Flight to safety in Bitcoin from fiat, altcoins, and usdt while altcoins suffer.
Congressman Brad Sherman calling for a bill to ban all cryptocurrencies. The House Democrat from California says he plans to introduce legislation that will make it illegal for Americans to buy and sell crypto assets.
DApps may qualify as money transmitters under U.S. law in certain circumstances, according to new guidance sheet published by FinCEN outlining when and how different companies, individuals and platforms in the crypto space may be money transmitters under the Bank Secrecy Act and other relevant laws.
Michael Novogratz expects BTC to beat all-time-high price within 18 months. Said during an interview with CNN, he also said he believes $6,000 is probably a stall point, and next one will be $10,000. Moreover, he expressed the belief that this time, other cryptocurrencies "aren't going to go up nearly as quickly."
Hacker who stole $41 million from Binance has consolidated stolen bitcoin into just seven addresses. 7,070 BTC was moved from Binance’s hot wallet in a single transaction consisting of 44 outputs, 21 of them being Bech32 (Segwit) addresses. Hacker has since consolidated BTC from 44 addresses to seven: six at 1,060.6 BTC and one with 707 BTC.
Blockstream has announced Liquid Bitcoin (LBTC) is now available for deposits and withdrawals on Bitfinex as well as for conversion to BTC at a 1:1 peg. Liquid Bitcoin is the Bitcoin version that runs on Liquid, a permissioned blockchain controlled by 15 entities comprising mainly of exchanges.
Bitfinex has received $1 billion in hard and soft commitments for its exchange token sale, according to Zhao Dong, who also said "there's a high possibility Bitfinex will not conduct a public sale" for its token offering LEO.
GSR Capital has finally closed on investment in tZERO. Instead of buying $30 million of tZERO tokens, as previously agreed, the Hong Kong private equity fund invested just $5 million in tZERO equity. Finalized transaction values tZERO's at $1 billion, less than the $1.5 billion in the initial agreement.
May 10-11 - Ethereal New-York (Joe Lubin, Ryan Selkis, Laura Shin, Chris Burniske)
May 11-12 - Magical Crypto Conference (Elizabeth Stark, Adam Back, Peter Todd, Charlie Lee, Riccardo Spagni)
May 13-15 - Consensus 2019 (Jeff Garzik, Jameson Lopp, Dan Morehead, Hester Peirce)
May 31 - CME Bitcoin Futures May 2019 contract (BTCK19) last trade date; settlement June 5
Jun 25-26 - Bitcoin 2019 (Andrew Poelstra, Anthony Pompliano, Jihan Wu, Tuur Demeester)
Aug 6 - Litecoin Block Reward Halving (Coin reward decreases from 25 to 12.5 coins)
Just tried transferring BTC from @TheRockTrading to @bitfinex using @Blockstream Liquid, the transaction was executed and confirmed in less than 5 minutes, and best of all the amount is confidential to outside observers. Congrats to both exchanges and all other people involved
The masses are running towards the asset which is -currently- rising. By doing so, most do not take advantage of the pump, they are the pump. One reason why most people do not make money by definition.
People who want to trade altcoins for Bitcoin can do so by selling their "altcoins" which are on Binance already. This creates selling pressure. The ones who want to put new capital into "altcoins" cannot do so because deposits are disabled. Net selling pressure. Just my opinion.
That is also why I hinted at possible impending price distortions due to the lockdown of @binance
Update: MakerDAO's stability fee is, indeed, a trash fire. "It was their responsibility to warn users that their loans are NOT suited for real-world use cases, and they might end up trapping users in the rates we see now.”
As I said 3 weeks ago: the MakerDAO "Stability Fee" is a misnomer. It is, rather, a penalty that props up the scheme by charging people to withdraw their money. And it's set by MKR whales.
Can we stop calling the DAI "stability fee" a "stability fee?" It's a withdrawal penalty that disincentivizes people from closing out their positions and ceasing to use the system.
The reason the reserve ratio hasn't crept up (currently 150%) is because it's already insane to tie up 150 of cash collateral to get 100 in cash, and increasing that ratio will only make that calculus more insane.
All of these stablecoin systems are being designed as one-way ratchets - make it easy to get in, but pay dearly to get out. Only makes sense if you want to lever existing crypto holdings to go long on crypto. Such a system will work until it doesn't.
"Closing out my CDP will result in a loss, the stability fee has been 75% for 6 months and I am still willing to take the hit to get what I can out of this trash fire." That's called a fire sale. You can only prop up an asset so long.
It's rare to see a US politician admit to what's been known around the world, but obscure to most in the US. The dollar hegemony that the US enjoys is what gives it much of its power. We're in the "then they fight you" phase. @BradSherman, I'm around if you ever want to talk.
1/ Today, the US Treasury published MASSIVE new guidance on crypto regulation. It has *major* implications for wallets, exchanges, ICO issuers, dApps, DEXes... OH MY (um I'm gonna tweet about it)
2/ The best way to understand this official guidance is the following: FinCEN cares deeply about your financial privacy, so long as nothing is private from FinCEN.
3/ Why? FinCEN (Financial Crimes Enforcement Network) is the bureau of the Treasury tasked with preventing terrorist financing, money laundring, and other nasty stuff. They're happy with you living your life as you see fit, so long as they get the data they need to stop bad guys.
4/ FinCEN is a big data agency. They scoop as much transaction data, identifying information, suspicious activity reporting as possible, and use it to stop the bad guys. They've been doing it for crypto, too - since at least 2013!
5/ Let's dive in. First up: Wallets. Noncustodial wallets are not money transmitters in the US. They are unregulated. Nice to see FinCEN confirm what most commentators have been thinking for a long time.
6/ This is an historic day for @blockchain, @Ledger@BRDHQ , @EdgeWallet and all the rest. I'll confess to personal delight here, too. Advocating for the protection of noncustodial, open-source software publishers has been a personal goal of mine for the better part of a decade
7/ Why? Because, even if many crypto users rely on their availability, they do not *control* funds any more than an operating system or a mobile device does. I join the chorus of commentators commending FinCEN for finally committing this approach to writing.
9/ Next up: Exchanges. Did you know that, whenever you make a funds transfer, your bank has to send *your* personally identifying information along to any recipient financial institution?
10/ @jony_levin can keep me honest here, but apparently this is mostly for backup purposes, to ensure that FinCEN can get its data even if one of the banks goes bust. FinCEN says crypto exchanges have to do this too... but, like, how?
11/ A crypto exchange user requesting a withdrawal just supplies an address. How is the exchange supposed to know whether it is for another FI or just a noncustodial wallet? You'll be shocked, I'm sure, to hear that our industry has been fighting about this since 2013.
12/ There is no real way to implement this without an interstitial (mandatory?) layer over the core network, just so that FIs can message each other. Sounds a bit like SWIFT eh? Anyway, that's a nightmare.
13/ On to crypto ATMS, or "BTMs" or crypto vending machines. FinCEN says those are money transmitters. Cool. I think we all mostly assumed that anyway.
14/ For clarity: They're money transmitters (MTs) regardless of whether they sell from their own inventory or they just transmit user funds to an exchange
15/ Now on to FinCEN's exhaustive analysis on Lightning Nodes. This is a really good one so buckle up.
16/ Heh okay FinCEN didn't say anything at all about lightning nodes. Nor are they going to. It's just silly. Honestly, people, stop with this stuff.
17/ You know what the guidance does talk about, though? Decentralized Exchanges ~DEX~ Yes, The wave of the future. The crypto thing that is going to change all the other crypto things And I'm only a little bit shocked that they got it totally right.
18/ DEXes that just post bids and asks without settling the funds - they are unregulated. They don't actually "control" any funds. DEXes that settle trades, though, they both "accept" and "transmit" crypto, making them just as regulated as any other exchange.
19/ I'll note that this outcome is unique to FinCEN, cryptocurency and money transmission. If the DEX is listing a something other than mere virtual currency (like, say, a tokenized security), securities laws kick in too.
20/ The securities laws are much broader and don't require "control". SEC said as much in a recent enforcement action that I hereby direct you, CT people, to immediately link to in a comment to this tweet.
21/ We pause here at 21, this hallowed number, to commemorate the giant on whose shoulders we all stand.
22/ But we continue because satoshi ain't the boss of me.
23/ We're mostly continuing into gross and weird territory though: ICOs, and dApps. FinCEN says ICO sellers could possibly maybe under some circumstances be MTs in the US, but only if they actually transmit money.
24/ FinCEN mostly speaks in jargon here so I'll boil it down: software development? not regulated. *deploying* software? still not regulated deploying software that transmits money? Very much regulated Not super helpful but as good as their guidance gets.
25/ What about ICOs? This is a tricky one. I'll be grateful if CT can help me to digest it but here goes:
26/ Simply premining and then publicly selling the premined coins (in an ICO or otherwise) *is not* money transmission. Pre-selling coins to a select group of individuals (whether or not you deliver in the future) *is* money transmission *unless you're selling a security*. Why?
26/ According to FinCEN, just premining and selling openly isn't really "acceptance and transmission" Premining and selling to a small group while the developer still controls the network means the developer is really an "issuer" and therefore an MT.
27/ Prelling a security, though, like SAFTS and SAFT+E, etc. is investment activity falling under the securities laws, not the MT laws. We talk about this in the SAFT project whitepaper. Good to see it from FinCEN, too.
28/ OK just a couple more and then we'll call it quits: Cloud miners: Not regulated unless they host a wallet Crypto Payment processors: Totes regulated almost always Tumblers & Mixers: If custodial, def regulated.
29/ What about multisig? If you have control over sufficient keys to spend, regulated. If you have sufficient keys to prevent spending, not regulated (wait wut why not?)
30/ There's much, much more, but I'm le tired, so I'll just leave it at this. I hope this thread is helpful. All reg guidance is imperfect but I think FinCEN did an admirable job of learning about a weird, complex topic and giving practical, actionable advice. Cheers!
In a period where: —political tensions escalate between US and China, —global equity markets fall sharply —VIX largest spike in many months —global yield curves flatten/invert #bitcoin has RISEN and >$6,000 Crypto showing its value as an uncorrelated asset.
Instead of a tweet storm about the FinCEN crypto guidance, I downloaded and annotated the entire thing. For those who actually would like to read the document, but may need some help in figuring out exactly which sentences/ sections matter. DL here :) katherinewu.me/writings/fince…
In regards to the SEC's digital asset framework: "While Howey has four factors to consider, the framework lists 38 separate considerations, many of which include several sub-points...contribute to the feeling that navigating the securities laws in this area is perilous business.
Re: the no-action letter (tokenized airline miles): "If these tokens were securities, it would be hard to distinguish them from any medium of stored value. Is a Starbucks card a security? If we are going that far, I can only imagine what name the barista will write on my coffee"
Pierce also echos the frustrations around the open questions for broker-dealers, trading platforms, Reg A issuers, investment advisers and funds: "The SEC's silence is likely to simply push this innovation & any attendant economic growth into other jurisdictions..."
Mic-drop ending: "The U.S. securities markets have historically been the envy of the world; I do not want heel-dragging by the SEC in crypto to mar that well-deserved reputation."
TL;DR: To my non-lawyer eyes, this looks like mostly bad news. Running a Lightning node requires a money transmission license. Oddly, providers of anonymity services are exempt. DEX operators (but not necessarily developers) are money transmitters.
Let me add a few other random thoughts.
First of all, this document is not a case of "the man" going after crypto, the tech. It is not a case of heavy-handed legislation. It is not a mindless attempt at a ban, of the kind that we have seen in other countries. It's a nuanced document, written by subject matter experts.
It is remarkable what the document does not do: it does not ban the tech. It does not ban any aspect of the technology that actually makes FINCEN's job harder. It leaves anonymity providers exempt, for instance.
It also does not burden or exempt anyone based on their status or title, like developer, wallet provider, etc. Instead, it has a very functional view: they are attempting to capture behaviors where someone has possession of value and helps transfer it.
They provide clarity for multisig wallets, and they seem to exempt multisig wallet providers. This is good. They believe hosted wallets qualify as MSBs, which is not new.
They exempt developers of DEXs and Dapps, insofar as they remain only developers. But they have an "operator" classification that does qualify a DEX operator as an MSB. If you're on the money transfer path and benefiting directly from the value exchange at the DEX, you're an MSB.
To my reading, the document qualifies every LN operator as an MSB. Given how similar LN is to hawala networks, and given the role hawala networks played in financing terrorism pre-9/11, this is not surprising, but it's at odds with the community's expectations.
There will be a lot of uproar over this issue, and many legal minds will look into the nuanced language in the document. Recall that this is a deleted document, that I'm not a lawyer, and therefore this is just a fun exercise with no binding power at the moment.
They also explicitly mention that mining payouts are exempt from MSB status, because that's part and parcel of a "hosted mining" service, but any additional services (e.g. token swaps where dirty coins are exchanged for fresh ones, come to mind) are not.
The bit about hosted mining still leaves a bit of a loophole: hosted mining can still be used for money laundering. Regardless, I think everyone will appreciate the clarity. And the document circumscribes the services that can be provided by miners.
27 Apr, 2019
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