programming, policy, progress
1. Debate, grow, build: Programming languages & crypto
Sam Blackshear, Noah Citron, Eddy Lazzarin, and Sonal Chokshi
What are the differences between smart-contracts programming and traditional programming — and where does programming for blockchains sit along the long history and evolution of programming languages overall? In the latest episode of ‘web3 with a16z’ (yes we’re back with an all-new season!), we overview all things programming languages and crypto: for both existing blockchain & smart contract programmers, and for other developers seeking to enter the space.
But this discussion is also for those curious about how programming languages evolve (and come into existence)... as well as anyone interested in the intersection of language, code, and expression.
2. Policy: On recent news & moves; developing frameworks for regulation
Understanding recent moves
When the U.S. Department of Justice criminally charged a senior executive (and Russian national) of cryptocurrency exchange Bitzlato with unlicensed money transmitting, many people – even crypto industry insiders — commented that they had never heard of it. So what’s going on here, and why does it matter?
This move is significant because the “Bitzlato Order” — issued by the U.S. Department of Treasury’s FinCEN the same day — is the first such order issued pursuant to section 9714(a) of the Combating Russian Money Laundering Act (Public Law 116-283). It identifies Bitzlato Limited, a financial institution operating outside of the U.S., to be of primary money laundering concern in connection with Russian illicit finance. As such, it prohibits certain transmittals of funds involving Bitzlato by any covered financial institution. This is in addition to the DOJ criminal charges for Bitzlato failing to implement anti-money laundering safeguards, and thus enabling criminals to profit from their wrongdoing — including ransomware and drug trafficking from the now-defunct darknet Hydra marketplace, where users exchanged more than $700 million in cryptocurrency (either directly or through intermediaries).
As alleged in the order and the criminal complaint, Bitzlato executives knowingly facilitated criminal activity by failing to implement even the most basic anti-money laundering (AML) and Know-Your-Customer (KYC) measures. The FinCEN order in effect shuts down Bitzlato’s ability to conduct transactions with other financial institutions.
For entrepreneurs and those watching (or in some cases reading the tea leaves on!) regulatory moves and implications, it’s worth noting that this is a good example of Treasury using its authority in a “fit for purpose” regulatory action. It’s precisely how regulation should be: going after the real wrongdoers, under clearly established rules.
And if you’re wondering what the difference is between a section 9714(a) order (the Bizlato Order described above) and section 311 special measures (which are authorized under the USA PATRIOT Act); or, what financial institutions are "covered" by the Order and what they have to do — you can check out FinCEN's accompanying FAQs here. As always, make sure to do your diligence on any businesses you’re dealing with… and when unsure about regulatory implications, consult legal or regulatory counsel.
related: For an overview of AML/KYC, BSA, sanctions, and more about illicit finance and how crypto entrepreneurs can navigate, go here.
see also: In case you missed it, check out the last installment in our ongoing regulatory updates series, where David Sverdlov et al on our a16z crypto regulatory team share useful agency, as well as regional, news & moves.
Regulate businesses, not software
Miles Jennings, Brian Quintenz
Two extremes clash over web3 regulation: One faction that argues for applying existing regulations wholesale to web3; and the other that argues for completely excluding web3 from existing, successful regulatory frameworks. But both produce bad policy outcomes. So how to resolve this tension?
Continuing our series on regulations that preserve the benefits of web3 technology and protect the future of the internet — while reducing the risks of illicit activity and consumer harm — a16z crypto’s Miles Jennings and Brian Quintenz suggest a more pragmatic approach. The key tenet? Regulate businesses, not software. That is: businesses should be the focus of regulation… whereas decentralized, autonomous software — especially the underlying decentralized blockchains, smart contracts, and networks that provide the internet with new functionality — should not. Check out the full series here:
An overview of the argument: why, why now (Jennings)
Addressing the ‘dilemma’ of DAOs (Jennings)
see also: Jennings’ (with David Kerr) deep-dive series not just extending, but developing, legal frameworks for DAOs.
3. Resources: Learning about zero knowledge through dedicated courses
As more people increasingly seek to learn about zero knowledge proofs, systems, etc., there’s been a recent surge of (even more) courses dedicated to the topics — many of which are free and open to the public. Check out the latest syllabi, streaming links, and course materials we’ve culled below:
*new* Zero knowledge proofs, a MOOC from U.C. Berkeley with others:
*new* Modern zero knowledge cryptography, from MIT & 0xPARC: https://zkiap.com/
see also the 9th BIU Winter School on Cryptography (2019), which focused on the fundamentals and foundations of zero knowledge (the upcoming 13th program will focus on blockchain technologies overall)
see also the summer virtual school (2021) “Foundations and frontiers of probabilistic proofs” from Mathematical Sciences Research Institute
…finally: be sure to also visit (or revisit) the a16z crypto Zero Knowledge Canon, which we periodically update with the latest resources – and which now features a section just for courses and more:
--Sonal Chokshi and the a16z crypto team
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