Yesterday it was all doom and gloom for the exchanges. The state of New York released a damning investigative report on exchanges operating in its jurisdiction and a UK parliamentary committee called for dramatic regulations to be levied on cryptocurrencies. Yet the exchanges have some salty words of their own.
Consider the response from Coinbase, which was slammed by the New York Office of the Attorney General for producing up to 20 percent of its own trading volume. Coinbase hit back, saying that such trades were performed “on behalf of Coinbase Consumer customers,” i.e. to create liquidity on the exchange. It reiterated, saying that it does not “trade for the benefit of the company on a proprietary basis." The steely response makes sense—without artificial trades, investors will be left in monetary limbo with no one to buy or sell from.
Anonymous exchange Kraken, which was also slighted in the Office’s report, was more scathing in its reply. Jesse Powell, Kraken’s founder, wrote on Twitter that "NY is that abusive, controlling ex you broke up with three years ago but they keep stalking you, throwing shade on your new relationships, unable to accept that you have happily moved on and are better off without them. #getoverit.” Sounds very specific—do you still have feelings for her, Jesse?
The exchanges do have some right to be suspicious, given the news that authorities in Brazil are investigating whether a cabal of top banks had conspired to stifle crypto exchanges. Brazil’s Administrative Council for Economic Defense is looking into the activities of Banco do Brasil, Banco Bradesco, Itau Unibanco Holding, Banco Santander Brasil, Banco Inter, and Sicredi.
Allegedly, these banks used their monopoly over the financial sector to shutter the accounts of brokerages trading in bitcoin. The banks themselves retorted that the brokerages had simply failed to comply with anti-money laundering laws. But it remains suspect—bitcoin investments, according to Reuters, have dramatically risen in Brazil over the past years, at the expense of traditional banking services. Jealous lovers indeed.
If only there were an early-warning system that could immutably inscribe infractions on a digital ledger, eh? Well there is! It’s called Sentry, a platform devised by ConsenSys-funded company Hala (Yes, yes, ConsenSys funds us, too. Get over yourself). Sentry accrues data from airstrike early warning systems (“using a combination of civilian observations and social media reporting, IoT sensors”) in war-torn areas—i.e. Syria—and records the information immutably.
Hala itself, because its platform is decentralized through the Ethereum blockchain, cannot tamper with the records, which can subsequently be used to hold violent state powers accountable for their actions. Sentry admits that “the truth or relevance of any data collected can still be disputed,” but it’s a step toward jamming state propaganda machines that disseminate lies.
At least there’s still one man who is willing to hold himself accountable. Leathery old man John McAfee, has come clean about a whitepaper for “trout-flavored soda” that he pretended to have received anonymously. Spoiler alert: “trout-flavored soda” is actually McAfee's own idea, and he was just gauging trout sentiment before pulling the trigger. In quite possibly the most self-conscious product launch of all time, McAfee wrote:
OK. Yes. I mislead [sic] my followers. There was no white paper submission for “Trout flavored Cola.” It is my own company. [...]I have created a line of soda drinks sporting flavors such as “Trout,” “Salmon,” “Broccoli,” “Gravy,” “Pork Chop,” “Sun Dried Tomatoes,” “Pickled Ginger,” “Wasabi” and others. If any of my followers would venture to buy even a single six pack of any of these drinks please state your feelings. (Salmon Soda, BTW, is fucking awesome.)
Decrypt’s official boardroom-approved, editor-signed, cross-referenced, and searingly objective take on McAfee’s product?
If it ain't broken, it doesn't need a fish-flavored fix, John.
Also, somehow—cats are mining cryptocurrencies. Please regulators, make it go away.