Prof of Forensic Accounting & Corporate/Securities/Banking Law, Expert Witness, Crypto Policy Ninja
United States
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When you hire Veritas Financial Analytics as your policy consultant, your enemies become my enemies. veritasanalytics.net
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Upon my term ending on the SEC’s advisory committee last week, I took the chance to give Chair Gensler some strong words about his abuse of digital assets. Check out Gensler’s response.
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🎉 Some good news for DeFi, bad news for @GaryGensler. In a case against Binance last week, a judge ruled that Binance didn’t have sufficient contacts to be considered operating an unregistered exchange in the US.
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Sharing my Law360 piece today challenging the SEC’s abuse of the “Howey” test in its case against @Ripple and @bgarlinghouse. Also a 🧵 on how @SECGov may be making an epic mistake that I’ve tried to relay to @GaryGensler while on his advisory committee. veritasanalyticsllc.com/fina…
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I don’t have all the facts. And I agreed with many of the arguments in Hinman’s speech on Ethereum. I also think this at least requires an SEC Inspector General investigation.
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This might be crypto’s 2008, but it doesn’t resonate that way in DC. I was here in 08, testified about bailouts and Dodd-Frank.The reg backlash was a function of the bailouts. This is not then. Last thing you wanted was another FTX reg forecast thread, too bad! 🧵
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I want to join the fight for digital asset freedom, and the many folks have been fighting a long time on these issues like @jerrybrito and @kristinsmith and @jchervinsky and @millercwl at @fund_defi with support of thought leaders like @cobie in DeFi community
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And yeah, I’m pitching something, full disclosure. I’m starting a non-profit to sue regulators, cryptofreedomlab.com
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We are getting dangerously close to the Treasury Department treating financial privacy as a crime.
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My digital asset regulation Genesis block proposal is my first effort. It merely calls on the SEC to open public comment on the unique issues that digital assets face. Summary of the proposal in cointelegraph: cointelegraph.com/news/sec-a…
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As a community we need to support @HesterPeirce with comment letters and any other way we can, her thought leadership has been a rare light in the dark. And how cool is it that she posts on GitHub? sec.gov/news/public-statemen…
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If this unit contacts you, do not speak to them without contacting counsel first. Their institutional incentive is not to “protect investors.” It is to bring a strike suit and use leverage to get a big fine. They don’t care if investor value gets destroyed as a result.
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The Supreme Court takes original meaning seriously, maybe you caught the news today. The original language of Howey was very restrictive, applied to profit “solely” from efforts of others. If @Ripple takes the case to SCOTUS I think they can win.
Today we announced that we’re bolstering the unit responsible for protecting investors in crypto markets & from cyber-related threats. The newly renamed Crypto Assets & Cyber Unit in the Division of Enforcement will grow to 50 dedicated positions.
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It may even help if they focused on rug pulls and actual fraud but they don’t. They target big players with robust in house counsel who commit zero fraud, like BlockFi, simply to go after a deeper pocket and get a bigger fine.
I wonder how many taxpayer dollars are being wasted in @GaryGensler’s personal crusade against the crypto industry?
cnbc.com/2022/05/03/sec-adds…
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I mention in the proposal all the smart crypto lawyers the SEC needs to hear from like at @lex_DAO and @LeXpunK_Army like @lex_node whose safe harbor 2.0 proposal is heavily cited in my proposal github.com/lex-node/SafeHarb…
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When people say that the New York Times is biased and corrupt, this is the story they should cite. This one. Everything about it.
Since Sam Bankman-Fried launched the company FTX, its executives and its philanthropic arm spent or pledged hundreds of millions of dollars in political and charitable contributions, consulting fees, investments in media outlets and real estate. nyti.ms/3tVN9U8
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Gary bears a lot of blame for what happened. Centralized intermediaries want a licensing and disclosure regime that works, they want reasonable guidance on custody, they want accounting that complies with GAAP. Gary’s obsequious posture has hurt lots of investors.
This week I had a chance to sit down with @healthymkts to discuss recent issues in the crypto markets.
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My latest column for Cointelegraph is out.
cointelegraph.com/news/my-st…
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First, DCCPA is dead. Good. It needed to die. Industry players in DC, who I continue to respect, felt pressure to hold their nose and negotiate since SBF was such a bankrolled in DC. That’s gone, and we can quit debating DCCPA tactics and talk principle again.
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Crypto industry wants SEC to do their job and take down fraudsters and scammers. The problem is SEC prefers to shake down deep pockets who have committed zero fraud.
#cryptonews
The SEC has added a few "misleading" crypto trading firms to its list of unregistered entities.
decrypt.co/98638/sec-mislead…
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The original language talked about profits “solely” from the efforts of others. To say that element has been watered down by circuit courts is the wrong metaphor. It has been Niagara Fall’d.
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For major crypto legislation, things were largely frozen anyway. No comprehensive bills will pass this year or next. Best hope is attach a discrete item or two to a must pass bill. De minimis tax is top priority. We can’t replace the payment system if every payment is a cap gain.
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We should also attach an approps ride to stop SEC from adopted the Reg ATS amendment that targets DeFi. @PatrickMcHenry is already showing leadership there.
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Merkle root based proof of reserves are a game changer for exchange auditing. Always been impressed by @krakenfx on this, glad it’s getting attention. We need to teach accountants and auditors about merkle-based reserve proofing.
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The Howey test has been cited in hundreds of appellate opinions, many of which have expanded it beyond its original meaning in the original case of almost 90 years ago.
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Published an article in Real Clear Markets today about why Ripple’s fight with SEC can and should go all the way to SCOTUS. @JohnEDeaton1 veritasfinancial.squarespace…
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Some of the analysis in the case is about Section 12 issues where the SEC doesn’t operate under the same standard as private plaintiffs. The win for Binance on exchange registration is nevertheless a blow for Gary. cointelegraph.com/news/binan…
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Met with an R Senate Agriculture LA at Fed Soc tonight. “We have this great crypto bill, DCCPA, crypto industry loves it.” She is regretting she sat at my table, I talked her ear off for an hour and I think it did some good.
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I didn’t have the heart to watch this meeting, so I missed this absolutely brilliant statement from Commissioner Peirce,
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So many great DC advocacy projects in development to advocate for digital asset owners. Make sure you subscribe to @twobitidiot’s latest DFA project newsletter. procrypto.substack.com/p/the…
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Otherwise, it’s the courts. We need lots and lots of lawsuits, and amici, and comment letters backed up by the threat of suit. Buy time to build, buy time for regime change (even if just for a moderate pro innovation D SEC Chairman, there are some.)
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@GaryGensler was not the final boss. The final boss is "national security Republicans" and the big bank lobby. The crypto/MAGA alliance must stay strong to defeat them.
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The Binance case is good news, but we should remain vigilant as the shadow attacks in “exchange definition” and “dealer” continue. coindesk.com/policy/2022/03/…
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But he offers no comment on the Binance case. And he threatens he may not even permit ATS licenses for crypto exchanges that seek them. He’s increasingly out of touch.
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Everyone with funds on FTX will have their accounts doxxed as part of the bankruptcy proceeding. Then your public keys will be associated with your transactions and used to surveil all your activity on chain. THIS is why we use Zcash shielded.
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And yet, in a speech today he continued his threat that every exchange must have at least one token that’s a security that therefore must register (what I call the Gensler Gotcha). sec.gov/news/speech/gensler-…
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That IG investigation could either clear Bill, or provide more background about what happened. This law firm “retirement” ethics policies are also a hot mess.
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There is a massive scam going on in investing. People are throwing money at hyped claims, massive cognitive dissonance, lack of real returns, massive fees, and now politicians in DC going along with the con….I am of course talking about ESG.
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We need the best CEX lawyers and DeFi lawyers together to hash out bill language they could all live with. I’m going to take a shot at that at an event my Crypto Freedom Lab is putting together at the Mayflower in DC this Spring. Who wants to come and contribute?
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One of my favorite hobbies is challenging SEC overreach. Someone will sue, and the SEC will likely lose, on its political moves to help the proxy advisor/union and state pension fund alliance. nationalreview.com/2022/04/s…
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There are many crypto firms that want to operate inside the regulatory perimeter, and financial regulators have prevented them from doing so. Financial regulators, including SEC and bank regulators, are responsible for harm from boxing crypto firms out.
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Got a cool new side project, I will have a biweekly column in Coin Telegraph focused on crypto regulation and financial privacy!
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@zooko recently posted that ZEC in our community lockbox is worth ~40 million. Wow. Imagine open source research and development that can fund. That will benefit work on ETH and many others. That is a flywheel that gets wrapped into a lot of other chains. ZEC is the commons.
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Enjoyed talking with the great @JohnEDeaton1 on this podcast. Gary Gensler’s posture on cryptocurrency is doing real harm to digital asset owners. John’s work defending the 60k XRP holders Gary is attacking is noble work.
#xrpcommunity
👊😎
@XRPArmyNews1 presents:
@JohnEDeaton1 and @JWVerret - Blockchain Law Prof teaches Accounting & Corporate, SEC Advisory Committee member
Ripple/XRP XRP Army Community Channel Presents Attorney John E Deaton Interview with J.W. Verret piped.video/-w1y89KKUMk
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The founders of @zcash were very careful about regulatory risk six years ago, at a time when most other projects were not, and I am very grateful for that particularly today.
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This bill targets “self-hosted wallets” and requires they implement KYC if they want to accept Bitcoin from a crypto exchange registered with the CFTC. Raising the bat signal for @twobitidiot @ChrisBlec
For all of y’all asking, the complete RFIA bill text is now live:
lummis.senate.gov/wp-content…
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I’m grateful for the crypto litigators. Street fighters who have our backs. @propelforward @stephendpalley @JohnEDeaton1 @mtcoppel
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My eyes literally can’t read tribal inter-token war FUD. If you want to challenge a token, show me analysis of fundamentals and tokenomics.
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Living my best life camping in the Chesapeake Bay. I may have gone overboard with the fire for morning coffee.
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To be honest, I’m deeply disappointed in @BrianQuintenz. Man you need to disavow this speech, admit you were wrong, NOW, admit you’ve learned more about this industry. It’s ok to have been wrong before you dove in. At which point we should forgive. Or else you don’t belong in this industry going forward man.
The CFTC's current position on DeFi was laid out in a speech by Brian Quintenz (who now works for a16z) in October 2018:
cftc.gov/PressRoom/SpeechesT…
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@s_alderoty is playing three dimensional chess while the SEC is playing tic tac to.
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I use Flexa for purchases at Barnes and Noble and Chipotle, but sure keep telling me that “crypto has no use.”
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Saw that one. Gary could benefit from auditing my securities law course to learn a little securities regulation.
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This is a violation of the fundamental human right to financial privacy.
1/ 🇪🇺🚨
Disappointed to see the proposal on self hosted wallets passed today and hope the final vote on the report will take into consideration security risks and privacy violations that will transpire if enacted into law.
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It’s a fine goal, needs to be genuine self-regulation and the opposite of FINRA. Wait till @PatrickMcHenry starts doing oversight of Gensler. He’s a master craftsman of congressional oversight.
McHenry calling for creating a new regulator for digital assets instead of SEC and CFTC
"neither fish nor fowl"
correct take imo, but this path also has big hurdles and offers new opportunities for politicians to fuck this all up
what say you, frens?
piped.video/watch?v=0kFxvNVi…
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Had a great time talking with @JohnEDeaton1 about the great work he’s doing fighting injustice by the @SECGov.
So Sports Fans…who wants to see a conversation between @JohnEDeaton1 and @JWVerret…you know the guy who until a few days ago was an Advisor at the sec! Ok our #Retweet Tag 2 Team will be tweeting the link to the interview in the am. Great interview! @Christo83585620 @Liz85139
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I’ll bet on Do Kwon, I’ll bet on Jose, I’ll bet on protocol governance design, I’ll be on dev allocations that vest over the long term.
20/ I'll also continue investing and contributing to other ecosystems that excite me. Most importantly, you'll never catch me or any other @Delphi_Digital team member throwing shade at projects or rooting for them to fail
WAGMI is the crypto way
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Poll for the Zcash foundation board race was close, 59-58, but I won! Thanks Zcash fam! forum.zcashcommunity.com/t/r…
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Best crypto news of the year is that Tom Emmer is Majority Whip. Having someone in congressional leadership who actually understands crypto is essential right now!!!!
FTX's collapse is not a crypto failure. It's a failure with CeFi, @GaryGensler, and Sam Bankman-Fried. Decentralization is the point. Watch below for more thoughts 👇
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I will be distributing both an NFT collection and a token distribution to fund litigation against the SEC, bank regulators, and the IRS.
The charity of the decade! If he offers an NFT next year, he will have enough money to sue (and, I hope, lobby) on a scale that will dumbfound officials! I will be glad and proud to contribute!
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First, in the SEC’s case against BlockFi, BlockFi got tagged in part for yield account for ETH. Further, to say staking meets the definition of “note” or “investment contract” misunderstands the tests entirely.
Hey @JWVerret why is the SEC so aggressively going after companies providing crypto yield and completely leaving any Ethereum related staking alone? @GaryGensler was very clear that paying interest falls under security laws.
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Just finished reading the SEC’s climate rule. It’s a book. It’s like the worst book you’ve ever read. It’s a book about the final days of the securities disclosure system and the death of independent, objective accounting standards.
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Arguments against the proposal going multiple layers deep. Does @SECGov appreciate all the parties that are ready to litigate, and collateral impacts that ensue on a treasury market rule this doesn’t belong in anyway once litigation commences?
Comments on the SEC's proposed rule expanding the definition of "exchange" to (maybe) capture DeFi are due today.
As usual, the crypto industry is showing up in a big way. Read @BlockchainAssn's comment here: theblockchainassociation.org…
Some other great comments I've seen so far 👇
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Oh I was blocked by John Reed Stark (President of John Reed Stark Consulting LLC) a long time ago.
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Love ThorSwap. Make no mistake, SEC is preparing to come after Thorswap to try to destroy this amazing tool. I hope we have maximum decentralization, maximum anonymity for our devs and node operators. Be ever vigilant #THORChain and #rune friends.
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IMF paper, they're very worried about emerging market crypto adoption. I am very excited about it. Zcash global ambassadors more important now than ever, this list needs to be a focus for @zcash and @ZcashFoundation we need you @ZcashNigeria!!!!
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We need a resource of names of crypto enforcement unit members and anonymously provided feedback about whether they commit professional violations like intimidation, threatening criminal referral, slow walking, etc. Many members of that unit will seek crypto jobs later.
they should double the size of their trading/markets and corpfin teams to figure out how to regulate crypto coherently, instead of square-peg-round-hole enforcement & saying "tell us why you can't comply"
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Every corporate lawyer or corporate law academic that follows my feed needs to check this out. You think “ESG” is the next big thing, but it’s decidedly not. It’s smart codes interacting with business entity law. And don’t get me started on how DeFi will overtake public finance.
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Man I wish the smartest minds in crypto law would sit down and write up a model regulatory framework for crypto. Wait, they just did. Take a look @GaryGensler. github.com/LeXpunK-Army/Reg-…
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I would race to @zcash defense if I thought this was a threat.
“We looked at @monero @zcash and all these other things and we’re like ah f**k those guys we could do so much better!” - @IOHK_Charles
Who’s excited for the new #Cardano sidechain Midnight? 🕛
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He leaked the bill draft, which started the controversy, which led to the @ErikVoorhees debate, which led to the work by @CoinDesk on FTT at Alameda, which led to CZ dump. Don’t get me wrong, you are very entertaining bitboy.
Imagine being this tone deaf to reality. Yea… a guy hardly anyone has heard of stood up to SBF’s regulation… not the cumulative MILLIONS of views on my videos going directly at SBF’s policies lol
#BitSquad is tired of being ignored by the suits.
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SEC settlement against @nvidia alleging insufficient disclosure of GPU use for cryptomining by customers. This is a reach for SEC, you don’t typically have to disclose how customers use your product. Bogus reach by SEC to make a “crypto fine” headline. sec.gov/litigation/admin/202…
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If there’s an axe murderer on the ballot Tuesday, and they are pro-crypto, I look forward to voting for them.
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I’m grateful for the teams @ZcashFoundation and @ElectricCoinCo who work so hard to secure financial privacy.
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Terrific podcast. One takeaway, don’t use Wasabi, use Samourai…
SLP358 @Marketsbylili #Bitcoin Privacy for Beginners
Lili and I chat:
- trade offs of Non KYC vs KYC
- how to acquire non KYC
- staying private with @SamouraiWallet & @SparrowWallet
- donations
- Canadian trucker bitcoin
- @wasabiwallet chain analysis
stephanlivera.com/358
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This was a great debate, and cheers to @bankless of which I’m a fan. One quibble with @RyanSAdams calling Luna a bank because of the LFG stabilization fund…technically inaccurate.
Thanks very much to @bankless for having me on, and to @gametheorizing for the excellent debate
I'm hopeful we've created the go-to resource for those who want to hear the $LUNA thesis and I'm happy to have repped the bull side 🌕
piped.video/watch?v=6eOU5OaK…
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NFTs will be a vital part of the economy, as on chain memorialization of physical goods ownership and securitization of lending and other UCC replacement. Boring stuff but transformative and exponentially lucrative. NFT jpegs are just a game we’re playing to prep for it.
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My man single handedly destroyed SBFs DC agenda, which started the dominoes. Ya’ll really want to start something?
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After today’s news, it’s a good time to remember why we are here. The Zcash community are inheritors of the cypherpunk movement and are fulfilling Satoshi’s unfinished dream of a private decentralized blockchain. Tune in tomorrow for a call with Zcash Board candidates.
Zcash Foundation Board Candidate Call
With @JWVerret & @kurtopsahl
Tomorrow at 19:30 UTC
forum.zcashcommunity.com/t/q…
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