Ethereum ERC-4337 Smart Accounts & Abstraction are Here

The launch of the new ERC-4337 standard has enabled smart accounts to become available on Ethereum, which is expected to help with mainstream adoption by making crypto user-friendly. This development marks a significant shift towards making cryptocurrency more accessible to the general public. The account abstraction feature of ERC-4337 enables the use of standard smartphone security modules to store unique cryptographic keys used for cryptocurrency, which upgrades them to de facto hardware wallets. It also enables the use of two-factor authentication, signing transactions on your phone using a fingerprint or face scan, setting monthly spending limits on an account, and the use of session keys to play blockchain games without constantly having to approve transactions.

The launch of smart accounts is a significant response to the need to make cryptocurrency more user-friendly for new users who may not be familiar with the technical process of setting up a wallet. It also eliminates the need for new users to learn about seed phrases or the technical jargon associated with cryptocurrencies. Instead, smart accounts offer a simple and user-friendly approach to cryptocurrency, which is expected to attract more people to adopt the technology.

One of the key benefits of smart accounts is that users who lose their phone or device can use time-locked social recovery of their account via a group of trusted friends or even a commercial service. This is a significant improvement over the traditional approach, where users who lose their cryptographic keys may lose access to their accounts permanently.

There have been numerous proposals to enable account abstraction prior to this, but all required a difficult hard fork of Ethereum and took a back seat to more pressing upgrades like the Merge. ERC-4337 offers an alternate approach that makes use of decentralized infrastructure called “bundlers.” The technology works by having a smart wallet sign a “user operation” which gets fired to a special mempool. Bundlers are like miners or validators, taking user operations from the mempool and delivering the desired result back to the wallet. The bundlers also pay for the gas (transaction fee) required and are compensated by the user’s contract account or by a third party known as a “paymaster.” This could be a decentralized application (DApp) or it could be a wallet provider.

Smart accounts are set to become a key theme for crypto in 2023. The technology has already been incorporated natively into zk-Rollup layer 2 solutions from StarkWare and zkSync. Visa has also designed an automated crypto bill payment system that makes use of smart accounts. The launch of smart accounts is a significant milestone in the development of cryptocurrency, and it is expected to make cryptocurrency more accessible to new users, which could accelerate the adoption of the technology.

ConsenSys' ZkEVM Set for Public Testnet to Deliver Secure Settlements on Ethereum

Blockchain technology company ConsenSys has announced that its zero-knowledge Ethereum Virtual Machine (zkEVM) rollup will be released to a public testnet on March 28. The private beta, which started in Q4 2022, gave early access to a limited number of users and processed over 350,000 transactions. The zkEVM is expected to offer fast finality, high throughput, and the security of settlements on the Ethereum blockchain. The rollup is the culmination of work from several teams within ConsenSys, including those at Infura, Truffle, MetaMask, Besu, and Gnark.

The public beta testnet aims to trial the system under challenging and adversarial conditions. ConsenSys is in discussions with leading players in the Ethereum ecosystem to deploy and integrate the zkEVM testnet. The final upgrade will also start its auditing and security process to ensure the zkEVM is safe and secure before a mainnet launch earmarked to take place later in 2023. The zkEVM is aimed at making it easy for decentralized applications and tools to switch to its roll-up by building a trustless, censorship-resistant, decentralized, and performant execution layer that scales Ethereum.

The zkEVM is touted to offer a number of benefits, including zero switching costs for projects in the ecosystem. Developers can build on the zkEVM or migrate existing decentralized applications (DApps) without changing code or rewriting smart contracts. The zkEVM also uses Ether for gas fees, cutting out the need for third-party code translation and other middleware solutions. The integration of MetaMask with the zkEVM is aimed to expedite the onboarding of users. Infura integration also allows developers to ship DApps at scale. Developers will also be able to build, test, debug, and deploy Solidity smart contracts with a variety of layer 2 developer environments powered by Truffle. ConsenSys aims to keep its zkEVM open-source after launch.

ConsenSys is focused on making the scaling rollup EVM-equivalent a key factor in making it easy for DApps and tools to switch to its zkEVM. Collaboration with the wider layer 2 ecosystems is also a focus for ConsenSys. The organization is looking to work with innovators in the space to convene the first zkEVM "multi-prover" rollup. This type of scaling rollup would have multiple prover implementations generating validity proofs of computation.

List of Crypto Companies Cutting Ties With Silvergate Bank

Several cryptocurrency companies announced yesterday that they would be cutting ties with Silvergate Bank after the California-based bank delayed the filing of its annual 10-K report with the U.S. Securities and Exchange Commission (SEC). In the notice to the SEC, the bank signaled that its financial health could be different than previously disclosed, having sustained more losses during its fourth fiscal quarter of last year than it initially reported in January. In response, Silvergate’s stock price plummeted 53% on Thursday, representing over a 93% decrease from the stock’s all-time high of around $222, set in November 2021 during crypto’s previous bull run.

Crypto exchange Coinbase Tweeted it would no longer facilitate payments using Silvergate bank in U.S. dollars. The decision was made “in light of recent events [and] an abundance of caution,” the exchange explained. Crypto.com also stated that it would reject funds transferred to and from its platform via Silvergate, and Bitstmap announced it would temporarily pause its support for bank transfers conducted via Silvergate. Other companies that have cut ties with the bank include Gemini, Circle, Paxos, and Cboe Clear Digital.

Silvergate previously reported that its bank deposits had fallen significantly amid the collapse of cryptocurrency exchange FTX, reporting a 68% drawdown of $8.1 billion in January that took place during the final fiscal quarter of last year. In order to satisfy the avalanche of withdrawals it faced during that time, the crypto-friendly bank secured a $4.3 billion loan from the Federal Home Loan Bank and sold around $5.2 billion in debt securities. The bank drew ire from members of Congress including Elizabeth Warren (D-Mass), who penned an open letter addressed to Silvergate CEO Alan Lane, claiming that Congress and the public deserved insight into the role that Silvergate potentially played in FTX’s implosion.

This move by the companies in the digital assets industry to cut ties with Silvergate has sent a ripple through the industry, with many wondering what the impact will be on the crypto-friendly bank. It remains to be seen how this development will impact the bank's financials and reputation in the industry, but it is clear that many companies are concerned about their exposure to the bank and are taking steps to distance themselves from it.

Sony Exec Says Hollywood is Turning to Games in Search of Originality

The recent boom in video game adaptations to film and TV has been difficult to explain. However, during this year's DICE conference, Sony Pictures’ senior VP of virtual reality Jake Zim explained his view on the matter. In his opinion, video games have an upper hand over other mediums because coming up with new ideas is challenging, and the general wellness of adaptive sources has been deeply explored. Games, on the other hand, have been less explored in comparison. Zim added that the Sony team is focusing on how the company's motion picture and TV brands can best be adapted to virtual reality games.

Zim's theory adds some nuance to the question of why production companies and distributors are suddenly working so closely with game development teams. The last decade has seen executives burn through the previous generation's adaptation sources, leaving video games as fresh territory to explore. And not just fresh ground, but ground that bears new fruit on a rapid basis. Video games offer a wealth of untapped content for adaptation, with recent titles like Sons of the Forest selling two million copies within days of release. This trend is expected to continue, with horror distributors like Universal eyeing similar games for adaptation.

While Zim's perspective will be welcomed by developers with successful games, it may raise red flags for investors looking to capitalize on the trend. The history of adaptation shows that the gold rush on licensing comic books for adaptation in the '90s through the 2000s drove some comic creators to create comic books explicitly for the purpose of adapting them into film or TV. Platinum Studios, for example, produced the original comic that inspired the 2011 science fiction film Cowboys and Aliens and became buried in a sea of lawsuits around 2013.

Despite the potential risks, Zim's team at Sony is focused on producing new experiences for fans of its franchises like Men in Black, Jumanji, or Breaking Bad. They are also taking meetings with directors and writers working on the live-action versions of these franchises, with some expressing interest in working on VR as well. For instance, director Neil Blomkamp, who has experimented with interactive creations with Unity, visits Zim's office regularly while cutting his next film.

Sony's virtual reality games like Ghostbusters: Rise of the Ghost Lord and Groundhog Day: Like Father Like Son have been greenlit, and the team's workload is only set to increase with the release of the PlayStation VR2 headset. However, while video games offer a wealth of untapped content for adaptation, investors must be cautious of the potential risks that come with them.

Elden Ring Expansion: Shadow of the Erdtree Revealed

From Software has announced that an expansion for Elden Ring called Shadow of the Erdtree is currently in development. The announcement was made on the game's official Twitter account, and not much is known about the expansion at this time. Those familiar with the game's lore might be able to piece together what the expansion might consist of.

Elden Ring was released in February of 2022, and since then, fans have been eagerly awaiting news of additional content. The game was met with critical acclaim upon release and quickly became a fan favorite. The game's world and lore are incredibly detailed, and many players have been hoping for more content to explore.

The announcement of Shadow of the Erdtree is sure to be exciting news for fans of the game. From Software is known for creating challenging and rewarding games that are beloved by many. Given the success of Elden Ring, it's no surprise that the developer is working on more content for the game.

However, there is currently no release date or window for the expansion. Fans will have to wait patiently for more information about what the expansion will entail, as well as when they can expect to play it. Until then, they can continue to explore the world of Elden Ring and speculate about what the future might hold.

Overall, the announcement of Shadow of the Erdtree is sure to be exciting news for fans of Elden Ring. The game was a critical and commercial success upon release, and the announcement of additional content is sure to keep players engaged and invested in the world of the game. While there is no release date or window for the expansion, fans can rest easy knowing that From Software is hard at work on new content for the game.

Pokemon Concierge Netflix Game Adaptation Announced

The Pokémon Company and Netflix have announced an original series called Pokémon Concierge. Unlike existing Pokémon anime, the series will feature stop-motion animation, giving it a unique feel compared to other adaptations. The story follows the concierge, Haru, and Pokémon guests at the Pokémon resort. Studio Dwarf is animating the series.

This adaptation aligns with Netflix’s strategy of adapting beloved IP and creating localized content with global appeal. Netflix already hosts the first season of the Pokémon anime plus seasons 23 through 25. Minyoung Kim, Netflix’s VP of content for APAC, expressed excitement to expand the Pokémon universe with an entirely new storyline.

Pokémon was ahead of the curve in adapting the franchise for different mediums. The anime, which was released alongside the original Red and Blue games, helped fuel the IP’s popularity. With the series protagonist Ash Ketchum retiring, Pokémon has the luxury of being able to experiment, especially now that so many other titles are making their first jump from game to television or film.

While there is no release date for Pokémon Concierge yet, fans are eagerly awaiting its arrival. This announcement is just the latest in a series of recent Pokémon-related news, including the highly anticipated release of Pokémon Legends: Arceus, a new Pokémon game set in a pre-modern Sinnoh region. Overall, it appears that the Pokémon franchise is continuing to evolve and expand across multiple mediums.

Square Enix CEO Steps Down Amid Big Changes in Gaming

Japanese video game company Square Enix has announced that their CEO and president Yosuke Matsuda will step down from his role and be replaced by the company's current chief strategy officer, Takashi Kiryu. The change will take effect in June 2023, following the company's annual shareholder meeting in May.

Matsuda is leaving his position after having run the company for many years. During his tenure, he sold the company's Western studios such as Eidos Montreal, and Crystal Dynamics Square Enix Montreal to Embracer Group for $300 million. This meant he disposed of properties such as Tomb Raider and then focused on an expansion into blockchain games. Square Enix also released the critically panned Forspoken title.

The company stated that it intends to reshape the management team in order to keep pace with technological innovations and maximize creativity. In a statement, Square Enix said: “Under the rapid change of business environment surrounding the entertainment industry, the proposed change is intended to reshape the management team with the goal of adopting ever-evolving technological innovations and maximizing the creativity of the company’s group in order to deliver even greater entertainment to its customers around the world.”

Kiryu, who is 48 years old, has been with Square Enix since 2020, and he became director of Square Enix in May 2022. The company has made significant investments in blockchain technology, and despite a crash in cryptocurrency with the FTX meltdown and an accompanying drop in prices for non-fungible tokens, Matsuda issued another letter in January saying the company would continue to invest in cryptocurrency.

The decision to replace Matsuda comes at a time when the gaming industry is experiencing rapid growth and development, with blockchain and cryptocurrency playing an increasingly important role. It remains to be seen how Kiryu will lead the company through this transition, but Square Enix is clearly committed to staying competitive and innovative in the ever-changing landscape of the entertainment industry.

Mitsubishi, Fujitsu, and Other Tech Firms to Create Japan Metaverse, Economic Zone

A group of Japanese companies is collaborating to create a virtual world, called Ryugukoku, as part of the country’s Web3 strategy. The metaverse alliance includes IT services company Fujitsu, automobile manufacturer Mitsubishi, and global bank Mizuho, as well as six other companies. The goal of the collaboration is to create a framework for companies to take advantage of Web3 marketing, work reform, and consumer experience initiatives. The platform will be used to connect users to different Web3 services created by companies and government agencies.

Ryugukoku will serve as a virtual world that will allow users to access different Web3 services created by the member companies. The platform will also feature “Auto-Learning Avatars” that collect users’ information to provide a personalized metaverse experience. Additionally, the “Pegasus World Kit” will help users create gamified metaverse experiences, and the “Multi-Magic Passport” will provide identification and payment methods to facilitate interoperability within the metaverse space.

The Japanese government has been working to integrate Web3 technology into its national agenda. In October 2022, Prime Minister Fumio Kishia announced that the country would be investing in digital transformation services, including non-fungible tokens (NFT) and the metaverse. In November 2022, the country’s Digital Ministry announced plans to create a decentralized autonomous organization (DAO) to help government agencies enter Web3.

The development of a metaverse alliance in Japan is part of a growing trend in the technology and finance industries to build and promote interoperable virtual worlds. The metaverse is seen as the next frontier of digital experiences and is expected to revolutionize the way people interact with each other and with digital content. The development of Ryugukoku is an important step in the growth of the Japanese metaverse economy and will allow companies to create innovative new products and services that take advantage of this new platform.

Car Makers, Fashion Giants, and Pet Food Brands Seek Web3 Trademarks as 2023 Rolls On

Multinational corporations have continued to file trademark applications covering Web3, crypto, nonfungible tokens (NFTs), and the metaverse, despite a broader downturn in related markets. The month of February saw General Motors, Lacoste, and Walmart file trademark applications related to Web3. On February 16, General Motors filed for two new trademark applications covering its Chevrolet and Cadillac brands, which are focused on downloadable digital media files containing collectible artwork, text, audio, and video authenticated as NFTs.

A day later, on February 17, French clothing giant Lacoste filed five trademark applications for “CHAMPS-ELYSEES,” detailing plans for NFTs, crypto transaction software, virtual clothing, stores for virtual goods, and virtual real estate services. In early February, Walmart filed trademark applications for the “SamsClub” name and logo, with plans for NFTs, blockchain software, virtual reality healthcare, cryptocurrency trading, brokerage, and financial services.

In January, several Web3, NFT, metaverse, and crypto-related trademark applications were filed by various companies. Pet food firm Pedigree, insurance company Nationwide, Irish distillers Jameson, French fashion giant Yves Saint-Laurent, and even the National Geographic Society were among those filing trademark applications.

Multinational corporations’ continued interest in trademarks related to Web3, NFTs, and the metaverse demonstrates their commitment to these technologies and the potential they hold for future business opportunities. These companies’ filings signal an increased interest in expanding into these markets and a desire to protect their intellectual property.

Overall, the continued filing of trademarks in the Web3, NFT, and metaverse spaces indicates that major corporations believe there is significant potential in these emerging markets. With Web3 technology becoming increasingly integrated into national agendas worldwide, it seems likely that more and more companies will enter these spaces in the coming years.

Jack Dorsey's “Web3 Twitter” Bluesky Is Now In Closed Beta

Bluesky, Jack Dorsey's Twitter alternative, is now available in closed beta on the App Store. The invite-only app could soon join a crowded field of budding Twitter competitors, including Mastodon. Interested users can submit their email addresses to join the waitlist. The Bluesky app reportedly borrows heavily from Twitter, including features like searching for and following users and viewing their posts on a Home timeline. However, it includes minor differences like "What's up?" in place of "What's happening?" along with a simplified process of creating a post (which can also include photos) by selecting a plus button.

Bluesky began in 2019 as a Twitter-funded side project. Dorsey, who co-founded Twitter and was still CEO when the initiative started, saw it as a more open alternative to an increasingly centralized Twitter. Then, Bluesky spun off as its own company in 2021. Dorsey has said he believes social media should be free of corporate or government control and that only authors should have the power to remove their social-media content. Additionally, although he said Twitter's decision to ban Donald Trump after his role in inciting the January 6th insurrection was "the right decision," he also worried about its precedent in endangering a "free and open global internet."

The success of Bluesky and other Twitter alternatives is uncertain, as it remains to be seen if Twitter users will leave the platform in large numbers. Some users who are seeking an alternative to Twitter may be doing so because of current CEO/owner Elon Musk's headline-grabbing embrace of far-right figures and ideology. However, it may be illogical to expect these users to flock to a brainchild of someone who holds reservations about banning anyone for any reason.

Despite the uncertainties, the emergence of Twitter alternatives highlights growing concerns about the power and influence of social media platforms, particularly in light of recent controversies over censorship and free speech. Dorsey's Bluesky and other platforms like Mastodon aim to provide a more open and decentralized alternative to Twitter, where users can control their content and express themselves without fear of censorship or interference from powerful corporations or governments.

Emmy Award-Winning Disney-Backed Baobab Studios Launches Momoguro Ethereum NFTs

Baobab Studios, a multimedia studio that has won nine Emmy Awards for its short films and virtual reality experiences, is launching a family-friendly Web3 project called "Momoguro" and an accompanying Ethereum NFT collection. Created by multimedia director and animator Martin Allais and writer-director Nico Cassavecchia, Momoguro is a colorful fantasy world where creatures called "Momos" can fuse together to form hybrid characters. The project is releasing NFTs as well as an NFT roleplay game (RPG) where players can go on "quests" across a world called the Uno Plane to combine Momos. The franchise is minting its genesis NFTs for 0.22 ETH apiece (about $365) Thursday, which are "Holoselves" players can adopt to later enjoy the Uno Plane.

The Momoguro RPG will be on ImmutableX, a layer-2 Ethereum scaling solution, and will include NFTs as a core game feature. The game is set to launch in Q2 of 2023. Baobab Studios is not a Web3 company, but it's exploring the possibilities of how NFTs can engage users in storytelling experiences.

"We believe stories transcend mediums," Baobab Studios CEO and Cofounder Maureen Fan said in a statement. "Baobab Studios' mission is to inspire you to dream and bring out your sense of wonder. Make YOU matter. This begins by creating great characters and stories, like Momoguro, where you can be part of the story," Fan added. "We aspire to bring the Momoguro IP to as many channels, streaming platforms, and widespread media as possible."

Momoguro's creators also believe their property's lore carries an important message. "Community plays a big part in this," Momoguro's Cassavecchia said in a statement. "Inclusivity is paramount for the franchise, from ethnicities, genders and body types, Momoguro's ethos is that everyone is welcomed."

Baobab currently boasts having Pixar cofounder Ed Catmull and Twitch cofounder Kevin Lin on its board and has raised over $31 million in total funding from the likes of Disney, Samsung, and Comcast, according to Crunchbase data.

Sorare NFTs Seek Regulatory Compliance, Says CEO

A recent ruling by a federal judge in Manhattan that Dapper Labs’ NBA Top Shot NFTs may be unregistered securities has raised concerns over regulation in the NFT market. Nicolas Julia, CEO of Sorare, a fantasy sports NFT firm, believes that NFTs should be listed under a new category outside of existing sports betting and daily fantasy sports regulations. Sorare’s app allows users to buy, sell, and trade licensed digital player cards and participate in free-to-play fantasy contests based on real game performances. Sorare claims to have over 3 million users worldwide and partnerships with over 300 sports organizations, including the NBA, MLB, and MLS.

Sorare’s NFT games rely on the Ethereum blockchain, which differs from Dapper Labs and its Flow blockchain that runs NBA Top Shot and its digital collectible marketplaces for the NFL, UFC, and others. Last month, Judge Victor Marrero ruled that Dapper’s reliance on a private blockchain was “fundamental” to the court’s decision to view its NFTs as securities. Dapper Labs disputes the notion that it operates a private blockchain and has instead said Flow is gradually decentralizing with 68% of its nodes operated by external validators, according to claims made by Dapper Labs in October 2021.

Julia and other Sorare executives met with invited media during a recent NBA game at Madison Square Garden. Sorare maintains its headquarters in Paris and opened its first U.S. office in New York in early 2022. The company is currently hiring engineers, data scientists, designers, and legal team members for its New York City office. The company is looking to expand into the U.S. market and is hoping to partner with the NBA and MLB, which Julia believes is “absolutely critical” to building the biggest brand in the world of sports.

Although NFTs have been around for several years, there is a growing concern about their regulation. Sorare has been proactive with regulators in the U.S. and Europe to help build a framework that might be appropriate for the new category they are building, which Julia believes is not a betting product or a daily fantasy sports product. Julia hopes that something will be built in the future that can better define the framework for NFTs.

Sorare has partnerships with some of the world's biggest soccer leagues. Other European soccer leagues to offer NFT contests on Sorare include Germany’s Bundesliga, Spain’s LaLiga, France’s Ligue 1, and Italy’s Serie A. Sorare’s app allows users to buy, sell, and trade licensed digital player cards and insert those players into their lineups to join free-to-play fantasy contests against others as their lineups earn points based on an athlete’s real game performances. Fans who win Sorare’s contests can earn prizes such as jerseys, merchandise, match tickets, and VIP tickets to meet their favorite teams and players in real life.

Nouns 3D-Printed Fashion Collection NFT: Paris

NFT Paris, a conference for Web3 enthusiasts, featured a fashion show by Danit Peleg, a fashion designer whose work incorporates new technologies. Peleg showcased a collection of 3D-printed apparel inspired by Nouns, an Ethereum project that auctions one new NFT per day and uses the funds to fuel a community-driven and open-source intellectual property. Each piece of clothing was designed and then brought to life using varying 3D printing technologies, including Polyjet and Multi Jet Fusion. Peleg said that the project’s open-source, Creative Commons 0 (CC0) model drew her in. That approach means that anyone—even those who don’t own a Nouns NFT—can create and sell their own projects and products based on the brand. In fact, it’s encouraged: the NFT holders routinely fund projects using the treasury of funds from the daily auctions.

Peleg brought five outfits to the conference, each inspired by specific NFTs in the valuable profile picture (PFP) collection as well as the overall Nouns brand. Many of the pieces feature the familiar, boxy Nouns glasses (or “Noggles”), as well as detailed recreations of some of the avatars that have been minted to date. The pieces were printed in a way to feature hinges between the little Nouns characters, while others were glued together using the printed pieces.

Peleg is known as a 3D-printed fashion pioneer. Her initial collection, made as a student in 2015, went viral online, and she followed that up with a TED Talk that has racked up nearly 2 million views. Her work was also featured in the opening ceremony of the 2016 Rio Paralympics.

“Nouns” is a notable Ethereum project that auctions one new NFT per day and uses the funds to fuel a community-driven and open-source intellectual property. The project’s open-source, Creative Commons 0 (CC0) model means that anyone—even those who don’t own a Nouns NFT—can create and sell their own projects and products based on the brand. In fact, it’s encouraged: the NFT holders routinely fund projects using the treasury of funds from the daily auctions.

Coinbase to Delist Binance USD Stablecoin

Coinbase, the San Francisco-based cryptocurrency exchange, has announced that it will suspend trading for Binance USD (BUSD) on March 13, less than a month after Paxos Trust disclosed that it will stop minting the Binance-branded stablecoin. Paxos Trust has owned and operated BUSD since its inception in 2019, but it has decided to “end its relationship with Binance” ahead of a lawsuit from the Securities and Exchange Commission (SEC) over issuing BUSD. Coinbase’s decision to suspend trading for BUSD is likely an attempt to avoid scrutiny from regulators that might claim the exchange facilitated the sale of unregulated securities, according to the Director of Regulatory Affairs at Blockchain Intelligence Group, Timothy Cradle.

Cradle noted that Coinbase’s decision to suspend BUSD trading is similar to the measures taken by exchanges in 2020 after the SEC accused Ripple Labs of raising $1.3 billion in unregistered securities sales through the token XRP. Numerous exchanges, including Coinbase, suspended XRP in the wake of the lawsuit's announcement. The dispute between Ripple Labs and the SEC remains ongoing today.

Binance’s founder and CEO, Changpeng Zhao, has stated that Paxos was also ordered to stop issuing BUSD by one of its primary regulators, the New York Department of Financial Services (NYDFS), as well. Though Paxos oversees the backing of BUSD that’s issued on Ethereum, it does not do the same for the BUSD issued by Binance on the exchange’s proprietary network Binance Smart Chain.

To maintain the legitimacy of BUSD that flows on Binance’s network, the exchange claims it keeps the tokens fully collateralized with Paxos-regulated BUSD. However, the backing has slipped beyond $1 billion on multiple occasions, and Binance has admitted that it has encountered “delays” with gathering the appropriate capital. The SEC plans to sue Paxos for violating investor protection laws, the company confirmed to Decrypt. Paxos would have to register with the SEC to re-launch the coin, which Cradle believes will likely end in a settlement, with a cease-and-desist order being somewhat permanent.

Lori Trahan Targets Online Extremism in the Games Industry

Rep. Lori Trahan (D-Mass.) has criticized major video game companies for not being forthcoming enough in responding to a reported increase in white supremacy and other forms of extremism in online games. Trahan and other congressional Democrats had requested that 14 video game companies describe their harassment and extremism policies after an Anti-Defamation League report found a rise in hateful conduct in games. The report found that 16% of young players said they had been exposed to white supremacist comments while playing games. Despite being asked to detail their efforts to assess or mitigate extremism in their games, nine of the 14 responses did not do so.

Many of the responses describe game company policies for combating harassment, including in-game tools for reporting problematic players. For example, Fortnite-maker Epic Games has more than 1,500 specialists to address player reports, while Sony mentioned the ability for players to record recent interactions to include in incident reports. Tencent said it prioritizes reports from accounts used by minors, while Among Us development studio Innersloth randomizes player names for users under 13. However, the majority of companies did not address Trahan's most urgent questions, according to tallies provided by Trahan's office.

The ESA, the gaming industry's trade group, responded to Trahan and other congressional leaders with a letter outlining measures the industry has taken with parental controls and moderation. While condemning white supremacy and other forms of hate, the ESA letter suggests that the political alarm over games is based on an overly broad use of the term "extremism." The ESA letter states that millions of Americans are engaging in fun, positive, and valuable play on gaming platforms, and where harmful behavior surfaces, the industry addresses it promptly.

The popularity of online games creates challenges of scale for game companies or anyone else trying to monitor for hateful speech. Human moderators, automated chat filters, and parental controls are all existing tools in use industry-wide. Some companies responding to Trahan's questionnaire said they currently or plan to use artificial intelligence to help detect problematic comments or content from players.

Trahan is actively looking at possible avenues for legislative actions to further shine a light on how extremism exists in online games and explore what can be done by regulators, companies, and gamers to better address the issue. The lack of reply from video game companies could trigger more pressure from Washington. While the gaming industry takes the issue seriously, some companies have been criticized for not doing enough to combat extremism in their games.