This week saw a lot of signs that crypto has begun its phase of worldwide adoption: Facebook met with central banks about Libra, FATF rules began to affect listings at crypto exchanges, and Wells Fargo revealed it plans to create its own version of JPM Coin. Plus, the revolving door going on at the CFTC with the crypto industry indicates that even regulators acknowledge a future in which crypto plays a role.
One arrest shocked the crypto world: Steven Nerayoff, a lawyer involved in early Ethereum, was arrested on charges of extortion. And he was extorting ETH, which of course meant the case got dragged into the Crypto Twitter debate over whether ETH is money.
On the podcasts, Olga Feldmeier of SmartValor tells us the fascinating story of her background growing up with hyperinflation in Ukraine, and Jacob Franek of Coin Metrics explains why Ethereum’s daily transaction fees are starting to outpace Bitcoin’s.
This Week’s Crypto News…
Facebook and Central Banks Continue Tussle Over Libra
Officials of 26 central banks grilled representatives of Libra in Basel on Monday. Calibra head David Marcus tried to pre-empt criticism with a tweet storm that said Libra would not threaten fiat currencies: “Libra will be backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve. As such, there’s no new money creation, which will strictly remain the province of sovereign Nations.”
However, as Larry Cermak of the Block pointed out, “This is obviously not true. If Libra were to become used by the masses, there would be more demand the currencies in its basket (likely USD, GBP, JPY, SGD, EUR) and less demand for currencies not in its basket. And developing countries are actually Libra’s target.”
FATF Rules Indicate Regulators Don’t Understand How Privacy Coins Work
Crypto exchanges in some jurisdictions such as Korea and the UK have begun delisting privacy coins as part of an effort to comply with FATF travel rules, which require exchanges to send information on the parties involved in a transaction, but they seem to be unaware the coins like Monero and Zcash have viewing keys that enable transactions to be private while also allowing regulators to see into the transaction. Even for non-privacy coins, the issue seems to be that exchanges don’t currently have a standardized way to share data, even for non-privacy coins.
Wells Fargo Joins the BankCoin Club With Wells Fargo Digital Cash
The bank will use the digital token to settle internal cross-border payments. The system will be built with R3’s Corda platform.
Lawyer Involved in Early Ethereum, Steven Nerayoff, Arrested on Charges of Extortion
The cofounder of Casper Labs and advisor to tZero could face up to 20 years in prison if convicted. The affidavit alleges that Nerayoff extorted 30,000 ETH and a 10,000 ETH loan (that he never repaid) from a Seattle-based company he was advising. His partner in the alleged scheme, Michael Hlady, sent this text to the company COO: “[Jane Doe] fix this by the time I land or I promise I will destroy your community. (1) we will go public with Stevens holding. (2) we will sell and get everyone we know to sell. (3) we will sue you. (4) a story will be written about [Company 1]. You are stalling for stalling’s sake. I will be landing in 4hrs I expect you and [John Doe] on the phone.” Katherine Wu also noted, “Nerayoff’s associate falsely claimed to be a former member of the United States military and former government agent who had worked for the National Security Agency, the Federal Bureau of Investigation and the Central Intelligence Agency– WHO DOES THAT?????!!!”
VanEck-SolidX Withdraw Their Bitcoin ETF Proposal
Though the firms didn’t explain why, they have at least begun “offering shares of the Trust to qualified institutional buyers (entities with at least $100 million in assets owned or invested),” writes CoinDesk.
North Korea Plans to Build Its Own Bitcoin
Alejandro Cao de Benos, the official in charge of North Korea’s cryptocurrency conferences, and a special delegate for the Committee for Cultural Relations for North Korea told Vice that it will be “more like bitcoin or other cryptocurrencies,” but not a digital version of the North Korean won.
‘Crypto Dad’ Goes Full-On Crypto; CFTC Does Too
‘Crypto Dad’ Christopher Giancarlo, recently departed from his post as chairman of the Commodity Futures Trading Commission, joins the Chamber of Digital Commerce. Meanwhile, the CFTC hires Dorothy DeWitt, most recently vice president and general counsel for business lines and markets at Coinbase. In related news, SEC Commissioner Hester Peirce bemoans to Longhash the lack of regulatory clarity regarding crypto in the US and praises Asia’s more pragmatic and welcoming approach.
Neeraj’s Umbrella Tweet Goes Viral With Normies
So, this isn’t pure crypto, but it was amusing when a tweet by Coin Center’s Neeraj Agrawal about an umbrella that had locked a company out of its WeWork space stormed the internet.
