Coinbase is challenging the U.S. Treasury over the recent tornado cash sanctions

Crypto Coinbase has challenged the decision of the United States Treasury Department to include Tornado Cash, a decentralized software project, on the list of Specially Designated Nationals and Blocked Persons (SDN). This action, which was brought up in the Western District of Texas, marks a serious clash between the rapidly expanding cryptocurrency industry and the federal regulatory authorities.

Tornado Cash is a platform that runs on the Ethereum blockchain that offers immutable smart contracts that permit anonymous cryptocurrency transactions. This protects the users of Tornado Cash from having their privacy compromised. This piece of software has emerged as a central issue in the ongoing discussion on the appropriate level of government oversight of the digital space.

According to the allegations made in the complaint filed by Coinbase, the action taken by the Treasury Department to penalize Tornado Cash goes beyond the scope of the legal power granted to it under the International Emergency Economic Powers Act (IEEPA) and the North Korea Sanctions and Policy Enhancement Act. The plaintiffs contend that the usual definitions of a “national” or “person” do not apply to Tornado Cash since it is a decentralized organization, and these activities are governed by those definitions. In addition, they argue that the smart contracts in issue do not qualify as “property” in the legal sense since they cannot be changed and no one owns them. Furthermore, they claim that Tornado Cash does not have any legal, equitable, or beneficial stake in the smart contracts in question.

The judicial procedures shed light on the difficulty of governing blockchain technology and the ramifications it has for individual privacy and rights. The plaintiffs contend that the inclusion of Tornado Cash on the SDN List by the Treasury unfairly criminalizes the use of a privacy-focused software application, which impacts law-abiding persons. The plaintiffs have filed a lawsuit to challenge this designation.

As the case moves forward, it exemplifies the rising contradictions between the essential need for regulatory control in the bitcoin industry and the basic rights of free speech and privacy. The verdict in this case has the potential to establish an important precedent for the future regulation of cryptocurrencies as well as the wider use of economic penalties in the era of digital technology.

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Court Upholds OFAC’s Designation of Tornado Cash Under IEEPA

The United States District Court for the Northern District of Florida issued a decision concerning the designation of Tornado Cash by the Office of Foreign Assets Control (OFAC). The case, identified as Case 3:22-cv-20375-TKW-ZCB, revolved around the designation of Tornado Cash under the International Emergency Economic Powers Act (IEEPA). The IEEPA authorizes the president to declare national emergencies to handle unusual foreign threats to the United States’ national security, foreign policy, or economy. Utilizing this authority, the president had declared national emergencies concerning malicious foreign cyber-enabled activities and North Korea’s nuclear missile program.

Tornado Cash, a service utilizing smart contracts on the Ethereum blockchain to provide a degree of anonymity to transactions, was designated by OFAC on August 8, 2022, and later re-designated on November 8, 2022. This designation was challenged by the plaintiffs, who are users and a non-profit cryptocurrency advocacy organization. They argued that the designation of Tornado Cash’s core software tool exceeded OFAC’s statutory authority since it is mere computer code and no foreign entity has a legally recognized “property interest.” The designation listed 91 internet addresses affiliated with Tornado Cash, aiming to block and prohibit transactions through these addresses.

The Court’s decision upheld OFAC’s designation. It rejected the plaintiffs’ argument, stating that the operative language in the IEEPA is “any interest,” not “property interest” or “ownership interest.” According to the Court, Tornado Cash’s founders, developers, and Decentralized Autonomous Organization (DAO) have an indirect beneficial “interest” through the service’s usage, which increases the value of Tornado Cash’s governance token, TORN. The Court explained that an increased usage of Tornado Cash enhances the value of TORN, held by these entities, and thus establishes a financial “interest” for the purposes of the IEEPA.

Furthermore, the Court found that OFAC’s decision was not arbitrary or capricious and was adequately justified based on the foreign-affairs rationale, particularly given Tornado Cash’s involvement in laundering cryptocurrency for the benefit of the North Korean government. The Court also dismissed the plaintiffs’ First Amendment claims, stating the designation didn’t implicate Plaintiffs’ First Amendment rights as there are other privacy tools available for them.

In conclusion, the Court denied the plaintiffs’ motion for summary judgment and granted the defendants’ cross-motion for summary judgment, thereby upholding OFAC’s designation of Tornado Cash under the IEEPA. This judgment underscores the legal challenges faced by privacy-centric blockchain services in light of national security and foreign policy concerns.

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Vodafone DAB and Chainlink Labs Unveil Blockchain Solution to Streamline Global Trade

Vodafone’s Digital Asset Broker (DAB) and Chainlink (LINK) Labs have unveiled a proof of concept (PoC) in collaboration with Sumitomo Corporation and InnoWave. This initiative aims to tackle the inefficiencies entrenched in the mammoth $32 trillion global trade arena.

The core of the demonstration lay in the fluid exchange of pivotal trade documents across varied platforms and blockchains, a process often hampered by disjointed systems. The prevalent use of inconsistent paper or digital platforms with subpar interoperability has been a major bottleneck across different sectors in global commerce. By leveraging Chainlink’s Cross-Chain Interoperability Protocol (CCIP) alongside DAB, the companies showcased a solution to ensure security and interoperability across IoT devices at network fringes. This fusion potentially paves the way for a unified interface facilitating secure data and token exchanges across both public and private blockchain networks, alongside IoT networks.

Real-World Application

An illustrative use case presented was a vessel autonomously transmitting data regarding a cargo fire to smart contracts via DAB’s platform and CCIP, potentially activating a marine cargo insurance procedure. This PoC underscores the capability of DAB-enhanced IoT devices and blockchains in delivering secure, trustworthy, and traceable data for smart contract, blockchain, and AI applications.

Trade Document Exchange

Furthering this initiative, the consortium will delve into the feasibility of global trade applications benefiting from DAB’s Economy of Things (EoT) platform. The EoT platform holds promise in empowering devices to autonomously serve as reliable data sources during trade processes, and also leverage DAB’s prowess for enhanced financial transaction processing. During SmartCon 2023 in Barcelona, Spain, a demonstration showcased how trading entities could circumvent unnecessary cargo transit delays by smoothly transferring a digital bill of lading between multiple stakeholders across several blockchains.

Vodafone DAB Joins Chainlink Network

A noteworthy development is Vodafone DAB’s fresh alliance with Chainlink Labs, marking its entry as a Chainlink Network node operator. This positions Vodafone DAB as a key player in facilitating enterprises and businesses to create and deploy smart contracts by ensuring secure and streamlined data exchange and computation. Chainlink’s decentralized oracle networks act as conduits between on-chain smart contracts and off-chain real-world occurrences and data.

The involvement of top-tier entities like Vodafone DAB and Chainlink Labs in devising solutions to longstanding global trade issues showcases the vast potential of blockchain technology. With 3 billion IoT devices projected to transact in the economy of things by 2030, securing consensus and validation between DAB and Chainlink will be pivotal in propelling this growth.

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Web3 Foundation Announces Over $1.1M in Grants Under Wave 19 Program

The Web3 Foundation has recently concluded its 19th wave of grants, dedicating over $1.1 million towards 33 different projects under the Web3 Foundation Grants Program. This wave witnessed a submission of 100 applications, marking the highest in over two years. The foundation highlighted its 600th grant and the processing of the 1000th milestone within this period. The burgeoning Polkadot developer community, now ranked second globally after Ethereum, accentuates the innovation and zeal of teams within this ecosystem. The Grants Program remains a pivotal part in fostering these teams and enticing new developers, enhancing Polkadot’s reputation as one of the most vibrant communities in the Web 3.0 domain. This initiative is aimed at facilitating the upcoming array of innovations through an accessible, transparent, and open grants program.

A noteworthy trend in this wave was the emphasis on tooling grants aimed at augmenting smart contract capabilities, specifically on Polkadot’s ink! smart contracts. The intent is to bolster developer tools for swifter and more secure contract development, focusing on testing, analysis, and enhancing developer interaction with ink! smart contracts. Additionally, projects centered around data analysis emerged, as illustrated by the Data Analysis Tools and Analytics Platform Request for Proposals (RFPs), currently being handled by three distinct teams.

The foundation also approved several grants pertinent to the core infrastructure of Polkadot including wallets, chains, and pallets, which are deemed crucial for the holistic benefit of the ecosystem.

Similar to the preceding wave, a substantial number of grant proposals were in response to RFPs, indicating a dynamic and evolving RFP list open to new proposals. Current topics of interest encompass formal verification, anti-collusion mechanisms, cross-chain messaging, and account security.

The recipients of Wave 19 grants span across various domains including User Interface, Chains and Pallets, Smart Contracts, Tools, APIs, Languages, Research, and Wallets. Some notable recipients include:

User Interface: DOTLY by justmert, Polkadot Analytics Platform by MOBR Systems, and Hyperdot by Infra3.

Chains and Pallets: Melodot by ZeroDAO, On-Chain Automated Treasury Management by Centrifuge, and Storage solution on Polkadot by Eiger.

Smart Contracts: Contract Wizard by Protofire, Roloi — XCM Payment Automation by NeoPower Digital, and DAOsign.

Tools, APIs, and Languages: Ocelloids XCM Transfer Monitoring Service by SO/DA zone, DelightfulDOT by Coong Crafts, and Polkadot Snap Maintenance by ChainSafe.

Research: StorageHub by Moonsong Labs.

Wallets: Research and development MPC ECDSA by Orochi Network, Distributed Cryptography for Polkadot Wallets by PolyCrypt GmbH, and dApps/Wallet integration native mobile libraries by Tesseract.

The Web3 Foundation continues to welcome new proposals as the Web 3.0 ecosystem unfolds and matures. The application process is streamlined, involving a simple submission of a pull request to the grants program repository. The foundation advises potential applicants to meticulously outline a comprehensive roadmap to enhance the likelihood of approval. They also provide resources and guidelines to aid in the application process, alongside a platform for obtaining more information or tips for crafting an exceptional application.

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Temasek invests in algorithmic currency system

Temasek, the government-owned investment firm of Singapore, has recently invested $10 million in Array, a developer of an algorithmic currency system based on smart contracts and artificial intelligence. Array has announced that the funding round marks its second, raising its valuation to over $100 million.

The new Temasek-backed algorithmic currency system is aimed at providing a more stable, efficient, and scalable asset than traditional cryptocurrencies like Bitcoin. The system is expected to have a variety of use cases, including payments, remittances, and investments.

Array’s smart contract platform, ArrayFi, is designed to enable decentralized applications built on top of its network and driven by its proprietary AI algorithm ArrayGo. ArrayGo operates independently, without any human or institutional control, and is triggered solely by market actions. According to a Medium blog post by the Array team, a traditional bonding curve is implemented manually to ensure the value of the token remains stable and predictable for investors and traders indefinitely. The bonding curve is implemented into a smart contract that governs the issuance and trading of the native token Ara (ARA). The smart contract platform also aims to protect Array users against “pump and dump” schemes.

Temasek’s investment in Array comes several months after the Singapore government admitted that the company suffered reputational damage due to investing in the collapsed crypto exchange FTX. In November 2022, Singapore’s Deputy Prime Minister Lawrence Wong argued that Temasek suffered more than just financial losses due to investing in FTX.

Despite suffering significant losses, Temasek continues to invest in cryptocurrency projects. In April, Temasek also participated in a $10 million series A round for the United States-based impact-verification and intelligence firm BlueMark.

Temasek is fully owned by the Ministry of Finance but operates independently. The company was forced to write down its entire $275 million FTX investment, which accounted for just 0.09% of Temasek’s $403 billion portfolio as of March 2022. Despite this loss, Temasek continues to be a major investor in various industries, including technology, healthcare, and financial services.

In conclusion, Temasek’s investment in Array highlights the company’s continued interest in cryptocurrency projects despite significant losses in the past. The new algorithmic currency system developed by Array aims to provide a more stable and efficient asset than traditional cryptocurrencies, with a variety of use cases such as payments, remittances, and investments. With the backing of Temasek, Array’s valuation is set to exceed $100 million, indicating significant potential for growth and development in the future.


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Visa New Crypto Initiative

Visa, a leading global payment corporation, has announced its latest initiative focused on stablecoin payments. This move is part of the company’s ongoing exploration of the potential benefits of the cryptocurrency industry. Visa’s latest cryptocurrency-related endeavor was unveiled by Cuy Sheffield, the company’s head of crypto, via Twitter on April 24th. Visa made the announcement. A new cryptocurrency product has been developed to promote the extensive use of public blockchain networks and stablecoin transactions.

Visa is on the hunt for software engineers with specialized skills in programming, backend systems, and Web3 technologies. The goal is to create innovative products that simplify digital commerce in our daily lives. The organization is seeking potential employees with prior experience in writing and debugging smart contracts using Github Copilot and other AI-assisted engineering tools. In the latest job posting, the preferred qualifications for the position include a comprehensive understanding of layer 1 and layer 2 solutions, proficiency in writing smart contracts using Solidity programming language, and familiarity with both public and permissioned distributed ledger networks, security protocols, private key custody, and Ethereum enhancements like ERC-4337.

Visa’s venture into the cryptocurrency market in 2020 has led to the development of a new cryptocurrency product. In a recent development, the business has partnered with the blockchain startup Circle to facilitate the integration of the stablecoin USD Coin (USDC) on a specific set of credit cards. In the face of a challenging market for cryptocurrencies in 2022, Visa has reportedly postponed a number of new industry partnerships. Despite the company’s efforts to expand its crypto offerings, setbacks such as the struggles of Celsius and FTX have contributed to a more cautious approach.

Visa has announced a new crypto project, signaling the company’s increasing involvement in the cryptocurrency and blockchain industry. The move also highlights Visa’s desire to promote the widespread adoption of stablecoin payments. Visa’s goal to encourage widespread use of stablecoin payments is a testament to the growing interest and demand for this type of currency. In a recent development, Visa has launched a new cryptocurrency product that is expected to have a significant impact on the growth and progress of the industry. As more companies and individuals begin to recognize the benefits of cryptocurrencies, this latest offering from Visa is poised to play a crucial role in their adoption.


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Ethereum Layer 2s See Surge in Popularity in Q1 2023

Ethereum layer 2 networks, including Optimism, Arbitrum, and Polygon, saw a surge in popularity in Q1 2023, according to a report from Web3 development platform Alchemy. The report, titled “Web3 Development Report,” cites data from Dune Analytics and shows that Ethereum users bridged over $635,000 worth of crypto assets to these networks from January to March, a significant increase of 44% over the fourth quarter of 2022 and 518% over the first quarter of 2022.

The growth in bridged assets may have been driven by successful airdrops from Optimism and Arbitrum in Q1 2023, as suggested by the Alchemy report. Additionally, layer 2s saw greater activity from developers, with the deployment of smart contracts related to layer 2s increasing by 160% compared to Q1 2022, despite a 30% decrease from Q4 2022.

Layer 2s have been offered as a solution to Ethereum’s scalability problem, which has been causing high gas fees since as early as 2020. By enabling more transactions to be processed off the main Ethereum network, layer 2s can significantly reduce the fees required to interact with the blockchain. As a result, users are increasingly turning to these new scalability solutions.

This trend is reflected in the broader Ethereum ecosystem, with increased developer interest observed in Q1 2023. According to the Alchemy report, Ethereum software development kits (SDKs) such as Ethers.js, Web3.js, Hardhat, and were downloaded 1.9 million times in the first quarter of 2023, an 8% increase from Q1 2022. Downloads of the MetaMask SDK, a tool used to develop apps that can interact with Ethereum wallet MetaMask, also increased in each month of the first quarter.

The crypto industry is coming off the back of a steep downturn in trading volume and crypto prices during 2022, with scandals like the UST depegging and FTX collapse causing many investors to shy away. However, despite this negative sentiment, users still flocked to these new scalability solutions.

While layer 2s have proven to be a useful tool for improving Ethereum’s scalability, some experts have argued that sharding the Ethereum network will also help to cut down on gas fees. Sharding involves breaking up the Ethereum network into smaller, more manageable pieces, allowing for more parallel processing of transactions. Ultimately, a combination of solutions will likely be necessary to address Ethereum’s scalability challenges and keep up with growing demand.


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Astar Network Launches Second Iteration of Smart Contracts

Astar Network Launches Second Iteration of Smart Contracts, Supporting Ethereum Virtual Machine and WebAssembly Virtual Machine

Astar Network, a multichain decentralized application (DApp) protocol, has announced the launch of the second iteration of its smart contracts on its mainnet on April 6. This iteration will support both Ethereum Virtual Machine (EVM) and WebAssembly Virtual Machine (WASM VM), and the Astar team claims that having both virtual machines and allowing interactions between the two is a “key success factor” in an emerging layer-1 blockchain.

According to the Astar team, even though the Ethereum network brought about the Web3 revolution through smart contracts, it cannot build the future of blockchain on its own. Therefore, Astar Network is offering an alternative for developers who want to utilize the benefits of both EVM and WASM VM.

To celebrate the launch, the Astar team has invited community members to a panel discussion led by its executives and various Polkadot developers to discuss how WASM can be utilized. The company will also meet with its infrastructure partners who will build the foundations for the WASM environment.

This announcement comes as Ethereum layer-2 scaling solution Polygon has recently released its zkEVM beta to its mainnet, allowing developers to deploy smart contracts at lower costs. Polygon founder Sandeep Nailwal described zero-knowledge (ZK) proofs as the “holy grail of Ethereum scaling.” The release of Polygon’s zkEVM beta and Astar Network’s launch of its second iteration of smart contracts both offer alternative solutions for developers who want to utilize the benefits of Ethereum scaling.

Meanwhile, the Web3 Foundation, the team behind Polkadot, has once again argued that the Polkadot (DOT) token is not a security. On Jan. 26, the firm restated that DOT has already morphed away from being a security and said that the United States Securities and Exchange Commission has welcomed talks with the firm.

In conclusion, Astar Network’s launch of its second iteration of smart contracts that support both EVM and WASM VM offers an alternative solution for developers who want to utilize the benefits of both virtual machines. As the blockchain industry continues to grow and evolve, it is likely that we will see more alternative solutions and protocols emerge to meet the demands of developers and users alike.


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Forsage Founders Indicted for Alleged $340 Million “Global Ponzi” Scheme on Ethereum Blockchain

A federal grand jury in the District of Oregon has handed down indictments against the individuals who are believed to have been the masterminds behind the “global Ponzi” scam known as Forsage, which is said to have generated $340 million.

According to a statement released by the Department of Justice (DOJ) on February 22, the four Russian founders, Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov, have been formally accused of having key roles in the scheme that raised approximately $340 million from victim-investors. This information comes from the formal accusation.

U.S. Attorney Natalie Wight for the District of Oregon stated that “today’s indictment is the result of a rigorous investigation that spent months piecing together the systematic theft of hundreds of millions of dollars.” She also stated that “bringing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies.”

Forsage promoted itself as a low-risk, decentralized financial platform that was based on the Ethereum blockchain and offered customers the opportunity to create passive income over the long term. Blockchain analytics, on the other hand, allegedly shown that eighty percent of Forsage “investors” got back less money than they had initially contributed.

Analysis of the smart contracts, as reported by the Department of Justice (DOJ), indicated that monies that were obtained when new investors acquired “slots” in Forsage’s smart contracts were routed to older investors, which is consistent with the definition of a “Ponzi scheme.”

Forsage has an active Twitter account, on which they recently posted a thread saying that community members who take part in “The Ambassador Program” will be able to receive monthly incentives by accomplishing certain activities. The tweet was published on February 22.

The Securities and Exchange Commission filed charges of fraud and selling unregistered securities against the company’s four founders and seven promoters on August 1. At the time, acting chief of the SEC’s Crypto Assets and Cyber Unit Carolyn Welshhans said: “Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”

Back in 2020, the Philippines Securities and Exchange Commission had also raised concerns about Forsage, indicating that it may be a Ponzi scheme. However, one month later, the platform remained the second-most popular decentralized application (DApp) on the Ethereum blockchain.

When a prosecutor brings criminal charges against an individual or group and accuses them of committing an offense, this is referred to as a charge. However, an indictment is filed by a grand jury if prosecutors are successful in persuading a majority of the grand jury members that a formal accusation is warranted following an investigation.

The use of grand juries is widespread practice in the prosecution of significant federal and state criminal crimes.


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Real Vision CEO believes NFT will act similar to high-end property

Raoul Pal, CEO and co-founder of Real Vision, speculates that nonfungible tokens (NFTs) would behave similarly to “high-end property” in the old economy and will outperform Ether (ETH) during boom cycles in the cryptocurrency market.

The former executive at JPMorgan offered a rundown of what he felt most bullish about when it came to NFTs in a video that was uploaded to YouTube and published on February 20. The video lasted one hour and covered topics such as key use cases for the asset class, its underlying technology, and its potential performance in comparison to Ether.

According to Pal, in the same way that “high-end property” often outperforms the market when the “economy rebounds,” it is expected that the same will occur with specific NFTs during boom cycles in the cryptocurrency market.

“Therefore, I am able to transfer my ETH into a JPEG, which is an NFT. However, why? If you like, you can think of a [Crypto]Punk as a high-end property in London or New York or Hong Kong or wherever it is, and when the economy starts booming and people have more money, they tend to buy expensive high-end property. “Well, because much like high-end property and think of a [Crypto]Punk as a high-end property in London or New York or Hong Kong or wherever it is.

In addition to this, it has a history of outperforming the majority of the market. And I believe the same thing will take place in the ETH economy,” he went on to say.

He brought attention to the fact that major collections such as CryptoPunks and the Bored Ape Yacht Club (BAYC) have become status symbols in the cryptocurrency community. This is analogous to the fact that owning a luxury home, car, or item from a well-known brand provides access to exclusive clubs or what he referred to as “mini network-states.”

NFTs, he said, provide a “means of owning property in the ETH market.” He went on to say that humans are “stupid” and that we “love to socially signal things.” ETH is a cryptocurrency.

In retrospect, the former manager of a hedge fund stated that it was the year 2022 when non-fungible tokens (NFTs) first began to attract his attention because he began to “understand the power of what they are and what they can do.” This included the ability to transfer “value” using blockchains and automated smart contracts.

He also brought up the applications of NFTs in the resolution of contracts, saying that blockchain-based ledgers can offer verifiable transparency on what has been agreed upon between people, while smart contracts can, in essence, do away with the need for unnecessary third parties. He cited these applications as an example.

“Now, what’s interesting about the smart contract element of a networked financial transaction is the fact that it kind of allows for the settlement mechanism to be automated in code and resolves without the need for a third party, so you don’t need the courts, the lawyers, the notaries, and the accountants,”

Pal said that ever since he began investing in NFTs, he has placed around ten percent of his ETH holdings in “premium NFTs,” such as CryptoPunks and BAYC NFT.

As a result of the fact that such collections have been able to maintain a respectable level of value throughout the bad market, he hypothesized that they may possibly provide greater upside potential than negative danger. He is also of the opinion that there will be a rise in the price of ETH in the future.

“When measured in terms of ETH, the prices of CryptoPunks and Bored Apes have shown an astonishing lack of volatility over the last several days. Yes, they had a blow-off top, and once it subsided, they returned and have been trading about 65 ETH ever since. And the fact that they didn’t fall too much farther is something that fascinates me about it. During the large crypto market crash in June, they had a strong rise. Aside from that, though, they have just made a comeback and have maintained their position at 65 ETH. Therefore, whatever ETH does, they are just replicating it,” he said.


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