  What you need to know today in crypto and beyond July 21, 2021 Sponsored By:  Welcome to The Node.
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Today's must-reads Top Shelf  MAKING HISTORY: Sam Bankman-Fried's FTX exchange has raised the largest funding round in crypto history. The exchange's $900 million Series B round included more than 60 investors, including Paradigm, Ribbit Capital and Sequoia.
BOFA IN EU: Bank of America's prime brokerage unit has started the clearing and settlement of cryptocurrency exchange-traded products for hedge funds in Europe, according to sources familiar with the matter. Last week, BoA, the second largest bank by assets, also approved cash-settled bitcoin futures trading for some clients. CBDCS: A CBDC is "probably necessary" for a competitive digital economy, Bank of Canada said in a staff paper. The bank argued that a CBDC would give consumers a non-bank option to store their money risk-free, increasing competition in the market for retail deposits, and would allow users to bypass payment services providers such as credit cards. A TREND? The Maker Foundation has announced it is turning over operations entirely to its decentralized autonomous organization (DAO), MakerDAO, as founder Rune Christensen has long promised. This comes after crypto trading pioneer ShapeShift announced last week that it is closing its doors and handing over its keys to a DAO controlled by FOX token holders.
IN CUSTODY: Ethereum developer Virgil Griffith has been remanded in custody, Inner City Press reported Wednesday. The developer was previously charged for allegedly violating U.S. sanctions against North Korea by offering knowledge of how to potentially circumvent sanctions using crypto.
–Helene Braun
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Overheard on CoinDesk TV Sound Bite  "The more freedom I was seeking, I realized in 2018, the less free I actually felt."
A message from CoinDesk  The Investor's Perspective on the Bitcoin Taproot Upgrade Taproot is a bundle of three upgrades to Bitcoin aimed at improving network security, privacy and scalability. At the same time, it poses some potential drawbacks to Bitcoin including risks of low adoption, unintended privacy shortcomings and Bitcoin community disappointment and fracturing.
CoinDesk Research's newest report dives into the economic impact and investment implications of the Taproot upgrade. Download the full report.
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Putting the news in perspective The Takeaway  No, the European Union is not "banning anonymous crypto wallets" In a series of shocking statements early yesterday, European Commission regulators declared that they were "banning anonymous cryptocurrency wallets" as part of a money laundering crackdown. This understandably sent crypto markets tumbling – but they quickly recovered, apparently as it became clear the E.U. had woefully misrepresented the substance of the proposed regulation.
The crypto provisions (PDF) were part of a package of four proposals intended to fight money laundering. In a tweet thread summarizing the proposed rules, Mairead McGuinness, the E.U. commissioner for financial services, wrote that the measure "will ban anonymous crypto wallets and make sure that crypto-asset transfers are traceable."
If that sets your hair on fire, take a deep breath. I try not to use the F word, this being a family publication, but this is one of the rare appropriate instances: The statement from McGuinness is straight-up FUD. Rather than a ban on crypto wallets, the E.U. rules would impose tighter but defensible rules on money service providers, such as exchanges or custody services. Either McGuinness and her communications team misspoke out of genuine ignorance when describing the new rules to the public, or they knowingly obfuscated as a way to misdirect public perception.
As Tim Copeland at The Block pointed out, the new rules would be very similar to the "travel rule" guidelines from the multinational Financial Action Task Force. The rules prohibit providing anonymous services, such as crypto custody or exchange accounts provided by a third party, not the provision of software for self-custody.
In short, the ban would impact the crypto equivalent of Swiss bank accounts, not the use of crypto as cash. So if you're willing and able to self-custody (which you should really be doing anyway), you can still hold and spend crypto anonymously (unless you do commit a crime, then that anonymity probably won't last long).
"Banning anonymous wallets" would be a truly terrifying goal, because nearly every cryptocurrency wallet is anonymous by default, in the same sense that every web browser is anonymous by default. Wallets like MyCrypto, Exodus and Electrum are software, available for download worldwide. The notion of "banning anonymous crypto wallets," in other words, implies an utterly draconian crackdown involving raids on server farms hosting wallet code, SWAT teams battering down the doors of DeFi degens' basement apartments, and developers on trial for helping people move data around.
Unsurprisingly, many news outlets reported McGuinness's statements without examining them. Some even further distorted the essence of the new rules, such as the Irish Times' laughable declaration that the E.U. would "ban cryptocurrency anonymity," full stop.
In the face of such credulous headlines, crypto prices briefly swooned, with Bitcoin dropping below $30k. But the ship righted itself quickly and BTC surged back above $31.5k by this morning. That could have been for any number of reasons, but it's reasonable to guess the resurgence came as traders figured out that the EU was not, in fact, "banning anonymous crypto wallets."
It's a mixup that drives home the point that cryptocurrency regulation is too often being created by people who know next to nothing about the technology. (McGuinness also justified the new regulations by leaning hard on the idea that cryptocurrency is a huge new money laundering threat, which simply isn't true.)
At the same time, it does seem improbable that a high-ranking EU commission, made up (mostly) of adult professionals, could get something so basic wrong. So here's the alternative explanation for the realpolitik crowd: The E.U. knows it can't "ban anonymous crypto wallets." But by obfuscating the difference between custodial wallets and self-custody software, they may hope they can mislead some portion of the public into thinking that custodial accounts are the only kind that exist.
–David Z. Morris
 The CoinDesk Quarterly Review 2021 Q2
After two consecutive quarters of strong price gains for most of the top crypto assets, Q2 2021 finally brought an end to market euphoria with a resounding crash.
Most CoinDesk 20 assets, which constitute 99% of the crypto market by verifiable volume, ended the quarter with negative returns. Meanwhile, protocol development for the world's largest cryptocurrencies by market capitalization, Bitcoin and Ethereum, reached new milestones.
CoinDesk Research's latest Quarterly Review dives into the trends, developments and technological progress that shaped the crypto markets from April to June 2021. The full report is now available from the CoinDesk Research Hub.
The Chaser... 
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