Category: Bitcoin

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Banking Bitcoin Crypto News Regulation

SEC Chairman Admits: Bitcoin Competes With the US Banking System

At the Digital Asset Compliance and Market Integrity Summit held in New York on December 1, Securities and Exchange Commission (SEC) chairman Gary Gensler finally admitted that Bitcoin is a competitor to the US banking system and its worldwide consensus.

Regulation at the Heart of Discussion

At the event, Gensler joined former SEC chairman Jay Clayton for a broad discussion of the burgeoning crypto sector. Gensler saw his responsibility as mitigating risks of a “spill in Aisle 3”, which may be caused in his view by a financial instability event, stablecoins, the lending sector, or “by the investing public getting hurt by fraudsters or good-faith actors promoting and raising money”.

Gensler repeatedly referred to the sector as the “Wild West” and argued that “whether it’s a trading platform or token, [they] are not going to evolve well outside of the tenets of public policy”. His main concern articulated related to the asymmetry of information:

At the core of our bargain in the securities markets is: investors get to decide what risks they want to take. But the people raising the money, the issuers, should share full and fair disclosure.

Gary Gensler, SEC chairman

On Bitcoin

In his conversation, Gensler drew a distinction between Bitcoin and digital assets, recognising that in the case of the latter, many projects exhibited securities-like qualities.

Repeating prior comments, he reiterated his position that Bitcoin’s innovation was real in that it was “about money and ledgers” and enabled 24/7 instantaneous, transparent and final settlement. He then went on to describe Bitcoin as an “off-the-grid” alternative to the traditional financial system:

We layered over our digital money system about 40 years ago with money laundering and various sanctions and regimes around the globe; we layered that over a digital currency system called our banking system. In 2008, Satoshi Nakamoto wrote this paper in part as a reaction, an off-the-grid type of approach. It’s not surprising that there’s some competition [Bitcoin] that you and I don’t support but that’s trying to undermine that worldwide consensus.

Gary Gensler, SEC chairman

When Gensler was appointed, Bitcoiners were optimistic as he seemed to appreciate the distinction between bitcoin and altcoins.

However, even if his latest pronouncement is disappointing to Bitcoiners, it’s difficult to argue that Bitcoin isn’t threatening US dollar hegemony. Gensler’s sentiment is also shared by Hillary Clinton, who recently described Bitcoin as “undermining the dollar“.

Shifting towards a “Bitcoin Standard”, like El Salvador, is what broadcaster Max Keiser has termed a “speculative attack against the US dollar”.

So far it seems to be working. And perhaps for that reason, Gensler’s concerns are well-founded.

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Bitcoin Crypto News Investing Tokens

STX Token Shoots Up 65% Following Jack Dorsey’s Exit: Coincidence?

The Stacks Network (STX) token has spiked nearly 65 percent in the past week, half of which came after the announcement that CEO Jack Dorsey was resigning from his position at Twitter. Some in the investor community cite Dorsey’s decision to step down as the instigator for the price movement.

STX Token Price. Source: Tradingview

In the past four days, the STX price has risen nearly 65 percent to its new all-time high of US$3.61 and at the time of writing had cooled down to US$2.60, according to data from CoinMarketCap. On the day of the Twitter announcement, the price shot up 25 percent, pointing to some sort of correlation for some in the investing community.

Dorsey’s Connection to Bitcoin

While the reason for the spike is not cut and dried, multiple things have happened that could impact the increasing price of the token. The speculation around what Dorsey will do next is one of the driving factors – now that the ex-Twitter CEO has stepped down, will he pursue his passion for Bitcoin and decentralisation?

“If I were not at Square or Twitter, I’d be working on Bitcoin,” Dorsey said at Bitcoin 2021, a conference held in Miami in June. The tech entrepreneur has shown his interest in blockchain technology multiple times. Even at Twitter, Dorsey spearheaded Bluesky – a project aimed at turning the social media company into a decentralised protocol.

Upgrades Coming to STX

Among the other reasons for the price spike, Stacks Network recently announced a major upgrade (SIP-012), due December 12. The improvement proposal aims to increase the network capacity by 100 percent as well as launch its CrashPunks non-fungible token (NFT) collection. The Stacks NFT marketplace has also contributed to the protocol’s rallying price action in the past.

Bitcoin, being the first of its kind, was not built with smart contract capabilities, therefore to utilise new functionality such as DeFi and smart contracts, a protocol will need to plug into Bitcoin.

Co-founded in Princeton University’s computer science department in 2013, Stacks Network is a layer 1 network facilitating smart contracts that settle on the Bitcoin blockchain. The STX token acts as fuel to power those smart contracts on the network, and by staking STX and supporting consensus, participants are paid in BTC.

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Bitcoin Crypto News Social media

Jack Dorsey Going All-In on Bitcoin After Resignation from Twitter?

Running a public company is challenging enough but up until yesterday, Jack Dorsey was running two – Twitter and Square. After resigning from Twitter with immediate effect, the platform he helped create was abuzz with rumours as to what he had planned next.

Dorsey Leaves the Company He Created

In a tweet characteristic of his laid-back and often understated approach to doing business, he elected to make his resignation email public to the broader community:

Dorsey noted that he felt that being “founder-led” was “severely limiting and a single point of failure”. Parag Agrawal, a former engineer who had worked his way up the ranks over the past 10 years to become CTO, became CEO with immediate effect.

Aside from stepping away from operations, Dorsey also committed to resign from the board to “give Parag the space he needs to lead”.

I’ve decided to leave Twitter because I believe the company is ready to move on from its founders. My trust in Parag as Twitter’s CEO is deep. His work over the past 10 years has been transformational. I’m deeply grateful for his skill, heart, and soul. It’s his time to lead.

Jack Dorsey

Speculation as to Dorsey’s Plans

It has been well-known that Dorsey is a massive advocate for Bitcoin, having uttered the now-famous words at the Bitcoin 2021 conference: “I don’t think there is anything more important in my lifetime to work on”.

From running his own Bitcoin node to rolling out Bitcoin tips on Twitter, to putting Bitcoin on Square’s balance sheet and investing in solar-powered Bitcoin mining, Dorsey is clearly inspired by Bitcoin and its potential to drive change in the world.

Despite this, some have speculated that Dorsey is looking to move into the Web 3.0 space, particularly in light of Twitter’s recent “Blue Sky” decentralised social media project.

Others, however, reckon it’s pretty obvious that he will be working on Bitcoin-related projects and initiatives:

Whatever the case may be, Bitcoin or crypto, the common thread seems to be that Dorsey’s central mission has now shifted towards decentralisation – whether that is of money, applications, or the internet itself.

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Banking Bitcoin Crypto News Markets

Bitcoin Slides After Hitting All-Time High in Turkey Amid Currency Crisis

Turkey is in the grip of a crippling currency crisis as the Turkish lira continues its freefall. The sell-off was sparked after President Recep Tayyip Erdoğan demanded the Central Bank of Turkey cut rates for a third consecutive month from 19 percent to 15 percent.

Shortly after, Bitcoin printed a fresh all-time high against the weakened lira, suggesting that perhaps, Bitcoin fixes this.

The Turkish lira has lost a third of its value in November. Source: Bloomberg

What is Happening in Turkey?

The Turkish lira has been steadily weakening against the US dollar for the past decade, but this week saw the currency collapse over 15 percent in a single day, a historic event for any G20 country.

In a historic event for a G20 country, the Turkish lira is in free fall and making the case for a bitcoin hedge.
Turkish lira/USD exchange rate. Source: TradingView

To make economic matters worse, Turkey’s Consumer Price Index (CPI) has been accelerating over the past two years and is now just under 20 percent.

In a historic event for a G20 country, the Turkish lira is in free fall and making the case for a bitcoin hedge.
Turkey’s CPI. Source: FRED

With growing inflation, reducing real rates and limited USD foreign exchange reserves, the picture is looking bleak for ordinary Turkish citizens. To make matters worse, US$13 billion in debt is set to expire this month and next.

In a historic event for a G20 country, the Turkish lira is in free fall and making the case for a bitcoin hedge.
Source: Bloomberg

Typically, during periods of high inflation, central banks will look to raise interest rates. However, Erdogan, who has fired three central bank chiefs in two years, has pushed for lower interest rates to increase economic growth and exports as well as decrease unemployment.

Yet it is the Turkish citizen who faces a severe decline of purchasing power at an unprecedented rate during a period of soaring prices and political instability.

A former Turkish central bank deputy governor, Semih Tumen, has criticised the policy for annihilating the purchasing power of ordinary Turks, describing the move as an “irrational experiment, which has no chance of success”.

Bitcoin Responds

Following the currency sell-off, Bitcoin did its thing, soaring against the Turkish lira to reach an all-time high of ₺735,432/BTC.

Turkish lira/BTC. Source: TradingView

On November 26, as news of a new Covid-19 variant spooked markets, Bitcoin retreated by 7 percent, however in Turkey it remains up 70 percent over three months and 220 percent year-to-date.

Bitcoin has been viewed as an inflation hedge and this crisis in Turkey is no doubt an opportunity for it to shine. Earlier this year, Bitcoin rose as the Argentine peso collapsed, with the current CPI in the South American nation sitting at over 50 percent. And it’s not just developing nations experiencing inflationary periods – just two weeks ago, Bitcoin catapulted on news of the US’ highest CPI print in over 30 years.

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Bitcoin Crypto News Gaming Metaverse

Pokémon Go Developer Releases Augmented Reality Game Where You Can Earn BTC

US software company Niantic, best known for creating augmented reality (AR) mobile games such as Pokémon Go, has revealed it has partnered with bitcoin (BTC) rewards company Fold. In announcing their partnership in a November blog post, the companies jointly revealed a new AR game that will allow users to earn BTC in the metaverse.

Earn BTC By Exploring the Metaverse

Fold, in partnership with Niantic, will forge and develop a new game called Fold AR, which will be available for users leveraging the Fold mobile app. The game will allow users to earn BTC and in-app benefits by exploring the metaverse.

According to Fold chief executive officer Will Reeves, “This is the easiest, most fun way to get your first piece of bitcoin … Anyone can use our app to earn bitcoin and other rewards by exploring the world around them. For us, it’s always been important to make participating in the bitcoin economy easy for anyone, regardless of education or technical expertise.”

What is a Metaverse?

The partnership has said that it intends to “forge an alternative version for the metaverse – one that promotes human freedom and happiness through bitcoin and fun”. The term “metaverse” was coined by American science fiction writer Neal Stephenson to describe a “dystopian future where technology dominates the human experience”.  

Fold, which is focused on BTC and the metaverse as a vision for the internet, intends to build a place where technology can unleash human freedom and happiness.

Rewards vs Risks

The team has started rolling out a limited beta of the experience in the Fold App. In order to get started, users open the “Play” tab in the Fold App to discover BTC and other hidden rewards around them. Every 10 minutes, a new block appears somewhere around the user and if opened triggers an explosion of rewards.

Rewards include satoshis, extra spins to get more rewards, time extensions to remain in the game longer, and an orange pill that protects players against harmful surprises. Users should beware as “shitcoins and poison pills” are lurking, threatening to take away hard-earned BTC. Fold AR is joining a host of methods of earning free BTC.

Fold AR metaverse. Source: Fold App

Have Fun While Getting Rich

While the term “metaverse” is gaining a lot of traction, metaverse tokens are soaring amid the buzz as they allow users in the virtual world to add real-world value.

AR has paved the way for gamers and users alike to engage in a virtual world while earning real-world money at the same time. The future is sure to be in the metaverse.

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Bitcoin CBDCs Crypto News Ethereum India

India to Ban All Cryptocurrencies But Its Own

In a shocking plot twist, India will ban all private cryptocurrencies bar a select few in a bill seeking to regulate digital currencies announced by parliament.

The Indian government will allow a limited number of cryptos to promote their underlying technology and uses, and the country is set to launch its own digital currency in December following “serious concerns” regarding private cryptos.

An estimated 15 to 20 million Indian crypto investors will be affected after the government announced it was looking to ban most private cryptos, except those it will allow according to a legislative agenda. Bitcoin and Ethereum are among the digital assets set to be banned as legislative bodies cite “serious concerns” surrounding cryptos in general.

‘Financial Terrorism’ a Symptom of Unregulated Cryptos

Indian Prime Minister Narendra Modi has said countries should work together to ensure the safety of cryptos so they do not “end up in the wrong hands”. Modi has also claimed that the unregulated nature of digital assets makes them prone to money laundering and financial terrorism.

Through the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, India looks to restrict the domestic marketing and advertising of cryptos. In a country where many well-to-do citizens have traditionally turned to gold as an investment, the new ban will see some 15 to 20 million investors no longer able to go the crypto route as an alternative.

One Indian crypto user took to Reddit to express his dismay at the situation in detail:

I am an Indian and I am ashamed to admit it today! from CryptoCurrency

Like many others, the country has fallen on difficult times during the Covid-19 pandemic and is struggling in its fight against the virus. Australian cricketers Pat Cummins and Brett Lee have stepped in to help, each donating a generous amount of money. Lee turned to cryptos to fund his donation, giving one bitcoin to Crypto Relief, which went towards boosting the oxygen supply for Covid patients on the subcontinent.

India to Pilot CBDC in 2022

The Reserve Bank of India (RBI) is looking at the feasibility of a Central Bank Digital Currency (CBDC) and may launch one in the upcoming fiscal year. The CBDC is a digital derivative of a legal tender issued by a nation’s central bank.

Yet many are raising concerns regarding India trying to make its own digital currency that will be held by the reserve. Arguments are being put forward such a currency will defeat the entire purpose of cryptos.  

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Australia Bitcoin Crypto News Regulation Superannuation

ASIC Investigating Further into Gold Coast Superannuation Scam

Short of opening a special branch in Queensland, the Australian Securities and Investments Commission (ASIC) has had an unusually busy month in the Sunshine State.

On November 6, ASIC obtained Federal Court orders to shut down unlicensed Gold Coast financial services business A One Multi for suspected unlawful activity. This came after it imposed a three-year ban on Queensland investment adviser Keith Robert McDermott for similarly failing to provide advice in clients’ best interests.

In the same week, an A$100 million class-action lawsuit was filed against the Gold Coast-based issuers of controversial token Qoin.

Now ASIC is trying to recover a trove of bitcoin worth up to A$29 million held in an encrypted device belonging to a director of A One Multi who is suspected of large-scale superannuation fraud. The investigation implicates CoinSpot, the crypto exchange used by accused scammer Aryn Hala to invest his allegedly ill-gotten gains.

Almost $30 Million in Bitcoin Unaccounted For

ASIC has co-accused Hala and his partner Heidi Walters along with A One Multi of scamming 92 financially strapped Australians who were looking to gain early access to their super. Bank accounts show the couple’s company received A$25 million from the investors. No criminal charges have been laid.

Alleged super scammer Aryn Hala. Source: Gold Coast Bulletin

ASIC alleges Hala and Walters used their victims’ money to buy bitcoin, luxury cars and other high-end goods, couture fashion, weight loss surgery, and to make a substantial donation to their church.

The couple has engaged lawyers, indicating they intend to challenge ASIC’s allegations. Hala and Walters’ legal team says they are openly assisting both ASIC and the receivers with their inquiries, including providing all financial records, in the hope the investigation is expedited.

ASIC called in receivers from KPMG to unravel Hala’s business and personal accounts and to trace the trove of bitcoin. It has also won travel bans against Hala and Walters and freezing orders over their assets, which include a Tesla and a Ferrari.

Unpicking Hala’s bitcoin investments has proved problematic for regulators and has raised issues regarding oversight controls at CoinSpot, which bills itself as one of Australia’s leading cryptocurrency exchanges.

CoinSpot Initially Claimed Hala Was Not a Customer

According to court documents filed by the regulator in support of freezing orders against the couple and A One Multi, CoinSpot initially told ASIC investigators that no records were held for crypto accounts in the name of Hala, Walters, or their company.

On closer inspection of Hala’s bank statements, ASIC located his CoinSpot account number and found he had a balance of just $1.96. A full CoinSpot audit showed Hala’s bitcoin wallet had received 375.99 BTC (worth almost A$30 million at time of writing) and executed total sell orders of A$979,843 – indicating that some $29 million worth of coins were located elsewhere. ASIC investigators believe Hala had transferred the coins to a cold wallet.

CoinSpot defended its early claim that Hala was not an account holder.

CoinSpot has a cooperative relationship with all relevant regulatory bodies including ASIC. Any lawful requests for information by regulators are treated seriously and with priority … [although that] information may need to be verified before any information can be shared.

CoinSpot statement

Hala is expected to share instructions with receivers KPMG on how to access his cold wallet in coming weeks.

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Banking Bitcoin Crypto News Investing New Zealand Superannuation

$75 Billion Aussie Super Fund Hostplus: ‘Crypto is Too Big to Ignore’

One of Australia’s largest institutional investors believes that cryptocurrency as an investment is the economic elephant in the room, with the likelihood of super funds holding digital assets inevitable in time.

Hostplus has over A$2.2 billion committed to the venture capital sector, of which A$1.5 billion has already been invested. The industry super fund’s chief investment officer, Sam Sicilia, says it is no longer possible to dismiss the booming crypto market simply because of regulatory headwinds.

Sam Sicilia, chief investment officer, Hostplus. Source: ioandc.com

“Hostplus does not have crypto investments, but I do see the day where it becomes mainstream for institutional super funds,” Sicilia told The Australian newspaper. “It’s not just about a return for us. We need a governance structure, we need safekeeping of the assets, and there are regulatory requirements.”

Much Work Still to Do for Super Funds

Super funds needed to do a lot more groundwork before they were “crypto-ready”, Sicilia adds, and regulatory challenges had to be met ahead of any such move.

Last month, the Bank of America released a research paper on crypto with a similar outlook as institutional investors around the globe consider crypto’s prospects.

“With a US$2 trillion-plus market value and more than 200 million users, the digital asset universe is too large to ignore,” according to Bank of America analysts Alkesh Shah and Andrew Moss.

Both Shah and Moss predict that crypto-based digital assets could form an entirely new asset class.

It’s difficult to overstate how transformative blockchain technology, digital assets and the thousands of decentralised apps that have yet to be created could potentially be.

Alkesh Shah and Andrew Moss, crypto and digital assets strategy analysts, Bank of America

Earlier this month, the Reserve Bank of Australia red-flagged the “fervour” and “speculative demand” for crypto, warning of the potential for a severe price decline.

That said, Hostplus’s Sicilia foresees that bitcoin’s volatility would open up buying opportunities well below its current US$57,500 price (at the time of writing).

“I think we can get 10 per cent or more out of equity markets each year until people have a choice to put their money somewhere else. And that could be a long time from now,” says Sicilia, who oversees A$75 billion in assets under management at Hostplus.

‘Where Else Will People Be Putting Their Money?’

“People will keep putting their money into equity markets to get dividends. That’s the driving force powering markets. And there will be volatility, of course, but so be it. Where else are they going to put their money?”

Two months ago, Australian superannuation funds were being urged to consider exposure to crypto assets or risk being left behind. In July, New Zealand-based pension fund Kiwi Saver revealed it had invested in bitcoin in October last year. While its chief investment officer said at the time that most super funds in Australia would follow suit within five years, the reality is that Aussie super funds remain too slow out of the blocks.

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Bitcoin Crypto News Markets

El Salvador To Build “Bitcoin City” By Issuing $1 Billion Tokenised Bitcoin Bonds

El Salvador’s Bitcoin-friendly president, Nayib Bukele, is once again hitting the headlines. After making bitcoin legal tender earlier this year, the charismatic leader has announced plans to build “Bitcoin City” using tokenised bitcoin-backed bonds.

Volcano-Powered ‘Bitcoin City’

On Saturday, President Bukele revealed to a captivated crowd that his government, in partnership with Blockstream and Bitfinex, would be developing “Bitcoin City”, funded through the issuance of bitcoin-backed billion dollar bonds.

The party-like atmosphere was electric, leaving some observers lost for words.

Bukele told the crowd that Bitcoin City would rely on volcano-generated geothermal energy and, even more exciting, that it would be entirely tax-free for residents, save for a 10 percent value-added tax (VAT) applied to all transactions in the region.

Invest here and make all the money you want. This is a fully ecological city that works and is energised by a volcano.

President Nayib Bukele

The Nuts and Bolts

In terms of some of the practicalities, Bukele noted that half of the money raised through VAT would be used to pay off the bonds issued to fund the city’s startup costs, while the other half would be used to fund public services.

At this stage, details are somewhat sketchy but the goal is clearly to make “Bitcoin City” an attractive destination for foreign investment. As the President said: “If you want bitcoin to spread over the world, we should build some Alexandrias.”

Some of the more interesting aspects of the proposed city include that its design would be circular, and contain an airport as well as residential and commercial districts. Apparently, the central plaza may even have a Bitcoin symbol when viewed from above.

In order to issue the bonds, El Salvador has partnered with Blockstream and iFinex (the parent company of Bitfinex). The latter will be granted a securities licence in order to issue the Bitcoin bonds, something that is expected to take place within 60 days.

One interesting feature of the Bitcoin bond is that it will have special dividends attached to it generated through the staggered liquidation of bitcoin. These will be paid out to holders through Blockstream’s asset management platform. Critically, the use of this platform will enable investors to get involved for as little as US$100 – that simply isn’t the case today for retail investors who want to invest in government bonds.

Looking Forward

Thus far Bukele’s bold Bitcoin bet has paid off – it’s funded construction of a pet hospital, as well as 20 new schools, all from profits generated from the nation’s bitcoin trust.

Of all of Bukele’s moves since making bitcoin legal tender, the creation of bitcoin-backed bonds may end up being his biggest yet. While the traditional finance world may view this move as risky, those operating in the crypto space have welcomed the decision with open arms.

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Binance Coin Bitcoin Cardano Crypto News Dogecoin Ethereum Markets Solana

Crypto Market in the Red Amid $880 Million Liquidity Flush

The crypto market is experiencing a sharp correction after approximately US$840 million was liquidated this week, draining nearly US$400 billion from the market.

Data from Coinglass (previously known as Bybt.com) shows at least 78,358 traders were liquidated in a span of just 24 hours. The largest single liquidation occurred on Bybit – ETH/USD, US$3.1 million.

ETH holders were by far the most affected compared to other cryptocurrencies such as BTC, which in 24 hours had a total of 1.13k BTC ($68.14 million) liquidated across most exchanges.

Most Currencies in the Red – Bitcoin Retests 58K Support

Liquidations were triggered when BTC plunged over 10 percent this week, dragging most of the market with it. Altcoins such as Binance Coin (BNB), Cardano (ADA), Solana (SOL), and Dogecoin (Doge) were in the red by double digits as well.

Many say the drop is due to the $1.2 trillion infrastructure bill that US President Joe Biden signed into law on November 15. The bill is embedded with various crypto tax provisions for entities considered “brokers” by US law, even if they aren’t, such as node validators. The unclear and biased language caused outrage in the crypto community, with many industry leaders calling for opposition of the bill.

Going back to Bitcoin, the daily RSI pulled back to 40k levels but the price is currently hovering above 60k, though a further drop is expected in coming weeks.

Compared to previous dips, this one represented only 12 percent off its all-time high (ATH), but the emotional reaction appears to be much more intense. Back in September, BTC retraced -25 percent before jumping to new ATHs.