{"id":25891,"date":"2023-08-25T21:27:03","date_gmt":"2023-08-25T21:27:03","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=25891"},"modified":"2023-08-26T09:38:43","modified_gmt":"2023-08-26T09:38:43","slug":"crypto-collapse-tornado-cash-arrests-federal-reserve-shuts-down-farmington-bank-prime-trust-played-terra-luna","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2023\/08\/25\/crypto-collapse-tornado-cash-arrests-federal-reserve-shuts-down-farmington-bank-prime-trust-played-terra-luna\/","title":{"rendered":"Crypto collapse: Tornado Cash arrests, Federal Reserve shuts down Farmington Bank, Prime Trust played Terra-Luna"},"content":{"rendered":"<p><i>By <b>Amy Castor<\/b> and <b>David Gerard<\/b><\/i><\/p>\n<ul>\n<li aria-level=\"1\">Enjoying our posts? Keep them coming \u2014 send us money! Here\u2019s<a href=\"https:\/\/www.patreon.com\/amycastor\"> Amy\u2019s<\/a> Patreon and here\u2019s <a href=\"https:\/\/www.patreon.com\/davidgerard\/\">David\u2019s<\/a>.<\/li>\n<li aria-level=\"1\">Another way you can help our work: <b><i>tell just one other person<\/i><\/b>. Word of mouth is the best way to get information out about any creative work. If you like this, tell someone. Thank you.<\/li>\n<\/ul>\n<blockquote><p>\u201cAt this point, I think it&#8217;s near inevitable Sam&#8217;s going to try and copy Ross and hire a hitman to off his former girlfriend using 75pt Comic sans font on a non internet connected computer in the prison library in full view of the guards.\u201d<\/p><\/blockquote>\n<p style=\"text-align: right;\">\u2014 <a href=\"https:\/\/furry.energy\/@Rycochet\/110941311349728973\">Rycochet<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/08\/09\/us-sanctions-tornado-cash-and-crypto-shrieks-in-horror\/tornado_cash\/\" rel=\"attachment wp-att-23537\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-23537\" src=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2022\/08\/tornado_cash.png\" alt=\"\" width=\"340\" height=\"210\" srcset=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2022\/08\/tornado_cash.png 680w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2022\/08\/tornado_cash-300x185.png 300w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2022\/08\/tornado_cash-348x215.png 348w\" sizes=\"auto, (max-width: 340px) 100vw, 340px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<h3>An ill wind<\/h3>\n<p>The US has charged Ethereum mixer <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/08\/09\/us-sanctions-tornado-cash-and-crypto-shrieks-in-horror\/\">Tornado Cash<\/a> co-founders Roman Storm and Roman Semenov with laundering over $1 billion in criminal proceeds by operating Tornado Cash between 2019 and August 2022, when the US <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/08\/09\/us-sanctions-tornado-cash-and-crypto-shrieks-in-horror\/\">shut it down<\/a>. [<a href=\"https:\/\/www.justice.gov\/usao-sdny\/pr\/tornado-cash-founders-charged-money-laundering-and-sanctions-violations\"><i>press release<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.justice.gov\/media\/1311391\/dl?inline\"><i>indictment<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>Storm has been arrested and Semenov has been added to the US sanctions list. Semenov was last heard of in Dubai, that jurisdiction of flawless international repute and tremendous civil liberties for your crypto. [<a href=\"https:\/\/home.treasury.gov\/news\/press-releases\/jy1702\"><i>OFAC<\/i><\/a><i>; <\/i><a href=\"https:\/\/apnews.com\/article\/cryptocurrency-treasury-crypto-sanctions-russia-north-korea-88115029d0a033b7b8b3e3a34dccf00c\"><i>AP<\/i><\/a>]<\/p>\n<p>Tornado Cash was a stand-alone smart contract <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2020\/05\/21\/news-drm-on-jpeg-images-on-the-blockchain-blockfi-user-data-breached-tornadocash-mixer-goes-full-dao-the-plant-cuttings-asset-bubble\/\">beyond any human control<\/a>. But Storm and Semenov are being charged not with writing the code itself, nor even over the existence of the smart contract itself, but with \u201cconspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business, and conspiracy to commit sanctions violations\u201d \u2014 by running a money transmission business that knowingly laundered criminal proceeds and funds for sanctioned entities.<\/p>\n<p>Storm and Semenov made money from the Tornado Cash relays, which were the best way to use the smart contract. Their company, PepperSec, even got $950,000 in venture capital from an unnamed angel investor.<\/p>\n<p>Merely operating the service was a long-standing violation of anti-money-laundering law \u2014 <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2019\/05\/09\/fincens-guidance-on-crypto-business-models-are-you-a-money-transmitter\/\">FinCEN expressly advised in 2019<\/a> that mixers are money transmitters. If you run a mixer in the US without registering, that\u2019s a crime.<\/p>\n<p>That\u2019s bad enough \u2014 but actual crooks and sanctioned entities ran their dirty money through Tornado Cash. Storm and Semenov got messages from the victims of many crypto hacks \u2014 and even just those hacks added up to hundreds of millions of dollars in ETH.<\/p>\n<p>The Feds got access to some of Storm and Semenov\u2019s Signal chats \u2014 presumably via \u201cCC-1\u201d (or \u201cCo-Conspirator-1\u201d) from the indictment. We suspect that &#8220;CC-1&#8221; is Dutch Tornado Cash developer Alexey Pertsev, the third guy in PepperSec, who was arrested in August 2022, shortly after Tornado Cash was sanctioned, and was held in jail until April 2023. [<a href=\"https:\/\/www.coindesk.com\/policy\/2023\/02\/15\/tornado-cash-developer-to-stay-jailed-as-dutch-trial-continues\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<p>The <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/03\/29\/news-crypto-crime-statistics-axie-infinity-hack-kevin-roose-debunked-lightning-network-speed-nft-lawsuits\/\">Axie Infinity hack<\/a> of March 2022 appears to be what got the Office of Foreign Asset Control interested. North Korea stole $620 million in ETH and laundered $455 million of it through Tornado Cash.<\/p>\n<p>Semenov and Storm blocked the North Korean hackers from the bit of the system that they ran \u2014 so North Korea started just accessing the smart contract directly. So Semenov and Storm could argue they aren\u2019t responsible for this particular direct use of the standalone smart contract.<\/p>\n<p>Storm\u2019s lawyer, the highly competent Brian Klein at Waymaker Law, said: &#8220;We are incredibly disappointed that the prosecutors chose to charge Mr. Storm because he helped develop software, and they did so based on a novel legal theory with dangerous implications for all software developers,\u201d because he has to, really. [<a href=\"https:\/\/www.reuters.com\/legal\/us-charges-two-founders-sanctioned-virtual-currency-mixer-tornado-cash-with-2023-08-23\/\"><i>Reuters<\/i><\/a>]<\/p>\n<p>Coinbase backed a suit against the Treasury to remove the OFAC sanctions on Tornado Cash. This suit has been thrown out. Judge Robert Pitman ruled that \u201cTornado Cash is an association\u201d consisting of \u201cits founders, its developers, and its DAO.\u201d As such, Tornado Cash is \u201can entity that may be designated per OFAC regulations.\u201d A similar suit filed by Coin Center is still in progress. [<a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.txwd.1211705\/gov.uscourts.txwd.1211705.94.0.pdf\"><i>Doc 94<\/i><\/a><i>; <\/i><a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.txwd.1211705\/gov.uscourts.txwd.1211705.95.0.pdf\"><i>Doc 95<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.courtlistener.com\/docket\/67077726\/joseph-van-loon-v-department-of-the-treasury\/\"><i>Coinbase-backed case docket<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.courtlistener.com\/docket\/65418276\/coin-center-v-yellen\/\"><i>Coin Center case docket<\/i><\/a>]<\/p>\n<h3>Sometimes you need to get their full attention<\/h3>\n<p>FTX-affiliated Farmington State Bank pivoted to digital assets in 2022 \u2014 in an attempt to create a stablecoin \u2014 without getting prior approval from its supervisors. So state and federal regulators have issued a cease and desist and the bank is being shut down. [<a href=\"https:\/\/www.federalreserve.gov\/newsevents\/pressreleases\/enforcement20230817a.htm\"><i>Federal Reserve press release<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.federalreserve.gov\/newsevents\/pressreleases\/files\/enf20230817a1.pdf\"><i>Cease and desist order<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>The joint enforcement action, from the Federal Reserve Board and the Washington State Department of Financial Institutions, bars Farmington from \u201cmaking dividends or capital distributions, dissipating cash assets and engaging in certain activities\u201d without permission. The bank has also been ordered to preserve all records.<\/p>\n<p>This wasn\u2019t a bank failure like the others this year \u2014 this was a bank getting shut down for bad behavior. The Fed didn\u2019t take Farmington out back and shoot it \u2014 they made a point of taking it out <i>front<\/i> and shooting it.<\/p>\n<p>Farmington was a tiny 135-year-old bank serving small rural towns in Eastern Washington. It\u2019s operated out of the same one-story historic building since 1911 when it moved out of an office above a saloon.<\/p>\n<p>But then in 2020, holding company FBH bought Farmington. FBH was controlled by Jean Chalopin, who is also the chairman of Deltec Bank \u2014 one of the main banks for FTX subsidiary Alameda Research and stablecoin issuer Tether.<\/p>\n<p>Chalopin and Deltec are in the Bahamas \u2014 as were FTX and its founder Sam Bankman-Fried. FTX was one of Tether\u2019s biggest customers.<\/p>\n<p>Through Alameda Research, <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/12\/04\/crypto-collapse-ftx-headed-for-examiner-bahamas-crypto-shenanigans\/\">FTX acquired just under 10% of FBH<\/a> on March 7, 2022, for $11.5 million. Ownership stakes below 10% don\u2019t require regulatory approval. Just six days before, FBH had trademarked the name Moonstone Bank. Soon after, Farmington began doing business as Moonstone. [<a href=\"https:\/\/www.prnewswire.com\/news-releases\/fbh-corp-raises-11-5m-in-private-equity-funding-from-alameda-research-ventures-301497307.html\"><i>Press release<\/i><\/a><i>, 2022; <\/i><a href=\"https:\/\/trademarks.justia.com\/972\/90\/moonstone-97290463.html\"><i>Justia<\/i><\/a>]<\/p>\n<p>When FBH took over Farmington, it agreed to maintain Farmington\u2019s existing business model offering savings and loan services to farmers and ranchers in eastern Washington. Any change to this would require prior approval from the Federal Reserve Board of Governors, the Federal Reserve Bank of San Francisco, or the Washington DFI.<\/p>\n<p>But in January 2023, Farmington did alter its business plan, quite radically. According to the Fed, Farmington made a deal with a \u201cthird party\u201d to design IT infrastructure to \u201cfacilitate the third party\u2019s issuance of stablecoins to the public.\u201d In exchange, Farmington would get 50% of mint and burn fees.<\/p>\n<p>We don\u2019t know who the \u201cthird party\u201d was or what stablecoin it was, existing or new, that Farmington planned to facilitate. <strong>Update:<\/strong> Looks like it was a new planned coin, US+ from Fluent Finance. [<em><a href=\"https:\/\/www.globenewswire.com\/news-release\/2022\/10\/24\/2540201\/0\/en\/Fluent-Finance-and-Moonstone-Bank-Accelerate-Crypto-Adoption-by-Issuing-US-Stablecoin.html\">press release<\/a>, 2022<\/em>]<\/p>\n<p>Soon after it went hard into the stablecoin business, Farmington\/Moonstone announced it would be stepping away from crypto and returning to its roots as a community bank. We suspect the regulators had had a little word. [<a href=\"https:\/\/www.businesswire.com\/news\/home\/20230119005836\/en\/Moonstone-Bank-to-Refocus-on-Community-Bank-Role-Exit-Crypto-Space\"><i>Business Wire<\/i><\/a>]<\/p>\n<p>Farmington, a state-chartered bank, did not have a Federal Reserve master account when FBH bought it, but it applied for one and was approved by the Federal Reserve Bank of San Francisco in June 2021. What a <a href=\"https:\/\/amycastor.com\/2022\/12\/18\/crypto-collapse-binance-is-not-so-fine-ftx-delaware-vs-ftx-bahamas-celsius-voyager-gemini-tether\/\">clever way<\/a> to give a stablecoin access to central bank money. [<a href=\"https:\/\/www.frbsf.org\/banking\/publications\/district-circular-letters\/2021\/july\/new-member-bank-farmington-state-bank\/\"><i>San <\/i><em>Francisco Fed<\/em><\/a><em>, 2021<\/em>]<\/p>\n<p>We wrote before how Custodia in Wyoming tried to set up a stablecoin with access to central bank money, why this is bad, and why the Federal Reserve <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/04\/09\/so-much-for-wyoming-blockchain-regulatory-capture-the-fed-blocks-custodia-bank\/\">absolutely would not allow this<\/a>.<\/p>\n<p>The Fed says that \u201cthe Board&#8217;s action ensures the bank&#8217;s operations will wind down in a manner that protects the bank&#8217;s depositors and the Deposit Insurance Fund.\u201d Farmington will wind down by August 31. The bank has sold all of its assets to the Bank of Eastern Oregon.<\/p>\n<p>Farmington\/Moonstone saw its overall deposits drop from $98.9 million in September 2022 to $16.3 million by the end of June 2023 after federal prosecutors seized $50 million from an FTX Digital Markets account at Moonstone.<\/p>\n<h3>Crypto custody is a steel when you\u2019re playing Terra-Luna<\/h3>\n<p>Prime Trust has filed the first-day motion in its <a href=\"https:\/\/amycastor.com\/2023\/08\/15\/crypto-collapse-sam-bankman-fried-goes-to-jail-sec-appeals-ripple-ruling-prime-trust-bankrupt-the-tangled-tale-of-trueusd-and-tron\/\">bankruptcy<\/a> \u2014 and it\u2019s a hoot. [<a href=\"https:\/\/cases.stretto.com\/public\/X274\/12452\/PLEADINGS\/1245208242380000000073.pdf\"><i>Doc 14<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>It turns out that Prime Trust had been gambling on Terra-Luna \u2014 and lost $6 million of customer money as well as $2 million of company money. This is despite previously claiming that \u201cPrime Trust does not engage in any lending or borrowing services nor rehypothecation of customer assets.\u201d [<a href=\"https:\/\/support.primetrust.com\/hc\/en-us\/articles\/8842511593755-Does-Prime-Trust-re-hypothecate-customers-digital-assets-\"><i>Prime Trust<\/i><\/a><i>, 2022, <\/i><a href=\"https:\/\/archive.is\/q4q8D\"><i>archive<\/i><\/a>]<\/p>\n<p>But what killed Prime was the \u201cWallet Event.\u201d Prime stored its ETH in a multi-signature address, the \u201c98f Wallet.\u201d The keys were kept in Trezor hardware wallets. The seed phrases were engraved on steel.<\/p>\n<p>Prime migrated the stored assets to crypto custody firm Fireblocks between July 2019 and the first quarter of 2020. Believing all assets had been migrated, Prime disabled its own access to the 98f address. Unfortunately, customers were still sending crypto to the 98f address. This crypto is now unrecoverable \u2014 because Prime couldn\u2019t find where they\u2019d put the pieces of steel.<\/p>\n<p>They tried to cover the hole by taking US dollars from \u201comnibus client accounts\u201d to buy ETH to pay out the withdrawals \u2014 $76,367,247.90 in total.<\/p>\n<p>Prime reported the Wallet Event to the Nevada Financial Institutions Division and other state regulators between September and November 2022.<\/p>\n<p>The company says it worked with Nevada on the issues but suffered multiple \u201cruns on the bank\u201d \u2014 which it blames on \u201clicense revocations by certain state licensing agencies, negative press, incorrect reporting, and the demise of the BitGo transaction\u201d \u2014 and so Nevada pulled the plug on Prime in <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/07\/02\/crypto-collapse-trueusd-in-trouble-prime-trust-and-banq-go-down-europe-hates-binance-blockfi-terra-luna-twitter-is-just-resting\/\">June 2023<\/a>.<\/p>\n<p>Everyone in the C-suite who was involved in the \u201cWallet Event\u201d was fired. But Prime has a wizard plan that will totally make customers whole by the fourth quarter of 2023! That\u2019s a month and a bit away.<\/p>\n<h3>Everybody still hates Binance<\/h3>\n<p>Binance has lost its UK payment processor Checkout.com as of August 17 over money laundering concerns. Before this, Binance was one of Checkout\u2019s biggest customers. Checkout was processing up to $400 million a month for Binance in recent months. [<a href=\"https:\/\/www.forbes.com\/sites\/davidjeans\/2023\/08\/18\/payment-processor-checkout-drops-binance-over-money-laundering-compliance-concerns\/?sh=1b92e25c5623\"><i>Forbes<\/i><\/a>]<\/p>\n<p>You\u2019d almost think sanctions-busting was part of Binance\u2019s business model. This time it\u2019s money from Russia and blacklisted Russian banks using Binance\u2019s peer-to-peer service. [<a href=\"https:\/\/www.wsj.com\/finance\/binance-cryptocurrency-russia-sanctions-ddb948c3\"><i>WSJ<\/i><\/a>]<\/p>\n<p>Binance lost its Visa-branded crypto credit cards in July and is losing its Mastercards as of September 22. [<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-08-24\/mastercard-to-end-its-binance-co-branded-card-partnership\"><i>Bloomberg<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/zl6Ok\"><i>archive<\/i><\/a>]<\/p>\n<h3>It woz my lawyers wot done it<\/h3>\n<p>Sam Bankman-Fried wants to invoke an advice-of-counsel defense and blame FTX\u2019s lawyers for his rational decision-making. Prosecutors told Judge Lewis Kaplan that if Sam was going to say his lawyers did it, he needed to say who the lawyers were, so they named the lawyers: [<a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.nysd.590940\/gov.uscourts.nysd.590940.222.0.pdf\"><i>Doc 222<\/i><\/a><i>, PDF<\/i>]<\/p>\n<blockquote><p>&#8230; Fenwick lawyers as well as in-house counsel for FTX, including Dan Friedberg, Can Sun, Ryne Miller, and others, were involved in reviewing and approving decisions related to these matters and others, which gave him assurance that he was acting in good faith.<\/p><\/blockquote>\n<p>At Sam\u2019s new home in MDC Brooklyn, his lawyers say he\u2019s been subsisting on bread and water and sometimes peanut butter because the prison has been unable to accommodate his vegan diet. The jail has also failed to supply Sam\u2019s court-ordered medication. [<a href=\"https:\/\/twitter.com\/innercitypress\/status\/1693978139737624876\"><i>Twitter<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/wip\/QdtAU\"><i>archive<\/i><\/a>]<\/p>\n<p>Sam and his lawyers have been trying to work out laptop and internet access to review discovery in time for his trial in October. Sam\u2019s lawyers argue the material can only be viewed online. Judge Kaplan says that for now, Sam can meet with his lawyers in the courthouse cell block, but he has to give prosecutors 48 hours&#8217; notice so they\u2019ll have time to prepare hard drives of evidence for him to review. [<a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.nysd.590940\/gov.uscourts.nysd.590940.223.0.pdf\"><i>Doc 223<\/i><\/a><i>, PDF<\/i>]<\/p>\n<h3>Regulatory clarity<\/h3>\n<p>The SEC has sued New York crypto investment firm Titan for promising ridiculous annual returns of up to 2,700% \u2014 based on assuming 21% in the first three weeks, on a completely hypothetical account, and extrapolating that to the rest of the year. Titan is paying out $192,000 in disgorgement and an $850,000 civil penalty. [<a href=\"https:\/\/www.sec.gov\/news\/press-release\/2023-153\"><i>SEC press release<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.sec.gov\/files\/litigation\/admin\/2023\/ia-6380.pdf\"><i>Complaint<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>Three Arrows Capital principals Kyle Davies and Zhu Su founded a new exchange, OPNX, to trade the debts of bankrupt crypto companies such as Three Arrows Capital. Dubai\u2019s Virtual Assets Regulatory Authority has just slapped a 1.2 million dinar (USD $2.7 million) fine on Davies and Zhu and Mark and Leslie Lamb of <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/06\/29\/coinflex-gets-roger-verified\/\">CoinFLEX<\/a> for violating investment promotion laws. [<a href=\"https:\/\/www.vara.ae\/en\/regulations\/regulatory-notices\/vara-notice-of-fines-opnx-exchange\/\"><i>VARA<\/i><\/a>]<\/p>\n<p>PayPal is \u201cpausing\u201d UK crypto purchases as of October 1, 2023. The FCA has new rules on crypto marketing which take effect starting October 8 \u2014 including a \u201ccooling-off\u201d period for first-time buyers. So PayPal needs to work out how to reverse the irreversible. [<a href=\"https:\/\/www.fca.org.uk\/news\/press-releases\/fca-introduces-tough-new-rules-marketing-cryptoassets\"><i>FCA<\/i><\/a>]<\/p>\n<p>Coinbase has suspended stablecoins USDT, DAI, and RAI for Canadian users. Canada restricted trading of algorithmic stablecoins earlier this year after the collapse of Terra-Luna last year. [<a href=\"https:\/\/www.coindesk.com\/business\/2023\/08\/17\/coinbase-will-suspend-usdt-dai-and-rai-trading-for-canadian-users\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<p>Nate Chastain gets three months in prison and a $50,000 fine for <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/06\/01\/former-opensea-executive-nate-chastain-arrested-for-insider-trading-of-nfts\/\">insider trading at OpenSea<\/a>. [<a href=\"https:\/\/www.justice.gov\/usao-sdny\/pr\/former-employee-nft-marketplace-sentenced-prison-first-ever-digital-asset-insider\"><i>DOJ<\/i><\/a><i>, <\/i><a href=\"https:\/\/twitter.com\/innercitypress\/status\/1694076246718611772\"><i>Twitter<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/wip\/rIPq4\"><i>archive<\/i><\/a>]<\/p>\n<h3>The unceasing drone of good news for bitcoin<\/h3>\n<p>If you follow crypto bankruptcies, and especially if you\u2019re a creditor in a crypto bankruptcy, you\u2019ll know Kroll, which supplies services to bankrupt companies. Kroll got hacked and lists of FTX and BlockFi creditors were leaked \u2014 the information that <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/07\/30\/john-jay-ray-sues-ftx-inner-circle-for-1-billion-prosecutors-want-sam-bankman-frieds-bail-revoked\/\">FTX wanted to keep under seal<\/a>, but which they\u2019re now calling \u201cnon-sensitive.\u201d No passwords were leaked, just names and contact details. But watch out for scammers. [<a href=\"https:\/\/www.coindesk.com\/policy\/2023\/08\/25\/ftx-blockfis-customer-data-compromised-in-kroll-hack\/\"><i>CoinDesk<\/i><\/a><i>; <\/i><a href=\"https:\/\/twitter.com\/FTX_Official\/status\/1694899217326608611\"><i>Twitter<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/DMFON\"><i>archive<\/i><\/a><i>; <\/i><a href=\"https:\/\/twitter.com\/BlockFi\/status\/1694844414294704547\"><i>Twitter<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/kQwlA\"><i>archive<\/i><\/a>]<\/p>\n<p>The Centre consortium that issued the USDC stablecoin is being dissolved. USDC issuance will be managed entirely by Circle. Coinbase has bought a share in Circle. [<a href=\"https:\/\/www.coinbase.com\/blog\/ushering-in-the-next-chapter-for-usdc\"><i>Coinbase<\/i><\/a>]<\/p>\n<p>In case you actually believed NFT bros ever gave a hoot about artists, they\u2019re abandoning the royalty fees excuse \u2014 that artists would get paid a bit for resales. OpenSea will stop collecting royalties as of March 2024. But you can still optionally tip the artist! [<a href=\"https:\/\/opensea.io\/blog\/articles\/creator-fees-update\"><i>OpenSea<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.theverge.com\/2023\/8\/17\/23836440\/nft-creator-royalty-fees-are-dead-opensea-optional\"><i>Verge<\/i><\/a>]<\/p>\n<p>Zeke Faux from Bloomberg has a book about crypto, <i>Number Go Up<\/i>, coming out in September \u2014 it seems to be the season. Bloomberg has excerpted his section on social media scammers who use tethers, and the awful industry behind them. [<a href=\"https:\/\/www.bloomberg.com\/news\/features\/2023-08-17\/my-crypto-hell-journey-started-with-a-wrong-number-scam-text\"><i>Bloomberg<\/i><\/a>]<\/p>\n<p>CoinDesk\u2019s El Salvador correspondent Jonathan Martin keeps trying and failing to use bitcoin there, with no more success than in <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/08\/09\/crypto-collapse-the-fed-takes-on-crypto-banks-coinbase-earnings-call-is-bad-ftx-2-ex-harder\/\">his first report<\/a>. He can <i>see<\/i> Bukele&#8217;s vision! In the Lightning future! If not at all in the present. Nothing works, but that&#8217;s <i>good<\/i> news. [<a href=\"https:\/\/www.coindesk.com\/consensus-magazine\/2023\/08\/18\/el-salvador-diary-lightning-is-key-to-bitcoin-adoption\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<h3>Media stardom<\/h3>\n<p>Forkast on the UK and crypto: \u201cCould Rishi Sunak\u2019s blockchain dream live on without him?\u201d With quotes from David. [<a href=\"https:\/\/forkast.news\/rishi-sunak-blockchain-dream-live-on-without-him\/\"><i>Forkast<\/i><\/a>]<\/p>\n<br><br><div align=\"center\"><p><a href=\"https:\/\/www.patreon.com\/bePatron?u=8420236\"><img src=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/10\/become_a_patron_button.svg\" alt=\"Become a Patron!\" title=\"Become a Patron!\" width=217 height=51><\/a><br><p style=\"align:center;\" class=\"patreon-badge\"><i>Your subscriptions keep this site going. <a href=\"https:\/\/www.patreon.com\/bePatron?u=8420236\">Sign up today!<\/a><\/i><\/p><\/div>","protected":false},"excerpt":{"rendered":"<p>It woz my lawyers wot done it.<\/p>\n","protected":false},"author":1,"featured_media":23537,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":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":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[3016,2653,3597,2835,568,1795,3598,3602,951,2152,1794,650,670,288,1501,3364,5,2305,3333,3601,166,1515,3604,2174,3610,3609,1798,3334,3608,3607,3051,3606,3441,3043,986,2462,1446,2020,2326,2181,3435,860,3596,985,3600,3140,3595,137,3603,2491,33,3050,2946,3605,1796,457,403,3611,1865,354,552,3599,3419],"class_list":["post-25891","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised","tag-3ac","tag-alameda","tag-alexey-pertsev","tag-axie-infinity","tag-binance","tag-blockfi","tag-brian-klein","tag-can-sun","tag-canada","tag-centre","tag-checkout-com","tag-circle","tag-coin-center","tag-coinbase","tag-coinflex","tag-dan-friedberg","tag-dubai","tag-el-salvador","tag-farmington-state-bank","tag-fbh","tag-fca","tag-federal-reserve","tag-fenwick","tag-fireblocks","tag-fluent-finance","tag-forkast","tag-ftx","tag-jean-chalopin","tag-jonathan-martin","tag-kroll","tag-kyle-davies","tag-leslie-lamb","tag-lewis-kaplan","tag-mark-lamb","tag-mastercard","tag-nate-chastain","tag-nevada","tag-nft","tag-ofac","tag-opensea","tag-opnx","tag-paypal","tag-peppersec","tag-prime-trust","tag-robert-pitman","tag-roman-semenov","tag-roman-storm","tag-russia","tag-ryne-miller","tag-sam-bankman-fried","tag-sec","tag-su-zhu","tag-terra","tag-titan","tag-tornadocash","tag-united-kingdom","tag-us-treasury","tag-us","tag-usdc","tag-visa","tag-washington","tag-waymaker-law","tag-zeke-faux"],"jetpack_featured_media_url":"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2022\/08\/tornado_cash.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/25891","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=25891"}],"version-history":[{"count":25,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/25891\/revisions"}],"predecessor-version":[{"id":25916,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/25891\/revisions\/25916"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media\/23537"}],"wp:attachment":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media?parent=25891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/categories?post=25891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/tags?post=25891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}