Tornado Developer Arrested | ‘WeWorkifying’ Crypto Wallets

TORNADO CASH DEVELOPER ARRESTED

The industry has been reeling since the U.S. Treasury blacklisted popular cryptocurrency mixer Tornado Cash last week, contending that Washington is overreaching, preventing legitimate users from protecting their privacy and stifling software developers. This week’s reported arrest of a suspected Tornado Cash developer by the Dutch Fiscal Information and Investigation Service has sent a new wave of shock waves because the service is essentially a decentralized, open-source software that anyone can contribute to rather than a company or a person. This raises questions of whether the coders contributing to a privacy-preserving app are crossing into the area of helping facilitate money laundering and whether those who interact with them—including receiving money from an address that has used the app—will potentially be breaking the law.

Though the details of the charges against the suspect (The Block claims his name is Alexey Pertsev) are limited, that action is seen as an escalation in regulatory enforcement against decentralized protocols as well as programmers behind the code. Blockchain analytics firm TRM Labs issued a statement on Monday saying that it’s engaging with decentralized finance entities “to understand how best to mitigate sanctions risk.”    

ADAM NEUMANN’S NEW COMPANY IS WORKING ON A CRYPTO WALLET  

When Adam Neumann revealed his new venture to WeWork-ify the residential real estate sector Monday, backed by a $350 million investment from Andreessen Horowitz, the announcement was long on hype and short on details. Forbes has learned that the company, Flow, intends to launch a digital wallet that can store crypto–among other currencies, including U.S. dollars–in addition to the real estate management software it announced previously. Flow’s representative said the planned digital wallet cannot be used to make rental payments for Flow-managed apartments using cryptocurrency but can be used for outside purchases like any other wallet.

Neumann has previously tested the waters of cryptocurrency, cofounding a startup called Flowcarbon, which recently raised $70 million in a funding round also led by Andreessen Horowitz. The startup intends to tokenize carbon credits, but recently delayed a token sale citing poor cryptocurrency market conditions.

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:00 p.m. on August 18, 2022.

$1.2 BILLION CRYPTO DEAL CRUMBLES

What was supposed to be a landmark deal for the crypto industry has fallen apart in acrimony as investment firm Galaxy Digital Holdings said it would abandon its $1.2 billion bid for BitGo, claiming the digital-asset custodian failed to deliver financial statements that the target company insists it has supplied. Galaxy is trying to walk away from a $100 million breakup fee. The company announced Monday that it was exercising “its contractual right to terminate” the cash-and-stock transaction.

The acquisition was agreed upon in May 2021, with San-Francisco-based BitGo set to help Galaxy Digital expand its offerings for institutional investors.

BANKRUPTCY COURT ALLOWS CELSIUS TO SELL BITCOIN

The judge overseeing the Celsius Network bankruptcy case on Tuesday gave the company permission to sell newly mined bitcoin after the exchange overcame opposition from unsecured creditors, though the ruling came over the continued objection of the U.S. Department of Justice. As of its bankruptcy filing on July 13, the company’s Celsius Mining unit owned 43,623 operational rigs, generating around 14.2 bitcoin—about $339,919 at the current price—a day. Celsius specified that proceeds of sales of bitcoins generated by its mining rigs will be kept separate from the company’s cash management system, satisfying the creditors, many of whom are individual investors whose assets are tied up in the bankruptcy.

BLOCKCHAIN 50 SPOTLIGHT

Tech Mahindra: The technology arm of Indian conglomerate Mahindra Group (2021 revenue: $5.1 billion) has developed more than 60 blockchain-based products spanning telecom, media and entertainment, manufacturing, retail and energy. One of the most interesting: VaccineLedger, which was developed in collaboration with a startup funded by Unicef and Gavi, the vaccine alliance that oversees a worldwide Covid-19 vaccine database with the World Health Organization. The blockchain helps prevent counterfeiting and reduces the number of vaccines that go to waste by tracing the shots from manufacturer to recipient. It records data related to custody, temperature, location and purchase orders for each vial. VaccineLedger already operates in two states in India, with plans to expand globally.  

ELSEWHERE

Crypto Lender Genesis Lays Off 20% Of Workforce, CEO To Depart [The Wall Street Journal]

Tether Swaps Accounting Firms, Says It Will Publish Monthly Attestation On Stablecoin Backing [CoinDesk]

The Crypto Geniuses Who Vaporized a Trillion Dollars [New York Magazine]  

Nina Bambysheva
Reporter
Forbes Money & Markets

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