Extremists Are Turning To Crypto, But Can We Do Anything About It?

The shooting in El Paso this weekend took the lives of 20 innocent people. After it emerged that the alleged shooter had been using far-right echo chamber 8Chan to spread his message, Cloudflare announced it would cease the provision of cyber-security services, quickly forcing the site offline.

However, following in the footsteps of the Daily Stormer, 8Chan announced its intention to move its cybersecurity provisioning to Washington-based BitMitigate. BitMitigate has nothing to do with Bitcoin, but it does claim to have a “proven commitment to liberty.”But, in the prevailing political climate these days, “liberty” seems to have an uncomfortable overlap with violent extremism.


Epik Monsters

BitMitigate has some intriguing links to the decentralized world. It was previously acquired by a company called Epik, which provides software services including web hosting. One of its clients is Gab, an alternative social media network increasingly favored by the far right and other fringe figures as they’re forced off Twitter, YouTube, Facebook, and other leading social media.

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Gab was previously blocked by domain registrar GoDaddy and PayPal, as the preferred platform of the mass shooter who gunned down 11 people in a Pittsburgh synagogue last year. It’s also the new social media home of figures like Milo Yiannopoulos, Alex Jones and Richard Spencer.

Both platforms are now realizing the value of decentralization. After becoming non grata with PayPal, Gab is now accepting Bitcoin, which its founder Andrew Torba has referred to as “free speech money.”

The CEO of Epik, aptly named Robert Monster, took it upon himself to use decentralized file-sharing protocol IPFS to upload banned videos of the Christchurch shooting in New Zealand. Taking to Gab, he called the technology “crazy clever” for its censorship-resistance, and informed his fellow users that he was working on software to make IPFS “easy for anyone, with no technical skills required.”

Deplatforming racists is one thing, but not all censorship is (pardon the expression) a matter of black and white.  Back in 2011, donations to Wikileaks were blocked by credit card companies like Visa and MasterCard, after the group exposed the secrets of the world’s governments.

In this case, the joke was on the payments industry. Wikileaks started canvassing for donations in Bitcoin, and founder Julian Assange later claimed in 2017 that the site had made a 50,000% return on the funds it collected.


The Beginning and End of First Amendment Rights

Voltaire supposedly offered to “fight to the death” to defend his opponents’ rights to speech, and the same principle underlies the First Amendment in the United States. But in a world where mass shootings are incubated and livestreamed on social media, the debate between censorship and free expression could very much become a “fight to the death.”

Philosophical musings aside, it seems unlikely that the First Amendment’s authors could have anticipated the mass murders that have now become commonplace, or that constitutional liberties would be used to shelter for hate-filled manifestos.

Furthermore, nobody can argue that Twitter, Facebook, YouTube, Cloudflare or GoDaddy have an obligation to tolerate this from their customers. Freedom of speech doesn’t apply private companies.

But in a decentralized network, nobody is in charge; censorship-resistance does not discriminate right from left. Although some dApps, like Peepeth, are accessible via managed interfaces which can restrict content, open-source protocols like IPFS or a blockchain can be used by anyone with the technical know-how to access them.

Therefore, as extremists and hate speech are pushed out of the mainstream, they’re likely to decentralized protocols to spread their messages. The question is – what should the rest of us do about the fact that we’re sharing  these decentralized protocols can become leveraged by extremist groups? And, more crucially: what can we do?


The Democratic Case For Censorship Resistance

Public blockchains allow everyone to operate within its space freely and on an equal footing. Decentralized protocols do away with traditional power structures, which can appeal to liberals, libertarians and anarchists alike.

Many crypto projects such as Monero are inherently tied to the concept of privacy, and some exchanges still sell themselves on the lack of KYC. Blockchain is delivering private web browsing, self-sovereign data, decentralized finance and much more.

These technologies are already being used for good. Bitcoin is providing a financial safe-haven from Venezuela’s crippling inflation. The WFP has used distributed ledger technologies to provide food aid directly to refugees. And in an impressive demonstration of blockchain’s censorship-resistance, activists used the technology to penetrate the Great Firewall of China.


A Safe Space for Extremists?

But not all the beneficiaries of decentralization are so easy to sympathize with. Like the Chinese activists, Gab is making its bid for decentralization to overcome censorship. The platform is now attempting to raise series A funding for a move to blockchain, and recently migrated to the decentralized Mastodon social network, much to the dismay of Mastodon’s founder.

That came after Gab forked Brave back in April this year, in an attempt to create a censorship-resistant browser. The move led Brave CEO Brandon Eich to refer to Gab as a “parasite.”

Just as the privacy-conscious and oppressed can now find decentralized solutions so can extremists of every description.


Can Censorship-Resistance Be Conditional?

 There are many others who share the views of the Mastodon and Brave founders and find the idea of sharing space with violent racism distasteful, but whether they have any choice in the matter is another question.

On the one hand, it’s impossible to imagine limiting censorship-resistant technologies to those with acceptable viewpoints, especially in the context of a decentralized environment.

On the other hand, the crypto space is already controversial enough, without becoming visibly occupied by extremists. If the next mass shooting is planned on a blockchain platform, cryptocurrencies could attract a very different sort of regulatory attention.

For advocates of decentralization, the question is which alternative is worse: a platform which forbids offensive expression, or a platform which cannot.

Indian Govt to Pitch Bitcoin Ban Bill in January

The Indian government is planning to introduce its controversial bitcoin ban bill in December-January parliamentary session, according to local crypto news provider Crypto Kanoon.

The decision surfaced during an ongoing court hearing between the Reserve Bank of India (RBI) and regional cryptocurrency exchanges. Officials representing the Narendra Modi’s financial ministry submitted a draft bill before the Supreme Court judge, which would serve as the basis of the future of cryptocurrencies in India.

Crypto Kanoon claimed that the draft is the same which was prepared by the intergovernmental committee led by former Economic Affairs Secretary Subhash Chandra Garg. The document recommended an outright ban on bitcoin and all types of “private cryptocurrencies,” and ten-year jail time for those who do not abide by it.

Meanwhile, the government officials requested the Supreme Court to adjourn the hearing unless January next year. They confirmed that they intend to introduce the bitcoin ban bill in the lower house of the Indian parliament during the winter session.

Crypto Kanoon@cryptokanoon · 5hReplying to @cryptokanoon

Matter adjourned for January last week.

Crypto Kanoon@cryptokanoon

In the petitions praying for Ban or regulation:

Govt. submitted draft regulation before the Court which was submitted to it by Garg Committee.

Govt. requested the Court to adjourn the matter till January as the it intends to introduce the bill in parliament in winter session.2511:04 AM – Aug 8, 2019Twitter Ads info and privacy17 people are talking about this

RBI Circular Under Court’s Observation

Last year in July, RBI had barred banks from doing business with firms associated with bitcoin and other cryptocurrencies. The Internet and Mobile Association of India (IMAI) later took the Indian central bank to the Supreme Court. It accused the federal body of being biased towards the emerging cryptocurrency sector in India, stating their circular was unconstitutional.

The case went through several delays in over the last 12 months, only to be heard at a full extent on August 8, 2019. The IMAI counsel argued that bitcoin is not a sovereign currency but a commodity, which is why any decision for it should come from the Securities and Exchange Board of India (SEBI), not RBI. The counsel also added that RBI exercised the same powers as parliament while forcing the Indian cryptocurrency market to shut down.

Crypto Kanoon@cryptokanoon · 3hReplying to @cryptokanoon

Technology underlying the Blockchain and Crypto is being explained to the Hon’ble judges.

Crypto Kanoon@cryptokanoon

Counsel argues that Cryptos must not be equated to Sovereign Currency i.e., rupee etc.

One is commodity, other is currency.

In support, judgement of Brazilian Supreme Court is being read.11812:53 PM – Aug 8, 2019Twitter Ads info and privacy28 people are talking about this

The IMAI lawyer also rubbished RBI’s views about cryptocurrency exchanges working without obtaining a license, stating that companies did not require such authorization, for bitcoin and the rest of the cryptocurrencies did not attain a legal definition in India. The counsel also referred to companies that either lost money or ran out of business opportunities because of the RBI circular.

The court recommended filing a fresh case against RBI under 19(1)-g – an Indian Constitution Act that guarantees to all citizens the right to practice any profession or to carry on any occupation, trade or business. Only reasonable restrictions can stop a person from working.

The case will resume on coming Wednesday 14th August 2019.

News Galaxy: Institutional Crypto Lending Will Become ‘Multi-Billion Dollar Business’

Galaxy Digital expects cryptocurrency lending to boom. The merchant bank has announced an investment in crypto loans provider DrawBridge Lending (DBL) in order to offer new financing products and help grow the lending/borrowing market.

Announced this morning, the Galaxy investment will provide DBL with funding to create a suite of financing vehicles, which will provide institutional investors with new loaning facilities and allow the crypto market to scale.

Galaxy and DBL plan to jointly develop a new special purpose funding vehicles (SPV), that will allow institutions to leverage digital assets for capital while maintaining overall ownership.

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SPVs are subsidiary companies that hold all the assets of the parent company, as well as their risk and obligations. Also referred to as  ‘bankruptcy-remote entities’, they isolate risk and protect institutions from the threat of bankruptcy.

By isolating risk, SPVs encourage institutions to lend more. Institutional borrowers will be able to access more capital to fund expenses or make new investments; lenders will be able to put digital holdings to work and earn interest.

Both Galaxy and DBL expect the new product to accelerate market development in what is still a relatively nascent space. “We believe the institutional crypto lending space will be a multi-billion dollar business in coming years,” a DBL spokesman told Crypto Briefing, “and we say this without any hesitation.”

DBL is already a CFTC-licensed lender in the U.S. Launched in 2018, it already provides lending facilities to institutional investors in forty-nine states as well as Washington D.C. Although the focus will primarily be on Bitcoin (BTC)Ether (ETH), BSV and EOS, the new SPVs will be available in any digital asset with sufficient liquidity.

“The institutionalization of digital assets is still relatively nascent despite increasing momentum and interest from a number of respected firms and industry players,” said Michael Novogratz, CEO and founder of Galaxy Digital.

Demand for cryptocurrency lending is growing. Crypto wealth management firm BlockFi – which provides crypto-denominated interest accounts and loans  – successfully completed a Series A funding round this week, raising over $18M from Winklevoss Capital, ConsenSys as well as Galaxy Digital.