Coinbase CEO Brian Armstrong hints at Lightning integration

Coinbase CEO Brian Armstrong has hinted that the cryptocurrency exchange may integrate Lightning, a layer 2 scaling solution for Bitcoin. In a tweet, Armstrong responded to criticism for not integrating the Lightning network by saying, “Lightning is great and something we’ll integrate.” However, he did not provide any further details on what the integration would involve or when it could be expected.

The Lightning network enables faster and cheaper BTC transactions than the Bitcoin base network, but Coinbase, along with other exchanges such as Binance and FTX, has been criticized for not integrating the technology. If Armstrong follows through on his statement, Coinbase would join Bitfinex, Kraken, and OKX as the largest trading platforms to integrate Lightning.

David Coen, a Lightning enthusiast, had previously suggested that many trading platforms may be reluctant to integrate Lightning because it goes against their business plan of integrating as many altcoins as possible. However, Coinbase has lately been more active in the Ethereum ecosystem, launching “Base” in February 2021, an Ethereum layer 2 application-focused network powered by fellow layer 2 Optimism.

In addition to the potential Lightning integration, Armstrong recently offered a $100 prize for the “best” examples of how people are using crypto in Africa. However, the winner reported that he has not received the payment, prompting a Bitcoiner to suggest that Armstrong “needs a lesson on Lightning.”

It is interesting to note that Armstrong wrote an article in January 2016 expressing support for Bitcoin scaling solutions, saying, “We also did it to show our support for scaling Bitcoin, and encourage things to move forward, since we’d like to see a solution sooner rather than later.” Lightning was launched about two years later in March 2018, with last month marking the fifth anniversary of the network.

If Coinbase were to integrate Lightning, it would be a significant step towards making Bitcoin more accessible and practical for everyday transactions. With the rising popularity of altcoins and increasing demand for fast, low-cost transactions, integrating scaling solutions like Lightning is becoming increasingly important for cryptocurrency exchanges. However, it remains to be seen when and how Coinbase will integrate Lightning, and whether other major exchanges will follow suit.


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Arbitrum Community Seeks Return of 700 Million ARB Tokens

The Arbitrum community is demanding the return of 700 million ARB tokens to its DAO Treasury after the Arbitrum Foundation transferred the funds without receiving the community’s approval in March. The transfer of the tokens caused significant concern among ARB holders, leading to a proposal for the return of the funds.

According to the proposal, the foundation should only proceed with its budget plan after returning the tokens. “This is a symbolic gesture to demonstrate that the governance holders ultimately control the DAO, not the Arbitrum service provider nor the Foundation,” said a community member. The proposal has gained support from 55% of voters, with 42% opposing it and 2% abstaining. Voting will end on April 14.

The dispute between Arbitrum’s foundation and its community started at the end of March, following the foundation’s first governance proposal (AIP-1), which called for funding its operations with 750 million ARB tokens – worth nearly $1 billion. However, this proposal faced significant backlash from community members, who were concerned about the foundation’s ability to handle such a large amount of tokens.

In response to community concerns, the foundation clarified that AIP-1 was a ratification, not a proposal. The foundation noted that some of the tokens were already sold for stablecoins and acknowledged that its first governance attempt failed due to communication problems and decisions that were “clearly not articulated correctly.”

A few days later, the Arbitrum Foundation released a set of new improvement proposals aimed at restoring community dialogue. The new proposals included AIP-1.1, which covered a smart contract lockup schedule, spending, budget, and transparency. The other, AIP-1.2, tackled amendments to current founding documents and lowered the proposal threshold from 5 million ARB tokens to 1 million ARB “to make governance more accessible.”

However, the efforts did not resolve the issues with ARB holders. As the proposal for the return of the 700 million ARB tokens indicates, “The foundation has unilaterally been allocated $750M tokens from the DAO that was not approved by the governance tokenholders. Any funds must be returned until it has been properly allocated by the DAO and the DAO only.”

This situation highlights the importance of communication and transparency between blockchain project teams and their communities. The success of a decentralized project depends on the active participation of its community members, who are ultimately the ones with the power to govern the project’s direction. It remains to be seen how this dispute between the Arbitrum Foundation and its community will be resolved, but it is clear that community support and engagement are essential for the success of any decentralized project.


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FTX Control Failures

FTX, a multi-billion dollar cryptocurrency company, has faced control failures due to inadequate financial and accounting controls, an inadequate group management structure, and the use of software not suitable for large companies, according to CEO John Ray III. In a court filing in April 2021, Ray gave a detailed account of the deficiencies that his restructuring team had identified at FTX.

Ray noted that FTX relied on a hodgepodge of Google documents, Slack communications, shared drives, and Excel spreadsheets to manage its assets and liabilities. The company used QuickBooks for its bookkeeping, which Ray said was designed for small and mid-sized businesses and not for a company that operates across multiple continents and platforms like FTX. As a result, around 80,000 transactions were left as unprocessed accounting entries in “catch-all QuickBooks accounts titled ‘Ask My Accountant.'”

According to Ray, FTX was run by three inexperienced people “not long out of college” who controlled almost every significant aspect of the company. Co-founders Sam Bankman-Fried and Gary Wang, along with former engineering director Nishad Sing, had the “final voice in all significant decisions” despite their limited experience. An unnamed FTX executive noted that “if Nishad [Singh] got hit by a bus, the whole company would be done. Same issue with Gary [Wang].”

It was also reported that FTX failed to file its financials on time at the end of financial reporting periods and did not carry out back-end checks to identify and correct material errors. Additionally, the company couldn’t provide a complete list of its employees at the time of bankruptcy filing in November.

Brett Harrison, the president of FTX.US, raised concerns regarding “the lack of appropriate delegation of authority, formal management structure, and key hires at FTX.US.” However, when Harrison voiced his concerns to Bankman-Fried and Singh, his bonus was significantly reduced, and he was instructed to apologize to Bankman-Fried by the firm’s internal counsel. Harrison refused and resigned following the disagreement.

Ray stated that when he took control of FTX in November, there was “not a single list of anything” related to bank accounts, income, insurance, or personnel, which caused a “massive scramble for information.” He also pushed back against the motion to assign an independent examiner to the bankruptcy case out of fears that “inadvertent errors” could result in “hundreds of millions of dollars of value being destroyed.”

In conclusion, FTX’s control failures were due to a lack of appropriate financial and accounting controls, an inadequate group management structure, and the use of software not suitable for large companies. Inexperienced founders controlled the company, and it relied on a hodgepodge of online shared documents and communications.


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Hong Kong Embraces Web3 Despite Crypto Market Volatility

In a recent blog post, Paul Chan, the financial secretary of Hong Kong, emphasized the need for the city to push forward with Web3 technology, despite the ongoing volatility in the crypto market. Chan proposed a strategy that focuses on proper regulation and promoting development to facilitate the steady growth of Web3. He noted that Hong Kong plans to prioritize financial security, prevent systemic risks, and focus on investor education and protection, as well as measures around anti-money laundering.

The government of Hong Kong first floated the idea of introducing a bill to regulate crypto in October last year. By February 2023, the Securities and Futures Commission (SFC), the local securities regulator, released a proposal for a regime for cryptocurrency exchanges set to take effect in June. The industry has faced a bear market and setbacks with exchange collapses and ongoing scrutiny from regulators. However, Chan compared the current situation to that of the early 2000s internet bubble, where the market participants became much calmer after the bubble burst.

Chan also emphasized the need for market participants to focus on competing in technological innovation, practical application, and value creation, contributing to improving the quality of the real economy. He called for the deeper development of blockchain technology, which can find wider application scenarios and solve more existing problems due to its characteristics and advantages of transparency, efficiency, security, disintermediation, de-platformization, and low cost.

Hong Kong’s approach to crypto regulation is in stark contrast to that of the United States, which has adopted a more hardline response to the industry. The difference in regulatory approaches has led to speculation that the crypto industry’s “center of gravity” will shift to Hong Kong. Cryptocurrency exchange has already announced plans to launch a presence in Hong Kong following the local government’s planned 50 million Hong Kong dollar ($6.4 million) cash injection into Web3 in the city’s 2023-24 budget.

In a March 20 speech in Hong Kong, the secretary for financial services and the treasury, Christian Hui, stated that Hong Kong has been attracting “interest” from various crypto firms worldwide since October 2022. Chan concluded his post by acknowledging that the road of innovation and technological change has never been smooth sailing. He emphasized that even if the development direction is locked, the actual path has to be worked out step by step. He called for persistence in trying to find new solutions and new ways out to facilitate the steady growth of Web3 in Hong Kong.


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Bitget Launches Web3 Fund

Bitget, a cryptocurrency exchange, has established a Web3 Fund to provide financial assistance to venture capital businesses and projects all over the globe that are Web3-friendly. The exchange will give priority to Asian initiatives that are headed by competent teams and have clear roadmaps, with an emphasis on finding solutions to challenges that exist in the real world. Gracy Chen, managing director of Bitget, has underlined the exchange’s dedication to make Web3 a worldwide phenomenon, just like Web2 was. Web2 was a sensation that spanned the whole globe. The objective of the Bitget Web3 Fund is to identify those initiatives that will have the greatest possible influence on the procedure.

Foresight Ventures, ABCDE Capital, SevenX Ventures, and DAO Maker are just few of the venture capitalists that may be interested in participating in this endeavor as possible partners. Another prospective partner is Dragonfly Capital, which has just made an investment of $10 million in Bitget to assist the company’s continuous worldwide development.

Over 80,000 traders and 380,000 replica traders have joined Bitget since the platform’s inception in 2018. The exchange has ambitions to extend the goods it offers in 2023, including spot trading, launchpad, and Bitget Earn. Bitget has just just paid $30 million to purchase BitKeep, a Web3 access gateway that has more than 9.5 million customers.

Bitget established a fund with a capitalization of $200 million during the bear market that occurred in 2017 in order to protect the assets of its customers and regain the trust of investors. The value of the fund was guaranteed to be preserved by the exchange for a period of three years. Additionally, throughout the course of the previous year, Bitget instituted stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures in order to prevent dishonest individuals from using its services.

The fact that Bitget has decided to establish a Web3 Fund is evidence of the company’s dedication to fostering growth within the Web3 ecosystem. The exchange intends to discover and support initiatives that have the potential to have the most significant influence on making Web3 a phenomenon on a worldwide scale, and it will do this with the assistance of its possible partners. Bitget’s goals for development through the year 2023 demonstrate the company’s commitment to satisfying the ever-evolving requirements of its client base while also preserving its position as a market leader in the cryptocurrency exchange field.


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XRP Not a Security According to Hogan

Jeremy Hogan, a lawyer at the legal firm Hogan & Hogan, has recently declared in a series of tweets that the digital asset known as XRP, which is owned by Ripple, is not a security since it does not meet the criteria for what is known as a “investment contract.” Hogan contends that the United States Securities and Exchange Commission (SEC) has not shown that Ripple is in violation of either an implicit or explicit investment contract in its action against the company. This is despite the fact that XRP might be regarded a security according to the definition of an investment contract.

Hogan notes that the SEC contends that the purchase agreement is all that is necessary to demonstrate that XRP is a security; nevertheless, this argument differentiates the “investment” from the “contract.” Hogan adds that the SEC contends that the purchase agreement is all that is required to demonstrate that XRP is a security. According to Hogan, a simple purchase cannot be considered a “investment contract” since there is no duty for Ripple to do anything other than transfer the asset. This is because there is no further consideration involved in the transaction.

The Securities and Exchange Commission (SEC) initiated legal action against Ripple in December 2020, alleging that the company unlawfully marketed unregistered securities in the form of its XRP coin. Ripple has long contested this allegation, stating that the Howey test, which is used to assess whether or not a transaction qualifies as an investment contract, does not apply to XRP. This test is used to establish whether or not a transaction qualifies as an investment contract.

Hogan further contends that each of the “blue sky” instances, which the Howey case relied on for defining an investment contract, featured some type of a contract pertaining to the investment, and that this was the case regardless of whether the case was decided in favor of the plaintiff or the defendant. According to Hogan, the most important question is not whether Ripple utilized the money from the sale of XRP to support its business, but rather whether the SEC has established that there was either an implicit or explicit “contract” between Ripple and XRP buyers pertaining to their “investment.” Hogan is of the view that the SEC has not proven that there was such a contract. As far as Hogan is concerned, there was never any such deal.

How the SEC will react to Hogan’s claims is something that has not yet been determined. On the other hand, his research offers a fresh point of view on the current legal struggle that is taking place between Ripple and the SEC. In the event that XRP is not regarded as a security, this development may have substantial repercussions for the direction that the cryptocurrency market is headed in the future.


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Japan supports OpenAI amid concerns

OpenAI, the artificial intelligence (AI) company, has received support from Japan amidst a wave of bans by different countries and uncertainties. Japan’s Chief Cabinet Secretary Hirokazu Matsuno announced on April 10 that Japan would consider incorporating AI technology into government systems, including OpenAI’s ChatGPT chatbot, subject to privacy and cybersecurity concerns being addressed.

This announcement followed an alleged data breach on March 20, where Italy’s data protection watchdog temporarily blocked the chatbot on March 31 and directed OpenAI to immediately restrict data processing for Italian users while an investigation is ongoing.

OpenAI CEO, Sam Altman, visited Japan to meet with government officials, including Prime Minister Fumio Kishida. Matsuno expressed his support for OpenAI, stating that the Japanese government would consider adopting its technology if privacy and cybersecurity concerns are addressed.

Altman expressed his enthusiasm about engaging with Japan’s remarkable talent and creating something exceptional for the Japanese people during a press conference in Tokyo. He also mentioned his amazement at the adoption of this technology in Japan.

During his meeting with Kishida, Altman discussed the potential of the technology and how to remove any negative aspects. They also deliberated on how to be cautious about the risks and maximize AI’s benefits for people. OpenAI is considering the possibility of opening an office in Japan and extending Japanese language services.

However, OpenAI is currently being investigated by Canada’s privacy commissioner for allegedly collecting and utilizing personal information without consent. On April 4, the Office of the Privacy Commissioner of Canada announced that the probe was initiated after a complaint from an anonymous individual. Philippe Dufresne, head privacy commissioner, emphasized that his department is closely monitoring AI technology to protect Canadians’ privacy rights.

OpenAI’s technology has been the subject of controversy in different countries. Japan’s expression of support for the company amid these concerns is a positive development for OpenAI’s efforts to expand its operations globally. OpenAI’s commitment to enhancing its models’ proficiency in the Japanese language and its cultural nuances also shows its dedication to providing effective AI services to Japan. However, addressing privacy and cybersecurity concerns is crucial for OpenAI to gain wider acceptance and adoption of its technology.


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Global Shipping Business Network (GSBN) Bullish on Blockchain

Blockchain technology has had a rocky start in the logistics industry, with Danish logistics firm Maersk terminating its blockchain-based supply chain platform last year. However, Hong Kong-based Global Shipping Business Network (GSBN) has not given up on blockchain applications in global trade. In fact, the nonprofit consortium sees blockchain as a crucial logistics tool in the long term.

GSBN currently operates one of the world’s largest platforms that can be described as an alternative to Maersk’s TradeLens tool, according to a report by the South China Morning Post. The platform is based on a permissioned blockchain with strong data governance, allowing only authorized parties to contribute and consume shipping-related data.

Since launching its blockchain-based shipping platform in 2021, GSBN has tapped major shipping partners like Cosco, Orient Overseas Container Line, and Hapag-Lloyd. In addition, the organization has also reached partnerships with terminal operators such as Hutchison Ports, SPG Qingdao Port, PSA International, Shanghai International Port Group, and Cosco Shipping Ports. Among the members, only German Hapag-Lloyd and Singaporean PSA International are not based in mainland China or Hong Kong.

Despite past failures of major industry firms like Maersk in implementing similar projects, GSBN CEO Bertrand Chen is confident that blockchain technology has yet to fully catch on and its adoption may take another decade. However, with the world’s largest shipping companies on board, the potential of blockchain in logistics seems promising.

The use of blockchain technology in the logistics industry has been a topic of discussion for several years. It is seen as a tool that can increase transparency and efficiency, as well as reduce fraud and errors. However, the adoption of blockchain has been slow due to concerns about security, scalability, and interoperability.

GSBN’s permissioned blockchain platform addresses some of these concerns. With strong data governance, it allows only authorized parties to access data, reducing the risk of data breaches. In addition, by bringing together major shipping partners and terminal operators, the platform aims to increase efficiency and reduce the time and costs associated with shipping.

While Maersk’s failed blockchain platform may have dampened enthusiasm for blockchain in logistics, GSBN’s platform shows that there is still potential for blockchain in the industry. As the platform gains more traction and more companies adopt blockchain technology, the logistics industry may see a shift towards more transparent and efficient supply chain management.


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Symbiosis Integrates zkSync to Enhance Token Swaps

Symbiosis, a cross-chain automated market maker, has recently integrated zkSync, a layer-2 scaling protocol, to enhance the speed and reduce the fees of token swaps on its platform. The integration allows users to make any-to-any native asset swaps across Ethereum Virtual Machine (EVM) and non-EVM networks without having to switch between different wallets and interfaces.

The decentralized exchange (DEX) was launched in March 2022 and has already processed over $100 million in total transaction volume in stablecoins. It offers single-sided stablecoin pools that provide zero impermanent loss to liquid providers and facilitates “any-to-any” native asset swaps on its platform.

The integration of zkSync aims to make liquidity transition to and from zkSync “secure, fast and cheap.” It also expands the variety of token swaps through the DEX, supporting any-to-any native swaps to and from zkSync. This additional functionality enhances the user experience of value-added services built on top of Symbiosis.

According to Simeon Avramov, co-founder of Symbiosis, layer-2 scaling protocols like Optimistic and ZK-rollups are crucial for various decentralized finance (DeFi) platforms and services. They are lowering the entry barriers in terms of the price per swap and user experience of value-added services built on top. Avramov believes that zero-knowledge rollups could outcompete Optimistic Rollup solutions like Arbitrum and Optimism.

Avramov also emphasizes the importance of cross-chain players and interoperability layers to support zero-knowledge solutions as soon as possible. “ZK represents an inevitable and natural evolution among scaling solutions,” he said.

The integration of zkSync is a significant development for Symbiosis, as it will enhance the speed and reduce the fees of token swaps on its platform. This will attract more users and provide a better user experience. Symbiosis serves over 12,000 unique wallet addresses and has an average of 3,000 daily transactions.

Moreover, the scaling technology is not limited to Ethereum or other smart contract blockchains. The Swiss-based nonprofit ZeroSync Association is currently developing zero-knowledge proof tools that will allow Bitcoin (BTC) users to expedite the process of verifying individual blocks and, eventually, the entire blockchain.

In conclusion, the integration of zkSync is a significant milestone for Symbiosis, as it enhances the speed and reduces the fees of token swaps on its platform. It also expands the variety of token swaps and improves the user experience. The use of zero-knowledge proof technology in scaling solutions is an inevitable and natural evolution, and it is crucial for cross-chain players and interoperability layers to support zero-knowledge solutions as soon as possible.


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BTC Mining Report Draws Criticism

The New York Times’ recent report on Bitcoin mining, “The Real-World Costs of the Digital Race for Bitcoin,” has been met with criticism from BTC proponents. The article claims that Bitcoin mining has a “voracious” appetite and uses as much energy as all residences in New York City. However, some analysts have pointed out that the article cherry-picks data and neglects the increasing use of renewable energy in the mining sector.

Bitcoin environmental, social, and governance (ESG) analyst, Daniel Batten, said that the article exaggerates the fossil fuel use of BTC miners and uses incomplete datasets to support its thesis. He also noted that some Bitcoin miners in the United States and Canada use 90% sustainable energy to fuel their mining activities, but the NYT article focuses on the sites least backed by renewable energy.

Bitcoin proponent, Troy Cross, criticized the article for using “marginal emissions accounting” and selectively applying it only for carbon emissions, not generation. Dennis Porter, CEO of the Satoshi Act Fund, also noted an error in the article’s initial reporting, where the wrong town was named for a BTC mining facility in Texas.

BTC mining firm Riot’s vice president of research, Pierre Rochard, accused the NYT of using “fictitious fractional-reserve carbon accounting” and “cooking the books to fabricate emissions.” Meanwhile, another Twitter user believed that the article was fear-mongering.

Despite the debate on Bitcoin mining’s energy consumption, it remains significant for the blockchain. Mining is used to verify transactions, make it decentralized, and add a layer of security. According to the Bitcoin Mining Council’s Q4 2022 report, the Bitcoin network is already a leader in sustainable energy use, with 58.9% of its energy coming from renewable sources.

While some mainstream outlets criticize Bitcoin mining for its environmental impact, many BTC proponents see these reports as hit pieces and offer opposing perspectives. Some are even campaigning to change Bitcoin’s mining consensus to the more environmentally friendly proof-of-stake. Despite the criticism, Bitcoin mining’s importance to the blockchain makes it an essential area for continued development and research into sustainable energy solutions.


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