Are We All Going To Jail?

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What's Dropping ⚡️

• Minting Now: 18 & Over, The cult sexual slasher film with stars such as Ashley Benson, G-Eazy, A$AP Nast, Winnie Harlow, Pamela Anderson, Paris Hilton, and Lindsey Pelas is an NFT gated film that also includes incredible perks like the ability to attend the premier and after party in LA with the stars, attractive IP utility, and more. See the trailer and purchase on Nifty Gateway here.

• Mark Cuban recently shared that he is bullish on ApeCoin and several other altcoins on the AltCoin Daily pod. He also shared some great sentiments regarding the state of the market. (Youtube)

• A "Metaverse Mission" has been created by Netflix alongside their movie Gray Man featuring Ryan Gosling. Players can make their way through a maze while collecting outfits and items. (Metaverse Mission)

• Crypto enthusiasts of Australia now have the chance to be rewarded in BTC with MasterCards' new card. (Watcher)

• Bored Apes are playing soccer! BAYC #6045 will make its debut virtually during the MLS All-Star game on Wednesday. (Twitter)

• Beanstalk Farms plants a new seed after being shut down for four months due to a massive hack. This Ethereum-based stablecoin project may be the underdog of the year. (Bean)

• Coca-Cola recently released a new collection on Polygon in celebration of Friendship Day and their one-year anniversary of entering the metaverse. (Coca-Cola)

• This week marks a step in the right direction for Voyager, as they begin refunding nearly $270m. We'll be watching from the sidelines to see how this plays out. (NODE)

• The CEO of Cameo has apparently had his Ape stolen and resold after his Apple ID was hacked. (Variety)

• Vitalik shared an idea of his regarding stealth addresses, and anonymous NFT ownership. The mastermind is at it again. (CoinTelegraph)

• Happy Birthday to procedurally generated NFTs the Nouns! (Axios)

• The U.S. has sanctioned crypto service Tornado, effectively blacklisting them in America. This is apparently due to unknown nefarious behavior and is an attempt to reduce possible laundering. (CNBC)

Gov Puts An End To Tornado Cash 🌪️

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the virtual currency mixer Tornado Cash on Monday, by adding it to the Specially Designated Nationals (SDN) list. According to their press release, the Treasury suspects that the currency mixer has laundered over $7 billion since it first became available in 2019. They point specifically to the Axie Infinity heist ($620 million), the Harmony Bridge Heist ($96 million), and the Nomad Heist ($7.8 million) as instances where hackers have used Tornado to launder stolen proceeds. This makes Tornado the second virtual currency mixer to be sanctioned by OFAC - Blender.io was sanctioned in May after it was implicated in processing $20.5 million stolen in the Ronin Network Heist.

Sanctioning Blender and Tornado represent the first instances wherein OFAC does not target a particular individual or set of individuals, but rather a piece of technical automation. Tornado.cash exists as a decentralized on-chain protocol that is not dependent on any particular author. Despite this fact, the GitHub account of one of Torando’s founders was suspended. Tornado and other mixers are designed to provide people with a tool to make their transactions private; it’s a tool that facilitates financial anonymity. Tornado removes the on-chain traces between the source and destination address by mixing funds in a pool of many funds. Although the service is appropriated by bad actors looking to obfuscate their illicit paper trails, it is also commonly used as much, if not more by laymen who desire to preserve their privacy.

Jerry Brito and Peter Van Valkenburgh have made the significant point that restricting the use of privacy tools like mixers, is akin to compromising America’s first amendment. The sanction doesn’t create a restriction on transacting with a particular suspect person, but rather it targets a tool that exists to preserve privacy. Free spending, just like free speech, is necessary to communicate political intent. It is not yet clear how people who have wallets with Tornado will be able to retrieve funds, or how the authors behind the software will fare in this vicious onslaught, but The Drop will be covering it closely.

Vitalik Hints At Stealth Addresses 🔍

There are a few significant pillars that combine to create a blockchain, one of which is transparency, and another being global ledger tracking. If someone sends or receives an item, it can be traced with the blockchain technology, including assets such as NFTs. Now, Vitalik Buterin, founder of Ethereum, is saying that may not be the case after all.

In a tweet by Vitalik on August 8, he states the idea of stealth addresses for NFTs. Imagine sending an NFT to someone on Ethereum’s blockchain, and the only person with knowledge of the asset is the new owner themselves. While there have already been proposed solutions, Vitalik says that one can achieve this with “much lighter-weight technology.” He presents an example that highlights how a user has the ability to “hide the link to the sender and recipient’s highly visible public identity.” Thus, the only one with an understanding of the owner is the recipient.

When it comes to the blockchain, transparency is one of the key selling points. Everyone has visibility into where the funds moved unless the individual or group utilized a pooling tool like Tornado Cash (currently sanctioned by the US government - as you read above). Over the years, Vitalik has positioned himself as having a more pro-privacy stance. What that means for the future of Ethereum is anybody’s guess. For the time being, Vitalik is pointing out the abilities of the blockchain, and the capabilities that people have yet to discover or utilize. WAGMI.

Post of The Day

Meme Drop 💧

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Sponsored Content: In this issue, the first bullet point was sponsored ad by 18 & Over.

Disclaimer: The Drop DOES NOT provide financial advice. All content is for informational purposes only. The Drop is not a registered investment, legal, or tax advisor or a broker/dealer. Trading any crypto-related asset is extremely risky and could result in significant capital losses.

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Gannon Breslin, Kayla Kilbride, CryptoVonDoom, Naveed Lalani, Alex Reed, Naman Patel, Big Tuna

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