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NFTs: Women artists want to bring equity to Web3 – Morning Brew

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Dianna "Mick" McDougall; Sources: Getty Images
· 9 min read
Fame Lady Squad (FLS) announced themselves as an artist collective of three women stepping into the NFT space in early July 2021. They planned to sell 8,888 of their “ladies”: avatars with blue skin or vibrant, green hair or others that—in the grand internet tradition—shot lasers from their eyes or had flashy tattoos. It was, FLS claimed, the “first female avatar project of all time.” The project caught the eye of NFT collectors who were drawn to its Bored Apes does women’s empowerment vibes, selling roughly $1.5 million worth of avatars in just weeks. But the feel-good, women-led project had a big problem: The artists, Cindy, Kelda, and Andrea from the United States and Norway, were really three men from Russia, programmers and developers who went by “Max R,” “D Mefi,” and “John Russo.”
They were unmasked by a sleuth tweeting a long and complex thread that revealed their online identities. The outcry echoed across NFT Twitter and the fallout was swift: prices for the avatars quickly sank, at one point dropping 90%. In response, the founders opened a now-deleted Twitter poll asking if they should give the reins to women in the community instead–78% of respondents answered “yes,” according to Danielle Davis, an artist and collector, who took over FLS in August 2021 along with Ashley Smith. They have since built a new community for FLS fans and collectors that’s focused on serving as an educational resource for women in crypto and NFTs. But the damage was done, the secondary market prices for the avatars never fully recovered from that initial drop.
“It’s a bro culture out there,” Davis said. “There’s not a lot of accessible resources for a businesswoman to listen to.”
FLS may have gained notoriety during the dramatic unmasking of its founders, but Davis’s experience in the industry isn’t unusual: NFT marketplaces are dominated by men, both as makers and buyers, and the pieces of art and other collectibles sometimes command tens of millions of dollars. A November report from art market analytics firm ArtTactic found that women on Nifty Gateway, one of the largest auction platforms for digital art, accounted for just 15% of artists in the marketplace. The study covered 20 months of sales during which “male artists command 77% of total primary and secondary sales value at $258.3 million.”
The most successful artists, including top-selling Beeple, were overwhelmingly men, the report found. The only woman to crack the top 10 of bestselling artists was synth-pop singer Grimes, who sold $8.9 million worth of NFTs in early 2021. Her NFTs, one of which featured cherubs floating through the air over a glowing cross as an original song plays, reflected Grimes’s idiosyncratic style, no doubt contributing to her success. Women artists without Grimes’s loyal fanbase saw significantly lower sales on Nifty Gateway. Jo-Anie Charland, a Vancouver-based artist and designer, was the second-bestselling woman artist, earning an impressive $1.6 million, which was still well below her male counterparts.
There are a couple of reasons why women are underrepresented in the NFT marketplace: For one, they have historically taken up new tech at slower rates, and NFTs and crypto are no different, particularly given their volatility. “This is just another example of it,” said Pamela Peterson Drake, a professor of finance at James Madison University. “And because of the risk involved in this particular market—and women are risk averse—you’re not going to see as much participation.”
Gender discrimination prevails in the world of tech and the art world, too. As of 2019, women artists only accounted for 2% of the art auctioned. But women interviewed by Morning Brew don’t see the NFT space as a culmination of those barriers. Instead, these artists see blockchain and its decentralized nature as an opportunity to finally shake the old guard, alchemizing the tech and art worlds to create a new one where women hold more influence.
But in order to build that Web3 utopia, women still have to navigate old biases that can stifle progress. When Maliha Abidi, a 26 year old based in the UK, traveled to New York to attend NFT.NYC as a new artist, one of the first questions she got asked was, “Are you sure you’re in the right place?”
A Pakistani American woman who wears a headscarf, Abidi knew she didn’t look like most of the conference’s attendees, but she believes the NFT community, built on ideals of decentralization, equity, and disruption, can have a place for her. “It’s not a norm for people to see somebody like me in the space,” Abidi said.
“White men are the norm in this community,” Abidi continued. “I don’t really like when some people…tried to act oblivious to the fact just because they would see a handful of women around them. Nobody’s saying that they don’t exist in this space. All we’re saying is that they don’t get the same opportunities.”
Abidi is hoping to change that. She’s part of a smaller movement that survey numbers don’t capture: Women artists say they’ve seen more women start to make and mint NFTs in 2021, and that those women are finding an entrée into crypto through art and fashion. Blockchain’s potential to decentralize current power structures lures many like Abidi, who said she hopes Web3 will not make the same mistakes as Web 2.0. In response to the gender gap among NFT artists and collectors, she launched a project called Women Rise in November. It offers 10,000 computer-generated women avatars as NFTs, some featuring famous women like Aretha Franklin or Malala Yousafzai. Abidi pledged a portion of the funds to organizations that support gender equality, girls’ education, and mental health, including the Malala Fund, and she hopes to one day launch a school in the metaverse for girls. Women Rise is one of several women-led efforts circulating through the NFT market. By mid-January, it had sold out.
For women outside North America and Europe, the financial disparities are starker. The ArtTactic report found that the most financially successful artists, regardless of gender, lived in the US, Canada, or Europe. Yinkore, a Nigerian artist, started selling NFTs four months ago. Her work has gotten as much as 1 ETH (about $3,100). In her time in the marketplace, she has found “a vast disparity when it comes to people who actually buy from women of color.” She said that “a lot of us buying from Black women are Black women ourselves.” When she tried to track down other African women who have also sold an NFT for 1 ETH or more, she couldn’t even find five, she said. That pushes her to invest back in other emerging artists. “I make a sale, and then I have to put back into my community,” Yinkore said.
In interviews with Morning Brew, women described gendered gatekeeping they’ve encountered, as well as virtue-signaling by men who sometimes tweet for investors to support NFTs made by women, but fail to include specific women’s names in those calls for investment and don’t purchase such art themselves. And women artists say some men still gravitate toward other men, finding it easier to relate to and collaborate with those similar to them.
“There’s just like a human disconnect,” Elise Swopes, a 32-year-old digital artist in Brooklyn, said of networking with some men in the NFT space. “Which I’m fine with getting over, and opening up myself to, and I don’t know if they are. Who’s going to take that first step? I’m tired of always taking that first step.
“You guys have been winning for too long,” Swopes said. “Let’s make a new world, and do something different.”
Artists list their work on platforms like OpenSea and Nifty Gateway, the two largest platforms for buying and selling NFTs, but to move pieces and stand out among millions of listings, they need institutional support and large social media followings. Making top dollar requires artists to either network and market themselves in the hopes of getting featured on those NFT platforms’ homepages, or to bring NFTs into the traditional art world, like Beeple, who sold the most valuable NFT to date for $69 million through Christie’s auction house. For now, most of the money in the market is concentrated at the top: 25% of artists account for almost 90% of sales, and the top 5% of artists make 55% of sales, according to ArtTactic’s report.
It’s impossible to quantify the number of women involved in the NFT space or their sales. Neither OpenSea nor Nifty Gateway responded to inquiries from Morning Brew regarding the numbers of women and men selling on their platforms. But it’s a safe bet that men vastly outnumber women artists on both platforms.
Still, some see those platforms as their way into the art world. Sara Baumann, 30, who started her first NFT project, Women and Weapons, this summer, said NFTs allowed her to pursue art full time. “It is so, so, so hard and dog-eat-dog,” the Dallas-based artist said of the traditional art world. She’s had more luck with NFTs. “I don’t know that I would have had the same opportunity without the NFT space.”
Despite her success, she said she sees the gender bias in the marketplace. “There is such a lack of balance to what each sex is pulling in. It’s definitely there. …I do see that discrepancy for sure. We just, for some reason, we have not been able to isolate what exactly is the cause of it.”
Women artists said they often see men asking for ways to support women as they start selling NFTs. It’s not hard, they say: Just open your wallet and buy the art. “If you’re looking to support female artists, simply buy from them. That should be good enough,” Abidi said. She encouraged collectors and fellow artists to listen to women in the NFT space and reach out to see what they needed. “It’s not rocket science,” she added. “How you would support a bro, that’s how you support a woman.”
Matty Merritt / 01.20.2022
Matty Merritt / 01.19.2022
Neal Freyman / 01.20.2022
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Tyler Hobbs' Fidenza NFT Project Gets $1M Pump Over 48 hours – CoinDesk

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DOJ Asks Congress for Tools to Limit NFT Money-Laundering Risk – PYMNTS.com

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Down at the very bottom of the crypto crime report the Justice Department issued last week was a request that could make it a lot harder to buy and sell NFTs.
Citing examples of criminals using the sale of the popular nonfungible tokens that hold art, video, music and collectibles to launder funds, the Justice Department asked Congress to define some of all NFTs as “value that substitutes for currency” under the Bank Secrecy Act (BSA).
Doing so, it said in “The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets,” would “make clear that its key [anti-money-laundering (AML) and countering the financing of terror (CFT)] provisions — including the obligations to have customer identification programs and report suspicious transactions to regulators — apply to NFT platforms, including online auction houses and digital art galleries.”
See also: DOJ Seeks to Double Jail Time for Money Transmission Crimes
The impetus, the department said, is the “explosive growth in the demand and corresponding markets for NFTs, perhaps most notably in the area of digital art.”
Substantial Risk
This “presents substantial money-laundering risks,” it said, citing a February Treasury Department study on money laundering in the broader art market.
“NFTs can be used to conduct self-laundering, a sequence in which criminals purchase an NFT with illicit funds and then resell to a purchaser who pays for it with clean funds unconnected to a prior crime,” that report noted.
It also found that in most cases, “digital assets that are unique, rather than interchangeable, and that are used in practice as collectibles rather than as payment or investment instruments … are generally not considered to be virtual assets under [international regulations].”
The “nonfungible” part of NFT means that each is unique and cannot substitute for any other, as opposed to cryptocurrencies like bitcoin which all have the same uses and value.
NFT marketplaces “may take the view that this definition [of a ‘value that substitutes for currency’] does not apply to their activities — and that they are thus not subject to the BSA’s anti money-laundering and anti-terrorism laws, the department said.
Justice is asking Congress to amend the BSA “to make clear that its key AML/CFT provisions — including the obligations to have customer identification programs and report suspicious transactions to regulators — apply to NFT platforms, including online auction houses and digital art galleries.”
Already There
Redefining NFTs as “value that substitutes for currency” would allow the Treasury Department’s Financial Crimes Enforcement Unit (FinCEN) to “potentially seek to regulate such activity under its money transmission regime,” a trio of lawyers at Skadden, Arps, Slate, Meagher & Flom wrote in an April blog post.
That, according to Jamie Boucher, Eytan Fisch and Javier Urbina, would require NFT marketplaces to register as money services businesses (MSB) with FinCEN.
Some types of NFTs — notably those used to fractionalize tangible assets like physical artworks and real estate, but also other valuable art or collectible tokens — are likely securities, the Securities and Exchange Commission (SEC) has said.
See more: How Did NFTs Become SEC’s Newest Crypto Target?
In FinCEN’s view, the trio noted, those can be repurposed to fit the definition of “value that substitutes for currency” and thus may already require MSB licenses.
 
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FTX Talking With Investors for $1B Fundraising at $32 Billion Valuation – NFTgators

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Quick take:
Although Binance maintains its number one spot in terms of crypto transaction volume, FTX is catching up quick after rising to third, behind Coinbase. This could change soon given the steps FTX is taking in web3.
According to reports, Sam Bankman-Fried’s company is seeking $1 billion in a new round of funding at a valuation of about $32 billion. That values FTX twice the value of Coinbase— whose market cap stands at just over $14 billion, and at least 7-fold Binance’s most recent valuation of $4.5 billion.
And there is a good reason for the disparity in market share (volume-wise) and overall valuation. FTX is more than just a crypto exchange platform. 
The company has expanded its ecosystem to include stock trading, NFTs, crypto lending services and more, all forming significant operational synergies for the rapidly growing web3 company.
It explains why investors are placing such value on FTX. According to sources close to the $1 billion fundraising talks, the figure could change by the time the round is closed, CNBC reported, citing people who did not want to be named.
FTX has been one of the most active investors in the web3 space during the crypto winter. The company is in the process of acquiring the crypto lending platform Blockfi for a reported amount of $240 million.
Last year, it acquired crypto derivatives platform LedgerX allowing it to offer derivatives trading alongside traditional crypto exchange services.
Earlier this year, the company purchased Good Luck Games, the developer of the card battle game Storybook Brawl for an undisclosed amount. The acquisition added another perspective to FTX’s business pouncing on the rapidly growing web3 gaming sector.
The company also recently announced a partnership with online game retailer Gamestop to onboard the gaming community to web3.
In July, Bankman-Fried refuted claims that FTX was planning to buy retail stock brokerage platform Robinhood after Bloomberg published a report suggesting discussions were underway.
News about the new fundraising come hot on the heels of the company’s $900 million raise announced in July. FTX also raised $420 million in October 2021.
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New NFT Marketplaces Bid to Dethrone OpenSea From Top Spot
Space Runners Ramps Up the Development of Its Metaverse-Only Fashion House with $10M Round

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