19 March

“Most cryptocurrencies traded higher on Friday after a volatile week. Ethereum (ETH) was the standout, climbing as much as 5% in the past 24 hours, just shy of $3,000 for the first time in two weeks. Meanwhile, bitcoin (BTC) rose above $42,000 and was up 3% over the same period.

Equities were also higher on Friday, while gold, a traditional safe haven asset, traded lower. The rebound in stocks and the outperformance of several alternative cryptocurrencies (altcoins) suggests a greater appetite for risk among investors.

We remain optimistic that any dips for ETH and BTC are buying opportunities.

Ether’s rise is partly due to progress on the merge of the Ethereum blockchain’s mainnet with the Beacon Chain. Earlier this week, Ethereum merged on the Kiln testnet ahead of the blockchain’s eventual move to a proof-of-stake network.

We have seen a corresponding increase in the number of active validators on the Beacon Chain from 300,702 at the end of February to 315,576 as of March 17.”

See Also: Popular Bitcoin ‘Carry Trade’ Loses Shine as US Inflation Nears 8%

“The Argentine Senate on Thursday night approved a debt deal of $45 billion with the International Monetary Fund (IMF) linked to an agreement that includes a provision discouraging the use of cryptocurrencies.

For its part, the cryptocurrency provision was included in a letter of intent signed by Argentina and the IMF on March 3. The provision, entitled “Strengthening financial resilience,” says:

To further safeguard financial stability, we are taking important steps to discourage the use of cryptocurrencies with a view to preventing money laundering, informality and disintermediation.

The Latin American country, which recorded year-on-year inflation of 52.3% in February, has become one of South America’s the leading crypto hubs in the region.”

See Also: El Salvador’s Bitcoin Bond Issuance Apparently Delayed

“What makes Dietz’s metaverse a “meta” metaverse (not to be confused with Meta’s metaverse) is its focus on interoperability. The digital ecosystem allows users to build projects on its virtual land using several different game engines, including Blender and Unreal Engine 5, used by Epic Games to run “Fortnite.”

Dietz’s metaverse itself is centered around a coordinate system that maps experiences within the platform’s many cubes, which users themselves can essentially own as virtual land. Inside the cubes are more cubes, and within them, more cubes. It creates what Dietz calls “the Alice in Wonderland effect,” where space can be embedded inside itself, and users can shrink themselves to experience it.

The MetaMetaverse also comes attached to its own layer 1 blockchain, boasting a new programming language called “metametalang” that allows users to build out metaverse ambitions of their own.

The programming language can be used for running games and simulations inside of [the cubes], and mapping parallel realities, all in a natively cross-chain environment.

The platform itself is still in development, and the team has yet to announce its first public land sale for the initial “Mars” universe.”

See Also: Universal Boosts Metaverse Band Plans With New Bored Ape Ethereum NFT
See Also: DAO Treasuries Top $8.2 Billion on Ethereum, $1.3B on Solana: DeepDAO

“The community behind decentralized stablecoin platform MakerDAO is mulling over a major tokenomics shift that could replace its governance token, Maker (MKR).

The proposed solution is a new stkMKR token which would replace MKR as the core governance token of MakerDAO. It would act as a staking or bonding token issued to those who have deposited MKR for governance purposes.

The staking proposal addresses some issues and inefficiencies with the current tokenomics model, which operates a “buyback and burn” mechanism. There is also a “weak crypto narrative,” according to monet-supply, who said that MKR issuance could be put toward improving the protocol. The current system also has limited deterrence against governance attacks or voting manipulation.”

18 March

“Warren (D-Mass.) announced Thursday a new bill to block cryptocurrency companies from conducting business with sanctioned companies. The bill seems to extend beyond just Russian sanctions, however.

The U.S. Treasury secretary could also require that crypto exchanges operating in the U.S. not conduct transactions for, or otherwise work with, crypto addresses belonging to people based in Russia if this is deemed to be in the national interest.

Another provision would authorize the Financial Crimes Enforcement Network (FinCEN) to identify users transacting with more than $10,000 in crypto.

Not later than 120 days after the date of enactment of this Act, the Financial Crimes Enforcement Network shall require United States persons engaged in a transaction with a value greater than $10,000 in digital assets through [one] or more accounts outside of the United States to file a report.”

See Also: Sberbank Gets License From Russian Central Bank to Issue, Exchange Digital Assets

The bipartisan group sent a letter to SEC Chairman Gary Gensler asking for answers around the probing of crypto companies. The questions asked were about the SEC’s use of authorities in its Division of Enforcement and Division of Examination to obtain information on digital asset and blockchain firms.

It appears there has been a recent trend towards employing the Enforcement Division’s investigative functions to gather information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s standards for initiating investigation.

Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements. We will ensure our regulators do not kill American innovation and opportunities.

The congress members called for their queries to be answered no later than April 29.”

“Chris Dixon and Arianna Simpson praised Optimism’s ‘exceptional team, carefully designed developer experience, major scaling benefits, years of research and testing, and full composability.’

Optimism is a layer 2 scaling solution built on the Ethereum blockchain that uses a transaction execution method called optimistic rollups to improve throughput and lower transaction fees while still maintaining the security properties of the underlying blockchain. The funding will largely go toward hiring, according to the company.”

See Also: Polygon onboards Simba Chain for Ethereum scaling and infrastructure development

“GameStop also noted that it had hired dozens of people in Q4 with experience in areas including blockchain gaming, e-commerce and technology. In February, GameStop said it would be partnering with layer 2 system Immutable X for the launch of its NFT plans.

GameStop expects its NFT marketplace will include ‘billions of low-cost, in-game assets that can easily be bought and sold.’

We recognize that our special [connection] with gamers provides us a unique opportunity in the Web 3 and digital asset world.”

See Also: APE Token Tied to Bored Ape Yacht Club NFTs Sinks 80% in Opening Hours

See Also: DeFi Blue-Chip Token Aave Up 17% Amid Latest Upgrade

“The director of the Science and Technology Supervision Bureau of China’s Securities Regulatory Commission, Yao Qian, has called for a special focus on Web3, deeming it to be the future of the internet. Yao predicted that Web3 will reconstruct the organizational form and business model of the internet economy to greatly improve the existing internet ecosystem.

The Chinese regulatory executive believes Web3 will effectively solve the problems of monopoly, lack of privacy protection and malicious algorithms in the Web2 era, and make the internet more open, inclusive and secure.”

See Also: Bank of Canada collaborating with MIT on CBDC research

17 March

In a widely telegraphed and anticipated move, the U.S. Federal Reserve said Wednesday that it will lift the fed-funds rate by a quarter-percentage point to a range of 0.25%-0.5% from the current rate of close to zero. This is the first time since December 2018 that the central bank has raised its benchmark interest rate. The Fed also announced that it will reduce its balance sheet “at a coming meeting.”

Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices and broader price pressures. The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.

The median expectation is now for seven 25-basis point hikes for 2022, which would bring the fund’s rate up to 2.8%. That is about 100 basis points higher than what was expected three months ago. Committee members are also predicting much slower gross domestic product growth for 2022 that what they predicted before. They now see 2.8% growth, down from the 4% growth they estimated in December.

Equity markets do not tend to suffer all that often or all that much, during rate-hike cycles, [and] since the bitcoin/Nasdaq correlation is still holding very strong, I would expect the same thing for cryptocurrencies in general.”

See Also: Cryptos Recover From Drop After Fed Rate Hike; Expect Higher Volatility
See Also: Hang Seng, China Stocks Soar as Beijing Pledges Support Amid Equity Rout

“Zelenskyy legalized crypto in the country, signing into law a bill on virtual assets, amid a frenzy of digital asset donations to support the country’s defense against a Russian invasion.

The law determines the legal status, classification, ownership and regulators of virtual assets, as well as setting registration requirements for crypto services providers. Exchanges will be able to operate legally, and banks will open accounts for them.

The Ministry of Finance is working on amendments to the country’s tax and civil codes to fully launch the market for virtual assets, the statement said.”

“The company will seek to strengthen its presence in the Latin American country and comply with local regulations, according to CEO Changpeng Zhao. Speaking at EthereumRio, Zhao also said the company is looking to strengthen its 100-person team in Brazil.

Zhao’s statements come after Binance signed a Memorandum of Understanding (MoU) to acquire Brazilian securities brokerage Simpaul Investimentos on Monday. On his visit to Brazil, Zhao met with regulators and politicians, including the governor of the Brazilian state of São Paulo.

Last week, Zhao said that Binance plans to buy more companies in non-crypto industries as a way of expanding the appeal of digital assets.”

See Also: FTX Boosts Global Presence With AZA Finance Link in Africa
See Also: Oxio Raises $40M to Bring Tokenized Telco Model to US and Brazil

“The NFT staple is getting its own token and DAO just days after BAYC parent company Yuga Labs acquired the IP for CryptoPunks. Yuga Labs plans to “adopt ApeCoin as the primary token for all new products and services,” but press materials insist that ApeCoin is really only the product of a new organizational unit called ApeCoin DAO.

A press release took great pains to distance ApeDAO’s token launch from the Bored Ape Yacht Club, presumably for legal reasons. Club-style NFTs with perks for long-term members can start to resemble investment contracts.

The token will be owned and operated by ApeCoin DAO, a decentralized autonomous organization that gives token holders governance rights over the DAO’s “Ecosystem Fund.” Web 3 celebs including investor Alexis Ohanian have said they’d be on the council initially overseeing the token’s governance.

A trademark filing for the token indicates a plan for the DAO to sell physical merchandise as well as virtual goods, including jewelry, books, clothing and beverages.”

See Also: The Sandbox Metaverse Token Jumps 8% Amid HSBC, Paris Hilton Tie Up

Edward Snowden has previously criticized CBDCs, describing them as “cryptofascist currencies” that could “casually [annihilate] the savings of every wage-worker.” Snowden again weighed in on the rise of central bank digital currencies (CBDCs) when he spoke at Camp Ethereal 2022 last week, expounding on why these new assets are problematic.

With CBDCs, we don’t realize that we have immediately been subordinated and collectivized to the central actor in the economy. Our freedom from permission becomes ever more finite and ever more limited.

The idea that Canada of all places would do this—and I think most people see Canada as a pretty enlightened government—is really an illustration of the concern. Whether you’re for or against this particular protest or protest movement is really secondary to the problem that, at the flip of a switch, we are vulnerable to being unable to take anything out of our wallet.

A CBDC is a digital version of a fiat currency (like the US dollar or euro), backed by a central bank. They are centralized by design, whereas cryptocurrencies like Bitcoin and Ethereum are decentralized.”

16 March

“The Kintsugi 🍵 merge testnet, launched late December, has been a valuable testing ground for The Merge. Through various test suites, multi-client devnets, shadow forks of Goerli, application deployments, and the community’s help #TestingTheMerge, we’ve arrived at a set of stable and robust protocol specifications. Now that clients have implemented these latest specs, a successor to Kintsugi, Kiln 🔥🧱, has been launched!

Like the Ethereum mainnet, Kiln’s execution layer was launched under proof-of-work in parallel to a Beacon Chain running proof-of-stake. The Merge happened on Kiln on March 15, 2022. The network is now running entirely under proof-of-stake!

Kiln is expected to be the last merge testnet created before existing public testnets are upgraded. Application & tooling developers, node operators, infrastructure providers and stakers are strongly encouraged to test on Kiln to ensure a smooth transition on existing public testnets.”

“We’re working on bringing NFTs to Instagram in the near term.

Zuckerberg also said that “hopefully” in the coming months, Instagram members will be able to mint their own non-fungible tokens (NFT) within the app.

“Ethereum application and infrastructure builder ConsenSys has closed a $450 million funding round that values the New York City-based blockchain company at $7 billion.

The firm’s new valuation coincides with its flagship Ethereum wallet and browser extension, MetaMask, reaching over 30 million monthly active users, while Infura, a widely used infrastructure tool created by ConsenSys, now boasts some 430,000 developers.

Physical expansion plans for ConsenSys will see the firm’s headcount increase from 700 to over 1,000 employees by the end of 2022. The funding will also support the expansion of MetaMask with a major redesign scheduled for release later this year.

The firm’s stated intention is to convert much of its treasury into Ethereum’s native cryptocurrency, ether (ETH), some of which will be sunk into decentralized finance (DeFi) yield and governance operations, ConsenSys said. The lion’s share will be staked in anticipation of Ethereum’s upcoming merge to proof-of-stake.

We view ourselves as powering what’s going on, rather than trying to compete with what’s going on.”

See Also: Ethereum Wallet MetaMask Passes 30M Users, Plans DAO and Token
See Also: Polygon Studios Adds C-Suite and VP-Level Talent From Amazon, Electronic Arts, Penske Media

Saudi Arabia is in discussions with Beijing about pricing some Saudi oil sales to China in yuan instead of dollars, according to a Wall Street Journal report. China is a buyer of more than 25% of Saudi Arabia’s exported oil.

Chatter about this sort of arrangement has been ongoing for several years, but recent events have brought a new urgency to talks. According to the report, the Saudis are questioning longstanding U.S. security commitments to the kingdom.”

See Also: Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales

“Hong Kong’s stock market had its worst day since 2008 this week, with the Hang Seng China Enterprises Index (HSCEI), an index of mainland China companies listed in Hong Kong, closing down 7% Monday and dropping another 4% by mid-day Tuesday.

Huobi’s Research Institute director [stated] this market volatility was largely driven by regulatory developments in China and the U.S., and is unrelated to broader macroeconomic factors which is why it has not impacted the crypto market.

Last Friday the [U.S. Securities and Exchange Commission] disclosed a list of delisting risks that included five U.S.-listed Chinese companies, sparking investor concerns about the delisting of Chinese stocks, so Chinese and U.S. investors have been selling off.

Even though Hong Kong’s market decline is regulatory and not macro-driven, some investors are urging caution.

All-time high intra-country wealth gaps, along with all-time high sovereign debt levels, and all-time highs of inter-country connectivity have created an extremely fragile global economy.”

See Also: Bitcoin and Stocks Stabilize Ahead of Fed Announcement

Aptos, a team helmed by former Facebook coders, is among a handful of teams looking to bring the Diem (formerly Libra) blockchain to life outside of the watchful eye of Meta. Notably, Aptos said its devnet, meant for coders to contribute open-source code, is now live – with developers at big-name crypto firms offering their time.

There are great companies like Anchorage, Binance, Blockorus, Coinbase [COIN], Livepeer, Moonclave, Paxos, Paymagic, Rarible and Streaming Fast in our community already giving feedback, and contributing code on Devnet.”

“Kazakhstan’s crackdown on illegal crypto mines has forced another 106 miners to stop operations. In late February, the government said it busted 202 megawatts worth of illegal crypto mines.

Following investigations by the country’s financial monitoring agency and other state bodies, 55 of the mines closed voluntarily and 51 were forced to shut down. The 51 are suspected of tax and customs evasion and placing equipment in special economic zones without permission.”

15 March

“A proposed rule that could have, in effect, banned the popular cryptocurrency bitcoin across the European Union (EU) has been quashed.

The European Parliament’s economic and monetary affairs committee voted 30-23 on Monday to keep the provision out of a draft of the proposed Markets in Crypto Assets (MiCA) framework, the EU’s comprehensive regulatory package for governing digital assets.

The proposal required all cryptocurrencies to be subject to the EU’s ‘minimum environmental sustainability standards with respect to their consensus mechanism.’ The proposal met with a heavy backlash from crypto advocates worldwide.

[Notably], a slim majority of the monetary committee voted in favor of a compromise that calls on the European Commission to offer alternative regulation:

By 1 January 2025, the Commission shall present to the European Parliament and to the Council, as appropriate, a legislative proposal to amend Regulation (EU) 2020/852, in accordance with Article 10 of that Regulation, with a view to including in the EU sustainable finance taxonomy any crypto asset mining activities that contribute substantially to climate change mitigation and adaptation.”

“The European Union’s (EU) landmark regulatory framework for governing crypto assets has passed another threshold on its way to ratification. On Monday, the EU parliament’s Economic and Monetary Affairs Committee voted 31-4 in favor of a new draft of the Markets in Crypto Assets (MiCA) framework.

The framework broadly captures the issuance and trading of cryptocurrencies, and promises to make it easier for crypto firms to expand throughout the EU’s 27 member states by facilitating a “passportable” license that would be valid between countries.

See Also: ‘Shark Tank’s’ O’Leary Lobbies Congress for Sen. Lummis’ New Crypto Bill

“Inflation appears to have become a top concern both on Wall Street and main street days before the U.S. Federal Reserve (Fed) decides its response to rising prices. Surging prices for food, energy and housing have sent inflation in the U.S. to a four-decade high and the Russia-Ukraine war is expected to worsen the situation.

Inflation is likely to be persistently high (but lower than now) for some years. This adds fuel to the bitcoin-as-a-hedge thesis and could encourage even more portfolio allocations to a liquid asset with an independent monetary policy and a hard cap on supply.

The Fed is likely to raise borrowing costs by 25 basis points later this week and signal a continued fight against inflation through the rest of the year. The expected first rate hike since 2018 seems to have been priced in by markets. Bitcoin has dropped nearly 40% in the past four months, predominantly on the Fed rate hike fears.”

See Also: Carnage: China Breaks, Apple Cracks Key Support, Yields Soar As Rate Hike Odds Surge

“The small but blossoming non-fungible television space got a bit bigger on Monday with the announcement of “The Gimmicks,” an animated wrestling show backed by actress Mila Kunis’ Sixth Wall production company.

The adult series, self-described as “South Park meets WWE,” follows a group of washed-up wrestlers longing for former glory. The non-fungible token (NFT) component comes in the form of a “choose your own adventure” mode for owners of the show’s NFTs, allowing holders to vote on the direction of the show’s plot at the end of each episode.

I see the tech and community that comes with NFTs and Web 3 allowing for the audience to directly communicate with and inform creators of what they like and what they don’t.

The pipe dream of token-backed content creation is a landscape where producers and filmmakers can fundraise for projects while retaining creative control and distribution rights.”

“The Ukrainian government launched a new crypto donations website on Monday, streamlining its multimillion-dollar effort to turn bitcoin into bullets, bandages and other war materiel.

“Aid for Ukraine,” which has the backing of crypto exchange FTX, staking platform Everstake and Ukraine’s Kuna exchange, will convert crypto contributions into fiat for deposit at the National Bank of Ukraine. Oleksandr Bornyakov, an official at the digital ministry, hinted that an upcoming NFT collection ‘will give the next boost to the crypto fundraising process.’

Crypto assets proved extremely helpful in facilitation of funding flows to Ukrainian citizens and soldiers, as well as in raising awareness and engaging people worldwide.

The country’s collective efforts have already raised some $48 million in bitcoin (BTC), DOT, ether (ETH), SOL, tether (USDT) and other cryptocurrencies, according to the website. Other estimates place the amount closer to $100 million.”

The Disrupt Weekend

A provision looking to force proof-of-work cryptocurrencies like bitcoin to switch to the more environmentally friendly proof-of-stake consensus mechanism is in a draft of MiCA up for a parliamentary vote on Monday.

A previous draft of the MiCA framework contained a strongly worded provision that proposed a prohibition of crypto services that rely on environmentally unsustainable consensus mechanisms starting in January 2025. But the provision was later scrapped following industry backlash.

One version of the new draft has a similar provision though toned down from the original. It says that crypto assets ‘shall be subject to minimum environmental sustainability standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.’

It also says that energy-intensive crypto assets that are already in use in the EU before the legislation comes into effect, will have to ‘set up and maintain a phased rollout plan to ensure compliance with such requirements.’

The crypto community has been swift to react, with some calling on citizens in the EU to contact their parliamentarians to oppose the measure. Ledger issued a statement saying:

Individuals and organizations should be free to choose the technology most appropriate to their needs. Policymakers should neither impose nor discriminate in favor of a particular technology. This is deeply concerning and would have serious consequences for Europe.”

See Also: Bitcoin-Banning Measure Seen Too Close to Call in Tomorrow’s EU Parliament Vote

“A layer 1 blockchain called Juno is on the verge of doing something radical: taking away tens of millions of dollars’ worth of a holder’s tokens using an on-chain vote by other users. The proposal appears to be the first major instance of a blockchain community potentially voting tokens out of the hands of a fellow holder.

Juno, a smart-contract layer 1 in the Cosmos ecosystem, was allegedly the victim of a Sybil-like attack in which one user faked multiple wallets to receive a disproportionate share of a recent airdrop. The wallet alleged to belong to the airdrop gamer now contains more than 3.1 million JUNO tokens with a market value of just over $122 million.

A new Juno proposal, Proposal 16, would draw down the “Whale Wallet” to 50,000 JUNO tokens, which the proposal describes as a “fair share” of the airdrop. The proposal argues that, beyond a matter of simple fairness, the reversal is an existential necessity for Juno, because the whale now has a huge share of the network’s voting and economic power.

The debate about such deep intervention changes considerably when it’s happening via on-chain voting, rather than through a fork. A fork is a fundamentally social and nebulous process, often initiated by people with power and influence, but requiring public persuasion to make sure miners continue extending the “correct” chain. On-chain voting, by contrast, is both more rigorous and more opaque: Proposals lay out clear outcomes, but as Buterin himself has pointed out, it’s quite easy to buy votes or manipulate the process in various ways.

Whether it winds up being manipulated, the scary part about Juno’s Proposal 16 is something more fundamental. In a very loose sense, it undermines the core cryptocurrency value proposition that if you control your own private cryptographic keys, you have total control over your tokens. Instead, it shows that blockchains, too, involve social as well as technical consensus.

For some, this response will be seen as an upside and even an evolutionary path – a significant step, in particular, toward decentralized autonomous organizations (DAOs) that have real enforcement power and are willing to flex it.

Even if you’re focused on the upside, it will be important and difficult to create a stronger distinction between systems with this sort of on-chain capability, and those that offer true irreversibility. Bitcoin, Ethereum and most other major chains don’t have on-chain proposals or governance mechanisms that would make this possible. Unfortunately, that’s a distinction likely to be lost on the general public and even on most crypto speculators.”

Unless users or applications are running their own node, they are completely relying on third parties like Infura and Alchemy to interact with the blockchain for them. The concept of “Stateless Ethereum” would help remove the reliance on centralized service providers and would allow blockchain users to access the chain locally in dire situations, especially if they are being blacklisted.

But how could ordinary users spin up their own full node, especially as it will continue to become more memory and software intensive as Ethereum’s state grows? According to Ethereum developer Ben Edgington, you can fix this at the protocol level by making state storage somebody else’s problem. By introducing state providers, tasked with the core job of maintaining the history of Ethereum, you can also introduce stateless clients that make running an Ethereum node easier than ever, leading to true decentralization and resilience of the network.

Stateless Ethereum is just one of the exciting upgrades that will become possible after the Merge, and 2022 is lining up to be one of the most exciting years in the network’s 6-year history.”

“The first version of the open-source project is not ready for real funds because it needs more testing. But the release shows CoinSwap, a long-standing idea – first described by cryptographer Gregory Maxwell on the Bitcointalk forum in 2013 – finally coming to life.

Belcher believes Teleport’s CoinSwap has advantages over CoinJoins. ‘Imagine a new privacy tech for bitcoin, like CoinJoin, but can’t be blocked [because] the [transactions] look exactly the same as regular [transactions].’

If done the right way, CoinSwap transactions can’t be detected on the blockchain. They look just like normal transactions.

For anyone looking at the blockchain her transaction appears completely normal with her coins seemingly going from address A to address B. But in reality her coins end up in address Z. Anybody doing analysis on the blockchain would always have a niggle in the back of their mind: ‘What if this transaction I’m looking at was actually a CoinSwap?

The doubt and uncertainty added to every transaction would greatly boost the fungibility of bitcoin and so make it a better form of money.”

“It’s a blockchain startup project that few people have heard of, involving a cryptocurrency that barely anyone trades. But the saga of LBRY is being closely tracked by lawyers who say the low-profile case now before the U.S. Securities and Exchange Commission could have massive implications for the key question of which cryptocurrencies might be deemed to be afoul of regulations and why.

The SEC’s civil lawsuit against LBRY might end up setting a regulatory precedent for hundreds of small-scale crypto projects.

A judicial opinion in the LBRY case will have much more impact for people looking for clarity than the Ripple case. There are so many, many projects that did similar things to what LBRY did compared to what Ripple did.

The SEC sued LBRY last March for allegedly offering unregistered securities to raise a total of $6.2 million starting in 2016. The SEC accused LBRY of offering and selling LBC to institutional investors and using the proceeds to pay bills for operating expenses. Investments where returns are closely intertwined with a business’ managing performance are typically considered securities, regulated assets that need to be registered with the SEC.

Unlike bitcoin and some other cryptocurrencies that are more decentralized, LBC is managed by a centralized team. That is why the SEC thinks LBC should be considered a security instead of a currency. LBRY also made an ambitious promise about the token’s future value that the SEC thought to be misleading.

What the SEC is targeting in this case is how LBRY publicly announced to its community (investors in the crypto world) that it planned to engage with a “market maker.” A market maker is an entity that is supposed to buy and sell the company’s crypto token on a regular basis at prevailing market prices. Such an announcement is likely to increase the price of their token, striking a nerve with the SEC.

LBRY responded to the SEC in June, writing ‘the SEC is squeezing a new technology into an outdated and vague definition of security.'”

12 March

Russian President Vladimir Putin said there was “positive movement” in negotiations, which were happening on a “daily basis.”

Putin’s comments buoyed global markets. S&P 500 futures added 1.31%, and futures on the tech-heavy Nasdaq 100 rose 1.65%. Sentiment in Europe was stronger, with Germany’s DAX jumping 3.41% and Stoxx Europe 600 gaining 2.09%.

Crypto markets were mixed. Bitcoin jumped from $38,600 in European morning hours to slightly over $40,200 as Putin’s comments went public. Ether added 2.4% in the past hour.”

“Yuga Labs, the company responsible for the Bored Ape Yacht Club NFT collection, has acquired CryptoPunks and Meebits [IP] from the developer Larva Labs.

We now own the brands, copyright in the art, and other IP rights for both collections, along with 423 CryptoPunks and 1711 Meebits.

Yuga Labs says it plans to grant the commercial rights to all CryptoPunk and Meebit images to their respective owners. The company has already done this for Bored Ape owners [where] each token holder is free to monetize their specific ape. Holders have used that idea to spin off their own NFT collections based on particular apes, or to sign their apes with major record labels.”

See Also: After ‘Doxxing’ Fracas, Bored Apes Team Starts Asking for Customer ID
See Also: PwC report calls NFTs ‘the future of digital assets in sports’

The Fed appears set to raise interest rates next week for the first time since 2018. The dilemma here is whether to fight inflation, risking the possibility that doing so triggers a recession, or to tolerate higher prices and keep the momentum going. Making a choice is easier said than done, with the ongoing Russia-Ukraine war raising the specter of stagflation – a combination of low growth and high inflation.

Observers say Fed Chair Jerome Powell and his colleagues will kick-start the tightening process with an interest-rate hike of 25 basis points next week while also signaling that they will push hard against inflation for the rest of the year.

Futures contracts on Fed funds imply a 25 basis point rate hike is already baked in to the market. Risk assets may face selling pressure if the Fed hints at aggressive rate hikes or an early start to quantitative tightening.

“Cryptocurrency firms based in the United Arab Emirates (UAE) have been hit with a flood of requests by Russian clients to liquidate billions of dollars worth of digital assets. One crypto executive claims to have received a number of requests from Swiss brokers over the past few days to liquidate billions in bitcoin (BTC), with not one of those requests being for less than $2 billion.

Many Bitcoin veterans, having seen these sorts of reports more than once, are taking the Reuters story with a big grain of salt.

Calling a hard fake news on this one. This kinda feels like the 2018-2019 deluge of emails to [over-the-counter] desks about whales wanting to sell 10-100k slugs of BTC … Will believe it when the ticket gets printed. Until then, FUD.

The UAE has previously claimed it is not siding with either Western allies or Moscow.”

See Also: Treasury Department Issues Guidance on Using Crypto to Evade Sanctions

“Operators must be registered with the FCA to offer ATM services and comply with money laundering regulations.

As none of the 27 fully registered crypto firms have been approved to offer ATM services, any crypto ATMs in the U.K. are operating illegally.”

See Also: SEC Rejects NYDIG, Global X Spot Bitcoin ETF Applications

11 March

There is now more than $25 billion betting on Ethereum’s most-anticipated upgrade.

These deposits, which are parceled into batches of 32 ETH at a time, are validators on the Ethereum Beacon Chain. Users appear to be more bullish than ever on the launch of Ethereum’s upcoming transition.”

An on-chain oracle and a public API aim to help decentralized projects better track crypto wallets and ensure regulatory compliance. The company says that these tools will be provided to cryptocurrency market participants for free.

As countries around the world continue to leverage economic sanctions in response to Russia’s invasion of Ukraine, decentralized Web3 groups like DEXs, DeFi platforms, DAOs, and dapp developers are searching for lightweight tools to help them and their customers comply with sanctions policies.

Now is the time for the industry to demonstrate that blockchains’ inherent transparency make cryptocurrency a powerful deterrent to sanctions evasion.”

Bitcoin was little changed after the Consumer Price Index (CPI) report, which closely matched economists’ expectations.

The Consumer Price Index rose 7.9% over the past 12 months, the fastest since 1982. On a monthly basis, the CPI rose 0.8% in February, faster than the 0.6% increase reported for January. So-called core inflation, which excludes volatile food and energy prices, rose 0.5% in February, slower than analysts’ expectations.

Bitcoin remains locked into the risk trade and will continue to trade off incremental updates from Ukraine.”

Today, the global payments giant launched its crypto services, offering businesses the ability to use Stripe as a payment method for crypto and NFT transactions. Stripe is offering payout services for Web3 companies as well as know-your-customer (KYC) and fraud prevention.

To facilitate its Web3 services, Stripe announced that it has deals in place with FTX, FTX U.S., Nifty Gateway, Just Mining, and Blockchain.com.”

See Also: FTX Picks Stripe to Build Payments and Risk Mitigation Feature
See Also: EBay Teases ‘Digital Wallet’ in Investor Presentation as Crypto Rumors Swirl

“U.S. President Joe Biden called for an urgent, government-wide focus to be placed on the research and development of a potential central bank digital currency (CBDC) in his executive order signed Wednesday. The order suggests that Biden – who noted that “over 100 countries are exploring or piloting” CBDCs – does not want the U.S. to get left behind.

The order calls for a full-scale assessment of the potential benefits and risks of a CBDC, both for consumers and investors as well as the broader U.S. financial system. Biden has ordered the Treasury Department to spearhead the research and report, with input from other federal agencies.

The executive order catalyzes the important work to pilot, test and advance the development of a CBDC.

There are several organizations already researching and piloting CBDCs in the United States, including the Boston Fed, which has partnered with Massachusetts Institute of Technology (MIT) on CBDC technology, and the Digital Dollar Project.”

See Also: CBDCs will not impact private stablecoin market, says Tether CTO

“Nine Republican U.S. Senators have introduced a bill aimed at setting regulations and guidelines concerning China’s digital yuan.

If left unchecked, technologies including China’s Digital Yuan will empower Russia to evade global sanctions on systems such as SWIFT and enable the CCP to further surveil and threaten their citizens. This bill holds China accountable as they introduce their new digital currency.

The Say No to the Silk Road Act would – among other things – require the State Department to issue a warning on the digital yuan, require the Secretary of Commerce to report on trade enforcement actions.

10 March

“U.S. President Joe Biden signed a first-of-its-kind executive order on cryptocurrencies on Wednesday, directing federal agencies to coordinate their approach to the sector.

The “whole-of-government” effort to regulate the crypto industry focuses on consumer protection, financial stability, illicit uses, leadership in the global financial sector, financial inclusion and responsible innovation, according to a fact sheet accompanying the order.

The executive order directs federal agencies to better communicate their work in the digital asset sector, but it does not lay out specific positions the administration wants agencies to adopt. Similarly, the order did not announce any new regulations for which cryptocurrency companies to abide.

The President has put forward a holistic whole-of-government approach to understanding not only the macroeconomic risks, but also microeconomic, with the risk to each individual, investor and business that engages with these assets.

Digital assets can provide opportunities for American innovation and competitiveness and promote financial inclusion. Innovation is central to America’s story and our economy, generating jobs and opportunities, creating and building new industries, and sustaining our global competitive edge and leadership.

Part of the order directs the U.S. Treasury Department to draft a report on “the future of money and payment systems.”

[The order] recognizes that our assessment of the risks and potential benefits of digital assets must include an understanding of how our financial system does and does not meet the current needs of consumers.

The executive order will also ask agencies to evaluate how the U.S. could issue a central bank digital currency, ‘should issuance be deemed in the national interest.'”

See Also: Full Text of Biden’s Executive Order on Cryptocurrency

The order is largely perceived as a step in the right direction that could offer the industry much-needed regulatory clarity.

Many industry participants hope the executive order will address the current, fragmented regulatory environment in which regulation is often achieved through enforcement actions by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

McCauley called the order a “shot in the arm for crypto” and said that, to strike the balance of “responsible innovation” called for by Biden, ‘the crypto community needs to recognize that – for the benefit of our industry – regulators have a role to play in the crypto ecosystem.’

Today’s executive order makes it clear: This isn’t them-against-us.

Today’s order is the first step in what will likely be an extended process to get the industry the clarity we’ve been seeking. We now have a much better understanding of the government’s intentions and roadmap for digital assets and a commitment to support innovation in this space.”

See Also: Crypto Miners to Benefit From Biden’s Executive Order

Ukraine’s president “shares our vision” that the use of crypto could be an “economic breakthrough,” according to the country’s deputy minister at the Ministry of Digital Transformation.

Bornyakov said that more than $60 million of the $100 million was received in the main fund run by Kuna, the Ukrainian crypto exchange. The rest of the money has been sent to several other smaller funds.

The funds sent to Kuna are reportedly being spent on non-lethal equipment, including fuel, food and bulletproof vests for soldiers.”

See Also: Bored Ape Yacht Club Donates $1 Million in Ethereum to Ukraine

A custodial bank with more than $43 trillion in assets under custody and administration, and just shy of $4 trillion in assets under management, State Street launched a crypto division last year with plans to evolve into a “multi-asset platform” to support cryptocurrency trading and more.

We are building the financial infrastructure needed to support our clients’ allocations to this new asset class.

London-based Copper is a provider of institutional custody offerings across more than 40 exchanges and 450 digital assets.”

See Also: Binance Eyes Non-Crypto Acquisitions to Enlarge Total Market: Report

The consumer price index (CPI), due out at 8:30 a.m. ET on Thursday, is expected to show that the inflation rate was 0.8% in February, or 8% over the past 12 months. That would be the highest level since 1982, and faster than the 0.6% monthly clip reported for January.

Bitcoin and crypto in general will remain tied to the news out of Ukraine and continue to trade broadly in a risk off/on fashion. We feel that the CPI report on Thursday will prove to be a side event to the Russia/Ukraine situation.

Federal Reserve Chair Jerome Powell said last week he supported a 0.25 percentage point increase in short-term interest rates, which would be the first hike since 2018. The Fed has become more dovish in recent weeks as the Russia-Ukraine conflict drags on and adds concern about global oil supplies and price pressures.”

“Aiming to be a “major player” globally in digital assets, Dubai’s ruler announced the creation of a regulatory and licensing authority.

Today, through the virtual assets law, we seek to participate in the design of this new and rapidly growing global sector. The independent authority will oversee the development of the best business environment in the world for virtual assets in terms of regulation, licensing, governance, and in line with local and global financial systems.

The future belongs to whoever designs it.”

“Yesterday, Twitter, Facebook and other social media companies announced they would begin targeted attempts of removing Russian disinformation. As harmful as “fake news” and propaganda can be, there’s a strong case that evidence of this information war should be preserved.

Although private companies have every right – and sometimes the legal or moral obligation – to curate their platforms by removing or boosting content according to their own prerogatives and bottom lines, understanding history is often as dependent on remembering lies as documenting facts.

These ads, sock-puppets, false flags, distorted narratives, crisis actors and outright lies are all significant. Withholding information from public view, including articles from sanctioned media outlets and spam, might diminish our understanding of Russia’s campaign and Putin’s motivations. It might also prevent activists, writers and legal institutions from holding bad actors to account.

Decentralized crypto platforms are designed to be information-agnostic, making them potentially important venues for understanding these times of conflict. By distributing trust and replicating data across nodes worldwide, they ensure this information remains undoctored.

Open, decentralized platforms operate according to different, perhaps higher, values that information should always be readily accessible, unadulterated and durable. Several crypto exchanges, including Binance and Kraken, took a similar line when declining to follow traditional financial institutions from “freezing” Russian accounts.

Crypto, in its truest form, presents a permissive view of data and finance – both money and information should be free. This perspective places a high degree of trust and responsibility on users to think critically about what they’re consuming and in what they’re investing. But it’s perhaps the only consistent standard that can be applied.

All other ways of reckoning with or packaging information are subject to the whims of human judgment, coercion and sanction.”

9 March

“Former Federal Reserve and U.S. Treasury Department official, and now Credit Suisse (CS) short-term rate strategist, Zoltan Pozsar has written the U.S. is in a commodity crisis that is giving rise to a new world monetary order that will ultimately weaken the current dollar-based system and lead to higher inflation in the West.

This crisis is not like anything we have seen since President [Richard] Nixon took the U.S. dollar off gold in 1971.

As the initial Bretton Woods era (1944-1971) was backed by gold, and Bretton Woods II (1971-present) backed by “inside money” (essentially U.S. government paper), said Pozsar, Bretton Woods III will be backed by “outside money” (gold and other commodities).

Pozsar marks the end of the current monetary regime as the day the G7 nations seized Russia’s foreign exchange reserves. What had previously been thought of as risk-free became risk-free no more as non-existent credit risk was instantly substituted for very real confiscation risk.

What occurred surely isn’t lost on China, and Pozsar sees the People’s Bank of China (PBOC) faced with two alternatives to protect its interests – either sell Treasury bonds to buy Russian commodities, or do its own quantitative easing, i.e., print renminbi to buy Russian commodities. Pozsar expects both scenarios mean higher yields and higher inflation in the West.”

See Also: Gold Market TA
See Also: The Philippines to launch pilot CBDC implementation

“President Joe Biden is set to sign an executive order this week summarizing the U.S. government’s strategy for dealing with cryptocurrencies. The White House has been working on coordinating the efforts of different federal agencies since last year.

The order would direct federal agencies to consider potential regulatory changes, in addition to the national security and economic implications of cryptocurrencies. Federal agencies would report later this year on their progress.

The White House has been under pressure to play a more central role in setting policies for and regulating digital assets.”

See Also: European Parliament Proposes Expanding ‘Travel Rule’ to Crypto Transactions of All Sizes
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See Also: Bitcoin Stabilizes Ahead of Biden’s Executive Order on Crypto

Visa, Mastercard and PayPal are all suspending operations in Russia, the companies announced Saturday. Crypto companies have by and large resisted calls for unilaterally blocking all Russian residents.

Once complete, all transactions initiated with Visa cards issued in Russia will no longer work outside the country and any Visa cards issued by financial institutions outside of Russia will no longer work within the Russian Federation.

This war and the ongoing threat to peace and stability demand we respond in line with our values.

Russia’s central bank said in a statement that Visa and Mastercard cards would continue to work within Russia after the credit card processors announced their suspensions. Cross border transactions are not expected to work.”

See Also: Russian Banks Switch To Chinese Card System As AmEx Joins Visa & MasterCard In Suspending Russian Operations

“Binance set up its own fiat-to-crypto payments provider, Bifinity, to help businesses become “crypto-ready.”

Bifinity, which was officially established last year and which was launched on Monday, supports 50 cryptocurrencies and all major payment methods, including Visa and Mastercard. Merchants will be able to use Bifinity’s APIs (application programming interfaces) to “get their business crypto-ready,” enabling them to accept payments in crypto.

Binance also said it fully reopened euro and sterling transactions over the single euro payments area (SEPA) and U.K’s Faster Payments Service networks as of 11:00 UTC.”

“Don’t look now, but there are signs that Ethereum’s high-gas-fee woes may be abating. A series of so-called Layer 2 innovations have begun to offer a fix—the latest in the form of StarkNet, which is now integrated into crypto infrastructure giant Alchemy’s development kit.

We’re driving towards Vitalik’s vision of five-cent transactions.

Alchemy’s integration of StarkNet is significant because the company provides behind-the-scenes support to a large swath of Web3, with customers ranging from banks to crypto exchanges. Alchemy clients now will have an option to build services using the low-cost StarkNet tools—a development that Garland suggests could supercharge Web3 app development.

Alchemy isn’t the only major crypto player to deploy StarkNet—Immutable, an NFT gaming startup that just raised $200 million, is counting on StarkNet to make its transaction-heavy operations affordable.”

Goldman Sachs (GS) is offering interested clients access to an ether (ETH) fund issued by Galaxy Digital, according to regulatory documents filed with the U.S. Securities and Exchange Commission (SEC) on Tuesday. In June, Galaxy agreed to funnel liquidity to Goldman Sachs’ bitcoin (BTC) futures offering.

CAIS Capital LLC, an alternative investments platform, will [also] receive “placement fees” for referring clients to the institutional fund, Tuesday’s SEC filing said. It’s separately involved in a different Galaxy-backed Ethereum fund whose filing also hit Tuesday.”

“Agrotoken, an Argentina-based agricultural commodities tokenization platform, expects that over the next six months, 1,000 Argentine farmers will receive Santander credits collateralized with tokens based on soybeans (SOYA), corn (CORA) and wheat (WHEA) launched by Agrotoken.

This is the first time a financial services platform has used blockchain technology and crypto assets to expand the agricultural credit market and unlock farmers’ business potential.

Santander and Agrotoken plan to offer the crypto-backed loans in Brazil in June, and in the U.S. in late 2022, noting that the three countries together comprise 70% of global wheat, corn and soybean production.

“Grewal points out that despite the sanctions put forth by governments over the years, laundering of fiat currency through traditional financial institutions remains the most sought-after method for sanction evasion.

On the other hand, Grewal argued that digital asset transactions are inherently public, traceable and permanent — an important feature that can be leveraged by governing authorities to detect and deter evasion.

Trying to obscure large transactions using open and transparent crypto technology would be far more difficult than other established methods (e.g., using fiat, art, gold, or other assets).”

See Also: Crypto Still Isn’t Helping Russian Oligarchs Evade Sanctions
See Also: US Senator Warren Drafting Bill to Ensure Crypto Can’t Be Used to Evade Sanctions

“Bitcoin (BTC) was higher Tuesday as traditional markets including stocks and commodities swung wildly, with investors reacting to U.S. President Joe Biden’s announced plan to join the U.K. in banning Russian imports of oil. Crude oil prices rose 5% Tuesday.

Bitcoin traders were monitoring the surge in oil prices along with the latest developments in Russia’s war on Ukraine. Experts posit that the U.S. could turn to Venezuela or Saudi Arabia to alleviate soaring gasoline prices in light of the Russian oil ban.

BTC managed to turn against the tide, winning back the initial failure, despite the decline in stock indices.”

A group of 35 shareholders of Ethereum giant ConsenSys AG (CAG) have filed for a special audit of a 2020 deal that saw JPMorgan Chase acquire an “influential” [10%] stake in two of its flagship products. The deal, known within CAG as Project North Star, resulted in financial institutions (JPMorgan) winning a significant slice in the company’s lucrative intellectual property (IP), specifically MetaMask and Infura.

Original CAG insiders reckon the deal was ‘to the detriment of the minority shareholders of CAG and to the benefit of Joseph Lubin personally.’ Indeed, Project North Star has proven incredibly lucrative for CSI shareholders like JPMorgan. A year after the transaction, the IP in question was used to raise funds for CSI at a valuation of $3 billion. Ethereum co-founder Lubin is the majority shareholder of CAG and CSI.

The former ConsenSys employees are invoking an article of the Swiss Code of Obligations which, if successful, may render the deal void.”

See Also: Chico Crypto on JPMorgan Deal (Video)