Bitcoin Is Worth $1T and OKCoin Delists BCH and BSV

This article is excerpted from Blockchain Bites, a daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.

$1T

Bitcoin is a trillion-dollar asset. The first and largest cryptocurrency set a new high of $53,739.48 Friday morning, the magic number at which the market value of all bitcoins in circulation is worth $1 trillion. This is up from a $178 billion market capitalization last year, CoinDesk’s Zack Voell reports.

While in some sense a meaningless event, it is also a serious milestone on the path for bitcoin to become a significant part of the global financial ecosystem. The open protocol is now more valuable than Facebook, and could soon overtake Alphabet, Google’s parent, or Amazon if prices continue to rise.

In February 2011, just two years and one month after the Bitcoin “genesis block” was mined, the cryptocurrency hit dollar parity, or the moment when one BTC could be exchanged for $1. This was an important psychological event, proving that bitcoin wasn’t just a usable currency, but a viable, alternative monetary system.

“[I]t’s like going from kids playing an early version of a game on the street with sticks and rocks, to 10 years later it being the fastest-growing, most important, most impactful game that’s taking over the sports world,” CoinDesk podcast editor Adam B. Levine, an early adopter, told Blockchain Bites.

“Initial viability is important. Mainstream acceptance is important,” he said. Institutions are rapidly entering the bitcoin economy at a moment when the U.S. dollar’s longevity has never been more in question.

Indeed, the trillion dollar sign post may signal a future where a dollar price quote for bitcoin hardly matters. It’s unlikely the entire global economy is denominated in satoshis – even less so in “bits” – but bitcoin could become a viable global reserve asset. Not just sitting on disruptors like MicroStrategy or Tesla’s balance sheets, some predict a world where governments hold.

As Michael Venuto of Toroso Asset Management said this morning on CoinDesk TV, “[Bitcoin’s] price is more or less a meme. It gets people excited but perhaps for the wrong reasons, preventing them from going down the rabbit hole.”

CeFi and DeFi paddycakes

PancakeSwap is the latest automated market maker (AMM) clone looking to unseat Uniswap as the top DeFi trading platform. The protocol is developed by Binance and offers reprieve to soaring gas prices on the Ethereum-based original. Liquidity, volumes and the price of its native CAKE token are skyrocketing, perhaps to the ire of stone-cold Ethereum stans.

This exchange ain’t big enough …

OKCoin is delisting bitcoin cash (BCH) and bitcoin SV (BSV) to prevent new customers from confusing these two forks for bitcoin (BTC). “This is not an easy decision. We had a choice and there is collateral damage, but we had to stand up for the bigger principle we believe in,” OKCoin CEO Hong Fang told CoinDesk. Bitcoin Cash is a clone of Bitcoin, with minor adjustments to increase block sizes. BSV, championed by Craig Wright, known for his claims to be the inventor of the original Bitcoin, is itself a fork of Bitcoin Cash. CoinDesk tech reporter Colin Harper dives in.

Systemically important: bank says

Bitcoin, and the wider crypto market, could face a severe liquidity shock if traders lost faith in tether (USDT), according to JPMorgan analysts. In a new report, bank analyst played catch-up to the interminable tether conversation, saying the dollar-equivalent stablecoin’s implosure could trigger a bank run-like event. There are more than $33 billion USDT in existence, up from $4 billion just 12 months ago.

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Why Everyone Wants an Invite to Clubhouse Crypto

At approximately 1 a.m. ET on Jan. 30, somewhere outside New York City, a CoinDesk reporter came across what could be crypto’s next craze. Or perhaps its latest trial. While searching the annals of Clubhouse, the increasingly popular audio-only app, I stumbled across a dark conspiracy: A group of men masquerading as lizards building a new cryptocurrency. 

A lounge of men masquerading as lizards had gathered as tokens teleported from an originating contract into their digital wallets. And here, basking in the light of public display, they discussed how to get the word out. A full-on, unfettered conversation.

“Are we on 4chan yet?” one asked, mentioning the pseudo-anonymous messaging board known as a font of memes and anti-social messages. They weren’t, but things apparently had gone awry anyway.

“What do you mean we got rugged again? Did someone add more liquidity?”

“No, no one even sold yet.” 

“Don’t say that in the chat.”

“I’ve screenshotted this chat, so if we get rugged I know it’s one of you guys.”

“I still have more questions.”

“I still have no lizard.”

“Only 666,666 lizard. Few understand this.”

That’s not the type of commentary one would imagine coming from, say, Satoshi Nakamoto when unveiling Bitcoin to the world. But it’s the pinnacle of social performativity that has found a home on Clubhouse. 


Clubhouse is a social media platform open to anyone with an invite and an iPhone. It has become the place to be for tech moguls and, more and more, crypto tastemakers looking to chat. Elon Musk pops in from time to time to talk about bitcoin and dogecoin, while other crypto luminaries including Meltem Demirors, Caitlin Long and Neeraj Agrawal appear more regularly. 

Like any social media platform, Clubhouse is what you make of it. There’s room enough for genuine discussion alongside scammers and multi-level marketing schemes. Some see it as the next vector for crypto adoption, which could be true; others as a way to replace some of the socialization missing during the pandemic age. It can get pretty weird, pretty quick. 


None know this better than Arya Bahmanyar, better known by his alias CoinDaddy, and his coterie of technologists and artists building “Lizard ETH.” Though Bahmanyar would reject being called a Lizard “leader” – there are no “devs,” he said – he was the figure to answer for the group, when a reporter came sniffing around. 

In a message he pinned to the group’s public Telegram channel, Bahmanyar said Lizard is a “meme art project” and a “statement on the absurdity of DeFi and the current state of Ethereum.” It has no prescribed value or use, and anyone can claim LZRD for free (except for Ethereum gas fees). 

Its main utility, in fact, seems to be as an icon around which a group of like-minded friends can talk and s**tpost. “It is a project of friendship,” Vincent Terracciano, a member of the LZRD Telegram channel, told CoinDesk repeatedly. 

In crypto’s decade-long run, the distinction between memes and this novel form of money has become difficult to parse. In 2013, people made sense of bitcoin by calling it “magic internet money.” In 2017, lambos were a shared desire of the nouveau riche. This summer saw the rise of yield farms, where “DeFi degens” would plow ETH into Yams, Sushi and Pickles. 

See also: Michael Casey – Memes Mean Money

CoinDesk Chief Content Officer Michael Casey went as far as saying money itself has always been a meme. So it makes sense to talk about the “internet’s native money” in terms of a language born on the web. Further, one could expect that anywhere a meme could thrive, crypto would too. 

Crypto club

Like all good and decent technologies, Clubhouse is flattening hierarchies among users and providing a space for anyone to be heard – literally. That may sound odd to say about a company that has thrived on hype around its exclusivity – you have to be invited to the club, for now – but the app’s appeal is more than just FOMO or bragging rights.

“It’s not just a phone call,” Steven McKie, a founding partner at the crypto-focused venture firm Amentum Capital, said over Zoom. “Anyone can randomly pop in and out, so everyone maintains this modicum of professionalism by default. It really does feel like a good episode of [National Public Radio] sometimes.” 


Others have compared the experience to tuning into a podcast, going to a conference or hanging out at a coffee house. This clubby vibe, bordering on yuppie professionalism, hasn’t been lost as the app grows. December’s 600,000 users has surged to six million. Andreessen Horowitz, which invested $10 million in May, reinvested in January at a $1 billion valuation. 

“Everybody loves podcasts in the crypto space. What better than an ephemeral podcast where you just had to be there,” McKie said. “Especially during COVID this past year, we’ve just been glued to our phones, reading things on Twitter, Slack and Telegram. It’s just exhausting.” To the extent that Clubhouse offers something new, it’s by making it easier to engage empathetically with other people, McKie said. 

See also: Bitcoin Bull Run: OGs on Why This One’s Different

Apart from semi-private lizard lounges, this reporter has tuned in for guitar jams and listened to lawyers debating Twitter bans, all in service of the job. There’s always at least five channels dedicated to self-help and often at least one meta-room focused on Clubhouse moderation and etiquette. 

And crypto-specific rooms? There’s investment advice for newbies. Chats about the granularities of bitcoin’s source code. CoinDesk has been experimenting with running rooms focused on news events. Both the number of crypto groups and their relative size are growing along with Clubhouse and CoinMarketCap’s worth. 

A club called “Bitcoin” had just over 12,000 followers on Jan. 15. Less than a month later it’s approaching 20,000. While that particular group, which hosts the Weekly Bitcoin Meetup, is led by the closest thing crypto has to public figures – including Brekkie von Bitcoin, Dan Held, Marty Bent, Amanda Fab, Nic Carter, among others – that’s not the case across the board. 

Many of the most prominent voices on Crypto Clubhouse are relative unknowns on the “it’s always Blockchain Week somewhere” conference circuit. Few have Twitter clout.



“I’ve been educating people on bitcoin since 2013. There’s been nothing like Clubhouse so far,” Lamar Wilson, a crypto startup founder and influencer, told CoinDesk in a video interview.

Wilson is far from unknown among early bitcoin adopters, though he isn’t a name often in the news. He founded Pheeva wallet, an early backdoor to get bitcoin wallets on iPhones (before that portal was slammed shut) and runs the Koinda Facebook group, which boasts about 25,000 followers. 


He also runs the Black Bitcoin Billionaires group on Clubhouse, which has grown past 17,000 followers in under two months. The group holds themed discussions on a daily and weekly basis, frequently moderated by Najah Roberts, chief visionary officer of an over-the-counter desk called Crypto Blockchain Plug. They both put in at least four hours a day running rooms or popping into others. 

Crypto Virgin Hours is probably the best-known chat room. It attracts approximately 200 participants every afternoon, offering a chance for the interested but unanointed to ask basic questions about wallets and coins. 

“Our mission is to onboard the world onto bitcoin,” Wilson said. “People always ask if I have to be Black to be in the group. No – It’s called that just to say it’s run by Black people, but everyone is welcome.” To that end, Black Bitcoin Billionaires partnered with Cash App to get one million satoshis in Black hands during February.

Wilson considers bitcoin to be a tool for Black people to accumulate wealth to pass to the next generation. “Bitcoin is a great equalizer. It’s an asset anyone can have access to without worrying that anyone can take it from you,” he said.

“Clubhouse is the first big social media application that Black people have been an early majority on,” Wilson said. “In every room that you’re in, it’s at least 50% Black. I think it’s because this is what we do as Black people. We go to barber shops, we go to beauty salons and talk. It fits the African American culture.”

The DOGE house

On a day I tuned in, Roberts was fielding a lot of questions about dogecoin, generally steering people away from the meme currency. “It has no purpose, it’s a parody coin. I can’t explain it,” she said, with a laugh. “I have some for fun. But I don’t even know what exchange mine is on. I’ve had it since 2017.”

Although she called it a “pump and dump,” Roberts didn’t put investors off, telling them, “If you made money, be comfortable with your profits.”


See also: Emily Parker – Why We Should Take Dogecoin Seriously

While it’d be a mistake to say Clubhouse is a haven of sound investment advice, it seems less scammy than the bowels of Telegram or Discord. In part, that’s from the efforts of people like Roberts, Wilson and others including Cory Klippsten, founder of SwanBitcoin.  

If you spend any amount of time on the crypto side of Clubhouse, you’re bound to bump into a couple of people with “SwanBitcoin” in their usernames, the name of the bitcoin startup for which they work. They’re not there to shill their app necessarily, but usually trying to educate users on the good word of bitcoin.  

Klippsten joined the app in December and immediately got to work bringing others like him aboard. First he brought his colleagues, then his friends, before ultimately spinning up a Telegram chat to “hack” a way to share invites. (Clubhouse gives out invites to each new person who joins, and additional invites for those most active on the app.) He estimates this scheme brought in more than 1,000 bitcoin proselytizers. 


“Now, basically two-thirds of Bitcoin Twitter is on there,” he told me over Zoom. “The purpose is to make sure, if the word ‘bitcoin’ is used, there’s a bitcoiner there in the conversation to explain reality.” This isn’t to say Klippsten is a “toxic maximalist,” an epithet used to describe people who still think of Ethereum as an alt-coin project. 

“That’s what’s great about Clubhouse, you’re talking to real humans. It’s not the same as 280 characters on Twitter, where you fire something off and you’re done,” he said. He recalled one room where someone started “going off” on Twitter CEO Jack Dorsey, which was quickly moderated. 

“Even if you disagree with some things he’s done – I disagree with some things Cash App has done – that’s inappropriate when you’re doing it on audio,” he said.


That said, the self-moderation of Clubhouse can only go so far. Like other social platforms, there have been numerous reports of misogynist, racism, anti-Semitism and outright bullying. Clubhouse’s founders, who declined to be interviewed, has largely been silent on such issues so far.

“You know, the system isn’t perfect, but it’s a beta platform that’s growing. I do think that there are way more pockets of positivity than negativity,” Bomani X, a pseudonymous artist and former face of the app, told CoinDesk. 

Bomani said one of the biggest draws has been the connections he made in the crypto community. He works as a digital strategist for musicians such as Nicki Minaj and Lil Wayne, and chatting on Clubhouse has gotten him to think about how crypto could expand artists’ rights over their own music. 

See also: Audius Has Big Numbers by Crypto Standards but Can It Take On SoundCloud?

Nothing is in the works right now, but he’s thinking about how blockchain can refigure broken payment models for artists and create new opportunities for fan engagement. “I definitely would love to see what the music-crypto space has to offer, especially as a creator myself,” Bomani said. 

Meanwhile, Ayra Bahmanyar said Lizard “is a completely neutral canvas everyone who feels they want to can paint on.” 

That’s true for Clubhouse, too.


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Money Reimagined: Tucker Carlson Is Right About Financial Privacy

Welcome to Money Reimagined. 

I’m on vacation. So this week’s main-bar column comes to you from Executive Editor Marc Hochstein. In it, Marc draws deeply on his objective consistency to remind us that wherever you stand on the politically charged issues of our day, we all lose when our right to privacy is breached in pursuit of them. 

Before I took two days off, my podcast co-host Sheila Warren and I got to record the first in a multi-part series on the nonfungible token craze. To explore why people in the art and entertainment world are so excited about NFTs right now, this week’s stage-setting episode starts with a look at how human beings decide how to value something.


For this, we were joined by perhaps the perfect guest: Nanne Dekking, the former vice chairman of Sotheby’s who is now the CEO of blockchain company Artory. This was an especially fun one! Check it out after reading Marc’s insights.

– Michael Casey

Bank of America: World police

Trigger warning: This column has something nice to say about Tucker Carlson.



On Feb. 4, the Fox News host broke a story that should concern all Americans, even those who normally blanch at his populist brand of right-wing politics. Indeed, the revelations should interest anyone who cares about the future of money, even if Carlson’s TV broadcast could have used more context.

Since the Jan. 6 Capitol Hill riot in Washington, D.C., Bank of America has been helping federal investigators search for extremists by combing through its transaction records, “Tucker Carlson Tonight” reported, without naming its sources (standard journalistic practice with sensitive stories).

Specifically, the country’s second-largest bank searched for customers who:

  • Transacted with debit or credit cards in Washington on Jan. 5 and 6
  • Paid for hotel or AirBnB reservations in the area after Jan. 6
  • Bought weapons, or anything else (“t-shirts included”) from a “weapons-related merchant,” between Jan. 7 and “their upcoming suspected stay in D.C. area around Inauguration Day” (Jan. 20)
  • Made “airline-related purchases” after Jan. 6 – “not just flights to Washington, but flights anywhere, from Omaha to Thailand.”

Of the 211 customers who met the “thresholds of interest,” at least one was interviewed by the authorities before being cleared of suspicion, Carlson told his more than 4 million nightly viewers. 

“Bank of America is, without the knowledge or the consent of its customers, sharing private information with federal law enforcement agencies,” he thundered. “Bank of America effectively is acting as an intelligence agency, but they’re not telling you about it.”

What else is new?

To seasoned observers of the financial services industry, including regulated cryptocurrency businesses, it’s tempting to scoff, “no kidding, Columbo.” 

Banks have been providing customers’ private information to the government without their knowledge or consent for decades under the 1970 Bank Secrecy Act and related anti-money-laundering (AML) regulations. 


“For B of A, as well as any other regulated entity, it’s not like we’re sheriff deputies or an extension of law enforcement, but because we’re regulated, we have regulatory obligations. That’s how the regulatory framework was designed by our legislature and politicians,” said Tim Byun, global government relations officer at crypto exchange operator OK Group and a former Visa executive and bank examiner. “The public and customers should and need to be aware of this.” 

Read more: Why Ledger Kept All That Customer Data

Financial institutions routinely file suspicious activity and currency transaction reports (SARs and CTRs), hundreds of thousands each year, to the Treasury Department. These reports contain sensitive personal information about customers who may not have committed any crime. As CoinDesk’s Ben Powers reported last year, they are stored indefinitely by a bureau that appears ill-equipped to guard them. A trove of them would make a comely prize for hackers. The SolarWinds breach only reinforced doubts about Uncle Sam’s cyber defenses.

After 9/11, the Patriot Act heightened banks’ “intelligence agency” role decried by Carlson. Particularly pertinent here may be Section 314(a), which authorizes the government to share with financial institutions the names, addresses and other data about individuals and groups suspected of terrorist and money laundering activity, and in turn requires those firms to search their records and tell the authorities if they find a match.  

On Fox, Carlson asked his viewers to put themselves in the shoes of the B of A customer. “The FBI hauls you in for questioning in a terror investigation, not because you’ve done anything suspicious, but because you bought plane tickets and visited your country’s capital,” he said. “Now they’re sweating you because your bank, which you trust with your most private information, has ratted you out without your knowledge.”

Don’t tell a soul

(Rachel Sun/CoinDesk)


Carlson’s indignation is understandable – but so would any bank’s reticence to notify customers they were being “ratted out.” Tipping off a customer to an investigation by disclosing a SAR filing, for example, is illegal, and both the bank and the officer responsible may be held liable for lapses. “All banks have responsibilities under federal law to cooperate with law enforcement inquiries in full compliance with the law,” B of A noted in its response to Carlson’s questions.

Some details of Carlson’s report were fuzzy. For example, he complained that B of A cast “an absurdly wide net,” but it’s not clear how absurdly wide. The broadcast didn’t explicitly say whether the bank reported only those customers who met all four of the criteria described, or all who satisfied any one of them.  


Read more: Marc Hochstein – Who Are the Real Monsters?

Also, while Carlson noted that B of A retrieved the information “at the request of federal investigators,” it would be helpful to know the exact nature of the request: a warrant backed by probable cause and signed by a judge? A subpoena? An order by the shadowy, Kafkaesque FISA court? (Neither Fox News nor B of A answered requests for clarification by press time.)

Here’s where the Patriot Act may come into play. Did B of A search its records in response to a Section 314(a) notification? If so, was this tool used because the suspects were considered domestic terrorists? (Remember, the law was written when the popular idea of a terrorist was Osama Bin Laden, not the QAnon Shaman.) 

Does a search for broad types of purchases, rather than named individuals, fall under the scope of Section 314(a)? How much leeway did B of A have to push back against the Feds’ demands, as Carlson implies it should have? Was law enforcement simply looking to supplement information already gleaned from public video footage, names to put to faces? It’ll be interesting to see what further reporting finds. 

But remember the big picture. Since the 1970s, courts in the U.S. have held that people have no reasonable expectation of privacy in information they voluntarily turn over to third parties. As a result, the investigative methods Carlson exposed, however shocking to Joe Sixpack, are pretty standard. Our financial transactions aren’t protected by the Fourth Amendment of the U.S. Constitution. 

Should they be? That’s a question we ought to revisit in this digital age. Say what you will about Tucker Carlson, but he deserves credit for drawing public attention to the matter. 

– Marc Hochstein

Ethereum’s whales

Signs of ownership concentration are emerging on the Ethereum network as participation grows in Ethereum 2.0’s stake-based validation system. The number of ether “millionaires,” or addresses holding 1,000 ETH or more, has dropped by 7% in 2021, as of Thursday, accelerating from 2020’s 6% annual decline, according to data provided by Coin Metrics. 

Meanwhile, at more whalish depths, populations are increasing. The number of addresses holding 10,000 units or more has increased by 8%, and Ethereum has added a single new “billionaire.” Since the start of the year, the number of addresses holding 1 million ETH or more has gone from seven, to nine, and back to eight as of Thursday. 

(Shuai Hao)

Source: Coin Metrics

Let’s be clear, these aren’t uncharted waters for ether ownership concentration. The number of 10,000 ETH addresses hit peak in February, 2018, at 1,284. As of Thursday, it’s 1,276.

These shifts in ownership are taking place as staking grows on Ethereum, with 90,349 active validators on the network, up from 77,890 at the beginning of February, according to CoinDesk’s Valid Points newsletter, which provides in-depth coverage of the Ethereum 2.0 roll-out. 


Fears of ownership concentration in proof-of-stake systems are not new. And it’s a little early for ETH bears to sound the decentralization alarm. For one thing, these are addresses. They don’t even necessarily indicate entities, let alone what kind of entities. They could be exchanges or other service providers representing many smaller entities. However, with Ethereum governance set to be tied to asset ownership in a proof-of-stake system, they bear watching.  

– Galen Moore, CoinDesk senior research analyst

The Conversation: Bitcoin’s energy

With bitcoin’s price rise pushing crypto back into mainstream conversation, Twitter alighted on a long-simmering question this week. Is bitcoin’s energy consumption – inevitably high because of its proof-of-work algorithm and decentralization – justifiable? 

Meteorologist and climate journalist Eric Holthaus said it this way:


But Yassine Elmandjra, an Ark Invest analyst, said a lot of bitcoin mining uses renewables these days:


CoinDesk columnist Nic Carter said bitcoin’s climate scolds fail to account for the dollar’s own impact:


And some said BTC could even restore stability to Texas’ troubled grid, with mining facilities (“bitcoin batteries”) helping to balance supply and demand:


Meanwhile, lawyer Jake Chervinsky said bitcoin was healthier for criticism:


– Ben Schiller, Features editor

Relevant reads: Adoption everywhere

Bidding up. In another sign of mainstream crypto acceptance, Christie’s is auctioning its first nonfungible token. “EVERYDAYS: THE FIRST 5000 DAYS,” by @beeple, is the “first purely digital work of art ever offered by a major auction house.” CoinDesk’s Jamie Crawley reports. 

Meme message. Dogecoin, which has seen year-to-date returns of about 1,000%, is often seen as a big joke. But in this op-ed, CoinDesk Global Macro Editor Emily Parker asks us to take the project seriously, if only because of what it tells us about the moment. Increasingly, she says, reality seems to be “shaped by collective belief, rather than underlying facts.” In other words, if a community wants a coin’s price to rise, it will rise, irrespective of fundamentals. 


ETF at last? Exchange-traded funds have long been seen as a prerequisite for Wall Street adoption of crypto, but they’ve fallen foul of regulatory approval. Is that about to change? CoinDesk’s regulatory expert Nik De stirs the tea leaves, including a change in regime at the Securities and Exchange Commission, strong institutional interest in bitcoin and a newly-launched bitcoin ETF in Canada. 

– Ben Schiller

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Bitcoin Is Now a Trillion-Dollar Asset: Where Do We Go From Here?

The milestone isn’t just psychological, and potentially opens entire new groups of investors who couldn’t participate previously.

This episode is sponsored by Nexo.io.

Download this episode

Bitcoin is officially a $1T asset. As the price surged over $54,000, the total market cap of bitcoin reached the new all-time high.

In this episode, NLW explores the significance of the milestone, arguing:

  • There has been a slate of good news, from BlackRock rumblings to Canadian ETFs that have been driving recent price action
  • There are a variety of institutions that couldn’t allocate to the space before because it was too small but which are now in play
  • In the wake of the milestone, we’re likely to see more research house FUD
  • We’re also likely to see a number of major bitcoin positions announced in the days to come

See also: Bitcoin Market Value Tops $1T as Price Passes $53,697

Image credit: uzenzen/iStock/Getty Images Plus

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Bitcoin Brokerage River Financial Raises $17M: SEC Filings

High-end bitcoin brokerage River Financial raised $17.3 million in a recent equity sale, according to documents filed with the U.S. Securities and Exchange Commission (SEC) Thursday.

Form D filings reveal two-year-old River aims to raise nearly $500,000 in additional funding for a total of nearly $17.8 million. The firm reported 34 backers in its latest filing but none of them were known at press time.

It was not immediately clear if the $17 million figure includes funds from the $5.7 million seed round River completed last July with backing from Castle Island Ventures, Slow Ventures and a slew of other VCs. Partners at those firms did not respond to multiple CoinDesk inquiries.

CEO Alexander Leishman acknowledged in a brief phone interview Thursday the brokerage was considering pursuing additional funding. He confirmed in a Friday follow-up that River’s counsel had submitted documents to the SEC but declined to elaborate on the round. 

The SEC requires private companies notify the regulator of equity sales within 15 business days of the first sale in a round. The documents filed Thursday with the SEC state River Financial completed its first sale of the round on Jan. 28, 2021.

River’s equity filing comes as the bitcoin-only brokerage embarks on a massive hiring push across compliance, client acquisition and engineering, with at least seven positions open for a team currently only 16 strong, according to the website.

Software job postings indicate River intends to build new services for its iOS app, and is considering taking steps to bolster account security and develop “novel performance reporting features,” projects it offers as examples to prospective hires. 

River serves deep-pocketed bitcoin investors and has in the past insisted it manages a “brokerage” service, not an exchange. It is seeking to refine that white-glove offering already available 32 U.S. states, as evidenced by the client operations analyst position. 

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Bitcoin News Roundup for Feb. 18, 2021

With the both of the top two cryptocurrencies setting new record high prices plus a look at what dogecoin says about our world, CoinDesk’s Market Daily is back with the latest news roundup.

Add Markets Daily to your Alexa Flash Briefing here.

This episode is sponsored by Nexo.io.

The $8.7 trillion-asset BlackRock is “dabbling” in cryptocurrencies – becoming the norm as bitcoin and ether rally to all-time high prices.

Dogecoin’s rise reflects the power of collective belief and a longing for a more ideal form of crypto.

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What Happens if All Stablecoin Users Have to Be Identified?

Imagine the following scenario: Sometime in 2021, financial regulators declare that all stablecoin owners must be verified. What would happen to the cryptocurrency ecosystem?

Right now, a large chunk of stablecoin usage is pseudonymous. That is, you or I can hold $20,000 worth of tether or USD coin stablecoins in an unhosted wallet (i.e., not on an exchange) without having to provide our identities to either Tether or Circle, the managers of these stablecoin platforms. We can send this $20,000 along to other users, who can transfer the coins on, who in turn can transfer them on, and no one along this chain needs to unveil themselves.

J.P. Koning, a CoinDesk columnist, worked as an equity researcher at a Canadian brokerage firm and a financial writer at a large Canadian bank. He runs the popular Moneyness blog.

The only point at which stablecoin users have to submit to a Tether or Circle know-your-customer (KYC) process is to redeem stablecoins directly for traditional bank dollars. Or vice versa, to deposit dollars with Tether or Circle and get freshly minted stablecoins.


In a world where traditional non-blockchain based financial institutions like PayPal, Chase, and Zelle link all payments to names and addresses, stablecoin networks have become a rare moat of digital payments privacy. This has led to some fairly exotic uses for stablecoins.

In Moscow, Chinese gray market clothes vendors trade cash for tether to repatriate profits, writes CoinDesk’s Anna Baydakova. Ukrainian companies that import from Turkey use tether to skirt foreign exchange controls, and a multi-million Ponzi scheme relied on Paxos standard (PAX) for payments. Meanwhile, in the world of decentralized finance (DeFi), unidentifiable computer programs are conducting billions of dollars in unregulated financial transactions using USD coin and other stablecoins.  

But will regulators allow this privacy moat to continue to exist? What if, at this very moment, officials working for the Financial Crimes Enforcement Network (FinCEN), the U.S. Treasury’s money laundering watchdog, are plotting how to rein in stablecoin pseudonymity? 


See also: What Are Stablecoins?

Let me speculate about how a potential unveiling might look.

FinCEN could rule that henceforth, if anyone wants to access tether, USD coin, or any other official stablecoin (TrueUSD, Paxos standard, Gemini dollar, Binance USD, HUSD) they will need to apply for a verified stablecoin account. That would mean providing photo ID, proof of address and other information to Tether, Circle or other issuers.

For many existing stablecoin owners, this won’t be a big deal. Professional arbitrageurs who use stablecoins to move value from one centralized exchange to another are probably already KYC’d. And retail clients who keep their stablecoins on an exchange like Binance wouldn’t see any changes because the exchange already verifies their identities anyways.

But given that every transfer would need to have names and addresses associated with it, an unveiling would certainly weigh on gray market uses such as the Chinese traders in Moscow.

With stablecoins getting bigger by the day, regulators probably can’t ignore the issue of pseudonymity forever.

The issuers themselves would be inconvenienced, too. Building infrastructure to collect and verify the identity of all users, and not just the few who redeem or deposit, is expensive. To recoup their costs, issuers like Tether and Circle may consider introducing fees. All of this could render stablecoins less accessible for people who only want to use them for casual remittances.

It is in the world of DeFi that the fallout of a stablecoin unveiling could be felt the most. Real people who own stablecoins can be easily identified. But in DeFi, stablecoins are often deposited into accounts controlled by bits of autonomous code, or smart contracts, which don’t have any underlying owner. It’s not evident how a stablecoin issuer can conduct KYC on a smart contract.


Maker, one of the most popular decentralized tools, contains $350 million USD coins in various user-created vaults. This hoard of stablecoins serves as collateral backing for dai, Maker’s decentralized stablecoin. Another $130 million USD coin is held in a Maker’s peg stability module smart contract. If all stablecoin owners must be identified, it’s not apparent who or what entity would have to undergo a KYC check for this $130 million. 

Compound, another popular DeFi tool, currently holds $1.6 billion USD coin and $350 million tether. Lenders can deposit their stablecoins into Compound smart contracts and collect interest from borrowers who draw from the contracts. 

Liquidity pools, smart contracts underpinning decentralized exchanges like Uniswap and Curve, also hold large amounts of stablecoins. Curve liquidity pools currently contain $1.25 billion worth USD coin and $450 million worth of tether.

See also: JP Koning – What Tether Means When It Says It’s ‘Regulated’

Under the strictest scenario, stablecoin issuers could be required to cut off any entity that can’t provide a verified name or address. Which means Curve, Maker, and Compound smart contracts would all be prevented from receiving stablecoins. 

Given the ecosystem’s reliance on stablecoins, this would come close to breaking it. Compound, Curve and Uniswap might try to adapt by substituting FinCEN compliant stablecoins like USD coin with decentralized ones, say like Maker’s dai stablecoin. Because decentralized stablecoins don’t rely on traditional banks, they are less beholden to FinCEN dictat.

But remember, Maker relies on USD coin collateral to imbue dai with stability. If Maker, like Compound and Curve, can no longer hold USD coin, then dai itself would become less stable. And so the usability of Compound and other protocols relying on dai would suffer.


If we imagine a more dovish scenario, FinCEN might allow for a smart contract exemption. As long as stablecoins are held in a smart contract rather than an externally controlled account, then FinCEN would allow the stablecoin issuer to provide financial services to the smart contract. Much of DeFi could continue on as before.

This option provides a pretty big loophole for bad actors, though. The whole reason for requiring platforms to verify accounts is to prevent them moving illicit funds. If stablecoins held in smart contracts are exempt from KYC obligations, then enterprising individuals will move stablecoins to the smart contract layer and thus stimie FinCEN controls.

See also: Questions About Tether Just Won’t Go Away. Does the Crypto Market Care?

A middle-of-the-road scenario is that FinCEN exempts smart contracts from stablecoin KYC, but only if the smart contract itself verifies the identities of all addresses that interact with the contract. So Curve, in this case, would have to set up a customer due diligence program if it wanted to qualify to use stablecoins. Maker would have to vet all vault owners.

Under this scenario, we could imagine DeFi splitting into two. Purely decentralized protocols would avoid stablecoins altogether to avoid subjecting their users to KYC. Not-so-decentralized finance would start to verify users to maintain access to stablecoins.  

There are many other potential scenarios. As you can see, this is a complex problem. If FinCEN is indeed exploring the question of stablecoin pseudonymity, I wouldn’t want to be the official tasked with trying to design an appropriate response. Too strict and DeFi may no longer function. Too light and DeFi will continue to pose a money laundering threat.

But the clock is ticking. The combination of tether, USD coin, Paxos standard, Binance USD, TrueUSD, dai, and HUSD now regularly surpasses bitcoin in terms of on-chain volume. In January 2021, these stablecoins processed $308 billion in transactions compared to bitcoin’s $297 billion. With stablecoins getting bigger by the day, regulators probably can’t ignore the issue of pseudonymity forever.



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BitPay to Pay $500K to Settle OFAC Sanction Violation Charges

Crypto payments platform BitPay has settled with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on charges of over 2,000 apparent sanctions violations.

According to an enforcement notice published on Feb. 18, BitPay will pay $507,375 on allegations it allowed individuals in Ukraine, Cuba, North Korea, Sudan, Iran and Syria to transact with people in the U.S., in apparent violation of U.S. sanctions law. Roughly $129,000 in cryptocurrencies were transacted.

This is a developing story and will be updated.

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