EU Squashes Crypto Mining Ban

The biggest crypto news and ideas of the day

Mar. 14, 2022

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Welcome to The Node.

In today's newsletter: EU squashes proposal banning crypto mining.

Japan lays out penalties for crypto exchanges. And Actor Mila Kunis backs animated wrestling show "The Gimmicks."

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

–Daniel Kuhn

Today's must-reads

Top Shelf

BANNING BITCOIN: A proposed rule by the EU that could have effectively limited or banned the use of proof-of-work crypto mining has been squashed. The European parliament's economic and monetary affairs committee voted on Monday to keep the provision draft out of the proposed Markets in Crypto Assets (MiCA) framework. EU leaders have pushed against proof-of-work cryptocurrencies over energy concerns, arguing that renewable energy may be channeled into sustaining cryptocurrencies like bitcoin rather than serving national use.

CRYPTO PENALTIES: Japan's government and financial regulator has laid out penalties for crypto exchanges making unauthorized payments to sanctioned individuals following Russia's invasion of Ukraine. The announcement, made Monday, comes amid concerns surrounding the use of crypto as a way to evade sanctions placed on Russia and some individuals. While no evidence has been found, crypto exchanges could be fined as much as 1 million yen, or $8,500 per infraction, and executives could face up to three years in prison.

HOLLYWOOD AND BLOCKCHAIN: Animated wrestling show "The Gimmicks" is jumping into the non-fungible token (NFT) space. The adult series follows a group of washed-up wrestlers longing for glory and is being backed by actor Mila Kunis' Sixth Wall production. Users will be able to mint on the Solana blockchain for free once NFT sales go on sale on March 18. Owners of the show's NFTs will be allowed to "choose your own adventure" by voting on the direction of the show's plot following the conclusion of each episode.

FUNDING ROUND: Solana-based Magic Eden raised $27 million in a Series A funding round as it looks to expand its products and services. The NFT marketplace said it will use the funds to build out a gaming vertical and launch an NFT mobile application for browsing, minting and trading NFTs on the go. The funding round was led by Paradigm and included contributions from Sequoia and Solana Ventures. Similarly, blockchain game development studio Metaverse Game Studios has raised $10 million in a funding round. The company's flagship game, Angelic, "is building a massively multiplayer metaverse with a deep gameplay layer enriched by a sophisticated backstory," said Animoca Brands co-founder and executive chairman Yat Siu. The game features a take-it-in turns strategy and looks to "bridge the divide between blockchain games and AAA titles," Siu said in a press release.

–Fran Velasquez

Overheard on CoinDesk TV...

Sound Bites

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What others are writing...

Off-Chain Signals

Tennessee Bitcoin Miner Faces Lawsuit Over Noise Complaints (Decrypt)
Darnet Dealer Forfeits $2.3M in Bitcoin, Sentenced to 8 Years (Decrypt)
Bitcoin mixing service CoinJoin starts blacklisting BTC tied to illegal activity (The Block)
Crypto vs. physical: The Elon Musk-Michael Saylor inflation debate boils down to scarcity (Cointelegraph)
Austin's mayor embraces Web3 tech and crypto payments (Cointelegraph)
Crypto Exchange Bitstamp USA Taps Wall Street to Boost Diversity (Bloomberg)

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Putting the news into perspective

The Takeaway

The First NFT Monopoly

With Bored Apes and CryptoPunks under the same corporate roof, the NFT market barrels toward further centralization.

This past fall, I wrote about the idea that, while much of the rhetoric around cryptocurrencies has to do with "decentralization" as a guiding ethos, the NFT space is in fact already extremely centralized.

Specifically, it's centralized on the sales side. According to data from the blockchain analytics company DappRada, the vast majority of all NFT sales volume is concentrated on two platforms: OpenSea, the Andreessen Horowitz-backed incumbent, and LooksRare, a scrappy outsider that emerged a few months ago. But since the vast majority of sales volume on LooksRare comes from "wash trades" – that is, traders selling themselves their own NFTs in an attempt to take advantage of the platform's token rewards system – it's safe to say that what you might call real NFT trades are happening almost entirely on OpenSea.

And while that's still very much the case, the NFT market has recently begun a kind of second-order centralization in the realm of content.

On Friday evening, Yuga Labs, the company behind the Bored Ape Yacht Club NFT collection, announced it had acquired the "brands, copyright in the art and other IP rights" for two NFT projects from the developer Larva Labs: CryptoPunks, the pixelated mugshots that helped elevate NFTs into the public consciousness last year, and Meebits, their 3D counterparts.

CryptoPunks were the world's most valuable NFTs for most of 2021, until Bored Apes dethroned them.

Read the full story here.

–Will Gottsegen

Anonymity Is the Key to Everything

Anonymity – this word plunges many into fear. Fear of the unknown and fear of ever having to leave your comfort zone. However, some have overcome all this.

One international team of experienced risk managers, programmers and quants has decided to make a loud statement about their developments in automatic high-frequency trading algorithms (HFTA). The Mechanics of the Future team has created an anonymous Insider Protocol ecosystem built on an improved version of MimbleWimble technology.

*This is sponsored content from Insider Protocol.