Unchained - How a16z’s New NFT Licenses Hope to Solve Rights Problems for Creators and Buyers - Ep. 391

Starting point is 00:00:00 Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto seven years ago, and as a senior editor of Forbes, was the first mainstream meter porter to cover cryptocurrency full-time. This is the September 2nd, 2022 episode of Unchained. In case you didn't know, every episode of Unchained is also available on YouTube. Go to YouTube.com slash seeing you slash unchained podcast to subscribe. One inch is a top dex aggregator that finds the best rates across multiple networks. Why use a single decks when you can use them all? Get one inch on your phone now or swap on one inch.io. With the crypto.com app, you can buy, earn, and spend crypto in one place.

Starting point is 00:00:52 Download and get $25 with the code Laura. Link in the description. Don't miss Mainnet, the most anticipated crypto event of the year, September 21st to 23rd in New York City. Get $300 off your pass today by visiting mainnet. Events and entering promo code unchained at checkout. See you this fall at Mainnet 2022. Today's guest is Miles Jennings, General Counsel at A16Crypto. Welcome, Miles. Hi, Laura. Thanks for having me.

Starting point is 00:01:23 We've seen that rights surrounding NFTs can have a large influence on the success of the project and, frankly, can also spark some controversy. This has been true with projects such as Cryptopunks, board apes, moonbirds, etc. On Thursday, A16C crypto released a set of free and public can't-be-evil licenses designed specifically for NFTs, seemingly to address these issues. Can you describe what problem or problems you were trying to solve? with these licenses? Sure. So I think that there are really,

Starting point is 00:01:58 there are four problems that we were really looking at in the industry. The first one was that, you know, in a lot of instances, NFT projects weren't using any licenses whatsoever. And the reason that that's a problem is because, you know, ultimately when you buy an NFT,

Starting point is 00:02:15 there isn't a copyright that automatically comes along with that unless there's an actual license. And so when you're getting an NFT, you're actually just getting a token, and you're not actually getting any rights to the artwork. And so that raises questions around whether or not you can display that artwork yourself, whether or not you can commercialize it and all of these fundamental questions. And so users, I think, expectations weren't aligned with kind of what reality was, right,

Starting point is 00:02:41 what they were actually getting. And then, you know, a lot of issues around kind of why people weren't getting licenses is that they're very expensive. It requires kind of significant time and effort with counsel to do so. And a lot of projects are, you know, started by artists and they don't kind of have the money to basically, you know, engage in that kind of activity. The second problem was that even when you do have licenses, there was a lot of ambiguity around what the rights were that they were conveyed in the license. And so as a result of that, you know, even where you do have these licenses in place, it's unclear whether or not they're actually effective. Third, most of the licenses aren't on chain.

Starting point is 00:03:21 And so as a result of that, there's a question of whether or not people are actually consenting and reaching an enforceable legal agreement when they buy the tokens. And so even if a project has done everything right in creating a license and having it be very clear and not ambiguous, whether or not it's actually enforceable is a question. And then the final point, right, is that basically because of all of those problems, there's a real lack of standardization in the industry, right? Every single project has their own license. And really, you know, there's obviously CCO, which is great.

Starting point is 00:03:55 And we're very supportive of that. But, you know, not every creator wants to use CCO. And so as a result, right, the lack of standard approach, I think really creates a lot of risk that users don't know what they're actually getting when they buy an NFT. And, you know, that not knowing, right, what, you know, we can't expect every user that buys an NFT to go read the terms of service for that NFT. and what people tend to do when they don't kind of engage in that type of research, right, is they basically look to the market and they'll base it, okay, well, this NFT must have good

Starting point is 00:04:29 rights because the market is supportive of it and people are buying it. But that's not always the case. And as we've seen in kind of other sectors of this industry, right, the market kind of behaves in ways that are unexpected sometimes. And it, you know, because people are putting their money into a defy protocol, for instance, does not mean that it's necessarily safe. And so ultimately you do need to do your own research, and we know that a lot of people won't do it. So standard approaches is really the way to kind of overcome that issue.

Starting point is 00:04:58 So really, like, what the can't be evil licenses are about is basically increasing overall transparency and awareness for users so that we kind of can address these, you know, the problems that we just discussed. And earlier when you were saying CCO, can you just describe what that is for people? Sure. CCO is a license that was created by the Creative Commons, which all of our licenses were really inspired by. And the CCO is their most permissive license. It basically puts the intellectual property into the public domain. And what that means is that, you know, anyone can use the artwork to display it, to commercialize it, regardless of who owns the actual underlying NFT. And so a lot of lot of projects have thought that that is, you know, the best route to go in the space because it, you know, one of our, one of my colleagues, Scott Commoners, just wrote this article about how, you know, the CCO licensing framework really allows kind of for a vibrality and to happen around the intellectual property because everyone can use it. And so you see pieces of, of some materials, you know, of some copyrighted materials being added to other NFT projects. And it basically kind of

Starting point is 00:06:13 tries to build this whole ecosystem around that idea. And so, you know, it's just one, one approach. There's obviously a lot, but it's, it's one that's gained a lot of popularity in the space. And earlier, just, you know, when I asked you to kind of address all the problems you're trying to solve, a lot of what you raised were problems that buyers were facing. Are there also problems that creators were facing that these licenses can address? Sure. I think one of the number one problem that some creators are facing is disputes amongst token holders and disputes amongst NFT holders in particular against one another, but then also NFT holders against the creators. So wherever you have a lack of clarity and ambiguity around kind of what a person's rights are,

Starting point is 00:07:00 right, there's more likely to be dispute about those rights. And as a result of that, you know, you see a lot of creators being sued by NFT holders, and you see NFT holders suing other NFT holders. And so as a result of that, right, that is going to overall is going to act as an economic drag on the entire ecosystem. And it's not, you know, not in anyone's benefit to see that continue. All right. So let's walk through the five rights that the licenses address.

Starting point is 00:07:28 The first one is copy, display, and distribute. What does that mean? So copy, display, and distribute sounds like what it is, right? I mean, ultimately, this allows you to basically display your artwork. It would allow you to, you know, copy the artwork that's associated with an NFT and put it on a t-shirt that you wanted to wear. And that's really kind of a fundamental, you know, basic right associated with these. And it's the right that I think everyone expects that they have when they obtain an NFT,

Starting point is 00:07:58 but they don't actually have unless they have a license. And so that's, you know, again, one of the critical reasons why, you know, more clarity around licensing is necessary. Yeah, I think that was one of the ones where it was like every single license had that. The next one is commercial use. What, right, does that give people? Yeah, so commercial use, right? I mean, very clearly, I think a lot of people are excited about NFTs and the artwork associated with NFTs because they can use it in a business. So, I mean, most recently, right, we just saw Eminem and Snoke.

Starting point is 00:08:31 use their NFTs at the VMAs, right? They're very clearly building a brand around, you know, their specific apes. And as a result of that, right, you would expect them to be able to reap kind of commercial rewards for that. You know, I think we've heard kind of stories of people doing Seltzer Water branded with NFTs. And there's all sorts of stuff. Really, it just allows people to kind of go out and, you know, use the NFT artwork in a business that they want to create. I think for board apes that was limited in some fashion to earning $100,000 a year from that, does this also impose a limit or is this unlimited? There's no limits here.

Starting point is 00:09:12 I think ultimately, you know, there's a lot of different approaches that people can take, and a lot of them are defensible and reasonable minds can, you know, disagree about how, how permissive these licenses should be. I think that, you know, one of the things that people that are probably new to the field don't get about intellectual property, right, is everything is a tradeoff, right? There will never be a single form intellectual property license that works for everyone because ultimately, you know, some creators want more control. Sometimes NFT holders want more control. They want to be able to commercialize. Sometimes they don't want to be able to commercialize and just want, you know, personal use.

Starting point is 00:09:50 And so, you know, one of the things that we did try to do by creating these six licenses, right, is not really take an opinion, you know, what the best license is. because no one can really say that about any given situation, right? People have to make their own decision about what kind of they want and what kind of community they want to build on top of. We'll walk through the last few rights. So there's modify and adapt. What does that allow people to do?

Starting point is 00:10:13 So modify and adapt is one of the areas where our licenses, I would say, are more permissive than the Creative Commons licenses that we were inspired by. Modifications and adaptions really are about, you know, taking your, your NFT, the artwork associated with your NFT, and creating derivative works. So, for instance, if I wanted to, you know, create a painting of a, you know, character that I owned through and had the, you know, commercial rights and the rights to modify and adapt to, then I could do that. So I could take that character and put it into various situations. I could create a television show using that character. And so all of those things really kind of

Starting point is 00:10:53 allow people to really make use of the NFT artwork in ways that is not just kind of related to specifically the artwork, right? So you can modify and adapt it. You know, one of the problems that that raises in the context of NFTs that we don't really see in kind of other areas of intellectual property is that a PFP project, right, the standard is kind of 10,000 NFTs. And all of those NFTs are are fairly similar. And so it's not surprising that people might want to use their NFTs for the same kind of purpose, right? So if if I wanted to, you know, take my, my character and put it on my t-shirt, right, I could do that. And it would be kind of nonsensical for me to then prevent other people from putting their, you know, NFT characters on their t-shirts

Starting point is 00:11:40 and selling them, right? And so as a result of that, one of the things that we really tried to do in our license is limit the friction that can arise between NFT holders within the same community. Now, obviously, people can disagree around whether or not that is the right approach or whether or not that just results in people copying each other. But ultimately, our goal here was to reduce the kind of overall friction and the potential for litigation between parties. Because if everyone is just suing each other, the only people that win are the plaintiff's attorneys. In a moment, we're going to talk about the rest of the rights. But first, a quick word for the sponsors who make this show possible. Join over 10 million people using crypto.

Starting point is 00:12:21 com, the easiest place to buy, earn, and spend over 150 cryptocurrencies. Spend your crypto anywhere using the crypto.com visa card. Get up to 8% cash back instantly, plus 100% rebates for your Netflix, Spotify, and Amazon Prime subscriptions. Download the crypto.com app now and get $25 with the code Laura. Link in the description. The most anticipated crypto event of the year is back. Join us at Mainnet 2022, happening this September 21st to 23rd in New York City.

Starting point is 00:12:57 Connect with 4,000-plus crypto builders and thought leaders for three days of can't-be-missed, keynotes, fireside chats, demos, networking, and more. Get $300 off your pass today by visiting mainnet. Events and entering promo code unchained at checkout. That's mainnet.com. code unchained. See you this fall at Mainnet 2022. Back to my conversation with Miles. So one of the additional rights that you address with these licenses is sublicense. What does that enable people to do? So sub licensing, you know, when you think about intellectual property, the way they kind of teach it in law school is that it's a bundle of sticks,

Starting point is 00:13:43 right? And this bundle of sticks, each little stick represents a different right. So it's a right to, you know, display the artwork in a television. show. It's the right to create a movie. It's the right to put it in a song. And so one of the things that often happens when you have intellectual property is that you'll have, you know, the owner of that intellectual property will sub-license one of those rights to someone who will then, you know, take that right and commercialize it and develop the intellectual property further. And so, you know, one of the things that that allows is it really kind of fosters a greater kind of contribution to the overall intellectual property that is being sub-licensed because it's being

Starting point is 00:14:22 used by different people for different endeavors and it's thought to grow the whole pie. Now, one of the problems that that introduces within the NFT space, right, is that if I were to buy an NFT from you, for instance, I wouldn't know whether or not you had already sub-licensed out certain rights associated with that NFT. So maybe you took, you know, you owned the NFT and you sub-licensed out to, you know, someone to create T-shirts. And so when I then buy the NFT from you, there's a question of whether or not I can then sub-license out the rights to make T-shirts. And the problem there, right, is that I would have had no way of really knowing, at the moment with the technology that we currently have, I would have had no way of knowing

Starting point is 00:15:06 whether or not you actually sub-licensed out rights. And so as a result, I don't know what I'm actually buying when I'm buying the NFT from you. So one of the approaches that we took to sub-license here, which is, it's very permissive, but ultimately, when I buy the NFT from you, the sub-licenses that you had entered into all terminate. Because there's no way for me to know what sub-licenses you entered, and you're the only one that really knows that. And so as a result of that, in order for there not to be an information asymmetry between the two of us that you could exploit against me, we kind of terminate the sub-licenses. And that's another kind of key difference from you know, other licenses that are that are out there. And we think that that is one that is very

Starting point is 00:15:49 kind of key to the can't be evil approach. Yeah. And it seems that then the onus is on the seller to inform whoever they've sublicensed the rights to, that, you know, now the contract's over. So one that was really interesting to me was hate speech revocation. Talk a little bit about what that is. Yeah, that's a controversial one and one that I think, you know, people feel very strongly about on, you know, at least on Twitter. And I think we debated this internally. I worked with, you know, great lawyers at Latham and Waukins and DLA Piper. I mean, Gave Mahmood and Mark Radcliffe. And, you know, we, we kind of wrestled internally about how to approach a lot of these issues. And, you know, with respect to hate speech, you know, you have one camp that will say, well,

Starting point is 00:16:37 you know, that really allows censorship. And ultimately, it's very hard to define what hate speech is. obviously inherently very subjective. And so as a result of that, if you allow creators to kind of revoke a license because someone, you know, used hate speech, then you've really opened the door to, you know, censorship and people, creators being able to rug their holders. And it's hard to refute that because it, you know, ultimately that is, that there is a risk of that in the event that creators retain that right. But at the same time, right, you can imagine, that creators and other NFT holders in a community wouldn't want people to be able to use their NFTs in some propaganda that really kind of reflects badly. And so there are, you know,

Starting point is 00:17:28 there's very differing views on what is the right approach. And again, we didn't take an opinion on kind of what the correct approach was. And so we have versions of our, each of our licenses that have kind of the hate speech revocation as a way to, you know, really, it should be be for creators in the community that surround these NFT projects to decide. Yeah, yeah, I can see how that's controversial. And yet at the same time, it's one of those things where for the creator, you know, they could feel that some kind of usage would like harm the brand overall. So in that sense, like it does make sense.

Starting point is 00:18:03 So I want you to, you know, you have referenced the descriptor that you guys used when you release these licenses, which was that they can't be evil. Can you talk a little bit about why you chose that phrasing and what you mean when you say that? So the phrasing, it can't be evil is a play on Google's slogan of don't be evil. In previous uses, what the words are trying to convey, right, is that Web 3 technology, blockchain technology enables computers to make hard commitments, which means that it allows people to trust computers because they don't have. a person isn't controlling that computer.

Starting point is 00:18:43 And as a result of that, right, rather than having to rely on the person controlling that computer to not do something evil, the computer can't do something evil. It is literally programmed to not be able to do that. And so what that does in the Web3 space is create all of this possibility of disintermediating, you know, various services, censorship resistance, and all of these kind of things that a lot of us are very excited about. In the NFT space, you had to disconnect where that, kind of ethos doesn't really apply because either, you know, NFT or creators, you know, aren't

Starting point is 00:19:17 putting licenses in place. People don't know what they're really getting. They don't understand what rights they have when they're buying. And so as a result of that, there are a lot of trust is necessary in the NFT market currently where, where, you know, holders have to trust the creators to not do anything. They have to trust their other, the other NFT holders within their community not to do anything that would hurt the, their NFT. And so as a result, right, what our licenses try to do is, again, increased transparency and awareness. And really, like, we took a holistic approach to try and increase, you know, the overall standardization that could be available in the market.

Starting point is 00:19:55 Because with increased standardization, we'll come increased understanding on the part of users. And as a result of that, there should be more clarity and there should be less kind of need to trust anyone within a given community. So just like on the sub licensing theme thing, right, with the way that we set it up, I don't need to trust that you haven't sub-licensed it because these licenses basically make it certain that all the sub-licenses are terminated, therefore I get the full bundle of rights that I would be expecting. So the licenses are available on GitHub. What does that mean that the rights can be coded

Starting point is 00:20:27 right into the NFTs? Like in general, how can creators and the buyers enforce these licenses? Yeah. And so this is, I will say, you know, one of my like favorite things about working on projects like this is that I get to work with guys on our engineering team, the more technical people who can take the idea, these legal ideas, and then turn them into actual things that work with the functionality of blockchain. So by putting it up on GitHub, you know, A, we've put basic versions of the licenses. So anyone is free to, and we publish them under the CCO license. So anyone can take them, they can fork them, improve them, do whatever they want with them. Right. But then what is really fun about it is that we basically, we deployed all six versions of the license to RWeave. And those are immutable. We can't change them. And then we integrated those licenses into a smart contract that we deployed to Ethereum. And so with one line of code, any NFT project can basically select the license that they want to use and incorporate it into their NFT project. And what, what that's,

Starting point is 00:21:35 that does is it basically puts the name of the license and the link to RWeave in their metadata, right? And what's good about that is that it will allow NFT marketplaces to display the license that is associated with a given NFT. And so now what that does, right, is that anyone that would be buying an NFT will be able to see what the license is. Now, obviously, that doesn't solve anything because if they don't go read it, they might not understand it. But we did try to make the licenses. I mean, if you read them, they don't read like legal agreements. They read, they're really designed for people to lay persons, non-legal people to be able to understand, but still we know everyone's going to look at it. And that's why we're really trying

Starting point is 00:22:21 to create a standardized approach here so that, you know, when you see the name or, you know, like other people will be talking about it, that you'll kind of understand the rights that come along with it. So in the last question, you talked about how, you know, there's no standard standardization, et cetera. But there are some previous attempts to standardize licenses for NFTs, most notably with Dapper Labs. So why do you think that hasn't taken off before and why do you think this time will be different? I think that the, I think that Dapper Labs like did a great job. I think that the one of the issues was that I think that they might have been too early. And obviously those licenses are still around and still and still like definitely viable. And, and we would be super

Starting point is 00:23:04 happy for those also to be adopted in greater forms, right? Because ultimately, it doesn't need to say, you know, on an NFT marketplace, it doesn't need to all be can't be evil licenses. They can be Dapper Labs licenses. Ultimately, what we want is more standardization. But again, as I said earlier, right, you're never going to have a single intellectual property licensing agreement that is going to be the supreme works for everyone. And so, but having, you know, greater standardization, where it's not every single NFT project has its own license, that's just kind of a scenario that isn't really workable. Now, I would also say that the Dapper Labs and the timing of it, right,

Starting point is 00:23:45 is I think the industry in general has started to become much more aware of the issues associated with like current practices than they have been previously. And so as a result of that, I think that, you know, this is a good time. And obviously the market is a little different now than it was, you know, previously. And so I think that there's, there's growing desire to kind of solve these problems. All right. Well, thank you for illuminating all this because I know this is an issue that comes up so frequently in NFT communities. So hopefully this will educate a lot of both the buyers and the creators. Thank you so much for coming on Unchained. Thank you for so much for having me.

Starting point is 00:24:23 This was great. Don't forget. Next up is the weekly news recap. Stick around for this week in crypto after this short break. To swap crypto, a user has to choose among hundreds of dexes on multiple networks, all offering different rates and fees. Do you want to avoid that hassle? Swap on one inch, a top dex aggregator built to get you better rates than any single decks. Enjoy unlimited liquidity across multiple networks and top level security. Get one inch on your phone now or swap on one inch.io. Thanks for tuning in to this week's news recap. Michael Saylor and Micostrategie gets sued for tax fraud.

Starting point is 00:25:07 Michael Saylor and Micostrategie are being sued for tax fraud in Washington, D.C. Carl A. Racine, Attorney General for the District of Columbia, tweeted that Taylor is a billionaire tech executive who has lived in the district for more than a decade, but has never paid any D.C. income taxes. In addition, Raycine's office claims that Microsrategy aided Saylor and his intent to evane taxes on his earnings. Taylor allegedly declared that he lived in Florida or Virginia, where state taxes are lower, instead of Washington, D.C., where, according to the complaint filed last week, he lived in a luxury penthouse and docked multiple yachts on the district's Potomac Waterfront from 2005 to present.

Starting point is 00:25:47 Both Sailor and Microstrategie deny the accusations. I respectfully disagree with the position of the District of Columbia and look forward to a fair resolution in the courts, said the former CEO of the company. the District of Columbia's claims against the company are false. I added Microstrategy in a statement. Racine estimates that the back taxes and penalties for both Staler and Micro Strategy could total up to $100 million. Could this lawsuit put pressure on Micro Strategy to sell Bitcoin?

Starting point is 00:26:14 This will likely just add to the pressure for them to capture cash on their Bitcoin position, especially if they have a large tax back bill, said Adam Cogran. After the news broke, the shares of Micros Strategy tumbled 4%. cloud service provider enforces ban on crypto mining or staking. After the Office of Foreign Assets Control sanctioned tornado cash, cloud service provider Hertzner, which hosts more than 10% of Ethereum nodes, said that running any miners, including Ethereum miners or proof of stake validators on its cloud infrastructure, is a violation of their terms of service. The prohibition could mean that Ethereum would rely more heavily on cloud service providers like Amazon, making it more centralized

Starting point is 00:26:53 and more prone to censorship. As the Ethereum community, continue to discuss sanctions-related censorship on Ethereum, Martin Copleman proposed a shutterized beacon chain, which essentially aims to encrypt key transaction details so they cannot be censored by validators. Both validators and relays wouldn't know whether to censor a transaction as they wouldn't be able to see its sender or its recipient. Martin was on this Tuesday show with lawyer Drew Hinkus

Starting point is 00:27:19 discussing what the sanctions mean for Ethereum as it moves to proof of stake, so make sure to listen. arrested Tornado Cash developers' links to Russian espionage are denied. Alexei Perziv, the web developer arrested in the Netherlands, possibly due to his work on tornado cash, was accused of espionage for reportedly having worked at a company linked to the Russian Secret Service. Zinia Malik, Pricev's wife, denied the accusations. Alexi has never been associated with the FSB of the Russian Federation and similar organizations, she told Coyndesk.

Starting point is 00:27:52 We moved to the Netherlands in the hope of a quiet, stable and, free life, which is unimaginable in military Russia. Perzib is still under arrest, and there's still no clarity on the charges for which he was brought in. Is Dai going to abandon its US DPEG? Rune Christensen, the co-founder of MakerDAO proposed a free-floating model for the protocol's staple coin, Dye. Maker lets users mint dye after depositing assets as collateral and is considered one of the OG Defi applications.

Starting point is 00:28:20 At the moment, there's almost $7 billion worth of dye in circulation. Concerned about the sanctions on Tornado Cash and all of its ramifications, like Circle Freezing USDC and DFI-front-ends censoring transactions, Christensen wants Maker to reduce its real-world assets exposure, which would require die to free-float away from the U.S. dollar. Tornado Cash had extremely little exposure to RDA, or Real-World assets, and is highly decentralized, but that didn't stop it from being sanctioned, he said. Christensen's justification to DPEG is this.

Starting point is 00:28:55 As all other currencies pour fuel on the fire of the global financial Ponzi scheme that is already deeply in overshoot, we can prepare for the worst and focus on accumulating resilient collateral, such as ETH, or even eventually physically resilient RWA, and build something that could end up meaning the difference between life and death for millions. The proposal sparked a ton of reactions within Maker. If you're looking for a great recap of the various camps within Maker and their positions, Greg DePrisco, the former head of business development at MakerDA and the founder of RWA co, wrote up a great tweet thread explaining the philosophies of these three groups, which he dubs the futurists, the centralists, and the decentralists.

Starting point is 00:29:38 By the way, if you're interested in the written version of the weekly news recap, sign up for my bulletin newsletter at laura shin.bulleton.com, where you can get the links to everything mentioned in the recap. Speaking of stablecoins, Tether, the issuer of the largest stablecoin USDT, denied a Wall Street Journal report that claimed the issuer might have problems with its balance sheet. The company also said that it will provide monthly attestations starting in January and swayed of criticism over the lack of a formal audit. AVEX stumbles upon wild accusations. Crypto leaks, an outlet that claims to reveal wrongdoings in crypto, posted a document accusing Ava Labs, disclosure, a sponsor of Unchained, of using. using law firm Roche Friedman to initiate lawsuits against competitors like Salana for a strategic

Starting point is 00:30:23 advantage. The accusations were categorically denied by Emin Gunzir, the CEO and founder of Ava Labs, which is the entity behind Avalanche, a layer one blockchain. Ava Labs believes in transparency and facing the world head on, not through behind-the-scenes dealing or activity, said Sear in a statement. The document has not been corroborated to date. In addition, it appears that CryptoLeaks is tied to a company called ICP, which is going through a fraud lawsuit brought by Roche Friedman. All three CryptoLeaks investigations can be linked to attacks on ICP, which calls into question the legitimacy of the accusations. On Wednesday, Kyle Roche, founding partner of Roche Friedman, withdrew as counsel from several class action lawsuits against crypto-related businesses, including Tether, Bitvenex,

Starting point is 00:31:09 Tron, and Binance. Avax, the native token of the Avalanche network, felt 11% following the news, a low of $17.56. However, it later recuperated almost all of its losses and is now trading at $19.30. Welcome to crypto, FBI. On Tuesday, the FBI warned users about investing in DFI platforms. Cybercriminals are increasingly exploiting vulnerabilities in decentralized finance or DFI platforms to steal cryptocurrency, causing investors to lose money, the agency wrote. The public service announcement comes after the U.S. Treasury sanctions on tornado cash, citing a report from the blockchain analytics company chain analysis, which described the $1.3 billion stolen in crypto during the first three months of this year, the FBI asks people to research

Starting point is 00:31:56 defy protocols before using them. It also recommends that defy platforms introduce better practices. In related news, Representative Raja Krishna Morthy sent a series of letters to regulatory agencies and some crypto exchanges. He requested information on how they are preventing crypto fraud, and what actions they are taking to protect customers. I am concerned about the growth of fraud and consumer abuse linked to cryptocurrencies, he wrote. In addition, Reuters reported that U.S. authorities have asked Binance to provide documentation on its anti-money laundering practices, and also requested that the exchange provide communications between CEO Changpeng Xiao and 12 other executives. Speaking of regulation, this week, the Financial Accounting Standards Board, or FASB,

Starting point is 00:32:42 which will be addressing how companies should handle accounting for crypto held on their balance sheets, has decided not to include NFTs in its cryptocurrency accounting project. Final bit of regulatory news, this week, Asset Manager Grayscale, said that crypto tokens, Stellar Lumens, Zcash, and Horizon, may be securities after receiving queries from the SEC. Three Arrow's Capital founder, Suu, claims Liquidator lied. Sousou, the co-founder of bankrupt Crypto Fund, Three Arrow's Capital, claimed that Teneo, the company in charge of liquidating three AC's assets, misled the High Court of Singapore.

Starting point is 00:33:19 The claim comes days after the High Court of Singapore gave approval to Tenao to probe the local assets of the hedge fund, which means that Teneo would be able to request any financial information and dig deeper into the matter. According to Bloomberg, Zhu said the liquidator had not provided an entirely complete or accurate version of events to the court. Also, for those interested in his whereabouts, which had been unknown, he delivered his affidavit in person in Thailand on August 19th. Speaking of troubled crypto lenders, Celsius, which has been in bankruptcy proceedings since July, filed to reopen withdrawals for certain customers in the custody program and withhold accounts. These accounts have deposits worth over $210 million for more than 58,000 users. The filing will be discussed by the bankruptcy court in a hearing next month. Also, Singapore-based lender Hodelnaw was granted creditor protection to organize its restructure on Tuesday.

Starting point is 00:34:15 And Voyager, the bankrupt crypto lender, extended the deadline for its bidding and restructuring processes. El Salvador's Bitcoin bond delayed again to later this year. Bitfinex and Tether CTO, Palo Ardoino, told Fortune that El Salvador's Bitcoin bond was delayed once again, until later this year. Bitfinex was set to be the sole exchange provider. El Salvador was the first country to adopt BTC as legal tender about a year ago. The government also announced a Bitcoin bond, which would be used to build a Bitcoin city. The release of the bond, also known as the Volcano token, was originally slated to happen in March of this year. Time for fun bits.

Starting point is 00:34:57 Crypto.com's expensive mistake. In May 2021, a woman from Melbourne asked for a refund of $100 Australian dollars from CryptoExchange, Crypto.com. which disclosure is a sponsor of my shows. She got the surprise of her life when she received more than 10 million Australian dollars in her bank account. It looks like someone mistakenly sent her more than 100,000 times her refund. The exchange didn't even realize the error until a Christmastime audit. By then, the money was gone.

Starting point is 00:35:26 The woman had accepted the gift, bought a luxury mansion, and sent $500,000 to her daughter. Crypto.com has now initiated legal action against this woman asking for the funds to be returned. If this had happened with crypto, the $10 million would have been lost forever. Thanks so much for joining us today to learn more about A16C's new NFT licenses. Check out of the show notes for this episode. Get exclusive access to more of my content through Bulletin. Subscribe for interviews you won't find on the Unchained podcast. Visit laura shin.b bulletin.com slash subscribe.

Starting point is 00:36:00 Unchained is produced by me, Laura Shin, with up from Anthony Yun, Matt Pilchard, Juan Omanovich, Pamma Jimdar, Shashonk, and CLK transcription. Thanks for listening.

Unchained - How a16z’s New NFT Licenses Hope to Solve Rights Problems for Creators and Buyers - Ep. 391

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