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These companies are using blockchain to improve ESG compliance for the mining industry

Sentient Equity Partners has joined the xx network to use its blockchain ecosystem to post its ESG compliance data in a public and transparent matter.

As part of its efforts to increase transparency, Sentient will also collaborate with C02 Labs and the xx network to develop a platform for mining operations’ ESG compliance.

While neither Sentient nor xx are household names in the blockchain industry yet, their collaboration marks an essential step in integrating blockchain technology into the broader mining industry.

Blockchain and ESG are a match made in heaven

ESG reporting is the disclosure of environmental, social, and corporate governance data. As with all disclosures, its purpose is to shed a light on a company’s ESG activities, usually to appease local environmental and corporate regulations.

However, the changing landscape of the global financial market has made ESG compliance much more than just another regulatory hurdle to overcome. The global increase in environmental consciousness means that better ESG compliance has become a tool to attract investors and financing as many are now looking to support sustainable businesses.

In the past decade or so, the mining industry has found itself in the middle of a fierce battle for the environment. On one hand, it serves as the backbone of almost every other industry and is integral to the global economy. On the other hand, its environmental impacts are hard to ignore and costly to resolve, making it an easy target in the global fight against pollution.

Given its profitability and importance to global trade, the mining industry is able to respond quickly to address the pressures from funds, shareholders, and governments to comply with various sustainability and CO2 reduction targets and regulations.

And there’s no faster and more reliable way to introduce transparency into a business than through blockchain technology.

William Carter, the CTO of the xx network, told CryptoSlate that the executive order from U.S. President Biden to focus on the energy impact of blockchain technology and the current climate crisis have incentivized investing in environmental transparency.

“Blockchain and decentralization has always been about transparency. The xx network believes this ethos should extend far beyond financial systems and has already focused on applying it to communications, voting, and computing,” he said.

As a development fund manager investing in mining projects, Sentient Equity Partners quickly realized the potential blockchain technology had in helping its investments meet various global regulations.

The company has recently entered into binding agreements to sell the Rincon lithium brine project in Argentina to Rio Tinto, the global mining conglomerate. Given the significance lithium mining has in the fight for the environment, posting the mine’s ESG compliance data in a public and transparent manner using a blockchain system was Sentient’s top priority.

“Rio Tinto’s recent acquisition from Sentient of the Rincon Mine lithium project in Salta Province—Argentina’s emerging hub for greenfield projects—reflects a strong commitment to developing a low carbon footprint.  Support for CO2’s blockchain ESG reporting is part of this same push for decarbonization,” Mike de Leeuw, the managing partner at Sentient, told CryptoSlate.

To that end, Sentient will collaborate with C02 Labs and the xx network to develop a platform for ESG compliance specifically tailored for mining operations. De Leeuw explained that the company has always been focused on innovation and sustainability, as well as looking to reduce and identify new opportunities.

“We believe that this project with CO2 Labs and the xx network to develop an ESG and Carbon footprint framework for miners and mining funds to comply with existing and future ESG regulations will add significant value to the mining industry. All industries, especially mineral-based businesses, have a responsibility to conserve resources and to invest in efficient low carbon technology.  There is no question that ESG reporting, specifically the CO2 Labs blockchain platform, is critical to all stakeholders–employees, the general public, and shareholders.”

David Chaum, the CEO of the xx network and the inventor of digital cash, said that it was an honor to have Sentient join the xx ecosystem.

“We are happy we can contribute to the environment and hope many other players follow the effort to decarbonise their portfolio and do so in an open and transparent manner.”

The post These companies are using blockchain to improve ESG compliance for the mining industry appeared first on CryptoSlate.

$44M Ponzi scheme charged with stealing $18M in funds

Two individuals and a company have been charged with operating an illegal community pool and fraudulently soliciting $44 million via an “income fund investing in digital assets.”

The defendants are Sam Ikkurty, Ravishankar Avadhanam, and Jafia LLC, with a status hearing scheduled for May 25, 2022.

The three funds in question are Rose City Income Fund, Rose City Income Fund II LP, and Seneca Ventures LLC, with all assets being frozen by order of the District Court on May 11, 2022. According to information released by the CFTC,

“the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations.”

The complaint claims that the defendants used websites and YouTube videos to “solicit more than $44 million from at least 170 participants to purchase, hold and trade digital assets, commodities, derivatives, swaps and commodity futures contracts.”

It is alleged that instead of investing the funds in order generate a passive income through staking or well-managed trading that the defendants simply reallocated funds to other users in a manner akin to a Ponzi scheme.

Further, it is alleged that the “defendants also transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange” for a total of $18 million.

The websites referenced in the official complaint are currently parked, suggesting that no further investors will be susceptible to their alleged scam. According to cached versions of the site from 2021, the site claimed to have two rules;

“Rule #1: Pay investors a steady dividend of 15% per year on a
Rule #2: Remember Rule #1 GET STARTED TODAY LEARN MORE monthly basis in perpetuity”

A blog post from 2020 gives information on their “mining” activities. A term often used by crypto scammers to con novices to the crypto space.

Many people are familiar with crypto mining, but few understand what this means. Using the term “mining” is done consciously to lull investors into a false sense of security as they have heard there is money to be made in crypto mining. The post states;

“At Rose City Income Fund, we are focused on generating income for our investors. We generate income from operating digital toll-booths. These toll-booths collect fees whether the market goes high or low. We employ market-neutral strategies, that produce reliable income. One of our Portfolio holdings is Synthetix, which we were buying last year at $0.5. We got another opportunity to add more this year in March.”

Despicably, the website appears to target the elderly as it states that “retirees are unable to generate any income from their savings” yet, their fund is “focused on capital preservation.” One of the defendants recently tweeted,

“It is just horrifying to see what wrong economic incentives do to the world. ‘land of free’ has more prisoners than communist, authoritarian China which has a population that is 4 times bigger.”

The complaint outlines in fine detail how the defendants transferred funds between participants instead of investing in digital assets and staking as they had claimed. There are also records of customer funds being transferred into accounts owned and operated by the defendant’s own accounts.

Worryingly, if any of the customers’ funds were, in fact invested into crypto assets, they may not be retrievable as, in March, Ikkurty was “beginning to like $LUNA now. Do Kwon made a game changing move by backing a stable coin with bitcoin.”

If funds were invested in either LUNA or staked with Anchor Protocol they will be down over 90% at today’s value. From the report, however, there seems to be little evidence that the alleged Ponzi scheme invested in any crypto assets on behalf of its customers.

The post $44M Ponzi scheme charged with stealing $18M in funds appeared first on CryptoSlate.

a16z Reiterates Bullish Thesis on Web3, Compares it to the Internet’s Early Days

Leading crypto VC firm Andreessen Horowitz (a16z) released a report offering an annual overview of the current trends and state of the crypto industry. The paper reiterated the firm’s bullish views on Web3, projecting long-term growth ahead of the sector, and weighed in on the dominant position as claimed by Ethereum among layer-one blockchains.

“Web3 is Fairer”

a16z summarized the report into a few observations, mainly on the state of Web3 and Ethereum. The VC giant attributed the recent selloff of the market as a possible sign of a seasonal downturn while maintaining that the crypto-powered Web3 could be one of the best opportunities of the decade.

The company argued that Web3 offers much fairer economic terms than Web2 giants like Meta. According to its data, in 2021, primary sales of Ethereum-based NFTs plus the royalties paid to creators from secondary sales on OpenSea yielded a total of $3.9 billion – four times more than what Meta has rewarded its creators through 2022.

Though YouTube and Spotify paid out respectively $15 billion and $7 billion to their creators as of 2021, the report outlined that each artist on Spotify and each channel on Youtube only received $636 and $2.47. In contrast, by categorizing NFT collections as Web3 creators, the firm said there are a total of 22,400 Web3 creators, and “web3 paid out $174,000 per creator.”

On top of crediting DeFi as a disruptor to the traditional finance industry, a16z also identified blockchain projects like Flowcarbon, Helium, and Spruce as strong candidates for solving significant real-world issues by leveraging the DLT strengths in privacy, transparency, and decentralization.

Ethereum Remains in Dominance but Faces Challenges

Another notable factor, as highlighted in the report, is Ethereum’s lead ahead of other layer-one blockchains like Solana, Fantom, etc. With nearly 4,000 monthly active developers, the second-largest blockchain by market cap has the most builders ahead of its primary competitor Solana which only has around 1,000.

However, the report noted that Ethereum’s emphasis on decentralization over scaling has made other networks more attractive to users with the enticement of lower fees and better performance.

“It’s Still Early“

a16z compared Web3 with the early commercial use of the Internet by analyzing the current size of such users, which is roughly between 7 million to 50 million. It states:

“The internet reached 1 billion users by 2005 – incidentally, right around the time web2 started taking shape amid the founding of future giants such as Facebook and YouTube.”

Seeing blockchain as “a hit product” like PCs and broadband in the 90s and 2000s and mobile phones in the last decade, the firm predicted that there will be “multiple winners” in the race.

G7 says crypto regulation must be swift and comprehensive

Finance Ministers and Central Bank Governors from the G7 met last week to discuss global economic conditions, including cryptocurrency.

The committee was joined by Heads of the International Monetary Fund, World Bank Group, Organisation for Economic Cooperation and Development, and Financial Stability Board, some of which have been anti-crypto in their stance.

The report states that the G7 is working alongside the FSB to “monitor and address financial stability risks arising from all forms of crypto-assets.” It cites the recent market downturn in crypto markets as a rationale to:

“advance the swift development and implementation of consistent and comprehensive regulation of crypto-asset issuers and service providers, with a view to holding crypto-assets, including stablecoins, to the same standards as the rest of the financial system.”

No reference to the 20% decline in the Dow Jones is made in correlation to the crypto market’s decline. Interestingly, a drawdown in crypto means that further regulation is required in a “swift” manner.

However, the traditional markets are supposedly efficient and sufficiently regulated. While proper regulation is likely needed within the young crypto industry, it is also important to consider and accept the nuances of blockchain protocols.

Traditional rules and regulations have been designed for the physical world and may not apply to the complex nature of DeFi, GameFi, and other digital financial assets. To say that the development of crypto regulation must be completed in a “swift” and “rapid” manner raises the question of whether this regulation will be thorough and supportive of innovation. Encouragingly, the report does indicate that stablecoin regulation must:

“adequately addresses relevant legal, regulatory and oversight requirements through appropriate design and by adhering to applicable standards.”

It further states that “digital innovation in payments is a key driver of economic progress and development, notably through faster, cheaper, more transparent and more inclusive cross-border payment services.”

However, the next section of the report does not focus on the crypto markets at large. Instead, it asses the feasibility and implementation of Central Bank Digital Currencies which it believes must “should be grounded in transparency.” It highlights that CBDCs, not existing cryptocurrencies, could be the solution to cross-border payments and innovation.

“CBDCs with cross-border functionality may have the potential to spur innovation and open up new ways to meet users’ demand for more efficient international payments.”

Numerous potential solutions exist, including Bitcoin’s Lightning Network, Ethereum Layer 2 solutions, and many other layer-1 blockchains that can manage, process, and settle international payments within seconds with minimal fees. However, these projects are public, open-source, and decentralized.

They are not subject to the same laws and jurisdictions as CBDCs. The G7 believes that the control of the financial system must remain within their remit. With global inflation over 6% and GDP dropping month on month, some will question whether it is time to change and a move towards decentralization.

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SWIFT Experiments With CBDC Interoperability for Facilitating Cross-Border Payments

The global provider of secure financial messaging services, SWIFT, is testing to interlink multiple domestic-based emerging CBDC networks for cross-border transactions. The Belgium-based network, which enables financial institutions to communicate with each other for global payments, has tapped the French information technology services and consulting company Capgemini for the move.

CBDCs’ Interoperability

According to the official blog post, SWIFT stated that the cross-border use of CBDCs may have been a blind spot for this type of digital currency since it is developed mainly for implementing domestic policies. SWIFT’s Chief Innovation Officer Thomas Zschach, believes different systems of CBDCs need to work together for “frictionless” cross-border transactions, and SWIFT has a role in this.

“Facilitating interoperability and interlinking between different CBDCs being developed around the world will be critical if we are to fully realise their potential. Today, the global CBDC ecosystem risks becoming fragmented with numerous central banks developing their own digital currencies based on different technologies, standards and protocols.”

SWIFT’s Head of Innovation Nick Kerigan noted that as CBDCs will be increasingly perceived as “a new form of fiat currencies,” multiple such platforms paralleling the traditional payment system will be developed to integrate with the traditional financial infrastructure.

In this case, SWIFT, whose technology solutions can be accessed by more than 11,000 financial institutions in over 200 countries, aims to potentially enable “a highly scalable and easily integrated solution” for international payments via CBDCs.

The post also outlined the deployment of a gateway on a domestic central bank digital currency network as the main feature of this experiment:

“The gateway will intercept cross-border transactions on the network, translate them, and send them to the SWIFT platform for onward transmission to another CBDC network or established payment system.”

By collaborating with Capgemini, the post revealed that SWIFT will be focused on addressing three use cases – CBDC to CBDC, fiat to CBDC, and CBDC to fiat. The giant has also looked beyond CBDCs, attempting to enable interoperability between other digital assets and currencies.

Under the Spotlight Amid Sanctions Against Russia

SWIFT – the Society for Worldwide Interbank Financial Telecommunication – is the world’s largest international financial messaging system. After the West agreed to exclude Russian banks from it, financial institutions in the region have faced troubles staying afloat.

Kicking Russia out of SWIFT was intended to cut out the country’s ability to liquidate assets and transfer funds across institutions that are members of the system. However, in a bid to isolate and punish the nation, the move caused criticism derived from countries like Russia and China – which planned to migrate to their own messaging systems to counter the impact of sanctions.

Featured Image Courtesy of Caspian News

Record Inflation Rates Spread Worldwide, Could Crypto Ease Some of the Pain? (Op-ed)

The condition of the global economy seems to be in a state of knockdown. The years of financial boom after the crisis in 2008 ended with the outbreak of the COVID-19 pandemic at the beginning of 2020. Social distancing measures and “stay-at-home” rules crippled production to a serious extent, while numerous central banks took the decision to print colossal amounts of fiat currencies in an attempt to patch economic holes.

Two years later, the move (combined with the Russia-Ukraine war and its financial consequences, among other economic distress, such as supply chain issues, soaring demand, and production costs) caused inflation rates to spike in many countries. In March, the inflation in Turkey hit a year-over-year record high of 61.1%. Nations like the US and the UK also suffered severely.

When the inflation rates were galloping that much during the 80s, most people invested their depreciating fiat currencies into something that could keep its value in the future, such as real estate or gold. Nowadays, though, we have cryptocurrencies, and some residents of the affected countries already seem interested in diversifying with the asset class.

Leading Economies Take a Major Inflation Punch

When observing the financial crisis worldwide, it is worth starting with the strongest economy – the United States of America. In April this year, the Consumer Price Index (CPI) clocked in at 8.5%, a record high for the last 40 years.

The reasons behind the negative statistics could be the Federal Reserve’s decision to print trillions of dollars during the coronavirus pandemic and the soaring electricity and gas prices due to the military conflict between Russia and Ukraine.

But it’s not all that simple, as the issues started well before the war in Europe. Supply chain problems were already harming the local (and global) economy and were only exacerbated in the past few months. Raw materials and labor are harder to find, leading to fewer products made and lower inventories, while the demand has remained the same or maybe even increased.

The effects are more than visible. And while transport, shelter, food, and all other costs soar daily, people’s salaries take time to reach the necessary level to cope with the turbulence. As such, many individuals started looking for solutions, and those who had the experience and financial capabilities distributed part of their wealth into precious metals, properties, bonds, stocks, and digital assets.

Numerous financial experts and crypto proponents describe bitcoin as the digital version of gold and a successful hedge against inflation. Paul Tudor Jones, Ray Dalio, and Jordan Peterson are some examples. The narrative that BTC could serve as an appropriate anti-inflation tool comes from its limited supply (only 21 million coins ever to exist), accessibility, and decentralization (it is not printed or controlled by central banks).

The accessibility feature is particularly interesting as some of the aforementioned assets typically regarded as safe havens are not as easy to access as BTC. All users have to do to get on the bitcoin blockchain is access to the Internet, and, if they choose to go through centralized exchanges, they can create accounts and be verified rather quickly. Investors could also purchase very small quantities of BTC (they don’t need to buy a whole one).

Weighing in on the matter, bitcoin bull Michael Saylor recently argued that the inflation rate in the US is actually higher than what authorities announced, advising people to seek shelter in the primary digital asset.

#Inflation is worse than you think, and #Bitcoin is better than you know.

— Michael Saylor (@saylor) April 12, 2022

The next country where inflation reached a 40-year peak is the United Kingdom. Apart from the reasons mentioned above, the local crisis was fueled by the nation’s withdrawal from the European Union, a move known as Brexit. Experts expect that it is likely to increase the cost of living in the UK due to its interrupted financial connections with the rest of Europe.

A recent Coinbase report revealed that crypto adoption in the UK is on the rise as 33% of Britons have already dived into the asset class. Bitcoin and ether are the most commonly owned, while Dogecoin and Binance Coin round up the top 4.

Record Inflation Reigns in Other Countries

In April, the largest country by landmass in South America – Brazil – marked the steepest rise in the inflation rate for a single month when the consumer price index IPCA rose from 11.04% in March to 12.1% 30 days later.

In light of the financial turbulence, according to Gemini’s survey, Brazilians are the global leader in crypto adoption, as 41% of the participants admitted owning bitcoin or altcoins.

The inflation rate in Nigeria is also heading north each month, and currently, it is over 16%. Interestingly, KuCoin estimated that one of the financial hubs in Africa has over 33 million crypto investors (35% of those aged 18 to 60). Apart from inflation fears, a huge proportion of Nigerians distribute their wealth into the cryptocurrency market because they have limited access to financial services.

Despite the negative trend in all these countries, the inflationary crisis appears to be even worse in Turkey. At the end of last year, the country’s national fiat currency – the Turkish lira – lost a significant chunk of its value against the American dollar. Many blamed President Erdogan, whose controversial policies might have led to the sharp drop.

In March this year, the inflation rate in Turkey surpassed 60% (a year-over-year). Gold remains the most important and widely employed investment instrument in the country, but there could be an issue with this as the authoritative government urged the population to turn over its precious metal holdings to help support the economy.

At the same time, locals are gradually shifting their focus toward bitcoin and even Tether, which, since it’s pegged 1:1 with the USD, allows people to purchase the closest available option of the greenback but on the blockchain.

Helium founder: Nova Labs supports a decentralized internet

We recently caught up with Helium Chief Operating Officer Frank Mong to talk about the future of decentralized internet networking. Nova Labs, formerly Helium Inc, recently received $200 million in funding at a $1.2 billion valuation. The Helium network has had the fastest rollout of a global wireless network in history. Mong details his love of the project declaring

“The Helium Network is proof of the incredible feats everyday people can accomplish when you come together under a shared mission.”

Mong also answers questions on the falling HNT rewards, network outages, competitions from other LoRaWAN networks, and the future of the Helium network.

Akiba: What does Helium mean to you? Not the elevator pitch, not the corporate response. What does Helium mean to you as an individual?

Frank Mong: The Helium Network is a culmination of nearly a decade of sheer hard work, and I see it as a project that will continue to grow and evolve to serve whatever wireless protocol comes our way five, ten, or 30 years from now.

It hasn’t been an easy journey—Amir founded Nova Labs (formerly Helium Inc.) along with Shawn Fanning and Sean Carey back in 2013, and I joined the team in 2017. Building a wireless network is traditionally very time-and-cost-intensive, and we struggled initially. It wasn’t until 2017 that we thought maybe there was a way we could use crypto to solve our cold-start problems.

In 2019 we launched the Helium Network with this crazy idea to reward everyday people with crypto to deploy Hotspots, and it just took off. Today we’re the fastest-growing wireless Network in history, with 800,000+ Hotspots in 60,000 cities worldwide. There are no words to describe the overwhelming amount of joy and gratitude we have towards our community—we launched an idea, and they made it into something incredible. To me, the Helium Network is proof of the incredible feats everyday people can accomplish when you come together under a shared mission.

Akiba: Why does the world need the Helium network?

Frank Mong: Wireless connectivity is simply inaccessible to most of the world. The Helium Network circumvents the billion-dollar costs and slow infrastructure that traditional telcos need in order to expand coverage around the country. This is critical because having access to the internet matters more than ever before.

Being connected means access to education, work, and staying in touch with friends and families worldwide. By putting the power of connectivity in the hands of everyday people, we’re able to democratize access – while allowing people to participate and benefit from an industry that’s historically been in the hands of the few.

Akiba: There has been some disquiet among the community in recent months regarding stability and rewards. How do you feel about the state of the Network?

Frank Mong: The Helium Network is the fastest-growing Network in history, and that kind of growth inevitably comes with scalability pains. Our focus at Nova Labs is on pioneering decentralized wireless networks, and we’ve continued to see the Helium Network accelerate at an unprecedented pace.

Akiba: What would you say to community members who feel that rewards have dropped to a point they are considering leaving?

Frank Mong: We should do a better job articulating expectations from mining and usage of the Network. Rewards come from both. As the Network of Hotspots grows, it’s essential for folks to understand that over time, APY should hopefully stabilize, and usage of the Network becomes a primary driver for rewards. We are in the early stages of use, and as that grows, I believe focusing on usage rewards will drive the next wave of the Helium ecosystem.

Akiba: What are your thoughts on other similar networks such as Planetwatch? Do these help the Helium network grow?

Frank Mong: Helium is supportive of a decentralized internet. To achieve our mission, the Helium Network has to be truly open-sourced. Therefore, our perspective on what constitutes competition isn’t necessarily other players in this space but rather the current status quo. Our core mission is to build the most ubiquitous, low-cost Network possible — and to achieve that; we can’t do it alone.

Akiba: What do the next 12 months have in store for Helium after the recent investment?

Frank Mong: It’s been three years since the first IoT network was launched. Since then, it’s been a rollercoaster of constant improvement, learning, and celebrating both the small and huge wins. The next 12 months will see massive new additions to Helium 5G along with the emergence of new applications leveraging the Network every day.

Akiba: Can you give us any hints at any upcoming developments we may not be aware of?

Frank Mong: I don’t want to spoil any surprises, but keep your eyes peeled for the next Helium 5G milestones and more usage of the current IoT network.

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