Last week [In] Crypto: Growth, Regulation, Fraud, Tapering

Be[In]Crypto has rounded up some of the most important stories from the crypto industry over the past week, in case you missed them.

Don’t forget to subscribe to our newsletter and get the weekly overviews straight to your inbox!

Growth of crypto firms

Despite global pandemics, natural disasters and other unforeseen circumstances, the companies on the 2022 Inc. 5000 list have not only continued to operate, but also increased in profitability.

Average revenue growth among the top 500 organizations boomed to 2,144% in just three years.

In addition, the same firms created over 68,394 jobs within that time frame. All this progress started when banks started investing in cryptocurrency and blockchain technology back in 2021.

The companies on this list are optimistic about the future, even though they know there are still challenges ahead. BlockFi crypto lending firm named top slot by Inc 5000 companies in the US.

The growth rate of BlockFi was an impressive 245,000% in three years. The firm has now moved on from being just a cryptocurrency exchange and lending platform to becoming a wealth management company. Other well-known crypto companies are Polygon, CoinFlip and Distributed Ledger.

Sri Lanka has recently seen an increase in Ponzi schemes as fraudsters take advantage of the country’s financial woes. The scammers promise high returns to investors if they put their money into cryptocurrency-related ventures. But instead of making money, the victims end up losing everything.

Regulation of digital currencies

The Superintendent of Financial Institutions in Canada has issued new guidance on the risks associated with digital currencies. The guidance is aimed at banks and other financial institutions that may consider offering services to customers involved in the cryptocurrency industry.

Canada’s cryptoassets will be observed by two groups, with Group 1 following the classification conditions set, and Group Two being subject to a more conservative prudential treatment. This comes after the Basel Committee published a new set of standards for banks dealing in crypto-assets and other digital assets. New data from the Bank of Canada reveals that the number of bitcoin holders nearly tripled from 2020 to 2021, rising from 5% to 13%.

Binance has received in-principle approval from the financial authority in the capital of Kazakhstan to open a cryptocurrency exchange. Binance Holdings Ltd. received an in-principle approval from the Astana Financial Services Authority (AFSA) to operate a digital asset trading facility and provide custody services in the Astana International Financial Center (AIFC).

Funding again

The Celsius platform is looking forward to receiving new money to help it finance a potential restructuring process.

In July, after imposing a moratorium on user withdrawals, Celsius failed to file for bankruptcy protection. The firm is now consulting with bankruptcy attorneys to assess its options for restructuring.

The company weighs financing packages of various shapes and sizes from various parties. It is currently unclear whether these offers are equity-based or debt-based, or what the terms of such an agreement will be.

Crypto CEO resigns

Zipmex CEO Marcus Lim faces harsh criticism from investors and shareholders, some of whom want him to step down. They state that the root of the problem lies in mismanagement, which caused a liquidity crisis on the stock exchange due to its ties to Babel Finance. This forced a withdrawal suspension in July 2022.

Genesis Trading CEO Michael Moro is stepping down as pressure mounts from exposure to Three Arrows Capital (3AC) and other hedge funds. This follows the company’s announcement that it saw $40 billion in lending in the second quarter, down 9% from the first quarter.

The cooled interest from institutional investors comes as the crypto market has seen a slowdown. The crypto market has fallen from a peak market cap of around $3 trillion to around $1.12 trillion at press time.

Tom Conheeny will join the Genesis Board, along with heads of risk, compliance and technology. At the same time, the company is looking for a permanent replacement for Michael Moro, who filled an advisory role during the recruitment.

Increase in crypto surveillance

Tencent Holdings has shut down its non-fungible tokens (NFT) platform after less than a week due to regulatory pressure from Chinese authorities. The decision comes after the government issued guidelines for regulating the booming NFT market.

Tencent’s announcement represents a significant retreat from the NFT sector, which has come under increased government regulation in recent months. The Chinese government unveiled its central bank digital currency (CBDC) to the public in 2022 during the Winter Games as a method to expand the digital yuan pilot.

Currently, most states are only in the early stages of developing their own CBDCs. The United States has announced that it will begin exploring a digital dollar, and India, one of the world’s most thriving economies, has made a similar announcement regarding its currency.

Treasury sanctions

Last week, Coin Center stated that the US Treasury went too far when it threatened to take legal action against the mixing service Tornado Cash, claiming that the business had violated a number of international sanctions. The organization is trying to contact the Office of Foreign Assets Control and is considering a lawsuit.

In August, the Office of Foreign Asset Control (OFAC) blocked Tornado Cash’s website and other digital currency websites that allegedly work with their commingling service that the Treasury says is being used by North Korea and Iran to launder money.

Tornado Cash’s software is open source, and the developers have no way of knowing who is using it. The service provides digital currency users with a degree of anonymity by allowing them to move their money through a so-called digital tumbler, making it difficult to trace the source of the funds.

OFAC’s decision was based on the fact that some digital currency users were using Tumbler to launder money, but the agency was unable to provide evidence linking Tornado Cash to those activities.

A discussion about the digital dollar

Federal Reserve Chairman Jerome Powell stated that the central bank will release a discussion paper on the potential to issue a central bank digital currency (CBDC) sometime this summer.

The Fed chairman addressed the issue in a public address posted on the Federal Reserve’s website. He first talked about how the Fed had always adapted to new technologies to facilitate payments.
Here, Powell specifically addressed the development of digital ledger technologies, highlighting cryptocurrencies, stablecoins and ultimately a CBDC. In light of the development of a potential “digital dollar,” Powell stated that the Fed would release a discussion paper on how best to move forward with this idea during the summer.

Disclaimer

All information on our website is published in good faith and for general information purposes only. Any action the reader takes on the information contained on our website is strictly at their own risk.