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This week: The international art fair Art Basel becomes a hotspot for the metaverse and Web3, Tether rankles more regulators, Elizabeth Holmes shares some harrowing details while testifying in the Theranos fraud trial, and Twitter itself gets a jolt from the sudden departure of CEO Jack Dorsey.

Web3, the metaverse and NFTs invade Art Basel

“If I weren’t already familiar with Art Basel, based on my twitter feed I’d think it was a VC conference with a quirky name,” tweeted Ashley Mayer, former communications vice president for Glossier.

That about sums it up. The international art fair, held each year in Basel, Switzerland, Hong Kong and Miami, became the event to be seen at for people in the NFT/metaverse/Web3-art movement. Held in the U.S. from Dec 2 through Dec. 4, Art Basel was so popular with tech industry types this year that flights from San Francisco to Miami apparently sold out.

Emma-Jane MacKinnon-Lee, founder of Digital Ax and a pioneer in the budding metaverse fashion industry, ended up taking a train 4,800 miles to get to the art fair because she wasn’t able to get a plane ticket. (We caught up with her while she was on her long journey and profiled her Web3 ambitions.)

The influx of crypto enthusiasts and Silicon Valley types didn’t go unnoticed amongst the usual crowd of artists, celebrities and socialites, both on Twitter and at the real life event.

Art Basel this, Art Basel that,” financial industry humor account litquidity quipped. “Where tf is the art? I’ve only heard people talking about inflation, stocks and crypto smh”.

More trouble for Tether

Tether, a stablecoin worth $74 billion, is purportedly pegged to the U.S. dollar and backed by reserves — two factors that have helped support its valuation. It has faced some scrutiny, though, over concerns that maybe it’s not as “stable” as it proclaims. 

The company is currently barred from doing business with anyone in New York under a settlement reached with state Attorney General Letitia James over allegations that the company’s digital coins did not in fact have any reserves backing them for a certain period of time. Questions were also raised in the probe about Tether being used to manipulate markets for other cryptocurrencies, namely bitcoin.

This past week, the U.S. Securities and Exchange Commission rejected a request to create a bitcoin ETF (one of many attempts to establish one) in part based on questions about possible manipulation spurred by Tether. News of the rejection uncorked numerous concerns on Twitter about Tether possibly being a giant fraud. (It appeared unlikely to many observers that Tether actually has backing for the $70+ billion market cap of its coins.)

Once this toilet has been flushed & the shill influencers delete their accounts, Tether implodes, and shitcoins go to zero, I may regain confidence in this space,” a crypto account called Mr. Whale, with 386,700 followers, tweeted. “Assuming we follow the trend of the 2000s dot-com bubble, I believe we’re destined for greatness in the long-term.”

Elizabeth Holmes testifies…and it is unsettling 

It is unusual for a high-profile defendant in a criminal fraud case to testify during a trial. Most defense lawyers will caution strongly against such a move. It is, after all, the prosecutor’s job to prove guilt. A defendant has no responsibility for “proving” his or her innocence. Taking the stand is a risk.

But Elizabeth Holmes, the founder and former CEO of Theranos, rolled the dice and testified in her defense. Facing as long as 20 years in prison if convicted of deceiving investors in the blood-testing startup, Holmes told jurors that she was a victim of controlling behavior and abuse by her much-older former boyfriend and Theranos president Ramesh “Sunny” Balwani.

As evidence, she showed the court a hand-written schedule she had made for herself in consultation with him, which sent Twitter into spasms of shock and horror. 

Written on a piece of stationery from Raffles The Plaza Singapore, it began at 4am with “rise & thank God.” It included references to low-calorie meals like a “banana, whey” for breakfast, “salad w/ tofu” for lunch and “broccoli w/ quinoa” for dinner. (She misspelled both banana and broccoli.)  It also included comments like: “I do everything I say — word for word,” and “I am never a minute late.”

People who brag about how much they work are usually con artists,” commented Bram Cohen, author of the BitTorrent protocol and founder of blockchain transaction platform the Chia Project. “But I wonder: Do they actually put in the hours they claim? What do they spend all that time doing?

No idea. But we, for one, are not convinced creating a successful company requires waking up at 4am, never being a “minute late,” and borderline starving yourself.

Goodbye Jack. Hello, Parag. 

Perhaps the biggest splash on Twitter over the past week was the sudden departure of Jack Dorsey, the site’s co-founder and former CEO. Dorsey, who is still serving as CEO of payment company Square (now renaming itself “Block”), said in a tweeted resignation email that he’s “worked hard to ensure this company can break away from its founding and founders.” 

Parag Agrawal, the company’s former CTO, became CEO effective immediately. 

Deep gratitude for @jack and our entire team, and so much excitement for the future,” he tweeted. “Thank you all for your trust and support.”

Because Twitter can obviously not handle this momentous occasion without trying to stir up a firestorm, Agrawal was immediately subjected to a wave of scrutiny from users over a comment he tweeted 11 years ago.

"If they are not gonna make a distinction between muslims and extremists, then why should I distinguish between white people and racists,” he tweeted in 2010, quoting comedian Aasif Mandvi.

The controversy died as quickly as it was raised, however, after media personalities pointed out that the comment was sarcastic. It was “a joke about absurd stereotypes, not a factual statement,” tweeted CNN reporter Andrew Kaczynski.

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