Crypto Weekly Issue 41

CONTENTS

cryptoweeklymag.com$2 October 2022 | Volume

Crypto.com Accidentally Sends Woman $7 Million

SEC Declares Network Control of Ethereum as Price Drops 20%

8

With Loss of Industry Domination, Bitcoin's Market Correlations Will Disappear 10

Federal Agents Recover $30 Million of Hacked Axie Infinity Funds 11

"The Blockchain Association" Sets Up New Crypto Industry PAC 12 Key Crypto Exchange Struggles as Values Plunge 13

S.E.C. Chief Gary Gensler: "Crypto is Not Laundry Tokens"

14

As an Act of Support for Ukraine Vitalik Buterin Attends Kyiv Tech Summit 15

UK financial Watchdog Warns FTX Crypto Exchange 16

The Ethereum Merge Has Completed Without a Hitch, But there is More Coming 18

White House Recommends Creating a U.S. Digital Currency 24

Cybersleuths who protect Crypto from Hackers are Making a Killing 34

How American Citizens May Legally Recover Crypto-Assets from Tornado Cash........................................................................36

Wall Street's Biggest Players Plan New Crypto Exchange 38

The U.S. OFAC Backtracks on Unlawful Action Against Tornado Cash But Sanctions Already Set a Terrifying Precedent 40

3 Ways To Protect Yourself From Possible Scams When Being Paid in Crypto 44

The Uses of Crypto Beyond Buying and Selling

46

Editors Letter

Welcome to Crypto Weekly

Editor

Crypto Weekly is the brainchild of the guys at CMC, and I am Rob Stone, Editor; and I hope to bring you an informative read on everything crypto every week of the year. Another week has gone by, and this is our 41st issue of Crypto Weekly.

The last several weeks saw the beginning of a new era for the world's second-biggest cryptocurrency; Ethereum. "The Merge" became a reality. The Merge represents a pinnacle of collaboration and engineering mastery across dozens of teams and hundreds of people. It's been in the making for two years and presents a huge upgrade to the Ethereum ecosystem, influencing countless other tokens. Ethereum's transition to proof-of-stake was like changing the engine of a moving car. Perhaps the biggest takehome is Ethereum will now use 99.95% LESS energy and dramatically reduce inflation by approximately 10x. In general, it's like upgrading from a coal engine in an old freight train to what might power the spaceship that'll take us to Mars. I'd suggest reading deeper into it yourself; to find out specifically what's interesting to you.

As usual, a lot of stuff has happened in the last week because the music never stops in the crypto sphere, and the time keeps rolling on. I hope you all enjoy what we have brought together for you this week. Please let us know your thoughts, and if you would like to see something featured, please do get in touch.

editor@cryptoweeklymag.com

Robert Stone

Editor

Crypto.com has won a lawsuit against a Melbourne woman after accidentally sending her the equivalent of around USD 7 million by mistake. Recovering the cash won't be easy - especially since it took the brain geniuses at the company many months to figure out they sent her all that money in the first place.

"The plaintiffs, according to the Australian Herald Sun, who broke the story of the suit, were unaware of this mistake until seven months later, in December 2021.", found judge James Dudley Elliott. He sits on Victoria's Supreme Court.

Misplaced

Before the cryptosphere crashed - months before

the exchange purchased the Staples Center for $700 million in November 2021, the exchange committed the monumental error.

The woman in question, meanwhile, had made a refund request for about $68 from the exchange, only to discover shortly after that the platform had deposited the many millions into her account.

She had already bought a luxury home for her sister, given more to her daughter, and moved most of the rest into a joint account when Crypto.com discovered its mistake. As a result, Crypto. com filed its lawsuit in February, and the sisters, after failing to appear in court, were ordered to sell their mansion and repay the exchange - plus tens of thousands in interest.

Crypto.com Accidentally Sends Woman

$7 Million

In October, the trial will resume.

Yes, the woman who received the mistaken transactions was almost certainly aware of Crypto.com's error. A similar mistake - sending

assets to the wrong blockchain wallet, for example - has plagued many a crypto user who has rarely, if ever, recovered money due to so-called "decentralized," unregulated crypto platforms.

SEC Declares Network Control of Ethereum as Price Drops 20%

As the shadow of a major US regulator falls over Ethereum's rising ambitions, its price has fallen over 20% despite last week's successful transition to proof of stake. Gary Gensler, chairman of the US SEC. The SEC says that since most Ethereum transactions are validated in the U.S., they should be regulated in the U.S.

The world's secondlargest blockchain was declared as coming under the jurisdiction of the U.S.

government and Security Exchange Commission, SEC, due to the majority of validator nodes that secure the network being set up within the U.S.

As of the time of writing, ether (ETH-USD) had fallen 20% to $1,364. However, bitcoin (BTC-USD) fared better, holding above $19K with a fall of 13% to $19,413.

As the world's secondlargest cryptocurrency by market cap, Gary Gensler's comments have rattled

investor confidence.

According to a report from the Wall Street Journal last Thursday, Gensler referred to the process of Ethereum's staking rewards and said: "From the coin's perspective, that's another indicator that under the Howey Test, the investors are anticipating profits based on the efforts of others and that makes Etherium a Security now."

After moving to a low energy use proof of stake method for validating

transactions, investors can now stake their ether to secure the validation of transactions on the network, and also profit from staking rewards. This profiting from staked ether has drawn the attention of Gensler and made crypto investors nervous about the future classification of Ethereum.

Furthermore, the SEC filed a federal lawsuit against crypto influencer Ian Balina on Monday for failing to register a

cryptocurrency as a security in 2018. A sentence in the lawsuit claimed the SEC had the right to sue Balina because the entire Ethereum network is under the jurisdiction of the U.S. government.

The SEC stated that the ether sent to Balina in 2018 was "validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country, and as a result, those transactions took place in the United States." Ethereum's commitment to being

seen as a fully global, decentralized blockchain that provides public good and a platform for web3 applications has been questioned.

Ethereum controls the majority of decentralized finance within the cryptocurrency ecosystem and most of the smart contract applications.

Approximately 45.85% of all Ethereum validator nodes are located within the United States, according to Etherscan. The secondgreatest density of nodes is in Germany, with 19% of validator nodes.

The SEC has not made

a standalone official statement Ethereum blockchain is a security. Still, suppose the blockchain is classified as a security rather than a commodity. In that case, this will create a legal precedent that would send a wave of panic throughout the entire cryptocurrency market.

A move by the SEC to classify Ethereum as a security would mean that most digital assets except bitcoin could be considered a security, and every project deployed on top of the Ethereum network

could be claimed to be a security and coming within the jurisdiction of the SEC. Being classified as a security will make Ethereum, and any application deployed on it, need to go through the lengthy process of registration with the SEC.

Also, if it is deemed a security, then that would mean Ethereum has been trading as an unregistered security for many years. This could lead to fines for the Ethereum Foundation, many exchanges trading ether, and most Ethereumbased cryptocurrency tokens.

With Loss of Industry

Domination, Bitcoin's Market Correlations Will Disappear

Bitcoin (BTC) is underperforming its rivals in a worsening macroeconomic and political environment. While inflation is surging, the war in Ukraine is causing concern about a recession, and global currency movements are volatile, Bitcoin is weakening relative to Ether (ETH). Despite harsh macroeconomic conditions, Bitcoin is still

not resilient like gold, as a store of value should be.

Bitcoin's dominance in the overall crypto ecosystem is declining due to Ether's growth, stablecoins, and alternate layer one blockchains. The underlying infrastructure of blockchain is built on layer one networks. As a result, cryptocurrencies are more of a structural trend

than a macroeconomic asset class. The postCOVID-19 era has seen bitcoin's correlation with the stock market increase, preventing it from acting as an inflation hedge. According to a recent industry report, capital flows into cryptocurrencies increased in response to monetary policy easing, and now that the market is tightening up, capital

inflows have reversed. It is expected that Bitcoin will remain a macro-driven crypto asset, while the rest will remain technology and innovation-driven. As BTC currently dominates the total crypto market cap in time, as interest in Bitcoin decreases, the correlation between BTC and other tokens will also decrease and eventually disappear.

—Crypto Weekly

Federal Agents Recover $30 Million of Hacked Axie Infinity Funds

Cryptocurrency

worth $30 million was recovered from Axie Infinity in March by federal agents working with blockchain analyst Chainalysis. The playto-earn game lost $625 million to the North Korean-linked Lazarus Group. The recovery is a significant

accomplishment for law enforcement and the crypto community. It is the first time crypto has been seized from a North Korean hacking group.

North Korea-linked groups typically use Tornado Cash to mix Ether, but the US sanctions imposed on the mixer forced them to use

alternative methods. To conceal their funds' source, they use blockchain bridges to switch between different kinds of digital coins, and the analyst was able to trace those crosschain transfers.

Most of the stolen funds from Axie Infinity remain on the blockchain,

indicating that bad actors have difficulty moving stolen assets around and converting them into fiat currency. There is a good chance that stolen funds will be recovered again from these hacking groups, according to Chainalysis.

AxieCon, which is currently taking place, was the site where the fund retrieval announcement was made, according to Bleeping Computer. According to Axie Infinity's publishers, the authorities recovered money will slowly be transferred into the game's treasury and then distributed to players. In any case, it won't be a quick process, and it may take several years to complete. —Crypto Weekly

"The Blockchain Association"

Sets Up New Crypto Industry PAC

Anew political action committee has been established by the Blockchain Association, which claims to be "the collective voice of the blockchain and crypto industries," adding to the growing campaignfinance efforts to influence the U.S. government's debate over digital assets.

Blockchain-based networks and cryptocurrencies are transforming financial and digital services. A reputable group of crypto and blockchain industry leaders founded the association to support American leadership in the industry through innovation and collaboration.

According to Kristin Smith, the association's executive director, the BA PAC will contribute to both major parties'

"pro-crypto" candidates. According to the group's filing with the Federal Election Commission, the timing is too late to make an impact in November's midterm elections, in which Republicans will try to surge into power in Congress or Democrats will maintain their tenuous grip. The PAC will, however, be able to exert influence before the 2024 presidential election.

The PAC will still donate to candidates for this November's election, though a press release Smith said declined to identify which candidates at this point in time. "We believe crypto is by definition a non-partisan issue," Smith said in a tweet on Monday. "We will support candidates in that spirit, seeking the best champions for this technology no matter which side of the aisle they

come from." Smith herself has donated to candidates from both parties, as well as right-leaning fundraising group WinRed, according to FEC data

The industry has quickly become one of the dominant forces in political giving, with its new PACs outpacing many of the political efforts from more established industries. Crypto billionaires such as Sam Bankman-Fried, founder of the FTX crypto exchange, have poured

tens of millions of dollars of their own money into U.S. politics over the past few years.

The chairwoman of the PAC will be Julie Stitzel, vice president of public policy at Digital Currency Group. Seth Hertlein, the head of policy at Ledger, and Ryan Selkis, founder of crypto data company Messari, will also serve as directors.

Jonathan Jachym is the head of policy at Kraken, while John McCarthy is counsel at Wicklow Capital. —Crypto Weekly

Key Crypto Exchange

Struggles as Values Plunge

Coinbase, the most popular U.S. cryptocurrency exchange, is facing turmoil in the wake of a plunge in currency valuations. Since the beginning of the year, there has been a decline in trading volume, mainly among the biggest institutional market holders, and shares have fallen by 75% amid weak earnings and lower trading volume. Despite growth in retail investor numbers over the same period, big money interests have lost ground.

The company's shares are extremely volatile as it struggles to regain a foothold in the crypto industry. As of Sept. 6, shares had closed negative 13 out of 15 days. Sept. 7 saw the stock rebound by 8.7% amid a broad market upswing.

Coinbase's New Issue

Due to the drop in interest in owning and trading cryptocurrencies such as bitcoin and ethereum, Coinbase faces a new challenge. During the second quarter, Coinbase's earnings and trading volume declined. Bitcoin traded below $19,000 on Wednesday as crypto valuation assessments fell below $1 trillion for the broader virtual currency market.

Competition Challenges Coinbase

Due to the elimination of trading fees for day-today bitcoin transactions by Binance U.S., other investors are choosing to trade at exchanges that do not require strict KYC rules, preferring to trade anonymously. These

problems for Coinbase are bringing more challenges than ever before.

By eliminating its previous fee of 0.1% on most transactions, Binance, an arm of the world's largest digital currency exchange, allows investors to trade bitcoins, the largest cryptocurrency by value, for free against U.S. dollars, Tether, and other dollarbacked stablecoins.

Shares of Coinbase have suffered because

a liquidity crisis has impacted several large and prominent lenders like Voyager Digital, Celsius Network, Babel Finance, and BlockFi.

Some institutional investors have closed their positions in crypto and are sitting on the sidelines. Others seem to have lost interest completely, while others may return. Coinbase has laid off 1,100 employees since June as part of its effort to lower costs. —Crypto Weekly

S.E.C. Chief Gary Gensler:

"Crypto is Not Laundry Tokens"

In a speech to lawyers on Thursday, Gary Gensler said nearly 10,000 crypto tokens are securities that violate federal law.

"Investors buy or sell crypto security tokens because they expect to make money from the effort of others in a common enterprise," the S.E.C. chairman wrote in prepared remarks, paraphrasing a definition of "security" in U.S. case law.

The attorney general pointed the finger at those in the industry who believe that existing securities laws are incompatible with cryptocurrencies and who are calling for rules tailored specifically to the industry. According to him, the S.E.C. has clarified how existing law applies to the industry through statements and enforcement actions and that no such rules are forthcoming. He added that these are not laundromat tokens. Promoters market these tokens, and investors buy most of them, hoping to profit from their efforts. It doesn't mean you didn't

receive a message just because you dislike it, said Gensler.

Gensler said investors need disclosure to help them determine whether investments will succeed or fail. According to him, "Investors deserve protection from fraud and manipulation. The law requires these protections." In May, the S.E.C. announced it was adding 20 new positions to its Crypto Assets and Cyber Unit, nearly doubling the size of its enforcement staff dedicated to protecting investors in the crypto market. During his speech,

Gensler specifically called out crypto exchanges and other intermediaries, asking that they get registered as brokerdealers and securities exchanges.

The S.E.C. has questioned Coinbase about how it selects which digital assets to list and how it classifies them, according to Coinbase's quarterly report. The S.E.C. filed charges against a former Coinbase product manager in July, alleging that nine tokens listed on the exchange are securities. Coinbase has said S.E.C. classifications are wrong.

Due to its failure to register with the agency, the crypto lending platform BlockFI was fined $100 million in February. Since crypto exchanges also provide custodial and broker-dealer services, the S.E.C. will need to develop new registering procedures.

Unlike stock exchanges, crypto exchanges can also offer both investments and commodities on the same platform, and Gensler has directed staff to figure out how to allow investors to trade both simultaneously.

Weekly

As an Act of Support for Ukraine Vitalik Buterin Attends Kyiv Tech Summit

It was a closely guarded secret for security reasons that Ethereum cofounder Vitalik Buterin was attending the Kyiv Tech Summit to show support for war-torn Ukraine.

It is not surprising that Buterin supports Ukraine. Ethereum's co-founder was born in Russia and met with Russian President Vladimir Putin in 2017 to discuss Ethereum opportunities. Still, he has been critical of his homeland's government and war with Ukraine for years. However, his visit is noteworthy due to the timing: Ethereum's muchanticipated Merge was just days away at the time of the event.

As the closing speaker of the summit, Buterin commented, "I have closely followed the conflict in Ukraine since it started. The goal of my trip was to visit Ukraine and to let them know that there are a lot of people who are

supportive of their cause and care about them."

In addition to Buterin, U.S. Secretary of State Antony Blinken also visited Kyiv unannounced. Blinken did not attend the Kyiv Tech Summit.

Thirty tech experts attended the wartime conference, including Buterin, and two government officials - Mykhailo Fedorov, Ukraine's Vice Prime Minister and Minister of Digital Transformation for IT Development, and Alex Bornyakov, Fedorov's deputy and the face of crypto use in Ukraine.

During the three-day hackathon, almost 50 projects were submitted by 500 hackers to support Ukrainian freedom fighters. Discussions included decentralized electoral voting, central banks issuing digital currencies, and the role of Web3 and blockchain in combating disinformation. A number

of topics were discussed, including decentralized electoral voting, central banks issuing digital currencies, and the role of Web3 and blockchain in the fight against disinformation.

In addition to contributing heavily to the war effort in Ukraine, Buterin said he wanted to see what kind of projects Ukrainians were doing, what they were working on, and what kind of implications blockchain, Web3, and Ethereum would have in Ukraine.

Having Vitalik and important representatives

from the Ministry of Digital Transformation join us on the ground was a real treat, said co-founder CJ Hetherington. "We are not simply holding a tech event here. We are part of a movement, a protest, and an embodiment of the unbreakable spirit of Ukraine."

Among the other speakers at the summit were Kiril Khomiakov, general manager of Binance Ukraine; Illia Polosukhin, cofounder of NEAR Protocol; and Pavlo Kartashov, director of the Ukrainian Startup Fund.

—Crypto Weekly

UK financial Watchdog Warns

FTX Crypto Exchange

Sam Bankman-Fried's group is 'targeting' consumers without authorization, according to the FCA

In the latest confrontation between British authorities and offshore digital asset companies, the UK's financial regulator has warned consumers not to deal with FTX, the cryptocurrency exchange managed by billionaire Sam Bankman-Fried.

Financial Conduct Authority stated on its website that the Bahamas-based exchange appeared to be offering products and services in the UK without its approval. "We do not authorize this company, and it targets UK residents," the statement said. As the UK steps up efforts to control the unregulated world of cryptocurrencies, the FCA has decided to take action against FTX, one of the largest exchanges for digital assets.

FTX's chief rival, Binance, has pledged to become fully compliant with regulation and to reapply for UK supervision. According to the FCA, Binance's complex and high-risk financial products pose a significant

consumer risk. Binance has "failed" to respond to some of its basic questions, making it impossible to oversee its sprawling operation. A spokesperson for FTX said they believed the regulator intended to warn consumers about a scam impersonating the exchange because some of the phone numbers the regulator listed had been reported as linked to scams. However, the spokesperson acknowledged that the FCA's identified

website - ftx.com - is the company's actual website. "FTX is investigating and communicating with regulators," the company said. In response, the FCA said: "It is important we issue warnings as quickly as possible, and we will inform you if more information becomes available." According to an FCA guide, crypto exchanges and wallet providers must register for anti-money laundering supervision if their digital asset activity is "carried on by way of business in the UK."

Recommended Markets Insight Matthew Elderfield There is a divide between EU and UK crypto regulation. The FCA and other financial regulators worldwide have faced a challenge in protecting

consumers and establishing standards in crypto markets where many of the largest groups are based offshore. FTX and Binance, registered in the Cayman Islands, have American affiliates to appease US authorities, but they also offer services in other countries.

FTX's European division announced that Cyprus's financial regulator had granted it an investment firm license as the crypto firm pushes to expand across the continent.

At the time, BankmanFried, FTX's chief executive, said: "Securing a license for the European Union is a crucial step toward becoming one of the world's most regulated exchanges." UK clients dealing with FTX would not be eligible for UK consumer protections such as the Financial Ombudsman or Financial Services Compensation Scheme and would be unlikely to get their money back if things went wrong, according to the FCA."

—Crypto Weekly

The Ethereum Merge Has Completed Without a Hitch, But there is More Coming

Robert Stone

After years of development and delay, the massive overhaul of Ethereum's core digital machinery known as the Merge has finally taken place, resulting in a significantly more energy-efficient system. The switch from proof-of-work to proof-ofstake, a more secure way

of running a blockchain, was no easy task. "What I use as a metaphor is swapping out an engine from a running car," said Justin Drake, a researcher at the Ethereum Foundation.

Potentially, there is a huge payoff. It is estimated that Ethereum now consumes

99.9% less energy. Some have compared it to Argentina suddenly shutting off its power grid.

The Ethereum developers say the upgrade will enhance the network's security and scalability, as well as its $60 billion ecosystem of cryptocurrency

exchanges, lending companies, non-fungible token marketplaces, and other apps.

In the wake of the Merge's official start at 6:43 a.m. UTC, More than 41,000 people watched the Ethereum Mainnet Merge Viewing Party on YouTube. Crypto

investors, enthusiasts, and skeptics closely watched the update for its potential impact on the wider blockchain industry, ending the network's reliance on crypto mining completely. They waited with bated breath as key metrics suggested Ethereum's core systems remained intact. The Merge finally succeeded after about 15 very long minutes, where all observers were held in suspense until it could be declared successful.

Ethereum's switch to proof-of-stake was envisioned from the beginning. Nevertheless, the transition was a complicated technical endeavor so risky that many doubted it would succeed. Drake says, "a part of me hasn't fully grasped what's happening. I've trained myself to accept it as a given." In addition to its complexity, the update may have been one of the largest open-source software projects in history, requiring coordination among dozens of developers, researchers, and volunteers. Tim Beiko, an Ethereum Foundation developer who coordinated the update, said, "I think the Merge can genuinely get people who were skeptical of Ethereum to experiment with it."

No More Miners

With Bitcoin, the concept of a decentralized ledger was introduced to the world in 2008 - allowing computers anywhere in the world to view, alter, and rely on an immutable record of transactions.

Smart contracts, introduced with Ethereum in 2015, expand upon Bitcoin's core concepts, making it a global supercomputer that records data onto its blockchain. NFTs and decentralized finance (DeFi) - the main catalysts for the recent crypto boom - were born from that innovation. During the Merge, Ethereum

retires its proof-of-work system, where crypto miners competed in writing transactions to its ledger and earning rewards. Imagine massive warehouses lined with rows of computers stacked on top of one another like books in a university library - each computer scorching hot as it strains to pump out cryptocurrency. These so-called "farms" are now obsolete.

In addition to fueling Ethereum's reputation as an environmental menace, this system was pioneered by Bitcoin and is responsible for Ethereum's massive energy consumption.

Proof of Stake

With Ethereum's new system, proof-of-stake, mining is eliminated. The Ethereum network replaces miners with validators, who stake at least 32 ETH at an address that cannot be traded or sold. By staking ETH tokens, a validator can write a "block" of transactions to Ethereum's digital ledger by drawing one of its tickets. Until the Merge, Ethereum's proofof-stake network, called the Beacon Chain, was just a staging area for validators to get ready for the switch. The Beacon Chain was integrated into the main Ethereum network to transition to proofof-stake.

Unlike running an app on your MacBook, proof-ofstake consumes "no more energy than a rounding error." "It's like running Slack. It's like running Google Chrome or Netflix. Your MacBook plugs into the wall and consumes electricity. But nobody thinks about the environmental impact of Slack, right?"

According to Edgington, the Merge upgrade will have a significant positive impact on the environment. My family and I can look back and say that we have helped remove a megaton of carbon from the atmosphere every week. That's something that matters," he said.

New incentives

Instead of a single opensource piece of software, the Ethereum network is better understood as a nation-state - a living organism created by a bunch of computers communicating in the same language, all following the same rules. Using Ethereum's new system, users are incentivized to follow the rules as written, thus preventing any unwanted tampering with the ledger.

By converting physical resources into security for the network, proof-of-work is a mechanism to prevent attacks. You need more physical resources for a

more secure network," Beiko explained. "In proof-of-stake, financial resources are converted to security."

Although Ethereum had thousands of individual miners, computers from just three mining pools controlled most of the network's hashrate, which measures the combined computing power of all miners. One or more of Ethereum's big mining firms could execute a 51% attack if they could accumulate a majority of the network's hashrate, making other miners unable to update the ledger.

Proof-of-stake dictates control over the network based on the amount of ETH staked, not the amount of energy expended. As punishment for hacking the network, proof-of-stake supporters say attackers can have their staked ETH slashed or reduced.

Trading the Merge

At least since mid-July, the Merge has been the subject of speculation in crypto markets, with traders initially expecting ETH prices to rally sharply. Following the crash in digital-asset markets earlier in the year, the ETH options market started pricing in the postMerge gains.

In general, it is impossible to predict with any certainty how the markets will react to a successful Merge. The upgrade has been on Ethereum's roadmap since its inception, so there's the possibility that it has already, by and large, been priced in by the market.

What's next?

"This is the first step in Ethereum's big journey towards being a very mature system, but there are still steps left to go," said Vitalik Buterin, Ethereum's co-creator, as he reflected on the Merge during the viewing party on the morning of the Merge. Despite the update, Ethereum's high fees and slow speeds remain as much of a barrier to growth as environmental concerns were.

For Buterin, the Merge is just the beginning. "To me, the Merge just symbolizes the difference between early stage Ethereum and the Ethereum we've always wanted ... to become," he said on Thursday's live stream. "So let's build out all the other parts of this ecosystem and turn Ethereum into what we want it to be."

Buterin explained, "PostMerge, the Surge, the Verge, the Purge, and the Splurge will continue to

make Ethereum's proofof-stake blockchain more scalable and secure."

Buterin's Future Expectations for Ethereum

Several weeks ago, Vitalik shared his vision for Ethereum post-Merge at the Ethereum Community Conference in Paris.

Finally, he shared that Ethereum will be only about 55% complete after the Merge.

As a result of the Merge, the Ethereum mainnet's current proof-of-work (PoW) protocol will be integrated with the Beacon Chain's proof-ofstake (PoS) blockchain system and will function as a PoS system after that.

What does this mean for Ethereum post-Merge?

Merge has been seen as the network's grand finale by many. But now, according to Buterin, Ethereum is also facing "the Surge, the Verge, the Purge, and the Splurge."

Scaling Ethereum with the Surge

As part of the "Surge," Ethereum introduces systems that will enable the creation of layer two products, including sharding and rollups, thereby making it easier for users to operate on Ethereum after the Merge is completed.

Ethereum Sharding

In this phase, Ethereum will introduce sharding. To ultimately enhance the network's scalability, sharding enables blockchain capacity and transaction throughput to increase along with the number of nodes, such that scalability does not sacrifice network decentralization.

Ethereum's entire network would be divided into smaller pieces, known as "shards." In essence, multiple mini-blockchains would be created within the same blockchain. As soon as the protocol moves to proof-ofstake, this becomes much easier. As a result, Ethereum will create 64 linked databases that are physically sharded.

Ethereum Rollups

Introducing rollups will also expand Ethereum's scaling potential.

Transactions are performed outside Ethereum's base layer (layer 1), then posted onto Ethereum's layer one blockchain, allowing rollups to use Ethereum's main security chain.

Though some have suggested that rollups are still some time away, some newer projects, such as zkSync and Polygon zkEVM, demonstrate that Ethereum's next phase is closer than many imagined.

The Verge

Verkle trees will be introduced in the next phase, also allowing scalability to be addressed. A Verkle tree is a "powerful upgrade to Merkle proofs that allows much smaller proof sizes," says Buterin. As a result of the Verge, storage will be optimized, and reduce node sizes. As a result, Ethereum will become even more scalable than other methods used for that purpose.

The goal of Merkle trees is to create reliable encryption by converting blocks of information into long strands of code. Branches are formed by grouping together the newest blocks of information. The Merkle root, the string of numbers containing all the previous data, is then determined. Bitcoin was the first blockchain to explore this method, which was adopted by Ethereum later.

By showing only a short proof of any piece of data, Verkle trees allow you to store a huge amount of data, which is then verified by someone with only the tree's root. Proofs will then be much more efficient as a result of this process.

Verkle trees are still not as widely known or used as other cryptographic solutions as a new

concept. Hence, while the Surge will deal with sharding and rollups, that phase will affect Ethereum's scalability and proofs.

The Purge and the Splurge Spare historical data is reduced or "purged in the Purge." By reducing historical data, validators under the new proofof-stake consensus mechanism will be able to validate the blockchain more efficiently. The blockchain should be able to process many more transactions this way, thereby minimizing network congestion. According to Buterin, Ethereum should be able to process 100,000 transactions per second by the end of this phase.

After all these last parts are completed, Buterin describes the next part, the Splurge, as "the fun stuff." It aims to ensure that the network continues to run smoothly and that any modifications to the protocol will not affect it. As a result, Ethereum will be scalable.

As with any tech development, there will be hiccups along the way to this ultimate stage. Due to the long wait for the Merge, the Splurge will mark a muchdeserved celebration for Ethereum's network when it finally arrives.

White House Recommends

Creating a U.S. Digital Currency

Adigital currency for the U.S. is a priority for the Biden administration, which says it will enhance the nation's global financial leadership. It released today a framework for regulating digital assets, such as cryptocurrencies and other items of value that exist only digitally. Digital asset handling is easier with this framework, and fraud resistance is ensured. Government agencies have been working on creating the framework since March 22, according to President Biden, Executive Order 14067, "Ensuring Responsible Development of Digital Assets."

The Digital Dollar: An Exploration

The framework proposes creating a U.S. central bank digital currency, or CBDC, a digital version of the U.S. dollar. As a fact sheet released to describe agency responses to the executive order, the CBDC could facilitate cross-border transactions, create technical innovations, and facilitate efficient payment systems. As a result of the discussion of a digital dollar, there have been

unfounded accusations that the government will control digital assets.

According to Politifact, "Executive Order 14067 does not allow the federal government to control money electronically." the federal government may be able to "turn on and turn off your money" when EO 14067 is implemented, according to a TikTok post. A fractional-reserve banking system enables the transfer of electronic U.S. dollars from one financial institution to another. To comply with the Fed's requirements, banks must hold only a fraction of their deposits. No bags of currency are involved in transfers; they take place electronically.

Similarly to the physical dollar, a hypothetical digital dollar would be regulated and backed by a central bank. In many statements, Jerome Powell, the Federal Reserve

Chair, has said that digital currency under a central bank would eliminate the need for cryptocurrencies.

Cracking Down on Fraud

Since the creation of crypto, illegal activity has been a concern in the digital asset space, resulting in all but around 16% of the population avoiding it. The following is included in EO 14067: "The President will consider contacting Congress to amend the Bank Secrecy Act (BSA), antitippoff statutes, and laws against unlicensed money transmitting to apply to digital asset providers explicitly." There are other options, too, including raising penalties on unlicensed transmission of money and allowing the Department of Justice to prosecute crimes involving digital assets wherever they occur.

" We will continue to monitor the development of the digital asset sector and the risks associated with illicit financing, seeking to identify any gaps in our legal, regulatory, and supervisory regimes," according to the framework released

today. By the end of February 2023, Treasury will undertake a risk assessment of illicit finance about decentralized finance and nonfungible tokens as part of this effort.."

Consumer and business protection

Creating a U.S. CBDC while dealing with fraud and illicit activities could based on the framework, "enable a more efficient payment system, provide a foundation for further technological innovation, facilitate faster crossborder transactions, and be environmentally sustainable." By increasing the accessibility of financial services to a wider group of consumers, the framework could also promote financial inclusion and equity.

Several government agencies have developed Policy Objectives for a U.S. CBDC System, which reflect the federal government's priorities for a potential U.S. CBDC System, in addition to the Treasury's illicit finance risk assessment by February and its nonfungible token assessment by July.

The gaming space has attracted some of the biggest names in Silicon Valley. This year's total investment in the sector is outpacing last year's by around 33%, even through the crash. Franklin Bi, the director of portfolio development at crypto

CRYPTO and NFTs are a Driving Force for Mainstream Adoption

hedge fund Pantera Capital, said blockchain gaming is at the perfect time to "take off."

Historically, the gaming industry has been characterized by new technology, new business models, and user

experiences. Crypto and NFTs have enabled all of those opportunities.

Several household names have jumped on the blockchain gaming bandwagon. A $69 billion deal was announced in January between

publisher of Minecraft and Call of Duty. Satya Nadella, Microsoft's CEO and chairman, says the deal will help develop "building blocks for the metaverse."Satya Nadella, Microsoft's CEO and

it possible to onboard a critical mass of users through blockchain games. Industry experts discuss how this nascent space can reach a broad audience in an Insider interview.

Bluzelle. In a statement, Bains said that his three children grew up playing Fortnite, Minecraft, and Roblox. "They already know how to acquire ingame assets and virtual currencies."

In addition to learning valuable finance lessons, it's a natural progression for the upcoming generation during." The skins or virtual cosmetics players purchase for their characters are a common

NFTs are owned by the studio rather than the buyer.

With the advent of blockchain games, virtual goods and items can now be put on the blockchain

and owned by you," Justin Kan, a cofounder of NFT marketplace, explained. "In exchange for letting go of control, these companies get a more robust economy."

"Owning digital assets motivates players to play their favorite games," said Kyu Lee, a partner at venture capital firm CRIT Ventures. Using blockchain technology, NFTs verify a player's asset ownership since it is recorded on a public ledger. Participant tokens can instead be stored in their crypto wallets or with another decentralized custodian instead of with Web2 gaming studios.

accessible to a wider audience makes it an effective onboarding tool, according to Stephen's Shiti Rastogi Manghani. The "move-to-earn" app STEPN allows users to earn game tokens by exercising.

Manghani, the startup's CMO, says that anything that is fun, social, and engaging will attract users. "I have seen this in multiple industries like retail, e-commerce, and social media. It fulfills basic human needs. Gaming apps or utility apps that meet those needs are going mainstream. A benefit to users is the cherry on top."

technologies because humans love to be entertained. "Alexey Pajitnov created Tetris to make computers more approachable and less intimidating," Geffen said.

The roadblocks to blockchain gaming.

several top blockchain games are showing weaknesses, according to the DappRadar report. Off-chain Labs CEO and cofounder Steven Goldfeder says "

The fact that gaming is entertaining and

Video games have long been a staple of younger generations, especially. UnCaged Games chairman Shahaf Bar Geffen says games have always been at the forefront of emerging

Every new technologyespecially one in a volatile market - comes with obstacles. Blockchain gaming has also shown signs of slowing down amid a crypto bear market. In Q2 of 2018, DappRadar reported that Axie Infinity, the game with the largest user base in the industry, had 83% fewer participants than in Q1. The decline in players was attributed to a $650 million hack on its Ethereumlinked sidechain, Ronin.

Although gaming activity still dominates the overall landscape,

"usability is a potential barrier to mainstream adoption. Do people just play for the returns and financial rewards, or is it fun?

Goldfeder states, "a good blockchain game should be a game first, and a blockchain application second. We believe incorporating blockchain technology should be additive, enhancing the gaming experience for users who wish to engage with the blockchain but not limiting access to those who simply wish to play. In order for blockchain to gain mainstream acceptance, it must be able to operate in the background, which requires ease of onboarding, fast confirmation times, and low transaction costs that are abstracted from users."

—Crypto Weekly

People enjoy playing games because they are entertaining.

Hello, new world.

Picture a whole new world on the rise. A decentralized society fuelled by blockchain technology. It could affect our economy, banks, businesses, even our social media.

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Let’s get ready for the future. Join us for what’s next: cartesi.io

It is the Metaverse that will shape the internet of the future. A significant change is taking place in the history of humanity, and its effects will carry through into the Metaverse.

When the internet was first developed, we used it for simple things like e-mail and chat. Eventually, we began using it for more complex things like financial transactions and making purchases. Now that virtual reality is here, we're entering a new era in which the Metaverse

will be our primary interaction tool.

When we move into the Metaverse, the possibilities are endless. Without ever leaving our homes, we will be able to buy clothes and cars and travel worldwide. All of this will be possible in a fully virtual environment, unlike anything we've seen before, making it far more realistic than anything we are familiar with today.

Metaverse-based communication and interaction are expected to eventually replace the

internet as our primary mode of communication and interaction. As a result, the Metaverse could have a far greater transformative impact than the internet since it represents a fundamental shift in how we use technology.

Some believe that the Metaverse will simply enhance the internet, making online interaction even more engaging and compelling by providing a richer, more immersive experience. There's no doubt that you've heard

that before, and like so many other cutting-edge technologies, it's hard to predict how the Metaverse will develop. Surely with such a seismic shift, there may be many things that will remain unforeseen until they happen. We can scarcely imagine how technology will transform the way we interact and communicate with one another. It will change everything without a doubt.

How will the Metaverse evolve? It will likely become our primary

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method of interacting with the world as time passes. Our main method of accessing information and conducting transactions will be through the Metaverse rather than traditional websites and apps.

Augmented and mixed realities will dominate future Metaverses. The real world is more appealing to those who prefer it over a virtual one. Augmented and mixed reality allows users to experience elements of the virtual world without leaving the real world. While full immersion VR will still exist, it will be mostly used for gaming and entertainment. Most people don't want to hang out in an entirely virtual environment. They prefer having layers of reality that they can interact with along with their virtual experience.

For several reasons, virtual reality will not be as popular as augmented and mixed reality in the Metaverse. The more realistic nature of augmented reality is the first advantage. It allows for better mental orientation when real and tangible aspects of reality are mixed with digital augmentations.

We are fully surrounded by a computer-generated reality with virtual reality,

creating an overpowering and alienating experience. However, you can still see and interact with the real world with augmented and mixed reality. Compared to virtual reality, the two together are more user-friendly. This can be accomplished by overlaying digital content over real-world objects in augmented reality. Videos, 3D objects, and text can all be included. Consequently, people can experience some aspects of virtual reality while still interacting with the real world.

Virtual reality provides a better, more engaging experience while maintaining a connection with reality. As a result, it is likely to become the dominant form of VR due

to its wider marketability. Metaverse Development Must Be Democratic Ecosystems of the future must serve the common good better than the current web in which large corporations dominate. In these large corporations, profits are the only concern, and the public good is unimportant to them. Not necessarily do making profits and the public's good coincide, yet they may.

Companies' primary goals historically are to make as much money as possible, and if it kills people, so be it. This predominant philosophy is demonstrably undeniable throughout history. This is not what the Metaverse should be about. In Metaverse societies, as in any public society,

there must be systems of agreed-upon rules and expectations. People worldwide should be able to share knowledge and ideas through the Metaverse. Creativity and collaboration should be encouraged among people who are not coerced into participation or rewarded by profit. In a profit-driven metaverse, however, this is unlikely to happen.

Metaverses should be built based on cooperation and community, not greed and self-interest. A metaverse that is open and accessible should be available to everyone, regardless of their income or social status. Rather than being controlled by a few powerful corporations, the Metaverse must be free and democratic.

In essence, the Metaverse is a digital space in which people interact and create. In other words, it is a blank canvas on which people can paint their own realities. It will be shaped by the people who inhabit it, just like any other space. People will be able to express their desires and fantasies in the Metaverse, which will magnify their human traits. People will be able to play dress-up, pretend to be celebrities, or explore new worlds in the Metaverse.

The Metaverse will likely magnify human traits because it will give people more freedom to act however they want without fear of punishment. The result could be good, such as people being more kind and helpful, or it could be bad, such as people becoming more

aggressive and violent. Humans will need to decide which path they want to follow.

Verified Identities are Needed for the Metaverse to Function rust is essential when interacting with other users in the Metaverse. It would be difficult to engage in trusted interactions without

verified identities. To open a bank account or board a plane, we need verified identities in the real world. Users must provide biometric data to establish their digital identity to accomplish this. It is possible to verify the identity of a user by verifying that this data corresponds to the avatar they are using. A facial scan or fingerprint could

be used in this regard. Passwords and PINs are also ways to verify identities.

There are several reasons why digital identities should be verified. A first benefit is that it enables users to trust that the people they interact with are who they claim to be. It is particularly important in a virtual world where anyone can be anyone. The second benefit is that it protects the privacy of users. We can protect sensitive information and services by verifying identities. As a final benefit, it ensures the security of user transactions. Fraud and theft among Metaverse users will be radically reduced by verifying the identity of both parties.

Safe and secure metaverses require verified digital identities. Using them allows users to trust one another and conduct transactions safely and securely. The Metaverse is coming and will have a major impact on the future. The potential uses for virtual, augmented, and mixed reality are endless, and we've just seen a glimpse of what's possible. How will the Metaverse look? What will it mean for the way we live and work? Nobody can answer these questions for now, but one thing is certain – the Metaverse will be big.

Cybersleuths who protect Crypto from Hackers are Making a Killing

They're hiring, raising prices, and taking in fresh funding as mass firings become the norm elsewhere in crypto.

Robert Stone

One sector of the crypto industry is thriving during a time when many are struggling. Companies that sift through code for flaws and run bug-hunting sites find themselves with more business than they can handle as criminals, including North Korean hackers, increasingly target cryptosphere software infrastructure.

As mass firings become commonplace in crypto, they're hiring more, raising prices, and raising funding.

This year, hackers have stolen roughly $2 billion from digital-asset protocols, according to researcher Chainalysis. These companies' increasing fortunes illustrate how the industry

is beginning to recognize the threat. Despite bootstrapping startups and community-driven projects, crypto security services have become indispensable.

According to Paul Frambot, chief executive officer of crypto startup Morpho Labs, "we have spent so much money on audits."

"DeFi is not taking security seriously enough," he said, referring to trading, borrowing, and lending crypto without a central intermediary.

The demand for protection is growing among investors. According to CB Insights, venture capital firms have invested $257 million in crypto auditing

and security firms this year, up from $185 million in all 2021.

Rising threat

During the roughly decade-long existence of crypto, crypto thieves have stalked the industry, from the Bitfinex exchange hack in 2016 to the PolyNetwork protocol exploit last year.

The problem has worsened recently due to a relatively new part of the ecosystem that's become a juicy target: crypto bridges and software platforms that let coins designed for one blockchain be used on another. In the first seven months of 2022, crypto bridges were hacked for over two-thirds of the total value stolen.

The Ronin Bridge connected to the Axie Infinity online game was attacked by hackers in March, making off with cryptocurrency worth about $600 million. Bridges are not the only targets. Hundreds of millions of dollars have been lost in the exploits of other projects, such as DeFi apps. In many of these projects, smart contracts - code that executes transactions automatically and cannot be reversed - are used, making errors in design particularly costly.

Earnings of $400,000

Experienced developers perform audits on code to identify bugs, security concerns, and other issues that could make

the technology run unintendedly—automated tools scan code by some crypto auditors. Like OpenZeppelin, others audit the code line by line, one after another. A protocol developer may be able to fix the weaknesses identified and then have the auditor review those patches.

According to Zeth Couceiro, founder of crypto recruitment firm Plexus Resource Solutions,

salaries for experienced blockchain auditors can exceed $400,000 yearly. Typically, they earn around 20 percent more than developers working on Solidity, one of the most popular crypto languages. This is due to the requirement to have a coding background and understand the architecture to identify vulnerabilities, according to Zeth Couceiro, founder of crypto recruitment firm Plexus Resource Solutions.

How American Citizens May Legally Recover CryptoAssets from Tornado Cash

Robert Stone

Citizens and residents of the United States can apply for a license to retrieve funds locked in Tornado Cash, the Treasury Department announced Tuesday.

In its "frequently asked questions" (FAQs) document Tuesday, the Treasury Department's Office of Foreign Asset Control (OFAC), its sanctions watchdog, provides guidance on how companies and individuals can comply with sanctions

against Tornado Cash, a privacy mixer for Ethereum that North Korean hackers blacklisted last month.

As a result of the sanctions, the crypto industry faced massive backlash, with concerns ranging from software sanctions to how Tornado Cash's smart wallets could be used to recover funds.

In the FAQs, Treasury didn't address the software concerns, but The Office of Foreign Assets Control

("OFAC") licenses could be requested. Crypto exchange Coinbase filed a lawsuit last week regarding locked funds. "Us citizens are encouraged to provide Tornado Cash with, at a minimum, all relevant information regarding these transactions, including the wallet addresses of the remitter and beneficiary, transaction hashes, the date and time of the transactions, as well as the amounts transferred. According to the FAQs,

OFAC would allow such applications to proceed, provided no other sanctionable conduct was involved."

Aside from addressing the fact that people attempted to troll celebrities via Tornado Cash after the sanctions were announced, the FAQs also addressed the issue of small amounts of ether sent through Tornado Cash to celebrities. According to OFAC's FAQs, while U.S.

citizens are prohibited from conducting any transactions involving Tornado Cash if a U.S. citizen receives a small amount without their permission, they are not required to report the transaction immediately.

An OFAC announcement claimed that Lazarus Group, a North Korean hacking entity, had sent millions of dollars in cryptocurrency through Tornado Cash, alleging that 20% of its volume

was associated with illicit activity.

According to a Treasury spokesperson via email, North Korea has increasingly used illicit activities, such as cybercrime, to raise funds for its weapons of mass destruction and ballistic missile programs." U.S. citizens must comply with these sanctions. "More broadly, the cryptocurrency industry must do its part to prevent illicit activity, whether

nation-state or not, as that is what constitutes 'responsible innovation," said the spokesperson. "As part of this, we will ensure that adequate cybersecurity measures are implemented, knowyour-customer measures are implemented, sanctions are complied with, and anti-money laundering obligations are met. The Treasury on these issues looks forward to continuing dialogue with the cryptocurrency industry on these topics."

"Us citizens are encouraged to provide Tornado Cash with, at a minimum, all relevant information regarding these transactions, including the wallet addresses of the remitter and beneficiary, transaction hashes, the date and time of the transactions, as well as the amounts transferred.

According to the FAQs, OFAC would allow such applications to proceed, provided no other sanctionable conduct was involved.

Wall Street's Biggest Players Plan New Crypto Exchange

EDX Markets, backed by Charles Schaub, Citadel Securities, Fidelity Investments, and others, will initially offer only a handful of cryptocurrencies such as bitcoin.

Robert Stone

Traders who buy and sell digital assets on a new cryptocurrency exchange will pay significantly less, thanks to the efforts of some of Wall Street's biggest

players. According to its lawyers, the company's lawyers are confident that bitcoin (BTC) is not a security - thus avoiding regulatory drama in Washington. Two of

the largest U.S. retail brokers, Charles Schwab (SCHW) and Fidelity Investments (through its digital assets arm), support EDX Markets. The venture is also supported

by two of the largest U.S. stock trading firms, Citadel Securities and Virtu Financial (VIRT), and investment firms Paradigm and Sequoia Capital, which EDX

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expects others to join. EDX CEO Jamil Nazarali said Tuesday that the company aims to push crypto toward the low costs of U.S. stocks. To illustrate, he gave the example of an investor wishing to buy $5,000 of an S&P 500 exchangetraded fund, whose spread, or cut, would likely be a few cents. The cost of a similar-sized BTC trade might now be $25, according to Nazarali. According to Nazarali, this market structure costs individual investors a lot of money. "We want to bring many of those efficiencies from the stock market to the digital marketplace."

The securities question.

U.S. regulators are sorting out crypto assets as to whether they are securities and therefore require a higher level of oversight. EDX is sidestepping that battle. Initially, the company will offer only a "few tokens we do not consider securities," Nazarali said. This includes bitcoins. In November, EDX will open for a pilot round of trading, followed by an official launch in January, Nazarali said.

Market makers such as Citadel Securities (Nazarali's former employer), Virtu, and possibly other market makers will execute the orders brought in by retail

brokers in EDX's consortium. According to Nazarali, lower trading costs will result from market makers' competition.

In addition, some accouterments professional trading firms like Citadel Securities and Virtu rely on will be brought over. Apart from the New York Stock Exchange and Nasdaq, which operate from other New Jersey data centers, the EDX exchange will be based in the NY4 data center in Secaucus, New Jersey.

Exchange customers can now house their computers in the same data center called colocation. Due to the use of cloud platforms,

crypto exchanges have historically been hard to physically locate, making getting the fastest access to them more difficult.

Market makers can quote tighter prices when colocation reduces latency and increases determinism. Its location in New Jersey is unique because major trading firms like Citadel Securities and Virtu use microwavecommunication networks to connect NY4 to another important colocation exchange in the U.S.: CME Group (CME), located in a data center near Chicago, Illinois. If professionals on EDX are trading bitcoin itself, CME's bitcoin futures contracts offer an obvious way to offset risk.

Crypto trades are outsourced to third parties for execution by Robinhood Markets and other major U.S. retail brokers not currently listed among EDX's backers, including Jump Crypto, the digital asset division of Citadel Securitieswhich Citadel Securities and Virtu compete.

EDX would love to attract that volume, Nazarali said. He said it would be good for retail broker-dealers if all of that comes on exchange. After working in traditional finance for Citadel Securities, Nazarali switched to crypto because of the energy in the ecosystem. "There are a lot of younger people," he said. "It's very energizing."

The U.S. OFAC Backtracks on Unlawful Action Against Tornado Cash But Sanctions Already Set a Terrifying Precedent

As of Sept. 13, the Treasury Department clarified the Tornado Cash sanctions after a huge uproar from around the world, including lawsuits over the illegal actions perpetrated by the U.S. government. According to the "OFAC" FAQs, "interacting with opensource code itself" is not illegal. This interaction is only legal if it does not include prohibited

transactions. According to the statement, copying, publishing, and browsing an archived version of the Tornado Cash website are all permitted. "Likewise, U.S. persons would not be prohibited by U.S. sanctions regulations from visiting the Tornado Cash historical website archive on the Internet, nor would they be prohibited from visiting the Tornado Cash website

if it becomes active again on the Internet," said the agency.

Maybe there is some hope there for what was one of the most prominent Ethereum mixers. Coinbase filed a lawsuit in response to the sanctions just days ago and the OFAC was obviously reacting to that lawsuit. The OFAC knows it had no legal basis for the sanctions it had imposed.

According to Coinbase's lawsuit, the sanctions themselves violate the First Amendment, which guarantees free speech. Computer code is speech, according to Bernstein v. the Department of Justice (DOJ), and free speech is protected under the U.S.

There is a violation of the First Amendment by the Treasury

Constitution. Therefore, the Treasury Department is effectively restricting speech by sanctioning open-source code.

By sanctioning Ethereumbased smart contracts in August, the Treasury's Office of Foreign Assets Control (OFAC) was the first government department to blacklist a technology not explicitly associated with a person or company. Individuals and institutions are typically excluded from its list of specially designated nationals.

"We do not object to the Treasury sanctioning bad actors, and we take a strong stance against illegal conduct," Coinbase said in a blog post that Treasury took

the unprecedented step of sanctioning an entire technology instead of a specific individual in this case.

Dapp developers, beware.

A sanctioned tool does not guarantee hackers, criminals, and the like will not use it. The smart contract will be used for the nefarious purposes of criminals, sanctions be damned since criminals have no respect for the law. Alexey Pertsev, a Tornado Cash developer, has been arrested after the North Korean-linked Lazarus Group allegedly laundered $455 million through a smart contract mixer. It was revealed on Aug. 23 that he would spend at least another

90 days in jail. As far as the Dutch investigators are concerned, Pertsev has never been formally charged with any crime. It remains to be seen whether OFAC's clarifications will affect his release - although it appears that opensource code cannot be considered criminal. On the contrary it is the targeting of innocent people by the OFAC that is illegal in itself. Developers have little control over how their software is used, and even less over who uses it.

Privacy is at risk due to shortsighted strategies.

Pertsev's arrest has already had on developers as a result of his arrest. In the first place, the fact that he was arrested and held without bail set a chilling precedent of government overreach.

In addition, the sanction itself may be overbroad, preventing people with legitimate reasons to use mixers and liquidity pools and jeopardizing their financial privacy and data security. Anyone can access open-source software. Anyone can access the Ethereum blockchain. Despite the fact that the code is still accessible, the U.S. government has done tens of thousands of crypto users a disservice by imposing needless bans. The Tornado Cash is more of a public good than a contraband item and the predominance of users arises from that category.

It is not necessary to say whether sanctioning a piece of code is practical. You are free to fork open source software if it is open source. If that happens OFAC will continually be playing catch-up, trying to sanction newly deployed smart contracts left, right, and center. It's not a realistic strategy, let alone being completely unwarranted as well as being an illegal action.

Web3 community members have warned of alarming effects that

Cookie Sale launched in February 2022, and aims to become one of the biggest launchpads for tokens on the BSC. With its sleek design and easy-to-use interface, CookieSale looks to be adaptable and adoptable for developers and a safe environment for investors. CookieSale works side by side with Kodi’s marketing & advertising agency Pitch. This benefits developers and holders of Kodi as well. As a developer, you will be able to use CookieSale as an “A to Z” platform.

From advertising to zhooshing up your “cookie” there will be something that satisfies almost anyone’s tastes. As a Kodi holder, a percentage of the revenue generated through

Kodi’s mission is to create a one-stop-shop IDO platform and provide investors with an interactive Entertainment Network that will keep users engaged, informed, and entertained while investing in the crypto space.

Clear Vision

Kodi`s vision is to create an ecosystem that will be a driver in promoting a safer economic environment for crypto investors to participate in and for developers to grow their projects. Kodi is creating an industry-first Entertainment Network that will become THE place for crypto investors to socialize, have fun, win prizes, and learn about everything crypto. Is there anything more about Kodi? How do you, as an investor benefit? Kodi by itself, is an entertainment project. Kodi plays games. post podcasts, do AMAs, have tournaments, live streams, and play plenty of music. At Kodi there are two subsidiaries.

"Pitch" being the in-house advertising agency, which is a one-stop shop, all things content creation, both in crypto and fiat. Branding, websites, commercials, you name it Kodi does it. The Pitch Advertising Agency and

CookieSale will be bought back into Kodi and then airdropped to holders, holding 10 million or more Kodi tokens.

Backed by powerful auditing companies such as Certik, SpyWolf, Brewlabs, Dessert Finance, Contract Checker, and HashEx developers will be able to choose between three pre-audited contracts or create their own and have it audited separately. Other key features include liquidity locking, anti-bot features, custom airdrops, visual cues to aid in identifying safer investments, and more.

One notable feature that stands out amongst other launchpads is that CookieSale will only charge a flat fee for listing. Developers will be able to launch the right way, without the fear of a large sell from the launchpad taking profit.

CookieSale launchpad. Cookie Sale will work in unison to become the go-to destinations for developers to build their brands and launch their projects With Cookie Sale, you can launch your project from A to Z. Gone are the days of taking your token supply. Kodi simply charges a flat fee, no strings attached.

So how do you benefit as a holder? Well, if you're, a holder of at least ten million KODI you receive BNB, rewards automatically deposited into your wallet. You also can participate in Kodi`s weekly games where you can win, BNB for free. But here's where things get really exciting. Two percent of every transaction goes straight into the Kodi treasury contract. The treasury buys back Kodi tokens, creating an increase in price, and stores them in the treasury. Twenty percent of these tokens are burnt and 80% gets used to top up the staking pools as needed revenue generated through pitch and cookie sale also gets added to the treasury contract. This creates the everincreasing price floor, whilst also removing tokens from circulation. Go say hi on their telegram community, or check out their website at Kodicoin.com.

3 Ways To Protect Yourself From Possible Scams When Being Paid in Crypto

AMLBot, an anti-money laundering service, reported that one-third of the American freelance workforce is now paid in cryptocurrency. According to AMLBot, an anti-money laundering service, one-third of American freelancers are now paid in cryptocurrency. Below are some tips to protect yourself from a possible scam if you are getting paid in crypto.

Check the Employer's Wallet

Payments should be coming from a legit crypto wallet. The AMLBot and AMLSafe crypto wallet's CTO, Slava Demchuk, says it is difficult to tell whether a payer is trustworthy simply by asking or identifying them. "Getting crypto on your account is just the beginning. Each transaction is checked

and validated by the network under the hood, which is a much more complex process. Since these processes are not visible or traceable, a small number of illegal funds can be hidden in anyone's account. Things seem fine - until they don't. Even payers you trust can put you at risk unwillingly."

Ensure that any payment you receive is from

a trustworthy source by using anti-money laundering screening services like AMLBot, Chainalysis, or Elliptic.

Make Your Crypto Wallet Secure

You should not only check the legitimacy of the wallet from which your payments are coming but also choose a secure wallet. Multi-signature authentication and two-

Robert Stone

factor authentication are safety features to look for.

In addition to ease of use, you should consider a few other factors when choosing a crypto wallet. "If you are a newbie, choose one with an easy and intuitive interface," Demchuk advised. "Determine whether you're interested in long-term safekeeping or active trading, then pick one with the right capabilities."

A multi-currency wallet may also be of interest to you.

Demchuk said that some wallets support only one or two cryptos while others support a wide variety of cryptocurrencies. Choose one that supports the currencies you intend to use." The more vendors you work with, the more wallets you may need. Demchuk suggested that you create a wallet for your trusted contacts

and another for your high-risk or unknown contacts. "In this way, you will keep your funds safe and secure and minimize the risk of receiving 'dirty crypto." Choose a Secure Crypto Exchange Choose a trustworthy cryptocurrency exchange to ensure the safety of your funds. "Avoid trading crypto on

exchanges that do not require Know Your Customer (KYC) verification," Demchuk said.

What To Do If Your Crypto 'Payment' Is A Scam

Even if you take all the precautions, it's possible to become the victim of a crypto scam. Suppose "dirty crypto" — crypto that originates from a hack, criminal activities, or unregulated exchanges — is deposited into your account. In that case, your wallet can get banned, and you could lose access to the funds within it. If this happens to you, there are actions you can take to try to recover your funds.

Demchuk advised disputing the decision with

the exchange first.

It could also be that the payer was scammed and sent you a bad payment without realizing it. "Inform the payer that they may be the victim of a scam and warn them to be extra vigilant in future transactions," Demchuk said. "Lastly, ensure that you never receive any other payments from the same source, and be super careful when dealing with future payments and transactions."

"You can also get professional help from companies that offer crypto dispute resolution services and investigations."

The Uses of Crypto Beyond Buying and Selling

There are many uses for cryptocurrencies besides just paying for goods and services.

The storage, transfer, and trading of cryptocurrencies can be done electronically. Current definitions of cryptocurrencies refer to them as "digital representations of value" that aren't issued by public authorities or central banks and are accepted by private or commercial entities for payment purposes. However, it is important to note that they are not considered currencies or money in

guide

the traditional sense in most countries. Most often, they are classified as commodities or securities though those designations are still subject to change.

In addition to the specific cryptocurrencies that serve as digital money, they all have market value. Due to blockchain technology's immense potential, new applications beyond conventional financial transactions are emerging at an unprecedented pace. More than just a passing fad, the evolving possibilities are changing the world.

The Bitcoin RevolutionBanking for the Unbanked

According to recent trends, Bitcoin is becoming increasingly popular in regions with limited access to banking or suffering from political instability and hyperinflation.

Globally, over 2 billion people lack bank accounts. In Latin America, 45% of adults do not have a financial account of any kind, according to the World Bank. More than 207 million people in Latin America do not have bank accounts as of 2022 due to poor infrastructure in rural areas. Providing banking services to lowincome families living in

remote areas with little or no access to branches of banking institutions has been a significant challenge in many Latin American countries. Then along came crypto.

For the first time, cryptocurrency provides banking services for people without bank access, allowing people without a bank account to send and receive funds across borders quickly while being less expensive than any other means. Crypto is the perfect solution for them.

The number of people with access to or owning mobile phones is increasing in many of these regions, even though economies are still largely cash-driven and people cannot afford transportation to visit banks for registration.

Creating a digital wallet for Bitcoin transfers allows people to store value without relying on traditional banks. By using digital wallets, people without bank accounts may be able to participate in finance and create a store of value independent of traditional banks.

Ethereum - a network for applications and smart contracts that is decentralized.

Even though Bitcoin started the crypto revolution, Ethereum was the one that made it a true industry. Because of its unofficial status as the "world standard" for decentralized applications (DApps), smart contracts, and the introduction of the ERC20 token standard, Ethereum is currently the most popular

distributed computing platform in the world.

The building blocks of Ethereum applications are smart contracts. On the blockchain, they are computer programs that allow traditional contracts to be converted into digital ones. The structure of smart contracts is extremely precise, based on an if this, then that logic. This means they behave exactly as programmed and cannot be altered.

Blockchain-based assets like utility tokens, which give holders the right to use DApps or preferential access to services offered by cryptocurrency ecosystems, online games like CryptoKitties, and security tokens, which transfer investors' shares in the company issuing the token, are based on the ERC20 standard and smart tokens.

IOTA - a platform for connecting IoT resources and services.

IOTA is the first distributed ledger built for the IoT"Internet of Things" - a network for exchanging value and data between humans and machines. Using smart contracts, physical devices connected to the internet can make payments and other transactions.

An example of a reallife use case for IOTA is its partnership with a prominent car manufacturer to test its "smart wallet" technology in connected car services. Mobile phones can be used to pay for road tolls, smart charging, or parking fees using credits earned by drivers. Various entities, such as highway departments, road maintenance authorities,

and others, receive these credits by enabling their vehicles to report on road conditions.

Digitizing precious metals with assetbacked tokens

The intrinsic value of asset-backed tokens is directly linked to the physical assets backing them up, unlike utility tokens. Tokenization

enhances the market liquidity of physical assets, making it easier for people to trade and invest.

Liquidity refers to the ease and speed with which assets are bought and sold. Purchase processes can be made much more efficient and quicker by digitizing real-world assets like real estate or cars. The digitization of assets also opens

markets to investors who weren't previously able to participate. In contrast to traditional financial institutions, tokenizing physical assets allows for an extremely high degree of fractionalization - that is, the asset can be divided into numerous small pieces.

Investing in fractional ownership of an asset allows all parties to benefit

from their investments in proportion to the fractions they own and requires only a small amount of funds. Traditional financial institutions generally restrict clients with insufficient funds from making investments, but tokenization allows people to start investing with as little as $100.

StablecoinsConnecting crypto to fiat.

The purpose of stablecoins was to eliminate the volatility of traditional cryptocurrencies by maintaining a consistent value. Typically, stablecoins are tied to the US dollar or Japanese yen and are referred to as "fiat-backed" stablecoins. Stablecoins may also be pegged to other cryptos called "crypto-backed," or

physical items are known as "commodity-backed."

A regulated financial entity should hold the fiat currency or asset backing up the stablecoin. Traders use stablecoins like Tether and USD Coin, pegged to the US dollar, to move quickly between cryptocurrencies.

Stablecoins have the benefits of cryptocurrencies without the volatility of prices since their value fluctuates alongside the value of another asset. Stablecoins are mainly used by cryptocurrency traders who want to quickly switch between volatile cryptocurrencies and stable assets.

If you wanted to trade Bitcoin for Ethereum without losing too much

value, you'd need to exchange it without losing too much value. In anticipation of the Bitcoin price dropping, you exchange your Bitcoins for a stablecoin such as Tether or USD Coin. In addition, stablecoins can also provide people living in areas marked by economic turmoil, unstable domestic currencies, and insufficient access to banking with a means of transferring value.

Technology and investment democratization are driving forces behind the blockchain industry. It will be crucial for cryptocurrency use cases to succeed in the future for global regulators and industry professionals to work together to promote the adoption of digital assets in everyday life.

of the week

Crypto's Undeniable Use Case

In this episode of Empire, Jason and Santi are joined by Erik Voorhees, the founder of Shapeshift and OG of the crypto industry.

50 www.cryptoweeklymag.comOctober 2022 | Volume 41 Erik believes crypto can change the world, and this episode explores his thesis on Bitcoin's future, on-chain maximalism, DAO structures and crypto's path to adoption.

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