The Big Bs

Welcome back. Turns out the SEC has other fish to fry. Last week, the regulator charged the Mormon church with $5 million for keeping its multibillion-dollar investment portfolio secret. At this point, we in the crypto world will take anything that diverts Gary G’s attention away from stablecoins…

Today: Coinbase rolls out a major new project, Binance’s Voyager deal is on the ropes, and Blur’s co-founder doxxes himself. Let’s dive in.

—Angelina

When the Base Drops

The path to success for crypto companies is less yellow brick road and more journey to Mordor. Staying relevant in web3 requires constant adaptation and growth—something Coinbase is tackling head on with the launch of its new blockchain project, Base.

What is Base? A layer-2 (L2) blockchain built on the Optimism network, Base is a scaling solution for Ethereum. Its goal is to become the go-to place for anyone to build decentralized apps on Ethereum in a cheap, secure, and developer-friendly way.

• Base will initially be incubated inside Coinbase before decentralizing over time. Long term, Coinbase wants to take on the role of “contributor” and hand off network governance to the Base community. Base’s underlying code is already open source.

• Base won’t be limited to Ethereum—it will provide easy access to other L2s like Optimism and integrate with other L1 ecosystems like Solana, Avalanche, and Polygon.

• Base is still in the testnet (aka training wheels) stage. The roadmap to mainnet is TBD.

Why it’s big news:

1. The Base launch comes at a pivotal time for Coinbase. Its recent Q4 earnings showed a company in transition—while it’s seeing some growth in its service fees and staking business, the exchange’s core revenue streams are drying up amid crypto winter. Base could diversify Coinbase’s balance sheet.

2. Base won’t have its own network token (something most L2s have to incentivize network usage). Instead, Base will stick to ETH as its native asset—a smart move considering the uncertainties of the current regulatory environment.

3. Base gives credence to the thesis suggesting crypto’s future is L2—proponents of which say Ethereum could become the universal settlement layer upon which all other projects are built.

Zoom out: Coinbase has the resources and the user count to make Base one of the top L2s. But the project’s rollout has been off to a rocky start already, and Coinbase has a track record of flopping on business experiments. Still, Base is worth keeping an eye on.

Voyager Deal Takes One Step Backward

Binance.US wants to buy the now-bankrupt Voyager Digital’s assets for $1.02 billion—but federal and state regulators have other ideas.

The SEC and the New York Department of Financial Services (NYDFS) temporarily blocked the deal with court filings submitted last week.

• The SEC argues that the deal violates federal securities law because the regulator considers some of the tokens held by the Voyager estate to be securities. If that’s accurate, Binance.US’s plan to sell those tokens and refund Voyager creditors would be a sale of unregistered securities.

• The NYDFS alleges that Voyager’s New York operations were illegal because it didn’t have the appropriate state licensing.

Implications: This deal looked like Voyager creditors’ best bet to get (some of) their money back, and these objections delay that possibility. 97% of Voyager creditors already voted in favor of the deal, raising questions about the SEC’s definition of investor protection in blocking the deal.

…which brings us to the bigger picture. This is the latest in a string of SEC interventions declaring various crypto offerings securities—despite the lack of SEC rulemaking defining those offerings as securities in the first place.

Who's Behind Blur?

Upstart NFT marketplace Blur is in the headlines again—but not for swiftly replacing OpenSea as the top NFT exchange by volume. This time, one of the Blur creators doxxed himself.

Whomst? 24-year-old Tieshaun Roquerre, known by his online pseudonym “Pacman,” revealed himself as Blur’s cofounder after rumors about his identity swirled on crypto Twitter early last week.

If you feel self-conscious after reading his CV…same:

Big picture: Roquerre’s identity reveal breaks with crypto’s deep-rooted tradition of pseudonymous founders. But it’s a smart business move that could build trust in Blur—a new player in a market notorious for rug pulls.

In other news:

• Is Hong Kong planning to be the next big crypto hub? Proposed new rules for retail investors suggest so.

• A crypto mystery: Was the infamous "Crypto Queen" murdered by mobsters?

• SBF was hit with new counts of fraud, bringing his total charges to 12.

• Spotify is testing NFT-enabled playlists.

• The NBA Top Shot lawsuit will move forward after a judge ruled that the NFTs could be securities.

Crypto Job Board

• Help Linera build a layer-1 blockchain as a Web3 Community Manager.

• Almanak Blockchain Labs is hiring a DeFi Researcher to apply data science within web3 verticals.

• Boost your happy hormones as a Web3 Finance Manager at Serotonin, a marketing a and communications partner for crypto firms.

And that's what you need on your radar today in crypto. Will Coinbase’s Base L2 be a success? Reply to this email with your thoughts. See you back here next Tuesday!