Author: Phil Stafford

Phil is a long-standing Australian journalist with specialised experience in business, finance, travel and popular culture.

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Bitcoin Bitcoin BSV Crypto News Cryptocurrency Law

Self-Proclaimed ‘Satoshi’ Craig Wright Cleared of Charges, But Liable for $100 Million

A US federal jury has found that Australian businessman Craig Wright – who not only credits himself as the inventor of Bitcoin but also claims to be Satoshi Nakamoto, its pseudonymous creator – owes US$100 million in compensatory damages to a company founded by his former friend and associate, the late Dave Kleiman.

Wright testified that Kleiman had helped him edit a white paper that explained the foundation of Bitcoin, but he insisted the two weren’t business partners. Kleiman died in 2013, and his brother Ira brought the federal civil lawsuit on behalf of Kleiman’s estate and the company he founded, W&K Info Defense Research.

“I feel remarkably happy and vindicated,” Wright said after the verdict was announced. “I am not a fraud, and I never have been.” He added that he had offered Kleiman’s estate “US$12 million many years ago, which if [they] had taken then in bitcoin, when it was $200, and kept it – you can do the math”.

Asked to comment specifically on the verdict against W&K, Wright said it means that “I owe my ex-wife more money” – referring to the fact that Ira Kleiman’s control of W&K is being challenged in a county court. Both Wright’s ex-wife and current wife claim to control a third of W&K and are suing Ira Kleiman, alleging he didn’t have authority to bring the federal suit. Those cases have been on hold pending the outcome of the federal suit.

Case Sets Historical Crypto Precedent

Vel Freedman, representing the plaintiffs, also approved of the verdict: “We just won $100 million!” Though a long way short of what he’d sought – up to $36 billion for the value of bitcoin in dispute, $126 billion for intellectual property and $17 billion in punitive damages – Freedman said the verdict set “a historical precedent in the innovative and transformative industry of cryptocurrency and blockchain”.

What follows is an edited extract of the joint statement released by Freedman and his legal colleagues:

We are immensely gratified [this verdict reflects] that Craig Wright wrongfully took bitcoin-related assets from W&K. Years ago, Wright told the Kleiman family that he and Dave Kleiman developed revolutionary Bitcoin-based intellectual property. Despite those admissions, Wright refused to give the Kleimans their fair share and instead took those assets for himself.

Vel Freedman, Roche Freedman

Earlier this year, the London High Court granted a default judgment in Wright’s favour for copyright infringement against “Cøbra”, the pseudonymous operator and publisher of the bitcoin.org website. Wright had sued Cøbra for unlawfully publishing the Bitcoin whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System”.

Aside from legal costs, the order required that “Cøbra” remove the whitepaper and put a notice on its website informing visitors of the default judgment for a period of six months. That deadline elapses at the end of December.

As for the default judgment itself, to the order of US$48,400, it’s not clear if Wright offered to share the spoils with the Kleiman estate. In any case, the $100 million in compensation won this week makes it look like pocket change.

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Blockchain Crypto News Gaming Sports

Football Manager Takes to the Blockchain with Footium

Ever wanted to ‘own’ a football club, build your own squad of players and earn rewards in the process? Now you can do it with Footium, a soccer strategy game where ‘managers’ can mint players from their academy and compete to win prizes.

Gamers Empowered Through Ownership

Co-founded in 2020 by Jordan Lord, a former software engineer at Netcraft, and Oxford economics graduate James O’Leary, Footium claims to improve on existing football games by empowering gamers through ownership.

“By introducing NFTs and a native token, we’ve brought play-to-earn characteristics to the kind of game that millions of users around the world spend hours playing each day,” says Lord, formerly a game developer for Multiverse and in real life a Derby County fan, while O’Leary is a smart contract developer with a passion for gaming.

Millions of people around the world spend hours each day playing football management games purely for fun. What if those hundreds, sometimes even thousands of hours spent playing could also generate revenue and improve their player and club value?

Jordan Lord, co-founder, Footium

Stake Tokens to Improve Club Morale and In-Game Performance

As Lord and O’Leary were building Footium, they realised the value-adding potential of token staking to improve club morale and in-game performance. As Lord says, “We decided to build the game we’d always dreamed of.”

Footium Division 1 has 1 league with 12 teams in and every division you go down, all the way to 8 the number of teams/leagues doubles. With Division 8 having 255 leagues in. Each club has a badge, kit and stadium. The badge will be based on a number of traits, the rarity of which determines their starting position in the league, along with the stadium size.

Initial Clubs Sold Out, But Plenty More Available on Secondary Market

Twice a day, your team plays in your league against other clubs. The game moves fast, with seasons of 20 games finishing inside two weeks. While the initial round has sold out, there is a total of 3060 clubs to choose from in the Footium universe, with plenty available on the secondary market. Go to footium.club for details. You can also follow Footium on Twitter and join the Footium Discord.

For information on three more new and exciting play-to-earn games, see September’s Crypto News Australia report regarding the growing Solana ecosystem. With nearly US$24.8 billion generated to date, 2021 was even then close to surpassing 2020’s full-year revenue (US$30 billion) and on track to overtake 2019 (US$43.6 billion) as the highest-grossing year ever for commercial gaming.

Last month saw the launch of MonkeyBall, a next-gen esports metaverse also based on the Solana blockchain. Like Footium, it’s a play-to-earn soccer game that combines high-production values, multiplayer gaming, NFTs and decentralised finance.

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Crypto Art Crypto News Metaverse NFTs Social media

Adidas Joins Forces With Bored Ape Yacht Club and Dives into the Metaverse

Adidas is collaborating with Bored Ape creators Yuga Labs and others in the space to enter the metaverse. And in a show of good faith that has attracted its fair share of derision, the global apparel brand has bought its own Bored Ape Yacht Club non-fungible token (NFT).

Adidas is also teaming up with NFT collector Gmoney and Punks Comic, a CryptoPunks-inspired unofficial Ethereum NFT derivative project.

Adidas Pays $156k for Single BAYC NFT

According to data from OpenSea, Adidas purchased Bored Ape Yacht Club NFT #8774 in September for 46 ETH, or just over US$156,000 at the time, and will rebadge it as a metaverse character called Indigo Herz. Rabid BAYC enthusiasts have paid as much as US$1.29 million for a single NFT.

Via Twitter, Adidas also recently announced a collaboration with upcoming Ethereum-based metaverse game The Sandbox.

Twittersphere ‘Welcomes’ Adidas to the Metaverse

Speaking of Twitter, reactions to Adidas’s leap into the metaverse have been mixed, to say the least. “We can’t wait to see Adidas in the metaverse,” tweeted Meta, the social media behemoth formerly known as Facebook, which has its own designs on the metaverse.

“This is the Sandbox metaverse, not Mark’s [Zuckerberg’s] metaverse. Or any clarification @Meta on where your metaverse will be?? at the @Roblox maybe? lol,” tweeted @horsesnft.

“Hopefully Adidas decides to stay in the cool parts of the metaverse, not Zuckerville,” tweeted @Lucky5Micah. Or this, from @marmish: “Cringe. So desperate to be cool.”

Summing up the negative responses was this tweet from @NFT_invest: “Good luck bitches! This is our space!”

Asics Beats Both Adidas and Nike to the NFT Punch

Like its primary competitor Nike, which has yet to bring its CryptoKicks patent to market, Adidas has been relatively slow off the blocks in the NFT race. Japanese multinational Asics stole a march on both brands back in July with the launch of its 189-piece digital footwear collection.

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Bitcoin Crime Crypto Art Crypto News NFTs

Silk Road Founder Drops NFT, Causing a Stir Among Bitcoiners

Silk Road founder Ross Ulbricht, who was convicted six years ago on conspiracy charges of money laundering, computer hacking, fraud and drug trafficking, is auctioning his own non-fungible token (NFT) for charity.

In May 2015, Ulbricht was handed two life sentences plus 40 years without the possibility of parole. After two unsuccessful appeals in 2017 and 2018, he remains in a US Penitentiary in Tucson, Arizona.

“Decades of incarceration stretch out in front of me,” Ulbricht writes in his prison blog, titled My NFT:

As I face that future – my eventual old age and death in this cage – I find myself looking for meaning and purpose. Why am I here? What good can I do with the time I have left and from where I am?

Ross Ulbricht, My NFT

Aged 29 when he was arrested and with time on his hands, Ulbricht reconnected with his art, producing illustrations that told the story of what he was going through. “Then someone said, ‘You should sell your art as an NFT. The community will love it’.”

Life in a Box, graphite pencil drawing, one of 10 artworks in the Genesis Collection NFT. It depicts Ulbricht’s shared cell in New York City, before he was moved to the Federal Penitentiary in Tucson, Arizona, where he remains. Ulbricht was 32 at the time he completed this drawing.

Hence the Ross Ulbricht Genesis Collection NFT, an assembly of writings and 10 artworks with an original animation by Seattle-based audiovisual artist Levitate. The singular NFT is being auctioned on the SuperRare platform, with bids closing December 8.

Proceeds Will Support Prisoners and Families and Fund Further Legal Efforts

As well as supporting other prisoners and their families, proceeds from the NFT sale will fund a trust dedicated to efforts to free Ulbricht from a life in prison. These include new legal proceedings.

At the time of Ulbricht’s arrest in 2013, Bitcoin was the only means of exchange on the Silk Road platform. While some devotees of Bitcoin and other cryptocurrencies recognise Ulbricht’s vision as an original catalyst for blockchain adoption, just as many have greeted news of his NFT offering with derision:

Among Ulbricht’s supporters, however, @CryptoCobain possibly pleaded his case most articulately:

Just over a year ago, Crypto News Australia reported on a police seizure of nearly US$1 billion in bitcoin from Silk Road‘s hoard.

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Crypto News Payments Regulation Tokens

SHIB Soars 30% on Kraken Listing Despite Competitors’ Regulatory Concerns

Mercurial memecoin Shiba Inu (SHIB) shot up 31.4 percent in a day after this week’s listing by crypto exchange Kraken to reach its highest mark since November 19.

After launching on Coinbase in mid-September, Brazilian exchange NovaDAX listed SHIB a month later with Gemini, Binance and Indian exchange CoinDCX following suit in November. SHIB has also been integrated by crypto payments service CoinGate, allowing users, merchants, traders and gift card shoppers to accept, buy, trade or spend the token.

Another positive sign for SHIB is its adoption by major tech e-retailer Newegg as a means of payment on its platform.

Whale Grabs Another 24.8 Billion Tokens, Now Holds $59m in SHIB

Soon after the announcement of SHIB’s Kraken listing, an anonymous crypto whale using the alias Gimli increased his holdings by 24.8 billion tokens, worth over US$1 million at the time of the purchase, to a total of US$59 million in SHIB.

Kraken has also clarified that SHIB will be tradeable against the euro and the US dollar with a minimum of 50,000 SHIB (US$2.48) required to open an order.

Kraken Defies Competitors’ Regulatory Concerns

Kraken’s decision to list SHIB stands in stark contrast to other digital asset exchanges, such as Robinhood, that have avoided listing altcoins like SHIB over regulatory concerns.

With 93 assets in total, Kraken is considered one of the least conservative exchanges. (Coinbase supports 51 assets and Robinhood only supports seven.) Other exchanges have been hesitant to list the so-called Dogecoin-killer over regulatory concerns, despite increasing pressure from their users.

On November 26 SHIB surpassed 1 million holders, despite trading 50 percent below its all-time high. Hedge fund manager Michael Burry has publicly questioned the token’s worth. Burry, founder of private investment firm Scion Asset Management and famous for forecasting the 2008 Global Financial Crisis, described the SHIB token as “pointless” in an October 9 tweet.

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Crypto Art Crypto News Ethereum Metaverse NFTs

Budweiser Launches NFTs That Unlock Future Benefits in ‘The Budverse’

Delivering on a promise made three months ago, iconic American beer brand Budweiser has launched its debut NFT collection … with one eye firmly on the metaverse.

A total of 1,936 collectibles (the number referencing the year Budweiser began marketing its beer in cans) will serve as access points to an as-yet-unrevealed ‘Budverse’. Sound familiar?

Priced from US$499 (core edition) to $999 (gold, limited to 36), each NFT features elements of classic photos, ads and design aspects charting the history of the brand. Tokens can be bought only via the official website with fiat currencies, credit card or bitcoin/ether via Coinbase Commerce, with a maximum purchase of US$10,000 per person per day, including fees and sales tax.

No Transaction Fees (Except a Gas Fee, That Is)

“These NFTs [minted on the Ethereum network and sold on leading NFT marketplace OpenSea] will act as your key to the Budverse and can unlock exclusive benefits, rewards and surprises,” Budweiser announced on its official Discord server. In a move ostensibly designed to shield buyers from exorbitant Ethereum transaction fees, Budweiser will itself mint the NFTs before distributing them. However, each NFT purchase attracts an additional charge to cover a gas fee of US$75. Go figure, as the Americans say.

Phallic Symbols Fly Through the Cryptosphere

Parent company Anheuser-Busch has also changed Budweiser’s Twitter name to “beer.eth”. At the same time as it purchased a Bud-themed piece from Tom Sachs’ Rocket Factory collection and used it for the brand’s official Twitter page in August, Budweiser bought its new Twitter handle from the Ethereum Name Service (ENS). An ENS name is used to point to an Ethereum wallet, in the same way a URL or domain name points to a website.

The Tom Sachs-designed Budweiser rocket ship. Source: decrypt.co

However, within hours of posting its Rocket Factory NFT, Budweiser’s wallet was bombarded with similarly penis-shaped NFTs sent by other collectors. All very adolescent, really, so it comes as a shock to be reminded that buyers of alcohol-branded collectibles must be certified as being over 18 years of age.

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Crypto News Scams Tokens

SnowdogDAO Potentially Rugged for $30 Million

SnowdogDAO (SDOG), a decentralised reserve memecoin based on Avalanche, has shed more than 90 percent of its value in what many in the DeFi community believe was the platform’s largest rug-pull.

Developers Claim ‘Failed Experiment’

Yet the SnowdogDAO team claims that what happened on November 26 was not a rug-pull, simply a “game theory experiment” that went awry. In the event, up to US$30 million in investments was lost.

Launched as an eight-day experiment that was scheduled to end with a giant buyback, SDOG understandably attracted a lot of attention. According to the development team, its so-called experiment was intended only to create awareness for Snowbank.

The buyback was to have been financed by assets acquired by the Snowdog treasury through mint sales. In eight days, the treasury market value grew to US$44 million, which meant that holders were able to compete for a portion of those funds during the buyback.

Buyback Fails Spectacularly

What the developers failed to clarify was that only 7 percent of the SDOG supply was eligible to be sold above market price before the buyback. But the buyback failed spectacularly within seconds of launching, with a single address making almost US$10 million by swapping SDOG for other cryptocurrencies, thus removing a quarter of the treasury’s buyback power.

Funds Drained into Three Wallets

Just before the buyback, the address bought around US$180,000 worth of SDOG with Magic Internet Money (MIM) in batches of $10,000 and then staked the token. A day later, they staked the funds and were able to drain over $10 million worth of MIM. Two other wallets drained $7.7 million and $3.3 million respectively using the same strategy.

The owners of the addresses are yet to be identified, though many believe they most likely belonged to people closely connected to the development team.

“This certainly looks like an inside job where someone made millions of dollars on two transactions,” said Steven McKeon of software security firm MacguyverTech.

They didn’t follow up on their promises, and unfortunately, a lot of people got wrecked. They liquidated within three or four seconds before it was launched. Someone knew something before everyone else did, and went straight to the target to liquidate everything in one shot.

Steven McKeon, MacguyverTech

Postmortem Greeted With Scepticism

Although Snowdog has published a postmortem, it was largely greeted with scepticism. “The postmortem didn’t address any of the concerns,” McKeon added. “It was really wishy-washy, and tells me they don’t care. They’re trying to cover their butts any way they can. That project has a super-high risk; I’d avoid them at all costs.”

The apparent Snowdog rug-pull is just the latest of many to have occurred in the DeFi space this year, adding to a list that includes TurtleDex, ICP Coin, WhaleFarm and Bondly Finance.

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Crypto News Ethereum Gas NFTs Sports Tokens

ConstitutionDAO: PEOPLE Price Pumps 200% as New ‘We The People’ Token Unveiled

When ConstitutionDAO was outbid in its effort to buy a rare, first-edition copy of the United States Constitution earlier this week, the community announced it would give donors a choice – either accept refunds, or remain in the DAO and receive a new “We The People” (WTP) governance token.

Refund Option Largely Ignored

Left with US$47 million worth of crowdfunded ETH reserves in its multi-signature wallets, ConstitutionDAO was probably unsurprised when many among its Discord community opted against refunds because of the associated high gas fees.

Most instead chose to receive WTP tokens without having to pay a gas fee at the rate of 1 PEOPLE per WTP, pumping the former token’s price by 200 percent. Meanwhile, ConstitutionDAO got to retain the capital in ETH. Win-win, with the bonus that the future price of WTP would rise in tandem with Ether.

DAOs Prove the Sky Is the Limit

DAOs are proving what a community can do when it chooses to achieve a collective goal. The day after ConstitutionDAO’s failed bid for the US Constitution, Krause House – an internet group named after late Chicago Bulls manager Jerry Krause – announced its intention to buy an NBA franchise, funded by the sale of NFTs. The group hit its goal of 200 ETH in the first 15 minutes of launching the sale via Mirror.

And earlier this year, Australian DeFi trading platform Tracer DAO managed to raise US$4.5 million in a strategic round of funding backed by various crypto companies.

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Crypto News DeFi NFTs Sports

What’s Behind Manchester City and FC Barcelona Dropping Their Crypto Sponsors?

Two of the world’s most highly valued professional football clubs, Manchester City and FC Barcelona, have discarded their crypto sponsors in eyebrow-raising circumstances.

After just over a week, Manchester City has suspended its partnership with shadowy cryptocurrency start-up 3Key Technologies. On November 15, the company was named by City as an “official regional partner in decentralised finance (DeFi) trading analysis” as part of a commercial expansion by the English Premier League champions.

Manchester City/3Key deal is no more. Source: retailtechinnovationhub.com

However, that process has now been halted, with the decision believed to be based on 3Key’s lack of online presence and an apparent absence of due diligence, although a City spokesperson has denied the latter charge.

“Manchester City conducts due diligence in respect of all of its partnerships,” the spokesperson said. “[The club]’s partnership with 3Key Technologies has been announced but has not been activated in respect of any specific products or services in any part of the world.”

Manchester City will retain its deal with Socios Fan Token App, which it signed in March this year.

FC Barcelona Cancels Deal With Ownix

In the case of FC Barcelona, the Catalan club announced on November 19 that it had cancelled a deal with NFT marketplace Ownix after the arrest of one of its consultants, Moshe Hogeg, owner of Israeli football team Beitar Jerusalem.

Moshe Hogeg faces charges of crypto fraud and sexual assault. Source: Flash90

Police arrested Hogeg and seven other people this week on suspicion of involvement in an alleged massive crypto fraud running into “tens of millions of shekels”. Hogeg is also facing separate charges of historical sexual assault involving an Israeli model.

On November 5, Ownix announced it was partnering with FC Barcelona to launch NFTs that would have allowed owners to buy digital certificates of authenticity for virtual items linked to the team’s history. This week, the club issued the following statement:

In light of information received that goes against the club’s values, FC Barcelona hereby communicates the cancellation of the contract to create and market NFT digital assets with Ownix, with immediate effect.

FC Barcelona official statement

Ownix tweeted in response that it had terminated its deal with Hogeg to provide consultation services, saying the decision had been made at Hogeg’s request. Ownix also denied any connection to Hogeg’s arrest and that he held any shares in the company.

Lawyers representing Hogeg said in a November 25 statement that he “vehemently rejects” all charges and is “cooperating fully” with investigators.

FC Barcelona’s ‘Debt Crisis’ No Closer to Resolution

Earlier this month, FC Barcelona announced it would be auctioning NFTs of memorable moments from the club’s 122 years in the game. It was whispered at the time that the club was in the midst of a debt crisis, reportedly around US$1.57 billion in the red this northern summer. The club’s previous leadership was accused of reckless spending on players who have subsequently underperformed.

With the cancellation of its deal with Ownix, those purported NFTs may be some way off yet.

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Australia Bitcoin Crypto News Regulation Superannuation

ASIC Investigating Further into Gold Coast Superannuation Scam

Short of opening a special branch in Queensland, the Australian Securities and Investments Commission (ASIC) has had an unusually busy month in the Sunshine State.

On November 6, ASIC obtained Federal Court orders to shut down unlicensed Gold Coast financial services business A One Multi for suspected unlawful activity. This came after it imposed a three-year ban on Queensland investment adviser Keith Robert McDermott for similarly failing to provide advice in clients’ best interests.

In the same week, an A$100 million class-action lawsuit was filed against the Gold Coast-based issuers of controversial token Qoin.

Now ASIC is trying to recover a trove of bitcoin worth up to A$29 million held in an encrypted device belonging to a director of A One Multi who is suspected of large-scale superannuation fraud. The investigation implicates CoinSpot, the crypto exchange used by accused scammer Aryn Hala to invest his allegedly ill-gotten gains.

Almost $30 Million in Bitcoin Unaccounted For

ASIC has co-accused Hala and his partner Heidi Walters along with A One Multi of scamming 92 financially strapped Australians who were looking to gain early access to their super. Bank accounts show the couple’s company received A$25 million from the investors. No criminal charges have been laid.

Alleged super scammer Aryn Hala. Source: Gold Coast Bulletin

ASIC alleges Hala and Walters used their victims’ money to buy bitcoin, luxury cars and other high-end goods, couture fashion, weight loss surgery, and to make a substantial donation to their church.

The couple has engaged lawyers, indicating they intend to challenge ASIC’s allegations. Hala and Walters’ legal team says they are openly assisting both ASIC and the receivers with their inquiries, including providing all financial records, in the hope the investigation is expedited.

ASIC called in receivers from KPMG to unravel Hala’s business and personal accounts and to trace the trove of bitcoin. It has also won travel bans against Hala and Walters and freezing orders over their assets, which include a Tesla and a Ferrari.

Unpicking Hala’s bitcoin investments has proved problematic for regulators and has raised issues regarding oversight controls at CoinSpot, which bills itself as one of Australia’s leading cryptocurrency exchanges.

CoinSpot Initially Claimed Hala Was Not a Customer

According to court documents filed by the regulator in support of freezing orders against the couple and A One Multi, CoinSpot initially told ASIC investigators that no records were held for crypto accounts in the name of Hala, Walters, or their company.

On closer inspection of Hala’s bank statements, ASIC located his CoinSpot account number and found he had a balance of just $1.96. A full CoinSpot audit showed Hala’s bitcoin wallet had received 375.99 BTC (worth almost A$30 million at time of writing) and executed total sell orders of A$979,843 – indicating that some $29 million worth of coins were located elsewhere. ASIC investigators believe Hala had transferred the coins to a cold wallet.

CoinSpot defended its early claim that Hala was not an account holder.

CoinSpot has a cooperative relationship with all relevant regulatory bodies including ASIC. Any lawful requests for information by regulators are treated seriously and with priority … [although that] information may need to be verified before any information can be shared.

CoinSpot statement

Hala is expected to share instructions with receivers KPMG on how to access his cold wallet in coming weeks.