Blockchain Bites: Designing Digital Dollars and Following the Quadriga Trail

The Ontario Securities Commission says QuadrigaCX, an infamous Canadian exchange, was a Ponzi scheme, while the National Science Foundation is issuing a grant to design a national digital currency.

AccessTimeIconJun 12, 2020 at 6:01 p.m. UTC
Updated Sep 14, 2021 at 8:51 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Top shelf

Digital Dollars
On Thursday the House Financial Services Committee (FSC) Task Force on Financial Technology convened on Capitol Hill to discuss the possible role of a digital dollar is distributing COVID-19 relief payments. The watchdogs discussed FedAccounts, or cryptographic wallets held by the Federal Reserve, for commercial banking services.

The National Science Foundation, an independent branch of the federal government, has given blockchain startup KRNC $225,000 to design cryptocurrency features for the U.S. dollar. The startup is pioneering the Proof-of-Balance consensus mechanism to assign voting power and distribute a digital currency to users in proportion to an individual’s existing wealth. 

Following the Money
The Ontario Securities Commission (OSC) issued a report saying QuadrigaCX operated like a Ponzi scheme. The provincial regulator said Gerald Cotten, who died  under mysterious circumstances, traded against his customers using their funds under fake accounts set up on other exchanges. This revelation contradicts Quadriga’s claims that customer funds were lost upon his death, as Cotten was the person to maintain copies of the private keys. 

Meanwhile, in the last two days three Ethereum transactions have spent $5.7 million on fees. But a report claims it’s not a bug – an exchange is being blackmailed. (Decrypt)

Elsewhere, the owner of a now-defunct Romanian crypto exchange CoinFlux has pleaded guilty to laundering roughly $1.8 million in a fraudulent scheme involving fake eBay ads and a car wash.

Protocol Level
Pseudonymous developer Fiatjaf has created Etleneum, what he calls a “centralized” version of Ethereum running on Bitcoin’s Lightning Network. Like Ethereum, Etleneum has public “contracts” open for anyone’s use, but protocol is not decentralized. Fiatjaf controls it all – as he is quick to note – as a commentary on the ways Ethereum tries and fails to cede technocratic and social power from a cadre of developers. 

Researchers from Imperial College London and University College London found the overwhelming number of transactions on the EOS, Tezos and XRP Ledger networks either have no value attached or are passing it back and forth within one entity. 

Security in technology
Mutual fund giant Vanguard has completed the first phase of a blockchain pilot to issue digital asset-backed securities (ABS). Together with blockchain startup Symbiont, an unnamed U.S. ABS issuer, BNY Mellon, Citi and State Street, Vanguard modeled the full lifecycle of an ABS settlement on blockchain.

Additionally, in separate statements, Algorand and Tezos Foundations said the blockchain networks are trying to stay on the right side of the Financial Action Task Force’s (FATF) “Travel Rule,” by linking up with analytics companies Chainalysis and Coinfirm, respectively, to help bake regulatory compliance into their eponymous blockchains.

Crypto wallet and bitcoin custodian, Xapo is discontinuing support for credit card payments for digital asset purchases, ahead of its transition into a digital bank later this year. As of yesterday, users would not be able to add funds to their account through credit cards.

Gemini is planning to expand its services to Singapore with the appointment of former Goldman Sachs executive Jeremy Ng as its new Managing Director of Asia-Pacific.
Crypto derivatives platform Seed CX will be axing its exchange arm to focus solely on its Zero Hash product, a custody and settlement service that accounts for 95% of the firm’s revenue.


On Thursday, bitcoin tumbled 6.37% to about $9,100 in tandem with a 5.7% sell-off on  the Standard & Poor’s 500 – rekindling an ongoing debate over the cryptocurrency’s use as a store of value. The slide in stocks came a day after the Federal Reserve provided an unexpectedly dour assessment of the outlook for the U.S. economy, and investors speculated that a possible uptick in new cases might slow the pace of the recovery. Some investors may have also sold bitcoin, still seen as a risky asset despite its 30% gain year-to-date. Since March, bitcoin’s price has shown a weak but consistent correlation with both gold and stock prices, and is now trading well below its price average for the past 50 and 100 days, typically a bearish signal.

Coinbase announced Wednesday it may list Bancor’s BNT token as well as 18 others, which gave the asset’s global trading price a slight bump. The token project itself saw a resurgence in May, facilitating nearly $10 million worth of trading volume and rising from roughly $0.20 a token at the start of the month to $0.85 by the end. Bancor’s growth, despite the broader economic crisis in 2020, may be due to a systems upgrade in April as well as the team’s role in forging a data strategy for Israeli Prime Minister Benjamin Netanyahu’s campaign. Still, BNT tokens are now selling for far less than they were during the initial sale in 2017.


Money Reimagined: The Fed, Hertz, a Bonkers Stock Market and why ICOs Still Matter
"Regulation is both unavoidable and necessary. But it absolutely should not function as protective armor for a capital market system that harms our economy’s capacity to optimize capital allocation," says Michael Casey in the latest edition of his weekly newsletter.


The Breakdown: Fed EditionOn the latest episode of The Breakdown, NLW looks into the Federal Reserve’s role in creating inequality.

Who Won Twitter?

Blockchain Bites banner
Blockchain Bites banner


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.