CoinDesk Crypto

Crypto scams on video hosting platform YouTube are continuing to prey on unsuspecting victims.

• In scam videos seen this week, the identities of Ethereum founder Vitalik Buterin and Tyler and Cameron Winklevoss, founders of the U.S.-based Gemini exchange, have been used to lure people into giving up cryptocurrencies like bitcoin and ether.
• The “giveaway” scams are based on the promise of doubling one’s funds after send an initial amount to a wallet address via QR code.
• Victims, in fact, receive nothing in return and lose the crypto they sent.
• In separate videos, which have since been removed by YouTube, both Buterin and the Winklevoss twins can be seen talking on stage, praising the benefits of their projects.
• The video grabbed for one of the scams featuring Buterin appears to be taken from an Ethereum event held in London earlier this year.
• YouTube has been under fire from Ripple Labs and CEO Brad Garlinghouse, who are suing over allegations the social media giant fails to police its platform against fake XRP giveaway scams.
• YouTube frequently blocks cryptocurrency-focused accounts that are not scams. The firm has previously said errors occur because of the sheer volume of content it has to monitor.
• YouTube, Gemini Exchange and the Ethereum Foundation did not return requests for comment by press time.

See also: Encrypted Messaging Site Privnote Cloned to Steal Bitcoin

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Over the past two years, many bitcoin believers donated cryptocurrency to initiatives in Venezuela, often holding up the small nation as the pinnacle example of the technology’s potential.

The truth on the ground is much more nuanced. 

The fintech startup AirTM distributed roughly $300,000 worth of cryptocurrency donations to 60,829 ID-verified Venezuelan e-wallets throughout 2019. The donated crypto came from entities like GiveCrypto, the Electric Coin Company and the artist Cryptograffiti. 

Related: Ethereum and EOSIO Square Up Over Enterprise Blockchain Business in Latin America

“To incentivize donations, the largest donor did receive a piece of the mural,” Cryptograffiti told CoinDesk, describing the crowdfunded mural project. 

Read more: Bolivars to Bitcoin: Activists Take Down Venezuela’s Maduro in Crypto Art Exhibit

The muralist’s crowdfunding campaign made up the bulk of bitcoin (BTC) donations, which in total represented less than 12% of funds donated to AirTM’s Venezuelan users. The bulk of donations were assets such as bitcoin cash (BCH), zcash (ZEC) and dai (DAI) and amounted to roughly $5 per donation. AirTM’s data shows few users chose to withdraw the crypto donations, opting instead to keep it inside the AirTM system.

According to an AirTM user survey, only 57% of recipients engaged with the funds. For some, even converting crypto to AirTM credits (AirUSD) inside a custodial user account was too much hassle.

Related: Brazil’s Ailing Economy Is Helping Dollar-Pegged Stablecoins Find Traction

For those who did access the funds, more than 2,000 Venezuelans said it was helpful for buying food. (You can see the full survey results here.) They typically did this by using AirTM to cash out bolivars as needed, using the digital wallet provider like a bank. Others used it as savings.

“So far I only use this crypto in AirTM,” one such user, Neysa Hurtado, said in an interview. 

Read more: Crypto Exchange AirTM Targets Troubled Markets With $7 Million Raise

Even bitcoiners like freelance engineer Geraldo Meneses, who does hold a small amount of crypto in his own wallet, preferred to use most of the donated crypto as AirTM credits. 

“Bitcoin is a way to charge for my work,” Meneses said via WhatsApp. “AirTM is my exchange platform and personal bank.”

Meneses said he used the extra bitcoin from this charity campaign to buy medicine for his mother, which was expensive and had to be shipped from abroad. 

Before the coronavirus crisis, he said it was possible to ship medicine from Europe within roughly two weeks, but now it can take up to a month. So having the capital to order in advance is important. 

“Many people are looking for ways to exchange dollars and cryptocurrencies,” he said. “The most cunning [exchangers] try to defraud innocent people.”

This was the benefit AirTM offered. Customers trusted the platform and knew how to use it, although few know how to operate zcash or bitcoin wallets. One new AirTM user, attorney Michael Barráez, said this was his first time learning about cryptocurrency. He said he might buy some bitcoin to hold for himself, as savings.

Read more: Brazil’s Ailing Economy Is Helping Dollar-Pegged Stablecoins Find Traction

“When democracy is back and the U.S. sanctions are over, our economy will flourish again,” Barráez said. 

Even if users have the skills to use cryptocurrency, some of them still prefer to manage most of their money with the option for recourse that a company provides. Others don’t want to hold a highly volatile asset at all. 

“I could see that the money [AirUSD] did not devalue,” first-time crypto user Jannet García de Rivas, an experienced engineer who works in the tech industry, said about why he converted the crypto donation. 

If Venezuela offers an example of bitcoin usage, then it appears there is user demand for bitcoin-friendly services provided by a regular fintech company. 

In short, people trust the service provider, even if they may occasionally choose to hold a small amount of bitcoin themselves. The service provider makes it easier for them to transact with bitcoin across borders or liquidate it. Other users, with specific needs, require lots of planning and preparation in order to use bitcoin directly and be their own proverbial banker.

“There is still so much work to be done in order to have bitcoin adoption in the region,” Cryptograffiti said. “For example, we had a random selection of refugees participate who just happened to be in the area, many of whom didn’t even have email addresses. In order to be the most effective, we could have tried to target a particular subset ahead of time.”

• Venezuela Is a Testing Ground for Digital Dollarization (and Zelle Doesn’t Like It)
• US Offers $5M Bounty for Arrest of Venezuela’s Crypto Chief

Over the past two years, many bitcoin believers donated cryptocurrency to initiatives in Venezuela, often holding up the small nation as the pinnacle example of the technology’s potential.

The truth on the ground is much more nuanced. 

The fintech startup AirTM distributed roughly $300,000 worth of cryptocurrency donations to 60,829 ID-verified Venezuelan e-wallets throughout 2019. The donated crypto came from entities like GiveCrypto, the Electric Coin Company and the artist Cryptograffiti. 

Related: Ethereum and EOSIO Square Up Over Enterprise Blockchain Business in Latin America

“To incentivize donations, the largest donor did receive a piece of the mural,” Cryptograffiti told CoinDesk, describing the crowdfunded mural project. 

Read more: Bolivars to Bitcoin: Activists Take Down Venezuela’s Maduro in Crypto Art Exhibit

The muralist’s crowdfunding campaign made up the bulk of bitcoin donations, which in total represented less than 12% of funds donated to AirTM’s Venezuelan users. The bulk of donations were assets like bitcoin cash (BCH), zcash (ZEC) and dai (DAI) and amounted to roughly $5 per donation. AirTM’s data shows that few users chose to withdraw the crypto donations, opting instead to keep it inside the AirTM system.

According to an AirTM user survey, only 57% of recipients engaged with the funds. For some, even converting crypto to AirTM credits (AirUSD) inside a custodial user account was too much hassle.

Related: Brazil’s Ailing Economy Is Helping Dollar-Pegged Stablecoins Find Traction

For those who did access the funds, more than 2,000 Venezuelans said it was helpful for buying food. (You can see the full survey results here.) They typically did this by using AirTM to cash out bolivars as needed, using the digital wallet provider like a bank. Others used it as savings.

“So far I only use this crypto in AirTM,” one such user, Neysa Hurtado, said in an interview. 

Read more: Crypto Exchange AirTM Targets Troubled Markets With $7 Million Raise

Even bitcoiners like freelance engineer Geraldo Meneses, who does hold a small amount of crypto in his own wallet, preferred to use most of the donated crypto as AirTM credits. 

“Bitcoin is a way to charge for my work,” Meneses said via WhatsApp. “AirTM is my exchange platform and personal bank.”

Meneses said he used the extra bitcoin from this charity campaign to buy medicine for his mother, which was expensive and had to be shipped from abroad. 

Before the coronavirus crisis, he said it was possible to ship medicine from Europe within roughly two weeks, but now it can take up to a month. So having the capital to order in advance is important. 

“Many people are looking for ways to exchange dollars and cryptocurrencies,” he said. “The most cunning [exchangers] try to defraud innocent people.”

This was the benefit AirTM offered. Customers trusted the platform and knew how to use it, although few know how to operate zcash or bitcoin wallets. One new AirTM user, attorney Michael Barráez, said this was his first time learning about cryptocurrency. He said he might buy some bitcoin to hold for himself, as savings.

Read more: Brazil’s Ailing Economy Is Helping Dollar-Pegged Stablecoins Find Traction

“When democracy is back and the U.S. sanctions are over, our economy will flourish again,” Barráez said. 

Even if users have the skills to use cryptocurrency, some of them still prefer to manage most of their money with the option for recourse that a company provides. Others don’t want to hold a highly volatile asset at all. 

“I could see that the money [AirUSD] did not devalue,” first-time crypto user Jannet García de Rivas, an experienced engineer who works in the tech industry, said about why he converted the crypto donation. 

If Venezuela offers an example of bitcoin usage, then it appears there is user demand for bitcoin-friendly services provided by a regular fintech company. 

In short, people trust the service provider, even if they may occasionally choose to hold a small amount of bitcoin themselves. The service provider makes it easier for them to transact with bitcoin across borders or liquidate it. Other users, with specific needs, require lots of planning and preparation in order to use bitcoin directly and be their own proverbial banker.

“There is still so much work to be done in order to have bitcoin adoption in the region,” Cryptograffiti said. “For example, we had a random selection of refugees participate who just happened to be in the area – many of whom didn’t even have email addresses. In order to be the most effective, we could have tried to target a particular subset ahead of time.”

• Venezuela Is a Testing Ground for Digital Dollarization (and Zelle Doesn’t Like It)
• US Offers $5M Bounty for Arrest of Venezuela’s Crypto Chief

There may be an enterprise blockchain arms race brewing in Latin America.

LatamLink, an alliance of three organizations involved in the launch of the EOS public blockchain in 2018, is now busy integrating the EOSIO software for enterprise uses. The group seems to be competing for business in the region with ConsenSys, a globally distributed outfit focused on all things Ethereum.

Up for grabs is LACChain, a blockchain framework that has the backing of the Inter-American Development Bank (IDB) and a host of public and private entities across Latin America and the Caribbean.

Related: A Rare Glimpse Into How Crypto Is Really Used in Venezuela

ConsenSys set up a Besu testnet for LACChain early last year, to create infrastructure that is both public and permissioned, where necessary, to accommodate digital identity and tokenized fiat money. It’s meant to enable use cases in government procurement, land registry programs, social impact projects and so on.

Read more: CoinDesk 50: Besu, the Marriage of Ethereum and Hyperledger

The Latin American EOS contingent is a voluntary alliance put together by EOS Costa Rica, with EOS Argentina and EOS Venezuela as founding members. All three organizations have experience running EOSIO infrastructure and were genesis block producers during the EOS mainnet launch, for which EOSIO creator Block.one raised over $4 billion in a protracted token sale.

Now EOS Costa Rica is set to unveil a testnet for LACChain, setting off a blockchain beauty contest of sorts between the two technology tribes – one that may ultimately lead to the beginnings of EOSIO-Ethereum interoperability.

Related: Brazil’s Ailing Economy Is Helping Dollar-Pegged Stablecoins Find Traction

The choice is LACChain’s.

“They [LACChain] can see if there is interoperability between the protocols, or choose one over the other,” said EOS Costa Rica co-founder Edgar Fernández. “You can see them side by side.” 

For his part, Fernández said it’s not going to be a “winner takes all” battle to see which will be the preferred mainnet option. Certain apps or use cases may be better suited to Ethereum; others might work best on EOSIO.

Something both sides agree on, though: The project could be a big deal.

“If LACChain becomes the gold standard, given the IDB’s deep relationships with governments, the private sector and international organizations, ConsenSys technology has the potential to serve billions of people across the world,” ConsenSys spokesperson Kara Miley told CoinDesk via email. 

ConsenSys added that it had not yet entered into any discussions about interoperability with EOSIO in the context of LACChain.

Read more: Inter-American Development Bank to Pilot Land Registries on Blockchain

LACChain tech lead Marcos Allende was at pains to point out the project was set up to be “tech agnostic” and is not a competition or a race between protocols.

“We are not launching the EOSIO network because there is anything wrong with Besu,” said Allende. “It’s not a competition between Besu and EOSIO to see which one is better or worse. It’s not a race to see which one has more transactions per second or better privacy. LACChain is about collaboration.” 

Being careful not to protest the case too much, IDB Lab Principal Specialist Alejandro Pardo reiterated the project’s original “agnostic, multiplatform” mission. 

“As part of our learning and exploration, we welcome LatamLink and EOS as part of LACChain, as we are fully aware of the exceptional value they bring,” Pardo said.

EOS Costa Rica recently demonstrated just how it could shake up the enterprise blockchain world. In May of this year, the group fielded an audacious winning bid to provide accountancy major Grant Thornton with a blockchain for intercompany transactions. Speed and scalability were deciding factors, the accounting firm said. 

Fernández of EOS Costa Rica said the Grant Thornton team had weighed Ethereum and Hyperledger before choosing EOSIO. 

LACChain has also gone through a process of tire-kicking, he said, starting out with Quorum – the Ethereum-based enterprise client built by JPMorgan Chase – and then also testing Linux Foundation-affiliated Hyperledger Fabric, the preferred enterprise blockchain platform of IBM. 

Read more: Hyperledger Conference Shows Where Blockchain Can Fight Global Warming

“IDB Labs started out with Quorum but it didn’t really work, it had too many problems,” Fernández said. “Then with Hyperledger Fabric, they found it wasn’t exactly what they were looking for either.”

Allende said LACChain has done tests with Hyperledger Fabric but is yet to launch a Fabric network. “We are interested in [Fabric], but we found it easier with Ethereum-based tech, and now with EOSIO, to get what we were looking for,” Allende said.

One thing that’s clear is the LatamLink team has had its sights locked on LACChain since its inception. The group made “a very interesting” presentation to IDB and LACChain around November of last year, according to Allende.

In the opinion of Fernández, bringing in some homegrown engineering talent is another important factor when it comes to LACChain.

Read more: Bitcoin in Emerging Markets: Latin America

“We know what EOSIO can do, and we wanted to show that Latin American talent can also build on this Latin American blockchain,” said Fernández. “We don’t need to rely on North America or Europe or Asia. We have the ability and talent to run this infrastructure from three Latin American tech companies.”

That said, LACChain’s Allende wanted to qualify this point, which he said had no bearing on the decision to run the EOSIO network.

“It’s great that we are bringing in more Latin American talent. But that is not the reason we are launching EOSIO. If the developers from LatamLink were from the U.S., we would be doing exactly the same thing,” Allende said.

• ConsenSys, Polychain, Tron, CipherTrace: Blockchain Startups Got $30M+ in US ‘PPP’ Bailout Loans
• Irish Charity Receives $1.1M Grant to Build Blockchain Platform for Aid Distribution

There may be an enterprise blockchain arms race brewing in Latin America.

LatamLink, an alliance of three organizations involved in the launch of the EOS public blockchain in 2018, is now busy integrating the EOSIO software for enterprise uses. The group seems to be competing for business in the region with ConsenSys, a globally distributed outfit focused on all things Ethereum.

Up for grabs is LACChain, a blockchain framework that has the backing of the Inter-American Development Bank (IDB) and a host of public and private entities across Latin America and the Caribbean.

Related: A Rare Glimpse Into How Crypto Is Really Used in Venezuela

ConsenSys set up a Besu testnet for LACChain early last year, to create infrastructure that is both public and permissioned, where necessary, to accommodate digital identity and tokenized fiat money. It’s meant to enable use cases in government procurement, land registry programs, social impact projects and so on.

Read more: CoinDesk 50: Besu, the Marriage of Ethereum and Hyperledger

The Latin American EOS contingent is a voluntary alliance put together by EOS Costa Rica, with EOS Argentina and EOS Venezuela as founding members. All three organizations have experience running EOSIO infrastructure and were genesis block producers during the EOS mainnet launch, for which EOSIO creator Block.one raised over $4 billion in a protracted token sale.

Now EOS Costa Rica is set to unveil a testnet for LACChain, setting off a blockchain beauty contest of sorts between the two technology tribes – one that may ultimately lead to the beginnings of EOSIO-Ethereum interoperability.

Related: Brazil’s Ailing Economy Is Helping Dollar-Pegged Stablecoins Find Traction

The choice is LACChain’s.

“They [LACChain] can see if there is interoperability between the protocols, or choose one over the other,” said EOS Costa Rica co-founder Edgar Fernández. “You can see them side by side.” 

For his part, Fernández said it’s not going to be a “winner takes all” battle to see which will be the preferred mainnet option. Certain apps or use cases may be better suited to Ethereum; others might work best on EOSIO.

Something both sides agree on, though: The project could be a big deal.

“If LACChain becomes the gold standard, given the IDB’s deep relationships with governments, the private sector and international organizations, ConsenSys technology has the potential to serve billions of people across the world,” ConsenSys spokesperson Kara Miley told CoinDesk via email. 

ConsenSys added that it had not yet entered into any discussions about interoperability with EOSIO in the context of LACChain.

Read more: Inter-American Development Bank to Pilot Land Registries on Blockchain

LACChain tech lead Marcos Allende was at pains to point out the project was set up to be “tech agnostic” and is not a competition or a race between protocols.

“We are not launching the EOSIO network because there is anything wrong with Besu,” said Allende. “It’s not a competition between Besu and EOSIO to see which one is better or worse. It’s not a race to see which one has more transactions per second or better privacy. LACChain is about collaboration.” 

Being careful not to protest the case too much, IDB Lab Principal Specialist Alejandro Pardo reiterated the project’s original “agnostic, multiplatform” mission. 

“As part of our learning and exploration, we welcome LatamLink and EOS as part of LACChain, as we are fully aware of the exceptional value they bring,” Pardo said.

EOS Costa Rica recently demonstrated just how it could shake up the enterprise blockchain world. In May of this year, the group fielded an audacious winning bid to provide accountancy major Grant Thornton with a blockchain for intercompany transactions. Speed and scalability were deciding factors, the accounting firm said. 

Fernández of EOS Costa Rica said the Grant Thornton team had weighed Ethereum and Hyperledger before choosing EOSIO. 

LACChain has also gone through a process of tire-kicking, he said, starting out with Quorum – the Ethereum-based enterprise client built by JPMorgan Chase – and then also testing Linux Foundation-affiliated Hyperledger Fabric, the preferred enterprise blockchain platform of IBM. 

Read more: Hyperledger Conference Shows Where Blockchain Can Fight Global Warming

“IDB Labs started out with Quorum but it didn’t really work, it had too many problems,” Fernández said. “Then with Hyperledger Fabric, they found it wasn’t exactly what they were looking for either.”

Allende said LACChain has done tests with Hyperledger Fabric but is yet to launch a Fabric network. “We are interested in [Fabric], but we found it easier with Ethereum-based tech, and now with EOSIO, to get what we were looking for,” Allende said.

One thing that’s clear is the LatamLink team has had its sights locked on LACChain since its inception. The group made “a very interesting” presentation to IDB and LACChain around November of last year, according to Allende.

In the opinion of Fernández, bringing in some homegrown engineering talent is another important factor when it comes to LACChain.

Read more: Bitcoin in Emerging Markets: Latin America

“We know what EOSIO can do, and we wanted to show that Latin American talent can also build on this Latin American blockchain,” said Fernández. “We don’t need to rely on North America or Europe or Asia. We have the ability and talent to run this infrastructure from three Latin American tech companies.”

That said, LACChain’s Allende wanted to qualify this point, which he said had no bearing on the decision to run the EOSIO network.

“It’s great that we are bringing in more Latin American talent. But that is not the reason we are launching EOSIO. If the developers from LatamLink were from the U.S., we would be doing exactly the same thing,” Allende said.

• ConsenSys, Polychain, Tron, CipherTrace: Blockchain Startups Got $30M+ in US ‘PPP’ Bailout Loans
• Irish Charity Receives $1.1M Grant to Build Blockchain Platform for Aid Distribution

Crypto trading platform bitFlyer is developing a digital wallet for Brave browser users in Japan, the companies announced Thursday. 

BitFlyer, which claims to be Japan’s largest cryptocurrency exchange by bitcoin trading volume, has partnered with the privacy-focused browser’s subsidiary, Brave Software International SEZC, which performs token operations, to offer the wallet feature to users of both companies.

Read more: Crypto Exchanges Must Stop Acting Like Casinos in Wake of Robinhood Suicide: bitFlyer Exec

Related: Crypto Exchanges Must Stop Acting Like Casinos in Wake of Robinhood Suicide: bitFlyer Exec

Ryotaro Chikaki, Brave’s chief marketing officer for Asia, told CoinDesk via email the wallet feature was already available to Brave users outside Japan, and that the development of a crypto wallet is essential to “realize a new ecosystem.” 

“We decided to work with bitFlyer as they’re the largest exchange in Japan with high trust by users for its security standard,” Chikaki said. “Also, they are one of the key players in crypto-asset and blockchain technology. For Brave, it was a natural choice to work with them to expand our ecosystem in Japan.”

In a press statement, bitFlyer said it listed Brave’s basic attention token (BAT) in April 2020 and will now be Brave’s first crypto wallet partner in Japan.

Read more: Compound’s ‘Yield Farmers’ Briefly Turned BAT Into DeFi’s Largest Coin

Related: Brave Browser’s Affiliate Link Controversy, Explained

“By leveraging the expertise and security that has characterized us since 2014, we will build a crypto asset wallet for Brave browser users to make owning and storing crypto as convenient as possible,” a bitFlyer spokesperson told CoinDesk via email. 

Earlier this year, Brave partnered with Binance to build an in-browser crypto trading tool, and was later involved in a controversy where the secure browser automatically added a URL tag when users typed “Binance” into the browser, suggesting visits to the exchange were being tracked.   

• Japan’s Biggest Banks Are Talking About Building a Digital Payments System
• Coincheck Customers Fall Victim to Data Breach After Domain Account Error

Crypto trading platform bitFlyer is developing a digital wallet for Brave browser users in Japan, the companies announced Thursday. 

BitFlyer, which claims to be Japan’s largest cryptocurrency exchange by bitcoin trading volume, has partnered with the privacy-focused browser’s subsidiary, Brave Software International SEZC, which performs token operations, to offer the wallet feature to users of both companies.

Read more: Crypto Exchanges Must Stop Acting Like Casinos in Wake of Robinhood Suicide: bitFlyer Exec

Related: Crypto Exchanges Must Stop Acting Like Casinos in Wake of Robinhood Suicide: bitFlyer Exec

Ryotaro Chikaki, Brave’s chief marketing officer for Asia, told CoinDesk via email that the wallet feature was already available to Brave users outside Japan, and that the development of a crypto wallet is essential to “realize a new ecosystem.” 

“We decided to work with bitFlyer as they’re the largest exchange in Japan with high trust by users for its security standard,” Chikaki said. “Also, they are one of the key players in crypto-asset and blockchain technology. For Brave, it was a natural choice to work with them to expand our ecosystem in Japan.”

In a press statement, bitFlyer said it listed Brave’s basic attention token (BAT) in April 2020 and will now be Brave’s first crypto wallet partner in Japan.

Read more: Compound’s ‘Yield Farmers’ Briefly Turned BAT Into DeFi’s Largest Coin

Related: Brave Browser’s Affiliate Link Controversy, Explained

“By leveraging the expertise and security that has characterized us since 2014, we will build a crypto asset wallet for Brave browser users to make owning and storing crypto as convenient as possible,” a bitFlyer spokesperson told CoinDesk via email. 

Earlier this year, Brave partnered with Binance to build an in-browser crypto trading tool, and was later involved in a controversy where the secure browser automatically added a URL tag when users typed “Binance” into the browser, suggesting visits to the exchange were being tracked.   

• Japan’s Biggest Banks Are Talking About Building a Digital Payments System
• Coincheck Customers Fall Victim to Data Breach After Domain Account Error

Coinbase has scheduled its first-ever investor day for Aug. 14, amid rumors that the crypto exchange is exploring a public stock listing.

It is unclear, however, whether the virtual event is related to the rumored efforts to go public. A Coinbase spokesperson confirmed the meeting is coming but said it was meant simply “to facilitate a wider understanding of cryptocurrencies and blockchain technology.”

“This will not be a traditional investor day, but rather an opportunity to hear our perspective on the cryptoeconomy and learn about Coinbase’s role in the ecosystem,” said the spokesperson, Daniel Harrison, in a prepared statement. He declined to provide further details.

Related: Coinbase Exploring Stock Market Listing, Reuters Reports

Reuters reported earlier Thursday that Coinbase was seeking legal teams in advance of filing for a public offering with the Securities and Exchange Commission (SEC), ahead of a direct listing. In a direct listing, shareholders in the private market are able to sell their holdings though the company itself does not issue new shares or raise additional money.

An investor day can often be a harbinger of a planned direct listing, as Jamie McGurk, a former operating partner at Andreessen Horowitz (a16z), wrote on the venture capital firm’s blog lost year. 

“The company will invite investors to their Investor Day, where they will publicly talk about the company and financial results – though still only about historical performance,” wrote McGurk (now a managing partner with Coatue Management), noting that this takes place about five weeks prior to the first trading day. 

A16z, it should be noted, is one of Coinbase’s investors, including leading its $25 million Series B round in December 2013. 

Related: Circle Confirms Freezing $100K in USDC at Law Enforcement’s Request

Direct listings allow existing shareholders, such as venture capitalists, to trade their equity in a public market without the company itself selling any new shares. Silicon Valley darlings Slack and Spotify previously followed this route, which minimizes the use of traditional Wall Street middlemen.

Such a route does not preclude a later public offering. In fact, it can make them more successful. 

“If further financing is needed in the future, the company now has access to the public capital markets as a seasoned issuer, which is one of the primary benefits of being public anyway,” McGurk wrote.

One person with knowledge of the upcoming meeting said a direct listing would make sense for Coinbase now, with many people in crypto anticipating an upward trajectory to the market soon. 

As newer companies like Compound and Kyber use innovative methods to extend ownership of their platforms to users, a direct listing would be the most cost-efficient way to provide Coinbase users with access to shares in the company, the source noted, while still adhering to its legal structure.  

Since its founding in 2012, Coinbase has raised a total of $547 million, according to Crunchbase. Its Series E round, in October 2018, valued the company at $8 billion. The San Francisco-based company boasts more than 35 million users and would be the first major U.S. crypto startup to go public, if it were to pursue a listing.

• Coinbase Taps Former Facebook Lawyer to Head Legal Team
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Bitcoin is back at $9,200 Thursday as crypto derivatives helped push its price down and equities closed lower.

• Bitcoin (BTC) trading around $9,211 as of 20:00 UTC (4 p.m. ET), slipping 2.3% over the previous 24 hours.
• Bitcoin’s 24-hour range: $9,154-$9,469
• BTC below 10-day and 50-day moving average, a bearish signal for market technicians.

When stocks overall trend lower, it often leads to bitcoin prices dropping, said Karl Samsen of Global Digital Assets. He added that as public companies continue to release their dismal quarterly business results, equities will drop even more. “We’re seeing a W-effect in terms of the COVID-19 reopening” of the economy, he told CoinDesk. Thus, the stock markets aren’t performing well Thursday.

• Asia’s Nikkei 225 closed flat, eking out a 0.40% gain as transportation and real estate stocks pushed up the index.
• Europe’s FTSE 100 index ended the day down 1.7%. Rolls-Royce stock fell 11% on poor first-half financial results.
• The U.S. S&P 500 was in the red 0.56% as losses in retail hammered the index, even while tech stocks were mostly up for the day.

Read More: Bitcoin Started Moving in Sync With S&P 500, Volume Dropped, in June 

Related: Bitcoin Started Moving in Sync With S&P 500, Volume Dropped, Kraken Says in June Volatility Report

As spot bitcoin headed lower Thursday, the cryptocurrency derivatives market saw its first excitement in a week as sell liquidations popped up on BitMEX. Traders who were long bitcoin saw over $20 million in BitMEX positions exited as price dropped on the spot exchanges such as Coinbase. 

Meanwhile, traders continue to place fewer bitcoin option bets, a sign they don’t expect crypto volatility to return – at least not yet, according to Vishal Shah, an options trader and founder of exchange Alpha5.

“When volatility is much lower, as it is now, there is no natural game,” said Shah. “It’s not worth it to sell options down here, and hence activity comes to a standstill,” he added. Indeed, the volume on options market is much lower, and the amount of traders using the commodities exchange CME for bitcoin options have dried up in July.

“Honestly, it is frustrating for all of us – lower volatility and a narrower range,” said Christopher Thomas of cryptocurrency broker Swissquote. “We’ll likely explode out of it at some point. We need a trigger.” 

Related: Bitcoin Option Traders Bet on Bullish Move Following Volatility Squeeze

Nevertheless, things change, especially in uncertain times, said George Clayton, managing partner of New York-based Cryptanalysis Capital. “Crypto never stays in one place for long,” Clayton said. “I don’t like the technical picture, but a big move in either direction wouldn’t surprise me.”

Ether (ETH), the second-largest cryptocurrency by market capitalization, was down Thursday, trading around $239 and slipping 3.6% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

The total value locked in Curve is $71 million, the second-highest for a decentralized exchange, or DEX. Curve is used to quickly trade between stablecoins and has $12 million in daily trading volume, just behind Uniswap for DEXs. 

Peter Chan, a trader at Hong Kong-based OneBit Quant, says Curve could see increased volume due to traders moving out of USDC and into other stablecoins amid recent news that CENTRE, the consortium behind USDC, froze $100,000 worth of the token in one account at the behest of an unspecified law enforcement agency. 

Read More: Circle Confirms Freezing $100K in USDC at Law Enforcement’s Request

“I saw this news about USDC freezing assets of a few addresses,” Chan said. “Quite concerned about it. Might see flow on USDC switching to other stablecoins”.

Digital assets on the CoinDesk 20 are mixed Thursday. Notable winners as of 20:00 UTC (4:00 p.m. ET): 

• stellar (XLM) + 12%
• decred (DCR)+ 3.9%
• dogecoin (DOGE) + 0.52%

Read More: Hong Kong’s National Security Law Could Threaten Local Crypto Brokerages

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

• cardano (ADA) – 8.8%
• 0x (ZRX) – 7.4%
• tezos (XTZ) – 6.7%

Read More: London Stock Exchange Parent Assigns ‘Bar Codes’ to 169 Cryptos

Commodities:

• Oil is down 3.4%. Price per barrel of West Texas Intermediate crude:  $39.46.
• Gold is holding on around $1,800 Thursday, in the red by just 0.30%.

Read More: DeFi Pushes ETF-Style Investing Toward Decentralization

Treasurys:

• U.S. Treasury bonds all slipped Thursday Yields, which move in the opposite direction as price, were down most on the 10-year, in the red 9%.

• Market Wrap: Bitcoin Jumps Past $9,400 Despite Weak July Volumes
• 23-Year-Old Who Lied to Bank About Bitcoin Holdings Pleads Guilty to Fraud

Cryptocurrency exchange Bitfinex will have to face allegations from New York State that it hid millions in lost funds, according to a ruling by the State Supreme Court’s Appellate Division on Thursday. 

New York prosecutors alleged in April 2019 that Bitfinex lost $850 million in client and corporate funds, and then used money from affiliated stablecoin Tether to cover the loss. Bloomberg first reported the ruling.

iFinex, which operates both Bitfinex and Tether, argued the funds had been deposited with a Panama-based company and were later seized by authorities in different countries. The firm had earlier also said it has been working to recover the funds seized by the Portuguese, Polish and American governments. 

Related: Tron Arbitration Challenged in Hostile Work Environment Lawsuit

In its decision, the appeals court rejected the argument that tether was neither a commodity nor a security, and affirmed the stablecoin falls under the court’s jurisdiction. 

“Not even virtual currencies are above the law,” New York Attorney General Letitia James told CoinDesk in a statement.

As it’s headquartered in Hong Kong and registered in the British Virgin Islands, Bitfinex had also argued it does not fall under the jurisdiction of state authorities and doesn’t cater to local traders. 

The court rejected the argument on the grounds the Attorney General’s office was seeking documents going back to 2015, and iFinex had permitted New York customers to trade on the Bitfinex platform until January 2017. In addition, the court noted some of the firm’s executives had been based out of New York. 

Related: Coinbase Exploring Stock Market Listing, Reuters Reports

“We will respect the court’s order. We have no further comment on this matter at this time,” BitFinex’s General Counsel Stuart Hoegner said in an emailed statement.

Read the court ruling below:

• First Mover: With Trading Volumes Slumping, Are There Too Many Crypto Exchanges?
• Cryptocurrency Exchange Kraken Adds New Banking Option for US Users

A 35-year-old Romanian programmer of the Bitclub Network pleaded guilty on Thursday to his role in establishing the mining pool Ponzi scheme that defrauded investors of hundreds of millions of dollars in bitcoin.

• The programmer, Silviu Catalin Balaci, confirmed in his plea that BitClub had indeed wreaked the economic damage that prosecutors accused the mining pool’s principals of committing: $722 million in stolen bitcoin over five years.
• Balaci’s testimony indicates BitClub never ran the lucrative bitcoin mining pools it lured victim investors with between April 2014 and December 2019. Instead, Balaci said he inflated the website’s mining activity to fool the “sheep” into sticking around.
• Balaci said he assisted Matthew Brent Goettsche and Russ Albert Medlin in setting up the network as its programmer. Goettsche has been in custody since December; Medlin, a fugitive, was arrested on sex charges in Indonesia in June. Balaci was recently arrested in Germany, according to a Department of Justice press release.
• Under the plea agreement, Balaci faces a maximum five-year sentence and $250,000 fine.

• Crypto Firm CEO Went Into Hiding After Claims 2,000 Investors Defrauded
• Digital Currency Guru of $568M Cyber Fraud Forum Pleads Guilty
• Crypto.com to Refund Clients as Wirecard’s Card Issuer Told to Cease Operations
• How to Spot a Crypto Scam

The official WikiLeaks Shop, an offshoot of the non-profit infamous for leaking government secrets, now accepts bitcoin Lightning payments. 

All proceeds from the online store, which sells WikiLeaks T-shirts and other swag, goes to fund WikiLeaks operations. The shop already accepts bitcoin and other popular cryptocurrencies for payments. Now, as of Tuesday, it also accepts bitcoin payments via Lightning, making the WikiLeaks Shop one of the earliest vendors to do so.

The Lightning Network supports a newer, faster type of bitcoin transaction that could potentially help bitcoin scale to support many more users. But using Lightning is still somewhat experimental and risky, compared to sending transactions directly to the Bitcoin blockchain.

Related: Bitcoin’s Lightning Network Is Vulnerable to ‘Looting’: New Research Explains

Read more: Bitcoin’s Lightning Network Is Vulnerable to ‘Looting’: New Research Explains

A WikiLeaks Shop spokesperson told CoinDesk the site added Lightning support after receiving a few requests from prospective customers. “We try to offer as many crypto payment options as possible that our supporters request, as lots of supporters also love cryptocurrency,” the person said.

This latest development from the WikiLeaks Shop carries historical significance since WikiLeaks was one of the first organizations to accept bitcoin in 2011 as a way to receive donations. At the time, U.S. banks were blocking payments via Visa and Mastercard to the controversial organization.

Read more: WikiLeaks to Accept Additional Cryptocurrencies for Donations

Related: Bitcoin Startup Zap Is Working With Visa

“I can’t speak on behalf of the main organization as the shop is technically separate. However, for the shop [bitcoin] was an easy process to add as we use the CoinPayments gateway,” a shop spokesperson told CoinDesk.

Users who pay for items using cryptocurrency rather than traditional payment methods receive a 5% discount.

“We generally see most crypto orders in bitcoin, litecoin, ethereum and very few in the other altcoins, but perhaps we will have more orders with this one,” the spokesperson added.

• After Years of Resistance, BitPay Adopts SegWit for Cheaper Bitcoin Transactions
• Cryptography Startup Brings Private Payment Channels to Tezos Blockchain

Two technology developers are trying to keep their workplace harassment lawsuit against the Tron Foundation on the path to trial.

A legal challenge is calling on a court to overturn an order allowing the central organization developing the Tron cryptocurrency to privately litigate a lawsuit through arbitration.

Richard Hall and Lukasz Juraszek, employees fired from the Tron Foundation last year, filed a writ of mandamus with the First District Court of Appeal in California in San Francisco on June 17 to reverse arbitration in a lawsuit alleging wrongful termination and hostile work practices at BitTorrent, a file-sharing service acquired in 2018 by the Tron Foundation. In March the San Francisco Superior Court approved the Tron Foundation’s and BitTorrent’s request to settle the lawsuit in arbitration instead of in court.

Related: Bitfinex Must Face New York Allegations Over $850M in Lost Funds, Appeals Court Rules

Parties to the lawsuit and their lawyers did not respond to requests for comment.

See also: Major Crypto Firms Including Binance, Civic, Tron Targeted in Flood of Lawsuits

Unlike an appeal, where an open-ended judgment on a civil or criminal case’s final outcome is rendered potentially after several years, a writ of mandamus decides within months whether a court fulfilled or violated its obligations.

The writ of mandamus says the Tron Foundation and BitTorrent submitted inadmissible documents supporting an arbitration agreement that contained illegal contractual terms. According to the writ of mandamus, the San Francisco Superior Court acknowledged the arbitration agreement was “unconscionable,” or skewed to favor the employer, but sided with the Tron Foundation and BitTorrent anyway.

Related: Introducing the CoinDesk 20: The Assets That Matter Most in Crypto

The San Francisco Superior Court ruled the arbitration agreement was valid as long as the employees saw, and took the initiative to sign, the paperwork. Hall and Juraszek responded in February to the Tron Foundation’s and BitTorrent’s motion to compel arbitration by claiming they had not read or were not permitted to negotiate the agreement.

The lawsuit alleges Tron Chief Executive Officer Justin Sun and Tron head of engineering Cong Li assaulted Tron personnel during office meetings, favored Chinese employees and harassed Hall and Juraszek for alerting the company to pirated content and child pornography circulating on BitTorrent programs. The alleged retaliation campaigns involved Sun and Li demoting and firing Hall and Juraszek, who had above-average scores on performance reviews, and tampering with their personnel files and corporate email accounts to orchestrate a cover-up.

Hall and Juraszek filed the lawsuit in October after reporting the Tron Foundation and BitTorrent to the California Department of Fair Employment and Housing (DFEH), a state labor agency that handles employment discrimination and harassment. The California DFEH in October gave Hall and Juraszek permission to file the lawsuit after they chose to move their complaints about the Tron executives and entities to a court of law.

• Digital Currency Guru of $568M Cyber Fraud Forum Pleads Guilty
• Ex-Bitcoin Dev Settles Defamation Suit Over Sex Assault Claims

A 31% drop in month-over-month trading volume in June drove bitcoin’s annualized volatility to a six-month low, according to a recent report by the cryptocurrency exchange Kraken. 

• According to the report, June was the most uneventful month for bitcoin (BTC) trading since February as a lack of market activity brought down trading volume to a four-month low of $36.6 billion.  
• In light of the subdued market and low volatility, bitcoin saw a price drop of 4.4%, the lowest monthly change since August last year. 
• The report also found that in a reversal of trends from earlier this year, bitcoin’s 30-day correlation with the S&P 500 turned “substantially more positive” and climbed to 0.65 in late-June. 
• In the same month, bitcoin’s 30-day correlation with gold slipped below the 1-year average and hit a low of -0.49. 
• According to the report, bitcoin’s reversal in correlations with gold and S&P 500 made it behave less like a safe-haven asset and more like a traditional financial asset amid a global stock market recovery during June. 
• The report says market participants for bitcoin should now pay closer attention to the 30-day forward looking volatility index for the S&P 500 (VIX), and that if BTC is going to break the multi-year macro down-trend, it would need to climb above $10,500 and trigger an upward trend.

• Market Wrap: Stocks Tick Downward and so Does Bitcoin, to $9,200
• Bitcoin Option Traders Bet on Bullish Move Following Volatility Squeeze
• Market Wrap: Bitcoin Jumps Past $9,400 Despite Weak July Volumes
• 23-Year-Old Who Lied to Bank About Bitcoin Holdings Pleads Guilty to Fraud

Coinbase is said to be preparing to go public, CENTRE blasklisted a decentralized address and U.S. sanctions on China could trickle down to crypto brokerages. Here’s the story:

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Coinbase Listing?
Coinbase is reportedly preparing to list on the U.S. stock market sometime in early 2021, according to a Reuters report. Sources said the exchange has already begun the process for a listing. Rather than an initial public offering, it’s said the firm would prefer to go down the route of a direct listing on an exchange. The company was valued at $8 billion at its last funding round in 2018.

Related: First Mover: Pie Anyone? DeFi Pushes ETF-Style Investing Toward Decentralization

CENTRElized?
The CENTRE Consortium blacklisted a USDC address in response to a law enforcement request, freezing $100,000 worth of the stablecoin, a spokesperson said Wednesday. “When an address is blacklisted, it can no longer receive USDC and all of the USDC controlled by that address is blocked and cannot be transferred on-chain,” according to a policy document shared with CoinDesk. The incident underscores the limits of decentralization when regulated businesses interact with permissionless networks. 

Brazil’s Boom
Brazil is experiencing a token boom, driven by interest in stablecoins. The number of Brazilian stablecoins traders has quadrupled since January 2020, according to a Binance representative. Other exchanges report a similar trend. Rather than spawning a Bitcoin Utopia, so far the cryptocurrency trend has further aligned Brazil with the U.S. dollar, in part due to the faltering Brazilian real, which hit a record low against the dollar in May 2020. “We have a trend of dollarization,” Nash exchange co-founder Fabio Canesin said, “so of course having stablecoin access is interesting for … access to smart contracts for more stable savings.”

Sanctions
U.S. sanctions in response to Hong Kong’s national security law – and Beijing’s tighter grip over the city’s financial system – could pose challenges for local crypto brokerage firms. The U.S. Senate passed the Hong Kong Autonomy Act on Thursday that could, if enacted, restrict foreign banks and subsidiaries of U.S. banks in Hong Kong from accessing the U.S. dollar system. This could take a toll on cryptocurrency companies in Hong Kong, which are highly dependent on the U.S. dollar system to settle and clear transactions. “The most successful cryptocurrency companies here are dependent on their access to the U.S. dollar system,” said Leo Weese, the president and co-founder of the Bitcoin Association of Hong Kong.

Movers & Shakers
HOPR, a decentralized alternative to Tor, closed a $1 million seed round led by Binance Labs with participation from Focus Labs, Spark Digital Capital, Caballeros Capital and Synaitken. While Avanti, the Wyoming-based crypto-first bank, has brought on internet cryptography pioneer Christopher Allen, former Federal Reserve official Katie Cox, and blockchain architect Bob McElrath as advisers. (Adriana Hamacher/Decrypt) Lastly, Ceres, a “seed to sale” transaction network for cannabis, has filed paperwork with the SEC to conduct a Reg. A sale, seeking permission to sell both a token and a coin. According to the application, the firm plans to sell up to $30 million worth of its tokens, which would represent an equity holding, and $20 million in Ceres coins, which would serve as a transaction tool in its payments network. 

Related: Blockchain Bites: DiDi to Trial the Digital Yuan and a Look at Chainlink’s Gains

Scams
Chinese police have seized over $15 million in bitcoin, ether and tether as well as supercars worth $2 million from the alleged operators of a novel scam that sold counterfeit tokens. China’s Ministry of Public Security said Wenzhou police arrested 10 individuals suspected of advertising a blockchain smart contract that claimed to generate Huobi Tokens (HT), Huobi exchange’s own crypto, that promised returns of 8%, one victim said.

• Libra still plans to issue its multi-asset backed stablecoin, according to Libra Director of Policy Julien Le Goc, speaking at the Global Digital Finance virtual summit.
• Only 23% of hodlers have an estate plan to bequeath their digital wealth, according to the Cremation Institute’s online survey.
• The Children’s Heart Unit Fund received nearly $48,000 in donations made using cryptocurrency.
• The CFTC will develop a “holistic framework” for crypto assets by 2024. (Yogita Khatri/The Block)
• The London Stock Exchange Group (LSEG) added 169 digital assets to its SEDOL Masterfile service, a global database used to tag and track securities and other investable assets. 

Multi-year lows
While bitcoin has gained 3% so far this week, the overall trading environment remains dull with volatility hovering at multi-year lows. Ten-day realized volatility is now at 20%, the lowest level for two years, “only preceded in Sep & Oct 2018,” QCP Capital said. Back in the autumn of 2018, the low-volatility consolidation ended with a big drop to below $6,000. This time, though, options traders are anticipating a breakout on the higher side. 

Transaction Revenues
In June, Ethereum miners generated approximately 17% of their total revenue from the transaction fees, The Block has found. This all-time high represents a jump from 10% of revenues earned from transaction fees in May. The researchers attribute the increase to several Ethereum Ponzi schemes and the growing interest in yield farming. (The Block)

The CoinDesk 20: The Assets That Matter Most to the Market
Digital assets aren’t what they used to be. As more people learn the fundamentals and grasp the potential for high returns, cryptocurrencies are emerging as a new asset category.

Introducing the CoinDesk 20, our list of the 20 digital assets that impact and define the market. From our new dashboard, uncover insights through price pages, key metrics, news and industry analysis, as well as video interviews with founders and key developers of the underlying technology. Dive into our freshly revamped practical guide to the assets that matter most to the market.

What DeFi Can Learn From ‘InFi’
Leah Callon-Butler, CoinDesk columnist and director of Emfarsis, thinks informal economies, like those that exist in Southeast Asia as a means of creating local financial resilience, are DeFi’s precedent. “The developing world has produced a wealth of community-based systems that rely on shared values to achieve economic empowerment on their own terms. By studying these informal systems of cooperation, we may uncover opportunities for blockchain to improve on existing practices or help to scale positive impact,” she writes. 

Who Let the Doge Out?
The latest episode of The Breakdown looks at the most 2020 financial story to date: the meteoric rise of dogecoin spurred by TikTok videos.

• First Mover: With Trading Volumes Slumping, Are There Too Many Crypto Exchanges?
• Blockchain Bites: Crypto’s Bailout Millions, Brazil’s Binance Ban, Lightning’s Bug

Directors of Canaan Creative, a publicly listed bitcoin miner manufacturer, were suddenly dropped from the company’s business registry, prompting speculation of a power grab.

• The company’s official Chinese business registry now lists Nangeng Zhang as the company’s sole director.
• Zhang’s title has also changed from chairman and general manager to executive director and general manager.
• He joined Canaan as CEO in 2015.
• Four executives in total – Co-chairman Jianping Kong, founder and CFO Jiaxuan Li, non-executive director Qifeng Sun and public affairs director Songhua Tu – have been removed from the registry.
• All but Songhua Tu had previously been listed as company directors.
• Both Kong and Li are still listed on the registry as part of Canaan’s “core team.”
• According to the registry’s changelog, the update took place on July 6.
• Sources speaking to Chinese media said Canaan is wracked by an internal struggle between Zhang, who is based in Beijing, and the directors at the company’s headquarters in the southern city of Hangzhou.
• It’s unclear what’s behind the dispute, but there’s speculation it could be over Canaan’s long-term strategy.
• Some have compared the takeover at Canaan to the bitter conflict currently raging between the two co-founders of rival bitcoin miner maker Bitmain.
• Bitmain’s Micree Zhan and Jihan Wu have been struggling over who controls the company for months.
• Canaan reported a net revenue loss of nearly $150 million in 2019 and another loss of $5.6 million in Q1 2020.
• Listed on Nasdaq, Canaan’s share price has more than halved since the bitcoin halving event to under $2 at press time.
• Canaan has not yet updated the Securities and Exchange Commission with the changes in senior management.
• The last significant filing was the company's annual report on April 15, which still lists the original board of directors.

Also read: Bitcoin Miner Maker Canaan’s Stock Hits Record Low 1 Month After Halving

• Iran Gives Crypto Miners One Month to Register With the State
• Bitcoin Miners Saw 23% Revenue Drop in June
• Bitcoin’s Mining Difficulty Has Rarely Been This Static in a Decade
• Consumer Watchdog Moves to Block Canadian Bitcoin Miner From US Power Grid

The Commodity Futures Trading Commission (CFTC), which regulates the U.S. bitcoin and ether derivatives markets, plans to develop a digital asset innovation blueprint by 2024.

• “We will develop a holistic framework to promote responsible innovation in digital assets,” the swaps regulator teased in its 2020-2024 Strategic Plan, released Wednesday.
• This “holistic framework” will help keep the CFTC apace with the “risks and opportunities” of these so-called “21st century commodities,” the regulator said, though it was unclear at press time how far the document will ultimately go.
• Chairman Heath Tarbert called for “principles-based regulation” of blockchain and digital assets in a June essay published by the Harvard Business Law Review, writing there that “overly prescriptive rules could stunt the development of this important market.”
• On a related front, CFTC announced Thursday it will host three fintech-focused virtual events this fall, including one talk on the future of finance and another on how regulators respond to financial innovation.

• WisdomTree Proposes ETF With 5% Bitcoin Exposure Despite SEC’s Long-Standing Blockade
• Market Wrap: Stocks Rally on Possible Stimulus but Bitcoin Is Flat at $9.5K
• Number of Institutions Buying Crypto Futures Doubled in 2020: Fidelity Report
• Bitcoin Options Growth Outpaces Futures, Swaps

Decentralized virtual private network (VPN) provider Orchid announced the launch of its VPN application on the Apple app store on Thursday. 

• In an emailed press release, Orchid said users of its app would be able to make in-app purchases to get VPN bandwidth. The in-app purchases would essentially work like gift cards for the OXT token, Orchid’s cryptocurrency used for transactions on its network. 
• Launched in December 2019, Orchid uses the Ethereum blockchain to enable users to buy and sell VPN bandwidth using its OXT token. 
• In its statement, Orchid said using in-app purchases was also a way to do away with the complicated steps associated with crypto transactions, which can often frustrate users. 
• “Orchid works by aggregating bandwidth from VPNs and other providers around the world,” said Steven Waterhouse, CEO of Orchid, explaining how using multiple VPN providers allows for an additional layer of privacy for users.
• According to the app’s listing on the Apple store, it is currently available for use on iPhones, iPads and the iPod. 

• How Apple’s COVID-19 Policy Limited a Public Health App in Taiwan
• Is Scam Selling Suppressing the Price of Bitcoin?
• US Officials Allege Student Defrauded Apple as Part of SIM Swap Attack
• For Contact Tracing to Work, Americans Will Have to Trust Google and Apple

One of the world’s largest cryptocurrency exchanges is said to be preparing to list on the U.S. stock market sometime in early 2021.

• Sources speaking to Reuters said Coinbase had already begun the process for a listing; it isn’t clear on which exchange venue this would take place.
• Rather than an initial public offering, it’s said the firm would prefer to go down the route of a direct listing on an exchange.
• The Securities and Exchange Commission would have to approve Coinbase’s listing application.
• Should it be approved, Coinbase would be the first crypto exchange to go public in the U.S.
• The company was valued at $8 billion at its last funding round in 2018.
• Coinbase declined to comment.

See also: Coinbase Lists Compound’s COMP Token for Retail Crypto Traders

• Circle Confirms Freezing $100K in USDC at Law Enforcement’s Request
• Coinbase Taps Former Facebook Lawyer to Head Legal Team
• First Mover: With Trading Volumes Slumping, Are There Too Many Crypto Exchanges?
• Cryptocurrency Exchange Kraken Adds New Banking Option for US Users

Binance Labs, the incubation and seed funding arm of the world’s largest crypto exchange, has made its first investment this year, backing decentralized privacy startup HOPR.

Announced Thursday, Binance Labs led a $1 million seed round in HOPR, which has also received funding from Focus Labs, Spark Digital Capital, Caballeros Capital and Synaitken. The seed round followed a fellowship award the startup received last year from BinanceX, the exchange’s early-stage developer platform.

The investment in HOPR, which takes data privacy to the next level with a token-incentivized mixnet solution, was a long time in the making, explained Binance Strategy Officer Gin Chao.

Related: Start9 Labs Pitches a Private At-Home Server. And It Works

“The team from BinanceX met HOPR over a year ago at Paris Blockchain Week, and we have got to know the team,” Chao said in an interview, adding:

“We will be making much fewer investments, and these are the sorts of projects we will be focused on, in areas that we feel have a sort of immediate product-market fit.” 

Chao said data privacy has proven value in traditional markets as well as crypto, and HOPR also has the right kind of credentials – with a token sale on the way and plans to become a legally recognized decentralized autonomous organization (DAO) in Switzerland.

“I think it’s the right type of problem to be solving at this time and HOPR’s solution is a great fit in terms of the ethos of blockchain and having an eventual decentralized organization with a token to address the problem,” Chao said.

Related: With Chat Privacy Under Threat in US, Firm Develops ‘100% User-Controlled’ Messaging

HOPR is not another on-chain privacy solution for blockchain transactions, explained HOPR co-founder Sebastian Bürgel, but a general network-layer protocol to allow users to exchange data privately, in the same vein as Tor (the onion router) or a virtual private network (VPN).

The idea to incentivize participants with tokens to enhance the privacy of a network is not entirely new; the Ethereum-based Orchid protocol does this, too. 

Read more: Orchid Tops $43 Million Raised in Token Sale for Crypto Tor Alternative

The problem, said Bürgel, is that when any two computers are communicating, many third parties – such as telcos and internet service providers (ISPs) – are privy to that data, not to mention a host of metadata.   

Data transmitted via the HOPR network “hops” from one relay node to the next, where each participant mixes that message with other traffic before sending it on. 

“Anybody can participate and be paid for the service of relaying traffic and thereby creating privacy for you,” said Bürgel. “You are paid in HOPR tokens similar to how miners get paid ETH on Ethereum.”

In terms of what participants can expect to earn from relaying and mixing on HOPR, Bürgel said this would be difficult to estimate, not the least because the network will not be centrally controlled in any way.  

“We imagine this is going to be a kind of marketplace,” he said. “I think it should be something that is comparable to a VPN subscription, which is an order of like $10 a month, so for some reasonable usage it should be in that range.”

Read more: Start9 Labs Pitches a Private At-Home Server. And It Works

Bürgel pointed out that VPNs have a history of leaking private data and also selling and monetizing that data, while Tor’s onion encryption doesn’t really do a good job of metadata privacy, and a particularly large data packet can be tracked going through the Tor network. 

“HOPR packets all look the same,” said Bürgel. “There’s a lot of cryptography under the hood, but basically HOPR packets are indistinguishable from one another and we are also mixing packets, so that brings significantly more privacy than Tor could offer.”

The network is still in the testing phase, but a medical data use case has been explored involving data transmitted between a hospital and a cloud provider. Another useful avenue involves regulatory requirements such as General Data Protection Regulation (GDPR) and also things like the Financial Action Task Force’s “Travel Rule” requirement.

“HOPR is perfectly positioned to deal with GDPR and to facilitate the exchange between regulated custodians, and we have been talking to Switzerland’s OpenVASP about this,” Bürgel said.

• The IRS Wants to Know More About Privacy-Enhancing Crypto Coins, Tools
• Bug in Moscow’s Blockchain Polling System Can Reveal How Users Voted: Report