September 21, 2022

The biggest crypto news and ideas of the day

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Hello and welcome to The Node. I'm Daniel Kuhn, here to take you through the latest in crypto news and why it matters. In today's newsletter: IMF says crypto needs a "global regulatory framework," Iran will begin testing a digital rial this week and a white hat hacker found a huge vulnerability in the Ethereum–Arbitrum bridge.

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– D.K.

Today's must-reads

Top Shelf

Crypto Needs 'Global Regulatory Framework,' IMF Says: The International Monetary Fund (IMF) has called on financial regulators around the world to come together to develop a "global regulatory framework" for crypto assets. The regulator warned the longer it takes international regulators to form a game plan for regulating crypto, the more likely it is that regulation will be locked in at a fragmented, national level.

Separately, U.S. Congressman James Himes (D-Conn.), an outspoken central bank digital currency advocate, told CoinDesk in an interview that the digital dollar likely won't be part of the retail banking world. Although White House reports on CBDCs "point the way" to eventual adoption, Congress has yet to pass legislation.

Iran Starts Testing a Digital Rial This Week: The Central Bank of Iran (CBI) will start a CBDC pilot on Thursday. The country's government has advocated for crypto as a means of circumventing U.S. sanctions, and it seems like blockchain could be a component of an eventual "crypto rial," which the CBI called "programmable banknotes" in a report..

Elsewhere, crypto exchange Huobi Global has enabled crypto purchases with fiat currency in Latin America, joining other global players including Bybit and MetaMask.

Indonesia Wants Citizens to Steer Local Crypto Exchanges: Regulators in Indonesia are introducing a rule requiring domestic cryptocurrency exchanges to be mostly led by its citizens. The rule would require at least two-thirds of directors and commissioners on crypto trading platforms to be Indonesians residing in the country, in an effort to strengthen oversight of the industry in the wake of the Terra blockchain collapse.

White Hat Found a Huge Vulnerability In Ethereum–Arbitrum Bridge: The rush to find a way of lowering transaction costs on the Ethereum blockchain led developers behind scaling tool Arbitrum to miss a bug in its latest update that could have potentially led to hundreds of millions of dollars in stolen funds. Arbitrum paid about 400 ether (US$53,000) to the hacker who flagged the vulnerability, which was found before bad actors could exploit it.

Separately, the latest reporting on cryptocurrency Wintermute, the victim of Tuesday's $160 million hack, is that the market maker has over $200 million in outstanding DeFi debt to several counterparties. Wintermute's CEO had said the company remains solvent and that it has "twice over" the amount of equity that was stolen.

– Xinyi Luo

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Putting the news into perspective

The Takeaway

Amazon and Wanda Sykes Think Spying on You Is Hilarious

Next Monday, Sept. 26, will mark the premier of "Ring Nation," which its producers describe as "a half-hour, studio-based series that gives audiences a daily dose of life's unpredictable, heartwarming and hilarious viral videos shared by people from their video doorbells, smart home cameras and more."

The light tone is reflected in the choice of host, comedian Wanda Sykes. The videos will specifically come from Ring brand video devices, and the Amazon-owned company is a co-producer of the show.

Critics, however, are arguing the show is anything but a low-stakes revamp of "America's Funniest Home Videos." Technology advocacy groups Fight for the Future (FFF) and Media Justice instead allege that "Ring Nation" is "normalizing and promoting Amazon's harmful network of surveillance cameras," and that Ring's Neighbors app "amplifies racial profiling and further subjects communities of color to racist policing and criminalization."

Amazon acquired Ring for a reported $1.2 to $1.8 billion in 2018 as part of its larger strategic push into "smart home" devices and commercialized data gathering. Unlike traditional security systems, Ring doorbell cameras upload their video to Amazon's servers. The full extent of Amazon's use of those videos is unclear, but it is known that Amazon can and has accessed and shared them with police departments without a warrant or user consent. Ring has refused to even disclose how many users' videos it has shared without permission. Installing a Ring camera on your own property, in short, borders on giving Amazon permission to do whatever it wants with the footage.

FFF and Media Justice have launched a campaign for the show's cancellation. IndieWire reports that a broader coalition of 40 activist groups have now signed on to the campaign, including the generally pro-video citizen journalism nonprofit WITNESS and the UCLA Center for Race and Digital Justice.

(Maxim Hopman/Unsplash, modified by CoinDesk)

Massachusetts Sen. Ed Markey (D) has also decried the show, saying, "Amazon appears to be producing an outright advertisement for its own Ring products and masking it as entertainment … The Ring platform has too often made over-policing and over-surveillance a real and pressing problem for America's neighborhoods, and attempts to normalize these problems are no laughing matter."

Instead of "America's Funniest Home Videos," "Ring Nation" might be much better compared to the 1990s poverty and brutality exploitation touchstone "Cops." The show is co-produced by MGM subsidiary Big Fish Entertainment, formerly behind an even more exploitative riff on the "Cops" model called "LivePD," which was, not coincidentally, cancelled in the summer of 2020 when George Floyd's murder by police showed Americans (for really the first time ever, we swear) that police brutality existed. "Cops," incredibly, is still in production, but only airs internationally, not in the U.S. The brutality of American policing, it seems, is still good entertainment in other countries, but all too real at home.

On a similar note, "Ring Nation" producers say the show is intended for syndication – that is, primarily terrestrial broadcast. There is no indication it will appear on Amazon's streaming platform, suggesting that Amazon may be working to expand Ring's market by targeting the show to lower-income viewers who aren't yet Amazon customers – while hiding it from more-connected audiences such as the coastal media.

This makes Wanda Sykes' involvement particularly objectionable. It seems obvious she's being leveraged to mute objections from the Black communities most harmed by mass surveillance and police state paranoia. Organizers of the "Cancel Ring Nation" campaign point out that "footage from Ring cameras was used to track and monitor protesters who took to the streets, exercising their First Amendment rights, in the wake of George Floyd's murder … Racial profiling and racist policing are core components of Ring's business model, which profits off fear."

That is, Ring sells more surveillance devices when audiences are more afraid of their neighbors. So while the "Ring Nation" press announcement leans on wedding fails and cute animals caught on Ring cameras, you can bet the show will also traffic in "suspicious" characters "caught in the act" and other forms of fear mongering.

Shows like "Cops" are no longer palatable to American audiences because the U.S. policing agenda has been shown to be about serving the powerful and protecting them from the weak – especially the weakest of all. American police have killed 129 children across the U.S. since 2015, according to a database maintained by the Washington Post, a number worth remembering when Ring tries to sell itself with footage of cute trick-or-treaters.

Actual cops have squandered the deference once accorded them by society through corruption and incompetence. Amazon and founder Jeff Bezos would like to offer a friendlier vision of public safety – one based not on human relationships or community solidarity, but on artificial intelligence and omnipresent spying.

At least a camera can't shoot your kid, right?

– David Z.Morris

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Continue reading here

*This is sponsored content from Tron.

Overheard on CoinDesk TV...

Sound Bites

"It will dampen innovation. It will cause entrepreneurs to look elsewhere to innovate."

– Blockchain Foundation Executive Director Cleve Mesidor, weighing in on crypto regulation, on CoinDesk TV's "First Mover."

What others are writing

Off-Chain Signals

House Stablecoin Bill Would Put Two-Year Ban on Terra-Like Coins (Bloomberg)
US Digital Currency a 'Unanimous Need' to Compete With China: House Committee (Decrypt)
Are Companies … Aside From MicroStrategy … Still Buying Bitcoin? (Blockworks)
Opinion: Why crypto businesses need anti-money laundering regulations (World Economic Forum)

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