Now you’ll be able to spend your whole crypto wallet at Whole Foods, and soon you may be able to bid on CryptoKitties at eBay.
Growing adoption of cryptocurrency payments by mainstream companies was the big theme that emerged on the first day of Coindesk’s Consensus 2019 conference in New York on May 13. The Winklevoss twins’ Gemini announced that major retailers—ranging from Whole Foods to Nordstrom’s—were accepting crypto payments. Meanwhile, online marketplace eBay teased it may soon take virtual currencies with ads and a show sponsorship.
But the SEC’s Valerie Szczepanik was there to throw a little cold water on the party, warning that exchanges pushing IEOs may be violating the law.
Gemini, Flexa partner to allow crypto payment at major retailers
Gemini announced a partnership with payment processor Flexa designed to make it easier for major retailers to accept cryptocurrency at the register.
Fifteen major retailers—including Whole Foods, Lowe’s, Nordstrom, GameStop and Bed, Bath & Beyond—will accept the Gemini dollar stablecoin (GUSD) as well as bitcoin (BTC), ether (ETH), and bitcoin cash (BCH) using the new SPEDN mobile wallet, Gemini CEO Tyler Winklevoss announced at the conference. The SPEDN app will shortly be available on the Apple App Store.
Playing on the “HODL” meme used among enthusiasts to cheer on crypto investing for the long term, the SPEDN wallet encourages day-to-day spending of cryptocurrencies. That, after all, is the original stated goal of Bitcoin’s pseudonymous creator Satoshi Nakamoto
Yet retailers aren’t necessarily accepting cryptocurrency payments directly. Flexa accepts the crypto payment and transfers dollars to the merchant. Crypto deposited to the SPEDN app is custodied with Gemini.
Just as Gemini claims to build a bridge between crypto and finance, “Flexa’s mission is to link the island of crypto to the mainland of retail merchants,” Winklevoss said. “By providing Flexa with trusted custody and infrastructure, we hope to profoundly improve the payment experience; and merchants who are currently subject to overly complex, expensive legacy systems of credit and debit cards stand to benefit significantly.”
While consumers get convenience, the two main benefits to merchants are better fraud protection and the vastly lower transaction cost compared to credit and debit cards, which typically charge 2% to 4% of the purchase price.
And, because Flexa pays in fiat currency, merchants are not exposed to cryptocurrencies’ price volatility and can use their existing point of sale hardware.
“The Flexa offering, and its support of Gemini dollar, is another step towards a more efficient, cost-effective, and fairer global financial system,” Winklevoss said. “We’re excited for all that’s ahead. Don’t just HODL, SPEDN!”
Other retailers accepting Flexa SPEDN payments include, Barnes & Noble, Baskin Robbins, Caribou Coffee, Crate & Barrel, Express, Jamba Juice, Lowe’s, Office Depot & OfficeMax, Petco, Regal Cinemas, and Ulta Beauty
With ads and sponsorship, eBay teases accepting payment in cryptocurrencies
Online auction giant eBay generated a fair amount of buzz by signing on as a sponsor of Coindesk’s Consensus 2019 show, and placing some prominent ads in the venue.
Large signs near the show’s main ballroom read “Virtual Currency. It’s happening on eBay.”
Another read “Digital Collectables. It’s happening on eBay.” CryptoKitties, anyone?
The ads also teased the size of eBay’s marketplace, reading, “Reach 179 million active buyers in the world’s largest marketplace.”
SEC’s Szczepanik says exchanges may violate securities law over IEOs
The Securities and Exchange Commission’s senior advisor for digital assets and innovation, Valerie Szczepanik, told Consensus 2019 attendees that cryptocurrency exchanges charging a fee to list initial exchange offerings (IEO) may be violating U.S. securities law.
Charging such a fee and working to attract buyers likely qualifies them as broker-dealers, she said noting, “[i]f they are not registered they will find themselves in trouble in the U.S., if they have a U.S. issuer or U.S. buyers, if they are operating on the U.S. market.”
She pointed to charges brought by the SEC against ICO superstore TokenLot in Sept. 2018, calling the case “instructive in this regard.”
By bringing buyers to ICOs, the platform acted as an unregistered broker-dealer, meaning it was “participating in the distribution in violation of the registration provisions.”
TokenLot and two executives settled the charges without admitting wrongdoing, paying penalties totaling nearly $570,000
The warning came on the heels of the long-awaited guidance the SEC issued in April, aiming to help to cryptocurrency industry determine if ICOs must register as securities.