The lawyers representing Dr. Craig Wright in his lawsuit against Peter McCormack have confirmed that McCormack intends to abandon his defence of the lawsuit.
The lawyers representing Dr. Craig Wright in his lawsuit against Peter McCormack have confirmed that McCormack intends to abandon his defence of the lawsuit.
There is perhaps no better illustration of this than Blockstream, a company which perpetuates the problems faced by Bitcoin knockoffs and then offers its own solution to those problems, while attempting to destroy and censor the better solutions that already exist (and have existed since the release of the White Paper).
Blockstream a nexus point for the crypto crime cartel
Blockstream is a blockchain technology company founded by Adam Back. Its activities should be of great interest to the wider digital asset community: they have raised over $80,000,000 since going public in 2014. But for a company who promises to form the foundations for the financial infrastructure of the future, that money has returned very little other than the undermining of digital asset adoption and ensuring the personal enrichment of its founders.
If you understand what Blockstream actually is—and who is running it—then this isn’t a surprise. Straight from the Roger Ver playbook, Blockstream is a fundamentally ideological company masquerading as a non-partisan blockchain company.
The stated purpose of Blockstream, in Back’s words, is to “sell sidechains to enterprises, charging a fixed monthly fee, taking the transaction fees and even selling hardware.”
A sidechain is not a blockchain at all. The fees from sidechains do not go to miners—they go to the developer of the chain, in this case Blockstream. Sidechains are typically used to patch the holes in the capabilities of the underlying protocol. Therefore, the better Bitcoin becomes, the more obsolete companies like Blockstream become.
Blockstream’s Liquid sidechain is a perfect example. According to them, Liquid was created because Bitcoin’s supposed high-latency means that the volume of transactions which take place on-chain is going to be limited, so the solution is to move a large volume of transactions off the main chain and onto this sidechain.
This is laughable in itself because we know that the original Bitcoin does scale and was designed to do so—more on that in a moment.
But most important about Liquid is that it works by replacing the on-chain Proof-of-Work model with a system where Blockstream appoints a small group of market participants to validate the side-chain transactions themselves and then submit them to the main chain. This small group is called the Liquid Federation, and by and large consists entirely of digital asset exchanges.
If this is raising red flags already, it should. Not only is this not decentralized, as Blockstream audaciously claims, it is entirely centralized in a small hand-picked cabal (read: cartel) of exchanges with which they will trust the transactions they are trying to lure off-chain.
What kind of entity does Blockstream find suitable to give this kind of control to? Well, included in this ‘federation’ are such criminal enterprises as BitMEX and Bitfinex, both of whom have been shown to treat the digital asset economy and the money trusted to them as a private cash dispensary and in BitMEX’s case, at least, were complicit in the dubious Bitcoin SV delisting attacks.
Here’s Bitfinex executive Zane Tackett admitting the company seed invested in Blockstream and also into Shapeshift:
Despite BitMEX’s founders being indicted and Bitfinex coming under investigation for covering up an $850 million loss and using user funds to do so, both are still members of the Blockstream federation.
The solution Blockstream says it wants
Blockstream has built itself on a business plan which requires bitcoin—as originally conceived in the White Paper—to fail. Blockstream needs bitcoin to be unscalable, with a hard block cap to ensure that mass adoption is impossible. Every failing of Bitcoin is a victory for Blockstream, because it allows them to provide a patchwork service on top of the original protocol to fill the need.
What does Blockstream make of Bitcoin SV, then? Bitcoin SV scales on-chain already, having demonstrated massive transaction volume and fractional cost. It does everything that Blockstream says Bitcoin can’t do.
In reality, the millions that have been funneled to Blockstream have funded the on-going misinformation campaign which passes the various Bitcoin imitators off as the real bitcoin and in which the proponents of the true bitcoin are subject to libel, slander and harassment.
In addition to being the person behind Blockstream’s business model, Adam Back has accused Bitcoin founder Craig Wright of lying about having invented Bitcoin, that he had forged the evidence which supports him, and that he had committed tax fraud. Back also inadvertently admitted that Blockstream employs a ‘large’ team whose job it is to ‘debunk and disprove.’ Given the scale of the misinformation peddled by Blockstream, it’s no surprise that they have a dedicated propaganda team, but Back’s admission of this is bold, to say the least.
Former Blockstream CTO Gregory Maxwell once provided a step-by-step guide to exploiting a possible vulnerability between BTC and Bitcoin SV which would allow users to steal unsplit coins. The vulnerability was not disclosed in accordance with Bitcoin SV’s bug bounty system, but was instead posted to social media site Reddit.
Speaking of Reddit, Maxwell was exposed for using multiple Reddit accounts to spread misinformation about bitcoin and denigrate Craig Wright. This is par for the course for Maxwell, who was banned by Wikipedia for bullying, harassment and using multiple accounts to reinforce edits he was making on Wikipedia.
Former Blockstream CEO and co-founder Austin Hill made his debut into the business world by scamming $100,000 out of unsuspecting Canadians. He placed advertisements in newspapers offering to pay people up to $600 a week to review television shows. Those that wrote in were asked to pay a deposit of $49 for a hastily cobbled-together training program, and Hill was relying on these people simply not completing the program. Hill has openly admitted to all of this. Rather than acting as a wholesome story about how Hill found the light and went on to work with Blockstream, the actual story reads more like a troubling origin story that is consistent with Blockstream, a company which is designed to profit from perpetuating the flaws of Bitcoin’s imitators.
Of the cofounders who don’t appear to be involved in theft, fraud and slander, most appear to be happy to leave Blockstream behind. Co-founder Matt Corallo said on Twitter that he’s embarrassed to have helped co-found the company. In response, Luke Dashjr, apparently another co-founder, speculated that Blockstream has let troll propaganda redefine the company.
Bitcoin loses out
Consider how corrupt Blockstream is, and the damage it is doing to those who have bought the false vision of Bitcoin that the likes of Adam Back have sold. Blockstream, employer of many BTC Core developers, creates and sells sidechains which exist to address flaws in the underlying protocol. The flaws that Blockstream is trying to address—like scalability—were actually all created by Blockstream themselves. The original protocol worked and still works today as BSV. Blockstream only exists to try to confuse the world on the design brilliance of the original protocol of Bitcoin, trading today only as BSV.
Bitcoin SV is the answer to the problem that Blockstream is pretending to solve: only Bitcoin SV’s solution precludes the likes of Blockstream entirely. Our thesis holds true: a good test for criminality is whether a company and its executives are in favor of Bitcoin SV and Craig Wright, or if they spend their time trying to tear them down. Blockstream continues to make a tidy sum by doing the latter, and the rest of the cartel are reaping the benefits as well.
That is how criminal cartels work, after all.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market." title="Crypto Crime Cartel: Blockstream needs Bitcoin to fail" />
Blockstream perpetuates the problems faced by Bitcoin knockoffs and then offers its own solution to those problems, while attempting to destroy and censor the better solutions that already exist.
Tether is pulling its support for Peter McCormack in Craig Wright’s libel suit, CoinGeek has learned.
The amendments apply to several statutes, and have been drafted with concern for the potential damage wrought by under-regulation in this area, balanced by the need for a commercially sensible regime which does not stifle industry growth. Throughout the consultation and drafting process, the Swiss Federal Council has made clear that the objective is to create the best possible framework so that Switzerland can continue to grow as a leading, innovative and sustainable blockchain and fintech destination.
Bitcoin Association’s Regional Manager for Europe, Patrick Prinz, said the changes had been a long time coming and sent a strong signal to the market.
“Regulators always take time to learn and understand the environment before acting,” explained Prinz.
“Globally, we are now entering a phase of execution, where regulators are beginning to directly engage by implementing new laws and legal frameworks, as well as removing those players who are intentionally disregarding the core rules of the cross-border investment game.”
The amendments introduce a new category of tokenized rights called ‘uncertificated register securities’ (Registerwertrechte/URS), analogous to security tokens. URSs share the same key features as traditional securities, but are able to be transferred digitally. Under the amendments, these assets must be registered on a distributed ledger technology (DLT)-based register and can only be transferred or claimed through that register.
They set out requirements for the DLT-based register, which include adequate security standards protecting the register against unauthorized changes. While the amendments do not go far into detail as to what qualifies as adequate, it does provide a list of well-known examples of adequate systems, including proof-of-work and proof-of-stake. The entity offering the URS must also disclose the details of the URS and the register being used. The amendment also stipulates the liability of the offeror if they do not meet their disclosure obligations.
Regarding exchanges, the amendments apply to the Swiss Financial Market Infrastructure Act. Specifically, it sets out the requirements for exchanges that are offering DLT-based securities (as distinct from payment assets, such as Bitcoin SV). It largely uses the existing wording regarding traditional trading venues. Most importantly, it allows the Swiss Federal Council and Swiss Financial Market Supervisory Authority to stipulate licensing requirements for these exchanges. Keeping in line with the attitude toward commercial practicality in the amendments, they are also given the discretion to make specific requirements for smaller exchanges which pose lower risks to the financial system and their customers.
Prinz expected the changes to create a more equitable environment for exchanges to operate in—a move he said would only be a positive for the industry.
“These moves by the Swiss regulator will have the effect of levelling the playing field for DLT exchanges and traditional exchange operators alike, as well as strengthening the requirements for service providers to retail customers to implement and obey both AML and transaction monitoring rules,” he explained.
“To date, I am still not clear why some digital asset service providers felt that they could operate in the dark, with existing rules and regulations not applying to them.”
The last big area to be impacted by the amendments is bankruptcy law. Legislators foresee digital assets playing more of a role in insolvency proceedings as adoption continues to increase. From next year, digital assets which rest with a third-party custodian are protected in case the custodian begins bankruptcy proceedings. Custodians must keep the digital assets available to the rightful owner at all times, and must be able to allocate the assets it is controlling to individual clients or an identifiable community of clients.
There are other, smaller amendments which are also important. Issuers of payment tokens and decentralized trading platforms are also now explicitly subject to Switzerland’s anti-money laundering requirements, meaning they will now have to take the same steps to prevent money laundering as traditional financial institutions. Offerors of URSs who exclusively serve institutional or professional requirements are no longer required to be affiliated with an ombudsman’s office, as was the case before. Those acting as custodians are also now required to obtain a FinTech license in situations where digital assets are accepted as deposits.
The amendments are far reaching, and Switzerland’s efforts to modernize existing legislation to accommodate digital assets means many already-understood rules and regulations can be applied to digital assets. At the same time, the Swiss Parliament has tried to avoid stifling the growth of the digital asset industry in the country by making practical allowances within the rules, especially for smaller entities who might have value to add to the ecosystem but would be unduly burdened by rules which are more appropriate for larger companies.
It’s important to note that the amendments still leave discretion to the likes of the Swiss Financial Market Supervisory Authority regarding issues such as licensing requirements, so there will be further developments in Switzerland once the amendments come into force next year.
“The values and mantra that underpin the moves by the Swiss regulator today are right in-line with Bitcoin SV: foster a regulation-friendly ecosystem that facilitates innovation in the digital currency space and blockchain industry, while respecting the rule of law,” said Prinz.
“Today, the regulator has made it clear that running a business comes with liabilities—something which must be glaringly obvious to even the most ignorant players in the market now.”
See also: CoinGeek Live panel on Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers.
https://www.youtube.com/watch?v=cGcz1LLXMJY&feature=youtu.be&t=23072" title="Swiss parliament approves raft of digital asset regulations" />
The Swiss Federal Council has made clear that the objective is to create the best possible framework so that Switzerland can continue to grow as a sustainable blockchain and fintech destination.
Larry Dean Harmon is accused of willfully failing to properly register Helix and Coin Ninja and willfully failing to implement an effective anti-money laundering program within either business.
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Lynn Wright is asking for a declaration from the Court that Ira Kleiman has no authority to use W&K to sue Dr. Craig Wright.
The move was announced by the U.K. regulator, representing the conclusion of more than a year’s worth of consultation.
There’s very little in the BitMEX indictments that couldn’t be said against cryptocurrency exchange Binance and its founders.
Much of CoinGeek Live was dedicated to the concept of scalability, a pre-requisite for the world to get behind one chain and reap the benefits.