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Is Russia legalizing crypto a major bull run alert?

Let’s digest:  

1. Russia Legalizes Crypto

2. DraftKings Shuts Down NFT Marketplace

3. BitClout Founder Arrested on Fraud Charges

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Russia Legalizes Crypto

Russia has enacted new legislation that not only legalizes crypto mining but also initiates an experimental regime for crypto transactions and trade.

Passed by the State Duma on Tuesday, these laws aim to integrate digital currency more deeply into the Russian economy.

• Starting November 1, 2024, the first law will officially legalize crypto mining.

• Entities and individual entrepreneurs must register with the Ministry of Digital Development to operate without energy consumption limits.

• Those not registered will still be allowed to mine but must stay within certain energy use thresholds.

• This legislation also assigns the Bank of Russia and various government bodies the responsibility of regulating mining activities.

• Miners will be required to report their crypto earnings to a government-authorized body.

Furthermore, to safeguard monetary stability, the authorized body, in conjunction with the central bank, may impose restrictions or bans on digital currency transactions.

Additionally, the law prohibits the advertising of crypto and their promotion to an unlimited audience, signaling a cautious approach to the broader crypto market.

The second piece of legislation, effective September 1, 2024, introduces a test phase where selected companies can engage in cross-border settlements and cryptocurrency exchange trading under the Bank of Russia's supervision.

Companies interested in participating must apply to be part of this experimental framework.

🖼️ NFTs

DraftKings Shuts Down NFT Market Due to Legal Issues

DraftKings has announced the immediate cessation of its NFT operations, a move influenced by recent legal challenges and developments.

This decision follows a federal court's determination four weeks ago that DraftKings' NFTs may indeed qualify as securities under U.S. law.

In an email to its users, DraftKings explained - "After careful consideration, DraftKings has decided to discontinue Reignmakers and our NFT Marketplace, effective immediately, due to recent legal developments. This decision was not made lightly, and we believe it is the right course of action.”

Users of its Reignmakers fantasy sports game will still be able to access and transfer their NFT assets despite the shutdown.

• The sports betting giant ventured into the NFT space during the peak of NFT interest in 2021, launching its marketplace on the Ethereum-based Polygon network.

• The company was initially inspired by the success of NBA Top Shot, a similar sports-themed NFT project.

• DraftKings experienced significant initial success, particularly with its Tom Brady-themed NFT collectibles, which sold out instantly.

However, the legal landscape shifted in March 2023 when a class action lawsuit was filed against DraftKings, asserting that its NFTs met the criteria of investment contracts as defined by the Howey test. 

On July 2, the court agreed that there was plausible evidence supporting this classification.

This closure coincides with broader industry challenges, as NFT sales are projected to reach their lowest monthly volume since November 2023.

According to data from CryptoSlam, NFT sales have plummeted by 74.6% since March 2024, which recorded a year-high of $1.6 billion in sales. This downturn reflects the increasing regulatory scrutiny and market volatility impacting the NFT sector.

🟠 Crypto

BitClout Founder Arrested on Fraud Charges

Nader Al-Naji, founder of the crypto DeFi project BitClout, has been arrested and charged with wire fraud and facing additional charges by the SEC.

Operating under the pseudonym "Diamondhands," Al-Naji was apprehended in Los Angeles and could face up to 20 years in prison if convicted of the federal charges.

• The SEC's allegations don't stop at fraud but extend to the unregistered offering and sale of cryptocurrencies.

• The case also implicates his family, naming his wife and mother as defendants, which underscores the severity of the alleged misconduct.

• BitClout, also known as Decentralized Social (DeSo), promotes itself as a pioneering crypto social network aimed at decentralizing social media via blockchain technology.

• Despite claiming no centralized company structure, the SEC argues that Al-Naji's claim of "decentralization" was a façade meant to evade regulatory oversight.

Al-Naji is accused of diverting over $257 million raised from investors to fund a lavish lifestyle, including renting a luxurious residence in Beverly Hills and purchasing extravagant gifts totaling at least $2.9 million.

These actions starkly contrast with BitClout’s premise of a community-driven platform.

Non-fungible News

• Gaming: Pixelverse and Jambo Team Up to Boost Crypto Gaming

• NFTs: Does the SEC Have Jurisdiction Over NFT Art?

• Crypto: Stablecoin Growth Soars as Crypto Global Mass Adoption Ramps Up

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