Sweden’s central bank has tapped Accenture to develop its e-krona digital currency pilot project, the Riksbank announced in a press release Friday.

Accenture will build out the e-krona’s consumer-facing features – such as how a user would pay on various mobile platforms – and run them in a test environment with “simulated stores.” Its initial contract lasts for one year, but Riksbank said it is open to as many as seven years of tests.

Riksbank hasn’t committed to issuing an e-krona at this time.

Regardless of the limitations, the partnership, which the central bank intends to sign later this year, is set to move the Scandinavian nation’s long-awaited e-krona one step closer to reality.

Such a development could tap into Sweden’s growing aversion to physical cash. Swedes have flocked so readily to cashless payment alternatives that the Bank of Canada’s Deputy Governor Timothy Lane said physical kronas are falling out of use.

“You’re actually reaching a tipping point [in Sweden],” Lane said at the Philadelphia Federal Reserve’s November Fintech conference. “Merchants are increasingly refusing to accept banknotes and banks are increasingly not offering services to process banknotes.”

Cash-free financial headwinds prompted Riksbank to begin studying an e-krona long before the more recent central bank digital currency (CBDC) rush. In 2016 the bank’s Deputy Governor Cecilia Skingsley said Riksbank was “facing pressure” to move away from coins and bills the public largely balked at.

It then began to study an e-krona in depth. Two reports, the first in September 2017 and a followup one year later, outlined everything from a digital currency’s legal ramifications to its impact on bank lending rates.

Notably, those reports revealed Riksbank’s reticence to base any such digital currency on a blockchain or distributed ledger technology (DLT), which Riksbank labeled an “inefficient technology.” But its 2018 report nonetheless stated that “an e-krona should be able to interact with DLT solutions.”

It is not clear what technology Accenture’s proposed e-krona will utilize. Riksbank classified the procurement process in its June 2019 proposal solicitation, calling the information “important to national security” in a press release at the time.

75% of IoT Firms Want to Add Blockchain: Survey

While there are still few large-scale use cases of blockchain, the Internet of Things (IoT) industry turns out to be “a sweet spot” for the adoption of such technologies.

Avivah Litan, an IT industry analyst at Gartner, said in a survey, said that“75 [percent] of IoT technology adopters in the U.S. have already adopted blockchain or are planning to adopt it by the end of 2020 out of more than 500 U.S. companies.”

Blockchain technologies can create a trusted environment for data transmissions between virtual networks or devices while increasing efficiency of such exchanges, according to the survey.

According to Litan,  of the 75 percent of blockchain adopters, 86 percent are implementing both IoT and blockchain in various projects.

The IoT companies aim to integrate computing devices with digital and mechanical machines to avoid human-to-human or human-to-computer interaction.

For example, Apple Watch and Amazon Alexa are using these technologies in consumer goods. The technologies can also be used in the healthcare, industrial and military sectors.

Increased security and trust in shared multiparty transactions are the top benefits when the companies combine blockchain and IoT technologies, according to 63 percent of the survey respondents, while 56 percent said the top benefit is an increase in business efficiency and lower costs.

However, Litan cautioned that blockchain implementations related to protocol changes could be difficult for long-lived IoT devices due to its relatively high volatility.

“Some blockchain implementations struggle to scale to the transaction rates that can be generated by large numbers of connected things,” Litan said, expecting the necessary evolution in both blockchain and IoT to mature in five to 10 years.


What would the late former Federal Reserve Chair Paul Volcker have thought about digital currencies issued by central banks?

The short answer is nobody knows; Volcker never really got steeped in the fast-developing world of crypto.

“Bitcoin? What’s that?” Volcker replied when asked about the largest cryptocurrency by a Quartz reporter in April 2013. “I’m too old to know anything about that.”

The question is worth asking, though, since Volcker, who died this week at 92, is regarded as perhaps the most effective and credible Fed chief of the past half century.

Volcker led the U.S. central bank from 1979 through 1987 and is known primarily for jacking up short-term interest rates to as high as 20 percent to short-circuit double-digit inflation. The aggressive move helped to push the U.S. into recessions in the early 1980s, driving the unemployment rate to nearly 11 percent from 6 percent and drawing outcry and pushback from corporate executives, unions and lawmakers. But by the mid-1980s, the inflation rate dropped back below 2 percent, and the economy resumed its growth.

Now, the Fed and central bankers around the world are grappling with the emergence of a new form of money: digital currencies made possible by cryptography and advances in the distributed-ledger technology known as blockchain. Authorities from Ghana to Sweden are examining the concept while China, the world’s second-largest economy, is moving forward with tests of a digital version of its national currency, the yuan. Some observers of say China’s effort might be partly geared to undermine the U.S. dollar’s supremacy.

Easier on consumers

The promise of these government-backed digital currencies is that they might reduce the need for paper bills and coins, making it easier for consumers and businesses alike to exchange payments. Those are benefits that Volcker likely would have embraced, says Richard Sylla, a New York University economics professor emeritus who specializes in financial history.

“One of the arguments for digital currencies is that it could lower the costs of moving money around the world,” Sylla said in a phone interview. “And he certainly wouldn’t have been against investigating the possibility of that.”

Sylla, who knew Volcker professionally, says he was with the former Fed chief once when he was about to fly to Mexico for a meeting. According to Sylla, Volcker casually remarked that the world might be better off if it had a single currency; things might just be simpler that way.

Of course, the U.S. dollar serves as the de facto global reserve currency, stockpiled by central banks and investors in just about every country. The U.S. is the world’s largest economy, and the dollar serves as the default tender for many cross-border loans as well as payments in international trade and big global commodity markets like oil and gold. There’s also the need for dollars to buy dollar-denominated assets like U.S. Treasury bonds, seen as a better store of value than risky assets like stocks in an economic downturn or financial crisis.

Volcker was a critic of Wall Street financial-engineering products like credit-default swaps and collateralized loan obligations, and he famously pushed (successfully) after the 2008 crisis to stop banks from making speculative proprietary trades with customer deposits.

But Volcker was reportedly a fan of technological improvements to make the financial system work faster and more efficiently, or to improve the ease of payments in the broad economy. Volcker said in December 2009 that he thought the ATM machine was the most important innovation in the banking industry of the prior two decades, because it “really helps people and prevents visits to the bank and it is a real convenience.”

‘Volcker would have created it’

Dick Bove, a five-decade financial-industry analyst for the brokerage firm Odeon Capital, said in a phone interview that Volcker likely would have opposed bitcoin and other digital assets built by independent developers. According to Bove, Volcker believed that “central banks should have control of the financial system in a given nation, and it should have control of interest rates and the volume of currency being created, and it should be used to help the country meet whatever goals are needed at any point in time.”

But a digital currency issued by the central bank? Bove bets Volcker would have been all for it – just for the sake of keeping up with new technology.

“If the need for a central bank digital currency arose, I think Volcker would have created it,” Bove said.

U.S. Treasury Secretary Steven Mnuchin said last week that he and the current Fed chair, Jerome Powell, agree there’s no need for a digital version of the dollar “in the near future, in the next five years.”

Paul Brodsky, a partner at the crypto-focused investment firm Pantera Capital, said Volcker likewise might have taken a cautious approach to a digital dollar rollout.

“He would have waited and let it see how it played out in the private sector before pushing forward with a Fed digital currency,” Brodsky said.

Keeping a tight lid on money…

Jimmy Song, with crypto-focused venture capital firm Blockchain Capital, says Volcker might have endorsed a digital dollar as a technology. But that leaves unsolved what Song sees as the basic problem that led to the original formation of bitcoin, in the wake of the 2008 crisis: technocrats’ efforts to exercise too much control over money, leading to mistakes and excesses.

Volcker is “not someone who wanted to give people self-sovereignty or freedom,” Song said in a phone interview. “A Fed-backed digital currency is conceptually not very different from the system that he oversaw. It’s mainly just an infrastructure upgrade.”

…but not too tight

David Yermack, chair of New York University’s finance department, said he knew Volcker and that the late Fed chief was surprisingly conservative when it came to the benefits of limited government. One benefit of some digital-dollar proposals is that individuals might be able to deposit money directly with the Fed, without having to set up accounts at commercial banks.

But that might create the “risk of abuse for political reasons,” since the government would have more direct control over people’s money, says Yermack, who teaches courses on bitcoin and has co-authored research papers on central-bank digital currencies. Some critics of China’s push for a digital yuan argue that it would simply become easier for central authorities to monitor citizens.

The benefits of a central bank digital currency “might be desirable but encroach on personal freedom,” Yermack said. Volcker “had a lot of faith in the private sector. He was never a person who stressed big government for its own sake.”

But according to Sylla, the financial historian, Volcker would not have wanted to cede monetary authority to private companies like Facebook, which is developing a digital asset for payments, known as Libra.

“What Volcker would have said if he were still with us and we could ask him, is that the idea of a central bank digital currency was an idea worth studying, but I’m pretty certain he would not want it to be under the control of Mark Zuckerberg,” Sylla said, referring to Facebook’s CEO.

Digital asset custody firm Trustology has cut seven staffers, including three executives, as the big banks and institutional players that were its target market are taking longer than expected to jump into the crypto space.

The firm, which now has a headcount of 11, has changed focus and is now courting crypto hedge funds and exchanges as well as the nascent decentralized finance space.

“Unfortunately we had to let go of seven individuals – three executives and four developers,” said Alex Batlin, CEO and founder of Trustology. “We needed to restructure, we needed to downsize.”

The move is another sign of belt-tightening in the blockchain industry following the crash in cryptocurrency prices of early 2018. It follows recent news that Trustology backer ConsenSys has been forced to cut its operations in India and the Philippines.

Almost exactly a year ago, Trustology raised $8 million in seed funding from ConsenSys and Two Sigma Ventures, the VC arm of the technology-focused quant fund.

Trustology started out with a vision to build an enterprise-grade custody technology to secure crypto assets on behalf of banks and institutional clients. Over the past year, there’s been lots of engagement with banks, said former UBS banker Batlin. (The Trustology founding team also comprises ex-bankers from Bank of America, RBS, Goldman Sachs and Barclays).

However, this year’s Sibos banking conference, which took place in London in September, turned out to be a watershed moment, said Batlin.

“I talked to most of the folks that I’d expect to be doing something – all the top tier banks – and had great conversations, but one of the things I was able to take away from it: there wasn’t a provisioning of budget in the coming fiscal year dedicated to production rollout of custodial services,” he said.

Batlin blamed this in part on the crypto winter, or industry downturn following the 2017 boom, which reduced buy-side demand from institutional hedge funds, and also the general fact that many banks are now planning for a recession of some degree and looking out for undue costs.

“It’s still not something that they are prioritizing for the next year,” said Batlin. “What we decided was, this will take longer than originally anticipated back in 2017. Very simply, we needed to have a longer runway,” he said.

There are still signs of bank interest in crypto custody, such as a report this week from Reuters, citing unnamed sources, that Dutch lender ING was developing storage tech for digital assets.

Batlin said staying in a long game was part of startup life which is something his investors understand.

“One of the reasons I partnered with ConsenSys as an investor is because Joe [Lubin] has got a remarkably long term vision,” he said.

Japan-based startup Nayuta has released what it says is the first lightning network wallet with a built-in bitcoin “full node.”

Lightning is the scaling technology trumpeted as the future of bitcoin payments. With the new Nayuta Android app, users can tap into the new payment system in one of two ways: by using the baked-in bitcoin “full node” for added security or they can switch to a “SPV” version (Neutrino), which isn’t quite as secure, but takes up much less space on the phone.

Nayuta claims it is the first developer to add a full node to its wallet, making the esoteric sovereignty-preserving technology a bit easier to use. They use a fork of the project ABCore, which makes it easier to run a full node on Android devices.

“Using a full node is the only way to really know if you received bitcoin, if you don’t use a full node you are always trusting somebody to a degree, whether that would be the wallet company’s node or the miners,” said Christian Moss, Nayuta’s mobile app developer.

Full nodes can take hours to download, but they’re the most secure way of using bitcoin as the user doesn’t have to trust anyone to ensure they have the correct transaction data. Making a full node easy to run has long been a primary goal for many bitcoin developers.

“For day-to-day, it is definitely more convenient and practical to use the wallet without the full node. However it is important to have the full node available in case the network were attacked in a similar fashion to Segwit2x with miners producing invalid blocks,” Moss said.

‘Hybrid’ mode

In addition to allowing users to choose either a full node or a SPV node running in the background, there’s a third “hybrid” mode, which allows the wallet to automatically bounce between the two.

“With hybrid mode, during the day when you are outside your wallet gets blocks from Neutrino [the SPV wallet], and at night when your phone is charging, having wifi, and [the bitcoin full node] is running it will check those blocks are valid,” said Nayuta CEO Kenichi Kurimoto.

He hopes this is a good way to get the best of both worlds.

“In the bitcoin space, only a fully [validating] node is the perfect solution for self-sovereignty. On the other hand, the SPV node is superior for storage size, internet connection bandwidth, and power consumption. We think that there may exist a new good solution to this trade-off problem. Nayuta mobile wallet hybrid mode is one such solution,” he said.

Moss is optimistic it will only get easier to run a bitcoin full node on a mobile device over time.

“Whilst this current implementation of a full node lightning wallet is not as super user-friendly we think that research and development in this direction is a no-brainer for bitcoin. [In] the future, as smartphones become more powerful, running a full node could have a similar UX experience as running a light client wallet,” he said.


Ethereum has successfully completed the Istanbul hard fork.

Hitting at block number 9,069,000, the systemwide upgrade is the network’s third in 2019, following February’s St. Petersburg and Constantinople hard forks. The months-long process culminated at 0:25 UTC on Sunday.

Another iteration of Ethereum 1.x, Istanbul is the network’s eighth hard fork overall with the first code changes being approved in June 2019. (Eth 2, the network’s major transition to proof-of-stake (PoS), is expected in 2021.) Being non-contentious, all ethereum clients – which host and independently upgrade the ethereum protocol themselves – have agreed to the new software.

Istanbul includes six Ethereum Improvement Proposals (EIPs), specific code changes to the ethereum protocol, including EIPs 152, 1108, 1344, 1844, 2028 and 2200.

According to a blog post from ethereum venture studio ConsenSys, the main issues addressed by the six EIPs are:

  • Denial-of-service (DDoS) attack resilience (EIP 1344).
  • Interoperability with equihash-based proof-of-work (PoW) cryptocurrencies such as zcash (EIP 152).
  • Gas costs (EIPs 1108, 2028, 2200).

Stepping back, the cost to send a transaction on the ethereum network is called gas and paid in fractions of ETH called gwei. The lowered gas costs enabled by Istanbul’s EIPs are meant to increase bandwidth on the blockchain and foster zero-knowledge privacy technologies such as zk-SNARKs.

Last-minute mixup

One scare before Istanbul took place was with ethereum client Parity, which released an urgent message to Parity Ethereum users to conduct a patch on the pre-released Parity Ethereum update before the Istanbul hard fork occurred. In short, EIP 1344 – concerning opcodes – was not initially included.

While the fix itself was simple, ethereum core developer Hudson Jameson said in the “AllCoreDevs” Gitter messaging platform that if Parity clients failed to update in time, a new chain could develop causing double spends.

“Parity represents about 23% of the network and is commonly used by major miners and exchanges,” Jameson said Friday. “I fear if one to two major exchanges stay on the old fork and one to two major mining pools mine the old chain it will cause confusion and in a more severe case double spends.”

Lingering questions

As CoinDesk reported in September, 680 smart contracts on Aragon, a governance platform, will be broken by the planned hard fork.

Certain code changes will change how funds can be sent between decentralized autonomous organizations (DAOs), forcing users to manually migrate smart contracts from one structure to the other.

While Aragon supports the continuing growth of ethereum, Aragon One CTO Jorge Izquierdo said ethereum developers need to be more cognizant of those developing on the network.

“Developers don’t want to build on a moving target, and backwards compatibility should be taken seriously as well,” Izquierdo said in an email to CoinDesk Friday. “Ethereum is not a toy anymore, it’s a platform with a sizable investment and a big reach, and as such changes like this need to be professionally measured before being taken.”


Cryptocurrency financial services firm Unchained Capital has hired Will Cole of the Wyoming Blockchain Task Force as its new chief product officer, the firm announced Thursday.

Cole leaves Stack Overflow, a resource site for programmers, where he’s been vice president of product since 2012. Becoming familiar with bitcoin that same year, Cole was tapped for the Wyoming Taskforce for his expertise on the subject and helped create state jurisdictional rules for bitcoin and blockchain adoption.

With Unchained, Cole will help further develop bitcoin-related financial products.

“I think it’s a bit of a misnomer that bitcoin makes banks obsolete,” Cole said in an interview. “[Bitcoin] certainly negates several banking business models. But as long as there is money, there will be loans custody, and other financial services that support that money.”

The Austin, Texas-based Unchained Capital was founded in 2017 and offers a slew of products based on multi-signature security models such as fiat-for-bitcoin lending and bitcoin cold storage. The company says its platform has facilitated over $100 million in aggregate transaction volume.

Collaborative custody remains a premier service for the firm, such as inheritance protocols that allow family members access to private wallets after the owner has died.

Unchained has been working with the former Blockstream architect and cryptographic pioneer Christopher Allen as a sponsor of the #SmartCustody project and supports related work such as social key recovery, Allen told CoinDesk.

Source: Coindesk


The first application on Kadena’s public blockchain is a tracking platform for CBD oil.

The platform is expected to launch after Kadena’s smart contract becomes fully functional on Jan. 15, 2020.

The cannabis project is only the first step for Kadena to tap into the multibillion-dollar healthcare industry, Will Martino, the firm’s CEO, said in an interview.

“We have much greater visions that include putting together a much larger healthcare data marketplace,” Martino said.

In the long term, Kadena hopes to achieve this goal via a partnership with Raleigh, N.C.-based Rymedi, a technology firm that provides data services for pharmaceutical, healthcare and other life-sciences companies and institutions.

In particular, Kadena and Rymedi could provide clients with an immutable and auditable record-keeping platform that could accelerate the drug approval process with the U.S. Food and Drug Administration (FDA).

Consumers will be able to scan QR codes on products and look up production records. Using prospective consumer feedback, Martino said Kadena could launch a similar platform for prescription drugs in the future.

“This validates purchasing and authenticity, especially useful in geographies and industries where fraud and quality concerns remain potentially life-threatening issues,” Kadena said in a statement.

In April, Rymedi became one of the members of an FDA-approved consortium to study the use of blockchain technology to track and verify specialty prescription drugs in several U.S. states with a focus on intra- and inter-health system medication transport and usage.

“With their deep experience in financial markets and transaction data, Kadena is a uniquely aligned partner for us,” Rymedi CEO David Stefanich said in a statement.

Kadena claims to have one of the most scalable proof-of-work platforms for facilitating cross-chain transactions. The firm announced mining on its mainnet had begun on Nov.4 with plans to raise an additional $20 million in a November token sale.

The firm will enable miners to trade KDA tokens on Dec. 17. People can use Kadena’s smart contracts with the tokens starting on Jan. 15.


Microsoft is pitching blockchain technology as a way to make artificial intelligence less scary for its corporate customers.

Much like consumers who are wary of AI, enterprises are queasy about putting their full trust in a “black box” where machine learning algorithms are indiscriminately applied to vast data sets. But Microsoft, which helps thousands of firms manage their data, claims a blockchain can add trust and a degree of transparency, assuaging such concerns.

Underpinning this is a new tool called Azure Blockchain Data Manager, which the software giant released at its annual Ignite conference in Orlando, Florida, but was overshadowed by the announcement of a platform for creating enterprise tokens.

Blockchain Data Manager takes on-chain data and connects it to other applications. So transaction data from nodes or inside smart contracts can be sent to other databases or data stores. These are the sort of places where AI can be deployed, or in the case of supply-chain, where internet-of-things (IoT) information can be brought to bear.

“From manufacturing to energy to public sector to retail, AI is digitally transforming businesses in every vertical,” said Marc Mercuri, principal program manager for blockchain engineering for Microsoft Azure, the company’s cloud computing business. “Blockchain can ensure that everything from the algorithms to the data going in and out of them is trustworthy.”

Acting as a trust anchor for downstream data analytics might sound like a rather abstract and modest innovation for blockchain. But blockchain on its own has shown few tangible benefits among companies that rode the initial wave of hype.

Data trail

A distributed ledger can be used to look at the provenance of data before AI parses it, Mercuri said. “Where did it come from? Where was it transformed? What was the code used to transform that? What was the input and the output of that transformation?”

The concept is plausible to Avivah Litan, a vice president and distinguished analyst at Gartner Research.

Blockchain, AI and IoT could be combined in the tracking of shipments of organic beef from Argentina, for example, she said.

In this case, the blockchain would allow participants to agree on all the conditions and exact location of the shipment, informing the distribution strategy further down the line, which is where AI might come in.

“Now, you could do that without blockchain,” said Litan, “but with blockchain you get a shared, single version of truth and an immutable audit trail so it’s a much better source of data to feed your AI models.”

Microsoft’s data manager is designed to be “ledger-agnostic,” meaning it could be used with various types of blockchains, although the company’s forays in the sector have traditionally been linked to ethereum, including enterprise versions like JPMorgan’s Quorum.

Test customer

One of Microsoft’s customers, Icertis, a cloud-based platform for contract management, tried out Blockchain Data Manager “in preview,” prior to the release at Ignite, and built use cases involving ethical supply chain contracts and the way certain subsidized pharmaceutical drugs are used. Icertis used Quorum for the Data Manager builds, but the firm has used R3’s Corda as its main blockchain previous to that.

An example that demonstrates the concept of trusted AI involves contracts that include a limitation of liability or a particular type of disaster recovery clause, for instance. By feeding data into an AI model, the level of risk for the end-user, if they agree to the contract terms, can be predicted.

Monish Darda, CTO and co-founder of Icertis, said the aim was to show the end-user what made the AI reach its conclusion, proving that it was not prone to any kind of data-led bias.

“I can go in and see what data was used to reach that decision,” said Darda.

“If my model is trained from that data, it gives me a transaction ID or a hash of the transaction written in the blockchain, and I can then go deep and say, ‘hey, two years ago I got these 10 data points that I used in my machine learning model, that influenced my calculation of risk’,” he said.

KPMG too

Big Four consultancy KPMG also has a blockchain-based trusted AI release slated for January.

Arun Ghosh, U.S. Blockchain Leader at KPMG, said a large part of machine learning is not data science but data engineering.

“It’s cleaning and collating and integrating information, and then you run the algorithm,” he said. ”What we are finding is that you can compress the data engineering process by adding a trusted layer that is immutable by nature.”

Would you get a tattoo of your employer’s logo?

Gareth Li, head of business development and partnerships at Binance, had the crypto exchange’s angular diamond etched on his arm to match founder Changpeng “CZ” Zhao’s ink. And a similar level of commitment extends to the charismatic CZ’s fans, who get their own Binance tattoos, sometimes permanently.

Cryptocurrency has strayed from its roots in the decade since a mysterious programmer (whose identity remains unknown, and to most users unimportant) invented a new form of anonymous digital cash. Today, cults of personality and public histrionics define the sector. And the stakes are often higher than getting inked like an idol.

Industry dynamics are “getting very personal,” as one Chinese investor, who did not want to be identified, put it.

CMT Digital’s head of trading, Brad Koeppen, agreed. Cryptocurrency markets are almost uniquely vulnerable to gossip and sentiment swings, he said. The correlation between public personas and trading activity isn’t always apparent from public exchange data, especially for tokens with identifiable figureheads like Binance’s BNB (CZ) and Tron’s TRX (founder Justin Sun), Koeppen said.

“It’s a little bit more relationship-driven at this point” than traditional markets, he said. “That has to do with the number of entities that are involved.”

Meme wars spawned last month over media coverage of Binance’s operations in China offered a salient example of celebrity token politics.

When news outlet The Block published an article on Nov. 21 with an unnamed witness claiming Chinese police conducted a “raid” on Binance’s Shanghai office, the Twitter feud escalated to near-nuclear proportions. The price of BNB also continued a downward slide from roughly $17 to below $15 the next day.

Social media chatter routinely sways crypto price movements. For example, in July the news of TRX creator Justin Sun’s thwarted Warren Buffett lunch also influenced market activity, Koeppen said. He described this as a widespread issue faced by cryptocurrencies with prominent founders.

“It’s hard to know when Joe Lubin or Vitalik Buterin will say something, or when Justin Sun will get in trouble. The market reacts quickly,” he said.

These cults of personality harness fans and followers to influence the market by defining the public narrative. And the entrepreneurs themselves encourage grassroots marketing by using retail investors as foot soldiers. In seemingly rare circumstances, some founders even offer monetary rewards.

Meet Tommy Mustache

The day The Block published its “raid” report, Binance’s Zhao tweeted that he would devote 100 bitcoin to an anti-FUD fund. FUD, or “fear, uncertainty and doubt,” is the rallying cry of crypto fans aggrieved by anything that doesn’t sing the praises of their favored token. Sun, who is now also a Poloniex investor, tweeted that he would personally donate 100 bitcoin to Zhao’s “FUD fighting fund.”

Beyond the anti-FUD fund, Sun also announced that he was sending $1,000 worth of USDT to a self-taught trader now living in Silicon Valley, known on Twitter as “Tommy Mustache,” to help him make derogatory memes shaming The Block’s staff for failing to apologize for what they considered a sensationalist article. (Mustache confirmed to CoinDesk that he received Sun’s payment.)

As a passionate holder of both BNB and TRX, Mustache said several people in his Telegram groups sold their BNB after The Block report because they feared Zhao may be arrested or otherwise penalized.

“Investors like me are getting hurt [by rumors] and we are sick of it,” Mustache said.

To be clear, so far little evidence suggests there was a police “raid,” and that phrasing was later changed by The Block to “visit.” There does, however, appear to be ongoing changes related to how and where China-based Binance staffers operate. Even if Chinese authorities are taking a close look at various offices affiliated with the exchange, that doesn’t imply any such visit would be disciplinary.

Still, Zhao later denied the existence of any Binance office in Shanghai since 2017, which strained credulity given the fact that employees were working in that area. When asked if he believes Zhao and Sun’s personal reputations give the tokens he owns their value, Mustache said that was “above his pay grade” and declined to comment on whether he would sell if anything happened to Zhao personally.

Regardless, Zhao’s rivals and former coworkers at the Asian OKEx exchange promoted this headline feud while spreading other accusations of dishonesty and unethical behavior by Zhao personally. (In Chinese social media groups, sexist criticism of Binance co-founder and fellow OKEx alum He Yi took a dark turn that has, fortunately, not made its way to Crypto Twitter.)

In short, Mustache worried negative headlines and Twitter feuds were impacting the value of his holdings.

That’s why he’s using the money from Sun to pay a graphic designer in Romania who makes reporter-bashing memes, in addition to thousands of dollars from Mustache’s own money. The funds are distributed to followers who share memes or contribute their own, following the giveaway format Sun often uses for the TRX community.

Mustache, who said he never received money from either founder before this incident, met Zhao in person over Thanksgiving weekend. Zhao likened their burgeoning bromance to a first date as the BNB holders’ meme-making crusade raged on. On Dec. 2, Mustache retweeted a call to “protect our investments” by discrediting FUD. (Binance denied contributing any money to this meme war.)

FUD according to whom?

As this case illustrates, what qualifies as FUD is generally defined by crypto celebrities.

In many cases, bombastic tweets and public announcements from token founders appear to surf the gray area between misrepresentation and optimism.

“This space is so young and immature, compared to what the business norms are,” said attorney Nelson Rosario, who specializes in legal issues related to cryptocurrency at the Chicago-based firm Smolinski Rosario Law. “People are still trying to figure out the killer use cases. So best practices are being developed on the fly.”

Compare the latest Binance examples to when Sun tweeted in October that an upcoming partnership would expose TRX to “billions of customers.” The reality was made clear later that week: A small technical update meant Samsung devices could be used more easily by Tron developers (and, ostensibly, dapp users).

Yet the price of TRX doubled in the days leading up to Samsung’s flagship conference, from roughly $0.01 on Oct. 25 to $0.02 on Oct. 29, when it was clear Sun would speak at the event but there wasn’t any clarity what he would be announcing. The price slid back down after the less-than-overwhelming conference announcement on Oct. 31.

“We have a real definition problem in terms of the language we all use. We think we are saying the same things, but we’re definitely not,” Rosario said, speaking to the ambiguity of what it means to “distribute” apps and tokens.

In neither case, Zhao’s denial nor Sun’s hyped-up speech, did token fans demand apologies or retractions for unclear or misleading statements that might protect or bolster the respective token’s reputation. Those demands are reserved for statements that could be seen as negative. (CoinDesk reached out to both the Tron and Binance teams. We will update the article if we hear back.)


Stepping back, Sun may have gotten involved with the latest anti-FUD meme war because it could impact his businesses as well.

One Chinese bitcoiner and crypto investor, who asked to stay anonymous to protect business relationships with the parties involved, said Zhao and Sun work closely together and such relationships “impact how liquidity will flow.”

Plus, Sun tweeted in October that he owns a “huge bag” of BNB tokens, along with the native tokens of other Chinese exchanges that “support” the TRX project. In some ways, the price of TRX may be influenced by Binance’s liquidity, which over-the-counter traders often described as unusually authentic and reliable.

Instead, Rosario agreed with Koeppen that the crypto market’s relative immaturity can make it difficult to distinguish puffery and personal politics from any deliberate intent to manipulate retail investors.

“There is a certain element of fake it until you make it for any emerging technology field,” Rosario said. “With Theranos, they had a product that they claimed worked. But it didn’t work. … Do any of these [blockchain] networks actually work? What does that mean?”