INTRODUCING THE NEWEST IN CRYPTO POLICY NEWS from COINTELEGRAPH

Law Decoded

INTRODUCING THE NEWEST IN POLICY NEWS

May 9-15
You are reading the inaugural edition of Law Decoded, Cointelegraph’s new weekly brief on law and policy governing fintech and crypto. Our aim is to keep you updated on the most vital events of the week, presented alongside essential context and analysis so that you know what to make of them.
It remains a formative time in the relationship between regulators and financial technologies, making this an exciting place to be. I hope to make Cointelegraph’s coverage and analysis an indispensable map to those trying to navigate that developing relationship.
As for this week, it’s been rich in conversations. This was in part because everyone was talking about Bitcoin’s halving, which happened on Monday. Thanks are also due to Consensus Distributed’s impressive roster of guests and speakers.
While lawmakers continue to focus on COVID-19 responses, emerging technologies including blockchain have emerged as major potential beneficiaries. Which makes sense. Blockchain technology’s promise is in its ability to conserve data as it moves from person to person. A highly contagious virus has added a sense of peril to all points of contact among people, both personal and economic.
As the wave of deaths due to the coronavirus seems to have crested in most of the developed world, emergency legislation is giving way to longer-term plans to reconsider how the global economy works. Enter blockchain.
Kollen Post, Policy Editor

TON Is Dead, Long Live TON

The biggest regulatory news this week is Telegram — which effectively surrendered to the SEC by abandoning its plans for the Telegram Open Network.
Telegram’s ICO for TON’s native Gram tokens was massive, gathering $1.7 billion — a record only topped by EOS. How or whether this money is going to return to investors remains unclear. With an app that is free to use and doesn’t harvest data, Telegram itself doesn’t have a clear revenue stream.
The SEC’s initial emergency action against Telegram back in October was a shock to the crypto community, taking place just before the firm planned to issue Grams. The SEC based its case on the incompleteness of TON, meaning that buying Grams was still a form of investment in Telegram.
In his scathing letter announcing Telegram’s withdrawal from TON, CEO Pavel Durov denounced U.S. control over the global financial system — a stance that, alongside Telegram’s recent work to distribute information regarding COVID-19 within Russia, may well help rehabilitate Durov and company to Russian authorities, with whom they have been butting heads for years.
Curiously, members of the TON community used the network’s open-source software to launch a version independent of Telegram last week. If it retains independence from Telegram and doesn’t attempt a similar ICO, it would almost certainly avoid the SEC. But if it flounders in the absence of Telegram, that would kind of prove the SEC’s point that this wasn’t a true independent network.

Visa Does the Dollar?

Filed by Visa back in November 2018, a patent for a digital currency on a blockchain (potentially Ethereum) recently became public. The patent suggests a pretty straightforward centralized fiat-backed stablecoin, but there are two key points to consider.
The first is obvious: This is Visa, the global heavyweight of payments processors. With current technology that handles 150 million transactions a day and claimed capacity of over 65,000 per second, the credit giant touts scale that is the envy of crypto networks. Their interest in moving over to crypto is huge.
The second point is slightly less apparent. The patent has become public years after initial filing, very possibly to take advantage of an uptick in conversations about a central bank digital currency in the United States.
Only last month, digital “FedAccounts” dominated headlines thanks to a rash of legislation proposing them as more efficient means of distributing COVID-19 aid. While a digital dollar has not come out of any laws signed so far, the concept has sticking power. Visa may well be trying to lay claim to the technology the U.S. ends up using.

Lazarus Group to Keep North Korea Alive Amid Pandemic

North Korea’s hacking program, including the infamous Lazarus Group, has long been a critical source of revenue for a pariah regime locked out of global trade. New reports from South Korea say that the program is ramping up activities to compensate for economic damage sustained amid COVID-19.
Perpetrators of the biggest crypto exchange breaches of all time, the hacking program has been a prominent thorn in the side of the country’s neighbors — Japan and South Korea. Angered at their talent for circumventing U.S. economic warfare, the Treasury has sanctioned Lazarus Group by name, as well as a number of affiliates who have laundered on behalf of the program.
The drought of information leaving the country — which recently led to serious widespread speculation over whether or not the supreme leader was dead — means that it has been difficult to judge the impact of COVID-19 on the country. Increased hacking may be symptomatic of deeper issues.

Further Reading

The Electronic Frontier Foundation, a longstanding nonprofit focused on technological freedoms, has put together a free ebook of digital rights to respond to privacy concerns amid the pandemic.
In the same vein, Sean McDonald of the Brookings Institute comments on the inherent politicism of applications that trace contact in an effort to contain the novel coronavirus.
Writing for the Atlantic Council, Michael Greenwald runs down Facebook’s recent efforts to bring Libra into the regulatory fold, its updated white paper and the hiring of a former Treasury bigwig as CEO.

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