Welcome to The Node. This is Daniel Kuhn and Prachi Vashisht, here to take you through the latest in crypto news and why it matters. In today’s newsletter:
Binance, the world’s largest crypto exchange by trading volume, has been sued by the Commodity and Futures Trade Commission (CFTC). CEO Changpeng Zhao is listed as a defendant. The CFTC filed the suit late Monday morning in a federal court in Chicago, and is alleging the exchange failed to register for licenses. For months reports have circulated that the U.S. Department of Justice, Securities and Exchange Commission and other agencies have been working out a case against the global exchange reportedly related to money laundering offenses. “Today’s enforcement action demonstrates that there is no location, or claimed lack of location, that will prevent the CFTC from protecting American investors,” the CFTC’s filing reads. Bitcoin immediately fell about $1,000 on the news, trading at $26,800.
Hackathon
The hacker behind Euler Finance’s $200 million exploit that occurred earlier this month returned 51,000 stolen ether (worth about $90 million at the time). They also moved tens of millions of dai stablecoins to another wallet, blockchain data shows. Earlier this month, Euler offered a $1 million bounty for information related to the exploiter. Elsewhere, CertiK is claiming developers behind the little-known Kokomo Finance platform orchestrated a $4 million exit scam. In addition to blockchain data, all of Kokomo’s social media platforms and its website were deleted during Asian morning hours.
Crypto Wins?
MicroStrategy, the business intelligence company turned quasi-bitcoin fund, prepaid the remaining principal on its $205 million loan from the recently collapsed Silvergate Bank, according to a Friday U.S. Securities and Exchange Commission filing. The company has also purchased another 6,455 bitcoins (~$150 million) over the past five weeks. Meanwhile, a Morgan Stanley analyst said bitcoin’s recent rally is partially explained by expectations of increased liquidity spilling over from the U.S. government’s bank bailouts. Finally, a wallet controlled by the FTX bankruptcy estate consolidated about $42,000 worth of airdropped arbitrum (ARB) tokens that would’ve belonged to dead hedge fund Alameda Research.
Sound Bites
“It’s not correct that all crypto is a security.”
Former CFTC Chairman Christoper J. Giancarlo, on CoinDesk TV’s”First Mover”
The Takeaway: Skull of Satoshi
Last week, Benjamin Von Wong unveiled an art installation he was commissioned to create by Greenpeace USA for its “Change the Code, Not the Climate” campaign. The $5 million campaign is funded by Ripple co-founder Chris Larsen and aims to change Bitcoin’s proof-of-work (PoW) consensus algorithm through a “code change” in order to save the environment.
The idea being that PoW uses energy and other consensus algorithms do not.
Von Wong’s art piece was revealed Thursday, March 23, in a blog post and video. He calls it the “Skull of Satoshi” – an apt name for an 11-foot tall skull made of wood, recycled styrofoam and 300+ pieces of electronic waste. The skull also features red laser eyes, a nod to the Bitcoin Twitter community who wear laser eyes in their profile pictures.
Instead of enraging the Bitcoin community, as Greenpeace’s campaign normally does, the Skull was at first generally embraced because it was really cool.
I mean just look at how metal, how punk rock the whole art installation is. It’s literally an 11-foot skull with glowing red laser eyes and smokestacks growing out the top. What’s not to love?
Without getting into too much detail, the conversation about moving Bitcoin from proof-of-work to something else, like proof-of-stake (PoS), which doesn’t use energy, is generally a nonstarter. Bitcoin will almost certainly never move away from proof-of-work. That isn’t obvious from the outside, so that’s exactly where Von Wong began his journey to understand bitcoin mining.
In a reflective tweet thread, Von Wong said he thought the Bitcoin environmental problem was “black and white.” After the “phenomenal accident” of the Skull of Satoshi, Von Wong spent time in conversation with environmentalist bitcoiners including Level39, Troy Cross and Daniel Batten. He now recognizes that Bitcoin can be a powerful force for improving the environment.
This creates a somewhat interesting parallel. Greenpeace will still presumably use the Skull of Satoshi to promote the “change the code” campaign, but it will work everywhere except on the internet where the skull has become somewhat of a mascot for Bitcoin’s environmental potential even without moving its consensus mechanism from proof-of-work.
The story here is that Von Wong went from “there’s only one way to fix Bitcoin’s environmental problem” to “actually, there are many ways to fix Bitcoin’s environmental problem” in the space of a few days. It’s not a story because Von Wong is someone big, important or special. It’s a story because as more and more people get interested in Bitcoin the environmental question will certainly come up again and again. And bitcoiners will, and must, be ready to engage constructively.
For someone who has been around bitcoin for a while, I viewed Von Wong’s learning process around the nuances of bitcoin mining as honestly unsurprising.The fact that it was carried out in what seemed like a relatively nonabrasive way bodes well for onboarding of future environmentalist-leaning bitcoiners.
If Bitcoin is to succeed, we need more bitcoiners. And because Bitcoin and environmentalism are not mutually exclusive, there are ways for PoW blockchains to be a positive force.
Bitcoin is for everyone, including environmentalists.
Nasdaq says institutional appetite in crypto is steady as it plots push into custody, trading (The Block)
Bitcoin Holders Hit New Highs as Fed Tightening Eases (Blockworks)
NFT whale down millions after farming Blur tokens with Bored Apes (Protos)
Is Peter Thiel’s inner circle behind the Satoshi Nakamoto pseudonym? (Protos)
Canada’s Bankrupt ‘Crypto King’ Kidnapped, Tortured, Held for $3 Million Ransom (Decrypt)
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Heating Up
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