Daily Archives: May 21, 2024

OPINION:

As the FTX collapse demonstrated in 2022, issuing and trading digital assetsincluding cryptocurrenciesneed clear rules of the road.

The regulatory gaps in the digital asset market must be filled by legislation, not by independent agencies ruling by enforcement. If Congress does not take action, Securities and Exchange Commission (SEC) Chairman Gary Gensler will continue to exercise broad authority over all digital assets.

Thats why we collaborated with House Financial Services Committee Chairman Rep. Patrick McHenry (R-NC) and House Agriculture Committee Chairman G.T. Thompson (R-PA) to craft our Financial Innovation and Technology for the 21st Century Act (FIT21), which crafts a fit for purpose regulatory framework for digital assets that protects consumers and investors while keeping innovation in the United States.

This type of committee collaboration is unprecedented and may be the most substantial piece of digital asset legislation in Congresss history. FIT21 directs the SEC and Commodity Futures Trading Commission (CFTC), along with the bank supervisors, on how to classify cryptocurrencies and other digital assets as securities or commodities.

Since our two committees passed FIT21 last summer, this bill has incorporated our members bipartisan priorities. We believe it fully responds to the Financial Stability Oversight Council (FSOC) and the Presidents Executive Order on Ensuring Responsible Development of Digital Assets.

Digital asset regulation is making further bipartisan strides in Congress. This past week, both the House and Senate sent the SEC and White House a clear, bipartisan message to nullify their SAB 121 rule, which is detrimental to consumer protection and yet another example of SEC Chair Genslers reckless rule-by-enforcement approach to cryptocurrency. Democrats in the House and Senate voted to roll back SAB 121, signaling that protecting consumers and preserving innovation in America are priorities for lawmakers on both sides of the aisle.

The FIT for the 21st Century Act is a pragmatic legislative solution that ensures both crypto-native and traditional finance companies can sensibly innovate in this market while establishing consumer protections that are currently clearly inadequate.

As Chairmen of the Digital Asset Subcommittees, we remain committed to passing our landmark legislation into law. This week, our historic bill heads to the House Floor, where it must pass to ensure America continues fostering innovation and remains a global tech and finance hub.

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Bringing clarity to cryptocurrency - Washington Times

For much of its existence, the cryptocurrency company nChain was governed by a golden rule of office politics: It was not a good idea to challenge Craig Steven Wright, the chief science officer.

At nChains London offices, Dr. Wright, an Australian computer scientist, was treated as a sort of philosopher king. He wore three-piece suits and drove a Lamborghini. A middle manager would tape Dr. Wrights ramblings about obscure technical matters and then share the recordings with a staff of researchers, who were instructed to turn his musings into patents.

In 2017, Martin Sewell, an nChain employee, circulated a skeptical memo documenting technical errors in a series of papers that Dr. Wright had published about economics and computer science. A manager called Mr. Sewell into his office and told him that he had to stop.

The deference to Dr. Wright was just this extraordinary arrangement, Mr. Sewell recalled. Like he was some sort of god of everything.

Indeed, Dr. Wrights authority rested on a claim to a kind of divine significance that he was the mysterious creator of Bitcoin, the original cryptocurrency.

In 2008, a person using the pseudonym Satoshi Nakamoto published a white paper explaining the basics of Bitcoin, a clever idea that eventually became the foundation of a multitrillion-dollar industry. Then, as abruptly as he had emerged, he vanished. Satoshi, whos known by his first name, controls an estimated 1.1 million Bitcoins, a $75 billion stash that has sat untouched for more than a decade.

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This Man Did Not Invent Bitcoin - The New York Times

The TDR Three Key Takeaways regarding Venture Capital and Cryptocurrency Startups:

The cryptocurrency industry attracted substantial venture capital funding despite regulatory uncertainty and market fluctuations. In the first quarter of 2024, venture capital investments in crypto surged to $2.4 billion, signaling renewed investor confidence in the sectors long-term potential.

According to the latest PitchBook report, the recovery in publicly traded tokens and the rise in institutional adoption are key factors driving the increase in venture capital funding. These trends will drive increased VC funding, stated PitchBook analyst Robert Le.

This influx of capital reflects a broader trend of growing interest in cryptocurrency startups. The emergence of meme coins, DeFi platforms, NFTs, and blockchain-based applications has not only expanded the markets appeal but also diversified investment opportunities. The ability of these innovative digital assets to generate substantial returns has made the crypto market an attractive option for investors looking to diversify their portfolios.

Despite its inherent volatility, the crypto markets potential for high returns continues to lure venture capitalists. The first quarter of 2024 saw a significant number of early-stage deals, which have become highly competitive. As Robert Le from PitchBook noted, The investment rounds have become highly competitive, especially at the early stages.

One important trend in the current venture capital landscape is the higher valuations being placed on early-stage deals compared to late-stage deals. This shift suggests that investors are betting on the future growth and success of new cryptocurrency startups. Le observed, This is compounded by the fact that early-stage deals are earning higher valuations than late-stage deals but we will see if this trend holds in the coming quarters.

The rise of decentralized finance platforms, which aim to recreate traditional financial systems in a decentralized manner, has been a significant driver of venture capital interest. DeFi platforms offer innovative solutions that challenge conventional banking and financial services, making them attractive investment opportunities. Similarly, NFTs have opened new avenues for digital ownership and monetization, further broadening the scope of the crypto market.

In addition to these technological advancements, the institutional adoption of cryptocurrencies is playing a crucial role in increasing investor confidence. Large financial institutions are increasingly integrating blockchain technology and digital assets into their operations, underscoring the legitimacy and potential of the crypto market.The first quarter of 2024 also saw the debut of several Bitcoin ETFs, which have contributed to renewed investor interest in the crypto sector. These ETFs provide a regulated and accessible way for investors to gain exposure to Bitcoin, further driving the flow of venture capital into the market. As the market matures, we can expect to see more sophisticated financial products and services emerge, further integrating cryptocurrencies into the global financial system. Want to keep up to date with all of TDRs research and news, subscribe to our daily Baked In newsletter.

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Venture Capital Pours $2.4 Billion into Cryptocurrency Startups in Q1 2024 - The Dales Report

Key Takeaways

This past week, a major conviction occurred in a crypto technology case, as a developer of privacy-preserving software was convicted for money laundering in the Netherlands. The CEO of digital asset manager Grayscale also resigned, and a report suggested the crypto industry could have a bigger political impact than ever through lobbying efforts.

Tornado Cash developer Alexey Pertsev was reportedly convicted of money laundering by a Dutch judge on Tuesday, and received a 64-month prison sentence.

An indictment revealed that between July 9, 2019, to Aug. 10, 2022, Pertsev consistently engaged in money laundering, and ignored suspect origins of illicit transactions on Tornado Cash.

Following the verdict, the 31-year-old Russian was taken into custody. Pertsev can appeal the sentence, but the time he has already spent in detention since his arrest in August 2022 will not be deducted from his prison term.

The case may influence upcoming trials of other Tornado Cash developers, including Roman Storm and Roman Semenov, who also face money laundering and sanctions violations charges in the U.S.

Grayscale CEO Michael Sonnenshein is stepping down, according to a release Monday. The company said Sonnenshein, who played a key role in the launch of spot Bitcoin exchange-traded funds (ETFs), is leaving the company to "pursue other interests."

Goldman Sachs Head of Strategy for Asset and Wealth Management Peter Mintzberg will take over the role on August 15. Mintzberg brings over 20 years of experience from roles at BlackRock, OppenheimerFunds, and Invesco. Until Mintzberg steps in, Grayscale CFO Edward McGee will serve as interim CEO.

Barry Silbert, CEO of Grayscale parent Digital Currency Group, praised Sonnenshein's leadership in transforming the Bitcoin Trust into an ETF. Earlier this year, Grayscale was among the firms that successfully listed a spot Bitcoin ETF in the U.S. after challenging repeated denials by the Securities and Exchange Commission (SEC).

The crypto industry is ramping up its lobbying efforts in Washington, aiming to influence the upcoming U.S. elections, CoinDesk reported.

By investing heavily in pro-crypto candidates, the industry is hoping to make progress in establishing a more favorable regulatory framework. Notably, crypto-focused political action committees (PACs) like Fairshake have raised substantial funds to support candidates sympathetic to crypto. These efforts have already impacted key races, reportedly helping thwart the re-election of Congresswoman Katie Porter, who has been critical of crypto.

Fairshake also contributes to party-affiliated PACs like Defend American Jobs and Protect Progress, and supports both Republican and Democratic candidates who back crypto-friendly policies.

U.S. lawmakers are preparing for a vote on the Financial Innovation and Technology for the 21st Century Act (Fit21), deemed crucial by major crypto companies for the future of the U.S. crypto industry.

Fit21 aims to establish safeguards against risky behavior and ensure consumer protection in cryptocurrency custody and bankruptcy, providing clearer guidelines for the industry. The upcoming vote could also determine whether the Commodity Futures Trading Commission (CFTC) will become a major crypto regulator, and delineate its jurisdiction from that of the SEC.

The Crypto Council for Innovation, which includes industry giants like Coinbase (COIN), Kraken, and Andreessen Horowitz, wrote a letter last week advocating for the bill, emphasizing the importance of the legislation for supporting the growth of digital assets and maintaining U.S. leadership in financial innovation.

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Cryptocurrency Market News: Tornado Cash Developer Sentenced to Over 5 Years in Prison - Investopedia

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Wealth of knowledge: Teen recognized for helping educate others about cryptocurrency - The Daily Reflector

The African continent is experiencing a dynamic shift in the cryptocurrency landscape. With some countries embracing regulation and others remaining cautious, the future of crypto adoption is a topic of intense discussion. CIO Africa, interviewed Ray Youssef, the visionary CEO behind NoOnes, a financial communication super app to dive deep into these critical issues.

Youssef, a serial entrepreneur with a proven track record of bootstrapping successful businesses, brings a wealth of experience to the table. Having co-founded Paxful, a leading peer-to-peer Bitcoin marketplace, he understands the transformative potential of cryptocurrency, particularly in regions like Africa, where financial inclusion remains a challenge.

Nigeria and South Africa have been on two different trajectories regarding crypto regulations in the past few months. While the former is going hard on crypto platforms, the latter has issued licences to over 75 crypto institutions. How might these differing regulatory environments impact the long-term trajectory of cryptocurrency adoption across Africa?

Youssef: The landscape of cryptocurrency adoption in Africa is heavily influenced by disparate regulations. While stringent rules stifle innovation, supportive frameworks cultivate trust and provide a conducive environment for entrepreneurs. Its crystal clear: for nations to prosper, they must prioritize the support of entrepreneurs through the facilitation of free trade and an unimpeded flow of capital. South Africas progressive stance stands as a beacon of inspiration, beckoning other African nations to embrace similar regulatory approaches. Failure to do so risks impeding economic growth and delaying the widespread adoption of cryptocurrencies on the continent.

What kind of collaboration between regulators and industry players would you say is crucial to building a sustainable crypto ecosystem in Africa?

Youssef: Its imperative that regulators and industry players establish open channels of communication. Lets not mince words: clear, concise regulations are non-negotiable. Theyre the backbone of fostering innovation while keeping everyone in line with compliance standards. But lets not stop there. Education is sorely lacking. Regulators, industry folks, and the public alike need to get on the same page about the potential benefits of cryptocurrencies. And lets be real, folks, we cant turn a blind eye to the rampant illicit activities happening in the crypto space. Its time for action, not just talk.

Through your journey of bootstrapping impactful crypto startups and being acknowledged as one of Coindesks 40 Most Influential People, whats a key similarity youve observed between Africas crypto scene and the broader development of crypto markets in the global south?

Youssef: The crypto landscapes of both Africa and the broader Global South are flourishing thanks to grassroots innovation spearheaded by local entrepreneurs and communities. In these regions, theres a distinct emphasis on empowering individuals by expanding access to financial services and unlocking economic opportunities through cryptocurrencies. This grassroots momentum not only drives innovation but also fosters a more inclusive and equitable financial ecosystem, poised to transform lives and economies across Africa and beyond.

NoOnes has experienced some growth in Africa despite regulatory challenges. What specific factors do you attribute to this success?

Youssef: NoOnes local presence in Africa isnt just about establishing a foothold; its about gaining a deep understanding of the market dynamics, even in the face of regulatory hurdles. By prioritizing the empowerment of African entrepreneurs, NoOnes is making waves, building trust, and driving substantial growth in the region. But lets not overlook their dedication to education. By enlightening citizens about the advantages of cryptocurrency, we are not just making a profit; we are making a meaningful impact.

You are vocal about your mission to secure a billion daily active users of Bitcoin within the next seven years. In such a dynamic regulatory landscape in Africa, how do you see this panning out?

Youssef: NoOnes will adapt to evolving regulations while pursuing user growth goals. It aims to educate regulators and the public about Bitcoins benefits for greater acceptance and clarity. Ultimately, Africas success hinges on encouraging entrepreneurship through free trade and free-flowing money system.

Looking ahead, what trends do you anticipate shaping the future of the cryptocurrency industry in Africa, and how is NoOnes positioning itself to capitalise on these trends?

Youssef: NoOnes intends to offer accessible financial services and pioneering solutions tailored to Africa and the Global South. The company is dedicated to advancing innovation for African users and enterprises, alongside disseminating knowledge on financial liberation to the masses. With NoOnes at the forefront, the future of Africa appears promising, promising significant strides towards economic empowerment.

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The Future Of Cryptocurrency In Africa - CIO Africa

Market manipulation in cryptocurrency involves using deceptive tactics to artificially control a digital assets price. Manipulators aim to either inflate (pump) the price to sell their holdings for a profit or deflate (dump) the price to buy more coins at a lower cost. These tactics compromise the legitimacy of the market and create an unfair environment for investors.

No, manipulating cryptocurrency markets is generally not legal. Heres why:

The legal landscape is still evolving, especially across different countries. The global nature of cryptocurrencies can make enforcement tricky.

Making stock prices jump or fall isnt easy, especially for well-established companies with high trading volume. Its much simpler to manipulate stocks with a low daily trading volume, like penny stocks.

Here are some common tricks manipulators use

These schemes often involve illegal trading tactics like

While Decentralized Exchanges (DEXs) offer more control over your crypto trades, they also come with security risks. Hackers can take advantage of weaknesses to steal funds. Some people can manipulate market prices with less money (low liquidity). DEX transactions are transparent, allowing sneaky traders to front-run others for better deals. Fake copies of real cryptocurrencies can also trick users into losing money.

To make DEXs safer, they need stricter rules for what cryptocurrencies can be traded, more money in their markets to prevent price manipulation, and ways to stop priority fee abuse. Regular security checks and user education are also crucial. By addressing these issues, DEXs can become a more reliable and secure way to trade crypto.

Fighting crypto market manipulation requires a comprehensive approach. Financial arthritis must collaborate on clear rules and improve surveillance to spot suspicious activity. Exchanges must be transparent about trading data. Technology can help, too, with features like delayed transaction information and decentralized order books on DEXs, which make it harder to manipulate prices. User education and a community focus on trading are important. We can create a safer and more trustworthy crypto market by working together.

While cryptocurrencies offer exciting possibilities, theyre vulnerable to manipulation through misleading information used to inflate or deflate prices for personal gain. This breaks down trust in the entire market. The good news? Regulators are working on creating clear rules, and technology is evolving with features that make manipulation harder. Even Decentralized Exchanges (DEXs), which have their own security risks, are taking steps to improve.

In the end, stricter regulations, better technology, informed users and a community focused on ethical trading are the keys to a safer and more trustworthy crypto market for everyone.

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What is Market Manipulation in Cryptocurrency? - UseTheBitcoin

Key Takeaways

Bitcoin (BTC), the largest cryptocurrency by market capitalization, remains in focus Thursday morning after the Financial Times reported that futures exchange CME Group (CME) plans to launch spot Bitcoin trading. The news comes a day after the digital asset logged its best one-day performance since March 25 after softer-than-expected inflation data.

Under the proposed plan, Chicago-based CME would run the spot trading business through the EBS currency trading venue in Switzerland, a platform that has comprehensive regulations relating to trading and storage of crypto assets, people with direct knowledge of the talks told the FT.

CME, which already offers a range of Bitcoin and Ether derivative products, has held discussions with traders who want to deal cryptocurrencies through a regulated marketplace, the sources said, though they noted no arrangements had been finalized.

The move would allow investors to execute more complex Bitcoin trading strategies involving both spot and futures markets, such as basis trades. These work by borrowing money to sell futures while buying the underlying spot asset and profiting through the spread differential between the two.

News of CME offering spot Bitcoin trading comes after the cryptocurrency gained more than 7% on Wednesday after weaker-than-expected consumer price index (CPI) figures eased concerns that persistent inflation could scuttle interest-rate cuts expected later this year. Bitcoin, like other risk-on assets, remains highly sensitive to rate movements as elevated yields make safer assets, such as U.S. Treasurys, more attractive to investors.

Bitcoins price has struggled to gain upside momentum since breaking down from a symmetrical triangle in early April, with investors promptly selling into any countertrend rallies over the past month. However, in a sign sentiment may be swinging back in favor of the bulls, Mondays rally, which occurred on the highest trading volume in two weeks on Coinbase, saw the legacy cryptocurrency close above the closely watched 50-day moving average (MA).

Looking ahead, a move higher from these levels could set the stage for Bitcoin making another attempt at its $73,835.57 all-time high (ATH) set in March this year, while a failure to hold above the 50-day MA could see the bears regain control and the price fall to longer-term support around $52,500.

Bitcoin was trading at around $66,400 at 8:30 a.m. ET.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read ourwarranty and liability disclaimerfor more info.

As of the date this article was written, the author does not own any of the above securities.

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Bitcoin in Focus As CME Reportedly Plans to Offer Spot Trading in the Cryptocurrency - Investopedia

Bitcoin (BTC) soared above $71,000 early Tuesday, reaching its highest level since early April, while Ether jumped more than 19% to $3,700. This surge followed Bloomberg analysts increasing the likelihood of a spot ETH exchange-traded fund (ETF) being approved in the U.S. to 75%.

According to the latest data from SoSoValue, as quoted by The Economic Times, Bitcoin ETFs saw total net inflows surpassing $241 million on May 20. Notably, BlackRocks Bitcoin ETF, IBIT, drew in over $66 million in net inflows, while Fidelitys Bitcoin ETF, FBTC, registered net inflows of $64 million.

Also read: SEBI recommends regulators to oversee crypto trade, RBI still sees macro risk

The crypto market is surging as investors react to a torrent of good news. ETH has skyrocketed 19% in 24 hours to surpass $3,700, while Bitcoin has crossed $71,000, up nearly 8%. The catalyst for this surge appears to be the ETF approval, with chatter suggesting the SEC could be doing a 180 on this increasingly polarizing issue," said Rajagopal Menon, VP, WazirX.

The global cryptocurrency market cap jumped by 7.9% to approximately $2.61 trillion in the past 24 hours.

Other major cryptocurrencies also saw significant gains: BNB (5.1%), Solana (3.5%), XRP (5.7%), Dogecoin (8.6%), Toncoin (5%), Shiba Inu (6.8%), Avalanche (14%), and Cardano (7.8%).

Markets began to rally late Monday after Bloomberg analysts Eric Balchunas and James Seyffart increased the likelihood of a spot ether ETF from around 20% to 75%. Subsequently, CoinDesk reported that the U.S. Securities and Exchange Commission (SEC) requested that exchanges seeking to list ether exchange-traded funds update their 19b-4 filings ahead of an important deadline this week.

This happened as SEC asked aspiring ether ETF exchanges to update 19b-4 filings ahead of the 23rd May deadline. However it is still unlikely that the ETH ETF will be approved this week itself - the SEC seems to be moving in a positive direction, and that is what has triggered the market.

In the meantime, Ethereum, the second-largest cryptocurrency in terms of value, surged by 19.2% to reach $3,667 in today's trading session.

Also read: Stage set for return of Binance, Kucoin to India

Spot Ethereum #ETF approval odds have surged to 75% from 25%, as the #SEC asks exchanges to update 19B-4 filings on an accelerated basis for Spot Ethereum ETFs. This is huge news for the future of Ethereum, indicating it may soon follow in the footsteps of #Bitcoin. Owing to this, the market is witnessing significant movement and is expected to gain further traction," said Avinash Shekhar, Co-founder and CEO of Pi42.

Over the past day, the market capitalization of Bitcoin, the leading cryptocurrency globally, surged to $1.402 trillion. As per CoinMarketCap, Bitcoin's dominance now stands at 53.79%. Additionally, Bitcoin's trading volume in the last 24 hours saw a significant uptick, soaring by 135% to reach $52.07 billion.

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Published: 21 May 2024, 04:51 PM IST

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Bitcoin surges to $71000 level today; what's driving the rally? - Mint

N Rotteveel/iStock Editorial via Getty Images

Bitcoin (BTC-USD) advanced markedly on Monday in late afternoon trading, briefly topping $70K, leaving behind the subdued price action of the past few days.

The original cryptocurrency (BTC-USD) rose by as much as ~6% to $70.3K, before paring gains to $69.6K at the time of writing. That marked the first time in which BTC tested the $70K mark since early April.

BTC wasn't the only token experiencing strong intraday gains. Ether (ETH-USD) shot up 11.5% to $3.43K, Solana (SOL-USD) +8.2%, Cardano (ADA-USD) +3.4% and Dogecoin (DOGE-USD) +5%.

There wasn't a clear catalyst supporting the turnaround; however, it came on the same day that failed crypto lender Genesis won court approval of its bankruptcy liquidation plan to return billions of dollars to its defrauded customers. The news perhaps boosted investor confidence in crypto.

In any case, the rally helped push up crypto-related stocks. Marathon Digital (MARA) +15%, Bit Digital (BTBT) +22%, Greenidge generation (GREE) +15%, Riot Platforms (RIOT) +9%, MicroStrategy (MSTR) +9% and Coinbase (COIN) +8.5% all finished Monday's session notably higher.

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Bitcoin jumps back to over $70K, buoying crypto-tied stocks (Cryptocurrency:BTC-USD) - Seeking Alpha