Bitcoin’s Rising Liquidity a Good Sign for Price Recovery, Say Analysts

The year has been mostly rough for the crypto market, and investors were already getting used to the status quo. However, Bitcoin made a comeback recently, rising close to $35,000 and taking the rest of the market with it.

The comeback wasn’t sustained though, even though Bitcoin has managed to stay above $34,000 for the last few days. This has raised questions on whether or not the rally will be sustained.

According to some analysts, the rally has a good chance of being sustained because of the rising liquidity that is seen in Bitcoin.

Bitcoin’s liquidity has been on the rise for the past four months, something the analysts say could result in Bitcoin’s sustained recovery.

Traders are more confident when there is increased liquidity because they are confident there will be someone on the other side of the world willing to buy from them when they are ready to sell. For Bitcoin, this means more investors are willing to buy the asset for sale later.

According to Bitfinex analysts, this is welcomed by high ticket traders and institutions, “who prefer an asset class which can provide exposure and exit without high spreads.”

Another analyst and Falcon X Head of Research David Lawant agrees with this position. “The early liquidity signs of this rally are encouraging,” Lawant said in a note, adding that strong liquidity trends are an important signal to confirm that the current price recovery is sustainable.

“With the potential for more favorable liquidity conditions going forward, I’m excited about the current crypto market prospects,” he added.

Dissenting Opinions

Bitcoin is currently in its third week of a sustained upward trajectory, which began in mid-October. However, YouHodler Chief of Markets Ruslan Lienkha said the current liquidity levels must  not be taken as a sign of a sustained period of strength for Bitcoin.

“We noticed an uptick in liquidity in the crypto market but it is not possible to say at the moment if it is the beginning of a new upward trend or just a correction in a few-year-long period of capital outflow from the crypto market,” Lienkha told The Block.

Indeed, Bitcoin has seen significant inflow in the past month, with its market capitalization increasing by $140 billion. Bitcoin-based funds have also seen net inflows of almost $410 million within the past month.

“If we talk about the whole crypto market, I think the current level of liquidity is somewhere close to the April 2023 level. If we talk specifically about bitcoin, it might be at a 1.5-year high but just because of a kind of cannibalizing of the token market due to the steady increase of bitcoin share in the market,” Lienkha added.

What is Fueling the Liquidity?

There is an increasing confidence in Bitcoin shown by the massive liquidity flowing into it, but what could be fueling this confidence?

One possible explanation is the increasing probability of a Bitcoin ETF getting approval in the U.S. Several ETF applications have been submitted, and just like in past years, decisions on them have been delayed.

However there’s high hopes that at least one of the applications will be approved. Some analysts even believe that multiple applications will be approved, and this could be directly contributing to the net inflows seen.

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Marshall Islands Introduces New Legislation for DAOs to Address Major Concerns

In an advanced report, the policymakers in Marshall Island approved new legislation on crypto assets. The report demonstrated that the new law aims to strengthen existing laws on decentralized autonomous organizations (DAOs).

 At the initial rule-making process, the bill was formulated by David Paul, an active advocate for crypto, and his close ally Adam Miller, the chief executive of MIDAO. The collaborative efforts aimed at revising the Decentralized Autonomous Organization Act of 2022 to meet the global standards for DAO.

Marshall Island Adopts New Legislation for DAO

An exclusive interview with Miller revealed that the new Decentralized Autonomous Organization Act of 2023 differs from the old provision for DAO. The CEO admitted that the new legislation provides a comprehensive law for DAOs across the globe.

The executive anticipates that the new law will be a roadmap for regulating the DAOs in the world. The executive noted that the new legislation has incorporated some of the elements of the old law.

 Primarily, the amendment of the DAO laws aimed at strengthening the existing laws. According to Miller the new law has reduced the registration time for DAOs from 60 to 30 days.

In the old law, the registration was conducted between 30 to 60 days. The executive noted that the new provision aimed at improving the attractiveness of DAO ecosystem in the region. He confessed that the new rules removed some of the restrictions on DAO entities.

Initially, the DAOs were held accountable for using open-source software. Miller stated that under the new rules, DAOs creating open-source applications will not be held accountable for using their proprietary software.

 The executive noted that the new legislation considers governance tokens not as securities. It implies that the governance tokens are limited from offering economic rights.

Marshall Island Adopts DAO as Legal Entities

Miller confirmed that the amendment of DAO legislation was crucial to address the challenges battling Web3 and the DAO ecosystem. The executive noted that lately legal practitioners have raised concerns about the establishment of practical governance tools. Miller described the new legislation as groundbreaking crypto laws. 

Remarkably, Miller and Paul latest development aims at supporting the Island country to attain the DAO goal. In 2022, Marshall Island accepted DAO as a legal entity. The adoption of DAO in the region aims to accelerate the growth of decentralized finance (DeFi) and related entities.

This development allowed the registered legal entities to adopt the DAO structure and the governance model to optimize their operations. The government anticipated that adopting friendly regulations on DAOs would encourage the number of DAOs to increase.

 In 2021, the Island country had around 100 registered DAOs.The exciting growth of the DAOs in Marshall Island inspired the government to partner with MIDAO to provide comprehensive solutions to DAOs and Web3 entities.

Role of MIDAO

The partnership mandated the MIDAO to oversee the registrar’s office for Web3 and DAOs. The MIDAO team supports legal entities to set shop in the Island country.

A review of the requirement for establishing DAO in Marshall Island demonstrates that an individual or entity must create an account with MIDAO.

In the subsequent process, the applicant will be required to complete the registration process by engaging MIDAO agents. Under the DAO requirements, the DAO entity will be restricted from having a board of directors to operate in the Island country.

 The old rules demonstrate that based on the decentralized nature of DAO, all the data will be stored on the blockchain technologies. It implies that DAO requires less paperwork and writing. 

The report demonstrated that DAO will have anonymous members except for one member. The Marshall Island requires the un anonymous DAO member to be from outside the country. Reports indicate that the DAO member meets the existing requirement such as know-you-customers (KYC) requirements.

In July, the MIDAO generated $1 million in a funding round to support the regulation on Web3 and DAO. The fundraising aimed to strengthen the operation of Web3 organizations in the region. Also, MIDAO aimed at improving the accessibility of legal and regulatory frameworks to Web3 entities.

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UK Releases Final Policy for the Regulation of Stablecoins

The UK has finally released its policy for the regulation of fiat-backed stablecoins, marking a significant milestone in its effort towards crypto regulation. The release of this policy makes way for inclusion of these stablecoins in the UK payment chains.

The new policy which will come into place by 2024 aims to incorporate stablecoins into the existing financial regulatory framework. This approach is entirely different from the rest of the European Union which is bringing an entirely new regulatory framework for crypto known as the Markets in Crypto-Assets (MiCA).

Stablecons are cryptocurrencies that are pegged to fiat currencies or other forms of external commodity from which they derive value. Their value is therefore relatively stable, with the value of a USD-backed stable coin being roughly 1 USD at all times.

This quality of relative stability has made stablecoins widely popular among investors and for payments, since they retain the speed and low transaction cost that characterize cryptocurrencies in general. 

The UK has seen the potential of stablecoins becoming even more popular for payment, hence the need to regulate them and bring them under existing financial regulations. They will be subject to the Payment Services Regulations 2017 and the Financial Services and Markets Act 2000.

“Certain stablecoins have the potential to become a widespread means of retail payment, driving consumer choice and efficiency,” HM Treasury stated. “In order to deliver this, the government intends to bring the regulation of certain activities relating to fiat-backed stablecoins within the UK’s financial services regulatory perimeter.”

Fiat-backed Stablecoins Under FCA

The financial conduct authority (FCA) is the foremost agency for financial regulation in the UK, and is also a key player in the regulation of stablecoins and crypto in general. 

After the first phase of the regulatory implementation, HM Treasury intends to bring fiat-backed stablecoins into the Financial Conduct Authority’s remit via secondary legislation. This will empower the FCA to ensure that fiat currencies backing stablecoins held in a statutory trust as insurance for customer funds in case of a bank run.

The regulation is however restricted to fiat-backed stablecoins. While other types of stablecoins will still be in the UK’s payment chain, they will not be regulated, except for algorithmic stablecoins which will be captured in subsequent regulation.

This is because of the concerns around algorithmic stablecoins following the collapse of TerraUSD (UST), an algorithmic stablecoin issued by Terra. Because of the unstable nature of this class of stablecoins, the UK will capture them in a follow-up regulation.

“This is because their under-collateralised nature means they share characteristics with unbacked crypto assets and crypto-backed tokens are only as stable as the underlying crypto asset,” stated the Treasury.

Experts Weigh in

Crypto regulation has been long awaited in the UK, but what will be the outcome of the stablecoin policy? Financial services regulatory partner at Norton Rose Fulbright Albert Weatherill weighs in.

“Today’s publications largely confirm what we already knew in February – regulation is coming to crypto assets in a fairly expansive way,” said Weatherill.

He further stated that major questions such as “when these rules will come into force, how applicants will be able to get authorized and what the substance of the rules will be” remain unanswered. 

Head of investment analysis at AJ Bell, Laith Khalaf also commended the regulation of stablecoins under existing financial framework, saying  “the apparatus and resources for supervision are already there and working in tandem with regulators worldwide”.

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Trezor Executive Warns the Customers on Phishing Email

In an advanced announcement, Trezor, the leading crypto hardware wallet provider in Prague, has revealed plans to investigate a phishing campaign targeting its customers.

The report demonstrated that Trezor users have been receiving phishing emails that lured them to download a suspicious link for buying a wallet. The phishing attack was brought to light by ZachXBT, a renowned blockchain investigator. 

Trezor Suffers a Phishing Attack

In an October 26 report, ZackXBT warned the Trezor customers to avoid falling into the scammers’ trap. Citing an X post from one of the affected customers, ZackXBT noted that the attackers were sending phishing emails to deceive the users while purchasing digital wallets. 

The ZackXBT team noted that the recent phishing emails mirror a malicious attack that occurred in March. In a past incident, the hackers introduced a phishing email to trick the Trezor user into sharing the recovery phrases. 

Also, the bad players had developed a fake Trezor website, deceiving the users to disclose their private keys. In the email, the attackers purported to work for Trezor and were fixing a software bug. They encourage the users to download a suspicious link only to steal their login details. 

The ZachXBT team warned the public from downloading the phishing email linked to the Trezor purchases. The blockchain firm noted that the social media alerts aimed at informing the public on the possible data breach on Trezor. 

Impact of Phishing Attack

The ZachXBT report demonstrated that Trezor’s malicious attack could impact data breaches to its UK business partner Evri. Besides the warning, ZachXBT observed that two Reddit users reported the Trezor incident. 

The ZachXBT report and the social media posts concerning the Trezor attack have forced the company to take preventive actions. An announcement conveyed by Trezor brand ambassador Josef Tetek revealed that the company was aware of the ongoing phishing attack. 

The executive stated that the Trezor team has actively been informing the public about fake websites and domains. Tetek admitted that Trezor has been educating the customers on the risks associated with cybercrime. 

Trezor Takes Preventive Measures to Address Phishing Attacks

He stated that the blockchain firm has developed multiple educational materials to educate users on effective ways to address phishing attacks.

A review of the Trezor publication demonstrates that most phishing emails mandate the users to download fake Trezor suites that require the customers to sign in to their wallets to proceed with the subsequent steps. 

He noted that attackers aim at exploiting the seed phrases provided by the users after logging into the application. After obtaining the user’s login details, the bad actors access the application to transfer the available funds to their external wallets. 

Tetek noted that at no point will Trezor request the user to provide a seed phrase or pin. He urged users to avoid sharing their recovery seed with any website or application. 

Tetek requested the users to follow Trezor instructions before proceeding with any transaction involving the recovery seed. The official stated that the hackers have occasionally launched phishing attacks on Trezor platform. 

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VanEck Projects Solana to Increase by 10,600% in 2030

In the past few days, the bulls have been active in the market. The resurgence of the bulls has triggered an uptrend among best-performing crypto assets.

The bullish movement in the crypto industry has become a point of discussion among blockchain analytic firms. In a recent update from the New York-based asset manager, VanEck demonstrated that Solana will become a top rival for Ethereum. 

VanEck Predicts Solana to Gain Bullish Momentum

The VanEck team noted that the Solana native token SOL broke the $32 resistance level. At the time of writing, Solana has slightly decreased by 0.7% to trade at $31.71, according to CoinMarketCap data.

 Reflecting on Solana’s strong rally, the VanEck team anticipates that the seventh-largest crypto asset will maintain the bullish trends to reach $3,211.28 in the next decade. 

The VanEck report demonstrates that Solana will increase by 10,600% by 2030. The altcoin’s strong uptrend will overtake Ethereum (ETH), the second-largest crypto asset by market capitalization.

 As earlier stated, the Ether is expected to garner bullish steam to trade at around $ 11,800 in the coming months. It implies that if the VanEck prediction comes to pass, Solana will become the largest blockchain network. 

The VanEck group envisages that Solana will support numerous applications and the customer base will reach 100 million users. The asset manager anticipates that the expected uptrend will position Solana as Ethereum’s top rival. 

A review of Solana’s 2023 market performance demonstrated that the value of SOL has steadily increased by 200%. According to DefiLlama, Solana’s total locked value (TVL) reached $378 million. 

Solana Expects a Price Pullback

However, a report from the directional movement index (DMI) demonstrates that Solana might reverse the current uptrend. The DMI report indicated that to maintain the bullish momentum, the bulls should remain active to shield Solana value from declining. 

The DMI report portrayed the possibility of Solana declining below the $30k mark. Therefore, if the market reacts according to the DMI report, some investors holding short positions for Solana might consider selling their assets. 

Currently, the technical indicators indicate that the blue line denoted as (+DI) established an uptrend while the red line (-DI) has further declined. The movement of blue and red lines signals the potential of the Solana value to fall.

 Commenting on Solana’s price movement, a crypto trader on X account remained optimistic that Solana was one of his “alt picks.” The trader predicted Solana would sustain the bullish momentum to outshine Bitcoin and Ethereum.

Editorial credit: JOCA_PH / Shutterstock.com

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Top Fed Official Says Stablecoins Need to be Regulated

A senior official of the Federal Reserve, Michael Barr says stablecoins need to be regulated. Barr stated this on Friday in prepared remarks while speaking at a conference in Washington D.C.

Barr, who is the vice chair of supervision at the Fed, said that a stablecoin is pegged to government-issued fiat currencies and so “borrows the trust of the central bank.” This makes it necessary for the Fed to be involved in its regulation.

“So, the Federal Reserve has a strong interest in ensuring that any stablecoin offerings operate within an appropriate federal prudential oversight framework, so they do not threaten financial stability or payments system integrity,” Barr said. 

Stablecoins have become of much interest to the central bank for a while now, but it announced plans to monitor banks involved with stablecoins more closely in August. The bank more recently said it was “deeply concerned” about issuing stablecoins without strong federal oversight. 

Also speaking, Barr said that the central bank was still carrying out research on a central bank digital currency (CBDC), but also added that there is no conclusion on whether or not a CBDC will be launched.

“The research is currently focused on end-to-end system architecture, such as how ledgers that record ownership of and transactions in digital assets are maintained, secured, and verified, as well as tokenization and custody models,” Barr said. 

The Interest in Stablecoins

Stablecoins have been in existence for years, but only got the attention of regulators recently following the crash of the algorithmic stablecoin TerraUSD. Since then, regulators have called for the regulation of stablecoins.

The concerns have worsened recently, especially as the adoption of stablecoins has been on the rise. This is because they bridge the gap between the use of fiat currencies and cryptocurrencies, while they have the speed and low cost of transactions that characterize cryptocurrencies, but possess the stability of fiat currencies.

Already, lawmakers are working on a bill for the regulation of the class of assets, but the bill has not succeeded much after being criticized by some lawmakers. However, the bill which is being considered by the House Financial Services Committee will be  brought back into focus soon.

Part of the bill is a provision that would allow state regulators to approve stablecoin issuance without Federal Reserve input, an idea house members like Maxine Waters were not comfortable with. 

Concerns Around Cryptocurrencies in General

Stablecoins aren’t the only class of cryptocurrencies that have come under scrutiny. The securities and exchange commission (SEC) has cracked down massively on the crypto industry as a whole, especially this year. 

As a result, crypto assets in general are now being considered for regulation since the SEC does not have any clear rules for the industry to follow. This is also under consideration by the lawmakers and  hopefully there will be regulation not just for stablecoins but for the entire crypto industry.

When the regulation finally comes, it will hopefully increase confidence and interest in the crypto industry since investors have been skeptical about investing in crypto assets because it is unregulated up to this point. 

There have also been debates between Republican and Democrat lawmakers about the status of cryptocurrencies, the controversies may soon come to an end with proper regulation for the industry.

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Sam Bankman-Fried Admits Binance was to Acquire FTX at Undisclosed Amount

In an October 27 court hearing, the founder of the FTX, Sam Bankman Fried, revisited some of the plans he had for the now-defunct crypto exchange. Shortly after the launch of FTX, the crypto mogul planned to sell his venture to the world’s largest crypto exchange, Binance. 

In the early stages of FTX, Bankman Fried confessed that he planned to offer a unique financial product, such as margin trading, to enable the customers to cap their debts. Margin trading is an exclusive financial product allowing customers to buy and sell their assets through borrowed funds.

FTX Planned to Introduce Cross-Margin Trading

 In 2019 Bankman Fried deliberated with his business partner Gary Wang about the new product that will propel FTX to generate substantial gains. While establishing FTX Hong Kong Bankman explained the need for FTX to fill the existing gaps in margin trading sector. 

In the initial development stages of FTX, the crypto mogul admitted that he mandated Wang to lead in formulating the crypto exchange code. The executive recognized the work done by Wang in building FTX. He confessed that at the infancy of FTX, he only provided valuable input based on philosophical persective.

At that time, the crypto investor noted unaddressed matters in the margin trading. Despite the risk associated with margin trading, Bankman Fried pointed out that this investment was more profitable compared to traditional trading.

 The investor confessed that before leaving Alameda Research to start FTX, he planned on offering cross-margin trading. According to Bankman Fried, margin trading enables traders to utilize the surplus margin when buying and selling digital assets. He noted that the excess margin was only used to meet the margin trading requirements. 

The executive anticipated that specializing in margin trading would push the FTX to growth stage.

Binance Abandoned Plans to Acquire FTX

Based on the market performance of crypto assets in 2019, the former FTX CEO regretted that getting customers was more challenging. The executive devised multiple marketing strategies to broaden FTX’s customer base. 

He noted that referrals and word of mouth were effective strategies for onboarding more customers to FTX. The report demonstrated that the FTX team utilized a unique risk engine to gain a competitive advantage in a vibrant crypto market. 

The embattled crypto exchange adopted a risk engine approach to examine the customer accounts and identify the users with the possibility of being liquidated. 

A review of FTX’s financial report illustrated that in 2019, the Bahamian crypto exchange FTX generated $20 million in revenue. Bankman Fried noted that the crypto exchange mushroomed in 2021 after yielding $3 million daily.

He anticipated that the expected growth of FTX would attract the investors’ attention. Having broad experience in crypto matters, Bankman had established a solid network with key players in the digital sector. 

Relationship Between Binance and FTX

He projected that Binance would acquire FTX at an undisclosed amount. In an earlier post, the Binance team had announced plans to acquire the bankrupt crypto exchange to introduce a liquidity offering. 

The Binance plans failed to materialize after the impolsion of FTX in November. Besides withdrawing from the acquisition deal, the Binance team cut ties with FTX and its top executives. 

A statement from the Binance chief executive Changpeng “CZ” Zhao announced divorcing FTX for misappropriation of customers’ funds. The Binance CEO regretted that he was not in a position to support FTX due to the complexity of the matter. 

The executive admitted that Binance was still contemplating acquiring FTX and the process was at its initial stages. According to the court report, Binance was an FTX active client and supported the exchange in attaining its primary objective. 

The report demonstrated that Binance contributed $80 million in Binance Coin (BNB) in the FTX seed funding round.

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Taiwan Crypto Bill Passes Second Reading at Parliament

Taiwan has proposed a bill for the regulation of crypto, which passed first reading at the parliament today Friday 27 October, reports say. 

The special law proposed by parliament member Chang Chiang and 16 other lawmakers would require all crypto platforms operating in Taiwan to apply for a permit or be ordered to cease and desist.

According to Chiang, there is no timeline for the first reading but it may not happen earlier than the end of January 2024 when the tenure of all the lawmakers in Taiwan will expire.

At the moment, the crypto industry in Taiwan is only required to comply with anti-money laundering which the Financial Supervisory Commission (FSC) introduced in 2021.

“After the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage,” Yung-Chang Chiang said. “We hope that the Financial Supervisory Commission can also submit their version of a draft bill to the legislature, allowing various sectors of society to further consolidate consensus during the process.”

Speaking earlier this month about FSC guidelines for the crypto industry, Chiang said the industry can form its own self-supervisory rules through a potential industry association, but such measures lack legal enforceability.

“In this case, under the authority of this special law, regulatory authorities can impose administrative penalties on operators who violate these self-regulation rules. Without such a special law, the regulators would lack the ability to impose penalties,” Chiang said at a parliament hearing. 

Bill Comes Early

The proposed bill for the regulation of the crypto industry in Taiwan came earlier than expected because according to Chiang, it was expected for reading by the end of November, but this is just the end of October.

The urgency could be due to the fact that some crypto companies in the country are yet to comply with AML rules, and regulators can’t impose penalties without the special rules. Meanwhile, players in the crypto industry in the country have recommended that the regulation of the crypto industry be done by size.

Speaking at the hearing earlier this month, cofounder and Group CRO of Taipei-based crypto exchange XREX, Winston Hsiao while admitting that regulation is necessary, said it needs to be done “step-by-step.”

“If we must discuss the special law at this stage, we hope that the law could regulate crypto platforms by their sizes,” Hsiao said, further stating that smaller firms should be regulated by  the the self-supervisory rules formulated by the industry association while bigger firms should comply with requirements of the special rules.

Facilitating Crypto Growth

Though lawmakers wish to put the special rules in place for proper regulation of the crypto industry, this could also be a good thing for the industry. Currently, crypto companies find it difficult to access banking services, probably because they’re not fully regulated. 

Representative of global partnerships of Binance Damien Ho made a request that banks become more crypto-friendly.

“We also boldly suggest that the Taiwan government should encourage some private or public banks to become more crypto-friendly and handle [crypto firms’] relevant business,” Ho added. “This can help crypto businesses develop in a more regulated and effective manner.”

With the special rules in place, the crypto industry may finally gain the acceptance and support it needs to thrive in Taiwan.

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Hashdex Develops a New Approach for Offering Bitcoin ETF on the CME

With the ongoing spot Bitcoin exchange-traded fund (ETF) discourse, the leading asset manager in Sao Paulo, Hashdex, has made an exciting move to end the US Securities and Exchange (SEC) delays in approving the pending applications. On Thursday, October 26, the Hashdex team held a closed-door meeting with the SEC to deliberate on its Bitcoin Futures exchange-traded fund (ETF) offering. 

A source privy to the information revealed that the discussion revolved around the Hashdex application to offer spot Bitcoin ETF. The report indicated that the meeting was attended by six SEC officials, NYSE Arca, K&L Gates, Tidal Financial Group, and Hashdex top executives. 

Hashdex Seeks for Approval of Spot Bitcoin ETF

During the meeting, the Hashdex official gave a presentation on the strategy the asset manager intends to use in offering the spot Bitcoin ETF. For the past few months, the SEC has been reluctant to approve the spot Bitcoin ETFs due to a lack of regulatory clarity for digital assets. 

The delays and the multiple rejection of the Bitcoin ETF offering by the SEC has forced Hashdex to devise new ways to introduce a new financial product.

The Hashdex official offered a detailed explanation of the strategy the asset manager plans to adopt to offer the spot Bitcoin ETF on the Chicago Mercantile Exchange (CME), currently governed by the Commodity Futures Trading Commission (CFTC). 

A review of the October 26 presentation demonstrated that Hashdex spot Bitcoin ETF offering will differ from the dozen applications. The Hashdex team revealed that its new financial product does not require a surveillance-sharing agreement.

Hashdex Devise a New Mechanism for Offering Bitcoin ETF

Reportedly, the SEC has been delaying approving most of the applications for failing to meet the regulatory requirements. A revisit of the revised application demonstrated that the SEC had rejected the applications from Fidelity, Valkyrie, and BlackRock after the asset managers failed to provide a surveillance partner. 

Unlike the other ten applicants, Hashdex plans to offer physical Bitcoin ETF from exchanges listed in the CME markets. The official confirmed that the Hashdex Bitcoin ETF offering will rely on the CME pricing.

One exciting feature of the Hashdex Bitcoin ETF offering will be the use of the CME instead of the spot exchange. The crypto community welcomed the uniqueness of the Hashdex approach.

SEC to Approve Bitcoin ETF Application

A statement from the renowned Bloomberg ETF analyst James Seyfart described the Hashdex approach as undeniable for the SEC. The analyst argued that even if the SEC reject the dozen of the Bitcoin ETF applications, the regulators might consider approving the Hashdex application.

Seyfart remained optimistic that there was no chance that the SEC would reject the Hashdex application. The analyst noted that the Hashdex proposed approach conforms with the SEC Teucrium Order. This provision considers the Bitcoin Futures Market listed on the CME as sufficient to support new financial products seeking to gain Bitcoin exposure.

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Lawmakers Ask DOJ to Investigate Binance and Tether for Terrorism FInancing

Lawmakers in the U.S have called on the Department of Justice to investigate crypto exchange Binance and issuer of USDT stablecoin, Tether to ascertain their involvement with terrorism.

This call comes following the terrorist attack on Israel a few weeks ago. In a letter to the DOJ on Thursday Republican lawmakers Sen. Cynthia Lummis, R-Wyo., and Rep. French Hill, R-Ark., asked the Justice Department in a letter on Thursday to:

“carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism through violations of applicable sanctions laws and the Bank Secrecy Act.” 

“To that end, we strongly support swift action by the Department of Justice against Binance and Tether to choke off sources of funding to the terrorists currently targeting Israel,” the lawmakers wrote.

The letter further asked Attorney General Merrick Garland to “to reach a charging decision on Binance that reflects their level of culpability and expeditiously conclude your investigations into the ongoing illicit activities involving Tether.”

Regulators Tackle Binance and Tether

Both Binance and Tether have been under the scrutiny of regulators in the U.S for years. The securities and exchange commission sued Binance in June this year on allegations that the exchange failed to register as a security exchange and also for allowing the trading of securities.

Similarly, CFTC filed a lawsuit against Binance shortly after the SEC suit, claiming that the exchange was violating federal laws and was indifferent towards compliance. 

The CFTC also fined Tether in 2021 concerning the backing of its stablecoin, USDT. The CFTC claimed at the time that Tether falsely claimed that USDT was fully backed by U.S Dollars saying that Tether made “untrue or misleading statements and omission of material fact” related to its stablecoin, USDT and fined the company $41 million.

“It is well-known that Tether is knowingly facilitating violations of applicable sanctions laws and the Bank Secrecy Act by failing to conduct adequate customer due diligence and screenings despite being aware that its product is used to facilitate terrorism and other illicit activities,” Lummis and Hill said. 

Both lawmakers however praised crypto and distributed ledger technology, stating in the letter that they can “drive responsible innovation.”

“Many crypto asset intermediaries seek to comply with U.S. sanctions and money laundering laws, correctly viewing the regulations as necessary to unlock the promise of crypto assets and distributed ledger technology,” they said. 

Tether and Binance Role in Fighting Hamas

The attack on Israel has led to a renewed commitment by U.S. regulators to fight the use of crypto for terrorism financing. Lawmakers have since expressed concern over the fact that Hamas and other sister terrorist organizations had raised funds in crypto weeks before the attack.

However, both Tether and Binance have played roles towards containing Hamas’ use of crypto. Binance reportedly helped the Israeli police to freeze multiple accounts associated with the terrorist organization shortly after the attack. 

Tether has also reportedly frozen 32 addresses controlled by Hamas and Russian-linked entities in Israel and Ukraine.

It seems the lawmakers suspect the two companies of involvement in terrorism financing because of the addresses they host which are linked to the terrorist organizations. Meanwhile, the U.S lawmakers are still pushing for crypto regulation in the country.

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US Representative Sean Casten Formulating a Bill for Combating Crypto-Terrorist Financing

In a recent turn of events, crypto assets have appeared as an effective conduit for transferring funds to support the Hamas militants. The shift to crypto terrorist financing has attracted the attention of global policymakers and regulators.

On Wednesday, October 25, Sean Casten, a representative of Illinois, revealed plans to formulate a new bill to back the existing Bank Secrecy Act (BSA). This provision was adopted by Congress in 1970, aiming at mitigating money laundering activities in the United States.

US Lawmakers Urge Biden Administration to Address Terrorist Financing

 Under the BSA, investors and businesses are mandated to keep proper books of record and report to the relevant authority on compliance matters. In his address, Casten plans to revise the BSA requirement to combat money laundering activities.

The 51-year-old policymaker confessed that the proposed bill would correspond to Senator Elizabeth Warren latest submission on crypto terrorist financing. In light of Senator Warren’s October 18 address at the House Financial Services Committee, Casten noted that the two bills will focus on crypto funding illicit groups and national security matters.

He admitted the proposed legislation would support Warren’s earlier proposal at the Senate. Even though Casten failed to provide further details concerning the bill, he acknowledged that Warren had earlier proposed a bill to combat the use of crypto in money laundering and violating sanctions.

In July, the Massachuset senator had called for the amendment of BSA requirements. She suggested that the existing BSA principles should be extended to crypto miners, digital assets wallet providers, and token issuers to mitigate the misuse of cryptocurrency.

The fearless advocate for financial reforms aimed at creating an equitable, safe, and prosperous environment for US businesses. Her bleak prophecy came to pass on October 7 when the Palestine illicit group invaded Israel. The brutal attack claimed the lives of over 1,200 people.

Besides the killing, the Hamas group took hundreds of hostages, creating humanitarian crises in Israel. In response to the Hamas attack, the Israeli militants launched multiple airstrikes in Gaza to sever the operations of the Palestine terrorist groups.

Hamas-Israel War Intensify

As the situation becomes more chaotic, global regulators have stepped up to support Israel to restore its national security. A Wall Street Journal (WSJ) report revealed that Hamas had conducted a crypto fundraising before launching the deadly rampage in Israel.

According to WSJ, Hamas and the Palestine Islamic Jihad had launched multiple fundraising to raise $134 million in crypto to support its operation.

The WSJ revelation compelled the Israeli law enforcers to collaborate with crypto firms and banks to freeze all accounts tied to the Hamas group. Reportedly, Binance and Tether were among the crypto firms that supported the Israeli authority in blocking all addresses and wallets owned by the Hamas group.

In response to the regulatory action taken by the Israeli law enforcers to sabotage Hamas funding sources, Senator Warren led over 100 lawmakers to urge the Biden administration to address terrorist financing. The bipartisan members penned a joint letter to the White House and the Department of Treasury on matters concerning “crypto-terrorist financing.” 

US to Sever Hamas Funding Sources

In the letter, the lawmakers requested the Biden officials to explore effective strategies to address the misuse of crypto assets. They urged Congress and the White House to take strategic actions to mitigate the use of crypto in unlawful financial activities to prevent another crisis.

Based on the complexity of the matter, the lawmakers demand the two regulatory agencies to respond by the end of October. The letter forced other regulatory agencies to intervene to weaken Hamas’ financial capabilities.

In a separate document, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) in the US announced plans to take decisive action to block Hamas revenue sources. A statement from the Secretary of the Treasury, Janet L. Yellen, argued that the US would take potential action against the Hamas financiers and supporters.

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Neon Machine Raises $20 Million for Launching of Shrapnel Game

Neon Machine, the team behind AAA extraction shooter Shrapnel, generated $20 million in a Series A funding round. In an October 25 update, the Seattle-based gaming company revealed that the investment will be utilized in revamping the Shrapnel game.

With the progressive growth of the gaming sector, the Neon Machine confirmed that the development of Shrapnel was at a “critical time.” Based on the launch phase of the Sharpel game, the developers will introduce an early-access version at the end of this year. This development aims at preparing the Neon Machine for the official launching of Shrapnel next year.

Polychain Capital Leds Neon Machine Funding Round

Interestingly, the successful funding round was led by Polychain Capital. Other companies that supported Neon Machine fundraising include Griffin Gaming Partners, Tess Ventures, Franklin Templeton, IOSG Ventures, and Brevan Howard Digital.

The Series A funding round aims at supporting the Neon Machine to attain its core objective. Initially, the gaming company was launched to produce exclusive HBO movies. The launching of Neon Machine came when there was a high demand for digital interactive experiences.

With the high demand for HBO-oriented interactive episodes, the studio attained a growth stage in 2021 after generating $10.5 million in a seed funding round. Since then, the Neon Machine has continuously debuted exciting content, including comic books and digital collectibles.

In 2022, the studio launched the PFP NFT collection, which was a combination of collectibles and generative arts. In the meantime, the Neon Machine has generated $37.5 million in seed funding and the sale of private tokens. This investment is expected to propel Neon Machine to hit its maturity stage.

Besides strengthening its financial capability, the Neon Machine has raised its talent bar to around 70 employees. The dedicated employees have supported Neon Machine in winning several gaming awards. The collaborative efforts made by the Neon Machine team have enabled the firm to recruit personnel with extensive experience in gaming.

Extraction Shooter Shrapnel Going Public in December

In an exclusive interview with the chief executive of Neon Machine Mark Long stated that the studio anticipates introducing groundbreaking technologies to the conventional gaming sector. Primarily, the studio seeks to develop an exclusive shooter game that allows the players to build their gaming applications.

The CEO confessed that the Neon Machine plans to allow the user to own some of the gaming features. Currently, the studio anticipates releasing Shrapnel, as a unique sci-fi extraction shooting game.

Long affirmed that the Shrapnel game will comprise in-game features such as cosmetics and weapons. These in-game features on the Shrapnel Avalanche will be available as non fungible tokens (NFTs).

The CEO admitted that the developers of the new game built Shrapnel on the Avalanche platform. At the primary development stage of Shrapnel, the studio introduced its ERC-20, dubbed SHARP, centered on the Avalanche network.

Gaming Companies Adopts Blockchain Technology

In an earlier announcement by the head of Web3 at Neon Machine, Marc Mercuri explained that the studio plans to leverage the GameBridge technologies to create the most awaited game, Shrapnel. A GameBridge is an advanced platform that supports game developers and artists in building unique content.

Mercuri confessed that GameBridge exhibits enormous capabilities in harmonizing the blockchain’s essential features, such as composability and interoperability. The executive noted that the Shrapnel game corresponds to the free-to-play multiplayer game.

Mercuri revealed that the Shrapnel game will accommodate the solo and group players. This development seeks to allow the players to create their gaming software on the Shrapnel platform. Later, the owners of the Shrapnel gaming features will be allowed to mint them as digital collectibles.

Currently, the Shrapnel developers are working on introducing user-generated content (UGC) to allow the player to publish their work on different social media platforms.

Elsewhere, a capital partner from the Polychain, Josh Rosenthal, applauded the efforts made by the Shrapnel project team in redefining the game sector. The executive noted that the Shrapnel team aims at boosting the player experience.

Rosenthal noted that the Shrapnel leveraged blockchain technology to provide the user with complete ownership of the game. In support of Rosenthal’s argument, Jocy Lin, a founding partner at IOSG Ventures, recognized the remarkable efforts done by Shrapnel in transforming the conventional extraction gameplay through blockchain.

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Brazil Central Bank to Break New Grounds in CBDC Issuance

The central bank of Brazil is on the verge of breaking new grounds in the issuance of its CBDC. The bank holds an ambition to issue a CBDC that has the characteristics of a typical distributed ledger technology and retains privacy. 

According to the bank’s president, Roberto Campos Neto, as governments around the world work on CBDCs, they are faced with one major challenge, which is bridging the delicate balance between open networks and privacy, which the bank intends to solve.

“When you look at the CBDCs out there, they’re not actually full DLTs. They are hybrid, which means that you have the DLT part inside the central bank, but then you have centralized outside,” he said Friday at a panel discussion in Miami.

“DLT platforms were made by people that want an openness, so everybody can see what everybody else is doing,” he continued. “So the question is, how can you have a DLT platform so that you have the benefit of the nodes producing the registration and the contract without affecting the privacy issue? So this is the most challenging part. Nobody has solved this problem yet. I think we are very close to doing so.”

Brazil is one of the countries that have advanced the most in their CBDC development. The country intends to launch its CBDC by next year, despite criticisms from experts concerning the project, and with the extra effort to solve the issue of privacy, it could be a leader in the CBDC technology.

Facilitating International Transactions

The question of seamless international transactions is one that has troubled the world for decades, since every country has its own currency which cannot be used in another country. Cryptocurrencies serve as a solution to this as they don’t have borders, but most governments don’t regard them as means of exchange.

Therefore they seek to launch CBDCs as alternatives. According to Campos Neto, CBDCs have the potential to eventually make international transactions faster and more efficient, without the need for a common currency.

“If every country has a digital currency, and we are able to connect those currencies digitally, in a fast and secure way, you actually have achieved the goal of having a common currency without actually having to sacrifice your monetary policy,” he said. “We actually can connect centralized systems to DLT systems just as fast as DLT to DLT. So the idea that crypto is always going to be better than a system that connects CBDC is no longer true,” he added.

Making the Digital Real Better

The digital Real project is at an advanced stage and Campos Neto said it will bring about better features than what the regular CBDC offers. He said beyond payments, the digital Real will improve processes around contracts and registration used in transactions like international real estate purchases.

“Today if you want to buy real estate in the U.S., your life is very hard. You have to have an escrow account, have to have a lawyer on one side, the lawyer on the other side. There is a lack of transparency, and it’s very slow, and it costs a lot,” he said.

“So if you have a system that basically, you have a smart contract that is designed to do a payment of real estate, and it meets with encrypted code, which is the money that’s actually been designed for that transaction, and it clicks, it generates a contract and a registration. And you don’t need notaries in Brazil … It improves this process of contract and registration,” he further stated.

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Ernst & Young Envisage SEC Approval of Bitcoin ETFs Will Increase the Demand for Crypto Among Institutional Investors

In an official communication, Paul Brody, the head of blockchain at Ernst & Young (EY), observed the changes in demand for Bitcoin among institutional clients. Addressing the CNBC team on Monday, October 23, the executive stated that institutional clients have been reluctant to invest in Bitcoin.

Brody noted that the delays in approving the Bitcoin exchange-traded funds (EFTs) restricted the institutional clients in investing in crypto assets.  

Significance of Bitcoin ETF Approval Among Institutional Investors

The executive blamed the US Securities and Exchange Commission (SEC) for delaying the approval of the Bitcoin ETFs. Brody remains optimistic that institutional investors will invest in more crypto assets after the approval of the Bitcoin ETFs.

He anticipates that institutional clients will invest trillions of dollars in BTC after the approval of the Bitcoin ETFs. Brody underlined that institutional investors will only be willing to venture into crypto assets if the SEC greenlights the pending ETF approval or revises the existing regulation on crypto assets.

A close examination of the current crypto adoption, Brody argued that most investors acquire Bitcoin as an asset. In contrast, crypto entrepreneurs invest in Ethereum as a computing platform for businesses and decentralized finance (DeFi). Brody argued that with the changes in the crypto market most investors are not purchasing Bitcoin as a payment tool.

In the interview, one of the hosts requested Brody to comment on the market performance of crypto assets, including the risks and the volatility of the tokens. Responding to the query, Brody confirmed that crypto assets differ from gold.

The executive stated that the price of Bitcoin has unique features compared to other digital assets. Brody noted the supply declines as the price of BTC increases. The executive describes the Bitcoin price movement as inelastic in nature.

Despite the exciting growth of the crypto industry, Brody believes that fiat currency will retain its high usage. The executive anticipates that the financial sector will expand exponentially to accommodate central bank digital currency (CBDC) and stablecoin payments in future.

Institutional Investors Demands for Clear Crypto Regulation

In his address, Brody expressed his positive stance on immenent approval of the Bitcoin EFTs by the SEC. Even though the SEC has not provided further details concerning the pending application, the investors are speculative about the existing crypto regulations.

In the meantime, high profile asset managers such as Grayscale, BlackRock, Fidelity, and ARK Investment have already submitted their Bitcoin ETF applications. The slew of applications submitted to the SEC signals a growing appetite for Bitcoin EFTs among the retail and instititional clients.

In an earlier post, the SEC chair Gary Gensler confirmed the recipient of the Bitcoin EFTs application from multiple financial instititions. Gensler brief remarks on the Bitcoin EFTs rule-making process created an enigma among the crypto investors.

In August, the court ordered the SEC to review Grayscale Bitcoin ETF. The court ruling obliged Grayscale to submit an S-3 form to the regulators to allow the SEC to reconsider its Bitcoin Trust (GBTC). The Grayscale procedural move challenged the ARK Invest and 21Shares to revise its application.

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Upland Game Nets $7 Million in Series A Funding Round

On Friday, October 20, the California-based crypto game Upland raised $7 million in a Series A funding round. The EOS Network led the successful fundraising in collaboration with other crypto and blockchain firms, including Animoca Brands and C3 Venture Capital. 

EOS Leads Uplands Games in Series A Investment

In an official publication, the Upland team confirmed that the investment will be rerouted toward restructuring its crypto game. Firstly, the gaming company plans to add more features to boost the user’s experience. 

The report illustrated that the Uplands developers will create unique features allowing players to purchase digital locations centered on real-world maps. Additionally, the Upland team plans to optimize its marketing strategy to reach a large audience and widen its market presence. 

The report demonstrates that the proposed development on the Upland platform will activate developer tools created by third parties. The investment will enable the Uplands team to create an Ethereum token tied to its in-game utility token, Spark. Afterward, the Upland team plans to allow its token to be available on the Ethereum network as Sparklet.

Speaking exclusively, Dirk Lueth, the co-founder of Uplands, argued that the proposed development aims at blocking metaverse projects from stagnating. The executive was pleased to announce that the gaming company plans to increase Upland’s performance in the open market. 

Upland Game Seek to Improve its Gaming Features

The CEO added that the Upland team plans to operate as compliant entities. Citing the Ripple case against the US Securities and Exchange Commission (SEC), the CEO confirmed that the Upland team had restricted the buying and selling of its native token to investors to attain the desired level of compliance. 

The executive stated that despite the metaverse sector’s slow growth, the Uplands team has demonstrated its unwavering commitment to broaden its geographical presence. Leuth argued that the Uplands will not withdraw from its mission regardless of the cyclical nature of the metaverse sector. 

Despite the slowing down the metaverse sector, Leuth believes that web technology has massive capabilities to transform the gaming company. As the chairperson for the Open Metaverse Alliance of Web3 (OMA3), Leuth noted that key players have engaged in continuous development to improve the sector. 

 He stated that the OMA3 has prioritized formulating the standards for the metaverse project. The executive indicated that during the launching of the Upland, the developers preferred EOS to Ethereum due to gas charges. 

The executive confessed that the EOS network blended well with the needs of the Upland games. The massive capability of the EOS has enabled Upland to optimize its minting potential to around 80 non-fungible tokens (NFTs) every second.

Overview of Upland Market Performance

Notably, the gaming company was first launched in 2019, having similar features as Monopoly, a renowned board game. During the launching of the game, the Uplands majored in property trading games centered on the EOS blockchain network to allow the players to trade their digital real-world properties. 

With the changes in the gaming sector, the Uplands team has heavily invested in significant upgrades to meet the ever-changing market demands. A revisit of Upland’s recent development demonstrates that the gaming company has integrated digital cafes, vehicles, and treasure-hunting features to enable players to hit their targets.

 Beyond this, dynamism in the gaming industry has forced the Uplands team to organize a fashion event that will be launched in the coming months. The significant development of the gaming platform has expanded the Upland user base. 

As of press, Uplands has registered over 3 million players with around 30000 active players. Interestingly, the attempt to cement its market performance has inspired Uplands to seek strategic partnerships with fast-paced gaming companies. 

A recent report demonstrated that Uplands has partnered with FIFA and the NFL association to realize its end goal. The report shows Uplands plans to collaborate with more US, European, and Latin American firms to support its core objectives. 

According to Leuth Uplands, a strategic partnership with ON1 Force anime-focused NFT game enabled the company to expand to Japan. 

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SEC Drops Charges Against Ripple Execs Brad Garlinghouse and Chris Larsen

The U.S. securities and exchange commission (SEC) has dropped its charges against Ripple’s top executives Brad Garlinghouse and Chris Larsen over whether they are liable in their involvement in illegal securities sales. 

In a filing on 19 October, the agency wrote to Judge Analisa Torres, stating that it was voluntarily withdrawing the case. 

“The SEC and Ripple intend to meet and confer on a potential briefing schedule with respect to the pending issue in the case — what remedies are proper against Ripple for its Section 5 violations with respect to its Institutional Sales of XRP — and respectfully request until November 9, 2023 to propose such schedule to the Court or, if the parties cannot agree, to seek a briefing schedule from the Court on a contested basis,” the SEC said in a filing on Thursday. 

Ripple’s chief legal officer celebrated the case withdrawal on Twitter. Saying “The SEC made a serious mistake going after Brad & Chris personally – and now, they’ve capitulated, dismissing all charges against our executives,” he wrote on X.  “This is not a settlement. This is a surrender by the SEC.”

Ripple’s Long Battle

It all started in December 2020 when the SEC dragged Ripple and the two executives to court on allegations of securities laws violation. Ripple was accused of issuing XRP which the SEC said was a security, while Garlinghouse and Larsen were accused of illegally selling a security and raising $1.3 billion in the process.

Ripple and the two executives have been in court since then, until Judge Torres ruled in July that part of the XRP sales did violate securities laws. The SEC then appealed the case, but has now withdrawn allegations against Garlinghouse and Larsen.

Commenting on the case dismissal, Ripple co-founder Chris Larsen said “Today, we are legally vindicated and personally redeemed in our battle against a troubling attempt to abuse the rules in order to advance a political agenda to suffocate crypto in America,” the Ripple Executive Chairman said. 

“It is a travesty that we were forced to defend ourselves from an ill-advised attack that was flawed from the day it was filed,” Larsen added.

Following the July ruling, several analysts said the victory wasn’t just for Ripple but for the entire crypto industry as it had implications for the future of other crypto companies as well. 

Crypto Industry Winning

The July ruling in favor of Ripple was the first ruling in support of the crypto industry in recent times. It encouraged other crypto companies like Coinbase and Binance to fight back against the SEC which has also taken the two exchanges to court.

This has been followed by another ruling in favor of Grayscale which requested approval from the SEC to convert its Bitcoin trust to a Bitcoin spot ETF. The SEC however turned down the request and Grayscale filed for an appeal which it won.

The SEC decided not to appeal the ruling this time, something analysts say is a big moment for crypto. Because of the Grayscale ruling, both the judiciary and the lawmakers are now strongly in support of a Bitcoin spot ETF.

SEC chair Gary Gensler on Thursday said the agency was working on multiple applications at the same time, and analysts believe the agency may approve multiple applications at the same time.

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SEC Chair Says Agency is Working on Multiple Bitcoin ETF Applications

The chairman of the U.S. securities and exchange commission (SEC), Gary Gensler says his agency is working on multiple Bitcoin ETF applications. 

When asked on Wednesday about the ongoing review process for spot bitcoin ETFs, Gensler said “The staff is doing work on those multiple filings.” In an interview with Bloomberg, Gensler didn’t give out much details about the process, and particularly refused to comment on the SEC’s ongoing case with Grayscale.

 He also didn’t say if the agency will approve a single ETF application or multiple applications as many people have predicted. The SEC had last month delayed decision on ETF applications from big names in the crypto space including BlackRock, Invesco, Valkyrie and Fidelity.

Since then, there has been anxiety on what the outcome of the decision is likely to be, as the crypto industry is eagerly looking forward to a Bitcoin spot ETF. Gensler assures that the agency is working on the applications through a “time tested” process.

“What we have in front of us, just so that the viewing public understands, we have not one, but multiple, I think it’s eight or ten filings that the staff, and ultimately the Commission, is considering,” he said. “When an asset manager is seeking to take something public, these exchange traded products need to register with the SEC, and they go through a filing, somewhat similar to going public, like an IPO.”

“And so it’s really the work of our Division of Corporation Finance that gives feedback, our Division of Trading and Markets of course looks at the filings,” he continued. “This is a time tested process that goes back decades. The staff of the SEC, it’s called the Disclosure Review Team, but in that group, they respond and give feedback to potential issuers.”

Hope for an ETF on the Rise

There has been a high optimism that a Bitcoin spot ETF could be on the horizon. This is mainly because the ETF applications this time around are from reputable companies, and the SEC has requested for some corrections.

The high hope also has to do with the recent court ruling backing Grayscale and directing the SEC to reconsider its application for an ETF. Because of the ruling, many analysts have said the SEC has no choice but to approve an ETF eventually, they even project that multiple ETF applications may be approved at once.

Gensler’s confirmation that his agency is working on multiple applications further fuels this optimism that multiple applications will be approved at the same time.

Lawmakers Back ETF

Following the ruling by the court that the SEC should consider approving Grayscale’s Bitcoin ETF application, lawmakers in the U.S have asked the SEC to approve a Bitcoin spot ETF as soon as possible in order to provide a safe way for investors to enter the crypto space.

This has been supported not just by Republican but also by Democrat lawmakers as they see no reason why a Bitcoin spot ETF cannot be approved, when several Bitcoin futures ETFs have been approved in the past.

Hopefully, the SEC will be able to make up its mind about approval by early 2024, which will play a critical role in determining the future of the crypto industry for years to come.

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Hamas Crypto Use Bad for Coinbase’s Pro Crypto Case: Berenberg

Coinbase has been pushing for regulatory clarity for the crypto industry in the United States. The crypto exchange has been in court on allegations of securities laws violations, but insists that regulatory clarity is missing, and so there’s no basis for such allegations.

To prove this, Coinbase has headed to court with a filing that demands the securities and exchange commission (SEC) to create a clear regulatory framework for the industry. In addition, the company has been lobbying congress to pass legislation for regulation of the crypto industry in the country.

However, Berenberg Capital Markets’ Mark Palmer said the recent report on terrorist organization Hamas using cryptocurrencies to finance its activities could be a setback for Coinbase’s cause concerning crypto.

“The primary driver of our cautious stance toward Coinbase Global is not our concern about the company’s operating performance during the next couple of quarters, but rather on the threats to its business from the various regulatory actions and litigation that it faces in the U.S.,” Berenberg analyst Mark Palmer said in a research note.

Hamas has reportedly been raising funds through cryptocurrencies weeks before the organization launched an attack on Israel. Last week, Israel froze the account Hamas was using to raise funds, and top crypto exchange Binance also helped to seize Hamas funds coming through its platform.

“While Hamas announced last April that it would no longer use crypto for fundraising due to the ability of authorities to track its movement on blockchain ledgers, we believe the recent headlines are likely to make clarity around the question of crypto’s legal status even more elusive,” Palmer said.

Coinbase’s Legal Struggle

As a result of the crackdown on crypto in the U.S, Coinbase was one of the first crypto exchanges to come under scrutiny, alongside Binance. The SEC filed a lawsuit against the exchange in June and the case has been ongoing since. 

The SEC has accused the exchange of violating securities laws by allowing the trading of crypto assets it considers to be securities. The exchange is also accused of failing to register as a securities exchange.

It was as a result of the case that Coinbase filed its own case demanding regulatory clarity from the SEC. SEC has however argued that there’s sufficient regulatory guidance for crypto companies to follow, and there’s no need for any special regulation for the industry.

To further push its cause, Coinbase has been lobbying lawmakers recently with some success. The lawmakers are now working on drafting legislation for the industry with a clear definition of what a security is and what it’s not. 

It is probably also because of Coinbase’s efforts that the lawmakers are supporting the approval for a Bitcoin ETF.

Coinbase Shares Exceed Expectations

Coinbase’s attempt to defend itself against the SEC allegations could have positive effects on its price. The company’s share price increased by 4.3% on Tuesday, and according to Palmer, it could do better in the future.

“The company’s defense against the lawsuit that the SEC filed against it appears likely to be an overhang on its share price for some time to come,” Palmer said. 

Consequently, the firm raised its estimate of Coinbase’s consumer transaction revenue to $240.8 million from $210 million to reflect “our expectation that its consumer take rate will contract at a slower pace than we had been anticipating.”

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Tether Blocks 32 Addresses Linked to Hamas to Sabotage Flow of Funds

In a Monday October 16 press release, Tether, the largest stablecoin issuer by market capitalization, blocked 32 digital wallets tied to the Palestine terrorist group Hamas. The report indicated that Tether joined forces with the Israeli law enforcement units to weaken the financial backbone of Hamas.

The stablecoin issuer confirmed that the illicit group had stored assets in USDT worth approximately $873,118 on the suspended wallets. The collaborative approach to freeze the wallets was spearheaded by the Israeli National Bureau for Counter-Terror Financing (NBCTF). 

Tether Suspends Wallets Owned by Hamas

A statement from Tether’s newly appointed chief executive officer, Paolo Adroino, revealed the two leveraged blockchain technology to identify the suspicious transaction linked to the Hamas group. The incoming CEO admitted the operation was well coordinated, resulting in the disabling of the send USDT feature on the blocked wallets. This move implies that the wallet owner is restricted from any funds transfer until the account has been reactivated. 

Adroino confessed that the decentralized nature of crypto assets had enabled the transactions to be traceable. Based on his vast expertise in technology, Adroino dismissed claims that most crypto transactions are not anonymous.

 The CEO admitted Tether has actively partnered with international law enforcers and regulators to address terrorist financing. The executive vowed to collaborate with the authority to restore financial integrity and combat cryber crime. 

Last year, shortly after the liquidation of FTX, Tether supported freezing assets worth around $360 million. The move demonstrated that Tether is committed to addressing cybercrime by freezing assets worth $20 million connected to a phishing attack.

 Subsequently, the stablecoin issuer supported freezing $1.7 million in assets stolen from the Yearn Finance protocol in 2021.

Crypto Firms React to Hamas-Israel War

The stablecoin issuer has worked with multiple law enforcers from 32 countries in the ongoing fight to mitigate cybercrime. In an interview with Reuters, the prominent blockchain analytic company in the US, TRM Labs noted that financial terrorists preferred dollar-backed crypto assets to other fiat and cash currencies. 

Reflecting on a February study, the TRM Labs observed that the use of Tether in financing terrorist activities rose by around 240% in 2022.

 The research findings indicated that some of the terrorist groups opted to use other stablecoins in financing their operations. The TRM noted that the high usage of Tether in funding criminal activities was due to the low transaction cost and stability of the coin.

Israel-Hamas War Heightens

In 2019, the Hamas group launched a crypto fundraising by passing the international sanction. Last year, the Israeli law enforcers seized around 190 Binance accounts tied to the Hamas group. During the seizure of the crypto wallet, the Israeli law enforcers noted that the Hamas group had made a $1.7 million crypto transfer to the Lebanese illicit group Hezbollah. 

In the ongoing regulatory scrutiny the Israeli authority has demostrated their commitment to end the war. Currently the Israel-Hamas conflict has challenged global leaders to extend their staunch support to the Israelis to end the suffering in Gaza.

In response to the war, the president of the United States, Joe Biden, has announced plans to visit Israel on October 18. The report demonstrated that President Biden’s visit to Israel aims to explore ways to ensure that humanitarian aid from global donors reaches the war victims. 

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BlackRock CEO Says Bitcoin’s Rally on False News Shows Massive Crypto Interest

BlackRock CEO Larry Fink says the Bitcoin rally triggered by false news on Monday shows how much interest there is in  crypto. He described the event as the sign of “pent up interest in crypto.”

Fink, whose company has also applied for a Bitcoin spot exchange traded fund (ETF) said he has been receiving information from clients on the need for crypto. He added that investors are looking for quality and he believes crypto will give them what they want.

“Some of this rally is way beyond the rumor,” Fink said in an interview on Fox Business. “I think the rally today is about a flight to quality, with all the issues around the Israeli war now, global terrorism. I think there’s more people running into a flight to quality, whether that is in Treasuries, gold or crypto, depending on how you think of it. And I believe crypto will play that type of role, as a flight to quality,” he added

Bitcoin rallied to $30,000 for the first time in months on Monday following news that the BlackRock Bitcoin spot ETF application had been approved by the securities and exchange commission. The post was later deleted, but the rumor had already gone round, triggering the rally.

This was also triggered by a Twitter post by Cointelegraph saying that “SEC approves iShares bitcoin spot ETF,”  which was live for 30 minutes before it was updated  and later removed. Cointelegraph apologized saying it was “a tweet that led to the dissemination of inaccurate information.”

Hope of an ETF Approval

The year 2023 has brought much hope to the crypto industry, mainly because of the increasing tendency of a Bitcoin spot ETF getting approval. Though there have been ETF applications submitted to the SEC over the years, none have been approved. 

However this year, there are many signs that suggest a Bitcoin spot ETF may be underway. The first is that the SEC requested for some changes to be made to the submitted applications, something that has not happened in previous years.

At the same time, the U.S congress is pressing on the SEC to approve a Bitcoin ETF, especially following the court ruling in favor of Grayscale. The congressmen have asked the SEC to approve a Bitcoin ETF as soon as possible since there’s no reason not to.

Also, the SEC decided not to appeal the ruling in favor of Grayscale, which according to XBTO Global CEO Philippe Bekhazi, is a key moment for the crypto industry.

“Given the pressure the SEC has faced from the courts and the U.S. House Financial Services Committee, it is a question of when, not if, this approval gets the green light,” Bekhazi said in a note sent to The Block.

New Possibilities Following Approval

The crypto industry has been looking forward to a Bitcoin spot ETF approval because it is believed that it will usher in more investors. Bekhazi believes this is true, adding that it will open doors to new possibilities in the industry.

“When this approval happens, it will open up new possibilities for a number of sovereign, pension funds, IRAs and 401k as well as other institutions who, before this point, may not have had access to digital asset investment opportunities,” he added.

He expressed optimism that an approval ill come in Q1 2024, after the SEC completes its assessment. The agency has postponed decisions on the applications for a later date.

The post BlackRock CEO Says Bitcoin’s Rally on False News Shows Massive Crypto Interest  first appeared on CryptocyNews.com.

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Nigeria Offering $290,000 Grant to Support AI Startups and Research

In an official communication, Bosun Tijani, Minister of Communications, Innovation and Digital Economy in Nigeria, confirmed that the government plans to invest in expanding artificial intelligence (AI) technologies. The minister stated that the Nigerian government will provide a grant to finance AI-related projects. 

Nigeria to Invest in AI Projects

Mr.Bosun argued that the numerous benefits of AI inspire the Nigerian government to finance startups and studies related to the development of AI technology. According to the minister, the government will issue grants totaling 5 million nairas, equivalent to $6444, to support creators and startups in the AI sector. 

Updating the X community, Mr Bosun argued that the grant program aims at supporting the country to realize the Nigeria Artificial Intelligence Research Scheme (NAIRS) goal of  mainstream adoption of AI.

 Primarily, the NAIRS will focus on the main industrialization sectors, including agriculture, education, healthcare, and employment. During the launch of the NAIRS program, the Nigerian authority outlined the requirements for an eligible applicant.

NAIRS Grant Requirements 

The authority indicated that it was essential for the applicant to submit a research proposal that seeks to foster AI development. The applicant should conduct a study outlining benefits and the significance of improving the Nigerian economy using AI technology. 

However, the ministry requires the applicant to create an alliance with a startup, local, and foreign researcher to qualify for the program. Based on the NAIRS requirements, the applicant should demonstrate vast experience in research and entrepreneurship. 

Also, to be considered for the program, the applicant should have at least one publication or a peer-reviewed article of his research work. It implies that the NAIRS applicant should meet all the requirements to be fully eligible.

A review of the requirements, the NAIRS seems to be a competitive program since the selection criteria only considers the best candidate. Last month, the team behind the NAIRS program invited developers and scientists to participate in formulating the National Artificial Intelligence Strategy. 

Nigeria Pushing for High Usage of AI to Promote Economic Development

Guided by the National AI Initiative Act of 2020, the NAIRS team developed a comprehensive procedure to nurture AI development and expand its user case in different sectors in Nigeria. 

The report indicated that the eligible candidates can submit their proposals from October 13 to November 15 this year. Afterward, the ministry will work closely with AI experts to select viable proposals. 

The government anticipates that the usage of AI will replicate the crypto adoption in the country. Currently, Nigeria ranks as the leading African country with the highest adoption of crypto technology. 

Recent statistics demonstrated that between June 2022 and July this year, the crypto activities in Nigeria generated $56.7 billion, a 9% increase from last year. The surge in crypto-related activities in Nigeria has obliged the government to tighten regulations to address financial crimes and fraud.

Factors Contributing to High Adoption of Crypto in Nigeria

On Saturday, a federal court in Nigeria accused Lawrence Success Karinate, a crypto trader, of engaging in a fraudulent scheme breaching the Cybersecurity Act of 2015 section 22(2)(b). The court ordered Mr. Karinate to settle court penalties amounting to around 200000 naira for engaging in cybercrime offenses and online deception. 

The court judgment warned crypto traders planning to engage in exploitative business activities. The decision supports the government’s ongoing efforts to implement measures to combat financial crime. 

Despite the strict regulation, the Nigerian authority recognizes the benefits of blockchain and crypto in stimulating economic development.The government introduced a national blockchain policy in August to foster innovation and drive economic development. 

Launching the Nigerian blockchain policy aimed at expanding the government revenue streams through tokenizing real-world assets and expanding the decentralized finance (DeFi) sector. The approach encourages the Nigerian to develop innovative solutions to transform the education, entrepreneurship, supply chain, healthcare, and transport sectors. 

The adoption of emerging technologies such as blockchain crypto and AI aim at creating a new frontier of economic and tech opportunities in the African country.

Benefits of Blockchain Technology

A few weeks ago, Nigeria’s National Information Technology Development Agency (NITDA) introduced blockchain in issuing education certificates. The NITDA announced plans to integrate blockchain technologies into the National Youth Service Corps (NYSC) system to support certificate verification. 

The development aims to address the circulation of fake education documents that violate the Nigerian Criminal Code Act section 468. 

The post Nigeria Offering $290,000 Grant to Support AI Startups and Research first appeared on CryptocyNews.com.

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