After the DCI/IOTA email leaks, all that is left is to search for the cause, the reasons and higher objectives of the initiators, as no vulnerability was found, but IOTA's reputation has been severely damaged.
The following abstract showcases the structures and monetary interests by the Digital Currency Group (private venture capital firm) and journalist Morgen Peck in order to strengthen the marketposition of the Zcash cryptocurrency. That includes weakening Monero’s and IOTA’s marketposition. Whether the Digital Currency Initiative of the MIT Medialab is a second initiator of this campaign or if they accept the positive consequences for their own ventures, such as Enigma, is unclear. However, it seems like Zcash and the Digital Currency Group are the origin of this campaign. Additional antagonists of IOTA may have followed the rule: seize the opportunity.
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Content:
1) Involved parties
a) Digital Currency Group
b) Morgen Peck
c) Digital Currency Initiative, MIT Media Lab
2) Regulations regarding Conflicts of Interests
a) Federal Regulations
b) MIT Policy
c) Boston University Policy
d) IEEE Policy
3) Direct Conflict of Interest
3.1 Morgen Peck
3.2 Coindesk and Digital Currency Group
3.3 Digital Currency Initiative
4) Additional conflictive Connections between Researchers and Investors
5) Conclusion
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Disclaimer: This is a coordinated effort of independent investigators that shed light on the recent events following the question:
Are the past events around IOTA part of a coordinated campaign to discredit IOTA?
1. Involved Parties
a) Digital Currency Group
Digital Currency Group (DCG) is a private venture capital company (https://angel.co/digitalcurrencygroup/jobs-at-portfolio-companies) focusing on the digital currency market located in New York City.
Coindesk, Grayscale and Genesis belong to the DCG.
Over 90 investments are part of their portfolio including Bitcoin, Blockstack, Blockstream, Ledger, Ripple and Zcash.
b) Morgen Peck
Morgen Peck is an independent journalist foccussing on cryptocurrencies.
She writes for Coindesk, IEEE Spectrum, American Banker, Slate, etc.
c) Digital Currency Initiative
The MIT media lab opened the Digital Currency Initiative (DCI) to research possibilities of blockchains and DLT’s.
The MIT Media Lab has as part of the private university Massachusetts Institute of Technology the monetary incentive to push products innovations and patents.
An excerpt of spinoff products of 2016 can be found here: (https://dam-prod.media.mit.edu/uuid/603fef6c-42e1-46b2-8b31-0b19b3b236c3)
The DCI has workgroups for Zcash, the Ligntning Network, and several other blockchain based solutions and innovations.
The MIT Media Lab is funded as follows (Wikipedia):
The Lab's primary funding comes from corporate sponsorship. Rather than accepting funding on a per-project or per-group basis, the Lab asks sponsors to fund general themes; sponsors can then connect with Media Lab research. Specific projects and researchers are also funded more traditionally through government institutions including the NIH, NSF, and DARPA. Also, consortia with other schools or other departments at MIT are often able to have money that does not enter into the common pool.
2. Federal Regulations
a) Federal regulations on conflict of interest according to the John Hopkins University:
New federal regulations regarding financial conflicts of interest went into effect on August 24, 2012 and in turn led to revised JHU and divisional policies regarding disclosure requirements of faculty and investigators and the review, management and reporting of financial conflicts of interest. The revised regulations are available here.
Some of the key elements of the revised regulations are as follows:
Additional disclosure requirements. The revised PHS regulation expands the requirements for disclosure. It requires that income related to all of an investigator's “institutional responsibilities” be disclosed. In addition to reporting income from for-profit organizations, investigators must also report income from non-profit organizations. Investigators on PHS-supported grants or contracts must disclose each occurrence of sponsored or reimbursed travel that is related to their institutional responsibilities, regardless of the relationship of the travel to the PHS-funded project, when the amount of travel during the preceding 12 months reaches or exceeds $5,000 in the aggregate for a particular entity. (Note: This aggregate value includes travel for spouses, domestic partners and dependent children unless the travel occurs in the course of their employment by the entity.) Some exceptions apply. Click here for additional information on what you are required to disclose.
Retrospective review. If a financial interest is disclosed “late” and is determined to be a financial conflict of interest (FCOI) with PHS-supported research, the institution must complete a retrospective review of the research project to determine whether the design, conduct or reporting of the research that was already conducted was biased.
Training requirement. All investigators on PHS-supported grants and contracts are required to receive training on conflict of interest whenever the institution’s policy changes and every four years thereafter. In addition, training must be completed whenever the institution determines that an investigator is not in compliance with the university’s conflict of interest policy and/or has not adhered to the assigned management plan for his/her conflict.
Public reporting of FCOIs. The institution must provide a written response within five business days of a request for information concerning any FCOI related to PHS-supported research if it involves the principal investigator/project director or any other person who has been identified by the institution as senior/key personnel. The written response must include: the investigator’s name, title and role with respect to the project; the name of the entity in which the investigator has the financial interest; the nature and approximate dollar value (in ranges), if fair market value can be reasonably determined.
Source: https://engineering.jhu.edu/wse-research/conflict-of-interest/
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b) Massachusetts Institute of Technology Policy and Procedures On Conflicts of Interest in Research:
A conflict of interest (COI) can be any situation in which financial or other personal considerations have the potential to compromise a researcher’s professional judgment and objectivity in the design, conduct or reporting of research. MIT has a responsibility to ensure that its teaching and research environment fosters the generation of new knowledge and positive learning opportunities for students and preserves the integrity of its research enterprise and the public’s trust. MIT policy, therefore, requires that MIT officers, faculty, and staff and others acting on its behalf avoid or mitigate real or perceived financial conflicts of interest and ensure that their activities and interests do not conflict with their obligations to
MIT or its welfare. The Vice President for Research is responsible for ensuring implementation of this policy.
Source: https://coi.mit.edu/sites/coi/files/uploads/coi-policy-2017-02-23.pdf
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c) Boston University Investigator Financial Conflicts Of Interest Policy For Research
Boston University (“BU”) recognizes the importance of collaborations with industry, government, academia and others, and seeks to encourage such relationships. However, it is important that the financial incentives which may accompany such relationships do not create financial conflicts of interest that might undermine the validity of the research or the safety of human research subjects. Such conflicts of interest have the potential to create real or apparent bias in research and may reduce public confidence in the research enterprise.
Source: http://www.bu.edu/researchsupport/forms-policies/investigator-financial-conflicts-of-interest-policy-for-research/
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d) IEEE - Institute of Electrical and Electronics Engineers
IEEE has established the Principles of Business Conduct to:
-Make it clear that IEEE requires fair dealings with all involved parties
-Avoid conflicts of interest
-Maintain confidentiality of information entrusted to IEEE
-Assure that IEEE’s assets are only used for IEEE purposes
-Protect ownership of assets developed under initiatives of IEEE
-Provide full disclosure of financial transactions of IEEE in its reports to volunteers and management
-Comply with applicable laws, rules, and regulations
-Notify IEEE Corporate Integrity Officer if presently debarred, suspended, proposed debarment, or excluded by any US federal government department or agency; or if within the last three years have been convicted or had a civil judgment rendered against you for criminal offense in connection with a public transaction, violation of federal or state antitrust statutes commission of fraud, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statement, tax evasion, violating federal criminal tax laws, obstruction of justice, or receiving stolen property; if presently indicted for any of these offenses; or within last three years had one or more public transactions terminated for cause or default; or if any of the foregoing actions occur subsequent to the submission of a compliance certificate. (This is necessary for IEEE's annual certification process with the US federal government, which is required so that US federal agencies can make payments to IEEE for products like IEL and for grants)
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2. Conflicts of Interest
2.1 Direct Conflict of Interest of Morgen Peck
Morgan Peck is writer for Coindesk (owned by Digital Currency Group), IEEE Spectrum, American Banker, Slate, BBC Future.
It’s safe to assume that she is paid by the digital currency group, but she masks her actions as work of an independent journalist, while she’s acting in favor of her financier.
DCG is invested in Zcash: http://dcg.co/portfolio/
Involvements:
a) Morgen Peck writes and speaks only in favor of Zcash:
https://twitter.com/morgenpeck/status/790968657429929984?lang=en
https://www.coindesk.com/zcash-audit-finds-no-serious-issues-launch-ceremony-security
http://www.radiolab.org/story/ceremony
https://www.americanbanker.com/news/cheat-sheet-the-trade-offs-of-blockchain-privacy-tools
https://spectrum.ieee.org/computing/networks/a-blockchain-currency-that-beats-bitcoin-on-privacy
https://spectrum.ieee.org/tech-talk/computing/networks/the-crazy-security-behind-the-birth-of-zcash
b) Morgen Peck is invited to the “Zcash ceremony”:
https://z.cash/technology/paramgen.html
c) Morgen Peck writes extraordinary negative about IOTA and presents:
https://spectrum.ieee.org/tech-talk/computing/networks/cryptographers-urge-users-and-researchers-to-abandon-iota-after-leaked-emails
d) Morgen Peck follows 13 Zcash devs/foundation-members on Twitter:
https://twitter.com/str4d
https://twitter.com/secparam
https://twitter.com/matthew_d_green
https://twitter.com/JackGavigan
https://twitter.com/valkenburgh
https://twitter.com/ZcashFoundation
https://twitter.com/zcashco
https://twitter.com/acityinohio
https://twitter.com/MadarsV
https://twitter.com/zooko
https://twitter.com/feministplt
https://twitter.com/arcalinea
https://twitter.com/ioptio
Morgan Peck is also followed by most of them.
Conclusion: The independent journalist Morgen Peck has many connections to Zcash.
She is involved in conversations, interviews and countless, solely positive articles about it.
While she is working for Coindesk, the IEEE, and American Banker, she always reports in favor of Zcash.
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2.2 Direct Conflict of Interest by Coindesk and the DCG
a) Coindesk publishes extraordinary positive articles about Zcash:
https://www.coindesk.com/better-faster-zk-snarks-zcash-developers-release-new-privacy-tech
https://www.coindesk.com/edward-snowden-zcash-is-most-interesting-bitcoin-alternative
https://www.coindesk.com/zk-starks-new-take-on-zcash-tech-could-power-truly-private-blockchains
https://www.coindesk.com/better-faster-zk-snarks-zcash-developers-release-new-privacy-tech
b) And negative about IOTA:
https://www.coindesk.com/broken-hash-function-iota-price-drops-on-tech-critique
c) Coindesk frequently writes about Zcash but ignores IOTA's development.
IOTA: 45 results found (3 articles actually about IOTA)
Zcash: 177 results found (almost all about Zcash)
Coindesks editorial policy propagates independence and journalistic principles:
We strive for utmost fairness, accuracy, objectivity and responsible reporting, whether reporting original news or in reviewing
and corroborating information from other sources.
The editorial team will cover news with impartiality and integrity, without influence of CoinDesk's owner or its investors.
All editorial team members and freelance writers for CoinDesk are required to disclose any investments or outside activities
associated with cryptocurrency and blockchain technology.
CoinDesk does not accept payment in return for publishing news articles, features or product reviews. Neither do we pay for
tips or access to sources.
CoinDesk, as an organization, does not take positions on the economic value on any given cryptocurrency or blockchain project,
though our outside opinion contributors may express their own views on such matters.
CoinDesk employees are not restricted from owning or investing in cryptocurrencies or blockchain-based projects as investments.
However, CoinDesk maintains disclosure guidelines that all contributors must follow when reporting on cryptocurrencies or
tokens in which they are invested.
d) Grayscale Investments.
The company owned by DCG has a Zcash Investment Trust and Thesis.
Articles:
https://www.linkedin.com/feed/update/urn:li:activity:6334384648960950272
https://www.linkedin.com/feed/update/urn:li:activity:6369966911991660544
Assumption: The Digital Currency Group has vested interest in success of Zcash.
They publish positive news on Coindesk and can attack competing projects on a global scale.
2.3 Conflict of Interest of the Digital Currency Initiative, DCI (MIT Media Lab)
a) Zerocash (developed into zcash) is part of “featured research across MIT” in the MIT Media Lab
b) Part of the DCI-team that published the “IOTA vulnerability report” are:
-Neha Narula (MIT Media Lab)
-Ethan Heilman (Boston University, Paragon Foundation, Commonwealth Crypto)
-Madars Virza (MIT Media Lab, Zerocash)
-Daddeus Dryja (MIT Media Lab, Lightning Network Developer)
3) Additional conflictive Connections between Researchers and Investors
a) Meltem Demirors is the Director of Development at Digital Currency Group.
She is also guest lecturer at the MIT Media Lab.
(https://everipedia.org/wiki/meltem-demirors/)
b) DCI vs DCG logo (coincidential similarities)
c) The MIT Media Lab connected project “Enigma” develops an own data-marketplace-solution.
d) Patrick McCorry:
He is a cryptographer from the UCL. He met Ian Miers,
Daddeus Dryja, Ethan Heilman and Peter van Valkenburg at Bitcoin 2017,
Workshop for Bitcoin and Blockchains.
Being an unknown actor before, he lately became clearl
Antagonistic (https://twitter.com/paddyucl/status/967728996187328512) to
IOTA. Also here: (ttps://twitter.com/paddyucl/status/965743980846682112)
According to his curriculum vitae (http://www0.cs.ucl.ac.uk/staff/P.McCorry/),
he has an academic relation to Andrew Miller, Zcash Advisor.
He furthermore worked with Ethan Heilman and Andrew Miller on Ethereum
and Bitcoin related Studies (http://homepages.cs.ncl.ac.uk/patrick.mccorry/atomically-trading-roger.pdf).
Furthermore with Andrew Miller on a Security Audit of RSKJ Ginger 0.2.0
(http://www0.cs.ucl.ac.uk/staff/P.McCorry/rskaudit_ginger_120717.pdf)
It appears that he also shares the common interest of Ethan Heilman and
Andrew Miller to damage IOTA’s reputation.
5) Conclusion
The evidence at hand impressively shows what nepotism and business connections, as well as common interest can mean in the ecosphere of cryptocurrencies.
The Digital Currency Group, the Digital Currency Initiative, Coindesk and Morgen Peck as their journalistic tool combine their efforts in order to strengthen their portfolios or simply to give competing projects such as IOTA a rough time.
The email leaks between the DCI and IOTA have shown the true intentions of the DCI but the presented connections in this report make the following conclusion rock solid.
IOTA is facing coordinated efforts in order to suffer collateral reputational damage from entities and developers around the DCG, the DCI and connected acquaintances which act in everyones own favor.
The introduction of conflict of interest-policies for the MIT, the IEEE and the Boston University as well as the federal regulations has been made to highlight that the actions of named involved persons and entities are in -direct violation- to these policies.
