Unchained

Earlier this week, Ethereum co-founder Vitalik Buterin and four co-authors published a paper describing a smart contract protocol called privacy pools that would enable crypto users to associate their funds with those being used for legitimate purposes versus those being used in criminal activity such as hacks or money laundering. The protocol addresses one of the main shortcomings of coin mixer Tornado Cash, which has been sanctioned by the U.S. government.  Chainalysis chief scientist Jacob Illum, one of those co-authors, discusses the impetus for the paper, the technology behind privacy pools and how they would work in practice, who would provide some of the necessary organization to operate the pools, and some of the early criticisms of the paper. Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Show highlights: what the current state of crypto privacy is and what the motivation was to write this paper what privacy pools are and how they work how zero-knowledge proofs are the key technology behind privacy pools what the role of association set providers is in making this new technology work what would happen in different potential scenarios, such as a "bad address" being discovered after a transaction has been made how the protocol would protect the privacy and identity of the users how law enforcement, credit score agencies and other organizations could have "special viewing privileges" of transactions, according to Jacob how the community has been reacting to the recently published paper Jacob’s response to criticisms the paper has received from industry players why Chainalysis participated in the paper given that many people see them as 'anti-privacy' Thank you to our sponsors! Crypto.com Arbitrum Foundation Thales DAO Toku Guest Jacob Illum, chief scientist at Chainalysis Links Unchained: Tornado Cash Cofounder Arrested, Another Sanctioned by U.S. Government CoinDesk: Crypto-Mixing Service Tornado Cash Blacklisted by US Treasury Blockchain Privacy and Regulatory Compliance: Towards a Practical Equilibrium Matt Corallo’s tweet Crypto lawyer Preston Byrne’s tweet Previous coverage of Unchained on Tornado Cash: The Chopping Block: 'Code Is Law' Is 'Obviously Not How Anything Works Ever' The Chopping Block: Why DeFi May Be Over-Complying With Tornado Cash Sanctions Preston Van Loon on Ethereum’s Merge and His Lawsuit Against TreasuryGiven the Sanctions on Tornado Cash, Is Ethereum Censorship Resistant? The Chopping Block: Did OFAC Overstep by Sanctioning Tornado Cash? Tornado Cash Sanctioned. Did the Government Overstep Its Bounds? Learn more about your ad choices. Visit megaphone.fm/adchoices

8 Sep 202338min

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tarun Chitra, and Robert Leshner chop it up about the latest news. This week, the group sits down with Circle CEO Jeremy Allaire to discuss how the USDC stablecoin issuer responded to the banking crisis that started at the end of 2022, what PayPal’s new stablecoin offering means for Circle and the rest of the industry, and whether central bank digital currencies (CBDCs) represent real competition for stablecoins.  Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show highlights:  how the collapse of FTX and other companies led to a de-banking crisis for the industry what the Circle Reserve Fund is how the banking crisis in early 2023 caused a "flight from safety" how regulatory clarity has improved in the aftermath of the banking crisis why Jeremy actually hopes PayPal's recently launched PYUSD is successful why Tarun believes Central Bank Digital Currencies (CBDCs) are one of the most "boring concepts" within the industry whether CBDCs pose a threat to businesses that issue stablecoins such as Circle Whether the status quo on stablecoins in the U.S. of knowing-your-customer on redemption and minting, but not on holding, is likely to continue.  Hosts: Haseeb Qureshi, managing partner at Dragonfly  Robert Leshner, founder of Compound Tarun Chitra, managing partner at Robot Ventures Guest: Jeremy Allaire, CEO of Circle Disclosures Links The Chopping Block: Was Crypto Just Debanked? Will PayPal's PYUSD Steal Market Share From Tether and Circle? The Fall of SVB: What Happened and How It Affects Crypto Learn more about your ad choices. Visit megaphone.fm/adchoices

7 Sep 202352min

Friend.tech, a decentralized social media platform in which you can buy and sell “keys” in your friends on X (formerly known as Twitter) whose value can go up and down, has become a viral sensation, racking up as many as 100,000 users since launching on August 10. Should keys be considered securities and thus regulated by the SEC? How should gains and losses be taxed? And how private should users assume their communications and transactions on the platform are? Securities and banking law professor at George Mason Law School JW Verret, and tax partner and co-head of the Digital Assets and Blockchain Practice at Fried Frank Jason Schwartz, share their thoughts.  Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Show highlights: how Friend.tech works and how the price of keys is determined how Friend.tech is different from many other past attempts at creating a decentralized social media platform whether the keys offered by Friend.tech could be deemed securities by the SEC what wrapped Friend.tech tokens are and whether these could be considered securities why the traditional approach to crypto taxation is bad for most Friend.tech taxpayers what the tax implications of Friend.tech airdrops are what Friend.tech users should assume about their privacy on the app what the future holds for Friend.tech Thank you to our sponsors! Crypto.com Arbitrum Foundation Toku Guests: J.W. Verret, Associate Professor of Law at George Mason Law School Previous appearance on Unchained: Coinbase's Legal Action Against the SEC: How It Will Likely Unfold Jason Schwartz, tax partner and co-head of the Digital Assets and Blockchain Practice at Fried, Frank Friend.Tech Shows How Complicated Taxing Crypto Transactions Can Be by Jason Schwartz Links Unchained:  Friend.tech Threatens to Penalize Users That Move to Copies or Forks Friend.tech Clarifies That Database of 100,000 Users Was Not Leaked What Is SocialFi? A Beginner’s Guide The ‘Howey Test’ and the Debate Over Crypto's Legal Status - Crypto Security vs Commodity CoinDesk: Friend.tech Attracted NBA Influencers. So Why Does Everyone Think Crypto’s Latest Trend Will Die? Decrypt: Friend.tech Renames Its Token—But Is It Even Legal? Learn more about your ad choices. Visit megaphone.fm/adchoices

5 Sep 202358min

This week’s emphatic ruling in favor of Grayscale in its suit against the SEC to convert its massive bitcoin trust into an ETF generated plenty of hopium among the bitcoin faithful that a spot bitcoin ETF will get approved soon and open a flood of investment in bitcoin. What are the odds of that truly happening now, though, and if it did, how much additional money could wind up being invested in bitcoin as a result? Also, which companies’ applications would get approved first and how would the various products compete with one other? Bloomberg’s senior ETF analyst Eric Balchunas separates the hype from the reality in answering these questions and more. Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Show highlights: why Bloomberg increased the likelihood of a Bitcoin ETF being approved this year from 50% to 75% how the ruling exceeded the expectations of the legal analysts at Bloomberg why it's important that the ruling was a bipartisan decision whether, from a legal perspective, it's "weird" to deny a spot ETF but approve a futures one how a spot Bitcoin ETF would act as a bridge for Baby boomers to invest in crypto what the two most likely SEC responses to the ruling are what the likely timelines for an SEC spot Bitcoin ETF approval or disapproval would be whether Gary Gensler's agency will approve Ethereum futures ETFs in the U.S. why BlackRock's and Fidelity's ETFs are more likely to be approved first, according to Eric how the different ETFs would compete in the market why spot Bitcoin ETFs pose a serious threat to crypto exchanges' businesses Eric's estimate of how much additional money would pour into Bitcoin if a spot Bitcoin ETF is approved Thank you to our sponsors! Crypto.com Arbitrum Foundation Thales DAO Toku Guest Eric Balchunas, Senior ETF analyst at Bloomberg Intelligence Links Previous coverage of Unchained on Grayscale and ETFs: Why Grayscale Is Suing the SEC Over Its Denial of a Bitcoin ETF Bitwise’s Latest Plans to Get a Bitcoin ETF Approved DCG’s Dilemma: Should It Sell Its GBTC Holdings to Repay Gemini? Gemini vs. DCG Is Heating Up. Could Gemini Force Genesis Into Bankruptcy? ‘The Last Big Whale’: Why the Crypto Contagion of 2022 Eventually Hit Genesis Unchained:  Grayscale Wins Lawsuit Against SEC Over Denial of Bid to Convert GBTC Into a Bitcoin ETF Bitcoin ETFs Explained: What Are They & How Do They Work? Learn more about your ad choices. Visit megaphone.fm/adchoices

1 Sep 202347min

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, and Tarun Chitra, chop it up about the latest news. This week, the gang goes in depth with Coinbase chief legal officer Paul Grewal to discuss Grayscale’s win in its court case against the SEC, Coinbase’s ongoing dust-up with the SEC, the onerous new crypto reporting regulations proposed by the U.S. Treasury, and the unsettling legal arguments behind the government crackdown on Tornado Cash.  Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show highlights:  why Paul considers the court ruling in favor of Grayscale in its case against the SEC “nothing short of monumental” how much it actually matters if a spot Bitcoin ETF gets approved what options the SEC has now to pursue its position why BlackRock may have applied for its spot Bitcoin ETF when it did how the SEC 'changed its tune' and went from approving Coinbase’s S1 to suing them in a federal court, according to Paul how the collapse of FTX may have affected the SEC’s view of Coinbase why Coinbase has decided to wage its battle against the SEC so publicly  when Paul expects a final decision to be made on the SEC’s lawsuit against Coinbase what Paul would do to regulate the digital asset industry if he were Gary Gensler whether the Treasury Department’s extensive proposed reporting regulations mean the crypto industry is “screwed”  why Paul believes that the government’s crackdown on Tornado Cash is "dead wrong on the law" Hosts Haseeb Qureshi, managing partner at Dragonfly  Tom Schmidt, general partner at Dragonfly  Tarun Chitra, managing partner at Robot Ventures Guest: Paul Grewal, chief legal officer of Coinbase Previous appearances on Unchained:  Just a Coincidence? Coinbase and Polygon Lawyers See Bad Omens in SEC Crackdown Coinbase’s Top Lawyer Calls SEC Wells Notice a ‘Massive Overreach’ Disclosures Links Unchained:  Grayscale Wins Lawsuit Against SEC Over Denial of Bid to Convert GBTC Into a Bitcoin ETF SEC Issues Coinbase a Wells Notice Tornado Cash Cofounder Arrested, Another Sanctioned by U.S. Government Bitcoin ETFs Explained: What Are They & How Do They Work? Coinbase: We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead. TechCrunch: SEC settles first NFT enforcement case, fines LA media company $6M The Block: Treasury, IRS release proposed crypto tax reporting rules Learn more about your ad choices. Visit megaphone.fm/adchoices

31 Aug 20231h 4min

Oracles are all about bringing important data (mostly asset prices) onto the blockchain. As such, they’re a key part of decentralized finance. But oracle provider Pyth sees room for improvement as it relates to being more real-time than crypto incumbents like Chainlink. Mike Cahill, the CEO of a brand new Pyth-linked firm called Douro Labs, joins the show to explain the opportunity he sees in building better oracles. Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Show highlights: how Pyth Network works and what the upcoming Perseus upgrade consists of Mike’s background in traditional finance why oracles are necessary in crypto and what the challenges are for oracle providers whether it’s hard for traditional institutions to participate in crypto protocols what the four types of oracle solutions are and how they differ how Pyth determines which data providers are allowed in the network and how that will change if it becomes more decentralized why Mike compares the scalability of Pyth to how Facebook grew why Douro Labs is being launched and why it will be solely focused on Pyth for now the factors driving Pyth’s growth, according to Mike Mike’s opinion on the current state of the crypto market and what the endgame is for Pyth Thank you to our sponsors! Crypto.com Arbitrum Foundation TOKEN2049 Guest: Mike Cahill, CEO at Douro Labs. Links What’s the Difference Between Pyth and Legacy Oracles Unchained:  What Are Blockchain Oracles? Learn more about your ad choices. Visit megaphone.fm/adchoices

29 Aug 202344min

On Wednesday, the U.S. Government indicted Tornado Cash developers Roman Storm and Roman Semenov for three counts of conspiracy involving a staggeringly large number: $1 billion in criminal proceeds. The U.S. Department of Justice attached North Korean hackers to a large portion of this sum, alleging that Tornado’s privacy tech enabled nefarious deeds. Amanda Tuminelli, chief legal officer of the DeFi Education Fund, joins the show to assess whether the U.S. Government got it right or is merely misguided in its understanding of how blockchain technology works. Should Tornado Cash devs be held to account for the criminal use of their software? Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Show highlights: why the U.S. Government says the cofounders of Tornado Cash facilitated money laundering what the difference is between the concealment of potential proceeds of a crime versus the facilitation of that crime why Amanda believes that if the government understood the technology they wouldn’t be making these allegations whether the charges and the indictment will have implications for all software developers whether these allegations could mark the “end of DeFi” in the U.S. whether front-end applications in DeFi will need to mandate KYC checks for all users how the charges appear to contradict earlier FinCEN guidance how the DOJ will use the involvement of North Korean hackers to “make it look bad” for the jury what the future of the case will look like and whether there will be a motion to dismiss the indictment Thank you to our sponsors! Crypto.com Arbitrum Foundation Thales DAO Guest Amanda Tuminelli, Chief Legal Officer at DeFi Education Fund Links Previous coverage of Unchained on Tornado Cash: The Chopping Block: 'Code Is Law' Is 'Obviously Not How Anything Works Ever' The Chopping Block: Why DeFi May Be Over-Complying With Tornado Cash Sanctions Preston Van Loon on Ethereum’s Merge and His Lawsuit Against Treasury Given the Sanctions on Tornado Cash, Is Ethereum Censorship Resistant? The Chopping Block: Did OFAC Overstep by Sanctioning Tornado Cash? Tornado Cash Sanctioned. Did the Government Overstep Its Bounds? Unchained:  Tornado Cash Cofounder Arrested, Another Sanctioned by U.S. Government OFAC Updates Tornado Cash Sanctions To Include DAO Coin Center Sues the US Treasury Over Tornado Cash Sanctions Coin Center: New Tornado Cash indictments seem to run counter to FinCEN guidance Learn more about your ad choices. Visit megaphone.fm/adchoices

25 Aug 202333min

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest news. This week, Coinbase’s Jesse Pollak talks about the ambitious goals of Base, the new Optimism–based blockchain from the publicly traded crypto giant. With the viral success of Base-based Friend.Tech, Jesse discusses the Base team’s ambitious goals to onboard “a million builders, a billion users.” Is this the long-heralded path to scaling Ethereum? Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show highlights:  why Jesse says it’s still “day one” for Base the reason behind Base’s “one million developers, one billion users” slogan what the advantages of Base are compared to other layer 2 blockchains how Base accounts for the fact that it doesn’t have a token to incentivize developer activity how MEV bots represent a big part of the transactions on Base, especially with the emergence of Friend.Tech why Friend.Tech found early success despite being similar to previous efforts  Jesse’s response to the fact that fault proofs are not live on any of the OP Stack chains how much of the revenue generated by Coinbase’s sequencer will be distributed to Optimism whether Base and Optimism Mainnet compete with each other  how layer 2 chains are choosing different design paths and how that differentiates them Hosts Haseeb Qureshi, managing partner at Dragonfly  Robert Leshner, founder of Compound Tom Schmidt, general partner at Dragonfly  Tarun Chitra, managing partner at Robot Ventures Guest Jesse Pollak, lead contributor at Base Disclosures Links Unchained: Coinbase Launches a New Layer 2 on Ethereum CoinDesk: Social Platform Friend.tech Gains 100K Users in Days Even in Depths of a Bear Market TechCrunch: Friend.tech hype is skyrocketing, but will it actually reach the stars? Decrypt: Base Daily Transactions Outpace Ethereum on Friend.tech Frenzy Learn more about your ad choices. Visit megaphone.fm/adchoices

24 Aug 202359min