marketplace, posted $2.3 million in the last day, followed by OpenSea, which recorded $651,000.
“Coinbase tried with their NFT marketplace, but it was a pretty big flop,” Zerion’s Chief Growth Officer Alexander Guy told Decrypt. “Binance has an ecosystem, but it’s quite contained. If you want to get into NFTs as a builder or collector, you really have to be self-sufficient.”
Guy added that non-custodial wallets (including Zerion) are generally preferred by traders. Self-storage refers to storing your cryptocurrencies and tokens in your own controlled wallet, including so-called cold wallets such as a Ledger or Trezor. Such wallets are not connected to the Internet and are thus less vulnerable to hacks or freezing of assets, which can happen on exchanges.
The SEC’s actions are also limited to US soil, with European crypto enthusiasts barely affected by the news.
“SEC actions seem contained to the US, but it came up in a few conversations with companies looking to operate in the US,” Paulin Byusa, founder and CEO of Avenir, which provides dollar entry and exit ramps for EU-based businesses . “Otherwise it felt like a distant issue for EU-focused users and businesses.”
Instead of a massive crackdown on crypto businesses, the EU has gone in a much different direction, arguably taking the lead in regulatory directions in the crypto race.
Janet Ho, Chainalysis’ head of policy in Europe, called the Inbound Markets in Crypto Assets (MiCA) framework a gold standard of rules, while the SEC’s own Commissioner Hester Peirce defined it as a “model” for similar policies on the state side.
In addition to both Coinbase and Binance finding little traction in the niche, or the EU’s more optimistic crypto approach, the NFT space is also full of artists and creatives rather than hardcore speculators.
“The NFT bubble is a bit different – a lot of artists, creators, games and startups who may not be so deeply interested in regulatory news, especially in a foreign region,” Rebekka Revel, co-founder of NFT Club Berlin and SuperTeam Germany, told Decrypt.
When asked if it was because NFC Lisbon was primarily focused on artists and collectors or because nobody in Lisbon cares about the SEC, Borget said Decrypt that the “digital nation” The Sandbox is building only has 20% of the US user base. Almost the rest is spread across Asia (40%) and Europe (30%).
“It’s not about caring about the SEC.” The SEC is trying to protect users, he said. “We do not agree with certain aspects of this lawsuit, and we are not the ones the SEC is targeting.”
Perhaps, in the end, that is the key.
Just as NFC Lisbon participants were unfazed by the SEC’s actions earlier that week, choosing instead to delve deeper into a digital world hosted by the city, the commission may share the same sentiment toward jpeg collectors.
It’s not the art they’re after, but the pesky unregistered securities.
