This week in Crypto (August 8–August 14)

This week in Crypto (August 8–August 14)

Technology
August 14, 2022 by
8
Two major stories dominated crypto space over the past week. Firstly, the US Treasury Department’s sanctioning of cryptocurrency mixer Tornado Cash. Secondly, the impeding merge of the Ethereum network. Tornado Cash is a decentralized protocol which allows users to transact privately by commingling funds across several addresses via smart contracts. The protocol has been used by
This week in Crypto (August 8–August 14)

Two major stories dominated crypto space over the past week. Firstly, the US Treasury Department’s sanctioning of cryptocurrency mixer Tornado Cash. Secondly, the impeding merge of the Ethereum network.

Tornado Cash is a decentralized protocol which allows users to transact privately by commingling funds across several addresses via smart contracts. The protocol has been used by hackers to mix illicitly gained cryptocurrencies with licit ones. The Treasury Department alleges that Tornado cash has been used to launder approximately $7 billion USD including roughly $500 million by a North Korean hacking group.

The announcement by the Treasury Department, however, has been the first time ever a piece of software on the internet has been sanctioned. Sanctions typically involve individuals or business not decentralized applications. The regulatory first has DeFi and crypto market participants scrambling to figure out the implications for their businesses and the space as a whole.

Circle, backer of USDC, already announced that it will move forward with freezes of USDC linked to Tornado Cash. Some DeFi protocols have banned wallet addresses that have interacted with the protocol from using their services. MakerDOA, one of the largest players in the DeFi space and the DOA behind the DAI stablecoin, announced contingency plans should its stablecoin be sanctioned by Washington as DAI is partially backed by USDC.

In other news, the historic transition of Ethereum to a Proof-of-Stake mechanism draws ever closer with a tentative date of early September. Over the past two months, the price of ETH has rallied over 100% in anticipation of improved token economics and staking mechanics. The historic and long awaited moment is detailed in the long read this week. In addition to explaining its significance of The Merge, the article explores the question of whether the POS mechanism could turn ETH into a security under the Howey Test.

Lastly, BlackRock continued its foray into the crypto space with a launch of private trust that tracks the spot price of Bitcoin. The trust will be offered to US-based institutional clients, likely piggybacking on the previously announced partnership with Coinbase.

Major Headlines:

US Treasury sanctions cryptocurrency mixer Tornado Cash

US Treasury sanctions cryptocurrency mixer Tornado Cash

Centre Bans USDC Addresses After Tornado Sanctions

Centre Bans USDC Addresses After Tornado Sanctions – The Defiant

Circle’s Response: Uncharted | The Responsibility of Trust

Uncharted | The Responsibility of Trust

US Treasury Dept Press Release

U.S. Treasury Sanctions Notorious Virtual Currency Mixer Tornado Cash

MakerDAO May Execute ‘Emergency Shutdown’ If Sanctions Hit DAI

MakerDAO May Execute ‘Emergency Shutdown’ If Sanctions Hit DAI – The Defiant

Ethereum core developers suggest tentative dates for The Merge

Ethereum core developers suggest tentative dates for The Merge

Ban Banks From Holding Crypto, UN Development Body Says

Ban Banks From Holding Crypto, UN Development Body Says

BlackRock launches private trust offering direct bitcoin exposure

BlackRock launches private trust offering direct bitcoin exposure

Long Read:

What’s at Stake: Will the Merge Turn Ether Into a Security?

What’s at Stake: Will the Merge Turn Ether Into a Security?

Chart of The Week:

New to trading? Try crypto trading bots or copy trading

This week in Crypto (August 8–August 14) was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

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