Biden bars Chinese-backed miner near nuclear missile base, citing spying concerns: CNBC Crypto World

Biden bars Chinese-backed miner near nuclear missile base, citing spying concerns: CNBC Crypto World

today Bitcoin slips back to the $61,000 level the US orders a chinese-backed crypto Miner to sell land near a nuclear missile base and Mana Le of trust machines weighs in on bitcoin’s price moves and how the spot crypto ETFs in Hong Kong has changed the industry welcome to cnbc’s crypto world I’m Talia Kaplan crypto prices in the red this morning with Bitcoin falling back below $62,000 as of noon Eastern ether dipped more than 2% to just under $2,900 and polygon’s madic token dropped 1.5% to 66 okay let’s talk about the top stories the Biden Administration has ordered a Chinese backed crypto Mining Company to sell land near nuclear missile base in Wyoming President Biden issued the order yesterday following an investigation by the committee on foreign investment in the United States a government agency chaired by the US Treasury Department that investigates corporate deals for National Security concerns the White House said the British Virgin Islands firm that is majority owned by Chinese Nationals acquired the real estate in 2022 placing its operations within one mile of the Francis ew Warren Air Force Base the presidential order went on to say that the company’s site contained specialized and foreign sourced equipment potentially capable of facilitating surveillance and Espionage activities Biden said that there was credible evidence to believe the company called mine one might take action that threatens to impair the National Security of the United States The Firm was ordered to divest from the land in the next 120 days and to remove certain improvements and equipment at the property the company did not yet respond to cnbc’s request for comment next two US senators are questioning the Justice Department’s pursuit of crypto mixers in this letter sent to attorney general merri Garland Senators Ron weyden a Democrat from Oregon and Cynthia lumus republican from Wyoming questioned the interpretation of law the department is using to pursue crypto software Services as unlicensed money transmitting businesses the Senators argued that the interpretation contradicts the guidance from the Department of the treasury’s financial crimes and forcement network and quote threatens to criminalize Americans offering non-custodial crypto asset software Services they also claimed non-custodial crypto service providers cannot be classified as money transmitter businesses because us users retain sole possession and control of their crypto assets the Senators urged Garland to quote discard the flawed interpretation arguing that subjecting developers to potential criminal liability will stifle Innovation the letter comes a couple of weeks after the doj alleged that Samurai wallet is an unlicensed money transmitting business Last Summer the department also alleged that Crypt mixer tornado cash is an unlicensed money transmitting business sticking with tornado cash a Dutch Court sentence developed Alex perv to more than 5 years in jail for money laundering according to coindesk the indictment claimed perv made a habit of committing money laundering between July 2019 and August 2022 and that he should have at least suspected the criminal Origins of elicit transactions on the tornado cach platform the developer was first jailed in the Netherlands in August 2022 after tornado cach was blacklisted by the US government at the time the US Treasury alleged that tornado cash was a key tool for the sanctioned North Korean state-backed hacking group Lazarus which had been tied to Major crypto thefts coindesk reports that perv can appeal his sentence two other developers of the crypto mixer also face allegations of money laundering and sanctions violations in the US one of those developers is still on the run the other will head to trial this September all right back to markets for our main story I spoke with man the CEO of trust machines for insight on what’s driving bitcoin’s price right now he also co-founded Stacks an open- Source blockchain Network that brings smart contracts to bitcoin and weighs in on Venture Capital appetite for layer 2 Bitcoin projects let’s talk about bitcoin’s price first because we’re stuck in this range around 60 to $63,000 and it kind of seems like bitcoin’s boring again after all the excitement around ETFs and the having earlier this year experts have been telling CNBC that now that those big events are done not to expect Bitcoin to test new highs for the next few months what’s your take on where bitcoin’s price stands right now and are you in the same camp who believe it could be months before we get back to New all-time highs yeah so I think um to me it’s like it feels like I’m watching a movie the same movie on repeat like I’ve seen this three times before like every hoing um the months after the hoing it actually becomes exactly like this you know it’s boring there was a lot of interest like right before the hoing everyone’s waiting for like you know things to just like change very rapidly and then there’s this slight disappointment you know things kind of like became stale for a bit and and typically in my experience it’s two to three months uh before things started picking up again I don’t I don’t think history exactly repeats itself but right now it just seems like the same story I’ve seen before and it certainly will be very interesting to see if that forecast comes to fruition but I mentioned ETFs here in the US however a couple of weeks ago Hong Kong became the first in Asia to offer retail investors the ability to trade Bitcoin and ether at spot prices with the launch of six spot Bitcoin and ether exchange traded funds how does the roll out of these products change crypto sentiment in your view they have much smaller trading volume than us ETFs but do they still have a meaningful impact on the industry I think their impact is extremely meaningful because uh people might not remember two years ago Hong Kong actually started like shutting down on on bitcoin and crypto like everything was just like tightening up and and this is like a reversal of that right so my sort of like theory is that this is uh the mainland China almost like using Hong Kong as a smaller experiment to see how to how to interact with this technology how to regulate it and so on so I think it’s actually potentially extremely significant if you look at the trading volumes we have to remember that it’s a much smaller Market as well uh but I think it’s a very significant market and for me the bigger thing remains that Hong Kong uh is is more like a test bed and an experiment that mainland China is actually running uh to to interact with with Bitcoin interesting and expanding on that I think those ETFs are just one sign of Hong Kong’s renewed Embrace of crypto which slowed down during Mainland China’s Crackdown on the industry a couple of years ago as you noted so what’s your reaction to the expansion of crypto in the region and how do you feel about the growth of bit coin globally do you see signs of real adoption that people just aren’t paying attention to so I was actually in Hong Kong last week I was there for Bitcoin Asia and also there were a couple of side events that we were organizing mostly focused on bitcoin l2s and there was a remarkable difference actually some of the uh ogs like people who were around in like 2013 2014 uh that I’ve known known for a while they came and commented to me that it feels like such a different world because they would organize some Bitcoin Meetup up or especially a developer focused event and very few people would show up and at at our Bitcoin L2 event literally it was so jam-packed that I had to step out of the venue for five minutes to get some fresh air and then come back so it’s it’s a completely different world the interest in building on bitcoin the interest in Bitcoin is actually like going through the roof right now so I want to talk about another Trend we’ve seen this year which is spikes in transaction fees on Bitcoins and network especially around the having as a co-creator of stacks and a developer of applications through trust machines what’s your take on the swings in transaction fees this year and how Bitcoin layer 2os fit into that yeah so I think bitcoin’s block space has um has sort of been underutilized over the past few years I personally expected this to happen much sooner uh Stacks the project actually started because of these fee spikes in 2017 like that’s when you know in late 2017 like in started uh stack started and that was a direct sort of like reaction to bitcoin scalability limitations and the spike and fees that we saw uh during during 2017 and now I think for the for the past couple of years it was sort of like very surprising to me how fees stayed low because that’s not a natural environment for Bitcoin in my view if Bitcoin starts getting any meaningful usage meaning like even if you know a handful of millions users or especially tens of millions of users start using the network at the the same time fees are going to spike right like Bitcoin is not designed to scale to let’s say a billion users or even hundreds of millions of users uh at the BCE player and that just reinforces uh the need for l2s and we’re seeing tons of innovation there obviously Stax is sort of like one of the major players leading the Bitcoin L L2 Innovation and then there are so many other new projects as well that are coming up and I think they are going to be extremely important because Bitcoin fees on a long enough timeline uh would just keep going up and I think it would be harder and harder to use Bitcoin at at the at the L1 level sticking with developer Trends but also moving to VC interest where do you think the industry stands on development and growth for Bitcoin there was a real decline in VC dollars after the last cycle and according to pitchbook we’re starting to now see an uptick again so does it feel like things are rebounding to you I think in conversations that I’ve had with other peers things are definitely rebounding uh people are raising capital especially in the in the Bitcoin space especially the Bitcoin L2 space I think seed and series a stage rounds are actually getting over subscribed and then even for the larger projects they’re doing you know U rounds at at significantly higher valuations uh that I’ve just seen in in my peer grou so I do think like things are things are coming back uh specifically on the Bitcoin L2 Market I think if you just compare to even ethereum it’s a 7080 billion doll market for ethereum l2s and Bitcoin l2s are sitting at like four five billion depending on how you count and stacks is like you know 80 90% of it and I think this Market should be much much larger and wec sort of like see that and they want to come in and take those early bets on smaller projects and and try to see the growth of Bitcoin L2 landscape okay before we go I want to mention that cnbc’s 2024 disruptor 50 list is out today with a whole host of AI companies taking top spots you can check out the list over at cnbc.com D50 and you can go over to cnbc.com cryptoworld if you want to learn more about how some AI firms are using blockchain to bolster the performance of this growing technology we’ll be back again tomorrow and we’ll see you then [Music]

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Muneeb Ali, the co-founder and CEO of Trust Machines, weighs in on bitcoin’s price movements and explains how the launch of spot crypto ETFs in Hong Kong has changed the industry.

Chapters:
00:00 – CNBC Crypto World, May 14, 2024
0:27 – Bitcoin dips
0:42 – The headlines
4:09 – Muneeb Ali of Trust Machines

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Biden bars Chinese-backed miner near nuclear missile base, citing spying concerns: CNBC Crypto World