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Bitcoin advocates revolt against the Trump administration’s frantic crypto regulations

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Bitcoin fans across the country are rallying against a common enemy, the Treasury’s Financial Crimes Enforcement Network (FinCEN).

US Treasury Secretary Steven Mnuchin, one of President Donald Trump’s closest associates, has been working overtime since Thanksgiving to push several crypto regulations through before the Biden administration takes over on January 20, 2021.

FinCEN statements list the usual reasons for financial regulations, an effort to curtail terror financing, sanctions evasion and black market activity related to drugs and weapons, without any mention of new evidence justifying the unusual urgency.

These include a FinCEN proposal that would require exchanges to store records involving transactions over $3,000 sent to any personal wallets, plus report users to FinCEN for cumulative transactions worth more than $10,000 in a single day. For comparison, banks are required to flag cash withdrawals over $10,000, not transactions within the banking system itself, and banks are not required to keep tabs on where the customer spends the cash taken out of the system.

Plus, a complementary FinCEN statement proposed requiring Americans to report crypto holdings worth more than $10,000 at any foreign service provider. Although the details of this second initiative are still vague, it’s clear the Treasury wants to make special note of the know-your-customer information for anyone dealing with thousands of dollars worth of bitcoin.

The Electronic Frontier Foundation called this a “push for more financial surveillance” without any need for warrants or suspicion. (Bitcoin users already need to report their holdings in their taxes, just like any other asset.) As such, over 65,615 crypto advocates submitted critical statements to FinCEN, including companies like Fidelity and Square. Square’s statement said the company “would be required to collect unreliable data about people [recipients] who have not opted into our service or signed up as our customers.”

The Washington D.C. nonprofit Coin Center issued a statement saying this proposal would also limit American access to decentralized services, where users may not know their counterparty or network operators. Peter Van Valkenburgh, Coin Center’s research director, told TechCrunch the proposal is highly unusual because it only allowed for 15 days of comments, instead of the standard 60-day period, for a rule that would impose more data collection requirements on crypto companies than other financial institutions.

“It requires the exchange to collect, retain and report extra information that they don’t have to for a cash transaction, like the name and physical address of a counterparty,” he said. “It’s on a timeline to complete this process, as far as we know right now, before the new administration. That means the rule would be final. The new administration could issue a new rule, and overturn that past rule, but that’s a much more difficult process.”

Incoming Senator Cynthia Lummis, sworn in the first week of January, tweeted it was “ridiculous” for the Treasury to have this unusually short comment period. Likewise, nine members of Congress issued a letter warning this hasty rulemaking over the winter holidays undermined the legitimacy of the process.

These proposals aren’t just sudden, they’re also so vague that they appear poorly researched. Both Square Crypto developer Matt Corallo and MIT Media Lab director Neha Narula issued public statements saying the FinCEN proposals confused basic technical concepts about how bitcoin addresses work. This would make such regulations difficult to implement, burdening American companies with prohibitively high compliance precautions.

“Political motivations are always hard to discern, but public rumors have consistently indicated this is a personal push by Mnuchin, not further up or down,” Corallo said. “We’ll learn a lot about what the next few years look like based on what [incoming Secretary Janet] Yellen says and what new leadership at FinCEN looks like. There are a lot of things Yellen could decide, but it would be hard for her to do a worse job of building useful and practical regulations than Mnuchin’s last-minute attempts here.”

Van Valkenburgh said his nonprofit, and other crypto industry organizations like it, are prepared to challenge the ruling in court if the Trump administration fails to follow the legislative process. Namely, the Treasury is required to read and consider all of the public comments submitted by January 7, 2021, the arbitrary date set by the rulemakers themselves.

“They technically then have the power to issue the final rule, saying they considered all the comments,” he said. “But if it’s obvious that they didn’t consider all the comments, which I feel like it would be if the final rule came out any time before the new administration comes in, it would be very easy to argue in court that the requirement to read and consider all the comments has not been met.”

As it stands, Van Valkenburgh said it appears the outgoing administration intends to “saddle” the incoming administration with “chaos.”

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Elon Musk is donating $100M to find the best carbon capture technology

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Elon Musk said Thursday via a tweet that he will donate $100 million toward a prize for the best carbon capture technology.

Musk, who recently surpassed Amazon’s Jeff Bezos to become the world’s richest person, didn’t provide any more details except to add in an accompanying tweet the “details will come next week.” It’s unclear if this is a contribution to another organization that is putting together a prize such as the Xprize or if this is another Musk-led production.

The broad definition of carbon capture and storage is as the name implies. Waste carbon dioxide emitted at a refinery or factory is captured at the source and then stored in an aim to remove the potential harmful byproduct from the environment and mitigate climate change. It’s not a new pursuit and numerous companies have popped up over the past two decades with varying means of achieving the same end goal.

The high upfront cost to carbon capture and storage or sequestration (CCS) has been a primary hurdle for the technology. However, there are companies that have found promise in carbon capture and utilization — a cousin to CCS in which the collected emissions are then converted to other more valuable uses.

For instance, LanzaTech has developed technology that captures waste gas emissions and uses bacteria to turn it into useable ethanol fuel. A bioreactor is used to convert into liquids captured and compressed waste emissions from a steel mill or factory or any other emissions-producing enterprises. The core technology of LanzaTech is a bacteria that likes to eat these dirty gas streams. As the bacteria eats the emissions it essentially ferments them and emits ethanol. The ethanol can then be turned into various products. LanzaTech is spinning off businesses that specialize in a different product. The company has created a spin-off called LanzaJet and is working on other possible products such as converting ethanol to ethylene, which is used to make polyethylene for bottles and PEP for fibers used to make clothes.

Other examples include Climeworks and Carbon Engineering.

Climeworks, a Swiss startup, specializes in direct air capture. Direct air capture uses filters to grab carbon dioxide from the air. The emissions are then either stored or sold for other uses, including fertilizer or even to add bubbles found in soda-type drinks. Carbon Engineering is a Canadian company that removes carbon dioxide from the atmosphere and processes it for use in enhanced oil recovery or even to create new synthetic fuels.

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Chinese esports player VSPN closes $60M Series B+ round to boost its international strategy

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eSports “total solutions provider” VSPN (Versus Programming Network) has closed a $60 million Series B+ funding round, joined by Prospect Avenue Capital (PAC), Guotai Junan International, and Nan Fung Group.

VSPN facilitates esports competitions in China, which is a massive industry and has expanded into related areas such as esports venues. It is the principal tournament organizer and broadcaster for a number of top competitions, partnering with more than 70% of China’s eSports tournaments.

The “B+” funding round comes only three months after the company raised around $100 million in a Series B funding round, led by Tencent Holdings.

This funding round will, among other things, be used to branch out VSPN’s overseas esports services.

Dino Ying, Founder, and CEO of VSPN said in a statement: “The esports industry is through its nascent phase and is entering a new era. In this coming year, we at VSPN look forward to showcasing diversified esports products and content… and we are counting the days until the pandemic is over.”

Ming Liao, the co-founder of PAC, commented: “As a one-of-its-kind company in the capital market, VSPN is renowned for its financial management; these credentials will be strong foundations for VSPN’s future development.”

Xuan Zhao, Head of Private Equity at Guotai Junan International said: “We at Guotai Junan International are very optimistic of VSPN’s sharp market insight as well as their team’s exceptional business model.”

Meng Gao, Managing Director at Nan Fung Group’s CEO’s Office said: “Nan Fung is honored to be a part of this round of investment for VSPN in strengthening their current business model and promoting the rapid development of emerging services and the esports streaming ecosystem.”

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Google’s parent firm is shutting down Loon connectivity project

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Google’s parent firm Alphabet is done exploring with the idea of using giant balloons to beam high-speed internet in remote parts of the world.

The firm said on Thursday evening that it was winding down Loon after failing to find a sustainable business model and willing partners. The demise of Loon comes a year after Android-maker ended Google Station, its other major connectivity effort. Through Station, Google provided internet connectivity at over 400 railway stations in India and sought to replicate the model in other public places in more nations.

That said, Alphabet’s move is still surprising. Just last year, Loon had secured approval from the government of Kenya to launch first balloons to provide commercial connectivity services in Kenya — something it did successfully achieve months later, giving an impression that things were moving in the right direction.

Perhaps the growing interest of SpaceX and Amazon in this space influenced Alphabet’s decision — otherwise, the two firms are going to have to answer some difficult feasibility questions of their own in the future.

“We talk a lot about connecting the next billion users, but the reality is Loon has been chasing the hardest problem of all in connectivity — the last billion users,” said Alastair Westgarth, chief executive of Loon, in a blog post.

“The communities in areas too difficult or remote to reach, or the areas where delivering service with existing technologies is just too expensive for everyday people. While we’ve found a number of willing partners along the way, we haven’t found a way to get the costs low enough to build a long-term, sustainable business. Developing radical new technology is inherently risky, but that doesn’t make breaking this news any easier.”

The blog post, which makes no mention of what will happen to Loon’s existing operations in Kenya, characterised Loon’s connectivity effort as successful. “The Loon team is proud to have catalyzed an ecosystem of organizations working on providing connectivity from the stratosphere. The world needs a layered approach to connectivity — terrestrial, stratospheric, and space-based — because each layer is suited to different parts of the problem. In this area, Loon has made a number of important technical contributions,” wrote Westgarth.

More to follow…

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