CoinDesk Crypto

The exploding decentralized finance (DeFi) space is now firmly on the radar of regulators and concerns are growing that it could become a magnet for criminal or nefarious activity, according to blockchain analytics provider CipherTrace.

DeFi has grown from a science project into a $11 billion market, one in which there appears to be almost zero know-your-customer (KYC) provision and a considerable risk of potential manipulation.

DeFi is such a young space, it’s hard to tell whether the sort of money-laundering activities typically associated with cryptocurrency mixing services will migrate there. But preliminary findings after the recent KuCoin hack suggest this new generation of decentralized exchange (DEXs) could be added to crypto mixers as an attractive service for crooks, said CipherTrace CEO Dave Jevans.

Related: Why Hardnosed Bitcoiners Should Learn to Love DeFi

“I think there’s a lot of concern that these platforms can be used as effectively the next generation of money-laundering mixing services,” said Jevans. “If I can put my stuff into a DeFi contract, it gets mixed up with other people’s money when it comes back out. Because there’s no tracing and there’s no KYC, it effectively is operating as an old-school crypto money-laundering service.”

In the case of the KuCoin hack, the thieves used five DEXs – Uniswap, Kyber Network, DEX.AG, Tokenlon, and 1inch.exchange – and have so far sold over $17 million in tokens that could be frozen by the owners of their respective projects, according to analysis by crypto sleuthing service Elliptic.

Read more: Ocean Protocol Forks to Retrieve Tokens Stolen From KuCoin Exchange

But while these DeFi services are acting as a useful layer to exchange tokens, they are not actually covering the hacker’s tracks at this stage, said Elliptic co-founder Tom Robinson.

Related: Record $166M Ethereum Fees Last Month Were 6 Times Bigger Than Bitcoin’s

“The hacker isn’t using DEXs to hide their tracks, they’re doing it so they can sell their stolen tokens,” Robinson said via email. “The token issuers (Tether, Ocean Protocol, etc.) are freezing accounts or reversing transactions associated with the stolen funds in order to aid their recovery. So the hacker needs to convert them into something like ether, which is much less likely to be taken from them.”

On mixers

Speaking hypothetically, there are some other interesting reasons why DeFi could benefit potential money launderers, said Jevans of CipherTrace. Ironically, interacting with a smart contract (computer programs that run on top of blockchains, and on which DeFi is based), could provide a layer of safety and security for the hacker, Jevans said.

“Because these are contracts, it’s much harder to get ripped off,” said Jevans. “Some of the mixing services, when they get sufficient volume, they pull an exit fraud and just basically stop working. That’s the way a bunch of these guys make money; they’ll charge low fees on mixing and wait until there are a few tens of millions in the hopper, then they just take off.”

Another risk for criminals using crypto mixers is the chance the service itself gets busted by law enforcement and the funds are seized. 

Read more: ‘Inherently Borderless’: Acting OCC Chief Talks Crypto, State Licenses and DeFi

“We’ve seen a number of seizures and arrests. Well, if your money was in there at the time, I assure you, you’re not getting it back,” Jevans said.

And despite the fact that gas fees on Ethereum-based DeFi apps are becoming ridiculously high, it’s still cheaper than using a mixer, Jevans added.

“Mixers are expensive,” he said. “DeFi platforms present less risk and the fees are less, too. In my view, a DeFi platform is also better because you’re mixing your bad funds with a lot of good funds,” Jevans said, adding:

“I would argue that mixers – and this is just my opinion – have a disproportionately high amount of criminal activity going through them. Whereas DeFi has a lot of people who want to get in on the next investment trend.”

DEXs are very different from mixers because the flow of funds through them is clear to see on the blockchain, said Robinson of Elliptic.

“Mixers are used to break the blockchain trail by making it difficult or impossible to link incoming funds to outgoing funds,” Robinson said. “In contrast, this is very easy to do with DEXs – the operation of the smart contract is auditable on the blockchain, so the incoming transaction in one asset and the outgoing transaction in another asset, are clear to see.”

No KYC

DeFi platforms contribute a particular black spot on the overall crypto KYC landscape, the general topic of the report released Thursday by CipherTrace. But DeFi is undoubtedly on the regulatory radar, as evidenced by recent comments from U.S. Securities and Exchange Commission (SEC) crypto czar Valerie Szczepanik. 

“We’ve seen [DeFi] projects that are subject to vulnerabilities, attacks, hacks, manipulation,” Szczepanik said at the Parallel Summit on Sept. 18, 2020. “We’ve seen structures that purport to enable users to lend money, earn interest, borrow money, exchange, take positions; these are all financial activities and they are likely subject to various laws already, including securities law, potentially banking and lending laws – definitely AML/CTF laws.”  

So are DeFi platforms thinking about adding KYC at any point in time? Jevans doesn’t think so.

“From what we have experienced over the last couple of months is that they don’t want to have anything to do with KYC,” Jevans said. “They just say they are writing software and, while they get beneficial funds from it, they are not ‘operating’ it. But it’s interesting to see what the governance of the platforms is, which often happens to be from venture capital-backed companies.”

Read more: DeFi Is Just Like the ICO Boom and Regulators Are Circling

Indeed, the CipherTrace report suggests this could be an avenue a regulator like the SEC might pursue, especially when faced with a U.S.-domiciled firm like Uniswap inhabiting a kind of decentralized lacuna. 

“While the operations of DeFi exchanges are decentralized, the scale of the governance decentralization varies greatly. For instance, Uniswap – located in San Francisco – has received venture investment capital from Andreessen Horowitz and Union Square Ventures,” states the CipherTrace report. 

Andreessen Horowitz and Union Square Ventures did not return requests for comment by press time. 

“So there is a place to go if you are a lawmaker or a regulator,” said CipherTrace’s Jevans. “At the end of the day, all of the governance is centralized by a for-profit company.”

Related Stories

• DeFi Buzz Drove Record $12M Earnings This Summer, Says Ethereum Miner HIVE Blockchain
• MakerDAO Adds Chainlink, Compound, Loopring as Collateral Options

Multi-asset exchange eToro is launching a new service that will offer rewards for “staking” tokens, beginning with TRON and ADA.

• The trading platform announced Thursday that the service, one of the first to offer staking for Cardano’s native ADA token, will go live later this month.
• eToro will effectively execute the staking on behalf of its users.
• Compared to proof-of-work protocols, which rely on miners running powerful computer hardware to confirm transactions, proof-of-stake (PoS) networks rely on the users themselves to stake, or lock up, their tokens and provides rewards for confirming transactions.
• eToro’s service is aimed to make staking more accessible for everyday users, the firm said in a statement. The exchange will email reports to users showing how much income they’ve made on a monthly basis.
• A spokesperson told CoinDesk the service will be free of charge for eToro clients.
• The number of fully functioning PoS networks is growing. Cardano, which has a market cap of $3.25 billion, launched its “Shelley” staking protocol in late July.
• The month before, Coinbase Custody announced plans to offer secure Cardano staking sometime in Q4 2020.

See also: DeFi Meets Universal Basic Income With Just-Launched Project From eToro

Related Stories

• Record $166M Ethereum Fees Last Month Were 6 Times Bigger Than Bitcoin’s
• DeFi Buzz Drove Record $12M Earnings This Summer, Says Ethereum Miner HIVE Blockchain
• Australia to Spend $575M on Tech Including Blockchain to Boost Pandemic Recovery
• Twitter’s Dorsey Calls Out Coinbase CEO for Ignoring Users’ ‘Societal Issues’

Bitcoin faced selling pressure in September as the U.S. dollar rose against major currencies for the first time in six months.

• Bitcoin fell by over 7% over the period, the biggest monthly percentage decline since March, according to CoinDesk’s Bitcoin Price Index.
• Back in March, prices fell by nearly 25% as the coronavirus-induced crash in the global equity markets triggered a global dash for cash, sending the dollar higher.
• Bitcoin’s latest monthly decline is again accompanied by an uptick in the greenback.
• The Dollar Index (DXY), which tracks the greenback’s value against majors, gained nearly 1.8% in September – the first monthly rise since March.
• “BTC seems to be sensitive to a stronger dollar in the short term,” Mike Alfred, CEO of Digital Assets Data, told CoinDesk in an email.
• Bitcoin has moved largely in the opposite direction to the DXY since the coronavirus crisis slammed markets in March.

• The top cryptocurrency by market cap, bitcoin rallied from $3,867 to $12,400 in the five months to mid-August before falling back to $10,000 last month.
• Heading the opposite way, the DXY topped out at 103.00 in March and fell to a 16-month low of 91.75 in August. The index rose back above 95.00 last month.
• The S&P 500, Wall Street’s equity index, and gold have moved more or less in lockstep with bitcoin over the past 6.5 months.
• However, these correlations may be coincidental, according to Alfred – that is, the dollar has been influencing price action in the major markets as well as bitcoin.
• The Federal Reserve’s massive liquidity injections drove the dollar lower in the second quarter and the majority of the third quarter, yielding a rally in all major assets priced in the greenback.
• As such, the DXY’s corrective bounce in September put pressure on bitcoin, gold, and equities. The greenback looked at its most oversold in nearly 40 years during August.

Looking forward

• Long-term sentiment remains bullish, as evidenced by a continued decline in the number of coins held on exchanges – a sign of investors shifting to holding strategies.
• In the short run, the cryptocurrency could continue to take cues from the U.S. dollar and the stock markets.
• “We can’t ignore the greenback's breakout from its recent consolidation and expect a continued rally in the dollar to weigh over BTC,” said Matthew Dibb, CEO of Stack Funds.
• Additional bearish pressure may emerge from potential outflows from tech-heavy stocks and the Nasdaq, Dibb added.
• According to a tweet from chart analyst and trader Josh Rager, bitcoin’s late September recovery from $10,000 to $10,800 has kept the bullish price structure intact.
• Rager now foresees a green month for markets in October ahead of the U.S. elections.
• At press time, bitcoin is trading near $10,888, up 1.93% on the day.

Also read: Bitcoin May Return to Center Stage After Ethereum’s White-Hot Summer

Related Stories

• First Mover: Nine (Bullish) Bitcoin Predictions for Final Months of (Awful) 2020
• Why Hardnosed Bitcoiners Should Learn to Love DeFi
• Market Wrap: Bitcoin Retests $10.8K; Total Value Locked in DeFi Hits $11B
• First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

Blockchain services firm Diginex has become the first crypto exchange operator to list on Nasdaq. The stock went live Thursday morning under the EQOS ticker symbol, a nod to the firm’s EQUOS.io trading platform.

• Diginex’s back-door listing came through a merger with a special-purpose acquisition company (SPAC) called 8i. 
• After raising private capital and redeeming shares of the SPAC, the company now has $50 million in capital for strengthening its balance sheet and investing in the business.
• Diginex CEO Richard Byworth said he expects a mix of global retail and institutional investors to buy shares. Over time, he expects the majority of Diginex shareholders to be U.S. investors because of the Nasdaq listing.

Read more: Diginex Going Public Is About More Than a Nasdaq Ticker Symbol

Related Stories

• KuCoin Maintains Wallet Freeze as Hackers Begin Laundering Stolen Crypto
• Bitcoin Balances on Exchanges at 2-Year Low and That May Be a Bullish Sign
• Over $150M Drained in KuCoin Crypto Exchange Hack
• Russian Web Censor Tells Binance It’s Been Blacklisted – Three Months Late

In the latest effort to smooth a path for buttoned-up investors, Talos, an institutional-grade conduit to the crypto ecosystem, is emerging from stealth mode to serve brokers, custodians, exchanges and over-the-counter (OTC) trading desks.

The platform started out in 2018 and is backed by an impressive list of investors including Autonomous Partners, Castle Island Ventures, Coinbase Ventures and Initialized Capital. 

Over the past year or so, Talos has been quietly onboarding a core group of capital market participants so that the platform can make its debut in a revenue-generating state, said Anton Katz, the firm’s co-founder and CEO.

Related: This Ethereum Startup Is Building a ‘DeFi Firewall’ for Institutional Investors

“It’s not that we were really hiding, but it’s just that we come from a capital markets background and would tend to shy away from talking about things before they are ready; when you’re selling to institutions that can be frowned upon,” Katz said in an interview. “Now I think we have reached a good point, working with a good set of customers and the platform is in a more mature state.”

Talos provides tools to support clients through the full trading lifecycle, from price discovery through to clearing and settlement, the company said.

Read more: Behind ‘Prime Broker’ Buzzword Lies a Complex Strategy Game for Crypto Firms

“One of the biggest keys to widespread institutional adoption of digital assets is a technology infrastructure that unites all market participants and gives them the confidence to operate at scale,” Arianna Simpson, founder of Autonomous Partners, said in a statement. “That is exactly what Talos has built, and we are excited to help them realize their ambitious launch and growth plans.”

Institutional herd 

Related: Bequant, Now in Crowded Prime Brokerage Race, Adds Signature Bank Integration

The last couple of years have seen much talk about an institutional herd moving imminently into crypto; how has this landscape changed in that time and have these expectations been met?

“I think it’s important to keep in mind that the institutional sector does not have an on/off switch,” said Katz. “It’s not like they’re either in or out. There are really a couple of different groups of institutions, some of them are a little bit more risk-averse, some of them less, and what we are seeing right now are less risk-averse players becoming the early adopters.”

Read more: This Ethereum Startup Is Building a ‘DeFi Firewall’ for Institutional Investors

The design requirements for crypto platforms are quite different from regular capital markets, Katz explained. On the pre-trade side of things, when compared to capital markets the data being collected for crypto is a lot less reliable and has to be collected in multiple places and cleaned properly. 

In terms of trading there are things like a treasury management aspect, so moving capital between different exchanges, which again is something that doesn’t really exist in capital markets. While on the post-trade side, capital markets are much more secure and standardized.

“I would say you don’t have to be as defensive when you’re building your platforms in capital markets as you do in crypto,” said Katz. “The precision that you need with every single trade, it calls for completely different system design.”

Related Stories

• Institutional Trading House ErisX Joins Silvergate Exchange Network
• Crypto Lender Nexo to Enter Prime Broker Race, Enlists Chainlink for Audits

Ethereum miners earned over six times more in fees compared to those working on Bitcoin in September.

• Glassnode data shows Ethereum’s total transaction fees stood at an all-time high of $166 million for the month – far more than the $26 million taken in Bitcoin fees.
• Ethereum fees long trailed those on Bitcoin, but have been on a tear over the past few months as surging interest in DeFi led to record transaction volumes.
• Fee revenue on Ethereum first outpaced Bitcoin’s in June – the same month decentralized lender Compound released its governance token and kick-started the DeFi mania.

• As the DeFi space picked up momentum, the difference between Ethereum and Bitcoin fees has increased from only $10 million in June to well over $70 million by August.
• Thursday’s data shows the fee disparity between the two protocols practically doubled to $140 million in September.
• Monthly Ethereum fees were just $1.5 million at the start of 2020.
• This coincides with total value locked (TVL) in DeFi, which first broke the $1 billion in February but surged over the summer to well over $11 billion, according to DeFi Pulse.
• HIVE Blockchain cited DeFi as a major contributing factor when reporting it earned approximately $12 million in fees in the second fiscal quarter, 30% up from Q1.

See also: DeFi Summer; Bitcoin Fall

Related Stories

• First Mover: Nine (Bullish) Bitcoin Predictions for Final Months of (Awful) 2020
• CipherTrace Outlines Regulatory Gray Zones Plaguing Booming DeFi Sector
• eToro to Offer Staking Rewards for Holders of TRON and Cardano
• Why Hardnosed Bitcoiners Should Learn to Love DeFi

HIVE Blockchain has reported its best-ever quarter, as the mining firm raked in record fees from the frenzied activity in decentralized finance (DeFi) over the summer.

• The Toronto-listed mining company released its unaudited results Thursday, saying it mined a total of 32,000 ether (ETH) and 121,000 ethereum classic (RTC) in the second fiscal quarter ending Sept. 30.
• Per CoinDesk's price data, that comes to nearly $11.8 million for mining ether, and a further $664,000 for ethereum classic – approximately $12.4 million at time of writing.
• The figures represent a near 30% increase from the 25,000 ETH that HIVE mined in the first quarter and a 50% increase on the same quarter in 2019.

• HIVE said it currently costs around $150 to mine a single ether. Based on September’s average ether price of $343, the company made approximately $193 in gross profit.
• Going by the amount processed across the fiscal quarter, HIVE – which expanded its ETH mining capacity by 20% in March – made roughly $614,000 from ether.
• HIVE attributes its bumper quarter to the fees charged over the summer, when surging interest in DeFi led to record transaction volumes on Ethereum.
• As fees for processing transactions increase with volume, miner revenue increased considerably over the summer.
• CoinDesk reported last month that miners made an estimated $16 million in a single day for confirming DeFi-related transactions on Ethereum.
• Before the announcement, HIVE shares closed 5% down yesterday at 0.35 CAD ($0.26).

See also: Ethereum Transaction Fees Set a Record Once Again as DeFi Becomes Even Pricier

Related Stories

• Record $166M Ethereum Fees Last Month Were Six Times Bigger than Bitcoin’s
• Australia to Spend $575M on Tech Including Blockchain to Boost Pandemic Recovery
• Twitter’s Dorsey Calls Out Coinbase CEO for Ignoring Users’ ‘Societal Issues’
• MakerDAO Adds Chainlink, Compound, Loopring as Collateral Options

Australian Prime Minister Scott Morrison has announced that the federal government has set aside nearly A$800 million (US$575 million) to invest in digital technologies as part of its coronavirus recovery plan.

• Morrison announced the news Tuesday, saying that the funding is aimed to help the country’s businesses recover from the economic effects of the COVID-19 outbreak, as well as create more jobs.
• While Australia hasn’t been hit as badly as nations like the U.S. and India by the virus, it’s still seen around 27,000 cases and nearly 900 deaths in total, according to its official figures.
• After seeing growth for a record 30 years, the coronavirus has now tipped the country into a recession as lockdowns sent spending spiraling.
• The US$575 million investment, to be concreted in the 2020 budget, is part of Morrison’s plan to bounce back from the pandemic.
• In the announcement, he sets out that varying amounts will be spent on different prongs of the plan, including:
• $256.6 million on a digital identity solution that will make it easier and more secure to interact with government services (and later, the private sector).
• $419.9 million to fully implement the Modernising Business Registers (MBR) program.
• $22.2 million will go to help small businesses utilize digital technologies through tools and training made available under the Australian Small Business Advisory Service.
• Blockchain technology gets a specific mention with a $6.9 million initiative that will see two pilots aimed to cut business compliance costs.
• Other prongs include the accelerated rollout of 5G and industry trials of the technology, a “regulatory technology commercialisation initiative” to improve compliance and support digital technology companies, and an effort to mandate the adoption of electronic invoicing by 1 July 2022 for government agencies.
• “The Plan supports Australia’s economic recovery by removing out-dated regulatory barriers, boosting the capability of small businesses and backs the uptake of technology across the economy,” the prime minister said in the announcement.

Also read: Ex-Employee at Australian Science Agency Avoids Prison After Mining Crypto on Supercomputers

Related Stories

• Record $166M Ethereum Fees Last Month Were Six Times Bigger than Bitcoin’s
• DeFi Buzz Drove Record $12M Earnings This Summer, Says Ethereum Miner HIVE Blockchain
• Twitter’s Dorsey Calls Out Coinbase CEO for Ignoring Users’ ‘Societal Issues’
• Blockstack’s Clarity Smart Contracts Will Source Data From Chainlink Oracles

Twitter CEO Jack Dorsey tweeted his disapproval of Coinbase CEO Brian Armstrong steering his company away from corporate activism.

• Armstrong wrote in an open letter published Sunday that Coinbase had “an apolitical culture,” and that the exchange would not engage in “broader societal issues” or entertain employee discussions about it.
• After the letter, Armstrong circulated a company-wide memo informing Coinbase employees that if they did not like the policy they could take a “generous” severance package instead.
• Twitter CEO Dorsey responded that by the very act of being a crypto exchange, Coinbase was already activist by definition and there’s no point in pretending otherwise.
• “Bitcoin (aka ‘crypto’) is direct activism against an unverifiable and exclusionary financial system which negatively affects so much of our society. Important to at least acknowledge and connect the related societal issues your customers face daily. This leaves people behind,” Dorsey tweeted.
• The back and forth comes at a time when tensions in the U.S. are boiling over with COVID-19, civil unrest and now a heated presidential race between incumbent President Donald Trump and former Vice President Joe Biden.

Read more: Coinbase Offers Severance Package to Employees Unsatisfied With ‘Apolitical’ Mission

Related Stories

• Blockstack’s Clarity Smart Contracts Will Source Data From Chainlink Oracles
• SEC Alleges Big-Talking Florida Crypto Investor Defrauded Clients of $6.8M
• BitFlyer Opens Japanese Bitcoin Market to European Traders
• Data Management Startup Fluree Unlocks $1.5M Air Force Contract With Latest VC Raise

A U.S. judge ruled Wednesday that Kik violated securities law when it raised $100 million via a token sale in 2017.

Judge Alvin Hellerstein, a U.S. district judge for the Southern District of New York, wrote that in his view, Kik’s “token distribution event” (TDE) satisfied the three prongs of the Howey Test, referring to the Supreme Court case used as a standard for determining whether the sale of something is a securities sale. The Securities and Exchange Commission (SEC), which filed the suit against Kik last year, maintained that the messaging platform’s Kin token sale was an unregistered securities offering while Kik claimed it was not.

“Kik concedes that its issuance of Kin through the TDE involved an investment of money by which participants purchased or acquired Ether and exchanged Ether for Kin. Thus, the parties agree that the first element of the Howey test is satisfied,” he said in the 19-page ruling. “The parties dispute whether the second and third elements are satisfied. I hold that that they are.”

Related: SEC Alleges Big-Talking Florida Crypto Investor Defrauded Clients of $6.8M

Initial coin offerings (ICOs) and token sales have been treated as unregistered securities sales for the most part by the SEC, which has filed suits against numerous startups and companies, including Telegram, another messaging company that raised a mammoth $1.7 billion.

Many of these cases use Howey, which says something might be a security if there is an investment of money in a common enterprise, with the expectation of profit, primarily from the efforts of others.

Judge Hellerstein wrote Wednesday that Kik “extolled Kin’s profit-making potential,” satisfying one of the prongs, and that Kik “pooled proceeds from its sales of Kin in an effort to create an infrastructure for Kin, and thus boost the value of the investment.”

Read more: The SEC Case Against Kik’s ICO Appears Strong, Experts Say

Related: SEC Orders Salt Lending to Offer Refunds to Investors in Its $47M ICO

This satisfies another prong, he said.

In a statement, Kik CEO Ted Livingston said he was “disappointed in this ruling,” and that the company is considering its options, including a potential appeal.

“To be clear, Kik has always supported the Commission’s goal of protecting investors, and we take compliance seriously. In preparing for the sale of Kin, Kik retained sophisticated counsel (both in the United States and internationally) to analyze the law as we understood it, and we continue to believe that the public sale of Kin was that of a functional currency and not a sale of securities,” he said.

Read more: The 8 Biggest Bombshells From the SEC’s Kik ICO Lawsuit

Livingston added that the ruling would not impact kin.

Kik general counsel Eileen Lyon took aim at the SEC in a statement, saying the agency “should engage in proper rulemaking, including the opportunity for public commentary, rather than force our industry to hunt for regulatory clues among the SEC’s conflicting statements, Commissioner and staff speeches, no-action letters, closed-door meetings with the SEC and nonprecedential settlements.”

The parties have until Oct. 20 to file either a joint proposal for providing relief to Kik’s investors, or a document explaining their positions on how to proceed.

Related Stories

• SEC Seeks Trial of Swedish National Over Alleged Fraud That Took $3.5M in Crypto
• SEC Won’t Take Action Against Compliance-Focused Digital Security Exchanges

The MakerDAO community has voted to add support for a trio of new tokens for the decentralized finance (DeFi) loans that generate DAI stablecoins.

Vaults are now open for deposits of Chainlink’s LINK, Loopring’s LRC and Compound’s COMP. Community members pitched proposals to add the tokens this summer and voted for their integration via Maker’s on-chain governance platform this week.

Counting this new crop of collateral options, MakerDAO has added 11 new DAI vault pairs this year. The other tokens, MANA, WBTC, ZRX, KNC, TUSD, PAX, USDC and USDT, were added partly in response to DAI losing its $1 peg, as the extra collateral was meant incentivize collateralizing more DAI to drive its price down.

Related: Market Wrap: Bitcoin Retests $10.8K; Total Value Locked in DeFi Hits $11B

In a recent bid to rectify DAI’s peg instability during DeFi’s yield farming craze, the Maker community voted in a proposal to lower the collateralization requirements for DAI’s primary USDC vault to pump more DAI into the market. Since the proposal’s implementation, DAI’s price has dropped to $1.01.

Speaking to CoinDesk about proposals to keep DAI’s peg steady, MakerDAO founder Rune Christensen said there is “no other option but to onboard more collateral.”

Currently, USDC is the most popular collateralization option for DAI with 372 million USDC locked. 

Read more: ‘No Other Option but More Collateral’: The Short- (and Long-) Term Fixes for Dai’s Broken Peg

Related Stories

• DeFi Summer; Bitcoin Fall
• Blockstack’s Clarity Smart Contracts Will Source Data From Chainlink Oracles
• First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

Encryption startup NuCypher has finished distributing its network’s native token, NU, to over 2,000 prospective node operators who staked more than $125 million worth of ether (ETH) during the month of September. NuCypher’s system will hit Ethereum’s mainnet on Oct. 15.

Primarily marketed as a solution for developers building decentralized applications (dapps), NuCypher helps firms encrypt data before they upload it to decentralized storage networks, while also retaining control over who can read the data once its uploaded (using an advanced form of flexible cryptography called proxy re-encryption). 

On the other side, participants who run the network’s nodes earn fees in return for performing cryptographic functions and maintaining the network. To participate, nodes need to stake NuCypher’s token, NU. The company needed a way to distribute NU to entities it might reasonably expect to participate once it goes live, and the solution it came up with was called “WorkLock.”

Related: Thirst Traps Explode on NFT Platforms, With Predictably Controversial Results

Under NuCypher’s WorkLock token distribution program, participants looking to run nodes were required to lock in a minimum of 5 ether (worth roughly $2,000 depending on when the ETH was committed). It also requires the staked ETH stay locked for a minimum of six months, starting the day the mainnent launches. The onerous collateral requirement levied on aspirant node operators was meant to dissuade users from claiming NU tokens and not participating in the network.

While participants can choose to stay or leave with their escrowed ETH after the six months pass, if they attempt to withdraw earlier or act maliciously, they would have to forfeit the staked ETH. 

Read more: Polychain, Bitmain Back $10.7 Million SAFT for Encryption Startup NuCypher

“What it allows you to do is stake or escrow ETH into this WorkLock smart contract. You lock it up for six months from mainnet launch and that grants you this new stake that you can use to operate a new NuCypher node,” co-founder MacLane Wilkison said in an interview.

Related: First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

Last October, NuCypher announced the completion of a  $10.7 million token sale from investors such as Polychain Capital, Bitmain, CoinFund, Arrington XRP Capital, Notation Capital and others.

Wilkinson founded the company alongside Michael Egorov, who also founded the popular automated market maker for stablecoins Curve.

Related Stories

• Kadena Looks to Capture DeFi Energy With New Decentralized Exchange
• First Mover: Binance CEO Sees Future in DeFi While Bitcoin Volatility Turns Minuscule

Sexy selfies and feminist GIFs are selling like hotcakes on non-fungible token (NFT) markets, but not everyone is thrilled about this trend.  

Blockade Games co-founder Marguerite deCourcelle, who sold more than $160,000 worth of NFTs before the NFT craze really kicked off in August 2020, launched a cypherpunk self-portrait NFT in early September and said she intends to explore more “personal tokens” over the next year. 

“I brought in about $20,000 in a month. I haven’t really focused on selling personal NFTs as a part of my business model,” deCourcelle said. 

Related: Prospective Node Operators Stake $125M in ETH to Participate in NuCypher Encryption Network

She marketed the campaign with photos of herself, portraits that clearly required styling and editing skills, which predictably attracted trolls and harassment on social media. Some trolls suggested models can’t be trusted, the infamous temptress trope, comparing deCourcelle to beauty queen Jessica VerSteeg, who is being charged with fraud. But deCourcelle wasn’t deterred. 

“The bitcoiners that see me with a personal token are outraged that I’m … selling a scam with ‘my good looks.’ Most of my supporters and fans enjoy that I’m so front and center,” she said in an interview. “It brings more transparency as I try to be more personable and engaging.”

Read more: The Inevitable Marriage of Yield Farming and NFTs, Explained

She said haters suggest she must choose to either be a model/influencer or a developer/designer, as if she couldn’t be both. Like many different types of influencers, crypto influencers often market by modeling, which plays out across social media instead of fashion magazines and runways. 

Related: First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

For example, Rachel “CryptoFinally” Siegel collaborated with a variety of artists using Rarible in September to issue dozens of NFTs inspired by her selfies. She said one of her NFTs sold for hundreds of dollars worth of crypto, 1 ETH, and another of her NFTs is a lingerie photo titled “I’m in it for the money,” listed for $3,614 worth of ETH. 

Siegel said she hasn’t cashed out any of her earnings yet. Instead, she uses them to mint new NFTs, buy collectibles from other artists and pay for other types of transactions. Many of these pieces are complex images, not simple selfies, all using her general vibe and features. 

“The selfies are representative of new demographics starting to enter [the NFT market],” Siegel said.

Some crypto-savvy women are now using NFTs to profit from their public image, selling to fans who understand they’re basically paying a tribute to the creator in exchange for a blockchain-based receipt. If sex workers can sell bathwater or socks, and podcasters can sell stickers, why can’t crypto influencers sell blockchain receipts? 

In response to the haters, who call these women vain and accuse them of harming the industry, Siegel tweeted: “if my selfies alone have the power to destroy crypto then honestly let it burn boys lmao let it burn.”

Gendered markets

While some women find new conduits for artistic expression in NFT markets, others are dismayed to find their images used by strangers. 

For example, the web developer and painter who goes by Ashtoshi said her bikini selfie was put up for auction via Rarible, without her consent, for over $1,051 worth of crypto. 

Although it may be unlawful for a stranger to profit from her misappropriated image, depending on the source, Ashtoshi herself struggled to get support from the platform to sell her art. She’s one of the critics who thinks selfie NFTs are silly. 

“While, of course, my pictures were posted publicly on my Twitter, to have them taken from my page and then attempt to be sold with promises of ‘writing a person’s name on my boobs,’ etc., is a bit unsettling,” Ashtoshi said in an interview. “It’s unfortunate because I did ask to be verified on Rarible the same day I posted my art – but it never happened.”

Read more: The Fast-Growing NFT Market Is Problematic Yet Promising

Women in the crypto community don’t have a choice whether people will attempt to profit from their sexuality. They only have (limited) legal options to fight it like a cat-and-mouse game. This is a tale as old as time, where predominately male circles demean women profiting from their own image as the artist and owner, rather than the passive muse. As a painter who did not want to sell sexy selfies, Ashtoshi said she was disappointed by this dynamic. 

“I won’t be posting anything else on Rarible or using the platform for anything from here on out,” Ashtoshi said. “While the idea of NFTs is super fascinating, I think there absolutely has to be some type of verification measures put in place to guarantee that what you are purchasing is an authentic piece of art.”

Ironically, a blockchain receipt only proves authenticity if the artist (or trading platform) invests legal resources to defend personal brands. No one suggests male influencers “deserve” to have selfies misappropriated, the way women are slut-shamed for selfies taken from Twitter. Some might say the self-portrait NFT trend is part of a wider push by feminist crypto fans to destigmatize self-soveriengty, especially with regards to the female body. 

Read more: ‘Crypto Instagram’ Is Becoming a Thing, Scams and All

Crypto-savvy artists like Kitty Bast, Kamil Juaregui and Caroline Dy blur the lines between evocative portraits and digital collectibles. 

Ashtoshi said she wished she had posted her painting NFTs anonymously, to avoid her debacle. Other artists use anonymity to court controversy, such as the team called ButerinSisters (after Ethereum creator Vitalik Buterin). They made a clitoris GIF NFT for roughly $54, which was traded by several collectors. ButerinSisters said they met other feminists in the space by promoting this NFT, and hope to playfully educate a few men as well. 

“We are feminists and when we discovered the Rarible platform we realized that there were mostly creations made by men and for men, it seemed interesting to us to show feminine creations,” ButerinSisters said in an interview. “We want to use the web 3.0 technology to fight [the patriarchy] and develop feminists representations with decentralized infrastructure, which cannot be censored. … Anatomy is political.”

Related Stories

• Kadena Looks to Capture DeFi Energy With New Decentralized Exchange
• First Mover: Binance CEO Sees Future in DeFi While Bitcoin Volatility Turns Minuscule

Shares of Canaan Creative, one of the few publicly traded cryptocurrency mining equipment manufacturers, closed the July period down only 2%, a negligible decline given they ended the preceding three quarters down double digits.

• While the company’s shares have never ended a quarter on a positive noted since their Nasdaq listing in November 2019, they recently showed signs of stabilizing.
• Since June, every trading session has closed in a tight one-dollar range between $1.75 and $2.75, according to data from TradingView. In November 2019, Canaan shares started trading around $12.60.
• After closing Q2 with a 38% drop in share price, the Hangzhou, China-based company posted a 160% quarter-over-quarter revenue increase, as CoinDesk previously reported.
• Still, Canaan’s lack of share price appreciation and continued operating losses reflect the fierce competition faced from MicroBT and Bitmain, said Ethan Vera, co-founder of Seattle, Wash.-based mining company Luxor Technology, in a private message with CoinDesk.
• Vera called the company’s latest ASIC miner a “step in the right direction” but noted the technology needs continued improvement “if they want to see any gains in market share.”
• And share price.

Related Stories

• MicroBT Sets Up First Offshore Bitcoin Miner Factory to Expand US Market Share
• Iran Is Ripe for Bitcoin Adoption, Even as Government Clamps Down on Mining
• Marty Bent on Why Bitcoin and Big Energy Are Unlikely Allies
• Jihan Wu Regains Upper Hand in Bitmain Co-Founder Fight

Bitcoin’s price tested $10,800 to close out September while despite some market deflation, investors continue pushing crypto into DeFi.

• Bitcoin (BTC) trading around $10,701 as of 20:00 UTC (4 p.m. ET). Slipping 0.27% over the previous 24 hours.
• Bitcoin’s 24-hour range: $10,657-$10,859
• BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin’s price dipped down to as low as $10,657 Wednesday, bouncing into the $10,800 range and settling to $10,701 as of press time. 

Read More: BitcoinACKs Lets You Track Bitcoin Development and Pay Coders for Work

Related: DeFi Summer; Bitcoin Fall

Jason Lau, chief operating officer of cryptocurrency exchange OKCoin, said that while bitcoin wasn’t able to hit fresh 2020 highs in September, he’s optimistic the cryptocurrency can still push upward heading into the fourth quarter of 2020. “Bitcoin’s price momentum is still positive, with its pullbacks leaving higher highs,” Lau told CoinDesk. “This is signalling a possible further continuation of this upwards move.”

Quantitative trading firm QCP Capital wrote in a September-capping investor note that bitcoin and ether were able to stay above “key” price points for the month, which it sees as a pragmatic sign. “The key support from the early month lows of $10,000 on BTC and $310 on ETH both saw substantial buying demand,” QCP wrote. “This prevented any cascading short gamma selling into quarter-end, which had been our fear if those levels broke.” 

Constantin Kogan, partner at cryptocurrency fund-of-funds BitBull Capital, noted a jump in the number of new entities on the Bitcoin network, its highest level since October 2018, as a sign of positive sentiment. New unique addresses in Bitcoin are described by data aggregator Glassnode as “entities that appeared for the first time in a transaction of the native coin in the network.”

“We’re seeing a spike in activity by new participants coming into BTC not yet reflected in price. It doesn’t happen often,” Kogan told CoinDesk regarding the new entities metric. “This is what traders call a divergence; in this case the trend looks more bullish.” 

Related: First Mover: Chainlink’s Sorry September Returns Shows DeFi Hysteria Deflating

Over in the bitcoin futures market, funding rates are now mostly in positive territory on major derivatives venues. This is a reversal from the past week and a sign bullish traders are again entering the market, according to OKCoin’s Lau.

“Bitcoin perpetual swaps funding rates have started turning positive,” Lau told CoinDesk. “This indicates that investors are more willing to go long at current price levels.”

DeFi crosses $11 billion locked

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Wednesday trading around $355 and slipping 0.32% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

The amount of cryptocurrency “locked” or held in decentralized finance (DeFi) protocols, topped $11 billion on Tuesday, according to data aggregator DeFi Pulse.

Almost 20% of the total locked is in decentralized exchange Uniswap, which despite declining volumes topped $2.29 billion in total liquidity on Tuesday. Alessandro Andreotti, a cryptocurrency over-the-counter trader based in Italy, said that although the DeFi market may be cooling since June’s explosion of protocol token launches, its ascension will continue – although perhaps at not so fast a pace. 

Read More: Compound, Gauntlet Founders Raise $4M for New DeFi Scout Fund

“I think DeFi will keep on growing, even though its growth until now has been parabolic,” said Andreotti. “Many new projects and exchanges are coming out right now, so I see no signs of it slowing down at this time.”

Other markets

Digital assets on the CoinDesk 20 are mostly in the green on Wednesday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

• bitcoin sv (BSV) + 4.3%
• orchid (OXT) + 1.8%
• litecoin (LTC) + 1.2%

Notable losers as of 20:00 UTC (4:00 p.m. ET):

• eos (EOS) – 1%
• dash (DASH) – 1%
• tezos (XTZ) – 0.26%

Read More: SEC Orders Salt Lending to Refund Investors in Its $47M ICO

Equities:

• Asia’s Nikkei 225 closed in the red 1.5% as consolidation in Japan’s telecommunication sector led stocks lower, dragging down the index.
• Europe’s FTSE 100 ended the day slipping 0.53%, pushed lower by bleak production forecasts from energy provider Royal Dutch Shell.
• In the United States the S&P 500 climbed 1% as talks continue in Washington on parameters for a new round of coronavirus-related economic stimulus.

Commodities:

• Oil was up 2.3%. Price per barrel of West Texas Intermediate crude: $40.05.
• Gold was in the red 0.50% and at $1,887 as of press time.

Treasurys:

• U.S. Treasury bond yields all climbed Wednesday. Yields, which move in the opposite direction as price, were up most on the 10-year, jumping to 0.687 and in the green 5.8%.

Related Stories

• Reef Finance Raises $3.9M for Cross-Chain DeFi on Polkadot
• DeFi ‘Vampire’ SushiSwap Still Hemorrhaging Liquidity

With the first Trump–Biden debate now smoldering behind us, the betting markets have picked their winner. That also means they’ve decided on a loser: President Donald Trump.

Tuesday marked the first time the incumbent squared off face-to-face against his rival, Democratic nominee and former Vice President Joe Biden. The two septuagenarians bickered, insulted, belittled and at times screamed at one another at almost regular intervals, all in hopes of convincing the American public each is the best choice to control the world’s largest nuclear arsenal.

And while conventional, real-time polling may have been unavailable during the roughly hour and a half Trump and Biden squabbled, bets were furiously being made over whom the markets believe will be the person running the U.S. for the next four years.

Related: Fed Reserve Governor Brainard Said to Be Biden’s Choice for Treasury Secretary

So why turn to the so-called predictions markets, where people bet on the outcomes of major events? The theory goes something like this: Those willing to risk their capital provide more accurate information about expectations than those who merely answer a survey. Money talks, as they say.

Trump’s rough night on PredictIt

On PredictIt, a prediction market run by New Zealand’s Victoria University of Wellington, the volume of “shares” on the question “Who will win the 2020 U.S. presidential election?” saw its highest-ever day on Tuesday, coming in at about 708,500.

Bettors buy “shares” in a candidate. When a candidate wins, the payoff is $1 per share; everyone who bet on someone else goes home with nothing. Besides being centralized, PredictIt is also regulated in the United States.

Shares of “Trump” started off the debate trading at around 46 cents, roughly where they had been for much of the month. Early in the debate, as it quickly heated up, buyers began growing a little more optimistic on Trump’s prospects, with shares rising to as high as 48 cents. However, they closed the hour back at 46 cents after roughly 46,000 shares traded hands. Just seven hours before, fewer than 5,000 shares were traded.

Related: What Is DeFi?

As the night wore on and the debate took a turn for the weird, if not troubling, sellers came in where they could, taking prices down to as low as 42 cents, more or less where it was at press time.

Read more: Prediction Markets’ Time Has Come, but They Aren’t Ready for It

Meanwhile, Joe Biden’s shares remained more or less in the 59-cent range during the debate. However, some 39,700 shares were traded. Considering the higher price, that’s a couple of thousand dollars more in volume. Biden’s stock has since been on an upswing, as high as 63 cents as this article was published.

Given the nature of this election, there were a few trades for the nominees’ running mates.

Some 40,000 shares of Kamala Harris were traded between 3 cents and 5 cents during the debates. A buyer or several buyers, perhaps speculating the GOP would want to or need to change the top of their ticket, bought nearly 100,000 shares of Mike Pence at the for between 1 cent and 2 cents.

Florida, man

The American election, of course, isn’t a one-horse race. Rather, it is 51 separate elections for sets of electors from each state and the District of Columbia. And that’s where some of the more interesting price movements have been taking place.

On Wednesday, bettors changed their minds about Florida, moving the Sunshine State from Republican at 52 cents to Democrat at 51 cents. Like presidential shares, state races also pay $1 to the winner and nothing to the loser.

That compounds trouble on the electoral map for Trump, who is seeing traditional southern Republican states like North Carolina and Arizona come into play. Wagers also appear confident Wisconsin, Michigan and Pennsylvania – the three states crucial in Trump’s 2016 victory – will switch to the Democrats.

The moves now give the Democrats a likely 335 votes in the Electoral College, up from 306 several hours before. This puts PredictIt’s numbers close to Nate Silver’s FiveThirtyEight.com’s prediction that Biden will capture 332 electoral votes. Candidates require 270 electoral votes to win the presidency.

Down the ticket

Bets on the Senate haven’t been kind to Majority Leader Mitch McConnell, either.

Gamblers now see the Democrats picking up enough seats to downgrade the longtime Kentucky Republican senator to Chuck Schumer’s (D-N.Y.) current office as Minority Leader, assuming Republicans in the upper chamber decide to keep him at their helm even if they lose control. According to PredictIt, Democrats will start the next session with 51 senators, picking up states including Arizona, North Carolina and Maine.

Decentralized markets confirm

While PredictIt is a centralized market, more blockchain-friendly exchanges also have bad news for Team Trump.

To be sure, they are smaller in size than others but offer more tailored questions. And since this is an anything-goes election, such bespoke contracts may help those who need to hedge for some reason or else just want to take on an enticing bet. After all, whether Trump will concede the election remains a mystery.

For example, Augur, the most well-known decentralized prediction market, offers one contract on “Will Donald J. Trump win the 2020 U.S. Presidential election?” expiring Jan. 20, 2021. Another one – “Will Donald Trump win the 2020 U.S. Presidential election?” – expires Jan. 7, 2021. “Who will win the 2020 U.S. Presidential election?” expires on Dec. 7, 2020.

In the first two, a “yes” contract (that Trump wins) is at 49%. In the last one, Trump is at 40% to Biden’s 54%. Presumably, the 6% is an unknown factor which, in 2020, is entirely possible.

Polymarket has bettors pricing a Trump win at 46 cents though briefly Tuesday night, it was as high as 52 cents. Just $100,000 worth of contracts have traded on that contract since it began three months ago. PredIQt on the EOS blockchain gives the president nearly the same odds, trading at 45%. Omen, which prices its contracts in DAI, gives Biden a 58.8% chance of winning.

FTX, a market that doesn’t just trade crypto derivatives, also has a market on various election-related contracts. Traders there are also bearish on Trump.

Trump’s “futures contract” on FTX had a rapid sell-off just as the debates came to a close. Prices fell to 40 cents from 43.5 cents on volume of 57,000 contracts. Back in February, it traded as high as 65.2 cents before crashing to as low as 31.8 cents in the midst of the March 12 market crash. It rebounded to 50 cents until June, it began trending lower.

Biden’s price got a boost at about the same moment, albeit on smaller size. His contract on FTX rose to 60.4 cents from 55.5 cents on 10,000 contracts just as the debate commentators were shaking their heads on-air in disbelief at the spectacle they had just witnessed.

Of course, prices fluctuate every day.

Facts change and, as this is 2020, sometimes get invented, too.

Thus what’s true at the time of publication can change on a dime. It is now fewer than five weeks until Election Day. Buckle up!

Related Stories

• Ethereum Gas Fees Drive Gnosis-Powered Prediction Market to xDai’s Layer 2
• US Treasury Sanctions Russians Using Crypto for Election Interference

Algorand and Blockstack PBC’s joint smart contract language, Clarity, is getting a data boost from Chainlink’s oracle network.

• The planned integration will see Chainlink’s oracles (information source links for blockchain-based applications) feed data into Clarity’s cross-blockchain smart contracts, starting with realtime price points.
• Blockstack said in a press release its users will get access to the entire Chainlink data library “in the near future” but did not provide a timeline.
• The team-up comes ahead of Blockstack’s planned Stacks 2.0 protocol upgrade. The startup’s CEO Muneeb Ali slated mainnet rollout for late Q4 in a recent blog post update.
• Clarity smart contracts, which will ultimately provide Algorand and Blockstack with inter-chain communications, are also set to debut at mainnet launch.

Related Stories

• SEC Alleges Big-Talking Florida Crypto Investor Defrauded Clients of $6.8M
• BitFlyer Opens Japanese Bitcoin Market to European Traders
• Data Management Startup Fluree Unlocks $1.5M Air Force Contract With Latest VC Raise
• 3iQ’s Bitcoin Fund Gets Second Listing of 2020 – This Time on Gibraltar’s Stock Exchange

A Florida crypto trader has been charged with duping $6.8 million from investors in his purported digital asset day trading shop.

• The U.S. Securities and Exchange Commission alleged in its Tuesday complaint that the defendant, Thomas J. Gity, defrauded investors from January 2018 through January 2019 as he claimed to never end a trading day in the red.
• Gity allegedly lured in 18 investors with lofty promises of outsize returns and assertions that he had $100 million under management.
• The SEC claims that Gity cooked his books to sell the lie.
• Only $970,000 of investors’ funds ever landed in Gity’s trading account, the SEC alleged. About $1.8 million allegedly went to Gity’s son. Prosecutors said Gity used the rest to perpetuate his Ponzi-like scheme.
• Gity was charged with multiple violations of securities law in U.S. District Court for the Southern District of Florida on Tuesday.

The case is a reminder that investors in cryptocurrency should watch out for promises too good to be true. Crypto, just like all asset classes, has its share of charlatans preying on the aura of a little-understood but much-hyped investment vehicle.

Related Stories

• Blockstack’s Clarity Smart Contracts Will Source Data From Chainlink Oracles
• BitFlyer Opens Japanese Bitcoin Market to European Traders
• Data Management Startup Fluree Unlocks $1.5M Air Force Contract With Latest VC Raise
• 3iQ’s Bitcoin Fund Gets Second Listing of 2020 – This Time on Gibraltar’s Stock Exchange

Amy Webb, a quantitative futurist and founder of the strategic foresight firm Future Today Institute, thinks the world can, indeed, get worse.

In her most recent book “2020 Tech Trend Report: Strategic Trends that Will Influence Business, Government, Education, Media and Society in the Coming Year,” Webb examines the companies – and the people who run them – that will make the future either a utopia or a new hell.

Webb’s major idea centers around how the G-MAFIA (an invective and acronym of Google, Microsoft, Amazon, Facebook, IBM and Apple) and its Chinese counterpart in BAT (Baidu, Alibaba and Tencent) are becoming increasingly interwoven in our lives.

Related: Better Broadband Will Pave the Way for a ‘Brand New World’

Digital innovations – from artificial intelligence to payments architectures – are not in themselves dangerous. But decisions made today to serve political or shareholder interests, rather than the public good, could destabilize our shared future.

This post is part of CoinDesk’s “Internet 2030” series.

She’s not the only one who sees a dystopian AI arising from the ether, nor the only person to think the G-MAFIA and BAT exert outsized influence over society and politics. However, despite technological revolts and regulatory hamstringing, she admits these companies are not going anywhere.

CoinDesk corresponded with Webb over email. The conversation has been lightly edited and condensed for clarity.

Related: Crypto Co-ops and Game Theory: Why the Internet Must Learn to Collaborate to Survive

What do you suppose will happen to the “G-MAFIA” in a decade? Will they continue to consolidate power and if so, what happens to the rest of the internet? 

The G-MAFIA will continue to consolidate power. Even if antitrust measures pass in the United States, and that’s a big if, it’s unlikely the companies will accept the findings of the investigations and agree to be broken apart. 

So the question is really about how do the G-MAFIA evolve? Amazon, Google and Apple are making bold, decisive moves into health care. From Amazon’s Halo wristband to Apple Fitness+ to Google’s acquisition of Fitbit, big tech players are working now to collect and analyze our health data. 

See also: Zephyr Teachout: Take Back the Economy From Economists

But those are just devices you wear on your wrist – what about the biometric detection algorithms that mine, refine and optimize us? Or the move into electronic health data and records? And insurance in the case of Amazon, and outpatient care in the case of Apple’s employee clinics? 

If we zoom out, big tech getting into health care is just one of many areas where we’re seeing disruptive change happening at a relatively fast clip. Microsoft is building the future of smart agriculture. Facebook is, as you know very well, working on the future of cryptos and DLTs. IBM is always ignored, but it’s making important strides in open enterprise architecture for AI. 

They’re all vying for cloudshare. Power will be consolidated in a way that will be difficult to see if you’re not intentionally gathering data and working to connect dots across products, services and industries. They are amassing more power and influence than our governments.

What might the cultural or political effects be of an ever-greater consolidated and extractive web? 

We talk about privacy a lot, and journalists certainly write a lot of stories about data sharing, privacy and consolidation within the tech sector. But when it comes to everyday consumers and business leaders, it just doesn’t seem like these are priority issues. We’ll feel the effects when there is litigation, new policy or sweeping policy enacted.

You write about the tech giants of America and China as competitive and cooperative forces. What do you expect will happen to the “splinternet” – will the divide between east and west grow wider? 

Unfortunately, with China’s provocative moves to achieve cyber sovereignty, we’re going to see a deeper splinternet. 

See also: China Aims to Be the World’s Dominant Blockchain Power – With Help From Google, Amazon and Microsoft

There are greater forces at play here. China’s Belt and Road Initiative, which swaps infrastructure development in emerging markets for debt, could lead to BRI countries being coerced into using the Chinese internet rather than the existing internet, which to be fair relies on data transfer for monetization. 

Projects like Tim Berners-Lee’s Solid are an interesting example of emerging decentralized approaches to the web, applications and data use. Similarly, I think we’ll see more distributed networks like Golem and Morpheus. 

But it will take a long time for Web 3.0 initiatives to move from the fringes to the mainstream.

Do you see a genuine way out through distributed technologies that may give people control over their own data? 

I worry about people who never update their passwords – should we entrust them to manage sensitive data? There are complex questions about data hygiene, data governance, compliance, risk. Distributed tech solutions solve some of our problems, but not all.

Few people have an understanding of how data are collected, by whom, for what purpose. There are lots of organizations proposing some kind of “ownership” model, where we individually would “own” our data. What does that mean? 

I want consumers to be much better aware of what data they are generating – that includes the digital emissions they’re releasing without realizing it. Think of all the metadata being generated by our connected devices, the ambient sounds in our homes and offices, our movements and gestures. All of those digital emissions, plus the PIIs collected now by contract tracing apps and biometric scanning systems – I mean, we’re swimming in data. 

How can we become better at predicting the future?

As a futurist I’ll be the first person to tell you that I can’t predict the future. The math doesn’t work out. If I’m dealing with a limited quantity of variables, then yes, I might be able to make a prediction. The reason we’re continually surprised is because we’re only thinking tactically about what matters right now, or we’re thinking fancifully about the deeper future. The hard work is finding signals in the present and modeling their next-order impacts using data and rigorous frameworks. Predictions are brittle. The goal of any good futurist is preparation. 

See also: Don Tapscott – A New Social Contract for the Digital Age

The question really is: How can we reduce uncertainty? We should all try to get better at confronting cherished beliefs and accepting chaos and chance as drivers of change. Ultimately, strategic foresight isn’t about making predictions. It’s about creating a state of readiness and knowing when to act. This includes being ready for a sudden chaotic event, like a natural disaster or a global pandemic. The best strategic foresight work results in insights, internal alignment, and faster, data-driven decision-making. I like to use a flywheel analogy. With some pushing and persistent effort, the effect is a reduction in surprise and uncertainty.

I do not believe in “Black Swan” events, which are unpredictable events that come as a total surprise and have severe consequences. Nothing is truly instantaneous. When people talk about the pandemic as a “Black Swan” event, they are wrong. The virus emerged, governments made poor choices, and now we’re dealing with the aftermath. Plenty of models predicted we’d be in this situation back in December if good, disciplined choices were not made. 

Related Stories

• The Standard About to Revolutionize Payments
• How We Short Capitalism – And Finance the Revolution

BitFlyer Europe is giving its European bitcoin traders direct access to the Tokyo-based parent exchange’s Japanese liquidity.

• Announced Wednesday, the cross-border initiative opens Japan’s high-volume bitcoin markets to European traders courting the bitcoin/Japanese yen trading pair.
• BitFlyer said in a press statement the new approach eases those traders’ access to liquidity by doing away with multiple account requirements.
• In the long term, bitFlyer said it plans to unlock cross-border trading pairs across its three active regions: Europe, Japan and the U.S.

Related Stories

• Data Management Startup Fluree Unlocks $1.5M Air Force Contract With Latest VC Raise
• 3iQ’s Bitcoin Fund Gets Second Listing of 2020 – This Time on Gibraltar’s Stock Exchange
• SEC Orders Salt Lending to Offer Refunds to Investors in Its $47M ICO
• DeFi ‘Vampire’ SushiSwap Still Hemorrhaging Liquidity