This Week in the Metaverse: Meta Makes Deep Cuts, NFT Sales Fall 60%
Things move quickly in the metaverse, and in the wider world of web3 as a whole. Here’s what you need to know from the past week:
Meta Platforms plans to terminate its lease at its 225 Park South office location in New York City, according to reports. News of the impending shutdown comes after a grim milestone for Meta: Last week, the company’s founder and CEO Mark Zuckerberg announced the first major budget cut in the company’s nearly 20-year history (which was originally founded as Facebook in 2004), plus a hiring freeze and expected layoffs that will likely leave the company with a smaller workforce in 2023 than it has now, according to Bloomberg.
Meta has recently spent huge amounts of capital in its efforts to be a mover in the metaverse, a gamble that may or may not have paid off yet. In the last days of September, the company’s stock reached its lowest point since 2019.
Tim Cook casts doubt on the future of VR, emphasizes enthusiasm for AR
Apple CEO Tim Cook doubts the long-term appeal of the metaverse and virtual reality (VR). The tech billionaire told Dutch publication Bright that “it’s important that people understand what something is … I’m not sure the average person can tell you what the metaverse is.” While he acknowledges that VR is “something you can really immerse yourself in,” he adds that he doesn’t “think you’ll live your whole life that way.”
Instead, he is betting on augmented reality (AR), which he described in the Bright interview as “a profound technology that will affect everything.” Apple is expected to release its long-awaited AR headset – which will reportedly also include some VR features – as soon as next year.
Cook isn’t the only tech mogul to rain on the metaverse parade. Snap CEO Evan Spiegel, who has also been pushing his company in the direction of AR rather than VR, recently told The Guardian that the concept of the metaverse is “quite ambiguous and hypothetical.”
NFT sales fell sharply in the 3rd quarter
The non-fungible token (NFT) market continues to plunge amid the ongoing “crypto winter.” NFT sales were down around 60% in the third quarter of 2022 compared to the previous quarter, according to a Reuters report published earlier this week. The report, which cited data from blockchain data tracker DappRadar, said NFT sales were around $3.4 billion in Q3, compared to $8.4 billion in Q2 and $12.5 billion in early 2022, marking a peak for NFT the market.
Shaky economic conditions caused many investors to abandon risky crypto assets earlier this year, triggering a general decline in the crypto market.
FSOC report urges Congress to crack down on crypto
A new government report urges Congress to introduce regulations on the crypto market to protect the stability of the US economy. The 124-page report, published on Monday, was compiled by the Financial Stability Oversight Council (FSOC), a panel of leading financial regulators created as part of the Dodd-Frank Act after the 2008 financial crisis.
“Crypto-asset activities could pose a risk to the stability of the US financial system if their interconnections with the traditional financial system or their aggregate scale were to grow without following or being coupled with appropriate regulation, including enforcement of the existing regulatory structure,” the report says.
FSOC, part of the Treasury Department, compiled its report in response to President Joe Biden’s “Ensuring Responsible Development of Digital Assets” from March of this year. The order called for a “whole of government approach to managing the risks and harnessing the potential benefits of digital assets and their underlying technology.”
The report made many suggestions for potentially effective strategies to regulate the crypto market, including Congress passing legislation to give federal regulators “explicit rulemaking authority … over the spot market for cryptoassets that are not securities.”
Celsius executives withdrew over $40 million in crypto before freezing customer withdrawals, according to court documents
New court documents reveal that two former executives and one current executive from crypto-lending firm Celsius Network withdrew a combined $42.13 worth of cryptocurrency shortly before the company froze all customer withdrawals and filed for Chapter 11 bankruptcy earlier this year.
According to CoinDesk, which broke the news early this morning, Celsius former CEO Alex Mashinsky withdrew around $10 million in crypto; the company’s former CSO Daniel Leon and current CTO Nuke Goldstein pulled out about $11 million and $20.8 million, respectively. Celsius reported that Mashinsky resigned from the company last week, followed by Leon on Tuesday.
Celsius filed for bankruptcy in July, an event that some called crypto’s “Lehman Brothers moment,” referring to the collapse of the major Wall Street firm in the earliest days of the financial crisis in 2008. The company reportedly owes its users about 4.7 billion dollars and does not have the means to repay them.
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