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Swyftx Review

Swyftx Homepage

Verdict: Is Swyftx any good? 

Swyftx is one of the best options on the market for Australian cryptocurrency investors. The platform offers low trading fees (0.6%) and tight spreads, making it a cost-effective crypto exchange for buying, selling and trading digital currencies.  

The crypto exchange’s streamlined design, support for recurring buys and live chat make it a comfortable choice for complete cryptocurrency novices.  

More experienced users will enjoy a comprehensive earn hub, crypto bundles and a huge range of supported assets.  

Advanced derivatives traders may want to look for an alternative exchange, as Swyftx does not offer futures, options or perpetual contracts.   

Overview 

Website:  Swyftx.com/au/  
Headquartered:  Brisbane, Australia 
Listed cryptocurrencies:  310+ 
Trading fees:  0.6% 
Fiat currencies:  AUD, NZD and USD 
Deposit methods: Bank transfer, PayID, POLi, Credit/Debit Card 
Australian-based customer service:  Yes 
Mobile app Yes, iOS and Android 

What is Swyftx?  

Swyftx is an Australian cryptocurrency exchange headquartered in Milton, Brisbane. The platform was founded in 2017 by Alex Harper and Angus Goldman and has since expanded to service customers from New Zealand. The company also has plans to support customers from the UK and Canada.  

Users can buy, sell and trade over 310 crypto assets using the platform’s streamlined yet customisable user interface. The huge variety of digital assets on offer makes Swyftx an excellent choice for both beginner and more experienced investors.   

Australian crypto exchanges can be notorious for high, undisclosed spreads, but Swyftx is renowned for its fee transparency. The trading fee is a flat 0.6%, with the possibility of discounts based on high trading volume, and spreads are easily visible 

The platform supports a competitive earn hub, SMSF (Self-Managed Super Fund) support, advanced order options and a demo trading mode. 

In its relatively short life, Swyftx has established itself as a reliable, cost-effective and secure exchange. Beginners and intermediate investors alike will find themselves at home using the platform, although advanced users wishing to trade derivatives will want to look elsewhere.   

Pros and cons 

Pros Cons 
Competitive trading fees (0.6%) and transparent spreads, especially for an Australian exchange Fees are a bit high for day-traders, compared to international trading platforms (like FTX or Binance) 
Excellent reputation for security and trustworthiness No advanced trading options like derivatives 
Well-optimised and sleek mobile app No insurance fund 
Wide range of supported cryptocurrencies  
 
Helpful features like earning, SMSF support and tax report generation  
 

Is Swyftx safe?  

Swyftx has built a reputation among the Australian community for being a trustworthy and safe exchange. In its 3+ years of operation, the platform has never reported a hack or other compromising event. Swyftx is registered with the Australian Transaction Reports and Analysis Centre (AUSTRAC) and abides by all Anti-Money Laundering (AML), Know Your Customer (KYC) and Counter-Terrorism Financing (CTF) laws.   

The cryptocurrency exchange prioritises the safety of its customer’s assets and utilises a multi-tiered security approach. Swyftx uses industry-standard security measures such as Two-Factor Authentication (2FA), cold storage, penetration testing, data encryption and the least privilege principle. Swyftx also aims to become one of the very few Australian exchanges to receive ISO 27001 certification. This certification is regarded as the international benchmark for security management.   

Swyftx does not currently offer an insurance fund for crypto assets and fiat currency held on the platform. This does not necessarily make Swyftx any less safe than alternatives — particularly given its sparklingly clean track record — but it is still worth keeping in mind. 

Swyftx customer support 

Swyftx has one of the best customer support services for Australians wanting to buy and sell crypto. The platform hosts a comprehensive Help Centre, filled with 100+ helpful articles that  walk customers through depositing AUD, placing buy/sell orders or customising the dashboard.   

If the Help Centre doesn’t answer the question, Swyftx offers a 24/7 live chat. The support team is Australia-based and responsive, with wait times usually ten to fifteen minutes during work hours.   

Swyftx has a 4.7/5 star rating on TrustPilot (from 3,822 reviews) and a 4.6/5 star rating on ProductReview (from 3,686 reviews), demonstrating the team’s excellent customer service. 

Swyftx fees  

Australian crypto exchange platforms are generally a little costlier than international alternatives, but Swyftx’s competitive trading fees stack up well against its local and overseas competitors. 

Overall, Digital Surge is the only Australian exchange that currently has cheaper combined transaction fees and spreads than Swyftx. 

Trading fees  

Swyftx charges a flat trading fee of 0.6% on all transactions. This includes buying and selling cryptocurrencies with AUD or swapping one coin for another.   

Customers can expect around a 1% trading fee on average when using other Australian exchanges, making Swyftx quite cost-effective. 

Deposit & withdrawal fees 

Fiat  

Swyftx does not charge any fees on AUD deposits and withdrawals from an Australian bank account. Free and near-instant fiat transactions are a great feature of the exchange.   

The deposit and withdrawal limit for AUD is $50,000 per transaction, per day. However, both of these limits can be extended upon request. 

Credit/debit card deposits will incur a 3.6% third-party processing fee from Banxa. The maximum card deposit is $60,000 per month.  

Cryptocurrency  

Swyftx does not charge any fees for sending or receiving cryptocurrencies to a wallet. However, standard network (gas) fees will apply.  

Spreads  

Spreads are the difference in an asset’s price between the time an order is placed, and the time it is executed. Spreads are hidden fees that can make trades more expensive than they appear. Those new to trading may not know what spreads are and quickly become confused at the extra costs.  

Swyftx hangs its hat on providing some of the tightest spreads in Australia. The platform is transparent with the spreads for each trade, with fees starting as low as 0.45%. The overall average spread of 1.7% is extremely competitive in the Australian market. Some customers have reported Swyftx’s competitors charging very high spreads of over 4%.  

Swyftx features  

Trading on Swyftx  

Swyftx’s trading interface is clean and easy to navigate. Beginners can easily build their portfolio by setting up instant orders for buying or selling cryptocurrency. Finding coins to purchase is easy — users can simply type the coin’s name into the search bar and click “Buy”. Alternatively, customers can sort through the 310+ digital currencies based on recent price movements or market cap. 

More experienced traders can set up advanced orders that trigger when an asset hits a specific price (effectively a limit order). This can be used to potentially buy or sell cryptocurrencies at a preferred value, instead of at the current market rate. The Swyftx trading terminal also offers a customisable chart. 

It’s worth mentioning that Swyftx lacks several features advanced traders might desire, such as derivatives, market depth and an order book.  

Earn  

Swyftx supports earn wallets for 20 assets, where customers can lock up their tokens and passively earn returns of up to 65+%. Generally, the earning rates on offer are competitive for a centralized exchange. Although yields typically fluctuate, the APYs for assets like Kusama, Kava and Tron are above average. On the other hand, Ethereum and Solana have lower earning rates than if investors staked them on-chain.  

Each asset is divided into three tiers, where the more cryptocurrency a customer locks up, the lower their earning rate. For example, someone staking less than 3 ETH could earn an APY of 2.5%. However, if they are staking more than 6 ETH, that APY drops to just 1.5%.  

The Earn program works similarly to a high-interest savings account, where cryptocurrencies locked in an earn wallet are loaned to Swyftx without a minimum period. Swyftx then repays the “at-call” loan with interest.  

There are no fees for depositing or withdrawing cryptocurrency from the Earn wallet. Some major digital currencies supported include Solana, Cardano, Ethereum, Cosmos and Polkadot.   

In 2022, Swyftx removed four cryptocurrencies from their earn program — TrueAUD, USD Coin, USD Tether and Bitcoin — as a preventive method to ensure customer safety. Unfortunately, these cryptos are typically in high demand for passive earning, so some investors will need to find a suitable alternative.  

Demo mode  

Demo mode is a fantastic initiative by Swyftx that allows beginners to practice trading cryptocurrency without risking any capital. Swyftx is one of few exchanges that offer crypto demo trading accounts. 

Switching to demo mode will provide each account with $10,000 in “mock” currency, which can then be used to build a virtual portfolio. Demo mode is a great way for newcomers to get used to the Swyftx platform, and for experienced investors to test new trading strategies.  

Bundles  

Swyftx offers nine different crypto bundles for customers to invest in. Bundles are a bit like exchange-traded funds (ETFs), being a curated basket of multiple digital currencies. Bundles are a great way to diversify your portfolio, as they are less exposed to the price swings of a single cryptocurrency. 

Bundles range from the simple “Big Two”, which contains only Bitcoin and Ethereum, to the “Staking Coin”, which is filled with ten assets that can all be staked via Swyftx Earn.  

SMSF  

Swyftx allows eligible Australians to add cryptocurrency to their self-managed super fund (SMSF). This has become increasingly popular due to its tax benefits and the overall performance of cryptocurrency since its inception. Swyftx has partnered with crypto SMSF specialists New Brighton Capital to meet growing demand and address any regulatory risks.  

To comply with Australian policies, users must create a separate Swyftx account specifically for trading crypto within an SMSF. To be approved for this account, customers must supply supporting documentation including financial records. For a full list of SMSF requirements, refer to the ATO.  

Creating an SMSF can be a convoluted and confusing process, which is why Swyftx offers consultations with their experts.  

OTC  

High-volume traders, institutions and SMSF accounts can buy and sell over 280+ cryptocurrencies over the counter (OTC). Swyftx’s OTC desk supports trades of over $100,000 AUD and offers global liquidity and lower fees than other Australian competitors.  

Affiliate program  

Swyftx offers an affiliate program that more than 70,000 crypto investors have used. Customers with a valid Australian Business Number (ABN) will receive a commission for sharing promotional material and registering new users. Affiliates will receive 30% on all fees paid by new accounts that sign up with their unique referral link. Commissions are paid on the first week of every month.  

Recurring orders  

Swyftx allows its customers to automate investing through recurring orders, also known as dollar-cost averaging (DCA). DCA involves buying a certain amount of one — or multiple — cryptocurrency at regular intervals. This way, investors can ignore the short-term price fluctuations of an asset and continue accumulating.  

Recurring orders are a powerful way for beginners to build a long-term crypto portfolio while mitigating the risks of trying to time the market. Swyftx customers can set up DCA orders for all 310+ supported assets, as well as crypto bundles.    

Tax reports  

One of Swyftx’s most compelling features is the platform’s ability to integrate with useful tax software. The Australian Tax Office (ATO) has cracked down on tax reporting for crypto investors, so Swyftx can help its customers ensure they’re meeting all their obligations. 

Swyftx offers a free tax calculator. Using it is simple — customers just enter the value of disposed cryptocurrencies at the time of purchase and sale, as well as their taxable income. The calculator will then estimate the Capital Gains Tax owing come tax time.  

Alternatively, Swyftx can be easily integrated with the popular tax reporting software Koinly and Crypto tax Calculator. Users can export a CSV file of their Swyftx trades for a specific timeframe and feed it into the Koinly software. That’s all there is to it — Koinly will then generate a tax report. Koinly can also connect directly to the Swyftx platform via an API key.  

Business accounts  

Swyftx supports business and trust accounts for professional traders and other crypto-related service providers. Personal, SMSF and entity accounts can all be linked to a single login, making cycling through them quite convenient.  

Note: Users are required to create a personal account before they can open an entity account for their business or trust.  

Swyftx mobile app  

Swyftx offers a clean and responsive smartphone application for Android and iOS devices. The app supports most of the main features found on the desktop platform, including trading cryptocurrency on the go, receiving price notifications and transferring assets to an earn wallet.   

The Swyftx mobile app has been generally well-received, with a 4.6/5 star rating and hundreds of thousands of downloads. 
 

How to sign up to Swyftx  

As one would expect from a modern, reputable exchange, signing up for a new account on Swyftx is an incredibly simple process.  

Step 1  

To get started, navigate to the Swyftx platform’s home page. From here, customers can select either the white “Signup” button in the top-right corner, or the large orange “Sign Up Now” button in the middle of the page.  

Step 2  

Even if you wish to create an entity or SMSF account, you will need to start off by registering a personal account. Continue the signup process by entering your country of residence and email address. Once done, select “Next”.   

Step 3  

Swyftx will now send a 6-digit verification code to verify the email address entered in the previous step. Input the numbers to complete email verification. 

Step 4  

Next, enter your first and last name, a long with a mobile number. Swyftx will then require you to enter another 6-digit code, this time verifying the mobile number provided.   

Step 5  

Finally, new accounts must pass Know Your Customer (KYC) verification before they can start depositing AUD and trading cryptocurrency on the Swyftx platform. This is due to the Australian government’s AML and CTF policies.   

To pass this process, you must have access to some form of government-issued identification, such as a driver’s license, passport or identity card. Take a photo (using a smartphone to do this is advisable) and upload them to complete verification. Once verified, the account is registered and ready to begin trading cryptocurrencies! The verification process usually takes a couple of minutes.  

Although not a requirement, it is always recommended that new accounts enable Two-Factor Authentication (2FA) before doing anything else. 

Frequently asked questions  

Is Swyftx legitimate?  

Yes, Swyftx is a legitimate cryptocurrency exchange that was founded in 2017 and has been servicing customers since 2019. Swyftx is headquartered in Brisbane, Australia and licensed as an Australian business.   

Is Swyftx safe?  

Yes, Swyftx is one of the safest exchanges on the market. The platform is dedicated to protecting its user’s assets, employing industry-standard security measures such as hot/cold wallet storage, data encryption and 2FA. The exchange has never experienced a hack or other form of public attack.  

Is Swyftx a wallet?  

Swyftx itself is not a wallet, however, the exchange does support storing over 310 cryptocurrencies on the platform. Additionally, Swyftx supports 15+ Earn wallets for customers to passively earn income on assets like Tron, Cardano and Ethereum. Although Swyftx’s wallets are safe, it is typically recommended to withdraw cryptocurrencies from exchange wallets to a third-party hardware wallet.  

Can Swyftx be trusted?  

Yes, Swyftx is one of the more reputable exchanges available to Australian investors. The company has an Australian-based support and development team and is registered with the relevant government agencies. Additionally, Swyftx has garnered impressive ratings of 4.5+ on Australian review websites such as TrustPilot and ProductReview.  

Is Swyftx regulated?  

Yes, Swyftx is registered with and regulated by the Australian Transaction Reports and Analysis Centre (AUSTRAC). It is advised that crypto beginners stick to regulated exchanges, making Swyftx a solid option. 

Categories
Banking Blockchain Crypto News Polygon

Buffet-Backed Neobank to Launch Its Own Crypto Token

nubank app on a smartphone

Warren Buffet-backed Nubank, Brazil’s largest digital bank by market volume, has announced it will launch its own cryptocurrency in the first half of 2023. The cryptocurrency, which is to be known as Nucoin, will run on the Polygon blockchain.

In a press release posted Wednesday October 19, Nubank explained that Nucoin will provide discounts and other perks to holders and will function as, “a new way to recognize customer loyalty and encourage engagement with Nubank products.”

Nubank Goes Deeper into Crypto

This isn’t Nubank’s first foray into crypto. Earlier this year, the bank started to dabble in Web3 by offering crypto trading services to its customers in partnership with the crypto trading platform Paxos. 

The announcement that Nubank now plans to launch its own cryptocurrency marks a significant deepening of its interest in crypto. 

Before the launch of Nucoin next year, Nubank plans to select 2,000 customers to test the token and provide feedback and guidance on its development.

Nubank Believes in Blockchain

Nubank’s General Manager for Nucoin, Fernando Czapski explained that the bank believes blockchain has excellent potential, saying:

“This project is another step ahead in our belief in the transformative potential of blockchain technology and to democratize it even more, going beyond the purchase, sale and maintenance of cryptocurrencies in the Nu app.” 

Fernando Czapski, General Manager for Nucoin at Nubank

Other large players in the finance sector have also been making announcements recently which demonstrate their belief in crypto’s potential. Just days ago, Mastercard announced its new Crypto Secure program in partnership with Paxos, which aims to make it easier for banks and other financial institutions to offer crypto trading services to their customers, a move that could potentially boost mainstream adoption of crypto.

Categories
Crypto News Investing Regulation South Africa

South Africa Classifies Crypto Assets as Financial Products

Bitcoin infront of South African Flag

In a milestone decision for crypto regulation, South Africa declared on October 19 that all crypto assets are, in fact, financial products. 

This declaration from South Africa’s Financial Sector Conduct Authority (FSCA), the nation’s financial services regulator, means that all crypto assets are now governed by the Financial Advisory and Intermediary Services Act, 2002 and will be subject to the same regulation as other financial products.

The declaration was signed by South Africa’s Commissioner of the FSCA, Unathi Kamlana, and came into effect immediately.

What Now Qualifies as a Crypto Asset in SA?

The declaration includes a definition of what qualifies as a crypto asset. The definition used is quite broad, defining a crypto asset as a ‘digital representation of value’ that meets the following three criteria:

  1. It’s not issued by a central bank but it is able to be traded, transferred or stored, allowing it to be used for payment, investment or other uses;
  2. It applies cryptographic techniques; 
  3. It uses distributed ledger technology (such as blockchain).

What Does it Means for Crypto Investors in South Africa?

For the first time, cryptocurrencies will be regulated in South Africa, which stands to bring significant benefits to investors and consumers — such as improved legal protections for victims of scams and improved anti-money laundering (AML) and know your customer (KYC) compliance. 

Regulation will also lead to more clarity around the legal status of cryptocurrencies that may encourage more commercial and enterprise use cases, such as real-world asset tokenisation and partnerships between traditional financial institutions and crypto-based businesses.

Despite the benefits of regulating crypto, there are fears that increased regulation and KYC requirements may lead to marginalised people losing access to crypto services on which they rely, with some suggesting people who earn under a certain threshold should be exempt from KYC requirements.

According to Finder’s Cryptocurrency Adoption Report, released in August 2022, 4.2 million South Africans own crypto, that’s 10 percent of the population, slightly lower than the global average of 15 percent.

Categories
Bitcoin Crypto News History

Bitcoin Added to the Guinness Book of World Records

Bitcoin and trophy

Alongside quirky honours like ‘Tallest man ever’ and ‘Largest living cat’, Bitcoin (BTC) has now been immortalised in the Guinness World Records (previously known as The Guinness Book of Records). 

Guinness World Records has recognised several of the OG cryptocurrency’s most noteworthy achievements, including its status as the world’s oldest cryptocurrency and the most valuable cryptocurrency.

These entries, and a host of other crypto-related entries, were included in the 2023 edition of the annual compendium. Other notable new entries into the Guinness World Records recognised topical subjects such as TikTok and space travel.

Listing Reflects Crypto’s Relevance

In addition to the records mentioned above, the 2023 edition of the Guinness World Records includes quite a few other Bitcoin and crypto-related records. 

Some of the more notable entries include:

  • The most expensive NFT artwork went to an artist known as Beeple (real name Mike Winklemann) for his work ‘Everydays: The First 5000 Days’, which sold in March 2021 for a whopping US$63,346,250. 
  • The first country to adopt Bitcoin as legal tender is listed as El Salvador on September 7, 2021.

Other crypto-related entries appearing on the Guinness World Records website include:

  • Largest Bitcoin Fraud
  • First Commercial Bitcoin Transaction
  • First Bitcoin Transaction
  • First Minecraft Server With a Bitcoin Economy
  • First Country to Adopt Bitcoin as Legal Tender
  • Most Valuable Cryptocurrency
  • Oldest Cryptocurrency
  • First Cryptocurrency Exchange
  • First Blockchain
  • Largest Cryptocurrency Hack
  • First Decentralised Cryptocurrency
  • First Seizure of Cryptocurrency
  • First NFT
  • First Tradable NFT
  • Largest Cryptocurrency Winning Jackpot in an Online Poker Tournament
  • Most Expensive NFT Artwork (Limited Edition)
  • Most Expensive NFT Artwork (Open-Edition Auction)
  • Largest Seizure of Cryptocurrency
  • Most Valuable Sports Club NFT
  • Most Expensive NFT Collectible
  • First Ethereum NFT
  • Highest Floor price for an NFT Collection
  • Richest Crypto-billionaire (Current)
  • Highest Transaction Volume for an NFT Collectible Game
  • Most Expensive Tweet Sold at Auction

Speaking to Coin Telegraph, a representative from Guinness World Records explained the publication’s interest in crypto:

“[Guinness World Records] tries to reflect that year’s zeitgeist and the topics our readers are likely to be discussing…We will be watching this space with interest over the next few years, as the technologies that underpin crypto develop and find a wider range of applications.” 

Guinness World Records Spokesperson
Categories
Banking Crypto News DeFi Payments

Mastercard and Paxos Team up to Help Banks Offer Crypto Trading

Mastercard and Paxos

Mastercard announced Monday that it is extending its partnership with cryptocurrency trading platform Paxos to create a program to make it easier for banks and other financial institutions to offer crypto trading services to their customers.

The program, called Crypto Source, will see Mastercard act as a bridge between Paxos and banks, with Paxos providing cryptocurrency trading and custody services on behalf of the banks.

Partnership Aims to Increase Retail Confidence in Crypto

Mastercard said its role in Crypto Source is largely about creating a secure, trusted bridge between crypto markets and traditional banking. By providing this bridge Mastercard hopes to increase both banks’ adoption of crypto trading services and retail investors’ confidence and willingness to engage with crypto markets. Mastercard’s President of Cyber & Intelligence Ajay Bhalla explained:

“At Mastercard, trust is our business. What we are announcing today is a connected approach to services that will help bring users safely and securely into the crypto ecosystem. Our recent investments in this space, such as the acquisition of CipherTrace and Ekata, are providing us with a unique set of capabilities to help provide our customers and consumers with the most technically advanced solutions available in the market.” 

Ajay Bhalla, President, Cyber & Intelligence at Mastercard

Mastercard’s role centres around verifying transactions, ensuring security and regulatory compliance, and helping banks implement the technology into their existing systems. Mastercard said banks would also be able to offer additional functionality, such as digital receipts and loyalty programs, to augment the core functionality. 

Program Deepens Mastercard’s Links With Paxos

Paxos is a blockchain-focussed company perhaps best known for their gold-backed cryptocurrency PAX Gold (PAXG), which has worked with numerous large finance companies, including PayPal, on crypto-related projects. 

Last year, Mastercard worked with Paxos to enhance its payment card offerings, making it easier for its partners, such as banks and crypto exchanges, to convert cryptocurrencies into fiat currency.

Crypto Source builds on Mastercard’s pre-existing relationship with Paxos and deepens its involvement in crypto ecosystems. Speaking about the relationship, Mastercard’s Chief Digital Officer, Jorn Lambert said:

“We’re excited to build on our long-term partnership with Paxos – co-innovating to bring safe and secure technology to financial institutions. Our crypto product innovations will provide choice at scale and continue to bring one-of-a-kind opportunities to financial institutions as they seek to offer new, advanced services to their customers”

Jorn Lambert, Chief Digital Officer, Mastercard

According to Mastercard, Crypto Source is currently in a pre-pilot phase, the company has not yet announced a date for a broader rollout of the program.

Categories
Bitcoin Crypto News Economics Market Analysis

Latest US Inflation Report Higher Than Expected – Bitcoin Swings 6%

Bitcoin with chart in the background

A higher than expected CPI figure from the US Department of Labor released on October 13 saw Bitcoin’s (BTC) price immediately plummet, before recovering to sit up 1.5 percent.

The inflation figure of 8.2 percent was higher than the 8.1 percent most market watchers had predicted, sending both crypto markets and traditional financial markets tumbling. 

According to data from CoinGecko, immediately following the news Bitcoin’s price dropped over three percent from just over US$19,000 to US$18,317. In the hours since the initial decline, both traditional and crypto markets rallied strongly. At the time of writing, Bitcoin was changing hands at US19,423.

Recovery Follows Traditional Markets

After the initial rapid fall, traditional markets closed the day up, with the Dow up 2.8 percent on the day and the S&P 500 up 2.6 percent. The popular view is that crypto markets reacted to what was going on in the traditional markets and tracked their behaviour.

Analysts aren’t entirely sure what caused the traditional markets to rally so strongly after the initial impact of the CPI announcement, but some say the high CPI figure was simply already priced in.

Core Inflation High, Markets Await November Rate Announcement

The core inflation figure, which came in at 6.6 percent, is perhaps even more worrying than the headline figure. Core inflation, which excludes food and energy prices, now sits at its highest level in forty years and suggests high inflation may be becoming a more permanent feature of the US economy. 

With such a high core inflation figure it’s now likely the US Federal Reserve will issue a large rate hike when they meet in November. 

Further evidence of a likely large rate increase comes from data on federal-fund futures trading from CME, which suggests a strong chance of an interest rate rise of 75 basis points, or 0.75 percent. 

Generally, rate hikes have been bad news for risk-on investments like cryptocurrency, so the next few months may be a tough time for the crypto markets.

Categories
Bored Ape Yacht Club Crypto News NFTs Regulation

SEC Investigates Bored Ape Creator Yuga Labs 

bored apes

Yuga Labs Inc., the company behind the wildly successful non-fungible token (NFT) collections Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) is being investigated by the US Security and Exchange Commission (SEC), according to a report from Bloomberg. 

Speaking to Bloomberg, an anonymous source claims that the SEC is looking into whether Yuga Labs’ NFTs should be regulated like stocks and should therefore comply with disclosure laws applicable to traditional securities. 

The SEC will apparently also be examining Yuga Labs’ governance and utility token, Ape Coin (APE), which has been distributed to holders of their NFTs.

Case to Clarify Status of NFTs

The main issue of law that the SEC is seeking to clarify in this case is whether or not NFTs should be regulated as securities. 

An earlier report from Bloomberg published in March of this year had previously revealed the regulator had started looking closely at the NFT market generally, so an investigation specifically into Yuga Labs, one of the most prominent market participants, is not entirely surprising.

Yuga Labs One of the Largest Players in NFT Space

Since launching in 2021, Yuga Labs has grown to become one of the largest and most successful players in the burgeoning NFT collectibles space. The company’s Bored Ape Yacht Club (BAYC) NFT collection, which depicts cartoonish apes, soared in value following their release, hitting a record sale price of a whopping US$3.4 million dollars in October of 2021.

To support Yuga Labs’ growing NFT ecosystem, the Ethereum-based Ape Coin governance token was released and distributed to NFT holders earlier this year through a separate body known as the Ape Foundation. Ape Coin was released by this foundation rather than by Yuga Labs due to regulatory concerns. 

Around 62 percent of Ape Coin was distributed to community members, with 15 percent going to NFT holders. A sizeable percentage also went to Yuga Labs and the founders of BAYC. 

At the time of writing, data from Coin Gecko showed Ape Coin was down around four percent on the news of the investigation.

Yuga Labs “Happy to Cooperate“

Yuga Labs claims it’s happy to cooperate with the SEC’s investigation and understands the regulator is keen to learn more about the booming crypto industry:

“It’s well-known that policymakers and regulators have sought to learn more about the novel world of Web3. We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem. As a leader in the space, Yuga is committed to fully cooperating with any inquiries along the way.”

Yuga Labs Spokesperson, speaking to Bloomberg

The SEC hasn’t spoken publicly about this case, but based on other cases it’s clear the regulator believes virtually all crypto assets should be viewed as securities and adhere to relevant securities law. 

SEC Chair, Gary Gensler, has repeatedly stated that he believes many forms of crypto could pass the Howey Test — the standard under US law used to determine if an asset is a security, which centres around an investor pledging money to an enterprise with the intention of making profits from its efforts. 

Categories
Crypto News NFTs Real Estate Scams

Sydney Cafe Owner Aims to Turn Remote Island into Crypto City

The owner of a busy Sydney café, Denys Troyak, recently closed up shop, packed his bags and jetted off to help build what he hopes will become a crypto utopia in the Pacific island nation of Vanuatu. 

According to a report from the ABC, Mr Troyak is now running operations for the supposed crypto-paradise-in-the-making, a private city to be known as Satoshi Island. Named after the pseudonymous founder of Bitcoin, the island is touted as the place to be for crypto industry professionals and crypto-enthusiasts.

ABC’s report indicates supporters of the idea having already invested in plots of land on the island valued at between $900 and $11,000.

NFT-Based Land Deeds in Crypto-Centric Paradise

One of Satoshi Island’s key investor selling points is its promise to allow people to own land on the island and have their ownership represented in the form of non-fungible tokens (NFTs) rather than traditional paper deeds. 

The team behind Satoshi Island claim these NFTs can be bought and sold much more easily than traditional real estate, allowing investors to easily trade their NFTs on secondary markets if and when they decide they want to take profits.

In addition, Satoshi Island plans to release citizenship NFTs which will verify a holder’s right to live and work on the island and entitle them to additional perks such as access to airdrops and early mints. Notably, however, Satoshi Island isn’t a country in its own right: it’s a part of Vanuatu and these NFTs will not grant holders citizenship of Vanuatu.

Image source: Satoshi Island website

Haven’t We Seen This Before?

You may be thinking this all seems a bit far fetched, and indeed there have been several previous attempts to establish crypto-utopias on tropical islands that have failed for various reasons.

Perhaps because of the poor track record of these kind of projects, Satoshi Island has attracted its fair share of critics. One of the key concerns these critics have raised is that under Vanuatu law the NFT buyers can’t actually own the land they’re being sold. 

Speaking to the ABC, Mr Troyak himself said, “one cannot own land in Vanuatu…NFT holders have exclusive rights to the blocks of land on Satoshi Island” — how this squares with claims on the Satoshi Island website that investors can “own a real piece of the island” is not clear.

Image source: Satoshi Island website

Another issue facing the team behind Satoshi Island is that in January the Vanuatu Financial Services Commission (VFSC) issued a notice warning investors the project could be a scam. This notice has since been removed after Satoshi Island took legal action against the VFSC claiming it was harming their business. But doubts still remain and the Vanuatu Government continues to evaluate the project.

In related news, Boracay, an island off the west coast of The Phillipines has been labelled ‘Bitcoin Island’, on the back of growing support for crypto as a form of payment among local businesses driven largely by promotional activity by the crypto wallet app Pouch.

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Binance BNB Crypto News DeFi Hackers

Binance Network Suffers $560 Million Code Exploit

hacker with phone with binance logo

An exploit of a bug in the Binance-run blockchain network, BNB Chain, allowed a hacker to ‘trick’ the BNB Chain’s BSC Token Hub bridge into sending them roughly US$560 million worth of BNB tokens. This incident renewed concerns involving the security of cross-chain bridges.

The Binance team responded by suspending activity made on the Binance blockchain, freezing a majority of the stolen assets. It’s estimated that the hacker made off with roughly US$100 million worth of assets on other chains.

Within a day of suspension, BNB Chain tweeted that the bridge was up and running again:

In the days following the hack, the price of BNB fell by 5-7%.

Source: CoinMarketCap

Investor funds safe, extra BNB created

BNB Chain is not the first cross-chain bridge to experience a major hack — around $US$625 million worth of WETH and USDC was drained from Ronin earlier in 2022, considered one of the biggest hacks in the history of crypto. 

As the BNB Chain hack was revealed, Binance CEO Changpeng ‘CZ’ Zhao quickly moved to reassure users, tweeting that funds were safe:

The ‘extra’ BNB were essentially created from nothing, through an exploit of the bridge’s code.

A detailed analysis tweeted by security expert @samczsun explains how the hack may have been carried out, summarising by saying, “there was a bug in the way that the Binance bridge verified proofs which could have allowed attackers to forge arbitrary messages.”  

Next Steps: On-Chain Governance Vote

BNB Chain has said governance votes will determine how to approach the next steps in relation to whether to freeze the hacked funds, whether to use BNB Auto-Burn to cover the remaining hacked funds, and how to deliver a Whitehat program to find future bugs and reward hackers with bounties.

The platform also committed to contributing to a broader conversation about the vulnerabilities in cross-chain bridges, stating:

“We will openly share the details of the postmortem and all lessons on how to implement more advanced security measures to shore-up these vulnerabilities.”

BNB Chain
Categories
Blockchain Crypto News Gaming Metaverse NFTs

Industry Giants Announce Big Moves into Blockchain Gaming

gamer with hands in the air

The world of blockchain gaming continues to boom, with prominent gaming industry figures, including Sega, Epic Games and PUBG creator Brian Greene, all announcing new blockchain-based projects within the past fortnight.

Blockchain games have generally been poorly received by seasoned gamers, as they’re often brimming with micro-transactions, gambling and/or NFT collectibles. Despite this, blockchain gaming has expanded rapidly over the past few years, growing over 2000% in 2021 alone.

The enthusiasm shown for blockchain projects from reputable industry figures in the past few weeks perhaps marks the start of a transition to higher quality and more positively received games. 

PUBG Jumps Into The Metaverse

The first big announcement came from PUBG creator, Brian Greene on September 28, when he announced his next project, known as Artemis, will be a blockchain-based metaverse game featuring NFTs. According to Greene, Artemis will be an open-world game that will allow players to make anything they can imagine.

In an interview with the HitPoints Substack, Greene was keen to point out the game will not be a cash grab, an accusation levelled at some other blockchain-based games:

“The only way this exists is if it’s made for everyone, and it’s not made for money.” 

Brian Green, PUBG Creator

However, Greene also says players will be able to make money in the game by selling their creations to other players. 

Greene is aware of the pushback against blockchain from the gaming community, but insists he’s committed to using the technology in Artemis, saying “I’m just going to do what I’m going to do…but it doesn’t matter if it’s called the metaverse. I don’t care what people want to call it.”

Epic Games Launches Playable Demo Of Solana-based Star Atlas

The next piece of news came from Epic Games, who released a playable demo of the Solana-based game Star Atlas. The demo, which is a pre-alpha release built using Epic’s Unreal Engine 5, allows players to explore a virtual 3D showroom and inspect ships and other vehicles which they’ve purchased as NFTs. 

Access to the Star Atlas demo is currently limited to holders of Star Atlas NFTs, although access codes will eventually be given to some select non-NFT owners. 

The developer of Star Atlas, ATMTA, says they’ll gradually add more features to the playable demo over the coming months, including the ability for players to take their ships out for a test flight. The date for the full release of Star Atlas hasn’t been specified, but it’s expected to still be several years away.

In addition to releasing the demo, ATMTA also released a developer toolkit designed to ease the development process for others looking to create Unreal Engine 5-powered games leveraging Solana.

Sega Announces Plans To Launch First Blockchain Game

Finally, gaming icon Sega, has announced it’ll be launching its first blockchain-based game in collaboration with developer Double Jump Tokyo. 

The game will be based on Sega’s Sangokushi Taisen arcade franchise and will leverage the Japanese Oasys network, which is designed specifically for blockchain gaming and integrates with Ethereum, Astar Network, and potentially other blockchains.

Sega and Double Jump Tokyo haven’t clarified exactly how blockchain will be incorporated into the game and haven’t specified a release date.