The Disrupt Weekend

The blockchain developer says its new tool can spin up decentralized applications in 4 minutes. Alchemy says the Create Web3 Dapp tool (CW3D) is open source.

Our overall mission and vision is to bring blockchain or Web3 to a billion people. The way we really see that happening is by empowering developers. The idea here is you can build your own templates, components, and find features and things that you want.”

Today, we announced Ethereum Mainnet’s first distributed validator! This marks the first phase of Obol’s journey to bringing DVs to Mainnet Ethereum. This huge milestone signals the dawn of a new chapter in Ethereum staking, one that is more secure, resilient, and decentralized for all validators and stakers alike.

The Mainnet DV is running in the homes of core team members spread across 3 continents. Our vision of the future includes validators being shared by participants across the world.

The strong performance of the validator demonstrates the promise of DVT to improve the performance, resiliency, and security of Ethereum validators, especially for those who choose to run validators from home. The successful launching of the world’s first DV comes on the back of 3 years of research, 2 years of development, and 9 months of testing.”

See Also: Altcoins Scaling Base Chain (Video)

“As one of the most popular websites in the world, the popularity and reach of YouTube cannot be understated. From September to November last year, the website ranked only behind Google in terms of use, with 74.8 billion visits on average per month.

Last year, Mohan disclosed in a blog post that YouTube was looking at ways it could possibly integrate Web3 technology, whether by “making YouTube more immersive” by leveraging the metaverse or tapping technology like NFTs.

We believe new technologies like blockchain and NFTs can allow creators to build deeper relationships with their fans.

For example, Mohan wrote that NFTs could be a compelling, ‘verifiable way for fans to own unique videos, photos, art, and even experiences from their favorite creators,’ adding it would allow creators and audiences to collaborate in new ways.

“Maximalist dogma does no one any good. This is worth examining because digital asset allocations may now be poised for a revolutionary shift towards the Ethereum blockchain. Bitcoin (BTC) miners, in particular, may face a new opportunity as Ethereum’s potential value is unlocked.

Ethereum, at first glance, may seem like an unlikely contender to add value to bitcoin miners. However, a PoS model for consensus allows Ethereum validators to receive passive ether (ETH) rewards, something currently not possible with Bitcoin. The mining sector is sitting on massive bitcoin reserves that have limited use as a financial instrument, outside of converting to cash to cover operations, and holding for the long term.

A PoS blockchain like Ethereum can serve as a welcome complement to bitcoin mining operations. Bitcoin rewards can be converted to ETH, and then staked for rewards. Staked ETH can function like an interest-bearing asset, with balances compounding over time. This creates a flywheel-like effect between the two largest digital assets. From there, miners can devise additional creative ways to derive value. What might initially serve as a treasury management tool could, through innovation and development, become an additional line of business.

Both concepts, proof-of-work (PoW) and PoS, can work in tandem. Bitcoin miners are in a unique position to realize how the two can complement one another to drive revenue, monetize stranded energy and realize the future of decentralization.”

The basis of coming global crypto rules will be formed on a new synthesis paper, jointly produced by the International Monetary Fund (IMF) and the Financial Stability Board (FSB), announced India as the holder of the Group of 20 (G20) Presidency in Bangalore on Saturday. The synthesis paper will be submitted during India’s G20 Presidency which culminates in September when India hosts G20 leaders from around the world.

First of all we are going through the study process so that their can be informed discussions.

The announcement came after three days of meetings in India among the 20 largest economies of the world, collectively known as the G20, in which creating a global regulatory framework for crypto was a priority.”

See Also: Crypto’s Banking Problem: Industry Needs Access but US Regulators Keep Digital Assets at Bay
See Also: Classifying Digital Assets With A New Framework: Datonomy

“The Solana network’s deep freeze continued Saturday as validators were preparing a second restart attempt that they hoped would restore service to users of the blockchain.

The chain’s block production has ceased and transactions aren’t processing or being validated. For users of the chain, it means they can’t. Their on-chain crypto assets are unmovable, frozen in place until critical backend infrastructure comes back online.

By evening New York time, validators running Solana’s infrastructure had long since concluded that the best way to right the chain would be to synchronize a restart and fork the chain. A first attempt was abandoned when validators realized they picked the wrong point at which to restart, further lengthening the delay.

Hours into the crisis key voices in the Solana ecosystem were still looking to identify a culprit. One leading theory was that a “fat block” gunked up the blockchain’s mechanics. Notably, the network was moving to an upgraded version shortly before its troubles began.”

See Also: Solana Network Stumbles, On-Chain Trading Slows After ‘Forking’ Incident

25 February

On Friday the two largest cryptocurrencies by market capitalization plunged after the U.S. Commerce Department reported that the personal consumption expenditures (PCE) price index climbed by an unexpectedly robust 5.4% in January, offering the latest evidence that inflation remained problematic. The PCE price index is the U.S. Federal Reserve’s favored inflation gauge.

Still, the two assets remain up 39% and 32% year to date. The OP token of the Optimism network rose approximately 20% this week, following Coinbase Global’s announcement of its layer 2 network launch.

On a macroeconomic basis, little occurred this week to shake the probabilities of continued interest rate hikes by the U.S. central bank’s Federal Open Market Committee (FOMC). While inflation has moderated, the persistently tight labor market remains concerning for Federal Reserve governors.”

See Also: YFI Sets Six-Month High as Yearn Finance Teases Ether Liquid Staking Product
See Also: Tokens of Optimism Ecosystem Surge as Coinbase Unveils Its Layer 2 Base

In Friday’s document, the watchdog noted that many countries have failed to implement its norms, including its controversial “travel rule,” which requires services providers to collect and share information of crypto transactions.

The plenary thus agreed on a road map to strengthen implementation of FATF standards on virtual assets and virtual asset service providers, which will include a stocktake of current levels of implementation across the global network.

A report on its findings is due in the first half of 2024. FATF published its updated standards for crypto in 2019, but last June, it said only 11 of 98 surveyed jurisdictions were enforcing the travel rule and urged them to act faster.”

See Also: IMF offers Jordan’s central bank recommendations for implementing retail CBDC
See Also: Why Nigerians Aren’t Turning to the eNaira Despite Crippling Cash Shortages
See Also: DeFi ‘fragility’ causes and cures explored in highly technical Bank of Canada study

Salesforce, the cloud-based CRM software giant, is breaking into Web3 to help future-proof its clients and connect with a new generation of customers.

We think the wallet is the new cookie. It’s gonna be embedded in all the brand’s websites, connecting your wallet. That’s a new data layer.

The company launched the pilot for an NFT minting and sales platform last June, designed to help engage online communities and collect valuable data. At the time, a spokesperson for Salesforce told Bloomberg that brands could likely use NFTs for creating loyalty initiatives and accessing private web communities.”

The exercise giant’s vice president of fitness programming is soon launching Swagger Society, a Web3 lifestyle membership club that aims to foster a fitness community in Web3. Arzón has been exploring how Web3 can embolden fitness communities more effectively than centralized membership platforms.

Interesting possibilities emerge when we combine the economic approach of Web3 with the fitness industry. Last year, a new fitness-oriented category of blockchain gaming called move-to-earn (M2E) games tested the theory that rewarding consumers with crypto tokens would motivate them to exercise.

Arzón believes that gamification can certainly motivate behavior, but beyond any new gimmicks and gadgets a person needs more than a game or a token, they need an accountability partner. ‘Finding like-minded, values-driven folks who are willing to put those values into action is what gives [a new behavior] ‘stickiness.’

She believes that, beyond the short-term incentivization of M2E gaming, NFT membership models may provide the perfect level of “stickiness” because members become more than simply monthly subscribers. Purchasing an NFT acts as a lifetime, all-access pass, granting holders entry to a community.”

“The Chamber of Digital Commerce is trying to stop a case brought by the U.S. Securities and Exchange Commission (SEC) against a former Coinbase (COIN) employee accused of insider trading.

According to Boring, the SEC “piggybacked” on the DOJ case, essentially ‘latching onto a third party who had nothing to do with the issuance of these tokens.’ Boring said what the SEC is doing is another example of regulating by enforcement and does nothing to define ‘what sort of digital asset transactions it considers to be securities transactions.’

If the court rules in favor of the SEC, nine of the supposed 25 crypto assets the trio purchased and sold could be defined as securities. This could lead to further legal battles for other crypto companies that list the tokens, she said.

That’s why her group filed the amicus brief, arguing that the SEC’s crackdown is a form of “backdoor rulemaking.”

Optimism Base Superchain 🔵_🔴 with Ben Jones, Karl Floersch, & Jing Wang

24 February

Coinbase launched Base, an ethereum layer 2 network built using Optimism’s OP Stack, to attract millions of new crypto users in the coming years. Coinbase would allow developers to directly integrate their product with Base and provide fiat onramps – targeting an estimated 110 million verified users and $80 billion in assets on the platform in the Coinbase ecosystem.

Today, we’re excited to announce the testnet launch of Base, an Ethereum layer 2 (L2) network offering a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps or “dapps” onchain.

Coinbase is also joining Optimism as a core developer on the open-source OP Stack, a developer toolkit for the Optimism network, the firm said. Coinbase also announced the Base Ecosystem Fund, which will invest in and supports early-stage projects building on Base. Coinbase has no plans to issue a new network token.”

See Also: Optimism Token Up 6.5% as Coinbase Builds Its Layer 2 on the Platform
See Also: Coinbase Joins the Ethereum Layer 2 Rat Race – Can It Grow?
See Also: DeFi Liquidity Protocol Synthetix Deploys Version 3 on Ethereum

Music streaming Spotify is testing a new service called “token-enabled playlists,” which allows holders of non-fungible tokens (NFT) to connect their wallets and listen to curated music.

Currently, the service is available to token holders within the Fluf, Moonbirds, Kingship and Overlord communities. Universal Music Group’s NFT band KINGSHIP also shared that it had created a token-gated playlist for NFT holders featuring Queen, Missy Elliott, Snoop Dogg and Led Zeppelin.

Meanwhile, a number of Web3 music platforms have cropped up to decentralize the music listening experience. Audius, for example, is a crypto-linked streaming service that allows users to earn AUDIO token rewards for interacting with its app while Royal and anotherblock allow creators to sell music royalties as fractionalized NFTs.”

See Also: Web3 Music Streaming Platform Audius Integrates TikTok

“Here Not There has raised $25 million in a Series A round led by Andreessen Horowitz (a16z) to build out Towns, a Web3 group chat protocol and app that lets online communities build blockchain-based gatherings in a fully decentralized way.

Towns offers an end-to-end encrypted chat protocol that lets communities create programmable, self-governed “town squares” where users can assemble and chat without worrying about whether the app owner will decide to prevent access, profit from the activities or change user rights. Communities can control settings like administration, privacy and roles, and create tailored experiences that can include rewarding member participation or allowing members to sell non-fungible tokens (NFT) in the chat. Any community can build new clients or application programming interfaces (API) on the protocol for control and customization.

The team’s vision for creating a digital town square where members can define the borders, set the rules, and build the world they want is an ambitious goal that is uniquely achievable through the promise of decentralization and web3.”

See Also: Galaxy acquires institutional crypto custody firm for $44M
See Also: Pantera Invests $10M in Metaverse Game Worldwide Webb

“‘Directors generally agreed that crypto assets should not be granted official currency or legal tender status in order to safeguard monetary sovereignty and stability,’ the statement said, calling for countries to clarify tax treatment and align with global standards. ‘Directors agreed that strict bans are not the first-best option, but that targeted restrictions could apply‘ to limit crypto risks, though some board members think ‘outright bans should not be ruled out,’ the statement continued.

The growing adoption of crypto assets in some countries, the extra-territorial nature of crypto assets and its providers, as well as the increasing interlinkages with the financial system, motivate the need for a comprehensive, consistent, and coordinated response.

Regulations shouldn’t stifle innovation, and governments can benefit from the underlying digital technology, the statement added.”

See Also: US Banking Regulators Warn Banks About Crypto Liquidity Risks
See Also: Montana Senate Passes Bill Protecting Crypto Miners
See Also: Crypto Bank Custodia’s Bid for Fed Supervision Rejected Again

U.S. officials are now charging the onetime crypto wunderkind with bank fraud and operating an unlicensed money transmitter in addition to the eight counts he already faced. Bankman-Fried also faces a modified campaign-finance law charge, conspiracy to make unlawful political contributions.

Bankman-Fried and other conspirators agreed to and did make corporate contributions to candidates and committees in the Southern District of New York that were reported in the name of another person. Bankman-Fried’s use of straw donors allowed him to evade contribution limits on individual donations to candidates to whom he had already donated.

Bankman-Fried and others, in a bid to open a bank account, “falsely represented to a financial institution that the account would be used for trading and market making,” when it was in reality to be used to receive and transmit customer funds, the unsealed charges said.

The document calls on Bankman-Fried to forfeit hundreds of millions of dollars’ worth of assets, which in many cases have already been seized by the government. They include more than 55 million shares trading app Robinhood Markets (HOOD) currently valued at $550 million.”

Coinbase Announces Base🔵, an Ethereum L2 Network Powered by Optimism

23 February

Hong Kong will earmark $6.4 million (HK$50 million) for developing its Web3 ecosystem, according to its 2023-2024 budget published on Wednesday. The funds will go towards organizing major international seminars, cross-sectoral business co-operation and workshops for young people.

Hong Kong’s financial secretary, Paul Chan, also announced the start of a task force dedicated to the development of virtual assets, composed of members from policy bureaux, regulatory bodies and industry. The government has [also] set aside $3.8 billion (HK$30 billion) for a co-investment fund focused on attracting non-local businesses to Hong Kong, according to Lee’s policy address.”

See Also: Tencent Cloud signs multiple collaboration agreements with blockchain firms
See Also: France pilots in-store crypto payments as Binance partners with Ingenico
See Also: Web3 Domain Alliance expands with 51 new members

“Backers of the stablecoin TrueUSD (TUSD) have gone live with a new system in conjunction with data-oracle project Chainlink to assure that reserves are adequate before new units of the dollar-pegged token can be minted.

The addition of the “mint lock control” makes TUSD the first stablecoin ‘to programmatically control minting with real-time on-chain verification of off-chain reserves.’

The key is to get information from the bank account where the stablecoin’s reserves are kept to the blockchain-based smart contract that controls issuance of new TUSD. The reserve data is aggregated by an accounting firm called The Network Firm LLP and then provided on-chain via Chainlink.”

See Also: Binance Shifts to ‘Semi-Automated’ Process to Manage Reserves of Tokens It Issues: Bloomberg
See Also: Frax Finance Votes to Fully Collateralize Its $1 Billion Stablecoin

For QCP Capital, there is now reason to believe that risk factors for price performance will come not just from the Fed — but China and Japan. Bitcoin is sensitive to global liquidity, and when central banks inject it, this marks an incentive for growth in and of itself.

While the jury is out on BTC’s value as an inflation hedge, it cannot be denied that it is the most direct global liquidity proxy, as it is not tied to any one central bank or nation.

While we were focused on USD liquidity — from the Fed’s QT and Reserve balance, we’ve missed the massive liquidity injection by the Bank of Japan (BOJ) and People’s Bank of China (PBOC) over the past 3 months. Contrary to consensus, central banks have net added $1 trillion of liquidity since the market’s bottom in October 2022, with the PBOC and BOJ the largest contributors.

Such a large injection of liquidity will no doubt find its way to crypto, even despite what appears to be the current US administration’s best efforts to prevent that.”

See Also: Developer Activity Shows Healthy Growth of the Crypto Space
See Also: Bitcoin Price Remains Lower After Release of FOMC Minutes

“The offering of Dapper Labs’ NBA-branded “Top Shot” non-fungible tokens might be securities, a federal judge ruled Wednesday.

The Court finds that Plaintiffs’ allegations render each consideration under Howey facially plausible. The Court finds that Defendants’ public statements and marketing materials objectively led purchasers to expect profits.

The allegations that Dapper Labs created and maintains a private blockchain is fundamental to the Court’s conclusion. By privatizing the blockchain on which Moments’ value depends and restricting the trade of Moments to only the Flow Blockchain, purchasers must rely on Dapper Labs’s expertise and managerial efforts, as well as its continued success and existence.

The judge said his conclusion ‘that what Dapper Labs offered was an investment contract under Howey is narrow,’ and other NFTs may not be securities. ‘Rather, it is the particular scheme by which Dapper Labs offers Moments that creates the sufficient legal relationship between investor and promoter to establish an investment contract.

See Also: NY Attorney General Sues Crypto Exchange CoinEx, Alleges AMP, LBC, LUNA and RLY Tokens Are Securities
See Also: Titanic artifacts to be tokenized as NFTs in new partnership
See Also: LinksDAO to Bid on Scottish Golf Course Following Vote

“The Canadian Securities Administrators (CSA)—made up of securities regulators from each of the 10 provinces and 3 territories in Canada—have published a long list of new requirements for crypto companies wishing to stay legally compliant, and stablecoin platforms are clearly in the agency’s crosshairs.

Crypto asset trading platforms within the country will now be prohibited from allowing customers to buy or deposit stablecoins, or other “Value Referenced Crypto Assets” (VRCAs), without the CSA’s prior written consent. Obtaining consent means meeting the administrators’ many due diligence requirements, including ensuring that the stablecoin is fiat-backed.

The CSA requires that trading platforms allow such tokens to be bought or sold only if their reserves are made of “highly liquid assets” (cash and cash equivalents), and only if those reserves are held with a qualified custodian. They must also be subject to monthly review by independent auditors. Distributions of those tokens must also comply with Canadian securities legislation since, according to the notice, ‘fiat-backed crypto assets generally meet the definition of security.’

For greater certainty, we would not expect to provide consent in respect of a VRCA that is not fully backed by an appropriate reserve but rather maintains its value through an algorithm.”

See Also: Canadian Crypto Trading Platforms Face ‘Enhanced’ Rules Under New Regulations
See Also: Rep. Tom Emmer Says Fed Must Not Create Digital Currency ‘Surveillance State’

It’s time to pay attention to RWAs

22 February

“According to Bloomberg, officials from China’s Liaison Office have been frequent guests at crypto gatherings in Hong Kong. The tone of their visits and followup calls with certain projects has been friendly.

Some stakeholders think that this can be seen as an endorsement of Hong Kong’s push to become a crypto hub, with the Special Administrative Region of China using its separate legal system and markets to be a testing ground – much in the same way as Hong Kong was China’s first test of open markets in the 20th century.

On Monday, Hong Kong’s Securities and Futures Commission (SFC) made its first push to open the door to retail crypto trading, beginning a consultation process for Virtual Asset Service Providers (VASP) seeking a license to provide trading services.”

See Also: Hong Kong’s Approach to Crypto Regulation Could Attract Capital, Talent to Asia: Bernstein
See Also: I’m American, but My Crypto Startup Won’t Be

“Deutsche Bank Singapore and Memento Blockchain have successfully completed the proof-of-concept phase of Project DAMA (Digital Assets Management Access), designed to facilitate the management of digital funds investing in tokenized securities.

Asset managers can create tokenized funds using one-window on Ethereum testnets involving a variety of strategies, such as DeFi staking. To invest in a fund, the institutional investors holding a non-transferable soulbound token (SBT) would provide collateral in order to mint and receive tokenized shares of the underlying digital investment fund of choice. Tokenized shares can then be swapped via a built-in digital marketplace for digital assets.

For asset security, Deutsche Bank and Memento Blockchain utilized MetaMask. MetaMask is built into the platform as the digital wallet of the partners’ choice for facilitating the transfer of digital assets. Institutional investors would need to hold both an SBT in their MetaMask wallet and KYC in order to access the platform’s decentralized applications.

For the next steps, Deustche Bank said it was exploring the use of Project DAMA in Singapore, where there are currently 1,100 registered fund managers with a combined total of $3.36 trillion in assets under management.”

See Also: Trading Platform eToro Gains New York BitLicense to Provide Crypto Services

“$100 million is being earmarked for a grant program funding the development of Web3, artificial intelligence (AI) and decentralized technologies in a partnership between Bosch and

The two companies are collaborating to create the Foundation, which will aim to fuel industrial adoption of innovative software, AI and Web3 technologies. The initiative will fund research and develop decentralized technologies for real-world use cases.

Bosch as one of the worldwide leaders in industrial engineering and mobility solutions sees the huge need for smarter technologies and governance to cope with the challenges coming with ever more connected ecosystems regarding safety/security, privacy, and data ownership.”

See Also: Ankr partners with Microsoft to offer enterprise node services
See Also: Mastercard to allow crypto payments in Web3 via USDC settlements
See Also: ConsenSys Acquires Easy-to-Use Blockchain Notification Tool ‘Hal’ to Strengthen Web3 Development

Bitcoin fixes broken democracies and fights government corruption by limiting its power to control its people, argues Bitcoin advocate and chief strategy officer of the Human Rights Foundation, Alex Gladstein. Gladstein said Bitcoin represents free speech, property rights and open capital markets, all of which are stifling to a tyrannical government, which often needs censorship, confiscation and closed capital markets.

Bitcoin makes it really hard for governments to impose those things on their people. I don’t see these dictatorial powers doing well in a Bitcoin standard; I think it becomes really hard for them.”

See Also: Nigeria’s Central Bank in Talks With Blockchain Platform R3 for CBDC Revamp: Bloomberg

“The Proof of Stake Alliance (POSA), a nonprofit industry alliance, has published two white papers examining on the status of deposit tokens in United States securities and tax law on Feb. 21. The papers were authored by representatives of over 10 industry groups.

Neither the U.S. Treasury nor the Internal Revenue Service have issued guidance on liquid staking, the POSA noted in “U.S. Federal Income Tax Analysis of Liquid Staking,” but it should be subject to capital gains tax rules under general principles. In line with capital gains taxation, the argument continued, ‘a liquid staking arrangement will be a taxable event only if there is a sale or other disposition of cryptoassets in exchange for property that differs materially in kind or extent.’

Receipt Tokens evidence ownership of intangible commodities in the digital world in a substantially identical manner that warehouse receipts, bills of lading, dock warrants and other documents of title evidence title to tangible commodities in the physical world.”

“Bitcoin breached a rare “Golden Cross” over the weekend, a bullish signal that typically foreshadows short-term gains. A Golden Cross occurs when the 50-day moving average for an asset crosses above the 200-day moving average.

Bitcoin has seen only six other crosses since 2015. The most recent prior to this latest cross was on Aug. 14, 2021.

See Also: Gamers made up nearly half of all blockchain activity in January: DappRadar Report
See Also: Filecoin, Storj Tokens Outperform Bitcoin Amid Increased Use of Decentralized Storage Protocols

“The note surfaced a week after Paxos acknowledged receiving a Wells Notice from the SEC. A Wells Notice is a tool used by the SEC to allege certain activity may be a violation of federal securities law, and may indicate the SEC intends to sue. Since announcing the halt in issuance, Paxos has facilitated more than $2.8 billion in BUSD redemptions with no significant market disruptions.

We are working with the SEC towards the publication of our Clearing Agency application. We are working with the OCC to move our conditional approval into an operationalized and launched National Trust. We are also working to expand our Singapore products in consultation with the MAS following our Payment Service Provider approval last year. We continue to pursue each of these plus any other opportunities for productive collaboration with regulators.”

See Also: Caitlin Long Sees ‘Coordinated Effort’ Among Regulators for Custodia Rejection

21 February

Hong Kong looks ready to invite retail traders back to crypto. In a new consultation paper, the Securities and Futures Commission of Hong Kong (SFC) proposed ‘to allow all types of investors, including retail investors, to access trading services provided by licensed VA [virtual asset] trading platform operators.’

The proposal recommends that several conditions be met before crypto trading for retail investors is reopened, however—including knowledge and risk assessments, as well as potentially setting limits to how much exposure traders are allowed.

The SFC identified criteria for which cryptocurrencies would be available for trading, too. Trading platforms would be responsible for vetting. After that, though, the token pool appears relatively shallow, with the Commission proposing that only “large-cap virtual assets” be eligible for listing.

These and other aspects of the newly-proposed crypto regime in Hong Kong are still open for discussion. Interested parties looking to contribute to the process have until March 31, 2023. The regime is expected to come into effect on June 1, 2023.”

See Also: Huobi crypto exchange aims to expand to Hong Kong amid regulatory changes

“Saudi Arabian Oil Group (Saudi Aramco), the near $2 trillion worth state-owned energy company, has signed a memorandum of understanding (MoU) with droppGroup to explore co-developing a range of Web3 technologies.

The Web3 applications will be aimed at helping Aramco’s employees. This includes potential on-boarding, training ecosystems, as well as a tokenized network and rewards program.

droppGroup, a Web3 technology provider, has a tech stack that includes artificial intelligence (AI) and machine learning (ML), extended reality (XR), tokenized networks, and metaverse environments.”

“The number of Bitcoin (BTC) whales, or wallet addresses holding 1,000 or more BTC, hit its lowest level since August 2019 on Sunday. There were 2,027 whales on Sunday, February 19, according to crypto analytics service Glassnode. The number of Bitcoin whales peaked in February 2021 at just under 2,500 but has declined steadily since then.

The same trend doesn’t appear among so-called mega whales, those holding more than 10,000 BTC, representing an investment of over $250 million at current prices. There are just 117 mega whales, fairly close to the historical highs of 123 in November 2022, and 126 in October 2018.

However, the number of smaller investors in BTC, wallets holding over one coin, has gradually increased over the past five years. The number of wallets holding more than one BTC currently sits at 982,000, a solid rise from around 814,000 around his time last year, and 788,000 in February 2020.”

See Also: Arbitrum’s User Base Is Fastest Growing Among Leading Blockchains: Bernstein

The SEC’s findings paint a much clearer picture of the entire Terra system as a fraud, one just as elaborate and calculated as Sam Bankman-Fried’s FTX. They also point to a variety of unnamed counterparties who could eventually be targeted as collaborators in the fraud.

1. TerraUSD’s ‘stability’ was a complete and conscious fabrication.

The most important new information laid out by the SEC is that in May 2021, when it experienced a small depegging from its $1 target price, Terraform and Kwon ‘secretly discussed with a third party that the third party would purchase massive amounts of UST to restore the $1.00 peg.’ This worked, and terraUSD returned to $1.

But this bailout was not discussed publicly. Instead, Kwon and others cited the May 2021 restoration of the peg as proof that terraUSD was “automatically self-heal[ing].” This narrative, which the SEC calls a complete fabrication, was key to enticing subsequent investors into the scheme.

This is a precise analogue of the fake laboratory tests that earned Theranos founder Elizabeth Holmes a decade-plus prison sentence.

2. Do Kwon and his allies are cashing out – big time.

They claim that Kwon and accomplices ‘transferred over 10,000 bitcoin from Terraform and Luna Foundation Guard … accounts to an un-hosted wallet.’ They have, the SEC claims, converted over $100 million of that bitcoin into fiat withdrawals through a Swiss bank since June 2022.

3. The Chai ‘deal’ was even faker than we thought.

Not only did Do Kwon exaggerate the Chai-Terra relationship in his own statements, he created an entire fake server to move fake money around to simulate fake transactions, with the clear goal of deceiving investors.

4. It turns out US regulation does matter.

Kwon and his team ‘engaged in conduct within the United States that constituted significant steps in furtherance‘ of their alleged crimes. The documents detail a healthy number of U.S. victims and argue the conduct described ‘had a foreseeable substantial effect within the United States.‘”

See Also: Jump Crypto Is Unnamed Firm That Made $1.28B From Do Kwon’s Doomed Terra Ecosystem: Sources

“Binance has launched a new update to its fan token platform that focuses on helping sports teams engage with their fans by offering various rewards to tokenholders. Its fan club program will now let fans gather points they can exchange for rewards, including tickets to games, access to meet and greets, video clips from their favorite players and participation in exclusive dinners with the athletes.

Participants can collect points by participating in fan token activities like voting in polls or completing other tasks. Having a higher level of participation will allow fans to have access to better rewards.”

18 February

“Cogent Bank — a Florida-based commercial bank — is proposing to participate with $100 million in loans to MakerDAO’s RWA Master Participation Trust.

The proposal is part of MakerDAO’s monthly governance cycle and seeks the same terms and conditions applied to Pennsylvania-based bank Huntingdon Valley Bank (HVB), which entered into a collateral integration with the crypto firm in July 2022, allowing the bank to borrow against its assets using DeFi. Under the same conditions, MakerDAO would use its trust arm to link the capital available at Cogent Bank with MakerDAO’s Dai (DAI) stablecoin.

The DeFi protocol would gain exposure to the credit market in at least eight categories, including commercial real estate, industrial, life insurance, consumer and public finance, with loans issued mostly on a fixed-rate basis.”

See Also: OpenSea Goes Zero-Fee, Creator Royalties Optional
See Also: Filecoin’s FIL Token Jumps More Than 30%, Sparking Interest in Virtual Machine Launch
See Also: Arbitrum Native Decentralized Exchange Camelot Growing Massively in February

Regulatory action against the Binance USD (BUSD) stablecoin and its issuer Paxos was specific to BUSD and cannot be extrapolated to others such as USD coin (USDC), Bernstein said in a research report Thursday.

[Further], the custody rule change is currently a proposal, and is favorable for bank-custodians and thus positive for crypto custodians such as Anchorage Digital, which have bank charters, and also custodians that operate under state charters, analysts Gautam Chhugani and Manas Agrawal wrote.

While the U.S. regulations seem to be getting harder, the regulatory murmurs from Hong Kong seem to be net positive, with expected easing of norms, we would not be surprised if the crypto market is led by Asia to begin with, until the regulatory fears settle down in the U.S.”

See Also: Custodia Bank Renews Push for Fed ‘Master Account’ After Rejection
See Also: Terra lawsuit a ‘roadmap’ to attack other algorithmic stablecoins: Delphi Labs

Binance founder and CEO Changpeng Zhao is looking to end relationships with U.S. banks and service firms, and is also re-evaluating its U.S. venture capital investments, according to Bloomberg’s source. Binance is also considering delisting tokens issued by U.S.-based projects, including Circle’s USDC stablecoin, Bloomberg wrote.

Shortly after the report was published on Friday, Zhao denied the exchange was considering delisting tokens attached to U.S.-based projects on Twitter, adding blockchain “has no borders.”

We pulled back on some potential investments, or bids on bankrupt companies in the U.S. for now. Like every other blockchain company, we are conducting a careful cost-benefit analysis and will pivot our business as necessary to protect our global user base.”

“The Bank of Russia’s central bank digital currency (CBDC), the digital ruble, is ready for its pilot phase, said the bank’s deputy governor. The project will be launched for peer-to-peer transfers between individuals and for retail purchases. After the pilot, the Bank of Russia will decide on the ways to expand the project.

The pilot will work on real operations for real people, but only for a limited number of them, with the 13 banks that have signaled they’re ready.

In later comments, the bank said the project can help decrease the Russian economy’s dependency on the U.S. dollar and mitigate the impact of foreign sanctions on the country since its invasion of Ukraine.”

See Also: Japan Announces Launch of New CBDC Pilot This April

17 February

The two biggest creditors of Mt. Gox have elected to get their bankruptcy recovery paid out mostly in bitcoin (BTC). The payouts will come in as part of the early lump sum option offered to creditors, now expected on Sept. 30.

Their decision to pick the former option could soothe longstanding fears among bitcoin holders that a wave of simultaneous liquidations tied to Mt. Gox bankruptcy recoveries could drive down the price of bitcoin. Had these two creditors opted to take the payout in fiat, the trustee overseeing the bankruptcy estate would likely have been compelled to sell off a significant portion of Mt. Gox’s recovered bitcoin holdings to fulfill all the fiat requests.

The price of BTC jumped after CoinDesk reported this development, topping $25,000 for the first time since June.”

Recently, the crypto market and Wall Street’s tech-heavy Nasdaq index have grown resilient to the Federal Reserve’s angst and the resulting uptick in Treasury yields. So one chart analyst expects a continued move higher that could see bitcoin more than double in value in the coming months.

Bitcoin is breaking out from a long basing formation. There is a saying, the bigger the base, the higher into space. Bitcoin may move from consolidation to another parabolic move back to $56,000.

Another good news for crypto bulls is that Nasdaq has broken out of a bull flag, a technical pattern known to accelerate an uptrend. Bitcoin’s 90-day correlation coefficient with Nasdaq has increased to 0.75, indicating the two assets are moving in tandem.

2023 could be a surprisingly good year for both crypto and equities.”

See Also: Bitcoin Jumps Past $25K for First Time Since August

“Matter Labs has renamed zkSync 2.0, its zero-knowledge rollup platform, to “zkSync Era” and is making its code open-source. Matter Labs’ announcement comes a day after a major competitor in the zkEVM space, the Ethereum scaling giant Polygon, locked in March 27 as its official launch date.

Starting Thursday, project builders that pre-registered for the the newly-dubbed “zkSync Era” platform will be able deploy their apps onto the network for the first time. The Era chain will be closed to general users, but app developers will be allowed to test their code in preparation for a full launch sometime in the coming months. According to Gluchowski, zkSync Era has over “200 projects lined up” to deploy on its platform.

People were expecting zkEVMs to arrive five years from now, but here we are, and it’s actually fully working. It’s the first time in history that projects can actually deploy on a ZK rollup on Ethereum.”

See Also: Web3 Firm Unstoppable Domains and Crypto Browser Opera Expand Digital Identity Offerings

“Flashbots, a research firm formed to crack down on the unsavory practice of “maximal extractable value” or MEV on the Ethereum blockchain, proposed “MEV-Share” to distribute the gains more broadly. The new protocol would distribute MEV to Ethereum users, rather than just to validators and data-block builders.

Flasbots said that MEV-Share would be an early implementation of SUAVE, which is a blockchain that would aim to decentralize the block-building process. The new protocol would introduce an entity in the MEV supply chain called “matchmakers.”

Currently, one of the ways that validators on Ethereum earn MEV is through MEV-Boost, a software that Flashbots developed in order to democratize MEV earned by validators and solve some issues of centralization.”

“Hong Kong’s government successfully issued its first tokenized green bond of 800 million Hong Kong dollars (US$101 million). The Hong Kong Monetary Authority had been looking into tokenized green bond issuance since at least 2021. The bond is the first green bond to be issued by a government globally. Green bonds are issued to finance eco-friendly projects, while tokenization allows the bonds to be sold digitally and with ease.

Processes of the bond lifecycle, including coupon payment, settlement of secondary trading and maturity redemption, will also be digitalized and performed on the private blockchain network.

Through a clear policy stance and road map, the Government will work towards providing a facilitating environment to promote sustainable and responsible development of the virtual assets sector. We welcome market participants to conduct tokenized issuances in Hong Kong.”

See Also: Crypto Was Singapore’s Top Area of Fintech Investment in 2022 Despite Global Slowdown: KPMG
See Also: Tencent Teams Up With MultiversX to Expand Web3 Strategy

“The SEC alleged that Terraform and Kwon misled investors on a number of issues, including who was using TerraUSD for payments, and called both the yield-bearing Anchor Protocol and the LUNA token “crypto asset securities,” according to the complaint.

The SEC is charging Terraform and Kwon with fraud, selling unregistered securities, selling unregistered security-based swaps and other related claims. In a press release, SEC Director of Enforcement Gurbir Grewal said the project ‘was neither decentralized, nor finance. It was simply a fraud propped up by a so-called algorithmic ‘stablecoin’ – the price of which was controlled by the defendants, not any code.’

Almost immediately upon UST’s recovery in May 2021, Terraform and Kwon began to make materially misleading statements about how UST’s peg to the dollar was restored. Specifically, Terraform and Kwon emphasized the purported effectiveness of the algorithm underlying UST in maintaining UST pegged to the dollar – misleadingly omitting the true cause of UST’s re-peg: the deliberate intervention by the U.S. Trading Firm to restore the peg.”

See Also: Binance Moved Funds From US Affiliate’s Silvergate Bank Account in 2021: Reuters
See Also: Bankman-Fried Remains Out on Bond, but Judge Warns ‘Revocation’ Proceedings Possible in Future
See Also: Bankman-Fried $250M Bond Is a ‘Joke,’ Claims Securities Lawyer

“According to a Feb. 16 tweet, e-commerce platform eBay’s nonfungible token (NFT) marketplace KnownOrigin will launch creator smart contracts for its artists. With the new contract, artists can split earnings and earn royalties as co-creators.

Users have been testing its Creator Contract beta release for the past few weeks, with 84 contracts thus far deployed and 250 editions of NFTs minted. Starting Feb. 24, all approved creators on KnownOrigin will be able to deploy and mint work on their own contract for public release.

The Ethereum-based platform seeks to empower creators and collectors by giving them the ability to showcase, sell and collect unique, authenticated digital items.”

How to Use Lido on Arbitrum and Optimism

16 February

Bitcoin bolted past $24,000 for the first time in two weeks after surging more than 8% over the past 24 hours, likely the result of the type of short squeeze that historically has sent prices higher. The percentage increase was the largest since BTC jumped 10.5% on Sept. 9. Investors liquidated some $60 million of BTC short positions over the past 24 hours.

Crypto-related stocks also jumped, with both exchange Coinbase (COIN) and bitcoin miner ​​Marathon Digital Holdings (MARA) increasing 15%. Business software company MicroStrategy (MSTR), a major BTC holder, recently rose more than 9%.

I think today was a reflection of some of the regulatory fears – and immediate fears around BUSD – easing.”

The proposed rule would require SEC-registered investment advisers to put all of their clients’ assets, including crypto assets, into “qualified custodians.” Those custodians have to come from a narrow list of regulated financial institutions. In the good-news category for the digital assets sector: The state-chartered trusts that many crypto businesses use for custody, such as Coinbase’s Custody Trust Co. and BitGo, may still be able to qualify in that role.

After today’s SEC proposed rulemaking, we are confident that [Coinbase Custody Trust Co.] will remain a qualified custodian.

Coinbase’s trust is chartered by New York, and it maintains custody for a significant swath of crypto investors’ assets in the U.S. The company advertises on its website that customers can store their assets in ‘segregated cold storage with a Qualified Custodian.’ Similarly, crypto bank Anchorage Digital was quick to assure crypto investors of its unique role in the industry as the holder of a federal charter from the Office of the Comptroller of the Currency (OCC).

But SEC Commissioner Mark Uyeda seemed to hit on one of the potentially alarming pieces of the agency’s proposal for the industry: the way it potentially cuts out the crypto exchanges. ‘Because crypto assets trade on platforms that are not qualified custodians, an adviser that trades crypto assets on a platform would violate the proposed rule. This approach appears to mask a policy decision to block access to crypto as an asset class.’

The proposal is now open for a 60-day comment period in which all the above points will be deeply discussed, and no SEC proposal is guaranteed to finish as a final rule.”

See Also: Former Paxos Exec: Regulators Failed to Address Crypto Collapses, Now They’re Going After ‘On-Ramps’
See Also: Tether’s USDT Gains $1B as Paxos Burns Over $1.8B of Binance USD Stablecoins

Hub71, Abu Dhabi’s tech ecosystem, has started a $2 billion initiative to back Web3 and blockchain technology startups in the region. The Hub71+ Digital Assets ecosystem initiative will also provide startups access to a wide range of programs and potential corporate, government and investment partners, according to a press release on Wednesday.

The capital of the United Arab Emirates (UAE) has long been positive on the crypto industry. The city’s international financial center introduced digital asset regulation back in 2018.”

See Also: European Commission launches blockchain regulatory sandbox for 20 projects annually through 2026
See Also: DBS Says Bitcoin Trading up 80% in 2022 on DDex Exchange
See Also: Conflux Network to Build Blockchain-Based SIM Cards in Partnership With China Telecom

“Celsius announced Wednesday that it has selected Novawulf Digital Management, a digital asset investment firm, to help bring its high-profile bankruptcy case to a close. The plan calls for the creation of a new company that would be managed by NovaWulf. NovaWulf would ​​also make a direct cash contribution of between $45 million to $55 million to the new venture.

The new venture would prevent debtors from assuming significant costs associated with liquidating customer assets and winding down the company, the plan states. Celsius estimated that over 85% of the bankrupt lender’s customers would be able to recover around 70% of their claims in liquid crypto.

The Debtors believe that the NovaWulf plan provides the best method to distribute the Debtors’ liquid crypto assets and maximize the value of the Debtors’ illiquid assets through a new company run by experienced asset managers.

The new company would be completely owned by Celsius’ Earn creditors, and ownership in the company would be distributed as a token that would trade on a network called Provenance Blockchain through a regulated broker-dealer. Under the new company, NovaWulf would bolster Celsius’ mining business to the benefit of equity holders, with $50 million set aside. The mining section of the new company would have over 120 mining rigs and would pay dividends to equity holders.”

“Arbitrum is currently the fourth-largest blockchain in terms of the total value locked (TVL), according to DefiLlama. Its $1.49 billion TVL is nearly double that of its main competitor, Optimism, which uses similar technology to scale Ethereum. Arbitrum owes much of its recent growth to GMX, a decentralized spot and perpetual exchange that launched in September 2021 and has since grown precipitously. GMX currently accounts for about 30% of Arbitrum’s entire TVL.

Transaction fees on Optimism and Arbitrum currently average around 20 cents and 14 cents, respectively, according to data from Blockworks. In comparison, average transaction fees on Ethereum are over 75 cents. In recent months, layer 2 projects have consistently seen higher combined transaction volumes than Ethereum’s base chain, according to L2beat.

Arbitrum and Optimism remain the largest rollups today, but they will face stiff competition in the coming months from a new cohort of upcoming zkEVMs – a more advanced breed of rollups that uses zero-knowledge cryptography to improve fees and security.”

See Also: Lido Finance Kicks Off Yield Farming Event on Ethereum Scaler Optimism

The signers were revealed to be Stanford University’s Andreas Paepcke and Larry Kramer, who put up $200,000 and $500,000, respectively. Bankman-Fried’s parents are both Stanford instructors. Paepcke is a senior research scientist while Kramer is a former dean of Stanford Law School.

Kramer told CoinDesk it was his friendship with Bankman-Fried’s parents, Barbara Fried and Joseph Bankman, that led him to post bail for the now-disgraced former FTX CEO.

My actions are in my personal capacity, and I have no business dealings or interest in this matter other than to help our loyal and steadfast friends.”

See Also: US Prosecutors Ask Judge to ‘Prohibit’ Bankman-Fried From Using Phones, Internet

15 February

Financially speaking, sending someone 100 USDC is no different than sending them $100 via Venmo. In both cases, one user is handing over a claim against a balance sheet – Circle’s versus PayPal’s – to another. From the issuers point of view, each dollar held by its user is just a liability, to be matched against equivalent assets.

From the point of view of safety a properly designed stablecoin is more secure than anything that came before. That’s because half of the balance sheet of the issuer is recorded on-chain and can be verified in trustless fashion. For Venmo, this means parent company PayPal’s regulators need to constantly collect data on user balances (liabilities) and check they match reserves in liquid capital (assets). Awkwardly, the primary source of data for PayPal’s liability is PayPal itself. Stablecoin issuers are different because their liabilities – the tokens they issue – are visible on-chain. Even Tether, the much-maligned stablecoin issuer, can’t lie about token balances.

Dollar stablecoins can [also] be a powerful force for economic inclusion to a substantial portion of the global population – people living in countries with high inflation and low access to banking.

Dollar stablecoins aren’t just great for users, they are also great for the U.S. government because they increase demand for government debt at a time of high inflation and high deficits. Products like Tether’s USDT and Circle’s USDC have already created over $100 billion in new demand for U.S. Treasurys, demand that’s much needed given the risk of de-dollarization.

This makes a properly designed and regulated one the ultimate win-win. Great for the oppressed abroad and the U.S government at home. That’s the real reason congress is coming around.”

See Also: The greatest risk to the U.S. financial system is not allowing stablecoins; it is banning them
See Also: Binance CEO: crypto industry will probably move to non-dollar stablecoins
See Also: Stablecoin Issuer Paxos Burns $700M Binance USD in 27 Hours Amid Regulatory Pressure

Siemens (SIE), Germany’s third-largest publicly traded company by market cap, issued its first digital bond as it looks to reduce paperwork and reach out to potential purchasers directly. The 60 million euro ($64 million) bond, issued on the Polygon blockchain, has a maturity of one year.

A blockchain bond makes paper-based global certificates and central clearing unnecessary. What’s more, the bond can be sold directly to investors without needing a bank to function as an intermediary.

By moving away from paper and toward public blockchains for issuing securities, we can execute transactions significantly faster and more efficiently.

The Electronic Securities Act that allows the sale of blockchain-based debt to take place came into force in June 2021.”

See Also: Billionaire George Soros’ Fund Dives Deeper on Crypto Bets
See Also: Ken Griffin’s Citadel Securities Discloses 5.5% Stake in Crypto Bank Silvergate
See Also: Digital Asset Infrastructure Provider Taurus Raises $65M From Credit Suisse, Deutsche Bank
See Also: Institutional Crypto Trading Platform Elwood Technologies Expands Offerings

“Polygon, an Ethereum scaling project, picked March 27 as the date for its zero-knowledge Ethereum Virtual Machine (zkEVM) beta main network to go live.

Zero-knowledge (ZK) technology is seen by many as a major improvement for blockchains and cryptography, aimed at increasing the speed of transactions and reducing their cost. ZkEVMs are a type of zero-knowldege (ZK) rollup, a scaling solution that processes transactions faster on a layer 2, then sends the transaction data back to the mainnet blockchain – in this case Ethereum.

In October, Polygon went live with its zkEVM testnet, allowing Ethereum developers to move over their smart contracts from the main blockchain without having to reprogram them in a different language. Since the testnet went live, over 75,000 ZK proofs have been generated and 5,000 smart contracts have been deployed.

Polygon zkEVM Mainnet is set to be the first fully EVM equivalent ZK rollup to reach mainnet, this represents a huge step towards scaling Ethereum and bringing Web3 to the masses.”

The U.S. Securities and Exchange Commission (SEC) is falling short when it comes to addressing how it deals with the digital asset industry, said TuongVy Le, partner and head of regulatory and policy at investment firm Bain Capital. What the federal agency is doing is regulating “almost entirely through enforcement actions,” Le, a former chief counsel for the SEC’s Office of Legislative and Intergovernmental Affairs, said.

When the SEC tells us that something is not compliant, it’s not necessarily the same thing as telling us what they would consider compliant. Enforcement actions are very facts- and circumstances-specific, so it can be difficult to know how broadly to read any single action.

By blindly and mechanically applying the existing securities laws without considering the potential of digital assets and blockchain technology, the SEC could potentially just kill something like staking.

As for trying to comply with the SEC, it’s actually not as simple as going onto the SEC’s website and filling out a form. Applying the federal securities laws to something like staking services, where a provider takes your crypto and does things with it, that actually raises really novel and complex questions around custody.”

See Also: Lawmakers Continue to Quarrel Over ‘Crypto Nightmare’
See Also: SEC to Make It Harder for Hedge Funds to Work With Crypto Firms: Bloomberg
See Also: Stablecoins not the target in BUSD crackdown: Matrixport head of research

“Interactive Brokers, a global brokerage firm with headquarters in the United States, announced the launch of its crypto trading services for institutional clients in Hong Kong on Feb. 14.

The launch of crypto trading services occurs at a critical juncture in Hong Kong’s regulated digital asset market development. Paul Chan, the financial secretary for Hong Kong, stated in January that the Hong Kong government is open to working with cryptocurrency and fintech businesses in 2023.

In December 2022, lawmakers in Hong Kong approved legislation to create a licensing scheme for companies that offer services related to virtual assets. The new regulatory framework is intended to give cryptocurrency exchanges the same level of market acceptance as the one that is currently in place for traditional financial institutions.”

See Also: South Korea Issues Guidance / Clarity on Secuirty Tokens

“Crypto prices moved back and forth as inflation slowed at a lesser rate than expected. Bitcoin sank in the first hour following the U.S. Bureau of Labor Statistics’ release of the January consumer price ondex (CPI), which showed prices rising 6.4% versus projections for 6.2%. Then bitcoin returned above $22,000, the level it had lost five days ago.

Crypto markets’ resilience underscores a new, albeit faint, optimism about inflation and the economy. Despite the tepid decline, the CPI has now sunk seven consecutive months, implying the Federal Reserve’s efforts to stem inflation are yielding positive results. Things appear to be moving in the right direction. Inflation has fallen from 9.1% to 6.4% since June 2022.