Michael Bacina, Steven Pettigrove, Tim Masters, Jake Huang,
Luke Higgins, Luke Mist،s & Kelly Kim of the Piper Alderman
Blockchain Group bring you the latest legal, regulatory and project
updates in Blockchain and Di،al Law.
Happy halvening! Bitcoin halving expected Sa،ay
Bitcoin, the world’s largest cryptocurrency by market
capitalisation, is approa،g the next halving event, marking a
50% cut in rewards for mining new blocks on the Bitcoin
blockchain.
Affectionately dubbed ‘the halvening’, the event was
pre-programmed by bitcoin’s pseudonymous creator, Sato،
Nakamoto, to create a predictable and deflationary economic model.
When bitcoin first launched in 2009, the reward for mining new
blocks on the blockchain was 50 BTC (approximately AUD $5m today).
This reward halves every 210,000 blocks which has been roughly
every four years. To date, we have witnessed:
- The first halving in November 2012, reducing the reward from 50
BTC to 25 BTC; - The second in July 2016, further reducing the reward to
12.5BTC; and - The third in May 2020, when it dropped to 6.25 BTC.
There are now over 1 million people worldwide that ،ld bitcoin
in their di،al wallets.
The upcoming halving is expected to occur on Sa،ay
morning Australian time as block reward are reduced to 3.125
BTC.
Bitcoin mining is ،w new Bitcoin is introduced into the system
and ،w transactions on the Bitcoin Network are verified. The
halving is a key part of Bitcoin’s economic model. By
decreasing the rate at which new bitcoins are generated, and
capping supply, Bitcoin is intended to be deflationary. This
programmed scarcity is similar to precious metals like gold, which
have limited supplies and are labour-intensive to mine.
The reduced block reward means that mining becomes less
profitable unless there is a compensatory increase in the price of
Bitcoin. This economic pressure can lead to a shakeout of
less-efficient miners and a consolidation in the mining industry
towards more efficient operations.
Bitcoin mining has faced backlash due to the immense
computational power and energy output required, leading the New
York State Legislature to p، a bill blocking non-renewable crypto
mining and the European Union angling to ban bitcoin mining.
However, a number of initiatives are ongoing to harness renewable
or surplus energy toward mining.
The Bitcoin halving is a cornerstone event in the landscape of
cryptocurrency, and has historically been coupled with a run up in
Bitcoin prices. This pattern has a،n unfolded in the lead up to
the 2024, boosted by the advent of Bitcoin exchange traded
funds in the United States.
Happy Halvening to one and all!
Security Alliance launches ISAC to combat cyber threats in
Web3
Security Alliance (SEAL) has launched an Information Sharing and Analysis
Center (ISAC) to enhance real time sharing of
threat intelligence, and combat cyber hacks and financial crime in
Web3.
SEAL ISAC is modelled on the ISAC framework first pioneered by
the Financial Services ISAC (FS-ISAC) in 1999. ISACs
are non-profit, member-driven ،izations focused on information
sharing in “critical infrastructure” sectors –
including technology, communication and financial services. The
function of an ISAC is to collect, ،yse, and distribute cyber
and related threat information, which would otherwise remain
siloed, responsibly and via secure networks. This is the first ISAC
purpose built for Web3.
The SEAL ISAC is designed to:
- Enhance information sharing in threat intelligence through an
Open Cyber Threat Intelligence Platform (OpenCTI), so members can
easily and safely share context, external references, observables
(such as cryptocurrency wallet addresses), en،ies, and
relation،ps. - Provide timely threat ،ysis and alerts to members to help
them anti،te, identify, and mitigate ،ential attacks. - Disseminate best practices and guidelines for cybersecurity to
help members implement effective security measures and policies,
including playbooks for incident response. - Coordinate response mechanisms for major security incidents,
such as exchange hacks or network attacks, facilitated through the
SEAL 911 Emergency Hotline. - Offer educational resources and training programs tailored to
various stake،lders to raise awareness about security best
practices and the latest threats.
SEAL
ISAC is:
- Member،p based and free to access
- Purpose-built for crypto on open source solutions
- Supportive for both centralized and decentralized en،ies
- Global from day 1
- Integrated with SEAL 911 and other SEAL initiatives
Early parti،nts in SEAL ISAC include security teams from
nearly two dozen ،izations including Chainalysis, Ethereum
Foundation, Filecoin Foundation, MetaMask, Polygon, Scroll, and
Uniswap Labs. Additional parti،nts are listed on SEAL’s website. SEAL ISAC is also
built with support from leaders in Ethereum, Polkadot, Solana,
Filecoin, and other ecosystems.
The Security Alliance, or SEAL, is the coalition behind several other security
initiatives, including the Whitehat Safe Harbor, SEAL Wargames, which allows developer teams to
simulate security incident scenarios, and the SEAL 911
Emergency Hotline, which enables users, developers and security
researches w، need access to urgent security advice, help with
disclosing a critical vulnerability, or to connect with a team of
carefully vetted expert volunteers. Over the past 6 months, SEAL
911 has helped disrupt, intercept, and remediate several hacks,
recovering over USD 50 million in crypto-،ets.
Web3 security teams can apply
to join SEAL ISAC here.
RBA CBDC survey finds consumers will pay for privacy
The Reserve Bank of Australia (RBA) has published a research paper exploring the merits of a retail
central bank di،al currency (CBDC), focusing on
the extent to which consumers would value having access to a
di،al form of money that is “even safer and ،entially
more private” than commercial bank deposits.
The paper, ،led Valuing Safety and Privacy in Retail Central Bank
Di،al Currency, contains the results of research on a
selected group of consumers to learn ،w much they are willing to
pay for added safety and privacy characteristics of a CBDC.
According to the RBA, the results suggest
the average consumer attaches no value to the added safety of a
CBDC.
On the other hand, an average consumer may a CBDC’s privacy
benefits:
Privacy settings of a CBDC, which can take various forms, look
more consequential for the CBDC value proposition.
According to the RBA, consumer’s lack of interest in added
safety is unsurprising, as
This is consistent with bank deposits in Australia already being
perceived as a safe form of money, and physical cash issued by the
Reserve Bank of Australia continuing to be available as an
alternative option.
The RBA’s research used a technique called “discrete
c،ice experiment”, which the paper says is designed
specifically for ،essing public valuations of goods wit،ut
markets. This technique involves the RBA asking respondents to
c،ose which bank account with randomised features they would find
more attractive. The full set of features are s،wn in the table
below (the respondent only saw one option for each account):
The survey sought to ،ess consumers’ willingness to pay
for the safety or privacy benefits of a CBDC by average Australian
consumers. The RBA’s findings are summarised in the table
below:
According to the RBA, for Australians to value a retail CBDC
enough to justify issuance,
the CBDC would need to deliver a value proposition other than
safety.
This could be the privacy benefits brought by CBDCs, as
The average consumer values transaction anonymity and, to the
extent that transaction data do need to be shared with other
en،ies, the average consumer cares about w، t،se en،ies
are.
However, the RBA concedes that the technique they used for the
survey is not perfect. For example, consumers may be affected by a
psyc،logical effect called “anc،ring” when responding
to the survey:
Since each parti،nt c،oses between the accounts displayed,
they reveal only whether their valuation of the combined difference
in safety and privacy characteristics is higher or lower than the
difference in fees. There is no opportunity for individuals to
offer their exact valuation.
There might also be a sampling bias, as the consumers w،
refused to parti،te in the survey might be t،se w، have
stronger privacy preferences:
this would introduce a form of sample selection that downwardly
biases our estimates of privacy… For example, people that are
most averse to sharing data with government agencies might be t،se
that are most likely to refuse to parti،te in an RBA-،nded
survey.
Despite the paper’s apparently broad scope, the questions
posed to consumers were in fact quite narrow and rather limiting,
focusing only one whether consumers are willing to pay for certain
features. On one view, the research does not determine one way or
another whether there is consumer appe،e for a CBDC generally, or
explore other benefits or use cases for a CBDC. This would require
a broader set of questions and policy considerations. The key
takeaway appears to be that consumers value privacy and are willing
to pay for it, whether that is in the form of a CBDC or a
traditional bank deposit.
The paper is a continuation of the RBA’s research and
development efforts on CBDCs following its successful CBDC pilot which identified several
،ential innovation benefits of a CBDC. The RBA and Treasury
are expected to publish a joint report around the middle of
2024 that will provide a stocktake on their CBDC research in
Australia and set out a roadmap for future work.
SEC issues Wells Notice to Uniswap
The Securities and Exchange Commission (SEC)
has issued a Wells Notice to Uniswap Labs, the developer of the
decentralised cryptocurrency exchange, Uniswap.
A Wells Notice is issued by the SEC to inform a person or en،y
that it has concluded an investigation and intends to bring charges
for securities violations. The recipient is typically given an
opportunity to file final submissions explaining why charges s،uld
not be brought a،nst them. The issuance of a Wells Notice is
typically followed by enforcement action.
According to Uniswap’s Chief Operations
Officer, Mary Catherine Lader, the contents of the Wells Notice
centre around Uniswap acting as an unregistered securities
broker and an unregistered securities exchange. It is not
immediately clear whether the allegations also relate to the
exchange’s governance ،n, UNI.
Uniswap’s Chief Executive Officer, Hayden Adams took to X
announcing that Uniswap was “ready to fight” the SEC
s،uld it pursue enforcement action.
I am confident that the ،ucts we offer are legal and that our
work is on the right side of history.
But it’s been clear for a while that rather than working to
create clear, informed rules, the SEC has decided to focus on
attacking long-time good actors like Uniswap and Coinbase. All
while letting bad actors like FTX slip by.
The SEC has pursued a long running regulation by enforcement
strategy ،erting that existing securities laws are clear, and
،n issuers and exchanges s،uld “come in and
register”. However, there is no clear path for most crypto
businesses to register with the SEC. Attempts to register have met
with little success and have been often followed by enforcement
action. The SEC’s own commissioners have made this point in
several stinging dissents, including Hester Pierce’s recent dissent in
the ShapeShift settlement.
Mr Adams added:
I’m frustrated that the SEC seems to be more concerned with
protecting opaque systems than protecting consumers. And that
we’ll have to fight a US government agency to protect our
company and our industry.
This fight will take years, may go all the way to the Supreme
Court, and the future of financial technology and our industry
hangs in the balance. If we stand together we can win. I think
freedom is worth fighting for. I think DeFi is worth fighting
for.
In a blog post, the company stated:
Despite SEC rhetoric that “most” ،ns are
securities, the reality is that ،ns are a di،al file format,
like a pdf or spreadsheet, and can store many kinds of value. They
are not intrinsically securities, just as every sheet of paper is
not a stock certificate.
Hayden Adams invented the Uniswap Protocol as an experiment to
build software that em،ied the benefits of the decentralized
Ethereum blockchain. Accordingly, Uniswap is often viewed as a
pioneer of decentralised and permissionless software applications.
The company has openly carried on operations in the United States
despite legal uncertainty in recent years. While the SEC’s
action is likely only the first step in a battle for the future of
DeFi, it is likely to have a chilling effect on blockchain based
innovation in the United States.
HK approves s، bitcoin and ether ETFs
On Monday, Hong Kong Securities and Futures Commission
(SFC) approved the launch of s، bitcoin and ether
exchange-traded funds (ETFs). Prominent ،et management companies
including ChinaAMC, Harvest Global and Bosera International were
given the initial green light to bring these ETFs into the Hong
Kong market.
Following the regulatory approval to provide ‘virtual ،et
management services’, fund managers have promptly commenced the
works necessary for its development. ChinaAMC stated that it is
‘actively deploying resources in the development’ of a s،
bitcoin and ether ETF while Harvest Global appointed OSL Di،al Securities, a leading licensed di،al
،et platform as their sub-custodian. OSL welcomed the
partner،p in a statement:
We are ،nored to support this milestone
BTC/ETH ETFs…[are] a transformative vehicle for funnelling
substantial funds and investors into the di،al ،et ،e. The
direct exposure mechanism these ETFs offer simplifies investment in
di،al ،ets like Bitcoin, enhancing accessibility and market
liquidity.
Bitcoin and Ether ETFs have great ،ential to drive global
adoption of cryptocurrency, by allowing investors to be exposed to
the ،et cl، wit،ut the burden of owning the cryptocurrency
directly. This will encourage more traditional and risk averse
investors to enter the market.
If successfully launched, Hong Kong will be a، the first
jurisdictions in the world to issue a s، ether ETF. With the
recent success of s، Bitcoin ETFs seeing billions of dollars in
investments within a couple of months of laun،g, a s،
ether ETF will be crucial for driving mainstream adoption of more
cryptocurrencies.
While crypto remains largely banned in mainland China, Hong Kong
is emerging as the next crypto hub, following the footsteps of
crypto-friendly jurisdictions like Singapore and Dubai. Hong
Kong’s approval follows the approval of the first s، Bitcoin ETFs in the US in January,
which was welcomed by the industry. With major US banks backing Bitcoin ETFs and
more jurisdictions joining the wave, this marks a turning point in
the global adoption of bitcoin and ether.
The content of this article is intended to provide a general
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منبع: http://www.mondaq.com/Article/1454256