Young Monday: Algorand and the Bank of Italy, Africa embraces crypto and NFT crimes

The Bank of Italy chooses Algorand as its first blockchain platform, cryptocurrency adoption grows in Africa and the “Yuga Labs Gate” scandal erupts

A week full of twists and turns in the world of crypto has just ended. The atmosphere has been tense as Sam Bankman-Fried was arrested a few days ago. Do Kwon, the fugitive founder of the Terra Ecosystem (LUNA) has been spotted in Serbia. Meanwhile, the list of crypto suspects has been growing as Yuga Labs and some celebrities including Justin Bieber, Madonna and Paris Hilton have been accused of manipulating the NFT market.

Beyond the world of crimes, courts and prisons, Algorand has been commissioned to develop a blockchain platform dedicated to the Italian banking and insurance sector. In other news, Africa is showing us new examples of adoption: Nigeria and Kenya are among the twenty countries where cryptocurrencies are most widely used. Moreover, it is increasingly easy to send money to the African continent thanks to the Lightning Network, Bitcoin‘s Layer 2 scalability solution.

Algorand and the first platform for banks and insurance companies

Algorand has been chosen as the Layer 1 blockchain that will support the development of a platform responsible for issuing digital financial guarantees. These are provided by banks and insurance companies to guarantee the fulfilment of contractual obligations or payments. Basically, they are documents that prove to creditors that you have the necessary funds to repay a debt. The platform will be developed in collaboration between Algorand, the Bank of Italy, IVASS (the institute for insurance supervision) and CeTIF, the research centre for innovation and technology of the Cattolica University of Milan.

But why was Algorand’s blockchain chosen? Firstly for its ability to process transactions cheaply and quickly but also because Algorand’s founder is the Italian mathematician Silvio Micali. He commented: ‘we are proud and honoured to be the chosen public blockchain’ moreover – ‘through Algorand’s technology, we can help solve many critical problems facing financial institutions and governments around the world today, bringing opportunity and inclusion to the table’.

The “Yuga Labs Gate” scandal: Justin Bieber, Madonna and Paris Hilton are also under indictment

Last week, several celebrities including Madonna, Justin Bieber, Paris Hilton and Jimmy Fallon were accused of illegally promoting Yuga Labs‘ NFTs, in particular, the famous Bored Ape Yacht Club. Thirty-three other defendants are being indicted, including a large number of Hollywood celebrities. They are alleged to have broken ten consumer protection and financial securities laws.

Yuga Labs has caught the authorities’ attention for devising a secret scheme in collaboration with celebrities, with the goal of inflating the price of the Bored Apes. The document submitted by the prosecution shows the scheme that Yuga Labs allegedly used to secretly reward the complicit stars. They would therefore not have purchased the Bored Apes using their own free will, but were incentivised by a financial return. The investigation also mentions the online payment service Moonpay, which handled the exchange of money between Yuga Labs and the stars.

A spokesperson for Yuga Labs told Decrypt: ‘In our opinion, these claims are opportunistic and parasitic. We firmly believe they are baseless and look forward to proving it’. Yuga Labs and the Bored Apes Yacht Club thus find themselves once again in the crosshairs of the US federal institutions, just two months after the still unfinished investigation by the Securities and Exchange Commission (SEC).

In October, the SEC investigated Yuga Labs to verify that it was not selling its NFT collections as securities without authorisation.

The African continent is embracing adoption

Jack Mallers, the CEO of Strike, a leading payment services company on the Lightning Network, made an announcement on stage at the AfroBitcoin conference. A partnership with Bitnob is being developed to facilitate money exchanges between Europe and Africa. Currently, the only way to send money to African countries, particularly sub-Saharan ones, is to use intermediaries. The best known of them is Western Union. However, intercontinental transactions are quite slow and expensive. For example, to make a $1,000 transfer to Africa you need to spend about five dollars in fees. Also, it takes no less than three working days for the payment to reach the recipient.

Thanks to Strike and its Send Globally app, Africans wishing to send remittance money to family or friends will be able to transfer pounds sterling (GBP) or euros (EUR) into the local currencies of Nigeria (NGN), Kenya (KES) and Ghana (GHS), in the space of a few seconds. The money, as is already the case when using Strike to pay in participating shops, will be automatically converted into BTC. It will then be sent, converted back into the local currency and deposited directly into the recipient’s bank account or mobile wallet.

A report compiled by Chainalisys shows that Africa is one of the continents at the forefront of the cryptocurrency industry. Among African countries where cryptocurrencies are most widely used are Nigeria and Kenya. They rank 11th and 19th respectively in the Global Crypto Adoption Index, which is also used by Chainalisys to measure cryptocurrency adoption in countries around the world.

CryptoCrime: Sam Bankman-Fried and Do Kwon

The vices of the ‘outlaws’ of the crypto world continue coming to light, and the stories are beginning to resemble a true crime series. Sam Bankman-Fried, the founder of the FTX exchange, was arrested early last week at his residence in the Bahamas. He is now awaiting extradition and trial, which could result in a sentence of 115 years imprisonment. This sentence was calculated by adding up the years of imprisonment for SBF’s charges. Namely embezzlement, financial fraud, conspiracy and money laundering, and two counts of wire fraud. In the first hearing, held on Tuesday the 13th of December in a court in the Caribbean archipelago, the prosecutor denied FTX’s founder bail, probably for fear that he might escape. Meanwhile, SBF has already applied for house arrest because of the health problems he claims to suffer from: insomnia and depression.

The other notorious fugitive from the crypto world, Do Kwon, for whom South Korea issued a warrant for his arrest on the 14th of September 2022, appears to have moved to Serbia last month. The former Terraform Labs CEO reportedly arrived in the Balkan country via Dubai, but  he may have already left. Unfortunately, due to the invalidation of Do Kwon’s passport, it is impossible to know his whereabouts with any certainty.

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