Sup, nerds!

Here’s what you’re getting in today’s edition:

• 💅 This is cool: We’re NOT all going to jail! (For now)

• 🔎 This seems important: Ooft! Another L for The SEC

• 🤝 Partner: Level up your Web3 gaming insight!​

• 🔪 Let's dissect this: The metaverse has a lot in common with a supermarket from 1787

Terms used in this edition (click for an explanation, or ​ask Web(GPT)3!​):
Wallet, NFTs, Meme Coins, Staking, DeFi, Metaverse.

💅 This is cool:

We’re NOT All Going to Jail! (For Now)

In one sentence: The tax code that requires crypto businesses to report the name/social security of anyone that sends them $10k+ in crypto (or face felony charges) will not be enforced…for now.

Remember last week when we had that fun chat about US tax codes?

Basically, as of Jan 01 ‘24, the IRS wants to now know the:

1. Name

2. Social security number

3. Favorite color

Of anyone that sends $10k (or more) of “business-related crypto” to your wallet.

…and if you don’t report it within 15 days - BAM!

(Potential) felony charges.

Problem is, the vast majority of crypto transactions are anonymous - making this stipulation near impossible to meet (at least currently)…so the big question became:

Are we all about to go to jail?

Well, we aren’t! (Hoooray!)…for now (Oh?)

The IRS clarified that the measure is not currently being enforced, and won’t be for a while.

Good news: when the time does come, the law will probably only apply to transactions made ‘in the course of a person’s employment.’

Even better news: that means it shouldn’t apply to flipping NFTs or day trading meme coins.

That said, there’s still some questions that need answering, like:

If your primary income is derived from staking Ethereum - how do you go about reporting it?

Cause last we heard, Ethereum doesn’t have a social security number.

(Or a favorite color).

🥇 Want the news before anyone else?

🔎 This seems important:

The SEC Just Got a Very Public Spanking From a New York Judge

In one sentence: Judge Katherine Polk Failla flamed the SEC for essentially trying to shift the goal posts and redefine what a security is, in a NY court yesterday.

You know that thing you used to do to get your older siblings in trouble?

You’d start crying for no reason other than to get your mom’s attention, then we she entered the room you’d make something up…

(“He pushed me” or “she took my toy”).

But every now and then, when mom posed the question “what happened?” - you’d freeze under pressure, fail to make a clear accusation, and all of a sudden you were the one getting a scolding.

This is like that.

Except it’s being played out in a court of law, between the SEC and Coinbase (and the role of ‘mom’ is being played by Judge Katherine Polk Failla).

ICYMI: The SEC is claiming that by offering crypto tokens like Solana, Cardano, and Polygon, Coinbase is selling unregistered securities.

(Aka: illegally selling shares in a company, to the general public).

But in yesterday’s court hearing, Judge Failla wasn’t having it.

J-Fai praised the DeFi community’s clear explanation of staking and wallet usage, while she slammed the SEC for essentially trying to shift the goal posts and redefine what a security is.

(Pointing out that former SEC director Bill Hinman had already publicly stated that a token in itself is not a security).

So…

‘The SEC got a scolding and now we’re being smug about it’

Is that the headline?

Well, yeah, kinda - but there’s more to it than just that!

The hearing was requested by Coinbase, in an attempt to get the entire case thrown out - which, if it happened, would be a landmark move for the future of crypto in the US.

(Unfortunately, at the time of this writing, the request has not been ruled on).

But if you’re reading this in the future and want to know the outcome:

Check the prices of Solana, Cardano, and Polygon - if they’re sky rocketing, it means the case has been thrown out.

Sadly, our guess is that this case will continue to be heard/dragged out.

🤝 Partner:

Level Up Your Web3 Gaming Insight!

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They cover gaming news and trends, as well as games themselves and game-related protocols (e.g Beam network), and we love them because they say it like it is - they cut to the chase while making sure everything is drenched in game visuals to keep you entertained.

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🔪 Let's dissect this:

The Metaverse Has a Lot in Common With a Supermarket From 1787

In one sentence: Magic Leap thinks metaverse development is skewed too heavily towards VR, and needs to be AR first.

Kevin, our intern, made a joke the other day that the metaverse reminds him of a supermarket built in 1787 Pennsylvania. 

Which sounds confusing, but kind of made sense once he explained it…

In 1787, attempting to create a supermarket would have been a pretty dumb idea. The automated mass-production of ‘food and other stuff’ wasn’t really a thing yet, so there wouldn’t be much to fill the shelves with.

This is basically the metaverse right now. 

His argument is that the metaverse is a compelling idea, but we need more technological developments to ‘get the shelves fully stocked, and customers in the door.’

Or better yet, instead of totally new and immersive 3D virtual experiences, we need more tools/experiences that fit in with our day-to-day lives.

Think: AR headsets that let you create a 100 ft virtual screen to work on, or allow you to digitally try on clothes before purchasing them online…

Good news for Kevin: it looks like some big names in the AR/VR space are in agreement with him on this one. 

Magic Leap just announced it is looking to focus more on real-world application of the space, and that companies in this field in general will need to do so for growth. 

They believe that the true capabilities of ‘the metaverse’ will come to life when digital and physical are intertwined. 

(And we agree!).

Spening 100 Days in the Metaverse