- August 22, 2022
Crypto News Roundup: The Most Important Events of the Last Week
We have summarized the most important crypto news of the last week for you. If you missed something, then you are exactly right here!
Crypto Companies Grow Despite the Crisis
Markets have to fight with a global pandemic, natural disasters and other unforeseen circumstances. Nevertheless, the 5000 fastest growing crypto companies in the USA were able to increase profitability. Inc. stated in a recent report that the top 500 crypto companies over the past 3 years have been able to record a profit growth rate of 2144%.
In addition, the 500 companies created more than 68,394 Jobs. All these developments started when banks started investing in cryptocurrencies and blockchain technologies in 2021. Companies are optimistic about the future. However, you also know that some Challenges to master have.
BlockFi, a crypto lending company, currently occupies the first place of the 5000 US companies. BlockFi’s profit growth rate was an impressive 245,000% – in just three years. The company developed from a pure crypto exchange or lending platform to an asset management company. Other well-known crypto companies listed in the list are Polygon, CoinFlip and Distributed Ledger.
In Sri Lanka, there has also been a recent wave of ponzi scams in which criminals take advantage of the country’s economic plight. The scammers promised investors high returns if they invest money in cryptocurrency projects. But instead of making money, the victims lost everything in the end.
Regulation of cryptocurrencies is progressing
The Canadian Financial Supervisory Authority (Superintendent of Financial Institutions) published new guidelines on the risks associated with digital currencies. The guide is aimed at banks and other financial institutions that might consider offering crypto services to their customers.
There are currently two approaches to the legal classification of crypto assets. One part of the Canadian government wants to continue the current classification, while another part is taking a more conservative approach.
Since crypto regulation is progressing in Europe. A few weeks ago, the Basel Committee published a set of new standards for banks trading in crypto assets and other digital assets.
In addition, new data from the Bank of Canada show that the number of Bitcoin owners from 2020 to 2021 in the country almost tripled. In addition, the share of the population that owns Bitcoin increased over the same period of 5% to 13%.
Binance also received official approval from the financial authority of the capital of Kazakhstan to open a crypto exchange in the country. Binance Holdings Ltd. received official permission from the Astana Financial Services Authority (AFSA) to operate a digital asset trading platform and provide administrative services at the Astana International Financial Center (AIFC).
Crypto-platform Celsius receives support
The Celsius platform expects fresh money to finance a possible restructuring process.
In July 2022, Celsius suspended withdrawals for client funds and filed an application for bankruptcy protection, but it was rejected. The company is now consulting with bankruptcy lawyers to consider alternatives for restructuring.
Celsius is examining several different financing options from different parties, which differ in form and scope. It is currently unclear whether these offers are based on equity or on borrowed capital and what the conditions for such offers look like.
Crypto CEOs Resign
Zipmex CEO Marcus Lim received sharp criticism from investors and shareholders. Some of the critics even demanded his resignation. The reason for the criticism is the mismanagement of the CEO and the connections to Babel Finance, which is considered the cause of the liquidity crisis of Zipmex. In July 2022, the crypto platform had to suspend withdrawals of client funds.
Michael Moro, the CEO of Genesis Trading, resigns in the face of increasing pressure from exposure to Three Arrows Capital (3AC) and other hedge funds, also back from his position. Earlier, the company announced that it had issued $ 40 billion in loans in the second quarter of 2022. This represents a decrease of 9% compared to the first quarter.
Institutional investors are showing a declining interest due to the current market situation. At the time of publication of the article, the total crypto market capitalization is $ 1.12 trillion, which is almost $ 2 trillion below the all-time high of $ 3 trillion.
Tom Conheeny will join Genesis’ board of Directors, along with new risk, compliance and technology leaders. At the same time, the company is looking for a permanent replacement for Michael Moro, who previously held an advisory role.
Chinese government puts pressure on NFT markets
Tencent Holdings was forced to close a new NFT marketplace a week after launch due to regulatory pressure from the Chinese government. The decision came after the Chinese government published guidelines to regulate the booming NFT market. The withdrawal of Tencent is just one of many such examples of the Chinese NFT market, which the government has put more and more pressure on in recent months.
China is currently developing its own central bank digital currency (CBDC), the digital yuan. At the 2022 Winter Olympics, the country already presented the digital yuan as part of a pilot project.
Currently, most states are in the initial stages of CBDC development. For example, the United States recently announced that it would start exploring the digital dollar. India, one of the most booming economies in the world, is also just starting to develop.
Tornado Cash Scandal continues
Last week, the Coin Center sharply criticized the US Treasury. The US Treasury Department threatened legal action against the Tornado Cash crypto mixer, claiming that it violates a number of international regulations. The organization is trying to contact the Office of Foreign Assets Control and is considering a lawsuit.
In August, the Office of Foreign Asset Control (OFAC) blocked Tornado Cash’s website and other Internet sites for allegedly collaborating with the crypto mixer. According to the Ministry of Finance, this is used by North Korea and Iran for money laundering.
Tornado Cash’s software is open source. Also, the developers have no way to check who is using the service. The service provides a certain level of anonymity to users of digital currencies. For this purpose, users can transfer funds through a so-called digital tumbler, which makes it difficult to trace the origin of the funds.
The decision of the OFAC was based on the fact that some users of digital currencies use the tumbler for money laundering. However, the Coin Center doubts the “evidence” presented with the crypto mixer and the accusations of the OFAC.
FED discusses digital U.S. dollar
The chairman of the Federal Reserve (FED), Jerome Powell, stated that the Central Bank will publish a discussion paper during the summer. This is to decide on the possibility of issuing a Central Bank digital currency (CBDC).
The FED chairman raised the issue in a public speech published on the Federal Reserve website. First, Powell talked about the fact that the Fed has always adapted to new technologies to facilitate payment transactions.
After that, Powell specifically addressed the further development of digital ledger technologies, referring to cryptocurrencies, stablecoins and, finally, a possible CBDC. With regard to the development of a future “digital dollar”, Powell stated that the FED will issue a discussion paper in the summer. The paper is intended to evaluate how those responsible can best progress with the project.
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