Crypto CEOs Make Their Case on Capital Hill

The biggest crypto news and ideas of the day

Dec. 8, 2021

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Today's must-reads

Top Shelf

CRYPTO CEOS ARE TESTIFYING: Top executives from the crypto industry are testifying before the congressional House Financial Services Committee this morning. The hearing will feature testimony from the biggest minds in crypto, including Circle CEO Jeremy Allaire, FTX CEO Sam Bankman-Fried and Bitfury Group CEO Brian Brooks. Lawmakers aren't expected to debate the merits of any specific legislative proposal to regulate crypto during this hearing, however, various reports by regulatory groups and requests by specific regulators may be discussed. The Senate Banking Committee will follow up with a hearing on stablecoins next Tuesday.

CRYPTO TEAM: Payments giant Visa has formed a global crypto advisory practice to help financial institutions develop cryptocurrency business lines as demand grows, the company said in a statement. Visa's crypto advisory team will work alongside the company's consulting and analytics group to advise banks on their crypto strategy and execution, as well as helping banks build dedicated crypto teams. Visa's head of crypto Cuy Sheffield says there's been an inflection point over the last nine months in which banks have started to recognize their consumers want access to crypto.

MOVES IN AUSTRALIA: The government of Australia will announce today the biggest reform in payment systems in 25 years, with big implications for crypto in the country. In an attempt to modernize Australia's payment systems, the new regulations will "broaden the definition of services and products that can be regulated," taking cryptocurrencies and digital assets "out of the shadows" and into a "world-leading" regulatory framework. Firms that buy and sell cryptocurrencies will have to be licensed to provide safety and security to users, and the government will also work out a licensing plan for crypto exchanges next year.

FROM BIG TECH TO CRYPTO: Former Google CEO Eric Schmidt has joined Chainlink Labs as a strategic advisor, the blockchain project announced Tuesday. Chainlink develops oracle networks to connect real-world data with smart contracts built on blockchains. Schmidt said that "the launch of blockchains and smart contracts has demonstrated tremendous potential for the building of new business models, but it has become clear that one of blockchain's greatest advantages – a lack of connection to the world outside itself – is also its biggest challenge."

–Helene Braun

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Overheard on CoinDesk TV...

Sound Bites

"The institutions are definitely coming … we're seeing it on a daily basis."

–Nexo co-founder and managing partner Kalin Metodiev, on CoinDesk TV's "First Mover."

What others are writing...

Off-Chain Signals

How centralized is bitcoin mining really? (Bitcoin Magazine)
Crypto-based digital art frenzy draws in charity (The Chronicle of Philanthropy)
Crypto lobby is going ballistic (The Economist)

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Putting the news in perspective

The Takeaway

No, Craig Wright Did Not Prove He's Satoshi in Court

Hi, David Z. Morris here. A verdict arrived Monday in the civil trial between Craig Wright and the estate of former collaborator Dave Kleiman. A jury found Wright guilty of intellectual property theft and has ordered him to pay $100m in damages to an entity he founded with Kleiman, W&K Info Defense. At the same time, the jury found Wright not guilty of stealing half of the proceeds of a Bitcoin mining business which plaintiffs claimed was a partnership with Kleiman.

But some publications are offering a much different interpretation of the jury's decision.

That headline is courtesy, as some of you will guess, of a website called CoinGeek, As evidence for its startling claim, the article quotes a statement made by Wright's lawyer Andres Rivero after the trial: "The decision reached by the jury today reinforces what we already knew to be the truth: Dr. Craig Wright is Satoshi Nakamoto, the sole creator of Bitcoin and block chain technology."

This statement, made outside of court proceedings by Wright's own attorney, obviously has nothing to do with the jury's ruling. The case did not consider the question of Satoshi's real identity.

CoinGeek has relentlessly engaged in similar distortions of the essence of the trial, stretching back to its pretrial stage years ago. This has turned out to be a masterful strategy, in part because the odd nature of the case meant any verdict could have been spun to Wright's benefit. Today, a disturbing number of mainstream news outlets are echoing CoinGeek's version of events, knowingly or not.

CoinGeek has clear financial motives for its campaign. The website is an Ayre Group company, one of several owned by (federally indicted) gambling entrepreneur Calvin Ayre. The Ayre Group is also an investor in nChain, the company that employs Wright as Chief Scientist. The Ayre Group has also invested in several projects, including HandCash and Taal, built on BSV, the fork of Bitcoin that Wright has pitched as designed according to "Satoshi's Vision."

Strictly on formal financial grounds, then, CoinGeek is not a news site, but an "owned media" branch of Ayre Group's nChain/BSV efforts. As a business operation, it serves the same function as, say, the Taco Bell Blog – promoting its parent entity's services, products, and agenda.

To be fair, the Taco Bell Blog appears to have much higher production values and commitment to accuracy than CoinGeek. Take, as a random example that popped up while I was researching this piece, a CoinGeek headline that claims FTX CEO Sam Bankman-Fried will appear "in court" tomorrow. The event in question is testimony before the House Financial Services Committee, which is absolutely not a "court."

Read the full column here.

–David Z. Morris

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