Welcome to Chain Letter! Great to have you. Here's what new in the world of blockchains and cryptocurrencies. | | China has crypto in its crosshairs yet again. Nearly a year after the government banned initial coin offerings and shut down domestic cryptocurrency exchanges, it is again tightening the screws on the industry. Censors have blocked a number of blockchain and cryptocurrency-focused accounts from WeChat, the popular social media service. WeChat, as well as online payment service Ant Financial, have announced that they will restrict or ban cryptocurrency-related transactions. Financial regulators have instructed stores, hotels and other businesses in downtown Beijing not to host cryptocurrency-related speeches, events, or activities. The South China Morning Post reports that authorities will block access to 124 websites operated by offshore cryptocurrency exchanges that had provided trading services to Chinese users. And, according to local reports over the weekend, Baidu will restrict or ban cryptocurrency-related content on its Reddit-like online platform. Despite all this, “many industry insiders” tell the Wall Street Journal that blockchain technology is still thriving in China. The government recognizes its long-term value, Jehan Chu, co-founder of a Hong Kong-based cryptocurrency investment firm, told the Journal. “Instead, they're trying to reform it and clean it up so they can roll it out in China the way they rolled out the internet, their own way with their own rules.” In other words, it’s not that the Chinese government doesn’t like blockchains—it just doesn’t like blockchains it can’t control. | | Someone finally won Ethereum’s most popular gambling “game”—by scamming it. It’s been called a Ponzi, a pyramid scheme, an “incisive critique of cryptocurrency and the hype surrounding it,” and an outright scam. Whatever Fomo3D is, now we know it is possible to win—even if doing so requires rigging the system. The game works by enticing users to buy “keys.” After each key purchase, time is added to a countdown timer; if the timer ever hits zero, the last person to buy a key wins. If you buy keys, you can earn passive income from keys that are subsequently purchased. Purchasing keys also contributes to the pot, and, if someone ever wins the whole shebang, you get a portion that corresponds to how many keys you hold.
The first winner has finally emerged, raking in nearly $3 million—but victory did not come easily. The anonymous player triumphed by using key-buying bots and then strategically “jamming up the Ethereum blockchain just long enough to block out the other players,” spending between $11,000 and $13,800 worth of Ether in the process, according to Motherboard. When Fomo3D first emerged, some speculated that the game, whose tagline is “All the fun of an exit scam,” might never end. Turns out all that was needed was an actual exit scam. | | Cryptocurrency and the “anti-dollar coalition.” Governments facing US-imposed economic sanctions appear to be trying to create a “parallel financial system that would be out of reach of America’s long arm,” and digital currencies might provide a way to do so, argues Gal Luft, co-director of the Institute for the Analysis of Global Security. Luft writes in an op-ed for CNBC that America’s global supremacy has been possible in part “due to its control over the plumbing of global finance and particularly the broad acceptance of the dollar as the world’s reserve currency.” The rise of digital currencies might threaten that, he argues—especially if other nations from the “anti-dollar coalition” follow Venezuela’s lead and launch currencies in order to get around US sanctions. | | Loose Change Fill your pockets with these newsy tidbits. | | | Iran has released a new draft describing its planned national cryptocurrency. ( Finance Magnates) | | | | The top 10,000 Ethereum addresses (or around 0.03 percent the total) hold more than 83 percent of the network’s wealth. ( LongHash) | | | | US SEC commissioner Hester Peirce says she is worried that “innovative efforts” might go overseas because her agency is “behind the curve” when it comes to cryptocurrency regulation. ( MarketWatch) | | | | Ant Financial, a payments service affiliated with Alibaba Group, plans to launch a blockchain-based service next month, along with an app for tracking food products. (CoinDesk) | | | | Union Bank of Liechtenstein says it will become the world’s first regulated bank to issue its own crypto-token, which will be pegged to the Swiss franc. ( Finance Magnates) | | | The Money Quote “These IPOs will be a litmus test.” — Rohit Kulkarni, a managing director for private investment research at SharesPost. Three Chinese manufacturers of specialized cryptocurrency mining chips are planning Hong Kong-based IPOs. That could be risky, given the bear market conditions and general uncertainty over the future of cryptocurrency mining. (Bloomberg) | | | |
