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Doing it for the kids
On 9 February 2022, BBC News ran a heartwarming puff piece on Birmingham cryptocurrency millionaire Hanad Hassan — who apparently put fifty dollars into cryptos last year, and turned it into $1 million! “Mr Hassan now wants to use his wealth to help people.” [BBC, archive]
This was to promote a BBC1 Midlands documentary, We Are England: Birmingham’s Self-Made Crypto-Millionaire — about Hassan’s wonderful work for his local area — that was all set for broadcast that evening. [BBC, archive]
Unfortunately, it appears that BBC Midlands’ research failed to go so far as Googling their subject. Jim Waterson from the Guardian did Google our fellow — and found out just how Hassan’s crypto career had worked out. [Twitter; Guardian]
Hassan’s crypto, Orfano, a highly-pumped token on Binance Smart Chain, had shut down in September 2021 — and the promoters kept everyone’s ether. Orfano came back as OrfanoX — which shut down in October, again keeping everyone’s ether. [Twitter]
“The bsc space has changed quite bit since Orfano originally launched with a whole new way of marketing and tokenomics and I also believe this new space is toxic,” said Orfano’s promoters, in the process of providing a worked example of the toxicity. [Reddit]
The BBC quietly deleted the news article and even the programme listing when Waterson asked them about all of this. They say they’re conducting an “internal investigation,” to examine “editorial issues”. BBC Director of Nations Rhodri Talfan Davies has apparently been reminding some We Are England producers of the concept of basic journalistic rigour — even on personality pieces. [The Times, archive]
Even at the top end of sport, revenues have leveled off. So a common crypto grift is to sell the idea of NFTs as collectible “fan tokens” to sports clubs. [Guardian]
English Premier League football team Arsenal fell for CashBetCoin in 2018, and last year did a deal with Chiliz/Socios to release the “$AFC Fan Token.” Unfortunately, the promotions for the fan tokens talked up the price a bit much — and the Advertising Standards Authority has now required the club to put investment warnings on the tokens. [ASA]
Another Premier League team, Crystal Palace, suddenly lost the logo of cryptocurrency sponsor IQONIQ from its official shirt. That’s because the company had gone into liquidation. IQONIQ had deals with clubs across Europe, and sold fans a lot of tokens, which are now unusable. [Times, archive]
From December last year, we have an amazing tale of a barely existent NFT pseudo-company, Color Star, who sponsored the Philadelphia 76ers basketball team. Color Star “focuses on the application of tech and artificial intelligence (AI) in the entertainment industry.” The company’s website largely doesn’t work. Color Star’s CEO, Sir Lucas Capitein, doesn’t appear to exist, and claims a degree from Harvard that doesn’t exist. Color Star plans to operate a “metaverse.” [Defector]
Update (from Craig Burley in comments): Color Star is dropped by the 76ers, makes a legal threat to Defector for covering the story, and is unclear on how New York addresses work. And Lucas Capitein appears on video! [Defector; YouTube]
Baby’s on fire
The possible last days of Bitcoin mining in Siberia — Polina Ivanova from the Financial Times goes to Irkutsk.
The region around Irkutsk is extremely cold, but also has a ton of cheap hydroelectric power — around 1.2–1.5c/kWh household tariff — dating back to Soviet era uranium enrichment. Add cheap ex-Chinese mining rigs, and you have a lot of people out for a quick ruble. As well as the money, the rigs make good space heaters.
Irkutskenergosbyt, the local energy provider, is not pleased with the mining — crypto miners are overloading the local network and causing blackouts, and even melted power lines. The commercial tariff — which the miners should be paying — is also four times the household tariff.
“No one bothers to try and understand what bitcoins actually are,” says one miner. “The money just trickles in and trickles in. You’d better hurry up and get involved before this whole thing gets busted.” [FT, paywalled]
After months of US Bitcoin miners not selling their freshly-mined coins — instead using them as collateral for loans of actual money from Galaxy Digital and DCG — US miners are evidently short of even that cash, and are dumping their coins on the market again. The Bitcoin price is being held up by a Tether pump, but the miners’ stock prices are taking a pummelling. [Bloomberg]
Crypto miners in the US are setting up mining in “opportunity zones,” which were meant to encourage businesses to set up in poor communities, to avoid the swingeing capital gains taxes they’d otherwise be liable for after a very good 2021. One company is mining in South America — but set up a US management company with its address in an opportunity zone. [Huffington Post]
UK parliamentary petition: Ban the mining of and trade in “proof of work” cryptocurrencies within the UK. Shockingly few signers on this one as yet. [UK Government and Parliament Petitions]
Crypto Mines Congress: As the blockchain industry comes under scrutiny, crypto interests are cozying up to lawmakers — with quotes from me on CBDCs. [Daily Poster]
Alleged Bitfinex money launderer Heather Morgan’s hobby was doing the world’s absolute worst white woman alleged rap. Morgan sold NFTs of her album artwork — which are confirmed to have come from her rzk.eth address on the Ethereum blockchain. OpenSea froze the NFTs. The buyers are demanding that OpenSea refund them. Decentralised! [Vice; Buzzfeed News]
NFT market Cent has stopped trading NFTs, due to rampant plagiarism — “and people selling sets of NFTs which resemble a security.” Yeah, I think I see the bit that had them worried. [Reuters]
YouTube puts out an NFT proposal so self-evidently stupid that the newspaper reporting it calls it out: “It is unclear exactly what YouTube means when it says that creators can own creators’ videos, since NFTs do not inherently transfer copyright to owners.” [Independent]
In the UK, HMRC makes its first seizure of NFTs, with other crypto assets, in lieu of unpaid VAT (sales tax). The perpetrators used stolen identities, burner phones, false addresses and fake invoices. This isn’t quite use of NFTs in money-laundering — but it’s close enough for a splashy headline. I got to go on BBC Radio 4 Today around 7:50am on Monday 14 February about this one, to explain to the Establishment what on earth an NFT was. [Daily Telegraph]
Dan Olson interviewed about his hit video takedown of NFTs and crypto in general, “Line Goes Up.” “They’ll take a hypothetical application that doesn’t exist, that no one’s working on and might not even be possible, and treat it as though it’s already happening. Give themselves a gold star for having already done it, when no one’s even started.” [Vice]
Phil Libin: Venture capitalists are pouring so much money into Web3 because it’s useless and doesn’t work. “In Web3 and crypto, they found the ultimate thing that you could put an infinite amount of money into because it doesn’t do anything, so there’s no natural limit, and it lets them turn those funds around quickly.” [Pitchbook]
The Wall Street journal asks about Yats, a line of emoji-based NFTs. “I could say this NFT represents a string of initials, or this NFT represents my butt. It would be exactly as meaningful as turning a Yat into an NFT,” Mr. Gerard says. [WSJ, paywalled]
Everybody still hates Binance
The SEC is investigating Binance US, its links to two market makers, Sigma Chain AG and Merit Peak Ltd, with “ties” to Binance founder Changpeng Zhao (CZ), and to what degree Binance disclosed these links. [WSJ, paywalled]
Binance’s attempts to manipulate US regulators were exposed in scathing Forbes coverage of a leaked smoking-gun document in late 2020. Binance sued Forbes over the story — though there was no way they could win, and they dropped the suit in February 2021.
How to head off such calamities in the future? Well, Binance just put up $200 million to purchase a chunk of Forbes. [Forbes press release]
An incomplete history of Forbes.com as a platform for scams, grift, and bad journalism. Heather Morgan, the alleged Bitfinex hack money launderer, was also a Forbes contributor. [NiemanLab]
The IMF writes up CBDCs in Bahamas, Eastern Caribbean, China (all live now), Uruguay (live pilot programme in 2018), Canada and Sweden (neither live). [IMF]
Fraudsters are selling robocall bots on Telegram that are designed to trick crypto buyers into divulging their two-factor authentication, so they can drain the crypto buyers’ accounts. [CNBC]
Remember how ten Israeli crypto startup scene captains of industry were arrested in November for offences including fraud in past ICOs? One more name has been revealed — Avishai Ziv, a serial ICO “advisor” back in the day. [Times of Israel]
The Marshall Islands abandoned its planned cryptocurrency in June 2021. (It probably would have been bigger news if Nayib Bukele hadn’t announced El Salvador adopting Bitcoin a few days later.) That story ended with the Marshalls looking into welcoming blockchain entrepreneurs in need of cover to the jurisdiction — ‘cos the country is desperate. So they’ve just announced that the Marshall Islands will recognise DAOs as legal entities, having passed the Non-Profit Entities Act 2021. [CoinTelegraph]
Romance scammers phish lonely people with fake pictures and personas, eventually asking for money, or suggesting a great investment you should get into. The FTC reports that romance scammers touting for crypto schemes took $139 million in the US in 2021, out of a total loss of $547 million. “The median loss for consumers who reported paying a romance scammer with cryptocurrency was nearly $10,000.” [Press release; blog post; report, PDF]
Ask Hacker News: “Does Anyone else working in a crypto company feel this is all a scam?” It turns out that yes, quite a lot do. But they’re riding the promise of free money to the end. [Hacker News]
New blockchain use case found! How about … a blockchain based nuclear launch control system? [Digital Communications and Networks]
Living on video
I didn’t realise that I’d got my first byline in the Australian Financial Review! it’s a reprint of my Foreign Policy piece on El Salvador’s Bitcoin City from December. But still! [AFR]
Guardian Australia on Australians’ relentless gullibility for crypto, with quotes from me: “The general answer is: there’s no such thing as a get rich quick scheme, magic doesn’t happen, if there’s ever ‘one weird trick’ then it’s one weird trick for picking your pocket.” By Ben Butler, who founded the original version of Rocknerd. [Guardian]
CryptoVantage: “Why is the Supply of USDC and Tether Going Up in a Crypto Bear Market?” — with quotes from me. [CryptoVantage]
[man who won the lottery]: here’s why i think buying lottery tickets is the future of finance 👇🧵
— Brandon Dail (@aweary) February 7, 2022
— chekhov's gundam (@_r_o_n_e_) February 8, 2022
So sad and predictable to see the anti-tech media once again taking down hardworking crypto entrepreneurs for the “crime” of being successful, and money laundering
— Jeff Bercovici (@jeffbercovici) February 8, 2022
With inflation at 7.5%, you lose half your money in 9 years. The only way to outperform that consistently, that I have found, is crypto. Just this year I’ve already lost half my money.
— rcm (@rcm____) February 13, 2022
inventing a new kind of NFT where you give me all your money and then i shove you into a locker
— Double Stuf Warios (@bonesgoblin) February 14, 2022
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