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Let’s unravel how blockchain technology has the potential to disrupt the $1.3 trillion global energy market! The modern lifestyle we live today would not be possible without energy and, as a matter of fact, the demand for more energy is escalating at a rapid pace. The burden of this rising demand lies on the shoulders of centralized and monolithic power producers. The current value chain of the energy industry has not undergone many changes since about a century or more. On the other hand, the way the world works has entirely transformed since then. Clearly, there is a need to think from the first principles. Putting on the blockchain hat The fundamental features of blockchain are described below. These features will guide us to think from the first principles. Blockchain technology enables peer-to-peer communication using decentralized storage to record all transactional data. The communication can be autonomously governed by smart contracts. Any conflicts occurring in the network would be solved by swarming i.e. by using a consensus algorithm. Efficient P2P transaction platform: Inherently, the blockchain does not require any explicit auditor. All data is recorded in a chronological fashion on the blockchain which makes the blockchain auto-accountable. Self-auditable records: Blockchain has the potential to eliminate counterparties which cuts down costs and speeds up processes significantly. Fast processes, great flexibility, low costs: These above-mentioned features help in creating a conducive environment for blockchain to be used in the energy industry. As a result, a wide variety of use cases can be orchestrated to fit varying needs. Assessment of the current system The global energy market is presently full of monopolies and oligopolies with strict entry barriers. As a result, there is no visibility into the internal processes and no healthy competition in the market. These factors affect prices and trust directly. Blockchain technology can create opportunities for prosumers (consumers who are also producers). These prosumers would not only be able to consume and produce energy but also sell and buy energy in a P2P fashion with a high degree of autonomy. Presently, the value chain of the energy industry is multi-tiered. It consists of energy producers, transmission infrastructure operators, distribution infrastructure operators, and suppliers who are linked with end-consumers. All of these parties communicate with each other thereby convoluting the system. Blockchain has the ability to radically simplify this value chain by eliminating the middlemen and directly linking consumers with producers. This multi-tiered energy infrastructure is no longer reliable or efficient since the power grids are still working on old-school technology. In times of catastrophe, the first thing to go down is the power and since everything is dependent upon power, the entire infrastructure of the area collapses like a domino. In this day and age, most of the work is done manually on a grid; from rerouting power to computing amount of power generated. Futurists envisage resilient and efficient models like ‘smart grids’ which would have smart sensors and software installed on the grid. Other components required to complete the ecosystem are smart meters, smart devices like electric vehicles (EV), smartphone apps. Renewable sources of energy can be connected with this smart grid easily to generate clean fuel. This grid revolution would completely transform the way we consume energy. Another problem that plagues the energy sector is that of cyber attacks. Since the energy sector plays a critical role in the functioning of a modern economy, it becomes an attractive target for cyber attacks. These attacks may result in blackouts, economic and financial disruptions, or may even lead to loss of life. Since blockchain tech touts itself to be unhackable due to decentralized storage of records, it is safe to assume that energy-related data would remain safe and sound. The aim is to shift from a centralized value chain to a fully decentralized energy value chain where contracts are carried out autonomously and are bound directly between consumers and producers. This would give rise to a shared economy and a new business model that no longer require any controlling authorities. Use Cases and The Future A wide variety of applications can be crafted on top of the blockchain. Let’s explore these applications one by one. 1. Open market for buying and selling electricity Today, anyone can produce energy by installing solar panels. Blockchain enables these producers to sell excessive energy produced to their neighbours, friends, or family. This would result into emergence of an open market where an individual with a solar panel can participate in a community-driven market. This is an opportunity for the prosumers to either sell their excessive energy to their neighbours or feed it in the smart grid or store it for later use. These decisions can be governed by smart contracts running on top of any blockchain platform. 2. Recording ownership and a current state of electricity Till date, the most robust accounting system created is the blockchain system. In the energy sector, electrons are assets and management of these assets can be done on the blockchain. 3. Certification of renewable energy Presently, renewable energy has to get a certificate before actually be used. This process of getting certified can sometimes take weeks. This time can be cut short to a few minutes if blockchain technology is put into practice. 4. Provenance of electricity Today, it is hard to say where the electricity is coming from since electrons in the wire look alike regardless of their origin. Using blockchain technology, origin of electricity can be easily tracked. To do this in quickly, blockchain provides with fast swarming algorithms. 5. Metering and billing electricity consumption Smart meters can be installed to manage electricity consumption end-to-end. The price of electricity fluctuates throughout the day. It is expensive at peak hours and cheap at, say midnight. One can schedule their smart washing machine to run during midnight to save on utility bill. With added functionality, one can even pay for the utility bill in cryptocurrency. Apart from this, an immutable and a comprehensive archive of electricity billing data can be generated over a period of time. 6. Electric mobility Electric vehicles (EV) will become common only if EVs can access charging stations everywhere. EVs can be equipped with crypto wallets which will enable EVs to communicate with charging station (M2M communication) autonomously using smart contracts. A look around the world… Recently in Toronto a consortium was formed, including Insolar blockchain platform, Toronto and Region conservation authority, York University and Hero Engineering to test blockchain for smart energy systems. The objective of this partnership is to integrate the Insolar platform within a city-wide fleet of electric vehicles and charging stations that support vehicle (EV) to grid charging (V2G), which will be one the first blockchain-based V2G blockchain pilots in the world. Electric Vehicle getting charged. Source: https://pexels.com/ Insolar blockchain platform will become the backbone technology enabling seamless interaction and smart contracts fulfillment within the transactive energy system running in Toronto. Insolar platform has been already tested showing capacity of 19,000 transactions per second. Recently Insolar, the company behind the platform, has been ranked by the Startup Energy Transition rating among the high tech startups contributing to the energy sector. All of the above-mentioned use cases can leverage the open source nature, of the Insolar blockchain platform to unlock the future. Top-100 Ultimately, it is in the hands of the community to spearhead the adoption of blockchain in the energy sector. The success of blockchain in transforming global energy market is contingent upon R&D in the blockchain space, R&D in other technologies like artificial intelligence, and technical and legislative regulations. Apart from these, the applications should be quick, easy to use with great user experience. In the blockchain space, user experience is directly dependent on swarming. Such a culture where good behaviour is incentivised may indirectly affect socio-economic stimulus of that area. More job avenues would emerge in the field of management and operations. Blockchain has the capability to mitigate corruption which may be prevalent in the legacy multi-tiered value chain. Most importantly, blockchain is empowering people to transact on their own terms with a high degree of autonomy.

Toronto Blockchain Consortium for Global Energy Transformation

“I’m sorry to the hundreds of thousands of customers who validated our idea by shipping enough packages to circle the earth half a million times over.” These are the words from , an on-demand startup offering shipping and fulfillment services. In March 2018, the company ceased operations and had laid off all employees. What happened to this innovative startup idea? What caused to its shut down? Kevin Gibbon, CEO of Shyp Are you an entrepreneur? Are you running any startup? Do you wish to develop your idea into a money-spinning business? This post is for you. It is definitely worth reading if you are falling into any of the above categories. Shyp: A Company That Once Raised A Total Of $62 Million In Funding This story is different. Credit: wearecoordinate.com With an objective to make shipping easier and possible with the touch of a button, Shyp was developed as ‘Uber-of-shipping’ app. The app had offered a very simple yet novel, on-demand approach to the shipping services and it was very popular among the people of the USA. It allowed the customer to snap a photo of gift, electronic, or other items they wanted to send and then enabled users to enter destination and pick-up time. The company had provision for picking up items in shortest time, packaging of those items, and delivering to the requested destination. That was really an excellent idea as it redefined how postal services or shipping companies deliver an item. It is now a history and that taught every one of us a bigger lesson. What Went Wrong? Was it based on a poor business model? Yes, you can say. “ ,” About two years ago, we reallocated resources and shifted our focus to a more profitable customer cohort: small businesses. But, we decided to keep the popular-but-unprofitable parts of our business running, with small teams of their own behind them. This was a mistake — my mistake Gibbon wrote. The other factor, “We charge a $5 pickup fee, and that includes the packaging and coming to your home. And all items are not created equal. Shipping your shoes versus shipping your TV, it actually doesn’t sound like it makes a lot of business or financial sense. It doesn’t,” said Gibbon No, it is not true if you are thinking that bad user experience could also be one of the reasons. Shyp offered unparalleled customer experience with well-designed functions and user interfaces. “Everything Begins With An Idea.” Every startup, be it at the initial phase or grown-up, needs to read key takeaways from this story. What Do We Need To Learn From This? On-demand technologies now don’t attract customers be it a grocery, automobile, or maintenance service Everything is already available if you are choosing an on-demand model You need a long-term strategy to run a business You need to evaluate customers’ needs often Only fundraising can’t make your startup successful Sustainable ideas make sense rather than copying and pasting On the other side, Yerdle co-founder Carl Tashian shared the reasons what kills startups. He wrote, Behavioral, cultural, and interpersonal issues are among the biggest killers of startups, but they are seldom discussed in public. It is undeniably true. There are many factors we need to keep in mind when we are discussing the success of a startup. Many buzzwords come and go and the same happens with trends. For instance, we have observed the massive success of on-demand businesses. According to one source, 86.5 million Americans have used an on-demand service. People embraced it across the world, but as they say now every on-demand model has to undergo a reinvention to prove its potential. “It is of utmost importance to keep up with the changes.” Technology is deeply deployed regardless of the domains. Many startups have turned out to giant tech organizations and their services are used by people over the world. It is not true every time that you need to think something groundbreaking or out-of-the-box to get success. You need to think differently, that’s the point. Need an example? Here it is. Tapzo is acquired by Amazon Pay investing around $40 million If you are not aware of Tapzo, let us clear that first. Tapzo is an Indian startup that aggregates various apps like Uber, Ola, other food delivery services like Swiggy, Zomato, entertainment-based services like Book My Show, and bill payment services like BillDesk and many more into a single app. That sounds interesting. You need only one app to access app-based services. Focusing on how your idea can be of use makes difference. Mergers and acquisitions become mainstream news in day-to-day life. In such circumstances, how you leverage technology to implement your idea is worth to discuss. Whether you are focusing on a technology-driven idea or you want to spread awareness about your startup through technologies — in both cases, how you select your resources can be the key factor in the success of any startup. How You Select Your Technology Partner? Do They Help Validating Your Idea? Do They Help In Ideation? Before we proceed further, here are some questions you need to answer: Are you clear about your idea? Who are your users? Are you solving any problem of the user? Have you written or illustrated your idea? Do you have multiple ideas and its dimension to select from? Can you do a demonstration of your idea well? If you are not able to give suitable answers to the any of above questions, you can take help of startup technology partner who can sit with you, talk about your idea, help validate it, define the scope of the idea, and identify probable risks associated with it. From suggesting a right stack of technology to the end accomplishment, startup consulting service can help to test your idea through Proof of Concept ( ). Furthermore, if you want to test your basic idea with minimal features, there is a process to build (Minimum Viable Product) before you go for the actual implementation of an idea. POC MVP All you need to do is find experienced startup technology partner who helps right from the funding needs to the maintenance part to ensure its growth. If you want to know in-depth services, take a look below: Discuss your idea Validate and define Prototyping and risk analysis Design and development Quality assurance and testing at every level End-to-end support for product launch Maintenance and feedback Experience and expertise together can get the job done. If you want to build your own business or execute your unique idea, don’t wait. With 30+ years of experience, customer-first approach, and skills to provide end-to-end IT services, we @ are helping startups and entrepreneurs to shape their ideas into reality. SPEC INDIA Think about how you can better implement your idea with the help of right technologies by selecting right . Startup IT solution provider

Only 10% of Startups Will Exist By The Year 2022. Are You Going To Be One Of Them?

IoT should look less complicated than that… During late 2008, early 2009 something odd and unexpected happened. Cisco reported that there were more devices connected to the internet than people, and while the concept of “Internet of Things” wasn’t entirely new any more, it only then became a reality which for the most part sneaked up on us, taking the average consumer by surprise first, only to become an integral part of our everyday lives in less than a decade. It was only six or so years ago that we were doing the same as we used to since the invention of electricity — toggling switches like barbarians whenever we entered or left a room. Of course, some of us wanted to be fancy and opted to get a dimmer switch, and whenever we dimmed the lights, the amount of satisfaction produced by such a trivial action made us always feel a bit like magicians who finally perfected their skills of producing just the right amount of light at any time. But how wrong we all were… Philips, a mere five years ago showed us exactly that. Now, of course, Philips was and is no pioneer in IoT technology, but they did manage to — albeit, with Apple’s help — become the cause of widespread interest in domestic IoT projects. What is an IoT project? In its simplest form an IoT project is nothing more than the conscious decision of using internet and inter-connected connected devices in any given space — say a home — to solve a problem or upgrade a current solution. Calling it a project assumes there is planning, budgeting and implementation processes involved and there’s also a fairly clear goal to achieve. Generally speaking, the smallest IoT project tends to involve either smart-plugs, smart lights or both. These can of course then veer off into more enthusiast-level projects that involve connected heating, connected kitchen appliances, magic mirrors and the likes, which for brevity’s sake I am not going to cover in this article. Planning is everything! Planning an IoT project can quickly become a bigger nightmare than planning a wedding. Just like food, flowers, dresses and bowties have to work in unison, doing a project like this the right way is crucial. It will set the budget, and your expectations will be realistic. There are a few things to keep in mind at this stage: Hardware technology — try and stick to an ecosystem. You’d think that as a non-technologist it’s hard, but it’s actually quite simple. All IoT devices — at least the better brands — make it very clear what their devices work well with. As a rule of thumb, look for , , , . Say for instance if you’re looking to upgrade your lighting and decide to use the Hue system, they all work with both Alexa, HomeKit and Google Home. This will enable not only a connected system but also an interconnected system where different brands connect via some common software. “Works with Alexa” “Works with HomeKit” “Works with Google Assistant” “Works with SmartThings” Your phone — yes, it matters, and it actually matters more than you think. If you have an Android phone for instance, you needn’t care about , as that’s an Apple Home relevant technology. Sure, chances are that either Alexa will still be able to control them or Google Home but don’t get hung up on details that might not matter at all. “works with HomeKit” Your internet connection —which may or may not matter. Generally speaking IoT devices don’t need a internet connection to the outside world, but they do need WiFi, so if you have none of that, you may as well crawl back under that big rock you’ve been living under for the last 30 years. Initial setup often requires internet of at least a few Mb/s. Under 3 or 4Mb/s I’d start to worry. This is something you can though. permanent easily test The number of devices you need — and believe you me, there’s going to be quite a number of them. IoT is addictive and you will find use for it in every corner of your home. Every room requires at least one light-bulb and one switch. Hallways and kitchens can often benefit from motion sensors as well. In a realistic scenario, a 40 square meter one bedroom apartment requires 10 lights, 2 motion sensors and 5 dimmer-switches. That’s a total of 17 devices. If you opt to get smart plugs as well, you’ll be looking at anywhere between 4 to 8 plugs, making the total number jump easily over 20 devices. Your home — yes, things like having very old and unreliable electric wiring can be an issue, you need to know if the desired devices fit their designated locations and how you’ll be mounting them. Chances are you also don’t live alone, and there’s more than yourself to consider with all this technology in the house. Will grandma know how to use this and are the rugrats going to unplug your Alexa device at every chance they get? Money does not grow on trees… Just looking at the sheer number of devices makes you scratch your head and reconsider your project or your budget. Of course you can always scale back, and focus on just one room at a time. IoT projects are getting increasingly cheaper, which is good news, however on the other hand as mentioned before, IoT projects are addictive and can get out of hand very easily. The moment you get a taste of home automation and connected home-ware, things as simple as checking on your phone whether you’ve turned the lights off in the kitchen or not, or telling Alexa to make the lights dim green while you’re watching Outlander can make you think that not only have you honed the magic art of controlling light, but you are the Wizard of Oz himself. In no-time you’ll be mounting connected thermostats to your radiators, smart smoke detectors and talking — yes talking — to your kettle about the temperature you’d want your tea at. In just a matter of weeks your life could look exactly like the below meme. Often these devices on their own don’t cost much more than their “dumb” counterparts, but collectively can run up a pretty hefty bill at the till… IoT can be addictive… Who doesn’t have a screwdriver?!? You see, it’s one thing to plan it all out, have the necessary budget to purchase it, and it’s a completely different story getting it all to work, and yes, you often need tools. Make sure you have some. All of these require you to deal with electricity. Safety precautions are paramount and so is having the right tool for the job. An electricity testing screwdriver, a hammer, maybe some screws and a drill. A ladder will come in handy as well, trust me. The bottom line is, you need to know your home, what your walls and ceilings are like. If you are unsure about any of this, consult the necessary professional don’t just hack things together. No smart home is going to be smart enough in the face of sheer ignorance. Safety first! Let there be light! It is —by any account — a magical feeling to open your eyes up to lights that wake up with you in the morning, to have the kettle on by the time you get into the kitchen, have Alexa tell you the news while you’re brushing your teeth and generally give your home a living personality mirroring yours. But it’s important to do it right. IoT devices are not mere gadgets. With every device you are adding to the network, you are building an intelligence around your home, a brain for what used to be brainless and that’s . a responsibility you cannot take lightly — Attila Vago writer of codes, blogs and things that live on the web. Programming polyglot, pragmatic doer, member of the “taking care of business” crowd, with a no nonsense attitude. An easily inspired inspirational individual with a strong predilection towards most things nerdy, good, carnivorous food, and Lego. Uses a Mac. Runs at 6 a.m. HackerNoon and Quora author.

Everything You Need to Know to Start Your IoT Project

Design for human and planetary health: a transdisciplinary approach to sustainability

Recently, I had the opportunity to connect with , the Executive Director at , creators of the Ethereum Name Service (ENS). Our conversation came at a particularly exciting time for web3—possibly on the cusp of a bull market—and for ENS, which is seeing important milestones like its recent . Khori shared his vision of the “new internet,” emphasizing the role of digital identity and the push toward user-centric platforms in shaping an inclusive digital future. Khori Whittaker ENS Labs partnership with GoDaddy Khori, what exactly drew you into web3? My personal and professional journey has always been one of learning—and teaching. Throughout my career, I’ve been at the intersection of business and education, managing schools in the US for most of the past decade. My interest in adopting new technologies early led me to blockchain in late 2017. I started exploring how it could be applied in education, leading to exciting experiments with a blockchain-based student information system. This path then took me to Circle (USDC) where I engaged in a project focused on the talent side. It was then that I connected with , the founder of ENS. We started talking, and one thing led to another. Nick Johnson Today, I really see web3’s potential in transforming the internet as we know it. It redefines how we manage ownership online, improves access to information and resources previously out of reach, and fosters inclusive innovation through decentralized technology. You might hear me talk about Circle and ENS because both focus on breaking into mass adoption. On the monetary side, stablecoins like USDC or USDT allow you to send a transaction instantly and globally without going through all sorts of hoops. Once you experience that, you can’t go back. Then there’s the identity piece. With ENS, you possess a personal identity that is not bound to any specific platform, allowing you to carry it across the digital space. You can use it for transactions, reputation proofs, as a web domain… you name it! How do you see decentralized identity evolving in the future? I hope that in the future, we won't even be discussing web3—it will simply be the new version of the internet. At ENS, our goal is to welcome people into this new era. Currently, users' online identities are mainly stored and hosted on centralized servers controlled by major email and social media corporations. Web3 is about self-sovereignty and ownership. ENS gives users the freedom to carry their identities across platforms while maintaining their social graph and connections seamlessly as they move through digital spaces. For example, I've used Farcaster and Supercast, maintaining the same social network on both. When Warpcast experienced downtime, Supercast remained accessible, showing the resilience of decentralized identities. So, I believe the newfound control and autonomy over one’s digital presence will profoundly affect users in the years to come. What are some practical applications for digital identity? Education is a good example. Imagine being able to add your academic records directly to your digital identity. If you're a college student or recent graduate and need to share your transcript, you often have to pay your institution a fee to send it. Instead, these records could be linked to your digital identity, giving you control over who accesses them. That’s a basic user right. This extends to privacy enhancements we envision with zero-knowledge Layer 2 solutions. For instance, you could verify that you belong to a certain age group without revealing your exact age or share specific qualifications without disclosing all details. The same principle could apply to health and financial records. What parts of web3 identity haven’t been solved yet? One challenge is that we are still not really building for the next billion users. As a space, we are guilty of building for our niche little community over the past decade. This only works for tech-savvy users who are comfortable dealing with seed phrases and signing messages. It’s time we put the everyday person front and center. The other challenge is getting platforms like Facebook and X to recognize decentralized identities. But will they? It’s hard to say. They're reaping significant benefits from owning all our information. Yet, there's hope that social media sites like Farcaster might gain more traction. It’s unlikely that the traditional platforms will be able to maintain their hold indefinitely, especially as people begin to explore and understand what’s possible in the decentralized space. How does ENS think about onboarding this “next billion?” In the web3 space, we're all envisioning the future—the possibilities of 2030 and 2040. Yet, it feels like we're still playing by the rules set in 2012. It's time to update our playbook. The way we build our protocols and projects is crucial. I believe in moving from discussion to action. A key part of this action is establishing a digital identity for users, which is where ENS comes in. It's surprising to see so many new projects overlook the importance of a simple, user-friendly identity solution in favor of complex hexadecimal addresses. Identity solutions should be foundational, not an afterthought. Whether it's ENS or another service, the focus should be on prioritizing the user's needs from the start. Also, we can’t just keep talking to ourselves in a bubble. For example, our partnership with GoDaddy, which introduced ENS-enabled domains to millions of users, is a step toward a wider audience. Now, whether the users are ready to take the leap is the question—but the road is paved and ready. On our side, the adoption of ENS is growing, with hundreds of thousands already using .eth domains. The launch of Coinbase's subdomain service has expanded ENS usage to millions more. Similarly, Uniswap's introduction of uni.eth usernames saw significant uptake in just a few days. By collaborating with these large platforms to integrate ENS technology, we're extending its reach and making it a part of more users' online experiences. This enhances the users’ experiences and furthers adoption. cb.id We need to create B2C applications that genuinely appeal to everyday consumers, craft B2B solutions tailored to current business needs, and initiate what I call B2G (Business to Government) efforts to optimize the operations of local, municipal, and national governments. Solving real needs in the real world will bring the next billion users on board. Could these innovations ultimately help reshape societal values? In many parts of the world, people often feel like bystanders in their own stories. They witness decisions made by governments and corporations without having a say, leading to a sense of helplessness. Technology can shift our mindsets; our mindsets, in turn, can shape technology. I’m hoping that web3 will lead to a whole new way of approaching life. For example, by advocating for self-sovereign and decentralized identities, we can empower people to regain control and ownership. Maybe you don't have to just accept what's happening to you or your community anymore. We can come together, drive change, and pool resources to foster communities and decentralized autonomous organizations (DAOs) that push forward local initiatives. Thinking about concepts like network states, this is where societal change begins. It's about recognizing the power of collective action. This tech is not only about tearing down barriers but also about connecting people. Can you share your approach towards Layer 2 protocols and their significance today? Our strategy is grounded in active listening to the developers and the community, which informs our roadmap. A concern we’ve noted is the cost associated with domain registration and maintenance on Layer 1 networks. Even though a domain might only cost around $5, gas fees can go up to $25 or $30, which may discourage the user. And naturally, modifying your domain or adding records incurs additional on-chain fees. The recent Dencun update on Ethereum has helped, but our goal is to reduce these costs even further to simplify and accelerate how users manage their digital identities. What excites me about Layer 2 solutions is the opportunity to prioritize user experience from the outset. By considering what is lacking in current L1s and L2s, we can avoid those pitfalls. We're given a fresh start and ample time to craft something user-friendly that advances the protocol. At ENS Labs and within our wider community, there's ongoing research into various Layer 2 technologies, including discussions with Arbitrum or Optimism, and even the prospect of creating a dedicated ENS chain. Exciting! What are some other plans ENS has for the future? Naming anything/everything! We believe in humanizing the digital space, naming everything from wallet addresses to smart contracts. Not many know that ENS already has the capability to name smart contracts. This allows users to interact with contracts more transparently, knowing exactly what they engage with. Our vision extends to global adoption, making this intuitive naming system accessible worldwide and encouraging prominent organizations to integrate ENS names. We've already started making strides in this direction, such as our collaboration with the International Rescue Committee, facilitating crypto philanthropy with just a few clicks. This year, our focus is sharply on Layer 2 solutions. We're looking to collaborate with leading players from the traditional web and economic sectors, including businesses, governments, and more. Our goal is to simplify the internet for the future while prioritizing safety, security, and ease of use.

An Interview With Khori Whittaker: On ENS, Decentralized Identity & Socials, and the Next Billion

The TechBeat: From Institutional Feast to Community Ownership: The Billion Journey of ZKFair (3/25/2024)

USA v. Samuel Bankman-Fried Court Filing, retrieved on March 15, 2024 is part of . You can jump to any part in this filing . This part is 31 of 33. HackerNoon’s Legal PDF Series here II. The Court Should Order Forfeiture The Court should impose the proposed forfeiture money judgment. This number is derived as follows: First, the Court should direct the forfeiture of $8,000,000,000, which is a conservative estimate of the proceeds of the defendant’s wire fraud and conspiracy to commit wire fraud on FTX’s customers, and the property involved in his conspiracy to launder the proceeds of that wire fraud. As funds that the defendant obtained through false statements and promises, and then misappropriated, they are plainly “proceeds” pursuant to 18 U.S.C. § 981(a)(1)(C). See Bonventre, 646 F. App’x at 90 (calculating forfeiture based on “an amount representing the total client investment”); United States v. Kenner, 443 F. Supp. 3d 354, 378 (E.D.N.Y. 2020) (defining proceeds forfeiture as amount “received . . . as a result of the fraud.”). The total of $8 billion also represents property involved in the defendant’s money laundering. The reason FTX had such a deficit was that the defendant and his co-conspirators had agreed to launder those funds to and through Alameda. Second, the Court should direct the forfeiture of $1,300,000,000, which represents the proceeds of the defendant’s wire fraud and conspiracy to commit wire fraud on Alameda’s lenders. This sum represents the amount that Alameda owed lenders to whom it had defrauded by making false statements about its balance sheet, calculated as of the date of the bankruptcy filing. (GX1014). Third, the Court should direct the forfeiture of $1,720,000,000, which represents the proceeds of the defendant’s securities fraud. This sum is the amount FTX raised from investors in exchange for equity on fraudulent pretenses. (GX-26 (listing the total amounts invested in the Series B, B-1, and C round investments in FTX.com)). The defendant, however, asserts that he owes no forfeiture because “customers and creditors will receive a return of their funds via the bankruptcy.” (Def. Mem. at 88). This argument is factually unsupported and legally wrong. Starting with the facts, as discussed above, it is far from certain that FTX customers and lenders will be made whole, and the bankruptcy will almost certainly not cover losses by FTX’s equity investors (the victims of the conspiracy to commit security fraud), which were approximately $1.72 billion. As a matter of law, there is no basis for reducing the forfeiture judgment based on repayment to victims in bankruptcy. For money laundering based forfeiture under 18 U.S.C. § 982(a)(1), there is no suggestion in the forfeiture statutes that repayment to victims could reduce the judgment. Indeed, Section 982(a)(1) contemplates the opposite, since it is based on the “property involved” in the money laundering. See United States v. Elfgeeh, 515 F.3d 100, 139 (2d Cir. 2008) (for money transmitting offense, which similarly applies Section 982(a)(1) for forfeiture, affirming judgment for total amount transmitted even though there are no victims); United States v. Waked Hatum, 969 F.3d 1156, 1164 (11th Cir. 2020) (in money laundering case where victims suffered no loss, affirming forfeiture judgment of total sum of laundered money, because “the government’s interest in the [laundered property] vests ‘the moment’ such property is laundered”). The same is true for wire fraud based forfeiture. While the defendant asserts that the proper measure of forfeiture here is the net proceeds under Section 981(a)(2)(B), rather than gross proceeds under Section 981(a)(2)(A), (Def. Mem. at 87-88), he is wrong. As the trial record showed, the defendant embezzled billions of dollars of FTX customer funds, and induced investors to part with money based on false statements. That is “inherently unlawful” conduct and therefore the gross proceeds rule under Section 981(a)(2)(A) applies. See United States v. Bodouva, 853 F.3d 76, 80 (2d Cir. 2017) (Section 981(a)(2)(A) applies to embezzlement); Milton, 2024 WL 779210, at *5 (selling securities for which prices have been inflated by “misleading statements” is “more analogous to cases involving Ponzi schemes” and thus Section 981(a)(2)(A) applies). And under Section 981(a)(2)(A), the law is clear: “there is no statutory authorization for an offset” even for payments to victims. Bodouva, 853 F.3d at 80. The single case cited by the defendant for the proposition that return of funds through bankruptcy should offset victim losses is a decade-old, distinguishable decision from the Northern District of Illinois. See United States v. Hollnagel, No. 10 Cr. 195, 2013 WL 5348317 (N.D. Ill. Sept. 24, 2013). There, the district court reduced a forfeiture judgment to zero because the “[d]efendants returned the investors’ investments over time” before their arrests. Id. at *4. Not only did the defendant not return the $8 billion he stole before his arrest, but the Second Circuit has explicitly rejected the reasoning of Hollnagel, under Section 981(a)(2)(B). United States v. Shkreli, 779 F. App’x 38 (2d Cir. 2019) (summary order). In Shkreli, the Court held that because “‘forfeiture is gain based’, not based on the losses (or gains) to victims,” a defendant should be required to forfeit “the total amount invested by investors” even if investors were paid back by the defendant during the scheme. Id. at 42 (citing Torres, 703 F.3d at 203). The defendant next asserts that “none of the accounts identified for forfeiture were for [his] personal benefit,” “were not profits ‘enjoyed’ by [him], but rather maintained on behalf of the companies,” and therefore are not subject to forfeiture. (Def. Mem. at 88). This is legally and factually wrong. While the word “enjoyed” is found in Hollnagel, the law is clear that the Government can forfeit corporate assets based on a defendant’s crimes when those assets were maintained through and on behalf of a company the defendant “extensively controls” or “dominates,” such that “money paid to the corporation was effectively” under the defendant’s control. United States v. Peters, 732 F.3d 93, 103-04 (2d Cir. 2013) (forfeiture proceeding under Section 982); United States v. Tartaglione, 15 Cr. 491, 2018 WL 1740532, at *21 (E.D. Pa. Apr. 11, 2018) (same for Section 981), aff’d, 815 F. App’x 648 (3d Cir. 2020). The trial evidence of course established the defendant’s control and dominance of FTX, Alameda, and its affiliated entities. Finally, the defendant asserts that the Court should order no forfeiture because he “no longer has custody of the accounts identified for forfeiture in the PSR” since the Government seized the accounts. (Def. Mem. at 88). This is utterly meritless—there is no authority even suggesting that the Government’s seizure of assets traceable or involved in a defendant’s crimes somehow precludes the Government from seeking forfeiture of the defendant’s interest in those assets. Indeed, the forfeiture laws expressly authorize seizure as part of the forfeiture process. In order for the Government to effect forfeiture of the specific property described in the preliminary order of forfeiture, the Court must first order forfeiture of the defendant’s interests in that specific property. United States v. Daugerdas, 892 F.3d 545, 549 (2d Cir. 2018) (“At stage one of [forfeiture process], before entering a preliminary order of forfeiture, the court is directed to adjudicate the government’s interest vis-à-vis the defendant”). Only once the Court has forfeited the defendant’s rights in the property can the Court move on to “stage two,” by “resolv[ing] any third-party petitioner’s interests vis-à-vis the defendant.” Id. If no third-party has a cognizable interest in the property superior to the defendant’s, then the specific property can be finally forfeited to the Government. In the preliminary order of forfeiture, the Government lists specific property beyond that listed in the forfeiture allegations in the S6 Indictment and the bill of particulars. (Dkt. 314).[14] That specific property is all forfeitable as proceeds of the defendant’s wire frauds or as property involved in money laundering. The property listed in Ex. A(1) is another account in the name of Emergent Fidelity Technologies, which was seized at the same time and pursuant to the same legal authority as the property listed in the S6 Indictment ¶¶ 38(a), (b), 40(a), (b). Ex. A(2)-(255) are the specific forms of cryptocurrency maintained in the Binance accounts described in S6 Indictment ¶¶ 38(h), (i), (j), 40(h), (i), (j). Ex. A(258) is a bank account in the name of the defendant and another FTX employee, which received transfers from the account at Silvergate Bank in the name of Alameda ending in -4456, which as described in Government Exhibit 1050 accepted customer fiat deposits. The Government also seeks to forfeit the defendant’s interests in certain contributions traceable to his criminal conduct that he, Salame, and Singh made to political candidates and committees, during the relevant period. Beginning in March 2023, the Government, working with the United States Marshals Service and the FBI, sent letters to those candidates and committees who the Government had identified had received donations from the defendant, Salame, and Singh, requesting return of the donations as forfeitable property, and because the donations were illegal. As of today, 251 candidates and committees have returned $3,348,957.23. [15] The Preliminary Order of Forfeiture lists the identified campaigns, including those that have returned funds to the Government, in Ex. A(259) to (261). As evidenced at trial, the defendant’s interests in the political donations are forfeitable because the donations were made using the proceeds of the defendant’s wire fraud on customers and were themselves manifestation of his money laundering. (GX-1039; 1044; 1088; 1089; 1090). Continue Reading . Here [14] The airplanes listed at Ex. A(256) and (257) are the property listed in the bill of particulars. [15] The Government is also coordinating with the FTX Debtors, so that the estate retrieves some of the political contributions. In some circumstances, a political candidate or committee has sought to or did return funds to the estate rather than the Government. As of today, the Government understands that the estate has received $281,356 from 8 candidates and committees. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on March 15, 2024, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. storage.courtlistener

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