The Disrupt Weekend

“A new white paper from Orrick, KPMG and Upside Cooperative explores whether a legal structure common to credit unions and rural utilities could help revitalize blockchain and realize the web3 vision of a new digital world.

Credit unions, rural utilities, insurance companies, and agriculture producers often organize as cooperatives. In web3, projects that add cooperatives to their ownership structures could boost participation and reduce regulatory risk while giving users more control of the digital networks they use and a share of the value they create.

Giving users ownership through cooperatives might even provide builders and investors a better return on investment than if they
shared ownership with users through tokens alone. This is because the cooperative structure rewards users in proportion to their participation and consequently may provide a stronger incentive than tokens for users to engage with and strengthen digital networks.

The SEC has [also] consistently declined to classify cooperative memberships as securities, enabling cooperatives to distribute ownership to users quickly and easily, while also offering important protections to their members.”

“Since EIP-1559 was implemented, a grand total of 2.8 million ETH has been removed from circulation or roughly $4.6 billion at today’s prices. In just the last seven days, the Ethereum protocol has destroyed more than 16,364 ETH at an estimated rate of 1.62 ETH per minute, according to Ultrasound Money.

This burn mechanism also means that there is more ETH being destroyed than being issued to miners. Supply growth has now dropped to -1.06% per year since EIP 1559. This makes Ethereum more deflationary than Bitcoin, which was heralded as the original sound money.

“There may be instances where a user wants to demonstrate that their use of Tornado Cash is above board and not related to any illicit activity.

Proof of Innocence is a tool that allows users to prove that their deposits are not from sanctioned or blacklisted addresses. This not only improves the security and trustworthiness of the system, but also helps to protect legitimate users from being associated with illegal activities, without sacrificing their privacy.”

See Also: Vitalik: An incomplete guide to stealth addresses

“Blockchain-based fundraising for blockchain-based projects: we get that. What we are overlooking, though, is the potential crypto has to support fundraising and engagement for other, unrelated technologies, and what’s more, it can do so almost anywhere given crypto market structure flexibility.

Imagine this:

  • A regional bank in Luanda sets up a platform that tokenizes tranches of loans to startups aiming to bring digital efficiency to Angola’s ports, mitigating lender risk by adding liquidity and thus lowering the financing costs.
  • An incubator in Addis Ababa works with the Ethiopian Ministry for Innovation and Technology to develop an exchange for the trading of equity-like tokens issued by exiting startups with ideas ranging from vertical farms to satellite launch sites.
  • A venture fund in Accra collaborates with the Ghanaian stock exchange to launch a crypto platform that facilitates token-based fundraising, ICO-style but with official oversight and sufficient disclosure, helping projects from telehealth to e-learning get off the ground and find a market.

More liquid, transparent and innovative markets could kickstart regional development, especially if cross-border investment is allowed, possibly leading to tech initiatives that are global in scale.”

CoinDesk has identified 196 members of the new Congress – many of whom were just sworn in last week – who took cash from Sam Bankman-Fried or other senior executives at FTX. The names in Congress range from the heights of both chambers, including new Speaker of the House Kevin McCarthy (R-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.), down to a list of recipients new to high-level politics.

CoinDesk reached out to all 196 lawmakers to ask what they would do with the money. Most of the politicians who responded said they handed it over to charities to remove the taint of contributions from executives such as former FTX CEO Bankman-Fried, whose federal fraud charges also include an accusation that he violated campaign-finance laws. Others have revealed they had conversations with the U.S. Department of Justice about setting aside the money until it can be dropped into a fund to compensate FTX victims.

However, the campaigns channeling tainted money to favored charities may not escape the reach of FTX’s bankruptcy case. And even the organizations they give to could be roped in. If, during FTX’s bankruptcy process, the money its executives gave to campaigns (as well as other causes) is deemed “fraudulent conveyances,” the recipients have to give it back to FTX’s estate.

Making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX contributor does not prevent the FTX debtors from seeking recovery. We have received guidance from the Department of Justice that dollars received from FTX executives should be set aside for when a victims’ compensation fund is created in the future.

According to Sabino, the game of hot potato that campaigns play by giving donations to charity is a “political move” that doesn’t magically absolve them from their responsibility to pay back the money.

The law does not care if you gave it to Mother Teresa. And if the money has already been spent? Tough luck. You are still liable. You might go bankrupt yourself.”

“Binance has informed its retail customer base of a potential incoming service disruption that may halt on and off-ramp bank payment transfers. The service disruption will impact users of U.S Dollar-held bank accounts that are looking to buy or sell cryptocurrencies for less than $100,000 via the SWIFT payment system. The disruption will take effect on February 1.

The banking partner involved is Signature Bank, according to a Jan. 21 report by Bloomberg. The bank set the minimum transaction limit of $100,000 in effort to decrease its exposure to the digital asset market, Bloomberg explained.

Binance did however stress that customers would still be able to use their credit or debit card to buy or sell cryptocurrencies, and that payments to or from third-party exchanges would still be processed. The cryptocurrency exchange added that SWIFT-based transfers would remain in operation for non-USD bank transfers, such as the Euro.

Binance is now “actively seeking” a new SWIFT (USD) partner to avoid service disruptions for future bank payment transfers.”

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