Ep. 190 Legal WHOAS!
On this episode of the Unhashed Podcast: Bitcoin is no longer haram, shitcoins (and their participants) facing trouble left and right, people owed money by the platforms who screwed them also looking at a long road ahead. Oh, and perhaps Saylor needs Roche to drown the DC attorney general in litigation? Just an idea.
District of Columbia Attorney General Karl Racine accused MicroStrategy co-founder and Executive Chairman Michael Saylor of evading $25 million in district taxes in a lawsuit filed Wednesday. The lawsuit also names MicroStrategy as a defendant. Racine alleges the company conspired to help Saylor evade the taxes. The AG’s office said it’s seeking to recover a total sum of over $100 million in unpaid taxes and penalties. Shares of MicroStrategy were down more than 6% Wednesday afternoon on the news. Saylor, who oversaw the company’s push into bitcoin, stepped down as CEO earlier this month. Under his leadership, MicroStrategy spent close to $4 billion acquiring bitcoin at an average price of $30,700, and he has said he considers the company’s stock a sort of bitcoin ETF. Saylor allegedly claimed to reside in Virginia or Florida, which have lower or no personal income tax rates, while actually living in several different homes around D.C., including a penthouse apartment in the Georgetown neighborhood or on his yacht on the Georgetown waterfront or Potomac River when the apartment was undergoing renovations, according to the lawsuit. The suit includes several screenshots of posts that appear to be from Saylor’s Facebook page dating back several years and referencing the view from his “Georgetown balcony” and discussing his “home” while tagging Washington, D.C. This news comes in hilarious contrast to an article posted on Bitcoin Magazine just days ago, titled “Michael Saylor Is Working The Bitcoin Dream Job”, in which they explain “(Saylor) already stated that he plans on using his time to buy more Bitcoin and to educate CEOs on why and how to hold the asset on their balance sheets”. Maybe not now.
In somewhat related news, On August 26, 2022, Ross Stevens, CEO of Stone Ridge Holdings Group and executive director of the New York Digital Investments Group (NYDIG) subsidiary, made an impromptu appearance at BitBlockBoom in Austin, Texas, for a special announcement. Stevens has long been a proponent of Bitcoin through his Stone Ridge shareholder letter, his co-written article, “On Impossible Things Before Breakfast,” participation in the MicroStrategy corporate strategy program and interview with famous bitcoin proponent, Michael Saylor. “I want to live in a world of rules, not governed by rulers.” Stevens said. NYDIG has made numerous investments and loans in the Bitcoin industry and notably had 26,200 miners returned to them to pay off some debts. The company also recently made headlines when partnering with the New York Yankees to allow their employees to convert their salaries into bitcoin. Speaking from the Bitcoin Commons, Stevens shared that NYDIG will launch a Lightning accelerator project in New York. “The reality is that this year, the progress in Bitcoin and Lightning is staggering. Month after month after month, the nodes on Lightning are growing.” The accelerator is geared toward individual founders and small teams, developers working on Lightning, Taro and covenants, and pre-seed, seed, series A companies. Transportation and lodging will be provided for participants from anywhere in the world. The program will be run in eight-week cohorts. There will be 8-12 teams per cohort. World-class mentors with office hours. The cohorts will be exclusively non-remote. There will be significant seed capital for each team with already-recruited investors and full-time, in-house expertise.
California Gov. Gavin Newsom is set to sign a recently passed bill that would require digital asset exchanges and other crypto companies to obtain a license to operate in the state. The Digital Financial Assets Law, dubbed California’s ""BitLicense,"" takes after New York’s BitLicense regulation, which came into effect in 2015. California’s law, if signed by Newsom, a Democrat, would go into effect in January 2025. “While the newness of cryptocurrency is part of what makes investing exciting, it also makes it riskier for consumers because cryptocurrency businesses are not adequately regulated and do not have to follow many of the same rules that apply to everyone else,” Assembly Member Timothy Grayson (D-Concord), the bill’s sponsor, said in a prior statement. Among the requirements is a prohibition, which would be phased out in 2028, on California-licensed entities dealing with stablecoins, unless that stablecoin is issued by a bank or is licensed by the California Department of Financial Protection and Innovation. This is similar to a proposed (and never passed) bill in the U.S. Congress that would require stablecoin issuers to have a bank charter.
The biggest technology firm in Indonesia, GoTo Gojek Tokopedia Tbk (GoTo), entered the Bitcoin and cryptocurrency space by acquiring local exchange PT Kripto Maksima Koin, per a report from Reuters. GoTo acquired ownership of the exchange by purchasing 100% of available shares for 124.84 billion rupiah ($8.38 million). The tech firm reportedly stated the acquisition was part of a larger objective to become ""a diverse money management hub."" “We believe that blockchain technology may play a mainstream role in the future of finance,"" GoTo said, per the report. Indonesia's government also plans to establish a ""crypto stock"" exchange by the end of 2022, according to a report by DealStreetAsia, citing a minister. But Indonesia is not the only Muslim country making headlines this week in Bitcoin. Iran passed an act which enables the use of Bitcoin and cryptocurrency payments for imports through a comprehensive legal framework, per a report from local news outlet Tasnim. According to the report, Iranian Minister of Industry, Mine and Trade Reza Fatemi Amin revealed that the recently passed law defines regulations on cryptocurrencies, addresses supply concerns for fuel and electricity costs for mining and provides authorization for the administration to use cryptocurrencies. Minister Fatemi Amin reportedly reiterated the authorization was an agreement between the Ministry of Industry and the Central Bank –– arguably suggesting a multi-departmental consensus on the viability of bitcoin as a means for international payments. Additionally, Fatemi Amin also noted that local businesses will be able to import vehicles by using bitcoin, instead of the U.S. dollar or the euro. Tasnim highlighted the move comes on the heels of an August 9 announcement by the head of Iran’s Trade Promotion Organization (TPO) saying the country registered its first import order processed with cryptocurrency. The order was reportedly valued over $10 million. Bitcoin is apparently haram no more.
Mt. GOX coin distribution is delayed again. The distribution of funds to former customers of the defunct crypto exchange Mt. Gox will begin on a repayment date to be set in ""due course,"" according to a notice to creditors released by the Mt. Gox trustee, Nobuaki Kobayashi. Creditors are owed 141,686 bitcoin (BTC), 142,846 bitcoin cash (BCH) and 69,776,002,441 yen following a 2014 hack that resulted in the loss of 850,000 BTC.
Cryptocurrency exchange Crypto.com has backed out of a five-year sponsorship deal worth $495 million with the UEFA Champions League, European soccer's elite league, according to a report in SportBusiness. The deal, which had reportedly been agreed in principle, would have seen Crypto.com (http://crypto.com/) take over as sponsor from Russian-state owned energy company Gazprom. UEFA, Europe's governing body for soccer, canceled the Gazprom contract in March following Russia's invasion of Ukraine.
Now for a series of shitcoin news items. The AVAX token, founded by serial shitposter Emin Gun Sirer dropped to its lowest price since July 13 on Monday after a self-described ""whistleblower"" website, Cryptoleaks.info, accused that Ava Labs, the company behind the Avalanche blockchain, paid lawyers to hurt competitors and keep regulators at bay. On Friday, Crypto Leaks published a report saying that some years ago New York-based Ava Labs focused on developing Avalanche's ecosystem, and law firm Roche Freedman made a deal under which Freedman would collect confidential information of rival companies and trap them under class-action lawsuits in return for massive amounts of AVAX tokens and Ava Labs corporate stock. Per the videos Kyle Roche claims he gained 1% AVAX tokens and 1% equity in Ava Labs for his services.
A group of custodial-account holders at Celsius Network has formally asked the court overseeing the crypto lender’s bankruptcy case to authorize the return of their funds. The ad hoc group petitioned the Bankruptcy Court for the Southern District of New York on Wednesday for a declaratory judgment to require Celsius to allow withdrawals from the custodial accounts. Celsius filed for bankruptcy proceedings in July after freezing withdrawals in mid-June. The company is hoping to restructure its operations and use revenue generated from a still-being-built mining operation to survive.
Ethereum-based asset management protocol Babylon Finance will fully shutter in November after failing to recover from the impact of April’s $80 million exploit on Rari Capital. Rari allowed users to supply and borrow any asset in its Fuse pools to earn yields. Users can set up their own pools with a basket of Ethereum-based assets, such as Babylon’s tokens, and other users can deposit funds into those pools to earn yields. The yields are generated as rewards for trading activity on those liquidity pools. Babylon stored some $30 million in various cryptocurrencies at its peak and was among the top lending pools on Rari with $10 million in user-supplied assets.
Months after raising $200M in funding on a coin offering for its own blockchains, The developers behind decentralized telecommunications network Helium have proposed shifting the entirety of the protocol to the Solana blockchain because of its faster transaction speeds, high uptimes and more interoperability with other blockchains. Helium developers proposed shifting all Helium-based tokens, governance and economics around the network’s native HNT, DC, IOT and MOBILE tokens onto the Solana blockchain. The move would help scale the Helium network, which has grown to over 1 million “hotspots” in recent months, developers said.
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