Also today, it's not just Elon Musk who had a beef with Apple this week — now Coinbase is angry.
Editor’s Note: Is Apple Against Innovation?
Molly Jane Zuckerman writes…
This is the second time Apple has been in the news this week with drama surrounding its App Store.
The first play is already over (Twitter isn’t leaving the App Store anytime soon, as a video of Elon Musk and Tim Cook walking and chatting around a pool shows.)
But this second action between Coinbase Wallet and Apple is actually a continuation of a story that has already played out many times — will Apple ever waive their 30% in-app purchase fee for any reason?
I wondered a few months ago why Apple had no real incentive to get rid of this fee for crypto-only companies: the thing is, Apple never claimed to be a Web3 forwarder, so they were just NFT. Why should apps lose profits to support them?
But yesterday, Coinbase Wallet began to publicly fight back against what they see as an outdated and irrelevant policy regarding NFTs. As we cover in our news below, it’s technically impossible for Apple to pay a 30% gas fee for sending NFTs. Blockchain is completely incompatible with this type of purchase/profit system.
Coinbase Wallet claims that this policy is actively preventing users from investing in NFTs and developers from innovating in the crypto ecosystem. And to that I say… the same point I made earlier, but one step further. Perhaps Apple is not just a Web2 company with no interest in exploring the Web3, but rather a Web2 company with no interest in exploring the Web3. In other words, could Apple’s lack of interest in developing solutions to Web3 problems be less of a passive stance and more of tacit hostility?
Either way, Coinbase Wallet has left the proverbial ball in Apple’s court. But I wouldn’t hold your breath waiting for Apple to immediately lobby back — the company is much more polite about airing its laundry in public than, say, SBF has been recently.
In the latest interview – on US television – the SBF answered a key question on the end of FTX
Sam Bankman fried, the former CEO of the bankrupt crypto exchange, also told Good Morning America that he was “not even trying” to manage the risk.
Sam Bankman-Fried made a few “shocking” confessions in an interview with Good Morning America’s George Stephanopoulos that aired Dec. 1.
In just a few weeks in November, the troubled crypto-entrepreneur saw his $32 billion empire of FTX and Alameda Research collapse into bankruptcy, potentially wiping out a million customers.
The problem was that Alameda was reeling from the crypto winter, and allegedly borrowed $10 billion of FTX users’ money, losing $8 billion of it.
In a short clip from her second major interview, Bankman-Fried made a “shocking admission” about her lack of risk management and came so close to answering the biggest question on many people’s minds yet. Not answered: Did he know he was coming? FTX and Alameda Funds?
Here’s a look at four key moments of the conversation:
‘Why wasn’t I at the top of my game?’
Stephanopoulos asked Bankman Freud:
“How do you explain the failure? Was it negligence, arrogance? Was it unethical?”
After saying he’s had a lot of time in the past month — FTX’s real problems began on Nov. 6 and the bankruptcy filing on Nov. 11 — he said:
“Why wasn’t I on top of my game? I realize some of it was just a verbal distraction. I really should have taken some time every day to take a step back and say, ‘Here are the most important things.’ What are, and how do I monitor them and make sure I don’t lose sight of them.”
Admitting that he paid too much attention to trading volume – where FTX made money on transaction fees – Bankman-Fried said:
“I spent very little time looking at assets and looking at balances and positions, because that’s not where the revenue is coming from. And so I wasn’t looking at that as a primary business driver. Obviously. That it was a fundamental threat.”
‘I wasn’t even trying’
From there the conversation went like this:
GS: You said in the podcast that one of your greatest strengths is managing risk.
SBF: That’s right, and…
GS: This is clearly wrong!
SBF: I think there’s something more deeply wrong there, which I wasn’t even trying to figure out. I wasn’t putting any time and effort into trying to manage risk on FTX.
GS: This is a very impressive entry.
SBF: If I had spent an hour a day on risk management at FTX, I don’t think it would have happened. I think I stopped working hard for a while. Honestly, if I look back at myself, I think I stopped working hard for a while. You know, to be honest, if I look back on myself, I think I got a little bit depressed – a little bit more.
‘I’m not Bernie Madoff’
“A lot of people look at you and see Bernie Madoff,” Stephanopoulos told Bankman Freud.
he replied:
“I don’t think I’m exactly that. But I understand why they’re saying that people lost money, and people lost a lot of money. When you look at the classic story of Bernie Madoff, there’s no reality. met. The business there… it was just a big Ponzi scheme, right? FTX, it was a real business.”
do you know?
Stephanopoulos pressed three times to get Bankman-Fried to answer what was a critical question for both the civil litigation and possibly the criminal investigation. Did he know that customer funds were being improperly commingled with his own at Alameda – according to FTX’s terms of service this would not happen.
Alameda Research CEO Carolyn Ellison, who was allegedly Bankman Freud’s on-and-off girlfriend, has said that Bankman Freud knew that FTX funds were being improperly transferred to her firm.
The first few times he was asked, Bankman-Freud said that there were different situations in which they could be properly combined.
Stephanopoulos finally asked:
“If he’s in court and you’re in court and he’s under oath and you’re under oath, and you’re asked, ‘Do you know these funds are going to Alameda,’ what do you say?” Is?
Bankman Freud was silent for six seconds.
He finally said:
“I was not aware of any misuse of customer funds.”
The Department of Justice is seeking an independent FTX examiner.
The US trustee has called for the appointment of an independent investigator to represent all stakeholders in the failed crypto exchange, providing a neutral and more credible voice.
The US Department of Justice has asked a Delaware bankruptcy court judge to appoint an independent examiner to investigate the collapse of FTX.
A Dec. 1 filing by the DoJ’s Office of the United States Trustee said:
“FTX’s nearly one million creditors worldwide, outside investors, and regulators are demanding answers about what happened and how.”
And in a filing that said it doesn’t question the “ability, competence, or good faith” of the new CEO brought in to oversee the bankruptcy, John Ray III has a real obligation to creditors, one that Role that “comes with objectives that are not feasible. Must be aligned with all other interested parties.”
Comparing FTX to the bankruptcies of Lehman Brothers, Washington Mutual Bank and New Century Financial, the US trustee said:
“These cases are exactly the kind of cases that require the appointment of an independent fiduciary to investigate and report extraordinary liquidation of creditors.”
This is because an independent examiner, however, “will be able to act as a true impartiality to all affected parties”—meaning “as likely to be done by any stakeholder in these matters. will enjoy wider acceptance and credibility than the previous examination.”
In addition, the filing argued that such acceptance and credibility is particularly important in this case, as the collapse of FTX could have “wider implications for the crypto industry…”.
On top of that, an examiner will be able to investigate FTX’s previous management and its role in its demise, allowing Ray to focus on consolidating the approximately 130 companies under the FTX Group umbrella. will be allowed, making a “faster and more cost-effective resolution possible.”
Among other issues, an examiner would be able to investigate whether anyone was “involved in any misunderstanding or malpractice” that may have occurred.
Coinbase Drops iOS NFTs as Apple Extends 30% Gas Fee Cut
Top US crypto exchange shut down Coinbase Wallet’s ability to handle NFTs after the App Store demanded a 30% transaction fee for sending tokens from one address to another.
Crypto’s ongoing battle with Apple’s policy of collecting a 30% cut of every App Store sale drove NFTs out of the Coinbase wallet.
On Thursday, the @CoinbaseWallet Twitter account announced that the iPhone version of the wallet “can no longer send NFTs to Coinbase Wallet iOS,” the company said. “This is because Apple withheld our final app release until we disabled this feature.”
The problem, it says, is that “Apple claims that the gas fee required to send NFTs needs to be paid through their in-app purchase system, so they can collect 30% of the gas fee.”
Which, he noted, “is a problem for anyone who understands how NFTs and blockchains work” for several reasons.
“The biggest impact of this policy change is on iPhone users who own NFTs – if you hold NFTs in one wallet on iPhone, Apple can transfer those NFTs to other wallets, or to friends or family. It has made it very difficult to give gifts to people.”
More to the point, however, “the in-app purchase system doesn’t support crypto so we can’t comply even if we try,” Coinbase Wallet said. “It’s like Apple trying to take a cut of the fee for every email sent over an open Internet protocol.” He added:
“Simply put, Apple has introduced new policies to protect its profits at the expense of consumer investment in NFTs and developer innovation in the crypto ecosystem.”
Coinbase CEO Brian Armstrong added that the policy is “a good example of the discussions we have with Apple on a monthly basis to address their App Store monopoly.” “It gets pretty funny sometimes.”
30% solution
Apple’s new NFT policy announced on October 24th makes gas fees a lot harder to cut—or more technically, nearly impossible.
While it specifically allows NFT sales, it specifies that all sales must be in dollars, not crypto. Which, really, is less difficult because it matches the growing trend of selling NFTs for fiat as well as crypto.
The policy also imposes a 30% fee on all NFT sales. As a result, several leading marketplaces, including OpenC and Reverable, have only browser apps.
It also adds a number of new restrictions, including a ban on NFTs from unlocking other features in an app and, of course, those apps that provide an alternative payment method — the same battle with Apple that Fortnite-developer Epic Games Fighting in court.
And more recently, Twitter owner Elon Musk has attacked Apple for more than 30 percent in fees after it joined a number of major companies in pulling their ads — as a result of fears that its independent The speech policy will allow more objectionable content, including hate speech, to be returned. on the platform — and warned that the Twitter app could be blocked from 1.2 billion iPhones if it crosses Apple’s overly broad objectionable content clause.
Sam Bankman Freud lobbied for the regulatory bill that would have killed FTX.
The founder of a bankrupt exchange spent millions backing the Digital Commodities Consumer Protection Act that it would have been “impossible” to survive.
The most interesting question at Thursday’s Senate Agriculture Committee hearing on the demise of the FTX cryptocurrency exchange came from Colorado Democrat Michael Bennett, who wanted to know what its disgraced former CEO thought about it. When they lobbied so aggressively to create a comprehensive regulatory Framework for industry.
Pointing to FTX founder Sam Bankman Freud’s tendency to spend time and tens of millions of dollars to support the bipartisan Digital Commodities Consumer Protection Act (DCCPA) introduced by two of the committee’s leading members, Sen. Bennett said:
“One thing that gives me pause is just thinking about why FTX would have lobbied so hard for a bill it can’t comply with.”
Introduced earlier this year by committee chairwoman Sen. Debbie Stabino and ranking Republican Sen. John Bozeman, the DCCPA would give the Commodity Futures Trading Commission (CFTC) much broader regulatory control over crypto.
“I’ve thought about it myself,” said CFTC Chairman Ruston Benham, the only witness at the Dec. 1 hearing. “You hit the nail on the head, didn’t you?”
Behnam added:
“I can’t speak to what Mr. Bankman-Fried or anyone at FTX was thinking when they were advocating for regulation. It’s remarkable to think about it in a compliance context. And what we’ve learned about FTX entities. And just thinking about [the DCCPA], they would have been so far out of compliance, it would have been impossible.”
Given all the news that has come out about Bankman-Fried’s either spectacularly incompetent or unethical if not illegal management of FTX — he allegedly embezzled 10 billion of the exchange’s clients’ money. Dollars lent it to another company, the trading firm Alameda Research, which promptly lost $8 billion of it. – Not understanding what he was thinking is probably the only reasonable position.
what’s next?
The DCCPA received more support from a bipartisan pair of Senate Banking Committee members in the crypto industry than competing legislation from the Responsible Financial Innovation Act. It will give more powers to the Securities and Exchange Commission.
At the hearing, Benham said the DCCPA was still the bill that was needed, although he suggested a “pause” to ensure there were no gaps or holes in the bill. .
That means considering strengthening financial disclosure and conflict-of-interest reporting requirements — the latter was a huge problem with FTX and Alameda, allegedly — essentially putting FTX customers’ money at risk. was to be used to bet against them. He also allegedly commingled customers’ and Alameda’s funds, and Bankman Freud admitted to an almost complete lack of risk management protocols.
But that shouldn’t delay the passage of badly needed regulation, Benham added, noting that the CFTC currently “doesn’t have the authority to comprehensively regulate the digital commodity market.”
Currently, it can only regulate derivatives rather than the exchanges’ spot cash trading markets and investigate reports of misconduct. He said:
“We need exchange registration. We need monitoring of market activity. We need direct relationships with custodians of clients’ money so we can intercept and prevent money transfers. A comprehensive regulatory framework. There are a lot of tools in the works that we] have to stop all these illegal activities.”
‘Our rules work well’
One point Benham makes is that if you look at the broader financial markets:
“Our regulations work – they work very well. Our markets are resilient, and the reforms we’ve put in place since 2008 have been very effective and efficient.”
As for crypto, it has gone through two major crises this year, including the $48 billion collapse of the Terra/LUNA stablecoin ecosystem and now the implementation of FTX. And, he said:
“Traditional banking, the regulated banking system is safe. There’s absolutely no contagion, there’s not even a problem of market elasticity.”
To keep it that way, Benham said, we need to “apply the same principles of financial regulation that we apply to digital assets to traditional finance.”
He pointed to the case of LedgerFX, a US-based and US-regulated crypto derivatives and clearing platform acquired by FTX.
Among the only FTX Group firms not to file for bankruptcy, Benham said the bank was “walled off” from the other 130 companies under the FTX Group umbrella and was “healthy” and “solvent.” “Both were.
LegderX is an example of “regulation working”, he added:
“The DCCPA addresses these issues and would have prohibited these actions from occurring on FTX.”
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