Erik Voorhees, libertarian CEO of formerly anonymous crypto exchange ShapeShift, told Coindesk over the weekend that ShapeShift’s, er, shift to know-your-customer requirements earlier this month was not a capitulation to demands from regulators. Rather, Voorhees said, it was a “proactive step” that was taken to anticipate the regulatory jackboot before it came crashing down. “The risk of not doing so,” Voorhees added, “had gotten too great.”
But over the weekend regulators slipped off their jackboots and donned, in full view of the public, the cuddly well-worn slippers of paternal love. Kinda. U.S. Congressman Tom Emmer, co-chair (along with Rep. Bill Foster) of the newly formed Congressional Blockchain Caucus, has drafted three bills that would, hopefully, lead to a creative flourishing in the cryptoverse. The first bill urges the U.S. Government to adopt a “light-touch” approach that recognizes blockchain’s potential while condemning “illicit” uses of digital cash.
The second, in view of creating a “safe harbor,” would exclude crypto investors from paying tax on digital cash assets obtained as the result of a hard fork. The third suggests that “blockchain developers” must not be construed as “financial institutions” and be unduly regulated.
An artists impression of what a safe harbor for shrewd crypto merchants, garrulous crypto pirates, and comely crypto tavern mistresses might look like, if U.S. regulators get their way. PHOTO CREDIT: Flickr
It’s understandable why there should be at least some regulation. The Cyber Threat Alliance, a consortium of cybersecurity researchers, found that “crypto-jacking” attacks (when a hacker takes control of someone’s processing power to mine cryptocurrency on the hacker's behalf) increased by 459 percent between the end of 2017 and July 2018. “This rapid growth,” the report intones, shows “no signs of slowing down.”
More dangerous, however, is the threat from “EternalBlue,” the software vulnerability behind the infamous WannaCry ransomware attack that crippled the UK’s National Health Service, among countless other networks. The Cyber Threat Alliance found that EternalBlue—long thought dead—lives on in a strange, sad, cybernetic half-life as a component in popular mining malware.
Elsewhere in Bugdom a vulnerability discovered—and duly fixed—in the Bitcoin network was revealed to have been far worse than originally let on. The Bitcoin developers originally announced that they had discovered a vulnerability to “denial-of-service” attacks in the Bitcoin network. Now, however, they have admitted that diligent hackers could have exploited the bug to inflate bitcoin’s supply past its 21 million BTC hard cap.
Perhaps it’s time to roll in the big guns, ma’am. The Naval Air Systems Command, an arm of the U.S. Navy, has launched an initiative to trace the provenance of aircraft parts through supply lines, currently a “resource-consuming process that drives up the cost to operate military aircraft.” Sadly, however, it won’t be as if every Tom, Dick, and Harry can while away their lonely Sunday evenings tracing the provenance of anti-aircraft turret shafts and hull-glue; the Navy will imprint the records on a “permissioned”—i.e. private—blockchain.
In another, slightly sexier vision of the blockchain future, Dubai’s techno-metro-utopia initiative “Smart Dubai,” in concert with blockchain incubator ConsenSys (yes it funds us too, shh) and tech giant IBM, is incorporating blockchain technology into its “DubaiPay” instant-transactions payment platform to speed up transactions and advance its goal of making the city the world’s “happiest.” Ha. Someone, please, show us a line graph where “happiness” carries a perfect positive correlation with “seamless real-time blockchain-powered digital cash transactions.”