https://finbold.com/crypto-in-bold-week-august-21-2/

As bitcoin (BTC) struggled to recover this week, the crypto market was abuzz with its new hyped project, and law enforcement made several announcements as well. Additionally, there were several negative reports impacting the market’s largest exchange Binance. Below, we’ve highlighted these stories and others for you, allowing you to catch up on the entire week in just a few minutes.

Market Overview

• Despite a failed attempt to rally above $26,600, the price of BTC remained relatively unchanged this week, hovering near $26,000. At the time of writing, it has dropped by approximately 11% over the month. The price primarily responded to macro events and traditional markets, as the market was preoccupied with speculations regarding the monetary policies of central banks and the rise in bond yields. While the short-term prospects for BTC appear grim, there was another bullish forecast from a multibillion-dollar fund suggesting that BTC could reach $148,000 by 2025. We covered this topic in detail here.

BTC price chart:

Mining

• Bitcoin miners are in for a challenging week as this activity has become more costly at the time when BTC’s price has dropped by 11% over the month and returned to a level last seen at the end of June. This might encourage some miners to sell more BTC, further adding pressure to the price. The Bitcoin mining difficulty has increased by over 6% this week, reaching around 55.6 T (terahashes, or 55.6 trillion calculations per second). We covered this topic here.
• Another example of BTC’s benefits in energy and environmental contexts is Nodal Power, which raised $13 million for utilizing landfill gases, including methane, that is more potent than carbon dioxide in terms of contributing to climate change, for electricity production. This electricity is also used by Nodal to mine Bitcoin.
• Dropbox announced the discontinuation of their unlimited data storage service, as some clients have begun using it to mine crypto or use it in other ways not favored by the company.
• Yet another potential sign of how competition is evolving among nations in the Bitcoin mining business is exemplified by the startup Exahertz in Oman. They claim to have secured government support for their BTC mining project, valued at $1.1 billion. This has already been pursued on a national scale by the Kingdom of Bhutan.

Exchanges

• This week, Binance had its fair share of unfavorable media attention. Firstly, there was some confusion for Binance clients in Europe. The company acknowledged mistakenly announcing that SEPA transfers were no longer operational, even though it had previously been stated that the partnership with the current service provider would end on September 25. This date remains unchanged, and the exchange promises to find a solution by then.
• Furthermore, The Wall Street Journal brought to light a new batch of allegations against Binance – indicating fresh evidence that the exchange is offering services in Russia. Simultaneously, Russian media claims that although Binance has banned $ and EUR peer-to-peer crypto trading in this market, RUB trading remains available. 
• Adding to the woes, Binance which is facing multiple charges in the US, and payments giant Mastercard are terminating payment card services in Argentina, Brazil, Colombia, and Bahrain. 
• Meanwhile, payment company Checkout.com reportedly ended its partnership with Binance, citing regulatory and money laundering-related concerns.
• In the meantime, signs of stricter regulations continue to emerge in the landscape of centralized exchanges. This time, it was Bitget that announced stricter KYC (know your customer) procedures.
• One of the top 10 decentralized crypto exchanges, Balancer, urged its clients to swiftly withdraw their crypto from certain pools due to a potential vulnerability that could lead to fund theft. On Thursday, the team added, “Over 98.7% of liquidity initially deemed vulnerable is now SAFE. As of writing, the vulnerability has not been exploited. However, 0.42% of total TVL [total value locked] ($2.8 million) remains at risk, with users advised to withdraw ASAP using the UI.”

Stablecoins

• While it was somewhat evident before, it’s now even clearer why Coinbase has been actively promoting payments using the second most popular stablecoin, USD Coin (USDC). The exchange announced an investment in USDC issuer Circle, with whom they had collaborated on this stablecoin before. Simultaneously, it was revealed that USDC is set to be launched on six more blockchains by October.
• Furthermore, USDC has been integrated as a payment method on the Shopify platform. The latter has teamed up with the Solana (SOL) blockchain payment solution Solana Pay, which was the first to introduce USDC.

Privacy

• The hottest crypto project is the social network friend.tech, which allows the tokenization of its users’ social profiles that can be traded as “shares”, had to address reports claiming that data from over 100,000 of its users had allegedly leaked. The team asserts that this is untrue, but it doesn’t change the fact that these users’ crypto wallets and Twitter (now X) accounts were exposed (though the list has seemingly been removed). In either case, usage metrics for this network have declined since August 21.

• BTC and crypto hardware wallet manufacturer Trezor, in collaboration with privacy-focused Wasabi Wallet, has introduced the so-called coinjoin feature into the Trezor Model One device (previously only available on Trezor Model T). Coinjoin enhances the privacy of BTC users by making transactions highly untraceable. Simultaneously, another team has launched an educational project about Coinjoin.

Blockchains

• Bitcoin developer Luke Dashjr seems to have shifted his stance from “negative” to “neutral” regarding the much-discussed Bitcoin scaling technology drivechain this year. He submitted a pull request for drivechain on GitHub, which has taken the discussions about this technology to a new level. However, it’s worth noting that he was compensated by drivechain advocates from the Layer Two Labs team. Supporters argue that drivechain, which is a layer 2 technology, will offer numerous new possibilities for Bitcoin and might even render altcoins obsolete, as all the same functions could be achieved through the Bitcoin blockchain. Opponents, on the other hand, have reservations and warn about centralization and threats to Bitcoin’s security.
• The crypto giant Coinbase announced its steps necessary to decentralize its newly launched Base blockchain, although the specific timeline for this transformation remains unspecified. Simultaneously, the company shared its vision for a “Superchain,” envisioning a network of blockchains that would help Ethereum (ETH) scale. According to Coinbase, chains that are part of the “Superchain will allow builders and users to transact and move across chains easily and affordably.”

Taxes

• If tax authorities are keeping an eye on crypto news, they might find inspiration in the city of Cheongju in South Korea. The city plans to seize crypto holdings from investors who haven’t paid taxes and has already reached out to seven exchanges. 

Regulation

• The Bank for International Settlements (BIS), a central bank organization, issued a recent report warning about threats to financial stability related to the crypto market. However, it also urges caution against excessive regulation that might stifle innovation, even though, according to BIS, crypto has not yet fulfilled its promises. Furthermore, strict regulations could lead to an increase in the shadow market, making it harder to oversee, according to BIS.
• In combating fraud, the UK government has begun seeking public input regarding the ban on cold calls, which offer financial services, including those related to crypto. 

Companies

• The troubled BTC and crypto custody company, Prime Trust, has admitted that it lost around $8 million due to an investment in the collapsed Terra$ (T$) stablecoin last year. $6 million of the lost money belonged to their clients.
• BTC financial services company Unchained stated that in the second quarter of this year, compared to the first, its managed portfolio of loans collateralized by BTC increased by 170%. The company saw an 88% growth in business clients, a 67% increase in private clients, and a 260% surge in clients using BTC-related inheritance services. Although the company didn’t provide exact figures, it announced in April that it has originated over $500 million in BTC-collateralized loans since 2017, and its BTC custody platform held $2 billion worth of BTC at that time.
• Crypto wallet Exodus has revealed its results for the second quarter and first half of the year: monthly active users decreased by 6% in the second quarter compared to the same period in 2022, totaling 777,839. The net profit for the first half of the year amounted to $2.7 million, in contrast to a loss of $18 million last year (even with decreased revenues). The company reduced its staff by 33%.

Adoption

• World Mobile, which claims to be a provider of a decentralized mobile internet, has announced the launch of its app for Android phones, but so far it’s available only in a few countries: the USA, the United Kingdom, Canada, Australia, and Tanzania.
• Web3 domain company Unstoppable Domains has introduced a new encrypted communication service. They state that now, for example, you can send a message from Coinbase Wallet to Lens, a decentralized social network application, using the recipient’s wallet address or their existing Web3 domain.
• The Central African Republic has confirmed its plans for the tokenization of natural resources.

DeFi

• While the total value locked (TVL) in DeFi protocols still remains at the two-year low, the DeFi platform EigenLayer, launched in June and controversial due to potential negative impact on Ethereum’s security, managed to increase its TVL by over 200% in less than a day, surpassing $241 million and hovering near $238 million at the time of writing. 

Total value locked in DeFi

Legal Matters and Crimes

• The US has sent yet another unsettling signal to the crypto market and privacy advocates, a move that could impact legal enforcement in other countries as well. Developers of the privacy-focused crypto mixer Tornado Cash are facing charges of money laundering, sanctions violations, and illegal money transmission business. Meanwhile, crypto market lobbyists Coin Center point out that the charges brought, such as illegal money transmission business, contradict the stance of other regulators that developers of software like Tornado aren’t considered money transmitters.

I’m struggling to think of something, anything useful to say about the tragic mistake that is the DOJ’s decision to treat privacy and speech as crimes.

I’m blank.

— Jake Chervinsky (@jchervinsky) August 23, 2023

• The former product lead of one of the largest centralized NFT platforms, OpenSea, Nate Chastain, has been sentenced to 3 months in jail in the US for NFT insider trading. He has also been fined $50,000.

• The FBI has warned that the notorious North Korean hacking group Lazarus, linked to the country, might attempt to sell BTC worth $40 million.
• It is reported that a group of 50 Russian and CIS crypto enthusiasts are preparing a class-action lawsuit against the Estonia-registered Atomic Wallet, from which more than $100 million was stolen in June.
• Meanwhile, the Israeli police have accused a prominent crypto investor, Moshe Hogeg, and his business partners, of being involved in a $290 million crypto fraud scheme.

NFTs

• Yet another NFT platform, RECUR, known for its partnerships with prominent figures, is shutting down. Additionally, Nifty’s has also declared its withdrawal from the market earlier in August.
• At the time of writing, in the past month, among the top 10 NFT collections (based on market capitalization), only four collections saw an increase in their floor price, which is the lowest price for an item from the collection at that time. Meanwhile, Donald Trump‘s NFTs appreciated in value following his interview with Tucker Carlson on Wednesday.

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The post Crypto in bold: Binance woes, difficult Bitcoin, legal Tornado, USDC game, friend.tech drama, and more appeared first on Finbold.

https://finbold.com/crypto-in-bold-the-biggest-stories-of-the-week/

Market overview

After trading mostly sideways for almost two months, BTC experienced a flash crash below USD 26 000 in the late hours of Thursday (UTC time), causing the rest of the crypto market to decline as well and resulting in the liquidation of over USD 1 billion in trading positions within a day. At the time of writing, the total BTC and crypto market capitalization is down by around 10% in a week, hovering just above USD 1 trillion. 

Analysts are uncertain about what exactly triggered the sale in the spot market, which subsequently led to cascading liquidations and wiped out most of the gains BTC had achieved since BlackRock submitted their BTC ETF (exchange-traded fund) application to the US Securities and Exchange Commission (SEC) in June. 

Among the discussed possible reasons for the sell-off are speculations regarding SpaceX’s sale of their BTC holdings and investors preparing for a ruling in the Grayscale vs. the SEC case, which pertains to the transformation of the Grayscale Bitcoin Trust (the largest BTC fund) into an ETF. In either case, these market movements also need to be evaluated in the broader context of a not-very-positive macro environment, issues related to the weakening yuan, interest rate hikes in the US, a challenging week for tech stocks, increasing bond yields, and persistently low liquidity.

Total market capitalization chart (last 7 days ):

Politics 

• Argentina, suffering from over 100% inflation, could bring the first official Bitcoiner president to the G-20 club of nations in the form of Javier Milei. We wrote about this here.

Adoption

• A new wave of speculation in the crypto world involves crypto influencers jumping onto a new project on the Base platform, a blockchain developed by Coinbase. The platform, friend.tech, aims to tokenize users’ social networks. It’s somewhat similar to trading “shares” in people, giving you the opportunity to privately interact with a specific influencer whose “shares” you own. However, the platform has faced criticism for its lack of privacy, transparency issues, technical problems, and has been referred to as the second BitClout – a project that initially garnered hype and raised hundreds of millions, later evolving into DeSo and almost fading into obscurity.

• Distributed ledger technology (DLT) project Hedera Hashgraph‘s token, HBAR, experienced pump and dump this week when the US Federal Reserve (Fed) disclosed a collaboration with the micro-payment project Dropp built on the Hedera platform as part of the FedNow payment service, launched by the Fed this past July. Following the news that we wrote about here, HBAR surged by 30%, but it has now erased the entire gain.

HBAR price chart:

• It turns out that former US President Donald Trump holds not USD 250,000 – USD 500,000 worth of ETH tokens as previously stated, but rather USD 2.8 million. Additionally, from his crypto/NFT projects, Trump earned a total of about USD 7.6 million, according to updated data.
• The Helium Network (HNT) has introduced a somewhat decentralized 5G internet service priced at USD 5 per month. For now, it’s only available in Miami and has raised suspicions among some reviewers.

Blockchains

• One of the founders of Ethereum (ETH), Vitalik Buterin, openly stated that developers associated with Ethereum’s layer-2 and rollup solutions that help this blockchain scale, essentially have a backdoor to address matters if they believe something is amiss. 

• The blockchain platform Gitcoin (GTC), designed for open-source project collaboration, surprised and stirred the market with a new partnership focused on climate projects with the oil giant Shell. Critics call this a straightforward case of “greenwashing,” where more attention is given to advertising supposed positive actions against climate change than to the actions themselves.

• The blockchain giant ConsenSys has opened to the public another Ethereum scaling solution, Linea, while the creators of the popular memecoin Shiba Inu (SHIB) have launched their new blockchain, Shibarium. However, it didn’t start very successfully – when transferring ETH tokens from Ethereum to Shibarium, around USD 1.7 million worth of ETH got stuck. The developers of the new blockchain claim that “ALL IS WELL” and the issues arose due to what they call a supposedly high interest in Shibarium. In any case, there’s been a growing sentiment lately that there are already too many of these infrastructure blockchain projects and perhaps more attention should be directed towards developing/improving more useful applications.

Stablecoins

• The most popular stablecoin, tether (USDT), issuer Tether, announced that it will no longer support USDT on networks such as Omni Layer, Bitcoin Cash SLP, and Kusama due to lack of market interest. Omni Layer, built on the Bitcoin blockchain, was particularly important for Tether in its early days. The company mentioned that USDT could still return to Omni Layer if demand increases.

Regulation and taxes

• While the U.S. Federal Deposit Insurance Corporation included cryptocurrencies in its annual market risk review, the UK market regulator stated that since January 2020, it has only approved 13% (38) of crypto companies’ applications to operate in this kingdom.
• Kenya states that the controversial Worldcoin (WLD) project disregarded orders from its data protection agency to cease collecting personal data of the country’s residents until such directives were issued by the Ministry of Interior and Administration.
• Brazil plans to raise taxes on cryptoassets held overseas, incentivizing local crypto exchanges. 

Companies 

• The largest crypto exchange, Binance, due to changing market conditions, has optimized its operations by closing down the Binance Connect service. It was launched in March last year and provided fiat-crypto on-ramp/off-ramp services. The division was initially launched as Bifinity, an LLC of the same-name operating in Lithuania. However, according to a source with direct knowledge of the matter, Bifinity itself will continue to operate, and the team remains unaffected. In a post published by Binance in July, it is explained that Bifinity offers Binance clients services related to fiat currency conversion to/from BTC and crypto, such as purchasing crypto assets with payment cards or transferring funds from Binance to a bank account. The focus is primarily on European clients.
• The collapsed crypto lender Celsius obtained permission to survey former clients regarding the company’s revival and the distribution of USD 2 billion worth of BTC and ETH.
• The Bitcoin Frontier Fund has launched the first startup accelerator aimed at supporting projects utilizing the Ordinals protocol that helps upload arbitrary data (e.g., NFTs, videos, etc.) into the Bitcoin blockchain. An investment of USD 100,000 is offered (cash – only 70% of the sum) in exchange for a 2%-3% equity stake.
• The Orange Pill App, an application that helps Bitcoiners discover each other, secured a USD 250,000 investment.
• The developer of the payment-oriented Stellar (XLM) blockchain, the Stellar Development Foundation (SDF), invested in the remittance giant MoneyGram, with which it has been collaborating for some time. With this investment, the SDF also gets a position on the board of directors in this company.
• The Goldman Sachs-supported BTC and crypto custody company BitGo has attracted a new investment of USD 100 million, valuing the company at USD 1.75 billion. The company plans acquisitions and service expansion.
• BTC and crypto wallet device manufacturer Ledger will allow its customers in the US to buy BTC, ETH, Bitcoin cash (BCH), and Litecoin (LTC) using PayPal.
• At the same time, PayPal confirmed that it will no longer allow customers in the UK to buy cryptocurrencies from October to next year, citing regulatory uncertainties.

Mining

• The Bitcoin infrastructure giant Blockstream presented investors with a new product, the Blockstream ASIC (BASIC) Note, allowing them to invest in currently discounted Bitcoin mining computers (ASICs, application-specific integrated circuits), which would be more expensive to sell once (if) the BTC bull market gains momentum.

Exchanges

• Blockchain analysis company TRM Labs estimates that nearly two-thirds of “parasitic crypto exchanges” operate in Russia and Iran. These platforms are referred to as “parasitic” because they use solutions from major exchanges without permission and offer trading services with minimal or no KYC/AML (know your customer / anti-money laundering) requirements.

Metaverse and Web3

• The Lamina1 blockchain, dedicated to metaverse projects, has launched its beta version. One of the project’s co-founders is sci-fi writer Neal Stephenson, who introduced the term “metaverse” to the world in 1992. 
• Meanwhile, the Sichuan province in China announced its plans to grow the local metaverse industry to USD 34 billion by 2025.
• Polygons Labs, the team behind the Polygon (MATIC) blockchain, has partnered with South Korean telecommunications giant SK Telecom to foster the development of the Web3 ecosystem.

CBDCs

• Another payment giant, Mastercard, has introduced the “CBDC Partner Program” aimed at bringing together blockchain and payment companies interested in CBDC (central bank digital currency) projects.
• Two professors from the University of Bern claim that the “digital euro,” or the euro zone’s CBDC, is doomed to fail on arrival, as instead of taking real transformative steps, the European Central Bank is focused on how to maintain/protect the current banking system.

Security

• DeFi, presenting itself as the “first web3 antivirus and super application,” has launched a “crypto antivirus” designed to safeguard against prevalent scams and other attacks in the crypto world.

Law and Crimes

• The crypto community lost a legal battle financed by Coinbase against the U.S. Department of Treasury concerning a crypto privacy-enhancing and department-sanctioned crypto mixer Tornado Cash, controlled by a decentralized autonomous organization (DAO). The court disagreed with the plaintiffs’ argument that the department overstepped its powers, and recognized that a DAO could also be considered a responsible legal entity. Coinbase seems likely to support an appeal as well.
• These days, there’s no shortage of crime-related news at various levels – from thefts from projects on the new Coinbase’s blockchain Base (in one instance, thieves even created their own token afterward), exploited DeFi protocols Zunami and Exactly Protocol, and the FBI report on confiscated BTC and crypto, to yet another gruesome murder: the second case this year of a chopped body linked to another “crypto kingpin” discovered, or in this case, what’s left of a 41-year-old U.S./Bulgarian citizen. The crime took place in Bulgaria.
• The warning from the Philippine police might be relevant not only to Filipino players engaged in play-to-earn crypto games like Axie Infinity. Police warned that “cybercriminals are now using fake rewards in so-called “play-to-earn” mobile and online games to steal millions worth of cryptocurrency.”

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