The U.S. Securities and Exchange Commission is scrutinizing creators of nonfungible tokens and the crypto exchanges where they trade to determine whether some of the assets run afoul of the agency’s rules, according to people familiar with the matter.
....As part of its review, the SEC is seeking information on so-called fractional NFTs, which involve breaking down the assets into units that can be easily bought and sold, said the people, who asked not to be named as the investigation hasn’t been disclosed publicly.
First we had CDOs, then mortgage-backed CDOs, then synthetic CDOs, and then the financial system collapsed. Now, as a way to cure the financial boredom of the past decade, we're moving toward NFT-based CDOs. That's the obvious next step after you've sliced and diced all your NFTs, right? Put 'em in tranches and start selling them off as high-return AAA securities.
The mind reels. My mind does, anyway.
Meanwhile, the time is coming, or may be upon us, where crypto is the primary means that Russia uses to make international payments.
Crypto, the first choice among criminals.
"First choice among criminals"? Isn't that the whole reason cryptocurrencies were invented? To avoid the law? (particularly tax law)
Well, I think there was a lot of energy around dislike of "fiat currencies" which could be manipulated by the governments that issued them. In that sense, they were like going back on the gold standard or something.
There's probably still some of that energy there. To those people I say, you trust criminals more than you trust the government? Some of them say yes to that question, in fact.
Confess I'm not sure how you'd turn nfts into securities but I'm not a finance bro.
something about quacking like a duck....and pretending NFT's are like worth something.
I think the concept is kind of nifty but not more than that without fraud
Except, the purpose of collateralized debt obligations is to mix riskier debt with lower risk debt to create an overall acceptable risk profile.
Fractional NFTs make NFTs affordable so that ppl can participate in a shared ownership of, say, a Hockney NFT of a digital painting of his sausage dog.
It's similar to being able to purchase partial shares of a stock.
yeah, but then you get people creating instruments that are based on traches of combined fractional ownership of lots of different little bits of NFTs of various "investment" quality, and then people creating instruments based on swaps of such instruments, etc.
Unless the market for NFTs gets to be particularly large, though, all this is just wallstreet wankery/tax fraud/complicated money laundering. Stupid, wasteful, and potentially criminal, but not likely to trigger an economic crisis (I hope).
Nonetheless, there's a big leap between collateralized debt obligations and collateralized asset ownership. And you already have collateralized asset ownership in the form of mutual bonds.
If there were a more accurate parallel to a future of collateralized fractional NFTs, it would be mutual bonds.
👍👍👍👍👍
but it's different this time!!!
For people who share my cynicism about all things crypto, here is a good primer on NFT's. Long, but worth the watch:
https://www.youtube.com/watch?v=YQ_xWvX1n9g
‘‘Twas long but really informative. Pretty much confirmed what I knew and added more info and doubt.
Can’t say I know or care about Crypto but…how can Russia use it if they can’t buy it? You need $ not rubles to buy the stuff then you need to convert it back. Haven’t heard of Oil being traded in anything but $. I suppose it may possible to unload some oil for Crypto but I think it easier said then done.
Mining their own.
Umm, I don't know the details, but the major exchanges love to tout their independence of any government. I'm sure they will figure out how to do transactions in Rubles. You can certainly get a chart of Bitcoin v. Ruble. (And the price of 1 BTC has gone from 3.5m Rubles to 4.6m Rubles in the last week. That makes it likely that people with Rubles have become a lot more interested in buying Bitcoins).
And I'm sure there are lots of Russian accounts in dollars, since that's what people pay for oil with.
Ah, crypto is the globalist con of today. Globalization of wealth by the wealthy for globalist government.
It's not quite as dangerous because it (hopefully) won't have the credit ratings agencies falsely certifying them as investment grade. A securitized slice of an NFT-CDO is still going to be pretty speculative as far as assets go.
If it means the buyers of Melania Trump's NFTs get burned, it won't be all bad.
The thing with CDO's though is they were backed, at some point, with interest bearing loans. With NFTs I guess it is a bet on the value of the composite parts as collectibles or, in other words, it is based on the assumption that suckers are born much faster than once a second.