#Web3 Weekly: Jan. 3–9, 2021

Big Tech boots Trump and Parler. Meanwhile, crypto’s market cap soars over $1 trillion

Photo by Claudio Schwarz (@purzlbaum) via Unsplash

Re-sharing below the latest edition of #Web3 Weekly, my regular newsletter about decentralization. If you’d like to get it in your inbox every Sunday, subscribe here.

Frankly, it was sometimes difficult to separate tech news from “news news” this week:

• The fallout from Wednesday’s political unrest in the U.S. reverberated on Big Tech’s platforms. Twitter banned Donald Trump’s personal tweets permanently for inciting riots at the capitol in Washington. Rival Facebook suspended him “indefinitely.” And the social app Parler, which has recently become a gathering spot for right-wing extremists, told users to expect up to a week of downtime after it was booted from hosting its servers on Amazon Web Services. That came on the heels of removal from both Apple and Google’s mobile app stores, which will continue to make the app hard to find for new users if it persists.
• The global valuation of the crypto market topped $1 trillion for the first time, according to CoinMarketCap data. The milestone was largely driven by bitcoin’s rally to new records above $40,000. Big financial institutions are continuing to pile into crypto’s flagship token, which now constitutes 70% of the broader crypto market. Ethereum has also been soaring, up more than 50% for the week and now within reach of a new all-time high.
• Tetragon Financial Group, a major investor in Ripple Labs, sued the company to return its money. The move is the latest fallout from recent regulatory action against Ripple, whose XRP token is the third-largest cryptocurrency in the world. The U.S. Securities and Exchange Commission recently took action against Ripple, saying its token constitutes a security and was improperly sold to the public. That obviously puts the company’s shareholders in a bind, including Tetragon. It recently led a $200 million investment round in Ripple, according to Bloomberg News.
• Major crypto companies weighed in against proposed new regulations by the U.S. Treasury. Consensys and Square were among the big names that submitted letters as part of a public comment period before the rules are put into effect. Among the most controversial proposals are new efforts to track users’ “self-hosted” wallets, also known as “cold storage” among crypto fans. The industry is also already weighing legal challenges to the new rules if they are put into effect.
• Federally regulated banks in the U.S. can now use stablecoins to conduct payments and other activities. A key regulator, the Office of the Comptroller of the Currency, issued a letter confirming that it would indeed allow banks to participate in such blockchains under existing rules. The matter was previously unclear, leaving institutions uncertain of what they could do.
• President Trump signed an executive order banning transactions with eight Chinese-made apps, citing privacy and national security risks. The order, which goes into effect shortly after Trump leaves office later this month, includes the popular Alipay payment platform and several apps owned by Chinese tech giant Tencent. Incoming President Joe Biden could quickly reverse the policy, but it’s unclear if he’s inclined to do so, the Wall Street Journal reported.
• An AI exec says the U.S. should amend, not end, its Section 230 law. Writing for Fast Company, F5’s Shuman Ghosemajumder offered some ideas for fixing the 1996 provision that limits tech platforms’ liability for user-generated content. Some lawmakers and critics have recently advocated outright abolition of Section 230, arguing that it’s led to abuses and negligence by Facebook and others. But its advocates warn such a move could effectively shut down some online forums altogether.

That’s it for now. Thanks for spending some time with the newsletter today! If you’d like to get updates like this in your inbox every Sunday, please join our email list here.