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Quick Take

• UMA protocol enables permissionless issuance of any synthetic assets
• The majority of synths issued over the last 12 months were niche and were unable to attract any significant adoption
• The protocol has a unique oracle solution that requires human intervention, it is designed with game theory such that rational players are incentivized to act honestly
• The team has launched a new “optimistic oracle” framework that hopefully captures the oracle market by supporting arbitrary off-chain data relay beyond price feeds

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The European Central Bank (ECB) published a report about the international role of the euro Wednesday, touching upon the importance of central bank digital currencies (CBDCs) for future financial strength. 

The authors of the CBDC portion of the report were economist Massimo Ferrari and international economist Arnaud Mehl, both affiliated with the ECB. 

They stated that “attention should be paid to the risks to stability that might arise if a central bank does not offer a digital currency,” adding that “issuing a CBDC would help to maintain the autonomy of domestic payment systems and the international use of a currency in a digital world.”

The ECB, and particularly its president Christine Lagarde, has been receptive toward the idea of the digital euro as a complaint to physical cash — even if opposed to bitcoin and other digital assets like stablecoins. Lagarde’s prior comments regarding the digital euro had been vague and tepid at best, shaped by the need for more research and testing. 

While the ECB is still figuring out the infrastructure behind the digital euro, these comments coming out of the ECB report appear to be the most positive and bullish toward the broad benefits of implementing a CBDC to date.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• DarkSide, the ransomware group behind the Colonial Pipeline hack, has been cashing out some of its proceeds.
• According to blockchain analytics firm Elliptic, one of the platforms DarkSide used to launder the money is called Hydra, a massive darknet market that serves a Russian-speaking clientele. 

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Google is expanding the scope of its crypto-related advertisement policy, the latest development in a years-long back and forth from the tech giant.

In a policy statement published Wednesday, Google said that “[b]eginning August 3, advertisers offering Cryptocurrency Exchanges and Wallets targeting the United States may advertise those products and services when they meet the following requirements and are certified by Google.”

To qualify, exchanges and wallets need to “[b]e duly registered with (a) FinCEN as a Money Services Business and with at least one state as a money transmitter; or (b) a federal or state chartered bank entity,” “[c]omply with relevant legal requirements, including any local legal requirements, whether at a state or federal level” and “[e]nsure their ads and landing pages comply with all Google Ads policies.”

The new certification process will replace one that has existed for crypto exchanges since late 2018. 

In March 2018, Google made waves when it banned crypto advertising from its search engine, a move that came after Facebook undertook a similar policy shift earlier that year. Yet in September 2018, Google walked back that strict policy somewhat, allowing for crypto exchanges to become certified advertisers on the platform for the U.S. and Japanese markets. Elsewhere, critics have long accused Google of not adequately addressing crypto-related ad scams. 

Per Google’s new statement, it will not allow advertisements for “initial coin offerings, DeFi trading protocols, or otherwise promoting the purchase, sale, or trade of cryptocurrencies or related products.” Cited examples include “initial DEX offerings, token liquidity pools, celebrity cryptocurrency endorsements, unhosted wallets, unregulated DApps.”

Further, “Ad destinations that aggregate or compare issuers of cryptocurrencies or related products” are also not allowed.

“As a reminder, we expect all advertisers to comply with the local laws for any area that their ads target. This policy will apply globally to all accounts that advertise these financial products,” Google concluded.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Marathon Digital is reconfiguring its “sanctions-compliant” bitcoin mining pool following a community backlash.

CEO Fred Thiel announced the move in a statement posted on the firm’s website on May 31. Marathon’s MARA Pool began validating blocks on the Bitcoin network at the beginning of May, using wallet risk-scoring software from DMG that, according to Marathon, filtered out transactions involving wallets that appear on the U.S. Treasury’s Office of Foreign Asset Control. 

“Over the coming week, we will be updating all our miners to the full standard Bitcoin Core 0.21.1 node, including support for Taproot. By adopting the full standard Bitcoin core node, we will be validating transactions on the blockchain in the exact same way as all other miners who use the standard node,” Thiel said in the firm’s video statement.

Over the course of May, MARA Pool minted 226.6 BTC under this system, which many noted resulted in significantly reduced transaction fees going to the miners, as well as blocks that featured far fewer transactions than peers. With the adoption of Bitcoin Core version 0.21.1, the firm is moving away from “OFAC-compliant” mining. A representative for Marathon confirmed to The Block that this would include moving away from its partnership with DMG. 

In an interview with The Block, Thiel said of the controversy over OFAC-compliant mining that:

“There’s a certain amount of Bitcoin politics involved here. On the one hand you have groups in the bitcoin community who are all about maximum decentralization. They are against the whole concept of doing anything that has to do with financial regulatory compliance or government regulation. Then there are the institutional investors who like the fact that people are trying to make the blockchain more compliant because it makes it safer for you to invest.”

Despite Marathon’s overhauled approach to mining, Thiel maintained that major institutions will steer clear of a regulation-agnostic bitcoin in an email to The Block: 

“The industry will have to be responsive to regulatory requirements if the financial services industry and investors are going to participate — because they will not if it’s a violation of regulations,” said Thiel. “That being said we fully support the bitcoin community and their desire for full transparency decentralization.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Securities and Exchange Commission last week delayed its decision on whether Cboe bZx will be able to list WisdomTree’s proposed bitcoin ETF. 

On May 26, the SEC announced that it would be pushing back its decision on the listing from May 30 to July 14 “so that it has sufficient time to consider the proposed rule change and the comments received.”

The rule change itself is simply to allow listing of WisdomTree Bitcoin Trust or BTCW. WisdomTree filed a prospectus with the SEC on March 11, while the Cboe proposed the rule change on March 26. 

Since that time, the SEC has received only four comments. However, the commission has a history of stalling or rejecting applications for Bitcoin ETFs.

At the end of April, Cboe’s proposal to list VanEck’s ETF received a similar delay. To date, none has launched in the U.S., though some see the emergence of several Bitcoin ETFs on the Toronto Stock Exchange as a good omen. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto exchange operator Kraken has launched a new mobile app in the U.S., targeted at retail investors.

The app is available on both Andriod and iOS platforms and allows users to invest as little as $10, Kraken announced Wednesday. The Kraken app has already been available in Europe since January of this year.

With today’s launch in the U.S., the app is now available in all countries except for Crimea, Cuba, Iran, Japan, North Korea, and Syria, said Kraken. As for the U.S., Kraken does not provide services in New York and Washington.

Coinbase launched its first app over eight years ago in 2013. Coinbase launched mobile apps for professional traders last year. Kraken also offers apps for advanced traders — Kraken Pro, as well as for trading crypto futures — Kraken Futures since last a couple of years.

Coinbase and Kraken are currently the leading fiat-to-crypto exchanges. The former saw more than $200 billion in trading volumes in May and the latter saw more than $100 billion worth of volume, according to The Block’s Data Dashboard.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A White House spokesperson said Tuesday that “expanding cryptocurrency analysis” to trace ransomware-tied transactions is part of a broader focus on such attacks. 

According to a press gaggle transcript from June 1, Principal Deputy Press Secretary Karine Jean-Pierre spoke to reporters about the newly-disclosed ransomware attack on meat supplier JBS, which U.S. officials have reportedly tied to a criminal organization based in Russia. 

During the gaggle, Jean-Pierre said that “The White House has offered assistance to JBS” and that U.S. officials are probing the situation. News of the JBS ransomware attack comes soon after an attack on Colonial Pipeline.

“The White House is engaging directly with the Russian government on this matter and delivering the message that responsible states do not harbor ransomware criminals. The FBI is investigating the incident and CISA is coordinating with the FBI to offer technical support to the company in recovering from the ransomware attack,” Jean-Pierre said.

The White House rep then expanded on the scope of the Biden White House’s ransomware efforts, during which she then referred to a focus on cryptocurrency analysis.

Jean-Pierre said:

“Combating ransomware is a priority for the administration.  President Biden has already launched a rapid strategic review to address the increased threat of ransomware to include four lines of effort: one, distribution of ransomware infrastructure and actors working closely with the private sector; two, building an international coalition to hold countries who harbor ransom actors accountable; expanding cryptocurrency analysis to find and pursue criminal transaction; and reviewing the USG’s ransomware policies.”

Elements of the U.S. government already contract with industry firms such as Chainalysis on transaction tracing technology. It remains to be seen whether the Biden White House focus on ransomware will see these capabilities expanded by law enforcement agencies. In December, the Department of Justice’s inspector general urged the FBI to complete its work on a cryptocurrency support plan. 

“We call on organizations across government and the private sector to take the threat of ransomware seriously and modernize their cyber defenses, including implementing the practices in the executive order,” Jean-Pierre went on to say.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Asia-based private venture capital firm Master Ventures has launched a $30 million venture capital fund to support projects trying to integrate with Polkadot as well as other early-stage ventures building on the protocol, the company announced Wednesday. 

Polkadot is a single network that aims to enable multiple blockchains to work together. Each one of these blockchains is called a parachain and to be connected to Polkadot’s main network, they need to connect via a parachain slot, which are limited in number.

According to the announcement, Polkadot and Kusama — a standalone network focused on experimentation — aim to support the launch of more than 50 parachains in the next year and a half.

As part of the fund, Master Ventures hopes to support projects that are competing for these parachain slots.

The parachain slots will be auctioned off to the projects with the highest bids, and each project must hold polkadot (DOT) or kusama (KSM) depending on which protocol they want to use. When participating projects issue native tokens, they will then be “airdropped” to DOT or KSM lenders.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.