08/19/19

Walmart Cryptocurrency, The Walmart Coin

A couple of weeks ago, Walmart announced that it had applied for a cryptocurrency patent thereby spawning speculation that Walmart Coin was being plotted.

It wasn’t Facebook with a crowd of the crypto Illuminati floating the idea of its Libra coin to be overseen by gnomes in Geneva. It didn’t attract a lot of fanfare, and it didn’t trigger Congressional hearings.

No, it was plain vanilla, retail behemoth Walmart, who without much pomp or even a twinge of circumstance said, “Hey, we might be interested in an actual application of that blockchain and cryptocurrency stuff.”

Who would have ever thunk it, Walmart?

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07/16/19

Libra v The Senate

Today, the US Senate grilled Facebook’s Chief Libracan about all things Libra.

David Marcus is actually the head of Facebook’s crypto wallet subsidiary, Calibra. He was offered up as a human sacrifice to the US Senate Banking Committee to lay out the Libra project.

Reports are he was able to walk out on his power.

David Marcus, head of Facebook's Calibra (digital wallet service), testifies before a Senate Banking, Housing and Urban Affairs Committee hearing on "Examining Facebook's Proposed Digital Currency and Data Privacy Considerations" on Capitol Hill in Washington, U.S., July 16, 2019.

Marcus had the polished demeanor of a patient who had a regular, weekly colonoscopy or a barbed wire enema just to keep his game sharp. At times, I detected a bit of the third-grade-geometry-teacher-helping-one-of-the-slow-kids tone in his voice. Guy was masterful at giving non-answer answers.

In general, the hearings started out as a hate fest with various Senators laying out the case against Facebook as a lazy protector of privacy whose motto is “Move Fast, Break Things.”

The fact that Facebook had just agreed to a $5,000,000,000 fine to the Federal Trade Commission (3-2 vote with the Republicans on the FTC controlling the outcome) for privacy mischief probably contributed to the generally angry-high-school-wrestling-coach reception of guys like Sherrod Brown, Democrat of Ohio.

“Like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over and called every arson a learning experience.”

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07/12/19

The Trump Bump — Cryotocurrency

President Trump had some choice words to share in regard to cryptocurrency and the Libra (Facebook) cryptocurrency in particular.

They were not flattering.

The President is “…not a fan…” and suggests that cryptocurrency will “…facilitate unlawful behavior, including drug trade and other illegal activity.”

His full quote was:

“I am not a fan of bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated crypto-assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

He had a lot more to say, but that is the money line.

The comments were magnified by those of US Federal Reserve Chairman Jerome Powell who said that he felt that cryptocurrency “…raises serious concerns.” [Hey, if you were casting a movie on the Fed Reserve — sexy action thriller kind of movie with Charlize Theron as a central banker — is this guy not the perfect Fed Reserve Chairman?]

Powell’s comments, though less widely reported, contained substantial beef as he noted that the existing regulatory scheme does not “fit digital currencies” which he indicated would have to be addressed before Libra could go forward. He specifically called out Libra thusly,

“Libra raises many serious concerns regarding privacy, money laundering, consumer protection, and financial stability.”

The President pointedly noted that if Facebook wanted to go forward with Libra they should get a bank charter. Your Big Red Car said the same thing some time ago.

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06/23/19

Facebank and Libra

Big Red Car returned from babysitting duties for My Perfect Grand Daughter. We are learning how to boogie board, but don’t tell her mother.

While gone, Facebook announced the impending creation of Libra, an asset-backed cryptocurrency that will transform life as we know it.

I have taken to calling the entire entire enterprise — Facebook, the Libra Association, and Libra — Facebank.

Image result for libra cryptocurrency images

Bit of cynicism on a Sunday — we can’t trust Facebook with our data, so let’s trust them with our money? OK, had to get that out of the way, let’s march on, shall we?

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06/8/19

Criminalizing Crypto in India

Big Red Car here getting ready for a trip to Sam’s.

So, I’m reading a few things and stumble on an interesting article about India and its attitude toward crypto. This is interesting for a number of reasons, not the least of which is that twenty percent of the world’s population lives in India.

Here is the famous Gateway to India which will likely not become the Gateway to Crypto if a proposed law is approved.

The “Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019” levies a ten-year prison sentence on any individual who might “mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies.”

This is what is called a broad stroke. Not much left to the imagination. Not subtle.

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06/5/19

United States Securities and Exchange Commission v Kik (Kin)

Yesterday, the United States Securities and Exchange Commission sued Kik Interactive Inc, a Canadian company, for “…conducting an illegal $100 million securities offering of digital tokens.”

Here is the SEC Press Release.

The issuance of “tokens” has been a supercharged issue in the cryptocurrency world for some time as the issuers contend these tokens are not securities — therefore not subject to the requirements to issue a US SEC Form S-1, Registration and to provide quarterly, annual reports as well as reports of material events — while the SEC says maybe they are.

In any event, the issue has been out there for some time.

Many crypto advocates have suggested it will take a legal confrontation, like this one, for the issue to be resolved. Well, fellas, you got your wish.

The SEC is focused on the implications of what happens or doesn’t happen when a “security” is registered and issued.

Specifically, they contend, “By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions.”

Keep that “information” nugget in the front of your brain as you read deeper into this post.

The SEC’s view is that it is the securities issuing regulations and compliance therewith that provides the appropriate protections for investors. The requirements as noted above are:

 1. The issuance of a US SEC Form S-1, Registration Statement — filed with the SEC for comment and revision prior to issuance and thereby providing a platform upon which to make disclosures about the financial health of the issuer, discuss risks and other information a buyer would find of vital interest.

 2. The filing of quarterly reports, annual reports, and reports of “material” events and actions.

This would, in essence, create a public security. It is not end of the world. You cannot even see it from there.

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