Mastercard Buys Crypto Tracing Firm CipherTrace

PLUS: ex-CFTC official joins a16z, dYdX airdrop fallout and more |

The biggest crypto news and ideas of the day  Sept. 9, 2021 Sponsored by     Welcome to The Node.   If you were forwarded this newsletter and would like to receive it, sign up here.   Questions? Feedback? We'd love to hear from you! Simply reply to this email.   –Daniel Kuhn Today's must-reads Top Shelf ANALYTICS BUY: Payments giant Mastercard has bought CipherTrace, a firm that scans blockchains for illicit transactions, at a time when a number of governments and banks look to ramp up monitoring and compliance. The surprise acquisition announced Thursday via press release gives Mastercard the ability to track over 900 cryptocurrencies. Details of the acquisition were not disclosed. REVOLVING DOOR? Former CFTC top official Brian Quintenz has joined venture capital firm Andreessen Horowitz (a16z) as a part-time adviser. Quintenz left the federal commodities regulator in August after making a splash advocating for stablecoins and self-regulatory organizations for crypto. A16z, which recently raised over $2 billion for its Crypto Fund III, has been beefing up its crypto talent including former Winklevoss Capital associate Jane Lippencott. MASSIVE AIRDROP: The dYdX exchange finally enabled people to trade its governance token gifted to early users of the crypto derivatives exchange. It's unknown what the medium value of the airdrop was; the fully diluted market cap sits above $14 billion at press time, and many anecdotal reports indicate some users earned thousands of dollars worth of tokens. That is, except for dYdX users in the U.S.  PLAY TO EARN: DeFi Land, which aims to gamify the concept of decentralized finance, has raised $4.1 million in its first funding round. Built on the Solana blockchain, the soon-to-launch game comes as "play-to-earn" surges onto the crypto scene, propelled by breakout hits like Axie Infinity and its dedicated audience of gamers-turned-metaverse entrepreneurs. A message from Nexo When it comes to buying, borrowing or earning on your crypto, you won't find an easier, safer way to do it than Nexo.   And right now, with its Referral Program you can earn $10 worth of bitcoin for each friend you refer. And the best part – your referral gets $10 in BTC, too.   You can invite up to 100 friends – so you can get as much as $1,000 in bitcoin by copy-pasting a few links. And you can further bump that amount by earning up to 8% interest p.a. on your bitcoin, paid out daily.   Now is the time to unlock the full power of your crypto.   Join Nexo and start earning free BTC with your friends. Overheard on CoinDesk TV... Sound Bites "Right now, the United States is leading from behind."   –Former CFTC Chairman and "Crypto Dad" Chris Giancarlo, on the frustration over regulatory clarity on crypto products, on CoinDesk TV's "First Mover." What others are writing... Off-Chain Signals Lending bitcoins is easy (Matt Levine/Bloomberg Opinion) Even Under Taliban Rule and a Failing Economy, I am Blessed With Crypto (Anonymous in Kabul/The Tokenist) Why the SEC cracking down on Coinbase could level the crypto playing field (Zack Guzman/Yahoo!) And yet … Coinbase proves crypto still hasn't grown up (Felix Salmon/Axios) Ukraine is the latest country to legalize bitcoin as the cryptocurrency slowly goes global (MacKenzie Sigalos/CNBC) Keene (N.H.) man facing federal crypto charges released on bail (Caleb Symons/Sentinel Source) Introducing Crypto for Advisors, a weekly newsletter built specifically for financial advisors (FAs) and registered investment advisors (RIAs) who seek to incorporate this rapidly moving asset class into their work. Subscribe today. Sponsored Content   Unique.One: Using NFT marketplaces for philanthropy   Many different potential use cases for non-fungible tokens (NFTs) have come to light in the last few years, including art, gaming, luxury ownership and collectibles. UniqueOne.Network (UON) has been exploring that since the launch of its marketplace Unique.One, which was created to give economic alternatives to artists around the world who have been affected by COVID-19 lockdowns.   Putting the news in perspective The Takeaway The Burning Question Over Minting NFTs The other day I was walking through a flood-wrecked neighborhood when I found an interesting work of art on the ground. It was an original, signed and numbered (35/100) print of Theodoros Stamos' famed Paris Review cover sold at the New York World Fair. Kept in near mint condition since 1965 – probably unthinkingly cast aside with a number of household artifacts touched by the mighty Bronx River during Hurricane Ida's storm surge – I was surprised to learn it was only worth a couple hundred dollars. One man's treasure is another's trash, but this was clearly a gem. That's less than the least expensive Weird Whale NFT (non-fungible token), or than a "Loot box" for a non-existent blockchain game. My first thought was to burn it, then mint the asset as an NFT to list on OpenSea. Although not a major trend yet, as more people begin to recognize NFTs as a viable (and easy to own) asset class it's a question many may come to face.    There's precedent for burning art to create value. Last March, blockchain company Injective Protocol did just the same to a genuine Banksy. The "BurntBanksy collective" removed "the physical piece from existence" to make way for a smart contract that now stands for the memory of the original. (Banksy himself shredded a piece of his own work after it was sold at auction in 2018.)   To some extent, the BurntBanksy NFT is an entirely original work of art. It's a conceptual piece that asks whether we should prefer physical items over digital, as Paul Dylan-Ennis put it. Plus, it literally has a new signature that lives on the blockchain.  Then there's Damien Hirst's "Currency," a series that offers buyers the opportunity to own either a unique hand-painted sheet covered in colorful dots or one of 10,000 NFTs corresponding to them. In a year's time, if a collector chooses to own the painting, the matching token will be destroyed and vice versa.    "It's kind of this cynical choice," Sarah Meyohas, a Yale-trained artist who broke into the blockchain space in 2015 with "Bitchcoin," said in an interview. "He's telling you, like, do you want the physical dollar bill or do you believe in the metaverse, because he doesn't actually have a position on it."   Sometimes the choice is destroying an original digital work to make an NFT. A few months ago, the creator of the popular meme "Charlie bit my finger – again!" removed the video from YouTube (where it lived since 2007 and earned more 883 million views) after it was tokenized and auctioned off.  More often than not, the choice to destroy an object in order to monetize it is simply performative, a way of telling the world you were the first to have the idea or apply it to a new context. It can signal to the world that this is something worth paying attention to, but it rarely creates value – especially as time goes on.   "This is basically like a short-term band-aid to deal with the complications of having an asset exist both physically and digitally," Meyohas said.   Could the same be true of my Stamos print? Part of the post-war Abstract Expressionist movement in the U.S., Stamos' entire body of work was one big question mark. What is art? For him, painting could be reduced to pure colors on canvas. Purposely destroying his work fits the theme, a way to bring his work into a modern context.   But in the end, the gas price is just too damn high.    –D.K.   The Chaser... The Node A newsletter from CoinDesk See Previous Editions Copyright © 2021 CoinDesk, All rights reserved.  250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.