The political and regulatory issues around Bitcoin and crypto have been heating up -- especially with this being a midterm election year.
That has made pro-Bitcoin Congressional candidates popular with the crypto community. Aarika Rhodes, who is running against the most anti-crypto Congressman, Brad Sherman (famous for rants against crypto referencing make-believe coins such as, Mongoosecoin), has seen the Bitcoin community rally around her.
“We are seeing politicians that only get their money from big banks, corporations, lobbyists, PACs — and the everyday person is being ignored,” she says in the latest episode of Unchained.
"We know that the big banks keep people impoverished, we know that it’s a different way of finance and we know one in six people have [Bitcoin]. It’s an innovation that’s not going away, and it’s going to be as big as the internet,” she adds. Check out the full episode to find out what impact she thinks Bitcoin will have on the 2022 midterms, what her message is for other Democrats about Bitcoin and crypto and why she thinks Bitcoin and crypto should remain a non-partisan issue.
And now onto the big crypto news this week.
On Tuesday, the International Monetary Fund executive boardpublished a statement that "urged" El Salvador to "narrow the scope of the Bitcoin law by removing Bitcoin's legal tender status." In its report, the IMF "stressed that there are large risks associated with the use of Bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities."
Additionally, multiple directors also expressed concern about El Salvador's plans to issue Bitcoin-backed bonds. Bloombergreported talks between El Salvador and the IMF regarding a $1.3 billion loan have stalled due to concerns about Bitcoin. That being said, President Nayib Bukele has been expressing hispassion for Bitcoin on Twitter, where heannounced the purchase of another 410 Bitcoin for El Salvador on the 21st.
Wonderland, an Avalanche DeFi protocol forked from Olympus that is part of "Frog Nation," saw multiple tokens associated with the project experience a sharp sell-off on Thursday after allegations came to light that the project was founded by former co-founder of QuadrigaCX Michael Patryn, aka 0xSifu.
The allegations against Patryn were brought by on-chain analyst Zachxbtvia Twitter.
Since then, MyCrypto founder Taylor Monahan alsotweeted evidence of the same. On Twitter, Wonderland co-founder Daniele Sestagalli seemed to hint that the rumors are indeed correct,writing, "Today allegations about our team member @0xSifu will circulate. I want everyone to know that I was aware of this and decided that the past of an individual doesn't determine their future. I choose to value the time we spent together without knowing his past more than anything."
Patryn has had several criminal convictions. Famously, he also was involved in QuadrigaCX, a now-defunct crypto exchange that was found to have been plundered of more than $150 million of customer funds after its co-founder Gerald Cotten died mysteriously in 2019.
According to the Wall Street Journal, the assets of Diem, the Meta-backed crypto project plagued by regulatory opposition, have been reportedly sold to the digital-asset-friendly bank Silvergate Capital for $200 million. (Disclosure: I write a Meta Bulletin newsletter.)
Credit: SOPA Images
Silvergate’s purchase comes less than a year after it partnered with Diem to launch a stablecoin pegged to USD in a last-ditch effort to revive the project initially launched under the name Libra in 2019 (back when Meta was Facebook). However, as has been the case with many Diem stories, the project never launched.
Credit: Alex Wong
A provision tucked inside the recently proposed America COMPETES Act could prove "disastrous" for cryptocurrency, says Coin Center's executive director Jerry Brito.
Essentially, the provision gives the Treasury Secretary (currently Janet Yellen) the power to use "special measures" to police technology helping facilitate money laundering. Brito says that using "special measures,” the Treasury Secretary could make it illegal for financial institutions to transact with foreign crypto exchanges, miners outside the US, and/or non-custodial wallets if they deem such entities to be a "primary money laundering concern."
Notably, Brito says that the provision would eliminate any public process regarding the implementation of such regulation. "The proposed language in the America COMPETES Act would, and we cannot stress this enough, remove all formal controls, time limits, and public notice requirements from the imposition of these draconian measures," wrote Brito.
That being said, Kristin Smith, executive director of Blockchain Association,reported on Wednesday that her organization has had "constructive dialogue" and that "this is not another infrastructure situation." Her colleague, Jake Chervinsky, added that he is "optimistic that today's legislative situation will end up fine."
The Biden administration is planning on releasing a government-wide strategy for digital assets as soon as February. According to Bloomberg, the Biden administration will be publishing its strategy through an executive order that will ask federal agencies, such as the Federal Stability Oversight Council, to determine the risks and opportunities associated with cryptocurrencies via a report due in the second half of 2022.
The article, citing people familiar with the matter, says officials have held multiple meetings on the plan. The administration is also looking into the possibility of a central bank digital currency.
Sam Bankman-Fried, cofounder and CEO of FTX (Photo By Tom Williams/CQ-Roll Call, Inc via Getty Images)
FTX.US, the US-based affiliate of Sam Bankman-Fried's cryptocurrency exchange FTX, announced its first external raise of money – bringing in $400 million at a valuation of $8 billion. The exchange, reports CNBC, saw daily volume grow sevenfold in 2021, peaking at more than $800 million in November. Additionally, the company saw more than $67 billion in spot volume last year for crypto trades and now has around 1.2 million registered users in total.
Speaking of massive raises, Ripple, the company behind XRP, saw itsvaluation reach $15 billion this week after the company finished a buyback of shares from its Series C investors back in December 2019. One investor, Tetragon, had sued after the Securities and Exchange Commission charged Ripple and two executives with conducting an unregistered securities offering. ConsenSys, the Joe Lubin-led Ethereum development company, may raise a large funding round. The Blockreports that the firm is in talks with potential backers at a post-money valuation of $7 billion, which would double its latest valuation from November 2021. On Thursday, Fireblocks, a crypto infrastructure firm, alsoreceived a huge valuation, bringing in $550 million in a Series E valuing the company at $8 billion.
Microstrategy CEO Michael Saylor (Photo by Joe Raedle/Getty Images)
In a letter released last Friday, the Securities and Exchange Commission rejected MicroStrategy's bitcoin accounting method found in an earnings report. TheSEC's letter, dated December 3, went as follows and refers to a standard known as “generally accepted accounting principles”: "We object to your adjustment for bitcoin impairment charges in your non-GAAP measures. Please revise to remove this adjustment in future filings."
While this is only a paper quirk (as one could look up the amount of a company’s bitcoin holdings and the current value of BTC), recording bitcoin as an impairment affects the net worth of a company, and, therefore, its value to investors. This is most likely why MicroStrategy reported non-GAAP numbers in its earlier filings – it wanted to make its bitcoin holdings look better. However, MicroStrategy has agreed to stop its non-GAAP reporting.
MicroStrategyreported holding 124,391 bitcoin ($4.5 billion) on December 30, 2021.
While the crypto markets underwent a heavy dip last weekend, Solana experienced "high levels of network congestion" due to "excessive duplicate transactions." According to The Block, spotty network performance led to many DeFi users being unable to top up accounts before they were liquidated, and many large traders were forced to agree on prices off-chain to settle at a later date.
The issue was discussed at length onThe Chopping Block, where Haseeb Qureshi explained that Solana's lack of a fee market was the root cause of its problems.
Anatoly Yakovenko, the founder of Solana, alsochimed in on the network's performance issues, pointing out that "liquidator bots" were spamming the network with two million packets per second. According to Yakovenko, the engineers plan to issue a solution in the next 4-5 weeks in version 1.9 of Solana.
While fungible tokens like Bitcoin and Ethereum have been slumping in a period of macro uncertainty regarding the Fed and interest rates, volume and floor prices for non-fungible tokens have risen. For example, data from The Block shows that NFT marketplace volume surpassed $5.5 billion for January – marking an all-time high by more than $2 billion. Furthermore, floor prices for Bored Ape Yacht Club and CoolCats have seen their price floors hit an all-timehigh in the past seven days.
Speaking of Bored Ape Yacht Club, the 10,000-piece cartoon ape collection had quite a week. On Monday, Jimmy Fallon had Paris Hilton on the wildly popular Tonight Show, where they both compared their NFTs from the BAYC collection on live TV. In a sign that NFTs have truly gone mainstream, Fallon then tweeted the clip of him and Paris with the caption "#WAGMI."
Actress Gwyneth Paltrow alsobought into the Bored Ape Yacht Club this week via MoonPay, an NFT marketplace that has helped many celebrities join the NFT world.
In related news, NFTs were also featured in an open letterpenned by YouTube CEO Susan Wojcicki this week. "The past year in the world of crypto, non-fungible tokens (NFTs), and even decentralized autonomous organizations (DAOs) has highlighted a previously unimaginable opportunity to grow the connection between creators and their fans," Wojcicki wrote. Reddit, a social media network worth $10 billion, is alreadytesting a feature to allow users to connect NFTs to their profile picture on the platform (much like Twitter).
Ethereum saw two interesting products launch this week.
As covered on Tuesday's Unchained, Syndicate, a DAO-focused company, launched a new product called Web3 Investment DAOs this week. The new product will allow any Ethereum user to spin up an investment DAO in seconds – for just the cost of gas.
Additionally, the Etherscan teamreleased a new product called Blockscan Chat that allows Ethereum addresses to direct message each other.
When a new memecoin starts skyrocketing in price, it's usually best to check out Elon Musk's Twitter account. And indeed, on Tuesday, Elon tweeted that McDonald's should accept DOGE as payment. McDonald's responded, saying they would accept DOGE if Tesla accepted Grimacecoin – a then non-existent currency referring to the McDonald's cartoon character.
Dozens of Grimacecoins popped up on blockchains. According to Decrypt, one such Grimacecoin on Binance Smart Chain saw its price jump 120,000% in 24 hours.
The terms Eth1 and Eth2 are being phased out. Instead, Ethereum 1.0 will now be referred to as the execution layer, and Ethereum 2.0 the consensus layer. The Ethereum Foundation wrote in a blog post:
"One major problem with the Eth2 branding is that it creates a broken mental model for new users of Ethereum. They intuitively think that Eth1 comes first and Eth2 comes after. Or that Eth1 ceases to exist once Eth2 exists. Neither of these is true. By removing Eth2 terminology, we save all future users from navigating this confusing mental model."
Right-clicked saved from Ethereum.org :)
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Cover Credit: Tommy
