Arbitrum to Boost Presence in Japan with New Partnership

Arbitrum Foundation has entered a partnership with protocol studio Fracton Ventures to launch Arbitrum Japan. This is in a bid to boost Arbitrum’s presence in the country.

According to a statement, the partnership with an undisclosed funding will also promote ecosystem development and community education programs, according to a statement. Arbitrum is a layer 2 network that allows developers to seamlessly build on the Ethereum network. 

Its expansion to Japan is part of the foundation’s strategy to reach regions with untapped potential.

“We feel there is huge untapped potential within the Japanese region,” Arbitrum Foundation Head of Ecosystem Development Nina Rong said in the statement. “In our collaboration with Fracton Ventures, we feel we are uniquely positioned to reach a new demographic of developers, innovators and blockchain-curious consumers that haven’t previously been exposed to the benefits of blockchain technology.”

The partnership will  leverage Fracton Ventures’ network of experts, investors, and developers who co-create the future of Web3 as contributors rather than just supporters. Based in Japan, the company’s familiarity with the country’s regulatory demands will also make it easier for Arbitrum to fit in.

“When the opportunity presented itself to grow Arbitrum in Japan, we felt strongly that we would be the best partner to help bring the vision of Arbitrum Japan to life,” Fracton Ventures Head of Partnerships Siddharth Pillai added. “Our region is ripe for innovation within the blockchain sector, but hasn’t yet had the exposure to leading technology and developer tools – now, with Arbitrum Japan, they will have the opportunity to fully harness the power of blockchain.”

Promoting the Growth of Arbitrum

The partnership will achieve two major things, namely business building and ecosystem development. Primarily, it aims to promote the growth of Arbitrum in the Japanese market and foster business development through working collaborations between web2 and web3 companies in the country.

In addition to this, Arbitrum Japan plans to expand technical educational content via AMA sessions and hackathons. The statement further added that University ambassadors and community managers will also lead activities to boost Arbitrum’s adoption.

Arbitrum is currently the dominant Ethereum Layer 2 scaling network, with $5.9 billion (55%) of TVL across Layer 2 chains. The expansion to Japan is likely to further enhance the growth of the project, further strengthening its dominance over other Ethereum Layer 2 networks.

Japan’s Crypto-Friendliness

Japan has become a major crypto hub, attracting major crypto projects recently. Leading crypto exchange Binance recently opened its Japan branch, Binance Japan, and is in the process of launching a stablecoin backed by the Japanese Yen and other fiat currencies, and now Arbitrum is launching there.

This is owed to the friendliness of the government towards crypto. The Prime Minister, Fumio Kishida recently admitted the potential of web3 to transform the internet and contribute to social change.

Japan’s National Tax Agency in June also exempted crypto issuers from paying capital gains taxes of around 35% on unrealized gains,  in order to promote the growth of the crypto industry. This makes the country exceptionally attractive to crypto projects like Arbitrum.

“We have received a lot of interest from both Japanese enterprises and individual developers about Arbitrum technology,” Rong said. “We would like to better serve these clients with local resources on the ground. It was thrilling to see the Japanese government release a web3 whitepaper recommending to boost the crypto industry in the county,” she added. 

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Fireblocks Brings Tokenization to Financial Giants with BlockFold Acquisition

Enterprise-grade blockchain platform Fireblocks has announced its acquisition of smart contract development and consulting firm, BlockFold. BlockFold specializes in advanced tokenization projects for financial institutions.

Through the acquisition, Fireblocks will be equipped with better tokenization abilities to offer clients a more complete suite of services, including advisory, token customization, orchestration, and distribution through the Fireblocks Network.

It is projected that blockchain tokenization of financial assets will grow into a $16 trillion market by 2030 and will represent 10% of all financial assets. Fireblocks confirms this as it has seen a rapid increase in customer demands with a 350% increase in tokenization projects between 2022 and 2023, and 75% of tier-1 financial institutions exploring tokenization via its platform.

With the critical role that tokenization is playing in strengthening old banking and financial market infrastructure and bringing about healthy competition, Fireblocks intends to continue working with its partners to create an open tokenization market that will meet the specific needs of its customers.

“BlockFold’s expertise fills an important gap in the market, tailoring bespoke solutions for some of our most sophisticated customers and prospects in the banking and financial institutions space,” said Michael Shaulov, Co-founder & CEO at Fireblocks. 

“We already speak a common language in understanding these customers’ requirements at an architectural level. Bringing BlockFold’s expertise in-house means that we can better serve tier-1 financial institutions to quickly and seamlessly bring tokenization projects into production and new assets onto the blockchain. In addition, we can continue to innovate and expand our offerings and tailor our approaches as the market continues to mature and evolve,” he added.

Fireblocks released its first bank-issued stablecoin in March 2022. Since then, the company has delivered more than 10 stablecoin projects and is in active conversations with more than 25 banks globally, who are exploring the creation of bank-issued stablecoins or tokenized deposits. 

With such huge demands, Fireblocks expects the value of tokenized money on the blockchain to reach $450 billion within the next three years. 

Bridging the Gap Between DeFi and CeFi

Tokenization is gradually becoming more appreciated across industries, including in traditional markets. Just in May this year, Fireblocks enabled the Tel Aviv Stock Exchange and the Israeli Ministry of Finance to tokenize and settle a government bond following a live auction with 5 domestic and 7 global banks. 

The project has empowered the Israeli government to tokenize Israel’s government debt market in the future, which is worth $15 billion annually.

According to Head of Clearing at the Tel Aviv Stock Exchange, Orly Grinfeld, this tokenization technology will effectively bridge the gap between DeFi and CeFi.

“Fireblocks’ acquisition of BlockFold stands to strengthen its tokenization capabilities and bridge the gap between CeFi and DeFi by allowing financial institutions like TASE to build robust and scalable infrastructures and support well-governed digital asset ecosystems,” he said.

Doing More

Fireblocks is doing more than just tokenization in the blockchain space. In May, it partnered with Notabene, a pre-transaction decision-making platform to bring streamlined compliance experience for institutions.

By integrating its pre-transaction decision-making solution to the Fireblocks platform, Notabene helps to create a seamless experience for its institutional customers looking to comply with their local crypto Travel Rule requirements. 

Fireblocks intends to continue playing the critical role it is playing to help widen the scope of blockchain technology adoption across the world.

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BIS Official Outlines 3 Requirements for Supporting CBDC Adoption

In an advance communication, the Bank of International Settlements (BIS) outlined the factors that will contribute to the adoption of the Central Bank Digital Currency (CBDC). The September 27 report illustrated the need to develop a legal framework that protects the user’s privacy. Also, the BIS underscored the importance of granting the user complete control over assets.

Factors that will Contribute to CBDC Adoption

The BIS report stated that by providing the user the freedom to select a currency that aligns with his need is the critical driver to stimulating the adoption of CBDC. Speaking exclusively at the BIS Innovation Hub conference held in Switzerland, Agustín Carstens emphasized the need to develop a legal framework that supports the development and implementation of the CBDC.

The two-day event was attended by key players in the financial sector seeking to strengthen the operation of conventional and decentralized financial systems. The Switzerland event aimed at promoting innovation and establishing solid collaboration among key players in the financial industry.

In his address, Carstens stated that powers given to central banks will support the legitimacy of the CBDC. The executive argued that the central bank should act according to the law to align its operation with the legal requirements. 

Referring to various provisions in the law, Carstens agreed that the legal framework guides the central bank on the type of currency in circulation. The executive admitted the existence of multiple types of money, including ordinary cash, credit balances, and reserve accounts.

Despite the authority given to central banks, the government imposes some measures on the money in supply to hedge inflation and foster economic development.

BIS Pushes for CBDC Adoption

Reflecting on a report issued by the International Monetary Fund (IMF) in 2021, Carstens observed that approximately 80% of the central banks are restricted from issuing their own CBDC in the existing regulations. The IMF report demonstrated that the rules for offering digital currency are still unclear in most regions.

In a subsequent research by the BIS, the bank noted that around 93% of central banks worldwide are currently developing CBDC. The BIS admitted that CBDC development involves multiple stages.

In the report, the BIS argued the critical players in the development of CBDC are exploring ways to meet the growing demand for digital currency. Despite the long pursuit to implement suitable digital currencies, Carstens noted that the lack of a comprehensive legal framework has undermined the development of CBDC.

Community Criticizes CBDC Adoption

The delayed implementation of the CBDC has sparked criticism among the crypto community. Some crypto enthusiasts have recently argued that CBDC has been misused in increasing social credit scores. Regarding the digital currency’s speculation, Carstens stated that CBDC requires a well-defined legal framework.

In his intriguing report, the BIS general manager restated that protecting the user privacy, integrity of financial systems, and granting the user freedom over money are critical elements in the development of CBDC.

The executive noted a difference in patterns in the use of physical cash in different regions. Also, different approaches are adopted in implementing digital payment and retail CBDC to ensure other currencies coexist.

Carstens advised the central banks to explore ways the CBDC could increase value to society. The remarks from the BIS official came when China was campaigning for the adoption of the CBDC. Recently, the Chinese authority integrated digital fiat into the e-CNY software to allow tourists to make payments through Visa and Mastercard.

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Lawmakers Grill SEC Chair Over Regulatory Approach to Crypto

Chairman of the U.S. securities and exchange commission (SEC), Gary Gensler came under fire from the U.S. congress in a Wednesday hearing over his approach towards crypto regulation.

Gensler faced several questions on the floor of the house, the major ones being whether a Bitcoin ETF will be approved, whether Bitcoin is a security, and whether a Pokemon card could be considered a security. 

The first question was thrown by House Financial Services Committee Chair Patrick McHenry, R-N.C. who asked Gensler if Bitcoin was a security or not.

“I’m asking you to answer my question now.. “This is not supposed to be hard,” McHenry said as the question was met with a bit of back and forth.

In response to McHenry, Gensler said bitcoin is not a security, and that it does not meet the so-called Howey Test, a test that was born from a 1946 U.S. Supreme Court case and is now used to help determine whether transactions are investment contracts and thus subject to securities laws. 

On the issue of a Bitcoin ETF, Rep. Nickel, who was one of those who sent a letter to the SEC asking it to approve a Bitcoin ETF in light of the Grayscale ruling asked:

“Now that the SEC has the court’s decision in hand, rejecting your rationale for denial, does the SEC plan to approve the current pending spot bitcoin ETF applications?”

Gensler said the agency was “still taking this under advisement.” 

Finally, Rep. Ritchie Torres, D-N.Y., asked Gensler if buying a Pokemon card could be a security transaction that is subject to securities laws, to which he said no.

“If I were to purchase a tokenized Pokemon card on a digital exchange via blockchain — is that a security transaction?” Torres then asked. “I’d have to know more,” Gensler said. 

Gensler and the FTX Collapse

Gensler is now a household name in the U.S. because of his crackdown on crypto. This was his approach even before the collapse of FTX. However, there is the notion that he hasn’t approached the FTX case with the same seriousness he used with the rest of the industry.

During the hearing, McHenry accused Gensler of not being transparent to Congress regarding his interactions with bankrupt crypto exchange FTX and its former CEO Sam Bankman-Fried, leading to a subpoena threat. 

“Either we find a path forward where the SEC recognizes Congress as a co-equal branch of government and is responsive to our oversight duties, or my only option is to issue a subpoena,” McHenry said.

However, Rep Maxine Waters, D-Calif., backed Gensler up in her opening remarks, saying “The SEC is very much implementing the priorities that I and my Democratic colleagues championed when we were in charge, and is shaping up to be the most pro-worker, pro-investor, pro-small business SEC since FDR created the agency,”

Regulation by Enforcement

In another heated exchange, Rep. Tom Emmer, R-Minn., accused Gensler of being partial and taking a “regulation by harassment approach” toward digital assets.

“Instead it’s clear that you are working to consolidate your own power even though it means crushing opportunities for everyday Americans and frankly, the financial future of this country,” Emmer said. 

This is with respect to Gensler’s opinion that most cryptocurrencies and crypto firms are subject to federal securities laws, and that the industry is generally non-compliant.

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U.S. Lawmakers Push for Immediate Approval of Bitcoin Spot ETF

Lawmakers in the U.S. have urged the chairman of the securities and exchange commission, Gary Gensler to immediately approve a Bitcoin spot exchange traded fund (ETF). 

The lawmakers including Reps. Mike Flood, R-Neb., Tom Emmer, R-Minn., Ritchie Torres, D-N.Y. and Wiley Nickel, D-N.C., in a letter on Tuesday argued that a bitcoin spot ETF will make bitcoin investing easier and safer. 

“Congress has a duty to ensure the SEC approves investment products that meet the requirements set out by Congress,” they said. “To that end, we urge you to approve the listing of spot-bitcoin ETPs immediately.”

This is coming on the heels of a recent ruling on the Grayscale ETF application. A three-judge panel of the District of Columbia Court of Appeals in Washington early this month ruled that the SEC was wrong to turn down the company’s request without any explanations. 

Grayscale had applied to the SEC requesting to convert its large cap crypto asset management platform into a Bitcoin spot ETF. The judges found no reason why the SEC should turn down the request when it approved a Bitcoin futures ETF under similar circumstances. 

“The Court’s finding underscores the fundamental point,” the lawmakers said. “A spot bitcoin ETP is indistinguishable from a bitcoin futures ETP. Thus, the SEC’s current posture is untenable moving forward.”

There are already several applications submitted to the SEC this year alone for a Bitcoin spot ETF. The most notable of these are those of BlackRock, Ark Invest, and others. The SEC had last month postponed its decision on all the pending applications, saying it needed more time to decide.

SEC Soft on Chinese Crypto Companies

While the SEC seems so strict about approving Bitcoin spot ETF applications by American companies, lawmakers have expressed concern that the agency isn’t using a similar approach towards Chinese crypto companies.

Rep. Blaine Luetkemeyer, R-Mo., sent a letter to Gensler and Financial Industry Regulatory Authority President Robert Cook on Tuesday, expressing concern that both agencies allow registered broker-dealers with ownership ties to the Chinese Community Party to operate in the U.S. 

Luetkemeyer argued that the SEC wasn’t doing enough to address concerns regarding non-China based U.S. firms with ties to the CCP, mentioning examples such as Prometheum Inc, Webull Financial, LLC and Moomoo, Inc. 

“The SEC’s limited effort in this regard is particularly troubling given the important role registered broker-dealers play in our financial markets, including the fact that many of these firms provide (or intend to provide) products and services directly to retail investors, which requires the collection of substantial amounts of customers’ personal information,” the lawmaker said. 

Luetkemeyer, who sits on the House Financial Services Committee, questioned Gensler about the SEC’s data security concerns on ties to the CCP, among others.

SEC Postpones Decision on Bitcoin ETF

Despite the call by lawmakers for the SEC to approve a Bitcoin spot ETF urgently, the agency has announced that it will postpone decisions on another ETF till next year 2024. The agency is suspending its decision on the ARK 21Shares Bitcoin ETF to Jan 10 deadline. 

Meanwhile, the SEC’s decision on the other applications is still expected after the first postponement. The crypto community is more hopeful now than ever that a Bitcoin ETF coils become a reality and with the support of lawmakers, there is light at the end of the tunnel.

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Chase Bank UK to Restrict Crypto Transactions in October

JPMorgan financial arm Chase Bank announced plans to impose restrictions on crypto transactions in the UK. In a blog post, the Chase bank team confirmed that from October 16, UK retail and institutional clients will be restricted from engaging in crypto transactions.

The report demonstrated that the bank would adopt restrictive measures to prevent UK users from using debit cards and bank transfers to buy and sell crypto assets.

Chase Bank UK Restricting Crypto Transactions

An announcement by Chase Bank revealed that for customers attempting to bypass the new restrictions after the set deadlines, the bank will decline their crypto transactions. Upon reaching the Chase spokesperson for further questioning, the representative stated that the increase in fraudulent activities and scams in the crypto sector challenged the bank to take proactive measures to safeguard the consumer interest.

Firstly, the bank agreed to impose restrictive measures in all crypto-related transactions to address financial crime. Citing a study from the British fraud reporting agency on “Action Fraud,” the spokesperson noted that crypto losses have drastically increased.

Rise of Crypto Crimes in UK

The study demonstrated that crypto fraud increased by 40% as of May 2023. In the research findings, the agency noted that crypto losses in the UK translate to over $365 million, which equates to 300 million British pounds.

The agency concluded that crypto crimes have exposed customers to loss of substantial amounts. In response to the early warning from the agency, Chase Bank agreed to prioritize protecting the consumer interest by implementing measures that will safeguard their hard-earned money.

The Chase representative underscored that the institution will remain committed to attaining its primary objective of keeping its customers’ funds safe and secure. Guided by the bank core principles, Chase has been offering financial and banking services for decades.

Since 1877, the bank has broadened its geographical presence by establishing around 4600 branches serving over 50 million customers. The attempt to remain in the vibrant financial market has challenged the bank to uphold compliance and safeguard the customers’ interests.

Measures to Adress Financial Crime

The spokesperson admitted that the bad players in the financial sector have been preying on the UK customers. In particular, the spokesperson lamented that most reported cases involved crypto scams. To help mitigate the crime rate, the spokesperson reiterated that the bank agreed to restrict the use of Chase debit cards and other depository services in buying and selling crypto assets.

Subsequently, Chase Bank emailed its key stakeholders outlining the policy changes. In the September 26 email, Chase stated that the bank has agreed to change its policies due to the increase in fraudulent activities in the crypto industry that have exposed customers to financial losses.

The bank also updated the X community on the changes in policies. News concerning the changes sparked heated arguments among the investors.

In an X post, one user stated that the restriction on crypto transactions limits the investor’s freedom to explore the financial sector. Even though Chase aimed at protecting the investor from exploitative business activity, the user claimed that the restrictions undermine the use of crypto.

In a subsequent X post from a Bitcoin maximalist, the investors blamed Chase Bank for banning crypto. He expressed concerns on whether the bank new policy aimed at retracing back to the paper and pen banking practices. The user believed there was a solid solution to combat fraudsters rather than restricting crypto transfers.

Editorial credit: YES Market Media / Shutterstock.com

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Binance Partners MUFG to Issue Stablecoin in Japan

Leading crypto exchange Binance is working in partnership with Japan’s top bank, MUFG to study the issuance of a new stablecoin pegged to fiat currencies. 

The exchange in a statement on Tuesday said Binance Japan Inc. is conducting a joint study with the aim of issuing a stablecoin tied to fiat currency, in conjunction with Mitsubishi UFJ Trust and Banking Corporation (MUTB). The stablecoin is to be pegged to the Japanese Yen, as well as other top foreign fiat currencies, the statement said.

According to the statement, MUTB’s role includes exploring the use of its platform “Progmat Coin,” as infrastructure for stablecoin issuance. The two companies are expected to start operations by the end of next year after obtaining all necessary regulatory clearance. 

This is coming just weeks after Binance created a new platform for its Japanese users following its shutdown due to regulatory challenges many years ago. The leading crypto exchange launched the platform last month after making some adjustments to suit regulators. 

Binance first entered the Japanese market by acquiring Sakura Exchange BitCoin (SEBC), a licensed local crypto exchange service provider in November 2022. SEBC has now changed its business name from Sakura Exchange BitCoin (SEBC) to Binance Japan K.K, which is the current Binance subsidiary tailored to the needs of Japanese users.

Through the platform, new Japanese users can access services such as spot trading, bringing 34 tokens to its users in Japan, including BNB, and earn products, while derivatives services are to be made available in the future in a locally compliant manner.

Existing Binance Global users can now apply for migration to Binance Japan until November 30, after which their accounts will be set to withdrawal only mode, and non-compliant crypto assets automatically converted to Bitcoin.  

Japan’s Regulation Favors Stablecoin

Japan is one of the most open countries to crypto and blockchain technology, but also takes regulation of the industry very seriously. This is why Binance had to shut down its operations in 2018.

However with the new legal framework for stablecoins introduced by Japan’s parliament in June 2022, issuing stablecoins in the country has become much easier. The framework which took effect in June this year demands that the stablecoins be linked to the yen or another fiat currency and that holders have the right to redeem them at face value. 

Speaking on the importance of stablecoins for the economy and for web3 adoption, general manager of Binance Japan, Takeshi Chino said:

“Stablecoins have important use cases across the broader financial ecosystem – from a lower-cost and instantaneous cross border trade settlement for business clients, to the facilitation of trading other cryptocurrencies seamlessly for retail investors — stablecoins fill an important financial services need and are crucial for the success of Web 3.0 adoption.”

Also commenting on the stablecoin project, vice president of product of MUTB, Tatsuya Saito, said: “We believe that the new stablecoin from this collaboration will be a step forward in advancing Web 3.0.” 

Binance Widening its Reach

Binance is facing many regulatory challenges, particularly in the U.S. This doesn’t seem to deter the company though, as it appears to be expanding nonetheless. 

Apart from establishing in Japan and embarking on the stablecoin project, the exchange has also announced its return to Belgium, where it was banned earlier this year.

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mBridge CBDC Project Set to Onboard New Participants in the Launching of Minimum Viable Product

On September 22, the chief executive of the Hong Kong Monetary Authority (HKMA), Eddie Yue, confirmed that the mBridge project expects significant development in the coming days. The CEO delivered his keynote speech at the 2023 Bund Summit in Shanghai China outlining the expansion plan for mBridge, a platform developed to support central bank digital currency (CBDC) in cross-border transactions.

The CEO stated that the mBridge project had undergone multiple pilot trials to examine the efficiency of the CBDC. The mBridge project was developed by numerous central banks to support foreign transactions using CBDC and peer-to-peer (P2P) payments. The mBridge project has been design to support the user in meeting the regulatory requirements and compliance.

Launching of Minimum Viable Product

In a recently completed pilot test conducted by the Bank for International Settlements, HKMA, the central bank of China, Thailand, and UAE demonstrated that the mBridge project will enhance the speed of cross-border transactions. Additionally, the participants noted that strengthening the mBridge project provides cost-effective and transparent cross-border transactions.

The HKMA CEO explained that the impending launch of the minimum viable product (MVP) would be critical in expanding the mBridge project. Also, launching the MVP will be a gateway for the commercialization of the mBridge.

In his intriguing report, the CEO underlined that the team behind the mBridge plans on onboarding more central banks in the coming day. Yue stated that the expected enlisting of other central banks would be open to allow more participation from critical financial players.

Earlier, officials from the above-mentioned central bank developed the criteria for participating in the ongoing mBridge project. Under the proposed requirements to participate in the project, eligible central banks were not required to have established their own CBDC.

Ideally, the mBridge project team aimed at maintaining a small group of participants to attain the results. It was assumed that enlisting large consortia could slow the implementation of the mBridge.

Impact of Globalization in Emerging Markets

The report indicates that most participants, including the central banks of Israel, Sweden, Philippines, Korea, Indonesia, and Malaysia, have ongoing pilot testing of the CBDC. The CBDC Tracker report illustrated that the central banks of Nigeria, Bahamas, and Jamaica are the only participants who have successfully launched their CBDC.

Besides outlining the progress of the mBridge project, the HKMA CEO noted that the public has waned from supporting globalization. The executive stated that globalization has brought endless benefits to emerging markets.

However, the fragmentation of global economic risk has undermined globalization in most Asian countries. Yue admitted that, lately, there is a close connection between trade and supply chain linkages in Asia. The integration of the two encourages the use of local fiat in cross-border settlement.

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Hackers Compromises Mixin Network’s Cloud Services Heisting $200 Million

Mixin Network, prominent blockchain protocol that addresses scalability concerns, has suffered loss of substantial assets after the hackers compromised its database. In a September 23 update, the Mixin team lamented that hackers launched a malicious attack on the protocol, draining assets worth around $200 million.

The incident was first reported by SlowMist, a blockchain security company. In the report, the SlowMist team noted that the attacker identified a system vulnerability in the third-party cloud service provider.

Mixin Network Hacked

According to the SlowMist analyst, the attackers launched the malicious attack on Saturday, September 23, in the early morning hours. The incident resulted in a loss of measurable assets amounting to around $200 million.

Following the losses of substantial amounts, the Mixin team took proactive measures to ensure the remaining assets were safe. Hours after the hack, the Mixin team suspended all depository and withdrawal services indefinitely.

Consecutively, the blockchain firm enlisted SlowMist and Google to help in the recovery of funds. In a separate investigation by PeckShield, the Mixin owned assets amounting to $141.32 million.

The assets consisted of Ether (ETH), Dai (DAI), and Bitcoin (BTC), amounting to $94.48 million, $23.55 million, and $23.3 million, respectively. The Mixin team announced that deposit and withdrawal will commence after the technical team has fixed the system vulnerabilities.

Mixin Network Recovery Plan

Currently, the blockchain company seeks to restore operation before commencing to recover funds. Based on the hack’s severity, Mixin Feng Xiaodong’s founder has scheduled to give a public address on the livestream soon.

Since 2017, the Mixin Network has significantly improved the blockchain network. The report indicates that Mixin Network offers premium services that corresponds to the layer-2 protocol.

Primarily, Mixin seeks to improve cross-chain transfers by enhancing its efficiency and reducing cost. The remarkable contribution of the Mixin network solidifies the network at a considerable market share in the blockchain industry.

In July, the top 100 digital assets supported by the network were valued at $1.1 billion. The July report demonstrated that investors transferred around 663489 Bitcoin and 179647 Ether.

Given the September 23 hack, market critics argued that Mixin relies solely on a centralized database with a single point of weakness. They regretted that the centralized database contributed to the exploits since it is prone to vulnerability.

Rise of Malicious Attacks

A recent study from Immunefi demonstrated that the bad players had been preying on the Web3 sector last month. The ImmunFi report indicated that assets worth approximately $23 million were lost in August.

According to Immunefi, hackers stole assets worth around $15 million, while $7 million was lost in fraudulent schemes. The Immunefi analysis coincided with the hacking of Vitalik Buterin X’s account, which resulted in loss of a significant amount of assets.

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Hong Kong to Release List of Crypto License Applicants

As part of its strategy to enlighten investors about safe crypto firms to use, Hong Kong is releasing the list of crypto firms that applied for its newly launched retail crypto trading licenses. This new decision was informed by the JPEX’s incident last week, involving users’ funds of over $3 million. 

According to the Securities and Futures Commission, the list will contain the names of licensed virtual asset trading platforms (VATPs), a list of closing-down VATPs, a list of VATPs deemed licensed as of June 1, 2024 and a list of VATP applicants “in light of public demand.”

“To help the public more easily identify suspicious VATPs doing business in Hong Kong and enhance awareness, the SFC will enhance and issue a dedicated list of suspicious VATPs which is easily accessible and with prominence on the SFC’s website,” the regulator said in a statement on Monday. 

JPEX, an unregistered crypto trading platform operating in Hong Kong came under regulatory pressure when many of its users registered complaints with the authorities concerning their funds. 

The SFC took action and reported to the police, who have made several arrests concerning the case, including a social media influencer, Joseph Lam for promoting the company. The SFC blamed the incident on crypto investors not knowing which companies to deal with, as JPEX claims it has applied for virtual asset license in Hong Kong.

The Director of Licensing and Head of Fintech Unit, Intermediaries of the SFC, Elizabeth Wong stated at a press briefing on Monday that the publication of the list of applicants allows the public to scrutinize whether a particular platform has made false statements regarding license applications. According to Wong, there are currently four companies in the preliminary process of applying for licenses.

Hong Kong Takes Enforcement Action

Hong Kong is one of the budding crypto havens in the world, with its friendly approach towards crypto and crypto firms. From all indications, the region is open to all crypto firms interested in operating within its jurisdiction, and recently released guidance for applying for its licenses.

However, because of the proliferation of criminal activities around crypto, the authorities have decided to take enforcement action against fraudulent crypto firms, and the release of this list is one of the steps towards this direction. The police also raided 20 locations related to JPEX operations last week, an action that JPEX described as unfair. 

“It is very encouraging that Hong Kong is ready to take enforcement action on unlicensed and criminal activities, and it is likewise very positive to see that also those individuals who have coerced often uninformed investors to trade on JPEX, so-called ‘KOLs’ and ‘influencers,’ are held liable for their actions,” Donald Day, chief operating officer of Hong Kong-based crypto platform VDX, told The Block in a statement.

JPEX in a new announcement on Sunday told its Hong Kong customers to “temporarily cease depositing new assets and crypto-assets into the platform.”

Sanitizing the Crypto Hub

Hong Kong’s enforcement action may be a much needed decision to clean up the region and make it not just a global crypto hub, but to make it a safe one. 

The authorities have demonstrated willingness to make the place a leader in financial innovation, but this cannot be achieved with fraudulent firms springing up in it.

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Terra Classic Community Calls for Suspension of USTC Minting to Support Stablecoin Repegging

Since 2022, the Terra Classic community has been pursuing ways to repeg its stablecoin USTC, which formed a bearish market structure. In a recent report, the Terra community suggested that the stablecoin issuer should cease minting digital assets. Also, the community urged the Terra community to adjourn the reminting activities.

Repegging of Terra USTC

 In an AtomScan report, approximately 59% of the Terra supporters voted to discontinue minting activities. In contrast, 40% of the participants had a different mechanism to support the repegging of the USTC. 

The completed voting process aims to revive the USTC’s stability, which was backed by the US dollar currency. Additionally, the voting process aims at protecting the interest of the devastated stakeholders affected by the crashing of the Terra ecosystem.

In May last year, the USTC depegged from the US dollar, causing a downturn in the entire crypto market. At that time, the repercussions of the crashing of Terra negatively affected the performance of Luna Classic (LUNC), a stablecoin backed by USTC.

The report shows that LUNC’s market value dropped by nearly 100%, which resulted in loss of substantial assets. The dribbling momentum established by LUNC and USTC created a domino effect on significant crypto investments. The poor market performance recorded by the stablecoins obliged the regulators led by the US Securities and Exchange Commission (SEC) to probe the matter.

USTC and LUNC Fails to Overcome Bearish Structure

Reportedly, the SEC had filed multiple lawsuits against the co-founder of Terra Do Kwon for exposing the customers to losses. In the filing, the SEC accused Do Kwon of orchestrating a fraudulent scheme that resulted in the loss of billions of dollars.

Initially, the trash-talking entrepreneur described Luna and Terra UST as a game changer in the crypto sector. Do Kwon’s great invention failed last year, leading to a loss of over $300 billion.

The downfall of Terra and Luna challenged the community to explore practical ways to restore the market performance of the stablecoins. From the AtomScan report, the Terra community believed that by reducing the supply of USTC, the troubled stablecoin definitely repeg. The proposal underlined that halting the minting and reminting activities would encourage the exchange to commence the burning of the USTC.

Terra Classic to Suspend Minting and Reminting

In the proposal, the crypto community requested a fast-paced crypto exchange to support burning USTC. As of press, Binance burns approximately 50% of LUNC monthly.

In the meantime, the Terra community has requested the Binance team to support the burning of USTC. They project was that if Binance could support the burning of the stablecoin, the USTC would repeg.

At the beginning of September, the Terra community raised concerns about the rise of spam proposals. The community agreed to establish measures to address spam. The report indicated that the minimum deposit will be increased to 5 million LUNC.

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Coinbase CEO Opposes AI Regulation

In a recent X post (formerly Twitter), the chief executive of Coinbase, Brian Armstrong, opposed regulating the use case of artificial intelligence (AI) technology. Despite the inherent risk associated with the adoption of AI technologies, the CEO urged regulators to impose policies that will support the growth of the industry.

Importance of AI Technology

 In his September 23 post, the executive underlined the need to support the development of AI. A review of a recent study by McKinsey demonstrated that AI adoption has increased by 56% in 2021.

The statistics demonstrated that the adoption of AI has gained steady growth. With the rise of the adoption of AI technology, Armstrong urged the regulators to implement strategies to promote innovation and technology development.

The executive admitted that AI technology has massive potential to support data processing, critical in promoting national security. The official explained that despite the efforts made by the regulators to ensure safe and secure adoption of advanced technologies such as AI, some regulations had unintended consequences.

Coinbase CEO Stands Against AI Regulation

The CEO criticized some regulatory approaches that triggers unhealthy competition and undermine innovation. In his address, Armstrong stated that friendly regulation supported the Internet’s growth back in the 1900s.

He describes the internet era as a golden age for innovation. In his observation, Armstrong noted that the internet’s free and open access nature inspired the regulators to minimize their regulatory action on the industry.

At that time, the government enforced a national policy on information and technology that attracted the growth of the internet and other revolutionary technologies. Besides the policy, the government-funded research to improve the internet use case and foster innovation and technology development.

Armstrong noted that the government’s involvement in developing the internet aimed at promoting economic growth. In his address, the Coinbase CEO argues that the regulators and the government should formulate policies to support the development of the AI sector.

Instead of regulating the AI sector, the CEO urged the regulators to adopt measures that protect the industry. He regretted that regulating AI might undermine growth.

Coinbase Calls for Decentralization of AI Sector

However, Armstrong underscored the need to decentralize the sector to improve the government’s capabilities to leapfrog the development of AI. The CEO requested the critical players in the AI sector to invest in creating open-source protocols to improve adoption.

The Coinbase CEO’s positive stance on AI validates a recent study by the UK Competition and Market Authority (CMA) that illustrated artificial intelligence can enormously improve the community’s well-being. The CMA noted that AI will transform people’s lives and redefine business processes.

The competition regulators explained that AI will bring rapid changes, which will have a negative impact on competition. The CMA highlighted that AI technology will support fast-paced companies to dominate the markets. This practice is considered harmful competition, which might result in the violation of consumer protection regulations.

Significance of Regulating AI

The CMA concluded that regulators should impose measures to support consumer protection and foster economic growth. The CMA report echoes a UK Prime Minister’s AI task force call to regulate AI technology.

The task force envisaged that AI will become more powerful in the next two years. The Prime Minister and his team urged the UK regulators to expedite the implementation of AI rules.

Elsewhere, the Chinese authority enforced AI regulation last month. Under the new provision, the Chinese regulators outlined the provisional guidelines for regulating AI activities in the region.

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Coinbase Secures Central Bank Registration in Spain

Coinbase has secured a registration with the Bank of Spain, the company said in a blog post on 22 September. The exchange’s registration recognizes it as a cryptocurrency exchange and custodian wallet provider with the Bank of Spain. 

Going forward, Coinbase will have full liberty to offer its full range of products and services to retail and institutional users in Spain in compliance with the national legal framework. Coinbase’s move to secure the registration is in response to the increasing demand for crypto around the globe.

According to Coinbase, this increasing demand is evident from the increasing efforts to bring regulatory clarity in many jurisdictions. To this end, Coinbase is executing on Phase II of its “Go Broad, Go Deep” strategy for international expansion, and this Bank of Spain registration is a major step forward in the right direction.

With the registration, users in Spain will be able to access crypto custody services, buy or sell crypto using their local currency, as well as trade their crypto assets against other crypto assets on Coinbase. Commenting on the new development, Vice President of International and Business Development at Coinbase, Nana Murugesan said:

“We are excited to have achieved this registration from the Bank of Spain to support and grow our retail consumers, institutional clients and developer partners in Spain. Most of the world is stepping up to the plate and providing clarity and guidance for the crypto industry.”

“In the last year alone we have obtained VASP registrations in Italy, Ireland, and the Netherlands, as well as in-principle approval and launching in Singapore, launching in Brazil,  and, most recently, launching in Canada. Working with regulators in these jurisdictions is a fundamental step in our strategy to grow internationally and continue our momentum,” he added.

Coinbase’s Expansion Plans

While many only see the challenges facing the cryptocurrency industry, Coinbase sees opportunities, inspired by “the enactment of clear rules; innovation of more efficient, more accessible products and services; and user trust created through these products and services as our formula for long-term growth.”

The exchange says it is focusing on acquiring regulatory licenses in this phase 11 international expansion plan. It is also giving much attention to tailoring the local product experience for local needs, establishing local partnerships and strengthening local operations in ”Go Deep” markets that are enacting clear rules, as Spain has done. 

Spain happens to be one of the countries with clear regulations for the crypto industry, probably driven by its citizens’ interest in crypto. A research conducted by Bitnovo shows at least 29% of adults in the country believe crypto is the future of finance, and cryptocurrencies are currently the second most popular payment method, preferred over bank transfers.

It further revealed that 60.7% of Spanish citizens are motivated to buy cryptocurrencies for long-term investments, and 35.7% to make payments. What’s more? There are 178 Blockchain in Financial Services startups in Spain. In Spain, the total demand for blockchain skills has considerably exceeded projections.

MiCA Boosting Crypto Expansion

The newly introduced Markets in Crypto Assets (MiCA) legislation to regulate cryptocurrencies in Europe has received several commendations. Since it provides regulatory clarity for the industry, it is a big way to encourage crypto growth in the region.

Binance had a discussion with the European Banking Authority regarding stablecoin-specific regulations in MiCA on Thursday, and stated that the regulation is hugely favorable towards crypto.

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Mt. Gox Trustee Prolongs Deadline for Creditor Repayments to Next Year

The Japanese Bitcoin exchange platform  Mt. Gox has prolonged the deadline for repaying the creditors to next year. A letter penned by Nobuaki Kobayashi, the head of trustee, illustrated that the repayment period has been moved to October 31, 2024.

The trustee stated that a proposal to extend the repayment deadline was presented before the Tokyo District Court. Under this rehabilitation plan, the Mt. Gox team pledges to refund the hack victims at a considerable compensation rate of  90%.

Mt. Gox Extends Deadline to 2024

In 2014, Mt.Gox was renamed the granddaddy of hacks after attackers compromised the exchange and drained 850000 Bitcoin worth $350 million. A few weeks after the hack, the exchange was declared insolvent and filed for bankruptcy protection.

Following the closure of Mt. Gox operation, approximately 24000 customers were affected by the hack. The affected customers engage in lengthy battles to be compensated for their losses.

 After an uphill struggle to restore operation and refund the customers, legislators at the Tokyo district court and the creditors pursued ways to repay the hack victims. In response to the court decision, the exchange formulated a rehabilitation plan outlining the procedure to reimburse the creditor.

The rehabilitation plan was approved by the district court of Tokyo, instructing the exchange to refund creditors approximately $9 billion. Reportedly, the court ordered the Mt. Gox team to make the refund before October 2023.

Overview of Mt.Gox Rehabilitation Plan

Afterward, the troubled exchange requested the court for a repayment deadline extension. In a September 21 letter, the exchange stated that the new timelines would apply to the customers expecting base payment, intermediate repayment, and early lump sum repayment.

Subsequently, the deadline extension will allow the affected customers to submit required documents for compensation purposes. The creditors must provide critical information, including bank details and other personal information.

Guided by the rehabilitation plan, the trustee will liaise with banks’ and crypto exchanges in repaying the creditors. The trustee projects that the creditor would have provided the required information between now and January next year.

The trustee added that the Mt Gox team anticipates to begin repaying the creditors in Q4 of 2023. However, Kobayashi regretted that there might be changes in the rehabilitation plans due to the unprecedented crypto market.

Mt. Gox to Compensate Creditors

The trustee added that the exchange plans to announce the official timelines for the expected repayment. Commenting on Kobayashi’s announcement, the community expressed their disappointment.

They blamed the Mt. Gox team for postponing the repayment deadline twice this year. A scrutiny of the exchange’s financial capabilities demonstrated that Mt.Gox owns substantial assets that could support the repayment plans.

The exchange currently holds 138000 Bitcoin, equating to around $3.7 billion. Also, it owns Bitcoin Cash (BCH), amounting to approximately $29 million. Analyzing the financial report of the defunct exchange, some market critics argued that the compensation of 150000 BTC could create a “black swan” event that could negatively affect the Bitcoin ecosystem.

Editorial credit: 360b / Shutterstock.com

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Binance Contributes to MiCA Discussion on Stlbeacon Regulation in the EU

Leading crypto exchange Binance on Thursday outlined the details of a consultation it had with the European Banking Authority regarding stablecoin-specific regulations in the European Union’s Markets in Crypto Assets (MiCA) legislation. 

One of the key areas of focus for the conversation according to Binance was the question of whether stablecoin operators can be given some time to secure their Electric Money Institution (EMI) licenses in compliance with MiCA, which requires stablecoin issuers obtain an EMI license in the EU or else have their asset delisted from EU exchanges. 

“Currently, none of them do,” Binance wrote in a Thursday statement. “While we are confident that there will be a constructive solution in place before the mid-2024 deadline, if left as is, this could have an impact on the European crypto market and the competitiveness of European crypto exchanges in a global market.” 

Despite the challenges it is facing in the U.S. on the issues of compliance, Binance is one of the most respected players in the crypto industry, being the largest crypto exchange by trading volume. The exchange is actively working with regulators to arrive at proper regulation not just in the EU, but also in other jurisdictions.

After obtaining a virtual asset license to operate in Dubai, the company is currently working with regulators in the emirate to build a reliable regulatory framework for crypto. It is also doing the same in Kazakhstan where it recently launched its digital asset trading platform. Concerning the EU, Binance said the discussion is vital in helping MiCA achieve its goals.

“As an exchange that believes in the value of regulation and the pragmatic benefits of MiCA, we believe it’s important that these constructive conversations take place to help ensure that MiCA achieves its goals and any unintended consequences are reduced,” Binance added.

MiCA in Support of Crypto

MiCA is a crypto regulatory framework established by the EU to cover crypto assets which are not regulated by traditional finance regulations. The framework was established earlier this year, but is still in development and due to take off next year.

Through this discussion, Binance says that MiCA is an overwhelmingly positive framework towards crypto, unlike what most people might think once they hear about crypto regulation.

Binance’s CEO Changpeng ‘CZ’ Zhao earlier voiced his support for MiCA, stating that it would be the “global regulatory standard copied around the world” because of how it makes application for regulation easier by helping to streamline the number of licenses a digital asset provider must apply for. 

“The broad intent of MiCA is overwhelmingly positive for the crypto industry. As always, there are critical technical details that must be worked through,” it continued. “We will continue to work constructively with regulators and engage in these important conversations in the interest of helping to grow the crypto markets around the world,” the exchange stated.

Binance’s Regulatory Woes

Despite playing a major role in bringing about proper crypto regulation around the world, Binance still struggles with the issue of regulation in many jurisdictions, particularly the U.S. The exchange has been in court since June on allegations of securities laws violations by the SEC.

With its continued efforts to ensure full compliance, Binance may succeed in winning the case, especially considering the new turn of events where the courts have mostly ruled in favor of the crypto industry in several cases. 

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Alchemy Pay Bags Money Transmitter License in Arkansas

Crypto payment gateway Alchemy Pay has secured a Money Transmitter License in Arkansas, the company said in a press release on Thursday 21 September.

The license granted by the Arkansas Securities Department, empowers Alchemy Pay to enhance its operations within the United States, bringing its fully compliant crypto payment services for related-activity to Arkansas.

According to the Department, the license allows Alchemy Pay to engage in activities related to the selling or issuance of payment instruments, stored value, prepaid access, as well as the receipt of money and virtual currency to facilitate transactions with others.

Commenting on the license,  Ecosystem Lead at Alchemy Pay, Robert McCracken expressed delight that the company’s efforts towards compliance is yielding results.

“With a strong dedication to compliance, our team had invested substantial time and effort into securing licenses across various countries and regions. We are pleased to see that our endeavors have yielded positive outcomes,” McCracken said in a statement.

“Throughout recent years, Alchemy Pay has widely explored these emerging markets, building a robust presence and reputation in these regions, with a notable customer and user base. Leveraging its compliance capabilities, the company now prepares to expand its presence, aims to expand its services to users in the US, and further contribute to our mission, bridging the fiat and crypto global economies,” he added.

Alchemy Pay Seeks Compliance in Many Jurisdictions

Alchemy Pay has indeed invested significantly towards securing licenses in many jurisdictions. Arkansas is one of the U.S states the company has long pursued the license in, and has finally obtained it, but not relenting.

It is currently in the application process to obtain more Money Transmitter Licenses in other states across the United States. Up to this point, the company has secured the Money Transmitter License within the US, as well as several licenses in some of its major markets, including Indonesia and Lithuania.

The company is also reportedly actively pursuing an Authorized Payment Institution License in the United Kingdom, as well as seeking a Money Service Operator License and a Virtual Assets Service Provider License in Hong Kong, one of the leading crypto hubs in the world.

Additionally, the company gained official recognition from Visa and Mastercard earlier this year, giving it more credibility as an approved third-party service provider endorsed by these payment giants. With these achievements in place, Alchemy Pay is positioned to be a leader in payments in the near future, especially as crypto payments continue to gain popularity around the world.

ACH Price Jumps Following Licensing

The news of the license acquisition in the state of Arkansas has impacted ACH, Alchemy Pay’s native token positively. ACH is currently the 183rd largest cryptocurrency by market cap, according to Coin Market Cap. 

At the time of writing this report, the token has gone up 4.31 percent in the last 24 hours, coinciding with the announcement of the Arkansas license. This is not surprising as the license has widened ACH’s user base, bringing more users onboard.

Going forward, ACH is likely to record greater growth as the company continues to expand its coverage by obtaining more licenses both within and outside the U.S. Not only the price, but the trading volume has also increased by 107% in the last 24 hours, indicating that it is really being trading.

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Apple and Goldman Sachs Abandon Plans for Launching Trading Application

On Wednesday, September 20, the fast-paced tech and investment companies Apple and Goldman Sachs dropped plans to launch a trading application. A source privy to the matter said the proposed futures trading application was supposed to be launched last year.

However, due to the unprecedented economic downturns and spiking inflation, Apple and Goldman Sachs extended the deadline for officially launching the trading application. Also, the decision to put the project on hold was triggered by last year’s bearish crypto market that forced investors to sell off their digital assets.

Apple and Goldman Sachs Scraps Plans to Launch Trading Application

The report indicates that the idea of debuting the trading platform faded after the demand for trading applications declined during the bearish market. Unlike in 2020, when demand for investment solutions and trading applications was high, Apple and Goldman Sachs seemed to scrap the original plan. 

A review of the proposed trading application portrayed that the developers were almost ready to complete the project. It implies that the team behind the trading application is at the final stage towards the completion of the project.

In a previous report, the tech company had revealed plans to integrate investing features into the trading application. Apple explained that the investing feature will be at zero rates, and the development team has commenced working on the project.

In the report, Apple confirmed plans to launch the investing features in 2022. Reportedly, the investment feature aimed at allowing iPhone users to invest in Apple shares more effortlessly. However, the slump in stock prices forced Apple to pursue other viable opportunities. Reflecting on the performance of the stock market, Apple stated that the expected investing features could expose the customers to the inherent risk of financial losses. 

Objective of Apple and Goldman Sachs Parnership

 Apple and the Goldman Sachs team launched a groundbreaking savings account in April that will generate 4.15% annual returns. A statistic shared by the tech firm demonstrated that the users’ assets locked on Apple saving accounts reached $10 billion.

 A source familiar with the matter stated that it remains unclear whether Apple and Goldman Sachs planned on creating a crypto future trading category in the new application. In 2019, Apple entered into a partnership agreement with Wall Street Bank to revolutionize the financial sector.

At that time, Apple planned to diversify its business to introduce financial services to US customers. The two agreed to develop a credit card to bolster the financial health of the customers. Interestingly, the unique credit card marked a significant milestone for Apple and Goldman Sachs to gain considerable dominance in the financial sector.

Driven by the desire to transform the financial industry, the two companies introduced a buy now pay later feature to improve the efficiency of the transaction. The new feature allowed the credit card holder to divide the purchase into four equal payments. 

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Chamber of Digital Commerce Launching Digital Power Network to Support Crypto Miners

In an advanced report, the Chamber of Digital Commerce (CDC) revealed plans to launch an strategic coalition dubbed Digital Power Network (DPN) to support the agency in promoting innovation. The launching of DPN aims to support the organization in establishing robust trade associations in the blockchain and crypto sectors.

In a publication, the Chamber outlined the objective of launching the DPN and its significance to crypto miners. The report underlined that the DPN will give crypto miners a new voice in Washington in readiness for the next bull market.

Significance of Digital Power Network

According to the report, the Chamber stated that the DPN will support redefining the future of the US energy sector by implementing effective policies on crypto mining. In the report, the organization noted that the DPN will campaign for blockchain and Bitcoin technology. Primarily, the DPN seeks to transform the US energy sector by adopting emerging technologies such as blockchain.  

 The launching of the DPN came when regulators and environmentalists were gearing up to implement new ordinances to control noise and other crypto mining activities.

Despite the regulatory pressure on crypto mining, the DPN seeks to onboard the highest number of miners in the US. Presently, 11 crypto miners, including Marathon, Sustainable Bitcoin Protocol (SBP), BitDigital, Coinmint, Cipher Mining, and others, have joined the alliance.

US Seeks to Restrict Crypto Mining

Ideally, officials at the Chamber’s Mining initiative first presented the bill to form the alliance for crypto miners at the House of Representatives. In the submission, the Chamber stressed the need to establish proof of work (PoW) crypto mining to foster economic growth and promote attaining the sustainable energy goals.

In the proposal, the Chamber stated that the PoW supports the blockchain network to be trusted and decentralized. In March, Texas congressman Pete Session submitted the revised bill of PoW crypto mining. Session discussed the importance of Bitcoin mining in restoring energy independence in the US.

Regulation on Crypto Mining

The congressman’s report ignited heated exchanges among US policymakers and regulators. In a subsequent submission, Senator Edward Markey and his ally Jared Huffman formulate a new bill on crypto mining.

The two policymakers demanded the crypto miners disclose vital information on mining to the Environmental Protection Agency (EPA). The bill indicated that mining facilities consuming over 5 megawatts would undergo an EPA interagency investigation to assess complaince with the enviromental measures.

Markey underscored the need to limit the emission of greenhouse gasses that expose the community to inherent risks. The Markey proposal obliged other regulators to team up and regulate crypto-mining activities more keenly. The restrictions on crypto mining were led by the Arkansas policymakers who hurriedly sought to implement an emergency act to control noise from the data centers.

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Bitcoin Suffers Short-Term Selloff, But Diamond Hands are Buying More

Bitcoin’s price is becoming increasingly unpredictable. The asset has been trading in a tight range before a recent rally that saw it rise above $27,000 as investors hope for a happy ending to the Fed’s decision today.

One thing is clear though – the weak hands are selling. This is no reason to panic, because onchain data reveals that diamond hands, also known as long-term holders, are buying up more bitcoin. The sudden rally on Monday followed by a selloff reflects this reality.

According to Bitfinex analysts, such a trend is common and to be expected. “Current metrics depict short-term holders offloading their assets, with long-term holders capitalizing on the opportunity to buy in again,” they stated in a report. “Such time capitulation by short-term holders is typical of this cohort and it continues the trend of greater long-term holder accumulation,” the report further stated.

They also made reference to data from onchain analysis firm CryptoQuant, which shows that “the short-term holder cohort is currently at a deficit, leading them to relinquish the very coins they earlier bought from the long-term cohort.”

Long-Term Holders Accumulate

Despite the uncertainties surrounding Bitcoin’s price since the beginning of the year, one thing has remained clear, and that is the fact that long-term holders have been accumulating more Bitcoin. Data from several onchain analytics platforms like Glassnode have also confirmed that Bitcoin whales have held their assets for more than five years and are not willing to sell.

This was further confirmed by the massive movement of crypto assets off centralized exchanges in recent times. CryptoQuant analyst Adam Mourad also highlights onchain data that showed long-term holders are accumulating and moving assets off exchanges.

“Onchain outflow data shows bitcoin is tracing a strategic path chosen by certain investors to move their BTC away from exchange platforms, and recent observations following the price surge reveal that over 10,000 bitcoins have been transferred from exchanges to cold wallets,” Mourad told The Block.

The long-term holder accumulation trend could be because of their confidence in the future of Bitcoin. Investors are expecting no rate increase today Wednesday, as the Fed announces its decision on interest rates. If that happens, crypto assets could become more attractive to investors, causing more to enter the market.

Another factor could be the coming Bitcoin halving which is expected in 2024. This event has historically led to a rise in Bitcoin’s price, and investors are expecting a similar outcome following net year’s event.

What it Means for Bitcoin

With more investors buying and moving Bitcoin off exchanges for safe keeping, the asset is likely to experience a price surge in the future, despite the low volatility and price instability currently experienced. 

This has been the trend in the past. With sellers outnumbering buyers, the price dips eventually, but with more buyers and long-term holders, the price is likely to go up eventually. 

Interestingly, it isn’t just the number of holders that indicate a bright future for Bitcoin. Other key metrics such as Bitcoin mining difficulty also signal light at the end of the tunnel.

The mining difficulty – which is an indicator of miners’ interest in the asset – reached a record high few weeks ago, meaning miners have never been more interested in mining the asset than they are currently.

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U.S. SEC Says More Crypto Companies Will Face Charges Soon

The U.S securities and exchange commission (SEC) says it will extend its crypto hunt to more crypto firms soon. Head of the agency’s Crypto Assets and Cyber Unit, David Hirsch said this on Tuesday at the Securities Enforcement Forum Central in Chicago.

Hirsch said the agency isn’t done going after  crypto exchanges and decentralized finance (DeFi) projects it considers to be violating securities laws, similar to the case of Coinbase and Binance.

He further stated that his office is aware of and is investigating other firms that seem to be going the way of the two top crypto exchanges, adding that the industry’s compliance breeches “hold true well beyond any two entities.”  

“We’re going to continue to be active as intermediaries,” he said. “That can be brokers, dealers, exchanges, clearing agencies or any others who are active in this space, are within our jurisdiction and not meeting their obligations, either through registration or failure to provide adequate or complete disclosures.”

Binance and Coinbase are two of the biggest crypto exchanges in the world. The two were targeted by the SEC and sued in June on allegations of violations of securities laws. The agency alleged that the two exchanges were trading in securities, and that they failed to register as securities exchanges.

The case has lingered to this moment with no significant progress made, as both Coinbase and Binance have denied the allegations. Meanwhile, the agency has sought to investigate Binance.US in a hearing this week but was denied the request.

DeFi Not Left Out

One booming part of crypto is the decentralized finance (DeFi) ecosystem which took the industry by storm in 2020. While DeFi isn’t as tangible and easily traceable as centralized exchanges like Binance and Coinbase, Hirsch said it will not be left out.

“We’re going to continue to conduct investigations, we’re gonna be active in the space, and adding the label of DeFi is not going to be something that’s going to deter us from continuing our work,” he said.

Despite repeated condemnation of the SEC’s enforcement approach to regulating crypto companies, the agency has continued to pursue the same course in trying to bring crypto firms into compliance with securities laws.

Through its chair Garry Gensler, the agency has repeatedly said that crypto and crypto firms fall under its jurisdiction since it considers most crypto assets to be securities.

This is despite the lack of regulation for the crypto industry in the country, something Coinbase has brought up many times. The exchange had earlier filed a motion in court demanding the agency bring clear regulatory guidance to the industry.

SEC at Capacity

Because of the aggressiveness with which the SEC has been pursuing enforcement in the crypto industry, the agency has several cases in court, some even involving NFT companies for selling unregistered NFT securities.

Since its budget for such litigations is limited, Hirsch said the agency can only go so far with litigations at this time.

“There are more tokens extant — I think maybe 20,000, 25,000, last I read — than the SEC or any agency has the resources to pursue directly, and similarly there are a number of centralized platforms out there, some that are acting as unregistered exchanges,” he said.

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Bitbuy Closes Strategic Partnership with Localcoin to Improve Crypto Adoption

On Monday, September 18, the fast-paced fintech company in Canada inked a strategic partnership agreement with Localcoin, a crypto ATM provider. A blog post by Bitbuy’s parent company, WonderFi Technologies, indicated that the two partners will promote crypto adoption and improve accessibility to financial services and products.

Bitbuy Partners with Localcoin

 In an exclusive interview with Localcoin, the crypto ATM provider admitted that Bitbuy was the suitable partner for the business to attain the end goal. The Localcoin spokesperson stated that Bitbuy has solidified its market presence in Canada and has demonstrated its commitment to comply with the regulation.

Beyond this, the spokesperson argued that Bitbuy is expected to increase its customers to 900000 by October. An announcement conveyed by the chief executive of WonderFi, Dean Skurka, portrayed the willingness of Bitbuy to work closely with Localcoin.

The WonderFi boss lauded the remarkable contribution made by Bitbuy and Localcoin in increasing their brand value. The CEO described the strategic partnership as a beneficial project for the two companies.

Skurka highlighted that the Bitbuy marketplace offers deep liquidity that will work well with the broad ATM network of Localcoin. He stated that the strategic partnership will support Bitbuy to provide effective and user-friendly trading solutions.

The executive noted that the Bitbuy liquidity services and reliable order execution will improve the performance of the Localcoin liquidity pool. The proposed development seeks to enable Localcoin users to trade their digital assets in a timely manner and at a competitive cost.

Significance of the Strategic Partnership

In addition, the Bitbuy and Localcoin team agreed to integrate multiple application programming interfaces (APIs) to improve system connectivity. The proposed API integration will support the Localcoin liquidity and pricing system.

Reflecting on the partnership agreement, the two companies pledged to enhance security and user privacy by adopting measures that safeguard users from exploits.

Elsewhere, the co-founder of Localcoin, Tristan Fong, anticipates that the strategic partnership will be a game changer. He stated that partnering with the most trusted brand in the crypto sector will enable Localcoin to boost user experience.

Fong acknowledged that the partnership supports the crypto ATM provider to expand its products and attain its mission statement. He added that since 2017, the Localcoin team has been pursuing ways to improve the accessibility of crypto assets to Canadians.

The Toronto-based crypto ATM operator anticipates integrating Bitbuy proprietary tools on its networks in a few weeks. Notably, the strategic partnership with Localcoin marks a significant milestone for Bitbuy to increase its corporate partners.

Report from the head of sales at Bitbuy, Jeff Fitzgerald, stated that this year, the fintech company has entered into a successful partnership deal with Corporate Solutions Desk and Localcoin.

Objective of Bitbuy and Localcoin Partnership

Fitzgerald pointed out that Bitbuy plans to attract large audience and improve its scalability to become  the largest crypto trading company in Canada. Particulary, pursuit to gain dominance in the Canadian crypto sector challenges Bitbuy to invest heavily in diversifing its product line to meet the ever-changing needs of institutional and retail investors.

The fintech company has specialized in providing trading and staking services, which align with Localcoin’s core business. Localcoin ranks as a first-paced crypto ATM provider in Canada, offering a wide range of networks.

The Localcoin plays a critical role in the ongoing push towards mainstream crypto adoption by providing Canadians with a user-friendly ATM. Mostly, the Localcoin team supports the transactions involving major tokens, including Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC), among others.

Additionally, the Localcoin team has deployed effective strategies to provide users with a convenient and secure platform for trading cryptocurrency. According to the Localcoin website, the company has demonstrated its commitment to safeguarding the user by integrating revolutionary software that enhances privacy and security.

For seven years, the Localcoin team has installed 920 ATMs, which constitutes 33% of the 2747 ATMs available in Canada. Its popularity has grown even in the US, portraying the significant development made by Canadians to stimulate the growth of the crypto industry.

Besides the Bitbuy partnership, the Localcoin team have partnered with best-performing firms, including Hasty Market & INS, to support service delivery and expand its market presence. 

The post Bitbuy Closes Strategic Partnership with Localcoin to Improve Crypto Adoption first appeared on CryptocyNews.com.

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Crypto Market Sees Bounce Ahead of Fed Decision on Interest Rates

The crypto market has experienced a slight bounce with Bitcoin leading the way. The top cryptocurrency jumped to over $27,000 in the last 24 hours, gaining 2.42%. Other top cryptocurrencies have also bounced slightly as a result.

This represents a break out of a tight trading range that had held the market since mid-August. Bitcoin’s surge to $27,000 is a significant move for investors, as the market has been characterized by low volatility for weeks.

Other top cryptocurrencies like Ethereum and Binance Coin (BNB) have also gained noticeably. However, there are other assets that are not well known, such as Toncoin that has gained over 5% in the last 24 hours, making it the highest gainer among the top ten cryptocurrencies. The token also recently joined the top ten following months of upward movement.

Solana has also gained over 4% in the last 24 hours, making it even a higher gainer that Bitcoin, Ethereum, and BNB. In general, the market is in a relief rally that may or may not last, depending on the outcome of the Fed decision this week.

Investors Await Fed Decision

The Federal Reserve is set to announce its decision on interest rates this week. This could have alerted investors to prepare for an outcome which could affect the market in the coming months. It is expected that the Fed will maintain steady interest rates in its forthcoming announcement on Wednesday.

This is expected to affect the crypto market in ways similar to how it affects Dow Jones and the S&P 500. An increase in interest rates could spell doom for the crypto market as investors are not likely to go for risk assets like Bitcoin when interest rates on less risky forms of money are high.

On the contrary, a reduction of interest rates could have a positive impact on the cryptocurrency market since investors will be more likely to risk investing in cryptocurrencies in exchange for higher returns on their investments.

The current rally could be a reflection of investors’ activity around the market in hopes of a favorable announcement from the Fed which could trigger a bigger rally. However if the announcement comes out negative, the market may quickly lose its steam and return to the previous tight range it was trading in before now.

Crypto market Hopeful

Regardless of the Fed’s announcement outcome on Wednesday, analysts see good days ahead for the crypto industry, led by Bitcoin. Many analysts have predicted that Bitcoin can rise to higher prices in the coming months due to some factors such as the coming halving in 2024.

Another reason for optimism around Bitcoin and crypto is the potential for a Bitcoin spot ETF approval in the U.S. Many applications have been filed for a Bitcoin spot ETF in the U.S over the years, but none has been approved so far.

However with the current trends, there is a much higher likelihood of one of this year’s applications getting a nod from the securities and exchange commission. With all these factors combined, one analyst, PlanB sees Bitcoin reaching as high as $100,000 to $1 million by 2025. If this happens, of course the larger crypto market is likely to follow suit, leading to a rewarding season for investors. 

The post Crypto Market Sees Bounce Ahead of Fed Decision on Interest Rates first appeared on CryptocyNews.com.

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