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Hamas' crypto, Coinbase's headache 🤯
Hamas finds a crypto route? Coinbase's lobby party hits a speed bump. Vitalik talks about the moves, and that he ain't the one selling. Gucci in the Matrix and Reddit's crypto tokens nosedive.
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Hamas has been (repotedly) using crypto for funding its recent attacks on Israel.
And who's being affected?
Well, the whole Hamas and crypto scenes may have delivered a blow to Coinbase's lobbying initiatives in the US.
As per Berenberg Capital Markets, the Israel-Hamas conflict and its connections to cryptocurrency might pose regulatory and political challenges for Coinbase in the US.
What is all this about?
Last week in an effort to disrupt Hamas's funding channels, Israeli authorities have frozen a bunch of crypto accounts.
They're specifically targeting the connection between crypto markets and Hamas, especially after the recent assaults.
Check out the Chain Argos thread.
By the Numbers
Over 100 accounts on Binance, the world's top crypto exchange, have been shut down since Hamas's assault kicked off on October 7.
Israeli authorities have their eyes on nearly 200 additional crypto accounts, most of which are with, you guessed it, Binance.
Binance, staying true to its reputation, has been on the ball.
They've admitted to blocking a "few" accounts lately, reassuring everyone that they're in line with global sanctions rules.
Though they kept mum on any more specifics.
Coinbase’s US Lobbying efforts: Over the recent years, Coinbase has significantly bolstered its lobbying activities in the US.
Their aim? To push for clearer and more crypto-friendly regulations.
Mark Palmer, an analyst at Berenberg.
"The primary driver of our cautious stance toward Coinbase Global is not our concern about the company's operating performance during the next couple of quarters, but rather on the threats to its business from the various regulatory actions and litigation that it faces in the US."
Coinbase shares rose 4.3% on Tuesday to $78.26 at 11:26 am. ET.
Shares have declined 5.4% over the past month.
Coinbase stock's surge by over 112% this year stands out, especially when compared to Bitcoin's ~72% and the tech-heavy Nasdaq's ~29%.
Other Concerns for Coinbase: Palmer hints at the ongoing case with the US Securities and Exchange Commission (SEC) as a potential dampener for Coinbase’s share price momentum.
“Our Hold rating on COIN reflects our view that the stock is uninvestable in the near term.”
Hamas and Crypto
This isn't Hamas's first dance with crypto.
They waved the crypto-donations flag back in 2019 to sidestep global sanctions.
A dive by Reuters last year revealed Israeli authorities had shut down nearly 190 Binance accounts, many of which had ties to Palestinian companies aligned with Hamas.
Hamas's crypto wallet has swelled by tens of thousands over the years.
However, the Al-Qassam Brigades, Hamas's military wing, pulled the plug on their crypto donation drive this April.
The reason? Government success in spotting and prosecuting donors.
Experts weigh in
Arda Akartuna, Senior Crypto Threat Researcher at Elliptic
“The state of transactions shows a sudden drop at the end of April 2023 – coinciding almost exactly with the announcement by Hamas’ al-Qassam Brigades that it was suspending its Bitcoin donation campaign. Though the vast majority of the PIJ’s funds originate in USDT, the two events may still be related… PIJ-affiliated wallets have initiated high-volume transactions with those affiliated with Hezbollah, Hamas and numerous illicit money service businesses.”
Senator Elizabeth Warren is leveraging these concerns to advance her anti-crypto bill that focuses on new anti-money laundering regulations for cryptocurrencies.
Senator Elizabeth Warren said:
“The danger of crypto-financed terrorism is real and should be an urgent priority for Congress. There’s a growing bipartisan coalition of senators who are committed to passing this bill and fighting back against terrorism worldwide by choking off the financing.”
A senior Biden administration official told journalists:
“Hamas is funded, equipped, armed by Iran and others. And so, that’s why we have taken action throughout this administration to hold Iran accountable. We’ve imposed sanctions on Iran for support to Hamas and other terrorist organisations. That is going to continue.”
Senator Roger Marshall said:
“The abuse of crypto by terrorist organisations should serve as a wake-up call to Congress to crack down on digital assets and money laundering that we now know is helping bankroll the horrific massacres in Israel.”
Former CIA analyst Yaya Fanusie said:
“There’s not one financing method for Hamas or other terrorist organisations. They’re opportunistic and adaptive. Efforts to stop them are a constant game of cat-and-mouse.”
TTD Blockquotes 🎙️
Vitalik Buterin, the Ethereum guy.
“It's not actually me selling”
Ethereum's Vitalik Buterin, has been playing musical chairs with crypto lately.
And everyone was talking about this.
Posts from blockchain analytics firms such as PeckShield and Lookonchain initially claimed that on October 16th, Buterin's Ethereum wallet, named "vitalik.eth", made a $14.93 million transfer to the Gemini crypto exchange.
However, an Ethereum Foundation spokesperson provided clarity on this matter.
They explained that Vitalik Buterin only signed off on a transfer using his Ethereum Name Service (ENS) from a charity multisig wallet for the purpose of funding a grant.
Importantly, the funds never actually moved from Buterin's personal wallet.
Buterin has stepped up to set the record straight:
Kanro is a biotech charity that has received funding from Buterin. Its main focus is on addressing challenges related to COVID-19 and other pandemic issues.
The September transactions breakdown
On Sept. 25, 400 ETH was sent to Coinbase, which was: Worth an estimated $632,000.
Between Sept. 15 and Sept. 19: 321 ETH was deposited to Kraken.
On Sept. 17 and Sept. 20: 1,700 ETH was sent over to Bitstamp in several transactions.
On Sept. 19: 500 ETH was transferred to Paxos.
TTD NFTs 🐝
Refik Anadol's NFTs
Collection: "Winds of Yawanawa"
Trading Volume: A whopping $3.9 million in just a week!
Collaboration: The collection is a nod to the Brazilian indigenous community Yawanawa.
The Special Touch: These aren't your average NFTs. They're evolving visual masterpieces using weather data from the Yawanawa village in the Amazon.
Price Tag: Floor price stands at $18,300, but someone's wallet felt $26,000 lighter after a purchase.
Life Beyond’s Token Sales
Big News: A successful $3.5 million token pre-sale for the Bitcoin Metaverse Token.
Game Alert: "Life Beyond" - an open-world sci-fi game. Expect a new civilisation with NFTs and a tokenised economy.
The Token: Developed in partnership with Horizon Labs, slated for a launch next year.
Unique Feature: A metaverse ecosystem surrounding Bitcoin Ordinals, allowing inscriptions of digital assets on the Bitcoin blockchain.
Gucci’s Walk Down Memory Lane
Exhibition: Gucci Cosmos in London.
The Idea: Dive into Gucci's rich legacy through the lens of cutting-edge tech.
Who's Behind It? Fashion historian Maria Luisa Frisa and visionary Es Devlin.
Begin with a recreated elevator setting of Guccio Gucci's bellboy days. Expect video screens to create an illusion of movement.
Get ready for monumental statues donning suits from Gucci’s yesteryears.
Goal: To meld Gucci's iconic designs with technology's evolution and the tapestry of human connection.
Read more here.
The FTX Saga🚨
Bahamian Prime Minister Philip Davis asked Sam Bankman-Fried to give advice to his son on an NFT project, according to an email presented in court👇🏻
TTD Numbers 🔢
Bankrupt crypto exchanges FTX and FTX.US are in the spotlight.
AGAIN & ALWAYS.
This time for the possible huge payout of over 90% of assets to customers by Q2 of 2024.
On October 17, it was reported that FTX debtors have struck a potential deal after engaging in "extensive discussions" with various stakeholders.
The Proposed Settlement: An unofficial notice was filed on October 16 with a Delaware US bankruptcy court.
But, the clock's ticking.
They need to get the official documentation in by December 16 to get the court’s green light.
The "shortfall claim" (a pivotal part of the plan) puts estimates at around $8.9 billion for FTX.com and a comparatively modest $166 million for FTX.US. If everything goes according to plan, these payouts could roll out by mid-2024.
Words from the Top: John J. Ray III, the big boss at FTX, gave a thumbs-up to the settlement terms, suggesting that this move has salvaged value from what might have been a catastrophic loss for customers.
The plan in detail
FTX's idea involves splitting assets into three sections:
Assets meant for FTX.com customers.
Assets for US customers.
A general pool of other assets.
However, it's only the first two groups that get a piece of the "shortfall claim" pie.
While there's a payout on the horizon, it's not all rainbows and butterflies. FTX predicts that not all customers will get paid in full, with FTX.com likely shouldering a larger chunk of the losses.
If you pulled out over $250,000 from the exchange just nine days before the bankruptcy bombshell, brace yourself for a 15% reduction on your claim. However, if your claim's under the $250,000 mark, you're in the clear.
TTD Reddit 🐰
The platform's dropping its shiny "Community Points" tokens faster than you can say "downvote".
Launched to give a big thumbs-up to top-notch content contributors, these tokens are set to vanish by November 8.
These aren't just any tokens; they're fancy ERC-20 types that started on Ethereum, then hopped onto the Arbitrum Nova train. They unlocked the world of Reddit bling: badges, cool emotes, GIFs, and more.
But as the curtain falls, the token prices are diving deep. MOON (r/Cryptocurrency's pride) has plummeted by a whopping 84%, landing at $0.036. BRICK (the star of r/FortniteBR) hasn't fared much better, dropping about 43.7% to a not-so-impressive $0.056.(ATM)
Why's Reddit, a platform that made waves with its Collectible Avatar NFTs, leaving its crypto buddies behind? Reddit's very own Tim Rathschmidt spills the beans to TechCrunch:
“The resourcing needed was unfortunately too high to justify,”
“The regulatory environment has since added to that effort. Though the moderators and communities that supported Community Points have been incredible partners — as it’s evolved, the product is no longer set up to scale.”
TTD Surfer 🏄
dYdX Trading will not earn trading fee revenue from its upcoming v4 platform as it has transitioned to become a public benefit corporation.
Coinbase has suspended 80 non-USD trading pairs, including Bitcoin, Tether, and the euro, in an effort to improve liquidity on its platform.
The Sandbox has hired Nicola Sebastiani, a former executive at Ubisoft, PlayStation, and Apple, to be its chief content officer.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.