IMF questions effectiveness of crypto bans, Crypto.com secures key license in Spain and more
24 Exchange Pulls Plug on Crypto: A Steve Cohen-Backed Pivot Amid Regulations
24 Exchange, a trading platform that secured $14 million in funding in late 2021, which included support from Point72 Ventures led by Steve Cohen, has decided to discontinue its spot cryptocurrency product.
> This comes as global regulators intensify their scrutiny of cryptocurrencies.
> The Bermuda-based exchange, which was founded in 2018 and commenced operations in 2019, initially enjoyed robust support for its crypto trading product.
> However, the company’s Chief Executive Officer, Dmitri Galinov, revealed to Bloomberg News that there was a decline in interest and demand following the collapse of FTX and crypto-affiliated entities such as Signature Bank and Silvergate Capital Corp.
> Despite discontinuing its spot crypto product, 24 Exchange will maintain its crypto non-deliverable forward product. Continue here.
FTX Bankruptcy Unraveling
Alameda Research Hunts for $700 Million in Celebrity Access Fiascoe
Alameda Research, the hedge fund division of the now-bankrupt FTX group, is in pursuit of reclaiming $700 million that its founder, Sam Bankman-Fried, allegedly spent to gain access to high-profile individuals including celebrities and politicians.
> According to recent court documents filed by FTX’s current management, Bankman-Fried seemed to have no regard for proper protocols when expending funds.
> The court documents also allege that Bankman-Fried used the companies under his control akin to a “slush fund.”
> The court filings assert that Michael Kives, who previously served as an aide to both Bill and Hillary Clinton, and Bryan Baum, were essentially “super networkers” who unscrupulously accepted money. More here.
SEC’s Deferment Aims to Boost Payouts to Investors and Dodge Delays
The U.S. Securities and Exchange Commission (SEC) has consented to defer the collection of a $30 million fine from the insolvent crypto lending platform BlockFi until such time as the investors have been reimbursed, as revealed in a recent court document.
> Initially, BlockFi was under obligation to pay a $50 million penalty to the SEC to resolve allegations of not having registered its crypto lending product with the regulatory body.
> BlockFi conceded to the settlement in February 2022.
> However, in November, it entered bankruptcy proceedings following the downfall of the cryptocurrency exchange FTX.
> The SEC claimed that its outstanding payments should be treated as “general unsecured claims” amidst BlockFi’s ongoing Chapter 11 bankruptcy process. Details here.
JPMorgan Sheds Light on Bitcoin Mining Energy Struggles
In an analysis, JPMorgan divulged that Bitcoin miners who can access inexpensive electricity from sustainable sources are more likely to thrive amidst intensifying competition.
> The report emphasized that the primary expenditure in Bitcoin mining is electricity, which significantly influences the total production costs of the cryptocurrency.
> Consequently, miners are on a quest to secure more affordable and renewable energy solutions to safeguard their profit margins.
> JPMorgan’s report highlighted that electricity prices have been dipping, particularly in the United States – home to the majority of Bitcoin mining firms and the leading contributor to the global Bitcoin hashrate.
> Hashrate denotes the aggregate computational capacity deployed for mining and handling transactions on proof-of-work blockchains such as Bitcoin. Full report here.
IMF Weighs In: How Smart Regulations Can Foster Crypto Adoption Globally
Global regulators are treading carefully regarding digital assets, with differing approaches being adopted in various regions.
> While Europe is directing its attention toward establishing regulatory frameworks, China, on the other hand, has clamped down on cryptocurrencies entirely. Interestingly, a recently published paper by the International Monetary Fund (IMF) suggests that imposing a total ban on crypto assets may not be an enduring and effective method to mitigate the associated risks.
> The paper emphasized, “While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run.”
> The IMF advises nations to address the root causes of the demand for cryptocurrencies. Details here.
Crypto.com Enters Spain With Virtual Asset Service Provider Registration
Crypto.com, a prominent player in the cryptocurrency sector, has made strides in expanding its footprint in Europe, securing a coveted registration as a Virtual Asset Service Provider (VASP) from the Bank of Spain.
> This green light allows the platform to offer its extensive suite of products and services to customers in Spain, marking a significant move in its global expansion strategy.
> Kris Marszalek, the CEO of Crypto.com, expressed his enthusiasm about the new opportunity to serve the burgeoning cryptocurrency market in Spain, stating, “We look forward to continuing to work with the Bank of Spain as we launch our products and services in-market and providing users with the comprehensive, safe, and secure crypto experience that they desire.” More here.
Presidential Hopefuls Embrace Bitcoin: Kennedy Jr. and Ramaswamy Charting New Course for Digital Currency
In a bid to promote financial freedom and innovation, U.S. presidential candidates from different parties are throwing their weight behind Bitcoin and related technologies.
> Democratic candidate Robert F. Kennedy Jr., in an interview with The New York Post, pledged his commitment to fostering policies that support Bitcoin.
> He emphasized the importance of individual autonomy in managing Bitcoin wallets, nodes, and passwords.
> Kennedy stated, “I will make sure that we have policies that support bitcoin and the freedom to transact and that allow individuals to manage their own bitcoin wallets, nodes, and passwords.”
> However, he acknowledged the need for some regulation, albeit minimal, to curb money laundering. Full report here.
SAP Tests USDC Stablecoin for Speed and Transparency In Cross-Border Payments
SAP, a prominent software firm based in Germany, is reportedly employing Circle’s USDC stablecoin to examine international payment procedures.
> The company is attempting to address the hurdles faced by businesses when executing cross-border monetary transactions, and for this purpose, it has chosen USDC stablecoin.
> SAP is executing its tests on an Ethereum Test Network, as disclosed in a recent article. The company is keen on solving critical issues like costs, transaction pace, and transparency in transactions.
> SAP’s Sissi Ruthe conveyed, “Cross-border payments are a hassle for many small and mid-sized enterprises with integration business partners.”
> She added, “These major challenges can be solved with Digital Money as a means of settlement and Blockchain as the underlying technology.” Details here.
Bitcoin and Ether Skyrocket as Wall Street Titans Battle for Crypto Supremacy
> The world’s largest digital currency Bitcoin broke the $31,000 ceiling on Friday, ending the week with gains of about 19%, amid heightened interest of traditional finance firms in the crypto industry.
> Ether meanwhile, was trading at $1,920 levels, up over 13% for the week.
> Other major cryptocurrencies like Binance Coin, Ripple, Cardano, and Dogecoin were trading up 3%, 7%, 14.5 and 21.1% for the week, respectively.
> The renewed optimism in the crypto market apparently stems from investor confidence in digital currencies with prominent asset management firms filing for Bitcoin ETFs, notwithstanding the Securities and Exchange Commission’s staunch opposition of cryptos.
> WisdomTree, a leading provider of ETFs, filed an application for the launch of the WisdomTree Bitcoin Trust. Full report here.
