From the erratic ups and downs in bitcoin and ethereum value, to the explosion in initial coin offerings, and the unstoppable demand for mining-ready GPUs, cryptocurrency has become an inescapable story. It’s also become increasingly difficult to make sense of — as the industry expands, new currencies sprout up, and companies form overnight. Check here for the complete coverage of bitcoin, ethereum, litecoin, monero, Venezuela’s petro, cryptocurrencies at large, and the ways that ICOs and the underlying blockchain technology are helping shape a burgeoning industry and giving life to a new wave of startups and entrepreneurs.
It’s removing the GameStop Wallet from the App Store and Chrome Web Store on November 1st, according to a notice posted on its NFT website. GameStop is blaming the “regulatory uncertainty of the crypto space.”
When the company laid off staff in December, Axios reported that the crypto wallet team was “heavily impacted.”
That’s the statement from Brian Armstrong to the Financial Times, about the company’s choices that led to a lawsuit from the US Securities and Exchange Commission.
We really didn’t have a choice at that point, delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the US.
Armstrong claims the regulators asked Coinbase to delist basically all the over 200 tokens it trades, before the lawsuit was filed that points at 13 of them.
The company announced its fourth series of Collectible Avatars on Wednesday. Reddit is putting some limits on who can buy them for the first day of launch as part of an “initial access” period.
Reddit first released Collectible Avatars last year, and they could be a way for Reddit to bring in some money as it tries to make a profit.
Worldcoin, the OpenAI CEO’s “privacy-preserving” cryptocurrency, is starting its global rollout today. The initiative claims to provide a “reliable solution for distinguishing humans from AI online” by scanning people’s retinas with an orb-shaped biometric verification device to create a unique user ID for the currency’s World App crypto wallet.
The founders want to give it away for “free” in some regions, which has caused some prior controversy.
A lawsuit filed Thursday by FTX against its former leaders showed Sam Bankman-Fried’s younger brother messaging someone at the FTX Foundation charity about buying the Pacific island nation of Nauru, as reported by Bloomberg.
[it would be used] for “some event where 50%-99.99% of people die [to] ensure that most EAs [effective altruists] survive” and to develop “sensible regulation around human genetic enhancement, and build a lab there.” The memo further noted that “probably there are other things it’s useful to do with a sovereign country, too.”
This would be news to the nation’s roughly 12,000 existing inhabitants. Also, at 213 feet elevation, it’s vulnerable to rising seas, and damage from phosphate mining has rendered most of its land uninhabitable.
This Threads post about the NFT for Jack Dorsey’s first tweet isn’t quite right. There is a $3~ bid, but another one is nearly $2,000, and the owner, Sina Estavi, has claimed he might never sell anyway.
On the other hand... that was after Estavi was imprisoned for a bit under crypto scam allegations, he’s currently shilling a new crypto x AI token scheme, and he said he’d never sell the Dorsey NFT after attempting to do so and drawing a high bid of only $280.
Remember the “Crocodile of Wall Street,” aka Razzlekhan, aka Heather Morgan? She and her husband were arrested in 2022 on charges of trying to launder billions of dollars worth of Bitcoin stolen in the 2016 hack of Bitfinex. She’s also a rapper, among many other things.
Now Reuters reports she and her husband have reached a plea deal with prosecutors and are set to have a hearing on August 3rd.
Looks like CoinDesk found buyers:
The investor group is led by Matthew Roszak of Tally Capital, a private investment firm focused on crypto and blockchain-based technologies, and Peter Vessenes of Capital6, a venture-capital firm and family office, people familiar with the matter said.
I’m a big fan of the outlet, obviously, and oh boy will I look into powerful generational hexes if they screw it up.
If The New York Times were to report on the contents of my diary I would simply die from humiliation. Anyway, this trial is going to be a showstopper.
Does this inspire confidence?
The company told employees that it would stop offering certain benefits, effective June 19, including mobile-phone reimbursement, fitness reimbursement and work-from-home expenses, among other items, according to former employees and a message from Binance’s internal messenger viewed by The Wall Street Journal.
The last crypto bank standing is Customers Bank Corp, a “super community” bank that would prefer we’d all stop calling it a crypto bank, please.
But this time by Ripple, not Elon Musk. (I now get a personal notification every time his vacations are interrupted.) Levine writes:
I am not sure that it is actually all that good for crypto in the long run. The message of this decision is that crypto companies can freely sell tokens to retail investors as long as those retail investors are uninformed and the companies are secretive about it; only if they sell tokens openly to sophisticated investors will they get in trouble. That’s bad.
[Bloomberg.com]
So today’s ruling — using the much-contested Howey test — may be appealed by both sides, says Ann Lipton.
What about future crypto cases? Well, the thing about crypto is, the facts are different in every case. Assuming the Ripple decision is followed in other cases, some would involve ongoing obligations of some kind between the issuer and the token holder, and in those cases, courts may be more likely to find there was an expectation of profit from the promoter’s efforts.
[lawprofessors.typepad.com]
According to a report from The New York Times, Taylor Swift’s team signed a deal with FTX that could’ve paid up to $100 million following months of deliberation, contrary to a previous report that she didn’t.
The thing is, the deal didn’t actually go through. Sources tell the NYT that FTX founder Sam Bankman-Fried canceled the deal last minute, leaving Swift’s team feeling frustrated. Talk about dodging a bullet.
[The New York Times]
Worldcoin, a cryptocurrency project that gives free tokens to users that are willing to scan their eyeballs, has integrated its World ID verification protocol with Okta in Germany.
German developers can now select a “sign in with Wolrdcoin” option from Okta’s Auth0 marketplace to adopt it for their apps. The eyeball scanning hardware — dubbed “The Orbs” — will also be available to purchase around the country.
The suit alleges Friedberg enabled Sam Bankman-Fried and others to misappropriate billions in customer funds leading up to the catastrophic collapse of the company late last year, according to Bloomberg. The fall of FTX was just one part of the ongoing crypto winter.
The suit lays out the allegations:
Friedberg and others facilitated the routing of billions of dollars in purported profits of the FTX Group to the FTX Insiders, and their families, friends, and other acquaintances through purported personal ‘loans,’ bonuses, ‘investments,’ and all other means of transfer, including real estate purchases and hundreds of millions of dollars in charitable and political contributions.
A judge has permanently blocked Mason Rothschild from creating and selling MetaBirkins, a line of handbag NFTs modeled after the Birkin brand. Hermès won its case against Rothschild earlier this year, which alleged the Birkins-themed digital collectibles “rips off Hermès’ famous Birkin trademark.”
According to our survey results, as much as people are sure AI technology is going to have a significant impact on society, most of them don’t feel that way about non-fungible tokens.
Joseph James O’Connor, aka PlugWalkJoe, is a UK citizen connected to a massive 2020 breach on Twitter that pushed crypto scam ads through accounts for Barack Obama, Elon Musk, Apple, and others, as well as other social media account breaches.
Today a New York federal court judge sentenced him to five years in prison for his crimes minus 28 months for time already served. TechCrunch reports he will also forfeit at least $794,000 to his victims.
Yep, it uses ChatGPT. It only raised $5 million of the $10 million it wanted earlier this year so it seems like I’m not the only who’s a little skeptical of this.
The Block cites a source who claims to know the people behind recent phishing attacks with “NFT drainers” targeting high-value accounts. According to OpenSea employee “Plum,” it’s high school kids who “all play Roblox for the most part. So they’ll buy the coolest gear for their Roblox avatar, video games, skins and things like that.”
And they’re not even old enough to check out everything Roblox has to offer!
In most normal markets, market making and prop trading are done by independent companies. One of the reasons the SEC is mad at Binance is that they allege Binance’s entities may have manipulated crypto markets.
Also:
One of the people with direct knowledge about the teams said that Crypto.com executives gave other, external trading houses “absolutely dramatic sworn statements that Crypto.com was in no way involved in trading”, while another said that employees were asked to “say there is no internal market maker type operation.”
In response to questions from the Financial Times, Crypto.com said that employees had not been asked to lie to other market participants.
[FinancialTimes]
...but for passport shenanigans, not Terra / Luna. He’s been found guilty of forgery by a Montenegro court. The time he’s served since being arrested in March will count toward the sentence.
It’s about the restraining order, not the larger case. Last night, a judge approved the deal to make sure that only US employees have access to Binance.US funds:
According to the proposed agreement, Binance.US will take steps to make sure that no officials from Binance Holdings, the global exchange, have access to private keys for wallets or hardware wallets, or root access to Binance.US’s Amazon Web Services tools. The U.S.-based crypto trading platform will share detailed information about its business expenses, including estimated costs, in the coming weeks.
Remember when we talked about how the SEC has showed up on a horse, guns blazing, to regulate crypto? Here’s a nice report on how they’re also coming for the VC firms that poured money into crypto with a new rule change:
Legal executives at venture firm Andreessen Horowitz wrote that “absent a suitable self-custodial exception, the proposed Rule would effectively ban RIAs from holding and transacting in crypto assets for clients,” while Paradigm wrote that the rule could result in an effective “shadow ban” of crypto.
a16z could be particularly hard-hit by this change.
[The Information]
Bloomberg has some details on the stablecoin. Highlights include: a “sizeable loan” to the Celsius Network, extensive third party loans, and its banking network which, whew buddy. Tether made loans to parties such as Bitfinex — and lent $5.1 billion at one point, a significant amount of Tether!
I wonder how much Tether has cleaned up their act! Perhaps the team will release recent details to — ahahahahaha just kidding. Let’s see what else comes out.
Hot on the heels of the SEC regulatory crackdown on crypto, Blackrock has filed paperwork for a Bitcoin ETF, with Coinbase custodying. The SEC has never approved a spot Bitcoin ETF, and is embroiled in a lawsuit with Grayscale about rejecting their attempt at a Bitcoin ETF. (A ruling in that case is expected later this year.)
Controversial stablecoin Tether has dropped its objection to a CoinDesk Freedom of Information lawsuit in such a way that I’m like 👀👀👀:
Tether has nothing to hide and we hold utmost confidence in the accuracy of our financial figures. While the sensitivity that we had to a government agency releasing confidential data—at least as it pertains to Tether’s reserves—is lower now than it was in 2021, we remain vigilant about customer data. While we cannot count on fair coverage from CoinDesk, which often misrepresented Tether’s position in the market in favour of its main competitor, we call upon them to set their bias aside and to not publicly share any past or current customer names and not to thereby put anyone in the community at physical or digital risk.
This is an unjustified smear of great journalists. I wonder what Tether is afraid of.
[Tether, Tether Gold]
A brief guide to the politics behind the Binance and Coinbase SEC cases.
Before the Binance and Coinbase cases, the big crypto v SEC case was Ripple. Anyway they’ve released some EMAILS around a speech given in 2018 by William Hinman, which suggests that perhaps Ethereum is not a security, and looooooooooool:
“As written, the language remains vague as to whether ETH is a security. If you want to make an affirmative statement that it is not a security, the language could be stronger (i.e., just say it). If you don’t want to take an affirmative stance, we suggest using language similar to what you used for Bitcoin re. the disclosure regime to make it more consistent,” wrote former SEC Director of Trading and Markets Brett Redfearn on June 12, 2018.
Redfearn left comments in a proposed draft of the speech further emphasizing that point, saying parts of it “appear likely to create more confusion about the status of ETH.”
Ripple has a perspective, of course.
That’s not all. There may be some hiccups for the SEC:
She also expressed skepticism about the S.E.C.’s use of its enforcement powers to regulate the crypto world, calling it “inefficient and cumbersome.”
[The New York Times]
That was said by our EIC Nilay Patel on an episode of the podcast Decoder last year about decentralized autonomous organizations.
Now, a lawsuit won by the Commodity Futures Trading Commission (CFTC) against something called Ooki DAO establishes that these crypto-era decentralized finance (DeFi) orgs can be held liable for breaking the law.
CFTC Division of Enforcement Director Ian McGinley:
The founders created the Ooki DAO with an evasive purpose, and with the explicit goal of operating an illegal trading platform without legal accountability.
This decision should serve as a wake-up call to anyone who believes they can circumvent the law by adopting a DAO structure, intending to insulate themselves from law enforcement and ultimately putting the public at risk.
