CoinDesk Crypto

Bitcoin is a tool to avoid police extortion in Nigeria, centralized social media is being censored amid Thai protests and Federal Reserve Chairman Jerome Powell said the central bank will readdress its previous 2% inflation target over the next decade.

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Top shelf

Police-resistant 
To combat extortion and coercive policing in Nigeria, some, like Nigerian programmer Adebiyi David Adedoyin, are turning to bitcoin. Human Rights Watch has documented a trend in the country where police detain citizens, determine their life savings through force entry to their phones and seize it. It almost happened to Adedoyin. “The money they collected to let me go in that case would have been a lot more if I had more money in my account. But I had most of my money in bitcoin,” Adedoyin said. Police are less likely to look for a bitcoin wallet, he said. 

Related: First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole

Bitcoin fund
Fidelity Investments’ chief strategist, Peter Jubber, is launching a new bitcoin index fund. Disclosed in a Wednesday morning filing with the Securities and Exchange Commission, “Wise Origin Bitcoin Index Fund I, LP” has a $100,000 minimum buy-in and is the latest example of Wall Street veterans warming up to bitcoin. Wise Origin links back to Fidelity Investments via Jubber and Fidelity’s brokerage service and distribution subsidiaries, both of which are set to receive sales compensation from the new fund. It also shares a Boston office building with Fidelity, Danny Nelson reports. 

Centralized censorship
Thailand’s anti-government protests highlight the vulnerabilities of major social media platforms like Twitter and Facebook, CoinDesk’s Sandali Handagama reports. On Wednesday, Thailand’s digital minister Puttipong Punnakanta said authorities will continue an internet crackdown – including Facebook censorship and potential interference on Twitter – in an attempt to limit a groundswell of distributed political action in the country.

Exchange extortion
The New Zealand stock exchange has halted trading for the third day in a row as a result of criminal cyberattacks. Targeted disruption from malicious actors have knocked the NZX exchange’s hosting service Spark has knocked it intermittently offline. The criminals, potentially connected to the Amada Collective and Fancy Bear cybergangs, are demanding bitcoin in order to cease the attacks. Over recent weeks, the group has also attempted to extort bitcoin from PayPal, MoneyGram, YesBank India, Braintree and Venmo,  CoinDesk’s Sebastian Sinclair reports.

Blockchain on the LINE
Messaging giant LINE has launched a wallet for users to manage digital assets and a blockchain platform where developers can issue their own tokens, tokenize digital assets and run decentralized applications (dapps). The wallet services are only available in Japan, at launch, where LINE is particularly well-known. The company, whose messaging app boasts 84 million users, aims to leverage its existing network to jumpstart the development of its token economies and accelerate adoptions of many dapps built on its proprietary blockchain platform – setting it apart from other messaging app blockchain experiments.

Quick bites

• How OSL Became the First Crypto Exchange to Win Over Hong Kong Regulators (Ian Allison/CoinDesk)
• NASA Is Bankrolling a Blockchain for Quadcopter Communications (Danny Nelson/CoinDesk)
• Is This the Blockchain Firm That Will Get Enterprise to Finally Embrace Open Networks? (Ian Allison/CoinDesk)
• Libra Taps Ex-Homeland Security General Counsel as New Legal Chief (Sebastian Sinclair/CoinDesk)
• Cheap Bitcoin Mining May Be Coming to an End in Mongolia (Staff/Decrypt)

At stake

Related: Blockchain Bites: Major Acquisitions, Bitcoin Futures Liquidations and the SEC’s New Rules

Inflation watch
Federal Reserve Chair Jerome Powell announced new measures to control inflation at his annual speech on the U.S. central bank’s policy approach during the Jackson Hole symposium Thursday. 

The Fed has left itself flexibility to change its monetary policy plans in the future, including letting inflation rise above its traditional 2% target. In his speech, Powell didn’t rule out any use of its monetary policy tools, such as a broader expansion of its balance sheet to keep markets from tumbling if the economy worsens and bankruptcies increase.

It’s a speech that may have long-term implications on both bitcoin and ether, given the dollar’s relatively precarious position in the global financial system.

The implication for crypto is that the Fed will likely let inflation run hot for a few years, which could theoretically weaken the dollar and boost prices for bitcoin.

Thursday offers a reminder of just how dramatically once-slow-moving monetary forces have accelerated due to the devastating economic toll of the coronavirus pandemic. The national debt now stands at $26.5 trillion. Digital currencies are now being studied and pursued by central banks in China, the U.S. and just about everywhere else. Goldman Sachs recently warned the dollar risked losing its dominant reserve status, CoinDesk’s Bradley Keoun reports. 

Market intel

Flat options
Bitcoin’s options market foresees little price turbulence in the short term, CoinDesk’s Omkar Godbole reports. Bitcoin’s implied volatility on one-month options, a gauge of the market’s expectations for price movements, fell to the lowest level since July 25. Short-term price expectations have declined sharply from 70% to 52% over the past two weeks. This wait-and-see approach is happening ahead of Federal Reserve Chair Jerome Powell’s Jackson Hole address, in which he’s expected to signal tolerance for high inflation – a move that could weaken the U.S. dollar and propel bitcoin higher. 

Tech pod

Back to the Baseline?
Baseline Protocol, where corporates can use the Ethereum public mainnet as a common frame of reference among different systems of record, has released its Version 1.0. The way enterprise blockchains typically work is by running data on-chain like a traditional workhorse database – a grave error of judgment, John Wolpert of ConsenSys said. Announced Wednesday, the Microsoft-backed project – developed by Paul Brody, blockchain lead at EY, and Wolpert– uses Ethereum only for hashing and ordering events, CoinDesk’s Ian Allison reports.

DeFi debate
DeFi Pulse, run by the Concourse Open Community, has become the chief source of knowledge in the decentralized finance (DeFi) space, pionering a metric called, “Total Value Locked.” TVL represents the dollar value of all the tokens locked in the smart contract of a given decentralized lending project. While a convenient way to rank projects, it also raises controversies around the value in locked-in value. 

Op-ed

NFT games?
Leah Callon-Butler, a CoinDesk columnist and director of Emfarsis, reveals the unknown world of Filipinos using non fungible tokens (NFTs) to earn a living during the coronavirus pandemic. A popular Ethereum-based game, Axie Infinity, where players breed, raise, battle and trade adorable digital critters called Axies, is providing pathways out of poverty and helping spread the word about novel technology, she said. “It’s food on the table, it’s money for their families and it’s saving them when they cannot even leave the house during this pandemic,” Gabby Dizon, the Filipino co-founder of mobile app development company Altitude Games, said.

Podcast corner

Distributing dictator’s horde
Ruben Galindo, CEO of the P2P network Airtm, joins the latest The Breakdown to discuss how the crypto-powered network is teaming with Venezuela’s opposition government to distribute $18 million in funds the U.S. seized from the Maduro dictatorship.

Who won #CryptoTwitter? Related Stories

• First Mover: Binance’s New DeFi Futures Let Crypto Traders Bet on Decentralization
• Blockchain Bites: Bitcoin’s ‘Rich List,’ Ethereum’s Volatility, DeFi’s Shakeup

Coinbase Custody and Bison Trails announced on Wednesday that users would now be able to stake their solana (SOL) tokens on Bison Trails platforms. 

• In an announcement posted on its website, blockchain infrastructure firm Bison Trails said this would allow SOL token holders to partake in the Solana network through secure, offline storage to stake the tokens. This would allow users to move the SOL token to Bison Trails’ platform.
• While Solana has yet to determine the reward rate for users who choose to stake their tokens, Bison Trails CEO Joe Lallouz said there would be a “warmup” period for the staked tokens allowing them to become active so token holders can start earning rewards.
• In April, Coinbase Custody, the digital asset custodial arm of the San Francisco-based cryptocurrency exchange, also announced it would support staking of Polkadot tokens through Bison Trails’ platform.

Read more: Coinbase Custody to Support Polkadot Staking With up to 20% Returns

Related Stories

• Blockchain Project Qtum Moves to Boost Network Participation With Offline Staking
• Binance Launches DeFi Staking With Cryptos Kava and Dai
• CoinDCX Becomes First India Exchange to Offer Users Crypto Staking
• First Mover: Ethereum’s Transition to Staking Could Push More Traders to Use Derivatives

A “critical bug” has left 13% of Ethereum nodes useless, highlighting what is a growing chink in the network’s armor: client centralization.

First hinted at in May and June on GitHub, minority clients Parity-Ethereum and OpenEthereum versions 2.7 and later contain an unknown critical bug that stops nodes from syncing with the network’s latest block.

Such bugs would be a normal issue if it weren’t for the length of time it will take to fix (weeks to months) and additional strain it’ll place on the majority client, Geth.

Related: Developers Eye Mid-September for Ethereum, Polkadot Bridge Proof-of-Concept

Clients themselves are different programming language implementations of blockchain software. Running multiple implementations together is considered a way to thwart network attacks by having concurrent yet separate systems running.

It’s proven to be a helpful model historically. For example, the 2016 Shanghai attacks saw Geth momentarily shut down following a distributed denial of service (DDOS) attack. Parity-Ethereum managed to keep the network afloat single handedly.

The Ethereum Foundation-backed Geth client now supports some 80% of the $43 billion network. This dependency is a recognized attack vector that has forced developers to postpone the July hard fork, Berlin, so minority clients could gain some traction. 

Read more: Ethereum Developers Delay Berlin Hard Fork to Stem Client Centralization Concerns

Related: Why DeFi Pulse’s Key Metric Is So Simple It’s Confusing

Yet, eight weeks later Geth’s pie share has only grown larger. And it’s likely to climb as these broken node operators have a decision on their hands: turn off their client, back up to an old client version or swap to another client entirely.

Geth did not return questions for comment by press time.

Hot potato

It was an open secret among Ethereum developers that the Parity-Ethereum client was not up to spec. Indeed, OpenEthereum project manager Marcelo Ruiz de Olano told CoinDesk in a private message that his team found both unresolvable and “very severe issues affecting memory and disk usage.”

Parity Technologies, which originally founded the Parity-Ethereum client, stepped away from maintenance in December 2019, citing costs. The client was then handed off to a decentralized autonomous organization (DAO) of developers funded by ConsenSys spinout Gnosis, called OpenEthereum.

A cursory glance comparing Geth’s and Parity-Ethereum’s codebase commits on GitHub, particularly after the December transition, leads to some more questions about the latter’s codebase integrity, as noted by non-custodial marketplace LocalCryptos in a May tweet.

Read more: OpenEthereum Supported 50% of Ethereum Classic Nodes. Now It’s Leaving the Project

In the meantime, the OpenEthereum team has urged node operators to turn back the clock to 2019’s version 2.5 to bring nodes back online. De Olano said he has four engineers on the project alone and hopes to have a workable client by mid-September. Still, client diversification will remain an issue without additional support, he said.

“Ultimately this is a community project to increase the client diversity in Ethereum and everyone’s help is appreciated,” de Olano said.

Related Stories

• BitGo Weighs Building a Sidechain for WBTC as Ethereum Fees Climb
• Ethereum Tokens Worth $1B Vulnerable to ‘Fake Deposit Attack’

Decentralized finance (DeFi) continues to expand beyond Ethereum with the help of top-tier investors.

Acala, a DeFi startup building on the Polkadot blockchain, has closed a $7 million simple agreement for future tokens (SAFT) led by Pantera Capital. Other investors in the funding round include 1confirmation, Arrington XRP Capital, ParaFi Capital, Coinfund, Spartan Capital and others.

Polkadot is a blockchain designed both to easily integrate with other blockchains and to host a number of independent but interconnected chains. Acala functions as what the Polkadot ecosystem calls a parachain, allowing it to define the logic of the Acala ecosystem independent of other parachains.

Related: Developers Eye Mid-September for Ethereum, Polkadot Bridge Proof-of-Concept

“Being able to customize chain logic and optimize for DeFi use cases are key,” Bette Chen, chief operating officer of Acala, told CoinDesk in an email.

We’ve also recently seen excitement about DeFi reaching Cosmos; EOS has long had its own version of MakerDAO; and even Tron is chasing the latest buzz (though a massive exit by the tether stablecoin suggests it may not be working).  

Read more: Proof-of-Stake Chains Team Up to Prove DeFi Is Bigger Than Ethereum

Acala’s lead use case is creating a stablecoin, aUSD, with an eye on a suite of DeFi applications. It’s already achieved locking up $52 million in value on its testnet, according to a blog post shared with CoinDesk in advance.

Related: First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole

“Polkadot empowers an ecosystem of … domain-specific parachains optimized for their use cases,” Chen wrote. “Acala is a parachain optimized for DeFi.”

Need for speed

DeFi has been ruled by Ethereum so far, but it’s also become a victim of its own success, with whopping gas fees eating up returns for smaller investors.

“From a user perspective, they just want quality products on a fast chain and low fees. Ethereum is currently failing at the last two. New chains might be better,” Arrington XRP Capital founder Michael Arrington told CoinDesk.

That said, it doesn’t necessarily have to be that Ethereum loses users to Acala’s parachain for this investment to be a success. DeFi is still relatively small. There could be room across multiple blockchains.

“I don’t think DeFi will jump from Ethereum to Polkadot. They are two distinct communities that have users with different preferences,” Nick Tomaino of 1confirmation, another Acala investor, told CoinDesk in an email. “DeFi on Ethereum is here to stay and will continue to grow.”

As developers work to establish a bridge between Polkadot and Ethereum, Chen is also mindful of interoperability.

“We are working with teams building Ethereum bridges to fuel more cross-chain liquidity that’d benefit all DeFi users,” she wrote.

Read more: Developers Eye Mid-September for Ethereum, Polkadot Bridge Proof-of-Concept

Tomaino pointed in particular to an innovation on Acala, called Liquid DOTs (LDOTS), where users can both stake for staking rewards and also borrow against that stake.

“Staking is in a way competing with DeFi – users need to make a choice between staking yield and DeFi yield, as once an asset is staked, it cannot be used in other places,” Chen wrote.

Acala’s core function

Acala brings roughly the same mechanic to creating a stablecoin as that made famous by MakerDAO.

A user deposits an asset and borrows a portion of the value of that asset in the form of a newly minted token. On MakerDAO that’s DAI and on Acala that’s aUSD. This model has also been borrowed recently by Reflexer and Liquity.

Read more: Forthcoming Yield Farming Project Dispenses With Governance

Acala also has a governance token called ACA, that fills much the same role as MakerDAO’s MKR.

By adding a decentralized exchange (DEX) to its suite of products, Acala is also able to improve user experience for both loan creation and loan liquidation.

On the front end, the DEX means users can pay transaction fees in whatever coin they need. So, for example, if they were going to lock up renBTC to borrow aUSD, they could also pay for the transaction in a tiny amount of renBTC rather than finding some DOT to cover fees.

And if a liquidation occurs, backstopping it with a DEX should mean the liquidated users get the best price for their collateral, which means they should get the maximum amount returned.

In short, Acala has several moving parts: a staking derivative with LDOT, a DEX and a stablecoin, among other facets. 

Said Acala’s Chen: “The rationale behind the product suite we chose to build – we believe they are the minimum set of DeFi primitives we have to build in order to successfully bootstrap Acala and its ecosystem.”

In a press release, Paul Veradittakit, partner at Pantera Capital, wrote:

“Acala will become the DeFi hub for the entire ecosystem. The company will bring financial stability, liquidity and accessibility, enabling a mainstream audience for financial freedom.”

Related Stories

• Why DeFi Pulse’s Key Metric Is So Simple It’s Confusing
• Market Wrap: Bitcoin Braces for $700M in Options to Expire; Record $7B Value Locked in DeFi

Bitcoin whipsawed on Thursday after the Federal Reserve’s chairman signaled tolerance for high inflation, as expected. 

• The leading cryptocurrency jumped from $11,400 to $11,594 in 20 minutes to 09:30 a.m. ET only to give up gains in the next few minutes. At press time, bitcoin is trading near $11,380, down nearly 1% on the day, according to CoinDesk’s Bitcoin Price Index.
• The dollar index, which tracks the value of the greenback against majors, also faded the drop to 92.50 and now trades near 93.30.
• The negative correlation between the dollar and bitcoin has strengthened over the past few weeks.
• Federal Reserve Chairman Jerome Powell, while speaking at central bank’s annual Jackson Hole event, said that the central bank will now be willing to allow inflation to run higher than the 2% target before raising interest rates.

Read more: Commentary: Fed Chair Jerome Powell Details Inflation Target Changes

Related Stories

• Chainalysis Report Shows Healthy Crypto Usage in Venezuela
• Commentary: Fed Chair Jerome Powell Details Inflation Target Changes
• First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole
• Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech

Blockchain investment firm Digital Currency Group (DCG) has expanded into the bitcoin mining industry.

• The company – which also owns CoinDesk – announced Thursday the venture is already operating through a subsidiary called Foundry, an entity launched in 2019.
• Foundry provides cryptocurrency miners and equipment makers with “institutional expertise, capital, and market intelligence,” DCG said.
• It’s also “one of the largest bitcoin miners in North America,” per the announcement, and has provided “tens of millions of dollars” in financing to other mining operations.
• A DCG representative told CoinDesk that capital would primarily comprise equipment finance loans, but Foundry may also make investments given “the right opportunity.”
• Mike Colyer, previously a Core Scientific senior vice president, has been Foundry’s CEO since last October, according to his LinkedIn profile.
• “Foundry is bringing critical resources and guidance to an essential corner of the industry,” said Barry Silbert, DCG’s founder and CEO.
• DCG said it plans to invest more than $100 million into Foundry through 2021, as well as bring miners and manufacturers access to its network of companies.
• DCG said Foundry also aims to partner with major entities across mining and staking, and pledged to “work closely” with energy providers and governments to help these firms carry out their mining strategies.
• Foundry has been working in North America with China-based bitcoin miner manufacturer MicroBT over the last year, COO Jordan Chen said in the announcement.

Also read: Marathon to Buy Fastblock for $22M in Stock, Gaining Speed and Halving Bitcoin-Mining Costs

Related Stories

• ShapeShift Accuses Former Employee of Stealing $900K in Bitcoin
• More Than 95% of Crypto Futures Volume Is in Asia: Report
• Russia Is Blocking Bitcoin-Related Websites Again
• Developers Eye Mid-September for Ethereum, Polkadot Bridge Proof-of-Concept

The Venezuelan government’s push to create a cryptocurrency-centric economy appears to be working, but perhaps not in the way officials had hoped.

That’s the main takeaway of a new Latin America report by blockchain analytics firm Chainalysis. On Thursday, the startup revealed exclusively to CoinDesk that Venezuela ranks third in the world for crypto adoption, according to Chainalysis metrics, behind Ukraine and Russia. 

“The reason why it ranks so highly is the peer-to-peer marketplaces. That’s why Venezuela stood out to us,” Chainalysis research lead Kim Grauer said in an interview.

Related: Bitcoin Pops and Drops After Powell Introduces Average Inflation Targeting

The new data tells of a society so sick of hyperinflation that citizens are willing to turn to bitcoin (BTC) as a haven, Grauer said. They’re getting their bitcoin from peer-to-peer (P2P) exchanges such as Paxful and LocalBitcoins, centers of Venezuela’s burgeoning crypto scene.

Read more: A Rare Glimpse Into How Crypto Is Really Used in Venezuela

Meanwhile, Venezuela’s government-approved exchanges are struggling to gain traction.

Criptolago, an exchange owned by the Venezuelan state of Zulia and one of only seven exchanges with government approval, eked out just $380,000 in dollar-adjusted volume over the last year, according to Chainalysis research.

Related: First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole

LocalBitcoins reported $242 million in bolivar-to-bitcoin trading volume over the past 365 days, according to data site UsefulTulips. Over the same period, Paxful posted $311,000 in bolivar-to-bitcoin volume. (Paxful suspended payments with the Bank of Venezuela in June, citing U.S. sanctions.)

On-chain data suggests Criptolago is mostly being used by Venezuela’s elite, according to Chainalysis. The majority of its bitcoin transactions – 75% are over $1,000 – are simply too large for vast swaths of the cash-poor country to afford.

See also: What Venezuelans Think About Bitcoin and American Media

Experts consulted by Chainalysis speculated that the wealthy are using Criptolago to preserve their riches or even evade sanctions. No matter their reasons, usage is increasing: Criptolago’s bitcoin transfer volume in July 2020 was 13 times higher than it was one year ago. 

“From what we can identify, most of the activity on Criptolago is really large,” Grauer said. “It’s just those transfers that are driving the [exchange’s] growth overall.”

That a government-approved crypto exchange would not be citizens’ primary choice in a country wracked by hyperinflation and political turmoil was hardly surprising to the regional experts consulted for the Chainalysis report, Grauer said.

People are fearful of the government, of taxes, of surveillance, of fees, she said. They lack trust in their government, even if they have some faith in bitcoin.

Related Stories

• Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
• New Zealand Stock Exchange Hit Repeatedly by Cybercriminals Demanding Bitcoin

BestChange.ru, an aggregator of over-the-counter (OTC) cryptocurrency providers in Russia, is one of a number of websites being blocked by the country’s internet censorship agency, Roskomnadzor.

• This is the third block of the firm by the Russian authorities and comes as the result of a lawsuit brought by Roskomnadzor, according to BestChange’s head of public relations, Nikita Zuborev.
• BestChange lists the current prices and liquidity supply at the most popular OTC brokers in Russia and its neighboring countries, but isn’t involved in trades.
• Previous lawsuits were successfully overturned by BestChange in court, Zuborev said.
• While a court approved blocking of the websites including BestChange on Jan. 22, the firm was apparently only notified on July 23.
• “We always hear about the lawsuits ‘accidentally,’ we never get a subpoena [in time] and our lawyers always have to request a time extension to appeal first and then get to the lawsuit itself,” Zuborev said.
• The lawsuit also targeted cryptocurrency news websites and even an online flower shop, all of which, according to Roskomnadzor, were offering bitcoin for sale or goods in exchange for bitcoin.
• “The issuance and usage of bitcoin is decentralized and can’t be controlled by the state, which violates Russian laws,” the court's decision reads.
• BestChange said it plans to appeal the ruling and recommended users either employ a proxy to get around the block or go to the “mirror” version of the website using its .net domain.
• Bitcoin is not illegal in Russia, but it may not be used as a mean of payment, according to a bill recently signed into law by President Vladimir Putin.
• As far back as 2015, Russia was trying to limit access to crypto-related websites, blocking even resources like Bitcoin.org.
• The country’s central bank said it supported such measures in 2017 if platforms were selling cryptocurrency in Russia.
• BestChange saw almost 3.3 million views in July, with most traffic coming from Russia, Ukraine and Turkmenistan, according to SimilarWeb.
• OTC is the most popular way to buy crypto in Russia and the Commonwealth of Independent States countries, Zuborev said.

Also read: Moscow May Sell Footage From Public Security Cameras: Report

Related Stories

• Developers Eye Mid-September for Ethereum, Polkadot Bridge Proof-of-Concept
• Binance and Oasis Labs Launch Alliance to Combat Crypto Fraud and Hacks
• Libra Taps Ex-Homeland Security General Counsel as New Legal Chief
• NYSE Can Allow Firms to Raise Funding Through Direct Listings, Says SEC

“Protocol of protocols” Polkadot is weeks away from the release of the first viable bridge to the Ethereum blockchain, according to a Thursday announcement from developer house Snowfork. The bridge will roll out in phases and should be production-ready by March 2021. 

• Phase one of three slated for release mid-September will include “a working demo of two-way transfer of assets [and] state from Ethereum to our testnet chain and in reverse,” Snowfork developer Aidan Musnitzky told CoinDesk in an email.
• In a blog shared early with CoinDesk, Snowfork claims its bridge will be able to read Ethereum’s state trustlessly and vice versa. The team has identified two technical solutions to do so.
• The project’s announcement follows the deployment of Polkadot’s Rococo parachain testnet on Aug. 6.
• Snowfork itself is an “agency” of designers and developers who have previously worked on interoperability projects between Cosmos and Ethereum, the group said.
• Polkadot’s native asset, dot, also recently became available for those who participated in the network’s multiple public and private token sales since 2016. Dot subsequently broke the top 10 cryptocurrencies list when weighed by market cap at $5.5 billion, according to CoinGecko.

Read more: Polkadot Releases Rococo, Its Test Environment for Interoperable ‘Parachains’

Related Stories

• Russia Is Blocking Bitcoin-Related Websites Again
• Binance and Oasis Labs Launch Alliance to Combat Crypto Fraud and Hacks
• Libra Taps Ex-Homeland Security General Counsel as New Legal Chief
• Why DeFi Pulse’s Key Metric Is So Simple It’s Confusing

Leading crypto exchange Binance is launching the CryptoSafe Alliance platform in partnership with Oasis Labs, a data privacy company, to prevent and analyze cryptocurrency fraud.

• Calling it the first industry group of its kind, the exchange said the CryptoSafe Alliance will begin by offering post-mortem analyses of any hack or breach of contributing members, allowing members to have a better understanding of how to avoid similar attacks in the future.
• The alliance, which will be open to exchanges, blockchain protocols, cybersecurity experts and compliance firms, will maintain a so-called “blacklist” of member-submitted digital addresses.
• According to a statement announcing the alliance, addresses will be blacklisted when they are found to be complicit in criminal activity such as money laundering, fraud, extortion or theft. Members will then be able to integrate the blacklist into their services to protect their own users.
• “The CryptoSafe Platform is essentially a comprehensive database of wallet addresses, endpoint fingerprints and other related information as well as analysis tools and algorithms that support the fight against malicious behaviors including hacks,” the Binance security team said in a statement to CoinDesk.
• Eventually, the platform will also provide proactive real-time fraud analysis for alliance members. Doing so will make it easier for members to combat cryptocurrency hacks and thefts and, in doing so, generally improve the standard for the industry, according to the statement.
• “By forging closer ties between exchanges, security and compliance firms, and the crypto community, the CryptoSafe Alliance aims to strengthen the industry’s long-term defense against malicious behavior,” said Binance CEO Changpeng “CZ” Zhao.
• Oasis Labs’ decentralized, privacy-preserving software will be the primary infrastructure provider.
• “By using a combination of privacy-preserving technologies and a decentralized blockchain, the Oasis Network is able to ensure that the CryptoSafe Platform is trustless,” said Vishwanath Raman, Privacy Architect at Oasis Labs. “Each exchange that is part of the alliance can upload threat intelligence without it ever being shared with other partners.”
• To do this, all transactions, from uploading data through running queries, are maintained in an immutable append-only ledger with confidentiality so that each member, or their designated auditors, can audit only their transactions, Raman said.
• The platform supports the Bitcoin, Ethereum, TRX and EOS blockchains. Additional blockchain protocols and networks will be added later in the year.
• Fee structure is decided on a case-by-case basis. Members that meet the alliance requirements of contributing and consuming data will be able to join without any fees. Members that consume data without contributing will be charged, with exact details on fees to be released at a later date.

See also: Researchers Find Flaws in Security Protocols Developed by Major Crypto Exchanges

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• Developers Eye Mid-September for Ethereum, Polkadot Bridge Proof-of-Concept
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Crypto lender BlockFi is partnering with an independent crypto pricing provider to value customer deposits and collateral.

CF Benchmarks will price customers’ assets based on data it has sourced from five crypto exchanges that have passed the criteria in its methodology for pricing crypto: Bitstamp, Coinbase, Kraken, Gemini and itBit. 

BlockFi is the first crypto lender for which CF Benchmarks is pricing assets, even though the company usually works with firms such as exchange-traded fund provider Wisdom Tree. In September of last year, CF Benchmarks was the first cryptocurrency index to be recognized as a “Benchmark Administrator” under European regulations. 

Related: Aave Becomes Second DeFi Project to Overtake MakerDAO for Most Crypto Deposited

Read more: CME’s Bitcoin Index Provider Wins First EU Crypto Benchmark License

“You might see other providers in the market that operate exchanges and use the exchange for pricing but it might not be an indication of where the actual price is and where the liquidity is,” David Olsson, BlockFi’s global managing director of European and Asian markets, said in an interview.

CF Benchmarks’ indices update every second versus the five or 15 seconds at other index providers, CF Benchmarks CEO Sui Chung said. Prior to adding CF Benchmarks, BlockFi was able to capture data several times a minute, said Olsson.

“In terms of risk, let’s say with a five-second index … if you try to liquidate the loan when the market is moving very quickly, you may miss the boat and by the time you’ve managed to liquidate, you’re actually in negative equity,” Chung said. 

Related: BlockFi Raises $50M From Universities, NBA Star, Others as Crypto Lending Soars

Read more: BlockFi Raises $50M From Universities, NBA Star, Others as Crypto Lending Soars

Because bitcoin is an asset that can move in clips of hundreds of dollars per second, capturing price data allows BlockFi to hedge against flash crashes more efficiently, Olsson added.

The partnership follows a $50 million Series C funding round BlockFi raised to increase personnel and equity capital as the company expands its global reach. 

Related Stories

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Federal Reserve Chairman Jerome Powell explains the U.S. central bank’s economic approach, including how it will address its previous 2% inflation goal over the next decade.

CoinDesk First Mover Editor Bradley Keoun has already laid out the implications for the crypto space – you can read his article here.

Check this page for updates on commentary and analysis on the day’s events. Watch Powell’s comments here. 

Related: Bitcoin Pops and Drops After Powell Introduces Average Inflation Targeting

ND (10:00): Powell’s done for the day. The symposium will continue through tomorrow, with Bank of England Governor Andrew Bailey giving a speech Friday morning.

BK (10:00): Based on the muted market reaction after Powell’s comments, nothing he said was very far out of line with expectations – that the Fed is comfortable letting inflation rise above its 2% target over the next few years. But the Fed has left itself flexibility to change its monetary-policy plans in the future. And certainly Powell didn’t rule out any use of its monetary-policy tools, such as a broader expansion of its balance sheet to keep markets from tumbling if the economy worsens and bankruptcies increase. Entirely possible – and within the new framework – that the Fed could come out with more trillion-dollar money infusions the next time markets start to falter/lurch.

BK (9:52): Bitcoin’s price rally post-Powell speech has faded, now down to ~$11,400 from ~$11,600 earlier:

ND (9:49): The banking system was “well-capitalized and highly liquid,” Powell says, addressing the pre-COVID-19 economy.

Related: First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole

The point of the Fed’s efforts across the last six months was not to stimulate the economy but “provide a little bit of comfort” to individuals and businesses: “Our response was actually quite different from what it was in the financial crisis, so we could immediately cut rates to zero, we raised our asset purchases essentially without limit to support market function.”

The economy can recover – if the U.S. can keep the pandemic under control. The hard part is that a lot of communal activities (restaurant, hotel industries) might find it difficult to recover.

ND (9:47): Powell is saying more direct aid would be best but this is “very hard for us to do”; says he’d look to policy to address this concern.

ND (9:46): Low-wage workers have been disproportionately harmed by the ongoing pandemic, Powell says. He says his institution can support a strong labor market to try and mitigate but this would need to be an “all-governmental” effort. [University of Michigan Provost Susan M. ] Collins asks if the Fed can take any additional efforts to support minority-businesses and institutions in particular.

BK (9:46): Powell says “our policies are for the benefit of all Americans” but notes that its tools are “blunt” and the real power on any “distributive” efforts lie with lawmakers.

BK (9:40): The dollar is choppy – hourly chart of euro exchange rate vs. dollar after Powell’s speech comes out:

ND (9:36): Powell says that “public faith in large institutions around the world is under pressure,” and he hopes being transparent will help address that. We’ve definitely seen skepticism in institutions like the Fed in our space. That Powell is acknowledging this doubt is interesting.

He also said he doesn’t expect today’s move to “dictate” particular outcomes, noting this is kind of a subjective effort.

BK (9:32): “People don’t generally think about inflation moving up as a good thing,” Powell says. Sort of the elephant-in-the-room question for most non-economics/finance geeks.

ND (9:29): Powell’s prepared remarks have ended, but he’s participating in a Q&A with University of Michigan Provost Susan M. Collins.

BK (9:28): Of course, as we’ve seen, the Fed changes its long-run policies pretty much whenever the circumstances require it to do so – with a new rationale for doing so.

And here, too, the central bank is giving itself an out: “Of course, if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal, we would not hesitate to act.”

BK: (9:26): Bitcoin’s price rises 1.8% during Powell’s speech.

BK (9:24): Fed will review longer-run goals and policies roughly every five years, according to the statement. Powell says new policy statement was “revised today with unanimous consent” from Fed officials, adds “a robust job market can be sustained without causing an outbreak of inflation.”

The implication for crypto is that the Fed will likely let inflation run hot for a few years, which could theoretically weaken the dollar and boost prices for bitcoin.

ND (9:21): The Fed just confirmed it’s going to look for increasing inflation at times when needed. In an update to its statement of monetary policy strategy, the Fed says that if inflation falls below its 2% target consistently (as it has for most of the last decade), it will target inflation above 2%.

On price stability, the [Federal Open Market Committee] adjusted its strategy for achieving its longer-run inflation goal of 2% by noting that it “seeks to achieve inflation that averages 2% over time.” To this end, the revised statement states that “following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time.”

BK (9:16): Powell notes interest rates are close to the “lower effective bound” i.e. zero “even in good times” – while noting that productivity growth has declined in recent years – the ultimate driver of underlying economic growth.

ND (9:11): Powell is opening his remarks by explaining the history of the Fed’s current inflation targets and why the central bank has approached previous targets the way it has.

“Inflation targeting was also associated with increased communication and transparency, designed to clarify the central bank’s policy intentions,” he said. Bit of tea leaf reading but it sounds like he’s expecting a change.

And, of course, monetary policy has evolved, he noted.

BK (9:11): Nothing new from Powell so far. He’s just walking through the recent history of monetary policy.

BK (8:40): The Federal Reserve has pumped about $3 trillion into the financial system this year to help markets recover from the devastating economic toll of the coronavirus. So far, consumer prices have stayed muted, perhaps due to the deflationary impact of slowing demand for goods and services from households and businesses. Powell is expected to discuss whether to explicitly embrace a new policy of allowing inflation to run above the central bank’s 2% annual target. That way, above-target inflation would offset periods of time (such as most of the past decade) where price rises have undershot the target.

Such an explicit commitment would imply to traders that the Fed would stay unusually dovish on inflation for years to come — letting inflation run hot, which likely could push up prices dollar-denominated assets like stocks, gold and bitcoin, since the currency’s purchasing power would be weakening by definition.

Bloomberg News reported on Wednesday the Fed might keep short-term interest rates close to zero for five years or more, under a policy that could be unveiled as soon as next month.

ND (8:40): Thirty minutes before Powell opens at the Jackson Hole Fed symposium, hosted by the Kansas City Fed, and the big question in and out of crypto will remain the economy. While Powell’s keynote remarks are likely to draw the most attention, it’ll be just as interesting to see what the panelists and guest speakers through the rest of the two-day symposium say.

Last year saw now-former Bank of England Governor Mark Carney discuss the need for a financial system which moves away from the dollar. That’s significant in and of itself, but he coupled the suggestion with the idea that a synthetic hegemonic currency, created through a network of central bank digital currencies, could act as the dollar’s replacement (among other alternatives). Carney’s successor, Andrew Bailey, will take the virtual stage Friday.

Related Stories

• Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
• WATCH: Fed Chair Powell Lays Out Plan to Let Inflation Rise Above 2% for a While

Federal Reserve Chairman Jerome Powell explains the U.S. central bank’s economic approach, including how it will address its previous 2% inflation goal over the next decade.

CoinDesk’s First Mover Editor, Bradley Keoun, has already laid out the implications for the crypto space – you can read his article here.

Refresh this page periodically: We’ll be updating live through the event, and you can watch the livestream here.

Related: First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole

ND (9:47): Powell is saying more direct aid would be best but this is “very hard for us to do”; says he’d look to policy to address this concern.

ND (9:46): Low-wage workers have been disproportionately harmed by the ongoing pandemic, Powell says. He says his institution can support a strong labor market to try and mitigate but this would need to be an “all-governmental” effort. Collins asks if the Fed can take any additional efforts to support minority-businesses and institutions in particular.

BK (9:46): Powell says “our policies are for the benefit of all Americans” but notes that its tools are “blunt” and the real power on any “distributive” efforts lie with lawmakers.

BK (9:40): The dollar is choppy – hourly chart of euro exchange rate vs. dollar after Powell’s speech comes out:

Related: Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech

ND (9:36): Powell says “public faith in large institutions around the world is under pressure,” and he hopes being transparent will help address that. We’ve definitely seen skepticism in institutions like the Fed in our space. That Powell is acknowledging this doubt is interesting.

He’s also said that he doesn’t expect today’s move to “dictate” particular outcomes, noting this is kind of a subjective effort.

BK (9:32): “People don’t generally think about inflation moving up as a good thing,” Powell says. Sort of the elephant-in-the-room question for most non-economics/finance geeks.

ND (9:29): Powell’s prepared remarks have ended, but he’s participating in a Q&A with University of Michigan Provost Susan M. Collins.

BK (9:28): Of course, as we’ve seen, the Fed changes its long-run policies pretty much whenever the circumstances require it to do so — with a new rationale for doing so.

And here, too, the central bank is giving itself an out: “Of course, if excessive inflationary pressures were to build or inflation expectations were to ratchet above levels consistent with our goal, we would not hesitate to act.”

BK: (9:26): Bitcoin’s price rises 1.8% during Powell’s speech.

BK (9:24): Fed will review longer-run goals and policies roughly every five years, according to the statement. Powell says new policy statement was “revised today with unanimous consent” from Fed officials, adds “a robust job market can be sustained without causing an outbreak of inflation.”

The implication for crypto is that the Fed will likely let inflation run hot for a few years, which could theoretically weaken the dollar and boost prices for bitcoin

ND (9:21): The Fed just confirmed it’s going to look for increasing inflation at times when needed. In an update to its statement of monetary policy strategy, the Fed says that if inflation falls below its 2% target consistently (as it has for most of the last decade), it will target inflation above 2%.

On price stability, the FOMC adjusted its strategy for achieving its longer-run inflation goal of 2 percent by noting that it ‘seeks to achieve inflation that averages 2 percent over time.’ To this end, the revised statement states that ‘following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.’

BK (9:16): Powell notes that interest rates are close to the “lower effective bound” i.e. zero “even in good times” – while noting that productivity growth has declined in recent years – the ultimate driver of underlying economic growth.

ND (9:11): Powell is opening his remarks by explaining the history of the Fed’s current inflation targets and why the central bank has approached previous targets the way it has.

“Inflation targeting was also associated with increased communication and transparency, designed to clarify the central bank’s policy intentions,” he said. Bit of tea-leaf reading but it sounds like he’s expecting a change.

And of course, monetary policy has evolved, he noted.

BK (9:11): Nothing new from Powell so far. He’s just walking through the recent history of monetary policy.

BK (8:40): The Federal Reserve has pumped about $3 trillion into the financial system this year to help markets recover from the devastating economic toll of the coronavirus. So far, consumer prices have stayed muted, perhaps due to the deflationary impact of slowing demand for goods and services from households and businesses. Powell is expected to discuss whether to explicitly embrace a new policy of allowing inflation to run above the central bank’s 2% annual target. That way, above-target inflation would offset periods of time (such as most of the past decade) where price rises have undershot the target.

Such an explicit commitment would imply to traders that the Fed would stay unusually dovish on inflation for years to come — letting inflation run hot, which likely could push up prices dollar-denominated assets like stocks, gold and bitcoin, since the currency’s purchasing power would be weakening by definition.

Bloomberg News reported on Wednesday that the Fed might keep short-term interest rates close to zero for five years or more, under a policy that could be unveiled as soon as next month.

ND (8:40): Thirty minutes before Powell opens at the Jackson Hole Fed symposium, hosted by the Kansas City Fed, and the big question in and out of crypto will remain the economy. While Powell’s keynote remarks are likely to draw the most attention, it’ll be just as interesting to see what the panelists and guest speakers through the rest of the two-day symposium say.

Last year saw now-former Bank of England governor Mark Carney discuss the need for a financial system which moves away from the dollar. That’s significant in and of itself, but he coupled the suggestion with the idea that a synthetic hegemonic currency, created through a network of central bank digital currencies, could act as the dollar’s replacement (among other alternatives). Carney’s successor, Andrew Bailey, will take the virtual stage Friday.

Related Stories

• WATCH: Fed Chair Powell Lays Out Economic Policy Approach
• Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

Market Moves

As Federal Reserve Chair Jerome Powell prepares to speak Thursday at the U.S. central bank’s annual Jackson Hole Economic Symposium in Wyoming, the occasion offers a glimpse of just how dramatically once-slow-moving monetary forces have accelerated due to the devastating economic toll of the coronavirus pandemic. 

This time last year, President Donald Trump was vehemently criticizing Powell on Twitter for setting interest rates too high, as U.S. economic growth slowed and the national debt swelled past $22 trillion.

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

Related: Chainalysis Report Shows Healthy Crypto Usage in Venezuela

At at the 2019 Jackson Hole gathering, then-Bank of England Governor Mark Carney warned in a speech that the U.S. dollar’s status as the de facto global currency contributes to an unsustainable international economic and monetary regime. He argued that world leaders should create a “synthetic hegemonic currency,” potentially provided “through a network of central bank digital currencies.” 

Fast forward to now, and the Jackson Hole conference has been forced to go virtual because of the coronavirus. Trump’s economic stewardship, including a U.S. stock market that many investors now say is propped up by the Fed’s $3 trillion of freshly printed money, has become a core issue in the 2020 presidential election. The national debt now stands at $26.5 trillion.  Digital currencies are now being studied and pursued by central banks in China, the U.S. and just about everywhere else. Goldman Sachs recently warned the dollar risked losing its dominant reserve status. 

“The pandemic has sped up key structural trends and triggered substantial market swings,” strategists for the $7 trillion money manager BlackRock wrote this week. “The policy revolution was needed to cushion the devastating and deflationary impact of the virus shock. In the medium term, however, the blurring of monetary and fiscal policy could bring about upside inflation risks.”

Many investors are betting on bitcoin as a hedge against the potential debasement of the U.S. dollar, but Fed officials say deflationary forces might be stronger because of an expected drop off in demand from consumers and households.

Related: LIVE: CoinDesk Covers Fed Chair Powell’s Jackson Hole Speech

Crypto traders will focus in the short term on what the Fed’s speech might mean for bitcoin prices, which have surged almost 60% in 2020, far exceeding this year’s 7.7% year-to-date gain in the Standard & Poor’s 500 Index of U.S. stocks. 

But the Fed’s actions could also have implications for ether, the native token of the Ethereum blockchain, where entrepreneurs are developing alternative currencies and semi-autonomous lending and trading networks that might one day replace the current financial system. There’s also a fast-growing business in dollar-linked “stablecoins,” with the amount doubling this year to $13 billion.

“So much has changed,” said Joe DiPasquale, CEO of the cryptocurrency-focused hedge fund BitBull Capital. “There is this danger of the U.S. [dollar] in the future no longer being the world’s reserve currency. We are in a much worse position than we were in a year ago.”

Mati Greenspan, founder of the cryptocurrency and foreign-exchange analysis firm Quantum Economics, wrote this week that Powell’s return to Jackson Hole comes at a time when “people are just starting to ask questions about the intrinsic value of money.” 

“U.S. authorities have just taken on an inordinate amount of debt, more than they could possibly ever hope to pay back,” Greenspan wrote. “So the only viable option is to decrease the value of that debt by way of monetary debasement. It’s despicable and dangerous, but the only other option is austerity, which is too unpopular for any public servant to mention at this time.”

Bitcoin Watch

Bitcoin’s options market is foreseeing little price turbulence in the short-term despite central bank watchers expecting fireworks from the Federal Reserve on Thursday.

• Bitcoin’s implied volatility on one-month options, which gauges market’s expectations for price gyrations over the four week period, fell to 52% early Thursday – the lowest level since July 25, according to data source Skew. 
• Short-term price expectations have declined sharply from 70% to 52% over the past two weeks.
• The three-month gauge has pulled back from 80% to 68% and the six-month has declined from 80% to 72%.
• Analysts expect Powell to signal tolerance for high inflation – a move that could weaken the U.S. dollar and propel bitcoin higher.
• However, with strong expectations already built in, the scope for disappointment is high. The dollar may surge if Powell’s comments fall short of expectations.
• The event, therefore, has potential to trigger big moves in either direction

Read more: Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech

– Omkar Godbole

Analogs The latest on the economy and traditional finance

As dollar weakens, U.S. Treasury says Vietnam deliberately devalued dong (Bloomberg)

Fed Official George “not an advocate of letting inflation run hot” (CNBC)

Former FDIC chair dissents from rule change to facilitate bank dividends in “stressed” Coronavirus economy (FDIC)

Hurricane Laura, headed for U.S. Gulf Coast, could inflict $25B of damage (Bloomberg)

Intel unit in Japan to parry economic espionage (Nikkei Asian Review)

Australia’s ANZ bank launches digital lending platform for small businesses​​​​​​​ (ANZ)

Tweet of the day What’s Hot

Why DeFi Pulse’s Key Metric Is So Simple It’s Confusing (CoinDesk)

Publicly traded crypto miner Marathon to buy fellow miner Fastblock for $22M in stock (CoinDesk)

Fidelity’s chief strategist to head new bitcoin index fund with $100K minimum (CoinDesk)

From Luckycoin to Yam, the crypto industry can’t help making inside-joke meme tokens (CoinDesk)

Japan’s messaging giant LINE launches a digital wallet and blockchain development program (CoinDesk)

– Sebastian Sinclair

Related Stories

• Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
• WATCH: Fed Chair Powell Lays Out Economic Policy Approach

Bitcoin’s options market foresees little price turbulence in the short-term, even as central bank watchers expect fireworks during a speech by the chairman of the Federal Reserve on Thursday morning.

• Bitcoin’s implied volatility on one-month options, a gauge of the market’s expectations for price gyrations over the four week period, fell to 52% early Thursday – the lowest level since July 25, according to data source Skew. 
• Short-term price expectations have declined sharply from 70% to 52% over the past two weeks.
• Over three months, the gauge has pulled back from 80% to 68%, while the six-month line has declined from 80% to 72%.

• At 9 a.m. Eastern today, the Fed Reserve’s Jerome Powell is expected to announce new measures from the central bank at his annual keynote at the Jackson Hole symposium.
• Investors usually buy both calls (bullish bets) and puts (bearish bets) ahead of such key events, pushing implied volatility higher.
• Analysts expect Powell to signal tolerance for high inflation – a move that could weaken the U.S. dollar and propel bitcoin higher.
• However, with strong expectations already built in, the scope for disappointment is high, and the dollar may surge if Powell’s comments fall short of expectations.
• The event, therefore, has potential to trigger big moves in either direction.
• The lull in expectations for bitcoin price volatility may reflect that traders are playing a wait-and-see game until Powell’s planned direction becomes clear.
• That said, any potential volatility in the forex markets could feed into cryptocurrencies, as the inverse correlation between bitcoin and U.S. dollar has strengthened over the past few weeks.

• The 60-day inverse correlation is now strongest in at least 16 months.
• Further, the implied volatility terms structure remains steep, meaning the six-month implied volatility is still hovering above the three-month, which in turn is greater than the one-month metric.
• That “indicates that uncertainty is high,” Denis Vinokourov, head of research at the London-based institutional brokerage BeQuant, told CoinDesk in a Telegram chat.
• At press time, bitcoin is trading near $11,380, representing a 0.8% decline on the day.

Also read: Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

Related Stories

• Chainalysis Report Shows Healthy Crypto Usage in Venezuela
• LIVE: CoinDesk Covers Fed Chair Powell’s Jackson Hole Speech
• First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole
• WATCH: Fed Chair Powell Lays Out Economic Policy Approach

Related: LIVE: CoinDesk Covers Fed Chair Powell’s Jackson Hole Speech

LIVE: Keoun and CoinDesk regulatory reporter Nikhilesh De are covering Powell’s speech on CoinDesk.com and Twitter. Follow our live coverage here.

Related Stories

• First Mover: Monetary Challenges Aren’t Just Virtual as Fed’s Powell Returns to Jackson Hole
• Bitcoin’s Implied Volatility Falls Sharply Ahead of Jerome Powell Speech
• Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

The Libra Association has hired Stevan Bunnel, a veteran of the U.S. Department of Homeland Security, as its general counsel just three months after announcing his predecessor.

• According to a Thursday report by Bloomberg Law, Bunnel will replace Libra’s first-ever general counsel, Robert Werner, a former FinCEN staffer who was hired as recently as May.
• Werner said Bunnel is “an outstanding lawyer and a great guy.”
• Bunnel brings considerable experience to the role having spent time at Homeland Security as general counsel, and before that holding the position of managing partner of the Washington, DC, office of O’Melveny & Myers LLP, a large international law firm.
• Earlier in his career, Bunnel spent several years at the Washington, DC, U.S. Attorney’s Office, per his LinkedIn profile.
• The general counsel role meant Werner would have had to give up his seat on the board of directors at Deutsche Bank Trust Co., a position he told Bloomberg was unwilling to relinquish.
• The Libra Association, comprised of some 26 members including Facebook, was created to develop a global digital currency payments network.
• The association has come under fire on multiple occasions from regulators and lawmakers over concerns the project poses a threat to central bank policies and fiscal sovereignty.
• In recent months, Libra has been building a stronger legal team to help smooth its path to launch.

See also: Libra Hasn’t Abandoned Multi-Currency Stablecoin: Policy Director

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The New Zealand stock exchange has halted trading for the third day in a row as a result of criminal cyberattacks.

• According to a report by Bloomberg on Thursday, the NZX exchange has suffered connectivity issues leading to a series of outages that were the result of targeted disruption by bad actors from outside the country.
• The criminals are demanding bitcoin in order to cease the distributed denial-of-service (DDoS) attacks, which flood the bandwidth of a particular system with traffic rendering it slow or unusable.
• The exchange suffered outages during the last hour of trading on Tuesday and again for over three hours on Wednesday.
• Today’s outage has yet to be resolved, according to Bloomberg.
• According to another report by ZDNet, the attacks may be directed by a criminal cyber gang using monikers like Amada Collective and Fancy Bear that belong to more famous hacker groups.
• Specifically, the attackers have been targeting the exchange’s hosting service Spark, demonstrating a level of sophistication by regularly changing the protocols involved.
• Over recent weeks, the group has tried to extort bitcoin from other well-known financial services including PayPal, MoneyGram, YesBank India, Braintree, and Venmo.

See also: Twitter Hack Used Bitcoin to Cash In: Here’s Why

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• NYSE Can Allow Firms to Raise Funding Through Direct Listings, Says SEC
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• Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future
• Market Wrap: Bitcoin Braces for $700M in Options to Expire; Record $7B Value Locked in DeFi

The Securities and Exchange Commission (SEC) has given the green light for the New York Stock Exchange (NYSE) to allow some companies to raise capital without the expense of an IPO.

• In a Wednesday order, the SEC approved the exchange to amend Chapter One of the Listed Company Manual to allow firms to hold direct listings.
• The move means companies can now launch a direct listing on the NYSE as an alternate to the initial public offering (IPO), generally preferred by the SEC.
• The direct benefit means it would reduce costs associated with soliciting a bank to underwrite the transaction of an IPO.
• Previously, companies that have sold common equity securities in a private placement were allowed to list shares on the NYSE “solely” to allow shareholders to trade the stock.
• The rule change widens the scope to allow companies to list shares “in addition to, or instead of” facilitating shareholder sales.
• Firms will be allowed the new listing on a case-by-case basis and must meet certain thresholds, including being likely to sell $100 million in shares on the first day of trading on the NYSE.
• The so-called Primary Direct Floor Listing will also allow companies to avoid certain restrictions associated with IPOs, namely lockup periods that prevent insider trading.
• The American Securities Association (ASA), a brokerage group, said direct listings without protections against insider trading would allow for nefarious actors to cash out at “inflated valuations.”
• That would leave “Mr and Mrs. 401(k) holding the bag,” the ASA wrote in a March letter addressed to the SEC as cited in the Wall Street Journal.
• However, in the Wednesday order, the SEC said the NYSE’s direct listing plans already had sufficient investor protections in place.
• The changes come at a time when U.S. crypto exchange Coinbase is said to be preparing to list on the U.S. stock market sometime in early 2021 with preference given to a direct listing.
• On Wednesday, the SEC also announced changes to the rules for accredited investors, slightly expanding the pool of Americans who can invest in private securities.

See also: Crypto and Fintech Investor Ribbit Capital Files to Raise $350M for ‘Blank Check’ IPO

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• NASA Is Bankrolling a Blockchain for Quadcopter Communications

UPDATE (09:35 UTC, Aug. 27, 2020): Deribit has tweeted that the issue is resolved and trading is once again live.

The most popular cryptocurrency options exchange, Deribit, is suffering a severe service outage.

• According to company tweets early on Thursday, the trading platform is suffering “hardware issues” and a technician has been called to reboot its servers and (hopefully) bring services back to normal functionality.
• “We are not hacked and your funds are safe,” an initial tweet stated.
• Deribit went on to warn that it may not have its systems back online in time for today’s daily options expiry.
• In that case, the firm will “manually adjust the options expiry to reflect the actual market at the time of expiry.”
• The value used for the adjustment would be drawn from Deribit’s index as listed on test.deribit.com.
• However, the outage may knock confidence in the exchange with the news that Deribit doesn’t seem to have server redundancy to avoid such severe ramifications from technical issues.
• Similar issues have affected top U.S. spot exchange Coinbase in the past, leading it to eventually pledge to do more in terms of redundancy provision.
• Deribit may, in fact, have been lucky the outage didn’t occur Friday, when over $700 million-worth of monthly contracts are set to expire, most of them on Deribit.
• Today’s daily bitcoin option expiry is worth $22.8 million, alongside $6.5 million in ether options.
• Deribit is by far the most popular options exchange in the crypto space in terms of trading volumes:

Also read: Fidelity’s Chief Strategist Starts Bitcoin Index Fund

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