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This week in the Metaverse: Tornado cash banned in US, Paris Hilton plans to enter the sandbox

Things are moving fast in the metaverse and in the wider world of Web3 as a whole. Depending on who you ask, this futuristic, blockchain-based space is either the next big thing for marketing — and almost everything else — or an over-the-top fad. Here’s what you need to know from the past week:

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced Monday that it has sanctioned Tornado Cash, a crypto-mixing service “which has been used to launder more than $7 billion worth of virtual currencies since its inception in 2019.” US dollars was used. ‘ the ministry claimed in a press release. That total includes more than $455 million stolen by a North Korean-backed hacking organization called the Lazarus Group, according to the press release — “the largest known virtual currency heist to date,” according to the ministry.

As a result of Monday’s sanctions, US citizens are now banned from using Tornado Cash.

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The US Treasury Department has sanctioned crypto-mixing service Tornado Cash. (Adobe Stock)

“Today, the Treasury Department is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States,” Brian E. Nelson, Treasury Department undersecretary on terrorism and financial intelligence, said in a press release. “Despite other public assurances, Tornado Cash has repeatedly failed to put in place effective controls aimed at preventing it from laundering funds for malicious cyber actors on a regular basis and without basic measures to manage its risks. The Treasury Department will continue to aggressively crack down on mixers who launder virtual currencies for criminals and those who help them.”

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“Cryptocurrency mixers,” also known as “cryptocurrency tumblers,” are services that mix crypto assets to obfuscate their digital footprints (which would normally be recorded on the blockchain), making it harder for anyone to trace where they came from these assets come from. and where they go. (If that sounds a lot like money laundering, that’s because it really is – although hypothetically, someone could claim that they mix their crypto assets to protect their financial privacy.) Another crypto mixer, Blender. io, was sanctioned again in May.

The sanctioning of Blender.io and Tornado Cash appears to be part of a broader U.S. government crackdown on the crypto industry that has escalated in recent weeks. Earlier this month, for example, the New York State Department of Financial Services fined Robinhood Crypto $30 million for “material violations of the department’s anti-money laundering and cybersecurity regulations,” NYDFS Adrienne Harris said in a press release.

The watchdog group is warning more than a dozen celebrities against promoting NFTs online

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Truth in Advertising (TINA.org) has sent letters to 17 celebrities — including Eva Longoria, Tom Brady, DJ Khaled and Paris Hilton — reminding them that it’s against Federal Trade Commission guidelines to do NFTs on social media to apply without “a material connection” – i.e. without making it clear that they earn money from the promotion. On its website, TINA.org wrote earlier this week that “celebrities who promote NFTs generally do not help improve the financial literacy of their fans and followers. And while some of these celebrities can take risks because of their vast wealth, many vulnerable consumers don’t have that luxury. Because of this, it is crucial that consumers do their own independent research when considering purchasing these risky digital assets.”

Mark Cuban Calls Buying Metaverse Real Estate ‘The Dumbest Shit Ever’

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Mark Cuban has been crystal clear on his position on virtual real estate. Speaking recently to Altcoin Daily, a YouTube channel that focuses on crypto, the billionaire entrepreneur, Shark Tank star, and crypto investor said buying land in the Metaverse was “the dumbest shit ever.” .

In the physical world, real estate’s value is primarily driven up by scarcity. This principle does not apply equally within the metaverse, since scarcity cannot be artificially built into a virtual world. As a result, virtual real estate may not be valued as much as it is in the physical world.

Cuban also noted in his conversation with Altcoin Daily that it’s too early to say for sure how the Metaverse will evolve over time: “It won’t be just one size fits all,” he said. “There will be many different uses and many ways to define the metaverse. But right now it’s more talk than anything.” Ethereum founder Vitalik Buterin recently tweeted similar thoughts.

Coinbase reports a loss of $1.1 billion for Q2

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It’s been a tough few months for crypto and Coinbase – the world’s largest crypto exchange company – has been hit hard. Earlier this week, the company reported a net loss of $1.094 billion for the second quarter of 2022, compared to a profit of about $1.6 billion in the same quarter last year.

Coinbase was also the focus of a recent Securities and Exchange Commission (SEC) investigation into whether the company illegally allowed U.S. customers to buy and sell unregistered securities.

But it hasn’t been all bad news for Coinbase lately: it recently signed a deal with financial management firm BlackRock (BLK), which caused share prices to soar earlier this week.

Paris Hilton says she will start building in The Sandbox

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Paris Hilton announced this week that she plans to bring her company 11:11 Media to The Sandbox. She wants to build a virtual landscape where visitors can buy NFTs and participate in “social and community events like rooftop parties and glamorous social experiences at her virtual Malibu mansion,” according to CNBC.

A number of other prominent celebrities and brands – including Snoop Dogg, Adidas and Playboy – have already started their own activations in The Sandbox.

This won’t be the first party Hilton is throwing at the Metaverse; She launched Paris Hilton World in Roblox last year. She has also claimed that her nickname is “Queen of the Metaverse”.

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