November 26, 2022
Issue No. 30
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
- Blockchain & Defi: Japan Kicks Off CBDC Experiment; ConsenSys Reveals It Collects User Data via MetaMask RPC
- NFTs: App Store’s NFT Guidelines; 3LAU’s Royal Debuts Marketplace Bringing Music NFTs to the Masses
- Web3 & Metaverse: The Sandbox LAND Sale with Tony Hawk, Snoop Dogg; Mattel Launches NFT Marketplace
- Gaming: Netflix Making Triple-A PC Game; Fenix Games Raises $150M for Blockchain Games
- Legal Landscape: How Crypto Might Shake Up England’s Ancient Property Laws
Blockchain & DeFi Developments
Japan Kicks Off Central Bank Digital Currency (CBDC) Experiment
Japan’s central bank has started planning a central bank digital currency (CBDC) experiment with the country’s major financial players, according to a major newspaper report today.
The Bank of Japan is working with three megabanks as well as regional banks in the Asian nation—and next year will trial a digital yen, Nikkei reported Wednesday.
If all goes according to plan, the newspaper added, the BOJ may go ahead and release a CBDC in 2026.
The BOJ’s experiment will explore how deposits and withdrawals can work with a digital yen, today’s report noted.
A CBDC is a digital version of a state’s fiat currency—like the U.S. dollar or the euro—backed by a central bank. CBDCs are digital assets, but are different from the likes of Bitcoin, Ethereum, or Dogecoin.
This is because Bitcoin and other cryptocurrencies are decentralized; their ledger of transactions is maintained and checked by a distributed network of validators. CBDCs, by contrast, are centralized: a central power—the government or central bank—controls them. Different countries around the world are in different stages of researching and releasing CBDCs.
China is well ahead of the game—some citizens are able to spend the digital yuan. The Bahamas, meanwhile, launched its own CBDC back in 2020.
Ethereum Software Firm ConsenSys Reveals It Collects User Data via MetaMask RPC Infura
One of the firms behind the Ethereum merge, ConsenSys, said on Thursday that it also collects user data related to its on-chain wallet service MetaMask.
ConsenSys said that it collects some data related to user identification, such as contact details, profile information along with some other user data.
The firm added that when using Infura, which is the default remote procedure call (RPC) provider, on the digital wallet MetaMask, Infura will collect the user's IP address and Ethereum wallet address for transactions. RPC is a protocol for requesting data and information from a program running on a third-party computer server.
If a user switches to a different RPC on MetaMask the financial data will not be collected. Blockchain tool developer Infura and the digital wallet MetaMask are both products that are offered by ConsenSys.
Meanwhile, Crypto Twitter community members expressed displeasure at the move, which some felt invaded a user's privacy — one of the core ethos of the crypto space.
Similarly, decentralized exchange Uniswap recently began collecting some off-chain data such as users' device type or browser, saying that the move was aimed at improving user experience.
Polygon’s ‘Secret Sauce’: Why Starbucks, Meta, and Reddit Chose the Ethereum Scaler
Amid a brutal crypto downturn that has only gotten worse with FTX’s collapse, one blockchain platform has repeatedly shown that it can still onboard massive brands with a collective reach of billions into the Web3 world: Polygon, the Ethereum scaling network.
Recent highlights include Meta tapping Polygon to let Instagram users mint NFTs, Starbucks building an NFT-driven loyalty rewards program, Reddit minting unique NFT avatars, Nike revealing plans to mint digital apparel NFTs, and an NFT collectibles partnership with Disney after Polygon took part in the entertainment giant’s accelerator program.
Polygon Studios’ CEO Ryan Wyatt told Decrypt that when he joined Polygon Studios in February—following several years leading YouTube’s Gaming vertical—he saw a need to bring in more people with traditional web and brand experience to pair with the highly technical, Web3-savvy builders already in the space. “I wanted to fill that gap,” he said.
“With Web2 [companies], the impact is bigger and the implications are always bigger for those partners because they're navigating the space for the first time,” Wyatt explained.
“And so they are being very strategic in the way that they're doing it. They want to talk through it. That's a little bit of a different experience.”
Whether it’s a Web2 brand or a crypto upstart, Wyatt said that his team’s goal is largely the same: understand the prospective partner’s Web3 vision, convince them that Polygon is the ideal platform to build it on, and then provide support to bring that vision to life.
Bringing together experienced big tech veterans with Web3 natives who “live and breathe this space” yields a group at Polygon Studios that can help Web2 brands get over the hump and embrace NFTs and decentralized models, Wyatt said.
“It’s kind of like the secret sauce of the team,” he added.
App Store’s NFT Guidelines: Imminent Peril or Entry Ticket for Blockchain Games?
One of the biggest problems of blockchain games is reaching a mass audience. Most of the games on a blockchain run either on a browser or PC. Even the ones that exist on mobile cannot push for mass adoption, because there is no clarity as to how blockchain games are positioned.
Apple’s latest updates to the App Store Review Guidelines shed some light on this positioning while creating even more questions about the topic. The updates focused on the usage of NFTs and their functionalities inside games. The rules regarding IAP methods are now the following:
Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, cryptocurrencies and cryptocurrency wallets, etc.
This can be seen as a safety measure against blockchain games monetizing their players outside the App Store. The discussion around the alternative payment systems inside the App Store has a long history where Apple even had to allow for alternative payment systems in South Korea. The fact that Apple doesn’t want crypto payments to happen without them getting their cut is no surprise and this newsletter article is not long enough to discuss that.
However, the juicy part of the updates comes after the lines above. Apple gives a very vague description of the utility of an NFT inside the App Store with the following:
Apps may use in-app purchases to sell and sell services related to non-fungible tokens (NFTs), such as minting, listing, and transferring. Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app. Apps may allow users to browse NFT collections owned by others, provided that the apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchases.
There is a lot of interesting stuff going on with that short statement above. If we look at the first sentence that goes “Apps may use in-app purchase to sell and sell services related to non-fungible tokens (NFTs), such as minting, listing, and transferring.”, it is actually saying that NFTs can be sold in games through IAP. So, blockchain games can sell their NFTs as long as they are structured as an IAP. People might say “But isn’t that against decentralization?” because this means that the App Store would act as the central marketplace for every game there. However, decentralization might not be the value proposition that comes with blockchain games. Terms like decentralization, democratization and a bunch of other overarching words were thrown around during the crypto bull run. Nevertheless, now that the hype faded out and people are more focused on actually making games, the trade-off between decentralization and mass market reach should sway developers to forget about buzzwords.
Where that first sentence worries most of the developers is secondary sales, i.e., sales happening between players. There is absolutely no point in using the App Store for secondary sales because giving 30% of the transaction value each time an NFT changes hands practically drains all the value out of the players and hands it over to Apple.
So, although the secondary sales issue looks like it will stay as a gray area for a while, there are two potential solutions to this problem:
- Apple will allow game developers to handle secondary sales through their own marketplaces as long as the primary sales for those NFTs were available as IAP in the App Store. This will prevent Apple from making any changes in the App Store while getting their cut from those blockchain games for every primary sale done inside the mobile app.
- Apple would agree on taking a smaller percentage (similar to the 2-5% that the blockchain marketplaces take) for secondary sales. This would require Apple to work both on the technical implementations and also legal arrangements, but it is definitely a better long-term solution that will serve the whole business.
It’s crucial for blockchain games to utilize the mass market reach that existing gaming platforms provide if they want to be more than a niche. That cannot happen without compromising on certain aspects like decentralization so that those centralized platforms can help these games. Of course, just blockchain games compromising is not enough, so we have to also see the gaming platforms working together with blockchain games. Otherwise, the current way the blockchain games operate is not going to be big enough to reach mass adoption.
Saudi 2 - Argentina 1: NFT Collection "The Saudis" Price Spikes
Saudi Arabia-themed NFT collection dubbed The Saudis saw a massive jump in price after the national team beat Argentina. The win is also the most significant result the Arabian nation has achieved in the history of the tournament.
The Saudis was a free-to-mint collection of 5,555 NFTs which sold out within hours last July. The collection of 5,555 avatars is in a 2D pixelated style resembling CryptoPunks. Interest in these NFTs may well keep growing if the national team maintains its magnificent performance.
The result had a more adverse effect on the Argentine fan tokens, as the ARG token has seen less interest from fans. The token lost 47% of its value in the past few days since Argentina’s defeat in its opening match.
3LAU’s Royal Debuts Marketplace to Bring Music NFTs to the Masses
Royal, one of the biggest names in the burgeoning music NFT space, has finally launched its long-promised marketplace for music royalty rights.
Started by electronic musician and entrepreneur Justin “3LAU” Blau and Opendoor founder JD Ross, Royal raised $16 million in its seed funding round in August 2021. Last November, the Web3 music startup raised another $55 million in funding from Andreessen Horowitz, Coinbase Ventures, and Paradigm, along with popular musicians like Nas and The Chainsmokers.
With that capital, Blau tells Decrypt that Royal has spent the past year developing its browser-based NFT marketplace, where users can now discover new artists, trade Royal NFTs, and see detailed statistics on each asset.
The Royal marketplace pulls bid data and purchase history from the top overall NFT marketplace, OpenSea, plus its dashboard aggregates streaming data from Spotify, Apple Music, Amazon Prime Music, Tidal, and SoundCloud Premium.
Since it began releasing NFTs, Royal has dropped music with heavy hitters like Diplo, Nas, The Chainsmokers, Vérité, Elephante, and 3LAU himself. As a part of today's marketplace launch, Royal is releasing a new drop with electronic musicians Bingo Players and Zookëper.
Each Royal NFT offers buyers a share of royalty payments as artists’ songs are played on streaming services. Earlier this month, Royal announced that its partnered artists had paid out over $100,000 in royalties across more than 9,200 NFT collectors since launch.
This milestone shows that collector royalties, while currently modest, can be a real incentive for fans to buy NFTs from their favorite musicians. The percentage varies by artist and/or song, but it allows fans to invest in artists while betting on their future success.
While holders won’t make back what they paid for each Royal NFT right away, there are potential benefits for long-term collectors depending on which artist(s) they support. Royal NFTs aren’t just about music rights and royalties—some NFTs are eligible for bonus real-world perks, like access to meet-and-greets or listening parties.
Web3 & Metaverse
Ethereum Metaverse Game The Sandbox to Launch LAND Sale With Playboy, Tony Hawk, Snoop Dogg
The Sandbox, an Ethereum-based metaverse game, is kicking off its three-part LAND sale on Thursday in collaboration with popular brands like Tony Hawk, Snoop Dog, and Playboy, among others, the platform told Decrypt.
The upcoming sale will auction 1,967 LANDs—50 estates, 695 regular LANDs, 134 premium LANDs, and 19 1-of-1 pieces of LAND—with standard and premium LAND sales allocated via a blind ballot system. An estate is several LANDs that have been connected to make a larger parcel in the game.
The sale begins November 24 with an inaugural wave titled California Dreamin’ representing “California-themed brands such as Playboy and The Marathon,” and progress through two more thematic launches until completion in early 2023.
This is the first time that The Sandbox has partnered with multiple brands during a single LAND sale.
“By including multiple brands that share a similar theme, like the California brands of California Dreamin’ [...] users now have the chance to be neighbors of multiple partners that share a similar theme, like choosing the district you want to live in for a city,” co-founder and COO of The Sandbox Sebastien Borget told Decrypt.
Due to the blind ballot, users will be granted the opportunity to “acquire a prestigious virtual LAND and become Paris Hilton's or Snoop Dogg's neighbor, or even build their own club close to Cipriani,” he said.
To participate in the auction, users must have a minimum of 1,011 SAND in their blockchain wallet, equivalent to $526.43 at press time. The sale will be limited to one asset per user.
On their decision to implement stringent entry requirements for the sale, including requiring users to hold a minimum value of SAND in their wallet and KYC security procedures, Borget said that he anticipates this approach will democratize the distribution of assets.
“The biggest challenge we’re facing with our LAND sale is ensuring we serve our community by continuing to push toward decentralization and true ownership of its metaverse,” he added.
The second wave of LAND sales, titled The Galleria, will feature a virtual neighborhood experience built around the sectors of fashion, media, and hospitality. This sale is slated for December 1, and the third sale is expected in early 2023.
Mattel Launches NFT Marketplace With Hot Wheels Collection
Global toy company Mattel has launched its own non-fungible token (NFT) marketplace on Mattel Creations, the company's direct-to-consumer platform, expanding its lineup of digital collectibles from its portfolio of iconic brands.
The California-based entertainment conglomerate produces goods including dolls, games, and action figures, and owns the intellectual property (IP) rights to brands Barbie, Hot Wheels, Matchbox, UNO, and Fisher-Price, among others. So far, Mattel has released NFT collections for its Barbie and Hot Wheels franchises.
The Mattel Creations Digital Collectibles Marketplace is built on the Flow blockchain, which also powers the NBA Top Shot platform. The new NFT marketplace was made for "mainstream consumers" and "will not require users to own cryptocurrency to make purchases," according to a company press release. The marketplace also plans to integrate a "peer-to-peer trading platform that will allow collectors to trade their digital collectibles between them" by early 2023.
The first launch on the Mattel Creations Digital Collectibles Marketplace will be Series 4 of the Hot Wheels NFT Garage, which will comprise artwork featuring 60 cars from brands like McLaren, Aston Martin, and more. Each pack, priced at $25 each, includes seven hot wheels NFTs of varying rarity levels, with the rarest collectibles redeemable for physical die-cast replicas.
Ron Friedman, vice president at Mattel Future Lab, said in a statement that the development of a homegrown NFT platform will also the company "to translate iconic Mattel IP (intellectual property) into digital art." Hinting at future releases with the company's roster of toy brands, Friedman said: "This is the latest evolution of our digital endeavors, and we look forward to sharing more drops soon inspired by some of the world’s favorite Mattel brands.”
Mattel joins a growing number of physical collectible companies expanding into digital collectibles. In September, pop culture retail brand Funko released a physical and digital comic book collectible on the WAX blockchain. In addition, Marvel has teamed up with licensed NFT marketplace Veve to make its comic books viewable in augmented reality, while gaming powerhouse Hasbro has released a collection of Power Rangers NFTs that could be redeemed for a limited-edition action figure.
Games & Blockchain Gaming
Quality Drops for Pokémon Scarlet & Violet
Pokémon comes under fire from reviewers and players alike for releasing a game plagued with bugs, exploits, performance issues, and frustrating sets of game crashes. While the gameplay itself has been said to be a step in the right direction for the franchise, sadly the level of polish and quality assurance for a Pokémon game has dropped way below standard for most players.
Players have started to file refund requests to Nintendo and have to go through a Nintendo rep to plead their case for a refund. While the Nintendo eShop has a flat policy that disallows refunds because of a change of mind, an accidental purchase, or because players don't like the game, it will honor refunds for faulty products.
Despite the bumpy experience for players, Pokémon Scarlet and Violet has sold over 10 million units worldwide in just three days after its release on November 18. This is the most copies sold worldwide in three days ever for any Nintendo game, according to the press release.
Netflix Making Triple-A PC Game at New LA Studio
Netflix is hiring a game director to work on “a brand-new AAA PC game” at a new LA studio led by former Overwatch boss Chacko Sonny.
The tech giant is seeking talent that has “experience with FPS and/or third-person shooter games” and “extensive experience working on live service games”.
There are also nods to experience working with “social systems” and both “cooperative and competitive” gameplay, plus a working knowledge of Unreal Engine.
Like its mobile titles, it appears that Netflix’s triple-A PC game will be free of IAPs through subscription. The job ad states that the successful candidate “will be able to create, ship, and run a game without any competing design constraints due to monetization.”
As ever, Netflix is looking for top-tier talent – the ideal candidate is described as having “At least 10 years of game design experience, including experience as a Creative Director, Game Director, or comparable design leadership role.”
Netflix Games Studio’s LA office is also hiring a technical director, art director, and live service analyst, plus there’s a reference to “an exciting new 3rd person action RPG” in the job description for a lead engineer.
The successful candidate will likely be working with Chacko Sonny, former executive producer for the Overwatch franchise at Blizzard. Netflix boss Mike Verdu revealed last month that Sonny had been hired to lead its new LA studio.
Fenix Games Raises $150M to Publish and Invest in Blockchain Games
Fenix Games plans to acquire, invest and publish both existing games and blockchain games of the future. The company raised 150M to create a new kind of publisher for blockchain gaming, and the investors include Phoenix Group and Cypher Capital.
The new company suggests that blockchain gaming, which has exploded in the last couple of years, is heading toward a consolidation where big companies are going to emerge by acquiring or funding all strong startups.
“We plan to acquire, invest, publish, and operate in select cases games and studios,” said Chris Ko, CEO, and co-founder of Fenix Games
Fenix Games will focus on the marriage of game market economies and live operations to provide publishing services to all game models – premium, free-to-play, and blockchain gaming across all platforms.
Why OpenSea Is Sticking With NFT Creator Royalties
As the leading NFT marketplace, OpenSea’s policies carry a lot of weight—and going into November, many creators and collectors alike wondered about the $13.3 billion startup’s stance on creator royalties. But when OpenSea finally spoke out on the issue, its comments only created more questions, prompting backlash from creators.
Devin Finzer, co-founder and CEO of OpenSea, told Decrypt that the firm analyzed market data and spoke with creators ahead of its announcement and that it hoped to open a dialogue with more of the NFT community. Finzer said that his team was “surprised” by the level of pushback, which he attributed to the “ambiguity of how we were handling existing collections.”
“Our goal there was really to start a conversation with creators. And I think we really did, in many ways,” said Finzer. “A lot of people came out super active, wanting to tell us their perspective. In some ways, while it was a mixed reaction, it was actually a really healthy discussion.”
OpenSea had long honored creator-set fees on secondary sales, even though they can’t be fully enforced on-chain. But in recent months, rival platforms have gutted royalties in the name of cheaper transactions for traders, turning the NFT space on its head and throwing a curveball at creators dealing with falling prices and demand.
On November 5, OpenSea said that it was weighing its options and would continue to consult with the NFT community. It also launched a tool that would let creators of new Ethereum NFT projects block marketplaces that don’t fully honor royalties. But for existing projects, OpenSea cited the possibility of making creator fees optional for traders.
That didn’t go over well with many creators. The Bored Ape Yacht Club founders called OpenSea’s plan “not great,” while pseudonymous Deadfellaz co-creator Betty said that the firm’s communication with her was “misleading” and that “facts are not there.” Streetwear brand The Hundreds canceled a planned NFT drop on the platform.
OpenSea planned to make a decision by December 8, but instead acted within a few days. On November 9, the firm said that it would continue to enforce creator royalties on all existing NFT projects, noting in a tweet thread that it heard the community feedback “loud and clear.”
While creators and many collectors applauded OpenSea’s move, it wasn’t a clear-cut business decision for the company. Although the firm believes that royalties—typically a 5% to 10% fee paid by the seller and taken from the secondary sale price—are important to the industry, some traders are voting with their crypto at royalties-shunning platforms, cutting into OpenSea’s market share.
In deciding how to ultimately proceed on the royalties issue, Finzer told Decrypt that maintaining trust with creators is essential and that developing a new on-chain enforcement model—to block certain marketplaces—was part of that mentality.
ApeCoin DAO Launches Community-Driven NFT Marketplace
ApeCoin DAO, a community-led governing body made up of ApeCoin holders, has launched its own white-label non-fungible token (NFT) marketplace.
ApeCoin, the Ethereum-based governance and utility token used within the Bored Ape Yacht Club (BAYC)-linked APE ecosystem, launched in March.
Built by non-fungible token (NFT) infrastructure company Snag Solutions, the new community marketplace lists for-sale NFTs from Yuga Labs-owned NFT collections like BAYC, Mutant Ape Yacht Club (MAYC), Bored Ape Kennel Club (BAKC) and Otherdeed for Otherside.
Zach Heerwagen, CEO of Snag Solutions, said the platform offers “unique features built specifically for the BAYC and Otherside communities, including ApeCoin staking and NFT metadata integrations.”
The platform also offers a reduced-fee structure for sellers – .5% fees on ETH transactions and .25% fees on ApeCoin transactions – and holds .25% of each sale in a multi-signature wallet to fund future decentralized autonomous organization (DAO) initiatives, creating a benefit loop for ApeCoin holders.
“Snag exists to support creators by unbundling marketplaces, and we're excited to partner with the ApeCoin community to replace the status quo with a product that respects royalties while heavily reducing fees,” Heerwagen tweeted.
Its unique fee structure comes at a time when NFT marketplaces such as Magic Eden and LooksRare have dropped mandatory creator royalties, which put pressure on competitors like OpenSea and X2Y2.
Yuga Labs declined to comment. The ApeCoin marketplace is not directly affiliated with Yuga Labs, according to The Block, though Heerwagen told the outlet that “lines of communication were open with Yuga.”
Magic Eden Expands NFT Support to the Polygon Network
Magic Eden has added support for trading non-fungible tokens on the Polygon network, a move that will boost its ability to work with gaming projects on the network. Rather than acting merely as a venue for NFT trading, the firm wants to expand and capitalize on the emerging blockchain gaming niche on Polygon.
Magic Eden is the largest NFT marketplace on Solana by trading volume. Earlier this year, the project went multi-chain, first releasing its marketplace on the Ethereum blockchain in August.
Polygon is now the third blockchain that Magic Eden has integrated after Solana and Ethereum. Polygon, a proof-of-stake sidechain running parallel to Ethereum, allows for cheaper transactions for Ethereum-based applications.
By leveraging Polygon, the Magic Eden team noted that it is able to support game developers that want to integrate NFTs. “Given Polygon’s popularity amongst game developers as a low-cost EVM-compatible chain, integrating Polygon will continue to cement Magic Eden as the go-to web3 gaming platform," Zhuoxun Yin, co-founder of Magic Eden said.
Magic Eden explained it wants to work with game publishers in the Polygon ecosystem via a new launchpad. In fact, several game publishers, including Bora, IntellaX, nWay, Block Games, Boomland, Planet Mojo, and Taunt Battleworld have agreed to release NFT-based gaming projects on Polygon via Magic Eden’s launchpad.
National Policies & Legal Updates
How Crypto Might Shake Up England’s Ancient Property Laws
The Law Commission of England and Wales is exploring how digital assets should be treated under existing and new legislation, and its suggestions may upend centuries-old legal norms.
Financial regulators around the world are looking to tighten their control over crypto markets, especially after a turbulent year for digital asset prices and marketplaces. Although regulators can tell crypto companies and even investors how to behave, they don’t actually make the laws that could inform their regulations.
Legislators who put these laws in place, however, could lack the subject matter expertise to actually draft legislation. To address this shortfall, the U.K. government has entrusted an independent body made up of high court judges, lawyers, and law professors to study the crypto space and recommend ways to govern it.
The Law Commission for England and Wales, funded by the U.K. Ministry of Justice, is running multiple projects focused on the crypto space to determine the best ways to treat Web3 developments like decentralized autonomous organizations (DAO) and digital assets under new or existing laws.
A Law Commission project completed last November found the existing law of contract in England and Wales can be applied to smart contracts that underlie crypto transactions. It is also working on a conflict of laws project, exploring how to determine which courts should handle digital asset disputes because of their global nature. Recently, the body published a paper for consultation on its view that crypto should be treated as personal property to make it easier for investors to recover losses if they have their funds stolen or lost.
About two-thirds of the Commission’s work ends up being implemented by the U.K. parliament, according to Professor Sarah Green, the commissioner for commercial and common law. The Commission’s work can have influence in other jurisdictions as well. In cases where the U.S. doesn’t have legal precedents, the court "may consider” the Commission’s consultation paper on digital assets, according to U.S. Judge Martin Glenn, who is currently overseeing the bankruptcy proceedings for crypto lender Celsius.
With the U.K.’s government set – for now, at least – on turning the country into an international hub for crypto, the Law Commission’s projects may not only be important but also urgent.
Tornado Cash Developer Alexey Pertsev to Remain in Jail Until at Least Late February
‘S-HERTOGENBOSCH, Netherlands – Alexey Pertsev has been ordered to stay in jail until Feb. 20 after a Netherlands court found the Tornado Cash developer represented a flight risk.
Pertsev has been held in detention since August, days after the U.S. Treasury used sanction powers against the Tornado protocol, which it said had been used to launder over a billion dollars worth of cryptocurrencies and to support North Korean hackers.
At the hearing on Tuesday, Dutch public prosecutor Martine Boerlage announced money-laundering charges for the first time. Boerlage had said little more about the case than a press release but has now accused Pertsev of facilitating the processing of dirty money by writing the Tornado Cash code.
Boerlage brushed aside arguments that Tornado Cash was a decentralized protocol that Pertsev was powerless to control, claiming that it was in fact one and the same as PepperSec, a company Pertsev worked for alongside fellow developers Roman Semenov and Roman Storm.
Outside the courtroom, Pertsev’s lawyer, Keith Cheng, told CoinDesk he was “very disappointed” with the decision.
“It's clear to us that these judges are not as familiar with the subject matter as they should be,” Cheng said. “At the moment, the case law regarding criminal activities is all about bitcoin mixers … It's very important that the court understands that Tornado Cash is something different.”
Pertsev’s arrest and detention have drawn widespread outcry, including protests in Amsterdam and a tweet from Edward Snowden, an American who now lives in Russia after he leaked documents from the National Security Agency, comparing Pertsev’s treatment to the kid gloves afforded to executives at collapsed crypto exchange FTX.
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