A computer popup box screen warning of a system being hacked, compromised software enviroment. 3D ... [+] illustration.

The Justice Department has announced action against two hacks of virtual currency exchanges by North Korean actors.

According to court documents, the actors stole millions of dollars worth of cryptocurrency and laundered the funds through Chinese over-the-counter (OTC) cryptocurrency traders. Now, the Justice Department is seeking to recover those funds through the filing of a civil forfeiture complaint.

(You can test your knowledge of civil forfeiture here.)

The complaint follows criminal and civil actions announced earlier this year related to the theft of cryptocurrency through other exchange hacks by North Korean actors. Those thefts initially occurred in 2018; afterward, the Internal Revenue Service-Criminal Investigation (IRS-CI) Cyber Crimes Unit learned that a South Korea-based virtual currency exchange had been hacked. The North Korean cyber actors responsible for the hack stole nearly $250 million worth of virtual currencies, which eventually landed in about 146 virtual currency accounts. In March of 2020, the United States filed a forfeiture complaint against those accounts.

The theft was not particularly surprising. Last year, a panel of experts established by the United Nations Security Council to investigate compliance with sanctions against North Korea found that the North Korean government has "used cyberspace to launch increasingly sophisticated attacks to steal funds from financial institutions and cryptocurrency exchanges to generate income." Why? According to the panel, these activities allow North Korea "to generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector." So far, these activities have raised money for the country's weapons programs, with total proceeds to date estimated at up to $2 billion.

How does it happen? Money laundering through multiple accounts. Stolen funds can be transferred through accounts in a series of separate transactions and then routed to various countries before being converted to fiat currency. That makes it highly challenging to track the money. And if you change the kind of currency, it makes it even more difficult to trace. This practice of moving between different types of virtual currency is called "chain hopping."

The most recent complaint detailed a theft that happened on or about July 1, 2019. In that hack, thieves stole approximately 401,981,748 Proton Tokens (PTT) from a virtual currency exchange. About 280,269,180 PTT was contained before it could be liquidated, but the remaining approximately 121,712,568 PTT entered the market. Around the same time, the affected exchange reported thefts of other currencies. Those currencies were transferred to other exchanges through a complicated series of transactions summarized in court documents like this:

DOJ

According to the complaint, a few months later, in September 2019, a U.S.-based company focused on the Algorand blockchain (which administers ALGO tokens) was hacked in a related incident.The North Korea-associated hacker gained access to the company's virtual currency wallets, funds held by the company on other platforms, and funds held by its partners.In the hack, the thieves used 15 recovery seeds to recreate wallets owned by the exchange and its partners. A recovery seed - also known as a recovery phrase - is a list of upwards of 12 words that, when entered in a specific order into virtual currency wallet software, allows whoever has the words to recreate access to virtual assets within the wallet. What the hackers were able to do then is direct the transfer of funds out of the wallets into other addresses and wallets. That allowed the hackers to steal nearly $2.5 million and launder it through 106 accounts at other virtual currency exchanges.

Following the transactions allowed law enforcement to identify the property involved in the schemes. The complaint now seeks a judgment declaring that the property be forfeited to the United States government.

"As part of our commitment to safeguarding national security, this office has been at the forefront of targeting North Korea's criminal attacks on the financial system," said Acting U.S. Attorney Michael R. Sherwin of the District of Columbia."This complaint reveals the incredible skill of our Cryptocurrency Strike Force in tracing and seizing virtual currency, which criminals previously thought to be impossible."

Several different agencies were involved in the investigation, including IRS-CI's Washington, D.C. Cyber Crimes Unit, the FBI's Chicago and Atlanta Field Offices, and HSI's Colorado Springs Office with additional support from the FBI's San Francisco Field Office.

Assistant U.S. Attorneys Zia M. Faruqui, Jessi Camille Brooks, and Christopher Brown, with assistance from Supervisory Paralegal Specialist Elizabeth Swienc and Legal Assistant Jessica McCormick, Trial Attorney C. Alden Pelker of the Criminal Division's Computer Crime and Intellectual Property Section, and Trial Attorney David Recker of the National Security Division's Counterintelligence and Export Control Section are prosecuting the case.

"Despite the highly sophisticated laundering techniques used, IRS-CI's Cybercrimes Unit was able to successfully trace stolen funds directly back to North Korean actors," said Don Fort, Chief of IRS Criminal Investigation (IRS-CI). "IRS-CI will continue to collaborate with its law enforcement partners to combat foreign and domestic operations that threaten the United States financial system and national security."

The funds from these hacks, and the earlier hacks, were all allegedly laundered by the same group of Chinese OTC actors.The infrastructure and communication accounts used to further the intrusions and fund transfers were also tied to North Korea.

"At U.S. Cyber Command, we leverage a persistent engagement approach to challenge our adversaries' actions in cyberspace," said Brigadier General Joe Hartman, Commander of the Cyber National Mission Force. "This includes disrupting North Korean efforts to illicitly generate revenue. Department of Defense cyber operations do not occur in isolation. Persistent engagement includes acting through cyber-enabled operations as much as it does sharing information with our interagency partners to do the same."

"Today's complaint demonstrates that North Korean actors cannot hide their crimes within the anonymity of the internet. International cryptocurrency laundering schemes undermine the integrity of our financial systems at a global level, and we will use every tool in our arsenal to investigate and disrupt these crimes," said Special Agent in Charge Emmerson Buie Jr. of the FBI's Chicago Field Office."The FBI will continue to impose risks and consequences on criminals who seek to undermine our national security interests."

Original post:
Justice Department Seeks To Recover Hacked Cryptocurrency Funds Tied To North Korea - Forbes

Akon has released detailed plans of Akon City, his $6 billion futuristic cryptocurrency city, which he calls a real-life Wakanda, referring to the hit movie Black Panther. There will be seven major districts, and the city will be run on the akoin cryptocurrency.

Senegalese-American star and philanthropist Akon, whose full name is Aliaune Damala Badara Akon Thiam, unveiled Monday some major details of his planned Akon City. The $6 billion futuristic city in Senegal, Africa, will be run on the akoin cryptocurrency.

The city will be divided into seven major districts: the African culture village district, the offices and residential district, the entertainment district, the health and safety district, the education district, the technology district, and the Senewood district.

The African culture village district will feature a seaside resort and spa encompassing retail stores, a ballroom, a business center, a restaurant area, a night club, a fitness center, and a hotel. There will also be 20 chalets and an open market. The Associated Press reported Monday that a hotel within the city plans to feature rooms decorated for each of the 54 countries of Africa.

The residential and office district will comprise six residential buildings, two office buildings, and four parking structures. Akon Citys website explains that there will be a smart parking system, which it describes as a more efficient, safer, and energetically sustainable system that includes e-parking, automated parking system, e-transportation within the city and much more.

The entertainment district will have a casino, a stadium, a resort building with a hotel, and a sports field. There will also be a mall with a cinema, an entertainment area for kids and adults, and a fashion district. The health and safety district will consist of a general hospital, an outpatient center with a pharmaceutical retail area, laboratories, and a variety of clinics. There will also be a police station and a fire station, which include areas for training, sleeping, and fitness.

The eduction district will have three main buildings to accommodate MIT, Berkeley, Harvard, and Stanford. There will be housing for students and faculty members. The technology district will feature a tech park spanning several buildings while the Senewood district will have the Akon tower, a media tower, and four filming and recording studios that will help develop Senegals film industry.

Akon City is located in the heart of Cadastral de Mbodiene park within the beautiful landscape of water and surrounding nature, its website details, adding that the location is easily accessible to commuting as well as to the general public. The website further claims:

Akon City will set the standard for all future real estate development in Senegal as a country and region as a whole.

The project was, however, designed by a Dubai-based architect because a suitable one in Africa could not be found fast enough, the Associated Press reported, citing Akon. It is also unclear what percentage of the building materials and construction teams will be sourced locally, the publication noted.

While hopes are high in Mbodiene that the Akon City project will change lives, village chief Michel Diom was quoted as saying: We have a lot of hope. Many promised us projects, but we saw nothing. Without providing specific details, Akon also said hes considering franchising the concept to other countries on the continent, the publication conveyed.

In addition, Akon noted on Monday that the project has secured about one-third of the $6 billion needed. However, KE International, a U.S. based consulting and engineering firm that has been awarded the contract for building and executing Akon City, said in June that it had secured $4 billion from investors for the first and second phases of execution of Akon City.

According to the Associated Press, Akon traveled with government officials on Monday to the grassy fields in Mbodiene some 100 kilometers (62 miles) outside the capital where construction has yet to begin. Akon said the construction is set to begin early next year, adding that the first phase of the project alone could take more than three years. He previously said that phase one of Akon City will be completed by 2023 and the entire city, running on the akoin cryptocurrency, will be completed in 2029.

Akoin, a Stellar-based cryptocurrency, will be used in Akon City. The akoin cryptocurrency was created with the aim to be used as a common medium of transfer between Africas 54 countries Allowing African citizens and entrepreneurs to engage with the digital economy with only a mobile phone, its website describes.

The akoin cryptocurrency has its own wallet that allows users to trade amongst partnered cryptocurrencies internally through a proprietary and private atomic swap technology that makes a direct transfer with all major cryptocurrencies, our partners alt currencies possible, without having to go through a major exchange.

Akon first announced the idea of Akon City in 2018. He described it as a real-life Wakanda, comparing it to the technologically advanced fictional African city in the blockbuster movie Black Panther. Sadly, actor Chadwick Boseman, who portrayed Black Panther in Marvels popular movie series, died on Saturday.

On Monday, Akon said he hoped his Akon City project would provide much-needed jobs for people in Senegal and serve as a home back home for Black Americans and others facing racial injustices, the Associated Press also reported. The system back home treats them unfairly in so many different ways that you can never imagine. And they only go through it because they feel that there is no other way, Akon shared, elaborating:

So if youre coming from America or Europe or elsewhere in the diaspora and you feel that you want to visit Africa, we want Senegal to be your first stop.

Covid-19 has sown doubt everywhere. This means that those who had doubts about the attractiveness of Senegal, and Africa in general must convince themselves that there are men and women who believe in Africa, the two-time Grammy Award-nominated artist opined.

Born in the U.S. to Senegalese parents, Akon spent much of his childhood in the West African country. He started the Akon Lighting Africa project in 2014 with the aim to provide electricity by solar energy in Africas rural areas. Recently, he joined bitcoin entrepreneur Brock Pierces presidential campaign as Chief Strategist.

Will you visit Akon City? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Akon City, Walt Disney Co., Everett Collection

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Excerpt from:
Akon Unveils Major Details of $6 Billion Cryptocurrency City: Real-Life Wakanda - Bitcoin News

Regulations have not decreased cryptocurrency trading within some U.S. and foreign markets.

Cryptocurrencies may have matured beyond their tulip craze stage and emerged as a durable class of investments. Yet their regulatory treatment remains unsettled.

Cryptocurrency proponents argue that new regulation is often inappropriate for these novel assets secured by technical mechanisms. They further claim that regulation of this developing technology would stymie beneficial innovations. These crypto fans also warn that capital will move away from countries adopting stringent requirements and toward those with more laissez-faire regulatory regimes.

Some regulators echo these concerns. For instance, the U.S. Securities and Exchange Commissions Valerie Szczepanik, who leads the agencys cryptocurrencies working group, reportedly warned that overregulation could chill the market.

On the other hand, critics of cryptocurrencies point out the frequency of fraud, illegal activity, and regulatory arbitrage in wild west cryptocurrency markets. That cryptocurrencies are not tied to governments and do not require buyers and sellers to know each others real names to transact makes them attractive to criminals. At the very least, cryptocurrency trading should be subject to a similar array of regulatory obligationsincluding anti-money-laundering, tax, sanctions compliance, investor and consumer protection measuresthat are imposed on other financial activities, argue the critics.

To determine the optimal regulatory regime for cryptocurrencies, policymakers need to know how markets will react to regulatory action. Although that statement is true for the regulation of any economic activity, the stakes are particularly high concerning cryptocurrencies. If traders do not like the regulatory scheme in a particular jurisdiction, they can simply shift their trading activity to an offshore exchange.

Few of the usual switching costs that discourage regulatory arbitrage are present heremoving an individual traders activity offshore involves none of the costs and delays of currency conversion, nor does it involve any of the limitations of capital control that inhibit movement of fiat currencies.

In a new research paper, we examine how markets react to different types of regulatory actions over cryptocurrencies. We identify dozens of major government actionssuch as the announcement of new rules, novel enforcement actions, and important court decisionstaken in Japan, China, Russia, South Korea, the United Kingdom, and the United States. These actions concern money-laundering, investor protection, restrictions on cryptocurrencies use for payments, and their tax treatment, among other subjects.

We then pair that information with a commercial dataset containing tick-by-tick volume and price information on 56 exchanges worldwide for the two coins with the highest market capitalizations, Bitcoin and Ethereum. We use these data to conduct a series of volume event studies to identify any in-jurisdiction abnormal trading activity in the countries in our studythat is, traders moving their activity either into or out of exchanges located within the affected jurisdictionsimmediately following the regulatory action. We also run models concerning global volume and price.

Surprisingly, these event studies yield almost entirely null results. Across all six major countries with substantial trading activity, dozens of major regulatory actions, and hundreds of model specifications, we cannot reject the null hypothesis that regulatory actionvirtually any regulatory actiondoes not affect in-jurisdiction trading activity. Regulatory determinations that crypto-assets are not currencies, bans on their trading or use, and anti-money-laundering and exchange regulation are associated with abnormal declines in global price in some models but not with abnormal changes in global or in-jurisdiction trading volume.

Consider the following timeline of U.S. regulatory events. The figure shows point estimates and 95 percent confidence intervals for cumulative average abnormal volume in U.S.-based Bitcoin and fiat markets around 23 major regulatory events. As the figure shows, the estimates fall far short of statistical significance at conventionally accepted levels. In some cases, the 95 percent confidence intervals extend beyond the figures limits, meaning that one cannot reject either the possibility that the regulation in question led to a complete cessation of trading or a greater than 100 percent increase in trading.

These results cast doubt on the concern that regulation will chill economic activity in this sector. We find that despite the professed antipathy of some cryptocurrency pioneers to regulation, the upsurge in regulatory activity in recent years does not appear to have dampened market activity. In addition, we cannot identify any significant shifts in trading activity away from jurisdictions such as the United States where market participants complain about regulatory enforcement and uncertainty, nor toward jurisdictions that have been more welcoming.

Despite our findings, it is possible that national regulation of cryptocurrencies can still have some effect. One can only draw limited inferences from null results. A few nations have imposed hard bans on cryptocurrency trading that impact activity in the country. And concerns about the United States classification of tokens as securities has led many initial coin offeringsa tool some cryptocurrency projects use to raise money similar to an initial public offeringto register elsewhere. Exchanges based in the United States, or serving U.S. customers, sometimes avoid listings altogether. But for the cryptocurrencies that dominate trading volumesBitcoin and Ethereumwe do not see effects of regulation on in-jurisdiction or global trading volume.

Our null findings should at least cast doubt on the critique that regulation of cryptocurrencies will lead to capital flight. As governments weigh the possibility of increasing regulation on cyber innovations in an effort to serve societal goals, concerns about the ill effects of regulation should not be a first-order consideration.

Brian D. Feinstein is an assistant professor of legal studies & business ethics at The Wharton School of the University of Pennsylvania.

Kevin Werbach is a professor of legal studies & business ethics at The Wharton School of the University of Pennsylvania..

Read the original:
Does Regulation Chill Cryptocurrency Trading? - The Regulatory Review

The price of Bitcoin looks to enter a new range after a key breakout.

The price of Bitcoin rose to as high as $12,086 on Coinbase, as Ethereum (ETH) buoyed overall market sentiment. While the cryptocurrency markets momentum is evidently strong, there are two potential threats to the rally.

The daily chart of Bitcoin.

The two possible obstacles to the ongoing Bitcoin and Ethereum rallies are the U.S. dollar recovery and historical performance of BTC in the month of September.

Is The Weakening U.S. Dollar Momentum Reversing?

Analysts have generally attributed the upsurge of both Bitcoin and gold to the fading dollar in recent months.

In late July, the U.S. dollar plunged to a two-year low due to the slowing economy and soaring virus cases.

Since then, the U.S. dollar has continuously declined. From March, within five months, the U.S. dollar index dropped from 98.32 points to 91.75 points, by more than 10%.

The weakening dollar seemingly fueled the sentiment around alternative assets, including Bitcoin and gold.

But, some analysts say that the decline of the dollar is overexaggerated. On August 23, Capital Economics senior economist Jonas Goltermann said the DXY does not depict the full picture.

He described the downfall of the dollar as a greatly exaggerated narrative. He noted that the U.S. dollar remains the dominant reserve currency, with more stability over the euro and renminbi.

Perhaps more importantly, there is no obvious alternative to the dollar. The next two largest economies, the euro-zone and China, are both smaller than the US, and the euro (due to its still-fragile political underpinnings) and the renminbi (due to Chinas capital controls and unique political system) have significant shortcomings as reserve currencies, he said.

The U.S. dollar has fallen sharply since May, and it remains to be seen whether the dollar could rebound at a key support area.

The U.S. dollar index (DXY) attempts to rebound at a key support area.

The recovery of the dollar could cause the uptrend of Bitcoin, gold, and other cryptocurrencies to slow.

Another potential factor to consider is the historical performance of Bitcoin during the month of September.

Every monthly candle in the last three years for the month of September closed as red. While the data is more coincidental than cyclical, it would be compelling to see if the pattern breaks for the first time in 4 years.

The Momentum of Bitcoin And Ethereum Remains Strong

For now, the momentum of both Bitcoin and Ethereum remains strong. Even at a high price point, the on-chain market analysis firm Santiment said traders undecided on whether to take profit.

BTC jumped above $12k today for the first time in 2 weeks, while $ETH hit a 25-month high of $485. Volume, especially for #Ethereum, has soared as traders polarize and decide whether to #FOMO in or profit take, Santiment researchers said.

Key on-chain data points also continuously signal the start to an extended uptrend. Rafael Schultz-Kraft, the chief technical officer at Glassnode, said the Bitcoin short-term holder net unrealized profit and loss activity (NUPL) has been above zero for four months.

A positive NUPL historically served as an indication for BTC bull markets, Kraft noted.

Continued here:
Two Biggest Threats To The Ongoing Bitcoin And Ethereum Rallies - Forbes

CASHMERE A former apple juice factory in Cashmere will soon be home to a mealworm farm heated by cryptocurrency computers.

Seattle startup Beta Hatch is building a 40,000-square-foot production space in the former Tree Top facility to raise mealworms, a variety of beetle larva. The mealworms are dried and sold as a sustainable food source for poultry, fish and other livestock.

The company has been planning a move to Cashmere for more than a year and in 2019 won the top prize at at GWATA's Flywheel Investment Conference. After a few pandemic-related delays, Beta Hatch held a ceremonial groundbreaking last Wednesday and plans to begin construction within a few weeks.

Were just excited to get the project underway and continue to grow the business, CEO and Founder Virginia Emery said. Its a hard time for any kind of business, but the great thing about the food business is that everyone needs to eat so weve stayed open and active. And were continuing to grow despite the challenges.

Virginia Emery, founder and CEO of Beta Hatch

Their new building was home to Tree Top for 50 years untiloperationsstopped in 2008.First Beta Hatch will build a smaller ramp-up production area in the space to raise their tiny livestock while the full-scale operation is built out. Thats expected to be operational by November.

Mealworms, a type of beetle larva, are dried and used to feed poultry, fish and other livestock.

It allows us to scale the biology, because we cant just buy the billions of bugs that we need. We have to grow them. So it allows us to account for the generation time, Emery said.

When the full production space is done, the facility will produce around a ton of mealworms a day for distribution. But its primary output will be eggs billions of them every day.

This facility is an interesting one because we have a hub and spoke model. So the hub is the hatchery where you produce the eggs and the spoke is the ranch where you grow the product, Emery said. This facility will operate as a bit of a hybrid.

Beta Hatch is also looking for locations for those ranches, including in states like Idaho, Iowa or California, where they could be located near agricultural partners.

Wed love to have some ranches here, we could see adding capacity right here in Cashmere or somewhere else in Wenatchee, Emery said. But the beauty of the model is we can send eggs anywhere in the country.

Beta Hatchs Cashmere facility will be the largest of its kind in North America, Emery said.

Beta Hatch CEO Virginia Emery, center, held a ceremonial groundbreaking last Wednesday with officials from the city of Cashmere, U.S. Rep. Kim Schrier, and Malachi Salcido, whose next-door cryptocurrency mine will provide heat for the operation. The facility will raise mealworms, a type of beetle larva, for use in animal feed.

There are other facilities that grow mealworms for exotic animals but were the first to really focus on that commercial animal feed market with these bugs, she said.

She hopes theyll provide a more sustainable alternative to many of the ingredients currently used in the commercial animal feed market.

So, trying to look at the existing ingredients we have in animal diets that arent very sustainable, are very expensive, that have supply chains that rely on a lot of import or are susceptible to climate those are the kinds of ingredients that we can be replacing, she said.

One possible target in North Central Washington is fish hatcheries, Emery said.

Weve done tests where every growth stage of the fish has happily eaten a mealworm diet, she said. So we see a lot of opportunity in multiple species and multiple growth stages of the fish.

Beta Hatch is also looking to provide sustainability in its mealworm growing process. Part of the insects diet will likely be leftovers from Crunch Paks production facility, which is just a mile away.

Crunch Pak is right here down the road, probably as short as you can get as far as transportation of a food stock, Emery said. Theres plenty of perfectly good apple material that comes off their food line that they cant use. They have actually a very good program for getting those food stocks out to other food manufactures, people make cider and dried apples and other products with it, and so we would take a small piece of that for feeding our bugs.

Its quest for sustainability also brought Beta Hatch to Malachi Salcido, who runs a cryptocurrency mine in the other half of the former Tree Top building.

His cryptocurrency mining computers generate a significant amount of heat, which is currently exhausted out of the building using massive fans. Instead, some of that heat would be rerouted to Beta Hatchs production and growing rooms, which require around 78-degree temperatures and 70% humidity.

So for it to be warm and really humid takes a lot of heat energy, Salcido said. So one of the purposes of waste heat will be to boost the temperature part-way up the temperature and humidity hill. Then all of the mechanical systems dont have to start from ambient.

Salcido operates several other cryptocurrency and data centers in North Central Washington, but this is the first of its kind utilizing heat recapture. But the model could be useful for other agricultural industries, including cannabis farms, he said.

This kind of heat output recapture, we think there are going to be more kinds of applications for this. We expect to see and possibly be involved in heat recapture for cannabis grows, because cannabis needs to be as humid as possible without growing mold, he said.

See more here:
Insects and cryptocurrency meet to provide a sustainable animal food source in Cashmere - wenatcheeworld.com

Ethereum-based yearn.finance and its governance token YFI evolved into a major DeFi player.

Yearn.finance's native governance token, YFI, is now the second-biggest decentralized finance (DeFi) coin in the cryptocurrency market. Its market capitalization has surpassed $1.1 billion just one and a half months after its launch.

Four major components contributed to the rapid success of yearn.finance: unique supply, an active community, a respected developer, and innovative products.

Unique Supply, No Premine, Decentralized

The process of yearn.finances launch garnered the attention of many DeFi enthusiasts since the beginning.

Andrew Cronje, the main developer behind yearn.finance, rebranded, and relaunched iearn.finance with a suite of products. Cronje released YFI with no premine, a fixed supply of just 30,000 tokens, and no founder reward.

The transparent and decentralized launch of yearn.finance, which also gives YFI token holders all the governance rights, made the DeFi protocol unique.

The lead developer behind it, Andre Cronje, decided that he would create a $YFI token, and with that pass over control/governance of the entire yearn.finance suite of tools. Despite having the power to give himself a pre-mine or founder reward, he elected instead to keep zero tokens for himself, Daryl Lau, a contributor to Deribit Insights, explained.

A part of the intrigue behind YFI was its token. YFI has a fixed supply of 30,000, which led to the price of each individual token surpassing that of Bitcoin. But, in terms of market capitalization, even at a price point of around $38,300, its market cap is less than $1.2 billion. In contrast, the market cap of Bitcoin is at $216 billion.

The price chart of YFI, the native governance token of yearn.finance.

Respected Developer, Fast Shipping Speed

Cronje, despite receiving no major financial incentives from the YFI launch, has consistently shipped out new DeFi-related products.

Most recently, as an example, yearn.finance announced the launch of yinsure.finance.Yinsure will provide insurance coverage to DeFi users.

The developer has collaborated with various top developers and executives in the cryptocurrency industry. On August 28, Cronje hinted at a collaborative project with Sam Bankman-Fried, the CEO of FTX, one of the largest derivatives exchanges in the cryptocurrency sector. Bankman-Fried is also the chief executive of Alameda Research, a cryptocurrency trading firm and OTC desk.

Guess the cat is out of the bag, but just so that there is some expectation management, this is a long roadmap that we are working on, so it won't be anything anytime soon. But there will be something very sexy in the future, Cronje said.

The confluence of a low and unique supply model, a transparent launch, and an active developer eventually led yearn.finance to evolve into one of the largest DeFi protocols across various metrics.

According to data from DefiPulse, there is more than $790 million in total value locked in the yearn.finance protocol. It trails just behind Synthetix, Aave, and Maker.

Excerpt from:
Yearn.Finance: How Ethereum's DeFi Darling YFI Reached $1 Billion In 2 Months - Forbes

Image: ShutterstockAs of June 18, 2019, Facebooks closely guarded cryptocurrency project was no longer a secret. Thats the day the Creative Destruction Lab (CDL) announced that it would be joining Facebook and 26 other organizations as a founding partner of the Libra Association to create Libraa simple global currency and financial infrastructure that will empower billions of people. Headquartered in Geneva, the Libra Association will govern the infrastructure and manage and evolve this new ecosystem, enabling developers and businesses to build inclusive new financial service products for people around the world.

Set to launch in 2020, the currency will be backed by a reserve of real assets, providing low volatility and encouraging widespread global acceptance. The goal is for thoughtfully designed smart contracts operating on a widely accessible and stable global currency platform to unlock never-before-seen gains from trade, benefiting society at a meaningful scale.

Q. First of all, for those who dont know, what is the Creative Destruction Lab?The CDL is a not-for-profit program that initially began at the Rotman School of Management and has since expanded to sites at other universities including the University of British Columbia, University of Calgary, Dalhousie University in Halifax, HEC Montreal and the Said School at Oxford University (CDL-Oxford). CDL takes science-based, seed-stage start-ups and through a nine-month program of mentorship by some hugely successful entrepreneurs, takes them to market. In particular, we have focussed in recent years on AI and Quantum computing technologies. Hundreds have graduated the program since 2012 with equity valued of $4.2 billion created to date by CDL ventures.

I am the Chief Economist at CDL and I also run an incubator stream at CDL-Toronto that focusses on using the blockchain to generate new marketplaces, contract forms and other applications. We have 400 ventures per year in our program (including 25 in the Blockchain stream). Because the companies in our incubator stream are even earlier than our other streams, we provide ventures with economics and business training as well as some essential technical training. It is because of our blockchain stream that Facebook approached us to become a founding partners.

Q. Is this Facebook's currency?Facebook is not planning to issue its own currency, but instead has provided the code and development necessary for a new currency to be issued in its own right. As indicated, the Libra Association will manage that currency and will be eventually made up of 100 diverse organizations, of which Facebook (or more particularly its subsidiary, Calibra) will be just one. Each member will have one vote in making critical decisions in the Libra Association.

Q. What exactly is the Libra Association?At the heart of the Association is this new cryptocurrency called Libra. This cryptocurrency will not be like most of the others out there. It will be designed to have a more stable value with an exchange rate pegged to a basket of currencieswhich means it will have a stable exchange rate unless those main currencies change in value against one another, in which case, the bilateral exchange rate between Libra and those currencies will change. Of course, there will be fluctuations in the bilateral exchange rate between Libra and currencies not part of the peg, but in theory, volatility should be as low as you can practically get.

This pegged currency will be achieved in a robust way: Every token will be backed by low-risk assets (currency and Treasury bills) in the currency basket. And that management will be transparent, audited etc. The idea is that Libra will be a store of value designed to ensure it is an accepted medium of exchange, but it will not be a security that is intended to change in value based on measures of success or otherwise. In other words, Libra tokens will be issued on-demand as people exchange low-risk assets to acquire them, and then retired when the reverse happens.

All of this will be made possible by the Libra Blockchain, which will store records of transactions and other relevant information. While this blockchain will be permissioned (i.e. only those designated by the association can become nodes), it will be distributed amongst the 100 (at least initially). We expect that CDL will be one of those nodes. The job will be to run a server independently that votes or endorses blocks to form a consensus on the networkthat is, that blocks are valid, and things have not been altered. It is precisely this feature that was the key innovation in Bitcoin a decade ago that allowed cryptocurrencies to be possible.

Q. Why will the blockchain be permissioned?A permissionless blockchain means that anyone can operate a node because it has free entry. In the case of Bitcoin, this also allows free entry in being able to compete to mint Bitcoins which is why mining has become a lucrative activity and why proof of work systems like Bitcoinclever though they aretend to be very costly to run, given that the outcome is something purely digital. The idea of proof of work is to ensure that no one creates nodes for free.

In other words, if you want to be part of voting for a consensus, then you have to show something for it. One way around that is to prove something else of value. The most common idea is a proof of stake system whereby you put something of value and make it illiquid, and that gives you voting rights. A final way of ensuring that bad actors wont just populate nodes is to simply regulate who can run a node, and this is what a permissioned system does. It is not a free for all, and some power likely comes from being part of the conversation. But this is also what you need to run an efficient network. Libra made a different choice between decentralisation and efficiency than other blockchains.

It is critical to note that Libra will be distributed. Its 100 nodes have pretty diverse interests. Some care about payments; some care about start-up innovation; some care about social goals; and some care about a mixture of these thingslike CDL.

Facebook chose not to make this a Facebook thing, which makes it an exciting development in this space. I should add that Facebooks clear push for having Libra be more open and independent of it squares well with my expectation that Facebooks interest is not in payments per se but, instead, in activities that will enhance its platform objectives based on connections and interactions.

Facebooks interest is in laying down base infrastructure that will allow transactions to be conducted at low cost (even for tiny transactions) around the globe. They have worked to develop their own wallet for this purpose that will be integrated into Messenger and Whatsapp and elsewhere. If others build use cases for the currency that only helps in the currencys popularity and usefulness as a medium of exchange on Facebooks platform.

This brings me to what is essential here: the code. The advantage of having a digitized currency is that it can be easily transferred with a rich code base. To be sure, banks and other financial institutions have digitized money but, to the extent there is code, it is not something that anyone would describe as interoperable with what is, these days, some surprising distance from the rest of the economy. This has happened because security and money are not tied to one another. But with cryptocurrency, security is, literally, there and in the name. That means that more can potentially be done.

One example of this potential is, of course, what has come to be known as smart contracting. There is an excellent potential to use a code layer integrated with a payments mechanism to solve the fundamental smart contract challenge that arises because contracts interact with human decision-making. (Other examples include voting mechanisms such as quadratic voting or token reputation registries. These latter mechanisms also require a means of identity verification that is something that the Libra infrastructure could potentially support.

Alongside this, a new programming language, Move, has been developed and will be launched with the Libra Blockchain. Unlike Ethereum, which pioneered this idea, initially the code will be restricted to a set of templates until it can be proven to work in the wild. So while the promise of the code will be there, there will be some caution in the roll-out. It will be up to the Association to manage that process. In my mind, this will be a critically important set of decisions.

Q. What does CDL hope to gain from this?CDL does not have a financial interest in this associationor in any of the ventures that come through our program. Our mission is purely social. We are in the business of creating start-up ecosystems that do not require a fixed physical location. In that regard, we see Libra as a public utility that can support just thattaking digital payments to the next level to allow an application layer that could transform economic transactions and more.

While we believe that there is an opportunity for start-ups going through our program (especially those in our Blockchain stream),in the longer-term the real opportunity is for all start-ups, and that is our focus. By participating in creating a better start-up ecosystem, we will be fulfilling the CDLs core mission.

Q. Where do you think all of this will lead?We take the Lab part of Creative Destruction Lab very seriously. For that reason, we believe that everything we do is an experimentand Libra is no different. While there have been 18 months of technical development on the part of Facebook into this, as we know from our experience with entrepreneurial ventures until something hits the market, you cannot truly obtain signals as to its potential. There is too much uncertainty associated with innovation.

The range of outcomes is broad. Libra could be simply a new payments mechanism that improves financial access for many people in the world. Or we might look back in a few decades and see this the seed of a new wave of global connectivity not seen since the establishment of the modern monetary economy post-World War II with the Bretton Woods system. Or this may be the first of several new monetary platforms to emerge that began with Bitcoin, Ethereum to Libra and maybe others that are still in or to be developed. So the short answer is that I dont know where this will lead, but I am very excited that it is happening.

Q. What is next?For six months post-announcement, the founding members and partners have been meeting to work out the by-laws. My expectation is that there will be a series of meetings that will work similarly to a Constitutional Convention. How those will operate is anyones guess at this stage. However, I will be leading the CDL contingent in that endeavour.

The voice we expect to bring to the table is one that is squarely focussed on promoting start-up innovation. Moreover, where possible, we will be driven by the principles of open science so that discussions, consultation and data will be transparent and available. For the latest news on this initiative, visit http://libra.orgJoshua Gans holds the Jeffrey S. Skoll Chair in Technical Innovation and Entrepreneurship and Chief Economist of the Creative Destruction Lab at the Rotman School of Management, with a cross-appointment to the University of Torontos Department of Economics. He is the co-author (with Andrew Leigh) of Innovation + Equality: Creating a future that is more Star Trek than Terminator (MIT Press, 2019) and the co-author (with Rotman Professors Ajay Agrawal and Avi Goldfarb) of Prediction Machines: The Simple Economics of Artificial Intelligence (Harvard Business Review Press, 2018).

[This article has been reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management]

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The Dawn Of A Global Cryptocurrency - Forbes India