Firms Enable Crypto Payments; Blockchain Deployed for Luxury Goods, A&D and Postal Services; NFT Hype Continues; Turkey Bans Crypto; DeFi Hacked for $80M | BakerHostetler

Companies Enable Crypto Payments, Reports Address Market Developments

By: Keith R. Murphy

A major U.S. fintech and payments company recently announced that it has begun allowing its customers to buy, sell and hold cryptocurrency directly through its peer-to-peer payments app. Users are permitted to choose among bitcoin, ether, litecoin and bitcoin cash for their transactions, and they also can access in-app tutorials to learn more about cryptocurrencies. The company’s parent company previously obtained a BitLicense from the New York State Department of Financial Services, which enabled this new offering, according to the company’s press release. In related developments this week, a major U.S. news magazine announced that it is now accepting payment in cryptocurrency for digital subscriptions to its content, and a global shared-workspace provider announced that it will begin accepting payment in various cryptocurrencies.

Gemini, a regulated cryptocurrency exchange, has issued its “2021 The State of U.S. Crypto Report,” accessible on the company’s website. The report contains the results of a survey of nearly 3,000 investors and cryptocurrency-curious consumers and focuses on key trends identified by the survey.

A Big Four accounting firm released its newly launched “Global CBDC Index,” which the firm states was issued to allow readers to monitor the ongoing transformation caused by Central Bank Digital Currencies (CBDCs) globally. According to a press release, the index is “designed to measure a central bank’s level of maturity in deploying their own digital currency” and focuses on two main CBDC operational designs: retail CBDCs, which are held by individuals and corporates, and interbank, or wholesale, CBDCs, relating to financial institutions.

Also this week, a large international bank and credit-card issuer released its Global Perspectives and Solutions report, which addresses CBDCs, China’s work in developing its own CBDC, stablecoins and cryptocurrencies, among other major topics. The report notes the soaring interest in cryptocurrencies and notes that among other effects, the tokenization of money could modify, reduce or eliminate the roles of incumbent financial intermediaries and existing payment forms, such as checks and cards.

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Blockchain Solutions Deployed for Luxury Goods, A&D and Postal Services

By: Jordan R. Silversmith

A French luxury goods conglomerate recently announced a new partnership with two other major European luxury goods businesses to develop the first global luxury blockchain, Aura Blockchain Consortium. The goal of founding Aura is to provide customers greater transparency and traceability through the life cycle of a product. With authenticity and traceability so crucial to the industry, the conglomerate said that “it made sense for these competitors to work together to drive change and develop a shared solution.”

An American aerospace and defense (A&D) company recently signed a strategic partnership with a blockchain company that will grant it access to the blockchain company’s secure supplier intelligence platform, which connects Original Equipment Manufacturers (OEMs) to members of Swissmem, the Swiss association of mechanical and electrical engineering industries. The blockchain platform will allow for OEMs to be matched with subject matter expert supplier capabilities across Switzerland.

In another recent development, the U.S. Postal Service has certified a U.S. company to begin producing blockchain-generated ePostage labels. According to a press release, USPS ePostage labels will use nonfungible token (NFT) mail technology to create the world’s first blockchain-supported postage.

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Charitable NFTs Raise Millions, Soccer Player Pelé Announces His First NFT

By: Veronica Reynolds

Last week, Mick Jagger auctioned an NFT to support indie music venues. The token includes a 30-second visual of a person running through skulls with “Eazy Sleazy” (a song recently released by Jagger and Dave Grohl) playing in the background. The token sold via a 24-hour auction on Nifty Gateway and fetched a price of $50,000. Proceeds went to two local charities that support independent music venues in the United Kingdom and the United States (Music Venue Trust and the National Independent Venue Association).

Another charitable NFT depicting Edward Snowden auctioned for $5.44 million on Foundation (a platform that facilitates NFT auctions) last week. The token is called “Stay Free,” and the $5.44 million closing bid makes it one of the most expensive NFT sales. Like “Eazy Sleazy,” proceeds from “Stay Free” will go to charity – this time to the Freedom of the Press Foundation. The NFT is based on a photo by the visual artist Platon and includes Snowden’s face overlaying court documents related to the 2013 leak that exposed the NSA’s domestic surveillance program.

The famed soccer player Pelé recently announced he will be launching his first NFT. The artists, Kingsletter and Visual Lab, have been working on the soccer player’s digital trading card collection for months, and the first card will be released on May 2 with Ethernity Chain. Ethernity Chain was built on the Ethereum Network and specializes in donating proceeds from digital art to charitable causes. Ninety percent of proceeds from Pelé’s collection will go to his namesake foundation.

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DOJ Actions Cite Crypto Use, Turkey Bans Crypto, DeFi Hacked for $80 Million

By: Joanna F. Wasick

Last Thursday, the U.S. Department of Justice (DOJ) announced that two men were charged with producing false identity documents and aggravated identity theft in connection with operating an illegal e-commerce business known as “SecondEye.” From at least 2011, the individuals, through various versions of its website, electronically produced, sold and transferred digital versions of false government-issued identity and other documents. As part of the operation, the defendants accepted more than $1.5 million in bitcoin transfers from customers.

This week, the DOJ announced that another individual, Sheng-Wen Cheng, pled guilty to various fraud charges for engaging in a scheme to fraudulently obtain more than $7 million in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic. Part of Cheng’s fraud involved lying to investors in his blockchain-based peer-to-peer lending platform.

The Central Bank of the Republic of Turkey recently introduced legislation banning the use of cryptocurrency for payments throughout the country. The payments ban is set to go into effect on April 30; the trading of cryptocurrencies appears to be unaffected by the regulation. In related news, following the announcement of the new regulation, hundreds of thousands of users of a Turkish cryptocurrency exchange, Thodex, were allegedly left unable to access their digital assets after the trading platform abruptly halted trading Wednesday, spurring fraud allegations and criminal complaints. The CEO of the exchange is reportedly missing.

Earlier this week, a decentralized finance (DeFi) Polygon Network-powered protocol, EasyFi, reported it suffered a hack in which $80 million of assets were stolen. The hacker reportedly transferred out 2.98 EAST tokens and $6 million from liquidity pools in U.S. dollars, Dai and USDT. Amounts were then allegedly transferred to an unknown wallet on the Ethereum network. A $1 million reward has been offered by the company’s CEO and founder to the hacker for returning the funds in full.

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