This week, we open the year with two trends – one positive, one negative.
On the negative side, several web3 firms are following FTX’s footsteps in facing legal troubles. First, Coinbase was forced to pay $100 million in penalties for failing to vet users before opening an account, leading to criminal activity on the exchange. Second, Celsius Network founder Alex Mashinsky has been hit with a civil lawsuit from the New York attorney-general, which accuses the former head of the bankrupt crypto lender of defrauding hundreds of thousands of investors and flouting the state’s securities laws. Third, a Brooklyn-based federal court indicted Aurelien Michel for allegedly swindling users of the "Mutant Ape Planet" NFT project of $2.9 million. This news all points in the same direction. As Tezos cofounder Kathleen Breitman said in an interview with Fortune, “a series of blunders from well-capitalized projects has proven that… crypto often is still an exercise in building narrative rather than displaying technical acumen.”
On the positive side, non-Western countries are paying closer attention to web3. A few days ago, the Central Bank of Morocco announced a crypto bill to regulate the use of cryptocurrencies. Despite the fact that the Moroccan government considers crypto illegal, Morocco has the highest number of crypto owners within the Arab region. Second, Chinese residents can now trade digital collectibles using a state-backed blockchain platform – this is welcome news for residents who were previously banned from engaging with NFTs. Both these announcements point to greater willingness, even on the part of skeptical governments, to engage with web3. Should more governments follow, non-Western countries may become important players in the construction of tomorrow’s internet.