With help from Derek Robertson
ABU DHABI, UAE — Amid the ongoing crypto meltdown — with contagion from the FTX collapse spreading to other exchanges and D.C. regulators eyeing a crackdown — there are still some places where people are hedging their bets that crypto will be a big part of the future.
One of these is the United Arab Emirates.
As the Gulf states prepare for a post-hydrocarbon future, they’ve plowed huge amounts of money into efforts to reinvent themselves as tech hubs. In the UAE — home to both Dubai and nearby Abu Dhabi — that’s included an effort to create a regulatory environment that’s attractive to digital assets activity.
This week, crypto is high on the agenda at the Milken Institute’s Middle East and Africa Summit, which kicks off tomorrow morning at the Rosewood Hotel in Abu Dhabi. We’ll be covering it in person through Friday.
The summit’s agenda also spans climate, the science of aging, and much else, but as one attendee at a pre-conference reception put it, right now, FTX is “the elephant in the room.”
The 800-pound gorilla who mauled that elephant will soon be in the room, too.
Binance CEO Changpeng Zhao — who brought about the FTX collapse by calling attention to its shaky finances and dumping a pile of its now-worthless house tokens onto the market — is scheduled to be grilled on stage tomorrow by CNBC International’s Dan Murphy at 11:15 a.m. local time (Abu Dhabi is 9 hours ahead of Washington).
The Dubai-based Zhao, whose exchange was already the world’s largest and is only becoming more dominant as others falter, is the closest thing to a winner in the events of the past week.
Earlier today at another event, Abu Dhabi Finance Week, he tried to reassure investors. He predicted crypto would be “fine,” and said his announced plan to offer financial lifelines to troubled firms in the industry was making progress.
Afterward, economist Nouriel Roubini appeared at the same event, ripping CZ and summing up crypto in seven alliterative-but-not-very-positive words: “Concealed, corrupt, crooks, criminals, con men, carnival barkers.”
Zhao is just one of the crypto figures set to speak here as part two of the 2022 crypto financial crisis kicks into gear.
CFTC Commissioner Caroline Pham — who met with Sam Bankman-Fried before the FTX collapse and has called for proactive crypto rule-making by Congress while criticizing the SEC’s regulation-by-enforcement approach — is scheduled to appear at a welcome breakfast panel on the state of the U.S. economy tomorrow. So is Mike Novogratz, CEO of the crypto financial services firm Galaxy Digital, which disclosed tens of millions of dollars in likely losses from the FTX collapse.
While the crisis has inspired another round of predictions that the end of crypto has arrived, the early view from conference attendees is that it’s more like a particularly dramatic bump in the road. Tomorrow and Thursday, they’ll have a chance to outline where they think the industry goes from here.
A few other conference moments we’ll be watching:
- Eva Kaili of Greece, the vice president of the EU parliament and a blockchain booster, is due to speak at a Friday morning panel about leadership in a changing world.
- A global overview of current events panel tomorrow at 5 p.m. features former Treasury secretary Steve Mnuchin, former Austrian chancellor Sebastian Kurtz, and Nobel Peace Prize winner Leymah Gbowee of Liberia.
And yes, Paris Hilton will be speaking on a panel about the Metaverse tomorrow at 11:15 a.m., because… why not?
The metaverse is already an alluring marketing tool — but it can be used to push messages a lot more urgent than promoting burritos or sneakers.
Yesterday morning at the United Nations’ 27th Climate Change Conference, foreign minister Simon Kofe of the tiny island nation of Tuvalu announced that “as our land disappears, we have no choice but to become the world’s first digital nation.” The idea, as Kofe put it, is to create a virtual replica of the country that will preserve it and its history as they stand today, presumably before the country is further ravaged by climate change.
Rising not even five meters above sea level at its highest point, Tuvalu is one of the world’s nations most vulnerable to the flooding that now repeatedly threatens its small landmass. Tuvalu’s leaders have consistently tried to think up imaginative ways to remind the world of the country’s plight, like last year when Kofe addressed the COP26 waist-deep in water.
It’s a particularly poignant twist on the metaverse strategies that other governments have tried, like in Seoul, which is trying to bring its municipal functions into the virtual world. As the companies building the metaverse figure out how much real-world governance can, or should, spill over into the virtual one, a case like Tuvalu’s could at some point test that in a very real way. — Derek Robertson
It’s officially lame duck time in Congress, and some legislators are scrambling to push through more bipartisan, future-minded legislation.
One such bill is the Children and Teens’ Online Privacy Protection Act, or “COPPA 2.0,” an update of the internet child safety act first passed in 1998 that would set new ground rules for data privacy and app design. Sen. Maria Cantwell (D-Wash.), chair of the Commerce, Science, and Transportation Committee, said via a spokesperson yesterday that she “supports any effort to get children’s online privacy passed during the lame duck,” and Rosemary Boeglin, a spokesperson for Cantwell’s fellow committee member Sen. Ed Markey (D-Mass.), told DFD that the senator “is laser focused on passing COPPA 2.0 this year.”
The COPPA update is part of a wider effort to update Washington’s approach to kids’ privacy. Back in September I wrote about Markey’s efforts to push the bill, and to ask the FTC to use its regulatory authority to protect minors in virtual spaces in the meantime, especially from the use of “dark patterns” meant to algorithmically manipulate users. — Derek Robertson
Stay in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Steve Heuser ([email protected]); and Benton Ives ([email protected]). Follow us @DigitalFuture on Twitter.
Ben Schreckinger covers tech, finance and politics for POLITICO; he is an investor in cryptocurrency.
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CORRECTION: This newsletter originally misspelled the name of Tuvale foreign minister Simon Kofe.
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