The Crypto 5

Greetings!

Crypto holiday songs, a 2022 timeline, and all your questions answered about Web3 in time for your next family gathering.

Welcome to the Crypto 5.

We've?heard?sharing is caring, so think of?sharing this newsletter?as a seasonal and sustainable gift!

1. The Information on turning the heat off

The heat may be on for SBF, but the thermostat has been turned down for the crypto industry. Charges unveiled this week were good old fashioned fraud. The Information's Aidan Ryan spelled it out the allegations:

• Federal prosecutors in New York: wire fraud and conspiracy to commit wire fraud and money laundering.
• Securities and Exchange Commission: defrauding investors.
• CFTC: Defrauding customers and violations of the Commodity Exchange Act.?

Ryan's take: “FTX founder Sam Bankman-Fried has been charged with a range of financial misdeeds. But they don’t delve into issues that could give regulators more firepower for beefing up oversight of the crypto industry.”?

Some were concerned the SEC would try and slide in complaints about tokens being securities. While that didn't happen this time, “of course, the SEC could amend its complaint with additional charges or defendants,” Ryan added.

While the SEC v crypto takes a pause, good old-fashioned fraud and embezzlement seem to be still kicking around.

2. Reuters on turning the heat up...later?

Binance, the world's largest crypto exchange by daily volume, started in 2017 and has been under investigation by the US Department of Justice in 2018, according to an exclusive by Reuters this week.

Details are scant, but the article revealed two big things to the Crypto 5: “charges under investigation are unlicensed money transmission, money laundering conspiracy and criminal sanctions violations” and the Justice Department is torn between what to do next - delaying any next steps.

What would happen if an exchange 6x the size of FTX goes down? Is Binance at Risk? The article goes into detail about the history of the exchange, the case being built and the steps the company has taken to increase compliance and security. Take a look and let me know in the comments what you think.

3. Fortune on crypto in action in ukraine

The UN's Refugee Agency (UNHCR) has worked with the tech sector for many years, so its new venture should not surprise anyone. Instead of receiving aid in cash or one local currency that will have to be transferred to another, the UNCHR will put digital currency into the digital wallets of eligible recipients.

How will it work?

• Through a new blockchain-based aid program, UNHCR?will transfer USDC, a stablecoin pegged to the U.S. dollar, to eligible recipients’ Vibrant digital wallets, which run on the Stellar blockchain (Amanda note: there are different blockchains. Learn more about Stellar.
• The aid recipients can then receive the funds in dollars, euros, or local currency at a MoneyGram location, of which there are 4,500 in Ukraine, according to a statement.

Why?

It will make exchanging money faster, traceable and easier. The first cities to pilot the program: Kyiv, Lviv and Vinnytsia. More may follow.

According to Fortune:

“Despite a rough couple of months for crypto, including last month’s?collapse of FTX?and the charges filed against?former CEO Sam Bankman-Fried, the UN’s aid program illustrates a real-life use case for cryptocurrencies. Months after Russia invaded Ukraine, crypto has played an outsized role in directing funds to refugees and the Ukrainian government.”

4. The Crypto Council on What is Web3?

Yes - the Crypto Council does have a blog - so it counts as a news site and inclusion on this list. It is a shamless plug? It's a helpful answer to many incoming questions.

Many of you asked what is the difference between Web 2 and Web 3 (and then asked about Web 1). So we turned to research fellow Katherine Wu to help us break down the promise of Web3 and how crypto will underpin its goal.

To sum up:

• Web1 was the “Read” era, Web2 was the “Write” era – and Web3 is the “Own” era.?
• At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users by moving ownership of data, assets, and curation from the hands of corporations and intermediaries to individuals themselves.?
• Web3 is the ultimate vision and ethos, but crypto is what enables that vision in the form of tokens that, for example, grant users the right to help govern the services they use.?

Crypto is the enabler to the vision and promise of Web 3. So don't count it out - especially as we see many publicly traded businesses hiring for Web3 growth.

Wu continues: “In a way, Web3 is a reexamination of the relationship between the individual and the platform-centric and advertising-powered economy that won the Web2 era. As such, whatever the form the Web3 instrument takes: whether it’s digital assets, cryptocurrencies, non-fungible tokens, etc– are all to further and change our status quo.”

“Ultimately, what’s in a name – and why does the Web3 / crypto distinction matter? Short answer is that it doesn’t. One is the vision, and the other is the instrument in which the implementation and execution towards that vision gets carried out, meaning that it all continues to the end goal of a fairer and more equitable internet and economy.”

5. 2022 Crypto Timeline

We tried to find a timeline of events for 2022. We couldn't find a policy-specific one that also layered in the big global news events, enforcement actions and public comment periods. So we made one with an interactive filter feature and lots of links to primary sources. Go to our site and click on the circles and squares to open the more data box.

Sheila Warren 's companion piece takes us through a notable year of high highs and low lows. Overall, individuals and governments alike are taking note of the polylithic nature of crypto.?Some of the points on the timeline:

• Over $1 billion?raised rapidly and transparently for COVID Relief in India.
• $60 million donated?in the crucial initial days of the Ukraine war.
• The?crash of Terra?– and the associated losses.
• The Merge, a multi-year decentralized technical project,?taking place?without incident and significantly diminishing crypto’s overall energy usage.
• The EU's?Markets in Crypto-Assets?(MiCA) Regulation and accompanying?Transfer of Funds Regulation?(TFR).
• Singapore's?Financial Services and Markets Bill.?
• The US's Bipartisan Responsible Financial Innovation Act?proposed by Senators Lummis and Gillibrand and the?Digital Commodities Consumer Protection Act,
• The?dramatic rise and fall of FTX?and subsequent?arrest?of SBF.

We hope this tool can help with research and analysis, as well as provide a visual representation of just how crazy this year was.

Before you go

You may be tired from that list of a handful of events in the crypto calendar. You may have questions, and I want to hear them in the comment box below. But, before this newsletter gets too long, I'd like to leave you with this overall question:

Are there holiday songs about crypto?

None have broken through to the Billboard charts, but there are some, let's say, interesting ones out there. Here is one to start you off on what will likely become a rabbit hole.

Happy Holidays from the Crypto 5.