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| The biggest crypto news and ideas of the day Mar. 15, 2022 Was this newsletter forwarded to you? Sign up here. Supported by
Welcome to The Node.
In today’s newsletter: Shanghai police solve first cryptocurrency pyramid scheme. American Express could soon be exploring the metaverse. And Kazakhstan cracks down on illegal crypto mining.
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Today’s must-reads Top Shelf PYRAMID SCHEME: The Shanghai police arrested more than 10 people in connection with an alleged pyramid scheme worth approximately $16 million that involved cryptocurrencies. The bust follows a six-month investigation led by the Shanghai police bureau that spanned several provinces. The suspected criminals set up an online platform in June 2020 offering membership rewards and the promise of static income. During its lifetime, 60,000 member accounts were created on the platform. This is the first such case to be solved in the city.
METAVERSE FOMO: Payment giant American Express could soon explore the metaverse. The company recently filed metaverse-related trademark applications for its logos and products, including the Centurion black card and “Shop Small” program. Amex is looking to incorporate virtual payments and electronic business transactions for digital media and non-fungible tokens, or NFTs. The credit card service company’s applications come as traditional finance and large corporations aim to boost their metaverse exposure.
JOB HUNTING: The U.K.’s financial watchdog, the Financial Conduct Authority (FCA), is on the lookout for someone to lead the digital assets department and build a new team. The department head will take charge of the FCA’s regulatory activities regarding crypto firms that may be involved in “scams and frauds” and “lead a cross sector crypto strategy to have a single FCA narrative on crypto,” according to a LinkedIn job posting. Meanwhile, government and law-enforcement veteran Michele Korver is departing her role as chief digital currency adviser to the U.S. Financial Crimes Enforcement Network (FinCEN) and joining powerhouse venture capital firm Andreessen Horowitz (a16z).
CRYPTO CRACKDOWN: A crackdown on illegal crypto mines in Kazakhstan has forced another 106 sites to stop operations. More than 50 mines closed voluntarily, while 51 mines were forced to shut down, according to a government statement. The latter are suspected of tax and customs evasion and placing equipment in special economic zones without permission. Inspections also revealed that notable political and business figures were involved in some of the mines, including the brother of former President Nursultan Nazarbayev.
LICENSED: FTX Europe is the first firm to receive a license to operate a crypto exchange and trading house in Dubai. The newly established European unit will “oversee the development of the best business environment in the world for virtual assets in terms of regulation, licensing, governance, and in line with local and global financial systems," the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, tweeted when the news came out. The license comes a week after Dubai announced the creation of the Virtual Asset Regulatory Authority (VARA), which will be responsible for governing the crypto sector.
Overheard on CoinDesk TV... Sound Bites "In the next couple of months, it will be easier for us, or FTX, or any other crypto platform to connect to any ministry, not only in Ukraine, but in another country in Europe."
––Everstake COO Bohdan Opryskho on CoinDesk TV's "First Mover."
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What others are writing... Off-Chain Signals Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales (WSJ) Crypto.Com Announces ‘Initial Phase’ of U.S. Launch (Decrypt) Samsung, Qualcomm Back FreedomFi, Helium’s 5G Crypto Network Partner (Decrypt) The ‘world’s most advanced’ digital human wants you to buy her NFT art (The Block) Polygon Studios ushers in group of top-level gaming hires from web2 firms (The Block) Warner Bros and DC Comics Announce Hybrid Cards NFTs (NFT Plazas) Buffalo Trace Distillery Auctions Burnable Bourbon Bottle NFTs on BlockBar (NFT Plazas)
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Putting the news into perspective The Takeaway LimeWire and the Zombie Brands Pivot to Crypto
Last week, the defunct music platform LimeWire announced a comeback under new management.
Yes, LimeWire is back – but as a marketplace for non-fungible tokens (NFTs) rather than a file-sharing service. And with a team that has nothing to do with the early-aughts classic you knew and (maybe) loved.
It’s the latest example of a brand returning from the dead to cash in on the crypto gold rush. RadioShack, MoviePass and even something called “BlockbusterDAO” have all leaned into near-past nostalgia, too.
LimeWire’s resurrection is a bet on the power of the brand. The team behind the company’s new, crypto-inflected service is hoping a trusted name can help ease new users into the notoriously inhospitable world of Web 3.
LimeWire rose to prominence in the early 2000s, post-Napster and pre-streaming, as a piracy-centric music alternative to the iTunes Store. Just as you could get free movies and software through BitTorrent, LimeWire allowed you to download audio files (usually at an incredibly slow pace). In 2010, the service was shut down by a federal injunction, and the company behind it paid $105 million to major record labels in an out-of-court settlement.
It’s remembered fondly, though. The rapper Soulja Boy – one of the first real internet-native musicians – famously used the platform to drum up interest in his first few singles. For those frustrated with the current structure of the music business, with its emphasis on algorithmic discovery and streaming monoliths, it’s not hard to find something appealing in the DIY clunkiness of the LimeWire paradigm.
Not your cousin’s LimeWire
LimeWire was acquired last year by a pair of Austrian brothers, Paul and Julian Zehetmayr, and is now being relaunched with a crypto twist. Purchases will be denominated in U.S. dollars, but it’s pitching itself as an OpenSea alternative, a kind of eBay for NFTs, with a focus on music-related collectibles. Julian told Bloomberg it will be “initially a very music-focused marketplace,” but left the door open for other kinds of NFTs down the line.
On Monday, LimeWire announced a partnership with the company behind the Algorand blockchain. In an attempt to get speculators on board, the company also plans to release a token (according to the company’s website, LMWR is already being sold to insiders on an invite-only basis).
What’s not clear is how the new LimeWire will distinguish itself from existing music NFT platforms. Sound.xyz, which launched in December, is explicitly focused on communal listening and monetization. Royal, led by the producer Justin Blau, offers song royalties via crypto. Catalog is a marketplace for one-of-one audio NFTs. And communities like Water & Music, Tiny Mix Tapes, Poolsuite and Sone are experimenting with the social side of music NFTs.
So far, LimeWire’s revival feels like pure gesturing, an attempt by these two entrepreneurs to piggyback on the file-sharing site’s reputation in the hopes of a quick payday.
And while cash grabs have always been par for the course in crypto, the attempt to resurrect an old, beloved brand under the auspices of Web 3 has become something of a trend in recent months.
Creating a Hyperdeflationary New Token
Bitcoin and other crypto currencies are supposed to be a hedge against inflation. But the way many crypto coins operate is inflationary. There is a rapid rise in the number not just of new crypto coins but also in the number of those coins that already exist through mining and other activities that allow new coins to be created.
Moreover, most DeFi farms follow this approach. To break this mold, the team behind the Baby Moon Floki (BMFloki) token decided to take a different path by setting up mechanisms that automatically decrease the numbers of tokens in circulation. By reducing supply while demand is increasing, the basic laws of economics determine that the price will rise.
*This is sponsored content from Baby Moon Floki.
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