USDP, BUSD - New York False Claims Act

[Gunnar Larson]

---------- Forwarded message ---------
From: Gunnar Larson <g at xny.io>
Date: Fri, Apr 29, 2022, 6:47 PM
Subject: USDP, BUSD - New York False Claims Act
To: Weber, Richard (DFS) <Richard.weber at dfs.ny.gov>


Dear Mr. Weber:

How are you? I hope this message finds you well.

Evaluating USDP and BUSD market confusion specific to the New York False
Claims Act
<https://drive.google.com/file/d/1OhmuOfMTb4YfK6kzZ8S8Pl8d6urlB4Db/view?usp=sharing>,
can you kindly advise if USDP and/or BUSD preclude the New York False
Claims Act under NY-DFS regulation?

   - Specifically, has the state or local government has reached a binding
   settlement or other agreement with USDP and/or BUSD who potentially have
   violated section one hundred eighty-nine of New York's False Claims Act,
   resolving the matter and such agreement has been approved in writing by the
   attorney general, or by the applicable local government attorney (aka your
   office)?
   - According to Paxos
   <https://paxos.com/2022/04/07/busd-issued-by-paxos-on-ethereum-vs-busd-on-the-bnb-smart-chain/>,
   NYDFS agreed to the terms of the token in advance of issuing – this
   includes the stipulation that USDP and BUSD only be issued by Paxos on the
   ethereum blockchain at this time.
   - Paxos' marketing partner for BUSD – Binance – issues a token on its
   BNB smart chain called Binance-Peg BUSD. Note that Binance-Peg BUSD is
   strictly a Binance product; it is not issued by Paxos nor regulated by the
   NYDFS.

Paxos holds a Primary Purpose Exemption of 25%
<https://drive.google.com/file/d/1Yp6wx5EefmR_bGNJOPE_0mGlzSUMLaek/view?usp=sharing>.
As such, USDP and BUSD 1:1 reserves are potentially misleading and could
fall under New York's False Claims Act, unless barred by NY-DFS. For
example, a case brought by the New York Attorney General indicated that the
reserves for the stablecoin Tether (USDT) were not 100% fiat-backed. This
discovery was in direct contradiction to previous statements made by Tether.

Mr. Weber, the marketplace confusion specific to USDP and BUSD is similar
in nature to Meta and the Moscow Exchange digital asset delima. Given
Meta's relationship with USDP, we wanted to learn of any NY-DFS
administrative actions concerning USDP and/or BUSD that would exempt Paxos
from New York's False Claims Act.

Sending you the very best regards.

Gunnar Larson

---------- Forwarded message ---------
From: Gunnar Larson <g at xny.io>
Date: Fri, Apr 29, 2022 at 12:34 PM
Subject: Re: Meta Platforms, Inc. Board of Directors - USPTO, Digital
Assets and Moscow Exchange
To: Chollet, Nicki <NChollet at kilpatricktownsend.com>
Cc: Meta_Defensive_Disputes <Meta_Defensive_Disputes at kilpatricktownsend.com>,
cypherpunks <cypherpunks at lists.cpunks.org>, <investor at fb.com>, Alexi Anania
<a at xny.io>


Ms. Chollet:

We  have yet to hear back from our office concerning xNY.io - Bank.org's
prerogative to protect digital asset innovation. Meta's board of directors
may understand today's memo seeking clarification of intent concerning the
Novi and USDP relationship. Novi and the Novi logo are trademarks owned by
Facebook, Inc.

*On October 19, 2021
<https://www.novi.com/news/pilot-version-of-novi-now-available/> Meta's
Novi digital asset project announced a pilot engaging the USDP stablecoin: *

   - "For the pilot we are enabling people to send and receive money using
   USDP (Pax Dollar) through a partnership with Paxos and Coinbase. Our
   support for Diem has not changed. We see great value in the way Diem is
   designed with robust protections for consumers and controls to combat
   financial crime. We intend to migrate Novi to the Diem network once it
   receives regulatory approval. The goal for Novi has been and always will be
   to be interoperable with other digital wallets and we believe a
   purpose-built blockchain for payments, like Diem, is critical to deliver
   solutions to the problems that people experience with the current payment
   system. Imagine if you couldn’t send an email from a Gmail address to a
   Yahoo address, or if you could only text people with the same mobile
   provider as you."
   - "We chose USDP for the pilot so that we can test our systems with a
   stablecoin that has been operating successfully for over three years and
   that has important regulatory and consumer protection attributes. This
   means that people can easily withdraw their money in their local currency
   when they choose. USDP reserves are fully backed by the US dollar and are
   held 100% in cash and cash equivalents. We chose Coinbase, which manages
   $180B assets on its platform, to provide custody solutions for the secure
   storage of our customers’ funds."

Ms. Chollett, as of today USDP shows a value of $0.00 on Coinbase
<https://www.coinbase.com/price/usdp>, and appears to no longer be
supported by the Coinbase platform. Can Meta's board of directors clarify
their current relationship with USDP?

On April 7, 2022
<https://paxos.com/2022/04/07/busd-issued-by-paxos-on-ethereum-vs-busd-on-the-bnb-smart-chain/>
USDP was re-announced in New York in partnership with BUSD. How should the
marketplace interpret the intent of Meta's board of directors concerning
USDP and BUSD?

Sending you the very best regards.

Thank you,

Gunnar Larson
--
*Gunnar Larson - xNY.io <http://www.xny.io/> | Bank.org <http://bank.org/>*
MSc
<https://www.unic.ac.cy/blockchain/msc-digital-currency/?utm_source=Google&utm_medium=Search&utm_campaign=MSc-Digital-Currency-North-America&utm_term=blockchain%20unic&gclid=Cj0KCQiAyJOBBhDCARIsAJG2h5ctwwMz0MRbVSk-LaYD-GMU5UgDSw7ynxbGr_a7SkaFAZzJc1-pzxEaAi4NEALw_wcB>
-
Digital Currency
MBA
<https://www.unic.ac.cy/business-administration-entrepreneurship-and-innovation-mba-1-5-years-or-3-semesters/>
- Entrepreneurship
and Innovation (ip)

G at xNY.io
+1-646-454-9107
New York, New York 10001

On Wed, Apr 13, 2022 at 4:44 PM Gunnar Larson <g at xny.io> wrote:

> Ms. Chollett:
>
> Thank you, kindly, for continued correspondence related to Meta Board
> questions specific to xNY.io - Bank.org, PBC's concern to protecting
> cross-border digital asset innovation.
>
> xNY.io - Bank.org, PBC first became alarmed through Meta's obvious
> digital asset market problems related to Libra, Diem, Novi and USDP.
> Through Meta's continued digital identity transitions, xNY.io - Bank.org,
> PBC has pioneered cross-border digital asset logic(s). Moreover, the Moscow
> Exchange and Meta introduced market events over March that jeopardize
> digital asset market purty. Ms, Chollett, xNY.io - Bank.org, PBC will not
> pay for market effects related to Meta's cross-border disruption of digital
> asset innovation, related to Meta's obvious mark exactness (by definition)
> to the Moscow Exchange.
>
> *Ms. Chollett, we cannot concern ourselves with Meta's intentions, good or
> otherwise, given clear problems that exacerbate market risk: *
>
>    - March 11, 2022
>    <https://www.businessinsider.in/tech/news/russia-moves-to-declare-meta-an-extremist-organization-which-would-lead-to-all-its-services-being-cut-off-in-russia/articleshow/90155262.cms>:
>    Russia's leader, who is in charge of the Moscow Exchange cites Meta as an
>    'extremist organization' ...
>    - March 14, 2022
>    <https://www.lexology.com/library/detail.aspx?g=ff9f1af5-cc8a-473a-822b-8890c6c8c514>:
>    Frankfurt Kurnit Klein & Selz PC Benjamin G. Murray published SDNY insights
>    to a Russian State-Sponsored TV Network's Attempt to Dismiss Copyright
>    Lawsuit On Fair Use Grounds Denied.
>    - March 17, 2022
>    <https://www.sberbank.com/news-and-media/press-releases/article?newsID=cd44dd90-1dcf-4bb1-ab20-bc99e52d08a3&blockID=7&regionID=77&lang=en&type=NEWS>:
>    Moscow Exchange is the backend to Russia's largest bank, Sber. The
>    announcement on 03/17/22 confirmed Sber (via the Moscow Exchange
>    technology, at various levels) would issue digital assets.
>    - March 18, 2022
>    <https://cointelegraph.com/news/meta-files-8-digital-asset-and-web-3-0-trademark-applications>:
>    Meta Platforms Inc. filed USPTO mark applications for a mark EXACTLY
>    DEFINED to that of the Moscow Exchange.
>       - Ms. Chollette, below my signature you will find Meta's filing
>       numbers and descriptions related to a mark defined as Moscow Exchange, with
>       plans to engage the mark in commerce related to digital assets and virtual
>       reality.
>    - March 24, 2022
>    <https://docs.google.com/document/d/1f_fq1GaKNaAUGEyztdm-oMtIuEW2yXj4C5aoN0GA_fY/edit?usp=sharing>:
>    xNY.io - Bank.org, PBC contacted meta, with a memo introducing our direct
>    plan to protect cross-border digital asset innovation. Ms. Chollette,
>    please note that Russia has labeled Meta as an 'extremist organization' ...
>    So who really knows what the Moscow Exchange will thi
>
> xNY.io - Bank.org, PBC is a very reasonable digital asset pioneer, and
> sitting in Manhattan the jury is in on market contributions from Libra,
> Diem, Novi and USDP.  Ms, Chollette, Meta and the Moscow Exchange matter
> really suggest only losing marketplace contributions, obviously potentially
> devastating digital asset marketplace innovation(s). We aim to solve this
> problem immediately:
>
>    1. Ms. Collette, xNY.io - Bank.org, PBC recently shared Citigroup's
>    Metaverse and Money
>    <https://drive.google.com/file/d/1REoa87GCmt2uhDp7ZYswbTRw4ygQgjsL/view?usp=sharing>
>    whitepaper, with 33 highlights to our grave concern to Meta's potential
>    marketplace delinquency related to Meta's mark exactness to Moscow
>    Exchange.
>    2. Furthermore, Mr. Zuckerberg and Mr. Putin are both highlight quotes
>    to Citigroup's Metaverse and Money research.
>    3. With the date order, footnotes, and highlights xNY.io -Bank.org,
>    PBC kindly petitions Meta's board to understand the opportunity ... The
>    Moscow Exchange is not our problem, and for whatever reason Meta will have
>    no opportunity to make mark exactness our problem.
>
> The United State of America's cross-border approach to digital asset
> innovation will be cultivated, fostered and protected by xNY.io - Bank.org,
> PBC.
> We aim not to be adversarial with Meta, but we will stop at no cost to
> invest in claim rewards if necessary. Perhaps, we can organize a time to
> discuss potential resolutions in the immediate term.
>
> xNY.io - Bank.org, PBC must reserve all rights specific to harm from March
> 14, 2022
> <https://www.lexology.com/library/detail.aspx?g=ff9f1af5-cc8a-473a-822b-8890c6c8c514>
> and March 18, 2022
> <https://cointelegraph.com/news/meta-files-8-digital-asset-and-web-3-0-trademark-applications> market
> events.
>
> Please feel free to call or email anytime.
>
> Sending you the very best from New York City,
>
> Gunnar Larson
> --
> *Gunnar Larson - xNY.io <http://www.xNY.io> | Bank.org <http://Bank.org>*
> MSc
> <https://www.unic.ac.cy/blockchain/msc-digital-currency/?utm_source=Google&utm_medium=Search&utm_campaign=MSc-Digital-Currency-North-America&utm_term=blockchain%20unic&gclid=Cj0KCQiAyJOBBhDCARIsAJG2h5ctwwMz0MRbVSk-LaYD-GMU5UgDSw7ynxbGr_a7SkaFAZzJc1-pzxEaAi4NEALw_wcB>
> - Digital Currency
> MBA
> <https://www.unic.ac.cy/business-administration-entrepreneurship-and-innovation-mba-1-5-years-or-3-semesters/>
> - Entrepreneurship and Innovation (ip)
>
> G at xNY.io
> +1-646-454-9107
> New York, New York 10001
>
> 97320155: Online social networking and dating services, including a
> specific branch tailored for networking between cryptocurrency investors.
>
> 97320153: Design and development of computer hardware and software
> relating to Web3, including gaming, e-commerce, blockchain transactions,
> etc.
>
> 97320149: Entertainment and electronic publishing services, partly within
> virtual reality.
>
> 97320147: Telecommunication services for electronic assets held on its
> platform.
>
> 97320146: Financial transaction processing services relating to tokens,
> blockchain assets, cryptocurrencies and other virtual assets.
>
> 97320144: Advertising services via virtual or augmented reality networks
> and the metaverse.
>
> 97320140: Wearable peripherals for video games connected to virtual
> reality.
>
> 97320136: Downloadable software in the nature of a mobile application,
> such as for user authentication, online charitable fundraising and most
> notably, for hardware or e-wallets.
>
>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: text/html
Size: 16243 bytes
Desc: not available
URL: <https://lists.cpunks.org/pipermail/cypherpunks/attachments/20221213/3d83001a/attachment.txt>