IRA Financial Users Complain Over Missing Crypto

The biggest crypto news and ideas of the day

Feb. 15, 2022

If you were forwarded this newsletter and would like to receive it, sign up here.

Supported by

Welcome to The Node.

In today's newsletter: U.S. official introduces bill to regulate stablecoins. IRA Financial users raise concerns about hacked retirement accounts. And federal judge releases one accused Bitfinex bitcoin launderer.

Questions? Feedback? We'd love to hear from you – simply reply to this email.

–Daniel Kuhn

Today's must-reads

Top Shelf

RETIREMENT FUNDS: IRA Financial's retirement accounts held at Gemini were hit during a Feb. 8 exploit, leaving $36 million in savings in a perilous position. Affected users, appearing to count in the dozens, have begun reaching out to regulators after hearing incomplete responses from the crypto retirements firm and exchange.

STABLECOINS: U.S. Representative Josh Gottheimer (D-N.J.) has introduced a bill that would establish government-backed insurance for stablecoins. The bill would designate certain stablecoins as "qualified," making them redeemable on a one-to-one basis for U.S. dollars. Meanwhile, Silvergate Capital is still planning on a full 2022 launch of its stablecoin, but will first focus on regulatory clearance and then a pilot program, said Chief Strategy Officer Ben Reynolds.

MORGAN RELEASED: A federal judge has ordered one half of the couple accused of laundering the proceeds of a 2016 Bitfinex hack to remain in federal custody until they face trial. Prosecutors allege that Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, conspired together to launder 119,754 bitcoins (~$5 billion), and has now released Morgan on strict conditions.

HIRING SPREE: Coinbase, the largest U.S. cryptocurrency exchange by trading volume, will hire up to 2,000 people this year as it seeks to take advantage of opportunities in the development of Web 3 and other areas, Chief People Officer L.J. Brock said in a blog post Tuesday. The company plans to expand its product, engineering and design teams.

REBRANDING CHAIN: Binance Smart Chain (BSC), the layer 1 blockchain built by crypto exchange Binance, is rebranding to BNB Chain. Short for Build and Build, the move is an attempt to draw a connection to Binance's governance token, called BNB, as several technical upgrades are also rolled out (including more validators) to conjoin the Ethereum-compatible BSC with a "beacon chain."

DECENTRALAND LOUNGE: JPMorgan, the largest bank in the U.S., said it has become the first lender to arrive in the metaverse, having opened a lounge in Decentraland, a virtual world based on blockchain technology. The bank also released a paper exploring how businesses can find opportunities in the metaverse – including through NFTs and other digital experiences.

When it comes to buying, borrowing, or earning on your crypto, you won't find an easier, safer way to do it than Nexo.

Right now you can earn $25 worth of Bitcoin for each friend you refer. And the best part is that your referral gets $25 in BTC too!

How it works? It's quite simple - sign in to your Nexo account, copy your unique link and start referring like your life depended on it!

And here is what'll happen next: you and your referrals will both get $25 in BTC within 30 days of them passing the Advanced Verification and topping up the equivalent of $100 or more of any asset supported on the Nexo platform.

Join Nexo and start earning free BTC with your friends!

Overheard on CoinDesk TV...

Sound Bites

"We think we're going through a normalization on the regulatory front, where you have senior senators saying crypto is here to stay."

–Coinfund Managing Partner Seth Ginns, on CoinDesk TV's "First Mover."

What others are writing...

Off-Chain Signals

Steve Aoki Says He's Made More Money With NFTs Than From 10 Years of Music Advances (Decrypt)
Build Finance DAO Falls to Governance Takeover (Decrypt)
A DAO that funds students to attend crypto events loses half its budget to risky management (The Block)
Vesta Equity launches real estate-backed NFT platform on Algorand (The Block)
Disney names executive to oversee metaverse strategy -memo (Reuters)
SEC Probes Trading Affiliates of Crypto Giant Binance's U.S. Arm (WSJ)
Fraudsters are using bots to drain cryptocurrency accounts (CNBC)
Most crypto investors would hold even if prices crashed 80%: survey (Markets Insider)

It's never been easier to earn interest on Bitcoin and Tether with BitMEX EARN. Enjoy up to 10% APR on Tether and 4% on Bitcoin, fully backed by the BitMEX Insurance Fund.

With new products, reliable security, and responsive customer service, there's never been a better time to join BitMEX. Start earning interest today by subscribing to EARN here.

BitMEX products and services are not available to US Persons and in other specified jurisdictions.

Putting the news in perspective

The Takeaway

Humans Are the Last-Mile Problem of Bitcoin Crowdfunding for Canada Truck Protest

Bitcoin cannot be intercepted, making it a powerful charitable tool. But human organizations are still central points of failure.

Bitcoin has come a long way since its pseudonymous founder warned against people sending the nascent digital currency to the notorious data leaker WikiLeaks. "WikiLeaks has kicked the hornet's nest, and the swarm is headed towards us," Satoshi Nakamoto said on the Bitcointalk forum. It was his or her or their last public message before stepping away from the project.

Cut off from its banking account and other crowdfunding platforms, WikiLeaks' founder Julian Assange put out a call for BTC donations. This was precisely the type of situation for which Bitcoin was invented. A distributed financial network, Bitcoin enables people to transact a digital asset without divulging personal information and without the possibility of financial censorship.

The Bitcoin network does what it's supposed to do – this much is made clear by the recent fundraising effort to support a convoy of truckers in Canada, who are protesting coronavirus-related restrictions. Whatever Satoshi's concerns were for the nascent monetary network at the time, they are now certainly resolved.

Monday night, crowdfund organizers behind "HonkHonkHodl" announced they surpassed their goal of raising 21 BTC for the Ottawa Freedom Truckers Convoy. Donations are still coming in on the crowdfunding platform Tallycoin and are approaching the $1 million mark. Some 5,511 donors contributed, including the founder of the crypto exchange Kraken, Jesse Powell. To date, the two biggest donations, totalling more than $300,000, were made anonymously.

To some extent, today's convoy faces a much tougher situation than WikiLeaks. The Canadian government has temporarily broadened the scope of its anti-money-laundering and counter-terrorist financing rules to stymie donations (including crypto) to the protestors.

On Monday, after Canadian Prime Minister Justin Trudeau enacted the never-used "Emergencies Act," Deputy Prime Minister Chrystia Freeland said banks are allowed to freeze accounts related to the protestors without a court order and will be shielded from lawsuits for acting "in good faith." Canada's Toronto-Dominion Bank had already started freezing accounts, reportedly.

"If your truck is used in these blockades, your corporate accounts will be frozen. The insurance on your vehicle will be suspended. Send your rigs home," Freeland, a former senior editor at the Financial Times, told Freedom Convoy members. "Consider yourself warned."

Bitcoin facilitates cross-border transactions that cannot be intercepted by corporations, the police or other institutional bodies. The initial call for crypto donations was made after centralized crowdfunding platform GoFundMe closed an account that had raised over $7 million, citing "violence and other unlawful activity" during the demonstrations.

(Meanwhile, last night, alternative crowdfunding site GiveSendGo announced it suffered a data breach that exposed "gigabytes of data about donors to the Freedom Convoy, including photos and passport scans," according to The Verge.)

Still, questions remain. For instance, what is the best means of distributing bitcoin to protestors? Could donors or receivers face criminal liability for financially backing this controversial protest? Could the crowdfund's organizers take the bitcoin and run?

Read the full article here.

-Daniel Kuhn

Staking Claims: Abra's CEO Talks Passive Income

Bill Barhydt is the kind of smart person other smart people listen to. Before he was an investment banker at Goldman Sachs, he developed rocket simulations at NASA, the fancy term is computational fluid dynamics. He spent the dawn of the Internet Age at Netscape, leaving behind the high-paying Wall Street job.

In his current incarnation as founder and CEO of Abra — a global crypto platform that offers a popular brokerage for buying and selling cryptos combined with interest-bearing wallets – Barhydt gave CoinDesk Studios a bit of his time recently to answer our questions about how to draw passive income from digital holdings.

*This is sponsored content from Abra.