Starbucks NFTs, Reddit karma points on the blockchain, Saylor fired, Telegram ICO weak return – Attack of the 50 Foot Blockchain

by · August 17, 2022

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“Please, God, I’m not asking much of you. But give me this. A video of a sad cryptobro trying to get a beat cop to file a police report about his stolen monkey jpeg.”

There is very little sadder or funnier than corporate NFT projects launching after crypto crashes. Starbucks’ NFT program is the latest. “Additionally, the digital program can give customers a reason to care about NFTs.” Yeah, uh, okay. [TechCrunch]

Why did Starbucks want to do an NFT? Because Starbucks owner and CEO Howard Schultz thinks this will be a shiny object to distract his Generation Z workers from wanting to unionize. Yes, I know nothing in that sentence isn’t stupid. Remember, this is the guy who ran for president with a logo that was his name with his name on it. [Vice]

If all your monkeys are gone, OpenSea will freeze your NFTs! However, “if we do not receive a police report within 7 days, we will reactivate buying and selling for the reported item. This change will help prevent false reports.” [Twitter]

Launched in December 2021, HitPiece sold NFTs for every record and artist on Spotify. The entire music industry found out about HitPiece in February 2022 and came down on it like a ton of bricks and all HitPiece websites were disabled within about four hours. “Now, six months later, HitPiece is back — and the company wants you to forget all about it this February.” No, I don’t think I want to. [InputMag]

Section header by Klyith at SomethingAwful.

And we all shine on

Reddit is a website filled with forums on every topic imaginable. You can vote posts and comments up or down, and that’s your “karma”.

Unfortunately, there are enough high-level hodlers that Reddit has promoted a stupid and bad idea called “Community Points”, where the karma points become ERC-20 tokens that you can buy or sell. Because who doesn’t love to pay to win, right?

On August 9, FTX announced that Reddit Community Points would be “integrated” with FTX. You can exchange your compound internet points on Ethereum. The points were already traded on UniSwap. [press release; FTX blog]

Reddit uses the Arbitrum Nova sidechain for its Community Points – but FTX says moving tokens will cost you the Ethereum gas fees. These are much lower since the crash, around $1.16 average transaction fee as I write this.

Reddit’s terms of service still state: “Community Points have no monetary value (ie, are not a cash account or equivalent), cannot be sold to other users, and cannot be exchanged for cash or for any other goods and services outside of Reddit’s virtual goods or services.” ” [Reddit]

Reddit tried to get into NFTs in June 2021, selling four “CryptoSnoos”. (“Snoo” is Reddit’s cartoon Romanian mascot.) [Reddit]

In July 2022, Reddit decided to enter Reddit Collectible Avatars, which are absolutely not NFTs – even though they are on the Polygon blockchain. [Reddit; The Verge]

“Collectable avatars” were met with disgust by the actual users. Some subreddits, like r/shadowban, started banning users with NFT avatars. [Reddit]

A month later, Reddit already seems to be quietly ignoring the Collectible Avatars initiative. [Reddit]

Good news for bitcoin

Mr. Saylor has now moved on to his next level…of maxi research. This level is beyond anything any of us have ever imagined. This level is actually done in an exterior condition. This means that it is done completely externally from MicroStrategy. At this level of maxi, the company is nothing more than an obstacle, a liability for further profit as maxi. Thus … At 8:00 PM on Friday, January 24, 36 AD, L. Michael Saylor discarded the company he had used in this lifetime for 74 years, 10 months and 11 days. The company he had used to facilitate his existence in this BTC universe had ceased to be useful and had actually become a hindrance to the work he now had to do outside its borders. We felt it was important as bitcoiners, that you be the first to become aware of this fact. [MicroStrategy]

Block, formerly Square, is Jack Dorsey’s main company now that he has left Twitter. The Square side of the business runs some useful and popular real-money payment systems, and does it very well! Unfortunately, Dorsey’s assorted bitcoin follies dragged the company to a loss of $208 million in Q2 2022. [Shareholder letter, PDF]

You know, in all the years I’ve been following crypto, I’d never heard of any shenanigans from the Gemini exchange. Well, the CFTC sure has, suing over a 2017 futures offering. [CoinDesk; CFTC]

An old bitcoin use case has been revived: finally killing markets! Iranian citizen Shahram Poursafi, aka Mehdi Rezayi, instructed the Justice Department’s confidential source to “open a cryptocurrency account to facilitate payment” to assassinate former National Security Adviser John Bolton. [Justice Department; criminal complaint, PDF]

Regulatory clarity

Alexander Vinnik has been extradited from Greece to the United States. Vinnik operated the BTC-e crypto exchange, the exchange of choice for crooks to cash out their ransom winnings while it was running. Vinnik is also believed to have stolen a whole bunch of bitcoins from Mt. Gox exchange in the early 2010s. The US charges are for receiving stolen US bitcoins at BTC-e. [Justice Department]

Apple and Google are under investigation for the fraudulent crypto apps in their supposedly curated app stores. Senator Sherrod Brown wants details on their process for reviewing these apps, and specifically how these scammers get through. Get your asses, Senator. [The Verge; letter to Apple, PDF; letter to Google, PDF]

A crypto staffer for U.S. Senator Cynthia Lummis told Forbes that all U.S. crypto exchanges, including Binance, are being investigated by the SEC. Good. [Forbes]

New York has fined Robinhood $30 million for compliance failures on the part of its crypto division. Robinhood Crypto had poor anti-money laundering controls and a compliance department that was understaffed to the point of unusability and had no consumer helpline. The crypto division tried to send compliance up to the main company, who were not good at it either. [DFS NY; consent order, PDF]

Ben Delo of BitMEX ended up getting 30 months probation for violating the Bank Secrecy Act. Delo previously paid a $10 million fine to settle a lawsuit brought by the Department of Justice and the CFTC. [CoinDesk]

I put my head and heart on the dance floor

I missed this in January – TONcoin, the completely unofficial crypto that uses the software for Telegram’s abandoned blockchain ICO that definitely had nothing to do with Telegram… could end up integrated into Telegram Messenger? [CoinDesk]

The new TON Foundation is in talks to launch stablecoins in Cameroon, the Democratic Republic of the Congo (DRC) and the Republic of Congo – in the central CFA Franc zone, which includes the Central African Republic, which passed an El Salvador-style law to make cryptocurrencies legal tender in April. [Forbes]

Remember that Telegram completely screwed up with the failed ICO, because they had to return all the investors’ money after they had already spent it.

A number of Telegram’s very good Russian investor friends have assured the Durov brothers that they are very happy for the Durovs to still enjoy the use of their kneecaps, if possible. This is why Telegram has asked users for money for “Telegram Premium.” [Telegram]

Put block

There is little more fun in crypto and blockchain than just going through the claims and watching the clown car disintegrate before your eyes. Niko Weh found a blog post that listed 34 enterprise blockchain projects that absolutely proved there were real use cases for blockchains! [BuiltIn, archive]

So he went through them. Most are dead, the blockchain bit does nothing, or it’s essentially a cryptocurrency project. The only one that isn’t all that is Chainalysis, which sells compliance services to real financial institutions – and that’s cryptocurrency too, really. [blog post]

Doctor Buck’s letter

Mailchimp is a non-spam email company. They just kicked off all their crypto customers: “Please note that we cannot allow businesses involved in the sale, transaction, trade, exchange, storage, marketing or production therein of cryptocurrencies, virtual currencies and any digital assets.” Even crypto news site Decrypt was hit. [Decrypt; Twitter]

The crypto world is doing out there no understandable reason for this action, and they do not understand it at all! But Mailchimp’s terms of service state the reason explicitly: “Some industries have higher than average abuse complaints, which can compromise deliverability. To maintain the reliability of our platform, we may not allow businesses that offer these types of services, products or content.” The crypto guys were just spammy as hell. [Mailchimp]

Coincidentally, a class-action lawsuit filed in April against Intuit, which owns Mailchimp, alleges that Intuit “willfully, intentionally, recklessly or negligently” failed to protect Mailchimp data, and that this led to cryptocurrency being stolen from The Trezor wallet. users. [complaint, PDF; PacerMonitor]

New facts emerge

‘Tis the season to break international sanctions with crypto! Iran’s trade minister, Alireza Peyman Pak, tweeted about paying for a $10 million import order with crypto. “By the end of September, the use of cryptocurrencies and smart contracts will be widespread in foreign trade with target countries.” [Twitter, in Farsi; The Register]

Charles Schwab has launched the Schwab Crypto Thematic Index, a cryptocurrency stock index! Well, it’s a crypto-related index. Well, it tracks companies that have an unspecified alleged relationship with crypto — “companies that may benefit from the development or use of cryptocurrencies and other digital assets.” The Schwab Crypto Thematic ETF, which tracks the index, charges a fee of 0.30%. [press release; Schwab]

64% of UK crypto investors borrowed money to deposit crypto. Now they are having some problems paying back. [KIS Finance]

Remember the Beanstalk DAO, which fell to a corporate attack via flash loans? They are relaunching, because I guess suckers still have some cryptos left. [The Block]

The crypto collapse has flooded the fancy watch market. Where is the John Biggs article, that’s what we’re wondering. [Bloomberg]

Guest informant

“I am a professor of computer science. Like my colleagues, I know that bitcoin technology is rubbish.” Old-school /r/buttcoin regular Jorge Stolfi interviewed in El Pais. The interview was conducted in English, so I am linking to that version. [El Pais]

“I left my simple six figure job in crypto because I couldn’t bear to market to such a confused group of individuals and the toxic web3 workplace. Although I even like some aspects of crypto… the online crypto communities are extremely bizarre.” [Reddit]

Live on video

Stefan Rust does a crypto podcast called Super Excited, and interviewed me on it. This turned out pretty well. Stefan is a long time bitcoin and crypto guy and this was a great chat. [YouTube]

The Biggest Crypto Scams of 2022 (So Far): We’re Only Halfway Through the Year! With some recommendations from me. [Mashable]

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