Author: The Financial Times

Internet collectibles ranging from cartoon apes to artsy doodles have plunged in value as real-world conflict and a broader cryptocurrency slump begins to unwind one of the past year’s biggest speculative frenzies. Digital items known as non-fungible tokens burst into mainstream culture last year, as several animal collections including Bored Ape Yacht Club, Cool Cats and Pudgy Penguins spiked in price, aided by celebrity endorsements and social media hype. By the end of 2021, nearly $41bn had been spent on NFTs — making the market almost as valuable as the global art market. But almost as rapidly, large portions of…

The new crypto craze is community in action. Decentralised autonomous organisations (DAOs) are online groups with a purpose — sometimes social, often financial. Members join by buying tokens they use to vote. Smart contracts facilitate decisions. Everything is recorded. Decentralisation means that no one is in charge. DAOs were dreamt up as a way to automate trust. Many act as investment groups, pooling funds to buy assets. Venture capital firm Andreessen Horowitz, which has invested in the sector, goes further. It pitches DAOs as a structure that will one day replace companies. Instead of management taking decisions and paying out…

Group looking to scoop up businesses that operate in traditional markets following earlier investment in Forbes. Binance is planning an acquisition spree to push in to new markets as its massive digital assets trading unit comes under sustained regulatory scrutiny. The crypto company, one of the biggest in the digital asset industry, is looking to scoop up businesses that operate in traditional markets following its investment earlier this year in US business publication Forbes, Binance chief executive Changpeng Zhao said in an interview. “We want to identify and invest in one or two targets in every economic sector and try…

Netflix has suspended its streaming service in Russia, Activision Blizzard, Epic and Ubisoft have stopped gaming sales, and TikTok has suspended livestreaming and new content uploads, in the latest company reactions to the invasion of Ukraine. While Netflix and the video game publishers are alarmed by the violence, the move by TikTok, owned by China’s ByteDance, is prompted by Russia’s recently implemented “fake news” law that threatens long jail terms for anyone spreading misinformation about the armed forces. As a Financial Times investigation shows, TikTok’s moderation efforts have also been found wanting in the conflict, with a proliferation of scam…

Does it seem as though Web3 sprang into existence just a few months ago? It is the same here in San Francisco. All of a sudden a mythical digital utopia is being referenced in earnest by some of the biggest companies in the world. This is not by accident. Web3 was willed into being by tech investors. But it has given the wider sector a much-needed jolt of optimism. That optimism was on full display at ETHDenver, the biggest crypto conference in the US. Held in snowy Denver last month, the event had a distinctly low key aesthetic. The main…

The proliferation of new financial technologies calls for better cross-border regulation and supervision The emergence of digital currencies, both private and official, is shaking up domestic and international finance. This will yield many benefits but some things will remain much the same. There are risks, too, with developing economies potentially finding themselves on the wrong side of a widening global financial divide. Consider international payments, which are inherently complicated. They involve multiple currencies, payment systems operating on diverse protocols and institutions governed by varying regulations. So, cross-border payments tend to be slow, expensive and difficult to track in real time.…

“If you see this, you’re very early,” teased the Twitter account for Kapetta, a new “anime-inspired” NFT project. The line has become a familiar trope in the frothy market for non-fungible tokens, where blockchain-powered proof of ownership has created a hyper-speculative digital art market. Sure enough, within hours thousands of new followers hoping to get in on the ground floor sent Kapetta viral, based on nothing more than a sleek silhouette and a promise. Being “early” in the unregulated world of NFTs can be highly lucrative. The first supporters of a new project are often rewarded with “whitelist” access before…

The telecommunications bubble at the end of the 1990s never earned a place in the popular imagination to match the dotcom bubble that occurred at the same time. Deregulation and early internet euphoria combined to produce a massive over-building of new networks. An estimated $2tn of telecoms stock market value went up in smoke when the mania passed. But the new fibre optic cables that had been laid lived on, meaning that the infrastructure was already in place when companies such as Google and Facebook emerged to drive a much bigger wave of digital activity. In the world of cryptocurrencies,…

Tech executives and crypto enthusiasts are buying digital collectibles not just for investment — but as art. In early 2021, Dylan Field, chief executive of San Francisco-based design software group Figma, sold a digital collectible — a non-fungible token (NFT) — for more than $7.5mn. He had bought the CryptoPunk, a pixellated blue alien avatar smoking a pipe, several years before the market mania — for around $15,000. He has since built up a porfolio of about 600 NFTs from various collections and artists, many of which are about more than investment: some NFTs can operate like “participatory art experiments”,…

Cryptocurrency platforms fear they are about to face tighter regulatory scrutiny after the US Securities and Exchange Commission proposed new rules that could bring more digital asset exchanges under its purview. The amended rules seek to fill a regulatory gap by making platforms sitting outside the SEC’s supervision comply with existing standards intended to protect investors and promote fair and orderly markets. The new 654-page guidance, backed by the SEC in a vote last month, does not explicitly refer to digital asset exchanges. But the crypto sector and legal experts believe the industry could fall under an expanded SEC definition…