BTC Sessions - YouTube Crypto Scams, BTC $1T Settlement In 2020, Coinsquare Wash Trade Settlement EP081

Starting point is 00:00:15 Wasabi wallet and fairly private. What's up everyone? I'm Ben with the BTC sessions and this is your daily session. Before we dive in, I want to give a shout out to sponsors of the show, ledden.io. I've been working with these guys for well over a year using them myself and they offer a bunch of different services for which to use your Bitcoin. The first thing I ever used of theirs was their Bitcoin back loans. So in my instance, I was in the I needed dollars and I didn't want to sell my Bitcoin because one, that's a taxable event. And two, I was worried I would have to buy back in at a higher price point. So with this product, I was able to deposit my Bitcoin, get dollars in my bank account within 24 hours.

Starting point is 00:01:10 And when I paid that back, I got back the exact same amount of Bitcoin. Now, they've got a couple other offerings. They've got their Bitcoin and USDC savings accounts, which they've just upped the interest on to a high end of 8.8%. And then they've got their B2X offering, which uses the same loan mechanism to instantly buy more Bitcoin, which effectively doubles your Bitcoin on the spot. So if you want to check these guys out, there's a link in these show notes down below. And actually, if you use that link and you opt to get a loan, they'll give you 50 bucks worth a Bitcoin for free. And secondly, if you want to help out the show in another way and you're looking to secure your Bitcoin, which is a good goal to have anyways, if you're not already securing your Bitcoin, via a hardware wallet device than I highly recommend you do regardless of what you use.

Starting point is 00:02:00 It's better than just having it on your phone or your computer unprotected. But if you want to help at the show at the same time, you can check out the ledger, the nano-s or the nano-X. I do have both. I use them for various purposes along with my other hardware wallets. And you can check them out. They've got a ton of different deals on right now for trio packs, things like that. If you're looking into multi-sigs, so on and so forth.

Starting point is 00:02:21 So anyways, be sure to check them out. and there is a link in the show notes down below for that. Well, let's dive into the news. Now, given that my show is on YouTube, this is particularly interesting to me, there has been a slew of YouTube scams as of late. And this is topical because we saw the other day that Twitter got hacked and a lot of major accounts, including Bill Gates, Barack Obama, Joe Biden, Kanye West, I think Kim Kardashian.

Starting point is 00:02:51 There was a ton of them, but they were all tweeting. out scams that involved trying to get Bitcoin out of people. They only made off with $120,000. But when it comes to YouTube, there have been, again, a lot of scams and they're actually run as ads. They look very legitimate. And oftentimes, the, I guess, malicious individuals will come into a previously existing YouTube channel that

Starting point is 00:03:20 already has X number of followers and views and so and so forth. They'll buy the channel and then they'll revamp it to look very, very legitimate, whether it be somebody like Ripple, which we'll get into in a moment, or Elon Musk or SpaceX or whatever else it may be. But the same kind of scam as on Twitter that we saw where, hey, send Bitcoin here or whatever, their cryptocurrency here, and you will receive it back doubled to your wallet,

Starting point is 00:03:48 which a lot of people in Bitcoin understand that that's a ridiculous process. but some people are relative newcomers and, you know, the greed can get the best of anybody if the mood or the opportunity strikes them right. You've got to be careful out there. So, anyways, what's been happening is these scams have been running as pre-roll ads in front of a ton of different videos, including on occasion my own. So I had somebody screenshot the other day and say, ugh, these things. And it's, yeah, it's very, unfortunate. Now, YouTube is arguing that they are not liable for this whatsoever. So I'll read a little bit from this article on Coin Telegraph. They say YouTube's legal team has argued the platform is immune from liability for cryptocurrency scams perpetuated as part of its video content or descriptions. Attorneys for Ripple and CEO Brad Garlinghouse filed a lawsuit against YouTube in April in response to the platform's failure to stop XRP scammers and impersonators. Ripple argued that the platform benefits from the actions of the scammers by profiting from paid ads.

Starting point is 00:04:59 But according to a July 21st update on Law 360, lawyers for the video sharing platform argued in a dismissal bid that Section 230 of the Communications Decency Act, which generally protects platform publishers from liability over information provided by third parties, applied to the case. YouTube's legal team argued that its unwitting verification, of scam channels does not change the fact that the content was created by third parties, not the video sharing platform itself. Lawyers from the site claim that because Ripple is not alleging YouTube solicited, encouraged, or participated in the third party's fraudster scam, the platform has no liability.

Starting point is 00:05:44 So this is an interesting one. Now, if I'm not mistaken, Section 230 has provisions that pertain to, if you're a platform and you're not a publisher, then you should not be liable for what people put up on your platform. Much like Twitter, much like Facebook. If somebody puts up something, and part of this is how do you even attempt to stop this? But if somebody puts up something that is technically illegal on Facebook or on Twitter, an image that shouldn't be there, yes, it can be moderated and taken down. but for the amount of time that it was up and the damage it caused during that time, should the platform be liable?

Starting point is 00:06:28 And if that were to come to fruition, how do platforms deal with this? Do we have just like extensive moderation and wait times between posting or algorithms that will just kind of flag at will, which we've already seen on YouTube, including my own channel, got taken down for a period of 24 to 48 hours, for a bad algorithm like this? I'm very torn in this. On one instance, I worry about the overreach of this kind of stuff. But to, I can't believe I'm siding with Ripple on this at least a little bit, but to Ripple Labs' point, they are running these ads and they're being paid for them. They're

Starting point is 00:07:17 profiting off of these ads that are playing. Okay. And you would think that in in profiting off that illegal activity, they would at least have to forego those profits. I, that to me that seems like a maybe not fully fair, but fair-ish prospect. Now, the other thing about this is, again, these provisions, if I'm not mistaken, apply to, people that are not publishers, but rather platforms. But when you act as a publisher and you remove views that you do not like that are not in any way illegal,

Starting point is 00:07:59 but views that you do not like, we've seen censorship of more kind of right-wing ideologies on not only YouTube, but Twitter and other platforms. And when you get into that kind of content curation realm, then it starts to, to blur the line between platform and publisher. And if you're a publisher, then I believe there's some more liabilities in there. Again, I could be mistaken, but I think they're walking a pretty fine line here, and it'll be very interesting to see how this all plays out in court as it continues to do so. Anyways, let me know what you think. Do you think that they should be slapped with fines, and are you worried about the repercussions if that comes to fruition? Because content could just be

Starting point is 00:08:46 blanket banned because they don't want to deal with it at all. Let me know. Let's move on. So Bitcoin is targeting over $1 trillion in settlement this year, as well as stable coin growth has continued to blow up as I'm sure some of you may have well noticed. So Bitcoin has already settled $712 billion so far in 2020 and we're not even to the end of July yet. We've still got quite a few months ahead of us, while stable coins have already seen their biggest year ever. So I'll read a little bit further into this Coin Telegraph article here. Cryptocurrency public blockchains will settle in 2020, more in 2020 than ever before and have already topped $1.3 trillion in aggregate.

Starting point is 00:09:36 Compiled by analytics firm Masari on July 21st, the figures reveal that Bitcoin has settled $712 billion so far this year. Well, Ethereum is on 147 billion. Now, the interesting part to me is this graphic that was put up here by Masari. And it has a breakdown of kind of settlement amounts. And so when you track back to 2017, you see Bitcoin settled a total of $671 billion on chain with $13. perhaps 13 billion on, I guess, additional layers above Bitcoin or stable coins on Bitcoin. Ethereum settled $335 billion, which was somewhere in the realm of around half of what Bitcoin did.

Starting point is 00:10:32 Now, we move forward to, let's see, 2019. Now, Ethereum itself got chopped by nearly two-thirds to 133 billion. However, stable coins on Ethereum settled for $146 billion. Meanwhile, Bitcoin is basically higher than it was previously, $673 billion, and $99 billion on stablecoins based upon Bitcoin in some way, shape or form. Now, here's the interesting thing. We move to this year so far. Now, Bitcoin has already outpaced what it did in all of last year, and it's only end of July. Ethereum is still, again, I guess it has outpaced what it did last year already. It's at $147 billion. But the stable

Starting point is 00:11:32 coins on Ethereum have basically exploded to $423 billion. So, What we're seeing is when it comes to Ethereum, people aren't really hugely demanding the actual Ethereum, you know, the underlying asset itself. They're utilizing it to move other shit around, like Fiat coupons to tokens. And again, like I understand why some people use stable coins. I'm not excited about them by any means, but I understand that legacy banking is inefficient. and if you need to move money around and maintain a value in your local currency, I understand that and, you know, trader's going to trade, right? But yeah, what I'm noticing here that's sticking out to me is one,

Starting point is 00:12:21 volume in stable coins on Bitcoin has actually reduced and more so moved over to Ethereum. Ethereum itself as a settlement layer has basically vastly underperformed since 2017. 2018 was a big year for it, but again, like the last couple of years, it's kind of dropped off a cliff. And it seems to be more or less just like a stablecoin platform, whereas Bitcoin seems to be settling more and more in Bitcoin itself as money, as a base. settlement layer. So very interesting to see those developments. I expect we'll see kind of more of that. I think, yeah, maybe we'll see stable coins migrate to some, at least it'll take a portion of it to things like liquid. But Ethereum seems to very much be like a stable coin method of moving.

Starting point is 00:13:23 The thing is they're having excessive fees on chain now. And so they're having to grapple with what Bitcoin kind of knew for years now is that base layer transactions are going to be expensive as demand explodes. Like we saw CryptoKitties, digital cats that were unique, basically take down the whole network back in, was that 2017, 2018? Anyways, it was ridiculous. And a single popular app was basically able to bring the network to a crawl. So of course, if you're seeing this kind of volume and stable coins on on Ethereum on top of all the like crazy shit like defy stuff that's happening. Yeah, then yeah, you're obviously you're going to see some sort of a ramp up in fees. Anyways, let me know what you think.

Starting point is 00:14:25 Let's move on. So we discussed Coin Square previously. they were accused of wash trading and an insider actually leaked some communications of after they had opted to turn it off because they were worried about regulators coming in, higher-ups basically telling the person to turn it back on. Well, Coin Square Exchange execs have resigned over this wash trading scandal. So I'm going to read a few of the finer points here from CoinDesk. Canada-based crypto trading platform Coin Square has agreed to settle with the Ontario Securities Commission. After it was found, senior executives told employees

Starting point is 00:15:04 to make fake trades on the platform. Between quarter four of 2018 and quarter one of 2019, 90% of Coin Square's reported volume was faked in an illegal practice known as wash trading. As part of the settlement reached Tuesday, Coin Square admitted that around 840,000 illicit wash trades were conducted on the platform, amounting to a total value of 590,000 Bitcoin, which is almost $5.5 billion as of the writing of that article. The agreement also states that CEO and the founder and another executive unknowingly authorized, permitted, or acquiesce coin square staff to carry out the wash trading, made misleading statements, and sought retroactive against a whistleblower seeking to expose the misconduct.

Starting point is 00:15:59 So basically, one of them is going to have to pay a million. One of them is going to have to pay $900,000. Yeah, one of them also voluntarily paid, already voluntarily paid $50,000 to the OSC. And they are banned for a number of years from basically being registrants officers or directors of companies or market participants for two to three. three years, whereas the last guy, Mazur, received only a one-year ban. But anyways, they kind of got slaved down for that. Not ideal for them, that is. And I would be very surprised if a lot of this wasn't happening elsewhere. This one just seemed to get out. I mean, they were already

Starting point is 00:16:48 under investigation a little bit, but that internal person that leaked it definitely helped put that last nail on the coffin for those CEOs. So let's move on. So again, we were talking about the Twitter hack and how that person made off with about $120,000 with the Bitcoin by impersonating people, taking over their Twitter accounts and posting Bitcoin addresses and claiming that they would double the Bitcoin sent there. Well, as we know, Bitcoin is not anonymous. You can track the transactions and the individual has done some funny things now previously he was not very great with mixing coin joining trying to obfuscate the source sources and destinations of his coins he was utilizing various different known exchanges things

Starting point is 00:17:43 like that but he seems to be or she who knows they seem to be diving into the realm of of mixing now So I'll read a little bit here. Last week, hackers hijack Twitter taking control of accounts and several high-profile individuals. Yeah, a person made off with 12 and a half Bitcoin of around 120 ground. Now the Bitcoin is on the move and here's how the hackers are trying to escape with their spoils. According to blockchain analytics firm's cipher trace, the hackers are using a combination of Bitcoin mixing services, gambling sites, exchanges,

Starting point is 00:18:17 and even defunct addresses in its attempt to both hide the money, the money and turn it into other currencies. The first part of call was Bitcoin, a Bitcoin mixing service. These let people swap Bitcoin for someone else's Bitcoin. Basically, it mixes, it creates a transaction with a whole bunch of different inputs from various people and then spits out the same amounts to those people, but you don't know whose coins or whose, which is kind of just how Bitcoin itself functions, even when you have bits of coin yourself.

Starting point is 00:18:53 And there are other tools like pay to endpoint being utilized by merchant services, decentralized merchant services like BTC Pay Server that helps protect the, not only the merchant, but also the individual buying or selling or buying goods or services. The customer also gets to obfuscate their funds. And this protects them from prying eyes knowing how much Bitcoin they have. and so forth. So it's not just elicit means for this kind of stuff. There's good to it as well because it can be very dangerous to let the entire world know your net worth, obviously. Anyways, on July 16th, one day after the hack, attackers sent 2.89 Bitcoin, roughly 22% of

Starting point is 00:19:41 the haul to wasabi wallet, which has obviously a built-in mixer. It's a very effective way of stopping any observers from following the money trail. And a day later, they sent only 0.1 Bitcoin to another Bitcoin obfuscator called Chipmixer. I haven't heard of this one. Anyways, after all that, CypherTracus was unable to follow the Bitcoin any further. The next few days, Cypher Trace tracked piecemeal amounts

Starting point is 00:20:09 of the rest of the scam funds to peer-to-peer exchanges and gambling sites. Just over one Bitcoin, roughly 8.5% of the Twitter plunder. It was sent to an unnamed single-oneone Port-based crypto exchange. Now, a certain amount also went to an inactive cold wallet from Binance, and they believed that transaction was not to cash out funds, but rather to, like, troll everybody because

Starting point is 00:20:33 the individual at this point likely knows that the funds are being tracked. Anyways, I think some of the early actions of this guy or girl or group, I honestly think that's what's going to get them in the end. Having done things with a coin base and a few other not great decisions that they made with their coins, I feel like they will be caught at some point. But we will see. Moving on. Now in the name of tracking and regulatory worries, crypto exchange group is eyeing a bulletin board system for compliance for some new European regulations, namely something called the travel rule. So let's read a bit here. Top cryptocurrency exchanges are expected to release a white paper next month detailing a method

Starting point is 00:21:25 to ease compliance with the Financial Action Task Force Travel Rule. Now, this is aiming to help the industry with compliance burdens based on the guidelines for anti-money laundering. Bitcoin and Coinbase are a couple of these exchanges. The white paper will set out a framework designed to increase exchange transparency and setting out how they could share data over a peer-to-peer network and a type of bulletin board. Now, participants would share addresses on the board, and if another member claims an address, the two entities could then share data peer-to-peer to keep personal information out of the reach of hackers. The travel rule is issued for virtual asset providers in and it was issued in june of 2019 it requires crypto businesses to collect identifying data on both

Starting point is 00:22:21 a transaction sender and receiver and pass that information on with the transactions. The rule is designed to limit terrorist activity and money. Of course it is, but again, when you look at terrorist activity and money laundering funding, it's again, I've got to interject here. It's mostly with the US dollar and done in plain sight via banking. Anyways, besides the point. Let's keep going. It requires businesses to collect identifying on the center receiver, meant to curb terrorist activity and money laundering,

Starting point is 00:23:01 and it forces the identities of individuals on amounts of over $1,000 to travel with the transaction between the sender and receiver. Other exchanges involved here, Gemini, Krakken, Bitrix. Yeah. Anyways, I guess the moral of the story here is if you're using any sort of exchange or service that requires your identification in any way, shape, or form, just expect and understand that

Starting point is 00:23:33 everything you do is essentially being tracked. If you want a semblance of financial privacy, obviously you have to have some sort of a coin join situation going on and get yourself set up so that if you're saving long term and you need to have it away, but you don't want, you don't want anybody to be able to peek into your finances and target you for potential theft, then yeah, you need to be mixing your coins. You can use something like Wasavi Wallet, which I regularly use. Samurai Wallet has mobile mixing as well. There's a join market. There's a bunch of different options here, But again, just understand that people are tracking this stuff,

Starting point is 00:24:17 probably far more than you realize. Other things that you can do, obviously the biggest pain point is where you buy and sell your Bitcoin. So if you're really worried about that, then yes, you might want to go through peer-to-peer alternatives like Hoddle, Hoddle, or BISC, or, you know, packs full in some way, shape, form in that you could forge some sort of a relationship with somebody and then go to that person perhaps off-site if you choose. Kind of up to you.

Starting point is 00:24:52 And then on top of that, you have to worry about leaking data via your IP address. So if you're just going through ClearNet, which is just like the regular internet and you're not utilizing a VPN or you're not utilizing Tor, then certain transactions could be linked to your IP address, which is basically telling everybody who you are. So lots of stuff to worry about, but take it bit by bit, gradually learn about each piece and just do what you can because privacy is a sliding scale and nobody gets it perfect 100% of the time. Let's move on here.

Starting point is 00:25:25 Very excited. Citadel 21 just dropped volume 4. I love this, I guess they call it a cultural zine for Bitcoiners because it's just, it's so quirky and weird. It pretty much encapsulates the hardcore bit corners that have been around very, very well. There's always some unique little gems in here to read through. I was also very stoked to see that this article by Wizard of Oz or at BTC Shelling Point on Twitter included a mention of me because he was talking about his, talking about Bitcoin security via hardware wallet. and he was nice enough not only to give me a shout out here,

Starting point is 00:26:10 but to also include links to a number of my tutorials that I've put together for various hardware wallets. So again, thank you to Wizard of Oz and thanks to Citadel 21 for putting out another great issue. And God, I am so excited for them to do physical issues. This is exactly the kind of thing I want sitting on my bookshelves behind me. And so the moment that is available, I will be purchasing every copy that has come out so far. So I'm, you know, looking forward to seeing that.

Starting point is 00:26:46 Last couple things here. Awesome stuff out of BitcoinQ&A.com. This guy put together an infographic on how MyNode works, or rather how the pieces of My Node interact with each other. So he shows that you've got a Bitcoin node in the middle, which is a full copy of the Bitcoin blockchain and its consensus rules. Then you've got a Lightning Node, which refers to the Bitcoin blockchain and the consensus rules of the Lightning Network. And then you've got all of the pieces of software that interact with each one, and it shows how they interact and explains what they're for.

Starting point is 00:27:21 So very useful stuff. If you're using My Node, but you haven't had time to dive into all of these different pieces of software that are included with it, that would include myself. This gives you a nice little overview of what every. everything does so that you can see what interests me the most and what do I want to dive into and try out. So be sure to check that out. Awesome.

Starting point is 00:27:43 I'll have that link down below. And then finally, a fun article from the Bitsy Academy, again, written by the guys at Verify. So kudos to you guys for writing this. Thanks for submitting it. Anyways, it's talking about using Bitcoin Core and how it's your doorway to self-sovereignty. And they talk about how it can be sometimes intimidating as newcomers to not die. into this realm. Some people overlook the importance of it. So they talk about how Bitcoin core running it actually makes you a real peer in the network. You're not just utilizing the currency

Starting point is 00:28:16 and holding your keys, but you're actually confirming and utilizing the consensus rules yourself, making you a real peer. So it goes through a whole bunch of different stuff, you know, how many nodes are out there currently, how to get started depending on your resources, money, situation, time, all that kind of stuff. It gives you a number of different things. I took the liberty of throwing in the My Node tutorial, I guess, hearkening back to the previous story we're talking about, but all in all, good read,

Starting point is 00:28:47 recommend it, do check it out. And if you find it useful and you have some friends that aren't using a node yet, be sure to share this article with them. It might give them that little push to get started and claim their own monetary self-sovereignty. Anyways, guys, I'm gonna wrap it there.

Starting point is 00:29:04 Thank you so much for watching and or listening. As always, if you're here on YouTube, do hit like, subscribe, and share. All of those things really, really help. I'm not even kidding. They really do. So please do like, subscribe, and share. Now, if you want to hit me up on other platforms, I can't always trust YouTube, as we mentioned previously.

Starting point is 00:29:25 I'm on Facebook Live. I stream live to Twitter. I'm on Twitch, D-Live. Take a look around. You'll find me. And I'm also audio only when it comes to the news stuff like this. this on pretty much any podcast platform you could find, Spotify, Apple, Google, wherever, just go ahead, search me up, subscribe there. That would be helpful. And finally, if you want to

Starting point is 00:29:46 help with the show in any other way, you can hit the sponsors down below or you can drop me a Bitcoin Lightning Network tip at my tippin.me page. That is tippin t-i-p-in.me slash at BTC Sessions. With that, I'm out. Have yourselves a wonderful evening or a wonderful rest of the day wherever you are, and I'll see you next time for your daily session.

BTC Sessions - YouTube Crypto Scams, BTC $1T Settlement In 2020, Coinsquare Wash Trade Settlement EP081

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.