15 December

The partnership between the payments firm and MetaMask developer ConsenSys is intended to enable users to select their PayPal accounts as a payment option to buy ether (ETH) from within the MetaMask app. The offering is designed to facilitate seamless purchases and transfers of ether from PayPal to MetaMask.

This integration with PayPal will allow our U.S. users to not just buy crypto seamlessly through MetaMask, but also to easily explore the Web3 ecosystem.

Select U.S. customers can access the new offering beginning today as PayPal works to roll out the service to the rest of its U.S. customers over the next few weeks.”

See Also: PayPal has become an episode of Black Mirror: Elon Musk
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“For over a month, Binance CEO Chanpeng Zhao (“CZ”), like other exchange leaders, has been on a quest to convince users that his product is wholly different from FTX.

Like FTX, though, Binance is largely unregulated, and not everyone is buying CZ’s repeated assurances of propriety. Over the past week, a shoddy audit of the exchange’s reserves – followed by news of criminal investigations into Binance executives – alarmed users enough to catalyze record withdrawals from the platform.

While Binance appears to be weathering the storm so far (there are no glaring signs that the exchange has misappropriated user funds FTX-style), recent events have drawn attention to the fact that Binance, which exists beyond the scope of regulators and tracks customer holdings on its own servers rather than on public blockchains, asks for a tremendous amount of trust from its users in order to operate.

Coinbase, Kraken, Binance.US and other jurisdiction-specific Binance platforms make routine accounting disclosures and face strict oversight from regulators. The main Binance platform, however, isn’t subject to the same regulatory scrutiny as its peers. As such, it can offer relatively low fees along with products that it would be unable to run in the U.S. and many other countries – like sophisticated derivative contracts and margin trading facilities that allow users to borrow money in order to make bigger, riskier bets.

As a consequence of Binance’s regulation dodging, though, the platform’s users need to trust Binance’s word on whether their money is where it purports to be.

Despite Binance’s opaqueness, users continue to rely on the platform. The largest crypto exchange offers users the ability to trade more kinds of tokens, with higher liquidity and lower fees, than virtually any other platform – centralized or decentralized. It also offers strategies that are inaccessible, in many jurisdictions, to anyone other than licensed investors.

Unlike FTX, Binance “[doesn’t] allow a lot of crazy, weird margining” features like cross-margining, said Siemer.
And then, says Siemer, there’s the fact that Binance “doesn’t have an Alameda.”
While it’s technically possible that Binance is using or loaning out user funds behind the scenes, there’s no sister firm like Alameda to which Binance would have obviously funneled money.

While one can find some differences between Binance and FTX, it’s impossible to know what’s really going on at Binance behind the scenes. CZ, for his part, seems acutely aware of the fact that his exchange will live or die based on the trust of its users. In a world of centralization and lax regulations – perception is everything.”

See Also: Binance CEO Changpeng ‘CZ’ Zhao Warns Staff of Turbulent Times

“Brown and other lawmakers in the hearing settled into the lanes the parties have established in the wake of FTX: condemnation and suspicion of cryptocurrencies from Democrats, and an insistence from Republicans that the technology isn’t to blame. But the hearing did little to signal what they might do about the industry next year, when crypto legislation is expected to really get rolling.

The chairman hinted that one priority may be going after the structure of the big crypto firms, which routinely combines exchange, lending, custody and investing functions all under the same roof in ways that would be outlawed in the more closely regulated U.S. financial industry.

If we are going to learn from FTX’s meltdown, we must look closely at the risks from conflicts at crypto platforms that combine multiple functions.”

See Also: Binance Deliberately Caused FTX Collapse: Kevin O’Leary

Charges filed over the past two days make clear that the U.S. government is treating Bankman-Fried as the ambitious and calculating criminal that he is, not as merely a bumbling tech wunderkind who made some bad bets. A laundry list of incredibly serious civil and criminal charges have come from three U.S. agencies.

The charges are comprehensive, and the theory of the case presented is unambiguous – all of the agencies claim that Sam Bankman-Fried knowingly and with significant forethought committed fraud on a scale only comparable to history’s most elaborate cons.

The SEC supervises securities, and its charges focus on Bankman-Fried’s fraud against equity investors rather than against customers. Those charges will almost certainly result in huge fines and Bankman-Fried’s being barred from the financial industry. The CFTC basically oversees market structure, and the agency’s charges are focused on Bankman-Fried’s core crime: the commingling of depositor funds between FTX and the hedge fund Alameda Research. These are also civil charges that would mainly lead to monetary penalties.

What we really care about are the criminal charges, filed by the U.S. Department of Justice in the Southern District of New York. They are unbelievably extensive and serious, with wire fraud, conspiracy and money laundering making up just three of the eight total charges. The charging documents are reportedly vague on purpose, to give prosecutors leeway to assemble a case and specific allegations as their investigation progresses.

Partly because of that vagary, there have been varied estimates of the jail time Sam Bankman-Fried might face. But the litany of criminal charges seems to affirm previous estimates that he could, at least in theory, be in prison for the rest of his life.

He could get off easier if he is offered and chooses to accept a plea deal from prosecutors, but even such a deal would almost certainly involve many years of prison time. A plea deal would normally be quite likely, but there are two headwinds here. First, Bankman-Fried appears to be in a self-induced state of delusion; specifically, he seems to think he really did nothing wrong. That may lead him to pursue a jury trial instead of a deal.

But there’s also no guarantee that Justice will offer a plea deal. It’s common for even very serious crimes, but public outrage about FTX has been so intense that the Biden administration could conceivably push for a high-profile prosecution to appease a furious public.”

See Also: FTX Bankruptcy Court Is Warned Against Granting Bahamas ‘Dangerous’ IT Access
See Also: Justice Department Charges Nine in Crypto Ponzi Schemes

If it becomes law, the Digital Asset Anti-Money Laundering Act will bring know-your-customer (KYC) rules to crypto participants such as wallet providers and miners and prohibit financial institutions from transacting with digital asset mixers, which are tools designed to obscure the origin of funds.

The act would also allow the Financial Crimes Enforcement Network (FinCEN) to implement a proposed rule requiring institutions to report certain transactions involving unhosted wallets.”

See Also: New OECD report takes lessons from crypto winter, faults ‘financial engineering’

“The U.S. Federal Reserve on Wednesday raised interest rates by 50 basis points (0.5 percentage point) as it continues to slow the economy and moderate price increases. The decision brings the federal funds target range to 4.25%-4.5%, the highest level in 15 years.

Fed Chair Jerome Powell has signaled that the terminal rate – the peak rate for the current hiking cycle, expected sometime next year – will likely be over 5%. The most important decision is no longer the speed,’ Powell said, but rather for how long the Fed needs to stay restrictive until inflation comes down significantly, which he said will ‘be some time.’

Inflation as measured by the consumer price index (CPI) continues to slow on a yearly basis: November’s CPI report showed that inflation rose 7.1%, down from 7.7% in October.”

See Also: As Bitcoin, Stock Investors Cheer US Inflation Slowdown, One Macro Expert Calls for Caution
See Also: Citi Says Crypto Market Leverage, Open Interest Are Historically Low

A First Look at Illuvium