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Top Stories This Week

Binance suspends deposits for bridged tokens, seeks clarity from Multichain team

Crypto exchange Binance suspended deposits for 10 bridged tokens following days of uncertainty surrounding the Multichain protocol. Transactions on the cross-chain protocol have been delayed over multiple bridges in the past few days, with little information from Multichain’s team about the ongoing issues. In a tweet from May 24, Multichain said that some cross-chain routes were unavailable “due to force majeure,” noting that the time for service restoration was unclear. Binance was not the only company to take steps amid the unexplained downtime — the Fantom Foundation removed 449,740 MULTI ($2.4 million) from liquidity on SushiSwap. The MULTI token plunged during the week. On Twitter, rumors circulated that Multichain’s team had been arrested by the Chinese police, with $1.5 billion of smart contract funds under authorities’ control.

FTX 2.0 launching soon? Court filing shows a reboot plan in the works

Bankrupt crypto exchange FTX’s revival plans could soon become reality. According to court filing documents, FTX’s new management had a series of meetings with creditors and debtors in the past month, reviewing plans for restarting the exchange and finalizing the material required for its rebooting as FTX 2.0. The documents also suggest FTX could soon enter into a bidding process. Previous reports pointed out that a reboot could come as early as 2024, as the exchange has already recovered over $7 billion in assets.

Sam Altman’s Worldcoin secures $115M for decentralized ID

The bear market didn’t stop Worldcoin from raising $115 million this week in a Series C round led by Blockchain Capital. Funds will be used to support its decentralized World ID and recently released gas-free crypto wallet, World App. The project was co-founded by OpenAI CEO Sam Altman and built by Tools for Humanity developers to address issues emerging from the exponential complexity of artificial intelligence, such as proving personhood. Worldcoin’s token, WLD, is not available in the United States and some other countries.

Fahrenheit wins bid to acquire assets of crypto lender Celsius

Crypto consortium Fahrenheit won the bidding war for insolvent crypto lender Celsius Network. The bid incorporates Celsius assets previously valued at nearly $2 billion, including institutional loan portfolio, staked cryptocurrencies, mining unit, alternative assets, and over $450 million in liquid cryptocurrency. Behind the consortium are the venture capital firm Arrington Capital and crypto miner US Bitcoin Corp. While Celsius and its creditors have accepted the bid, regulatory approval is still required to complete the acquisition. Celsius filed for bankruptcy protection in July 2022, contributing to a prolonged “crypto winter” in the industry.

Earlier this week, the crypto community celebrated the 13th anniversary of the first Bitcoin transaction when developer Laszlo Hanyecz made the first documented purchase of a good with BTC. The exchange involved 10,000 BTC — worth $41 at the time — and two pizzas from a local restaurant in Florida. The milestone turned into an annual celebration for the crypto space, with community members reminiscing on how far the industry has come since the transaction. Over a decade on, the pioneer cryptocurrency network faces a new wave of disruption thanks to the advent of Ordinals, highlighting the need for developers and capital to build layer-2 solutions.

DeFi Dad has 152,100 Twitter followers. He’s a DeFi podcaster, head of portfolios at Fourth Revolution Capital and a prolific crypto YouTuber.

Who is this guy anyway?

Travis Blane, who is better known as “DeFi Dad” to his 152,100 Twitter followers, has been actively making crypto content since 2019.

He’s also the head honcho of marketing and portfolio support at Fourth Revolution Capital, an adviser for several Web3 projects, including Zapper and Push Protocol, and hosts two podcasts, The Edge Podcast and The DeFi Podcast.

Somehow, he still manages to tuck his two kids into bed every night and fight off monsters for them – which is completely on brand for Blane.

Blane is a jack of many trades but has defied the old saying and actually mastered some, too.

Illuvium CEO Kieran Warwick has once again been in the thick of a controversy, this time taking aim at applicants seeking to join Illuvium DAO’s marketing sub-council.

Warwick, who is not coincidentally also the game studio’s chief marketing officer, took to Twitter on May 9 to say that the DAO faced a “significant challenge,” with the sub-DAO hopefuls vying for the gig as they “need to possess the requisite marketing experience.” This upset the hopefuls, given the backhander about their lack of experience.

Not one to let an opportunity go to waste, Warwick then issued a media release about the “controversy stirred by its CEO, Kieran Warwick.”

The marketing sub-council is one of four sub-councils within the Illuvium DAO focused on particular tasks related to developing Illuvium’s products and community. The others relate to community, game and strategy, with the idea being to draw on community expertise to develop the project.

Sub-council members are paid in Illuvium tokens.

Top Stories This Week

Hyperbitcoinization coming, says Bitcoin OG as ‘wholecoiners’ hit 1 million

Bitcoin has crossed a significant threshold this month — there are over 1 million addresses that hold at least 1 BTC. Data from Glassnode shows an escalating pattern with regard to the amount of so-called Bitcoin “wholecoiners.” If the trend continues, Bitcoin price escalation could soon make buying it not only a luxury but something potentially unattainable altogether, according to Adam Back, co-founder and CEO of Bitcoin firm Blockstream. This hyperbitcoinization refers to the moment when the benefits of Bitcoin for financial transactions will eventually lead to the replacement of established financial institutions by a public-driven system, with Bitcoin becoming the world’s default value system.

FTX pursues $244M clawback from ‘wildly inflated’ Embed acquisition deal

FTX’s leadership is looking to claw back more than $240 million from insiders and executives that benefited from FTX’s “wildly inflated” acquisition of stock-clearing platform Embed in September. According to court filings, Embed’s own chief technology officer, Laurence Beal, was stunned that FTX paid so much for the company after one short meeting with its then-CEO, Michael Giles. Beal described FTX’s due diligence process with a cowboy emoji. Lawyers accused FTX insiders of disproportionate payouts to Embed shareholders, including $55 million paid to its CEO.

Robert F. Kennedy Jr. to accept campaign donations in Bitcoin

Robert F. Kennedy Jr. will be the first presidential candidate in United States history to accept campaign donations in Bitcoin, he announced during his first appearance as a presidential candidate at the Bitcoin 2023 conference. He praised the cryptocurrency as a “symbol of democracy and freedom” during the event. By having attended the Bitcoin event, RFK Jr. is not only targeting voters but also a potential source of millions of dollars in donations. The democratic candidate is incumbent President Joe Biden.

Voyager bankruptcy plan approved, customers may recover 35.7% of claims initially

Voyager’s bankruptcy plan was approved on May 17 and its customers could now expect to receive 35.72% of their claims initially, either in crypto via the Voyager app or in cash, after 30 days. According to Voyager, it had $1.33 billion of assets for recovery as of May 8, of which $629.8 million was available for initial recovery, on claims of $1.8 billion. If FTX/Alameda Research’s claim for preferential recovery is unsuccessful, creditors’ initial recovery could increase. For that claim, Voyager is holding back $445 million. Voyager may also be able to recover funds from bankrupt crypto hedge fund Three Arrows Capital.

Cryptocurrency trading platform Coin Cafe has been ordered to repay $4.3 million to its users after allegedly charging “exorbitant and undisclosed fees” for storing Bitcoin on the platform — leading to some accounts being drained entirely of their funds. One New York investor incurred fees exceeding $10,000 in a single month, while another investor was hit with fees amounting to $51,000 over a span of 13 months, said the office of the New York State Attorney General.

Hong Kong partners with 16 companies to build CBDCs

On May 18, the Hong Kong Monetary Authority (HKMA) announced the launch of the cyber Hong Kong dollar pilot project. According to officials, 16 selected companies from the financial payment and technology sectors will conduct the first round of trials this year on the feasibility of a Hong Kong dollar central bank digital currency (e-HKD). Companies included in the pilot include Alibaba Group’s Alipay Financial, Mastercard Asia, Ripple Labs, Visa, and HSBC.

The digital Hong Kong dollar will start off with six potential uses cases; comprehensive payments, programmable payments, offline payments, tokenized deposits, Web 3.0 transaction settlements, and tokenized asset settlements. The CBDC is scheduled for a three-stage approach, with the novel pilot program being an important aspect of the second stage.

However, the HKMA has not yet decided whether to officially launch the CBDC. It expects to share the results of the trials at Hong Kong Fintech Week 2023 in Q4. Yue Wai-man, chief executive of the HKMA, commented:

“Although the HKMA has not decided whether or when the CBDC will be launched, we are pleased to launch the Cyber Hong Kong Dollar Pilot Scheme. This is a good opportunity for the HKMA to join hands with the industry to explore innovative use cases and prepare for the possible launch of the CBDC in the future”

Back in Oct. 2021, Mastercard said that it would be preparing its payment infrastructure for integration with CBDCs. Likewise, Visa believes that stablecoins and CBDCs will play meaningful roles in payments and has an ongoing blockchain interoperability project related to the matter.

Most technological revolutions come with an unforeseen darker side.

When Austrian-born physicists Lise Meitner and Otto Frisch first split the atom in the late 1930s, they probably didn’t anticipate their discovery would lead a few years later to the atomic bomb. The artificial intelligence (AI) revolution is arguably no different. 

AI algorithms have been around for decades. The first artificial neural network, the perceptron, was invented in 1958. But the recent pace of development has been breathtaking, and with voice recognition devices like Alexa and chatbots like ChatGPT, AI appears to have gained a new public awareness.

On the positive side, AI could dramatically raise the planet’s general education level and help to find cures for devastating diseases like Alzheimer’s. But it could also displace jobs and bolster authoritarian states that can use it to surveil their populations. Moreover, if machines ever achieve “general” intelligence, they might even be trained to overturn elections and prosecute wars, AI pioneer Geoffrey Hinton recently warned.

“Enormous potential and enormous danger” is how United States President Joe Biden recently described AI. This followed an open letter in March from more than 1,000 tech leaders, including Elon Musk and Steve Wozniak, calling for a moratorium on AI developments like ChatGPT. The technology, they said, presents “profound risks to society and humanity.” 

With a total artwork value of $24 million Trevor Jones is one of the Top 10 most successful crypto artists worldwide.

Trevor Jones’ journey to crypto art stardom started the same way as many crypto noobs: His portfolio went way up, he failed to take profits, and the price came crashing down wiping out the paper gains.

A traditional painter, Jones always wanted to explore the intersection of art and technology, and he experimented with QR code oil paintings in 2012 and dived into AR art in 2013. 

But it was his 2017 investment in Bitcoin that sparked deep curiosity in what this new world of crypto and blockchain was about. After getting rekt in 2018’s crypto winter, Jones turned his attention from crypto trader to crypto painter. He says:

“I caught that bull run and made a lot of money and then lost a lot of money in 2018. It all went up and all came crashing down.

The launch of BRC-20 tokens and Ordinals NFTs on Bitcoin has transformed the No. 1 blockchain overnight into a clunkier version of Ethereum.

The core developers and miners who signed off on the network’s Taproot upgrade in November 2021 never envisaged this would be the result. Bitcoin now suffers from many of the same problems that have bedeviled Ethereum for years, including scammy memecoins and shitcoins, NFTs of monkey pictures hogging block space and skyrocketing transaction fees.

The network is even having to deal with incidences of miner extractable value (MEV), whereby miners profit by reordering pending transactions.

“I’m kind of upset at myself for not realizing,” says Quantum Economics founder Mati Greenspan, a Bitcoiner since 2013.

“It took these guys starting to hype up JPEGs on Bitcoin until I was like: ‘Oh shit, what did we just do?’” He laughs ruefully.

Your guide to the exhiliarating and vaguely terrifying world of runaway AI development.

It’s been a hell of a couple of weeks for Melbourne digital artist Rhett Mankind, 46, who enlisted ChatGPT to create a $100 million market cap coin called Turbo, which has now inspired a Beeple artwork and saved a man’s life.

Mankind, who knows nothing about coding, gave ChatGPT a $69 budget and asked it to design a top 300 memecoin. It came up with the tokenomics, the name “TurboToad” and Mankind used Midjourney to create the logo. Thanks to interest sparked on social media, CoinGecko shows the token hit a $100M valuation and joined the Top 300. 

There were a few hiccups: ChatGPT writes shitty smart contracts, and Mankind needed it to ask it for numerous rewrites based on error codes. The AI also didn’t warn Mankind to look out for the bots that bought 90% of the token supply when it launched.

That put an end to the TurboToad token and he had to crowdfund another $6669 to launch the new token Turbo, with NFT collector Pranksy helping by launching a liquidity pool on Uniswap. 

Top Stories This Week

Coinbase calls Pepe a ‘hate symbol,’ prompting calls to boycott the exchange

An email sent out to Coinbase customers describing the Pepe the Frog meme as a “hate symbol” co-opted by alt-right groups has drawn significant ire from the PEPE memecoin community this week. Two hours after the email was sent, the hashtag “#deletecoinbase” hit the trending sidebar on Twitter, with over 14,000 comments calling on users to boycott the exchange. Paul Grewal, the Coinbase’s chief legal officer, took to Twitter to respond to the outrage and apologized: “We screwed up and we are sorry.”

United State’s Florida Governor Ron DeSantis signed a bill restricting the use of central bank digital currencies (CBDCs) in the state. The new law prohibits the use of a United States federal CBDC “as money within Florida’s Uniform Commercial Code (UCC).” It also bans the use of CBDCs issued by foreign governments and calls on other states to use their commercial codes to institute similar prohibitions. DeSantis said he was spurred into action by White House studies of the new financial technology. The law takes effect on July 1.

Milady (LADYS), the self-organized memecoin based on the anime avatar NFT collection of the same name, surged by over 5,250% on May 11 after Elon Musk tweeted a meme using the imagery of a Milady NFT. The tweet also boosted the collection’s average sale price. “LADYS is a meme coin without any intrinsic value or expectation of financial return. There is no formal team or roadmap,” said the token developers. “The coin is completely useless and for entertainment purposes only.”

Bitcoin Ordinals continue to inspire debate among the Bitcoin community. Soon after their introduction in January 2023, opponents of the technology began to raise concerns about its perceived flaws, citing slow speeds and rising transaction costs. Meanwhile, its supporters claim that the ordinals provide more opportunity, improve decentralization and ensure freedom of expression. The technology enables adding text, images and code on a satoshi — the smallest unit of Bitcoin.

To catch a scammer: Kraken builds fake crypto account to ‘bait’ fraudsters

Crypto exchange Kraken has provided a novel method for flagging malicious wallets — building a fake crypto environment to “scam bait” bad actors. Kraken created the “custom environment” for popular streamer Kitboga to frustrate a scammer posing as U.S. President Joe Biden. The punchline comes when Kitboga, who portrays an elderly person with a $450,000 balance in Bitcoin, infuriates the scammer after incorrectly typing his wallet address before sending over all of the funds.

IRS wants $38 billion tax from Alameda

According to recent flings posted by the claims agent of bankrupt cryptocurrency exchange FTX, the U.S. Internal Revenue Service (IRS), is claiming a total of $44 billion from the exchange’s bankruptcy and related firms, including $38 billion against its sister quantitative trading firm Alameda Research. In one single claim, the IRS assessed $20.4 billion in unpaid partnership and payroll taxes against Alameda Research LLC.

Founded in Sept. 2017 by Sam Bankman-Fried and Tara Mac Aulay, with Caroline Ellison serving as CEO, Alameda was headquartered in Hong Kong and conducted up to $5 billion worth of trades per day at its peak. Hong Kong does not levy taxes on capital gains. However, being U.S. nationals, its founders and key executives are obligated to pay taxes on their worldwide income irrespective of where they reside and how many days they actually spend in the U.S. each year, as per the highly unusual U.S. taxation by citizenship regimen.

The partnership taxes assessed by the IRS suggests it believes the entity operated on a partnership regime, where, unlike corporations, profits are not taxed at the entity level but are instead “passed through” to its partners and subsequently taxed at the individual level.

If the IRS prevails, it could mean bad news for the creditors. According to the filing, the IRS is claiming the total unpaid taxes of $44 billion from FTX and related companies under Admin Priority. The IRS claims would take precedence over that of unsecured creditors, such as FTX’s one million users, during bankruptcy proceedings. Despite their best efforts, bankruptcy trustees and law firms have only managed to locate $7.3 billion in assets from FTX and related entities.

Milady NFTs and token frenzy

On May 8, seeing the traction surrounding meme tokens, a group of self-organized developers created the Milady (LADYS) token on Ethereum (ETH), basing their design on the popular anime nonfungible tokens (NFT) collection of the same name. The token has no association with Milady Mixer nor Charlotte Fang, the creators of the Milady collection.

Our biweekly roundup for the Web3 gaming community, featuring news, reviews and the latest on new releases.

Storybook Brawl shuts down servers

Months after the spectacular collapse of Sam Bankman-Fried’s crypto empire, the casualties keep coming. 

Good Luck Games, the creators of Storybook Brawl – reportedly disgraced FTX CEO Bankman-Fried’s second-favorite game after League of Legends – took down its servers on May 1. The team said it had explored different options to continue, and unfortunately, there was no path forward.

Originally a non-crypto game that launched on Steam in June 2021, Storybook Brawl was an autobattler card game featuring characters from fairytales and legends. It peaked at 2,770 concurrent players in September 2021 and FTX Ventures acquired it in March 2022. 

Following the acquisition, gamers protested by leaving negative reviews for the game on Steam. 

Top Stories This Week

Memecoin hype drives Bitcoin transaction fees to multi-year highs

The ongoing trading frenzy of memecoins like Pepe has triggered an unwanted consequence for Bitcoin (BTC) — raising its transaction costs to their highest point in two years. On May 3, the total amount of fees paid on the Bitcoin blockchain reached $3.5 million, jumping about 400% from late April. Bitcoin’s BRC-20 token standard has become the latest trend in the crypto ecosystem amid the rise of memecoins. A total of 8,500 different tokens have been minted using the BRC-20 standard. Gas fees on the Ethereum blockchain have also recently been skyrocketing to new multi-month highs.

Bitcoin miners earned $50B from BTC block rewards, fees since 2010

Amid an ongoing debate over miner costs and susceptibility to Bitcoin price dips, new figures suggest that miners are firmly in the black in the long term. Calculations from on-chain analytics firm Glassnode suggest that since 2010, fees and block reward subsidies have netted miners billions. Miners’ total all-time income is almost 40% higher than their estimated costs, coming in at $50.2 billion versus $36.6 billion, respectively.

Artificial intelligence pioneer and former Google employee Dr. Geoffrey Hinton shared his concerns about the technology that he helped develop over the past several years. According to the neural networks expert, AI could pose a threat to humanity in the future as it learns unexpected behaviors from the massive amounts of data it analyzes. He is also concerned at the continuing AI arms race to develop lethal autonomous weapons systems, as well as an increased number of fake photos, videos and text flooding the internet.

A wild Bitcoin price wager between former Coinbase chief technology officer Balaji Srinivasan and pseudonymous Twitter user James Medlock has been settled 45 days ahead of time for $1.5 million. Medlock offered to bet anyone $1 million that the United States would not experience hyperinflation on March 17. The ex-Coinbase executive accepted the bet, predicting the U.S. dollar would deflate due to inflation and, as a result, BTC would reach $1 million within 90 days. In the deal, Medlock netted $500,000, while another $1 million went to two organizations.

Microsoft axes Bing wait list, giving users free access to GPT-4

Microsoft recently announced a number of new AI-powered features for its Bing chatbot and Edge web browser, including full access to the GPT-4 model — the same underlying engine that powers the ChatGPT Plus subscription service. The new features won’t require any purchases or subscriptions, though users will need a free Microsoft account to take advantage of the Bing chatbot’s full suite of functions. By contrast, OpenAI’s ChatGPT Plus service costs $20 per month for access to the same GPT-4 model.