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136614 author: molly0xfff@hachyderm.io 24 Dec 01:00
tags: #crypto #cryptocurrency #uspol #uspolitics

Trump’s new director of the “Crypto Council” is Bo Hines, whose qualifications are apparently 1) playing football in college; 2) losing the 2022 midterm general election for a North Carolina House seat; and 3) losing even worse in 2024.

Trump apparently has more favors to repay than he has political positions to fill, so he’s just creating new ones. In addition to his newly-invented “Crypto & AI Czar”d position, allocated to reactionary PayPal mafioso and venture capitalist David Sacks, Trump has now decided he needs a whole “Crypto Council”. Among its first appointees is Bo Hines, whose qualifications to become the council’s executive director are 1) playing football in college; 2) losing the 2022 midterm general election for a North Carolina House seat; and 3) losing even worse in 2024, when he not only failed to secure the Republican primary nomination, but came in fourth place.26 The crypto world has, like me, mostly reacted with bafflement given that Hines’ crypto qualifications are as absent as all his others. He did receive around $425,000 in backing in 2022 from American Dream Federal Action, a cryptocurrency-focused super PAC run by then-FTX executive and now-federal inmate Ryan Salame, so he was evidently able to convince Salame of his usefulness to the cause.27

136613 author: molly0xfff@hachyderm.io 24 Dec 00:58
tags: #crypto #cryptocurrency

Despite the looming administration change, the SEC has still been sending out Wells notices. Crypto.com, however, is so confident the SEC will be hobbled by the new administration that they withdrew a lawsuit against the agency — the same day their CEO met with Trump.

The Unicoin crypto investment company say they have received a Wells notice from the SEC,c warning them of impending legal action involving not only unregistered securities offerings, but also fraud and deceptive business practices. Unicoin’s CEO Alex Konanykhin said the company received subpoenas earlier this year focused on the company’s eponymous token, which they say is backed by real-world assets including real estate. This is not the first SEC investigation into Unicoin, though previous ones did not result in any legal action. Unlike most crypto projects, Unicoin self-identifies its token as a security. While Unicoin had previously agreed with the SEC that they would not to try to go public or undertake ICOs, Konanykhin said they had decided to breach the agreement after Trump won the presidency.13 As a side note, Fortune Crypto has rather amusingly attributed this notice to SEC Chairman Gary Gensler’s “anti-crypto campaign”. Whether the headline writer meant to suggest that going after fraudsters is itself “anti-crypto”, or if this was an accidental peek behind the curtain of the “SEC anti-crypto campaign” narrative coming from the industry, is not quite clear to me.

The SEC has also reportedly delivered a Wells notice to the CyberKongz NFT gaming project. CyberKongz claimed in a statement on Twitter that the SEC communicated to them that they “can not have a token (ERC-20) in tandem with a blockchain game without registering it as a security”. Ho

Crypto.com has abruptly dropped the lawsuit it had only just filed against the SEC in October [I68] — a lawsuit which seemed to be a direct response to a Wells notice issued by the agency against the company in August. This unusual move just so happened to coincide with a meeting between Donald Trump and Crypto.com CEO Kris Marszalek, who posted a photograph with the president-elect on Twitter with the caption “Honored to have a seat at the table.”12 A spokesperson explained, “We withdrew our action against the SEC given our intent to work with the incoming administration on a regulatory framework for the industry.” Trump and Marszalek reportedly discussed crypto-related political appointments and the prospect of a Bitcoin strategic national stockpile.5

Do you think Marszalek asked to take the picture in front of the framed Kim Jong Un photo, or was that just coincidence?

136612 author: molly0xfff@hachyderm.io 24 Dec 00:57
tags: #crypto #cryptocurrency

The SEC has hit a subsidiary of Jump Crypto with a $123 million fine for their backroom dealings with the operator of the now-collapsed Terra stablecoin. They’ve also fined Cantor Fitzgerald — a company owned by a close Trump ally — for $6.75 million.

The SEC has levied a $123 million fine against Jump Crypto subsidiary Tai Mo Shan [W3IGG], which was involved in a secret deal with Terraform Labs to help prop up the floundering Terra stablecoin in May 2021. Jump spent $20 million to help the supposedly “self-healing” stablecoin regain its $1 peg, earning about $1.28 billion in the process, and Terraform Labs CEO Do Kwon would later claim that the restoration to a $1 price was thanks to an automatic feature of the Terra project and not some backroom deal [I54, 60].10 This lie by Terraform Labs and Jump Crypto helped build confidence in the sustainability of the Terra token, which collapsed horrendously a year later.

The SEC has also reached a settlement with Cantor Fitzgerald, which will pay a $6.75 million fine over allegations that two special-purpose acquisition companies (SPACs) had misled investors when they claimed that they had not been in contact with the eventual targets of their acquisitions.11 While the companies were not crypto-related (one is a now-bankrupt “smart glass” manufacturer called View, the other an Earth-observation satellite company called Satellogic), SEC action against a company helmed by Trump’s transition team co-chair and soon-to-be Commerce Secretary Howard Lutnick is noteworthy. Cantor Fitzgerald is also closely linked to the Tether stablecoin [I71].

136610 author: molly0xfff@hachyderm.io 24 Dec 00:56
tags: #crypto #cryptocurrency

Newsletter: The SEC is still busy even though it may soon be undermined, crypto industry capture of government continues to worsen, and several media outlets botch their crypto reporting at a time it’s needed most.

https://www.citationneeded.news/issue-72/

135744 author: molly0xfff@hachyderm.io 22 Dec 23:29
tags: #crypto #cryptocurrency

This is particularly hilarious given that Fortune has skewered Gary Gensler for failing to go after the FTX, Celsius, and Terra frauds.

Schrödinger’s regulator can’t go after fraud before the company collapses, but if it collapses and the SEC didn’t warn us, they failed.

https://fortune.com/crypto/2022/11/11/sbfs-disgrace-could-make-things-awkward-for-gary-gensler-and-the-democrats/

Gary Gensler blew it again. After his agency failed to warn investors about Terra and Celsius—whose collapses this spring sparked a trillion-dollar investor wipeout—the Securities and Exchange Commission chair allowed an even bigger debacle to unfold right under his nose. I’m talking, of course, about the revelation this week that the $30 billion FTX empire was a house of cards and that its golden boy founder, Sam Bankman-Fried, is the crypto equivalent of Theranos’s Elizabeth Holmes.

135742 author: molly0xfff@hachyderm.io 22 Dec 23:10
tags: #crypto #cryptocurrency

apparently preventing fraud is “anti-crypto”.

according to this Fortune headline, the SEC going after fraud and deceptive business practices after a company publicly announced they were going to breach a previous agreement with the agency is an “anti-crypto campaign”

https://fortune.com/crypto/2024/12/16/unicoin-gensler-wells-notice-sec-crypto-lawsuit-enforcement-action/

According to the Wells Notice, viewed by Fortune, the SEC plans to formally accuse Unicoin of violations related to fraud, deceptive practices, and the offering and sale of unregistered securities, although the letter did not specify the exact violations.

Still, because of its novel approach, Konanykhin told Fortune that the company has been subject to several SEC investigations, though the latest is the first to result in a Wells Notice. He said that the company had entered into a so-called standstill agreement with the SEC earlier this year not to conduct an ICO or go public, but Konanykhin said he decided to breach the agreement after Trump won the recent election. Unicoin had previously filed paperwork with the agency announcing its intent to go public through a reverse merger.

Fortune headline: “SEC plans to sue Unicoin—a sign outgoing Chair Gensler’s anti-crypto campaign is not over”

122615 author: tedu@inks.tedunangst.com 04 Dec 23:58
AES-GCM and breaking it on nonce reuse
group: inks@inks.tedunangst.com
tags: #article #crypto #exploit #math #random #security

114692 author: molly0xfff@hachyderm.io 25 Nov 2024 18:43
tags: #FTX #crypto #cryptocurrency

pro tip: name your organization something that sounds terrible to sue

FTX Trading Ltd. et al, Plaintiffs, against Fair Democracy, Defendant

98769 author: molly0xfff@hachyderm.io 06 Nov 2024 22:24
tags: #authoritarianism #crypto

I must once again urge you: please do not record your abortions on the blockchain.

https://mollywhite.net/micro/entry/please-do-not-record-your-abortion-on-the-blockchain

95504 author: molly0xfff@hachyderm.io 02 Nov 2024 23:35
tags: #crypto #cryptocurrency #uspol #uspolitics

Also, don’t forget there’s an audio version of these newsletters for those of you who prefer to listen! There’s an embedded player in the article, or find it in the Citation Needed audio feed wherever you get your podcasts. 100% real human voice, no text-to-speech.

https://pod.link/1719025552

95503 author: molly0xfff@hachyderm.io 02 Nov 2024 23:25
tags: #crypto #cryptocurrency #uspol #uspolitics

That’s just a tiny portion of what’s in this week’s issue. If you like my writing and want to support my work, please consider signing up for a pay-what-you-want subscription! It really helps me to keep doing this work.

https://www.citationneeded.news/signup/

95502 author: molly0xfff@hachyderm.io 02 Nov 2024 23:24
tags: #crypto #cryptocurrency #uspol #uspolitics

Some new crypto PACs have cropped up, including a few putting emergency funding behind Ted Cruz (R-TX) as his race appears to be tighter than originally predicted.

The weirdest new PAC is probably a very short-lived committee called “Republicans for A Pro-Crypto Senate Majority”, which raised about $200,000 from mostly Coinbase employees (including CEO Brian Armstrong), but also people like World Liberty Financial team member Zachary Witkoff.

A joint fundraising committee called “Republicans for A Pro-Crypto Senate Majority” was created and then disbanded almost as quickly, registering with the FEC on August 26 and then filing a termination report on October 30. The group listed as beneficiaries of its fundraising various PACs for the Republican Senatorial candidates Sam Brown (NV), Bernie Moreno (OH), Mike Rogers (MI), Dave McCormick (PA), as well as the National Republican Senatorial Committee. The group raised a total of $208,000 over its short lifespan, bringing in about half of that just from Coinbase executives including CEO Brian Armstrong ($23,300), president Emilie Choi ($20,000), vice president Kara Campbell ($13,200), and chief policy officer Faryar Shirzad ($13,200). Other notable contributions, all in the amount of $13,200, came from Multicoin Capital co-founder Tushar Jain, Paxos CEO Charles Cascarilla, Haun Ventures’ Kathryn Haun (formerly of Coinbase), Anthony Scaramucci, venture capitalist Mike Dudas, and Zachary Witkoff of both the Witkoff Group and Trump’s World Liberty Financial crypto projecte. Another $13,200 contribution came from Toby Scammell,f a man who served prison time and was fined as a result of both criminal and civil insider trading cases in 2014,36 and then who was fined $26 million by the FTC earlier this year for deceiving customers who were trying to obtain PPP loans37 (he lists his profession in the FEC report as “retired”). Another came from Ryan Selkis, best known for his

95501 author: molly0xfff@hachyderm.io 02 Nov 2024 23:23
tags: #coinbase #crypto #cryptocurrency #uspol #uspolitics

Elsewhere, Coinbase’s astroturfed “Stand With Crypto” lobbying group threw a Black Keys concert to benefit Bernie Moreno (R-OH). Perhaps because so few people showed up, half the audience were left watching the backs of the performers. “Weirdest gig we’ve ever played”, said the band.

Despite leaving Bernie Moreno off their endorsements list, Stand With Crypto threw a private benefit concert in Akron, Ohio that was nonetheless free to attend for anyone willing to fork over their contact information and download the Coinbase app. Headlining the show was the formerly popular band The Black Keys, self-described “pretty liberal motherfuckers” who once made fun of “right-clicking” NFTs, who have now found themselves playing a show to benefit a staunchly conservative candidate whose election could turn the Senate over to a Republican majority.21 Likely, they chose to take this gig for the paycheck despite all that after they were forced to cancel every concert on their planned tour this summer due to poor ticket sales. The Black Keys themselves, from the stage, referred to the event as the “weirdest gig we’ve ever played” — perhaps referring to the fact that their staging was set up backwards, with the band facing around 250 attendees standing with them on the stage, but leaving the large orchestra seating area empty and the roughly 250 people in the balcony area left to stare at scaffolding for the lights, and the performers’ backs. This bizarre choice was likely related to the fact that only around 500 people bothered to show up for a free concert in a venue that seats five times as many people. After more than thirty minutes of opening remarks extolling the virtues of crypto, during which one attendee joked they’d been tricked into attending a time-share

95500 author: molly0xfff@hachyderm.io 02 Nov 2024 23:22
tags: #coinbase #crypto #cryptocurrency #uspolitics

Coinbase has been promoting a new $25 million contribution to the Fairshake crypto-focused super PAC, which, like their May contribution of the same amount, appears to be in violation of campaign finance laws prohibiting contributions by federal contractors.

However, when I noted this earlier this week, I was met with a threat from Coinbase Chief Legal Officer Paul Grewal, who tweeted that continuing to report on Coinbase would be “.... unwise”.

Tweet by paulgrewal.eth on October 30, 2024
@iampaulgrewal
Once again, with feeling. Repeating misrepresentations of facts after previously being put on notice is …. unwise.

Quoted tweet by Molly White @molly0xFFF
As an active federal contractor, Coinbase is prohibited from making political contributions, including to super PACs. This makes $50 million that they have contributed in violation of pay-to-play laws for contractors.

Despite being the subject of our complaint with the FEC pertaining to their $25 million contribution to Fairshake in May, which was also within the prohibited time period, Coinbase has brazenly doubled this amount with a second contribution. While they’ve not (at least that I’ve seen) argued that they were unaware of this campaign finance prohibition, which would already be unlikely given clear warnings on Fairshake’s website that contributions by federal contractors are prohibited, this newest contribution seems to definitively remove that potential line of argument for them.

Instead, Coinbase’s only rebuttal to our complainta has been to claim that, despite that pesky federal contract of theirs, they somehow aren’t a federal contractor due to a detail in how the contract is funded. Because the contract is being paid out of the pool of seized cryptocurrencies and other assets known as the Department of Justice Asset Forfeiture Fund, they’ve argued they do not fall within the definition of “federal contractor”16 used by the FEC because they are not paid with “funds appropriated by the Congress” — an argument that lawyers at Public Citizen have plainly described as “incorrect”, and one that we rebutted on August 5 in our supplemental filing (citations omitted here):

As the Supreme Court has recently explained, “an appropriation is simply a law that authorizes expenditures from a specified source of public money for designated purposes.” Under this definition, Congress’s ena

Coinbase’s only communications with me since the FEC complaint have been public, made via a handful of tweets171819 from Chief Legal Officer Paul Grewal. In them, he outlined this argument while also insinuating that I am intentionally spreading “misinformation” on behalf of my shadowy backers. While Grewal has come up with this rather creative legal theory under which he argues Coinbase’s contributions were not prohibited, he has not identified any factual errors in my reporting. As far as I’m aware, neither he nor anyone else from Coinbase have commented on our position since we made the supplemental filing on August 5, except to repeat the claim in a tweet19 (without adding any further support for it) that the funds with which they’re being paid are not Congressionally appropriated.

Despite that, Grewal retweeted my recent post highlighting Coinbase’s newest contribution and its apparent violation of this prohibition with a threat, writing: “Once again, with feeling. Repeating misrepresentations of facts after previously being put on noticec is …. unwise.” And for the record, Grewal is not some total hack with no legal background, but is in fact an ex-magistrate judge who has somehow now found himself reduced to issuing impotent threats on Twitter for Coinbase. (I assume the position pays pretty well, but I can’t imagine any salary at which I would be willing to post with a straight face that it would be “.... unwise” for a writer to continue to report on my company).

95499 author: molly0xfff@hachyderm.io 02 Nov 2024 23:18
tags: #crypto #cryptocurrency #uspol #uspolitics

Newsletter: Coinbase threatens me that continuing to report on their activities would be “.... unwise”. Also, election spending hits a fever pitch, with several new crypto PACs coming out of the woodwork.

https://www.citationneeded.news/issue-69/

93849 author: molly0xfff@hachyderm.io 30 Oct 2024 22:30
tags: #coinbase #crypto #cryptocurrency #uspol #uspolitics

See my reporting on their previous violation, which is being reviewed by the FEC: https://www.citationneeded.news/coinbase-campaign-finance-violation/

93848 author: molly0xfff@hachyderm.io 30 Oct 2024 22:30
tags: #coinbase #crypto #cryptocurrency #uspol #uspolitics

As an active federal contractor, Coinbase is prohibited from making political contributions, including to super PACs. This makes $50 million that they have contributed in violation of pay-to-play laws for contractors.

Tweet by Brian Armstrong @brian_armstrong
We get the U.S. election results in 6 days, and no matter how you slice it, it will be the most pro-crypto congress ever.

But we're not slowing down post-election.

Today I'm announcing that
@coinbase
has committed another $25M to support Fairshake PAC, which they will use leading up to the 2026 midterms to elect pro-crypto candidates.

We're also supporting
@standwithcrypto
in their stretch goal to reach 4m advocates by the 2026 midterms.

The crypto voter is already a force to be reckoned with, but it will continue to grow.

We're going to keep showing up to protect our customer's rights and help get sensible legislation passed in major markets around the world.