Ep. 54 The $1.4 Trillion Lawsuit
On this episode of the unhashed podcast: Gregory Maxwell thinks 51% attacks are overblown, so what threats should we focus on mitigating instead? Block.One, the company behind the $4 billion behemoth ICO EOS has been fined a paltry $24 million. Is their rumored plan for another coin launch a damn near certainty at this point? And...iFinex, the company behind Bitfinex and Tether are looking at a $1.4 trillion lawsuit in relation to their reserve claims being debunked. Is this a righteous outcome or totally overblown?
Weekly News Wrap Up:
Famous Bitcoin developer Greg Maxwell wrote a couple of posts on Reddit explaining why he thinks the concerns of a 51% attack are generally overblown. He explains how 51% attacks can generally be defended against by waiting for more confirmations, and tend to be temporary in nature. Furthermore, second layer protocols make attacks less effective, because they can continue to function even if the base layer is temporarily unreliable. Attempts to pre-emptively mitigate 51% attacks tend to cause more centralization. According to Maxwell, rather than a 51% attack, the bigger risk is users failing to understand and protect the decentralized nature of Bitcoin
Vaultoro, the first gold exchange to enable bitcoin trading pairs, is working to add a new Lightning-based token called VGold. This new digital asset is built on the RGB protocol and is expected to launch by the end of 2019. According to Vaultoro’s communications and media officer, Gabriel Escalona, the company has opted in favor of Bitcoin’s second layer (as opposed to other popular token-issuing protocols) because Lightning is “super-fast, instantly transferable without confirmation times, and with near-zero costs.” (source)
It was a long time coming, but it happened: Block.one, the company behind EOS, settled with the U.S. Securities and Exchange Commission (SEC) for selling an unregistered security with its allegedly $4 billion (yes, that’s 4 with 12 zeros!) token sale. The sum total penalty? $24 million for EOS to effectively wash its hands of the unregistered token sale. While this settlement does not preclude action by other U.S. agencies or private lawsuits, the civil penalty is effectively an after-the-fact, pay-to-play fine, one that does not impede Block.one’s control over EOS, demand the company to disgorge any of its profits from the sale or ask that they remunerate token sale participants. EOS did not engage in fraud; it just sold an unregistered security, the SEC claims. (source)
A group of individuals is lobbing a $1.4 trillion class action lawsuit against the company behind Bitfinex and Tether, the latest in the company’s looming legal battles. David Leibowitz, Benjamin Leibowitz, Jason Leibowitz, Aaron Leibowitz and Pinchas Goldshtein, “on behalf of all others similarly situated,” the lawsuit states, are suing iFinex, the umbrella company for the cryptocurrency exchange and market’s most prominent stablecoin, for orchestrating “a sophisticated scheme that coopted a disruptive innovation — cryptocurrency — and used it to defraud investors, manipulate markets, and conceal illicit proceeds.” (source)
Protests and violence have been ongoing in Hong Kong for several months, first sparked by a proposed bill allowing authorities to detain “criminal fugitives” and extradite them to the mainland to face Chinese courts, despite the fact that Hong Kong does not currently have any extradition agreements of this nature. Worried that this will allow the Chinese government to have a free hand in curtailing Hong Kongers’ civil liberties, massive demonstrations have broken out. As early as August 2019, it was discovered that this civil unrest was having a noticeable effect on the price of bitcoin in Hong Kong. Despite a global depreciation in the cryptocurrency’s value, data on LocalBitcoins showed that Hong Kongers were turning to bitcoin in ever-increasing numbers. (source)
On October 2, 2019, noncustodial bitcoin wallet Edge began offering fiat exchange features which require no KYC data from users. This privacy-friendly feature is enabled by a partnership with Swiss-based cryptocurrency brokerage firm Bity, which makes use of a proprietary validation technology that is both compliant and convenient. However, there are two conditions that users must meet in order to benefit from the service: First of all, the user must use the Single Euro Payments Area (SEPA) transfer system, which is only available in 36 European countries; and second, a daily volume limit of 5,000 Swiss francs (approximately $5,000) per user has to be taken into account. “Bity has a long experience which dates back to 2014 in providing bitcoin exchange services in the Swiss regulated environment,” Bity CEO Alexis Roussel told Bitcoin Magazine. “Swiss law allows for small amounts to be exchanged without mandatory KYC, by providing ownership proof on the receiving address. At Bity, we believe access to KYC-less exchanges, in small amounts, is key to the upcoming mass-adoption.”
Price Analysis:
Number go up a little
Shout Outs:
Colin: JjimjilBangs generally
Ruben: Aquafield Spa (Jim-jil-bang)