Why Twitter Ads Send Crypto to Celebrities – TechCrunch
Welcome back to Chain reaction.
Last week we talked about a hack that gave new, ironic meaning to the word “trustless”. This week we touch on one of the most polarizing aspects of crypto – privacy.
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all mixed together
A weekly window into the mind of senior crypto reporter Anita Ramaswamy:
Tornado Cash has been the talk of the town this week in crypto circles. The US government’s Office of Foreign Asset Control (OFAC), a watchdog within the Treasury Department, imposed sanctions on the cryptocurrency mixer for its role in helping facilitate money laundering. North Korean-backed hackers, among others, have used the Tornado Cash platform to mask stolen crypto associated with some of the highest-profile hacks in web3 to date, including last week’s Nomad heist and the previous hack of play-for-profit Axie Infinity this year.
But in imposing sanctions, OFAC essentially used a sledgehammer to crack a nut. The agency’s official notice on the subject said the platform had facilitated $7 billion in money laundering — which happens to be the total value of cryptoassets that have been sent through Tornado Cash since it was created in 2019. Meanwhile, blockchain analytics provider Elliptic says only 1 .5 billion of funds on Tornado are actually linked to crime, including ransomware attacks and fraud. The rest, Elliptic claims, could include “legitimate use of mixers like Tornado, for example to preserve financial privacy.”
So what are some of these legitimate uses? An example came from Ethereum founder Vitalik Buterin, who confessed on Twitter that he has used the service to securely send donations to aid Ukraine without the Russian government’s knowledge.
However, OFAC’s dictum does not distinguish between criminal and legitimate use cases. As a result, many law-abiding crypto users are likely to suffer. Two major crypto infrastructure providers, Alchemy and Infura, blocked access to their API from all wallets using Tornado Cash. Circle has reportedly frozen ~$75,000 worth of its USDC stablecoins that were connected to Tornado through a shared wallet, according to Dune Analytics data.
Of course, internet pranksters joined in on the fun, as is usually the case in the crypto world. Some has sent crypto through Tornado Cash to famous wallets held by celebrities such as Jimmy Fallon and Shaquille O’Neal in an attempt to troll them by getting their wallets banned under the sanctions rules.
OFAC’s heavy-handed action appears to be an unclear approach that raises more questions than it solves when it comes to enforcement. Only time will tell how the latter plays out, but in the meantime, the crypto community is understandably quite upset.
the last pod
This week on chain reaction, Jacquelyn and Anita ran the show while Lucas was on vacation. Jacquelyn was coming off an exciting conversation Friday night with Vitalik himself, so she shared some of his comments about where crypto is headed.
We then dove into the news that Tornado Cash is being sanctioned in the US, Coinbase’s disappointing second quarter earnings and the beef between Binance and India’s largest crypto exchange, WazirX, over a transaction that supposedly took place two and a half years ago (or did it)?
Be sure to listen to it to get up to speed on the latest crypto tea and tune in next Tuesday for Anita and Lucas’ conversation with Li Jin, a web3 investor focused on the creative economy at Variant Fund.
Subscribe to chain reaction at apple, Spotify or your alternative podcast platform to keep up with us every week.
follow the money
Where startup money moves in the crypto world:
- Jump Crypto led Injective’s $40 million round to help expand DeFi applications.
- Pinata raised $21.5 million in a recently announced Series A and seed round from investors including Greylock and Pantera.
- CreatorDAO, a decentralized platform for content creators, raised $20 million in an a16z and Initialized Capital-led round with participation from celebrities including Paris Hilton and Liam Payne.
- Blockchain gaming company Lysto raised $12 million in a round led by Hashed, Square Peg and Beenext.
- Unstoppable Finance raised $12.8 million in a round led by Lightspeed for its DeFi wallet.
- Kurtosis, a crypto-focused developer tool system, brought in $20 million in a Series A round led by Coatue.
- Blockchain payment platform Ansible Labs raised a $7 million seed round led by Archetype.
- Zero-knowledge cryptography startup RISC Zero raised $12 million in a seed round led by Bain Capital Crypto.
- Fair.xyz landed $4.5 million from investors including OpenSea for its NFT coining platform.
- Cashmere raised $3 million at a $30 million valuation from investors including Coinbase Ventures to build a Solana enterprise wallet.
Here is some of this week’s crypto analysis available on our subscription service TC+ from senior reporter Jacquelyn Melinek:
5 takeaways from Coinbase’s disappointing Q2 results
Coinbase, which was once hugely profitable in the wake of its direct listing in 2021 thanks to a flurry of crypto-related trading activities, is now working to contain costs and defy the ongoing “winter” in the market and stick to previous full-year profitability targets. What follows are five takeaways from Coinbase’s report that stood out to TC’s Alex Wilhelm and Ram Iyer.
As Telegram grows in size, so does crypto traders’ reliance on the app
The crypto community has relied on social media like Twitter or messaging apps like Discord and Telegram to interact. But some say Telegram is the ultimate hub for communication and information — an important place to be in the crypto community. “Telegram usage is the bedrock of the crypto community,” the founder of the Telegram channel, who goes by the username nakamotocat, told TechCrunch. “Projects have come and gone, players have risen and fallen, but much of the discourse between different projects and market players is on Telegram, and it remains constant.”
Ethereum’s co-founder sees his role diminishing as blockchain becomes increasingly decentralized
As tier-1 blockchain Ethereum continues to focus on a roadmap toward greater decentralization, its co-founder, Vitalik Buterin, believes the moment may come sooner than expected. Buterin also looks to the future, believing the next decade will be crucial for crypto. “I think in general, in the next 10 years, crypto needs to transform into something that is not based on promises of being useful in the future, but is actually useful.”
Solana founder says NFTs have ’50 different use cases’ that could bring in millions this year
It feels like just yesterday that the NFT boom captured the attention of the crypto community, making waves even outside the web3 world. But a year or so later, the NFT hype has died down somewhat. But that doesn’t stop some in the crypto world from being optimistic about non-fungible tokens. “I think in NFTs, everything is just scratching the surface,” Raj Gokal, co-founder of Solana, told TechCrunch. “I think NFTs have 50 different use cases that seem to be lumped together. I think we expect the majority of those [crypto] projects to make use of NFTs.”
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