Drama this week will forever be recorded on the blockchain. Millions of dollars worth of funds are due to be contested in the courts, following allegations of criminal misconduct against the Canadian based Einstein exchange.
The British Columbia Securities Commission levied a charge against the company, investigating claims that it had misallocated and misused customer funds. Lead investigator, Sammy Wu tried to enter the exchange’s offices, but nobody would pick up the phones, and the elevators were locked to all floors.
Wu was able to piece enough together to bring a case against the exchange, and the courts will put Wu’s findings to the test. If Wu’s case goes through, Einstein could owe customers more than $16 million.
In another high profile legal spat, Bitcoin Manipulation Abatement LLC has filed a $150 million lawsuit against crypto derivatives exchanges FTX and trading firm Alameda Research LLC—which shares its CEO with FTX. The lawsuit, filed Sunday and amended Monday, alleges that the CEO and multiple employees twice unsuccessfully tried to manipulate Bitcoin prices on cryptocurrency exchange Binance.
Alameda Research took to Medium to trash the “nuisance suit”, saying it was “riddled with laughable inaccuracies, including mistaking the entire business model of Alameda.” “The troll has no evidence of any wrongdoing, and will not further discover any—because there was no wrongdoing to discover evidence of.” To be decided in the courts.
In China meanwhile, the country has caught blockchain fever after China’s President, Xi Jinping urged the industry to accelerate the development of blockchain technology. Per the president’s speech late last month, blockchain is “a key breakthrough that can facilitate China’s progress in core technologies.” In the wake of the President’s proclamations, the price of Bitcoin rose by 24 percent the next day; stocks in blockchain-companies skyrocketed; and the China Communications Industry Association suggested that October 24 be forever celebrated as “Blockchain Day.”
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That lead to China’s government, long presumed to have taken a hostile stance against cryptocurrencies, to declare the country’s huge crypto mining industry is, indeed, safe. The country’s government-controlled economic planning agency recommended not to phase out the industry, despite putting it on a list of industries not to be encouraged six months ago—which led to a widespread belief that it would inevitably be banned.
A new report from the International Data Corporation subsequently showed that the blockchain industry in China is booming. Though trailing behind Europe and the US, the report predicted that Chinese businesses would spend $2 billion on blockchain by 2023, and that they’d already spent $319 million this year. Our European friends meanwhile spent $674 million, and our US friends spent $1.1 billion.
The Bank of China’s insurance arm launched an insurance blockchain system this week, according to Decrypt own reporting of, er, Sina Finance’s own reporting of, er, Bejing Business News’ reporter, Men Fanxia Li Yujie. But, if the Chinese reporters (and Google Translate) got things right, then the “China Banking Insurance Information Alliance Chain”, built on Hyperledger Fabric, is used to store insurance policies in one place. By the end of September, the insurance company had accumulated more than 4 million electronic insurance policies.
But before you start breaking out the blockchain-backed champagne, China isn’t pro blockchain in all the ways. In an article that run in the People’s Daily this week, it said using blockchain to “store and spread illegal information”, for “illegal transactions” like money laundering, “should be severely punished.”
Other governments have been kind to crypto; this week, cryptocurrency exchange giant Binance, once known for running from governments, signed a memorandum of understanding with the Ministry of Digital Transformation of Ukraine. Ukraine, which recently hired a new pro-crypto minister, wants Binance, the privately run cryptocurrency company, to help it work out how best to serve its citizens. Per Binance’s press release, Binance will help the Ukrainian government develop “transparent and effective mechanisms” for crypto sales, and “beneficial conditions for investments and business in Ukraine.” The working group hope to present something to the Ukranian parliament before the year is out.
This week also saw the end of the feud between the House of the Zcash Foundation and the House of Electric Coin Company, who spent several busy months this year working out how to handle Zcash trademark. The Electric Coin Company held the trademark, but handed it over to the Zcash Foundation. Yet there were several terms and conditions attached: Zcash now have to maintain the trademark—a lengthy and costly affair—and if Zcash ever, ever go[es] against the clear consensus of the Zcash community,” the Electric Coin Company will step back in charge. And “both parties must agree on any network upgrade that is intended to create the new consensus protocol of Zcash.” If they can’t agree, then “the chain splits and neither implementation — neither the new one nor the existing one—can be called Zcash.”