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Top Headlines for 13 May, 2022

Chainsmokers to Airdrop NFTs with New Album

Chainsmokers, the music duo behind modern hits like “Closer” and “Paris”, have become NFT publishers.

The Chainsmokers’ album titled “So far So Good” has been released in May 2020 along with 5000 NFTs that will allow the collectors to earn a share of 1% of the recording’s royalties.

Based on data from music streams, social media channels and concert sales, the group will reward 5000 of their most loyal fans with a small share of royalties. These 5000 individuals will receive periodic notifications of their payments. If the collector sells his NFT to someone else, the Chainsmokers will earn a 7.5% cut from the secondary transactions.

Among the benefits of NFT technology for The Chainsmokers and other digital artists is that it allows them to earn a portion of secondary sales. The group will be using the NFT platform Royal to distribute the NFT collection. Royal is built on top of the Ethereum scaling solution Polygon and has already featured NFT drops from other popular artists like Nas.

Crypto Poses No Risks to Financial Stability

On 13 May 2022, U.S. Treasury Secretary Janet Yellen told the members of Congress that crypto does not pose a systemic risk to the global financial system.

Yellen’s comments are significant amidst persistent questions from lawmakers about cryptocurrencies.

Members of the House Committee on Financial Services (HCFS) grilled Yellen on several macroeconomic issues while also enquiring about the potential impact of stablecoins on the economy. Yellen said, “I can’t say that stablecoins have reached a scale where they are financial stability concerns.”

As a veteran of the 2008 financial crisis, Representative Jim Himes said that he did not believe that a $2 trillion industry was big enough to carry a systematic risk designation. Himes pointed out that the market capitalization of cryptocurrencies has significantly dropped from $2 trillion after the recent market collapse.

Although Yellen agreed with Himes’ initial assessment, she declined to specify when it would be right to classify the industry as a systemic risk. After the catastrophic financial collapse in 2008, the United States government released new legislation that categories especially large financial institutions like banks as potential systemic risks to the country’s economy. To keep these dangers in check, the government has increased its oversight over these institutions’ capital reserves and business operations. If crypto gets included in the systemic risks category, nearly every company or project in the industry will need to open up its business to the government.

SBF Buys 7.6% Stake in Robinhood

Sam Bankman Fried (SBF), CEO of the FTX cryptocurrency exchange, has acquired 56 million shares in the American stock and cryptocurrency trading platform Robinhood for $600 million — a 7.6% stake, according to its 13 May, 2022 filing with the United States Securities and Exchange Commission (SEC).

News of the sale caused shares of Robinhood to soar nearly 30% in after-hours trading as investors became aware of SBF’s acquisition. Only hours before the crypto entrepreneur made his move on 13 May, 2022 shares of Robinhood hit an all-time low of $7.71, and then rose after the announcement to $10.72.

Robinhood shares had been on a downtrend since hitting an all-time high of $55 at the time of its IPO in July 2021. The company had also reduced its workforce by 9% due to a decline in growth caused by a lack of investment activity. In its Q1 2022 earnings report, the trading platform disclosed an 18% decline in its revenue.

During this same period, the firm had observed an upward swing in revenue from its crypto divisions of 13%. Investors on Robinhood flocked to cryptocurrency as the traditional stock market turned bearish in Q1 2022. Robinhood has also significantly increased the size of its cryptocurrency offerings which now include assets like Ethereum L2 Polygon, Solana, Compound, and meme coin Shiba Inu.