https://thecapital.io/article/robinhoods-brand-fake-vs-paypals-crypto-corrup... Graduate research conducted over the last five years by preeminent global industry scholars, who embody a strong sense of integrity and pride in the social importance and credibility of good institutional design, tease out the following incidents. With friendly intentions, there is no way out of us moving forward. Corruption occurs when the private search for economic advantage and personal advancement clashes with laws and norms that condemn such behavior. Further complicating the picture, some illegal corrupt transactions drain public resources away from education, health care, and effective infrastructure—the kinds of investments that can improve economic performance and raise living standards for all. It is easy to prove Robinhood Markets (the financial services company) is a brand fake. Perhaps even more significant, there is no reason to think that PayPal, one of the more convenient and commonly-used online payment methods out there, will behave any better given their clear anti-cryptocurrency policy history. Paypal will likely further exploit their monopoly position and risk undermining a pure environment that maximizes the socially beneficial conditions of virtual currencies. Our estimation strategy so far has been predicated on the assumption that political and legal institutions affect sustainability directly and that the effect of corruption can be estimated conditionally on the institutional context. As we previously reported, it is perhaps no coincidence that the systemic risk to cryptocurrency and blockchain systems are tethered to activities of BitLicensees. The cost of corruption is greater than the sum of lost money: distortions in spending priorities undermine the ability of the state to promote sustainable and inclusive growth. This is possible in a framework already characterized by "weak law" that creates both a certain alteration of the rules of the market and perverse dynamics distorting the economy and inhibiting free competition. Robinhood’s Brand Fake The legend of Robin Hood portrays a man who robbed the rich and gave to the poor. His partisanship of the common people and his hostility to the Sheriff of Nottingham branded Robin Hood as one of the world’s best known folk heroes. According to a Forbes investigation earlier this month, despite its proclamations about democratizing finance, Robinhood's entire business has been built since its inception on selling its customers’ orders—known as “payment for order flow”—to Wall Street’s most notorious sharks, accounting for 70% of its $130 million in revenue during the first quarter of 2020. Robinhood’s SEC civil fraud investigation more or less points out the essence of potential brand fakery. A Robinhood spokeswoman declined to comment on the investigation or any talks with regulators, but stated: “We strive to maintain constructive relationships with our regulators and to cooperate fully with them.” PayPal’s Crypto Corruption The heads of enterprises must curb corruption by setting a clear tone at the top. A statement from the founding CEO of Paypal Holdings Inc., Bill Harris, described Bitcoin as a “scam” and a “colossal pump-and-dump scheme”. “I’m tired of saying, ‘Be careful, it’s speculative.’ Then, ‘Be careful, it’s gambling.’ Then, ‘Be careful, it’s a bubble.’ Okay, I’ll say it: Bitcoin is a scam,” he wrote in June 2019. Later in October 2019 Fortune asked PayPal’s current CEO, Daniel Schulman if he could share some details of the projects Paypal is working on. However, he replied: “Yes and no. Some of this is competitive, and we don’t really want to,” but noted that what Paypal is working on is “not necessarily competitive with Libra.” Emphasizing that cryptocurrency is “still very volatile,” the CEO revealed, “we don’t have much demand for it by merchants because merchants operate on very small margins.” He continued: “Until it becomes less volatile, it won’t be a currency that is widely accepted by merchants on the web — not the dark web, but the web.” PayPal’s fundamental longtime assault on the crypto industry policy was to freeze user accounts connected with any cryptocurrency-related activity. While some people may consider this to be borderline illegal, the company can close user accounts or freeze funds for extended periods of time whenever they feel the need to. In less than a year, everything changed for PayPal with the October 2020 announcement of achieving another regulatory first: through Paxos, PayPal has been granted the first virtual currency conditional license from the New York State Department of Financial Services. It seems that PayPal’s dance with “regulatory arbitrage” now engages the ability to provide crypto to their customers. Turn this matter as we will, and look at it from any side whatsoever, and it presents the appearance of anti-competitive behavior. PayPal’s deception and corruption in building its crypto business infrastructure now acts as a cartel sponsored by regulators. PayPal forbids user access to their own private keys. What’s more, users will not be able to transfer their crypto holdings out of their PayPal account, nor will they be able to send crypto to other PayPal users. In other words, PayPal more or less dictates what users can do with their cryptocurrencies, and could presumably freeze accounts if they see fit. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks. Note, however, that this potential monopoly could arise not from corruption but simply from a revenue-maximizing government that does not factor in the social benefits of competition or of effective natural monopoly regulation. Second, the hope of corrupt gains might lead government officials to privatize the wrong firms. That is, regulators may grant license(s) to firms that are operating at a high level as state firms and so appear valuable to private markets. Universal BitLicense Declaration People should not be presented with their only option being a binary choice between inclusion and giving up their data and privacy OR non-participation, exclusion and privacy, thereby effectively becoming a modern day 21st century outcast. The obvious consequences on the emotional level are often associated with economic risks, often linked to the obligation in respect of some banking institution or regulatory body from which the entrepreneur is required to interact. The basic mechanism of embeddedness is the “protection.” It may take different forms: the protection/extortion mechanism, which concerns the regulation of licit and illicit economic activities; the patronage mechanism, which involves the distribution of goods or services in exchange for votes, goods, services or other benefits; or the brokerage mechanism for the resolution of disputes. The protection function concerns, in general, all those activities which involve the maintenance of the order and the exercise of authority within a territory. On the contrary, the mechanisms of infiltration are: the management of trafficking, the money laundering in legal economic activities, and the interception of public funds. If the basic problem is monopoly power, policy should address that issue directly. If the problem is a lack of transparency and accountability in government activities, one should find ways to open up the public sector to oversight from outsiders. If the problem is an opaque and confusing regulatory structure, rules should be simplified and clarified. 90+ days from initial submission to begin “Conditional BitLicense” review: New York is not supported by a good faith argument for an extension, modification of or delay of granting “Conditional BitLicense” approval specific to review and consideration for approval of any reasonable version of the proposed “Universal Declaration on Virtual Currency & Human Rights.” Where the superintendent makes a determination that a regulated group has engaged in or is engaging in any of the practices outlined, the superintendent is empowered to issue appropriate Declarations pursuant to innovation and mandates clarification. Such orders may be issued without the necessity of a complaint being filed by an aggrieved person. Following the official announcement of New York’s conditional licence framework, we have submitted various communications that outline our clear ambition and intent to earn “Conditional BitLicense” and other approvals. - to save succeeding generations from financial fraud and corruption, which in our lifetime has brought untold sorrow to humanity, and - to reaffirm New York’s faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small, and - to establish conditions under which justice and respect for the obligations arising from BitLicence regulation and other sources of financial services law can be maintained, and - to promote larger social progress by leading global standards, given that New York remains the center of technological innovation and forward-looking virtual currency regulation Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of human rights or degradation of the BitLicense’s virtual currency statute or mandates set forth in this Declaration.