Crypto Guides, Knowledge & Insights

Britain Plans to Implement Blockchain into Traditional Markets

The United Kingdom will start testing blockchain technology in traditional finance operations, like stocks trading and bonds settlement, in the next year. The main mission of innovation is to establish the United Kingdom as a worldwide crypto hub, announced the countys ministry of finance on June 7.　　According to Gwyneth Nurse, one of the top people at the UK treasurys financial authority, implementation of blockchain is a major way to modernize and improve the efficiency of the United Kingdoms financial markets. The revolutionary innovation has the potential to be a game changer and may make it possible to emit securities much quicker than it is now.　　The process of launching and testing blockchain-using projects under regulatory supervision will utilize the sandbox model, an experimental framework for testing projects, which involves real customers. This is the same model that UK regulators first applied to the development of fintech companies. In addition to the sandbox model, the authorities also plan to introduce stablecoin regulation.　　Digital pound on the way？　　However, industry representatives believe that to leverage various advantages of blockchain technology within the market infrastructure, a proper digital currency is needed. According to ministry officials, though, work on the digital pound matter is already underway, with

2022-06-08Deep Dive

Crypto cannot fulfil ‘social role of money’ due to fragmentation: BIS

Blockchains have “inherent limitations” that lead to fragmentation, which means crypto is unsuitable as a means of payment, economists at Bank for International Settlements (BIS) said in a June 7 report.　　As the crypto landscape began to grow rapidly, the decentralized finance (Defi) ecosystem began to fragment, the report contends.　　Until January 2021, Ethereum was the dominant layer 1 blockchain controlling over 90% of total value locked (TVL) in Defi, DefiLlama data shows. As more layer 1 blockchains emerged, mainly Binance Smart Chain, Avalanche, and Terra until its downfall, Ethereums share of Defi TVL dwindled to around 54% by April 2022.　　The report argues that this fragmentation of the market arises from the inherent faulty designs of blockchain systems. It states:　　“It is the inherent features of blockchains – first and foremost, the need to incentivize decentralized nodes to validate transactions – that drive the fragmentation of the crypto landscape.”　　The consensus mechanism of decentralized blockchains requires validators to record transactions. These validators need to be rewarded with block rewards and transaction fees.　　For a blockchain to maintain its integrity, transaction fees need to be high enough to incentivize validators. If transaction fees become too low, validators may have an incentive to cheat, compromising the security

2022-06-08Deep Dive

DOJ Calls for International Cooperation to Fight Crypto Crime

A new DOJ report is calling for a strengthening of international cooperation to counter the criminal use of digital assets. Their recommendations include helping foreign nations develop the necessary infrastructure to investigate cyber crimes, robust information sharing, and uniform international regulations.　　Greater Cooperation Needed　　The U.S. Department of Justice (DOJ) submitted yesterday its response to President Joe Bidens Executive Order on digital assets from March 2022.　　The 58-page report, called “How To Strengthen International Law Enforcement Cooperation For Detecting, Investigating, And Prosecuting Criminal Activity Related To Digital Assets,” was produced in collaboration with the State Department, Treasury Department, Department of Homeland Security (DHS), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC).　　While acknowledging that “the United States supports the responsible use and development of digital assets,” the report states that their “perceived pseudonymity” make cryptocurrencies an attractive vehicle for money laundering schemes, ransomware, terrorist financing, fraud, and sanctions evasion. The DOJ also warns that criminals have targeted consumers and retail participants all over the globe by taking advantage of information asymmetry and anonymity-granting technology.　　“Uneven and often inadequate regulation,” the report says, “allow criminals to expose the U.S. and international financial systems to risk from jurisdictions where regulatory standards and enforcement are

2022-06-08Deep Dive

FTX And Opensea Hit $32 Billion And $13.3 Billion Respectively In Forbes Fintech List

Nine cryptocurrency-centered firms has made Forbes Fintech 50 seventh annual list, with top crypto exchange, FTX, and the worlds largest NFT marketplace, Opensea, taking the lead.　　FTX and Opensea tops Forbes list　　With a whooping valuation of $32 billion, Sam Bankman-Frieds crypto exchange and trading platform FTX, outranked other crypto fintechs to take the lead. The Bahamas based crypto exchange raised a $500 million fund earlier this year which took its valuation to $32 billion.　　NFT marketplace, Opensea, valued at $13.3 billion, is seen on the list for the first time and comes second among the nine crypto firms on the list. Opensea continues to dominate the NFT marketplace with over 1.5 million accounts having transacted on the platform.　　Other crypto fintechs that makes the Fintech 50 list are; Alchemy valued at $10.2 billion, AVA labs native token Avax market cap stands at $8.5 billion, Chainalysis latest valuation is $8.6 billion, Circle, creator of USDC is currently valued at $9 billion among others.　　Despite the bear run and the bloody losses suffered lately following the crash of the Terra ecosystem and huge selloffs in the crypto space, it seems crypto firms are still holding their own and cementing the general strength of crypto in Fintech.　　CEX

2022-06-08Deep Dive

Binance Partners With Malaysian Exchanges to Accelerate Crypto Adoption

The worlds leading cryptocurrency platform – Binance – reportedly revealed intentions to join forces with Malaysian exchanges to boost the local digital asset sector.　　Malaysia Could Benefit From Binances Robust Platform　　Binance has displayed its ambition to strengthen its global presence, and South East Asia is among its key targets. Three months ago, it made an equity investment in MX Global (one of Malaysias cryptocurrency exchanges). The latter will use the capital to educate locals about cryptos merits, find talents in the space, and develop new features within the domestic regulatory framework.　　According to a recent coverage, Binance will double down on its efforts in Malaysia, vowing to work closely with MX Global and other local trading platforms. The goal of the initiative is to accelerate crypto adoption in the region and raise awareness among Malaysians.　　Datuk Fadzli Shah – CEO at MX Global – stated that his company believes crypto represents the future. He also expects to see the industry functioning under appropriate rules.　　“Working closely with the Securities Commission, we want to ensure that the products that we introduce to the Malaysian market are worthy and safe for the investors to participate in this global wave of innovation,” the exec added.　　Additionally, Shah praised

2022-06-08Deep Dive

Citigroup CEO: Europe More Likely to Head Into Recession Than US

Citigroups CEO on Global Recession　　Citigroup CEO Jane Fraser warned about the health of the global economy Friday, Reuters reported. Citi is the third-largest and most globally-focused U.S. bank.　　Speaking at an investor conference in New York, she talked about how “the three Rs” are affecting the global economy, stating: “It‘s rates, it’s Russia, and its recession.”　　Fraser explained that Europes energy problems are “really having an impact on a number of companies in certain industries that are not even competitive right now.” She added that “some of them are shutting down operations … because of the cost of electricity and the cost of energy.” The Citi executive opined:　　Europe definitely felt more likely to be heading into a recession than you see in the U.S.　　Major central banks are already planning interest rate hikes to fight against inflation, preparing for the first round of global quantitative tightening. The move is expected to restrict credit and add stress to an already-slowing world economy.　　Commenting on the European Central Bank (ECB) action, Fraser said: “It feels like the ECB is a few months behind where the Fed has been in getting its arms around inflation and without quite the same flexibility that U.S. has.”　　In the U.S., Fraser

2022-06-08Deep Dive

PayPal Adds Cryptocurrency Withdrawals and Deposits

PayPal has announced that its customers can now move cryptocurrency to and from their personal wallets.　　PayPal Enables Crypto Withdrawals, Deposits　　PayPal said in a newsroom announcement that beginning today, June 7, it will support “the native transfer of cryptocurrencies between PayPal and other wallets and exchanges.”　　It noted that the feature is “consistently ranked by users as one of the most requested enhancements” to its cryptocurrency services.　　The new option allows users to withdraw cryptocurrency to crypto addresses, third-party exchanges, and hardware wallets. Additionally, the new feature allows users to deposit crypto into their PayPal account and send crypto to friends and family.　　Those capabilities apply to PayPals supported assets: Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).　　The feature will initially be available to select users in the United States and will be extended to all U.S. customers in future weeks.　　Small Steps Toward Full Crypto Support　　PayPal began offering a crypto trading feature in October 2020, but initially gave users few options beyond exchanging different coins. Those limitations attracted widespread criticism.　　The company later allowed users to spend their cryptocurrency with PayPal-accepting merchants starting in March 2021. However, the introduction of commercial payments did not provide a way for users to withdraw funds to

2022-06-08Deep Dive

Hong Kong Regulator Warns of Securitization Risks for NFTs

The Securities and Futures Commission (SFC) of Hong Kong recently issued a statement on the financial and legal risks surrounding non-fungible tokens (NFTs). It claims that such tokens are not only prone to the typical security vulnerabilities of crypto, but could also constitute financial assets bound by SFC regulation.　　 From Collectibles to Financial Assets　　According to the regulator‘s statement on Monday, NFTs “generally” do not fall under the SFC’s regulatory purview. These include NFTs created as “genuine” digital representations of collectibles, such as digital images, artwork, music, and videos.　　However, the commission claims that there are other NFTs that “cross the boundary” between collectibles and financial assets. Some, for example, are “fractionalized” or “fungible”, causing them to resemble securities and/or collective investment schemes (CIS).　　“Where an NFT constitutes an interest in a CIS, marketing or distributing it may constitute a regulated activity,” stated the regulator. “Parties carrying on a regulated activity, whether in Hong Kong or targeting Hong Kong investors, require a license from the SFC unless an exemption applies.”　　Authorization requirements may also be triggered if an arrangement related to an NFT involves public offers to participate in a CIS.　　NFTs saw their first true surge in popularity in 2021, mainly recognized as simple

2022-06-07Deep Dive

105 Countries Are Exploring Central Bank Digital Currencies, CBDC Tracker Shows

There are now 105 countries that are exploring central bank digital currencies (CBDCs). Among them, 50 countries are in an advanced phase of digital currency exploration (development, pilot, or launch).　　105 Countries Are Exploring CBDCs　　The Atlantic Councils Geoeconomic Centre has released a major update to its Central Bank Digital Currency (CBDC) Tracker. According to the tracker: 105 countries, representing over 95 percent of global GDP, are exploring a CBDC … A new high of 50 countries are in an advanced phase of exploration (development, pilot, or launch).　　Furthermore, the tracker details that “10 countries have fully launched a digital currency, with Chinas pilot set to expand in 2023.”　　Among the G20 countries, 19 are exploring a CBDC, with 16 already in the development or pilot stage. They include South Korea, Japan, India, and Russia.　　Last month, the Bank of International Settlements (BIS) released a report stating that 9 out of 10 central banks globally are exploring CBDCs. The BIS said, “the emergence of stablecoins and other cryptocurrencies have accelerated the work on CBDCs.”　　Some countries are further ahead than others, such as China. The Chinese central bank, the Peoples Bank of China (PBOC), has been actively testing and giving away its digital yuan.　　India is also

2022-06-07Deep Dive

North Korean Hackers Used Binance for Laundering Millions of Dollars Worth of Crypto: Reuters

According to an investigation conducted by Reuters, the Lazarus Group, a notorious cybercrime group sponsored by North Korea, laundered roughly $5.4 million with the help of Binance, the worlds largest cryptocurrency exchange, back in 2020.　　The ill-gotten funds were stolen from Eterbase, a little-known cryptocurrency trading platform based in Slovakia.　　The hackers opened a bunch of anonymous accounts, so the Binance exchange was not aware of those illicit transactions.　　Over a five-year period from 2017 to 2021, Binance processed more than a whopping $2.35 billion worth of criminally tainted cryptocurrency transactions. The exchange, however, has disputed the calculations.　　The Lazarus Group first came into prominence in the early 2010s after launching a cyber-espionage campaign against the South Korean government. It then attracted widespread media coverage after hijacking film studio Sony Pictures and leaking its confidential data, including some copies of then-unreleased movies. The famous hacking group was also behind the WannaCry ransomware campaign that infected hundreds of thousands of computers in 2014.　　After crypto went mainstream in 2017, the Lazarus Group started targeting cryptocurrency exchanges like Coinlink.　　As reported by U.Today, U.S. authorities found out that hackers from the “hermit kingdom” were behind the $625 million Ronin hack that took place earlier this year. Part of

2022-06-07Deep Dive

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