News: Regulators zero in on stablecoins, El Salvador’s colón-dollar, Tether printer remains paused

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Here’s what’s happening in the land of crypto. 

Regulations 

A new academic paper on stablecoins is up on the Social Science Research Network. It’s called “Taming Wildcat Stablecoins.” The 49-page paper was co-authored by Gary Gorton, a finance professor at Yale, and Jeffery Zhang, an attorney at the Federal Reserve.

The pair say that Tether is an equity contract, similar to a money market fund, while other stablecoins, such as USDC, Paxos Standard, and the Gemini Dollar, are more like debt. Liberty Reserve isn’t mentioned anywhere in the paper but the authors draw parallels between stablecoins and 19th Century wildcat banks — which is saying a lot because wildcat banks needed corralling. 

Frances Coppola, a UK freelance writer who spent 17 years in banking, tweeted some harsh criticisms of the report. Overall, I think it is worth a read. FT Alphaville has their own take on the paper.

Secretary of the Treasury Janet Yellen met with the President’s Working Group on Financial Markets — aka “The Plunge Protection Team” or the “holy shit guys” — to discuss stablecoins. The group includes the heads of the Federal Reserve, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. (Treasury Press Release; WSJ, paywalled)

Their discussion builds on a document the PWG published in December outlining regulatory issues regarding stablecoins — back from when former Treasury Secretary Steven Mnuchin brought them all together to discuss Facebook’s Libra, now Diem. That paper, in turn, grew out of the Financial Stability Board’s final report on the regulation of stablecoins in October.

SEC Chair Gary Gensler spoke about crypto exchanges at the Piper Sandler Global Exchange and FinTech conference. “When you go into one of these exchanges, you don’t know whether the order book is accurately reporting the bids and the offers,” he said. “You don’t really know if there is front-running. You don’t know whether some of the trading that is reported is real or fake.” (WSJ, paywalled)

Elizabeth Warren, a Senator from Massachusetts — so famous, she gets into international news slightly more than most senators — sent a letter to Gensler about crypto exchanges telling him that “the lack of common-sense regulations has left ordinary investors at the mercy of manipulators and fraudsters.” She wants the SEC to use its “full authority” to address these risks.

El Salvador and bitcoin

Bitcoin will officially become legal tender in El Salvador on Sept. 7. The fast-approaching deadline has left the country’s President Nayib Bukele and his team scrambling to figure out a way to pull this off without landing on their collective rear ends. 

“So far, it looks like Bukele will be getting everyone onto the government’s official Chivo custodial wallet, using that as an officially-supported payment system, and saying that’s ‘Bitcoin.’” David Gerard wrote in a recent blog post spelling out how Chivo is coming along. Hint: not very well.

In a normal world, you would create the payment system first and then add in the crypto later once you made sure everything was working properly. El Salvador is going about it ass backwards — taking bitcoin, and trying to build a payment system around that. 

The challenge is that bitcoin doesn’t really function as a payment system — and the Lightning Network, a second layer solution that was meant to scale bitcoin, can’t handle a small country with 6.5 million users. 

The Chivo wallet is the one thing that Bukele and his buds can’t afford to screw up on. It’s their wallet, so they’ve hired someone named “Lorenzo” to get the job done right. I assume that Bukele and co’s first instinct was to find someone they could trust to do their bidding — not necessarily someone competent. 

The weird thing is you don’t really need to build a payment system. You can literally hire a white label payment gateway and use it under your name while the processing is done by a third party.

Anyhow, it looks like “Lorenzo” is Lorenzo Rey, the Venezuelan developer from Dash — a crypto that started off as a fork of bitcoin. I’m sure the bitcoin maxis will love that.

El Faro reports that the Bukele regime is now planning to launch a national stablecoin called “colón-dollar.” Colón (Columbus) was the name of El Salvador’s currency before it was replaced by the dollar. It’s technically still legal tender in the country, but nobody uses it. 

According to the plan, the colón-dollar will be issued by El Salvador’s Central Reserve Bank, backed by a reserve of US dollars, and integrated with the Chivo wallet. “The move would restore a key element of monetary policy, which the country lost when it adopted the US Dollar in 2001: the ability to issue national currency,” says El Faro.

A stablecoin makes sense given that Bukele needs greenbacks to pay for the national debt, finance his new party’s campaigns, and pay back owed favors to shadowy figures like José Luis Merino, a high-ranking government official in El Salvador. 

You’ll find Morino’s name — along with several others associated with the Bukele regime — on the US Corrupt and Undemocratic Actors report.

Bukele doesn’t like El Faro — which translates to “The Lighthouse” — a publication that for two decades has dug into corruption, human-rights abuses, and gang violence. 

His government recently expelled an El Faro editor who was Mexican, saying it could not verify his work credentials. (Washington Post, paywalled)

El Faro is co-owned by Jose Simán, Bukele’s rival, so of course, Bukele hates them. The paper has fought a tough battle, but its toughest battle yet may be against the Bukele regime. (Global Investigative Journalism Network)

Circle’s sly plan to go public

I wrote about Jeremy Allaire’s Circle, how it plans to go public via a special purpose acquisition company, and why SPACs are bad. (My blog) 

Circle hasn’t been transparent about what is backing its now 26.4 billion USDC. They haven’t released their Q1 financials to the public, so now we are waiting for the SPAC to file an S-4 sometime in Q4. The S-4 will be the real test of transparency. 

[Update, moments after I published this newsletter, Circle came out with its May attestation. It’s a step toward greater transparency, but we still have questions. Why no full audit? Why the delay in making this info public?]

In his recent article, “A Stablecoin Applies to Become a Stonk,” Doomberg says he thinks SEC chair Gary Gensler is unlikely to let Circle pull off its terrible SPAC. “Under [former SEC chair] Clayton’s watch, the SPAC boom soared to historic heights. But from the early signs, Gary Gensler is no Jay Clayton.”

Here’s something I missed earlier: On page 52 of Circle’s Q4 2020 financials, there is a vague mention of a dispute with a “financial advisor” who claims they are entitled to “9% of any value issued to the Company’s shareholders in connection with the proposed business combination.”

Circle hasn’t disclosed who this financial advisor is, although there is some speculation as to whether Circle tried to go public with a different SPAC company earlier, and that didn’t work out. 

Here’s the text:

“The Company is currently in a dispute with a financial advisor regarding advisory fees in connection with the potential consummation of a proposed business combination. The advisor believes it would be entitled to a fee of approximately nine percent (9%) of any value issued to the Company’s shareholders in connection with the proposed business combination based on the advisor’s interpretation of its engagement letter with the Company. The Company disputes this and maintains that the advisor would receive, at most, a reasonable fee reflecting the custom and practice among investment bankers in similar size and type of transactions. At this time, no business combination has been entered into, and there is no fee owing. However, if any such transaction is completed, and a fee becomes payable to the advisor, we cannot determine the ultimate outcome of this dispute.”

Binance CEO: This is fine. Everything is fine

Binance is fast becoming a train wreck. Regulators around the world have been issuing warnings about the exchange, fiat off-ramps keep shutting, and users are complaining they can’t get their funds out. I wrote about it here and here.

Meanwhile, amidst the smoke and fire, Binance CEO Changpeng Zhao — aka “CZ” — continues to behave like everything is going swimmingly.

“A new chapter awaits us, as we embrace compliance and regulations,” he tweeted — after his Brazil director abruptly quit, and Italy, Lithuania, and Hong Kong issued notices about its questionable stock tokens.

CZ talks a big game when it comes to compliance, but that’s all it is — talk. In a June press release, the exchange bragged about helping to take down a Ukrainian crypto money laundering group.

If Binance was following proper KYC/AML procedures, it likely wouldn’t be a target for money laundering groups to begin with. 

Binance routinely reaches out to law-enforcement agencies to request thank-you notes after it cooperates with criminal probes as a way to show how law-abiding it is. The habit has become so disingenuous that the US Department of Justice straight out told federal agencies to stop signing the letters. (Bloomberg)

A bit of trivia — six years ago, CZ was the head of OKCoin’s Singapore branch, registered as a separate company during the infamous Roger Ver vs OKCoin dispute over the bitcoin.com domain. CZ was the go-between who transmitted — or fabricated — the version of the contract with a grossly forged digital signature. The saga was comedy gold on r/buttcoin in 2015.

Oh, and in case you’ve ever wondered about those “maintenance shutdowns” on leveraged exchanges, this Youtube video by Francis Kim, an investor and founder of 80bots, is a must see. “The biggest mistake I made that night was trusting Binance — that my open position would be safe with them.”

Tether printer still on pause

Tether hasn’t printed a darn thing in 50 days. They are stuck at 62.3 billion tethers. Actually, it looks like they even burned 400 million tethers since two weeks ago.

Bitcoin has lost more than half its value since April 14. Down from nearly $68,000, it’s now below $30,000. The concern is that the price of BTC will continue to drop if the Tether printer does not start up again soon.

Keep in mind, there are still a lot of tethers out there moving around between unknown wallets. And we have two other popular stablecoins — USDC and BUSD — to pick up some of the slack. 

In my last newsletter, I offered three theories on why Tether had stopped printing. Now, I am beginning to suspect some regulator may have sent them a cease-and-desist notice.  

There’s also Binance, one of Tether’s biggest customers. Binance is holding 17 billion tethers — about 30% of all the USDT out there. California-based Silvergate Bank terminated their relationship with the exchange in June. (Coindesk)

This means users can no longer transfer US dollars from their US bank to Binance, likely often used to fund purchases of USDT.

Faisal Khan, a banking and payments consultant, thinks that USDT demand probably came from leveraged traders (aka degenerate gamblers) who needed more chips for the Binance casino. (Startups and Econ)

The FT did a profile on Giancarlo Devasini, the 57-year-old CFO of Bitfinex and Tether. A former plastic surgeon, at one point, Devasini got into trouble for “unwittingly” loading unlicensed Microsoft software onto computers he was selling. He goes by the handle “Merlin.”

In communication logs from April 2018 to early 2019 shared with the New York attorney general, Merlin pleaded with “Oz” at Crypto Capital to return funds. Bitfinex had lost access to hundreds of millions of dollars of customer money entrusted to the shadow bank. The exchange had to eventually dip into Tether’s reserves to fund user withdrawals.

“Please understand, all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below $1K if we don’t act quickly,” said Merlin. (Court document)

So, to all those who think Tether has nothing to do with the price of bitcoin, Devasini would argue differently. 

Other newsworthy stuff

BlockFi just got hit with a cease and desist from the New Jersey attorney general. The high-yield crypto lender has to stop accepting new clients in NJ as of July 22. (Order)

BlockFi has been funding its lending through the sale of BlockFi Interest Accounts, or BIAs. You put your crypto in and get BIAs in return that earn interest. The NJ AG claims these interest earning accounts are unregistered securities.*

High-yields come with high risks. Still, BlockFi CEO Zack Prince says customer funds are safe. The question is, how safe will your funds be now that BlockFi is not getting as much new money coming in?

Dogecoin dropped below $0.2, so Elon Musk stepped in to do his part. He changed his Twitter profile pic to doge eyes, which helped lift the price back up to $0.19. (Decrypt)

Dogecoin creator Jackson Palmer returned to Twitter briefly to post a scathing thread on why he left crypto. According to him, crypto is an “inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.” He is 110% correct, of course. (Twitter)

Remember Virgil Griffith, the former Ethereum developer who went to the DPRK against all better judgment to speak at a conference? Virgil doesn’t really listen when people tell him not to do something. He got himself into trouble again, this time for trying to access his crypto — a violation of his bail conditions. (Court filing)  

Reggie Fowler — the person linked to $371 million in missing Bitfinex and Tether funds — has ditched plans for renegotiating a plea deal that he got very, very close to in January 2020. He’s headed to trial with his new defense team early next year. Hopefully, his new lawyer demanded payment in advance. (My blog post)

Trading volumes at the largest crypto exchanges, including Coinbase, Kraken, Binance, and Bitstamp, fell more than 40% in June, according to CryptoCompare. The cause? Bitcoin’s dropping price and China’s renewed crackdown on crypto. (CNBC)

As an article in WSJ points out, China arrested more than 1,100 people suspected of using crypto to launder dirty money in the month of June. That’s enough to put a damper on any exchange volume.

David Golumbia, a professor of digital studies at Virginia Commonwealth University and the author of Politics of Bitcoin, has a new podcast out where he talks about the right-wing politics of crypto. (Tech Won’t Save Us)

The Beijing Civil Affairs Bureau has banned an organization called China Blockchain Application Research Center. The founder is OKEx founder Star Xu, and its members include Huobi founder Lilin, Bibox founder and other giant whales of Chinese crypto. (Wu blockchain)

Hong Kong authorities have arrested four men allegedly tied to a money-laundering racket that used tethers to move $155 million through shell companies. (South China Morning Post, paywalled.)

Image: A one colón note. The colón was the currency of El Salvador between 1892 and 2001, until it was replaced by the US dollar. It is still legal tender, however.

*(July 20, 2021 — Updated to clarify that the NJ AG claims that BlockFi’s BIAs — interest earning accounts — are illegal securities. It doesn’t matter what type of crypto you buy those BIAs with, be it bitcoin, ether, or assets tied to Chainlink or UniSwap. It’s the BIAs. Also added link to the order.)

Related stories:
Binance: Italy, Lithuania, Hong Kong, all issue warnings; Brazil director quits
The curious case of Tether: a complete timeline of events
Tether’s first breakdown of reserves consists of two silly pie charts
NYAG/Tether, Bitfinex settlement reveals commingling of funds, years of shenanigans
Michael Peterson, El Salvador, and Bitcoin Beach

News: Tether printer on hold, China’s crypto crackdown, the world hates Binance, El Salvador’s Chivo wallet

In case you missed my tweet, I ended up sick at the end of June. I was chatting with a friend over Zoom when he noticed that I was tilting over in my chair. Was I drunk? No. Should he call an ambulance? I’m fine.

I ended up in the ER the next day on IV fluids and hooked to monitors. Turns out I had Anaplasmosis from a tick bite. Doxycycline did the trick, and I was on my feet again within 48 hours. 

Apparently, this is the price you pay for walking blissfully unaware through grassy fields and woodsy trails. 

I mentioned earlier I was writing a book on NFTs. While I did a lot of research on the subject, I’m putting the book on hold for now. My concern is, who would read it? NFTs seem to have been a fad, slipping out of fashion. 

If you are interested in the topic, check out my recent notes on NFTs and money laundering. I also wrote for Business Insider on how Metakovan was pumping Beeple NFTs months before he bought Beeple’s $69.3 million NFT at Christie’s. 

I think we can all admit that the art behind almost every NFT is absolute garbage, which the author of this blog post does a fine job of pointing out. 

China’s crackdown on crypto

The People’s Bank of China has hated crypto since 2017, when it initially kicked the crypto exchanges out. 

In recent months, the country has gone after crypto with a renewed vengeance, banning FIs from providing services to crypto firms and forcing bitcoin miners in the country to take their hardware offline. 

Up until recently, most of the world’s bitcoin mining (~ 65% to 75%) took place in China. The country’s crackdown on mining caused more than 50% of the bitcoin hashrate to drop since May.

The hashrate dropped faster than bitcoin’s difficulty algorithm could keep up. Every 2,016 blocks, the difficulty adjusts to account for how many miners are on the network. 

On July 3, bitcoin experienced a record 27.94% drop in mining difficulty, according to BTC.com, meaning now, bitcoin miners will have an easier time finding blocks. (CNBC)

Beijing even told companies they are no longer allowed to provide venues, commercial displays, or even ads for crypto-related businesses. On Tuesday, the PBoC said it had ordered the shutdown of Beijing Qudao Cultural Development, a company that makes software for crypto exchanges. (Reuters)

Why does China loathe crypto? Some people say the PBoC is trying to make way for China’s CBDC, but I doubt that has anything to do with it. The most likely reason is the country wants to stem capital outflows. According to a Chainalysis report last August, $50 billion in crypto assets moved from China to other regions in a 12-month period. 

Why has Tether stopped printing?

Tether is currently at 62.7 billion tethers, and it’s been stuck there for more than a month. Tether had several big prints at the end of May and now, crickets all through June and into July. The printer has totally stopped. 

Nobody is really clear on why Tether has put its printing presses on hold, but the timing seems to correlate with China’s crackdown on crypto.  

We have three theories for why Tether stopped printing

Theory #1 — Less demand

The China crackdown has created a reduced demand for tethers. When bitcoin’s hash rate dropped precipitously, so did the number of newly minted BTC per day — at one point it was down to 350 new BTC per day, as opposed to the 900 BTC per day the network should be producing.

Binance and OKex have mining pools, so bitcoin miners can mint bitcoin directly to their own exchange accounts. Since there is no way to cash out directly, miners convert BTC to tethers (USDT). And then convert USDT to RMB on unregulated over-the-counter platforms, such as Huobi and CoinCola.

With the exodus of miners from China, there was less demand for tethers. 

Theory #2 — Chinese junk debt

Another theory floating around is that Tether may have been getting Chinese junk debt to issue tethers, and now that is no longer possible due to the risks. 

Tether’s latest composition report showed that 50% of the assets backing USDT were unspecified commercial paper. In the US commercial paper market, that would place Tether among the likes of fund managers like Vanguard and BlackRock, which seems unlikely. (FT)

So maybe it’s holding Chinese paper?

“If Tether is holding Chinese commercial paper, the issuer can default on those debts with impunity. What is Tether going to do? Sue in Chinese courts?,” Tether whistleblower Bitfinexed said in a tweet.

He revealed in a DM that the info comes from a “reliable source.”

Theory #3 — USDC is picking up the slack

While the tether printer stopped, the USDC printer appears to have picked up speed, issuing 10 million USDC since May 8. 

As of July 5, there are 25.5 billion USDC stablecoins in circulation, so maybe USDC is stepping into Tether’s shoes?

In other news, Tether is working hard to shine up its tarnished image. The company is hiring a Reputation Manager, to “advocate for the company in social media spaces, engaging in dialogues and answering questions where appropriate.” 

If you want to fight the FUD spread by salty nocoiners like myself, this job could be for you. (Teether, archive)

Binance vs the world

The UK, Singapore, Japan, Germany, Canada and now the Cayman Islands are all moving against Binance, the world’s largest crypto exchange. I wrote a blog post detailing Binance’s pariah status. 

The bad news keeps getting worse. Following the FCA banning Binance in the UK on June 26, Barclays says it is blocking customers from using their debit and credit cards to make payments to Binance. (They will let you take money out, but they won’t let you put money in.)

Binance “talks a big game on anti-money laundering and know-your-customer” rules, but was “resistant to throwing human resources at compliance issues,” an executive at a payments company that helped connect Binance to the broader financial market before cutting ties with the group, told the (FT)

And worse still — on Tuesday, Binance told its customers that it will temporarily disable deposits via SEPA bank transfers. Binance said the move was due to “events beyond our control.” (FT)

Binance founder CZ says it’s all FUD.

Binance’s organizational structure

Binance has a lot secrets. The company refuses to say where its headquarters is located. And it’s tight-lipped about its organizational structure, too. 

On May 1, Brian Brooks, former Coinbase chief legal officer and former acting head of the Comptroller of the Currency, took over as CEO of Binance.US, replacing Catherine Coley. (WSJ)

In a Coindesk interview in April, he said he reports to the board of directors, yet he wouldn’t name who was on the board. 

Coindesk: “Brian, what is the reporting structure with Binance US. Who do you report to?”

Brooks: “I have a board of directors, which I will be a member of, and I will report to that board.” 

Coindesk: “Who else is on the board?”

Brooks: “The board is obviously the founder of the company and another person. It’s a private company, so we don’t necessarily go into the governance structure…”

Later when Coindesk asks him where Binance.com is located, Brooks dances around that question as well. He did say, however, that Binance keeps its US customer data separate from Binance.com. 

Binance.US also just brought onboard Manuel Alvarez, a former commissioner at the California Department of Financial Protection and Innovation, as its new chief administrative officer. (Coindesk)

FATF releases 12-month review 

The Financial Action Task Force, a Paris-based global anti-money laundering watchdog, published its second 12-month review of its revised standards for virtual assets and virtual asset service providers, or VASPs

VASPs include crypto exchanges, bitcoin ATM operators, wallet custodians, and hedge funds. 

When the FATF published its guidance in 2019, it recommended full AML data collection by VASPs — and Rule 16, also known as the “travel rule.” 

The travel rule requires VASPs to disclose certain customer data and include that data with a funds transfer, so that the info “travels” down the funds transfer chain.  

Of FATF’s 128 reporting jurisdictions, 58 have implemented the revised FATF standards. The other 70 have not. And the majority of jurisdictions have yet to implement the travel rule.

“These gaps in implementation mean that there is not yet a global regime to prevent the misuse of virtual assets and VASPs for money laundering or terrorist financing,” the FATF said. 

The FAFT plans to publish its revised guidance by November 2021 with a focus on accelerating the implementation of the travel rule as a priority. (Forkfast)

Kaseya ransomware  

The REvil ransomware operation is behind a massive attack centering on Kaseya, a company that develops software for managed service providers. MSPs provide outsourced IT services to small and medium-sized businesses that can’t afford their own IT department. 

Between 800 and 1,500 businesses have been compromised by the global ransomware attack, including schools in New Zealand and supermarkets in Sweden. 

The REvil gang has offered to decrypt all victims for $70 million in Monero (XMR), a cryptocurrency that is harder to track than bitcoin. The immediate ransom demand is $45,000 worth of XMR, rising to $90,000 after a week.

Nicholas Weaver, a researcher at the International Computer Science Institute in Berkeley, wrote a story for Lawfare breaking down the Kaseya ransomware attack. 

He also wrote an earlier story for Lawfare titled “The Ransomware Problem Is a Bitcoin Problem,” where he explains why getting rid of crypto is a great idea. “The ransomware gangs can’t use normal banking. Even the most blatantly corrupt bank would consider processing ransomware payments as an existential risk.”

El Salvador, bitcoin and Bitcoin Beach

Who is the San Diego surfer who brought bitcoin to El Zonte? A white evangelist named Michael Peterson. I wrote about him and his Bitcoin Beach project at length in a recent blog post. 

Peterson read my story. He says it’s full of “glaring inaccuracies” and “plagiarized pieces of other bad reporting.” When asked to substantiate his defamatory accusations, he never replied back. 

Does he use these same bully tactics to get people in El Zonte to use bitcoin? 

David Gerard wrote up a detailed blog post explaining the latest developments on bitcoin and El Salvador. 

Here are some notes, if you want to catch up quick:

  • Nayib Bukele, El Salvador’s president, has announced a government wallet — the Chivo wallet — that will be available for download in September. (Youtube)
  • The Chivo (slang for “cool”) wallet will hold both USD and bitcoin balances. 
  • Salvadorans who sign up for the mobile app will get $30 in bitcoin, but they have to spend it. They can’t sell their BTC for cash — which makes you wonder if Bukele is simply planning to issue new dollars under the guise of bitcoin. (I also recommend you read Gerard’s piece in Foreign Policy on this topic)
  • The technical details of the Chivo wallet are totally unclear. Is Jack Mallers, the CEO of Zap and the remittance app Strike, going to develop the wallet? We don’t know.  
  • Originally, Mallers said Strike was using tether for remittances. (My blog post.) Now, he says Strike is no longer using tethers, and the folks in El Salvador receiving remittances on his app will receive actual dollars. (What Bitcoin Did)
  • How will this happen? Mallers said in his What Bitcoin Did interview that his company has local banking relationships in ES, but we don’t know what banks, where. 
  • Here is a direct quote from the transcript of the interview: “So, I was like, ‘Well, fuck, I don’t know then how I’m going to pull this off!’ So, what I did is, we built Tether into Strike, which was the equivalent of the Chase bank account in America, and it at least gave us some MBP basic functionality, where I can go and just observe and listen and see how people used it and see if it was helpful. But now, we’re already integrating with the top five banks in the country.”
  • Mallers tends to be long on plans and short on details. When the media reaches out to him with questions — like Decrypt did when they learned Zap is not licensed to operate in most US states — he generally just ignores them. 
  • Despite what Mallers keeps claiming, sending remittances via Western Union from the US  to El Salvador isn’t really that costly, to begin with. Steve Hanke, Nicholas Hanlon, and Mihir Chakravarthi point this out in their paper: “Bukele’s bitcoin blunder.”
  • Jack Maller’s company Zap (the parent company of Strike) got $14.9 million in fresh funding in March from “Venture Series – unknown,” on top of a $3.5 million seed round a year prior. Nobody seems to know who is behind the funding. (Crunchbase)
  • Athena, the company that Bukele ordered 1,000 new bitcoin ATMs from, installed a new bitcoin ATM machine — the country’s third installed machine! — in La Gran Vía shopping center. They had a ribbon-cutting ceremony and everything.
  • Unfortunately, the machine was located in front of an upscale department store owned by the Simán family, Bukele’s arch enemy. Worried that the ATM would draw foot traffic to his rival’s business, Bukele had the machine relocated next to the toilets, where it sits unplugged. (Twitter) 
  • The US State Department named 14 El Salvadorans, many associated with the Bukele regime, as corrupt or undemocratic actors. (US State report)

Robinhood’s planned listing

Robinhood had plans to go public in June, but the SEC has some questions about its cryptocurrency business, according to Bloomberg.

The company also agreed to pay FINRA $70 million to settle allegations that the brokerage caused customers “widespread and significant” harm on multiple different fronts over the past few years.

Specifically, FINRA’s investigation found that millions of customers received false or misleading information from Robinhood on a variety of issues, including how much money customers had in their accounts, whether they could place trades on margin and more.

In its SEC S-1 filing, which dropped on July 1,  Robinhood notes that a “substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin. If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected.”

Robinhood currently supports seven different cryptos. When you trade crypto on Robinhood, you don’t ever hold the keys to your own crypto. Robinhood itself buys the actual crypto and maintains custody, so you can’t move your coins onto or off the platform. You’re stuck in there.

Bitcoin mining turns NY lake into a hot tub

The Greenidge Generation Bitcoin mining plant, owned by private equity firm Atlas Holdings, sits on the shores of beautiful Seneca Lake in New York. 

The tagline on its website reads, “Green Power for Generations to Come.”  

The firm uses lake water to cool its 8,000 computers used to mine bitcoin within the gas-fired plant. Greenidge’s current permit allows it to take in 139 million gallons of water and discharge 135 million gallons daily, at temperatures as high as 108 degrees Fahrenheit in the summer and 86 degrees in winter.  

Locals want the mining facility gone. They have been staging protests. They claim the plant is polluting the air and heating the lake, thanks to its use of fossil fuels.

“The lake is so warm you feel like you’re in a hot tub,” said one nearby resident. (NBC) (Arstechnica)

RSA Conference’s blockchain moment

Over the weekend, the RSA Conference gave infosec and computer science Twitter a bit of a shock when it suggested replacing the entire internet with — a blockchain. 

The tweet quickly disappeared, but not before being archived. The blockchain is immutable! I wrote about the event in a blog post.

(Updated on July 8 to note that Brian Brooks replaced Catherine Coley as CEO of Binance.US.)

If you like my work, please subscribe to my Patreon account for as little as $5 a month. 

Michael Peterson, El Salvador, and Bitcoin Beach

On June 8, El Salvador passed a law to make bitcoin legal tender, alongside the dollar. Salvadorans were blindsided by the decision. Overnight, their president, Nayib Bukele, had turned into a bitcoiner, even adopting the bitcoin laser eyes in his Twitter profile — he and members of his cabinet, too.  

Who sold Bukele on the plan? Many believe it was Michael Peterson, a 47-year-old white evangelical from San Diego. 

Peterson is behind the Bitcoin Beach project, ground zero for bitcoin in El Salvador. As recently as a few months ago, his voice found its way to Bukele’s ears. Although, to be fair, Bukele has been kicking around the bitcoin idea for several years now. 

“We’re trying to push on the president here to actually make El Salvador the first country that adopts bitcoin as an official currency. We haven’t succeeded yet, but I think we have pretty good odds to make that happen,” a baseball-cap-wearing Peterson said in a What Bitcoin Did podcast that aired on April 23.  

Peterson has spent the last 18 months aggressively promoting bitcoin to 3,000 residents in the seaside village of El Zonte, where he lives with his family part of the year, and the 500 residents of nearby Punta Mango.

A surfer, Peterson first came to El Zonte in 2006 to check out the waves. The town has long been a draw for surfers. He was so enamored by it, he bought a home there. The home has a guest house you can rent for $160 per night. In 2014, he opened another “mission guest house” in Punta Mango with three bungalows, each currently available for $200 per night.  

That same year, Peterson also set up MissionSake, formerly El Salvador Missionary Fellowship, a US nonprofit that focuses on community outreach and support for missionaries.

MissionSake, which Peterson operates with his wife Brittney, offers a range of services, including counseling, life coaching, financial planning — and an annual retreat called “The Gathering.” 

The last Gathering was in 2019. There was no Gathering in 2020, and there appears to be no Gathering in the works for this year either, probably because Peterson is preoccupied with his bitcoin experiment.

Peterson and his wife live in El Zonte with their two kids nine months of the year. In the summers, they travel back to San Diego to run their Bacon-A-Fair booth, where they sell bacon-wrapped food items to fairgoers at the San Diego and Orange County Fairs. Both of these fairs were canceled last year.

I suspect life got challenging for Peterson in 2020. El Salvador closed its borders from March 21 to June 14, which meant no visitors to rent out his bungalows to. He left the country in May on an evacuation flight. “We’ve been waiting for it to open back up,” he told Go Full Crypto in a podcast that aired September 22. (I’m not sure when it was recorded.) 

When Peterson returned to El Salvador, he set to work on his next project — a “bitcoin circular economy.” The goal was to get all the locals in El Zonte and Punta Mango transacting in bitcoin using a mobile payments app. Bitcoin would “bring people out of poverty,” he promised. It would “change the world.”  

Bitcoin has failed as a payment system since day one. It’s too volatile, too slow, and fat-finger mistakes mean your money is gone forever. The only people who use it for payments are criminals and ransomware hackers. Even hard-core bitcoiners now say bitcoin’s main use case is “store of value.” (As we’ll see later, no, the Lightning Network does not solve this.)

‘A labor of love’

Peterson has a B.A. in business from Westmont College, a Christian college in California. He graduated in 1997, according to his LinkedIn profile. He has been following bitcoin since 2012 and started investing in bitcoin in 2017, he said on the Anita Posch podcast

He assured Posch he is not making any money from the Bitcoin Beach project. “I have a business in the US and that is how I pay my bills. The Bitcoin Beach project is more just a labor of love.” 

After El Salvador passed its bitcoin legislation — the law goes into effect 90 days hence — Peterson tweeted: “Laughing as I sit In my RV trailer behind the carnival with my Fair Food stand with my AOL era email account and [social justice warriors] violently insist I am a rich TechoBro that foisted worlds 1st #BTC economy on #ElSalvador instead of crediting Salvadorans who did the work. They must be Racist”

[Update, since I published this story, Peterson changed the Bitcoin Beach Twitter account to “Chivo Beach,” showing his support of the new government wallet, and then back to Bitcoin Beach again.]

Peterson also claims to keep his ministry work separate from the Bitcoin Beach project. In an update to an article on Bitcoin Beach, Forbes wrote

“Upon further investigation, Bitcoin Beach initiatives have been separated from MissionSake, although the organizations remain closely aligned through their Founder.”

Just how “closely aligned” is a matter of question.

Hope House is linked to MissionSake’s Community Build project. It shares a new building in El Zonte with the Bitcoin Beach project and Strike — a Chicago-based payments startup. 

According to Hope House’s website, the charity teaches El Zonte youths computers and “life values.” Apparently, it also teaches classes on bitcoin, and how to use the mobile app for making bitcoin purchases, I’m told by people on the ground. 

The Hope House website lists Bitcoin Beach as its “main supporter.” You can also donate money to Hope House directly from the MissionSake website. 

As far as monetary policy goes, Peterson follows the Austrian school of economics. “As an economics major, I’m always drawn to the Austrian models. The world concept that most governments and central banks have gone with of just printing more money, that always perplexed me,” he told Go Full Crypto. 

Austrian economics supports the claim that a rigid gold standard is the only way to have “sound money” and that central banks and fractional reserve banking will inexorably lead to a collapse in the dollar. Thus, you need to hoard gold — or bitcoin, in this instance — because of its limited supply. 

Hoarding bitcoin runs counter to using it for everyday transactions. If a currency goes up in value, people won’t want to spend it. If the price crashes, you’re screwed.

So, who exactly is Peterson pitching bitcoin to in El Zonte?

El Salvador’s most vulnerable

El Salvador has a problem with violence. The country is plagued by gangs, such as MS-13, who make most of their money from extortion. Bukele’s 90% approval rating is partly due to having reduced homicides in the country by 60 percent. He allegedly negotiated with gang leaders, according to El Faro

Most young people get involved in gangs around the age of 14, said Jose Miguel Cruz, a researcher at Florida International University who has studied street gangs in El Salvador. That’s when young people are most open — or most vulnerable — to new ideas. 

Many of the gang members in El Salvador embrace evangelical Christianity as a way to escape violence. “In El Salvador, you join the gang, you join the evangelical church, or you leave El Salvador,” Cruz told NPR. Half of all gang members in El Salvador identify with the evangelical church. 

When I spoke with Cruz, he explained that evangelical churches have been sprouting up all over El Salvador, a traditionally Catholic country, for the last three decades. Every time he returns to visit, he sees more of them.

Likely, that is because evangelicals are militant in their recruitment efforts. “They see young people who have problems as a target to convert,” said Cruz. “Let’s say I am a gang member and I am touched by God. Supposedly, I have to recruit other people to join the church.”

Evangelical churches have become so entangled with gang communities in El Salvador that Bukele has been reaching out to pastors for help in negotiating with the gangs, Cruz said.

It is no surprise then that MissionSake’s efforts focus on young people. “Let’s walk with them, believing that they are called to fulfill the purpose that God has for them in the Kingdom. Let’s walk with them to help them change their world. This can be done through discipleship and education,” Peterson says on his website.  

Over time, Peterson has established relationships with young Salvadorans, including Jorge Valenzuela. According to MissionSakes’ website, Peterson prayed for Valenzuela until he “accepted Jesus as his Lord and Savior.” Valenzuela went on to become a disciple, converting other Salvadorans to Christianity. 

Today, instead of reaching out to youths and getting them to embrace Jesus, the 32-year-old El Zonte local plays an active role in promoting the miracles of bitcoin. “It changed my town,” Valenzuela told Bloomberg.

There are worrying signs that Peterson is employing the same militant tactics to promote bitcoin as he does Christianity. 

“The promoters are pleasant but they get angry if you do not join the project,” a source in El Salvador told me. None of the sources I spoke with wanted to reveal their true identities. It’s too dangerous, they say. “This is a place where people disappear,” one told me. 

Peterson insists that local Salvadorans run the Bitcoin Beach experiment. However, when reporters from El Faro showed up to meet with Valenzuela at Hope House, they were unable to get anyone there to speak to them. 

They were greeted by Hope House’s head of communications, who would not even give them his name. “Man, you are the head of communications and you can’t even tell us your name?,” the reporter said. 

“Luis Morales,” the man finally answered. “And that was the strongest information he gave us. Then the gates of Hope House were closed,” El Faro wrote.

Mystery donor

Peterson began devoting himself to his Bitcoin Beach project sometime in 2019 after a pile of bitcoin fell in his lap by way of a mysterious donor — or at least, that is what he says. He described how it happened in an interview with Forbes contributor Tatiana Koffman, who wrote:

“Sometime in early 2019, an anonymous donor with a fondness for El Zonte discovered a forgotten thumb drive loaded with Bitcoin. He had originally purchased the asset when it was priced at around 5-10 cents, and put it aside for several years. Upon realizing what his holdings were now worth, the donor spent several days attempting to unlock his wallet. After many futile attempts, the donor was finally able to remember his passphrase and retrieve the funds. A believer in using blockchain technology to boost inclusion for the unbanked, he decided to seize this stroke of luck and put the funds to good use by allocating a multi-year six figure donation to El Zonte.”  

As Peterson tells the story in Go Full Crypto, the donor first gave bitcoin to an organization he is connected with. (He doesn’t say what organization this is.) A few months later, the organization asked if he wanted to meet the donor. He told them, yes. But instead of speaking with the donor directly, he ended up speaking to a “manager” the donor had hired. As it turned out, the donor was a fellow libertarian. 

“I could tell from the description of his manager that he probably leaned libertarian, which was in line with my own philosophies and beliefs,” said Peterson. “And some of his concerns about government involvement were in line with some of my own leanings.” 

After the meeting, Peterson scribbled out a three-year proposal for “bitcoinizing” El Zonte, which the donor promptly approved. Bitcoin was priced at around $5,000 or $6,000 at the time, he said, which would have been in April or May 2019. 

‘A circular economy’

Getting people in El Zonte to actually use bitcoin was another story. Ultimately, it called for giving away free bitcoin. 

There are about 500 families in El Zonte. Bitcoin Beach gave each family $50 worth of bitcoin. The project also started paying teens in bitcoin for odd jobs, like picking up trash, lifeguarding, or doing well in their studies. Half of the bitcoiners in El Zonte are youths, according to Bitcoin Magazine. 

Bitcoin Beach is also funding El Salvador’s surf team. The surfers get a monthly stipend in bitcoin. On March 19, the day the surf team signed the contract, Katherine Diaz, one of the surfers, was killed in a freak accident. 

To raise money, Bitcoin Beach began asking for bitcoin donations on Diaz’s behalf to go toward a surf training center. The biggest donor is Square’s Jack Dorsey, who gave 3 BTC. The bitcoin donation wallet has so far received a total of 4.2 BTC, worth about $160,000.  

Peterson wants bitcoiners to see the Salvadoran surf team as theirs. “We don’t have our own country, we don’t have our own borders,” he told Anita Posch. “But we can have a surf team.” 

Mobile apps

Initially, Bitcoin Beach used the Wallet of Satoshi for on-chain transactions. Transaction fees were too high, so the project shifted to its own Bitcoin Beach Wallet developed by Galoy Money. The wallet uses a private version of the Lightning Network, a second layer solution that works on top of the bitcoin protocol. 

Lightning allows for faster payments and lower fees, but it has its own host of issues, including nobody has yet figured out how to make it scale — literally, the whole point of Lightning Network was to scale bitcoin — which is worrisome, given that this is supposed to work for all of El Salvador. 

Strike, a second mobile payment app that also uses a private version of Lightning Network, joined the project in January. Strike’s focus is on remittances, allowing Salvadorans living abroad — mostly in the US — to send money back home to their families. In 2019, remittances in El Salvador totaled $5.6 billion, around a fifth of GDP.

How it works: a sender deposits USD in their Strike account. Those dollars are instantly converted into bitcoin, whooshed across the border, and your mom in El Salvador gets not dollars, but tethers, a stablecoin with dubious backing. That changed when the company’s CEO, 27-year-old Jack Mallers abruptly announced the app was no longer going to be using tethers. 

Details are scant. Nobody is quite sure how Strike makes any of this possible — probably not even Mallers, I suspect. Add to that, Decrypt just reported that Zap, the parent company of Strike, doesn’t have proper licenses to operate in most US states.

“This is amateur hour, these people have never done a currency reform, they don’t know much about currencies,” Steve Hanke, an economist at Johns Hopkins University, told Decrypt.

There’s another option for Strike users receiving remittances in El Salvador. Peterson told Go Full Crypto, they can opt to receive bitcoin from Strike directly in the Bitcoin Beach Wallet, the Wallet of Satoshi, Blue Wallet, or “a number of the great Lightning wallets out there.”  

To be clear, Strike is using a “functionally private” version of the Lightning Network. Per its FAQ, the Strike network only passes transactions for approved entities — not the public Lightning mesh network. In practice, receiving bitcoin from wallets outside the system isn’t working anywhere near as smoothly as Peterson describes.  

As for the Bitcoin Beach app, Peterson reports things are going gangbusters. About 40 businesses in El Zonte are using the app, he told the Posch podcast. “It’s definitely the majority of the businesses now in El Zonte that are using bitcoin. [For] some of them, it makes up the majority of their revenue.”  

Reports from on the ground tell a different story. 

Zulma Rivas started accepting bitcoin for the fruit she sells in El Zonte. She rarely uses bitcoin because her smartphone can barely manage the payments app. When Reuters visited, her phone was broken. She often runs out of data on her cell plan anyway. 

Many of the residents in El Zonte downloaded the mobile app just long enough to grab their free bitcoin and cash out, one of the people I spoke with from El Salvador told me. 

The project is also suffering from serious problems of perception. Some El Zonte residents see bitcoin as the sign of the beast — a cryptic mark in Revelation that indicates allegiance to Satan —because the word “criptomoneda” (Spanish for cryptocurrency) sounds like it is mocking Christ. “They say that El Zonte has become the place where the beast was born,” the source said. “And some think the ‘999’ on images of the bitcoin coin is actually ‘666,’ the number of the beast.

Cashing out of your bitcoin in El Zonte is easy, the promoters of Bitcoin Beach say. You just need to track down a bitcoin ATM. Up until now, there were only two in the entire country — one in El Zonte and one in nearby El Sunzal. El Salvador ordered 1,000 more and just installed its third at La Gran Vía shopping center.

It turns out bitcoin ATM fees are high, however. 

One user got $13 when he tried to cash out $20 worth of bitcoin. In addition to a $5 fee, the Bitcoin ATM added 10.5% to the BTC price. 

Peterson admits the system sucks right now but says it will be great in the future. “The [ATM] in El Zonte I believe charges 8% if you want to buy Bitcoin and 3% to sell for cash,” he said via the Bitcoin Beach Twitter account. “This will change under broader rollout.”  

In response to an onslaught of criticism, he continued: “Everyone is missing the point — these fees all go to 1% once it gets up to speed and even the 1% not relevant because you don’t need to cash in or out because you use it and get paid in it.”

This is the eternal promise of bitcoin — things will always be better in the future. Meanwhile, many Salvadorans survive on less than $500 a month. They can’t afford to watch their money get siphoned away in transaction fees. 

A new bitcoin colony

Peterson’s M.O. is to promote bitcoin while brushing over the facts, such as bitcoin does not work for payments, Lightning Network does not scale, and El Salvador doesn’t have the infrastructure to pull any of this off by Sept. 7, when the new law goes into effect. 

The World Bank has already rejected El Salvador’s request for help in setting up bitcoin as legal tender. The irony here is that bitcoin was originally designed to circumvent the traditional banking system.

Almost everything in bitcoin boils down to “number go up.” Since early June, bitcoiners have swarmed El Zonte, buying pupusas with bitcoin and setting up camp. This isn’t the first time bitcoin bros have colonized a poor area and used it as a PR machine. They’ve done the same in Puerto Rico

Peterson’s master plan? He wants to see bitcoin adopted by El Salvador’s 6.5 million citizens, with El Zonte becoming the hub. Like a cherry on the top, Peterson’s vision, he told Go Full Crypto, includes erecting a bitcoin monument, a big “B” symbol, on El Zonte’s beach. “We want it to be a landmark where people can come and take selfies.” 

He’ll just have to remind the locals the “B” stands for bitcoin, not “el bestia.”

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El Salvador’s bitcoin plan: take your USD and turn them into worthless tethers

Last week, Nayib Bukele, the President of El Salvador, announced a plan to make bitcoin legal tender. The big announcement came via video on the second day of the Bitcoin 2021 conference in Miami. 

Leading up to the big reveal, Jack Mallers, the founder of crypto payments company Strike, strode back and forth across the stage at the conference, wearing a baseball cap and hoodie. While flashing what looked like a diamond studded ring on his finger, he spoke of the woes of the unbanked and the tyranny of central banks. He then went on to play Bukele’s video to a crowd of thousands of bitcoiners.   

Days later, Bukele pushed through his legislation, and on June 8, the tiny Central American country adopted bitcoin as legal tender. Alongside the US dollar, which the country transitioned to in 2001, businesses now must accept bitcoin as payment — unless they don’t have the technology.

El Salvador has partnered with Strike, a mobile app launched in March, to make payments in bitcoin possible. Strike claims it will allow Salvadorans living abroad to send money home instantaneously, without fees. Remittances, a lifeline to the country, surpassed $5.6 billion in 2019. 

While the concept sounds ideal, a closer look reveals worrisome details: Bukele’s plan, it appears, is to confiscate US dollars from remittances and force people to accept a worthless dollar substitute through the Strike app. 

In a Medium post written in January, Mallers claims that with Strike, “El Salvador users not only get access to free and instant international transfers anywhere in the world, but they also get access to a synthetic digital dollar on their smartphone.” 

Those “synthetic dollars” Mallers is talking about? Those are tethers.

Tether, for the uninitiated, is the dubiously backed stablecoin recently ousted from New York after the New York attorney generally brought up allegations of fraud. There are currently 63 billion tethers in existence, with billions more being minted each month. Each tether is supposed to be worth $1, but nobody knows for sure what, if anything, is backing the dollar-pegged cryptocurrency. Tether, by its own admission, is only backed by 3% cash. 

Strike uses a proprietary version of the Lightning Network, a second layer bitcoin solution for payments. The Lightning Network has never lived up to promises, and is not suitable for payments on a grand scale. Brazilian computer scientist Jorge Stolfi details its shortcomings in a Reddit post.

Here’s how Strike works: Say you want to send $1,000 from Los Angeles to your mom back home in El Salvador. You deposit your hard-earned cash into your Strike account. Strike debits your account and converts your $1,000 into bitcoins. It then sends the bitcoin to El Salvador where “it arrives in less than a second” on the wings of the Lightning Network. 

Once your bitcoin crosses the border, Strike converts it into tethers and plunks those into your mom’s Strike account. Now, instead of sending your mom real dollars, which she needs to pay bills and buy food, you have just sent her a bundle of tethers. What can she do with them?

She can use them to buy bitcoin and then she can sell the bitcoin for cash. If that sounds like a lot of extra layers, well, yes. Mallers explains how it’s done. Your mom can “simply go to a Bitcoin ATM or local Bitcoin teller and receive their local fiat currency” — in other words, actual US dollars. 

Let’s ignore for now the fact that there are only two bitcoin ATMs in the entire country of El Salvador — one in El Sunzal and the other in El Zonte — according to CoinATMRadar. 

Anyhow, Mallers lays out the details:

  • An El Salvador user requests to sell $100 worth of Bitcoin from Bitcoin ATM.
  • El Salvador user scans the Bitcoin ATM QR code with their Strike app.
  • Strike debits their Tether balance and converts it to bitcoin.
  • Strike then sends the bitcoin to the desired Bitcoin ATM address.
  • The ATM receives the bitcoin and issues the user their local fiat currency.

Essentially, you are converting back and forth to bitcoin twice. Here is the problem with that: Bitcoin is extremely volatile. The price can go up one day and down the next. On April 14, bitcoin hit a record of $64,829 but has since lost nearly half its value. How’s that for remittances?

“The FX risk in this system is massive,” Frances Coppola, a UK-based writer, who spent 17 years in banking, said in a tweet. “It’s not transaction fees people should be worrying about, it is the potential for massive USD losses because of the BTC conversion.”

FX, or foreign exchange, is the cost of converting from one currency to another. With bitcoin, that cost includes transaction fees — which were as high as $58 in April, according to YCharts — and the cost of bitcoin’s potential drop in value. (Conversely, if bitcoin goes up in value, Strike users won’t benefit because their money is converted dollar for dollar into tethers.)  

Bukele has set aside a reserve fund of $150 million at the country’s development bank BANDESAL to guarantee these currency exchanges — so merchants using Strike for bitcoin payments will not have to suffer any loss in value.* The trust has been set up in partnership with Strike.

In a Twitter Spaces call with several bitcoiners, Bukele explained that the cash in the reserve fund will eventually be replaced with bitcoin. “We are going to provide those US dollars, but we are going to get bitcoin in exchange.”

As bitcoin skeptic David Gerard points out in a more elaborate story, this is an excellent way to launder filthy bitcoin.

“There is absolutely no way to run Know-Your-Customer to international standards on Bitcoin transactions, and also have Bitcoin treated like legal tender. So they’re setting up a gateway for questionable bitcoins,” he said.

What’s to come of all this? My guess is that the $150 million fund will be sucked dry in no time by bad actors. The actual acceptance of bitcoin for payments of any sort in the country will be negligible.

Tether will see some level of adoption as “synthetic dollars” in Strike accounts, but Salvadorans will soon learn it’s worthless when they can’t convert tethers to actual spendable dollars. 

I would not be surprised if the Strike app suffers some major hack within six months. Also, I suspect international banks will severe ties with the local economy, meaning El Salvador’s economy will sink even further as a result. 

Bukele, who was elected in 2019 from the center-right Grand Alliance for National Unity party, has joined Mallers and a host of other bitcoiners in adding laser eyes to his Twitter profile. He is now tweeting about his next big idea: a project to mine bitcoin using energy from one of El Salvador’s volcanoes.

*Update June 12: it appears the $150 million reserve fund is only there to protect merchants from the volatility of bitcoin, not regular users. I also added a link to the Twitter Spaces call where El Salvador’s president says the fund will ultimately be replaced by Bitcoin. (Sounds a bit like Tether’s reserves!)

Feature Image: Twitter

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The curious case of Tether: a complete timeline of events

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