September 19, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits✍️✍️✍️

• Due to a bug in Binance’s accounting system, there was a $19 million misallocation of HNT tokens.
• Blockchain tool developer Infura plans to launch a decentralized protocol next year.
• Celsius asked the bankruptcy court for permission to sell $23 million of stablecoin holdings.
• The price of ETH fell more than 20% in one week.
• The SEC and Ripple Labs are both calling for an immediate ruling in the case over XRP being a security.
• After the Merge, Grayscale filed for rights to over 3 million ETHPoW tokens.
• Ethereum’s proof of work fork token (ETHW) plunges over 60% a day after launch.
• Cybersecurity company BlockSec said there were replay exploits in the Ethereum proof of work fork.
• The US SEC filed fraud charges against a crypto investment advisor in connection with the $4.3 million he raised from investors.
• Do Kwon said he is “not on the run,” and is cooperating with authorities.

Today in Crypto Adoption…

• Satschel, a Web3 compliance company, raised $5.2 million.

The $$$ Corner…

• Ex-Citadel Securities executives raised $50 million for crypto market maker Portofino Technologies.
• Binance Labs, the company’s VC arm, doubled down on Aptos investment ahead of its launch.
• Token management platform Magna closed a $15 million funding round.

What Do You Meme?

What’s Poppin’?

The White House Released a Framework for Crypto, But Many Are Not Satisfied

by Juan Aranovich

On Friday, the White House published the “first ever comprehensive framework” for digital assets and cryptocurrencies.

Back in March, President Joe Biden issued an executive order, in which the government laid out its policy objectives for the crypto space. The EO requested agencies to present a series of reports to Biden’s office on the key issues surrounding the industry.

In the framework, the government outlined the conclusions and recommendations of the studies these federal agencies have conducted after analyzing the crypto industry.

Even though this framework is not the same as regulation, which is highly awaited, it gives a hint to understanding how the government is thinking about crypto. The reports emphasize the potential risks of crypto, both for investors and also for financial stability.

The document cites the collapse of Terra as one of the examples of crypto triggering instability, blaming it for wiping out $600 billion. (Technically, Terra only represented a $60 billion wipeout. Financial analysts say that the remaining $540 billion vanished most likely due to macroeconomic conditions.)

Here are some other takeaways from the White House’s framework:

• The SEC and the CFTC are likely the agencies that will regulate the industry. The administration is calling on the SEC to “aggressively pursue” crypto projects that are not complying with securities laws and apply enforcement actions.
• The US Treasury will work with financial institutions to “bolster their capacity to identify cyber vulnerabilities” and will be in charge of tracking risks related to digital asset markets. The agency will work in cooperation with international organizations like the Organization for Economic Co-operation and Development (OECD) and the Financial Stability Board (FSB).
• The government is interested in reinforcing the US’s “global financial leadership.”
• The US Treasury and the Federal Reserve will be responsible for exploring the possibility of a central bank digital currency (CBDC).

Industry investors and institutions had been eagerly expecting the release of this framework. However, there were mixed reactions.

“Today’s reports and summaries from the Biden administration’s executive order on digital assets are a missed opportunity to cement U.S. crypto leadership,” said Kristin Smith, the Blockchain Association president, in a statement, noting that the framework focused more on risks than opportunities.

In addition, according to Sheila Warren, CEO of the Crypto Council for Innovation, the reports are “outdated and unbalanced.”

However, there were others who took the reports more positively. “It’s great to see the US moving towards a proposed crypto framework,” said Binance CEO Changpeng Zhao on Twitter.

In regards to the CBDC development, Rep. Tom Emmer said, “In the wrong hands, retail central bank digital currencies can be twisted into a surveillance tool.”

Recommended Reads

1. Vitalik Buterin on layer 3s
2. a16z crypto on the ingredients of the metaverse
3. Nikolas on establishing a minimum viable community

On The Pod…

Justin Drake, researcher at the Ethereum Foundation, talks about the Merge, how this transition affects Bitcoin, where Ethereum’s road map is going, and more. Show highlights:

• how Justin was feeling prior to and during the Merge
• whether the upgrade is complete or there are other things to watch out for
• why Ethereum has slashing and why it is a better form of removing any attackers
• the concern about centralization due to liquid staking derivatives providers, like Lido or Coinbase
• how the Merge affects MEV and the long-term vision of proposer-builder separation
• whether the Merge puts pressure on BTC to also transition to proof of stake
• what impact ETH’s more deflationary nature will have on BTC’s narrative as digital gold
• why Ethereum is the settlement layer for the internet of value
• whether there is a winner take all dynamic in the blockchain industry
• why Ethereum is more secure than Bitcoin, according to Justin
• what Justin thinks about the ETHPoW fork and its team and the risks of interacting with it
• the next steps in Ethereum’s roadmap

Book Update

You can purchase it here: http://bit.ly/cryptopians