News: Quadriga was even worse than we thought, FATF crypto guidance finalised, Facebook Libra roundup

The latest Ernst & Young report on the collapse of the QuadrigaCX crypto exchange is out, and it’s actually freshly amazing just how bad Quadriga really was. The exchange was a Ponzi scheme operating as a money laundering chop shop, dealing with a few outside customers here and there for appearance’s sake. It appears never to have been run as a sustainable business. Gerald Cotten created fake money on the exchange, bought real bitcoins with it, sold those coins on other exchanges, and blew it all margin-trading on altcoins — except what he spent on living a life of luxury.

Amy Castor has the summary, but you should read the full report as well — go to the EY Quadriga page, and look under Documents → English → Bankruptcy → 4. Reports of the Trustee → 2. First Report of the Trustee. I think we can definitely speak in terms of Cotten’s alleged death.

Disasters like Quadriga are why regulators are moving in on the space hard. The Financial Action Task Force (FATF) has finalised its guidance on virtual asset exchanges, and it’s precisely what was expected — Coindesk summarises the report. Countries have until June 2020 to enforce this on their crypto exchanges.



It’s the week of Facebook’s Libra! I got quoted by the BBC, Vice News, Yahoo Finance, Wired UK and Decrypt, and I went on Kelly Cutrara’s show on Global News Toronto 640. I was also one of the many working on the Wikipedia article, and dealing with the issues of how to write about something that doesn’t exist yet.

The support from some of Facebook’s partners is … desultory. The press releases from PayPal, Visa and Kiva in particular are remarkable in how hard they dodge committing to any actual courses of action whatsoever.

Libra has released its blockchain software! Or a barely functional pre-alpha that does hardly anything.

Nicholas Weaver details just a few of the ways in which the plans for Libra foreshadow a regulatory car crash.

All the crypto people who begged for “regulatory clarity?” Libra means you’re going to get it, good and hard. France creates a G7 task force to help central banks deal with “stablecoins” that are big enough to be a systemic risk.

Facebook doesn’t like FT Alphaville’s coverage of Libra. So you should probably read FT Alphaville more. It’s free with a login, and totally worth your time. In fact, read all of Financial Times’ Libra coverage in one place. My favourite bit of theirs on Libra is probably Brendan Greeley’s detailed demolition of the stupid idea that Libra — or Bitcoin — will do a damn thing to “bank the unbanked.”



Dr Craig Wright showed up in Florida on 18 June for his mediation in Kleiman v. Wright — though they didn’t come to a settlement. Let’s see how things go on 28 June.

The Mozilla Foundation released Firefox 67.0.3 to deal with a zero-day security hole — one that was actively being exploited. The hole was discovered by crypto exchange Coinbase, when an attacker tried to use it to “spearphish” them — targeting particular known individuals in the company.

“Despite its best efforts. Malta isn’t exactly emerging as the civilized, sensible crypto capital of the world.”

KodakOne (of KodakCoin) is still claiming to be doing things — a partnership agreement that will definitely generate $5 million of infringement claims! The software has yet to be released.

Reddit /r/bitcoin posters are super excited that this week’s Netherlands Donald Duck comic is about Bitcoin! It turns out to be about Uncle Scrooge “digitalising” his paper money — the only mention of Bitcoin is some guy in a restaurant whose name is “Berend Bitcoin” — then losing it all when his electricity and Internet fails. He makes it back, though, because his investments in paper factories paid off hugely when the Internet failed. 176-167 did nothing wrong!

“The Bitcoin Scam” by Alex Sobel MP is now up online. I helped review this for fact-checking. Any other politicians want help writing about crypto, feel free to contact me!

I was interviewed by The Native Society. Just in time to mention FacebookCoin!







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