Unchained - How Writing 'The Cryptopians' Shaped My Views on Ethereum - Ep.324

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, a journalist with over two decades of experience. I started coming 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 February 25th, 2022 episode of Unchained. 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. Brave wallet is the first secure wallet built natively in a Web 3 crypto browser with no extension

Starting point is 00:00:42 required. You can store, manage, and grow your crypto portfolio all from a safer wallet. Visit brave.com slash unchained to get started. Point change is the easiest way to earn passive income using crypto. You can safely deposit cash or cryptocurrencies to earn a different. 20% annual yield. There is no lending or market risk, just simple, high return yield farming. Create an account today at tri-defi.c-c-unc and receive 40 USDC. That's tri-defi.cc slash unc. Today's guest is me, author of the Cryptopians, Idealism, greed, lies, and the making of the first big cryptocurrency craze. Cure to interviewment,

Starting point is 00:01:31 me about my book, which came out on Tuesday, is Stephen Erlich, editor of Forbes Crypto Asset and Blockchain Advisor. Welcome, Stephen. Thanks, Laura. It's a pleasure to be here, and thank you for joining me as well. So, yeah, so let's dive in. Your book, your book just came out. I mean, one question that just immediately comes to mind is, why did you decide to write a book and why did you pick this topic? Having covered the initial coin offering craze in 2017 and seen just how quickly the whole thing took off and how it transformed the lives of so many different sources of mine, even my own life, actually. It really felt like something historic happened, and it felt like something that was worth chronicling in a book. So at that time, I felt, well,

Starting point is 00:02:21 this would be a good moment to, you know, try to capture what happened. And so that is why I decided to cover this. And also, I've wanted to write a book ever since I was a young child. So felt like a good time to achieve that goal. Yeah, that makes sense. And one thing that also kind of jumps out immediately when I think about the book is the title. I mean, it does sort of crack the veneer of happy-go-lucky group of optimists looking to build a better future. I mean, you really go deep and talk about some of the conflicts that arose among this early cadre of founders that broke along like economic, political, economic lines. and visions of how Ethereum should happen.

Starting point is 00:03:06 So, I mean, why did you choose that title? And what do you think people who read the book should understand about the early days of Ethereum? My editor and I wanted to capture the fact that this was a book that was really about people and about the human aspects of this technology. And so that was why, especially just the phrase the cryptopians was something

Starting point is 00:03:32 that, you know, he really advocated for. And for the subtitle, Idealism, Greed Lies, and the Making of the First Big Cryptocurrency craze, those elements are all part of that time period in crypto. And frankly, I think they're probably also, you know, they probably also capture the current time period as well. I think probably there's a mixture of that in pretty much every area of crypto. But, you know, it really comes through in the story that there are definitely elements of all of those things. And so, you know, that that basically just captured the story.

Starting point is 00:04:09 Yeah. And it's funny. In one section of the book, you talk about the red wedding day. And the book, the title itself reminded me a little bit of just like game of thrones and palace intrigue. So it is kind of an interesting sort of analogy there. So let's talk about some of the people. Obviously, the main character in the book is someone that I'm sure all of your listeners have heard of, Vitalik Vuterin, the Russian board, Canadian computer scientist, founder of Ethereum. What makes him such an interesting person to cover? Vatelic definitely is a very interesting character. He is not somebody that anybody would call, I mean, these are pejoratives that are used,

Starting point is 00:04:51 but, you know, basic or a typical fill in the blank. I mean, you could use anywhere there. and I don't think anybody would say Vitolic is typical in any way. He's really a singular person, and he has a very complex personality. And when you have someone like that who is a little bit, you know, different, not exactly kind of a certain type of person that you might be able to predict, like, you know, how they would be, but also somebody who has a hard time asserting himself, all of those things kind of, you know, are not necessarily qualities that make for a good leader.

Starting point is 00:05:31 And a lot of people looked to him as a leader in the early years of Ethereum, but he wasn't necessarily willing to assert himself in that way. And because there were so many different competing motives from different people and a lot of infighting, that created a lot of problems for Ethereum. And really those problems dragged on for quite a long time. And it's funny. I mean, as I read through the book, I mean, you see Vitalik's progression, maturation as a leader in some regards when it comes to making tough decisions when it comes to business, personality, et cetera. But he definitely does seem to struggle too about knowing who to trust, knowing whether certain people are just being nice to him because they want to ride his coattails or if they genuinely do care about him. And it's a lot for an early 20-something thrust into the center of a, it turned out to be a multi-billion-dollar economy.

Starting point is 00:06:27 So that is an interesting journey to follow. Yeah. And one thing I wanted to add was he was so naive when he was young that it didn't even occur to him that some people might have these ulterior motives. He was so pure that it never occurred to him that people might be trying to use him or that they might act toward him one way but a different way toward others. And so his inability to really understand human nature was another issue at, you know, at the core of kind of some of the dysfunctional issues in Ethereum leadership. Yeah. I mean, they kind of put in perspective, it sounds like this was really his first job. I mean, aside from writing articles for Bitcoin Weekly Bitcoin Magazine, I mean, this was his first exposure to office politics. Yeah, certainly his first management experience. But Metallics is just one of the characters.

Starting point is 00:07:18 I mean, for people, again, that are still relatively new to the space, I mean, they hear the name Gavin Wood. They think about the founder of Pocodot. They hear the name Charles Hoskinson and they identify him with Cardano. They don't realize one that Ethereum ever had a CEO or that it was Charles or that Gavin was a developer for Ethereum who built one of the main clients. So, I mean, just very briefly, can you just introduce us to a few of the main players from early on? that it sort of appeared throughout the book. So the main developers of Ethereum early on were Vitalik and Gavin, and also somebody named Jeffrey Wilkie,

Starting point is 00:07:56 as we might say in English, but in Dutch it's Jeff Vilka. And those three really coded up Ethereum. Obviously, they had help from other developers, but they were kind of the main three. And there were other people in early Ethereum leadership, such as Charles Hoskinson, who early on was the CEO. There were other co-founders such as Amir Chetrit, who was working on colored coins at the same time.

Starting point is 00:08:23 Anthony DiOrio, who funded the project early on, Joe Lubin, who then later went on to found consensus and was Ethereum's C-O-O during that early period, and Mihai Alicier, who worked with Vitellic on Bitcoin magazine. Yeah, it's funny. I mean, Joe and Anthony stick out. I mean, in some ways they're seen as the money. I mean, Joe, with consensus, an entire book could be written on the development of that company and sort of the role is played in Ethereum because, just because of some of the palace entry, but also it really tried to create, I guess what Joe called it a venture studio where they were trying to build companies, but also developed the blockchain at the same time. So it was a very difficult challenge. And people that followed the consensus closely will know about some of the issues and hurdles that it has had to overcome through its development. What were some of the challenges when it comes to building Ethereum? There might be a misperception out there that it's just a bunch of computer nerds in an office just coding up a blockchain. But there are, there were, I mean, there were some issues when it comes to funding, to development,

Starting point is 00:09:40 into just the legal status and then also the workforce, the composition of the team. So what were some of the big challenges and dividing lines that emerged for you as you were researching this book? So in true decentralized fashion, there were multiple people tasked with different things and they were spread across the globe. And there was a group in Zook who lived in a house together

Starting point is 00:10:07 and they tackled a lot of the administrative things around holding the crowd sale from Switzerland, you know, tax issues, legal issues, et cetera. But there were also people who were working on trying to make sure that they could hold the crowd sale in the U.S. and have U.S. investors participate. And so there was another crew in New York that was working with a legal firm here to try to get an opinion letter that would state that in this law firm's opinion that such a crowd sale would not be illegal. And meanwhile, there were the coders around the world who were working on the coding, Vatelik himself actually spent quite a bit of that time

Starting point is 00:10:45 in Asia. So, you know, even though Gavin had hired a whole office of developers for his C++ client in Berlin, you know, Vitolik, who was working on the Python client was often not there. Jeff Vilka was in Amsterdam and his team was spread across the globe. There were some people who were actually working from the Balloon office, but they were working for him, not for Gavin. So it was definitely very decentralized. And what were, I don't want you to give away all your secrets, but what were some of the dividing lines

Starting point is 00:11:20 or the big personality clashes amongst this sort of decentralized team? So, yeah, this gets into some of the things that I think I have not been known before my book. And one of them is that after a period, Jeff and Gavin started to grow apart, and there were, there was definitely, I guess you could call a rift. And so people will have to read a little bit about how this develops, but this was not something that their friendship started out with. It definitely grew over time. And, you know, part of the development of Ethereum is what caused that to happen.

Starting point is 00:12:02 And I hinted at it earlier in the interview, but there was a red wedding day, which was kind of, I guess, almost like a bloodletting in a figurative sense where the team kind of found a new reconstitution to move forward. Maybe you could just briefly talk about what happened there because it involves some very big names and sort of how it enabled Ethereum to move into the crowd sale and so on and so forth. So a lot of tensions had been building in Ethereum very early on, and all of this came to a head at a certain point where a certain group got together and they did some research on Charles, who was kind of Charles Hoskinson, who was sort of seen as one of the main causes of the tension amongst the group. and frankly, quite a big problem for Ethereum itself. And so they came together and they had, plot sounds like very nefarious, but it's really more around just a plan to have this discussion, but their purpose was to have Charles removed from Ethereum.

Starting point is 00:13:25 And that is what culminated in the Red Wedding Day or the Games of Game of Thrones Day, as people called it. And at that time is when Charles and Amir Shetrit were both removed from the project. This, this has been chronicled before, although I do think there are some new details about how it went down in my book. The scorebed app here with trusted stats in real-time sports news. Yeah, hey, who should I take in the Boston game? Well, statistically speaking. Nah, no more statistically speaking. I want hot takes. I want knee-jerk reactions. That's not. Not really what I do.

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Starting point is 00:14:45 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. It's time to bring Wall Street to Main Street. Coin change is democratizing access to wealth management with low-risk, high-return, passive income through defy. It's simple, just deposit your crypto into a coin-change high-yield account to earn more over time. Your yield is paid out daily and can be withdrawn any time.

Starting point is 00:15:21 Coin-changes yield farming doesn't utilize lending or other risky strategies. No minimums, no obligations. just high yield. It's time for a change. Create an account today at trydefi.cc slash unc to receive 40 USC. That's try defy.c slash unc. Um, so when was the crowd seal actually initiated and finalized and how much money did the foundation end up raising from it? The Crowdsale finally launched July 22nd, 2014, and it went for 42 days, which was a number they picked based off this book they liked. Douglas Adams is The Hitchhiker's Guide to the Galaxy. And they raised, so if you were to convert the Bitcoins as they came in, it would have been $18 million.

Starting point is 00:16:18 But since they did not do that, ultimately by the end, they got roughly half that in dollars. Yeah, I know that was also a point of contention in the book that people will need to read about. So the crowd sales done, but that's not where the challenges ended, obviously. Then Ethereum had to work on growing, and I think for really the first time, it had to deal with hostile actors as well and sort of handling some of the ramifications there. A few events that you detail extensively in the book include the Dow Hack, the Shanghai attacks, and also a hack of the parity client. So maybe you could just briefly touch on the three of those

Starting point is 00:16:58 because they're each a little bit different and forced the foundation to really sort of move quickly to avoid really significant damage or I guess crippling damage in the case of the Dow. So with the Dow, this obviously was just an application on Ethereum, but because the hacker got what was then about 5% of all ether, this definitely caused a crisis for Ethereum. And frankly, also, the Dow itself had 14% of all ether.

Starting point is 00:17:36 And so the remaining 9% were also at risk because the Dow Smart contract was just vulnerable. And so in that regard, that just created this huge existential crisis for Ethereum, which we did discuss in the Tuesday show. so if people haven't listened to that, they should definitely check that out. But that obviously, I mean, it led to the creation of Ethereum Classic, and that really is sort of seen as this stain

Starting point is 00:18:01 on the history of Ethereum. There are a lot of critics of Ethereum who will point to that as evidence that Ethereum is not immutable, which is, you know, in their minds, a point of criticism for a blockchain. Yeah, sacrosan.

Starting point is 00:18:16 Exactly. Yeah. And so, you know, after that, the other attacks were kind of different. The Shanghai attacks, which were a series of denial of service attacks on Ethereum over the course of a month, they basically ended up making Ethereum stronger because they just kept attacking these different weaknesses in Ethereum itself. This was not the Dow. It was Ethereum itself. And obviously that did create a problem for Ethereum, and it was something that all the developers were working on. But it didn't quite create

Starting point is 00:18:56 the same existential crisis because they basically just kept fighting off the attacks and patching each of the vulnerabilities until finally they stopped. And frankly, Ethereum at that point just became stronger and became more well equipped to handle what eventually became an onslaught of activity in the next year as the initial coin offering craze took off. And, for the parody multi-sig attack, those were really on the parody multi-sig wallet. There were two of them. And the second of those really impacted parity itself much more than anyone else. So it almost seems that that really was almost targeted at parody. But clearly, you know, I think a lot of people became aware of the importance of wallet security through both of those incidents.

Starting point is 00:19:48 Yeah, the Shanghai attacks, the DDoS attacks are interesting to me as well because for listeners who don't know, a DDoS or denial of service attack, it doesn't actually breach any security. It's really designed to just kind of overload a network or a website to do on the point where it stops working. And I mean, you detail exactly how that happened in the book, but it's not necessarily something being breached. It's more or less an attacker winningly or unwittingly, depending on the circumstances, just causing traffic overload to the point of just collapsed as late. Yeah. So one person, I just have a couple more because I know we don't want to go too long on this. At this point, we can't have any interview about the book without mentioning Ming Chan. She features prominently throughout and is certainly a controversial figure.

Starting point is 00:20:43 So maybe just please explain who she is, the role she played in the foundation and why she was so controversial. Ming was hired as the executive director of the Ethereum Foundation in the spring of 2015. And she was hired at a time when Ethereum was trying to kind of professionalize its board and the management of the foundation. So she was hired along with three other board members. And she almost immediately caused some drama and did certain things that cast suspicion on her motives. And when I say that, actually, I should rephrase it to say to certain people, she caused this suspicion. But to Vitalik, he either, you know, even though he was informed of the, those actions that cast suspicion on her motives, he either chose not to believe whatever those

Starting point is 00:21:48 suspicions might be or to have those suspicions himself. And he listened to her and ended up giving her a lot more power. And the board members ended up leaving over this situation. they kind of were put in a little bit of an impossible situation, which Vatollick himself wrote a letter explaining he agreed that, yes, they were in an impossible situation. But then after that, it really became about Ming and Vatolic essentially running the foundation. And Ming was very controversial because many people in the community did not think she was doing a good job. They felt that there were many problems with the way she managed the foundation. And because she was their boss, they couldn't necessarily express those issues and feel that they would be dealt with appropriately. And so the problems that people perceived with Ming just dragged on for as long as she was part of the foundation. Yeah. And then her exit also, as he deep in the book, was very protracted. And I think it ended up finally coming to a head when a bunch of Italics friends,

Starting point is 00:23:09 I believe it was in Thailand, almost had an intervention with him, where he kind of eventually came to the conclusion that, I guess, for the health of the foundation and Ethereum, they had to move on. But it is interesting. And also kind of paints a picture to the type of people that move into crypto, because we hear a lot, I mean, Ming had impeccable credentials. I mean, MIT, University of Michigan. I mean, on paper, she looked like a terrific hire.

Starting point is 00:23:38 And today, I mean, we hear all about people from Wall Street applying to work at crypto firms. And sometimes there is a bit of a culture clash. Sometimes sometimes it's just a personality. It might not be a good fit. And sometimes I know, as you detail in the book, when I was looking for Ming's replacement, he looked for someone that perhaps didn't have like the same sparkling resume, but would be a better culture fit. So I think that's an interesting thread that you pull at in the book. So I know we're getting close to time, but one of the other big themes he touched on are

Starting point is 00:24:07 ICOs and sort of how that craze started off and ended up throughout 2017 and early 2018. I mean, just brought unprecedented levels of fundraising and attention to crypto. And I wanted to your thoughts, because this has obviously been covered extensively by you and numerous other journalists around the world. I'm curious, like any big takeaways, but also, why do you think ICOs took off? when they did because there were plenty of crowd sales and token generation events, whatever you want to call it.

Starting point is 00:24:38 I mean, Ethereum ran one a couple years prior that did not raise hundreds of millions of dollars. So why do you think the ICOs really just exploded in late 2017 or late 2018? Because by that point, what the ether price as high as it was, it created a whole new class of crypto whales. Before then, we'd had the Bitcoin whales, but now suddenly there were all. these Ethereum wheels. And in top of that, now it was much easier to participate. There were things like my Ether wallet, which just made it possible for people to participate from their web browser. And that's what they were doing. And, you know, this was something where you didn't need to be

Starting point is 00:25:20 an accredited investor. And in the private markets in general, like for startups, were remaining private for much longer. You know, in previous areas in history, startups went public much more quickly than they do nowadays. And so there was just kind of, I think, a lot of hunger for people to get more return on their investments. And crypto really was providing that. And since, you know, just with a little my ether wallet, people could participate in these ICOs and very quickly become liquid and turn that into real money. And that's why we also saw these pumping dump schemes and continue to see them to this day, because crypto, assets are liquid very quickly. And, you know, it just creates a lot of incentives for bad

Starting point is 00:26:08 behavior. Yeah. And you detail my ether wallet in the book as well. And basically how Taylor stopped sleeping to answer a customer service request as they were coming in and they supported more ICOs. And so that is a fascinating part of it, part of it as well. And it kind of likens back to exchanges and how you detail where they, with the Dow, they let people buy Dow tokens right with with Fiat and just kind of eliminated that friction. So that's always an interesting little tidbit. I know we're getting close to time. So just to wrap up, I wanted to ask you to look at the research you've done for your book

Starting point is 00:26:44 and sort of how that applies to today, where defy is now the big thing, not necessarily, well, defy and NFTs. And both of those have gone through their own cycles of hype. NFTs currently are white hot. And basically, do you have any projections, prognostications about what you think, how some of those new trends might play up based on the work you've done to put this together? Well, something funny that I find is that both defy and NFTs are moving to DAWS. So I'm actually wondering if this next big trend is just going to be DAWS, but it's going to be all the things just move to DAO's. because a lot of different, like, you know, FWB is an NFT group or, I mean,

Starting point is 00:27:34 nouns Dow is like another Dow, but it's around NFTs. I mean, there's so many of them. And then if you look at, you know, like Ave or compound or whatever, all of these are either trying to decentralize or have already decentralized and they're using governance tokens. So I actually feel like that is the overarching trend. And we'll see what happens. But I am keeping my eye on it because obviously I am. in the market for what my next book will be.

Starting point is 00:28:01 And that actually was going to be my last question. I'm sure you're going to take a bit of a breather now that this is out. But if you had a plan to write a second book, what would the topic be? Well, let's just say I can't say too much about that right now. But I might have some news on that pretty soon. So keep posted. I'll keep you posted. All right, that sounds great. Well, once again, Laura, thank you for joining me on Unshane.

Starting point is 00:28:33 It was a pleasure to speak with you. And congratulations for getting this out there for everybody to read. Thanks so much. Thanks, Stephen. It's been so great having you interview me. I'm so glad you came on the show. Thank you. Web 3 means freedom from Big Tech and Wall Street with more control and better privacy. But your crypto wallet is a weak point. Most wallets are browser extensions, a Web 2 technology. That means the same old risks, app spoofing, fishing scams, and theft. Brave Wallet is different. Brave Wallet is the first secure wallet built natively in a Web3 crypto browser with no extension required. With Brave Wallet, you can buy, store, send, and swap assets, manage your portfolio, and NFTs.

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Starting point is 00:30:18 The crypto markets dropped from a high of around $1.76 trillion to a low of about $1.58 trillion between 1130 a.m. UTC on Wednesday and 1.30 a.m. on UTC on Thursday. Liquidations were also severe, with over $860 million in positions wiped out in the 24 hours between Wednesday and Thursday afternoon, 3.30 p.m. Eastern specifically, making it the largest liquidation event in February. According to the block, these liquidations could more than double if the price of ETH falls below $2,100, which would result in an automatic liquidation of $500 million in ETH if the positions of seven siblings, a large maker vault holder, are not re-collateralized. That being said, following an announcement from U.S. President Joe Biden of sanctions against Russia,

Starting point is 00:31:17 Bitcoin rose by more than $4,000. Russia's decision to enter Ukraine was met with vociferous opposition, by some of the biggest names in crypto. Very upset by Putin's decision to abandon the possibility of a peaceful solution to the dispute with Ukraine and go to war instead, wrote Ethereum creator Vitalik Boudarin,

Starting point is 00:31:38 who also added that the invasion is a crime against both the Ukrainian and Russian people. Digital currency groups, Barry Silver, was even more upfront, tweeting, Fuck War. Mimo Capital begins internal investigation

Starting point is 00:31:54 of Toby Honish. On Tuesday, I published an article on Forbes describing how, in the course of reporting and writing my book, The Cryptopians, my sources and I found the person that we believe is the 2016 Dow attacker, Toby Honish, who denied it in an email. Afterward, his new venture, Mimo Capital, expressed surprise at the result of my investigation, but also said it was conducting a new investigation into Honish

Starting point is 00:32:22 using a third-party firm. Outfishing. 17 open-sea users lose NFTs. 17 open-sea customers fell prey to a complex fishing attack on Sunday morning. According to an internal investigation completed by the NFT marketplace, the attack was not specifically connected to open-sea emails, domains, or its official website. Overall, the attack took place across 15 hours, during which thousands of dollars' worth of NFT were stolen. In a tweet thread recapping the fishing scam, OpenCCTO Nadav Hollander explained

Starting point is 00:33:00 the scam was most likely a targeted attack as opposed to a systemic issue regarding a contract upgrade on OpenC that tricked users into signing a malicious smart contract. Going forward, Hollander is confident that fishers will have trouble executing similar attacks because OpenC is adding EIP 712 to its new contract. This upgrade will improve the security of signing off-chain messages, such as signing a message to join a waitlist, raffle, or token-gated discord group. Hollander also noted that OpenC would be helping victims of the attack, even though it stemmed from outside the NFT marketplace. Speaking of OpenC and Buggy Code, a complaint filed by Timothy McKimmy in Texas federal court, claims that he is the rightful owner of Board Ape 3475, despite Ethereum's

Starting point is 00:33:55 blockchain showing that he sold it for 0.01Eth earlier this year, due to an alleged bug on OpenC's website. In his suit, McKimmy is asking for the return of his NFT and damages over $1 million. He is accusing OpenC of negligence and breach of contract. The current price floor for a board API club NFT as somewhere around $200,000. China outlaws crypto fundraising. China Supreme Court ruled that raising money from the public via digital assets is illegal, according to a statement released on Thursday. While China has banned crypto in the past,

Starting point is 00:34:36 this new ruling allows China to officially charge digital asset fundraisers with criminal sentences and jail time. Luna Foundation Guard buys Bitcoin, to back its stable coin. The Luna Foundation Guard announced a $1 billion token sale of Luna, the native token of Terra, a smart contract

Starting point is 00:34:56 blockchain specializing in stable coins. Doe Kwan, the founder of Terra, described the $1 billion raise as the largest ever cap formation in crypto. Investors who participated in the sale will see their Luna locked on a four-year

Starting point is 00:35:13 vesting schedule. Luna Foundation Guard, LFG, short, because crypto, is a non-profit organization focused on supporting Terra and UST, the largest stablecoin on Terra, and fourth largest stablecoin by total market capitalization writ large. Notably, proceeds from the $1 billion Luna sale will be used to purchase Bitcoin and create a 4x reserve, available to tap during times of extreme market volatility, to keep UST's value pegged to the dollar.

Starting point is 00:35:45 According to a thread by Terra, the move is designed to assuage concerns regarding a crypto bank run scenario, and Bitcoin is the ideal asset for such a plan. Although the widespread adoption of UST as a consistently stable asset through market volatility should already refute this, a decentralized reserve can provide

Starting point is 00:36:04 an additional avenue to maintain the peg in contractionary cycles that reduces the reflexivity of the system. The UST Forex Reserve is an LFG initiative to provide a further layer of support for the U.S.T. PEG using assets that are considered less correlated to the Tero ecosystem, like Bitcoin. In addition to the TARA News, a judge in New York ordered Terraform Labs, the development from behind Tera, to comply with an investigative subpoena into whether Teraform labs had violated U.S. securities laws via MIRR Protocol, a synthetic asset defy platform. Kwan, who is also the CEO of Terraform Labs, initially pushed back against complying with the SEC

Starting point is 00:36:47 and had filed a separate lawsuit against the securities regulator. Bitmex founders plead guilty. Arthur Hayes and Benjamin Delo, founders of and executives of the crypto exchange Bitmex, pled guilty to violating the Bank Secrecy Act on Thursday, which carries a maximum sentence of five years. A press release by the U.S. Department of Justice listed their children. transgressions as willfully failing to establish, implement, and maintain an anti-money laundering or AML program at BitMex. Both Hayes and Dello will pay a $10 million criminal fine. Canadian regulators are not a fan of self-custody. According to a report from the Leader Post,

Starting point is 00:37:32 the Ontario Securities Commission contacted law enforcement agencies regarding tweets from two prominent crypto CEOs, flagging the commons because the regulator felt the executives were offering advice on evading sanctions. The news comes after Canadian law enforcement asked Canadian crypto trading platforms to freeze assets associated with a list of cryptocurrency addresses involved in sending funds to the Freedom Convoy, Checker Protests. The flagged tweets came from Coinbase CEO Brian Armstrong and Cracken CEO Jesse Powell. They recommend that users concerned about government seizure move their assets off of crypto exchanges to self-custodied wallets. In response to a comment asking if Cracken would comply with authorities to freeze accounts,

Starting point is 00:38:19 Powell had this to say. 100% yes, it has slash will happen. And 100% yes, we will be forced to comply. If you're worried about it, don't keep your funds with any centralized regulated custodian. We cannot protect you. Get your coins or cash out and only not. trade peer-to-peer. As for Armstrong, he simply professed agreement with his fellow CEO, tweeting in response to a question about Coinbase custody in Canada. I agree with at Just Powell on this. Despite Canada's attempt to freeze funds associated with roughly 30 Bitcoin wallets, on-chain data shows that around 20 BTC have been moved since last week, with some of the funds ending up on Coinbase and Crypto.com, which Disclosure is a sponsor of my show. As of press time, it's

Starting point is 00:39:10 unclear if the funds were cashed out or whether crypto exchanges not listed as financial institutions in Canada would have to comply with Canadian law. Salesforce employees speak out against new database product. Two weeks ago, CNBC reported that Salesforce, a top 75 company by market cap in the world, is working on an NFT cloud service. However, as with many NFT projects that hit mainstream companies, the software provider is being met with immediate pushback,

Starting point is 00:39:42 this time in the form of 400 employees signing a letter objecting to the NFT initiative over environmental and scam concerns. Reuters cited one Salesforce employee who would quit if the NFT plan came to fruition and says the firm will be hosting

Starting point is 00:39:57 a listening session about its future plans soon. Andrew Yang launched a Dow. Former presidential candidate Andrew Yang launched a Dow last week, dubbed Lobby 3. The Tao's focus will be to advocate for Web3 policies in Washington, D.C. Unfortunately, ill-informed and poorly designed policy can prevent Web3 from reaching its full potential. That's why we're building Lobby 3, explained the website. Membership in the Dow will be controlled via an NFT with three tiers that will help operate the Dow,

Starting point is 00:40:32 via policy suggestions, speaker requests, and treasury decisions. The Mint for Lobby 3 will go live next Monday. Sotheby's gets punked. An auction for 104 Cryptopunks at Sothebyes was canceled at the last second on Thursday night. Zero X-6-50D, the Cryptopunks owner, explained the cancellation on Twitter, writing, Nevermind, decided to hoddle. He also posted a meme saying that he was, taking punks mainstream by rugging Sotheby's.

Starting point is 00:41:05 The value of the crypto punks had been estimated to be between $20 million and $30 million. Time for fun bits. NFTs are dumb. The only way to prove this is blowing up a car. To prove that the NFT space is full of really extractive zero-sum practices, as an artist called Schlomes told the block, they decided to blow up a $250,000 Lamborghini. Somewhat humorously, the charred parts are now being sold as a collection of 888 NFTs in a supposed protest of crypto's get-rich-quick culture, as the block reports.

Starting point is 00:41:44 Schlomes told Fortune that the majority of the sale would go to fund public art installations. Thanks so much for joining us today. To learn more about me, my book, The Cryptopians, Idealism, Greed, Lies, and then making of the first big cryptocurrency craze, and my findings about who the likely Dow attacker is, check out the show notes for this episode. Unchained is produced by me, Laura Shin, with help from Anthony Yun, Daniel Nuss, Mark Murdoch, Shusonk, and CLK transcription.

Starting point is 00:42:13 Thanks for listening.

Unchained - How Writing 'The Cryptopians' Shaped My Views on Ethereum - Ep.324

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