1st October 2024 > > Ohio & Roman Storm.

tl;dr

Ohio makes a second attempt to go crypto. Roman Storm’s ongoing legal worries provide both insight and a reminder of a warning.

Market Snap

Market Wrap

Far too much weight is given to quarter end closing prices. Historically, September, for a variety of reasons which have nothing to with the name of the month, has not generally been a good month for BTC prices. This last one has been the best ever, which has caused an outbreak of enthusiasm and despair in equal measure. The enthusiasm is easy to understand. It is comments like this that defeat me:

“If BTC bulls can’t muster the momentum to push back above the 2021 Mid-Cycle Top. If they can’t do that, they at least need to hold onto the 21-Week MA. Failure to do so opens the door for a retest of the lows.”

As always with techies, there are no probabilities or time-frames attached to the prediction, making it utterly worthless. But adding in a claim that price action on a specific day three years ago has relevance today moves this comment out of the world of fantasy and into a world of delusion.

Curious Cryptos’ Commentary – Ohio

Niraj Antani, State Senator in the Ohio Senate, on X:

“TODAY: I introduced a bill to legalize the use of cryptocurrency to pay state and local taxes and fees. Cryptocurrency is not just the future — it’s the present. I’m proud to be the most pro-cryptocurrency Member of the Ohio Senate.”

In 2018, the Ohio legislature approved just such a measure, but the Ohio Attorney General – playing his assigned role in Operation Choke Point 2.0 – ruled that the State Board of Deposits must also approve, which it has signally failed to do. The latest measure is designed to get over this roadblock.

The legislation also “expressly permits state universities and state pension funds to invest in cryptocurrencies, if they so choose.”

Lovely.

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Some of the comments posted on X in response are really rather brutish. We sometimes forget here in our little crypto bubble that there are many other people outside who remain wholly ignorant about the potential of the blockchain revolution. Their response to crypto developments is an emotional one based on disinformation and downright lies.

I am hoping that Kamala Harris’ crypto pivot will help to diminish some of the political heat around cryptos.

Curious Cryptos’ Commentary – Cryptos can make for some strange bedfellows

Over a year ago, Tornado Cash developer Roman Storm was arrested on money-laundering charges.

Mixers like Tornado Cash allow individuals to send cryptos into the mixer, and a little while later receive them back (minus a fee) to a new wallet. If designed well, they can make the tracing of transactions much more difficult.

You can immediately see the problem here. Privacy is a right, and mixers are a tool that can enhance your privacy. Mixers can also be used for hiding the source of funds derived from nefarious activities, aka money laundering.

My libertarian instinct tells me that any technological development can be used for good and for ill, and that progress would be stopped for evermore if the threat of heavy fines and custody within the US prison system was the potential reward for any individuals creating technological innovations. Tim Berners-Lee has never been threatened with being arrested for the proliferation of financial scams because of the internet, and rightly so. I cannot believe that this prosecution of Roman is in anyone’s interest.

This unfortunately means I am on the same side as Edward Snowden, who described Roman’s arrest as “deeply illiberal and profoundly authoritarian”. Which is both absolutely spot-on and also farcical coming from his mouth, given his choice of country to reside in.

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Last week Roman had his attempt at dismissing the case against him as it infringes on his First Amendment rights rejected in a U.S. district court. His argument was that “… this prosecution represents an unprecedented attempt to criminalize the development of software” which again is true. The key problem with things like Operation Choke Point of whichever variety is in play is that moral equivalence is the first casualty, which is a feature not a bug of Choke Point.

This tale is also a strong case for never getting involved in privacy coins, whose basic functionality is to act in a manner similar to mixers. The use of zero-knowledge proofs – one of the wonders of our time – obfuscates the movements between wallets.

The tax and legal authorities will not look kindly on users of privacy coins regardless of the outcome of Roman’s trial.