An anonymous reader shares a report: Hidden away in Coinbase Global's disappointing first-quarter earnings report -- in which the U.S.'s largest cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly users -- is an update on the risks of using Coinbase's service that may come as a surprise to its millions of users. In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts too.

Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, "the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings." Coinbase users would become "general unsecured creditors," meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.

40 days ago Bitcoin sold for $47,454. It's price now is $34,007 — a drop of 28%.

About a third of that drop happened this week, as "Bitcoin, ethereum and other major cryptocurrencies have fallen sharply," Forbes reports, "wiping around $200 billion from the crypto market in just a matter of days (though some fear the bitcoin price could fall far further)." Bitcoin is now at its lowest prince since last July, "in the aftermath of the Federal Reserve's biggest interest rate hike in years". Ethereum and other top ten luna, solana, cardano and avalanche are also struggling with market sentiment falling to lows not seen since January.... Smaller cryptocurrencies that have outpaced the likes of bitcoin and ethereum in recent months have fallen harder during this latest crash. "The future of individual coins or tokens remains dubious, the law remains in control of such solicitations and the approval of social media giants such as Elon Musk," added Tammy Da Costa, an analyst at DailyFX.
CNBC notes the drop occurred "after a broader stock sell-off in the U.S. last week," but points out that bitcoin "is now down 50% from its peak price of $67,802.30 in November 2021."

A New York bill that would ban new bitcoin mining operations is "swiftly making its way through the state capitol in Albany," reports CNBC. Some industry insiders fear that the bill, which calls for a two-year moratorium on certain cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions, could have a domino effect across the U.S. From the report: Lawmakers sponsoring the legislation say they are looking to curb the state's carbon footprint by cracking down on mines that use electricity from power plants that burn fossil fuels. For two years, unless a proof-of-work mining company uses 100% renewable energy, it would not be allowed to expand or renew permits, and new entrants would not be allowed to come online. [...] At this point, the State Assembly has passed the bill, and it is now under consideration by the Democratic-controlled State Senate, which will soon vote on the measure. If it passes, it will land on the desk of Governor Kathy Hochul, who could sign it into law or veto it. "If it passes, it would make New York the first state in the country to ban blockchain technology infrastructure," explained Perianne Boring, founder and president of the Digital Chamber of Commerce. "New York will be left behind, losing to other states at best, and at worst, other more progressive nations," says Galaxy Digital's Head of Mining Amanda Fabiano. "New York is setting a bad precedent that other states could follow."

An anonymous reader quotes a report from CoinDesk: California Governor Gavin Newsom signed an executive order on Wednesday to "create a transparent regulatory and business environment for Web 3 companies" in the state, according to a press release. Under the order, as well as the California Consumer Financial Protection Law passed in 2020, the state will create a "transparent and consistent business environment" for blockchain-related companies, including crypto asset projects and those of related financial technologies. California will also collect stakeholder feedback to create crypto asset regulations in conjunction with federal authorities, assess the use of blockchain technologies for state and public institutions, and create paths for blockchain-related research and work development programs.

On the regulation front, California plans to coordinate with Washington, D.C., for advice based on the crypto federal executive order that President Joe Biden signed in March. "California is a global hub of innovation, and we're setting up the state for success with this emerging technology -- spurring responsible innovation, protecting consumers and leveraging this technology for the public good," Newsom said in a statement. "Too often government lags behind technological advancements, so we're getting ahead of the curve on this, laying the foundation to allow for consumers and business to thrive." In late 2020, Newsom restructured the California department responsible for regulating financial services to also supervise the growing crypto industry.

According to the results of Patreon's first creator census, 43% of creators are strongly against crypto payments, while 30% said they don't care. "Nine percent said crypto payments would be crucial, while 18% said they would be nice to have," adds TechCrunch. From the report: Out of 250,000 creators active on Patreon, over 13,000 people responded to the survey, representing 113 countries and 18 languages. According to the survey, video is the most popular primary medium on Patreon, representing 38% of respondents. The next most popular categories are writing (17%) and podcasting (14%). Fifty-six percent of Patreon creators consider themselves closer to being seasoned professionals, while 44% say they're closer to just starting out. Interestingly enough, respondents also said that over 40% of their creative income came from Patreon.

[Patreon CPO Julian Gutman] told TechCrunch in December that the company had considered building a small crypto team to examine potential options, but that there weren't any plans set in stone for a plunge into web3. [...] "Some creators, including many who took this survey, are opposed to Patreon building any web3 functionality due to concerns about potential fraudulent behavior, environmental sustainability and inaccessibility of the technology in its present applications," the census report said. "Other creators already offer web3 benefits off Patreon and are excited about the flexibility and value they can offer memberships with new types of digital goods." Sure, crypto skeptics could simply just not use web3 features with their audience. But some creators worry that their audience will be less likely to support them via Patreon if the company dabbles in web3.

For now, Patreon will focus more on building features like a native video player, one-time tipping, gift memberships and a customized landing page layout. "Our focus continues to be on how to give creators more ownership and leverage over their content, and that includes exploring the benefits of web3 technologies," Patreon said in an email to TechCrunch. "However, neither our creators nor Patreon are prioritizing this space right now."

The Securities and Exchange Commission is vastly expanding its fight against cryptocurrency fraud by hiring more than a dozen new employees to combat cybercrime, the agency said Tuesday. From a report: The additional 20 positions will result in almost a doubling in size of the agency's Cyber Unit, which is also being renamed the Crypto Assets and Cyber Unit to reflect the group's growing mission, the SEC said in a release. The Cyber Unit was first founded within the SEC's enforcement division in 2017. "By nearly doubling the size of this key unit, the SEC will be better equipped to police wrongdoing in the crypto markets while continuing to identify disclosure and controls issues with respect to cybersecurity," SEC Chair Gary Gensler said in a statement.

Within a decade, 1 billion people will have used or tried crypto, up from about 200 million currently, Coinbase Global Chief Executive Officer Brian Armstrong said at the Milken Institute Global Conference on Monday. From a report: "My guess is that in 10-20 years, we'll see a substantial portion of GDP happening in the crypto economy," Armstrong said, speaking at a session with ARK Investment Management CEO Cathie Wood.

His comments come at a time of turbulence in crypto markets. After hitting an all-time high of almost $69,000 in November, Bitcoin has been falling in value. The world's biggest cryptocurrency is down about 17% since the beginning of the year. The chorus of skeptics' voices has gotten louder, but Armstrong and Wood, whose Ark is one of the biggest Coinbase investors, have shown a united front. Wood is seeing promise in even decentralized finance, a lightly regulated corner of crypto where people can trade, lend and borrow tokens directly, without intermediaries like banks.

The non-profit Wikimedia Foundation (which operates Wikipedia) "announced that it would no longer accept cryptocurrency donations," reports Mashable, saying the decision came after a three-month discussion period: Wikimedia said it would close its account with Bitpay, the crypto payment service provider which Wikimedia used to collect cryptocurrency donations....

The Wikimedia Foundation did say it would continue to monitor the situation, possibly keeping the door open to a future where it did accept crypto donations once again. For now, though, the critics of cryptocurrency and the broader Wiki community are victorious.
Mashable notes Wikipedia own figures showing that for all of 2021, donations in cryptocurrency to Wikipedia barely totalled $130,000 — or just 0.08% of its revenue. And a long-time Wikipedia editor notes on Twitter that in a three-month request for comments "excluding new accounts and unregistered users," the final tally supporting the ban was 232 to 94 opposing it. (That is, 71.17% supported the ban.)

"I'm really happy that the Wikimedia Foundation listened to the community's wishes on this issue," they tell Mashable, "and I'm really proud of my community for taking a principled stand."

A Bloomberg opinion columnist calls the RobinHood stock-trading app "a symbol of the 'memestock' boom that galvanized a generation of bored locked-down day traders.

"But judging by the company's latest figures, the mania is over." In the first quarter, Robinhood's monthly active users fell 10% year-on-year to 15.9 million, the lowest since the end of 2020. It's a loose metric, to be sure, covering debit-card swipes and webpage log-ins. Net funded accounts have held steady, but activity is flatlining: Transaction revenues fell by almost half, and average quarterly revenue per user slumped 61% to $53. In a post-lockdown era of rising inflation, consumers have less money and fewer hours to spare. Eyeballs and finger-swipes are not guaranteed.

This will put Robinhood's premium "tech" valuation — around seven times annual revenue, a higher multiple than Meta Platforms Inc.'s — under extra pressure. Shares of the financial-services company have already fallen 71% in six months, a drop that began well before Ukraine.

With fewer reasons to get excited about risky, hyped-up trades such as bitcoin (down 40% since October), the feedback loop of fear is spreading. Trading platform Coinbase Global Inc., which like Robinhood went public last year amid a retail-driven frenzy, is down 62%.

The average Robinhood user is 31 years old with an account balance of $240. It's a band of merry men (women are a minority on the platform) who dabble. While the company's business model differs from that of social-media and streaming apps, the reversal of fortunes looks a lot like the post-Covid "attention recession" that's also battering the likes of Netflix and Spotify Technology.
"The lost merry memestock men already appear disillusioned," the columnist argues. "What happens next, if speculative bets keep deflating, may swear them off trading for good."

But he also sees Robinhood is "talking up its appeal to paid 'Gold' customers and is launching a more diversified, bank-like suite of products. With its recent announcement of a new debit card, Robinhood no doubt aspires to become a super-app like unlisted fintech Revolut, valued at around $33 billion, according to CBInsights."

"Fort Worth, Texas, is now the first city government in the United States to mine bitcoin," reports CNBC.

"[A]nd in an almost poetic devotion to the initiative, Mayor Mattie Parker oversaw the construction of a small mining farm in City Hall." Three Bitmain Antminer S9 mining rigs will run 24 hours a day, seven days a week, in the climate-controlled information technology wing of Fort Worth City Hall. The city says the miners will be hosted on a private network to minimize the security risk....

Each of the program's three machines will consume the same amount of energy as a household vacuum cleaner, according to city estimates. While the mayor doesn't expect the three miners to be major money makers, the cost of electricity needed for the program is expected to be offset by the value of bitcoin mined.... To make it happen, the city has teamed up with a few key partners, including the Texas Blockchain Council, which donated the three mining rigs (each valued at roughly $600 apiece), and Luxor Technologies, a mining pool, which lets a single miner combine its hashing power with thousands of other miners all over the world to increase their chances of earning bitcoin....

After six months, Fort Worth will re-assess and decide whether to sink real cash into building out a mine .
Luxor's VP of business development argues that Fort Worth's move "is setting an example and effectively de-risking both bitcoin mining and bitcoin treasury strategies for every other mayor in the country."

Investor Warren Buffett addressed the annual shareholder meeting today for his multinational holding company Berkshire Hathaway — and said he still wouldn't buy bitcoin. But this time he gave a detailed explanation why. CNBC reports: "Whether it goes up or down in the next year, or five or 10 years, I don't know. But the one thing I'm pretty sure of is that it doesn't produce anything," Buffett said.... "If you said... for a 1% interest in all the farmland in the United States, pay our group $25 billion, I'll write you a check this afternoon," Buffett said. "[For] $25 billion I now own 1% of the farmland... Now if you told me you own all of the bitcoin in the world and you offered it to me for $25 I wouldn't take it because what would I do with it? I'd have to sell it back to you one way or another. It isn't going to do anything... The farms are going to produce food...."

"Assets, to have value, have to deliver something to somebody. And there's only one currency that's accepted. You can come up with all kinds of things — we can put up Berkshire coins... but in the end, this is money," he said, holding up a $20 bill. "And there's no reason in the world why the United States government... is going to let Berkshire money replace theirs."
Later Saturday Berkshire Hathaway's vice chairman Charlie Munger had an even harsher appraisal of bitcoin. "In my life, I try and avoid things that are stupid and evil and make me look bad in comparison to somebody else — and bitcoin does all three," Munger said.

"In the first place, it's stupid because it's still likely to go to zero. It's evil because it undermines the Federal Reserve System... and third, it makes us look foolish compared to the Communist leader in China. He was smart enough to ban bitcoin in China."

Regulators across the European Union need more powers to crack down on misleading online financial promotions, the bloc's securities watchdog said on Friday. From a report: The EU's executive European Commission is due this year to set out a retail investor strategy to catch up with rapid changes in technology which now allow people to buy shares or bitcoin with a few swipes on their smartphone. The bloc wants more retail investor participation to help build a deeper capital market that relies less on bank loans to fund the economy. "I believe these are fundamental shifts in how the market works and who engages in the market," Verena Ross, chair of the European Securities and Markets Authority (ESMA) told Reuters. "I think the downside of some of that is that it entices a lot of speculation, and a kind of gamification of the way retail investors engage in financial markets."

Ex-Google CEO and chairman Eric Schmidt says he's invested "a little bit" of money into cryptocurrencies -- but for him, the most interesting part of blockchain isn't virtual currency. It's Web3. From a report: "A new model [of the internet] where you as an individual [can] control your identity, and where you don't have a centralized manager, is very powerful. It's very seductive and it's very decentralized," Schmidt, 67, tells CNBC Make It. "I remember that feeling when I was 25 that decentralized would be everything."

[...] Schmidt says his interest in Web3 involves a concept called "tokenomics," which refers to the specific supply and demand characteristics of cryptocurrencies. Schmidt also notes that Web3 could come with new models for content ownership and new ways of compensating people. "[Web3's] economics are interesting. The platforms are interesting and the use patterns are interesting," Schmidt says. "[It] doesn't work yet, but it will." For Schmidt, part of the problem with today's blockchain technology -- specifically referencing bitcoin as an example -- is that the majority of time people spend on those systems is dedicated to "making sure that nobody's attacking them ... they're incredibly wasteful."

The Central African Republic (CAR) has approved Bitcoin as legal tender -- just the second country to do so. The BBC reports: CAR is one of the world's poorest countries, but is rich in diamonds, gold and uranium. It has been wracked by conflict for decades and is a close Russian ally, with mercenaries from the Wagner Group helping fight rebel forces. Lawmakers voted unanimously to adopt Bitcoin as legal tender, said a statement from the CAR presidency. The move puts CAR "on the map of the world's boldest and most visionary countries", it said.

El Salvador became the first country to adopt Bitcoin as an official currency in September 2021 - a move criticized by many economists, including the International Monetary Fund, which said it increased the risk of financial instability. Others have raised fears that cryptocurrencies such as Bitcoin could make it easier for criminals to launder money, and that they are environmentally damaging because they use so much electricity to generate.

In a first-of-its-kind move -- and the latest sign that crypto-investing has gone mainstream -- Fidelity Investments announced Tuesday that 401(k) plan participants will soon be able to invest in Bitcoin via their retirement plan. Reader BeerFartMoron writes: The investing option should be available by mid-year, Fidelity, the nation's largest 401(k) plan provider, said in a press release. Employers will need to opt into the change, which may limit which employees actually have access to Bitcoin in their workplace retirement accounts. That could enable millions of people to invest in the digital asset without the need to set up a separate account on a cryptocurrency exchange. There are few details currently available about how exactly the account will work, but Fidelity says employees will be able to invest in Bitcoin via what the company is calling the Digital Assets Account, which will be part of the investor's 401(k). That account will also hold short-term money market investments to provide the liquidity for transactions.

More than a week after the U.S. tied one of the biggest heists in crypto to a North Korean hacking group, digital-asset exchange Binance said it was able to recover about $5.8 million worth of the stolen loot that had made its way onto its platform in disguised form. From a report: The details of how it achieved this serve as notice for those who attempt to cash out ill-gotten cryptocurrency gains: It may only get harder. The U.S. Treasury Department last week tied the North Korean hacking group Lazarus to the theft of more than $600 million in cryptocurrency from the Ronin software bridge, which is used by players of Axie Infinity to transfer crypto. The department identified an Ethereum wallet address tied to the group, adding it to its sanction list. Binance was able to trace stolen funds that were initially moved from the hackers' wallet to Tornado Cash -- a service that allows for anonymous token transfers on the Ethereum blockchain -- and then to its exchange by working with external firms.

Brian Armstrong, the chief executive of Coinbase, believes Apple's App Store rules have hampered the company's product roadmap, accusing the iPhone-maker of banning features from their app and generally not being friendly with the cryptocurrency industry. From a report: "Apple so far has not really played nice with crypto, they've actually banned a bunch of features that we would like to have in the app, but they just won't allow it -- so there's potential antitrust issues there," Armstrong said.

Silk Road creator Ross Ulbricht will see his $183 million debt wiped out following the seizure of $3 billion in bitcoin connected to an unnamed Silk Road hacker, according to a court filing. From a report: In 2015, Ulbricht was sentenced to life in prison without parole. He was also ordered to pay $183 million in restitution, a figure calculated from the total illegal sales on Silk Road using an exchange rate at the time of each transaction. Court documents in 2020 reveal that the Justice Department seized 69,370 bitcoins from a hacker who moved the trove to a private wallet in April 2013. Ulbricht has been given a surprising reprieve, with the Justice Department making a deal with him in February 2021 that forfeits any claim Ulbricht may have had to the stolen bitcoin in exchange for the restitution to be repaid once the bitcoin is sold.

During a 92-minute presentation Wednesday on the state of the free software movement, Richard Stallman spoke at length on a wide variety of topics, including the need for freedom-respecting package systems.

But Stallman also shared his deepest thoughts on a topic dear to the hearts of Slashdot readers: privacy and currency: I won't order from online stores, because I can't pay them . For one thing, the payment services require running non-free JavaScript... [And] to pay remotely you've got to do it by credit card, and that's tracking people, and I want to resist tracking too.... This is a really serious problem for society, that you can't order things remotely anonymously.

But GNU Taler is part of the path to fixing that. You'll be able to get a Taler token from your bank, or a whole bunch of Taler tokens, and then you'll be able to use those to pay anonymously.

Then if the store can send the thing you bought to a delivery box in your neighborhood, the store doesn't ever have to know who you are.
But there's another issue Stallman touched on earlier in his talk: There is a proposed U.S. law called KOSA which would require mandatory age-verification of users -- which means mandatory identification of users, which is likely to mean via face recognition. And it would be in every commercial software application or electronic service that connects to the internet.... [It's] supposedly for protecting children. That's one of the favorite excuses for surveillance and repression: to protect the children. Whether it would actually protect anyone is dubious, but they hope that won't actually be checked.... You can always propose a completely useless method that will repress everyone....
So instead, Stallman suggests that age verification could be handled by.... GNU Taler: Suppose there's some sort of service which charges money, or even a tiny amount of money, and is only for people over 16, or people over 18 or whatever it is. Well, you could get from your bank a Taler token that says the person using this token is over 16. This bank has verified that.... So then the site only needs to insist on a 16-or-over Taler token, and your age is verified, but the site has no idea who you are.

Unfortunately that won't help if user-identifying age-tracking systems are legislated now. The code of Taler works, but it's still being integrated with a bank so that people could actually start to use it with real businesses.
Read on for Slashdot's report on Stallman's remarks on cryptocurrencies and encryption, or jump ahead to...

• Can GNU Taler accounts be frozen?
• Why cryptocurrency shouldn't replace banking
• The problem with VPN apps - and how interoperable encryption could protect your freedom

"Cryptocurrency has changed the game of cybercrime," argues Vice's Christian Devolu, in a new episode of their video series CRYPTOLAND. "Hackers and cybergangs have been locking down the data of large corporations, police departments, and even hospitals, and demanding ransom — and guess what they're asking for? Cryptocurrency!"

In short, argues an article accompanying the episode, cryptocurrency "gave birth to the ransomware epidemic."

Slashdot reader em1ly shares one highlight from the video: The team visits a school district in Missouri ["just one of around 1,000 U.S. schools hacked last year with ransomware"] that was the victim of a ransomware attack. ["Luckily, the school's backups were not impacted...."]
Another interesting observation from the article: When ransom payments do happen, companies like Chainalysis can track the Bitcoin through the blockchain, identifying the hackers' wallets and collaborating with law enforcement in an attempt to recover the funds or identify the hackers themselves.