Spencer Dinwiddie doesn’t plan to let the NBA’s objections stop him from tokenizing his $34 million contract and selling shares in an ICO-like sale.

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Rakesh Sharma

Basketball player Spencer Dinwiddie is heading for a showdown with his employer, the National Basketball Association (NBA), over a token offering which was scheduled to start today and has been postponed by a week. 

The Brooklyn Nets point guard’s security token offering (STO) for accredited investors planned to raise $13.5 million by tokenizing part of the income promised from his $34 million, three-year contract. The offering will allow him to earn cash upfront by soliciting funds from investors. In return, they will get “SD$8” tokens, guaranteeing a check and interest from his future earnings. Dinwiddie has earmarked $2.5 million this year as interest payments from his $16 million paycheck.   

But the NBA threw a spanner in his plans, claiming that he was prohibited from tokenizing his contract based on the terms of the agreement that he signed with them. Dinwiddie had said that he was willing to sit down and discuss the offering with them. But the deliberations were seemingly unsuccessful. In a series of tweets yesterday, Dinwiddie said he is “moving ahead” with or without the NBA’s blessings.

> This is why we are giving them additional time as our goal is to partner. 
> 
> Regardless of the @NBA’s position, we will move forward. Therefore we will launch on Oct. 21st, a week from our original date and before the start of the @NBA season. (2/8)
> 
> — Spencer Dinwiddie (@SDinwiddie_25) October 13, 2019

The main point of contention between the player and his employer are the terms of his contract. The league quoted from Dinwiddie’s contract, stating that “no player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract.” But he maintains that his offering does not constitute an “assignment” because it does not give his fans or token holders the rights to either the Nets or the NBA. 

> The NBA has stated its position that the CBA forbids Dinwiddie’s plan and the Brooklyn guard clearly remains resolute to go ahead with trying to sell shares in his contract. This is heading for a showdown of sorts barring a reversal of the NBA’s position ... which seems unlikely https://t.co/A6a3EZsKoz
> 
> — Marc Stein (@TheSteinLine) October 13, 2019

“He is not doing any kinds of rights assignment for IP that is NBA-owned,” explained Hassan Ahmed, Director of Finance and Operations at trading platform eToro. “It’s not his revenue (as an asset). It is his take-home income,” he told _Decrypt_.

That income can be spent by Dinwiddie in any manner. 

“If he wants, he can buy a convertible with it or ink a third-party agreement between him and his fans as an independent transaction between two parties outside the purview of his original employer,” said Ahmed. 

AN OFFERING WITH POTENTIAL 

To be sure, this is not the first time that individuals have been converted to assets for a promise of future income. Pop star David Bowie paved the way for such offerings by selling Bowie Bonds, that guaranteed a cut of his future royalties to investors, back in 1997. NFL running back with the Houston Texans Arian Foster also attempted an initial public offering in 2015 but had to abandon it amid injuries. 

Tokenization of contracts, however, moves beyond the mechanics of a simple offering. If it is executed successfully, the offering holds great potential for everyone involved. Players can liquidate part of their contract for money while the league benefits from engagement with a broader set of stakeholders. 

Ahmed said the offering is unique because it is for an “emotional asset” for NBA fans, the same way that baseball cards or merchandise can generate additional revenue for franchises. “There’s an investment and utility aspect which is really exciting,” he said.   

To that extent, a successful offering by Dinwiddie could be a precursor of similar offerings by other personalities in the sports and entertainment industry. Realizing the potential of this nascent industry, Dinwiddie has already launched an offering platform for sports and entertainment folk. 

Ahmed said the experimentation with fractionalizing income could also extend beyond high-profile figures to lay persons. For example, recent college graduates could reduce their loan burden by creating offerings for future incomes. “These offerings allow investors to participate in future income streams in a way that is more capital-optimized,” he said. 


NBA's Spencer Dinwiddie heads for showdown with league over STO

The people and companies shaping the crypto industry.

“Crypto Mom” Hester Peirce tells Decrypt how the SEC’s quiet rollout of “Rule 631” means Big Brother might one day surveil Bitcoin ETF buyers.

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It was perhaps the most weighty piece of writing to come out of the SEC last week that had nothing to do with a Bitcoin ETF or another enforcement action against a billion-dollar ICO.

Last week, Commissioner Hester Peirce took her own agency to task over a new and little-known SEC initiative, called Rule 613, that Peirce says amounts to a “massive government surveillance program.”

And while the future implications of this program for the cryptocurrency industry are yet undetermined, Peirce told _Decrypt_ in an interview that it’s precisely those institutional investors that the crypto world currently covets, as well as retail traders, would fall within the initiative's purview. It's the inclusion of retail, and the surveillance of Main Street investors, that Peirce takes issue with.

Rule 613 is a data reporting requirement for brokerages and exchanges, first adopted by the SEC in 2012, but just now approaching implementation. The rule creates what the SEC calls a “consolidated audit trail,” or CAT for short, which Peirce described in an op-ed last week as a system that forces “every broker in the United States to turn over every investor’s trades from start to finish to a database that the SEC and private regulators will be able to mine for data and analyze."

 Crypto industry shrugs off latest Bitcoin ETF rejection

It was in the wake of some very turbulent market events, like the Flash Crash of 2010, when U.S. stock markets lost around a trillion dollars in value in a matter of minutes before rapidly rebounding, that Rule 613 was created. It’s understandable, Peirce explained, for regulators to want to analyze such events to determine how they happen.

But over the ensuing seven years, as the project experienced technological and administrative delays, the purpose of the rule, according to Peirce, has morphed from collecting data to be analyzed in the event of a major market disruption to one that offers the government unfettered access to citizens’ financial information and is ripe for abuse.

So could Rule 613 offer the U.S. government the same kind of window into the customer data of U.S.-based cryptocurrency exchanges?

Commissioner Peirce told _Decrypt_ that the rule currently only applies to equities and options traded on national securities exchanges, and doesn’t currently cover crypto trades or exchanges. However, “if, for example, there were a crypto ETF or ETP that traded on a national securities exchange,” she explained, “purchases and sales of those shares would certainly be tracked” under Rule 613.

If the SEC someday approves a Bitcoin ETF, but the federal government collects individual data on each and every share traded, could that potentially turn away some would-be buyers? 

It’s a concern that might resonate with the privacy-focused crypto crowd, but perhaps less so among mainstream, retail investors, according to Peirce. “Most people in this space are so used to being really heavily regulated that they don’t even ask questions any more,” the Commissioner said.

Pierce added, however, that it isn’t too late to convince the SEC to change its course regarding this data-gathering rule. But it’ll take more than alarms sounded from within.

If people are of the opinion that “we understand that the SEC needs a picture of what goes on in the markets, but we also need the balance to have the government not erode our privacy,” Peirce said, that message needs to come from outside the Commission for regulators to hear it.


“Crypto Mom” Hester Peirce tells Decrypt how the SEC’s quiet rollout of “Rule 613” means Big Brother might one day surveil Bitcoin ETF buyers.

SEC’s Hester Peirce is worried about your privacy

DLive is hoping to grow its monthly users from 5 to 50 million with the help of the Theta Network's peer-to-peer streaming protocol.

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Nawaz Sulemanji

YouTube and Twitch competitor DLive is looking to massively scale up its video streaming platform after announcing its partnership with the decentralized video streaming protocol, the Theta Network.

The platform that earlier this year saw its streaming audience jump by over 67 percent after announcing that the man who currently has the most YouTube channel subscribers in the world—PewDiePie—had signed up to give weekly streams on the platform. The streaming platform now has a reported audience of 5 million monthly active users. 

“The DLive platform has grown tremendously in 2019, but with that comes fast-rising content delivery costs,” said Wilson Wei, CEO of Lino (the blockchain protocol that DLive is built on). “By adding Theta Network to DLive’s video infrastructure, DLive can reduce those costs by 50 percent or more, making DLive platform growth more sustainable,” he said. 

“This is how we can grow from 5 million to 50 million monthly users, and we’re excited to explore long-term strategic opportunities between Lino and Theta.”

In a blog post, the Theta team announced that the partnership will begin with Theta’s peer-to-peer streaming protocol being incorporated into the DLive video platform on both desktop and mobile devices. This join-up would then allow DLive users to relay video on the Theta Network. The team also mentioned that further collaborations are in the works that include content syndication with SLIVER.tv (a current Theta steaming partner) and other ways to incentivize and benefit the combined 8 million streaming-user base. 

“We’re thrilled to introduce the Theta Network to DLive’s 5 million users and bring decentralized video streaming to a mass audience,” said Theta Labs CEO Mitch Liu. “This partnership marks a major milestone for the Theta Network, making us one of the most widely utilized and adopted blockchain technologies of any industry.”


DLive partners with Theta to bring decentralized video streaming to the masses

The new tools, protocols and infrastructure shaping crypto today.

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California-based crypto custody firm BitGo will now support digital currency Tron, the company announced today. 

BitGO will offer Tron functionality across both its hot (online) wallet and custody solutions, according to today’s release. 

BitGo is one of the largest custody solutions in the crypto business, and claims to process some $15 billion worth of transactions per month. 

Tron, meanwhile, is the 11th biggest cryptocurrency by market cap, and this year was involved in controversy after Tron CEO Justin Sun dropped out of a heavily publicized charity lunch with legendary investor Warren Buffett.

Sun wrote in today’s release that the partnership will “enable TRON to further delve into various DeFi applications and we welcome them as a partner.” Sun is also the CEO of BitTorrent. 

“We worked with TRON’s development team to develop their first multi-signature, institutional-grade wallet,’’ Benedict Chan, CTO of BitGo, also said in the release. “TRON’s move towards on-chain, multi-sig opens the door for financial services clients who demand the highest levels of security.”

A “hot wallet” is distinct from a “cold wallet,” which stores funds offline. Hot wallets are supposedly more susceptible to hacks, but are popular for fast-paced cryptocurrency trading.

Tron has yet to be listed on Coinbase, whose custody arm rivals BitGo. Justin Sun earlier this year described a Coinbase listing as his “#1 priority.”


BitGo integrates Tron with hot wallets, custody solutions - Decrypt

Major crypto custody firm integrates Tron, the 11th biggest cryptocurrency.

BitGo integrates Tron with hot wallets, custody solutions

The projects, currencies, and events shaping crypto today.

The departure of Bookings Holdings, an online travel firm behind Priceline.com, is the latest to roil Facebook’s embattled blockchain and cryptocurrency.

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Online travel company Bookings Holdings has become the latest company to exit Facebook’s embattled Libra project, according to a _Bloomberg_ report. 

The Connecticut-based company, which runs a slew of travel sites, including Kayak.com and Priceline.com, joins other high-profile names, such as MasterCard Inc. and PayPal Holdings Inc., who exited the project last week. Their departures mean that the Libra Association now consists of 21 partners, down from the earlier figure of 28 when it was launched. 

The remaining association members are meeting in Geneva today to finalize its charter and formalize their partnership.  

The _Bloomberg_ report does not provide a specific reason for Bookings Holdings’ decision to move out of the association nor has the company provided a statement. But it is not hard to guess the reason. Facebook’s partners in the project are wary of the attention that their association with the project is bringing on their core business. 

Their fears about the project casting a negative spotlight came true last week when Democratic senators Brian Schatz from Hawaii and Sherrod Brown from Ohio, two of Libra’s fiercest critics, wrote a letter “urging” them to reconsider their association with the project. “If you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities,” they wrote.

Bookings Holdings is the odd exit in a stream of companies largely made up of financial services companies that are moving out of Libra. Other partners, including non-profits and ridesharing platforms like Uber and Lyft, are still with the project. “Large payment companies are wise to avoid legitimizing Facebook’s private, global currency,”  Sen. Brown stated on Friday.

“Facebook is too big and too powerful, and it is unconscionable for financial companies to aid it in monopolizing our economic infrastructure. I trust others will see the wisdom of avoiding this ill-conceived undertaking,” the senator said.


Bookings Holdings checks out of Facebook's Libra

Craig Wright: the man who would be Satoshi

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Craig Wright puts $5,000 bounty on Bitcoin fan

Tim Copeland

Craig Wright is suing Twitter user Holdonaut for defamation of character, and today offered a $5,000 bounty for any identifying information, according to CoinGeek. Already, fans of Bitcoin SV—the cryptocurrency that Wright supports—have started tracking the Twitter user down online, and publicly revealed his home address.

Wright’s move has shocked the crypto community, with many users reporting that tweets contained personal information and expressing dismay at the bounty. Some responded with a lighter touch, and even offered to be included in the lawsuit. Overall, the move demonstrates a deepening divide over cryptocurrency affiliations within the crypto community and could potentially make it look even more toxic to outsiders and dampen its prospects for wider adoption.

Since the personal information was revealed online, other twitter users have changed their profile pictures and names to match Hodlonaut’s. They include Bitcoin developer Udi Wertheimer, Bitcoin enthusiast Max Hillebrand and entrepreneur Giacomo Zucco. Hodlonaut’s real account has been deactivated.

Hodlonaut was the person behind the Bitcoin Lightning Torch, a project which saw a small amount of Bitcoin passed around from person to person on the Lightning Network. This helped to raise awareness of the network's growing popularity and received the support of Twitter CEO Jack Dorsey.

CoinGeek expressed support for Wright's lawsuit and the bounty, which is unsurprising as the site has close connections to him (it even encouraged its readers to look for tattoos matching the ones seen on a supposed picture of Hodlonaut.) It is one of the few outlets that advocate that Wright is Nakamoto and is a big proponent of Bitcoin SV, which Wright supports, and which is the cryptocurrency the bounty will be paid in.

Wright first “came out” as Nakamoto in May 2016 and continues to maintain that he is the Bitcoin inventor, most recently in an email to Roger Ver. He has offered various proofs but they have been refuted on the basis that anybody could create them with the information that’s available publicly. In fact, this site lets you create similar “proofs” that you are Nakamoto.

Within the crypto community, it’s quite rare for someone to be targeted and have their personal data revealed in public, but it _has_ been happening more frequently. Recently, Messari founder Ryan Selkis was targeted by fans of the cryptocurrency XRP who phoned his home address and people he knew.

> I want @Ripple @bgarlinghouse @MonicaLongSF @CoryTV @JoelKatz @warpaul to denounce any $xrp community threats against my family. I’m going to the fbi and local police after THREE calls. Ensuring our family doesn’t get swatted.
> 
> I’m not going home until it’s publicly stated.
> 
> — Ryan Selkis (@twobitidiot) January 25, 2019

There has always been a divide between the Bitcoin and Bitcoin Cash communities (the later has now split into Bitcoin Cash and Bitcoin SV) over how big the block sizes should be in the blockchain. The debate has become more fervent over time, with personal attacks made on the leaders of both sides. Now it appears the line has been crossed and people are being personally targeted. Can the crypto community fix these cracks or are things about to get a whole lot worse?


Craig Wright puts $5,000 bounty on Bitcoin maximalist - Decrypt

Craig Wright is suing Twitter user Holdonaut for defamation of character, and today offered a $5,000 bounty for any identifying information, according to CoinGeek.

Craig Wright puts $5,000 bounty on identity of Bitcoin maximalist who called him a fraud

Bitcoin SV fanboys have already posted the home address of the Twitter user in the hope of earning the bounty. Other communities are shocked at this behavior.