Bitcoin halving is coming near. Will this rare phenomenon make the crypto more expensive or is more volatility on the cards?
Bitcoin halving is coming near. Will this rare phenomenon make the crypto more expensive or is more volatility on the cards?
In the mysterious cosmos of cryptocurrencies, there exists a phenomenon called Bitcoin halving. Picture this: a cosmic dance of miners, investors, and enthusiasts, all eagerly awaiting the rare occurrence that has profound implications for the future of the world’s most famous cryptocurrency.
Bitcoin operates on a schedule governed by code. Roughly every four years, or after every 210,000 blocks are mined, Bitcoin experiences a halving event. This event reduces the reward miners receive for verifying transactions by 50%. As the supply of new Bitcoins dwindles, demand potentially surpasses supply, thus, propelling the price skywards. According to experts, the halving is expected between April 20 and 23 of this year.
According to Rajagopal Menon, Vice President at crypto exchange WazirX, the halving event needs to be seen in the context where the institutional demand for Bitcoin is already surging, especially via exchange-traded funds (ETFs). “This influx of institutional capital heightens the impact of halving events, fuelling market volatility and speculation,” he says.
For the miners of the Bitcoin cosmos, the halving presents both a challenge and an opportunity. With rewards slashed in half, miners must rev up their computational engines to compete for a smaller slice of the Bitcoin pie.
As for investors, there’s a mix of excitement and trepidation. Will Bitcoin ascend to new astronomical heights? Or will it plunge into a black hole of volatility? For Edul Patel, CEO & Co-Founder of crypto exchange Mudrex, historically, halving led to massive price surges for Bitcoin. “For instance, during the first halving in 2012, Bitcoin’s price skyrocketed from $13 to a peak of $1,152 the following year,” he notes.
Bitcoin tumbled on Tuesday shortly after it reached a new all-time high for the first time in more than two years.
The price of the cryptocurrency topped $69,210 on Tuesday morning, according to Coin Metrics, and then quickly pulled back. The losses deepened in late afternoon trading. It was last trading lower by 8% at $61,973.37.
However, with bitcoin on a hot streak, up 45% this year already, investors have cautioned that things could soon cool as unrealized profit margins approach extreme levels.
“The market is positioned for a steep correction, possibly between 10% and 20%,” said Ed Tolson, CEO and founder of the crypto hedge fund Kbit. “Any material move down will result in cascading liquidations on the crypto perpetual swap markets, where retail has piled into levered long positions, where funding rates are very high. Over the next few quarters, we expect bitcoin to perform well, but with sharp corrections along the way.”
Oppenheimer’s Owen Lau agreed.
“The rise is so much so fast that we are cautious about a correction,” he said. “But longer term, there are still catalysts supporting the positive price action.”
Bitcoin notched its previous record of $68,982.20 on Nov. 10, 2021, about a year before the catastrophic failure of FTX plagued the crypto industry in what some call crypto’s Lehman Brothers moment.
“Bitcoin reclaiming its all-time high yet again shows it is never going away,” said Alex Thorn, head of research at Galaxy Digital. “In its 15 years of existence, bitcoin has seen four 75% [plus] drawdowns, and each time it has come roaring back.”
Clara Medalie, research director at crypto data provider Kaiko, echoed that sentiment, saying a new record is “an important psychological milestone” and “demonstrates crypto’s remarkable ability to bounce back and continue to persevere despite big headwinds.” However, it “doesn’t have much material impact on the pace of innovation in the industry,” she added.
“Bitcoin becomes more useful as it grows more valuable,” Thorn added. “At higher market caps and daily float, it can support larger allocations. Bitcoin’s volatility has consistently decreased over time, allowing allocations to take larger position sizes.”
Since the beginning of February, investors have been watching key themes in the bitcoin narrative push its price higher.
Catalysts driving the surge in the cryptocurrency include the U.S. spot bitcoin ETFs that started trading earlier this year, along with the tightening bitcoin supply ahead of the late April “halving.” This event is designed to create a scarcity event around the asset. The flagship crypto’s upward trend accelerated this week.
Despite Tuesday’s immediate correction, the new record is a triumph for an industry that has long suffered from reputational and regulatory risk that seemed to be at its worst just two years ago, when bankrupt crypto lenders dragged down crypto investors and crypto exchange FTX collapsed. At the end of 2022, as traders were trying to gauge the potential extent of the FTX contagion, bitcoin fell to a two-year low. The cryptocurrency fell 64% that year and has been fighting to prove its legitimacy since.
“The odds have always been against bitcoin,” Thorn said, citing naysayers who have referred to it as “a bubble” and compared it to the “tulip mania” in Holland during the 1600s. “The people show time and time again that they want a decentralized, programmatic, scarce digital currency.”
It also could signal the start of a new wave of retail investors re-engaging with the crypto market, said Needham analyst John Todaro.
“Retail interest is oftentimes momentum driven, and all-time high levels are a pivotal momentum driver for even more investment,” he told CNBC. Additionally, “this could lead to more capital flows, ironically, into altcoins that comparatively start to look cheaper,” he said.
In the past month, investors have allocated over $5 billion across nine newly launched Bitcoin exchange-traded funds (Reuters / Marco Bello)
Bitcoin reached its highest point in over two years, reaching $57,000 on February 26. The cryptocurrency rose 9 percent to briefly touch the $57,000 milestone – its first time since November 2021, before dropping back down to around $56,500 levels, CoinDesk reported. The rise is being driven by increasing optimism about sustained investor demand through exchange-traded funds (ETFs), Bloomberg reported.
During the day-long rally, Bitcoin first pushed the $53,000 milestone before quickly climbing to $54,000, $56,000 and then $57,000 in quick succession.
Rally Triggered by Institutional Allocation, says Experts
Bitcoin is now up more than 200 percent from its previous bottom levels in November 2022 and after the FTX fiasco, noted Zakhil Suresh, CEO of crypto investment platform BitSave. “This rally has been primarily triggered by institutional allocation and the increased retail participation in the last few months due to Bitcoin Spot ETF applications in the US and upcoming Bitcoin halving,” Suresh said.
“Digital asset investment products saw weekly inflows totalling $598 million last week, according to Coinshares, marking the fourth consecutive week of inflows. Bitcoin saw $570 million inflows last week, bringing year-to-date inflows to $5.6 billion,” he noted.
On the market movements, Suresh said that even though prices started dropping immediately after 11 spot ETFs were approved by the SEC last month, owing to profit-booking by early investors, Bitcoin found support below $40,000 which also coincided with 100 Day Moving Average.
“AUM of all Bitcoin spot ETFs combined have crossed $39.40 billion according to Coinglass. Bitcoin is now the second largest ETF commodity in the US, surpassing Silver which has $11.5 billion in AUM. Fresh inflows from institutions have helped Bitcoin maintain its bullish trend,” he noted.
Further, Suresh said that an important level to cross right now for Bitcoin is the $60,000 resistance to continue its uptrend going into halving.
Spencer Hallarn, the global head of over-the-counter trading at crypto investment firm GSR, told the publication that the cryptocurrencies’ ascent, is “supported by strong ETF inflows”.
Earlier, the world’s largest cryptocurrency saw a rise of up to 3.5 percent, reaching $53,600, Bloomberg reported. The last time Bitcoin traded at this level was in December 2021 when it achieved an all-time high of almost $69,000 the preceding month.
In the past month, investors have allocated over $5 billion across nine newly launched ETFs. This amount considers the $7.4 billion withdrawn from the Grayscale Bitcoin Trust, which underwent conversion from a trust during the same period.
Both the U.S. and South Korea have sought to prosecute the creator of TerraUSD and Luna
Disgraced cryptocurrency entrepreneur Do Kwon should be extradited to the U.S. to face trial on fraud charges, rather than to his native South Korea, a court in the tiny Balkan country of Montenegro has ruled.
Kwon’s lawyers have three days to appeal the ruling by the High Court in the Montenegrin capital of Podgorica, a spokeswoman for the court said Wednesday. The appeals court will have the final word in the case, she added.
A local lawyer for Kwon, Goran Rodić, called the ruling illegal and pledged to appeal. Kwon, the creator of the failed TerraUSD and Luna cryptocurrencies, has previously denied committing fraud.
Kwon has been at the center of a tug of war between the U.S. and South Korea ever since he was arrested in March 2023 at the Podgorica airport while attempting to board a private jet to Dubai with a fake Costa Rican passport.
Both the U.S. and South Korea have sought to prosecute him on charges stemming from the May 2022 collapse of TerraUSD and Luna. The crash erased some $40 billion in value from the crypto markets, hurt thousands of investors worldwide and triggered a chain reaction that caused other digital-currency firms to topple into bankruptcy.
Last year, federal prosecutors in New York charged Kwon with eight criminal counts of fraud. The Justice Department alleged that Kwon misled investors about the stability of TerraUSD, an algorithmic stablecoin that used financial engineering to maintain a value of $1 a coin. A Stanford University-educated entrepreneur, Kwon had hyped TerraUSD as the future of money and derided critics who called it potentially unstable.
As ever for bitcoin’s spot price, values have been volatile this year but analysts say there have been several factors behind its recent recovery and believe its looming “halving” event could help further.
Pic: Reuters
Bitcoin has returned to the $50,000 level for the first time since December 2021, riding on the coat tails of a wider rally for US stocks.
The world’s largest cryptocurrency, which hit one-month highs last Friday, maintained its momentum on Monday by rising almost 5%.
Rivals, such as ether, saw similar percentage moves.
Analysts credited several factors for recent crypto gains, saying that wider market sentiment was benefiting from growing expectations of central bank interest rate cuts.
The prospect of cheaper borrowing costs ahead helped the S&P 500 and Dow Jones Industrial Average to record intraday highs earlier in the day.
The tech-focused Nasdaq was just shy of breaking through its best-ever level.
Bitcoin’s recovery from a wave of scandals, including the fraud-driven bankruptcy of the FTX exchange, was aided last month when US regulators backed the creation of 11 exchange-traded funds (ETFs).
These are investment products based on market prices that allow investors to gain exposure to bitcoin without owning the currency directly.
The Securities and Exchange Commission’s decision was seen as giving cryptocurrencies a form of official legitimacy for the first time, despite deep scepticism remaining over the lack of wider rules and oversight.
The body is currently reviewing applications for ETFs linked to ether’s spot price.
Bitcoin values were hurt by a wave of ETF outflows earlier this month but the price wobble ended on Friday when they were reported to have been replaced with net inflows.
The news helped leave bitcoin more than 10% up on the start of the year.
It topped $50,196 on Monday evening, according to LSEG data.
The all-time high for bitcoin’s value came in November 2021 when it exceeded the $65,000 level.
Analysts said the recent surge in value was also attributable to the next bitcoin “halving” event, expected in April.
Representation of the bitcoin cryptocurrency and a price chart are seen in this illustration taken October 24, 2023. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights
Bitcoin fell to a seven-week low on Monday, hovering below $40,000 for the first time since the launch of 11 spot bitcoin exchange-traded funds on Jan. 11.
The world’s largest cryptocurrency was last down 3.98% at $39,938.00, trading at its lowest since Dec. 4 after a brief recovery. Ether , the second largest cryptocurrency, was down 6.37% at $2,328.30.
Bitcoin had rallied on growing excitement the U.S. Securities and Exchange Commission (SEC) would approve bitcoin ETFs, opening up the cryptocurrency to a slew of new investors. Bitcoin gained around 70% from August, when a federal court forced the SEC to review its decision to reject Grayscale Investment’s bitcoin ETF application.
Some analysts said they had expected bitcoin to initially pare some of those gains.
Other market-watchers said on Monday the cryptocurrency was having trouble competing with traditional stocks after the S&P 500 benchmark index (.SPX), opens new tab notched fresh record highs on Monday driven by semiconductor and other tech stocks.
“It feels like bitcoin investors are running up a descending escalator right now as traditional financial benchmarks enjoy the easier ride to record highs,” said Antoni Trenchev, co-founder of crypto lender Nexo.
On December 28 last year, a show-cause notice was sent to Binance, Kucoin, Houbi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex for operating illegally in India.
Global Cryptocurrency Exchanges Blocked In India | File/ Representative image
The websites of some top global cryptocurrency exchanges like Binance, Kucoin, OKX, among others, were blocked in India on January 12.
This comes after the government sent show-cause notices to these crypto exchanges for not complying with the country’s money laundering laws. On December 28 last year, a show-cause notice was sent to Binance, Kucoin, Houbi, Kraken, Gate.io, Bittrex, Bitstamp, MEXC Global, and Bitfinex for operating illegally in India.
The notice was issued because these companies failed to register and follow local tax rules, reports Moneycontrol.
As a result, the finance ministry directed the information technology ministry to block their URLs.
Binance’s Customer Support also confirmed the development on X, saying, “We are aware of an IP block affecting a number of crypto firms, including Binance. This only impacts users who attempt to access the Indian iOS app store or the Binance website from India. Existing users who already have the Binance app are not affected.”
We are aware of an IP block affecting a number of crypto firms, including Binance. This only impacts users who attempt to access the Indian iOS app store or the Binance website from India. Existing users who already have the Binance app are not affected.
“We remain committed to the adherence of local regulations and laws and we are dedicated to maintaining active communication with regulators to ensure user protection and the development of a healthy Web3 industry,” it added.
On December 28, the FIU issued notices to Binance and eight other cryptocurrency exchanges, seeking clarification from them over operations in India.
Binance
India has blocked access to the web platforms for overseas crypto exchanges and virtual digital asset services providers including Finance, Kucoin and OKX, according to a report from Economic Times. The latest development comes against the backdrop of non-compliance with show cause notices by the Financial Intelligence Unit (FIU) of these entities.
Earlier this week, Apple removed offshore crypto exchanges such as Binance, Kucoin and OKX from its App Store after a show-cause notice by the finance ministry’s FIU for not complying with the country’s money laundering laws. The Android versions of these apps are also likely to be taken down, reported the National Daily.
On December 28, the FIU issued notices to Binance and eight other cryptocurrency exchanges, seeking clarification from them over operations in India. The FIU highlighted concerns about their unauthorized operations and non-compliance with laws with respect to the prevention of money laundering.
FIU’s notice had given a time period of two weeks for responding to these platforms, which lapsed on Friday, January 12. Additionally, the FIU recommended to the IT ministry that access to the uniform resource locator (URL) of these platforms be blocked, prompting the government’s subsequent action.
In response to the FIU’s show cause notices to non-compliant crypto exchanges, we took proactive steps, advising investors to transfer their funds to compliant platforms, said Edul Patel, CEO of Mudrex, an Indian Crypto Exchange.
“We are also providing dedicated support to ensure seamless fund transfers from other exchanges, upholding the highest safety and compliance standards. Indian investors should always aim to have their assets in the FIU-compliant entities as it gives them a way for legal recourse against any fraudulent activity on their account,” he added.
According to research by Esya Centre, a think tank, the global crypto exchanges cause a tax leakage of nearly Rs 3,000 crore a year to the central exchequer as they do not have a registered entity in India.
Introduction:
As concerns about global water security intensify due to climate change, Bitcoin’s water usage has soared dramatically, escalating by 166% from 2020 to 2021. The article investigates this surge and its potential repercussions, shedding light on solutions to address this mounting issue.
Bitcoin Mining’s Environmental Impact:
Exploring the environmental impact of Bitcoin mining, the article highlights a notable case involving Greenidge Generation’s alleged discharge of hot water into New York’s Seneca Lake. Despite global attention, the water usage of the Bitcoin mining network has been underreported, focusing mainly on energy consumption, carbon footprint, and electronic waste generation.
Quantifying Bitcoin’s Water Footprint:
Detailed insights into the water footprint of Bitcoin mining are provided, revealing the complex relationship between energy consumption and water usage. The process of Bitcoin mining, akin to a numeric guessing game, demands substantial energy and water resources. The competitive nature of mining, with millions of devices globally vying for rewards, results in significant electricity consumption (16.2 GW as of March 2023) and water usage.
Direct and Indirect Water Consumption:
Bitcoin mining requires water directly for cooling systems and indirectly through the generation of electricity. The article differentiates between water withdrawal and water consumption, emphasizing the challenge in obtaining accurate data on water consumption factors in mining activities.
Indirect Water Footprint Assessment:
By utilizing data from the Cambridge Centre for Alternative Finance (CCAF), the article demonstrates the 166% increase in Bitcoin’s water footprint from 2020 to 2021, attributing this surge to various factors, including shifts in mining locations. Kazakhstan’s significant contribution to the network’s water footprint, despite representing a smaller share of computational power, highlights the complexities of the situation.
Projections and Impact:
Estimating the potential water footprint of Bitcoin in 2023, the article suggests a staggering annual equivalent of 2,237 GL. It outlines the water footprint per transaction, emphasizing the substantial water consumption associated with processing Bitcoin transactions.
Addressing the Issue:
To mitigate Bitcoin’s burgeoning water footprint, the article suggests potential solutions, including immersion cooling, alternative power sources, and software modifications. These changes could significantly reduce the network’s water usage, paving the way for a more sustainable approach to Bitcoin mining.
Conclusion:
The evolving water footprint of Bitcoin mining poses significant challenges amidst global concerns over water scarcity. By understanding the complexities of Bitcoin’s water consumption, this analysis aims to drive discussions towards more responsible and sustainable mining practices.
Alex de Vries at the VU Amsterdam School of Business and Economics in the Netherlands has calculated that mining – the computational process that secures the bitcoin network – uses between 8.6 and 35.1 billion litres of water per year in the US alone. He says that bitcoin used 1.6 trillion litres of water globally in 2021, and expects this to rise to 2.3 trillion litres this year. Broken down per transaction, that means a single bitcoin trade consumes 16,000 litres of water – enough to fill a small swimming pool. This is “increasingly hard to defend”, says de Vries.
The world’s biggest currency hit as high as $40,210 in Sunday trade, its highest since April 2022. It was steady at $40,011 in thin trade early in the Asia day on Monday.
Both bitcoin and ether remain well below their 2021 record highs that were above $60,000 and $4,000 respectively
Bitcoin has broken above $40,000 for the first time this year as it rides a wave of momentum on broad enthusiasm about U.S. interest rate cuts and as traders anticipate the imminent approval of U.S.-stockmarket traded bitcoin funds.
The world’s biggest currency hit as high as $40,210 in Sunday trade, its highest since April 2022. It was steady at $40,011 in thin trade early in the Asia day on Monday.
“We’ll see if it sticks throughout the day, but bitcoin loves a break of big psychological levels, so it excites the bit-bugs again and adds to this momentum,” said Capital.com analyst Kyle Rodda.
For the year, bitcoin has more than doubled as it has thrown off the doldrums of the so-called “crypto winter” that followed scandals including the collapse of exchange FTX last year.
Riskier investments and other interest-rate sensitive assets, such as gold, have also rallied hard over the last few weeks as markets wager that the U.S. Federal Reserve has finished hiking rates and will start cutting early in 2023.
Reports in October that the U.S. Securities and Exchange Commission won’t appeal a court ruling that found the agency had been wrong to reject an exchange-traded fund application from crypto firm Grayscale Investments have also driven bets that an eventual approval is nigh.
The top U.S. securities regulator sued cryptocurrency platform Coinbase on Tuesday, the second lawsuit in two days against a major crypto exchange, in a dramatic escalation of a crackdown on the industry and one that could dramatically transform a market that has largely operated outside regulation.
The U.S. Securities and Exchange Commission (SEC) on Monday took aim at Binance, the world’s largest cryptocurrency exchange. The SEC accuses Binance and its CEO Changpeng Zhao of operating a “web of deception”.
If successful, the lawsuits could transform the crypto market by successfully asserting the SEC’s jurisdiction over the industry which for years has argued that tokens do not constitute securities and should not be regulated by the SEC.
“The two cases are different, but overlap and point in the same direction: the SEC’s increasingly aggressive campaign to bring cryptocurrencies under the jurisdiction of the federal securities laws,” said Kevin O’Brien, a partner at Ford O’Brien Landy and a former federal prosecutor, adding, however, that the SEC has not previously taken on such major crypto players.
“If the SEC prevails in either case, the cryptocurrency industry will be transformed.”
In its complaint filed in Manhattan federal court, the SEC said Coinbase has since at least 2019 made billions of dollars by operating as a middleman on crypto transactions, while evading disclosure requirements meant to protect investors.
The SEC said Coinbase traded at least 13 crypto assets that are securities that should have been registered, including tokens such as Solana, Cardano and Polygon.
Coinbase suffered about $1.28 billion of net customer outflows following the lawsuit, according to initial estimates from data firm Nansen. Shares of Coinbase’s parent Coinbase Global Inc (COIN.O) closed down $7.10, or 12.1%, at $51.61 after earlier falling as much as 20.9%. They are up 46% this year.
Paul Grewal, Coinbase’s general counsel, in a statement said the company will continue operating as usual and has “demonstrated commitment to compliance.”
Oanda senior market analyst Ed Moya said the SEC “looks like it’s playing Whac-A-Mole with crypto exchanges,” and because most exchanges offer a range of tokens that operate on blockchain protocols targeted by regulators, “it seems like this is just the beginning.”
Leading cryptocurrency bitcoin has been a paradoxical beneficiary of the crackdown.
After an initial plunge to a nearly three-month low of $25,350 following the Binance suit, bitcoin rebounded by more than $2,000, exceeding the previous day’s high. It was trading just below $27,000 at 0410 GMT.
“The SEC is making life nearly impossible for several altcoins and that is actually driving some crypto traders back into bitcoin,” explained Oanda’s Moya.
BROKER, EXCHANGE CRACKDOWN
Securities, as opposed to other assets such as commodities, are strictly regulated and require detailed disclosures to inform investors of potential risks. The Securities Act of 1933 outlined a definition of the term “security,” yet many experts rely on two U.S. Supreme Court cases to determine if an investment product constitutes a security.
[1/2] U.S. Securities and Exchange Commission logo and representations of cryptocurrency are seen in this illustration taken June 6, 2023. REUTERS/Dado Ruvic/IllustrationSEC Chair Gary Gensler has long said tokens constitute securities and has steadily asserted its authority over the crypto market, focusing initially on the sale of tokens and interest-bearing crypto products. More recently, it has taken aim at unregistered crypto broker dealer, exchange trading and clearing activity.
While a few crypto companies are licensed as alternative system trading systems, a type of trading platform used by brokers to trade listed securities, no crypto platform operates as a full-blown stock exchange. The SEC also this year sued Beaxy Digital and Bittrex Global for failing to register as an exchange, clearing house and broker.
“The whole business model is built on a noncompliance with the U.S. securities laws and we’re asking them to come into compliance,” Gensler told CNBC.
Crypto companies refute that tokens meet the definition of a security, say the SEC’s rules are ambiguous, and that the SEC is overstepping its authority in trying to regulate them. Still, many companies have boosted compliance, shelved products and expanded outside the country in response to the crackdown.
Kristin Smith, CEO of the Blockchain Association trade group, rejected Gensler’s efforts to oversee the industry.
“We’re confident the courts will prove Chair Gensler wrong in due time,” she said.
Tech investor Chamath Palihapitiya, who said two years ago that bitcoin has replaced gold and predicted the digital currency would climb to $200,000, has a much more cautious view on cryptocurrencies these days.
“Crypto is dead in America,” Palihapitiya said in the latest episode of the All-In podcast.
Palihapitiya blamed crypto’s demise largely on regulators, who have gotten much more aggressive in their pursuit of bad actors in the industry. Securities and Exchange Commission Chairman Gary Gensler has said crypto trading platforms should abide by strict U.S. securities laws.
In answering questions in front of lawmakers recently, Gensler connected the collapse of Silicon Valley Bank with the crypto industry.
“You had Gensler even blaming the banking crisis on crypto,” Palihapitiya said. “The United States authorities have firmly pointed their guns at crypto.”
The SEC has ramped up its enforcement of the crypto industry, bearing down on companies and projects that the regulator alleges were selling unregistered securities.
In February, the agency proposed rules that would change which crypto firms can custody customer assets. In March, the SEC issued crypto exchange Coinbase a Wells notice — typically one of the final steps before it files charges — warning the company that it identified potential violations of U.S. securities law. Last week, the SEC charged the crypto asset trading platform Bittrex and its ex-CEO with operating an unregistered exchange.
Coinbase CEO Brian Armstrong told CNBC that his company is preparing for a yearslong court battle with the commission, and is also considering relocating outside the U.S. if it doesn’t get improved regulatory clarity. Meanwhile, Bittrex has already announced it would wind down U.S. operations specifically due to “continued regulatory uncertainty.”
They “were probably the ones that were the most threatening to the establishment,” said Palihapitiya, referring to crypto companies. “And they were the ones that, in fairness to the regulators, did push the boundaries more than any other sector of the startup economy.”
“Now they’re paying the price for that,” he said. “The bill has come due for them.”
Gensler faced similar criticism from House Republicans over the agency’s crackdown on cryptocurrency platforms during four hours of congressional testimony last week.
“Regulation by enforcement is not sufficient nor sustainable,” said House Financial Services Committee Chairman Rep. Patrick McHenry, R-N.C. “You’re punishing digital asset firms for allegedly not adhering to the law when they don’t know it will apply to them.”
McHenry said the SEC’s approach was “driving innovation overseas and endangering American competitiveness.”
US Commodity Futures Trading Commission claims world’s biggest crypto exchange engaged in “willful evasion” of US law.
US regulators have accused crypto exchange Binance of operating a “sham” compliance programme [File: Kin Cheung/Reuters ]The world’s biggest crypto exchange Binance and its CEO and founder Changpeng Zhao are being sued by the Commodity Futures Trading Commission (CFTC) in the United States for operating what the regulator alleges were an “illegal” exchange and a “sham” compliance programme.
The CFTC sued Binance, Zhao and its former top compliance executive with “willful evasion” of US law “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit”.
Zhao, a billionaire who was born in China and moved to Canada at the age of 12, called CFTC’s complaint “unexpected and disappointing”.
“Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterisation of many of the issues alleged in the complaint,” Zhao said in a statement.
The lawsuit comes amid a broader and increasingly high-profile crackdown on crypto companies. For years, US prosecutors and civil investigators have targeted crypto firms for illegal offerings and failures to comply with rules designed to prevent illicit activity. But the pace of such government activity has surged recently.
The CFTC said in its complaint on Monday that from at least July 2019 to the present, Binance “offered and executed commodity derivatives transactions on behalf of US persons” in violation of US laws.
Binance’s compliance programme has been “ineffective” and the firm, under the direction of Zhao, told employees and customers to circumvent compliance controls, the CFTC said, citing a number of practices first reported by the Reuters news agency in a series of investigations into the exchange last year.
The CFTC also accused Binance’s former Chief Compliance Officer Samuel Lim of “aiding and abetting” Binance’s violations. Lim did not immediately respond to calls and messages from Reuters.
A spokesperson for Binance, which dominates the global digital asset sector, said the firm will continue to “collaborate” with regulators.
Binance has made “significant investments” to ensure it does not have US users on its platform, the spokesperson said.
CFTC Chairman Rostin Behnam said in a statement that Binance executives knew for years “they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance”.
The CFTC is responsible for oversight of commodities and derivatives markets, including Bitcoin. Firms such as brokers that facilitate US customers’ trading of such products are required to register with the agency.
Reuters reported in December that the US Justice Department had been investigating Binance since 2018 for possible money laundering and sanctions violations. Binance has processed at least $10bn in payments for criminals and companies seeking to evade US sanctions, Reuters has found.
Binance’s cryptocurrency BNB, the world’s fourth largest by market size, dropped by about 4 percent on the news.
In a tweet on Monday afternoon, Zhao wrote “4”, referencing a previous post listing his “Do’s and Don’ts” for 2023. The fourth item on the list was “Ignore FUD, fake news, attacks,” using an acronym for “fear, uncertainty and doubt” often used in crypto in relation to news perceived as negative.
Founded in Shanghai in 2017, Binance sits at the heart of the global crypto industry. Its core Binance.com exchange processed trades worth about $23 trillion last year, according to data provider CryptoCompare. Trading volumes hit $34 trillion in 2021, Zhao said last year.
In its latest step to tighten oversight of digital assets, the Centre has brought crypto trading, safekeeping and related financial services under the ambit of the Prevention of Money Laundering Act. The Union finance ministry issued a gazette notification to this effect on Tuesday.
Crypto exchanges and intermediaries dealing with virtual digital assets (VDA) will now be required to perform KYC of their clients and users of the platform. Besides, exchanges will have to report suspicious activity to the Financial Intelligence Unit India.
The notification says entities dealing in VDA will be considered “reporting entity” under PMLA-banks, financial institutions, entities engaged in real estate and jewellery sectors as well as casinos are ‘reporting entities’ now. Under this law, every reporting entity is required to maintain a record of all transactions.
Crypto entities have to maintain records
The Centre’s move to bring the cryptocurrency sector under the ambit of PMLA is in line with the global trend of requiring digital-asset platforms to follow anti-money laundering standards similar to those followed by other regulated entities like banks or stock brokers.
A gazette notification issued said that “exchange between virtual digital assets and fiat currencies, exchange between one or more forms of virtual digital assets, transfer of virtual digital assets (VDA), safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets, and participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset” will be now be covered under the Prevention of Money Laundering Act, 2002.
Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 14, 2018. REUTERS/Dado Ruvic/Illustration
More than 46,000 people reported losing over $1 billion in cryptocurrency scams since the start of 2021, the Federal Trade Commission (FTC) said in a report on Friday.
Nearly half the people who reported losing digital currencies in a scam said it started with an ad, post or a message on a social media platform, according to the FTC. (https://bit.ly/3x2NRQx)
The craze for cryptocurrencies was at a fever pitch last year with bitcoin hitting a record high of $69,000 in November.
Reports point to social media and crypto as a combustible combination for fraud, the agency said, adding that about $575 million of all losses related to digital currency frauds were about “bogus investment opportunities”.
Nearly four out of every ten dollars lost in a fraud originating on social media was lost in crypto, far more than any other payment method, with Instagram, Facebook, WhatsApp and Telegram being the top social media platforms in such cases, according to the report.
Previous to sanctions, Russia’s restrictions on cryptocurrencies were inexorable, contrary to what is proposed now.
The Chairman of the State of Duma Committee on Energy Pavel Zavalny said that Russia will now accept Bitcoin payment for oil. He made the announcement at a press conference on Thursday. However, Russia specified that only China and Turkey could pay for oil with Bitcoin.
The economy of Russia has thrived fervently on oil & gas for centuries. So much so that the country is referred to as an “energy superpower” with the world’s largest natural gas reserves. The oil and gas industry makes up about 40% of its budget revenue. Having faced sanctions from virtually all quarters that supported its economic growth, Russia’s economy has nose-dived. Trades on Russia’s stock market have equally stopped, reducing the ruble by half its value, thereby bleeding against the dollar.
Bitcoin hit $44,118 for the first time since early March. The digital coin has seen an upward movement after the announcement. The cryptocurrency managed to reclaim the mid-area around its current levels and could see further upside in the short term if bulls can sustain momentum.
Russia to Accept Bitcoin as Payment for Oil and Gas
As Russia is enlisted as the eighth-largest oil reserve and the world’s leading natural gas exporter, there were earlier speculations that Russia would resort to oil and gas amid sanctions. Indeed, wide speculation is now an option for Russia. Russia has lost its investors since it invaded Ukraine. The withdrawal of countries resulted in President Putin’s acceptance of Bitcoin from neutral countries like Turkey and China. Other countries regarded as “unfriendly” due to their exit from economic ties with the Russian Federation must pay for oil with rubles and gold. According to Zavalny’s transcripted speech version:
“If they want to buy, let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency. As for friendly countries, China or Turkey, which are not involved in the sanctions pressure… You can also trade bitcoins.”
Investment management company BlackRock CEO Larry Fink noted in an investor letter on Thursday. He posited that the invasion has caused nations to agree on deterring economic and trading ties with Russia. Unified in their steadfast commitment to supporting Ukraine, the West launched an “economic war” against Russia.
Why Bitcoin?
Previous to sanctions, Russia’s restrictions on cryptocurrencies were inexorable, contrary to what is proposed now. Russia planning to accept Bitcoin acceptance for oil may indicate that Putin’s war is nowhere near an end. Until the Western Societies strengthen their policy against Russia, nothing will stop its gas producers from Bitcoin payments. The matter was discussed on the agenda at the meeting between President Biden and European leaders on Thursday in Brussels. The West will dissociate every source of potential growth in Russia. They range from technology, supply chain, and human resource.
The speculation that Russia intends to evade sanctions through cryptocurrencies is still unproven. No one can seize or stop funds that are in BTC and any entity can use it worldwide. Nonetheless, energy transactions involve heavy funds, which is almost impossible to push through Bitcoin’s broad virtual paper trail.
The global cryptocurrency market-capitalisation rose 0.53 percent over the last 24 hours to stand at $1.87 trillion. Trading volumes also jumped 13.96 percent to $89.28 billion during this period.
The total volume in the decentralised finance (DeFi) space stood at $13.39 billion, around 15 percent of the aggregate 24-hour cryptocurrency trading volume. The total volume in stablecoins stood at $74.90 billion, making up 83.90 percent of the 24-hour cryptocurrency trading volume.
Bitcoin’s market dominance was down marginally by 0.41 percent to 41.75 percent and the largest currency in the crypto space was trading at $41,086.15, just above the $40,000-mark on the morning of March 22.
In the rupee terms, Bitcoin dipped 0.69 percent to trade at Rs 32,17,584 while Ethereum rose 1.11 percent to Rs 2,27,244.9
Cardano was up 2.9 percent to trade at Rs 71.11 and Avalanche also jumped 2.74 percent to Rs 6,764.23. Polkadot was up by 0.64 percent to Rs 1,471.64 and Litecoin also slightly rose by about 1.59 percent to Rs 9,153.36 in the last 24 hours. Tether, on the other hand, dipped marginally by 0.04 percent to Rs 78.28
Memecoin SHIB was up 1.23 percent, trading at a meager Rs 0.0018 while Dogecoin fell by 0.24 percent to trade at Rs 9.36. Terra (LUNA) rose 2.91 percent to Rs 7,375.15, while Algorand (ALGO) jumped almost 8.82 percent to Rs 63.32
In other news, Goldman Sachs recently became the first major US bank to have made an over-the-counter (OTC) cryptocurrency transaction. Notably, the Wall Street giant bought an OTC Bitcoin non-deliverable option (NDO) from Galaxy Digital, a New York-based cryptocurrency investment firm, run by billionaire Mike Novogratz.
Essentially, it means that Goldman Sachs bought a contract betting on the future price of Bitcoin—rather than actually buying the digital asset itself.
As of 7:30 am, these were the prices of various cryptocurrencies in the Indian market (Data from WazirX)
Sanctions may have thrown Russian businesses for a loop, but leaders of the country are reportedly using cryptocurrency to bypass the recent sanctions against the country. Blockchain analysis firm Elliptic has tracked down a crypto wallet, which has ‘significant asset holdings’. In an interview with Bloomberg, the co-founder – Tom Robinson – revealed that the wallet likely contains millions of dollars that belong to sanctioned Russians officials and oligarchs.
The exact value or the nature of the crypto assets has not been revealed by the company, but they claim to have shared the information with the relevant authorities.
Not everyone is complying with Russia’s sanctions
Mainstream crypto players, like Coinbase and Binance, have complied with the regulator’s requests and cracked down on transactions originating out of Russia. However, there are still more than 400 crypto services in the world that let anonymous users trade digital assets using Russia’s native currency, the ruble.
According to Elliptic, a week before the conflict between Russia and Ukraine broke out, ruble-related activity on some of these services – like Tornado Cash – was seen surging. Tornado Cash has declined to restrict services or comply with the sanctions and continues to anonymise transactions in Ethereum.
Some venture capitalists hope that the Ethereum-based OpenSea will soon take a backseat to Magic Eden, a new NFT marketplace on Solana.
Forty-three percent of all NFT purchases take place on OpenSea, with $23.3B in total sales, according to research firm DappRadar. But it is limited by the blockchain it operates on, which is Ethereum.
Venture capital titan Sequoia Capital has set its sights on Magic Eden, a company using the Solana blockchain to authenticate NFTs on its marketplace. Research by Etherscan indicates that Solana is capable of greater transaction throughput and lower transaction costs than Ethereum. However, history tells us that the cheapest or more efficient tool does not always end up superior. “We’ve also seen that most innovative projects choose Ethereum,” said Tim Beiko, a contributor to Ethereum.
Do Kwon, co-founder and CEO of Terraform Labs, has taken a $1 million wager that the price of LUNA will not fall below $88 by one year from now.
“Cool. I’m in,” Do Kwon wrote on Twitter on March 13, in response to a challenge issued by a self-proclaimed ‘semi-retired degen’ going by the name of ‘Sensei Algod.’
LUNA an ‘overpriced Ponzi’
Sensei Algod described LUNA, the native token of the Terra ecosystem, as an “overpriced Ponzi” that would fail.
“LUNA is a glorified TITAN, when people lose confidence it goes to zero,” he scorned, referring to the DeFi protocol Iron Finance’s token that went from $65 to $0 last year.
Claiming to have been early in identifying “gigantic Ponzis OHM, TIME and LooksRare.” Algod went on to dare anyone to “take a $1 million bet that LUNA will be lower in price one year from now.”
Do Kwon accepted the challenge, and took the mocking a step further,
Clipart rock NFT and small paper boxes that hold slips with QR codes are seen inside digital art collecting platform Neon’s first in-person non-fungible token (NFT) vending machine in Lower Manhattan’s financial district of New York City Photograph:( Agencies )
A non-fungible token (NFT) collector accidentally sold his Clipart rock NFT worth $1 million for less than a penny.
They listed their valuable NFT for 444 Wei instead of 444 ETH. Wei is the smallest unit of Ether and one Wei is equal to one quintillionth of an Ether.
A non-fungible token (NFT) is a crypto asset that uses blockchain to record who owns a digital file such as an image or video.
Soon after the NFT was sold for less than a penny, it was listed again for 234 ETH (Rs 4.6 crore). This NFT seller who made a huge blunder took to Twitter to share his bad luck and asked for help.
He wrote, “How’s your week? Mine? I just erroneously listed @etherrock #44 for 444 wei instead of 444 eth. Bot sniped it in the same block and tried to flip for 234 eth In one click my entire net worth of ~$1 million dollars, was gone. Is there any hope? Am I GMI? Can snipers show mercy?”
How's your week?
Mine? I just erroneously listed @etherrock #44 for 444 wei instead of 444 eth🤦♂️
Bot sniped it in the same block and trying to flip for 234 eth
In one click my entire net worth of ~$1 million dollars, gone
Business Today explains how you can mint your NFT for free on three platforms.
While some NFT minting platforms charge high gas prices, others have developed more efficient and cost-effective minting processes.
Do you know what is common between Kalpana Chawala, Deadpool, Amitabh Bachchan, Neo from Matrix, Micheal Jordan, Batman and the Ukrainian flag?
All of them have launched their own Non-Fungible Tokens (NFTs). NFTs are all the rage right now. But don’t worry, you don’t need Bruce Wayne’s fortune to launch your own NFTs, you can do it for free.
While some NFT minting platforms charge high gas prices, others have developed more efficient and cost-effective minting processes and, in this guide, we would be exploring three such platforms. Moreover, no code is required to mint your NFTs on these platforms.
But first, let us understand what minting an NFT means.
Minting is the process of integrating your NFT onto the blockchain. It occurs when the immutable and tamper-resistant digital public ledger, i.e. blockchain, accepts and stores your NFTs.
Minting is the process of integrating your NFT onto the blockchain. It occurs when the immutable and tamper-resistant digital public ledger, i.e. blockchain, accepts and stores your NFTs.
Several NFT marketplaces have updated their pricing structures over time to ensure that they continue to attract a broader audience. Three of them are discussed below.
The crypto market gives a thumbs up to Biden’s crypto executive order which sets to bring clear regulations in place. This is likely to boost institutional participation in the crypto space.
On Wednesday, March 9, the Joe Biden administration signed the much-awaited executive order on cryptocurrencies. The executive order points federal agencies to work on regulations for the crypto space.
This is for the first time that any federal agencies will be directly involved in dealing with crypto. Further, it sets a clear tone of an accommodative stand for digital assets in the US financial system.
On Wednesday, the crypto market reacted positively with Bitcoin (BTC) gaining over 8% and moving past $41,500 levels. Other cryptocurrencies from the altcoin space posted similar gains. The Ethereum (ETH) price surged 8% moving past $2,750 levels. However, Terra’s LUNA marked the biggest gains on Wednesday. The LUNA price shot up by over 20% moving closer to $100 levels.
However, yesterday’s crypto market and Bitcoin rally remain short-lived. As of press time, Bitcoin (BTC) is down 5% dropping under $40,000 once again as volatility hits hard. The broader cryptocurrency market is also trading down 5% but Terra’s LUNA has managed to hold back the losses and is currently trading at $94.
Cardano was up 1.25 percent to Rs 65.12 and Avalanche jumped 1.52 percent to Rs 6,053.005. Polkadot was up 0.82 percent to Rs 1,379.18 and Litecoin rose 1.82 percent to Rs 8,294.87 in the last 24 hours. Tether was down 0.49 percent to Rs 78.95
The global cryptocurrency market capitalisation rose 3.77 percent over the last 24 hours to $1.82 trillion while trading volumes rose 20.99 percent to $94.86 billion during the period.
The total volume in the decentralised finance (DeFi) space stood at $17.08 billion, around 18.01 percent of the 24-hour cryptocurrency trading volume. The total volume in stablecoins stood at $79.68 billion, making up 84 percent of the 24-hour cryptocurrency trading volume.
Bitcoin’s market dominance was up 0.86 percent to 43.17 percent and the currency was trading at $41,428.48 on the morning of March 10.
In rupee terms, Bitcoin rose 4.27 percent to trade at Rs 32,36,608 while Ethereum jumped about 1.69 percent to Rs 2,11,117.8
Cardano was up 1.25 percent to Rs 65.12 and Avalanche jumped 1.52 percent to Rs 6,053.005. Polkadot was up 0.82 percent to Rs 1,379.18 and Litecoin rose 1.82 percent to Rs 8,294.87 in the last 24 hours. Tether was down 0.49 percent to Rs 78.95
