Whatever happened to Jack Mallers? Three years ago, he was on top of the Bitcoin world when he took to the stage at Bitcoin 2021 to introduce El Salvador’s Nayib Bukele as the world’s first president to legalize bitcoin as legal tender.

And his star continued to rise. The following year, his keynote speech at the same event attracted a huge audience, and Google searches for his name soared when he boasted about NCR, Blackhawk, and Shopify integrations that would supposedly allow McDonald’s, Walgreens, Starbucks, and Walmart to accept bitcoin payments in-store.

“You’re going to be able to walk into a grocery store, to a Whole Foods, to Chipotle. You want to use a Lightning node over Tor? You do that.” To even more applause, he broadcasted a demo of him buying a soda at a Chicago market with a private bitcoin transaction.

By September 2022, Strike, his marijuana dispensary payment provider-turned CashApp competitor, had raised $80 million with Grant Gilliam’s Ten31, one of the most prestigious Bitcoin investment funds, leading the round.

Inevitably, however, fame fades.

Read more: Bud to Bitcoin: How Strike’s Jack Mallers stumbled from cannabis to crypto

The spotlight swivels away from Jack Mallers

Despite three years as a keynote headliner at Bitcoin’s largest annual event, Mallers was conspicuously absent from Bitcoin 2024.

In fact, his name rarely comes up in mainstream crypto media anymore. 

Not only that, Strike hasn’t announced major partnerships this year. Instead, its app added basic limit orders, boasted of a $35,000 pilot program, rolled out support for tax havens, lowered fees, added 2-factor authentication, and increased services for various countries including the UK.

In addition to an underwhelming 2024, Strike failed to live up to Mallers’ commitments from prior years. Despite his 2021 pledge to be bitcoin-only, Strike continues to use tether (USDT) in various African countries and despite a promise he made in 2022, US residents don’t use Strike to pay for groceries or meals at Whole Foods or Chipotle. 

By 2023, Mallers seemed to have learned his lesson about grandiose promises, tempering his announcements to a new office opening in El Salvador and improvements to the Strike app. He hasn’t reneged on those unusually conservative promises.

Of course, given Strike’s cash position and ease of fundraising, Mallers’ high net worth, and years of goodwill earned among venture capitalists and Bitcoiners, he could certainly surge back to prominence in future years.

For now though, and for whatever reason, Mallers has taken a step away from his mainstream media tour.

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The post What happened to Jack Mallers and Strike? appeared first on Protos.

On Tuesday, Jack Mallers’ Bitcoin-focused payments app Strike responded to a media inquiry about a customer database breach, saying, “There’s no evidence that Strike was breached.” However, within minutes, crypto researcher ZachXBT had posted evidence of the breach in a Telegram channel, and within hours, Strike admitted to customers that its email list was indeed breached by a third party.

The incident isn’t the first time that Strike and its CEO Mallers have misled the public about the reality of the company’s operations. 

Mallers promised, for example, that customers would be able to use Strike to pay for everyday purchases in bitcoin at Walmart, McDonald’s, Walgreens, and Starbucks. This simply never happened.

Then in 2021, Mallers demonstrated international workers sending a USD remittance in their Strike account. In fact, for months, Strike was secretly representing Tether as USD to customers in its app.

Good thing Tether’s peg held $1 until Strike disclosed the full truth. Nowadays, it’s stopped using Tether, anyway.

Too bad customers thought they had real USD all along. On their behalf, and without their consent, Strike previously used Tethers to back the USD balances that it represented as USD to customers.

The email breach at Strike was real

In a statement to crypto publication The Block, Strike initially denied ZachXBT’s allegations of a major data breach. The breach, ZachXBT alleged, exposed private email addresses customers had used to register with Strike.

Evidence soon surfaced.

Strike customers started receiving scam emails sent to a dedicated email address that they used only to sign up for Strike. Phishing emails used well-known brands in the crypto industry, such as Etherscan and OpenSea.

Another phishing attack played off of the idea that some beginners might not know how digital assets work. It suggested that users could only confirm a transaction if they clicked through to a phishing site.

Read more: Bud to Bitcoin: How Strike’s Jack Mallers stumbled from cannabis to crypto

Anonymous investigator ZachXBT posted evidence of the breach on a Telegram channel. The evidence included the above claims, which suggested that the scam emails would only have happened if Strike had actually suffered a data breach.

The curious history of Strike

Jack Mallers was born into wealth and enjoyed family connections to the highest tiers of Chicago finance. His original startup, Zap, rotated through business models like Colorado cannabis payments and white-labeled Bittrex services.

When El Salvador announced bitcoin as legal tender, Mallers tried to earn a government contract for Strike. He lost to Chivo, a South American competitor.

Zap eventually pivoted to developing Tether, Bitcoin, and Bitcoin Lightning Network-based functionalities. It launched Strike API in 2021. Twitter integrated its API to provide a Bitcoin Lightning Network-based tipping option, which has failed to gain much traction. As Elon Musk purchased Twitter, Musk made his intentions clear to opt for Dogecoin.

Unfortunately, researcher ZachXBT has forced Mallers and Strike to backpedal yet again. Despite the company’s initial claim that “there’s no evidence that Strike was breached,” there was plenty of evidence. Indeed, Strike was breached.

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The post Jack Mallers’ Strike denied an email breach that definitely happened appeared first on Protos.

Crypto payments processor Wyre was forced to limit withdrawals at the beginning of this year but was able to resume operations after receiving an undisclosed amount of funding from a mystery investor. Wyre has never disclosed why the withdrawal limits were needed.

This injection of funds came a few days after Stephen Cheng was elevated to interim chief executive officer (CEO) after previously serving as chief risk officer (CRO) and chief compliance officer (CCO). Last month, Cheng was promoted to permanent CEO. Previously, he was CCO at Prime Trust.

Wyre’s valuation peaked when Bolt, a checkout application, decided to purchase the business for $1.5 billion. However, the deal eventually fell apart for undisclosed reasons.

Twitter users have recently reported that Binance US is using Wyre and Lead Bank in Missouri to accept deposits. Wyre’s current CCO, Steven Huynh, was previously head of compliance for Binance US.

Wyre had previously partnered with Binance in order to offer BUSD as part of its checkout product.

In an attempt to understand Wyre’s position in the cryptocurrency ecosystem, Protos has attempted to look into the corporate structure of Wyre and discovered some strange details.

Read more: Binance controlled its US arm’s bank accounts for two years: Reuters

What is Wyre?

Wyre is a San Francisco-based company that has been active around the world. In 2017 it acquired Remitsy as part of its push into the Chinese market and opened a new Beijing headquarters. Former Remitsy CEO Richard Bensberg would serve as a director in Beijing for about two years before leaving and joining Blockstream, according to LinkedIn.

Wyre’s support documents list the banks it’s able to work with in China and says, “Wyre can deliver your payments to most major Chinese banks.”

One of the founders is Australian Michael Dunworth who was in line to make over $200 million in the Bolt deal before it fell to pieces. He founded Wyre along with Ioannis Giannaros, who he met in Silicon Valley.

Giannaros was the firm’s CEO until he transitioned to executive chairman to allow Cheng to step up as CEO. This move was announced on January 7 this year.

However, corporate filings suggest that Giannaros didn’t leave the role at that time. Wyre Payments Inc — the entity that holds the money transmitter licenses in the United States — filed its annual corporate report in Florida near the end of February. This listed Giannaros as CEO, president, director, and secretary of the corporation. It’s not clear why he was still listed as CEO after he’d supposedly stepped aside.

Furthermore, Giannaros still holds important positions in a wide variety of other corporate entities that appear to be important for the company.

The company’s privacy policy references Wyre Europe Ltd., which is an entity that was registered in the UK with Giannaros as the only officer. Confusingly, it appears to have been dissolved on May 9 of this year.

Its user agreement also references Wyred OÜ as one of its affiliates. This is the entity that users in the European Union are told to contact. Based in Estonia, it lists Giannaros as the ultimate beneficial owner but is also in liquidation, with the liquidator named as Alexander Urmas Vest. Estonian newspaper Postimees reported several years ago that Vest also goes by the name Urmas Sääsk and was previously convicted of fraud.

Giannaros also remains the sole director of Wyre Payments PTY LTD, the Australian entity referenced in the user agreement, according to corporate filings reviewed by Protos.

Why does it matter?

Wyre is still an active payment processor in use by cryptocurrency companies, yet its legal terms reference one company that’s dissolved and another that’s liquidated. Wyre’s main entity in the US still lists as CEO someone who supposedly stepped away from the position.

Wyre has yet to disclose why it had to institute withdrawal limits, who provided the funding that allowed it to remove the withdrawal limits, and why the legal documents on its website include a web of different entities in various states of use or decay.

Wyre claims in tweets that it “operates with transparency” but the reality seems vastly different.

Protos has reached out to Wyre with further questions and will update if we hear back.

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Software engineer Tobi Ojuolape has published a method for making very large payments using Bitcoin’s Lightning Network. He recommends Lightning nodes upgrade to support atomic multipath payments (AMP).

This new specification would split a large payment, routing the full amount via multiple channels. However, the transaction would remain atomic, in other words, “indivisible and irreducible.”

An atomic transaction is all-or-nothing, guaranteeing that either all money settles or else nothing settles. Atomicity prevents the sender from losing any part of their bitcoin if any particular route fails.

Ojuolape’s AMP proposal is unexpected because the Lightning Network primarily handles small payments. Historically, research into large, Lightning payments has been neglected.

A brief introduction to Bitcoin’s Lightning Network

Lightning is the most popular scaling layer for Bitcoin. Scaling layers use the base (Layer 1) blockchain but also contain additional functionality. Collectively, scaling layers are known as ‘Layer 2s.’

• Lightning requires opening and funding a payment channel on-blockchain that can subsequently manage transactions off-chain.
• Lightning nodes connect to one another, forming a mesh network with various amounts of liquidity between all participants.
• Coins route across the network, with each node charging a very small fee for routing payments.
• The end result is a cheaper, faster routing of bitcoin payments. 
• Trade-offs include security and decentralization, as Lightning transactions are not guaranteed by Bitcoin’s blockchain until users exit the network and settle on-chain.

Atomicity: How to safely send large payments via Lightning

Again, most Bitcoiners might view a technology to send a large payment via Lightning as counterintuitive. Why, they would ask, would anyone bother to use Lightning when a Layer 1 Bitcoin transaction would accomplish the same thing?

The vision for Lightning, however, is to expand Bitcoin as a financial system for the entire world’s population. Because Lightning routing fees are so much cheaper than Bitcoin’s base layer, the network could serve day-to-day needs for any amount of money, no matter how small or large.

From near-$0 as recently as 2019, Lightning now boasts over 17,000 nodes, 79,000 payment channels, and $150 million in capacity.

If this growth trend continues, Lightning will need a safe solution for routing large payments. Hence, Ojuolape’s AMP proposal.

Read more: Bitcoin Core developer proposes new type of pruned node

Bitcoin atomic multipath payments (AMPs)

LND v0.13.0-beta has introduced support for Atomic Multipath Payments. LND is one of the three most popular implementations of Lightning alongside Éclair and Core Lightning. Developers previously proposed and developed other protocols for multi-path payments, but AMP is the first to include atomicity.

AMPs add a new feature requiring atomicity. In other words, either all or zero payments must transmit; no partial execution of the transaction is allowed. If any payment as specified by the AMP sender does not settle, then nothing settles.

Atomicity avoids the risk of partial payments. While not a big deal when paying for a cup of coffee and losing a few cents, atomicity is critical when sending millions of dollars when that change could be worth many thousands of dollars.

Multipath payments eliminate the need to find a single channel with a large enough capacity to route the entire transaction. On an atomic basis, AMPs would raise the maximum size of a Lightning transaction from 14 bitcoin today into the thousands.

Read more: Bitcoin dev has fix for Lightning’s existential problem — offline payments

Atomic multipath ensures the whole payment gets through

Without multipath payments, sending bitcoin over the Lightning Network requires finding a single channel with sufficient capacity to route the entire payment if the sender does not want to trust multiple node operators.

Adding atomicity to multipath payments increases the security of this transaction by guaranteeing that the entire transaction settles, all at once.

Like all Lightning transactions, nodes supporting AMP would determine the best route for each data packet, ensuring that the full quantity reached its intended destination. This function reduces the risk of network congestion. Through AMP, senders can feel more secure about sending large payments without trusting too many node operators.

Tobi Ojuolape has described AMP as a method for making large Lightning Network payments without needing to find a single channel with sufficient capacity. Unlike other methods for multipath payments, atomic multipath payments ensure that the entire payment gets through without the risk of any lost change or partial payment.

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NSFW internet stars say they’re relying on crypto to make a living after mainstream finance companies started terminating their accounts.

Adult performers believe that corporate America is shunning their industry and refusing to take them seriously, despite their content bringing in upward of $10 billion per year, reports the New York Post.

Financial giant Wells Fargo reportedly sent letters, dated August 25, to a raft of content creators, informing them that their accounts were to be closed. What’s more, the company gave no reason for the closures beyond saying that it “performs ongoing reviews of its account relationships in connection with the Bank’s responsibilities to manage risks in its banking operations.”

In order to continue to operate their businesses, a number of these performers say they’ve registered with a website called WetSpace, a platform that operates in a similar fashion to OnlyFans but processes payments in cryptocurrency.

The site currently accepts eight different coins, namely Avalanche, Tether, USD Coin, Ether, Binance Coin, MATIC, BUSD, and Dai.

Speaking to the Post, former nurse and WetSpace founder, Allie Rae said: “We are not at the mercy of the banks, because we are crypto and do not answer to them, therefore we do not have that threat hovering over us,” (our emphasis).

She also says that the site provides anonymity to users due to the fact they don’t have to use a credit card to sign up and view content. This, Rae says, “has proven to be of great value to this audience.”

Read more: OnlyFans founder prepares to ride the NFT wave hard

The banks’ assault on the adult industry is just the latest hurdle that performers have had to overcome.

Last year, OnlyFans threatened to shut down NSFW content amid concerns from payment processors (the company eventually changed its mind and continued to host the disputed content), and just last week, Instagram nixed the account belonging to pornography streaming site Pornhub.

This is despite, says Pornhub, it not breaking any of the Meta-owned platform’s rules around nudity or sexual content.

For more informed news, follow us on Twitter and Google News or listen to our investigative podcast Innovated: Blockchain City.

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