Monthly Archives: February 2022

Catalytic convertor theft is costly and increasing | Letters To Editor | santafenewmexican.com – Santa Fe New Mexican

Posted: February 11, 2022 at 6:23 am

After having a catalytic converter stolen from my vehicle a couple of months ago, one sentence in a recent article about drug-related arrests (Police: Drug trafficking arrest surge a collaboration by agencies, Jan. 30) caught my eye: The drug trade is constantly evolving with many crimes inspired by or connected to it. When we talked to the Santa Fe County Sheriffs deputy who investigated this theft, he told my wife and me thefts of this nature have increased significantly across the county and city of Santa Fe over the past few months.

This is an expensive problem (more than $1,600 in our case) that has affected many people in our community, and I do believe that this whole business of drug trafficking and the fencing of catalytic converters for the precious metals they contain are part of the same underworld syndicates. Hopefully, our law enforcement agencies can expand their collaborative efforts to crack these rings.

While many may know that February is Heart Month, they might not know many people in the United States also commemorate Congenital Heart Disease Awareness Week from Feb. 7-14. And Feb. 14 is not just Valentines Day it also is Congenital Heart Disease Awareness Day. For the more than 2.5 million Americans who were born with a congenital heart defect, this day and week are a crucial time to spread awareness about the importance of congenital heard disease care throughout the entire lifespan.

As a parent of a son navigating adulthood with congenital heard disease in New Mexico and as a doctor who specializes in treating adults with congenital heard disease, we want everyone to know that heart defects are the most common type of birth defect in the United States, affecting approximately 1 in 100 births. As most children receive congenital heard disease treatment and live to adulthood, a growing population of adults with heart defects need ongoing specialized cardiac care.

While this is great news, the sobering fact is that despite the recent increase in the number of adult congenital heard disease clinics in the United States, only a fraction of patients are seen in specialized centers fewer than 10 percent of the nearly 2 million adults with congenital heard disease. The Adult Congenital Heart Association is a nonprofit whose mission is to empower the congenital heard disease community by advancing access to resources and specialized care. This month, join us and our association in spreading awareness about adults living with congenital heard disease and the specialized treatment they need to live a full life.

ACHA medical advisory board chair

The public has constitutional rights, through the Fifth Amendment and 14th Amendment due-process rights to maintain the existing locations of Galisteo Road north and south of Zia Road. The preliminary development plan from Zia Station LLC approved in April of 2021 and city Resolution 21-089 propose to donate Galisteo Road to developers to build on. They propose and approve doing this because the development requires a new location of the road to solve traffic volume increase, and the developer requires land to build high-density commercial and residential architecture to make money. I believe the city cannot move the road to serve private interests, which is exactly what they have approved doing.

One would think after two years of the coronavirus pandemic and reams of data available, the governor would be better informed and journalists more critical of her recent decision to continue the mask mandate. Only nine states remain with a mask mandate, and in the most recent seven-day average of new cases (as reported and found easily in the New York Times), they rank as follows (the lower the ranking, the higher the case counts): Washington, 14; California, 15; New Mexico, 17; Oregon, 18; Hawaii, 21; Nevada, 35; Illinois, 42; Delaware, 44; and New York, 46. If mask wearing helped, you would expect these states to be clumped in the 35-50 rank level.

I believe data suggests there is no evidence of the mitigating benefit of wearing masks. While the harm for us adults is marginal, we shouldnt ignore the negative effects on childhood development, as is now beginning to be seen. As anyone who has dined out recently knows, the Kabuki restaurant mask dance is comical and amusing but obviously not effective.

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Catalytic convertor theft is costly and increasing | Letters To Editor | santafenewmexican.com - Santa Fe New Mexican

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The Man Who Cracked the Code of L.A.s Notorious Sheriff Gangs – New York Magazine

Posted: at 6:23 am

Photo: Stewart Cook/AFP via Getty Images

John Sweeney, a 70-year-old civil-rights attorney from Los Angeles, doesnt have the name recognition of Ben Crump, who has represented the families of Trayvon Martin and George Floyd and appears, Zelig-like, seemingly whenever there is a major police shooting. Nor does Sweeney much resemble Johnnie Cochran, a mentor to the young Sweeney when they worked together at the Los Angeles County District Attorneys Office in the late 1970s. He was a real peacock, Sweeney remembered recently. I mean, whats the last time you see somebody at the DAs office driving a Rolls-Royce? Sweeney who is tall, walks with a careful grace, and has freckled skin, a thin mustache, and closely cropped hairis more like the Atticus Finch of the world of police-misconduct litigation: a gentleman who is brutally effective.

Sweeney has built his career, as well as a sizable fortune, on exposing violent gangs that reside on the other side of the thin blue line within the Los Angeles Sheriffs Department.These deputy gangs, as they are known, have been accused of hunting down Black men and framing the victims as instigators. In 2020, the Los Angeles County Board of Supervisors estimated that legal settlements related to deputy-gang misconduct have cost taxpayers $55 million. Im not saying this in a self-aggrandizing fashion, Sweeney said in November, but $30 million of that $55 million have been my verdicts and settlements against the Los Angeles County Sheriffs Department just in the last seven or eight years.

I feel that Ive accomplished what I wanted to accomplish get this out in the open, Sweeney told me. If history remembers my 40-year career, I hope its because my work began eradicating deputy gangs from the department.

The deputy gangs have long been a problem, but Sweeneys campaign was rooted in events that took place the night of August 25, 2016. A pair of deputies with the Los Angeles Sheriffs Department pulled their patrol vehicle to a stop in front of 401 North Wilmington Avenue in downtown Compton, a gray stucco building housing Flamingos Beauty Salon and Gonzlez & Luis Lawn Mower Shop & Repairs. Mizrain Orrego was at the wheel of the black-and-white unit, and Samuel Aldama was in the front passenger seat. About one month earlier, the New York Times profiled the two deputies for a piece about the perils of policing Compton, made famous by violence and gangster rap. As Aldama and Orrego approached a group of young people outside what they claimed was a hangout for the South Side Compton Crips, Orrego told the reporter, Every time you get three of these guys together, you know they have a gun somewhere. Yet while the deputies boasted that they had seized 18 guns from the streets during a nine-week period, they admitted they found no weapons when the reporter rode along with them on their shift.

On that late August night, the pair spotted Donta Taylor, a 31-year-old Black man, wearing a red hat with the letter C on the front on North Wilmington Avenue, an area controlled by the Cedar Block Piru gang. Aldama and Orrego asked Taylor if he was on probation or parole. No, Im not, Taylor said and then, according to the deputies, drew a semiautomatic, stainless-steel handgun and ran. The deputies radioed in a 417 person with a gun and gave chase on foot. Three minutes later, Aldama and Orrego cornered Taylor as he emerged from a hole in the fence that encloses a dirt path by the Compton Creek. Orrego said Taylor pointed a gun at him, and Orrego fired three shots in response. Hearing the gunshots, Aldama fired approximately ten to 12 more rounds at Taylor, who Aldama said was holding something in his chest area. Orrego fired two or three additional rounds at Taylor and saw him fall to the ground. An autopsy determined that Taylor had six gunshot wounds to his upper- and lower-right extremities and his left lateral back.

But contrary to the deputies claims, Taylor did not have a gun. There was not a gun anywhere on his person, near his body, or at the scene of his killing. And there was seemingly no purpose for the stop; Taylor was not a suspect in a crime, nor had he committed one. Taylors family said he simply encountered Aldama and Orrego as he was walking to a nearby market. Grieving and shell-shocked Taylors parents were celebrating their wedding anniversary the night he was killed the family turned to Sweeney, who held a press conference that October announcing a $50 million claim against Los Angeles County. The story the deputy sheriffs came up with is fabricated. It is a lie, and we will prove that, Sweeney said. No gun was found because there was no gun.

In April 2017, Sweeney sued the LASD on behalf of the Taylor family, claiming assault and battery, negligence, wrongful death, and civil-rights violations. An August 2017 review of the fatal shooting by thenLos Angeles County district attorney Jackie Lacey admitted that it appears that Taylor was unarmed at the end of the foot pursuit because there was no gun located in the area of the shooting and that it was evident Taylor was not armed at the time of the shooting and Orrego was mistaken. Nonetheless, the DAs office concluded that the available evidence is insufficient to prove beyond a reasonable doubt that Aldama and Orrego did not act in self-defense and the defense of others. The case was closed.

Though no criminal charges would be brought against the deputies, Sweeney continued litigating Taylors civil case. Taylor, it was a hunt for an animal, Sweeney told me. It just reminded me of a hunt for an animal through the wilds of Africa. During the discovery process in the spring of 2018, Sweeney learned that Aldama and Orrego nearly killed another Black man just months before they gunned down Taylor. On January 15, 2016, Sheldon Lockett, 29, stood outside his grandmothers home in Compton when he was approached by Aldama and Orrego, who were in the area investigating a report of a drive-by shooting. The pair drew their weapons on Lockett, who fled on foot. Aldama and Orrego called out on their radios that Lockett had pulled a gun; then they cornered him in a backyard. When Lockett attempted to surrender, Aldama and Orrego allegedly beat Lockett with their fists, feet, and batons, stung him with Tasers, and called him the N-word.

In a handheld video shot by LASD investigators that I obtained the department didnt begin using body cameras until the fall of 2020 Lockett sits handcuffed in a department vehicle bruised, bloodied, and confused, repeating when questioned, I got my ass beat. Even though no gun was found on Lockett and he hadnt committed any crime, he was arrested and charged with attempted murder. Unable to afford bail, Lockett was locked up in the county jail. About one month later, Locketts mother, Michelle Davis, filed a citizen complaint against Orrego and Aldama. But the LASD didnt investigate or discipline the deputies. Instead, it executed a search warrant on Daviss home, apparently looking for the weapon the deputies claimed Lockett had when he was arrested. Although the LASDs search of the Davis home didnt produce any weapons, Lockett wasnt released from jail until August 2, 2016 an eight-month stint behind bars when the case against him was dismissed for lack of evidence.

The only reason why we got Locketts name was because his mother filed this complaint, Sweeney said. Sweeney contacted the Lockett family and, in July 2018, filed a lawsuit in federal court against Aladama, Orrego, and the LASD, claiming excessive force, false imprisonment, assault, battery, false arrest, and civil-rights violations. In a separate claim, Sweeney alleged the LASD failed to properly hire, train, instruct, monitor, supervise, evaluate, investigate, and discipline Aldama and Orrego.

But while Taylor was killed and Lockett was maimed Sweeney claimed one of the deputies purposefully and violently rammed the end of a police baton in his eye socket neither case received significant media attention. That all changed on July 10, 2018, when the Los Angeles Times published a front-page story about Sweeneys questioning of Aldama during a May 2018 deposition for Taylors case. Under oath, Aldama admitted that he bore a tattoo on his leg of a deputy gang called the Executioners. The tattoo features a skeleton holding a Kalashnikov-style rifle encircled in flames. On the weapons magazine are the Roman numerals XXVIII, which stands for the LASDs 28th substation: Compton. The letters CPT short for Compton are also part of the design. Aldama said that as many as 20 Compton deputies had the tattoo, but he denied that he was part of the gang. He said he was inked for working hard.

A clip of the deposition in which Sweeney asked Aldama, Do you have any ill feelings towards African Americans? and Aldama replied, I do, sir went viral on social media. The story was picked up by BuzzFeed and the Daily Mail. (Aldama later said he misunderstood the question and denied having ill feelings toward Black people.) The Los Angeles Times piece featured photographs of Aldamas and Orregos Executioners tattoos taken during the course of the Sweeney depositions over strenuous objections from Aldamas legal team a major victory for Sweeney.

The evidence of Deputy Mizrain Orregos Executioners tattoo was a major breakthrough for Sweeneys case. Photo: The Sweeney Firm

I asked him about tattoos, Sweeney remembers. He lied, said he had them on his arms only. And when he finished describing those, I said, What about the one near your leg? He looked like he had seen a ghost. It was, Sweeney says now, the tattoo that shook the world and broke this whole thing open. In June 2019, the Los Angeles County Board of Supervisors approved a $7 million settlement to the Taylor family, one of the largest legal payouts in LASD history.

The $7 million settlement was followed by a 2020 California Supreme Court decision restoring the full $8 million judgment reversed by an appeals court to the family of Darren Burley, who was killed by Compton deputies in 2012 after they pinned him to the ground, pressed a knee against his neck, put him in a headlock, hit him multiple times with a flashlight, placed him in a hobble restraint, and Tased him. Much of the LASD narrative of the incident was disputed by witnesses including a Compton Fire Department captain who said the deputies did not call for medical help. Later, when Sweeney deposed an LASD whistleblower, he identified one of the deputies in the Burley case as an Executioners member. There is a cancer that has metastasized within the Los Angeles County Sheriffs Department, Sweeney said.

Sweeney comes from a distinguished line of pastors and lawyers. His father, Paul, was an attorney and his mother, Arminta, was, in his words, a southern belle from Georgia. His grandfather Samuel was a pastor at Harlems St. Marks United Methodist Church, which counted Black luminaries such as Sugar Ray Robinson and Paul Robeson as members. My father was from an extremely I dont say that lightly an extremely prominent family in New York City, Sweeney said. A January 17, 1955, piece in the New York Times headlined Pastor Suggests Tearing Up Evil described Samuel Sweeney inveighing against injustices like school segregation.

When the Sweeney family moved to Los Angeles, they lived in Baldwin Hills, then a haven for the Black upper-middle class. Redd Foxx, Tina Turner, and Ray Charles were neighbors. You can see how I was raised, he said. And it speaks volumes about why I am where I am today. Sweeney was not the only member of his family who rose to prominence: His sister, Joanne Berger-Sweeney, is president of Trinity College in Connecticut. Thats part of the reason Ive always been able to transcend my race because of my upbringing, background, Sweeney said. I can tell stories that other Black people cant tell that neutralize race and take it out of the picture.

Sweeney graduated from the University of Southern California in 1973 and the California College of Law in 1979. After law school, Sweeney was wooed by the Los Angeles County DAs office, where Cochran became first assistant district attorney in 1978. Although it was decades before his famous turn as O.J. Simpsons lawyer, Cochran was already a mythological figure in the Los Angeles legal community. In the mid-1960s, he represented the family of Leonard Deadwyler, a 25-year-old Black man killed by an LAPD officer as he drove his pregnant wife to the hospital. Deadwylers death, which was ruled an accidental homicide by a jury, received extraordinary attention, the case being the first legal proceeding in California to be broadcast on live television.

In June 1966, Deadwylers story was the subject of a nearly 5,000-word New York Times story by Thomas Pynchon. The killing of Leonard Deadwyler has once again brought it all into sharp focus; brought back longstanding pain, reminded everybody of how very often the cop does approach you with his revolver ready, so that nothing he does with it can then really be accidental; of how, especially, at night, everything can suddenly reduce to a matter of reflexes: your life trembling in the crook of a cops finger because it is dark, and Watts, and the history of this place and these times makes it impossible for the cop to come on any different, or for you to hate him any less, Pynchon wrote.

Cochran told Sweeney they would tackle police prosecutions together there. But soon after Sweeney joined the DAs office, Cochran left to go into private practice and urged Sweeney to come with him. He said, John, will you come work for me? Sweeney remembers. I said, Bye-bye, DAs office. Because he was litigating civil cases, Cochran was freed from the legal systems high standards for prosecuting the police in criminal court, and there were huge courtroom wins and monetary awards. In 1981, Cochran represented the family of Ron Settles, a 21-year-old Black college-football star who died in the custody of the Signal Hill Police Department. An initial autopsy concluded that Settles died by suicide at the jail, but a coroners jury found that Settles died at the hands of another. Cochran sued the department, and in 1983 the lawsuit was settled for $1 million an enormous amount at the time. Sweeney sat at the feet of the master trial attorney, said Priscilla Ocen, a law professor at Loyola Law School and a member of the Sheriffs Civilian Oversight Commission.

The string of successes under Cochran inspired Sweeney to strike out on his own, and he founded the Sweeney Firm in Beverly Hills in 1985. By the early aughts, it had racked up a series of big wins in torts, civil-rights, and criminal cases. Perhaps his most significant police-misconduct case involved the June 2000 shooting of Charles Beatty, a 66-year-old Black man, by a pair of LAPD officers who were angered that Beatty pulled around them at a traffic light. In 2002, a Los Angeles Superior Court jury awarded Beatty, who was shot four times in the back and had a bullet stuck in his spine, $2 million. One of the officers pleaded no contest to a felony charge of shooting into an occupied vehicle and was sentenced to five years in prison, a rarity in police-shooting cases. Ive never seen anybody have more command of the courtroom than John, said Steve Glickman, an L.A. attorney who has served as co-counsel and expert witness for Sweeney.

It would prove to be a life-changing year for Sweeney far beyond the historic Beatty case. In 2000, the Compton City Council disbanded its police department and replaced it with an LASD contract. It was meant to be a milestone for police reform driven by high homicide rates, gang violence, and most important, rampant misconduct and corruption by the Compton police, which brought the city unwanted international attention thanks to the anti-police anthems of N.W.As Straight Outta Compton. From my understanding, they were excited about the opportunity to come into Compton, said Aja Brown, Comptons mayor from 2013 to 2021. It was one of their largest contracts that they had at the time.

But reform quickly proved illusory. At around midnight on June 26, 2001, a Compton sheriffs deputy stopped a van that was leaving the area of a burglary. A Black woman named Shanara Batiste pulled her car up to the scene, saying that the vehicle was her cousins and that he hadnt done anything wrong. Things escalated from there, and Batiste ended up being slammed onto the hood with such force that she was left with two broken teeth and a broken jaw. In 2003, Sweeney obtained a $375,000 settlement for Batiste.

On July 5, 2009, Compton deputies stopped 16-year-old Avery Cody Jr. with a group of friends outside a McDonalds. When the deputies ordered him to raise his shirt to check for weapons, Cody panicked and ran. Deputy Sergio Reyes gave chase and shot him to death. Reyes said Cody was armed and took cover behind a newspaper rack to defend himself. Codys family was skeptical of the story and hired Sweeney. Sweeney obtained surveillance video from a nearby store showing that Cody was holding a cell phone, not the revolver deputies said they recovered. Surveillance tape also showed Cody running from Reyes, not ducking behind a newspaper rack. The surveillance camera has them walking past the camera coming from McDonalds back home, Sweeney remembers. Then about, oh, a minute and a half later, you see little Avery running back past the camera, back eastbound, and angling out into the street to get away from the cops. And you can see this deputy sheriff chasing him and getting into a crouch and firing and killing him. In 2011, Los Angeles County settled the Cody case for $500,000.

After the case settled, Sweeney got a call from Avery Cody Sr., who had become an anti-police-violence activist in the wake of his sons death: I got a case for you. It involved Robert Thomas Jr., who was shot to death by Compton deputies in what was becoming a familiar set of circumstances to Sweeney. On November 8, 2010, a group of deputies spotted Thomas, 21, standing outside a party they believed was thrown by the Carver Park Compton Crips. He was not committing a crime or suspected in any crime. The deputies said he was acting suspiciously and alleged, with no clear corroboration, that he was a gang member. They went around asking people to lift up their shirts because these gang people they wear these long, pristine white T-shirts that are baggy that go down to your knee, Sweeney said. Thats very important in this whole story. And Robert Thomas Jr. had one on. One deputy asked Thomas to raise his shirt, and he complied. But when another made the same request, Thomas ran. The deputy said Thomas reached for a gun in his pocket, prompting the deputy to fire in response, killing him.

Like the Cody family, the Thomases didnt believe the law-enforcement narrative. Theyre lying, basically saying that my son pulled a gun on them. But you cant pull a gun with your back turned from them and get shot 12 times in the back, Robert Thomas Sr. said. The LASD admitted that Thomas did not fire a weapon but claimed a handgun was recovered at the scene. Thomas, Sweeney found out, was unarmed, and the gun at the scene didnt have his DNA on it. In June 2013, a Compton jury awarded $7.5 million to the Thomas family. We were the first firm to really, really challenge on these cases, Sweeney said. Because not many people were taking these because you couldnt win them. Nobody believed that the cops could lie like this.

Sweeney was establishing a pattern by Compton deputies of questionable stops, claims of a gun, fatal shootings, and framing of victims. Sweeney said he has no evidence that the deputies who killed Cody or Thomas were in a deputy gang, but after these shootings I said, Something is going on. There is a gang out here. We just dont know it. I knew that I had a gang because of the history of deputy gangs within the sheriffs department from the Little Devils and the Regulators to the Vikings to the Jump Out Boys or the Grim Reapers.It stood to reason there was a gang at the Compton station. I just had to prove it.

The strange and sadistic subculture of the deputy gang has been a part of the LASD for more than 50 years. They are often referred to by law enforcement as social clubs or subgroups that engage in proactive policing. But Roger Clark, a former high-ranking member of the LASD who joined a deputy gang called the Little Devils in 1965, wrote in a court filing in the Lockett case, I understood that they were a group of white deputies who were responsible for wreaking havoc with the aggressive policing of largely African American and Hispanic communities.

Clarks contention about the true nature of deputy gangs has been borne out repeatedly in Los Angeles history. On August 29, 1970, Los Angeles Times reporter Ruben Salazar was killed after being struck by a tear-gas canister fired by a sheriffs deputy during an antiwar protest called the National Chicano Moratorium Against the Vietnam War. The deputy was based at the East Los Angeles station, which had adopted a Fort Apache logo featuring an image of a boot with a riot helmet and the phrase Siempre una patada en los pantalones, Spanish for Always a kick in the pants. The logo was later removed, but the East Los Angeles station has been the home of the Banditos deputy gang for decades.

In the early 1990s, a group of residents in Lynwood, a city in Los Angeles County patrolled by the LASD, filed a federal civil-rights lawsuit claiming they were subject to excessive force and warrantless arrests by deputies in the Vikings deputy gang, who engage in racially motivated, anti-black, white-supremacist hate crime activities, use racist speech, and glorify and celebrate the use of excessive force and other official misconduct by deputies. One plaintiff said he was kicked in the face, choked into unconsciousness twice, and Tased by a group of deputies who told him, Yeah n - - - - -, you aint got no rights. We are going to make sure you dont ask any more questions! A federal judge in the case referred to the Vikings as a neo-nazi, white supremacist gang. The LASD settled the case in 1996 for $7.5 million.

The Kolts Report, compiled in the aftermath of the 1992 riots over the exoneration of Rodney Kings police assailants, devoted a chapter to deputy gangs. The report said certain cliques were found particularly at stations in areas heavily populated by minorities the so-called ghetto stations and deputies at those stations recruit persons similar in attitude to themselves. But the authors stopped short of classifying them as gangs: The evidence does not conclusively demonstrate the existence of racist deputy gangs.

In the aughts, an explosion of federal lawsuits and ACLU reports came in response to brutal acts committed by deputies at the Mens Central Jail in Los Angeles County. These included the so-called 3000 Boys, who worked in the jails 3000 block, the site of a 2008 uprising by incarcerated people that was violently crushed by deputies. This is the kind of stuff you imagine seeing in Saddam Husseins Iraq, said one attorney. The victims were eventually awarded more than $5 million in attorneys fees.

In a 2012 report from a Los Angeles County commission, the 3000 Boys who have tattoos with the Roman numeral III on their calf area were described as highly resistant to supervision and involved in an unusually high number of force incidents. Because LASD deputies often start their careers at the Mens Central Jail dubbed a dungeon by the current sheriff the 3000 Boys can be an entry point into the violent world of deputy gangs. Aldama worked as a guard on the 3000 block and, according to a 2014 lawsuit, allegedly pinned a prisoner to the ground while other deputies beat, Tased, and pepper-sprayed him. (A use of force report prepared by Aldamas supervisor said Aldama simply used handcuffs and a knee in the back to bring a non-compliant prisoner under control.) In 2019, an alleged member of the 3000 Boys killed Ryan Twyman, who was shot at more than 30 times as he sat unarmed in a car with a friend.

Still, deputy gangs remained largely unknown in Los Angeles except among minority communities, their victims, and civil-rights attorneys like Sweeney.

If Sweeneys depositions of Aldama and Orrego thrust deputy gangs into the spotlight, his questioning of an LASD whistleblower, Deputy Austreberto Art Gonzalez, supercharged the story.

At about 6 p.m. on June 18, 2020, Deputies Miguel Vega and Chris Hernandez saw Andres Edgardo Guardado Pineda, 18, speaking to someone in a car blocking the entrance to an auto-body shop in Gardena, a small city south of Los Angeles. Investigators said Guardado then produced a handgun and fled, and deputies gave chase. When the deputies reached Guardado, Vega shot and killed him.

A Guardado family lawsuit filed claimed that Vega, without provocation or justification, and with willful and conscious disregard, fatally unloaded, at least six shots at Andres back.The manager of the auto shop near the site of the shooting said that the deputies shot Guardado several times in the back and that other deputies later removed several of his security cameras. An independent autopsy concluded that Guardado was shot five times in the back; Vegas attorney has said his client shot Guardado in self-defense.

That August, Sweeney deposed Gonzalez, a Marine Corps combat veteran who worked at the Compton station five and a half years, as part of the Lockett case. Gonzalez said Vega and Hernandez were Executioners prospects. Gonzalez explained that such prospects are described as chasing ink and that they get inked oftentimes after a shooting. He said deputy gangs hold 998 parties after a shooting. Some people say its to celebrate that, you know, the deputys alive, he said, and others believe its, you know, to celebrate that, you know, theyre going to be inking somebody. He said deputies radio in false reports of a weapon in order to justify use of force. We call it a ghost gun because it never existed, Gonzalez said.

I now call them a gang, he said of the Executioners. Because thats what gangs do they beat up people. Their focus is not this job. Their focus is this group.

In September 2020, Gonzalez filed a lawsuit against the LASD claiming he was retaliated against for whistleblowing. Gonzalez alleged that Compton station deputies become inked as Executioners after executing members of the public, or otherwise committing acts of violence in furtherance of the gang. Gonzalezs attorney said that when his client called a confidential tip line for internal affairs at the LASD, the call was leaked to the Executioners and graffiti was scrawled at the Compton station parking lot reading, Art Is a Rat.

Vega did not appear at the Los Angeles County coroners inquest into Guardados death in November 2020; instead, he submitted a declaration saying he would invoke his Fifth Amendment rights if called to testify. Hernandez, Vegas partner, also said he would plead the Fifth. Two homicide detectives investigating Guardados death appeared at the inquest but cited their Fifth Amendment rights and refused to answer questions.

The coroners inquest failed to provide any substantive movement in the Guardado case, but the revelations from Sweeneys depositions of Gonzalez attracted the attention of national politicians and had a radicalizing effect on Los Angeles activists.

It is outrageous that the officers involved in the killing of Andres Guardado are now refusing to testify in the coroners inquest into Guardados death, California representative Maxine Waters said in a statement. It is this type of obfuscation by the LASD that has fueled decades-long outrage and resentment among the communities who find themselves victims of police violence time and time again. LASD has a known history of serious abuses and allegations of misconduct that include racist gangs, the targeting of people of color, and shootings of civilians.

California representative Jimmy Gomez and Maryland representative Jamie Raskin wrote a letter to the U.S. Department of Justice calling for an investigation into deputy gangs. And an activist collective called Peoples City Council Los Angeles, founded just as COVID-19 began its spread in March 2020, started an aggressive campaign to target Sheriff Alex Villanueva and raise awareness about deputy gangs. At a May 20, 2021, meeting of the Civilian Oversight Commission, Ricci Sergienko of the Peoples City Council called Villanueva the lead gang member of L.A. County.

In the fall of 2019, eight deputies at the East Los Angeles station filed a lawsuit in California Superior Court claiming that the Banditos deputy gang who sport tattoos featuring a pistol-wielding, sombrero-wearing skeleton with a bushy mustache maintain a stranglehold on the unincorporated communities east of downtown through a reign of unlawful policing, violence, and intimidation. The lawsuit alleges that one Banditos leader Rafael Big Listo Munoz is protected by Villanueva.

In August 2020, Villanueva moved to fire or suspend 26 people from the East Los Angeles station, including Munoz, who were involved in a 2018 brawl at an event space in which several deputies said they were attacked by Banditos members. We did an investigation at East Los Angeles station resulting in 26 employees either disciplined or terminated, Villanueva told CNN in September 2020. And that means were taking steps forward. But in the same interview, Villanueva insisted, There are no gangs within the department. Lets get that off the table.

In January 2021, departing California attorney general Xavier Becerra announced a civil-rights investigation into the LASD, citing allegations of excessive force, retaliation, and other misconduct as well as a number of recent reported incidents involving LASD management and personnel. A few months later, the Los Angeles County Democratic Party called on Villanueva to resign and said it stood in solidarity with the Guardado family, recognizing the systematic brutality of law enforcement that has continued to shake our county. Leadership and accountability start at the top, and while strides have been made to reform police culture in Los Angeles, its simply not enough.

In July 2021, Waters sent a letter to the U.S. Department of Justice demanding an independent investigation into the Executioners, citing much of Gonzalezs testimony about chasing ink and 998 parties thrown by the Compton station. But the state and federal scrutiny seems to have only hardened Villanuevas resolve: In October, he refused a subpoena to testify before a Civilian Oversight Commission hearing on deputy gangs. Villanueva has become a regular on Tucker Carlsons show, railing about everything from his refusal to enforce COVID-19-vaccine mandates to woke DAs like Los Angeles County DA George Gascn, a reformer who defeated Jackie Lacey, the Los Angeles DA from 2012 to 2020 who didnt charge a single officer for an on-duty shooting despite the fact that more than 400 people were shot by law enforcement during her tenure.

In November 2021, a judge dismissed Gonzalezs lawsuit. Villanueva celebrated the decision with a tweet reading Google this, a reference to the Peoples City CouncilsGoogle LASD Gangs social media campaign. Gonzalezs attorney said he is appealing the decision. The judge refused to permit discovery with respect to The Executioners gang, Al Romero said, which along with his ruling dismissing the case, constituted a cover-up of murders of young men of color in Compton.

A May 24 federal court trial date is set in the Lockett case. In the Taylor and Lockett cases, both Orrego and Aldama have denied that they used excessive force and claim that the force they used was reasonable. In June 2017, Orrego was terminated from the LASD after being charged with a DUI in 2015 in Orange County and allegedly making false statements about the arrest; he is currently suing the department to get his job back. Aldama remains a deputy, but in November the LASD said Aldama was suspended for 15 days for allegedly making misleading statements about Orregos DUI.

The issue of deputy gangs is dominating the 2022 sheriffs race. Villanueva faces several challengers including the Compton-raised Cecil Rhambo. In December, a Villanueva campaign manager sent a text message to Democratic Party members suggesting that Rhambo, who retired from the LASD in 2014, was a member of a deputy gang. Rhambo then sent video to a Los Angeles Times reporter showing him shirtless and without tattoos on his torso, back, and arms; months earlier, Rhambo pulled up his pant legs for local-TV reporter Kate Cagle to prove he didnt have tattoos on his calves or ankles. After I defeat Alex Villanueva as Sheriff Ill permanently end deputy gangs, Rhambo tweeted on December 12. The next day, Rhambo was endorsed by the Los Angeles County Democratic Party. On February 1, Gomez and Raskin sent another letter to the U.S. Department of Justice requesting an investigation into deputy gangs.

When contacted for comment for this story, an LASD spokesperson pointed me to public statements by Villanueva about deputy gangs. The Department does not have gangs, Villanueva wrote in a November letter to the Civilian Oversight Commission.

Villanueva recently said that 43 shootings committed by his deputies are pending a letter of opinion from the Los Angeles County DAs office. Sweeney confirmed to me that one of the cases under review is Aldama and Orregos killing of Taylor in 2016. Of his recent deputy-gang-related cases, Taylors has the strongest chance at being prosecuted as a murder, Sweeney believes. The killings that are going on, nobody cared about them because they were nameless, faceless Black people over in the ghetto, he told me. Until we gave them a voice.

The one story you shouldnt miss today, selected byNew Yorks editors.

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Bitcoins 30% recovery in two weeks has BTC whales back in accumulation mode – Cointelegraph

Posted: at 6:22 am

Bitcoin (BTC) addresses holding at least 1,000 BTC, the so-called whales, have started accumulating more tokens during the recent market recovery. As of Feb. 10, the total supply in these addresses was 8.096 million BTC versus 7.95 million on Jan. 24, according to data from Coin Metrics.

The buying sentiment among the richest crypto investors picked momentum during Bitcoins recovery in the past two weeks as BTC rebounded from its 2022 low of $33,000 on Jan. 24 to around $43,500 on Feb. 11.

Small Bitcoin investors, addresses that hold less than 1 BTC, so-called fishes, also joined the accumulation spree during the recent Bitcoin price rebound.

Meanwhile, data resource Ecoinometrics shows the Coin Metrics data in the form of clusters, showing a synchronous accumulation behavior among Bitcoin whales and fishes.

Interestingly, the clusters looked the same as they did in the days leading up to BTCs record high of $69,000 in November 2021.

Once more this cycle, this rebound in price correlates pretty well with both the small fish and the whales addresses buying simultaneously for an extended period of time, wrote Nick, an analyst at Ecoinometrics, in anotepublished on Fed. 7, adding:

A report published by CoinShares this week also showed a rise in inflow across crypto funds last week. Notably, the capital injections into these funds have quadrupled to $85 billion, with $71 million flowing into Bitcoin-focused investment products, suggesting renewed institutional interest is also buoying BTCs price recovery.

Nick suggested that Bitcoin has enough room to grow its valuation in the coming months, citing a so-called aggregated risk score, derived from four parameters: risk of overextended market, risk of a low-demand and high-supply situation, risk of holders taking profits, and risk of increased selling pressure.

Related:Bitcoin rejects sell-off as 7.5% US inflation fails to keep BTC down for long

The outcome is represented in the colors red and blue suggesting a hot and cool market, respectively. The hotter the market, the higher the selling pressure.

Right now it is just warming up, the Ecoinometrics analyst said, adding that in theory, there is no obstacle to the price rising much higher except for the lack of momentum.

Meanwhile, on-chain data tracking planform Whalemap projected $46,200$49,000 as Bitcoins current resistance range, citing higher trading activity inside the price area in the past.

Similarly, the firm noted that the $41,400$42,400 range is now acting as support, as shown in the chart below.

Closest on-chain resistance according to whale accumulations is only at ~$47,000, it noted.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Against The Inevitability Of Bitcoin – Bitcoin Magazine

Posted: at 6:22 am

Bitcoiners are optimists.

When Satoshi Nakamoto wrote and released the first code that began the Bitcoin experiment, it was an inherently optimistic act in response to the economic and monetary turbulence referenced in the genesis block.

Satoshi was a cypherpunk, a group which envisioned shaping a better future through deliberate technological innovation, particularly in regards to software.

Cypherpunks write code.

By leveraging software, a single individual could have an outsized impact on the world and future societal outcomes. Unfortunately, however, this optimism has more recently been warped beyond recognition and become detached from the focus on actual progressive technical development.

I mean to highlight and push back on this attitude of inevitability, which stands in stark contrast to Bitcoins original practical optimism. Two prominent examples come to mind: PlanBs stock-to-flow (S2F) model and Michael Saylors Bitcoin strategy and rhetoric.

In PlanBs infamous price projection model S2F, the path to bitcoins dominance is charted, assured and deterministic. Sure, the author never claims its absolute precision. After all, all intellectually honest parties will agree volatility is unavoidable in bootstrapping a new monetary system from zero. But the popular attitude around S2F' and all similar models is clear:

Number goes up.

Its not a mystery why. With this idea as a guiding star theres nothing to do but sit around, stack sats with any available cash flow, and wait for the prideful moment you can tell everyone, I told you so. The lure of inevitability is easy, simple and seductive.

While Michael Saylor has been vocally critical of the S2F model, he seems to mirror the same underlying attitude of assumed inevitability. Saylor and his firm, MicroStrategy, are the most famous and aggressive public buyers of bitcoin in the world. MicroStrategy holds more than 124,391 bitcoin, while Saylor has stated he holds 17,732 as of 2020. Yet nearly two years into making their first public foray into Bitcoin, neither Saylor nor MicroStrategy have visibly engaged in any work to enhance the development efforts of Bitcoin or the surrounding software ecosystem to the benefit of that massive investment.

Saylors messaging in interviews is consistent, and to be sure, he does an excellent job of boiling down core concepts to general audiences via apt metaphors. Digital gold is an excellent mental model for describing bitcoins supply cap value to a new audience, one which he leverages liberally. But as the aphorism goes, All models are wrong. Some are useful.

Even the usefulness of the digital gold metaphor, however, quickly collapses beyond a superficial analysis, so allowing it to shape narrative and thinking too seriously quickly becomes counterproductive. This is for the simple reason that bitcoin isnt an inanimate rock or a static element on the periodic table. Its ever-evolving software, one that must continue to be maintained and improved on.

Saylors messaging and active investment strategy betrays the same underlying attitude behind models like S2F: The work behind Bitcoin is done, and success and growth is assured based on its static properties.

Number go up.

The issue with this attitude is simple. The battle is not won and not by a long shot. Suggesting otherwise, worse than creating misleading expectations, actively hampers our efforts to continue improving Bitcoin as a technology today.

How can we when a significant portion of the ecosystem, including its most prominent investor, are happy to stack sats and let a small cadre of open-source developers continue to do the work of actually advancing the Bitcoin protocol?

Some will take issue with this very premise and argue that Bitcoins success is inevitable based on the strength of that technology today. Bitcoins success, however, is not actually an all-or-nothing prospect that we can speak authoritatively about in advance.

Even if we accept the argument that the success of bitcoin as an asset due to its fixed supply and network effect is of high certainty, that does not guarantee the success of Bitcoin as a platform for a full stack, peer-to-peer financial ecosystem.

Its well known that Bitcoins base protocol layer has limited transaction throughput by design. This design choice ensures that the base layer remains as decentralized as possible its most important property. On top of this foundation, new software tools and layers can and are being built which increase the scalability of transaction throughput and other functions.

These solutions present a wide array of differing trade-offs, from relatively simple and purely centralized like Cash App and exchanges to self-custodial and largely decentralized like the Lightning Network. The latter category of solutions are intrinsically more difficult to build, so Bitcoin inevitability and the resultant complacency is simply not compatible with the community wide effort needed to enable these solutions to win out over easier, centralized alternatives.

Failing to correct for this will result in the wider Bitcoin ecosystem suffering from choke points and resilience shortcomings which can and will be easily leveraged by adversarial actors to attack the network and its participants.

Potential future outcomes in this area are nuanced and uncertain, and they can ultimately only be shaped via action. We can choose to ignore this and continue to rest on our laurels, assured in a degree of limited success at best. Or we can choose to continue down the technological rabbit hole of extending self-custodial and P2P solutions to as many people as possible.

The limiting factor for supporting more innovative self-custody and P2P solutions on top of Bitcoin remains in the core protocol itself.

To be clear, Bitcoins core protocol is limited and focused as a deliberate design decision which improves both scalability (unlike much more stateful alternatives like Ethereum) and attack surface. However, its current capabilities are simply not enough to support a full-stack P2P ecosystem. There are dozens of open Bitcoin Improvement Proposals (BIPs), many of them which possess significant conceptual ACKs (meaning agreement with the general goal of the proposal) with work slowly underway or, worse yet, at stages of high maturity simply waiting for adequate review, discussion and motivation to merge. With four years elapsed between the last two significant protocol updates, SegWit and Taproot, theres surely much improvement to be made.

However, complementary to the inevitable success attitude is the inevitable ossification attitude. Protocol ossification refers to when a protocol becomes so widely used that the number and diversity of stakeholders involved makes continued development of the protocol practically impossible, freezing it in place. This is, of course, ultimately an indicator of success, as it speaks to the widespread dominance of that protocol.

However, some will argue that ossification sooner rather than later is actually desirable as a defense against malicious changes to the Bitcoin core protocol, a la SegWit2x. This attitude entirely ignores and greatly increases another exploitable attack vector: stalling and preventing beneficial changes to the protocol which can enable more robust peer-to-peer and self-custodial solutions on subsequent layers. Indeed, after the spectacular failure of SegWit2x, any adversary would likely conclude the stalling strategy to be far more viable.

In understanding that our window for beneficial protocol enhancements may, in fact, be rapidly closing due to the natural process of protocol ossification, and that stalling further development is arguably a much more likely attack vector than pushing through a deliberately malicious change, our urgency to continue extending Bitcoin functionality today should be higher rather than lower. There is certainly no pro-Bitcoin case to hasten ossification now or in the near future, especially in the context of there being many more obviously beneficial changes and extensions to be made. Protocol ossification, like properly understood Bitcoin maximalism, isnt prescriptive but rather descriptive.

It should be noted that the argument here isnt that any shortcuts be taken, or some arbitrarily determined schedule of soft forks be adhered to for the sake of progress.

I do, however, hold that taking another four years to implement a significant extension of the core protocol would be an utter failure for the Bitcoin community. With so many compelling active BIPs and a passionate and active ecosystem of individuals and organizations, there is simply no reason for it.

Community discussion needs to be aggressively focused on shortening the process to develop, vet, debate, improve and activate these proposals safely while we still have the ability to do so. Indeed, after over 5.5 BTC was organically pledged to a bounty in support of finding showstopping bugs in BIP-119 CTV, there does seem to be significant community demand to do just that.

Bitcoin has come a long way in 13 years, and as should be expected, its progress and growth has led to dramatic changes in its reach and community makeup. With this change comes an evolving landscape of discourse and ideas, and the ideas that win out will increasingly be the simplest ones which appeal to the greatest common denominator. It should be no surprise then that digital gold, for all its elegance, has gained such traction. Or that simple price projection models which confirm our most basic biases are tracked and iterated on with such fanfare.

The issue lies not with such ideas existing or even gaining popularity. All models, while flawed, serve their purpose. The purpose of these concepts is to initiate the beginning of a funnel for more mainstream audiences. To provide easily digestible analogies allows newcomers the comfort to begin wading into an immensely deep ocean. This purpose flounders, however, if their own evangelists and the community at large fails to lay the groundwork and impetus to push ever deeper.

As a community, we fail when, in chasing the mainstream, we lose sight of the original spirit in which Bitcoin was created and bootstrapped. We fail when we are so easily seduced by our own clever marketing, and victimized by our own overconfidence, that we lose sight of the core principle which brought about this humble experiment and upon which all else continues to depend on. We can succeed by remembering it.

Cypherpunks write code.

This is a guest post by Ariel Deschapelle. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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How Wall Street learned to love bitcoin – CNBC

Posted: at 6:22 am

Bitcoin surged to new heights in 2021 as companies like Tesla and Mastercard warmed to crypto. But with regulators circling, the currents ahead are likely choppy.

Bitcoin is the talk of the financial world.

The world's largest cryptocurrency started 2020 at $9,000. As time passed, bitcoin's value rose sharply, soaring to an all-time high above $68,000 in November 2021.

Major companies from Tesla to Mastercard have jumped into the market, prompting a rally in bitcoin and other tokens like ethereum and solana.

Bitcoin has matured from a virtual currency used by criminals to an asset that's been embraced by Wall Street firms. Many investors now liken the cryptocurrency to gold, believing it provides a store of value akin to the precious metal.

But as regulators start taking a closer look at crypto and volatility plagues the market, whether bitcoin can continue its stellar run looks increasingly uncertain.

So, what's next for bitcoin? Watch the video above to learn what the future holds in store for the No. 1 crypto.

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Legendary Investor Bill Millers Bitcoin Position Is Very Big – Bitcoin Magazine

Posted: at 6:22 am

Legendary value investor Bill Miller reiterated in a Wednesday interview that holding bitcoin is akin to having insurance against financial catastrophe, echoing comments he made last month as he disclosed that bitcoin comprised half of his fortune.

Miller explained that bitcoin doesnt account for 50% of his portfolio any longer given the digital currencys price decline over the past couple of months. However, he said his allocation to bitcoin still is very big.

It's like an insurance policy, the chairman and chief investment officer of Miller Value Partners said, according to a Markets Insider report.

Insurance policies have no intrinsic value. In fact, you want them to have no intrinsic value. You dont want to have your house burned down, or get in a terrible accident, but you pay for insurance every year in case that happens, he added.

Whether anything has intrinsic value or not is a topic of debate, as some argue all value is subjective to human judgment. However, Millers point converses with the instability of many countries financial systems around the world.

Bitcoin is insurance against financial catastrophe as we see in Lebanon, or in Afghanistan, or many of these other countries where we saw (that) around the time of the pandemic, Miller said.

Afghanistan last year suffered from intense economic instability after a complete U.S. military withdrawal led to the governments collapse. Residents of the Afghan capital, Kabul, hit a brick wall in August as they sought to withdraw money from their bank accounts and flee the country as Taliban fighters took over the city demanding the governments surrender. Bitcoin quickly became a tool for financial freedom in the central Asian country.

Miller, who holds the record for most consecutive years outperforming the S&P 500 between 1991 and 2005, also said in the interview that KPMG Canadas recent bitcoin allocation was a bullish move.

I think you're going to see a lot of adoption among foundations and endowments and institutions this year, and that's going to continue, he said.

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Binance invests $200M in Forbes to boost consumer knowledge on Bitcoin – Cointelegraph

Posted: at 6:22 am

Binance, the worlds largest cryptocurrency exchange by trading volumes, is making a strategic investment in the 104-year old magazine Forbes to improve consumer understanding of cryptocurrencies and blockchain.

Forbes and Magnum Opus Acquisition Limited, a publicly-traded special purpose acquisition company (SPAC), officially announced Thursday securing a $200 million strategic investment from Binance.

Forbes previously announced plans to go public through a business combination with Magnum Opus in August 2021, with the deal expected to close in Q1 of 2022.

Binances strategic investment will be through Binances assumption of subscription agreements representing $200 million of commitments in the $400 million private investment in public equity (PIPE) that was announced along with Forbes intention to go public.

With Binance assuming existing PIPE commitments, the overall size of the PIPE will remain at $400 million, and Binances investment will be according to substantially the same terms as the existing PIPE investors, the announcement reads.

As part of the deal, Binances chief communications officer Patrick Hillmann and head of Binance Labs Bill Chin will join the Forbes board of directors.

According to Forbes CEO Mike Federle, the investment from Binance will help the firm get texperience, network and resources of the worlds leading crypto exchange and one of the worlds most successful blockchain innovators.

Forbes is committed to demystifying the complexities and providing helpful information about blockchain technologies and all emerging digital assets, he noted.

Binance founder and CEO Changpeng Zhao emphasized the importance of supporting media in the crypto industry as part of the companys commitment to boost consumer knowledge and adoption of crypto, stating:

A spokesperson for Binance told Cointelegraph that their investment in Forbes "would be the first investment of this kind" in the media industry, adding: "Web2 had a profound impact on the media sector. We believe that Web3 may have an equally important role to play in the future of journalism and publishing.

Related: Meet the top 5 busiest crypto funders of 2021, according to PwC

Binance has apparently been succeeding on its mission to promote knowledge about crypto and Bitcoin so far. In April 2020, Binance acquired CoinMarketCap, the most popular crypto website with 187 million visits as of August 2021. Apart from offering market capitalization charts, the website provides news, updates, and current market leaders. The firm subsequently launched its own crypto education portal, known as CMC Alexandria, in September 2020.

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What Is The Future Of International Bitcoin Adoption? – Bitcoin Magazine

Posted: at 6:22 am

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Listen To This Episode:

"Bitcoin Bottom Line" hosts Steven McClurg and C.J. Wilson opened this latest episode by talking about international bitcoin adoption.

Wilson asked McClurg if he believes the criticism that leaders of countries face will diminish after more countries begin to adopt Bitcoin. McClurg does not anticipate this to change and he recognized that a lot of people that come into power and want to make positive changes in their country have a difficult time doing it all at once. He includes an example of Saudi Arabia taking small strides to improve its country, but it cannot change all at once.

McClurg stated, Changing your entire currency system to bitcoin with the hope of financial freedom is one step in the direction to overall freedom.

Wilson said that we must look at these situations on a broad, long-term scale; have a low time preference, and be patient. Like the government, it can be difficult for companies to change quickly, especially if they are public.

Many people have been moving to or visiting El Salvador recently. The hosts believe that this is due to its Bitcoin adoption. Over the past two years, many people have been moving to places with like-minded people and fewer taxes.

Texas government officials have become pro Bitcoin recently. Texas is looking to attract the mining industry and has great potential because it is an oil- and gas-energy-focused state. Wilson noted surprise that many other states have not followed in Texas and Wyomings footsteps of adopting Bitcoin, especially with their natural resources.

McClurg stated that Bitcoin is a movement for the people, and it has been happening organically. Politicians are increasingly becoming pro-bitcoin. Wilson hopes that Bitcoin adoption will become a non-story because it will be successful and ubiquitous. McClurg predicted that in two to four years, political candidates who are not pro-bitcoin will be compared to flat earthers.

McClurg and Wilson ended the episode by looking at the nuance of crypto to say that we do not have to make generalizations. We can take a unique look at every leader, state, city and country to rank them internally.

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Bitcoin, Metaverse, DeFi and Other Crypto Categories Explained – FREE Webinar – TheStreet

Posted: at 6:22 am

Today, there are more than 12,000 coins and even more data points in the crypto universe. The cryptocurrency ecosystem is showing no signs of slowing down.

How does it compare to the stock market?

There are more cryptocurrencies than stocks in the US right now," says Matthew Sigel, Head of Digital Assets Research, at VanEck. "But investors don't have a comprehensive framework for understanding the drivers of the returns within that cryptocurrency market."

Sigel sat down with Action Alerts Plus Portfolio co-manager, Bob Lang, as part of our FREE webinar, Beyond Bitcoin and Metaverse: Crypto Categories Investors Should Know.

Editors Note: The webinar was recorded on January 28, 2021.

Topics include crypto's Back to the Future moment, key crypto categories explained,DeFi vs. traditional finance, monetizing the Metaverse, and so much more.Beyond Bitcoin and Metaverse: Crypto Categories Investors Should Know, is brought to you by our partners at VanEck.

[00:00:05.16] Bob Lang: The cryptocurrency world is evolving fast. There are now over 12,000 coins in the crypto ecosystem. And with so many coins and even more data points, a rigorous classification system is becoming increasingly essential for investors to structure sound investment decisions. So what are they, and which digital asset categories offer the biggest opportunities and risks short term and long term?

[00:00:28.86] Hello, and welcome to Beyond Bitcoin and Metaverse-- Crypto Categories Investors Should Know. I'm Bob Lang. Joining us today is a leading expert who spends his day in the crypto universe-- Matthew Sigel, head of digital assets research at VanEck. Thanks for joining us today. So let's get right to it.

[00:00:46.99] First, Matthew, what is digital asset categorization, and why is it so important to sort out the crypto world in this way?

[00:00:54.27] Matthew Sigel: Traditional investors have been trying to measure performance versus benchmarks for a long time. And one of the tools that help them achieve that is by breaking down the equity markets into sectors like technology, financials, consumer staples, telecom, et cetera. And that not only gives individual investors a chance to express a particular view on the sector, but it also gives diversified portfolio managers better information sources so that they can understand the drivers of their performance and make adjustments to reflect their views on sectors or to understand what stocks are driving the performance of an individual sector.

[00:01:40.53] So it's much the same in the case of cryptocurrencies. There are more cryptocurrencies than stocks in the US right now. But investors don't have a comprehensive framework for understanding the drivers of the returns within that cryptocurrency market without this type of categorization framework that we've developed. So we've tried to introduce eight different categories that can be used by traditional investors or crypto investors, much the same way that folks use the GICS Level 1 Index from S&P. And those sectors are now trackable on Bloomberg. And we think they give a lot of information to investors to understand the performance drivers within this vast crypto ecosystem.

[00:02:28.71] Bob Lang: Well, these are distinct non-overlapping categories that form the building blocks for new a crypto classification scheme at VanEck. Can you tell us more about how these benefit investors?

[00:02:39.18] Matthew Sigel: These eight cryptocurrency categories that we've developed at VanEck are distinct, non-overlapping sectors that will give investors a better window into what's working and what's not in the broader cryptocurrency market. So we think that investors are going to use these categories to express their views on a specific sector within cryptocurrencies and also to better understand how their diversified portfolio is acting by understanding the differences between how these end markets are acting.

[00:03:16.59] Bob Lang: Are there competing views on the categorization of crypto, and do you see, Matthew, these categories continuing to evolve?

[00:03:24.48] Matthew Sigel: One of the challenges that we faced when deciding on the methodology for this type of taxonomy was whether to make the categories mutually exclusive. That is, many of our competitors have introduced more of a basket-type approach, so collections of cryptocurrencies form an investable basket. But oftentimes, one cryptocurrency will fit into more than one basket. And that makes it a little more challenging to understand the broader performance dynamics within the space. You might not get a full view of what's happening in a category if the coins that comprise it are also part of another category.

[00:04:09.55] So I'd say that was one of the big decisions that we had to make, which was making these categories mutually exclusive. Another challenge has to do with just how fast-moving and flexible this space is. Many of these coins are open-source software projects whose final destination is still unknown. And it's possible that the category that they're in now may not be the one that they're in tomorrow.

[00:04:37.09] So this exercise is a recurring one, requires a lot of maintenance, continual upkeep. And we should expect the categories to change over time and the constituents also to change. And investors can understand those changes by going to the website, the MVIS website, or the VanEck website, where the index categories are released monthly.

[00:05:01.02] Bob Lang: Would you say, in effect, that these indices with common characteristics and value in measuring their performance as a group, and are all indices investable?

[00:05:10.84] Matthew Sigel:: On top of this crypto classification system that we've unveiled, we've released eight separate indices. So we've chosen the four most investable categories. And then for those categories, we've launched two indices for each of them, so a broad index that captures all the coins in that category, over $250 million market cap, and then a leaders index, which is the same category coins but a larger market cap requirement, $1 billion and up. And then we've introduced an invest-ability component. So a coin cannot make it into the leaders' category unless it is traded on one of the top-tier cryptocurrency exchanges and custodied by one of the top cryptocurrency custodians.

[00:05:55.34] And so in that way, the leaders' indices represent a true investable benchmark that investors can use to measure their own performance and also to measure the performance of the categories versus each other. That's a very helpful tool for investors in this space who have not had such a taxonomy in the past.

[00:06:13.75] These categories comprise coins that have common characteristics and share common values. So we see value in measuring them as a group and then measuring the groups versus each other to give investors an idea of how these baskets of coins with common characteristics are performing in the marketplace.

[00:06:32.96] Bob Lang: So do you see any potential for new categories and classifications as the crypto universe expands?

[00:06:38.23] Matthew Sigel: We started with these eight categories that represent something akin to a GICS Level 1, so the broadest cut of the ecosystem. We're in the process of working on it and will soon release a level 2 categorization. So each of the eight categories has between three to five subcategories, a further refinement of that system of common use, common values, creating groups of coins that investors can measure against each other.

[00:07:13.49] Bob Lang: Well, let's break down some of these categories for investors. The Street's crypto editor calls DeFi the next big thing and a real game-changer. Do you agree with that, and how so?

[00:07:23.83] MATTHEW SIGEL: Decentralized finance protocols, DeFi, are essentially software programs that run on top of another cryptocurrency. And they use a combination of that protocol's assets as a means to automate a financial service. So DeFi protocols connect lenders and borrowers, buyers and sellers without requiring a centralized institution.

[00:07:48.76] DeFi protocols comprise an overlapping ecosystem of decentralized applications and smart contracts. Most operate on Ethereum, which is the largest open-source blockchain smart contract platform. But many other blockchains now support decentralized finance applications.

[00:08:06.88] Bob Lang: Matthew, which tokens top the MVIS DeFi Leaders Index? And with such complicated earnings models, how are the leaders determined?

[00:08:17.02] Matthew Sigel: The MVIS Decentralized Finance Index comprises coins such as Uniswap, Aave, and Maker. These are the largest decentralized exchanges. And they create value by hosting a marketplace where buyers and sellers can meet to exchange cryptocurrencies and by taking a small commission of every trade. The complicating factor is that those commissions are denominated in the native token. So you pay Uniswap in Uniswap coins. And that represents a stream of earnings that can be valued by market participants using a discounted cash flow analysis or price to sales.

[00:09:00.07] Bob Lang:: Let's talk about DeFi protocols, which can be divided into several subcategories. What are they, and can you give us some examples of those?

[00:09:09.28] MATTHEW SIGEL: DeFi protocols include subcategories such as decentralized exchanges like Uniswap, lending and borrowing platforms like Compound and Aave, derivatives exchanges like Synthetix, asset managers like Mirror or Numeraire, insurance protocols like Nexus, and then protocols that aggregate all of those services together like Yearn Finance. It's really a fast-moving sector with a lot of changes. And we hope that this classification and subcategory model will give investors a better idea of what types of coins are working and what types of coins are underperforming. And that'll help capital get allocated more efficiently in the marketplace.

[00:09:53.80] Bob Lang:: What are some of the unresolved challenges that are facing DeFi? Some say this is a chance to rebuild finance from the ground up. Would you agree with that?

[00:10:02.86] Matthew Sigel: DeFi platforms enable buyers and sellers to find each other online without a centralized exchange or intermediary taking a large commission. And because it's a cheaper and faster and less censored way to transact, decentralized finance has been taking a lot of market share from both centralized crypto exchanges and the broader financial system at large.

[00:10:29.64] Now, there are a lot of uncertainties about the space still-- regulatory uncertainty, technological uncertainty. But the underlying innovation-- faster, cheaper, more frictionless value transfer across the world, 365, 24/7-- that's an innovation, a technological innovation that we don't think is going to slow down anytime soon.

[00:10:51.51] Bob Lang: Huge advantage to the currency. Many digital currency investors, Matthew, are familiar with exchanges. We use them, of course, for our digital currency transactions. Can you walk us through this category for the viewers?

[00:11:06.89] Matthew Sigel: The exchange category includes the tokens of centralized cryptocurrency exchanges such as FTX and Binance, who, in many cases, have chosen to list their entities as cryptocurrencies that trade on a cryptocurrency exchange rather than going public in an IPO on a traditional securities exchange. Many times, the underlying model is similar. The exchange will collect profits that it derives from charging its users commissions.

[00:11:40.26] And those profits will be denominated in the native token. In the case of FTX, that's the FTT token. So the exchange category includes those centralized cryptocurrency exchanges like Coinbase who, instead of listing in an IPO or raising capital in the traditional private markets, instead fund their equity via these crypto tokens which trade on crypto exchanges.

[00:12:08.19] Bob Lang: Hackers, Matthew, just hit the crypto exchange Crypto.com, siphoning some $35 million. What would you say are the biggest vulnerabilities? And should investors brace for more theft of this size if not greater?

[00:12:20.82] Matthew Sigel: As activity grows in cryptocurrency, and indeed in any industry, there are always opportunities and risks for technological mistakes and hacking. We've seen that in many industries. In fact, the proportion of cryptocurrency illicit activity fell in 2021 versus 2020. So we're optimistic that increased analytics and tools in the industry are helping regulators and exchanges better monitor the flow of funds in the industry and more quickly apprehend the wrongdoers.

[00:12:56.37] So many of the largest hacks that we saw last year, the funds were actually returned voluntarily after the perpetrators have doxed online thanks to the transparency that the blockchain provides. So it's true that in crypto, there are bad actors, as there are in every industry. But we're pretty optimistic that because of these analytics and tools that are available to anyone who's observing the blockchain-- anyone's crypto wallet can be tracked and monitored-- that the opportunities for wrongdoing are actually falling over time, not rising.

[00:13:30.24] Bob Lang: That's good news for future investors. Let's talk about the store of value, Matthew. What is that, and what falls under it, store of value?

[00:13:39.27] Matthew Sigel: The store of value category includes bitcoin and bitcoin derivatives. So we believe that bitcoin's proof of work consensus model is unique among cryptocurrencies. It provides the most robust security. And it guarantees that every bitcoin that's created contains the same amount of thermodynamic energy. And that is a point of attraction for investors who compare bitcoin to a hard asset such as gold, which also requires a lot of physical investment in order to mine.

[00:14:17.13] So bitcoin's high energy use is more of a feature than a bug, but it does merit its own category as a store of value thanks to the simplicity of its code, its energy intensity, and importantly, its fixed supply, making Bitcoin really the only fungible asset in the world that doesn't respond to higher demand with higher supply. That cannot happen with bitcoin.

[00:14:43.11] Bob Lang: Very unique, the qualities there. So investors often equate, Matthew, bitcoin to the whole crypto sphere, but there's so much more. How should investors think about Bitcoin as it compares to other altcoins?

[00:14:56.16] Matthew Sigel: The cryptocurrency industry is now $1.6 trillion roughly. Of that, bitcoin is about $700 billion. So we think investors are starting to differentiate between the various categories in crypto. Bitcoin stands alone as a store of value thanks to its unique proof-of-work consensus. We believe that it deserves a weighting in a portfolio that is commensurate with one's views on stored value. So maybe for gold and bitcoin, that may be 0% to 5% of an investor's portfolio.

[00:15:32.58] A large proportion of the ex-bitcoin cryptocurrency universe is more closely related to the growth equity component of your investment portfolio. These are bets on software protocols that are gaining market share thanks to their innovative ability to send value across the world in a more frictionless nature. So perhaps that allocation in an investor's portfolio, the ex-bitcoin smart contract allocation, might also be a 0% to 5% allocation.

[00:16:06.18] And perhaps it might be compared to one's investment in FAANG stocks, which represent 20% of the S&P 500 but whose profits may be at risk if indeed cryptocurrencies form a competitive threat thanks to the lower cost and lower take rates that they charge. So that's how we think about it over here.

[00:16:28.35] Bob Lang:: Well, The Street's crypto editor says governance tokens are as important as DeFi, as it tackles one of the core issues with crypto. For those new to this concept, can you explain governance tokens?

[00:16:39.69] Matthew Sigel: Governance tokens are an important part of cryptocurrencies. So governance tokens represent the right to own the decision-making of an entity. So if you owned 10% of the Uniswap DAO, the Uniswap Decentralized Autonomous Organization, then you would have a 10% vote in the corporate actions of that entity. So a decentralized autonomous organization is essentially a corporation that lives online where all stakeholders have the right to vote on corporate actions.

[00:17:16.50] Many times, the entity cannot spend even a dollar without the approval of the DAO members. So this governance right can be very valuable if the underlying entity owns a valuable asset, such as a decentralized exchange which might be earning hundreds of millions of a year in the case of Uniswap in trading profits. The Uniswap DAO's treasury is now $2 billion.

[00:17:43.35] And to spend even a dollar of it, the community has to vote. The community gets to vote. And that's why the token value of many of these governance tokens ballooned well beyond the size of the actual treasury. It's because these entities are earning profits, and the community gets to decide the destination of those profits, the use of those profits.

[00:18:07.11] So it's a new wrinkle on the corporation, which restores autonomy to the everyday player and really flips the script on capital formation. So we think we're going to see a lot of very interesting DAOs in 2022 that raise a significant amount of capital. One of the most interesting was, late last year, the Constitution DAO that raised $43 million, tried to bid on a hard copy of the US Constitution. They were outbid by Ken Griffin. But we have a hunch that the next DAO may not be so unlucky.

[00:18:41.71]Bob Lang: Well, it was a heck of a try. That's for sure. Let's talk about the regulatory environment here for a moment. Is the regulatory environment around these still uncertain? What do you think?

[00:18:52.83] Matthew Sigel:: The US regulatory environment is particularly uncertain. It's quite unique to have a new technology that the US is not leading on. And that is in large part due to the current administration's view on cryptocurrencies. The current STC is, we think, holding the bitcoin ETF hostage. We're trying to get Congress to act.

[00:19:21.66] Every day that we move closer to a midterm, there is less chance of Congress acting. That's just the history of legislation. So we think this year, there's likely to be very little that happens in terms of meaningful regulation. And in the absence of meaningful regulation, the innovation will keep moving forward. So it should be a good year for crypto because of that.

[00:19:48.03] Bob Lang: We've seen a flurry of partnerships between companies like Mastercard, Visa, American Express with cryptocurrency giants. What's driving all this activity?

[00:19:56.44] Matthew Sigel: What's driving the activity among the credit card companies to release bitcoin credit cards and other crypto credit cards is consumer demand. So consumers are sick and tired of unaccountable, unelected officials taking a large proportion of their savings, whether that's the banking sector or whether that's Web 2. So they're asking for these products.

[00:20:19.47] And in return, the market is providing them. And we think that's a big reason why crypto volatility, specifically bitcoin, is probably set to fall over the coming years. The early adopters of this technology were retail investors who were more volatile in their trading strategies. As the more sticky institutional buyers come in-- sovereign entities like El Salvador, which declared bitcoin legal tender, corporations who now own more than 1% of bitcoin outstanding, and the next leg will be these micro-payments, credit card rewards, gaming-- that will form the base of the pyramid-- a consistent source of demand, tiny pieces of bitcoin being bought by everyday people who are asking their financial institutions to provide products like these bitcoin credit card rewards.

[00:21:09.03] So we're hugely excited about that. We're trying to do some work on tracking the wallets associated with these credit cards so that we can begin to size and scope how big the demand will be. But it's a key linchpin in the thesis that bitcoin volatility should fall over time.

[00:21:25.62] Bob Lang: Yeah, good-- it's a good move for consumers, I think. Mastercard recently partnered with Coinbase for the crypto exchange's upcoming NFT marketplace. What could this mean for all the players as well as users, and could we see more partnerships like this down the road?

[00:21:41.08] Matthew Sigel: NFTs really just prove the ability to make digital items scarce. The original, killer app to demonstrate that utility for the marketplace was art-- profile pictures, files of digital art. This year, we think that utility will broaden out to include sports ticketing and concert ticketing along with gaming applications. So in the case of ticketing, what if the courtside NBA ticket that you bought also came with a 10% chance of dinner with one of the players after the game?

[00:22:25.60] That's the type of additional goods and services that can be bundled into an NFT-- connecting the digital world with the real world on top of it, proving digital scarcity, unlocking a series of benefits for ecosystem participants. It's the same type of model that these cities like Miami are trying to exercise with their city coins. If you own enough of the coin, you might get access early to, let's say, a museum opening or a park. And in that way, these cryptocurrencies really reward early participants, large participants who have conviction, and incentivizes them to do good and avoid wrong. And NFTs will enable that type of permission technology solution and bring a lot of value to consumers over the next year.

[00:23:21.60] Bob Lang: Matthew, media, and entertainment is pretty exciting area. NFTs are offering the early steps of monetizing the metaverse, of course. Can you walk us through that category?

[00:23:30.48] Matthew Sigel: Consumers already play in the metaverse when they use platforms like Roblox or Fortnite. These are real-time rendered 3D virtual worlds which can be experienced persistently by an effectively unlimited number of users with an individual sense of presence, with continuity of identity and history, and even some payments ability. The difference between the closed metaverse-- the Roblox and Fortnite ecosystems-- and the open metaverse is that in the open metaverse, all of these platforms can talk to each other. And they all can operate on a common unit of account, whether that's a stablecoin like US dollar coin or whether that's a more traditional cryptocurrency like bitcoin.

[00:24:19.23] And in the open metaverse, all these platforms being interoperable with each other will make a much more vibrant marketplace where consumers are going to have a lot more choice. And as we've seen in technology generally, open-source systems tend to beat closed systems. And we think that the same thing is going to happen with the metaverse. So think of it as Roblox or Fortnite but on the blockchain and interoperable because of the global nature of cryptocurrencies.

[00:24:50.65] So each of these metaverse platforms may have its own token and may use that token to incentivize certain behaviors, whether that's building interesting architecture, displaying NFTs, lingering for a certain amount of time, making certain goods or services available to customers. All of that will happen within each ecosystem's token, but those tokens will be interchangeable via bitcoin or Ethereum or US dollar, coins, or other stablecoins. So it really makes for a very scalable ecosystem in which users will share currencies in common. And we think that's a more attractive business proposition than walled garden ecosystems which tend to charge higher take rates and which are smaller.

[00:25:39.24] Bob Lang: Matthew, millennial investors are receiving one of the largest wealth transfers in history, $24 trillion. Why is it so important to understand this group of investors along with the investing process?

[00:25:50.31] Matthew Sigel:: In that scene in Back to the Future when he's playing "Johnny B. Goode" in front of all the high schoolers, and they're all staring at him glassy-eyed, and he says, I guess you guys aren't ready for that, but your kids are going to love it-- that's what's going on with cryptocurrencies. I can see it in my own family.

[00:26:06.69] The kids just understand this intuitively because they're digital natives. And the old fogies don't get it. And every day, more old fogies are dying, and more kids are turning 18 and getting access to their own money. So the math is inevitable here, just like the math was inevitable when it came to gaming-- World of Warcraft, Fortnite. The same thing will happen with digital currencies.

[00:26:30.64] And that's why we think it's important to get an early start, to dollar cost average in, because many of these assets are expensive, and to keep conviction that over the long run, because of this enormous wealth transfer that's about to happen, trillions of dollars headed from baby boomers to the younger generation who are increasingly digital native, they will adopt cryptocurrencies. There will not be young people who have zero weighting. And that will be a big change in how assets are allocated over time.

[00:27:00.12] Bob Lang: Huge change from one generation to the next. It happens through history, right? What are the key takeaways that investors should walk away with after this talk?

[00:27:08.93] Matthew Sigel: The key takeaways here are that up until now, investors have not had a transparent, comprehensive taxonomy that they can use to measure these mutually exclusive cryptocurrency categories against each other. And we think that the eight indices that we've released, these category indices, are going to do a great job of educating investors what are the common characteristics of these coins, how are they performing, as well as providing investable benchmarks that professional investors can use to measure themselves against the market. So we plan to use them for both purposes here.

[00:27:47.31] Bob Lang: That's fantastic. So with that, we're going to wrap it up. Thank you, Matthew Sigel. You've been watching The Street's special presentation-- Beyond Bitcoin and Metaverse-- Crypto Categories Investors Should Know. I'm Bob Lang. And for more information, head over to thestreet.com or our partners at vaneck.com.

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Bitcoin, Metaverse, DeFi and Other Crypto Categories Explained - FREE Webinar - TheStreet

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Russian government and central bank agree to treat Bitcoin as currency – Cointelegraph

Posted: at 6:22 am

The government and central bank in Russia have reached an agreement on how to regulate cryptocurrencies, according to a Tuesday announcement.

Russias government and central bank are now working on a draft law that will define crypto as an analogue of currencies rather than digital financial assets set to be launched on Feb. 18. Cryptocurrencies would function in the legal industry only if they have complete identification through the banking system or licensed intermediaries.

Kommersant notedthat Bitcoin (BTC) transactions and possession of cryptocurrency in the Russian Federation are not prohibited; however, they must be done through a digital currency exchange organizer (a bank) or a peer-to-peer exchange licensed in the country.

The report also highlights that cryptocurrency transactions of more than 600,000 rubles (roughly $8,000) would have to be declared; otherwise, it could be considered a criminal act. Those who illegally accept cryptocurrencies as payment will incur fines.

This news comes after months of speculation about how the Russian government will handle digital currencies. While it is still unclear what this decision will mean for businesses and citizens in Russia, it seems that the country is slowly warming up to the idea of cryptocurrencies.

Related: Russian central bank registers nations first digital asset manager

In January, the Bank of Russiacalled for a nationwide crypto ban in a report that warned about the speculative nature of the industry. The bank also stated that financial firms should not facilitate crypto transactions as part of that proposal to ban digital assets.

However, the proposalgenerated opposition from the Russian Ministry of Finance. A few days after the central banks call for a ban, Ivan Chebeskov, a ministry official, said that the government should regulate crypto rather than prohibiting it entirely. He warned that a total ban might result in Russia falling behind in technology.

Reports have also emerged that President Vladimir Putin supports efforts to regulate the countrys crypto mining sector.

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Russian government and central bank agree to treat Bitcoin as currency - Cointelegraph

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