tl;dr
• Reuters says Binance has a concerted effort going on to avoid regulatory scrutiny by the SEC• Optimism bridge is still in the crosshairs as hacker withdraws 200M fake BitBTC• Jack Dorsey unveils his Authenticated Transfer (AT) Protocol, does it mean anything?• Coinbase executive says Bitcoin spot ...
• Reuters says Binance has a concerted effort going on to avoid regulatory scrutiny by the SEC
• Optimism bridge is still in the crosshairs as hacker withdraws 200M fake BitBTC
• Jack Dorsey unveils his Authenticated Transfer (AT) Protocol, does it mean anything?
• Coinbase executive says Bitcoin spot ETF is inevitable, but regulators are dragging
• IRS subtly changes language to broader term "digital assets" to include NFTs
• Buffet-backed Brazilian Nubank to create new crypto on Polygon
Reuters has dropped a bombshell report about shady dealings at Binance. Here is what is on my mind today.
1. Reuters has published the results of an investigation into Binance. No one should be surprised, but a lot of people are being put on notice. The rumors have been looming over the heads of Binance executives for years now. The report says there was a plan to insulate itself from the SEC. Just like anything else, things sooner or later fall apart. When you have a mass exodus of a Compliance team you know something is afoot. The article identifies things like a backdated document, forged documents and more that all point toward a concerted effort by the Binance team to mislead regulators around the world. Now we know why they are scrambling to put together a global team to try and clean it all up.
2. Suffering over $2.5B in hacks I do not trust bridges. Optimism bridge currently dealing with a hack that produced 200 million fake BitBTC. They have a 7-day window of opportunity to minimize the damage. This is because of how bridges work. Truth be told, I don't even care. Until bridge technology can secure itself I tell my kids to stay away.
3. Jack Dorsey unveils his Authenticated Transfer (AT) Protocol. The technology is meant to allow users to communicate across blockchains using simple addresses like @yourename instead of long cryptographic addresses. The technology is built as a federated network and meant to allow users to control their information across various social platform projects. At best, I will say it is cute, but there is still the question of speed of communication. It is a major problem because everything is a transaction, including likes, shares, messages, replies, etc. The next level social platform whose experience is actually controlled by the users is a very long way off. Projects will get close, but I am still not convinced there is a Web3 opportunity there.
4. John D’Agostino, a senior advisor at Coinbase, says the introduction of a spot Bitcoin ETF is inevitable. I think we all know that. The US regulators have been dragging their feet and even thwarting innovation for some time. Things are heating up for the SEC to get its act together. Gary Gensler has been catching it from all kinds of politicians and industry leaders for some time. There is also mounting support for Grayscale's lawsuit against the agency with 4 industry associations joining the fray via an amicus brief requesting a reversal from the SEC and approve the spot Bitcoin ETF request.
5. The IRS expands 2022 tax language to include NFTs. They change language from "virtual currency" to "digital assets" with the latter being the broader term. The draft now states you will have to report any taxable income “if you disposed of any digital asset in 2022, that you held as a capital asset, through a sale, exchange, gift, or transfer,…”. Be mindful of your dealings and start preparing for your next tax filing now.
6. Way back in February I told you how Charlie Munger likened crypto to a venereal disease. Of course, it was after he and Warren Buffet invested $1B in Nubank. Today, Nubank just disclosed they will be launching their own cryptocurrency on Polygon.