Crypto for the world’s biggest censor.

I hope you all had a wonderful Thanksgiving! Ethereum Foundation researcher Virgil Griffith spent his getting arrested at Los Angeles International Airport for allegedly helping North Korea evade sanctions. I talk more about the online discussion around that and why I felt compelled to tweet at length about life in North Korea below.

On Unchained, we do a deep dive into Synthetix and how it became the second-most popular DeFi platform in a short period — and how the ecosystem took off after it changed its monetary policy. And on Unconfirmed, Nathaniel Rich tells us about his unmissable Vanity Fair feature on the Quadriga mystery. He tells us who Gerald Cotten really was, what was up with his business partner Michael Patryn and gives us his best theories for what really went down.

Finally, Unchained is launching its merchandise shop! We’ve got a few t-shirts, a couple hats and a mug. My team and I got creative with one of the t-shirt designs and came up with an image of a crypto rabbit falling down a hole. Swirling into the hole are playing cards showing coins like Bitcoin, Ethereum and Monero, as well as a DAO card ripped in half. There’s a Guy Fawkes mask, a DeFi cake, a Lambo, a fork, and a teapot that says HODL as well as teacups showing the Reddit and Twitter logos. There’s even a shitcoin! The rabbit is wearing a Bitcoin key on a keychain, a unicorn-and-rainbow t-shirt and, of course, is listening to Unchained. Check it out at!

This Week’s Crypto News…

Virgil Griffith Arrested for Helping North Korea Evade Sanctions

The biggest news this week was that Ethereum researcher Virgil Griffith was arrested at LAX on Thanksgiving for allegedly  assisting North Korea in evading sanctions. Afterward, many crypto people made comments on Twitter like that what Virgil did could help North Koreans break their dependence on their state or saying that it goes too far to say diplomacy with the North Korean government could never help the North Korean people or that what he did could bring peace between the two Koreas and other comments that indicated that people in the crypto community don’t seem to know much about North Korea.

I think it created a lot of cognitive dissonance for those of us who do have a fair amount of knowledge about North Korea. Recently, we saw everyone up in arms about censorship by Americans to appease the Chinese government. But now the same people were now saying, wait a minute, let’s not pass judgment on the guy who helped the most censorial dictatorship on the planet, which doesn’t even let its country on the internet at all, doesn’t let its citizens leave, doesn’t let its citizens travel within the country without approval and will lock you, your family and two generations after you in a prison camp if you do something it perceives to be against it. It was like, wait, if you’re fighting for censorship resistance, why are you justifying the behavior of someone who was helping the number-one biggest censor in the world? It was especially jarring seeing this from the unicorns-and-rainbows crowd.

So I ended up tweeting what I believe may be my first tweet storm ever, which states some facts about North Korea, just to make it clear what words like “peace” and “public” mean in the North Korean context. For instance, “public” in our countries sounds innocuous, because it indicates everything is out in the open, what is there to hide? But in North Korea, “public” means it’s approved by the dictatorship, meaning, it’s something that, at the very least, does not hurt Kim Jong Un’s ability to continue oppressing the 25 million people living there. So, using the word “public” as it pertains to North Korea actually doesn’t have that innocuous connotation there. Or the concept of “peace” between North Korea and the South or the US, which again, sounds so nice, but in the North Korean context takes on a twisted meaning because it implies that the Kim regime would survive, which would again mean continuing the oppression of the 25 million people living there … which again, doesn’t sound like peace.

I was surprised by the reaction to my tweet storm since I still wasn’t sure if people didn’t actually know these things since I wasn’t saying anything remotely new. But one person asked me what the everyday North Korean’s access is to the internet, and I realized, whoa, OK, that is so basic that it didn’t even occur to me to tweet it: When I said that they could not know information about the outside world without it exposing the Kim regime’s lies, that meant of course that everyday North Koreans are prohibited from accessing the internet. I am not even sure how many of them even know what the internet is though there is quite a lot of secret activity around prohibited information. So, yes, while in theory, getting cryptocurrency to people in oppressive regimes could very well be helpful, in the case of North Korea, how do you do that when they have no way to connect to the internet and if they attempt to do so, they risk their lives?

I think some people took my tweet storm as stating some opinion on Virgil — like I saw some stories saying I was criticizing him — but actually, I was just trying to explain to people what they were actually saying when they were tweeting those things. I just wanted them to know: Those words don’t have the meanings you think they do in North Korea. This is what it means on the ground when you say those things.

What I did say about Virgil is that I have no idea what was in his head but given the facts about North Korea, my best guesses are that he had no idea about how things work there or that if he did, he didn’t care. Leigh Cuen of CoinDesk had the best story summarizing the situation, Reuters reported that Virgil had thought it would be cool if North Korea mined ether, and Bleeping Computer had a story about a fake cryptocurrency trading site ridden with malware that is believed to be created by a North Korean hacking group.

Now, moving on from the censor who won’t let his people on the internet at all to the censor that won’t let its people onto certain websites on the internet …

Chinese Internet Firewall Blocks Etherscan

Wolfie Zhao of CoinDesk, who was a recent guest on Unconfirmed, reported that the Chinese firewall has blocked Ethereum block explorer Etherscan since at least October 30. He writes, “This is likely the first known case of a blockchain explorer becoming an internet firewall target and puts in the company of such blocked information and social media sites as Google, Facebook, Twitter, and Reddit.”

Could DeFi Lending Compromise Security on Proof-of-Stake Chains?

Haseeb Qureshi of Dragonfly Capital had a fascinating and worrying analysis about how attractive rates for DeFi lending could lower the amount of staking on chain, thereby harming the security of the network. Even worse, once the flywheel gets turning, people will want to short ETH, which increases the demand for borrowing, which drives the interest rate for lending even higher. His analysis was based on a paper by Tarun Chitra, who also had a more technical tweet storm on this, for those of you interested in the details. Eric Conner of Gnosis, Ethhub and the Into the Ether podcast put some numbers to this to show that such an attack was quite expensive.

China Exchange Watch: Binance Getting Cold Shoulder

Matthew Graham of Sino Global Capital tweeted that Huobi and OKEx are getting some level of approval in China while Binance and international exchanges are getting “iced out.” A Twitter account related to the Spartan Group stated that they think Binance will still do better over the long-term.

M&A in Crypto: Barbarians on the Blockchain

Token Data published a report on activity in M&A in the crypto space, showing that such deals peaked in 2018 at $2.3 billion and are coming in at around $700 million in 2019. They segment it out, with one subset being what it calls The M&A Barbarians: “Trading is crypto’s first killer-app providing big exchanges with cash and networks to engage in acquisitions. Unsurprisingly, Coinbase (16 deals ) leads the pack and engages in all types of deals (industry consolidation, regulatory plays, talent).” It’s worth checking out the full report or at least the tweet storm on it.

Are Hong Kong Protests Driving Adoption of Crypto: A Dive Into the Numbers

Longhash had a great article exploring whether or not the protests in Hong Kong have spurred adoption of crypto. The short answer is no, but it is worth it to look at the charts and graphs in the article to see how they arrive at this conclusion.

CoinJazeera: Ethereum’s Real Use Case Finally Discovered: Helping North Korea

CoinJazeera has a hilarious story on the Virgil news: “Griffith was warned by everyone not to go to North Korea and be so overt about pitching Ethereum’s first and only real use case. Everyone from Vitalik Buterin, his friends on Facebook, followers on Twitter, his parents, to even Stevie Wonder himself claimed he was retarded saying, ‘Even my blind ass can see that’s a dumb idea.’ Our reporters have learned that even libertarian hero Ross Ulbricht wrote him a letter on his best toilet paper to call him dumb for going. None of this would deter the brave and foolish Griffith from attempting to “liberate” the North Korean people by teaching their benevolent leader how to launder money.

“The Ethereum Foundation reluctantly accepted this daring pivot into helping oppressive regimes. They rationalized that as long as Virgil didn’t get caught everything would be fine. Of course, as attention-loving nerds often do, Griffith posted about his federal crime on Facebook, Twitter, Craigslist, and random billboards overlooking the highway. He even went so far as to alert the FBI themselves as to what he was doing because they seemed so ‘supportive’ of his good-decision making and wanted to learn everything they could to help.”