All Been Crypto — Week 19 Aug 2022

All Been Crypto — Week 19 Aug 2022

Technology
August 19, 2022 by
6
All Been Crypto — Week 19 Aug 2022 Apologies this weeks update coming out a bit later as I’m on the road. Was a relatively flat week until this morning when prices dropped 10% pushing us close to the 1tn market cap again. We had the ongoing debate after the tornado cash ban last week and where to
All Been Crypto — Week 19 Aug 2022

All Been Crypto — Week 19 Aug 2022

Apologies this weeks update coming out a bit later as I’m on the road. Was a relatively flat week until this morning when prices dropped 10% pushing us close to the 1tn market cap again. We had the ongoing debate after the tornado cash ban last week and where to draw the line in terms of decentralization and permissionlessness vs compliance with regulators. There were also a number of headlines on both the M&A side as well as fund raisings and unfortunately also some more job cuts announced. Markets continue to be volatile albeit on lower volumes as we head closer to the ETH merge. Enjoy reading!

Bat Tai Chi — btc21@mail.com

HEADLINES:

That ban that caused a Tornado

This is a follow up from last weeks piece as we had so much unfolding here. OFAGs decision to put Tornado Cash (TC) on the sanction list has resulted in a outcry of many industry participants to uphold true crypto values. It has brought critique on many and showed how centralized attack vectors are behind many so called ‘decentralized’ projects and platforms/infrastructure. It was shocking to see the arrest of one of the devs of Tornado in the Netherlands and in the US some argue the ban is unconstitutional. Coin Center is exploring bringing it to court all the while the DAO is trying to put in some additional contingency measures as the personal risk for many contributors rises. The major problem here is that even if the challenge is successful and the arrested dev gets free, it has a significant chilling effect — not many are willing to put their personal life on the line for writing code. I would think that if not part of the plan is at least welcome by regulators who are clearly against such strong privacy tools. The debate however left the Tornado Cash realm and quickly became bigger. It started to be about Ethereum’s immutability and censorship resistance which naturally comes into question when seeing so many key infrastructure quickly turn their back on TC in fear of OFAC repercussions. US based platforms have no choice really they comply or they are out. Reminds me about Eric Voorhees and Shapeshift how they gave up privacy for KYC in order not to shut down the company and then later on worked on decentralization to get back to the initial promise. In the short run projects really have no choice but to comply unless they are out of US and dont touch US counterparties. But of course that defeats a huge point about why we have crypto in the first place and so where you draw the line is difficult. Many say TC was a red line that can’t be crossed. Other’s put it at the block level where you can’t censor certain transactions. Coinbase’s Brian Armstrong got pushed to make such a statement, they would exit staking rather than enable on-chain censorship. You can see how deep the divide runs that TC has sparked.

Raises, Drops and Cuts and Partnerships

A mixed bag when you look at the headlines, we still see major players suffer from the Luna/3AC/Celcius fall out and the after wobbles of that. DCG is cutting 20% of its work for at Genesis and replacing CEO, while Galaxy is stepping away from their planned 1.2bn acquisition of BitGo and are being sued for 100mm in damages for this action. Cash is cleary running dry but also valuations have probably come down significantly since the deal was initially announced and there are probably other custody assets available on the market at the moment. On the flipside though we had CoinFund come out with a 300mm rais of a new fund focused on series A, we learned about Point72’s crypto ambitions which are starting to take shape and Dragonfly’s rebranding after the acquisition of Metastable. There was also a cooperation announced between to crypto giants FTX and Paradigm on a new product allowing you to trade the futures spread directly. Not surprising given how much interest there is now with ETH in deep backwardation.

Acala Hack caused aUSD depeg

DOT DeFi platform Acala’s native stablecoin, aUSD, depegged last Sunday, plummeting 99% after hackers exploited a bug in a newly deployed liquidity pool to mint 1.28 billion tokens. They quickly put the network in maintenance mode to freeze funds and eventually managed to recoup a significant portion of the uncollateralized tokens. But hey if you can freeze it that quickly that not good either right…This just reminds us that even on other chains with less economic value vulnerabilities still happen and loopholes get hacked and exploited. So just because we don’t read mostly about ETH/SOL exploits its more to do with TVL and where hackers see the honey pot. We are still very early but hopefully these security measures will get better over time, every hack is a fire probe at best and a nail in the coffin at worst.

QUOTES:

Having financial privacy should never be a crime

Roger Ver

Glad to see Ethereum people pushing against regulations that privileged ETH over other legitimate cryptocurrencies

Vitalik Buterin

Code has long been recognized as speech, so there are clear First Amendment implications whenever the government inhibits the publication of computer code on a public website

Electronic Frontier Foundation

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All Been Crypto — Week 19 Aug 2022 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

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