We’ve rounded up the most important crypto news from the past week for you. If you’ve missed anything, you’ve come to the right place!
Crypto companies are growing despite the crisis
Markets have to contend with a global pandemic, natural disasters and other unforeseen circumstances. Nevertheless, the 5000 fastest growing crypto companies in the US were able to increase profitability. Inc. stated in a recent report that The top 500 crypto companies have seen earnings growth of 2144% over the past 3 years.
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. The companies are optimistic about the future. However, they also know that there are still some to overcome challenges is.
BlockFi, a crypto lending company, currently ranks first among the 5000 US companies. BlockFi’s earnings growth was an impressive 245,000% in just three years. The company evolved from a pure crypto exchange or lending platform to an asset management company. Other well-known crypto companies on the list are Polygon, CoinFlip and Distributed Ledger.
Sri Lanka has also seen a recent spate of Ponzi scams, with criminals taking advantage of the country’s economic situation. The scammers promised investors high returns if they invest money in cryptocurrency projects. But instead of making money, the victims ended up losing everything.
Regulation of cryptocurrencies is progressing
Canada’s Superintendent of Financial Institutions has released new guidance 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 cryptoassets. One part of the Canadian government wants to continue with the current classification, while another part has a more conservative approach.
dCrypto regulation is also progressing in Europe. A few weeks ago, the Basel Committee published a set of new standards for banks dealing in crypto-assets and other digital assets.
Furthermore, new data from the Bank of Canada shows that the number of Bitcoin holders in the country have almost tripled from 2020 to 2021. In addition, the percentage of the population that owns bitcoin increased from 5% to 13%.
Binance also received official approval from the Financial Authority of Kazakhstan’s capital 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 gets support
The Celsius platform expects new money to finance a possible restructuring process.
In July 2022, Celsius suspended withdrawals of customer funds and filed for bankruptcy protection, but it was rejected. The company is now consulting with bankruptcy attorneys to explore restructuring alternatives.
Celsius evaluates several different financing options from different parties, varying in form and scope. It is currently unclear whether these offerings will be equity or debt-based and what the terms of such offerings will be.
Crypto CEOs Resign
Zipmex CEO Marcus Lim received sharp criticism from investors and shareholders. Some of the critics even called for his resignation. The reason for the criticism is the mismanagement of the CEO and the links to Babel Finance, which is considered to be the cause of Zipmex’s liquidity crisis. In July 2022, the crypto platform had to suspend withdrawals of customer funds.
Genesis Trading CEO Michael Moro steps down amid mounting pressure from exposure to Three Arrows Capital (3AC) and other hedge funds also back from his position. The company previously announced that it had raised $40 billion in loans in the second quarter of 2022. That’s down 9% from the first quarter.
Institutional investors are losing interest due to the current market situation. At the time of writing, the total crypto market cap is $1.12 trillion, down just under $2 trillion from its peak of $3 trillion.
Tom Conheeny will join the Genesis board along with new leaders from risk, compliance and technology. At the same time, the company is looking for a permanent replacement for Michael Moro, who previously had an advisory role.
The Chinese government is putting pressure on the NFT markets
Tencent Holdings was forced to shut down a new NFT marketplace a week after its launch due to regulatory pressure from the Chinese government. The decision came after the Chinese government issued guidelines to regulate the booming NFT market. Tencent’s exit is just one of many such examples of China’s NFT market, which the government has put increasing pressure on in recent months.
China is currently developing its own central bank digital currency (CBDC), the digital yuan. The country already presented the digital yuan as part of a pilot project at the 2022 Winter Olympics.
Currently, most states are in the early stages of CBDC development. The United States, for example, recently announced that it would begin exploring the digital dollar. India, one of the fastest growing economies in the world, is also just beginning to develop.
The Tornado Cash scandal continues
Last week, Coin Center sharply criticized the US Treasury Department. The US Treasury Department has threatened legal action against crypto mixer Tornado Cash, claiming it violates a number of international rules. The organization is trying to contact the Office of Foreign Assets Control and is considering legal action.
In August, the Office of Foreign Asset Control (OFAC) blocked Tornado Cash’s website and other websites for allegedly working with the cryptomixer. According to the Treasury Department, North Korea and Iran use it to launder money.
Tornado Cash’s software is open source. The developers also have no way to control who uses the service. The service offers users of digital currencies a degree of anonymity. To do this, users can transfer funds through a so-called digital tumbler, making it difficult to trace the origin of the funds.
OFAC’s decision was based on the fact that some digital currency users are using the tumbler to launder money. However, the Coin Center doubts the “evidence” presented with the cryptomixer and the OFAC allegations.
FED Discusses Digital US Dollar
Federal Reserve (FED) Chairman Jerome Powell said the central bank will release a discussion paper later this summer. This is intended to address the feasibility of issuing a central bank digital currency (CBDC).
The Fed chairman addressed the issue in a public address posted on the Federal Reserve’s website. First, Powell talked about how the Fed has always adapted to new technologies to make payments easier.
Powell then went into detail about the further development of digital ledger technologies, referring to cryptocurrencies, stablecoins and finally a possible CBDC. Regarding the development of a future “digital dollar”, Powell explained that the Fed will issue a discussion paper this summer. The purpose of the paper is to evaluate how those responsible can best move forward with the project.
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