Police Brutality Is Global, So Is Bitcoin

Nischal Shetty, the CEO of India’s top crypto exchange WazirX joins hosts Danny Nelson and Anna Baydakova on this week’s Borderless to talk crypto bans. Rumor has it India’s government is gearing up for a crypto crackdown; possibly a complete ban. Is that really the case? Nischal helps untangle fact from fiction in one of crypto’s most exciting emerging markets.

The conversation then turns to crypto-environmentalism, first through mining and then via NFTs. Miami’s dream of becoming a hub for “clean energy” crypto mining could run into some pretty “hot” opposition. Meanwhile, another NFT marketplace is bending the knee to environmentalists’ demands, but only slightly.

https://www.coindesk.com/miami-mayor-wants-city-to-become-bitcoin-mining-hub

https://www.coindesk.com/nifty-gateway-pledges-to-go-carbon-negative-amid-criticism-of-nfts

https://www.coindesk.com/cbdcs-will-reduce-demand-for-bitcoin-says-south-korea-central-bank-chief

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In this episode, Anna Baydakova and Danny Nelson speak with Kim Nilsson, a former user of the oldest (and long defunct) Mt. Gox crypto exchange. Nilsson has investigated the infamous crypto theft and has been watching the effort to repay the exchange’s creditors. 

When Mt. Gox stopped functioning and filed for bankruptcy, Nilsson didn’t just sit back and see what happened. He set up his own bitcoin node, coded software and tracked the stolen bitcoin to where it landed. He’s also been an active member of the Mt. Gox creditor community over the years. 

Nilsson explains why it takes so long to resolve all the seven-year-old situations, why most of the creditors are still holding on to their claims (instead of selling them) and what’s next for those who have been waiting for repayment since 2014. 

We also asked him to chat with us about the most interesting global crypto stories of last week. That was fun! 

For example, Canadian exchange Coinsquare was obliged by a federal court in Canada to disclose data on some of its 20,000 users to the national tax agency, the Canada Revenue Agency (CRA). The taxman is knocking on crypto exchanges’ doors, and that, Nilsson believes, is basically the end of privacy in crypto.

The rumor mill is working overtime in India: Will the nation ban all cryptocurrencies? Start blocking IP addresses of crypto exchanges? Maybe, maybe not. India is a big economy with a young and crypto-curious population, so the threat of crypto regulation has resounded.

Meanwhile in Turkey, the national currency, the lira, is tanking, and people are buying bitcoin to protect their savings. There are neither regulations nor a specific tax on crypto in the country, and the interest in bitcoin is surging in the time of fiscal uncertainty.   

Stories mentioned in this episode:

• WSJ: The Man Who Solved Bitcoin’s Most Notorious Heist
• CoinDesk: Mt. Gox
• CoinDesk: Mt. Gox Creditors to Vote on Draft Rehabilitation Plan
• CoinDesk: Crypto Exchange Coinsquare Ordered to Hand Thousands of Customers’ Records to Canadian Tax Agency
• CoinDesk: Crypto Is Not Regulated in Turkey, and It’s Thriving
• CoinDesk: India May Block IP Addresses of Crypto Exchanges: Report 

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In this episode, Anna Baydakova and Danny Nelson speak with Kim Grauer, head of research at Chainalysis, about the blockchain analytics firm’s 2021 “Crypto Crime Report,” how to locate where scammers send their money, and the state of crypto regulation and adoption. 

The report, released in February, maps out major crime types associated with cryptocurrencies: crypto scams, ransomware attacks and money laundering, among others. Kim Grauer explains how Chainalysis comes to its conclusions about the geography of crypto transactions, what cyber crimes were on the rise in 2020 and why transaction-tracking software hates mixers. 

Also, we discuss Sandali Handagama’s report about a startup that helps savings groups in Africa, and particularly in Nigeria, to invest in stablecoins and protect against inflation of their national currencies. In Africa, many people don’t have access to banking services, and instead, they do collective savings. Could crypto make this practice easier? 

On the regulatory front: European crypto firm Bitcoin Suisse has failed in its bid to win a banking license. FINMA, the Swiss financial regulator, on Wednesday rejected Bitcoin Suisse’s charter application on grounds the company had weak anti-money laundering defenses. Bitcoin Suisse has been working with banks and regulators in Switzerland for years now, but looks like it’s not enough. 

Stories mentioned in this episode:

• Chainalysis: The Chainalysis 2021 Crypto Crime Report
• CoinDesk: Nigerians Turn to Stablecoins for Protection Against Inflation
• CoinDesk: Stellar Development Foundation Invests $750K in Nigeria Remittance Platform
• CoinDesk: Swiss Crypto Firm Bitcoin Suisse Turned Down on Banking License
• CoinDesk: EU Regulators Warn Again on Crypto Investment Risks

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A collection of 5,000 .jpg files just sold at Christie’s for $69.3 million. Why? Because it’s art, it’s digital and it’s on a blockchain. Hosts Anna Baydakova and Danny Nelson dive into the non-fungible token (NFT) phenomenon and its wildest, eye-popping twist yet on “Borderless” this week, discussing what makes NFTs so valuable and whether they’re here to stay – potentially turning the art world on its head. Even hackers are paying attention.

The conversation then turns to Israel, where local media reported the Altschuler Shacham pension fund invested $100 million in Grayscale’s Bitcoin Trust at $21,000. (Grayscale is owned by CoinDesk parent company DCG). It’s the latest example of traditionally conservative money flowing into the historically volatile crypto. Danny and Anna discuss the trend. 

Finally, “Borderless” heads to New Zealand where a startup’s started minting one of the world’s earliest fully compliant stablecoin. With currency digitization sweeping across borders, the hosts consider how the future of money might be shaped by corporations and governments, too.

Articles in the podcast: 

https://www.coindesk.com/beeple-nft-christies-auction

https://www.coindesk.com/israeli-pension-giant-put-100m-into-grayscale-bitcoin-trust-report

https://www.coindesk.com/new-zealand-stablecoin-techemynt

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This week on “Borderless,” Anna Baydakova and Danny Nelson speak with Alex Gladstein, chief strategy officer for the Human Rights Foundation, about the intersection of bitcoin and activism, how global movements are using blockchain and what governments might try to do to stop it.

As more world governments step up their digital and financial surveillance measures, bitcoin has become a safe haven for pockets of oppressed. For example, in Nigeria female activists now harness bitcoin to get around government-ordered banking blockades. Alex and his partners at Human Rights Foundation use crypto grants and vocal advocacy to spotlight their stories.

At the same time, some governments have begun treating bitcoin as a tool of their own. The hosts discuss with Alex the ramifications of bitcoin weaponization and consider whether the problem is as bad as the United Nations makes it out to be. Does North Korea really fund its nuclear weapons program with stolen crypto? Alex has a lot to say.

Later in the episode, the hosts take on the non-fungible token (NFT) craze that’s taking the digital collectibles world by storm. What makes a LeBron James video worth hundreds of thousands of dollars, anyway?

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This week on Borderless, tech reporter Leigh Cuen speaks with data analyst and entrepreneur Boaz Sobrado about how bitcoin became relevant to him when he had to use it at his e-commerce company. 

With the changes in the U.S. presidential administration in 2016 and the strict regulations that followed it became harder to bank in Cuba. Processing payments and conducting proper international transactions were causing his company to bleed money. So Boaz turned to bitcoin to move money in and out of the country safely and provide commerce to Cuban communities. 

However, bitcoin adoption in Cuba turned out to be harder than he thought. Due to COVID-19, Cuba is undergoing the worst economic crisis since the 1990s. At that time Cuba’s economic structure was so atrocious that portions of its population suffered from hunger. Boaz says, “We aren’t there yet” that it isn’t as bad as the crisis of the 1990s. However, with Western Union remittance rates going down there is less and less money in the country. This has caused inflation to rise and product delivery to the country of Cuba to become more difficult. 

Listen as Sobrado discusses the informal peer-to-peer development of the cryptocurrency markets in Cuba and how the internet penetration in Cuba is accelerating bitcoin adoption.  

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In this episode, Anna Baydakova and Danny Nelson discuss the coming crypto taxation in Russia and India, North Korean hackers indicted by the U.S. Department of Justice and the GameStop story rolling into the U.S. Congress.

Russia is on its way to taxing cryptocurrency transactions. A draft bill on crypto taxation is now in Russia’s parliament, the State Duma, and it has just passed its first round of hearings last week. The bill says Russian taxpayers must declare crypto they receive to their wallets if its overall value reaches 600,000 rubles, or a bit more than US$8,000. 

India is also moving towards crypto taxation. According to a new draft bill, the government is likely to impose a personal income tax on crypto traders and a goods and services tax on trading platforms. So crypto exchanges will have to pay 18 % from the trading fees they earn. 

Around the world, it’s becoming our new reality: you deal with crypto, you tell your government about it. Danny shares personal experiences while Anna shares some fears about the future.

This week, the U.S. Department of Justice went after three North Korean hackers for allegedly stealing over $100 million in cryptocurrency from exchanges, including a handful in the U.S. Prosecutors said North Koreans have become the “world’s leading bank robbers,” using keyboards as weapons instead of guns. As longtime listeners of the pod know, they’re using that crypto to build more sinister weapons: nukes! 

They even used an initial coin offering to raise money! (Not financial advice.)

GameStop goes to Congress: the U.S. lawmakers questioned Reddit and Robinhood CEOs, as well as the redditor Roaring Kitty. Hearings like this might become hits on their own, just as the Facebook hearings did a couple years ago. But should we expect any material changes afterwards? One thing is for sure: Traditional capital markets are aping right into the crypto world insanity.

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In this episode, Anna Baydakova and Danny Nelson discuss North Korea reportedly stealing your crypto to create nuclear weapons, Tesla rattling markets at an opportune time and Nigeria trying to ban crypto. 

Starting Feb. 12, in the Chinese calendar, we are in the year of the ox, or bull; at least for now, things are looking quite bullish for crypto. Usually, Chinese users would massively sell bitcoin ahead of the New Year but the current rally is being mostly driven by institutions, not retail buyers in Asia. So it looks like the “To the Moon” show must go on!

A United Nations expert panel said North Korea used the money it extorted by cyber attacks to fund nuclear weapons development. The panel said that according to its investigations, North Korean regime-linked hackers worked all through 2020 and made the money now funding weapons of mass destruction and ballistic missile programs. According to Chainalysis, the hackers used DeFi infrastructure, over-the-counter brokers and mixers to sell their crypto. So will we end up with a bit of North Korean hacker crypto one day? 

Tesla hyped the bitcoin market right around the time some bad news came out of China. In February, Tesla’s annual report to the Securities and Exchange Commission included the news the company put an aggregate of $1.5 billion into bitcoin. Just before that filing several Chinese government agencies publicly questioned Tesla cars’ quality and safety. Coincidence?

Nigeria is trying to curb crypto adoption, but that is not so easy. In early February, the country’s central bank sent a letter to financial institutions ordering them to shut down all bank accounts associated with cryptocurrency trading platforms. Result: Binance halted deposits in Nigeria. As a result, Nigerians turned to peer-to-peer trading platforms. Is this actually good for crypto adoption? We’ll see.

Stories mentioned in this episode:

• CoinDesk: Why a Chinese New Year Sell-Off May Not Happen This Year 
• AP: UN experts: North Korea using cyber attacks to update nukes
• CoinDesk: UN Says North Korea Funded Nuclear Weapons With Crypto Hacks in 2020
• Chainalisys: Lazarus Group Pulled Off 2020’s Biggest Exchange Hack and Appears to be Exploring New Money Laundering Options
• CoinDesk: China Was Questioning Tesla About Quality Problems. Then Bitcoin Happened
• Bloomberg: Tesla Summoned by China Regulators Over Quality, Safety Issues
• CoinDesk: Nigerian Central Bank Says Its Ban on Crypto Accounts Is Nothing New 
• CoinDesk: Bitcoin ‘Can’t Be Stopped’: Nigerians Look to P2P Exchanges After Crypto Ban

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In this episode, Anna Baydakova, Tanzeel Akhtar and Danny Nelson discuss possible crypto restrictions in India, fresh darknet market research from Chainalysis and the newest chapter in Virgil Griffith’s North Korea saga. 

Will India ban crypto? The move by the government, rumoured for months, may be not as bad as expected. For now, it’s only about illegal activities involving crypto and using it to pay for things, as Minister of State for Finance Anurag Singh Thakur told the nation last week. 

India had cracked down on cryptocurrencies: In April 2018, the Reserve Bank of India barred India’s banks from serving crypto exchanges and related businesses. The ban was successfully challenged in India’s Supreme Court and lifted last March. Whether you can really ban crypto in any form is another question, though.

As for illegal use cases, Chainalysis new report on darknet markets and crypto says Russia, the U.S., Ukraine and China are the countries that pump the most money into the illegal goods marketplaces. Per the previous Chainalysis’ report on global crypto adoption, Ukraine and Russia also lead the global retail adoption of crypto. 

Does it mean most of the crypto adoption in these countries are “dark”? One thing is clear: Both these countries are user bases of Hydra, the world’s most successful drug marketplaces, pocketing about 75% of the entire darknet markets’ revenue, Chainalysis said.  

In the meantime, the court case of Ethereum dev Virgil Griffith is moving along – and it doesn’t look good. During the latest hearing, on Jan. 27, the judge rejected Griffith’s motion to dismiss charges he violated U.S. sanctions law in North Korea. Griffith’s lawyers’ argument that his speaking at a conference in North Korea is not equal to providing “services” to the sanctioned country apparently did not convince Judge Kevin Castel. Free speech or helping bad guys do bad things? A jury will decide in Griffith’s case. 

Stories mentioned in this episode:

• CoinDesk: Why India’s Proposed Crypto Ban Has Investors Nervous, May Feed Anti-Bitcoin Narrative 
• CoinDesk: India Minister Suggests Modi Government Not Planning Outright Crypto Ban
• CoinDesk: Russia and US Dominate Global Dark Market Traffic: Report 
• Chainalysis: Geographic Distinctions in Darknet Market Activity: U.S. and Western Europe Have the Most Vendors, Eastern Europe and China Lead in Money Laundering
• CoinDesk: Ukraine Leads Global Crypto Adoption, Chainalysis Says in New Report
• CoinDesk: Judge Denies Virgil Griffith’s Motion to Dismiss Charges 

Did you enjoy the show? We would love to hear what you think. Leave us a review on Apple Podcasts or your preferred service and talk to us directly via email at borderless@coindesk.com.

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In this episode, Anna Baydakova, Tanzeel Akhtar and Danny Nelson discuss what the GameStop stock market chaos can teach crypto, why the Bank of International Settlements is pitching central bank digital currencies (CBDC) instead of crypto, and the privacy concerns around China’s digital yuan.

The big story for the week involves the Reddit-based trading community called WallStreetBets that has been causing equities to behave like cryptocurrencies – very volatile. WallStreetBets have wreaked chaos in traditional markets after pumping GameStop stock up by nearly 900% in five days to around $380. Hedge fund Melvin Capital Management suffered heavy losses by betting against video game retailer GameStop. 

Does crypto fix this?

The digital yuan was front-and-center in yesterday’s CBDC survey by the BIS, better known as the bank for central banks. Researchers there said 20% of the global population will likely be using general purpose digital fiat in the next three years. What they didn’t say was the identity of the country with 18% of the global population…. China!

In the meantime, security researchers started paying attention to potential risks of the digital yuan for the users outside of China. The Center for New American Security issued a report on how the Chinese Communist Party might get access to the financial data of people worldwide including, potentially, Americans who will be using the Chinese system in the future. 

Would you use something like that, and do you care about privacy of your transactions?

Stories mentioned in this episode:

• CoinDesk: GameStop Investing Craze ‘Proof of Concept’ for Bitcoin Success, Says Scaramucci

• CoinDesk: GameStop-Style Revolts Spread, Drawing Attention of White House, Nasdaq; TD Ameritrade Restricts Trading 

• Reddit: An Open Letter to Melvin Capital, CNBC, Boomers, and WSB

• CoinDesk: BIS Chief Blasts Bitcoin’s Viability, Prompting Blowback From Advocates 

• BIS Plans Platform for Testing Central Bank Digital Currencies in Cross-Border Payments https://www.coindesk.com/bis-plans-platform-for-testing-central-bank-digital-currencies-in-cross-border-payments

• CoinDesk: Geopolitics at Stake in US Response to China’s Digital Yuan: Report

• Center for New American Security: China’s Digital Currency. Adding Financial Data to Digital Authoritarianism

• CoinDesk: WEF Davos: Bank of England Governor Insists Digital Payments (but Not Crypto) Are Sticking Around 

• CoinDesk: WEF Davos: Silver Lake Co-Founder Tells Davos Cash Is Used Far More in Crime Than Bitcoin 

• Colombia, Estonia Upload the Bitcoin White Paper to Their Governmental Websites https://www.coindesk.com/colombia-estonia-bitcoin-whitepaper 

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