{"id":15455,"date":"2020-01-19T00:21:44","date_gmt":"2020-01-19T00:21:44","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=15455"},"modified":"2020-01-20T17:44:44","modified_gmt":"2020-01-20T17:44:44","slug":"news-craig-wright-and-the-bonded-courier-reggie-fowler-plea-hearing-four-tether-class-actions-wb21-boaz-manor-and-bct-cobinhood-libra-blockchain-creme","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2020\/01\/19\/news-craig-wright-and-the-bonded-courier-reggie-fowler-plea-hearing-four-tether-class-actions-wb21-boaz-manor-and-bct-cobinhood-libra-blockchain-creme\/","title":{"rendered":"News: Craig Wright and the bonded courier, Reggie Fowler plea hearing, four Tether class actions, WB21, Boaz Manor and BCT, Cobinhood, Libra, Blockchain Creme"},"content":{"rendered":"

I think this new format for 2020<\/a> is working well, don’t you? Let’s keep going!<\/p>\n

I have a gig at the Science Museum on the evening of Friday 21 February! More details as I have them. I have no doubt the Imogen Heap<\/a> bit will be just fascinating.<\/i> [Science Museum<\/a><\/i>]<\/p>\n

If you like these newsletters \u2014 subscribe by email!<\/a> And money for strong drink and other legitimate writing expenses<\/a> is always helpful. If you like my posts, $5 a month<\/a> is the equivalent of buying me a pint every four or five weeks. Tell your friends and colleagues! It’s probably a reasonable business expense!<\/p>\n

The legal misadventures of Dr. Craig Wright<\/h3>\n

Kleiman v. Wright<\/a> continues: Craig Wright was ordered by the court<\/a> to produce details of the Satoshi stash \u2014 the Bitcoin holdings he claims to have mined with Dave Kleiman in the early days of Bitcoin \u2014 by 3 February. Or else. Wright tells the court the “bonded courier”<\/a> has arrived with the keys \u2014 “a third party has provided the necessary information and key slice to unlock the encrypted file” \u2014 and he’s passed the information on to Dave’s estate, we good now OK?\u00a0 [Notice of Compliance<\/i><\/a>, PDF<\/i>]<\/p>\n

The Kleiman estate replies that Wright just sent a list of Bitcoin addresses, and nothing else that was asked for \u2014 such as who the bonded courier was. And Wright has messed them around and run out the clock so much that they would like another three months for discovery and depositions \u2014 including further questions for Wright himself. nChain, Wright’s employer \u2014 that is, Calvin Ayre \u2014 seems to be calling the shots here, so the Kleiman estate might want to add nChain as a party in the litigation. [Kleiman v. Wright docket<\/i><\/a>; Plaintiffs’ Motion for Ninety Day Extension<\/i><\/a>, PDF<\/i>]<\/p>\n

Wright’s lawyer, Andres Rivero, says that Wright did not<\/i> in fact receive the private keys to the Satoshi stash \u2014 the cryptographic keys that are the things you have when you “have” a bitcoin. It’s not clear when \u2014 or if \u2014 the keys themselves will supposedly arrive. It’s possible that there is literally no evidence that this isn’t all just a made-up excuse for the repeated failure of Wright’s past claims. [Decrypt<\/i><\/a>]<\/p>\n

Wright’s defamation cases aren’t going so well either \u2014 he lost against Roger Ver<\/a> in August 2019 for lack of jurisdiction (and because there was “no evidence at all of any actual reputational harm that the Claimant has suffered”), and his case against anonymous Twitter user “Hodlonaut”<\/a> has just been dismissed for the same reason. If Wright wants to proceed against Hodlonaut, he will have to do so in Norway \u2014 where Hodlonaut started his own proceedings against Wright in July last year. Wright’s defamation suit against Bitcoin podcaster Peter McCormack<\/a> \u2014 who is a UK resident, so the UK is definitely the jurisdiction \u2014 is apparently still in motion. [Twitter<\/i><\/a>; <\/i>Twitter<\/i><\/a>; <\/i>Twitter<\/i><\/a>; <\/i>Decrypt<\/i><\/a>]<\/p>\n

Other legal blockchainery<\/h3>\n

Reggie Fowler<\/a> \u2014 the US money mule for Bitfinex, Tether, and many other crypto businesses \u2014 had his plea deal hearing on Friday. According to a post from someone who went along, Fowler was going to plead guilty on one charge, and have the others dropped \u2014 then he decided he wasn’t going to. The judge apparently asked him repeatedly if he understood what he was charged with. The eventual trial is in April. [Inner City Press<\/a>, CoinDesk<\/a>, Fowler docket<\/a><\/i>]<\/p>\n

There are now four<\/i> class action lawsuits against Bitfinex and Tether, alleging price manipulation in the Bitcoin market in violation of RICO \u2014 as well as the suits<\/a> that Leibowitz et al<\/i>. filed in October, and Young and Kurtz earlier this month, there’s now similar suits from Bryan Faubus and Joseph Ebanks. All are marked as connected \u2014 which doesn’t mean they’ll definitely be merged, but does at least mean the plaintiffs are likely to work together. [Faubus<\/i><\/a>, <\/i>Ebanks<\/i><\/a>]<\/p>\n

The US Justice Department has announced that Roger Knox has pleaded guilty to securities fraud. Knox isn’t a crypto guy \u2014 but he was a client of Michael Gastauer, who ran dubious money transmitter WB21, who still have $9 million of funds from the collapsed Quadriga crypto exchange. Coincidentally, a couple of weeks ago, Amy Castor was getting weird threats from Twitter anons on the subject \u2014 and wonders if Gastauer is worried Knox will talk about their work together. Amy has an article on this out shortly in Modern Consensus. [Justice Department press release<\/i><\/a>, Twitter thread<\/i><\/a>, Twitter thread<\/i><\/a>, Modern Consensus<\/i><\/a> front page<\/i>]<\/p>\n

ICO, ICO<\/h3>\n

In SEC v. Telegram,<\/a> it turns out that Telegram was, in fact, still selling Gram tokens after<\/i> the $1.7 billion private offering that Telegram claimed was exempt from registration as a security, under Regulation D 506(c). The SEC found the invoices to Telegram, from Da Vinci Capital and Gem Limited, for sales commissions from mid-2018 \u2014 and that’s bad, because you can’t sell a Reg D offering via other entities that are selling the securities on commission. Telegram maintains the commissions were “finder’s fees,” and the salesmen weren’t being underwriters \u2014 though calling a legally-defined action by a different name tends not to make any difference in court. [CoinDesk via Yahoo<\/i><\/a>]<\/p>\n

After a conference with the SEC and District Judge Kevin Castel, Telegram will produce some of the banking records the SEC requested, after redacting private information under foreign laws \u2014 but they want five to seven weeks to do this. The SEC suggested 26 February, and the judge has concurred. [Case docket<\/i><\/a>; <\/i>order<\/i><\/a>, PDF<\/i>]<\/p>\n

When Telegram contacted the Gram investors in October 2019 about the SEC filing its suit, the company told the buyers that there was $1.31 billion left that they could possibly hand back, as a termination amount. The rest has been spent \u2014 and that’s the spending the SEC wants full details of. [SEC filing<\/i><\/a>, PDF<\/i>]<\/p>\n

The SEC has charged Boaz Manor and Edith Pardo over the BCT (Blockchain Terminal) token offering of 2017-2018. Manor ran the offering under a fake identity, “Shaun MacDonald” \u2014 to hide the fact that Manor had been convicted of hedge fund fraud in the past, as revealed by Frank Chaparro from The Block in 2018. I’m shocked, shocked to hear that an ICO promoter turned out to be a serial scammer! [SEC press release<\/i><\/a>; <\/i>SEC complaint<\/i><\/a>, PDF; <\/i>The Block<\/i><\/a>]<\/p>\n

The SEC warns that Initial Exchange Offerings (IEOs) are a trash fire, and you should stay the hell away from them. IEOs are when an exchange puts an ICO-like token up directly for trading on their platform \u2014 often with promises of how they’ll manage the token. Like ICOs before them, IEOs are likely securities under US law. Even if the IEO is registered as a security in the US \u2014 of which there are zero examples so far \u2014 the exchange would need to be registered as a trading venue for securities, and<\/i> as a broker-dealer, if they don’t work to keep US buyers out. Investors may have no effective legal remedies in US courts against foreign exchanges that promote IEOs. Not even the crypto world seems surprised by this bulletin. [SEC investor bulletin<\/i><\/a>]<\/p>\n

Aaand it’s gone<\/h3>\n

Cobinhood crypto exchange users were made suddenly unhappy on 10 January \u2014 “COBINHOOD Exchange is shutting down and auditing all accounts’ balances from Jan 10 to Feb 9 in 2020. It will be re-opened on Feb 10, 2020. All COBINHOOD users can then retrieve their funds accordingly. Please DO NOT make any deposits; it may result in permanent loss.” [Twitter<\/i><\/a>]<\/p>\n

There’s rumours of a hack that Cobinhood have to investigate. Maybe they’ll reopen next month! Fingers crossed!<\/p>\n

Cobinhood has been shaky and weird in the past. The exchange was rumoured to have filed for bankruptcy protection in May 2019, after well-known financial troubles \u2014 users suspected an exit scam, as the exchange had just taken $3.5 million in the Dexon ICO \u2014 but they seemed to recover. The CEO then posted a convoluted explanation of events that didn’t make a whole lot of sense. But the users came back, ‘cos you can’t keep a good gambling addict down. [Blockgeeks<\/a>, Dexon<\/a>, blog post<\/i><\/a>]<\/p>\n

Coding the deckchairs on the Titanic<\/h3>\n

The Council of the Libra Association<\/a> has appointed a Technical Steering Committee \u2014 to develop this project that doesn’t have any fixed business specification as yet, and that regulators may never allow to launch. The committee are: Diogo Monica (Anchorage), George Cabrera (Calibra), Joe Lallouz (Bison Trails), Nick Grossman (Union Square Ventures) and Ric Shreves (Mercy Corps). It’s still not clear if any Association member other than Calibra has contributed paid developer resources \u2014 but if you ask, they’ll talk up the third-party wallet software that people have created. [Libra<\/i><\/a>]<\/p>\n

I only just found an awesome blog post by economist Michael Pettis<\/a> from June 2019, that I didn’t pick up on previously \u2014 explaining a whole pile of ways in which Facebook’s Libra idea is dumb and bad, with obviously disastrous implications. Pettis thinks Libra’s not about international payments for coffee, or personal remittances \u2014 it’s about large international capital flows, and the Libra Reserve being large enough to pressure governments and central banks. Regulators saw these implications immediately, which was part of why they wanted to halt Libra literally within minutes of its June announcement. [blog post<\/i><\/a>]<\/p>\n

Things happen<\/h3>\n

At least one million barrels of oil have been delayed after Venezuela demanded that certain maritime fees \u2014 which are currently paid in euros \u2014 had to be paid in Petros, starting this Monday, 20 January 2020. Buyers worry that such a payment may be in violation of sanctions. [Bloomberg<\/i><\/a>]<\/p>\n

Four US House representatives have introduced the “Virtual Currency Tax Fairness Act of 2020” \u2014 a bill to exempt cryptocurrency transactions under $200 from consideration for capital gains tax purposes, much as small foreign currency transactions are exempted. The bill was introduced by Suzan DelBene (D-WA-01) and David Schweikert (R-AZ-06), and is also supported by Darren Soto (D-FL-09) and Tom Emmer (R-MN-06). CoinCenter lobbied for the bill. It’s not clear if this new bill has the momentum to proceed \u2014 Schweikert’s 2017 bill to do the same thing died on the floor. [Bill<\/i><\/a>, PDF; <\/i>Schweikert press release<\/i><\/a>; <\/i>CoinCenter press release<\/i><\/a>; 2017 bill<\/i><\/a>]<\/p>\n

Bitcoin satellite and mesh networks don’t work so well when you\u2019re in a massive internet desert such as Iran \u2014 because of sanctions. \u201cIn situations where we don\u2019t have physical connection none of these f\u2014ing technologies help us.\u201d [CoinDesk<\/i><\/a>]<\/p>\n

After his adventures in Decentralised Finance<\/a> last week, Colin Platt will be doing a regular column for Decrypt on DeFi. This week \u2014 “MakerDAO: How to be your own pawnshop.” [Decrypt<\/i><\/a>]<\/p>\n

Blockchain, in a human face, forever \u2014 \u201cBlockchain Crème\u201d <\/i>from Cosmetique Bio Naturelle Suisse<\/i>. It’s real. A snip at 126.40 EUR! The same company sells a “Blockchain Serum” for a mere 140 EUR. [FT Alphaville<\/i><\/a>, free with login; <\/i>Blockchain Creme<\/i><\/a> (<\/i>archive<\/i><\/a>); <\/i>Amazon.de<\/i><\/a> (<\/i>archive<\/i><\/a>)<\/i>]<\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

https:\/\/twitter.com\/SeamusHughes\/status\/1218358638697418752<\/p>\n

\"Become<\/a>

Your subscriptions keep this site going. Sign up today!<\/a><\/i><\/p><\/div>","protected":false},"excerpt":{"rendered":"

Coding the deckchairs on the Titanic.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[460,1624,1617,1620,1627,1065,1512,747,436,670,1224,1637,1062,493,1634,1552,1622,1623,1619,1621,1625,1098,1239,9,1459,1101,1626,1328,6,1636,1631,1213,1632,1381,1628,1240,421,1269,1630,1618,234,33,1063,1633,1096,1086,1635,1629,745,296,1162],"class_list":["post-15455","post","type-post","status-publish","format-standard","hentry","category-uncategorised","tag-amy-castor","tag-anchorage","tag-andres-rivero","tag-bct","tag-bison-trails","tag-boaz-manor","tag-calibra","tag-calvin-ayre","tag-cobinhood","tag-coin-center","tag-colin-platt","tag-cosmetique-bio-naturelle-suisse","tag-darren-soto","tag-dave-kleiman","tag-david-schweikert","tag-defi","tag-dexon","tag-diogo-monica","tag-edith-pardo","tag-frank-chaparro","tag-george-cabrera","tag-gram","tag-hodlonaut","tag-ico","tag-ieo","tag-ira-kleiman","tag-joe-lallouz","tag-libra","tag-links","tag-makerdao","tag-mercy-corps","tag-michael-gastauer","tag-michael-pettis","tag-nchain","tag-nick-grossman","tag-peter-mccormack","tag-petro","tag-reggie-fowler","tag-ric-shreeves","tag-roger-knox","tag-roger-ver","tag-sec","tag-shaun-macdonald","tag-suzan-delbene","tag-telegram","tag-the-block","tag-tom-emmer","tag-union-square-ventures","tag-united-states","tag-venezuela","tag-wb21"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/15455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/comments?post=15455"}],"version-history":[{"count":36,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/15455\/revisions"}],"predecessor-version":[{"id":15497,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/15455\/revisions\/15497"}],"wp:attachment":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media?parent=15455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/categories?post=15455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/tags?post=15455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}