Blockchain Bites: PayPal, Mastercard Inch Closer to Crypto
Fintech giant PayPal is leaning on Paxos to handle its crypto services, Mastercard is expanding its crypto program and a prominent Canadian crypto platform has been accused of wash trading as much of 90% of its volumes.
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PayPal Picks Paxos
PayPal, the fintech giant planning to bring crypto trading to its massive user base, hasÂ chosen Paxos to handle the new serviceâs supply of digital assets,Â according to two people familiar with the matter. Paxos launched a brokerage service last week, which provides an API solution to allow businesses to begin offering crypto buying, selling, holding and sending capabilities â while handling all regulatory compliance aspects. Itâs unknown what cryptocurrencies PayPal intends to offer, though its entry into the space makes it one of the most mainstream companies to do so.Â
Canada-based crypto trading platform Coinsquare has been accused by the Ontario Securities Commission (OSC) ofÂ inflating its trading volumesÂ in an illegal practice called wash trading. In a Statement of Allegations from the OSC, filed last Thursday, the regulator alleges Coinsquareâs executives directed staff to wash trade as much as 90% of the platformâs reported volume between July 2018 and December 2019. The alleged misconduct occurred while Coinsquare was applying to the OSC to register a subsidiary, Coinsquare Capital Markets.
Mastercard is expanding its cryptocurrency program by granting Wirex, a crypto payment business, principal membership status. This status makes Wirex theÂ first native crypto company to be able to directly issue payment cardsÂ to its customers. The Financial Conduct Authority (FCA) regulated-Wirex offers a payment facility that automatically exchanges crypto into fiat currencies.
Standard Charteredâs venture and innovation arm has been working on aÂ crypto custody offering for the institutional marketÂ that could be piloted later this year. Alex Manson, the head of SC Ventures, said as many as 20 institutions have expressed interest in the custodial solution. He added, institutional adoption has been hindered by a lack of proper custodial offerings. Initially, SC Ventures had been looking at creating a market service, but realized it had to go a couple of steps back as many wouldnât touch the digital asset space âwith a flagpoleâ until they had ready access to an institutional-grade storage solution.
The U.K. government is looking toÂ increase oversight into cryptocurrency promotionsÂ in order to protect investors. On Monday, the countryâs Treasury said it would clamp down on âmisleading and inadequate promotionsâ that endangered retail investors, like crypto promotions. John Glen, the City Minister responsible for the U.K.âs financial services sector, said any firm looking to approve the financial promotions from unauthorized firms would first need to have the consent of the Financial Conduct Authority. He added the proposals would bring crypto product promotions up to the same levels as those for other asset-classes.
- A Welsh author memorializes theÂ ICO bubble in novelÂ form
- Wanted Wirecard executive is thought to beÂ sheltered by Russiaâs Secret Service
- Third Centra Tech founderÂ pleaded guilty to ICO fraud
- Balaji proposed a decentralized plan to exit Twitter (Decrypt)
- $1.6 billion was invested in institutional-focused crypto custody services (The Block)
The big story
Elon Muskâs OpenAI opened its third-generation language processing model to private beta, and crypto is aflutter with prognostications. GPT-3, short for Generative Pre-training Transformer, is a new AI-driven tool that revolutionizes how computers process and produce language.Â
âWhen properly primed by a human, it can write creative fiction; it can generate functioning code; it can compose thoughtful business memos; and much more. Its possible use cases are limited only by our imaginations,âÂ ForbesÂ reports.Â
Fed with nearly all the text available on the internet (roughly 175 billion parameters, or two orders of magnitude larger than its predecessor) GPT-3 can take any chuck of language a human gives it and run wild. Itâs the one of theÂ most advanced machine-learning language models to date.Â
Manuel Araoz, Zeppelin Solutions CTO, already used it to write aÂ 746-word blogÂ about a fake experiment looking at how GPT-3 can be used to deceive Bitcointalk forum members,Â DecryptÂ reports. This meta-blog demonstrates how language generators could be employed to create fake news and misinformation.Â
Araoz wonders whether GPT-3 will be âthe biggest thing since bitcoin.â Citing its raw processing power, and Turing Test-passing blogs and tweets, itâs likely this technical edge will have a profound effect on how we judge content â once itâs released to the wild world wide web.Â
Thereâs plenty to suggest this tool will deepen the skepticism of online content, but Gwern, a pseudonymous researcher in crypto, has already used it to find beauty.Â
âGPT-3âs samples are not just close to human level: they are creative, witty, deep, meta, and often beautiful. They demonstrate an ability to handle abstractions, like style parodies, I have not seen in GPT-2 at all,âÂ he writes,Â after testing it for a week. âChatting with GPT-3 feels uncannily like chatting with a human.â
Other early testers have their doubts. Delian Asparouhov, a Principal at Founders Fund, cautioned not to âget too excited, this isnât some sort of general AI, and the machine doesnât really have a way of understanding if what it is outputting is true or not.âÂ
While GPT-3 can predict language and finish a human beingâsÂ sentences, paragraphs, essays,Â it lacks internal understanding of language. It cannot reason. It cannot create. It can only mimic.Â
Whether thatâs enough to match the revolutionary potential of a self-sovereign financial system is an open question. But it seems like the genie is out of the bottle in both instances.Â
Trading activity in bitcoin futures listed on the Chicago Mercantile Exchange (CME) hasÂ cooled notably as the leading cryptocurrency languishesÂ in the price doldrums. Only 1,895 contracts, representing $87 million in daily trading volume, were placed. This is the lowest level since mid-April. This is one part of a larger trend. Total global daily volume, as calculated by adding numbers from BitMEX, Deribit, Kraken, OKEx, bitFlyer, CoinFlex, CME. Huobi, FTX, Bitfinex, Binance, Bybit, and Bakkt, tanked to $4.65 billion â down 87% from the $36 billion observed on May 11.Â
Two of CoinDeskâs senior-most leaders weigh in on theÂ Twitter hack aftermathÂ in their newsletters: Money Reimagined and Crypto Long & Short. You can sign up to get the full account in yourÂ inbox here.Â
This Isnât Good for Crypto
âNo, blockchain does not fix this,â CoinDeskâs Chief Content Officer Michael Casey begins his weekly newsletter,Â Money Reimagined.Â Heâs referring to the conversation on social media following the Twitter hack that left heads-of-state, corporate leaders and prominent crypto accounts exposed on Wednesday. Crypto Twitter responded with arguments that the exploit would shake trust in centralized systems and lead to a digital-first, self-sovereign revolution. That may be true, but Crypto Twitter isnât likely to change any hearts and minds, Casey argues, especially if the community keeps calling its critics âmorons.â
On Second Thought
In her latestÂ Crypto Long & ShortÂ newsletter, CoinDesk Head of Research Noelle Acheson argues the Twitter hack was good for Bitcoin, though not for the obvious reasons. While some have labeled the event a âbitcoin scam,â and called for the regulation or eradication of crypto, the hack highlights how this would be impossible: âOne of the strengths of bitcoin is that it is out of the range of state actors.â This reassurance may assuage the anxieties of interested, though cautious, investors waiting for regulatory clarity. Further, because Bitcoin is built on a public ledger, a trail of the hackerâs conduct is in full view. âThis should reassure regulators that bitcoin-related crime is not the threat to society some skeptics claim.â
Bitcoinâs First Metric
What areÂ bitcoin days destroyedÂ (BDD)? CoinDeskâs research team dive in to give a complete overview of whatâs thought to be Bitcoinâs first on-chain metric.
Who won #CryptoTwitter?
- Blockchain Bites: Binanceâs Bitcoin Mining, ConsenSysâ Legal Trouble and Why Politicians Blame Twitter, Not Bitcoin
- Blockchain Bites: Twitter Hack Fallout, A New Way to âYield Farmâ and a Hurricane-Proof CBDC
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