Bitcoin ‘rarely’ used for legal transactions, on ‘road to irrelevance’, say European Central Bank officials

European Central Bank officials alleged on Wednesday that bitcoin is “rarely used for legal transactions,” is fuelled by speculation and the recent erosion in its value indicates that it is on the “road to irrelevance,” in a series of stringent criticism (bereft of strong data points) of the cryptocurrency industry as they urged regulators to not lend legitimacy to digital tokens in the name of innovation.

The value of bitcoin recently finding stability at around $20,000 was “an artificially induced last gasp before the road to irrelevance – and this was already foreseeable before FTX went bust and sent the bitcoin price to well down below $16,000,” wrote Ulrich Bindseil and Jürgen Schaaf on ECB’s blog.

The central bankers argue that bitcoin’s conceptual design and “technological shortcomings” make it “questionable” as a means of payment. “Real Bitcoin transactions are cumbersome, slow and expensive. Bitcoin has never been used to any significant extent for legal real-world transactions,” they wrote.

“It does not generate cash flow (like real estate) or dividends (like equities), cannot be used productively (like commodities) or provide social benefits (like gold). The market valuation of Bitcoin is therefore based purely on speculation,” they wrote.

The bankers’ remarks have drawn criticism from several tech-savvy enthusiasts. In a series of tweets, investor and commentator Joel John pointed to a security auditing firm Chainalysis report that concludes that only 0.15% of crypto transactions were linked to criminal activities, compared to 5% for the traditional currency.

“I don’t mean to imply crypto has no funny actors. We had our share of scrupulous players and the regulators are a crucial part of the mix. But a little more effort into how the industry is covered can help us go far. Bias is easy, but it doesn’t deliver progress,” wrote John.

But this argument is flawed in the sense that as a technology becomes the norm, an increasing share of events will be linked to it.

We no longer say “internet linked accident” or “mobile app linked suicide” – as terrible as both events are.

— Joel John (@joel_john95) November 30, 2022

The central bank officialls also alleged that bitcoin has “repeatedly benefited from waves of new investors,” “manipulations by individual exchanges or stablecoin providers” but these tactics aren’t able to provide stabilizing factors.

The bankers say that crypto firms have funded lobbyists to sway lawmakers and regulators, but their efforts are not proving successful because even lobbying activities “need a sounding board to have an impact.”

“The current regulation of cryptocurrencies is partly shaped by misconceptions. The belief that space must be given to innovation at all costs stubbornly persists. Since Bitcoin is based on a new technology – DLT / Blockchain – it would have a high transformation potential. Firstly, these technologies have so far created limited value for society – no matter how great the expectations for the future. Secondly, the use of a promising technology is not a sufficient condition for an added value of a product based on it,” they added.

Several central banks around the globe have expressed concerns about the adoption of cryptocurrency (and the proliferation of their trading) in recent quarters. Shaktikanta Das, the governor of Reserve Bank of India, said earlier this year that cryptocurrency has no underlying value and is not even tulip, referring to the Dutch tulip bulb market bubble from the 17th century. The South Asian nation will kickstart a pilot for retail digital currency on Thursday, with which it aims to, among other things, protect citizens from the volatility of private cryptocurrencies.

Bitcoin ‘rarely’ used for legal transactions, on ‘road to irrelevance’, say European Central Bank officials by Manish Singh originally published on TechCrunch

Telcos should also pay OTT platforms, BIF urges govt

The BIF letter to the government came after telecom industry body Cellular Operators Association of India (COAI) said that OTT platforms must contribute towards creating and developing digital telecom infrastructure in India in exchange for using the services.

Crypto exchange Bitfront shuts down

“However, despite our efforts … we have regretfully determined that we need to shut down BITFRONT in order to continue growing the LINE blockchain ecosystem and LINK token economy,” the California-based company said in a statement on its website.

Pinterest shuts down its ‘Creator Rewards’ program

Pinterest has shut down its Creator Rewards program that allowed creators to earn money by creating content around monthly prompts and achieving certain engagement goals.

“The Creator Rewards program will end on November 30, 2022. To all the creators who participated, thank you for your partnership. We’re committed to exploring more ways to help you find success on Pinterest and we’re looking forward to finding more opportunities to work together in 2023,” Pinterest said in a note on its creator rewards help page.

The rewards program asked participants to create Idea Pins — a video format introduced by the company last year — based on a monthly theme to earn cash.

The announcement, first reported by The Information, also said that Pinterest will pay a one-time bonus to creators who participated in at least one reward goal for August, September, or October 2022. The company didn’t specify the bonus amount on the Creator Rewards page.

Pinterest said that it is closing this program “in order to focus on other creator programs and features.” Last year, when the company debuted Creator Rewards, it said it planned to invest $20 million in the program. Separately, the company launched a $500,000 Creator Fund last year and injected an additional $1.2 million this year into the project. The social network created this project to help creators from underrepresented communities through cash and ad rewards.

Pinterest is still continuing with programs like the Creator Fund, “shoppable” Idea Pins, and paid partnerships by converting Idea Pins into ads.

Social media companies have been constantly tweaking their creator payment programs in recent times. Last month, Snapchat reduced its payouts to creators from millions of dollars per week to millions of dollars per year. In September, Meta announced that it is closing its Live Shopping program to focus on reels. At the same time, the social media giant also closed its Instagram affiliate program, which allowed creators to get a commission if users purchased tagged products from their posts.

Pinterest shuts down its ‘Creator Rewards’ program by Ivan Mehta originally published on TechCrunch

South Korean prosecutors seek arrest warrants for Terraform Labs co-founder, investors and engineers

South Korean prosecutors said Wednesday they have requested arrest warrants for eight people related to Terraform Labs for the alleged fraud as the local authorities widen their investigation into the collapse of the TerraUSD and Luna tokens that wiped tens of billions of dollars from the crypto market earlier this year.

The Seoul Southern District Prosecutors Office confirmed to TechCrunch that it is seeking arrest warrants for eight people including Terraform Labs co-founder Daniel Shin, three Terraform investors, and four engineers of the cryptocurrencies TerraUSD (UST) and Luna, but did not disclose the identities of most individuals.

The move comes two months after South Korea issued an arrest warrant for another co-founder, Do Kwon, whose whereabouts are currently unknown, and requested Interpol, the international law enforcement agency, to issue a red notice for Kwon.

The prosecutors suspect Shin of taking illegal profits worth approximately $105 million (140 billion won) by selling Luna at the peak without disclosing properly to investors ahead of the Terra-Luna collapse, according to a local media report Yonhap. Shin is also being charged with using customers’ data from his separate fintech startup Chai to promote Luna, violating the Electric Financial Transaction Act. Local authorities reportedly raided the Chai office in mid-November as part of UST-Luna’s fraud probe.

Shin has refuted the claims of trading Luna at a market high and violating the customers’ data. Shin’s lawyer said today Shin left Terraform two years ago before the Terra-Luna collapse, and that he has no ties with the failure, according to local media.

Terraform was founded in Singapore in 2018 by Do Kwon and Shin. Shin left Terraform in March 2020 to found Chai and stepped down as CEO of Chai earlier this year.

The Seoul Southern District Prosecution confirmed a court is set to hold a hearing to determine the validity of the warrants this Friday, December 2.

Terraform’s UST and Luna fell from grace in early May after the so-called stablecoin depegged from its $1 value, wiping out investors’ $40 billion and prompting an uproar. South Korean prosecutors began the investigation after the crash of the UST-Luna token.

South Korean prosecutors seek arrest warrants for Terraform Labs co-founder, investors and engineers by Kate Park originally published on TechCrunch

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