Author: Ibiam Wayas

Ibiam is an optimistic crypto journalist. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.

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Crypto News DeFi Regulation

No Moons for Traders As DeFi Company “DMM DAO” is Shut Down By SEC

The operators of DeFi Money Market (DMM) have consented to a cease and desist order by the US Securities and Exchange Commission (SEC). They were charged by the SEC for misleading investors and also issuing US$30 million worth of unregistered securities through the decentralised platform. This is the first time the SEC has charged an entity for securities fraud involving DeFi technology. 

DMM Execs Sold $30 Million in Unregistered Securities

The two DMM executives – Gregory Keough and Derek Acree – and their company Blockchain Credit Partners were alleged to have misled investors about the operations and profitability of DeFi Money Market. 

Between February 2020 and February 2021, the three entities sold about US$30 million worth of unregistered securities to investors. Using smart contract technology, they issued the so-called mTokens and DMG tokens, which also served as the governance token of the protocol. 

The executives claimed they would use investors’ assets exchanged for mTokens to invest in real-world assets such as car loans. As such, the investors were promised a 6.25 percent return on their assets. However, DMM couldn’t deliver on this promise due to the volatility of the digital assets exchanged for the DMM tokens.

The price volatility of the digital assets used to purchase the tokens created risk that the income [raised] through income-generating assets would be insufficient to cover appreciation of investors’ principal.

SEC statement

SEC Orders DMM Executives to Disgorge Over $12 Million

Besides presenting false “car loans” to the investors, the DMM execs used their personal funds and those of Blockchain Credit Partners to pay interest to the investors. 

Full and honest disclosure remains the cornerstone of our securities laws – no matter what technologies are used to offer and sell those securities. This allows investors to make informed decisions and prevents issuers from misleading the public about business operations.

Gurbir S. Grewal, director, SEC enforcement division 

Without admitting or denying the SEC’s order, the execs agreed to cease and desist from continuing DMM business. Although DMM investors can redeem their mTokens, the SEC also ordered Keough and Acree to disgorge US$12,849,354 and imposed penalties of US$125,000 each. 

The DeFi industry has had little or no regulatory attention until now. However, over recent days, people have assumed it would come following recent changes and frequent cases of rugpulls. As recently as June 21, billionaire Mark Cuban called for the regulation of the DeFi space following the crash of the TITAN token. 

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Blockchain Crypto News NFTs

Marvel Launches Spider-Man NFTs

Popular media and entertainment company Marvel will be dropping its first-ever non-fungible tokens (NFTs) this weekend, featuring Spider-Man digital collectibles.

This first set of NFTs from Marvel will drop on app-based NFT marketplace VeVe, under a recent partnership with Orbis Blockchain Technologies Limited, the operator of VeVe.

More NFTs to Come from Marvel

According to the information shared by VeVe, the Spider-Man digital collectibles will be exclusively listed on the platform from August 7 at 8am PT. Marvel is expected to release about five different collectibles, ranging from US$40 to US$400 per piece. 

This will mark the first time Marvel fans will be able to purchase or interact with NFTs officially released by the comics giant. However, Marvel intends to drop more contents on the NFT marketplace, featuring 3D statues of comic superheroes and digital comic books, in coming weeks. 

The Spider-Man collectibles will be reportedly minted on Ethereum second-layer network, Immutable X.

NFT Sales Keep Soaring

Marvel’s Spider-Man collectibles come at a time where interest and sales in the NFT market are hitting the roof. Data from NonFungible shows that more than US$547 million changed hands in sales over the past 30 days and over US$42 million in the past 24 hours. 

CryptoPunks did US$172 million in seven-day volume, followed by Art Blocks and Meebits with US$57 million and US$17 million, respectively. 

NFTs certify ownership to rare or unique items on the blockchain. On July 21, Crypto News reported that one-of-a-kind 2017 painting CryptoMother, aka the “Crypto Mona Lisa“ would be auctioned by NFT STARS, an Australia-based NFT marketplace. The artwork is signed by Vitalik Buterin, co-founder of Ethereum, and previously attracted a bid of US$6 million in 2018. It can only go higher.

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Binance Crypto News Payments

Shopify Merchants Can Now Accept Crypto Payments Using Binance Pay

Leading crypto exchange Binance is set to build a crypto and fiat payment bridge that will enable Binance Pay users to send and receive digital currencies across several platforms, including Shopify. This follows the August 4 announcement of Binance’s partnership with Alchemy Pay, a crypto-fiat gateway technology. 

Binance Partners Alchemy Pay to Drive Crypto and Fiat Payment

Binance Pay launched in February to facilitate peer-to-peer and merchant-based transactions. As per the announcement, the fiat-crypto integration with Alchemy Pay will enable the millions of merchants on Shopify to accept payments in more than 40 different cryptocurrencies, including bitcoin.

Along with the e-commerce giant, the new service extends to other companies that support Alchemy Pay. These include the Canadian footwear brand ALDO, Hong Kong’s Pricerite, Singapore’s QFPay and Ce La Vi, and multinational Arcadier SaaS.

Binance Pay is available for all eligible users, and transactions on the platform are usually instantaneous. 

Alchemy Pay’s partnership with Binance for the Binance Pay wallet significantly expands the practical backbone applications we build between the crypto and fiat worlds.

John Tan, CEO, Alchemy Pay

Binance Ramps up Crypto to Fiat Payment

Binance is one of the big-name institutions in the cryptocurrency space, driving up the adoption of cryptocurrencies as a payment medium. In May, the exchange partnered with Travala to enable users to book and pay for hotel reservations using cryptocurrencies via Binance Pay. With over three million travel products, Travala was reportedly the first merchant to integrate the Binance Pay service.

Several businesses have showed interest in accepting crypto payments this year, following the increase in prices. In April, Crypto News reported that several Australian companies, including NBN Internet RSP Launtel, Dream PC Australia and Queensland Solar and Lighting, now allow customers to send payments using bitcoin and other cryptocurrencies.

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Blockchain Crypto News Crypto Staking Zcash

ZCash Founder Wants to Reduce Carbon Footprint with Proof of Stake

Electric Coin Co (ECC), the company behind the Zcash ecosystem, has hinted at moving the privacy cryptocurrency from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. 

Zcash founder Zooko Wilcox made this known in a recent blog post where he shared his opinion on why such a transition will benefit users.  

Wilcox Believes PoS will Make ZEC More Valuable

Zcash (ZEC) is a privacy-focused coin that currently runs on proof-of-work as it was forked from Bitcoin. PoW involves miners who compete to solve mathematical puzzles using intensive energy for newly minted coins as a reward. However, PoS is lighter and only requires validators who deposit their coin as collateral to verify transactions and secure the network.

Wilcox argues that moving Zcash to PoS will reduce downward pressure on the crypto, given there will no longer be miners who are bound to sell their coins to recover operating costs. He says that staking would add utility to ZEC and also encourage users to eventually become long-term holders.

The plan to transition ZEC to PoS also comes amid concerns around the intensive energy usage in PoW, which the court of public opinion believes endangers the planet.

Wilcox also mentions it was easy to maintain the security of a network with PoS as offenders or violators can be published without affecting the overall network.

While there are many who prefer PoW, I believe PoS would make ZEC more valuable to more people! The benefits are great, and they far outweigh the drawbacks and risks.

Zooko Wilcox, Zcash founder

Community Remains Unconvinced 

Some people, including Justin Ehrenhofer, are not in support of this. In a post on reddit, the crypto compliance analyst opined that transitioning ZEC to PoS indicates “they prioritise wealth over privacy“.

Ehrenhofer claims that 20 percent of the block rewards for the first four years were allocated to the founders. Thus, staking this massive number of coins will give them an advantage to earning new block rewards. He also notes that staking could impact the coin’s privacy.

It is not clear that shielded staking will be supported. If only transparent staking is supported, or if shielded funds must publicly share significant information to stake (which would make them more like transparent funds in effect), then Zcash will forever be largely transparent, not private.

Justin Ehrenhofer

In one of a series of tweets, Luxor CEO Nick Hansen also argued against the move, saying staking is a major centralising force:

What You Must Know

The ECC hasn’t yet finalised on transitioning Zcash to proof-of-stake. This is more like a proposal to understand which consensus mechanism the community believes adds more value to the Zcash network. It’s left for the community to decide whether the proposal should be passed. 

Whether Zcash itself changes is determined by whether the Zcash community chooses to run that software.

Zooko Wilcox

Regardless of the contradictions, there are already a good number of cryptocurrencies running on proof-of-stake. These include Tezos, Algorand, Cosmos, Cardano, and so on. The development also comes at a time when Ethereum is preparing to move to PoS. 

Crypto News Australia revealed this week that a major upgrade “London“ hard fork would be activated on the blockchain on August 4, preparing the path for Ethereum 2.0, which is based on PoS.

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Blockchain Crypto News Ethereum

Ethereum “London” Hard Fork Aug 4: Everything You Need to Know

August 4 sees the long-awaited London hard fork activated on the Ethereum blockchain. This is a significant upgrade that will improve the efficiency of transactions on the network, at least until Ethereum 2.0 (known as “Serenity”) is fully deployed in 2022.

The Ethereum London hard fork will introduce a deflationary model for Ether (ETH) – where half of the transaction fees will be burned. However, this isn’t too exciting for miners since it means a reduction in transaction fees paid to them.

Below is a quick summary of the five Ethereum Improvement Proposals (EIPs) included on the London hard fork:

  • EIP-1559: Change in Ethereum fee structure
  • EIP-3198: Improve the user experience of smart contracts
  • EIP-3529: Reduce refunds that had no impact
  • EIP-3541: Make future updates easier
  • EIP-3554: Make it easier to migrate to ETH 2.0 PoW to PoS

What ETH Token Holders Need to Know

If you’re holding ETH, then it won’t affect you too much.

All major exchanges are supporting the ETH hard fork. It seems uncertain at this time if a new coin will be created as part of the fork (as it was when BTC hard forked into BCH). There seem to be two scenarios:

  1. No new coin is created – everything will resume as normal.
    or
  2. A new coin is created – the exchanges will elect to choose the chain with the stronger hashrate and then create a 1:1 ratio distribution of your ETH holdings from the snapshot date of the fork.

If scenario 2) happens, then it could be likely you’ll end up with two ETH coin holdings that both have “value”. But it’s more likely that one of them might become useless and its dollar value will crash to zero.

You no longer need to select GAS price for transactions fees (it will be set automatically).

EIP-1559 will change the current transaction fee structure to a “base fee” for each block. This means there will be a fixed price for transactions so users don’t need to be pricing gas fees in order to increase the chances of having their transactions confirmed earlier. The blockchain will burn the fee, reducing the overall supply of Ether (ETH). This effect will create deflationary pressure on the cryptocurrency.

ETH deposits and withdrawals on exchanges will be paused until the upgrade is completed.

Binance will suspend ETH and ERC-20 tokens deposits and withdrawals at approximately 9:30pm AEST on August 5, 2021. Please ensure that you leave sufficient time for your ETH and ERC-20 tokens transfers to be fully processed prior to the above time. We will handle all technical requirements for users holding ETH and ERC-20 tokens on Binance. More information on specific trading markets affected here.

Some GAS tokens will now be useless and staking users may be refunded.

Among those assets affected by the hard fork will be Ethereum’s gas token GST2 and its improved version developed by the 1INCH team – CHI. Those gas tokens “will become useless after London”. Projects such as 1INCH that are using those gas tokens are implementing refunds to their communities.

This is a temporary upgrade until ETH 2.0 is released.

The PoS transition of Ethereum 2.0 is planned for 2022, so the implementation of the London hard fork is still time-limited and temporary. Developers are working on scaling up the ethereum network by adding more side networks and linking them. Ethereum insiders hope this will reduce congestion and transaction costs.

Ethereum Community Reaction to Ethereum 2.0

It’s evident that Ethereum users are optimistic about Ethereum 2.0, judging by the rapid increase in the number of coins staked on the deposit contract. At the time of writing, 6,681,276 ETH had been staked so far, equivalent to US$16.6 billion.

In anticipation of the upcoming upgrade on the network, Ethereum whales are increasingly accumulating ETH:  

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Australia Bitcoin Crypto News Payments

Square’s $39 Billion Afterpay Purchase to Expand BNPL Crypto Services in Australia

US-based financial services company Square Inc has entered an agreement to acquire Australian fintech firm Afterpay Limited. Both companies will integrate their businesses under the agreement, which will eventually enable Aussie users on Afterpay to make bitcoin purchases on a “buy now, pay later“ (BNPL) basis. 

Square to Integrate Afterpay Services on Cash App

Under the so-called “Scheme Implementation Deed“, Square agreed to acquire all Afterpay’s issued shares (ASX: APT) for an implied value of A$39 billion (US$29 billion), as per the announcement. 

Square CEO Jack Dorsey said his company would connect its Cash App and Seller ecosystem with Afterpay to offer more effective services and products for consumers and merchants.

This integration further extends Cash App services to Afterpay users, which means Australian users on the platform will benefit from different financial tools offered by Cash App, including bitcoin purchases, money transfers, cash boosts and others.

The addition of Afterpay to Cash App will strengthen our growing network of consumers around the world while supporting consumers with flexible, responsible payment options. Afterpay will help deepen and reinforce the connections between our Cash App and Seller ecosystems and accelerate our ability to offer a rich suite of commerce capabilities to Cash App customers.

Brian Grassadonia, Cash App lead, Square

If certain closing conditions for the deal are met, the transaction will be finalised in Q1 2022. On completion, the co-founders and co-CEOs of Afterpay will join Square to spearhead the services of the Aussie company under the Cash App and Seller ecosystem. Also, one of the execs at Afterpay is expected to join Square’s board.

Square’s Relationship with Crypto

Led by Jack Dorsey, Square has been an active player in the crypto space. It enables people to buy and sell cryptocurrencies via the Cash App, which recorded about US$3.5 billion bitcoin revenue in Q1 2021. Early in June, Dorsey disclosed on Twitter that Square was seriously considering developing a bitcoin wallet to support the community. 

In addition, Square has invested over US$200 million in Bitcoin, rating it as one of the top corporate Bitcoin corporate investors.

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Bitcoin Crypto News Institutions Investing

$7 Billion Fund Manager Bets on Bitcoin to Protect Against Rising Inflation

Horizon Kinetics, one of the best-performing fund managers in the US this year, chooses Bitcoin (BTC) as one medium to protect its investors against currency debasement. 

In an interview with the Financial Times, Peter Doyle, one of the co-founders of the US$7 billion investment company, expressed concern over rapidly growing debt fuelled by government response to the Covid-19 pandemic. Doyle fears this will eventually result in global inflation, which is why investors need to protect their portfolios.

There is no turning back after the pandemic and globally there is a debt problem, and it means either default or currency debasement.

Peter Doyle, Horizon Kinetics

Horizon Bets on Bitcoin and Property

Horizon Kinetics is betting on property and Bitcoin to protect its investors, according to the Financial Times article. Bitcoin has a limited supply of 21 million, and therefore it is bound to be scarce. 

People should have exposure to the asset class.

Peter Doyle

Having reportedly invested one percent of its Paradigm fund to Grayscale Bitcoin Trust in 2016, today Horizon’s Bitcoin investment represents a tenth of the fund. The company offers investors exposure to Bitcoin via the fund, which as of July 26 had gained 47.76 percent despite the recent market crash.

Bitcoin has garnered lots of attention, especially from institutional investors, for the sole purpose of hedging against inflation. This is the same reason that drew MicroStrategy to Bitcoin, and it is currently the largest corporate BTC investor. US Senator Cynthia Lummis also believes in Bitcoin as a safe haven and hopes to bring BTC to the “national conversation”. 

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China Crypto Exchange Huobi Regulation Trading

Huobi and OKEx Exchanges Dissolve China Entities, Moving Overseas

Amid rising regulatory pressure in China, major cryptocurrency exchanges Huobi and OKEx have decided to discontinue their entities based in the PRC. However, this won’t affect the main crypto trading activities of both exchanges.

Huobi, OKEx Dissolves Local Companies in China

In accordance with publicly available information, the stakeholders of Beijing Huobi Tianxia Network Technology Ltd agreed to dissolve the entity on July 22. Founded in 2013, Beijing Huobi is the company that operates the Huobi exchange in China. It is reportedly 70.52 percent-owned by the CEO of Huobi Group, Li Lin.

Beijing Huobi will be dissolved in about 45 days from the aforementioned date, and all the clearing and liquidation processes will be reportedly handled by Huobi Group’s CEO. 

The reason for dissolving Beijing Huobi is assumed to be the regulatory uncertainty and recent crackdown on crypto mining and trading activities in China. However, Huobi said the entity hasn’t conducted any business operations. 

Because this entity has not had any business operations, it is unnecessary and has applied for cancellation.

Huobi exchange

This comes a month after OKEx exchange also dissolved a Chinese subsidiary. Beijing Lekuda Network Technology Co was founded to operate OKEx services in China. However, a decision was made on June 24 to dissolve the company.

Could We See Exchanges Become Decentralised?

Major crypto exchanges have been making several adjustments to their services of late, which suggests that a whole new wave of regulatory security may be under way. Earlier this week, the largest crypto exchange, Binance, announced the reduction of the maximum leverage for Futures trading to 20x, likewise FTX exchange. 

It is likely some crypto platforms may decentralise operations as the industry becomes immersed in stringent regulatory pressure. This month, non-custodial crypto exchange ShapeShift revealed plans to completely decentralise its operations.

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Blockchain Crypto News E-commerce NFTs

Shopify Merchants Can Now Sell NFTs Directly on the Platform

Popular e-commerce platform Shopify is gradually tapping into the non-fungible tokens (NFTs) trend. In a recent tweet, president Harley Finkelstein mentioned that Shopify merchants can now sell NFT content directly from their online stores. 

At the moment, this offering is only available for a limited number of merchants. “A select few for now. Stay tuned,“ the president said. 

Chicago Bulls to Debut First NFT Sale on Shopify

According to Finkelstein, the Chicago Bulls basketball team will be hosting one of the first NFT collection sales under Shopify. The so-named “Bulls Legacy Collection” will be a limited edition offering to highlight the team’s six World Championship rings and NBA titles. 

The Chicago Bulls NFTs were minted on Dapper Labs’ Flow blockchain, and “no more than” 567 will be minted. 

Before Shopify offered this capability, merchants would have to sell through a third-party marketplace [with] less control of the sale and customer relationship. Once again, we are putting the power back into the hands of merchants and meeting customers how and where they want to buy.

Shopify president Harley Finkelstein

Shopify Keeps Drawing Close to the Crypto Space

Shopify is one major e-commerce company that has tried to blend into cryptocurrency trends. Since 2014, the company has been supporting crypto integrations. As recently as April 6, Shopify CEO Tobi Lutke showed interest in DeFi, asking for opportunities and suggesting the role the company could play in the decentralised finance space. 

Last year, Crypto News Australia reported that Australian developer Jeronimo Backes was working on an integration that will enable Shopify stores to accept payments easily in Cardano (ADA).

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Bitcoin Crypto News Markets

$1.1 Billion in Bitcoin Shorts Liquidated as BTC Reclaims $38,000

The crypto market is becoming euphoric following the sudden increase in the price of Bitcoin. BTC reportedly touched US$40,000 on July 25 and is currently trading at US$38,632 on CoinMarketCap.

It’s been about six weeks since Bitcoin was seen above the US$39,000 price level, and this has got many bears squeezed. 

Over $1 Billion in Bitcoin Shorts Liquidated in 10 Minutes

On-chain analyst Will Clemente tweeted that about US$111 million worth of Bitcoin short positions were liquidated in about 10 minutes. These are traders who got over-leveraged as BTC suddenly crossed US$38,000. 

A further glance at ByBt’s liquidation data confirmed that about US$1.02 billion worth of Bitcoin shorts were liquidated in 12 hours leading up to press time, and US$1.11 billion within the previous 24 hours from nearly 100,000 crypto traders.

The largest single liquidation was US$29.3 million on the Huobi exchange, according to Bybt. 

Are the Bulls Back in the Paddock?

Bitcoin hasn’t made this quick a move in some weeks, if not a month. Thus many people in the market have high hopes that the bulls are back in control. 

Since hitting an all-time high above US$63,000 in April, Bitcoin dropped by more than 40 percent as the bears took over the market. Some factors or developments, such as the Chinese ban on miners, may have contributed to the bearish state of the market. However, a lot of short-term holders lost confidence in the market as their positions went underwater. 

This led to increased panic-sells, especially among those short-term holders. Although the current price of Bitcoin looks bullish, some traders await a US$40,000 to $42,000 price as confirmation of the presence of bulls.

Bitcoin Reacts to Bullish News

Notionally, the price of BTC has been green for most of the time after Elon Musk and Jack Dorsey discussed Bitcoin at last week’s ‘B Word’ conference. At the time, Musk revealed that he personally owns Bitcoin, including SpaceX and Tesla. He also mentioned that Tesla might reconsider accepting payments in BTC for the second time.