EOS, in the form of Block.One, has settled with the Securities and Exchange Commission over its 2017 ICO being an unregistered securities offering — an ICO that was so hilariously terrible it rated particular mention in Attack of the 50 Foot Blockchain. Block.One has paid a fine of $24 million.
The crypto world has risen up as one and gone “WHAT ON EARTH” — EOS claimed at the time to have taken in four billion dollars in ether, and getting fined 0.6% of that seems like an amazing deal.
The order is oddly different to other SEC administrative orders over ICOs — it’s only seven pages, and there’s no section outlining the SEC’s legal reasoning.
Some have suggested that the fine was so small, relatively speaking, because EOS didn’t take in $4 billion at all — but instead, cycled the received Ether back through the system to make the eventual number look bigger and bag tokens for themselves. This is a trick many ICOs tried. But there’s no smoking-gun evidence I know of that EOS did this.
Stephen Palley posts a considered opinion — “I’d heard whispers, off the record and unsubstantiated, of subpoenas being issued over the summer, which means that this was a formal investigation and also means that in SEC investigation time, the case settled relatively quickly, within about a year.” Block.one tried to block US investors by IP, but some got through, and there was that advertising billboard in Times Square.
Palley cautions that this is not open season for token offerings — “the notion that this kind of settlement is a green light for unregistered securities offerings is stupid. Stupid. That’s the technical word.” Don’t try this now.
The SEC on unregulated securities sales pic.twitter.com/DAf3BIBH6Q
— Cryptofungus (@crypt0fungus) October 1, 2019
PayPal has officially dropped out of Libra. “PayPal has made the decision to forgo further participation in the Libra Association at this time.” But the company “remains supportive of Libra’s mission” — so that’s nice. PayPal was the only prospective Libra Association member who didn’t show up for a key meeting in Washington on Thursday. PayPal is worried about the regulatory backlash — “It doesn’t seem that there was a lot of pre-work done with regulators. Companies don’t want that to bleed into their businesses.”
Other prospective members were getting spooked by the regulatory heat as far back as August. Visa and Mastercard were named by the Wall Street Journal as getting iffy, and Bloomberg mentioned Stripe having qualms — they feel that Facebook “oversold” how comfortable regulators were with the project. David Marcus took to Twitter to deny everything.
Dante Disparte from Libra says there’s still 1500 organisations who’ve indicated interest in joining. The remaining 27 initial prospective members will be meeting in Geneva on 14 October to review the Association’s charter and appoint a board of directors.
Libra development continues apace — with a new roadmap.
Tim Cook from Apple was asked if he thought Apple setting up its own Libra-style private currency was a good idea. He doesn’t. (English version.)
Next firm that drops out gets data dumped. https://t.co/TlsFhW2vvD
— Libra (@LibraReserve) October 4, 2019
The New York Office of the Attorney General has responded to Bitfinex and Tether’s delay to document production for its appeal — “since the granting of the 354 Order in April, Respondents have failed to produce a single non-jurisdictional document.” The AG has asked the judge to speed it along a bit — maintain the injunction on Bitfinex taking money from Tether, and order them to collect documents ready for being required to produce them.
The SEC has settled with Nebulous, the company behind the Sia file-storage coin, over its 2014 offering — which was an actual altcoin with its own blockchain, not a token. Nebulous paid in fines about double what they took in in that offering.
The FCA will be banning selling crypto margin trading to UK retail investors. The Economist starts its piece by blaming Bitcoin price movements on manipulation to burn the margin traders. ‘Cos I pointed them in that direction.
https://twitter.com/karbonbased/status/1179906676406853632
Ohio businesses can no longer pay taxes in bitcoin, as the method is found not to be legal, and gets suspended. Less than ten businesses ever used it, though.
You can tell Bitcoin is digital gold — because the crypto space attracted gold scammers. Karatbars GmbH offered a gold-backed ICO token — they’re now under investigation by Florida regulators. Québec regulators had warned investors about Karatbars in 2014, as have regulators in the Netherlands and Namibia.
There’s room for fresh new gold-backed ICO operations — Dignity Gold is doing an audit, to appease investors upset that it dropped from 27 cents at launch to 0.2 cent now. But I’m sure a coin that claims it will totally be backed by $10 billion in gold when they mine it, and has a market cap of $1 million, will turn out to be entirely on the level.
A new study from the Bank Of Canada on how much more efficient Bitcoin is than the awful legacy financial system — “Using the growth rate of 25 bitcoins, for every block and average transaction fees in 2015, we find that Bitcoin generates a large welfare loss that is about 500 times as large as in a monetary economy with 2% inflation.”
Coinbase is dealing with the crypto winter by tripling its trading fees. It turns out dollar-based exchanges can’t really hide their trading volume problems.
The Bitcoin Foundation is pretty much dead. You could tell that from how they’ve done nothing in the past four or five years, but they finally stopped paying for the website last month. BitMEX Research has a nice article on the Foundation’s slow decline into irrelevance.
https://twitter.com/karbonbased/status/1177197899391930368
Izabella Kaminska takes you through how real-time gross settlement works in the real-life banking system — and how instant settlement turned out to be deadly to liquidity, and what this means for central bank digital currencies. “Banks needed funding not credit because without such funds in situ, real-time settlement could not be contractually achieved. That pre-funding need, however, would heighten the system’s sensitivity to logjams imposed by single institutions, and with it threaten total system gridlock.” See also Izzy’s Twitter thread of research — “What i find most interesting about all this is how it ultimately relates to the cost of pre-funding tx in any real-time system, and the degree such a set up will always be more expensive than a netting-based alternative that operates on trust.”
Of course WeWork has a frickin’ blockchain lab — space in 10 York Road, Southwark, which they promise will be set up as a blockchain hub as of 1 November. Arthur Breitman from Tezos is listed as one of the advisors. Sign up today with this robust company that will definitely be around next week!
A Russian iPhone user sues Apple for turning him gay — after someone sent him 69 GayCoins on a crypto payment app. Sounds legit.
https://twitter.com/iwearahoodie/status/1179394029802414082
"Cyberpunk" who uses public/public key to bootstrap a financial system reverts to "rusty staples" for proof of identity (by Johnroberts95000) [image] https://t.co/f9bhibCRGV pic.twitter.com/2Mm4gY78eP
— r/Buttcoin (@r_Buttcoin) October 3, 2019
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