With the help of Sam Sutton
For the past few weeks, I saidOn-chain analysis“” Cryptocurrency, And that can and cannot tell regulators about the mechanism of the crypto financial crisis.
Analysis is an important part of the crypto industry.Theoretically, the shared public blockchain behind each cryptocurrency should do it Making the system more transparent than traditional finance, companies scrutinize data for important information about currency flows. In reality, however, the data doesn’t tell much, and even experts often have to rely on guesswork to understand what actually happened.
The court is now moving to the limits of on-chain analysis, courtesy of the D Finity Foundation, a Swiss non-profit organization operating on a blockchain network called the Internet Computer.
Last week, Dfinity sued Arkham Intelligence, a crypto research firm in the New York Times and southern New York, for defamation and unfair trading practices related to the June 2021 Times article on the plunge in blockchain token prices. Insisted.
The complaint alleges plans to coordinate the misleading coverage of the Internet computer project, which was backstage-backed by an unnamed “ultra-rich” party. The alleged goal was to suggest that insiders would make a profit when the token price plummeted and the average investor would still have a bag.
According to the complaint, the Times article relied on Arkham’s misleading analysis of the project’s blockchain records.
In the details of the arrest, the complaint alleges that the author of the problematic Arkham report fled Austin to London, where they “live in a huge mansion, and also” CryptoLeaks.Info. ” It cites a website called and aims to show that people affiliated with Arkham are confessing to being guilty of a secret video sting.
The Times supports the story. “We are confident in the accuracy of the report and will be willing to defend the proceedings,” said Times spokeswoman Daniel Rhodes Ha. Arkham did not respond to requests for comment.
Corporate conspiracy and private intelligence settings are not new In the financial world.But at the heart of the complaint is the allegation that the defendant misunderstood the public. On-chain data in a way that is detrimental to Dfinity.
Both sides seem to agree with the naked facts that the analysis showed: Or Tokens distributed by Dfinity to a small group of addresses were quickly moved to the address associated with the crypto exchange.The question is what it is meaning.. According to the complaint, the defendant mistakenly implied that these moves implied large-scale sales of tokens by insiders. The complaint provides another explanation: the token was transferred to the wallet on the exchange for storage.
(There is also controversy over whether Internet computer tokens are eligible for security. Ambiguity of regulation For many blockchain tokens. )
Whether or not this particular case goes to court, it is a sign that the court must start working on a new area of on-chain analysis, and that it can and cannot be reasonably guessed.
Linked yesterday essay How blockchain takes the role of contract enforcement from the state by Professor Anthony Lee Zhang of the University of Chicago. The good news for the court is that if this proceeding is any sign, there is enough secondary debate about exactly what happened on the chain and they can stay in business for a long time to come. ..
Cryptocurrency exchange Coinbase quietly sells blockchain analysis and geotracking tools to Immigration and Customs Enforcement agencies, further chilling Rivertarian claims about the usefulness of crypto to circumvent government oversight. I am.
Coinbase’s push to build relationships with federal law enforcement agencies is widely covered, but for crypto exchange 63-page contract In addition to software tools that help criminals choose a maze of blockchain-based transactions that can be used to hide fraudulent payments, it provides ICE with “historical geographic tracking data.”The existence of the contract was first reported Intercept..
Brian Armstrong, CEO of Coinbase, has criticized government-led attempts to monitor and limit cryptocurrency transactions in the past. In February, Armstrong was in the midst of a truck driver’s protest that clogged downtown Ottawa and crippled trade between the United States and Canada. Encouraging people to transfer crypto assets If the Canadian government is concerned about freezing your account, go to a self-hosted digital wallet.
In an email, Coinbase spokesperson Caryn Leahy provides law enforcement and financial institutions with “streamlined access to public data,” but does not share “internal or customer data.” Coinbase is “a decentralized spirit in which cryptography was established.”
-Sam Sutton
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