Last Week [In] Crypto: Growth, Regulation, Scams, Step-Downs
Be[In]Crypto has gathered some of the most important stories from the crypto industry in the past week, in case you missed them.
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Growth of crypto firms
Despite global pandemics, natural disasters, and other unforeseen circumstances, the businesses on the 2022 Inc. 5000 list have not only continued to operate but also increased in profitability.
The average Revenue growth rate among the top 500 organizations bloomed to 2,144% in just three years.
In addition, these same firms created over 68,394 jobs within that timeframe as well. All this progress started when banks began investing in cryptocurrency and blockchain technology back in 2021.
The firms on this list are optimistic about the future, even though they know there are still challenges to come. BlockFi crypto lender firm named at the top slot by the Inc 5000 companies in the United States.
The growth rate of BlockFi was an impressive 245,000% in three years. The firm has now moved on from only being a cryptocurrency exchange and lending platform to becoming a wealth management company. Other well-known crypto companies featured are Polygon, CoinFlip, and Distributed Ledger.
Sri Lanka has recently seen a surge in Ponzi schemes as scammers take advantage of the country’s economic 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 released new guidance on the risks associated with digital currencies. The guidance is directed at banks and other financial institutions that may be considering offering services to customers involved in the cryptocurrency industry.
Canada’s crypto assets will be eyed by two groups, with group 1 heeding the classification conditions set, and group two will be subject to a more conservative prudential treatment. This comes after the Basel Committee published a new set of standards for banks dealing with crypto assets and other digital assets. New data from the Bank of Canada reveals that the number of bitcoin holders almost tripled from 2020 to 2021, rising from 5% to 13%.
Binance has received in-principle approval from the financial authority of the capital of Kazakhstan to open a cryptocurrency exchange. Binance Holdings Ltd. received 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).
Celsius platform is looking forward to receiving fresh cash to help it fund 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 alternatives for restructuring.
The company is weighing financing packages of various shapes and sizes from different parties. It is currently unclear whether these offers are equity-based or debt-based, or what the terms of any such deal would be.
Crypto CEO’s stepping down
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 an exchange liquidity crisis due to its ties with Babel Finance. This forced a withdrawal suspension in July 2022.
Michael Moro, the CEO of Genesis Trading, is stepping down from his position 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 downturn. The crypto market has dipped from a peak market cap of around $3 trillion to about $1.12 trillion at press time.
Tom Conheeny will join the Genesis Board, alongside risk, compliance, and technology executives. At the same time, the company is looking for a permanent replacement for Michael Moro, who fulfilled an advisory role during recruitment.
Increase in crypto monitoring
Tencent Holdings has closed its non-fungible tokens (NFT) platform after less than a week due to Chinese government regulatory pressure. The decision comes after the government released guidelines on 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 revealed its central bank digital currency (CBDC) to the public in 2022 during the Winter Games as a method of expanding 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 investigating a digital dollar, and India, one of the world’s most booming economies, has made a similar announcement regarding its currency.
Last week, Coin Center stated that the U.S. The Department of Treasury went too far when it threatened to take legal action against mixing service Tornado Cash, claiming that the business had breached a number of international sanctions. The organization is attempting to contact the Office of Foreign Assets Control and is evaluating a lawsuit.
In August, the Office of Foreign Asset Control (OFAC) blocked Tornado Cash’s site and other digital-currency sites allegedly working with its mixing 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 funds through a so-called digital tumbler, which makes it difficult to trace the source of the funds.
OFAC’s decision was based on the fact that some digital-currency users were using the tumbler to launder money, but the agency failed to provide any evidence linking Tornado Cash to those activities.
A discussion on the digital dollar
Federal Reserve Chair Jerome Powell stated that the central bank will release a discussion paper on its potential for issuing a central bank digital currency (CBDC) sometime during the summer.
The Fed chairman broached the subject in a public address posted on the website of the Federal Reserve. He first spoke about how the Fed had always adapted to new technologies to facilitate payments.
Here, Powell specifically addressed the advancement of digital ledger technologies, highlighting cryptocurrencies, stablecoins, and finally a CBDC. In light of the development of a prospective “digital dollar,” Powell stated that the Fed would issue a discussion paper about how to best move forward with this idea during the summer.
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