China's Comprehensive Crypto Crackdown

The biggest crypto news and ideas of the day

Sept. 24, 2021

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Today's must-reads

Top Shelf

DEJA VU? Chinese authorities ordered a fresh crackdown on crypto mining and outlawed virtually all crypto trading activities on Friday. The People’s Bank of China posted a list of forbidden activities – reiterating much of what was said in May, and adding new restrictions. Simultaneously, China's National Development and Reform Commission set out a plan to phase out mining entirely.

SOUTH KOREA: Just hours before the clock runs out, dozens of crypto exchanges in South Korea have yet to register with the nation’s anti-money laundering authority under new virtual asset regulations. Full registration requires security certification with the Financial Intelligence Unit as well as partnerships with banks for security purposes. The rules seem to benefit incumbents: As of 2 a.m. ET, only the country’s four biggest exchanges, Upbit, Bithumb, Coinone, and Korbit, had inked deals with banks, CoinDesk’s Eliza Gkritsi reported.

TWITTER TIPS: Twitter rolled out BTC tipping on Apple’s iOS yesterday, allowing users to link Bitcoin addresses and Lightning Network addresses to their profiles to easily send and receive the cryptocurrency. Android functionality is coming “soon,” as well as NFT verification for profiles. Strike, the company that built the technological layer behind Twitter’s tipping feature, is releasing it as an open API.

TIMELESS ISSUES: Yesterday afternoon, TIME Magazine announced a new NFT collection offering “unlimited access” to its website through 2023. Dubbed “TIMEPieces,” the collection consists of 4,676 tokens tied to digital artworks, each priced at .1 ETH, or around $310. The mint clogged Ethereum – one buyer paid $70,000 in gas fees, more than the value of the series – demonstrating the growing problem of bots and scalpers in NFT markets.

LIFELINE: The Future of Life Institute, a non-profit organization whose endgame seems to be immortality, has named two fellowship programs after Ethereum creator Vitalik Buterin. The Vitalik Buterin Ph.D. and postdoctoral fellowships, granted for work on safety issues in artificial intelligence, will provide up to $40,000 a year for five years and will cover tuition fees.

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Overheard on CoinDesk TV...

Sound Bites

"This really shows a diminishing power of China over the market and also a maturation of crypto and bitcoin as well."

–Arca CEO Rayne Steinberg, on the market’s reaction to the latest China crypto crackdown, on CoinDesk TV’s “First Mover.”

What others are writing...

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Putting the news in perspective

The Takeaway

Twitter Just Became Crypto’s Biggest Flywheel
The past four months have been full of transformational moments for crypto. From El Salvador’s adoption of bitcoin as legal tender to the political firepower that manifested during the U.S. Congress’s infrastructure bill debate, it feels like the ideas and predictions that I’ve been covering for nearly a decade are starting to become reality.

I think Thursday’s announcement of new crypto features on Twitter is of a similar significance. First up is a tipping feature that will connect profiles to Bitcoin and Lightning Network addresses (as well as other payments services). The service isn’t available on Android yet, so I haven’t been able to use it. But early glimpses show a streamlined and intuitive experience that looks set to smoothly onboard new bitcoin users. Twitter also says it will implement non-fungible token (NFT) verification on the platform soon, though no firm timeline was announced.

This will be the largest integration yet of crypto with an existing, mainstream digital service (aside from crypto features in financial apps like RobinHood and PayPal). And the fact that it’s Twitter making the first move could hardly be more bullish.

It’s true that Twitter, with about 360 million monthly active users, is far from the largest social network in the world – it’s smaller than even Pinterest, with about 450 million MAU, and can’t hold a candle to Facebook, which is approaching 3 billion MAU. But more important than raw size is that Twitter (though this is subjective) is the social network of choice for influential figures across a variety of fields, and the place where a lot of those leaders talk most impactfully amongst themselves. And they’re surrounded by a huge resource in the form of Crypto Twitter, which by happy coincidence has lately (at least from where I’m standing) become notably less toxic and more supportive.

That said, I’m actually not certain the Bitcoin integration is the biggest part of the Twitter news. The friendly-looking Lightning interface is exciting, but Twitter has never prevented posting public crypto addresses to profiles, so in some sense it’s more an upgrade than an entirely new option.

NFT verification, however, will be a step change. The feature is still in development but it will provide some way of confirming and visually conveying that an NFT displayed in a Twitter profile is authentic, and that it is owned by the same person as the Twitter profile. As we’ve discussed in these pages at length, NFTs are a novel and powerful way to flex and show community affiliations online, but this integration will make those claims vastly clearer and more powerful.

Finally, it’s very good news these features, which use truly public blockchain infrastructure, will make it to market before Facebook’s weird, still-floundering attempt to create a knockoff, pseudo-crypto called diem. Diem has always, in part, been a gambit to leverage Facebook’s size to ensnare users and advertisers in a payment system over which Facebook would have substantial influence. Twitter’s embrace of a system it doesn’t control demonstrates that a better future is possible.

–David Z. Morris

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