Author: Phil Stafford

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

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Crypto News Tokens

‘Big Short’ Investor Calls Shiba Inu “Pointless” After It Soared 230%

Hedge fund manager Michael Burry has questioned the worth of the Shiba Inu token (SHIB) after its 230 percent leap over the past week.

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:

Shiba Inu (SHIB) is a token that aspires to be an Ethereum-based alternative to dogecoin (DOGE), the popular meme coin. Unlike bitcoin, which is designed to be scarce, SHIB is intentionally abundant – with a circulating supply of one quadrillion.

Michael Burry, founder, Scion Asset Management

Expanding on his statement, Burry said: “Just saying, one quadrillion seconds is about 32 million years. One quadrillion days is 2.7 trillion years, or all of time, from the beginning of the universe, multiplied by 71,000. In other words, pointless.”

SHIB Circulation No Longer One Quadrillion

Several pundits on Twitter were quick to point out to Burry that the circulating supply of SHIB is no longer one quadrillion. Coinbase’s market data shows it currently stands at 394.8 trillion coins.

As the Shiba Token website explains: “Starting with a supply of 1 quadrillion, our founder, Ryoshi, locked 50 percent in Uniswap, then ‘burned’ the other half to Ethereum co-founder Vitalik Buterin for safekeeping.”

The token first achieved widespread attention when in May Buterin donated US$1 billion worth of SHIB to India’s crypto Covid relief fund.

Poster for The Big Short, the 2015 film adaptation of Michael Lewis’ 2010 book.

Burry is best known for being the first investor to foresee and profit from the 2007-2010 subprime mortgage crisis. He was profiled in The Big Short, a 2010 book by Michael Lewis about the meltdown, since made into a 2015 movie starring Christian Bale.

In June this year, Burry predicted the “mother of all crashes”, saying that “the problem with crypto, as in most things, is the leverage”.

What Is the Point of SHIB?

Last weekend, Crypto News Australia reported the Shiba Inu token had leapt 385 percent in the previous seven days, doubling its value in just one 24-hour period. The massive spike was partially blamed on a tweet from Elon Musk about his new Shiba Inu pup, Floki.

Soon after Musk posted an image of Foki on Twitter, even the #SHIB hashtag started trending. Meanwhile, data from Etherscan showed the number of worldwide Shiba holders had exceeded 700,000.

Categories
Bitcoin Crypto News Crypto Wallets Investing

El Salvador to Use Bitcoin Profits to Build $4 Million Pet Hospital

El Salvador President Nakib Bukele has a new pet project – using the country’s bitcoin profits to help build an animal hospital.

Bukele, who proclaimed bitcoin as legal tender on September 7, tweeted last weekend that the country had earned a surplus of US$4 million on its bitcoin reserve thanks to the surging price of the dominant cryptocurrency, up 17 percent in the past week alone.

El Salvador has accumulated 500 BTC over the past month, Bukele having bought the dip three times to bring its total reserve to 700 BTC.

Bukele says he will sink the US$4 million profit into a “pet hospital”, posting a computer-generated video of the project:

Bukele boasted that the pet hospital would be able to attend 384 consultations and 128 emergencies. He also tweeted: “By the way, we’re not selling any #BTC, we are using the USD part of the trust since the #BTC part is now worth more than when the trust was established.”

The government of El Salvador, a Central American republic beset by poverty and hyperinflation, has a bitcoin trust to facilitate transactions between US dollars and the crypto asset. Chivo is the name of both the trust and the commission-free wallet Salvadoreans can use to send remittances and make digital payments to businesses, either in dollars or bitcoin. 

According to Bukele, the trust now has a US$4 million surplus. Chivo can dispose of those millions without affecting the total amount in the trust, which retains the same quantity of bitcoin even when the US dollar amount goes down. 

Bitcoin Law Continues to Divide the Country

El Salvador uses the US dollar but businesses are also required to accept bitcoin as payment – if they have the technology to do so – as part of the country’s Bitcoin Law. The law was Bukele’s idea and has been nothing if not divisive – last month, thousands of Salvadoreans took to the streets to protest against it. Parts of the crypto community have endorsed the law, though institutions such as the World Bank say it will be problematic to enact.

Last month, Bukele announced that El Salvador would exempt foreign investors from taxes on their bitcoin profits to stimulate and hopefully increase foreign investment.

In July, the president foreshadowed that the nation’s abundant geothermal energy would be harnessed to mine Bitcoin, which according to conservative estimates could produce approximately 20,000 BTC per year and generate a profit of more than A$1 billion.

Now Bukele has his pet hospital plan in train, perhaps he might use some of these future bitcoin profits to alleviate living conditions for El Salvador’s long-suffering populace.

Maybe even build a human hospital or two?

Categories
Crypto News Cryptocurrencies Investing Tokens

Why Has Shiba Inu Soared 385% in a Week?

Meme coin Shiba Inu (SHIB) has leapt 385 percent in the past seven days, doubling its value in just one 24-hour period this week.

Now the world’s 12th largest cryptocurrency, the “dog that ate Dogecoin” has a market cap nudging US$17 billion, placing it ahead of Chainlink (LINK), Litecoin (LTC), Avalanche (AVE), and Uniswap (UNI).

Created by a pseudonymous developer under the alias of Ryoshi and launched just over a year ago, Shiba Inu has been described as “an experiment in decentralised spontaneous community building”. But why the sudden, seemingly spontaneous spike in value?

We can at least partially blame a tweet from Tesla and SpaceX CEO Elon Musk, proud owner of a new Shiba Inu pup called Floki:

Soon after Musk posted the above image of Foki last weekend, even the #SHIB hashtag started trending on Twitter. Meanwhile, data from Etherscan shows that the slavering pack of worldwide Shiba holders has now passed the 700,000 mark.

Shiba an Emblem of the Wider Crypto Market

Shiba Inu’s surge is emblematic of the wider crypto market, with bitcoin up 30 percent over the same period and Ethereum right behind it with a 25 percent spike.

One Shiba Inu whale (or whales) quietly transferred 6 trillion SHIB coins to a separate wallet address, with the overall price of the holdings worth US$80,856,857. The International Business Times reported the same whale(s) bought another 276 billion the next day, in instalments of 116 billion, 158 billion and a billion.

The whale(s) almost doubled their initial investment in just six days. Contrast this with the fact that on the first day of Shiba Inu futures markets, launched in May, traders lost over 1.34 trillion SHIB in just 24 hours.

Just days later, Ethereum co-founder Vitalik Buterin donated US$1 billion to an Indian Covid charity from the proceeds of dumping 660 billion SHIB, among other tokens.

Categories
Crypto Art Crypto News Investing NFTs

The Future of Music? Fans Can Now Invest in Music NFTs and Share in the Royalties

Financial services company Republic has announced the launch of “Republic Music”, an investment product that claims to offer “an entirely new way to create, produce and share royalties from music”.

Not to be confused with Republic Records, a New York-based label owned by Universal, Republic Music has partnered with crypto company Opulous to give fans the chance to “invest in the music they love for as little as US$100 and share in the rights to royalties”.

The idea is based on S-NFTs, or Security NFTs. The cryptosphere likes to argue that NFTs are not securities as such, as in the US they are subject to regulation by the Securities and Exchange Commission (SEC). But Republic views S-NFTs as a kind of security that can be invested in with the expectation of future profit.

The songs are going to be placed in an LLC, and you will be a member of the LLC. You will have a share of ownership in that song, and a right to the royalty on the back end.

Pialy Aditya, chief strategy officer, Republic

S-NFTs are overseen by the SEC and the Financial Industry Regulatory Authority (FINRA), the finance industry’s self-regulatory body. Thus US-based investors will have to comply with relevant know-your-customer (KYC) and anti-money laundering (AML) regulations to be able to get a piece of the action.

This hinges on Regulation Crowdfunding (Reg CF), which allows private companies to raise up to US$5 million from non-accredited investors.

Rapper Lil Pump Rides Republic’s First Wave

According to a Republic press release, “As part of the first wave of planned releases, [US rapper] Lil Pump is offering fans and investors the opportunity to be part of his forthcoming single Mona Lisa (feat. Soulja Boy), produced by Jimmy Duval.”

Rapper Lil Pump, first cat off the Republic rank. Source: vulture.com

Republic considers its music platform a “vertical” of its primary investment business, and is planning several other verticals geared toward fractional investments in different aspects of the creator economy.

In the new world order, early supporters are going to be rewarded, the artists are going to get paid and the community is going to grow stronger.

Pialy Aditya, chief strategy officer, Republic

More than six months ago, Crypto News Australia reported how some artists were considering directly offering their music in the form of tokenised products sold on DeFi marketplaces, rather than having it handled by traditional third parties such as record companies. It’s taken this long to start to become a reality.

Earlier this month, TikTok announced its series of NFT collectibles in collaboration with celebrity partners including US rapper Lil Nas X, Canadian musician/producer Grimes and NFT entrepreneur Gary ‘Vee’ Vaynerchuk.

Categories
Australia Crypto News Cryptocurrencies

Is ‘Collective Shift’ Simply Alex Saunders’ Nugget’s News Rebranded?

Ever since its founder went to ground nine weeks ago amid wild rumours of fraud, scams, misappropriated funds and leveraged loans, Alex Saunders’ crypto media channel Nugget’s News has also gone quiet. Turns out there’s been a discreet rebranding, with a new title reflecting exactly how that happened: by means of a collective shift.

The Nugget’s News team as shown on its website on April 5, 2021. Source: web.archive.org

The staff of so-named “global news platform” Collective Shift, headed up by 22-year-old Tasmanian Ben Simpson, is essentially the same team behind Nugget’s News. Simpson himself is the former executive director of Nugget’s News, Matt Willemsen reprises his role as head of content, while fellow Collective Shift staffers Megan Steicke (marketing), Nicholas Sciberras (research), Mark Drever (design) and Sarah Petty (editor) are also ex-Nugget’s team members.

Conspicuous in his absence, of course, is Alex Saunders, who in July figuratively vanished in the face of a Twitter storm alleging he had defaulted on personal loans extended to him by crypto investors, with the amount subsequently lost said to run “to eight figures”.

A Tale of Two Tasmanians

Like Saunders, Simpson is a relentless self-promoter. And in contrast to the recent low profile of his fellow Tasmanian, the former high-school dropout has made a point of thrusting himself into the public eye. Just this week, Simpson was the subject of a news.com.au report in which he boasted of making A$2 million a year in revenue from “a lucrative business idea that provides real-time research analysis and market updates on cryptocurrency”.

In the article Simpson claims “more than 3500 members” have signed up to Collective Shift, and that he employs “25 full-time and part-time staff”, many of whom formerly worked at Nugget’s News.

Reaction from the crypto community to the news.com.au report was swift, with many in the Twittersphere making pointed allegations to its author, Alex Turner-Cohen, regarding Simpson’s former colleague. Here’s one example:

ASIC Investigation Confirms Link

Australian Securities and Investments Commission (ASIC) documents show that up until June 22, Simpson was a director and shareholder in Nugget’s News before resigning and selling his shares to Saunders. On June 11 Simpson had registered his own company, Collective Shift, which took over the Nugget’s News business assets and intellectual property, including team, content, branding and communications. Subscribers were not advised of the change in ownership, though the Nugget’s branding had already begun to transition to Collective Shift.

ASIC frowns on the practice of companies re-branding under a new name, claiming ownership of assets of the prior company but not its creditors and liabilities. Directors have a responsibility to know what is going on within a company and can be held personally liable for any unlawful behaviour. Even claiming to have no knowledge does not absolve them from liability.

Simpson Downplays Saunders Connection

Simpson has distanced himself from his former close colleague, saying he confronted Saunders about the public allegations against him. “He looked at me straight in the eye and said, ‘don’t worry about, like, you know, there’s a couple of people I owe money [to], I am on repayment plans, don’t worry about it’,” Simpson said in a video statement to subscribers in his new venture.

Collective Shift is an independent entity and has had no involvement with any projects undertaken by Alex Saunders.

Ben Simpson, managing director, Collective Shift

Simpson has told the ABC that Saunders was not a shareholder in Collective Shift and was “no longer” a content contributor. He also told the Australian Financial Review that Collective Shift staff had no part in any of Saunders’ personal affairs. Saunders, however, openly stated in a YouTube interview in June with Uncommon’s Jordan Michaelides that “all of our research can be found at collectiveshift.com.au”.

Saunders has maintained his silence about all allegations of fraud and failure to repay loans. In August, New Zealand investor Ziv Himmelfarb filed a lawsuit against Saunders for defaulted loans totalling almost half a million dollars.

Crypto News Australia approached Simpson for comment regarding this story but he declined.

Investors Should Proceed with Caution

With claims that millions have been lost through the Nugget’s News fiasco, investors should proceed with caution when investing with largely unregulated crypto projects.

Collective Shift member on Twitter.
Categories
Banking Bitcoin Crypto Hardware Wallets Crypto News

Is Remittance-Dependent Tonga the Next Nation to Adopt Bitcoin as Legal Tender?

The small Polynesian island nation of Tonga will follow the example set last month by El Salvador in making bitcoin legal tender, if at least one senior politician has his way.

Like the Central American republic, Tonga is one of the world’s most remittance-dependent economies. Tongan MP, barrister, hereditary landowner and bitcoin advocate Lord Fusitu’a believes the adoption of bitcoin as legal tender in Tonga can potentially offset the high remittance commissions charged by money transfer services such as Western Union.

Last month, Crypto News Australia reported that El Salvador’s bitcoin adoption could cost Western Union US$400 million per year.

Between 38 percent and 41.1 percent of our GDP, depending on which World Bank figures you use, is remittances. To get those remittances to Tonga, Western Union takes a 30 percent bite out of them, on average. In El Salvador, it’s closer to 50 percent.

Tongan MP Lord Fusitu’a

Fusitu’a believes bitcoin has a place in the Tongan financial ecosystem and believes it could work using digital wallets such as Strike. He also suggests that bitcoin payment apps could be adopted en masse as they would not require a parliamentary order to implement.

Bitcoin is the first truly global natively open monetary system. Blockchain is the most optimal storage medium for money if your goal is decentralisation and complete, egalitarian democratisation of money.

Tongan MP Lord Fusitu’a

Choice of Wallet Could Be a Problem

Fusitu’a cites Strike, the digital wallet of Chicago-based Zap Solutions, as a potential means of accepting bitcoin as payment in Tonga. He claims that using Strike to send money back to Tonga from countries such as New Zealand would not require an act of parliament or even an endorsement by the National Reserve Bank of Tonga.

However, earlier this year it was found that Zap Solutions lacked the licences to operate in most US states, potentially meaning most cash and crypto transfers to El Salvador using Strike are illegal. That would have obvious implications for Tonga.

Fusitu’a’s enthusiasm for bitcoin is not shared by everyone in Tonga. Sione Ngongo Kioa, governor of the Pacific island nation’s reserve bank, has already indicated the bank has no intention of accepting bitcoin as legal tender. 

“The adoption of bitcoin as an official alternative currency is definitely unlikely,” Kioa said.

Categories
Crime Crypto News

Joe Biden to Bring 30 Countries Together to Stem ‘Illicit use of Cryptocurrency’

US President Joe Biden intends to marshall the resources of 30 other countries to try to prevent “the illicit use of cryptocurrency”.

In a statement released to mark the beginning of Cybersecurity Awareness Month, Biden said the US was linking up with nations around the world – “including our NATO allies and G7 partners” – to respond to cybersecurity threats.

We must lock our digital doors – by encrypting our data and using multi-factor authentication, for example – and we must build technology securely by design, enabling consumers to understand the risks in the technologies they buy.

Joe Biden White House briefing, October 1

The president said he was committed to strengthening US cybersecurity by “hardening critical infrastructure against cyberattacks, disrupting ransomware networks, working to establish and promote clear rules of the road for all nations in cyberspace, and making clear we will hold accountable those that threaten our security”.

Biden Ramping Up Against Ransomware

The Biden administration has been already ramping up measures against ransomware. Last month, the US Treasury announced “a set of actions focused on disrupting criminal networks and virtual currency exchanges responsible for laundering ransoms” as part of a whole-of-government effort to counter ransomware.

Also in September, Treasury issued the country’s first sanctions against a cryptocurrency exchange. Registered in Prague but based in Moscow and St Petersburg, Suex was linked to alleged ransomware cash-outs among other transgressions.

Ssshhhh … Don’t Mention Russia!

Conspicuously absent in Biden’s statement was any mention of Russia, in particular its growing ecosystem of cyber gangs. Yet ransomware had loomed large in conversations between Biden and his Russian counterpart, Vladimir Putin, in July.

Meanwhile, just last month the US Securities and Exchange Commission quietly signed off on a deal to spy on crypto DeFi transactions. And in May, Biden revealed a new proposal to report crypto transactions over US$10,000 from 2023, with the aim of generating an additional US$700 billion in tax revenue each year.

Categories
Blockchain Crypto Art Crypto News NFTs Social media Tokens

‘TikTok Top Moments’ NFTs Launch Featuring Lil Nas X and Grimes

TikTok is set to release a series of NFT collectibles with celebrity partners including American rapper Lil Nas X, Canadian musician/producer Grimes and NFT entrepreneur Gary ‘Vee’ Vaynerchuk.

TikTok Passes One Billion Active Users

The hugely popular Chinese video-sharing and social media app, which now boasts more than one billion monthly active users worldwide, will issue six different NFT drops based on what it terms “culturally significant” videos shared on the service.

Rapper Lil Nas X leads the TikTok NFT rollout. Source: Billboard magazine

The TikTok Top Moments collection kicks off on October 6 with Lil Nas X as the subject of the first drop, with an NFT based on a TikTok video by Seattle-based artist Rudy Willingham. The video, a stop-motion tribute to the rapper’s Montero (Call Me By Your Name) music video, has already garnered millions of interactions via the service.

Subsequent ‘Moments’ in the collection will feature Gary Vee, social media personality Bella Poarch, and musician Grimes, who in March this year sold her crypto art NFT collection for US$6 million.

NFT ‘pioneer’ artist Grimes features in the Moments collection. Source: foxnews.com

TikTok will offer both one-off and larger “limited edition” runs of its NFT collectibles. Other artists in the pipeline include Brittany Broski (aka Kombucha Girl), rappers Curtis Roach and FNMeka, and TikTok video regular Jess Marciante.

TikTok plans to showcase all six of its one-off videos at the Museum of the Moving Image in Queens, New York, this month.

NFTs Minted on Immutable X

The NFTs will be minted on Immutable X, a layer-2 scaling solution that runs on top of Ethereum. Immutable X attracts lower transaction fees and faster completion times than Ethereum’s mainnet, plus it uses significantly less energy than Ethereum’s proof-of-work consensus model.

The first six months of 2021 have seen some US$2.5 billion worth of trading volume across the top NFT marketplaces. Since then, however, leading marketplace OpenSea has recorded more than US$3.4 billion in volume in August alone.

That same month, Audius, a music streaming platform on the Ethereum and Solana blockchains, partnered with TikTok to create TikTok Sounds. As a result, the $AUDIO token surged 200 percent.

All very ironic when you consider that just a month earlier, TikTok banned its users from promoting crypto-related financial products and services and also prohibited ads relating to crypto.

Categories
Crime Crypto News Cryptocurrencies Scams

Crypto Romance Scams Cost Americans $133 Million in the First Half of 2021

Americans are increasingly falling into the tender trap of online romance scams, backed by figures for the first half of 2021. From January 1 to July 31, the FBI logged over 1,800 complaints related to romantic deceptions resulting in personal losses of approximately US$133,400,000, much of it in cryptocurrency.

Nationwide in 2020, only 23,768 complaints categorised as romance scams were reported to the FBI, though even that figure was 4,295 higher than the previous year. The obvious exponential increase in complaints in a mere six-month period has spurred the FBI into publishing a guide for potential victims to guard against the practice.

The scammer’s initial contact is typically made via dating apps and other social media sites, the FBI warns. Having gained the victim’s trust via the cultivation of an online relationship, the scammer may then claim inside knowledge of lucrative cryptocurrency investment or trading opportunities on the pretext of “building a future together”.

The scammer next directs the victim to a fraudulent website or investment application. The victim invests on the platform and returns a small profit predetermined by the scammer.

Hook, Line, Lure and Sinker

This practice invariably escalates to larger amounts of money as the scammer presses for urgency. When the victim is ready to withdraw funds again, the scammer invents reasons why this cannot happen. Additional taxes or fees need to be paid, or the minimum account balance has not been met to allow a withdrawal.

This usually encourages the victim to provide additional funds. Sometimes, a “customer service group” gets involved, also part of the scam. Victims are soon unable to withdraw any money at all, and the scammer(s) most often cut off contact with the victim and are never heard from again.

Tips to Prevent Online Eclipses of the Heart (and Wallet)

While many of these cautionary recommendations are No-Brainers 101, it may pay to keep them in mind:

  • Never send money, trade, or invest per the advice of someone you have solely met online.
  • Do not disclose your current financial status to unknown and untrusted individuals.
  • Do not provide your banking information, Medicare number, copies of your identification or passport, or any other sensitive information to anyone online or to a site you do not know for sure is legitimate.
  • If an online investment or trading site is promoting profits too good to be true, it’s most likely they’re false.
  • Be cautious of individuals who claim to have exclusive investment opportunities and urge you to act fast.

Like Americans, Australians are losing record amounts to scams of various kinds. According to an August report from the Australian Competition and Consumer Commission, Aussies lost over A$70 million during the first half of this year and more than half of that number was attributed to cryptocurrency investment scams. The top crypto-related scams in Australia, according to the report, were investment scams, followed by romance scams and personal identity mining.

Categories
Crypto News Cryptocurrencies Surveys

One-Third of the World’s 100 Biggest Companies Have a Positive Crypto Stance

The latest Blockdata research has found that 32 of the world’s top 100 publicly traded businesses have a positive attitude to cryptocurrencies, proving that even large organisations can no longer afford to ignore digital assets.

According to the research, of the top 100 firms 32 have a positive attitude toward cryptocurrency, 61 maintain a neutral perspective, and only seven have an opposing stance.

Those 32 businesses deemed favourable toward cryptocurrencies included one or more of the following criteria:

  • The business accepts cryptocurrency as a form of payment and provides connected goods or services.
  • The business keeps cryptocurrency in its treasury or recruits employees to work on developing cryptocurrency-related goods or services.
  • The business has senior leaders who have spoken in favour of cryptocurrency in the past two years.

Financial Institutions Are Changing Their Minds on Crypto

Of particular note is that many of these 32 businesses are financial institutions that were previously sceptical about cryptocurrencies but are progressively changing their minds due to customer demand.

Of the 61 businesses deemed neutral, 59 were considered so due to the absence of any public statements on cryptocurrencies by the company or its senior executive officers.

Top 100 Public Companies’ Stance on Cryptocurrency. Source: Blockdata

Most of the top 100 firms are involved in a line of business that is not immediately impacted by cryptocurrencies. As a best-case scenario, these businesses may utilise cryptocurrencies for transactions with partners. Conversely, they may incorporate cryptos into their treasury holdings to offset losses incurred by holding inflationary currencies such as the US Dollar.

The two exceptions are Microsoft, which has developed a Decentralised Identity system on the Bitcoin blockchain and intends to build further solutions, though this is not an endorsement of crypto; and Alibaba, which has tried to launch crypto-related projects, but none has succeeded.

The companies deemed negative on cryptocurrencies, regardless of whether they provide related goods or services, have been openly critical of cryptocurrencies or have limited customers’ ability to engage in crypto-related activities.

Other Surveys Flag Up to 76% Interest in Crypto

Last month’s 2021 Global Blockchain Survey, conducted by multinational accounting firm Deloitte, revealed that 76 percent of people believe crypto will be a strong alternative to, or outright replace, fiat money within the next decade.

A month before that, as also reported by Crypto News Australia, multinational financial services corporation Fidelity Digital Assets published a survey that revealed 70 percent of institutional investors were interested in buying cryptocurrencies.