Unchained - How Ukraine Is Leveraging Crypto in Its Fight Against Russia - Ep.326

Starting point is 00:00:00 Hi, all, I had a really wonderful first official book reading here in New York at The Strand. It was totally sold out and people were even being turned away at the door. We will try to do another reading somewhere in New York for those of you who couldn't make it. It was a blast meeting so many of you. Thanks to those of you who came and asked such engaging questions. Thanks also to Christine Lee of Coindesk who did a fantastic job moderating. There are a few more in-person events that I'll be doing in case you want to get your book signed or just say hello.

Starting point is 00:00:37 For folks in the Bay Area, on Tuesday, March 8th, I'll be doing a reading and signing at San Francisco's Commonwealth Club, moderated by the information's Kate Clark. Doors open at 5.15 p.m., the program begins at 6 p.m., and the book signing is at 7 p.m. For people in Seattle, I'll be doing a reading and signing as part of Town Hall's Seattle on March 9th at 7.30 p.m. at the forum, moderated by Steve Scherer of Town Hall, Seattle. Check out the show notes to buy tickets to both of these events. And I may also be at South by Southwest on March 12th. Details still TBD. And I might also be in Boston at Harvard the weekend of March 26th. No promises on either score, but I guess if you feel strongly about either one,

Starting point is 00:01:29 you can tweet at me, as that might tip the scales. On April 5th, I will be in Miami doing a reading, and on April 9th, I'll be in Annapolis at the Annapolis Book Festival. Finally, on March 23rd, I'll be doing a virtual reading with Powell's bookstore at 8 p.m. Eastern, 5 p.m. Pacific, and Jeff Roberts, executive editor of DeCript, and author of Kings of Crypto, will be moderating. Thanks again for attending, if you,

Starting point is 00:01:59 you came to New York, and if you want to come to the San Francisco or Seattle events, you can check out the show notes for tickets. And now, on to the show. Hi, everyone. Welcome to Unchained. You're a no-hype resource for all things crypto. I'm your host, Laura Shin, a journalist with over two decades of experience. I started covering crypto six years ago, and as a senior editor at Forbes was the first mainstream media reporter to cover cryptocurrency full-time. This is the March 4th, 2022 episode of Unchained. Brave Wallet is the first secure wallet built natively in a Web3 crypto browser with no extension required. You can store, manage, and grow your crypto portfolio all from a safer wallet.

Starting point is 00:02:48 Visit brave.com slash unchained to get started. Point change is the easiest way to earn passive income. income using crypto. You can safely deposit cash or cryptocurrencies to earn up to 20% annual yield. There is no lending or market risk, just simple, high return yield farming. Create an account today at trydefi.c slash unc and receive 40 USDC. That's tri-defi.c slash unc. With the crypto.com app, you can buy, earn, and spend crypto in one place. Download and get $25 with the code Laura, link in the description. Today's guest is Tamika Tillaman, chief policy officer at Katie Hahn's new firm.

Starting point is 00:03:36 Welcome to Micah. Pleasure to be with you. Thank you, Laura. When I was casting about for someone who could speak to the crisis in Russia and Ukraine, with what has turned out to be a surprising crypto angle, I realized you would be perfect because of your extensive experience, both in government and with blockchain technology. For listeners who are unfamiliar with you, can you please give a brief description of your background

Starting point is 00:04:02 so people can understand how your perspective is deeply informed by both subject areas? Well, I went to work in Washington now many years ago for a little-known Delaware senator named Joe Biden, and at the time he was the ranking member on the Senate Foreign Relations Committee, and I covered a large swath of the world for him that included Ukraine and spent a great deal of time engaging with Ukrainian officials in that capacity.

Starting point is 00:04:31 I then in 2008 went over to the State Department and served as a speechwriter and later senior advisor to Secretary of State Hillary Clinton and then Secretary of State John Kerry and ultimately encountered blockchain technology and crypto and Web 3 in the course of that work through a conversation initially with the then president of Estonia, Tomas Ilves. Estonia has some of the world's best digital systems, and we were talking about how we could port those capabilities to other countries around the world. And his suggestion was that if we were to do something like that, again today, we would build on blockchain. And that really got me interested in this vast new space of what we now call Web 3. I left the State Department a few years later,

Starting point is 00:05:20 inspired in large part by what I had found in the ecosystem, went to work at an organization called New America that operates at the intersection of innovation and policy and collaborated with governments around the world and across the United States in building out an array of open source and decentralized systems to serve the needs of their citizens more effectively. From there, went to Andries and Horowitz, where I was global head of policy with a focus on web three issues and joined Katie's team just a few months ago. So, yeah, so people can see how you know both areas very well. And why don't we now give a recap of what it is that has happened over the past week

Starting point is 00:06:04 and a half involving Russia and Ukraine and also then talk about how it is that crypto became involved in this story so quickly. Well, you've seen over the last several months a built. up by Russian forces in the bordering areas, primarily in Belarus and in areas of Russia that are right up against Ukraine. What we saw, you know, tragically, but in this case, there was a lot of warning as that as soon as the Olympics ended, Russian tanks rolled into Ukraine. And this was a case where U.S. intelligence did a very good job.

Starting point is 00:06:47 we had a pretty good idea that this was coming. And in the conversations that I had been having with U.S. officials for weeks and weeks, they anticipated that this would occur. You, I think, are now in a situation where the Ukrainians have proven incredibly heroic in defending their country and have been successful in holding off the Russian advances in many, if not the vast preponderance of the population centers around Ukraine. But, They are in urgent need of help in order to avoid being overrun. And it's surprising, but some of that help, a significant chunk of that help, has come from the crypto community.

Starting point is 00:07:30 The vice premier of Ukraine, the vice prime minister put out a call for help asking for people to donate. We've seen almost $50 million in contributions come in, which is pretty breathtaking, if you think about it, and a wide array of different Web3 tools harnessed in order to help in the response efforts. You see efforts to utilize platforms like RWeave for documents preservation and for evidence preservation in the case of war crimes. You see a variety of different mechanisms being utilized to send humanitarian support. So this is really the first conflict in which Web3 tools are playing a big role. And we're seeing that they can be utilized pretty decisively to support those who are standing up to oppression, which is, I think, one of the reasons

Starting point is 00:08:24 that many of us got into the space to begin with. Yeah, I mean, just to see a government Twitter account tweeting, here's our BTC and ETH and Tether address, and then later Dot was added. I mean, that was just really mind-blowing. You know, it really felt like Okay, definitely something historic is happening right now. You know, at what point in history have we ever seen anything even remotely similar to this? You know, one thing I wanted to ask about was several Russian banks were cut off from Swift, which is kind of like financial messaging infrastructure. And I have heard that, you know, some different entities felt that that maybe wasn't the right move,

Starting point is 00:09:08 that that should be kept neutral and that there were risks that then that would kind of break up the primacy of Swift and reduce its power and maybe by extension the power of the US dollar. What do you make of that? And then how, you know, there were concerns that, of course, then Russia could just turn to crypto instead. Like, what do you make of that debate and what the concerns were around crypto? Well, I think you've seen a couple of different elements come together very rapidly. The first is an unprecedented sanctions response by virtually the entire world, and Swift is one manifestation of that. Swift is an old and pretty cumbersome system. It's very expensive to use. It's very slow. It's not a great way to send resources between banks,

Starting point is 00:10:01 but it is the only system that most banks rely on to do that on a cross-border basis. And so I think, for that reason, Swift has been in trouble for a long time, and certainly many of us in the crypto community, the Web3 community, have been mindful of the challenges confronting Swift for quite a few years now. I think what we are seeing at the moment is a forcing function, which is that many countries are going to take a hard look at Swift, at the inefficiencies that exist within Swift. And it's true that potentially they may start looking for other solutions. I also think there's a real moment here for some of the solutions like dollar-denominated stable coins that are being developed that are frankly much more functional than the antiquated Swift system that we've been

Starting point is 00:10:57 stuck with for a long time to come to the forefront and prove that they can meet some of the needs that were previously provided by that system. So I think this is a moment when folks are going to start asking tough questions about our financial infrastructure and our digital systems. Hopefully, we're going to be able to answer those questions in ways that will ensure an open dynamic financial system going forward. But it's hard to argue that the Russian banks deserve to be sanctioned in this situation. And I certainly supported this. move to remove them from Swift. So numerous people have also warned that Russia, you know, could use crypto to evane sanctions.

Starting point is 00:11:44 For instance, Senator Elizabeth Warren tweeted, cryptocurrencies risk undermining sanctions against Russia, allowing Putin and his cronies to evade economic pain. What do you think of that theory? Is that possible or likely or is that unlikely? The most sophisticated analysts in this space, organizations like chain analysis have looked at this question in great detail. And they've come to the conclusion that it would be virtually impossible for Russian actors to utilize crypto to evade sanctions at scale. There may be limited instances in which an actor here or an actor there can circumvent the sanctions regime. But it's going to be extremely challenging due to the visibility. and accountability that's provided by blockchain architecture to really do an end run around the

Starting point is 00:12:37 international sanctions that have been put in place. I think that certainly law enforcement is going to be watching closely to see how this plays out. It's a pretty unprecedented set of circumstances, but in many of the engagements that we have with national security and law enforcement leaders, they are among the most enthusiastic actors when it comes to the use of, web three technology because they know that the alternative, which they've dealt with in past conflicts, uh, is pallets full of hundred dollar bills that go into war zones. And, uh, certainly, web three tools provide a much, much higher degree of accountability and transparency than the systems that they have been forced to rely on in the past, uh, which are deeply, deeply flawed and

Starting point is 00:13:28 problematic. Yes. certainly if I were in their shoes, I probably would prefer using blockchain technology over pallets of cash if I were trying to trace transactions. All right, so in a moment, we're going to talk a little bit more about some of the other crypto turns with this story, but first, a quick word from the sponsors who make this show possible. Web3 means freedom from big tech and Wall Street with more control and better privacy.

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Starting point is 00:15:16 Link in the description. Back to my conversation with Tamika. So one thing that has been reported is that trading volume, pairs in crypto with the ruble have increased in volume on Tuesday. The block reported that they are up over three times their normal volume. So what do you think is going on, you know, probably, I guess, on the ground level for Russian people? Well, the Russian people are facing an unprecedented crisis. There's no major economy in the world that has ever been unplugged from global markets in the way that Russia has over the last few days.

Starting point is 00:15:57 And certainly there are many Russian people who are not supportive of the war, and it's important to acknowledge that. But there is a broad recognition on the part of the international community that changing the behavior of Vladimir Putin and his regime will require imposing some pretty extraordinary and unprecedented penalties on the Russian economy. And so I think you see a lot of Russians looking to decouple from the ruble in any way that they can because the value of the ruble is plummeted.

Starting point is 00:16:34 And in many instances, what we're hearing is that the utility of the usual mechanisms that people would take advantage of to make purchases in Russia is also crumbling. Many of the payment systems that they traditionally rely on just aren't functioning. And so against that backdrop, it's not surprising that you're going to see folks trying to utilize decentralized architecture to keep their families fed and ensure that they're able to survive what is going to be a difficult time. So similarly did see that the Ukrainian government and the vice prime minister, who you mentioned before, I'm not sure how to pronounce it as a make, Mikhail Federov, yes. Called on crypto exchanges to freeze the accounts of Russian and Belarusian users, but the exchanges responded that they would only impose sanctions on individuals to whom, you know,

Starting point is 00:17:36 was legally required to do so. So why do you think these Ukrainian ministers or. the Ukrainian government were requesting this? And then what did you make of the exchange's response? Well, certainly, Ukraine's best hope right now is to impose the strongest possible penalties on Russia in order to ultimately most international policy and international diplomacy comes down to a very simple equation. The costs of pursuing a course of action for a leader greater than the benefits of that course of action. And previously, Vladimir Putin had made a determination that the costs of going into Ukraine

Starting point is 00:18:21 were going to be outweighed by the benefits that he was hoping to accrue from that. The Ukrainians are trying to change the equation, and they're using any possible tool that they can to do it. And you have to recognize the pressure that they are under in this extraordinary moment to do that. I think you are seeing a couple of things as this plays out. The fact that folks are moving assets out of rubles puts further pressure on the Russian economy. So that on its own is actually an additional challenge for the Kremlin. And then beyond that, I think there are a wide array of potential responses to this.

Starting point is 00:19:07 And you have to be somewhat, they've followed. the fact pattern for each specific case. I don't know that you can say categorically that kicking everybody off is the right thing or kicking nobody off is the right thing. There are going to be, I think, a lot of efforts over the next few days to identify individuals who are subject to the sanctions, make sure that those individuals don't have access to any asset. And sanctions, of course, are not based on the type of asset there based on the individual who is sanctioned. And so that's an important clarifying point. And hopefully we get to a place where those that are an urgent humanitarian need

Starting point is 00:19:52 are going to be able to access digital assets. Those that are facilitating or participating in the conflict in Ukraine should not be able to access their assets in my view if they're under a sanctions regime. And one other thing I wanted to ask about in terms of donations to the Ukrainian government is that we saw other crypto donations groups such as groups such as Ukraine Dow spring up. And I wondered how that, you know, donating to that, how that would compare to sending money to the government's addresses or just what you make of the fact that a Dow spring up for this purpose. Then, you know, what you thought the significance was of this. Well, there have been a variety of very innovative uses.

Starting point is 00:20:40 of Web 3 technology, including DAOs, some of which have been publicly announced, a number of which have not yet been publicly announced, but they're coordinating response efforts cross everything from humanitarian engagement to in some other instances looking at longer-term challenges like the prosecution of war crimes. And so we're seeing an array of different mechanisms

Starting point is 00:21:06 come to the fore. I think that with crypto in general, you get a much higher degree of transparency than you're usually accustomed to in humanitarian assistance or support provided in a conflict zone. So you know that money has arrived in the account. You can see when money has left the account. And in the context of a Dow, you have some say in how that money is spent. So there is a lot of accountability that comes with the utilization of Web 3 architecture that we haven't really had in any past global conflict. And that I think is something that we are still starting to wrap our heads around.

Starting point is 00:21:48 But my assumption is it's going to have a very far-reaching impact on the way that humanitarian support is provided in complex emergencies going forward. Donors will be able to know with a high degree of assurance that resources have hit a specific wallet that they're trying. trying to target. And in the past, you would send money off to a place like Afghanistan and pray that maybe a small portion of those assets would actually make it to their intended destination. That's no longer the case. So a very fascinating twist was that the Ukrainian government even then announced an air drop

Starting point is 00:22:28 at one point. They did ultimately cancel it and instead replace it with an NFT drop. and people were saying, oh, people are getting rug pulled by a sovereign nation. But I kind of wanted to unpack that. So at the moment that the airdrop was announced, what did you think the significance of that was before we knew that they were going to change their minds? I think it's fair to say that it is both extraordinary and unprecedented for a government to be utilizing defy tools to mobilize and aggregate capital. in the context of a military crisis.

Starting point is 00:23:07 That's not something that, to the best of my knowledge, we have ever seen before on planet Earth, but now that it's been done and being done, frankly, very successfully by the Ukrainians, and they are a country that has a high degree of technical proficiency. Many of their leaders are Web 3 natives. They understand how these tools work. I assume we're going to see this again,

Starting point is 00:23:29 and it's certainly likely that it could become a more common feature of providing support in complex humanitarian emergencies. I think that Ukrainian authorities have plenty of things to worry about right now, so I certainly would not be counting on them to provide air drops. I think that those who contributed speaking for myself, at least did so without any expectation of an air drop. But I do think that tools like NFTs could provide a very powerful. powerful mechanism for validating contributions going forward and creating the type of community

Starting point is 00:24:11 that Web3 systems are uniquely positioned to build across borders, across time zones, bringing people together to address a common challenge. And so ultimately, why do you think they decided against the token airdrop in favor of the NFTs? You know, I've had a lot of conversations with Ukrainian officials over the last couple of days, I haven't pushed them on that question and I wouldn't want to speculate. I think they had better things to worry about. Okay. So at this moment, you know, we're looking at just some really unprecedented things that have happened. But in general, from this moment and going forward,

Starting point is 00:24:49 you know, obviously I'm sure this isn't the main, you know, thing that's top of mind for the Ukrainian officials. But I do think that actually this has really showcased some benefits of blockchain technology. So what would you say are kind of the main lessons for some people who are, you know, seeing blockchain being used in this way for the first time? Well, I'd highlight four big areas where the international community should sit up and take very close notice. The first is when it comes to moving capital to governments. The United Nations has estimated in the past that in complex environments, you lose roughly 30% of every dollar that's deployed due to malfeasance and corruption. It takes another 15% approximately of every dollar to do auditing, monitoring,

Starting point is 00:25:48 and evaluation. So before you have done any good at all, before you've helped a single person bought a single blanket, you've lost 45 cents on every dollar that's deployed using traditional legacy systems. We need to be able to do a lot better than that. And so using Web3 architecture to move capital into complex humanitarian emergencies is the way of the future. This is how it's going to go. And I think governments are going to recognize that. Second piece is we can get resources to individuals in need in a way that we have never been able to previously. One of the reasons that Ukrainians are proving so adept in using Web3 tools now, is that when they ousted their past leader, who was beholden to Moscow and somebody who was engaged in extensive corruption,

Starting point is 00:26:44 you'll remember that many of the Ukrainians on the Maidan would hold up Bitcoin addresses on signs so that people watching from the outside could target resources to them directly because they needed band-aids, they needed medical supplies, they needed food, and you could send that help precisely where it was needed to the individual. So that's another huge advantage. The third thing I would highlight is the importance of decentralized systems in safeguarding information. When a military rolls in, they're going to do two things. One is destroy physical. records and the other, and we know that there were attempts to do this using a bug called WIPER, is to erase digital records. The advent of Web3 platforms like RWeave will provide new frameworks for safeguarding information in the face of military attacks. And that's very consequential and important if you want to be able to rebuild quickly and effectively. You need to know that your land registries are protected. You need to know that your

Starting point is 00:27:52 vital records have been preserved. And Web3 tools can help do that. And the last piece that I would mention, and I alluded to this earlier, is that we need to be using Web3 systems to preserve evidence of war crimes and atrocities. Unfortunately, there are war crimes being committed in Ukraine, and it has been very challenging in past conflicts to ensure that you have a clear chain of evidence regarding the validation of those crimes. And we can now use Web3 tools to have a much higher degree of confidence in the information that's coming out of war zones and ensure that it's protected against future deletion by bad actors.

Starting point is 00:28:40 I just almost had chills in some ways listening to you because I do feel these are just such kind of new capabilities and they'll really change the nature of these kinds of altercations. And so hopefully I would imagine that could have a positive effect, and I would hope that they would. One quick point on this, if I can, Laura. Right now, everyone is justifiably and correctly focused on bringing an end of the conflict and ensuring the removal of Russian troops from Ukraine. We also need to start thinking about the rebuilding process to come.

Starting point is 00:29:21 And I remember having a conversation with the individual who was Prime Minister of Haiti when the earthquake hit in that country many years ago. And he told me that the first building to collapse was the building that stored all of the vital records for the country. What that meant is that when it came time to rebuild, they couldn't do it because they did not know who owned the land that they were going to be building on. And it has been devastating now for a generation of Haitians to be able to get their lives back on track simply because there weren't good record-keeping mechanisms in place. Web3 systems should solve for that in Ukraine.

Starting point is 00:30:02 So in addition to seeing a Web3 enabled response to the conflict, my hope is that we're going to see a Web 3 enabled recovery in the aftermath. And that should enable people to get back to their lives much more rapidly than would have been possible otherwise. That's such a great story. I actually was there when you heard that story because this was on Necker Island. With Laurent Vermont. You were there.

Starting point is 00:30:27 I remember. Yeah, yeah, exactly. Yes. I could picture his face and I just couldn't remember his name. But thank you. Yes. And yeah, that was such a powerful story. I do agree that, yeah.

Starting point is 00:30:37 I mean, hopefully we will. see blockchain technology being used in this way and people will understand the power of it. This has been such a fascinating conversation. I so appreciate that you came in Unchained to explain all this. You know, would love to hear more when there is more news. But for now, thank you so much for coming on Unchained. Thank you. And thanks to all those who are helping to respond to this crisis using the tools and community that we've built over the last few years together. Don't forget. Next up is the weekly news recap. Stick around. for this week in crypto after this short break.

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Starting point is 00:31:46 Create an account today at tri-defy.c-c-slash-UNC to receive 40 USDC. That's tri-defi.cc-slash unc. Thanks for tuning in to this week's news recap. Are NFTs securities? That's what the SEC wants to know. According to Bloomberg, the U.S. Securities and Exchange Commission is probing NFT creators and marketplaces to determine whether certain tokens qualify as securities and should be regulated as such. Of particular importance to the SEC are fractional NFT platforms, where an NFT can be subdivided into many units that are sold independently of the original NFT, be it art, collectible, ticket or meme. Siting sources familiar with the matter, Bloomberg noted that the SEC had sent

Starting point is 00:32:45 subpoenas to both creators and exchanges requesting information. Interestingly, crypto-friendly SEC Commissioner Hester Purse, aka CryptoMom, had sent a coin desk in December. Given the breadth of the NFT landscape, certain pieces of it might fall within our jurisdiction. People need to be thinking about potential places where NFTs might run into the securities regulatory regime. The SEC's look at NFTs did not shock many crypto lawyers. For example, Anderson-Kill law partner Haley-Lennon tweeted that it was not much of a surprise. And Stephen Pally described the regulator's exploration as predictable as herring in brine. The news comes just a few weeks after the SEC fined BlockFi $100 million for offering a security product via its interest earning

Starting point is 00:33:37 accounts. Consensus has a messy lawsuit on his hands. A group of 35 employees at the Joe Lubin-led Ethereum Development Company Consensus filed a request for a Swiss court to review a previous deal between Consensus and J.P. Morgan. The 35 employees, who make up more than half of Consensus AG shareholders, claimed that a 2020 transfer of assets from Consensus AG to Consensus Software Incorporated was illegal. The deal saw J.P. Morgan take a significant stake in both Metamask and Infura, two major assets originally owned by the AG, without the AG's minority stakeholders being properly notified. In addition, the deal offset a $39 million loan from founder Joe Lubin.

Starting point is 00:34:28 According to the claims published by Arthur Hayes, who is heading the suit against Consensus AG, the transaction was to the detriment of the minority shareholders of CAG and to the benefit of Joe Lubin personally. The legal request comes shortly after a consensus fundraising round of $200 million at a $3 billion valuation. The company refutes the claims found in Hayes' letter telling the block, Mesh, aka Consensus AG, refutes the allegations underlying the legal action, as well as those contained in the factually inaccurate press release that was self-authored by one of the former employees. Mesh looks forward to formerly refuting the allegations and accusations in Swiss courts. Core Crypto Products block international users. In related news, Metamask and Infura, both Consensus

Starting point is 00:35:23 products updated their support pages to reveal that services are unavailable in certain jurisdictions due to legal compliance. This update accidentally led users in Venezuela and possibly Iran and Lebanon to being locked out of Metamask for a brief period of time. In changing some configurations as a result of the new sanctions directives from the United States and other jurisdictions, we mistakenly configured the settings more broadly than they needed to be, explained in fewer. Metamask said that it and infura would be unavailable in certain jurisdictions due to legal compliance going forward, but did not specify what areas. Iranian users of the NFT marketplace OpenC are also claiming that they have lost access to their

Starting point is 00:36:12 accounts, with multiple verified collections allegedly being removed from the platform. The IRS won't take no for an answer. The U.S. Internal Revenue Service filed to dismiss a lawsuit by Joshua and Jessica Jarrett, a married couple who claims they should not have paid income tax on staking rewards. While the IRS offered the Jarrett's a refund in December, the couple refused in an effort to force a federal court to decide how staking income is taxed in the U.S. However, this week, the IRS filed a motion to dismiss the case, arguing that the Jarrett's could not refuse its offer of a refund. In related news, during a March 2nd panel, Carolyn Shank, an IRS official,

Starting point is 00:36:59 said the regulator would be utilizing John Doe Summons to seek information from crypto exchanges on unnamed taxpayers. And in the UK, the Financial Conduct Authority revealed that it has opened 300 cases relating to crypto companies and has 50 live investigations, including criminal probes into unauthorized businesses. The FCA is the UK's supervisory authority regarding anti-money laundering and counter-terrorism financing. Bitcoin's best day in 365 days plus. Bitcoin had its best trading day in over a year on Monday, gaining 14% in a 24-hour period. Data from CryptoRank shows that it was a good week for the crypto market in general, with Bitcoin and Ethereum gaining 20% in the seven days spanning Thursday to Thursday, while only three coins, file coin, secret, and Leo,

Starting point is 00:37:55 in the top 100 by market capitalization, fell. As has been the case in 2022, Cosmos and Terra tokens led the charge with Roon, Luna, ANC, and Juno, making up four of the five biggest gainers of the week, among tokens in the top 100 by market cap, with each experiencing price increases between 65% and 79%. The cosmos and Terra pumps appear to be led by development and usage. On Terra's side, its native token, Luna, has been locked up at an extraordinary rate and overtook Ethereum 2.0-based ETH this week as the second largest staked token in crypto, according to staking rewards. Data from SmartStake shows that Terra has burned $2.48 billion worth of Luna since February 4th, a month ago.

Starting point is 00:38:49 and as covered on last week's podcast, Luna Foundation Guard, a non-profit supporting the stable coin at UST on Terra, bought $1 billion worth of BTC, with Luna locked into a four-year vesting schedule to backstop UST. Interestingly, it appears that LFG plans to purchase more, with Terra CEO Doe Kwan, tweeting, The Terra Protocol will be one of the largest holders of BTC. On Cosmos' side, the much-anticipated FMO's launch and airdrop took place this week, marking the arrival of the first EVM-compatible hub on Cosmos. Citadel Security CEO does an about-face on crypto.

Starting point is 00:39:33 Kenneth Griffin, founder of Citadel Securities, an infamous winner of the U.S. Constitution bidding war, told Bloomberg this week that his once negative sentiment regarding crypto has since shifted. He called crypto one of the great stories in finance over the course of the last 15 years. He added, and I'll be clear, I've been in the naysayer camp over that period of time. But the crypto market today has market capitalization of about $2 trillion in round numbers, which tells you that I haven't been right on this call. According to Griffin, Citadel Securities, which handles 25% of equities volume traded on the U.S. stock market each day,

Starting point is 00:40:14 and executes 35% of U.S. listed retail volume, will most likely get into the crypto market-making game soon, despite saying in October that the company would not, due to regulatory uncertainty. To the extent that we're trying to help institutions and investors solve their portfolio allocation problems, we have to give serious consideration to being a market maker in crypto, Griffin explained.

Starting point is 00:40:37 It's fair to assume that over the months to come, you will see us engage in making markets and cryptocurrencies. The news comes almost two months after Citadel Securities made headlines by taking $1.15 billion in capital from two venture firms, Sequoia and Paradigm, a cryptocentric company that has backed compound, cosmos, Sky Mavis, and Uniswap. This week in crypto adoption, no week filled with headlines about Ukraine, Russia, Swift, the EU, and more. It was easy to miss a slew of major companies adopting crypto in one way or another.

Starting point is 00:41:12 Here are three examples. KPMG purchased two NFTs this week. The Canadian arm of the major accounting firm bought Woman 2681 for $25,000 or $75,000 from the World of Women's NFT collection. It also minted KPMGCA.eath, an EMS domain. Charles Schwab filed with the SEC to create a crypto economy ETF that would give investors exposure to companies developing and utilizing cryptocurrencies. Rakuten Group launched an NFT marketplace last Friday that will allow users to purchase sports and entertainment digital collectibles, along with IP minting capability. Time for FunBits.

Starting point is 00:42:00 Kevin. The meme green pixelated money printing machine. Pixelmon, a blockchain gaming project, released a collection of 9,999 NFTs last week, generating $70 million in sales during a mint that saw collectors pay up to 3-Eath per NFT. The mint sold out quickly. However, collectors were immediately disappointed with the quality of the art, which was later described by Pixelmon's CEO as unacceptable. The NFTs grant holders exclusive access to Pixelmon-based land and token airdrops, boost in-game earning potential, and grant access to the alpha release, among other things.

Starting point is 00:42:42 However, the price floor for them has already dropped to 0.299eth on Wednesday night, meaning that some Minter's NFTs are worth one-tenth what they paid just a week ago. However, as this is crypto, one particular Pixelmon NFT, a species called Kevin, caught fire on social media and saw the floor price skyrocket due to its ugliness. one point, Kevin NFTs were selling for over $20,000. Kevin NFTs spawned an entire meme culture on Twitter, with the green, Bowser-like 3D character taking over crypto Twitter, and even receiving its own song from Song A.k.a. Johnathan Man. Kevin became so popular that a derivative project called Kevin Punks was minted and instantly became a hit, with 549 eath in volume

Starting point is 00:43:39 after just a few days of trading and a price floor of 0.88 Eth. Unchained tracked down a Kevin investor via OpenC and asked them essentially why they would spend 8.6Eth on a meme. John Bissu, co-founder of Seasons.io, seemed to think it was a good fit for his NFT platform and told Unchained that he might donate his Kevin into the trash pile on trashdow, where users can swap NFTs from qualified contracts in exchange for trash tokens, which govern the deposited NFTs. However, if Kevin continues to grow in value, BSU might fractionalize the NFT on seasons so that everyone can have a piece of memetic history, because, as Bsou explained to Unchained, there is a Kevin in all of us. All right, well, thanks for tuning in to learn more about Tamika.

Starting point is 00:44:31 the crisis in Ukraine, and Katie Hahn's new firm, be sure to check out the links in the show notes for this episode. Unchained is produced by me, Laura Shin, with help from Anthony Yun, Daniel Ness, Mark Murdoch, Shishonk, and CLK transcription. Thanks for listening.

Unchained - How Ukraine Is Leveraging Crypto in Its Fight Against Russia - Ep.326

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