US Sanctions Tornado Cash | The Capital


The Daily Conquest #057

Everything you need to know of today’s fast-moving crypto markets.

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Overview

  • Tornado Cash sanctions consequences
  • Bitcoin: Will BTC continue its uptrend?
  • Despite no meeting, Jim Cramer says the FED could raise rates in August.
  • Reddit chooses Arbitrum for its community points system.

Good morning,

Sanctions/bans have unforeseen consequences.

Remember when the US tried to ban alcohol in the 30s? The reaction was an implosion of organized crime families.

Another example is The War on Drugs in the 80s, a decades-long failure.

Now US authorities are turning to Crypto, and consequences of sanctions on users of Tornado Cash have already begun to develop. More in “My five cents” below.

Now that US authorities are sanctioning Tornado Cash, anyone in possession of Crypto that has interacted with the protocol could face steep fines or even jail time; something Ran covered exclusively during the fundamentals show today.

Related:  Trader Tone Vays Says Bitcoin Capitulation Imminent – Here's His New Crypto Outlook

In response to sanctions, a prankster (likely trying to make a point) sent 0.1 ETH from Tornado Cash to the accounts of many prominent crypto wallets, including those of Brian Armstrong, Jimmy Fallon, PUMA, and Shaq.

So what happens now? Does everyone on this list get punished?

Point taken.

How US authorities will react to this new development remains to be seen.

BTC/USDT 1D

Bitcoin rejected the 24k resistance zone (red), once again opening the possibility of the price reaching the 21.7k support if the trendline (green) fails to hold. The CPI data incoming tomorrow may signal the direction markets decide to take. BTC completed the daily candle down -2.77% to $23,149.

High-resolution chart

COIN/USD

Coinbase (COIN) failed to meet expectations for quarterly earnings, and the price took a significant hit and closed the day at $87.68, down -10.55%. However, for those seeking a stock crypto-proxy, COIN could be a prime candidate after the company partnered with the world’s largest asset manager Blackrock, to offer institutional clients crypto access.

High-resolution chart

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Jim Cramer sees the FED raising rates in August. Cramer noted the Federal Reserve could raise interest rates in August before their scheduled meeting in September if economic data fails to fall within expectation. However, take his opinion with a grain of salt. Historically, he’s a lousy forecaster. Although, If CPI data that releases tomorrow is significantly worse than expected, Cramer might be correct this time.

News tidbits:

  • AVAX and XLM are now trading on Robinhood.
  • Circle plans ONLY to support the Ethereum PoS chain after the merge.
  • German Crypto Exchange Nuri files for insolvency.
  • Gucci now accepts ApeCoin.

Reddit chooses Arbtirum. Ethereum Layer-two, Arbitrum has announced that Reddit’s community points system will be built on Nova Chain. The move allows Ethereum developers to create various apps that can utilize the future Reddit tokens.

Vitalik stealth NFT idea. Ethereum co-founder, Vitalik Buterin, has released a solution to add privacy to ERC-721 smart contracts (NFTs).

  • The team behind Moonbirds and Oddities has announced a plan to switch to a public domain model that allows anyone to reproduce the art from the two projects commercially. However, many in the community are not happy about the change.
  • This week in music NFTs.
  • Nas Academy to launch token-gated Web3 courses and library.
  • STEPN launches GMT earnings plans.
  • Theta Network to issue Galaxy NFTs to innovate the Samsung user experience.

The developments in the Tornado Cash sanctions help highlight the challenges of attempting to ban a decentralized entity.

Authorities can sanction specific wallets and freeze centralized elements, but it’s only a tiny ripple in a giant lake. In the case of sanctioned wallets, it was Circle’s centralized USDC coin. But the cryptoverse will adjust.

Now that Circle is bowing to US sanctions; developers will begin hammering out solutions. As a result, protocols will transition from centralized assets in favor of decentralized ones.

In turn, the goals of authorities will only become harder over time.

The more they sanction, the faster the decentralized privacy sector will advance. Moreover, the digital world adapts quickly. In reality, it’s a short-sighted solution (to a non-problem) without consideration of the consequences.

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