News: IOTA, Massive Adoption, Mastercard v. Libra, DRM in JPEG plans, Reggie Fowler plea deal fails, more Silk Road busts, ICO grace period, the Bitcoin market

  • I’m on a panel at the Science Museum on Friday 21 February! Tickets are already sold out, but maybe you’ll get lucky … [Science Museum]
  • And I’m flying to Vancouver the next day, for a documentary on the collapse of the Quadriga crypto exchange! I may have two seconds spare to meet up with anyone else in Vancouver — apart from fellow subject Amy Castor — but it’s not looking likely …

Massive attack

Jacob Kostecki has called off his crypto conference Massive Adoption, which I covered last week. Amy Castor writes it up. [Modern Consensus]

Kostecki confirmed to Amy that the Jedrek Kostecki who’s been ragging on him on Twitter for the past few years is indeed his brother. Jedrek also showed up on Reddit /r/buttcoin: [Reddit]

I don’t have anything to do with crypto, I just said that crypto is a f—ing scam and proof positive is that my brother is into it.

Do you want to hear about all the family members he owes money to? The $60k he owes me? The opulent spending he does when he gets his hands on any money? All the promises he’s made to pay back money? The people who he’d been friends with since high school who reached out to me to confirm that no, the won’t get the money they lent him after 20 years of friendship back? The cops who came to my house looking for him who’d end up harassing my then-pregnant fiancee instead?

Chris Doerfler found the source of the Massive Adoption flaming “M” logo — Berkshire web consultants, My Media Consultancy. This is quite possibly the lowest-effort intellectual property appropriation you’ll see today. Kostecki says he bought the logo online for $50. Mike Olthoff found a pile of other co-options of the logo. [My Media Consultancy; Kostecki Twitter, archive; Olthoff Twitter]



The Internet of Awful Things

IOTA continues to be a dysfunctional project full of obnoxious nutters. The latest conflict is between Sergey Ivancheglo (a.k.a. Come From Beyond) — the guy who claimed that security holes in IOTA were deliberately put there as “open source copy-protection” — and David Sønstebø, both formerly of Jinn Labs. Sønstebø and Ivancheglo are pointing fingers at each others, threatening lawsuits and police and so on.

There’s also $20 million in IOTA that Sønstebø has decided is his now — which is actually IOTA tokens from the original crowdsale that weren’t picked up by the buyers at the time.

Reddit user catlong-is-long from /r/buttcoin has attempted a short timeline of the present mess, for your popcorn munching — if not enlightenment as such. [Reddit]


In SEC v. Telegram, the SEC has filed more court documents listing possible investors in Telegram’s $1.7 billion ICO for Grams — CoinDesk goes through the candidates. [CoinDesk]

SEC Commissioner Hester Peirce has proposed an all-purpose get-out for ICO tokens — a three-year grace period from their first token sale, to achieve sufficient decentralisation to no longer be deemed a “security” under the Howey test. Peirce says the grace period would be “dependent on development teams acting in good faith” — good thing ICOs are only mostly scams, then. [CoinDesk]

Libra, still unbalanced

So why did Mastercard leave Libra? Mastercard chief Ajay Banga speaks to the Financial Times — and throws Libra under the bus so hard, it bounces twice.

Banga couldn’t get other Association members to commit to “not do anything that is not fully compliant with local law” — such as basic due diligence and Know-Your-Customer. “Every time you talked to the main proponents of Libra, I said ‘Would you put that in writing?’ They wouldn’t.”

Banga couldn’t see how Libra was going to make its money — and “when you don’t understand how money gets made, it gets made in ways you don’t like.” And Libra’s claims of “financial inclusion” made no coherent sense to him. [Financial Times, paywalled]

The Official Monetary and Financial Institutions Forum got Ipsos MORI to run an Internet-based poll on digital payments across 13 countries. The people they surveyed are not happy with the idea of tech companies issuing currencies (they mean Libra), but are much happier with the idea of central banks issuing currencies — in fact, central banks are the most trusted financial institutions. The Financial Times summarised the results, or you can read the full report on OMFIF’s site. [Financial Times, paywalled; OMFIF survey report, PDF]

Former Banque de France governor Christian Noyer thinks that central bank digital currencies for consumers are unlikely within the next ten years. But he thinks that “digital payments” — whatever that means, precisely — between commercial banks “will happen fairly soon.” And policy makers are not keen on large private currencies, such as Libra. [Financial Times, paywalled]

There’s one blitheringly obvious reason that ordinary citizens won’t be so keen on accounts directly with their central bank — negative interest rates. German banks are already maintaining vaults filled with physical Euro notes, rather than depositing their cash holdings at a loss with the Bundesbank. [Bloomberg]

The proposed economics of Libra are fundamentally based in ludicrously incorrect Bitcoin economics. Here’s a video of Christian Catalini explaining where all this comes from, at San Francisco Blockchain Week in late October — Zuckerberg had just suggested to Congress the idea of separate individual national Libras, but Catalini still speaks in terms of the “basket of currencies” version of Libra. I don’t suggest you waste 33 minutes of your life watching the video, but do skim the auto-transcript. Libra is dumb as hell. [YouTube]

Good news for Bitcoin

I know the Bitcoin market looks dead — but here’s a picture of Bitcoin having lots of fun with all its friends in the over-the counter (OTC) markets! They’re, uh, just outside the frame, where you can’t see any evidence of them. (Contains salty language.) [Crypto Briefing]

(“The magical OTC market where all the action is that does not move the price. Where every buyer gets a bargain and every seller gets a premium. Fees are low and the brokers make a killin.”  — devilegende, /r/buttcoin)

Bitcoiners are still trying to magick up a fresh crypto bubble — “Bitcoin has a higher return on a one, three and 10-year basis than any other asset class,” said Steve Kurz, head of asset management at Galaxy Digital, who lost a literal fortune buying big into crypto in January 2018, just as the previous bubble was collapsing. [Financial Times, paywall]

Bitcoin Cash is the fast and efficient Bitcoin that you can use as actual cash! If you don’t mind waiting five hours between blocks for purchases to go through. [Reddit]

“Venezuelan customers say that making their payments in dollars via Zelle is ‘easy and fast’ in a context of economic crisis and current service failures.” But I was told Venezuelans wanted bitcoins … [Voz de América; translation]

Coronavirus is good news for Bitcoin, because … a BTC.TOP mining facility has been shut down by Chinese authorities to help contain the virus? [Trustnodes]

Bitcoiners aren’t an apocalyptic death cult of ghouls — see, Billy Bambrough put that bit of the headline in quotes! []



They fought the law, and the law won

Reggie Fowler — formerly of Crypto Capital Corp, US money mules for several crypto exchanges — had a plea deal all set up, in which he would plead guilty to a single felony charge of money laundering, and forfeit up to $371 million in more than 50 accounts. But Fowler would only agree to forfeit whatever assets were in the accounts — and not make up the difference from his own money. The trial begins 28 April 2020. I’m pretty sure Fowler is playing stupid games, and will win stupid prizes. [Filing, PDF; Bloomberg]

The four class actions against Bitfinex/Tether — claiming they used tethers to manipulate the price of Bitcoin — have been consolidated into a single case, at the plaintiffs’ request. The lead attorney has not been chosen yet. [Order, PDF]

Virgil Griffith — the Ethereum developer who went to a crypto conference in North Korea, despite the US State Department telling him directly and personally not to do this — has pleaded not guilty to a charge of conspiracy to violate the International Emergency Economic Powers Act, i.e., the US sanctions on North Korea. Griffith is still out on bail, staying at his parents’ house in Alabama. [Modern Consensus]

Former staff from Silk Road, the very first darknet drug market, are still getting busted, seven years after it was shut down by the authorities — the latest is Gary Davis, who did administration and customer support. He pleaded guilty to conspiring to distribute illegal drugs. Davis was indicted in 2013, but fought extradition from Ireland. [Reuters]

Another Silk Road alumnus, Roger Clark — a.k.a. Variety Jones — has also pleaded guilty, to one count of conspiracy to distribute narcotics. Clark is the guy who first suggested to Ross Ulbricht that he commission a murder-for-hire, a suggestion Ulbricht took him up on. [US Department of Justice]

(This is the murder-for-hire that Ross truthers deny Ross ever had anything to do with — and anyway, he wasn’t convicted of it, so it’s unfair to think less of Ross for it, right? Just like how Jimmy Savile was technically never convicted.)

A crypto-based Ponzi scheme, run in Florida by John Michael Caruso of Zima Digital Assets — who called himself the “Kryp+0 K!ng”, spelt like that — defrauded over a hundred investors, including former Major League Baseball players, of at least $7.5 million in the past eighteen months. The Federal Trade Commission started getting complaints in April 2019, and the indictment has just been unsealed. [Complaint, PDF; Quartz]

Kleiman v. Wright — remember how Dr. Craig Wright had the keys to the Satoshi stash delivered to him by “bonded courier,” and the Kleiman estate wanted to ask Wright a few questions about this bonded courier? Wright has now told the court that the bonded courier is one of Wright’s attorneys! So all his communications with said courier are privileged. So sorry. [Filing, PDF; case docket]

Tom Morris: Why “smart contracts” are a fundamentally misconceived idea — “When software developers tell you their magic blockchain solution will ‘replace laws’ or ‘supplant contracts’, ask them when they last read a law or legal judgment or what they know about contractual interpretation.” [blog post]



Things happen

How to break into a Trezor hardware crypto wallet in about 15 minutes — you can extract the crypto seed by glitching the voltages going to the microcontroller, to disable the read protection. This is an inherent flaw in the STM32 microcontroller. The crack requires physical access to the device, and can be mitigated by using the passphrase feature. [Kraken blog, Trezor blog]

Jamie Bartlett’s BBC podcast series “The Missing Cryptoqueen” — on the OneCoin pseudo-crypto Ponzi scheme — has just sold screen rights to New Regency. They’re thinking a multi-part TV series. No prospective release dates have been announced as yet. If you haven’t heard this podcast series yet, you really need to. [Deadline, podcast]

The JPEG Committee — the people who maintain the official standard for JPEG images — has a subgroup working on Digital Rights Management for JPEG images … on the blockchain! Frederik Temmermans from the Media Blockchain subcommittee told me it wasn’t about DRM when I wrote about this in 2018 — but the Temmermans deck in the official JPEG documents from their January 2020 workshop details literally this plan, complete with mockup images of what they want the Internet to look like. The image below is from page six — good thing it wasn’t DRMed, so I could show you, hey. The only way to make this plan worse would be to add AI. [JPEG Committee; DocDroid, PDF]



Cas Piancey: The Unending Search for Transparency — “in a list of six simple ways to check on the legitimacy and transparency of the exchange/company, only one involves using the blockchain, and even this one is the least reliable of the methods listed.” [blog post]

Vote Izabella Kaminska, the Contrarian candidate, for “Fintech Influencer of the Year”! [Bobsguide]

I went on Richard Heart’s YouTube stream. The last half hour is just Richard talking about Hex, but the first half hour has been well received. [YouTube]






Become a Patron!

Your subscriptions keep this site going. Sign up today!

One Comment on “News: IOTA, Massive Adoption, Mastercard v. Libra, DRM in JPEG plans, Reggie Fowler plea deal fails, more Silk Road busts, ICO grace period, the Bitcoin market”

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.