Category: Bitcoin

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Bitcoin Crypto News Russia

Sanctions-Hit Russia Considers Accepting Bitcoin for Oil

According to Russia’s chairman of the Congressional Energy Committee, Pavel Zavalny, the federation is open to accepting bitcoin for its natural resources exports.

Russia Pressured to Find Alternative Solutions

Amid global economic sanctions and a rapidly depreciating national currency, Russia has found itself under significant economic pressure, requiring it to consider creative solutions to keep its economy afloat.

Since Russia exports around 10 percent of the world’s oil and about 40 percent of Europe’s natural gas, the sanctions imposed have dealt a blow to both the federation and global citizens alike. As Russia’s critical revenue source has all but dried up, everyday people are feeling the pain as global energy prices have skyrocketed. In response, Russia has resorted to accepting different currencies for its natural resources.

Russia Retaliates

According to a press conference translation, Zavalny suggested that Russia was open to accepting different currencies for its exports, though the method would depend largely on the preference of the buyer and the importing country’s relationship with Russia:

When it comes to our ‘friendly’ countries, like China or Turkey, which don’t pressure us, then we have been offering them for a while to switch payments to national currencies, like rubles and yuan. With Turkey, it can be lira and rubles. So there can be a variety of currencies, and that’s a standard practice. If they want bitcoin, we will trade in bitcoin.

Pavel Zavalny, chairman, Russian Congressional Energy Committee

The news comes after President Vladimir Putin announced earlier this week that so-called “unfriendly” countries would need to pay for Russian gas in rubles.

Harsh Measures Call For Hard Money

In his press conference, Zavalny echoed these sentiments in relation to “unfriendly countries”, saying: “When we exchange with Western countries … they should pay in hard money. And hard money is gold, or they must pay in currencies which are convenient for us, and that is the national currency – rubles.”

It’s been argued that when the G7 nations confiscated Russia’s US$700 billion in reserves, it marked the beginning of a “new monetary world order“. Whether you agree with that assessment or not, geopolitics quite clearly has had an impact. We may conceivably be witnessing the demise of the petrodollar in real-time and simultaneous emergence of a world where commodities are priced in hard assets.

While it may have been viewed as somewhat fanciful in years gone by, it is not entirely improbable that bitcoin will emerge in the coming decade as a pristine global reserve asset. At least, that’s what Bitcoiners such as Greg Foss think:

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Bitcoin Bitcoin Mining Crypto News

US Energy Giant ExxonMobil is Mining Bitcoin With Natural Gas 

ExxonMobil is diverting some of the natural gas it has no use for to power cryptocurrency mining operations in North Dakota. The oil and gas behemoth has partnered with Crusoe Energy Systems to convert the gas into mobile generators used for mining operations onsite:

It’s a Win-Win Situation

Launched in January 2021, the joint company is already looking to set up similar operations in Alaska, Nigeria, Argentina, Guyana and Germany, according to Bloomberg. In October last year, Texas led the way in using natural gas flares for mining bitcoin.

The project uses excess natural gas that would have been burned off via the flaring process and is now being put to use to help energy-intensive crypto mining operations find a source of power that would otherwise be wasted. Flared gas will be provided to bitcoin miners at other sites across the globe:

Crusoe Energy Systems is the pioneer of using wasted gas to power bitcoin mining operations and is now taking gas from an oil well pad in the Bakken shale basin of the northern US to power mobile generators used for bitcoin mining operations.

Crusoe Energy is now globally recognised for its “innovative” solution to flaring, which has become standard industry practice due to a lack of transportation infrastructure.

Twitterverse Goes Off in Response

According to ExxonMobil spokeswoman Sarag Nordin, “[We] continuously evaluate emerging technologies aimed at reducing flaring volumes across our operations.” She added that the company’s emissions reduction plan was expected to achieve World Bank Zero Routine Flaring by 2030.

The Twitterverse went crazy when the news was published:

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Bitcoin Crypto News Terra TerraUSD

Terra Founder Outlines Plans to Buy $10 Billion in BTC

Three weeks ago, the Luna Foundation Guard announced it would be buying US$1 billion in bitcoin to help restore “peg parity” between its decentralised stablecoin TerraUSD (UST) and the US dollar.

Terra’s founder has now decided to go one step further and declared his intention to acquire up to US$10 billion in bitcoin:

Refresher on UST and BTC

For those unclear as to how bitcoin fits within the context of a decentralised stablecoin such as UST, it’s worth going back to an earlier statement by the LFG Foundation:

As an algorithmic stablecoin, UST’s peg is maintained by a series of open market operations, arbitrage incentives, and countercyclical levers within the Terra protocol to offset market forces pushing the UST peg above or below one USD. LUNA, Terra’s reserve, staking and governance asset, retains an elastic supply to help neutralise directional market pressures impacting the peg.

LFG Foundation announcement

In short, bitcoin is used to restore the UST’s peg parity to the US dollar at times when there are protracted market sell-offs.

Terra Founder Reveals Plan Details

In a Twitter Spaces conversation with renowned crypto troll, Udi Wertheimer, Terra co-founder Do Kwon revealed plans to back UST with bitcoin:

Haven’t been following up with the exact numbers ’cause transactions we generally do this over OTC, but the current clip that we have to buy big coin is about $3 billion [referring to bitcoin] and we will add to that.

Do Kwon, Terra co-founder

He added that “out of that 3 billion, most of it we haven’t bought yet”. Do Kwon went on to describe the move as a “new monetary era of the Bitcoin standard”:

Naturally, there was a lot of excitement across crypto Twitter:

However, some of the more experienced market participants, including Bitcoiner Adam Back, had more questions. He asked, “Where is the $10 bil coming from?”, to which Do Kwon responded:

It’s not 10B today – as UST money supply grows, a portion of the seigniorage will go to build BTC reserves bridged to the Terra chain. We have 3B funds ready to seed this reserve, but technical infrastructure (bridges etc) is still not ready yet.

Do Kwon, co-founder of Terra

Details remain somewhat muddied and it’s not clear whether even Do Kwon has all his proverbial ducks in a row, having conceded at the end of the Twitter Spaces conversation: “I said more than I shoulda”.

Initial Acquisition More Like $3 Billion

While plans are to acquire US$10 billion in total, as noted by Do Kwon the initial acquisition will be US$3 billion. Eagle-eyed on-chain analysts have already seen evidence of buying with US$125 million already bought, and another tranche of US$125 million imminent:

If Terra’s plans go through as intended, it would become one of the largest bitcoin holders, more so than every corporate outside of MicroStrategy with its 125,051 BTC stash.

Whatever one’s thoughts are on algorithmic stablecoins such as UST, or Terra itself, it’s undeniable that using bitcoin as a tool to maintain peg parity is a unique approach that remains untested. At the very least, it introduces some excitement at a time when the market appears to be in a sideways consolidation phase.

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Bitcoin Crypto News

Malaysian Minister Calls for Bitcoin and Crypto to be Made Legal Tender

To the surprise of many, Malaysia’s Deputy Minister of Communications and Multimedia has broken ranks and called for bitcoin and other cryptocurrencies to be adopted as legal tender in the South-East Asian nation.

Mixed Messages?

A few short weeks ago, Malaysia’s Deputy Finance Minister indicated that digital assets “do not exhibit characteristics of money” and were therefore not suitable as a method of payment.

Now, the country’s Communications and Multimedia Ministry, which oversees the digital and technology sectors, has called for the government to allow cryptocurrencies as legal tender:

We hope the government can allow this.

Zahidi Zainul Abidin, Deputy Minister, Communications and Multimedia

While financial regulation falls under the Finance Ministry, the Ministry of Housing and Local Government also has jurisdiction over “digital financial activities”, according to Zahidi. 

Interestingly, an opposition party known for its progressive politics has backed the Ministry’s call to declare cryptocurrencies as legal tender:

Statement of support by Parti Bangsa. Source: Unthink

An ‘El Salvador Moment’ Unlikely

Despite positive signs, there are no clear indications that the government will shift its conservative stance towards digital assets.

Last September, the country joined forces with the Bank for International Settlements, Australia, Singapore and South Africa to test the use of central bank digital currencies (CBDCs) for international settlements via a shared platform in a project dubbed Project Dunbar.  Then, in January, the central bank confirmed it was exploring CBDCs but has not yet adopted a formal position on the status of digital assets.

It’s been more than six months since El Salvador adopted bitcoin as legal tender and rumours abound that Honduras might be next, with a possible announcement expected within the week.

If there is going to be a nation declaring bitcoin as legal tender, it is likely to be an over-indebted developing nation with little to lose. As a conservative nation in a comparatively strong fiscal position, the incentives for Malaysia to adopt bitcoin at this juncture are probably limited. However, with that said, if we’ve learnt anything over the past two years, anything is possible.

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Banking Bitcoin Crypto News Trading

US Bank Facilitates First Over-The-Counter Bitcoin Transaction

Goldman Sachs (GS) has become the first financial institution to make an over-the-counter (OTC) crypto options trade as it expands its digital assets team. GS has partnered with Galaxy Digital, a New-York based cryptocurrency investment firm, on the bank’s Bitcoin futures trading desk, which facilitated the transaction.

The digital asset trading unit at GS made its OTC crypto transaction in the form of a bitcoin non-deliverable option (NDO). An OTC Bitcoin NDO means that GS has essentially bought a contract betting on the future price of Bitcoin, rather than buying the digital asset itself. GS also added another digital assets VP to its team.

The company describes the move as a sign of maturity of the asset class in the eyes of institutional players. According to Damien Vanderwilt, co-president and head of global markets at Galaxy Digital:

We are pleased to continue to strengthen our relationship with Goldman and expect the transaction to open the door for other banks considering OTC as a conduit for trading digital assets.

Damien Vanderwilt, co-president and head of global markets, Galaxy Digital

Options Trading On the Rise

The move also follows the investment banking giant becoming more involved in the crypto space after restarting its bitcoin trading desk in March last year. Options trading has become an increasingly popular way of investing in crypto. Instead of traders buying and selling digital assets, they buy and sell contracts that bet on the prices of the assets.

Goldman Sachs Gets Bullish on Bitcoin

After the exciting news of the OTC NDO was announced, we see GS becoming ever more bullish on Bitcoin. Earlier this year, it released a note to its investors saying that a US$100,000 price tag for bitcoin is possible this year if it continues to erode gold’s utility as a store of value.

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Bitcoin Coinbase Crypto News Cryptocurrencies Cryptocurrency Law Tokens

Coinbase Dragged into a Class Action Lawsuit for Selling 79 ‘Unregistered Securities’

One of the world’s leading digital asset exchanges has once again landed itself in hot water. This time it has been hit with a class action lawsuit which, among other things, claims that it sold 79 different digital assets that constituted “unregistered securities”:

‘Howey Test’ is Back

Legal proceedings have been launched by three users who accuse Coinbase of selling unlicensed securities and are seeking damages amounting to at least US$5 million on behalf of themselves, in addition to others who have purchased Dogecoin, Solana, Cardano, and more than 70 other tokens listed in the claim.

The suit argues that although some digital assets such as Bitcoin closely resemble commodities, in that they are decentralised, others are more akin to traditional securities (or shares).

The plaintiffs argue that the manner in which some tokens were offered to the public was in fact modelled on an IPO (initial public offering), which necessarily requires a significant amount of disclosures. In the case of the tokens in question, it was argued that disclosures were extremely limited, typically in the form of a “whitepaper” supplemented with adverts and social media posts.

In short, the argument is that the tokens constitute “securities” as defined by the “Howey test”, which requires that all four elements be met on the following criteria:

  1. It involves an investment of money;
  2. It has a common enterprise;
  3. It was made with a reasonable expectation of profits; and
  4. It is derived from the entrepreneurial or managerial efforts of others.

This test, originating from a 1946 Supreme Court decision, is all too familiar for the Securities and Exchange Commission (SEC), which recently began looking into the question as to whether some NFT drops pass this test.

Case ‘Not Much of a Surprise’

Philip Moustakis, counsel at Seward & Kissel for Coinbase, suggested that “the case is not much of a surprise. After all, the SEC has signalled that it intends to pursue investigations or actions against crypto-exchanges.”

He added that the court would need to do the painstaking one-by-one examination of each of the tokens, highlighting the need for greater regulatory clarity:

Unless and until the SEC provides further guidance and a path to compliance for token issuers, crypto lending products, exchanges, and other market participants, the question of whether any particular crypto-asset or transaction is a security will be litigated one at a time.

Philip Moustakis, senior counsel, Seward & Kissel

Having felt the heat of regulatory scrutiny over its lending product, this latest lawsuit comes as another blow to Coinbase. The lawsuit may well have far-reaching consequences given that it aims to cover all persons and entities who transacted in any of the 79 tokens between October 8, 2019, and the present.

From an outsider’s perspective, this case may just be what is needed to finally put the question to rest as to whether some tokens are “unregistered securities”. Michael Saylor, the unofficial King of Bitcoin, clearly believes that most will:

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Bitcoin Crypto News Economics

El Salvador’s Bitcoin-Backed Bonds Set to Roll Out Despite Geopolitical Turmoil

Late last year, El Salvador announced plans to raise US$1 billion using bitcoin-backed bonds. Half of the proceeds would go towards building “Bitcoin City”, with the other half going towards acquiring more bitcoin to add to the country’s balance sheet.

The launch was scheduled for this week, but geopolitics had other plans:

Rollout Happening, but Timing Unclear

According to a Reuters report, El Salvador is looking for the right timing to launch its controversial bitcoin-backed bonds, which apparently could happen sometime between now and March 20, although delays are expected.

We believe that between March 15 and 20 is the right timing; we have the tools almost finished. But the international context will tell us … I didn’t expect the war in Ukraine.


Alejandro Zelaya, finance minister, El Salvador

Finance minister Alejandro Zelaya added further that “we’re still finishing some details, [but] almost everything is ready”:

Uncertainty Prevails

Analysts have had a difficult time predicting the likely demand for the bitcoin-backed bonds, given that sparse details have been provided. It also seems that since the initial announcement, the goalposts have been somewhat shifted:

These bonds started as a sovereign bond; now, it is a securitised corporate bond, which raises the question of success.

Nathalie Marshik, head of emerging markets sovereign research, Stifel Financial

Rather than being issued by the state, reports indicate that the bonds will instead be issued by a state-owned energy company, LaGeo:

It has been argued elsewhere that El Salvador’s radical moves are in large part motivated by a desire for the nation to regain its financial independence from creditors, including global organisations such as the International Monetary Fund (IMF):

Despite El Salvador recording 10 percent GDP growth in 2021 and an increase of 30 percent in tourism over the same period, persistent fiscal deficits and high debt service are leading to large and increasing financing needs.

Republic on an ‘Unsustainable Path’

El Salvador’s adoption of bitcoin as legal tender has always been viewed as controversial and in fact led to a credit rating downgrade of the nation’s sovereign debt. In a January statement, the IMF called on El Salvador to limit the scope of the bitcoin legal tender law, describing the country as being on an “unsustainable path”.

Whatever your view of El Salvador’s embrace of bitcoin, it’s self-evident that President Nayib Bukele is making bold moves, which could end up disturbing the legacy financial system as we know it.

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Bitcoin CBDCs Crypto News

Deloitte Claims Bitcoin Could Help Governments Create Cheaper CBDCs

A new report from financial services giant Deloitte has highlighted the potential of Bitcoin to form the base of a cheaper, faster and more secure ecosystem for digital fiat and central bank digital currencies (CBDCs).

Comparison between state-sponsored crypto and Bitcoin. Source: Deloitte

Existing Problems Recognised

Deloitte’s report acknowledged the need for a total revamp of the current fiat financial system, suggesting it was “slow, error-prone and expensive relative to performance in other high-tech industries”.

At its core, the report highlights five areas where leveraging the qualities of Bitcoin may be able to improve the current system. In fact, in 2015 the US Federal Reserve released a paper outlining its goal to “improve the speed and efficiency of the payment system from end-to-end over the next decade”. Its key outcomes included:

  1. speed – ubiquitous, safe, faster electronic solution(s);
  2. security – very strong security and high levels of public confidence;
  3. efficiency – reduce the average end-to-end (societal) cost of payment;
  4. cross-border payments – affordable international transfers; and
  5. collaboration with other payment participants – widespread participation with all payment participants.

Deloitte Offers Hybrid Solution

Having identified the problems, Deloitte continues to offer its solution – a blend of the best attributes of Bitcoin and newly established CBDCs and digital fiat.

This, Deloitte argues, would cut costs, reduce errors, increase speed, and simultaneously maintain the privacy and anonymity of user transactions.

Comparison of CBDC and BTC. Source: Deloitte

Throughout the report, much of the emphasis rested on one of Bitcoin’s most widely acknowledged value propositions – genuine decentralisation:

With the capacity to do so without relying on a centralised entity for day-to-day operations, whether commercial or federal, the effect might be really transformative.

Deloitte report

The report argued that Bitcoin was not a substitute for CBDCs and vice versa – instead, they would co-exist and provide greater consumer choice:

Bitcoin could ultimately spawn a series of new opportunities that would transform the current payments system into one that is faster, more secure, and less expensive to run.

Deloitte report

While this isn’t Deloitte’s first venture in the crypto ecosystem, the report has caused some controversy. How do you integrate the best qualities of a decentralised, uncensorable fixed supply digital asset such as Bitcoin with a centralised, unlimited supply CBDC?

Arguably this is impossible given that in many respects, they represent the antithesis of each other. Well, that seems to be what Bitcoiners think:

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Bitcoin Bitcoin Mining Digital Asset Mining Europe Mining

BTC Holders Breathe Sighs of Relief as EU Parliament Votes Against Proof-of-Work Ban

In yet another unexpected twist in the ongoing European cryptocurrency regulation saga, the EU Parliament has officially removed all language banning proof-of-work (POW) cryptocurrencies from the newly passed Markets in Crypto Assets (MiCA) directive. 

EU Goes Back and Forth on POW

The crypto industry was initially concerned about a draft of the MiCA bill that included provisions banning POW cryptocurrencies such as Bitcoin. It then reversed course following a strong backlash, claiming it “wasn’t their intention to create a de facto Bitcoin ban”.  But then things changed, again.

In a classic last-minute insertion of dangerous far-reaching language, reminiscent of last year’s US$1.2 trillion infrastructure bill, provisions banning POW cryptocurrencies were once again inserted into draft bill.

Even though research shows that Bitcoin mining emissions are at “inconsequential levels”, policymakers nonetheless felt it necessary to highlight so-called “unsustainable” crypto mining practices, a clear attempt if ever there was one at appeasing ESG stakeholders.

Crypto lawyer Jake Chervinsky had his doubts about the true intentions of lawmakers and didn’t mince his words:

Nathaniel Whittemore, host of The Breakdown podcast, suggested in his latest episode that environmental concerns are likely more about Bitcoin using energy at all:

My point is that fundamentally, the key thing that any environmental consideration of Bitcoin or proof-of-work is going to rest on, is not whether other things consume more energy, it’s whether the energy that Bitcoin does consume in the first place, is worth it.

Nathaniel Whittemore, host of The Breakdown podcast

POW Provisions Rejected … For Now

After the surprise inclusion of the POW provisions, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) rejected versions of the legislative package that contained a “de facto” ban on POW cryptocurrency mining by a count of 32 to 23 – with six individuals abstaining.

While commentators breathed a sigh of relief, Patrick Hansen of Unstoppable DeFi was quick to pour cold water on the notion that the battle was over:

Any chances left for the POW-ban? The groups that lost the vote have one last option. They could veto a fast-track procedure of MiCA through the trilogues and bring the discussion to the plenary of the Parliament. They need 1/10 of the votes of the EP to do so, which they have. That would bring the discussion around POW into the high-level policy arena. As we can’t predict how that would play out, it should be prevented. Even if it doesn’t change the vote on POW, it would unnecessarily delay the regulation for at least a couple of months. And even outside of this MiCA regulation, the discussion around POW-regulation is far from over. It will come back in the context of the sustainability taxonomy or in the upcoming data centre regulation.

Patrick Hansen, head of strategy & business development, Unstoppable DeFi

Hansen concluded by saying there is still “loads of work left in the month and years ahead, but today is a big political success for crypto in the EU”.

Bitcoin holders, miners and other POW cryptocurrencies might have won the battle, but clearly the war is far from over.

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Bitcoin Crime Crypto Wallets

BTC Mixer ‘CoinJoin’ Starts Blacklisting BTC Linked to Illegal Activity

The CoinJoin coordinator that facilitates the coin mixing functionality built into the privacy-focused Wasabi Wallet has started blacklisting accounts linked to criminal activity, in a move seen by many in the crypto industry as a blow to user privacy:

Essentially this means that Bitcoin addresses that have been linked to criminal activity in the past will be prevented from using the CoinJoin functionality offered by Wasabi Wallet.

Blacklists to Prevent Legal Trouble

According to blockchain analytics firm Elliptic, Wasabi Wallet’s CoinJoin functionality has likely been used numerous times in high profile thefts and scams to evade authorities. 

Apparently this illicit usage has concerned Wasabi Wallet’s parent company zkSNACKS. According to a series of tweets from one of its developers, the decision to implement blacklists on their CoinJoin coordinator is a bid to avoid legal and regulatory trouble:

In response to the move, Bitcoin users have aired concerns that it may impact their privacy and result in a slippery slope where legitimate use ends up being targeted by authorities:

Across the broader crypto market, privacy protocols have seen a growth in popularity recently, with the Ethereum-based mixer Tornado Cash surging 94 percent following recent updates.

What is CoinJoin?

CoinJoin is an open-source mixing protocol for the Bitcoin blockchain which allows users to perform anonymous transactions known as CoinJoins. 

CoinJoins create anonymity by obscuring the source and destination addresses used in the transaction – this process is also known more generically as coin mixing. CoinJoin coordinators play a vital role in finding users to participate in transaction pools and ensure anonymity.

CoinJoin Available on Alternative Services

Users do not need to use Wasabi Wallet to perform a CoinJoin transaction. While it is one of the most popular providers of the functionality, numerous other wallets and dedicated mixing services also offer automated CoinJoin functionality. 

Users can manually perform a CoinJoin, though this is difficult and requires advanced technical knowledge.