Scenius Sync (Issue #63)

New U.S. Tax Proposal Booed by Crypto World, The Fidelity Big Crypto Mafia, Pepe Team Members Make Off with $15m, Base and Optimism Unveil Partnership, & Solana Pay Brings USDC to Shopify

Scenius: The intelligence and the intuition of a whole cultural scene. The communal form of the concept of genius.

Welcome to The Scenius Sync.

Our mission with this concise publication is twofold:

1. Share the essential stories driving the crypto industry and markets.

2. Highlight innovative applications and mainstream adoption of crypto and blockchain technology.

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Essential News 🗞

1. Sweeping U.S. Tax Proposal Met With Boos From Crypto World

   • An immediate burst of criticism from the crypto industry shows the U.S. Treasury Department’s new proposal on how to handle digital assets taxes will face a long road as it enters a months-long period of public comments and hearings. X, the site formerly known as Twitter, quickly filled with complaints about the proposal’s scope – particularly how the tax-reporting demands may capture decentralized crypto operations that the industry would argue are impossible to bring into compliance.

   • More coverage here from Decrypt and a helpful X thread here for those who want to dig in.

2. Tornado Cash co-founders charged with money laundering, sanctions violations

   • The United States Treasury’s Office of Foreign Assets Control (OFAC) added Roman Semenov, one of the co-founders of the Tornado Cash cryptocurrency “mixer,” to its list of Specially Designated Nationals and Blocked Persons (SDN) on Aug. 23. Another co-founder, Roman Storm, was arrested by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation division in Washington state the same day. Semenov and Storm are being charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations and conspiracy to operate an unlicensed money-transmitting business in an indictment unsealed on Aug. 23. The first two counts each carry a maximum sentence of 20 years in prison. The money-transmitting charge is punishable by up to five years’ imprisonment.

3. Pepe confirms former team members stole $15 million from multisig wallet

   • Approximately 16 trillion Pepe tokens ($15 million) were illicitly transferred to crypto exchanges OKX, Binance, Kucoin and Bybit before being sold, according to an announcement. The theft was allegedly orchestrated by three ex-team members who accessed the Pepe multisig wallet, later deleting their social accounts and distancing themselves from the memecoin project.

4. FTX suspends user accounts amid Kroll cyber breach concerns

   • Kroll — the appointed claims and noticing agent for FTX’s ongoing bankruptcy proceedings — was subject to a breach that exposed non-sensitive data associated with claimants involved in the bankruptcy case. Following the breach, FTX has temporarily suspended accounts of impacted users accessing its claims portal. FTX announced the decision on X (formerly Twitter) as a proactive measure to prevent future incidents or additional harm following the recent hack. In response, Kroll provided FTX with reassurances regarding its active management of the situation and its continued oversight. FTX subsequently offered substantiation of this assurance by verifying that the breach had no impact on the security of account passwords, internal systems or financial funds.

   • In other FTX news, the Bankrupt Exchange Taps Galaxy to Sell, Stake and Hedge Its Crypto Billions

5. Balancer pools exploited after last week’s vulnerability reveal

   • DeFi liquidity protocol Balancer suffered an exploit following the discovery of a critical vulnerability in its v2 pools last week. The Balancer team acknowledged Sunday that they are aware of the exploit and most funds in affected pools have been withdrawn. 

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Innovation & Adoption 💡📈

1. The ‘Fidelity Mafia’ Behind Big Crypto

   • Some of the most prominent players in the digital-assets industry cut their teeth at the same place: Fidelity Investments. A storied mutual-fund powerhouse, Fidelity is a cornerstone of the traditional financial system that the founders of bitcoin and other cryptocurrencies intended to disrupt. Yet the 77-year-old company became a bitcoin pioneer in 2014, mining the token when it was trading around $400. It encouraged employees to experiment with blockchain technology and develop new products that led to the launch of its crypto business unit four years later.  Along the way, it built a deep talent pipeline for the industry.

2. Base, Optimism unveil shared governance and revenue-sharing framework

   • Developers behind the Base and Optimism networks have jointly announced a revenue-sharing and governance-sharing agreement. Coinbase, the parent company of Base, has also published a list of “principles of neutrality” it will follow to prevent Base from becoming centralized. This announcement was made through three separate blog posts on Aug. 24: one from the jointly controlled Optimism Collective, one from Base and one from Coinbase.

3. Shopify Customers Can Now Pay In USDC Via Solana Pay

   • Solana Pay, the payment protocol built on the Solana blockchain, is now plugged into e-commerce giant Shopify, allowing users to pay in USD Coin (USDC), the companies announced Wednesday. With the integration, users will be able to connect Solana-centric crypto wallets, like Phantom, and settle payments on-chain with merchants using USDC.

4. Nomura, CoinShares, Ledger joint venture Komainu wins Dubai crypto license

   • Komainu, a joint venture between Nomura and crypto firms CoinShares and Ledger, has received a full operating license from Dubai’s Virtual Asset Regulatory Authority (VARA). The United Arab Emirates has opened its door to crypto innovations, supported by federal grants and pro-crypto regulations aiming to nurture entrepreneurs. Attaining a VARA license in Dubai is a three-step process requiring crypto exchanges to qualify for provisional approval, a minimal viable product (MVP) license and a full market product license.

5. OnlyFans’ parent company bought $20M of Ethereum as revenue surged

   • The parent company of subscription platform OnlyFans has become the latest firm to reveal its cryptocurrency holdings, showing it invested nearly $20 million into Ether. in 2022.