Coinbase drops nearly 3% after SEC scores big win in lawsuit against crypto firm: CNBC Crypto World

Today, the SEC scores a major win in its lawsuit against Coinbase. The UK is regulating memes about crypto and other investments in an attempt to curb scams, and we take a deep dive into how the fashion industry is embracing Web 3. Welcome to CNB CS Crypto World. I’m Tanaya Mckeel. Crypto prices in the red across the board, with Bitcoin falling below the $70,000 level. As of noon Eastern, both Bitcoin and ether dropped around 2%. Solana dropped nearly 5% to $181.00. OK, let’s talk about the top stories. The SEC just scored a big win in its lawsuit against Coinbase this morning. A judge rejected the Crypto Exchanges bid to dismiss the agency’s claim that Coinbase engaged in unregistered sales of securities. That complaint will now head to trial. The regulator first filed suit against The Crypto Company back in June, alleging that the firm was acting as an unregistered broker and exchange. In the ruling, the judge wrote that the challenge transactions fall comfortably within the framework that courts have used to identify securities for nearly eighty years, and that the SEC adequately alleges that Coinbase, through its staking program, engaged in the unregistered offer and sale of securities. The judge went on to say that the court agreed to dismiss the SEC’s claim in the lawsuit that Coinbase acted as an unregistered broker by making its wallet application available to customers. In a series of posts on X today, Coinbase’s Chief Legal Officer wrote that the company was prepared for this and looks forward to quote uncovering more about the SEC’s internal views and discussions on crypto regulation. As of noon, Coinbase shares were trading around 3% lower on the news of the ruling. Next, Hashtags has become the 11th asset manager to enter the competitive and crowded SPOT Bitcoin ETF fields. The firm’s new Bitcoin ETF started trading in the US today after it completed the conversion of its futures fund to hold spot Bitcoin. Yesterday, Hashtags announced the renaming of its Bitcoin Futures ETF to the Hashtags Bitcoin ETF, which is trading today on the New York Stock Exchange under the ticker D5. The newly converted fund will invest at least 95% of its assets into spot Bitcoin, while up to 5% of the fund’s remaining assets can go into CME traded Bitcoin futures, contracts and cash, as well as cash equivalents. And finally, the UK’s financial services regulator announced guidelines for companies and social media influencers making memes about crypto and other investments. The Financial Conduct Authority said in a statement yesterday that any marketing for financial products, including those expressed in memes, should be fair, clear and not misleading. The watchdog said financial influencers, or fin influencers must have the approval of an FCA appointed representative to be able to make advertisements and memes about financial products. The regulator introduced the new rules in an effort to cut down on scams. The FDA stressed that the use of memes in promotions is prevalent in the crypto industry and said that they’re often shared on platforms like Telegram and Reddit. All right for our main story. Some think Web Three has the potential to change the way consumers interact, shop and buy fashion pieces. A few big brands have been quick to adopt the technology while others have been apprehensive. Crypto World’s Talia Kaplan explores how more and more fashion brands are embracing Web Three. The trillion dollar fashion industry is exploring new ways to reach people in the ever growing digital space and some companies think Web Three might be the way to do it. Fashion houses are using Web 3 components like NFTS, blockchains and the Metaverse to bring their designs into the next iteration of the Internet. Allied Analytics found the global digital clothing market, which encompasses augmented in virtual reality, AI, and blockchain, could skyrocket to nearly $5 billion by 2031. That’s compared to about $500 million the digital clothing industry generated in 2021. The blockchain segment was the largest market that year, contributing to 1/3 of the global digital market share. Blockchain technology is expected to maintain its leadership status through 2031. The Apple Vision Pro and the future of VR provides such an opportunity for us to create digital clothing that people can wear and and and flex in in their cyber world, Metaverse, whatever you’d like to call it. As the industry at large grows through AR and VR and as that space continues to develop, the digital clothing market will continue to accelerate. Nick Adler and Brandon Russo are Co founders of the fashion brand Mintage. The vintage clothing brand, which launched in 2022, integrates blockchain technology into garments. When we think about the blockchain at Vintage, we really think about it as an important feature within the overall brand. The first and foremost thing that we’ve done is to integrate NFC chips into our products. Super simple, no logins. You tap your phone up against there, tap the link that opens up the web browser, and then it pulls up the verified token. And so really blockchain is kind of the backbone within that digital receipt. When you open it and you start to browse, we can continue to update it and refresh it and add more information. A lot of what’s really important to us right now is storytelling. So we want you to know who designed the item, what number the item is in the collection, what potential rips and tears that things that we call traits live with the item, Potentially, Who wore the item? Was it worn by some celebrity? Mintage isn’t the only fashion brand looking to harness blockchain technology to benefit its business and its customers. Major labels that have been around for decades are two. LVMH, the conglomerate behind some of the biggest brands in fashion like Louis Vuitton and Christian Dior, expanded their Web 3 push in June by announcing A partnership with Epic Games. The collaboration allows LVMH to utilize epic 3D creation tools to offer things like virtual fitting rooms and fashion shows. And Gucci has ventured into the world of Web 3 gaming, teaming up with platform Roblox and augmented reality mobile games like Pokémon Go. Gucci has also been big on NFT. In July, the luxury brand teamed up with auction house Christies on an NFT collection. The Italian fashion house is one of the first major brands to truly embrace the space, accepting crypto payments and US boutiques Gucci with their NFT drop and then continuing to push the boundary. Whether it’s Roblox or some of those other video game spaces, those are awesome wins for the industry at large. LVMH doing their VIA collection, Adidas with what they’ve done with their alts community and how if you really love basketball, you can go by the basketball NFT and then that one gives you basketball related experiences. Same thing with running, same thing with music. That’s also a really cool way to engage your community and your customers. Now here at this conference called Fashion Innovation Worldwide Talks the topics of tech and fashion took center stage and that includes Web Three. You know the reason for the event together is really for the industry to get together to collaborate to change the ideas. Super important, especially as everything is moving so fast. Jordana and Marcelo Gomoreas are the founders of Fashion Innovation, a global platform aimed at fostering innovation in the fashion industry. I think Web Three could be a huge asset when it comes to the the industry being more sustainable because then you don’t need to have things physically where you’re touching them, you’re still experiencing fashion and you can even like create things and you could be a part of the ecosystem without us having to have so much waste at the end with things that don’t have to exist. She predicts Web Three will become synonymous with fashion within the next few years, especially with the integration of AI, the technology that was the main focus at this conference. A lot of your panels here today focus on a right. So you know, is that taking away from some of the blockchain, NFT Metaverse, Web Three type that we heard so much about in 2021 and 2022? I think yes. NFT Metaverse specifically. A lot of big brands that we’ve spoken to spent even when it was the, the big hot thing, you know, a lot of them said to us like I, you know, I don’t really know how I can integrate this into, I don’t know if it’s going to work. I don’t know if I’m going to get new consumers by doing this with virtual reality, these different experiences. I think it’s just going to take time. Kimberly Carney is the CEO of Fast Wire, a shopping app marketplace. She says there are more than 500 brands from 50 different countries on her platform, and she’s not hearing much from them about Web Three. What we’re thinking of is we want to try on products through AI. We want the customer to be able to come into the website, come into the app, try it before they buy. We want them to see what it’s going to look on them. So they have that experience of not only knowing the brand, being able to give feedback, but also they can see it on themselves before they even go to the brand’s website. AI right now is absolutely all the rage as the Crypto Winter partly drove the fashion industry’s rapid shift to AI. But a majority of people we spoke with at this event, say Web 3 still presents opportunities for fashion, especially as crypto makes a comeback in real life. Experiences, I think, are going to be a big thing, Whether that be like if you’re a musician for something like that, you can, you know, buy something at the merch, stand at a concert, and then when you tap into it, you can unlock digital downloads or other experiences. It’ll unlock maybe like a recording of the concert that you were just at. And that could be something that’s really special. When I think of fashion in this new era of Internet connection, I think of technologies like blockchain and how we can utilize that to create chains of ownership, how we can use it for loyalty programs and for consumers to connect more deeply and intimately with the brands that they participate with. And I think of it in terms of artistry and storytelling, so how we can use these emerging technologies to create really immersive and emotional experiences for brands and consumers to connect. And when I think of the future of fashion, I think it’s becoming more accessible. And what that means is when you look at augmented reality, when you look at virtual reality, both of those are giving experiences from home as like we’ve all been more at home, we’ve all been more remote. Those experiences give people that maybe wouldn’t have had the opportunity to go to a brick and mortar store, go try something in person, have like more of an in person experience with that product. And I think that’s really beautiful. While some brands have been taking the plunge experimenting with Web 3, not all are sold. Some fashion designers like Nicole Miller, who has been around since the early 80s, say they have no plans to move into Web Three. I think we’re going to get away from all this silliness and you know, all this artificial stuff and you know, you know, fake clothes and everything and and having avatars. I think we’re just going to go back to real clothes and natural fibers and I think we’re going to revert back the other way because I think it’s all going too far. There’s always going to be people who want to be traditional and really about the authentic brand or the authentic art, and I ultimately respect that. Technology is something I welcome and I’m truly excited about. I think that Web Three is just another technology that we can adopt and we can figure out ways to integrate. I don’t believe it’s going to take over an entire industry. I think it’s an exciting opportunity. Like I think of the Internet, like I think of other types of tech, it it just opens up new categories. And ultimately I think that people will slowly embrace it and it’ll become something that we don’t even think twice about. All right, that’s all for crypto world today. We’ll be back again tomorrow as Sam Bakeman Freed is expected to be sentenced. We’ll have a reporter in the courtroom and we’ll bring you the very latest. We’ll see you then.