Crypto News Recap - Is ETH a Security? Gensler Won’t Say - January 7, 2022 - January 14, 2022

Transcript

[Music] thanks for tuning in to this week's news recap thanks fomc crypto is tanking because of you probably on sunday afternoon the total crypto market dipped to lowe's not seen since september 2021. bitcoin led the way dropping below forty thousand dollars for the first time in roughly three and a half months overall the crypto industries market cap hit a weekly low of 1.86 trillion dollars on sunday before bouncing up to above two trillion dollars for the rest of the week according to data from coin class the market drop saw over 300 million dollars worth of positions liquidated on the

ninth which is the third time this has occurred in 2022. the tip coincides with big time money flowing out of digital asset investment products coin shares notes that digital asset investment products experienced the largest outflow of money on record for the week ending january 7th bitcoin and ethereum based products were hit especially hard losing 107 million dollars and 39 million dollars respectively the coin shares data shows four consecutive weeks of outflows which has not happened since september the firm points to last week's federal open market committee meeting as the catalyst for the market drop which hinted at inflation risks and the possibility of

interest rate increases a take that haseeb qureshi partner at dragonfly capital agreed with on the chopping block bitcoin developers are now protected by jack dorsey block ceo and avid bitcoiner jack dorsey announced plans via email to set up the bitcoin legal defense fund a non-profit organization aiming to protect bitcoin developers from legal pressures dorsey wrote the bitcoin legal defense fund is a non-profit entity that aims to minimize legal headaches that discourage software developers from actively developing bitcoin and related products such as the lightning network bitcoin privacy protocols and the like

according to dorsey the fund's first goal is to coordinate and organize defense for bitcoin developers in a lawsuit coming from tulip trading limited a company associated with craig wright who claims to be satoshi nakamoto and was a leader in the bitcoin cash and bitcoin satoshi's vision forks dorsey makes it clear that the board which includes himself chain code lapses to alex morcos and martin white an academic at the university of sussex is not seeking additional money for operations but may in the future cache app is rolling out lightning network integrations cache app the block owned payments platform has begun integrating lightning network into its ios mobile app

lightning network is a bitcoin scaling solution that allows users to transact cheaply and efficiently without settling each transaction on chain lightning has grown from holding just over a thousand btc to 3344 btc in the last year which means roughly 150 million dollars in bitcoin is locked in the lightning network while that growth is impressive cache app may bring an even further stampede of bitcoin to the layer 2 solution as data shows that cache app ranks as the 14th most popular app in apple's us app store furthermore in a recent report the company noted that over 40 million users transact on this platform each month

lightning networks should also receive a boost in activity from strike a lightning-based company led by jack mallors strike announced that its lightning network enabled app is extending its reach to argentina expanding a bitcoin slash lightning payments operation into a country with a 50 percent annual inflation rate and 45 million people seems like a decent product market fit commented lynn alden an economist on twitter in related news the wall street journal published a piece on how citizens of turkey are turning to bitcoin and tether in lieu of the turkish lira notably ezra alpe the chief marketing officer at the turkish crypto exchange bitlow told the wall street journal the turkish lira's

volatility and rising inflation seen in recent months has led our investors to see cryptocurrency as a profitable investment in the long term and as a hedge against inflation in the short term the wall street journal notes that the lira is down 40 against the us dollar since september which has led to crypto trading volumes in the lira jumping to 1.8 billion dollars per day despite the country banning cryptocurrencies last year paradigm and citadel securities make an odd couple citadel securities made headlines on monday by taking 1.15 billion dollars in capital from two venture firms paradigm and sequoia the deal values the market maker at

approximately 22 billion dollars citadel securities is massive according to its website the firm handles 27 of equities trading volume on the us stock market each day and executes 37 of us listed retail volume because robinhood makes a lot of money from citadel in exchange for data on its users trades when robin hood halted purchases of gamestop stock in early 2021 rumors swirled that robin hood was acquiescing to a request from citadel however the actual reason was because robin hood did not have enough collateral for the compliance demands from the gamestop mania the move to take money from paradigm which backs quite a few crypto

powerhouses like compound cosmos sky mavis and uniswap is an interesting move by citadel securities because back in september founder ken griffin said the company did not trade in crypto due to regulatory uncertainty however based on comments from paradigm co-founder matt huang in the press release it sounds like citadel will be moving into crypto we look forward to partnering with the citadel securities team as they extend their technology and expertise to even more markets and asset classes including crypto wrote huang coinbase enters the derivatives game on wednesday crypto exchange coinbase announced the acquisition of fair x a us-based cftc regulated derivatives

exchange the purchase could soon allow coinbase to offer regulated derivatives products to their u.s customers the press release noted the development of a transparent derivatives market is a critical inflection point for any asset class and we believe it will unlock further participation in the crypto economy for retail and institutional investors alike other crypto exchanges have made similar acquisitions ftx us acquired ledger x in august which is also a cftc regulated derivatives exchange crypto.com disclosure a sponsor of my podcasts is also in the derivatives game after purchasing nadex in december data from coin market cap shows that

binance did 53.4 trillion dollars in derivatives trading volume in the 24 hours eastern time spanning wednesday spot volume during the same stretch on binance was only 17.3 million dollars gary gensler avoids answering whether eath is the security on monday during a cnbc interview securities and exchange commission chair gary gensler was asked whether ethereum is a security or not gensler responded carefully saying we don't get involved in these types of public forums talking about any one project one possible circumstance or give legal advice over the airways that way however he then added in a somewhat ominous tone for eastholders that if

you're raising money from the public and the public is in anticipation of profit based upon that promoter sponsor that group's efforts that's within the securities laws in 2018 bill hinman the sec director of corporation finance said in a speech putting aside the fundraising that accompanied the creation of ether based on my understanding of the present state of ether the ethereum network and its decentralized structure current offers and sales of ether are not securities transactions however this is not quite the same as an official position by the sec visa and consensus want to bring cbdc's to tradfi visa is partnering with ethereum

infrastructure firm consensus to help traditional financial companies integrate central bank digital currencies explained visa's head of cbdc catherine goo in a press release if successful cbdc could expand access to financial services and make government disbursements more efficient targeted and secure that's an attractive proposition for policymakers the partnership could see visa issue cbdc linked payment cards using consensus's quorum blockchain in related news paypal confirmed reports that it is exploring a us dollar-backed stablecoin solution of its own we are exploring a stable coin if and when we seek to move forward we will of

course work closely with relevant regulators paypal's jose fernandez deponte told bloomberg ethereum's largest l2 went down for 10 hours arbitram the largest ethereum layer 2 solution by total value locked went down for nearly 10 hours on sunday off chain labs the developer behind arbitram says a hardware issue that led to sequencer downtime was the outage's root cause a sequencer is a node with special ordering powers that allow transactions on the chain to be finalized more quickly for now off chain has control over the lone arbitram sequencer the team says it is looking into decentralizing sequencer

control in light of this event according to arbitrom's twitter account no funds were lost due to network downtime pulled together sued by a former elizabeth warren presidential campaign staffer joseph kent a software engineer and former tech lead for elizabeth warren's 2020 presidential campaign has filed a lawsuit in new york federal courts against pull together a defy lottery protocol kent says he deposited ten dollars into pool together in october and argues that pull together does not qualify to give out lottery tickets under u.s law notably anyone who purchases an illegal lottery ticket under new york law is allowed to bring a class action lawsuit

on behalf of themselves and other ticket holders which could lead to 244 million dollars in damages according to the wall street journal in essence the suit questions whether pull together is autonomous and self-governed however in the journal pull together lawyer kevin brugel claimed that pull together simply owns the front end with information on how to use the protocol and that the operations are governed by the original code which pull token holders now control as the article states quote according to legal experts mr kent's lawsuit could be among the first to squarely address the question of who is legally accountable when a defy application known as a protocol is at

odds with the law or causes actionable harm to a user time for fun bits crypto land is a meme do you want to be part of the world's first physical crypto island asks a male narrator to begin an 18 minute 35 second video promoting crypto land after watching the full video which is a cross between a metaverse hellscape and a cheesy infomercial i personally would say the answer is no the idea is bold and familiar if you have kept up with nfts and dows recently cryptoland is attempting to purchase an island in fiji through the sale of nfts after that the details get sketchy for one it appears the island's acreage is

smaller than the amount offered in the nft sale more humorously basic questions such as how would the island get plumbing we're not particularly well covered all right thanks so much for joining us today to learn more about optub and the recent nft news discussed in today's show check out the show notes for this episode unchained is produced by me laura shin without from anthony yoon daniel ness mark murdoch shashank and clk transcription thanks for listening [Music] you