December 17, 2022
Issue No. 33
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
- Blockchain & Defi: Gaming-focused Oasys' Mainnet Goes Live; MetaMask Launches PayPal Integration…
- NFTs: Reddit Users Minted More Than 5 Million NFT Avatars; A Payload of NFTs were Sent to the ISS
- Web3 & Metaverse: WMG Furthers Metaverse Push With Digital Fashion Startup DressX; Apple Plans to Allow External iOS Apps in Potential Boon for Crypto & NFTs
- Gaming: Illuvium Releases Overworld Private Beta; Supercell Pulls Loot Boxes from Brawl Stars
- Legal Landscape: FTX Founder Sam Bankman-Fried Arrested in Bahamas; Senator Warren Introduces New Crypto Bill
Blockchain & DeFi Developments
Gaming-focused Blockchain Oasys' SEGA and Ubisoft-validated Mainnet Goes Live
Oasys completed the final phase of its mainnet, marking a significant milestone for the gaming-focused blockchain firm.
The three-step process started on Oct. 25 with initial validators taking over the running of nodes and ensuring the stable performance of Oasys Layer 1, also called the Hub-Layer. This was followed by the integration of the Verse-Layer, which confirmed successful rollups to the Hub-Layer.
Finally, essential ecosystem components were integrated to enhance the user experience, including a portal for managing activities within the Oasys ecosystem.
Oasys is one of several blockchain ecosystems that have developed over the last year specifically targeting web3 gaming.
While its private token sale earlier this year saw participation from the likes of Republic Capital, Jump Crypto, Crypto.com, Huobi, Kucoin, Gate.io, Bitbank, and Mirana Ventures, it has also partnered with traditional gaming giants.
In addition to crypto native firms like Yield Guild Games, its initial validators include the likes of Square Enix, SEGA, Bandai Namco, and Ubisoft.
Avalanche’s Core Wallet Goes Mobile With Android Launch
Ava Labs, the development company behind the Avalanche blockchain, today announced the release of Core Mobile, a mobile version of its flagship non-custodial multichain wallet.
First launching on Android with support for iOS slated for 2023, Core Mobile aims to connect DeFi, NFT, and gaming ecosystems across the Avalanche, Bitcoin, and Ethereum networks, as well as other EVM-compatible blockchains.
This release now gives users three ways to use Core—browser extension, web, and mobile—creating an interconnected Web3 experience, Ava Labs said in a press release shared with Decrypt.
“Core mobile is designed to give people maximum control over their crypto while ensuring the product is intuitive enough for anyone to use Web3,” Ava Labs Head of Product Nick Mussallem said in a statement.
“Mass adoption is coming, and Core will be the gateway for people who want a single platform that can do it all without the hassle of multiple wallets.”
Core Wallet: One platform for users’ assets, apps
Initially released in June this year, the Core wallet incorporated native Avalanche bridging functionality, enabling users to interact directly with decentralized applications (dApps) on the Avalanche blockchain.
Prior to that, users who wanted to move their assets onto the Avalanche network had to turn to compete for products like MetaMask to use an Ethereum-Avalanche bridge.
Other features that set Core wallet apart from the competitors include the ability to easily swap Avalanche, Bitcoin, and Ethereum assets, transfer Bitcoin and Ethereum to participate in Avalanche DeFi dApps and track real-time asset price movements in a unified watchlist,
“This means users can manage all of their major assets and apps in a single platform,” Mussallem told Decrypt.
MetaMask Launches PayPal Integration for Ethereum Purchases
MetaMask has added a PayPal integration to its software wallet, allowing U.S. users to purchase Ethereum directly from its mobile app. While the feature is not yet available to all U.S. users, MetaMask plans to roll out the feature “in the coming weeks slowly.”
According to the announcement, the PayPal integration will only be available through the MetaMask mobile app. The MetaMask browser extension already offers U.S. users the ability to purchase cryptocurrency directly from their wallet through CoinbasePay, Transak, MoonPay, or Wyre.
New Coinbase Tool to Let Users Reclaim Stranded Ethereum Tokens
Tokens lost to the ether may soon be retrieved, says Coinbase.
A new tool developed by Coinbase will allow users to recover ERC-20 tokens previously thought forever stranded, having been sent to incompatible public addresses associated with the exchange.
ERC-20 tokens are the standard Ethereum token format and first grew to prominence during the Initial Coin Offering (ICO) boom of 2017. Many of these coins, however, aren’t supported by Coinbase.
That means that incompatible ERC-20 tokens sent to Coinbase addresses wind up in limbo, with the exchange’s administrators unable to rescue them.
The coming “asset recovery tool,” which will roll out over the next few weeks, will facilitate recovery for over 4,000 of these unsupported tokens. The cumulative amount of tokens lost in this way is unclear, but a Coinbase spokesperson told Decrypt that the amount of lost tokens is "a small fraction of the total transfers made."
Until now, the lack of a recovery policy has been a source of grief for a number of users. One user, Shaman Yakubu, tweeted last year that he lost 400 of Polygon's MATIC tokens to Coinbase this way. Another user speculated that “millions of investor money have been lost and coins burned for no reason other than mislabeled tokens.”
Users who hope to recover their stranded ERC-20 tokens will have to provide details of the transaction that resulted in the loss, and the ensuing retrieval will command a small fee for sums more significant than $100.
It is not clear yet whether different incompatible tokens—that is, beyond ERC-20s—will also be supported. The platform will be unavailable in Japan and on Coinbase Prime.
Trump NFTs Top Sales Charts as Traders Buy-In “for the Lulz”
Despite incredulous mocking and criticism, the first official NFT collection from former United States President Donald Trump has sold out in less than a day. These digital trading cards are topping secondary market charts, and at least some of the sales came from NFT traders who bought in as a joke.
Trump’s collection of 45,000 NFTs minted on Ethereum scaling network Polygon had completely sold out this morning, fueling a rising secondary market as prices climbed. Currently, the cheapest-listed Trump NFT on leading marketplace OpenSea starts at about 0.15 ETH, or nearly $180, but had been higher earlier this morning. The NFTs initially sold for $99 apiece.
Over the past 24 hours, no collection has put up more secondary market trading volume, as OpenSea shows 1,204 ETH—or about $1.44 million worth—of trades. The Bored Ape Yacht Club is second with 427 ETH, or about $511,000 worth, in NFT sales.
Trump’s NFT rollout on Thursday—following the disgraced ex-president’s promise of a “major announcement”—was widely mocked by both NFT enthusiasts and haters alike as a cash grab and the latest grift from someone whose companies have frequently been investigated (and convicted) of fraud. Even Trump’s supporters complained about the project.
Even so, Trump’s NFT collection sold through in less than a day, netting over $4 million in primary revenue, and now secondary market sales are climbing. In some cases, supporters may have been lured in by Trump’s celebrity, or the promise of potential perks for holders including meet-and-green events and a ticket to a Trump gala.
But in some instances, it appears that NFT enthusiasts bought in because they thought it was funny or ridiculous, as evidenced by tweets suggesting that they had purchased a Trump NFT “because of lulz,” “for the memes,” or “for the culture.” Others wrote of buying and flipping Trump NFTs as being a “degen” play for bored traders.
“I’ve spent $99 on much dumber shit,” wrote one Twitter user. “Didn’t win a dinner date, [though].”
Reddit Users Have Minted More Than 5 Million NFT Avatars on Polygon
Reddit’s push into tokenized avatars has been a rare bright spot amid declining NFT sales and a wider crypto market in turmoil, and now the Polygon-based initiative has marked a new milestone with more than 5 million of the collectibles minted to date.
The Reddit Collectible Avatars NFT initiative crossed the 5 million mark over the past 24 hours, according to blockchain data curated on a Dune dashboard. They’re not highly concentrated among high-value NFT collectors (or whales), either, as the project has more than 4.25 million total unique wallets. About 3.95 million of those wallets hold a single Reddit NFT.
Reddit, the popular online discussion platform, announced plans to launch NFT avatars in July, tapping Ethereum sidechain network Polygon to offer up both free and premium avatars. The vast majority of the minted NFTs to date have been free avatars offered to heavy users of the site, which spans millions of separate communities (or subreddits).
The speculative bubble around Reddit’s premium NFTs was short-lived, with only about $700,000 worth of sales taking place over the past month. All told, the Reddit NFTs have yielded about $11.85 million worth of secondary trades to date—well below top-traded projects like the Bored Ape Yacht Club, which notched $61.6 million over the last 30 days alone.
Reddit’s NFT program, however, remains a notable example of how Web2 platforms can spur the potentially massive adoption of Web3 technology through giveaways.
Why a Payload of NFTs Was Just Sent to the International Space Station
Crypto degens often talk about their favorite coin or token pumping "to the moon," but NFT assets have actually been beamed up to outer space. On Thursday, the latest example—from Solana NFT project Infinity Labs—will see a collection of NFTs from numerous Web3 projects breamed into orbit via the International Space Station.
In an exclusive interview with Decrypt, Infinity Eve—the pseudonymous founder of Infinity Labs—said that one of her inspirations for sending NFTs to space was the 1977 Voyager Mission, which included a "Golden Record" inscribed with music from around the world, including Chuck Berry, Mozart, Bach, and Louis Armstrong.
The idea for Dreambound Orbital came to her during the pandemic when she says that she was in the hospital for treatment for an aggressive form of cancer.
Dreambound Orbital, a company that "launches blockchain experiments into orbit," is the result. In researching how to send NFTs to space, Eve says she emailed several people who work in the space industry and eventually connected with NASA and visited its Space Center in Houston, Texas.
Designed by Nanoracks, The Bishop Airlock is an addition to the International Space Station (ISS) infrastructure that enables commercial utilization of the ISS. "Now we were able to just make it happen," Eve said.
Joining Infinity Labs' NFT in its mission to the International Space Station are NFT assets contributed by the Solana Foundation, Metaplex, Phantom, Brave, Magic Eden, OpenSea, World of Women, MonkeDAO, Fractal, DeGods, Randi Zuckerberg, and more.
"I thought to myself: What is it about space that really inspires people, or just brings people together in so many ways,” she said, “and then also inspires people to think beyond themselves, or just feel like they're a part of something bigger?"
The NFTs included in the payload include artwork previously auctioned by marketplace Magic Eden called "This is Solana," created by pseudonymous artists TEJ and Ekko. It references many popular projects on the platform.
Web3 & Metaverse
Anima Raises $3M for Augmented Reality Protocol
Anima, the protocol for dynamic and ownable augmented reality, said it raised an additional $3 million in capital from new investors for its augmented reality protocol used in apps such as the Onlybots AR digital pets.
Anima‘s funding came from HashKey, Not Boring Capital, Polygon Studios and NGC Ventures. They join the company’s previous investors Coinbase Ventures, Flamingo, and Divergence Ventures.
“Web3 has brought digital assets under our control, but they still fail to connect back to our lives in meaningful and non-speculative ways. Augmented reality brings that relevance and connection,” said Alex Herrity, cofounder of Anima, in a statement.
“We believe creative minds should be shaping this new medium. Anima’s protocol and toolset make reality a canvas for creators, linking the context of the physical world with real digital ownership.”
Partnering with artists like Michael Kagan and Lyle Owerko, Anima’s early projects demonstrated the potential for augmented reality as an outlet for creators to explore new avenues, setting records for AR auctions and driving over a million dollars in art sales.
Last week, Anima introduced Onlybots, a collection of augmented reality creatures that showcase an ambitious collectible brand built for AR. The project sold out and hit the top trending projects on trading marketplaces within an hour of launch.
“Anima lets creators expand their toolkits and carry their creativity from the screen to the physical world. They’re building towards a future in which the whole world becomes a canvas,” said investor Packy McCormick of Not Boring, in a statement.
The Anima protocol and toolset are in a private beta with a public launch in early 2023, providing a path for creators to release and tokenize dynamic creations that interact with the real world. Anima empowers creators to set the terms of their sales and enables collectors to obtain true ownership.
Projects being built on the Anima protocol range from on-chain virtual pets to video games to immersive fine art sculptures.
How MNTGE Is Bringing Authentic Vintage Fashion Into the Metaverse
Vintage apparel and NFT collectibles are very different products, but both have fueled secondary markets with value defined in part by provenance, rarity, and unique traits. Those commonalities led to MNTGE (pronounced “Mintage”), a digital fashion startup that seeks to bridge the gap between vintage wear and the metaverse.
MNTGE was founded by Nick Adler—entrepreneur and Snoop Dogg’s brand manager—along with sneaker designer and streetwear store owner Sean Wotherspoon and former Adidas marketing manager Brennan Russo. Adler told Decrypt that he and Russo had the “aha moment” behind MNTGE while visiting Wotherspoon’s shop, Round Two.
“We just started to kind of really geek out over it,” said Adler of the parallels and potential mash-up between NFTs and vintage apparel.
Launching on Wednesday with an Ethereum NFT dubbed the MNTGE Pass, the firm aims to bring physical vintage fashion to the NFT world as digital wearables that can be used in metaverse platforms. But it also seeks to build a community amongst fashion and streetwear aficionados, providing priority access to real vintage finds.
MNTGE’s plans after launching the MNTGE Pass are varied, but they start with a drop of digital fashion curated by Wotherspoon himself in Q1 2023. The drop will showcase the kind of technology that the startup is playing with, using a high-end capture system—the same used to create digital doubles of actors for movies—to perfectly recreate physical vintage apparel.
Each of the 1,500 MNTGE Pass Day One NFTs will sell for 0.5 ETH (about $640) and grant holders access to MNTGE’s token-gated Discord community, plus priority access to Wotherspoon’s drop and more ahead from other designers. There will also be NFTs airdropped to holders along the way—bonus “Easter eggs,” Adler said.
Warner Music Group Furthers Metaverse Push With Digital Fashion Startup DressX
Warner Music Group is continuing to forge metaverse alliances with startups, this time inking a deal with DressX—which creates digital fashion wearables both on and off the blockchain—announced on Thursday.
Through the partnership, Warner Music artists will be able to create and license digital wearables and merchandise for fans. The items will be 3D avatar wearables or augmented reality (AR) virtual clothing, and can be viewed on platforms including Instagram and Snapchat, according to a statement.
Warner’s vast trove of popular artists across its various sub-labels includes major stars like Lizzo, Madonna, Coldplay, Ed Sheeran, Dua Lipa, and the Red Hot Chili Peppers.
What remains unclear is to what extent crypto and NFTs might come into play through this particular deal. However, the label framed it as another example of a Web3 partnership, so there may be as-yet-unannounced NFT components to come.
WMG is also investing in DressX as a part of the agreement, although the amount was not disclosed. Oana Ruxandra, WMG’s Chief Digital Officer, and EVP, Business Development, explained that the firm’s interest in DressX is due to a belief that life is only trending more digital.
“The representation of our future digital selves will be as important and, if you’re measuring by the sheer volume of interactions, maybe more important than how we represent ourselves physically,” Ruxandra said in a statement.
DressX cofounders Daria Shapovalova and Natalia Modernova created the company in 2020 with the goal of “giving a meta-closet to every person in the world.” In July, DressX became the first digital-native brand tapped to release digital wearables in Meta’s Avatar Store, a move that didn’t sit well with some Web3 purists.
The DressX alliance caps off a string of Web3 deals for WMG in 2022. In January, WMG said it would host virtual concerts with its artists in The Sandbox, an upcoming Ethereum-based metaverse game A month later, the record label announced a partnership with Web3 gaming company Splinterlands to develop artist-themed blockchain games for fans.
Apple Plans to Allow External iOS Apps in Potential Boon for Crypto & NFTs
Apple’s “walled garden” ecosystem design has enabled it to take up to a 30% cut of iOS app and service sales, to the frustration of users and creators alike. But a new report suggests that Apple is planning to open up its ecosystem—a move that may benefit apps built around NFTs and possibly expand the ability to make mobile crypto payments.
Bloomberg reports that Apple plans to enable the installation of apps from external sources outside of its own App Store on iPhones and iPads, according to sources familiar with the plans. The changes are being made in response to the European Union’s Digital Markets Act, which requires tech companies to fully comply with restrictions by 2024.
According to the report, the rollout of support for external apps from third-party sources and marketplaces will initially begin only in Europe to comply with the new law. However, the functionality could be expanded to other territories depending on whether those countries adopt similar regulations.
Apple is reportedly aiming to launch the feature in its iOS 17 software update, which is expected to launch next fall based on the typical annual release schedule.
The company is still weighing whether to allow third-party apps to use their own payments infrastructure, Bloomberg claims, rather than force developers to route payments through Apple’s own payments setup. That particular shift, if implemented, could make it much easier to spend cryptocurrency through iPhone and iPad apps.
The reported changes come amid growing pushback to Apple’s closed ecosystem, which not only philosophically clashes with Web3’s decentralized ethos but also has led to restrictions around the ways that apps can utilize NFT assets. In October, Apple updated its developer guidelines to state that NFTs cannot be used to gate access to features or content within apps.
NFT purchases are also subject to Apple’s 30% fee—a potentially impossible limitation to enforce on secondary market sales, at least. The iOS apps for marketplaces like OpenSea and Magic Eden only allow users to browse NFTs, not buy or sell them through the app.
The move could also benefit the growing Web3 metaverse, as Apple is widely reported to be developing a mixed-reality headset that may debut sometime in 2023. Many Web3 developers are building towards a metaverse defined by interoperability between platforms, using NFTs to represent ownership of assets that can be freely used across spaces.
Games & Blockchain Gaming
Monster Hunter “Variant Monster” Narrative & Sound Design
Variant Monsters are a great way for developers to make use of existing art assets, game mechanics, and narrative elements to create seemingly new content that can be used multiple times, through expansions or even free seasonal updates. We can see this in plenty of games. Like in Risk of Rain where there are different elemental elite enemies and bosses or in Diablo where there are elite and champion enemy variants. However, there are a few games that create great variants. For example, variants in the Monster Hunter World don’t seem like just “variants” but provide an experience similar to the introduction of a new monster. How do they do it? The lore and narrative, coupled with enhanced art & game mechanics reinforce the introduction of the variant in the Monster Hunter World. One of the greatest variants is the “Magala” variants
Gore Magala - Variant 1
Gore Magala is unlike anything the Guild has ever seen before. In light of the discovery that it is the juvenile form of the Elder Dragon, Shagaru Magala, some scholars have proposed that it be classified as an Elder Dragon as well, but until a consensus is reached it has been given the placeholder classification of ”Unknown” Its body is covered in dark exoskeleton plates, with notable features including the hidden feelers that are folded alongside its face, the lack of visible eyes, and fanged jaws that are actually parts of its external armor plates. The other unique part is its wings, which are covered in jet-black fur that resemble a tattered and ragged cape.
Gore Magala uses to see both predators and prey by heat and also acts as the vector for the pathogen known as the Frenzy Virus.
Audio: Gore Theme
Shagaru Magala (Adult Version of Gore Magala) - Variant 2
Shagaru Magala is the "adult" form of Gore Magala which transforms by shedding its black skin. While its younger form is classified as an ”Unknown” a Shagaru Magala is classified as an Elder Dragon. This is due to Gore Magala being a recently discovered species in the events of MH4, while the Shagaru Magala was known about for thousands of years previously in legend, famous for causing utter chaos with its deadly Frenzy Virus
In its juvenile form as a Gore Magala it lacks eyes, but upon metamorphosing it loses its heat sensors and gains useable eyes. Unlike a Gore Magala, it lacks the virus carrying hairs on its wings and instead uses a currently unknown mechanism to spread the Frenzy Virus. A Shagaru Magala is capable of making the Frenzy Virus cover a much greater range than that of its "juvenile" form and has the potential of killing every animal in a single area.
Audio: Shagaru Theme
Chaotic Gore Magala - Variant 3
Chaotic Gore Magala is a rare special Gore Magala that has failed to molt properly into a Shagaru Magala and has only molted halfway on one side of its body.
Chaotic Gore Magala is a lot more aggressive and a lot more violent than normal Gore Magala. This is due to their failed molting causing them constant pain. This has also changed their habits compared to a normal Gore Magala. It has even been found that Chaotic Gore Magala is slowly dying from the virus after failing to molt properly.
On one side of its body, it has some traits from Shagaru Magala. It has partially developed scales on its wing, neck, and head that come from its adult form. The horn on its head isn't fully developed and has really no use, unlike a Gore Magala's antennae. One of the most disturbing traits is its "eye". This eye doesn't seem to have developed completely, meaning the eye could be useless to it. Disturbingly when in its Frenzy State, this eye can be seen glowing red though very rarely.
Audio: Chaotic Theme
Monster Hunter Rise makes use of variant monsters to create seemingly new content for players. These variants are created through the use of existing art assets, game mechanics, and narrative elements. The variants have unique characteristics and features, such as the Gore Magala which is covered in dark exoskeleton plates and uses heat to see both predators and prey, and the Shagaru Magala which is the adult form of Gore Magala and has developed scales on its wings, neck, and head. The Chaotic Gore Magala is a rare variant that has failed to molt properly and is more aggressive due to the constant pain it experiences.
All of these variants provide a unique experience for players.
Illuvium Releases Overworld Private Beta!
A new game for Illuvium has gone live — if you’re one of the 30,000 lucky community members selected to try it out.
The private beta for "Illuvium: Overworld" is the second “Interoperable Blockchain Game (IBG)” released by Australia-based Illuvium Labs to date. A preview of gameplay teased details about the universe’s backstory, and the Overworld will involve playing as a ranger whose spaceship has crash-landed in the wilderness.
Players are able to explore a section of the Overworld called the Crimson Waste, mine resources, and forage for assets to create weapons and armor, or improve their drone companion. They can also encounter and capture Illuvials, the powerful creatures used for battling in "Illuvium: Arena," which came out earlier this year and is also in private beta.
A third title could also be around the corner. The company said "Illuvium: Zero" could have an alpha release before Christmas.
Aurory Open Alpha is Live!
The Open Alpha includes the Tactics mode, which is the strategic Netfies battler. Players can now access and play the Aurory Open Alpha for free by navigating to their website at app.aurory.io.
Supercell Pulls Loot Boxes from Brawl Stars in Favor of "Deterministic Rewards”
Supercell is removing loot boxes from its mobile battler Brawl Stars four years after the title launched.
The company broke the news in a video update and explained it's scrapping loot boxes in order to move away from probabilities and chances in favor of defined rewards that will give players "clear and exciting goals."
"No more probabilities, no more random rewards, and no more playing the guessing game when you unlock brawlers," said Brawl Stars game lead Frank Keienburg. "Moving forward, the rewards both on Brawl Pass and Trophy Road will be replaced with different deterministic rewards, some of which are new to the game. You will always know exactly what you're going to get."
Instead of amassing new brawlers through loot boxes, players will now be able to unlock them through a new reward track called Starr Road. According to the latest Brawl Stars patch notes, the Starr Road will let players unlock all non-Chromatic brawlers using credits, which can either be purchased, earned in-game by completing challenges and quests or making progress in the Brawl Pass or on Trophy Road.
The shake-up means that as of December 12 all unclaimed Brawl Boxes in a player's inventory will be automatically opened.
Anybody who purchased the Premium Brawl Pass before the removal of loot boxes will also receive an additional starting grant of in-game credits based on their current seasonal progress to compensate for the sudden change.
Those players and anybody who purchases the current Premium Brawl Pass going forward (so, before the season ends on January 2, 2023) will also receive a one-time payment of 80 gems (worth $4.99) as a form of "exceptional one-time compensation."
You can find out more about how the removal of loot boxes has affected Brawl Stars by digging into the latest patch notes.
Magic Eden Will Reward Loyal Traders With Discounts, Free NFTs
Magic Eden, the largest Solana NFT marketplace by sales volume, today announced a rewards initiative that will give its frequent traders special benefits including fee discounts and free NFTs.
The Magic Eden Rewards program, which kicks off later this afternoon, spans five tiers of rewards, with users earning points towards the program based on how much Solana (SOL) they’ve spent on the marketplace. Each step up the ladder provides greater benefits, the company said, including deeper discounts and access to NFT rewards.
For traders that have used multiple Solana wallets to trade NFTs on the platform, they can link all of them to a single Magic Eden account to maximize rewards considerations, rather than having each account based solely on a single wallet. A Magic Eden representative confirmed that wallet associations shared with the marketplace will be kept private and not disclosed publicly.
Magic Eden said that rewards will include things like “loot boxes” from NFT projects, NFT giveaways, and discounts. The program is described as a way for NFT creators to reach Magic Eden’s large user base, making it a marketing opportunity for projects while also potentially further entrenching the marketplace as the leader in the Solana space.
“As a marketplace, we’ve been trying hard to ship innovation that goes beyond the pure transactional layer,” CEO Jack Lu said in a release.
“Magic Eden Rewards gives us ways to celebrate and engage our community in new ways.”
National Policies & Legal Updates
FTX Founder Sam Bankman-Fried Arrested in Bahamas
The disgraced ex-CEO of FTX Sam Bankman-Fried has been arrested in the Bahamas, according to a statement from the Royal Bahamas Police Force.
Bankman-Fried, also known as SBF, was arrested following “receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition,” a statement read.
The US Attorney’s Office for the Southern District of New York confirmed the request in a statement via Twitter.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government, based on a sealed indictment filed by the SDNY,” it said.
“We expect to move to unseal the indictment in the morning and will have more to say at that time.”
Bahamas Police confirmed in a statement shared with Decrypt that law enforcement arrested Bankman-Fried, without incident, at 6 p.m. at his apartment complex in Albany. SBF’s arrest resulted from “various financial offenses against laws of the United States, which are also offenses against laws of the Commonwealth of The Bahamas,” the statement read.
Bankman-Fried was due to speak to lawmakers in Washington, D.C. tomorrow about the collapse of the digital asset exchange after agreeing to testify before a House Financial Services Committee but declining an invitation from the Senate.
It isn’t yet known what charges U.S. authorities plan to bring against Bankman-Fried, but legal experts tell Decrypt it’s likely to be some combination of bank and wire fraud. The Bahamas has an extradition treaty with the United States.
Senator Warren Introduces New Crypto Bill Targeting Self-Custody Wallets
Amid this week’s United States Senate hearings about the collapse of FTX, Senators Elizabeth Warren and Roger Marshall today introduced the Digital Asset Anti-Money Laundering Act, which targets the cryptocurrency industry with a number of proposed regulations that critics are calling authoritarian and unconstitutional.
The proposed bill seeks to place know-your-customer (KYC) requirements on blockchain infrastructure providers and participants operating in the United States, including developers creating software for decentralized networks and even the miners and validators that support such networks.
Warren and Marshall’s bill would direct the Financial Crimes Enforcement Network (FinCEN) to treat crypto wallet service providers, miners, validators, and other network users as “money service businesses,” per Warren’s statement, and thus require KYC for participants along with a requirement for anti-money laundering (AML) programs.
The bill would also impact unhosted, or self-custody crypto wallets, requiring platforms and networks to identify such customers and track their transactions. FinCEN proposed such a rule in December 2020, which many crypto industry companies and advocates spoke out against, but it has yet to be implemented. The bill seeks to finalize that process.
Furthermore, the bill prohibits any financial institution from using a digital asset mixer service or other privacy-enhancing technologies. Mixers are typically used to conceal transactions of cryptocurrency between wallets. The best-known Ethereum mixer service, Tornado Cash, was banned by the U.S. Treasury via sanctions in August.
“The crypto industry should follow common-sense rules like banks, brokers, and Western Union, and this legislation would ensure the same standards apply across similar financial transactions,” said Warren in a statement. “The bipartisan bill will help close crypto money laundering loopholes and strengthen enforcement to better safeguard U.S. national security.”
Already, the proposed bill has drawn significant scrutiny from the crypto industry. In a post this morning, crypto advocacy group Coin Center decried the bill as “an opportunistic, unconstitutional assault on cryptocurrency self-custody, developers, and node operators.”
France Mulls Full-Licensing Regime for Crypto Firms Citing FTX Bankruptcy
France may compel crypto firms to get a full license to operate in the country after a lawmaker proposed aligning the country’s laws with incoming EU regulation.
Hervé Maurey, a member of the Senate who sits on the finance commission, put forward an amendment on Tuesday that would do away with a grace period France currently plans to extend to crypto platforms.
At present, the rules allow crypto companies to operate in the country without a full license until 2026. The new proposal, which was adopted by the Senate this week and will go to the French parliament next year, would require firms to gain a full license from the financial regulator starting in October next year.
This would bring it up to speed with the Markets in Crypto Assets (MiCA) regulation from the EU, which the European Parliament will likely vote on in 2023.
“The recent bankruptcy of FTX has highlighted the risks inherent in any investment in crypto assets, especially when the company operates outside of any regulation,” Maurey wrote in the amendment. “These concerns, including for financial players, are shared at the European Union level.”
France’s current two-tier system mandates companies to register as crypto asset providers but then gives them the option to gain a full license, which requires higher levels of disclosure. While around 60 providers have registered with the regulator Autorité des Marchés Financiers (AMF), none have opted for full authorization.
Maurey’s amendment said that MiCA will impose similar requirements to the more thorough optional authorization scheme.
His proposal would close the option of simple registration and require firms to get a full license, therefore bringing them in line with the E.U. framework.
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