Gab to Use Square Cash App After Coinbase Ban

John Vibes

Earlier this week, CryptoGlobe reported that the controversial, censorship-free social media platform Gab was cut off from Coinbase without explanation.

Gab has had a series of challenging months, as a result of hateful content that they refuse to moderate on their website. Gab has become somewhat of a safe haven for people with extreme views who have been banned from more mainstream social media sites, but supporters say that that there must be some places on the internet that have zero moderation in order to preserve free expression and freedom of speech.

In October, Gab was dropped by Stripe and multiple web hosts after a mass shooter posted on the site before his attack. He posted on Facebook and Twitter also, but those sites did not receive any penalties.

Next, Gab turned to cryptocurrency for its censorship-resistant properties, but the company soon learned that these features are only guaranteed to users who hold the private keys to their wallets, and that these features are often forfeited when crypto is held on custodial services.

Without giving a reason, Coinbase closed the official account for the site, as well as the account of Gab’s co-founder Andrew Torba. In a post on Twitter after receiving news of the ban, Gab made a post on Twitter saying that "decentralized exchanges are the future," because crypto on/off ramps are very easily compromised.

Possible Alternatves

Gab seems to have moved onto Square's Cash App, according to a post made on Twitter this week.

However, Square is also a centralized company, which means that Gab could encounter the same problems again, especially if Square comes under enough pressure from the public and the rest of the industry.

New platforms are in development to serve users who might experience censorship, specifically activists and journalists. As CryptoGlobe reported, newscaster Ben Swann announced a new blockchain-based journalism project called Isegoria, which hopes to give a voice to some of the reporters who have been disenfranchised by the dominant social media websites.

Unregulated Crypto Derivatives Exchanges Dominate Regulated Alternatives

Trading volume on unregulated Bitcoin (BTC) derivatives exchanges is growing rapidly, and continuing to far outpace their regulated-institutional counterparts, according to the most recent (March) CryptoCompare Exchange Review.

unregulated exchange volume(source: CryptoCompare)

Both OKEx and bitFlyer exchanges hosted an average daily derivative trading volume worth well over a billion dollars during March - $1.5 billion and $1.14 billion respectively according to CryptoCompare. It seems then that the older derivative stalwart BitMEX, at $645 million daily average volume, has been rapidly eclipsed by the newer exchanges.

regulated exchange volume(source: CryptoCompare)

Institutional, fiat-dealing (regulated) exchanges hosted a fraction of this volume, the highest being $70.5 million on the CME exchange. CryptoGlobe reported last month the CME’s primary competitor, the CBOE, was shuttering its Bitcoin futures products citing low demand. CME volume spiked last month, but is down this month below to January levels.

However, despite the relatively low average volume, the CME did have one bumper day of record-breaking Bitcoin futures trading volume, trading nearly $550 million worth of bitcoin on April 4th - days after Bitcoin’s unbelievable breakout from its $4,200 resistance.

Outflanked

The ease of onboarding new customers may explain why the unregulated exchanges get more attention.

In a recent interview, BitMEX CEO Arthur Hayes underlined his exchange’s ability to “onboard a [new] customer within 10 minutes,” by accepting Bitcoin and only Bitcoin for funding. In addition, no KYC/AML checks are required to trade on BitMEX, merely an email address; whereas OKEx offers margin trading only after basic KYC/AML checks. These exchanges are registered in Seychelles and Malta, respectively, specifically to avoid such onerous accounting requirements for their customers.

As CryptoGlobe covered early in 2019, however, BitMEX and other derivative exchanges including OKEx officially exclude certain citizens from trading on their platforms due to regulatory concerns, most notably US citizens.

Hayes also intimated at the upcoming launch of an interest bearing Bitcoin-only bond, which he speculated could be used to leverage credit into future Bitcoin-denominated economic activity.