The Secret War — Privacy Coins in the Firing Line
A lot of regulation in crypto happens behind closed doors. Gag orders and “National Security Letters” (NSLs) are used liberally, and companies forced to comply with any number of things without being allowed to tell anyone about it. It’s also a criminal offense to tell anyone that you’ve been gagged or have received an NSL.
Last week Bittrex delisted several privacy coins: monero (XMR), zcash (ZEC) and dash (DASH), and this has been a trend amongst exchanges, with Shapeshift doing the same thing at the end of last year.
Bittrex provided no explanation for the delisting, apart from saying that users may not be able to withdraw these coins “due to events outside of Bittrex’s control.” They then added a cryptic hypothetical scenario:
“For example, there could be technical difficulties (e.g., the blockchain is broken) which prevent users from being able to withdraw their tokens.”
What do they mean, the “blockchain is broken”? Is that to imply some sort of enforced hard forks coming up that would make privacy coins less private, that the exchange won’t be supporting? Or is that to deflect from the fact that “out of Bittrex’s control” means “coerced by government”? What exactly is going on here?
I asked Erik Voorhees in an interview on Wednesday if he could talk about it, and he responded:
“I can’t. Someday I hope to.”
He then added:
“There used to be a first amendment.”
The constitutionality of NLSs has been challenged in court due to gag orders infringing on an individual’s right to free speech, but no federal ruling has ever been made on the issue.
Voorhees responded:
“It will reach the court at some point”
To those in the crypto space fighting in secret for the rights of all of us, a huge thank you and best of luck.
Watch the full Voorhees interview here:
Will Stablecoins Replace the SWIFT System?
The “Office of the Comptroller of the Currency” (OCC) published cryptocurrency guidance on Monday that says that U.S. banks can now use stablecoins to send transactions.
Forbes Contributor Hailey Lennon explains that a bank may now “issue stablecoins, exchange stablecoins for fiat currency, as well as validate, store, and record payments transactions by serving as a node on a blockchain (INVN).”
She goes into detail about what this means:
“While the United State’s financial system functions relatively smoothly, traditional payment rails are still slow, expensive and subject to banking hours and holidays.
The OCC’s guidance opens the possibilities that banks will use … stablecoins to transfer funds between financial institutions faster and without the need of a government intermediary.”
Kristin Smith, Executive Director of the Blockchain Association, noted to Hailey:
“Stablecoins, like USDC, can power faster, 24-hour real time payments in a way that existing US payments infrastructure can’t handle.”
It’s truly exciting to see financial innovation, but as a stablecoin OG told me today:
“There will always be a point of trust at the issuer [of the stablecoin], until there is a purely alforithmic stablecoin (the holy grail)”
I would have been more excited if the OCC’s announcement had been about using the DAI instead.
Shapeshift Ends KYC!
No More KYC with ShapeShift!
Non-custodial exchange, Shapeshift, used to be the go-to place for anonymously transferring between cryptocurrencies.
In 2018 a surprise move shocked the crypto community: Shapeshift was forced to run advanced surveillance on users, like all other exchanges. This practice, which is forced on companies, is not only ineffective, but also unethical and dangerous. It is warrantless collection and surveillance of personal, private information of innocent individuals.
But this week Shapeshift said "no more."
They are ending KYC, and customers will now trade with decentralized protocols instead of with the exchange itself.
All ethereum-based tokens will now be exchanged using decentralized protocols, KYC-free! Shapeshift predicts that cross-chain transactions of other assets will be available soon.
The future is decentralized, and Shapeshift is embracing it.
$1 Trillion Market Cap!
This week the total crypto market cap reached one trillion dollars! The total market cap of bitcoin itself is on its way too, and today surpassed the value of Facebook.
2021 is off to a great start! Let’s hope the pending wallet rule, whose comment period ended this week, doesn’t go through and dampen crypto spirits too soon.