Why the Song-a-Day man is suing the SEC

Plus, what should crypto tokenize next?

article-image

AevanStock/Shutterstock modified by Blockworks

share

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. Subscribe to the Empire newsletter.


Take it to court 

Two NFT artists — Jonathan Mann and Brian Frye — have filed a suit against the SEC in a route we’ve usually seen taken by larger firms like Coinbase and Consensys.

The goal for the artists is simple: Get some answers from the SEC and act before the agency can move against them for their NFT projects. 

Mann told me the suit was borne from “deep frustration” with the lack of clarity. The regulatory agency’s anti-crypto parade has already targeted two NFT projects, Stoner Cats and Impact Theory, and Mann felt that the actions “kind of implicated everybody in the NFT space.”

So, he and Frye took action.

Jason Gottlieb, who also represented DEBT Box in its now-infamous case, was brought on to help Frye and Mann argue their case against the securities regulator. 

Mann, the artist behind A Song A Day Mann, writes a song a day (in case his username wasn’t clear enough). He has penned songs about the SEC, including one from yesterday detailing his plans to sue the SEC, and one from September of last year about the SEC’s actions against Stoner Cats. He mints each song as an NFT, available on his site for folks to bid on.

(ICYMI: The Mila Kunis and Ashton Kutcher-backed project paid $1 million to settle with the SEC and destroyed NFTs in its possession.)

“As I looked at what they said Stoner Cats had done, and I looked at what I continually do on a daily basis, [I realized] there’s no daylight here between what they’re accusing them of and what I do and what basically everyone that I know in the space, artists and creators of all kinds, are doing all the time,” Mann told me.

The 45-page suit filed in a Louisiana court on Monday argues that artists like Andy Warhol and Georgia O’Keefe never had to worry about a regulator claiming that they were creating investment contracts through their art. 

“It would be crazy to think that Bob Dylan, Janis Joplin, the Rolling Stones, Ray Charles, Jimi Hendrix, Madonna, or Louisiana’s own Louis Armstrong should have retained attorneys to examine the SEC’s Form S-1 to see how to register their music for sale to the general public,” the complaint said.

I asked Mann if it felt like the SEC, through its NFT actions specifically, was taking aim at American entrepreneurs. Mann, for example, has been putting out a song a day for 16 years and has been involved in the NFT space since 2017 — way before the 2021 boom that probably put such things on the SEC’s radar.

“It’s very ironic to me, because in a lot of ways, I think of NFTs as the most… direct relationship that I can have with people who enjoy my music. Any other way that I could sell songs to folks would be mediated in one way or another by either a giant tech company or a payment processor who would take a cut,” Mann said.

“I would have to interact with these huge multinational corporations. [But] when I’m selling NFTs, it’s literally just me and them mediated by the blockchain which belongs to no one… I find it ironic that this way of interacting with my fans is somehow deemed more harmful by the SEC than you know what Spotify does to artists or YouTube does to creators, or Tiktok, or any of these things where creators are just screwed at every turn. And yet, that’s just deemed normal.”

It’s too early to tell how the case could play out, but one thing’s certain: As frustration mounts within crypto, more and more folks are ready to take a stand against enforcement actions — even before the SEC can target them.

— Katherine Ross

Data Center

  • BTC is down 4.3% over the past day after markets were spooked by movement of $2 billion in coins seized from Silk Road (it turns out they haven’t been sold — yet).
  • ETH has slipped 5% in the past week, currently sitting at $3,340.
  • Daily CEX liquidations have hit $170 million — 86% of those funds coming from long positions.
  • Ethereum is approaching 28% of the supply staked to mainnet (currently 27.75%, up over 1% since May.)
  • Base almost set a new record for daily transaction count over the weekend, reaching 4,161,494. That’s only 4,096 fewer than the all-time high set last Monday.

Blob’s your uncle

Ethereum blobs could go down as one of the most impactful changes to the crypto landscape in history.

At the minimum, however, the data suggests blobs have saved Ethereum users hundreds of millions of dollars in fees.

Blobs, ushered in by the Dencun fork in March, has made using the Ethereum ecosystem incredibly cheap — cheap enough to afford all sorts of high-volume memecoin shenanigans on layer-2s like Base and Blast.

Ether has turned inflationary as a result (fewer fees burned means more ETH net issued per block). But users are still vastly better off.

Over the past year, crypto users have paid over $9.75 billion in fees to use major blockchain protocols, not only Ethereum. That counts any app or network in the monthly top-20 by fee spend, according to Token Terminal: Bitcoin, Ethereum, Solana and Base, as well as DeFi protocols such as Convex, Lido and Uniswap.

Ethereum raked in around 30% of that annual total, or $2.85 billion. Tron (15%; $1.49 billion) and Bitcoin (13.5%; $1.3 billion) came in second and third, followed by liquid staking platform Lido with 10%, or just under $1 billion.

Since blobs, Ethereum fee spend has dropped to only 14% of the total — $86.9 million in July out of $614.7 million for the top 20. 

Ethereum’s monthly average leading into Dencun was over $208 million, starting in mid-2023

Tron fee spend is now almost three-quarters higher than Ethereum, with USDT transfers still the most dominant activity on the network.

Ethereum mainnet activity is meanwhile similar to where it was before blobs. The 30-day moving average for transactions is even higher: 8.2 million today compared to 7.6 million in early March (the past few days have seen slightly less than the average, about 8 million).

So, overall, Ethereum fee spend is down 60% on its pre-blob average, with somewhat comparable levels of onchain activity. 

That would imply that the reduction in Ethereum fee spend should roughly equate to how much users have saved due to the new blob fee markets.

Based on Ethereum’s fee spend between April and July, napkin math suggests that could be up to $230 million in four months, although the real figure is probably less, accounting for fluctuations in demand for blockspace.

Users will still stand to save even more at times of peak mania in crypto markets. Fee spend hit all-time highs in November 2021, when bitcoin neared $69,000 for the first time. 

At the time — pre-Merge — Ethereum gas fee rates were five times more expensive than they are right now, leading users to spend $1.83 billion to transact on the chain that month. The top 20 overall raked in $3.12 billion.

It’s not a perfect science, and there are loads of other factors, but based on that 60% number alone, blobs would’ve saved Ethereum users over $1 billion in November 2021… if they were created and adopted back then. 

And perhaps now that they have, crypto users as a whole may never spend that much again.

— David Canellis

The Works

  • Infrastructure provider Anoma Foundation is looking to raise new funding which would push its valuation over $1 billion, per a Bloomberg report
  • The Bank of England is plotting experiments with digital ledger technology and CBDCs as it mulls a potential CBDC in the future.
  • Caitlin Long, CEO of Custodia, continues to fight against the Fed after being denied a bank account by the Kansas City Federal Reserve, DL News reported.
  • Bitcoin mining hardware could be a $20 billion opportunity over the next five years, Bernstein analysts wrote.
  • Russia is looking into regulating crypto following US sanctions, Bloomberg reported.

The Riff

Q: What should crypto tokenize next?

A McKinsey temp might suggest tokenizing some obscure, exotic asset class in hopes of bringing more liquidity to whatever niche market it belongs to. Like rare books, maps and manuscripts, or Elvis memorabilia.

All that stuff is really old. How about looking to the future instead. So far in the future to stuff that hasn’t happened yet.

Let’s say I have a goal to sail around the world. I could tokenize that goal, creating an NFT that could only be minted when I achieve it. 

I open a prediction market to allow bets on whether I can really do it. People who are interested in supporting the cause — and even those who think I could never sail around the world — can bet against me, and those funds would go into a pool.

When I do sail around the world, the positive resolution of the prediction market would allow me to mint the NFT. All winnings in the pool would then go to a separate wallet that’s only unlocked by the NFT. 

Tokenize your hopes and dreams, and let your supporters (and your haters) fuel you to achieve them. That’s the pitch. VCs, if you’re reading this, get in touch.

— David Canellis 

Stocks. Bonds. Hell, tokenize my mortgage. 

There’s a lot of value in tokenization, and I know there are tons of conversations that still need to happen before any action is taken — especially in the realm of TradFi — but the use cases are endless. 

David’s pitch is the perfect setup, and gives an idea of the various ways folks can go about tokenizing stuff outside of the strictly financial lens. 

BlackRock CEO Larry Fink said tokenization is the “next step” for financial markets in January, and who am I to doubt him. 

No, but seriously, those who know know, and those who still think that tokenization is just a funky crypto thing reserved for small markets need to get with it. 

Tokenization is coming. It’s only a matter of time until it makes all sorts of things far more transparent.
Katherine Ross


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Unlocked Advisory-min.png

Research

This report distills Blockworks Advisory’s research on incentive programs and their analysis, offering a foundation for designing future initiatives and advancing industry-wide standards. By highlighting key lessons and methodologies, we aim to empower protocols to make informed, data-driven decisions.

article-image

Crypto is “really exciting,” former SEC Commissioner Paul Atkins said in a podcast interview last year

article-image

Bitcoin is now the “seventh most valuable asset in the world by market cap, just behind the likes of Google and Amazon,” GSR’s Brian Rudick said

article-image

Many analysts expected bitcoin to top $100K before year-end, though it’s been on a post-election tear

article-image

Will investors take a 10% lower return to get access to a regulated investment wrapper?

article-image

Brian Armstrong called out the hire of Gurbir Grewal, who had been the SEC’s enforcement division director since 2021

article-image

Certain senators will be interested to learn about Atkins’s private sector business interests, specifically those related to crypto