HyperLinq : Weekly Digital Asset Digest 22

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Rohan Raman
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The HyperLinq Weekly Digest is the one-stop source for the HyperLinq community to access relevant news involving digital assets, where we essentially outline key industry updates that our members may have missed. We are always open to suggestions and feedback so please do not hesitate to let us know what you think!


‘However Long It Takes’: Zuckerberg Vows to Win Over Libra Regulators : Nikhilesh De | CoinDesk

Facebook CEO Mark Zuckerberg says the company will spend "however long it takes" to get regulators and others on board before launching the Libra cryptocurrency project. Speaking during a quarterly earnings call on Wednesday, the social media giant’s founder sought to assure investors that Facebook would act responsibly with its development of Libra, the ambitious crypto project revealed last month as a potential payments rail for unbanked individuals. The company initially said it aims to launch the currency in the first half of 2020, but the pushback from regulators and politicians has called that timeline into question. Zuckerberg’s comments echo statements made by David Marcus, Facebook’s blockchain lead. Marcus, who used to sit on the board of crypto exchange and Libra Association member Coinbase, testified before Congress last week in back-t0-back hearings in an attempt to assure legislators that Facebook would not launch Libra until all regulatory questions have been answered.

In First, SEC Clears Blockchain Gaming Startup to Sell Ethereum Tokens : Nikhilesh De | CoinDesk

The U.S. Securities and Exchange Commission has issued a no-action letter to Pocketful of Quarters, a gaming startup looking to issue tokens on the ethereum blockchain. PoQ may legally sell its Quarters tokens to consumers without registering them as securities, the SEC Division of Corporation Finance wrote in its second no-action letter to a company seeking to launch a token sale. Quarters are built according to the ERC-20 standard – the first such token to receive U.S. regulatory approval. "The thing that’s notable here, this is the first ERC-20 public blockchain token", said Lewis Cohen of DLX Law, which worked with PoQ to secure the letter. "The most important thing for teenage boys is playing video games and this might be the first financial product that they have and it’ll be a crypto wallet", said Michael Weiksner, the company’s principal. PoQ is working with Apple and Google to sell Quarters tokens in the App and Google Play stores, respectively, the elder Weiksner said. The no-action letter requires a PoQ to follow a number of commitments, including ensuring that players can’t sell, buy or exchange tokens with each other. PoQ is still looking into whether that’s possible. Developers and influencers will have to pass know-your-customer and anti-money laundering processes before they can get an approved account. According to the letter, Pocketful of Quarters has fully developed its platform and can go live before any tokens are sold. Moreover, the Quarters tokens "will be immediately usable for their intended purpose" with PoQ’s gaming platform when the sale begins, and "only developers and influences with approved accounts will be capable of exchanging Quarters for at pre-determined exchange rates by transferring their Quarters to the Quarters Smart Contract". The SEC’s Ingram warned that "any different facts or conditions might require the Division to reach a different conclusion."

Indian Gov’t Panel Recommends a Blanket Ban on Cryptocurrencies : Adrian Zmudzinski | CoinTelegraph

An Indian government panel recommended a ban on cryptocurrencies, Reuters reports on July 22. The panel recommended to the government today to ban cryptocurrencies and impose sanctions for any dealings involving crypto assets. Reuters adds that, according to a government statement, the report and draft legislation released by the panel behind the recommendation will be examined by regulators and the government before taking a final decision. Earlier this month, India’s Minister of State for Finance, Anurag Thakur has pointed out that there is no law in India expressly prohibiting the use of cryptocurrencies. Still, draft legislation that would allegedly impose a ban on the use of cryptocurrencies in India has been published by local blockchain legal experts on social media over a week ago. While all assets fitting this definition would be prohibited, the regulation also suggests that a digital rupee, issued by India’s central bank, would be recognized as legal tender. As Cointelegraph recently reported, Bitcoin proponent and Tezos investor Tim Draper hit out at the Indian government on July 16 calling the government "pathetic and corrupt" for the proposed ban on cryptocurrency.

Too Sick for Buffett Lunch, Justin Sun Attends Tron Influencer Party in SF : Zack Seward | CoinDesk

Tron CEO Justin Sun couldn’t attend his ballyhooed lunch on Thursday with finance titan Warren Buffett because of kidney stones, he said. That didn’t stop him, however, from briefly mingling with influencers at a Tron-organized party on Thursday night in San Francisco. The appearance comes just a day after Sun penned an apology to the public, media and regulators for "over-marketing" the Buffett lunch. "All efforts should return to blockchain tech development from marketing and hyping". Despite the postponement of the main event – for which Sun submitted a $4.6 million donation to charity – after-party plans for Sun’s confab with Buffett proceeded as planned. Ten YouTubers were flown into San Francisco for Tron Influencer Day to celebrate the one-year anniversary of Tron’s acquisition of BitTorrent, the storied file-sharing platform founded in 2004. "He isn’t letting the last payment for BitTorrent get out of escrow". Sun’s appearance proved to be an odd bookend to a weeklong saga about the polarizing entrepreneur. Reports surfaced Tuesday that he was under border control and barred from leaving China. Those reports were disproven later that day when Sun broadcast a video of himself from a San Francisco high-rise.

MIT Fellow Says Facebook ‘Lifted’ His Ideas for Libra Cryptocurrency : Ian Allison | CoinDesk

Avid students of the literature on monetary innovation might feel deja vu when reading Facebook’s Libra white paper. Several aspects of the social network’s much-ballyhooed global cryptocurrency project uncannily resemble the vision laid out in a paper published last year in the Royal Society’s Open Science publication. For example, the Libra paper described a digital coin that would maintain its value because it was backed by a basket of fiat currencies and short-term debt. This echoed the July 2018 paper by MIT big-hitters Alex Lipton, Thomas Hardjono and Alex "Sandy" Pentland, who described an asset-backed, supra-national digital token. He advises fintech projects on working with central banks, including the Utility Settlement Coin’s technology provider Clearmatics. He is also the chief technical officer for Sila, a platform designed to help fintech firms interface with the financial system using a dollar-pegged stablecoin. To be fair, the economic design of Libra, as stated in its white paper, aims to integrate harmoniously with the existing infrastructure; for example, the Libra Association says it doesn’t want to impinge on the purview of central banks. Tradecoin, on the other hand, could be seen as notionally more of a challenger to the status quo, offering "a way that small countries, sovereign wealth funds, and retirement funds could get a fair shake in the world’s financial system, instead of being ignored or exploited by the big central banks", as the authors put it in a more recent paper. As such, there would be twice as much money in the system, with all the negative consequences, he said. "In developing countries, it will cause enormous inflation because the amount of money will be kind of doubled, roughly speaking, in fact much more than doubled", said Lipton. "I am not a big fan of quantity theory of money, but I am absolutely certain that as the amount of money explodes, prices will go up". That’s clearly not how Libra sees it. The white paper describes a stabilization mechanism whereby authorized resellers will purchase the coin in response to demand – and conversely when people want to sell Libra they receive fiat.

Coinbase Added 8 Million New Users in the Past Year : Helen Partz | CoinTelegraph

America’s biggest cryptocurrency exchange and wallet service Coinbase has signed up 30 million users since launching in 2012. Over the past 12 months, Coinbase has registered eight million new users, according to data revealed by Bitcoin investor and entrepreneur Alistair Milne in a tweet on July 22. Coinbase stopped disclosing precise details on the number of users on their website at the end of November 2017. Founded in June 2012, Coinbase is one of the most popular crypto exchanges globally, with adjusted trading volume of around $350 million as of press time. In August 2018, Coinbase CEO Brian Armstrong revealed that the platform was signing up 50,000 users per day back in 2017. Earlier this year, software firm DataLight reported that the United States was the most active crypto trading country with over 22 million monthly visits of crypto exchanges.

Huawei CEO Calls on China to Create a Rival to Facebook’s Libra Crypto : Daniel Kuhn | CoinDesk

Telecommunications giant Huawei’s chief executive has said that the time is ripe for China’s government to preempt Facebook’s Libra.Speaking in an interview with Italian media outlet L’economia, CEO Ren Zhengfei remarked that China has the capability to pursue such an undertaking. Ren was not necessarily looking to take his company toe-to-toe with the social media giant. Though his firm has made significant inroads in the blockchain space – including joining the Hyperledger consortium and releasing a blockchain-backed cloud service – he instead pointed to the advancements in blockchain technology made by the Chinese nation-state. Additionally, while some members of China’s central bank have said that Libra’s deployment could negatively impact the country’ economy, Wang Xin, head of the research bureau at the People’s Bank of China, said the competition could propel the country to issue its own national cryptocurrency. In fact, a few weeks after Libra was announced, searches on the China’s web search giant Weibo skyrocketed.

Bitcoin No Longer Desirable Option for Criminals, Says CoinCorner CEO : Helen Partz | CoinDesk

The sentencing of the CEO of the now-defunct darknet marketplace Silk Road shows that Bitcoin usage by criminals is in the past, according to Danny Scott, CEO of Isle of Man-based Bitcoin exchange CoinCorner. Gary Davis was sentenced to 6.5 years in prison for helping manage the now-defunct darknet marketplace Silk Road. According to U.S. officials, Silk Road operated over 1.5 million transactions with a total value of more than $213 million between January 2011 and October 2013, the report notes. Recently, Cointelegraph reported on the arrest of a Silk Road dealer who allegedly used cryptocurrency to launder over $19 million of profits from selling illegal drugs on Silk Road. Danny Scott, CEO of Isle of Man-based Bitcoin exchange CoinCorner, says that Davis’s sentencing shows that Bitcoin usage by criminals is in the past. He also cited findings by U.S.-based blockchain intelligence firm Chainalysis, which reported earlier this year that illicit transactions comprised less than 1% of all Bitcoin activity in 2018, down from 7% in 2012. In the press release, CoinCorner CEO considered Bitcion’s anonymity as a common myth, arguing that Bitcoin is actually pseudonymous, which means that all transactions are recorded on blockchain forever. As such, Bitcoin is a "poor choice of currency for criminals", Scott concluded.

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Rohan Raman

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