China' Comprehensive Crypto Crackdown

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The biggest crypto news and ideas of the day
Sept. 24, 2021
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Today' must-reads
Top Shelf

DEJA VU? Chinese authorities ordered a fresh crackdown on crypto mining
and outlawed virtually all crypto trading activities on Friday. The People'
Bank of China posted a list of forbidden activities – reiterating much of what
was said in May, and adding new restrictions. Simultaneously, China' National
Development and Reform Commission set out a plan to phase out mining entirely.
* In short: Banks and other financial institutions cannot offer crypto services, websites and apps cannot host cryptocurrency information and staff for overseas-headquartered crypto companies may be investigated for knowingly participating in the industry.
* More on the "Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Trading" signed by China' top financial and cyberspace regulators.

SOUTH KOREA: Just hours before the clock runs out, dozens of crypto
exchanges in South Korea have yet to register with the nation' anti-money
laundering authority under new virtual asset
regulations.
Full registration requires security certification with the Financial
Intelligence Unit as well as partnerships with banks for security purposes.
The rules seem to benefit incumbents: As of 2 a.m. ET, only the country' four
biggest exchanges, Upbit, Bithumb, Coinone, and Korbit, had inked deals with
banks, CoinDesk' Eliza Gkritsi reported.

TWITTER TIPS: Twitter rolled out BTC
tipping
on Apple' iOS yesterday, allowing users to link Bitcoin addresses and
Lightning Network addresses to their profiles to easily send and receive the
cryptocurrency. Android functionality is coming "soon," as well as NFT
verification for profiles. Strike, the company that built the technological
layer behind Twitter' tipping feature, is releasing it as an open
API.

TIMELESS ISSUES: Yesterday afternoon, TIME Magazine announced a new NFT
collection offering "unlimited access" to its website through 2023. Dubbed
"TIMEPieces," the collection consists of 4,676 tokens tied to digital
artworks, each priced at .1 ETH, or around $310. The mint clogged
Ethereum
– one buyer paid $70,000 in gas fees, more than the value of the series –
demonstrating the growing problem of bots and scalpers in NFT markets.

LIFELINE: The Future of Life Institute, a non-profit organization whose
endgame seems to be immortality, has named two fellowship
programs
after Ethereum creator Vitalik Buterin. The Vitalik Buterin Ph.D. and
postdoctoral fellowships, granted for work on safety issues in artificial
intelligence, will provide up to $40,000 a year for five years and will cover
tuition fees.
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Overheard on CoinDesk TV...
Sound Bites

"This really shows a diminishing power of China over the market and also a
maturation of crypto and bitcoin as well."
–Arca CEO Rayne Steinberg, on the market' reaction to the latest China crypto
crackdown, on CoinDesk TV'"First
Mover."
What others are writing...
Off-Chain Signals

* Crypto investors are asking big institutions for loans against their virtual assets, even in the staid world of bond investing, said TCW Group portfolio manager Bryan Whalen. While TCW doesn't want to meet such requests, other types of firms, including hedge funds and alternative asset managers, may be more receptive, he said. (Annie Massa/Bloomberg, paywalled but the nut is here.)
* WSJ' Dave Michaels looks at Grayscale' "DeFi trust" in light of an increasingly aggressive SEC
* Decentralized Pictures – a new project from Frances Ford Coppola' fabled American Zoetrope production company – is itching to leave beta (R. D. Danes/The Defiant)
* Jeff John Roberts profiles the power couple behind Tezos (Decrypt)
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Putting the news in perspective
The Takeaway

Twitter Just Became Crypto' Biggest Flywheel

The past four months have been full of transformational moments for crypto.
From El Salvador' adoption of bitcoin as legal tender to the political
firepower that manifested during the U.S. Congress' infrastructure bill
debate, it feels like the ideas and predictions that I've been covering for
nearly a decade are starting to become reality.

I think Thursday' announcement of new crypto features on Twitter is of a
similar significance. First up is a tipping feature that will connect profiles
to Bitcoin and Lightning Network addresses (as well as other payments
services). The service isn't available on Android yet, so I haven't been able
to use it. But early glimpses show a streamlined and intuitive experience that
looks set to smoothly onboard new bitcoin users. Twitter also says it will
implement non-fungible token (NFT) verification on the platform soon, though
no firm timeline was announced.

This will be the largest integration yet of crypto with an existing,
mainstream digital service (aside from crypto features in financial apps like
RobinHood and PayPal). And the fact that it' Twitter making the first move
could hardly be more bullish.

It' true that Twitter, with about 360 million monthly active users, is far
from the largest social network in the world – it' smaller than even
Pinterest, with about 450 million
MAU,
and can't hold a candle to Facebook, which is approaching 3 billion MAU. But
more important than raw size is that Twitter (though this is subjective) is
the social network of choice for influential figures across a variety of
fields, and the place where a lot of those leaders talk most impactfully
amongst themselves. And they're surrounded by a huge resource in the form of
Crypto Twitter, which by happy coincidence has lately (at least from where I'm
standing) become notably less toxic and more supportive.

That said, I'm actually not certain the Bitcoin integration is the biggest
part of the Twitter news. The friendly-looking Lightning interface is
exciting, but Twitter has never prevented posting public crypto addresses to
profiles, so in some sense it' more an upgrade than an entirely new option.

NFT verification, however, will be a step change. The feature is still in
development but it will provide some way of confirming and visually conveying
that an NFT displayed in a Twitter profile is authentic, and that it is owned
by the same person as the Twitter profile. As we've discussed in these pages
at length, NFTs are a novel and powerful
way
to flex and show community affiliations online, but this integration will make
those claims vastly clearer and more powerful.

Finally, it' very good news these features, which use truly public blockchain
infrastructure, will make it to market before Facebook' weird, still-floundering attempt to create a knockoff, pseudo-crypto called
diem.
Diem has always, in part, been a gambit to leverage Facebook' size to ensnare
users and advertisers in a payment system over which Facebook would have
substantial influence. Twitter' embrace of a system it doesn't control
demonstrates that a better future is possible.
–David Z. Morris
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The Chaser...

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