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A Rising Rate Environment will Tilt from Bonds to Crypto, Says Fundstrat Founder

by Blockchain NewsFebruary 15, 2022

Speaking on CNBC’s Crypto World Monday, Thomas (Tom) Lee, the founder of equity research firm Fundstrat Global Advisors, opined that with interest rates being on a reversal after experiencing a 30-year decline.

This is a game-changer for crypto because other investments like bonds will become less attractive. Lee noted:

“That means for the next 10 years, you’re guaranteed to lose money owning bonds… that’s almost $60 trillion of the $142 trillion [of U.S. household net worth].”

He suggested that the $60 trillion would find its way into the crypto sector to earn yield.

“The obvious thing is it rotates into stocks like FAANG, but I think what is more likely is a lot of speculative capital from equities… it’s really going to be tracing its roots to a rotation out of bonds and it’s going to eventually flow into crypto.”

The market expects the United States for the upcoming rising interest rate hike, with the latest Consumer Price Index (CPI) standing at 7.5% year-over-year.

Lee, however, acknowledged that an open mind is of the essence in the crypto market based on the volatility experienced. He stated:

“Unless someone really has a crystal ball, it’s very difficult to be precise in crypto. Drawdowns of 40% are really common and bitcoin makes most of its gains in 10 days in any single year. It’s tough to be too precise with crypto. It’s wide lanes.”

Crypto has emerged as an alternative asset class, having experienced significant diversification beyond trademark cryptocurrencies, like Bitcoin (BTC) and Ethereum (ETH), in the last two years.

Some of the new members become active in the cryptocurrency family, such as block decentralized finance (DeFi), stablecoins, and non-fungible tokens (NFTs). Nevertheless, these new assets have to stand the test of time so that investors can gain confidence in them as they have in Ethereum and Bitcoin.

A recent study by blockchain firm Paxos noted that consumers were changing their minds because they were treating crypto as ideal investment vehicles.

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South Korean University to Present NFT Certificates for Graduates

by Blockchain NewsFebruary 15, 2022

Sungkyunkwan University (SKKU), a top private university in Suwon, South Korea, seeks to add flavour to its graduation ceremony slotted onFebruary 16, by offering (non-fungible token) NFT certificates to three graduators because of their excellent performance in school.

Per the announcement:

“If the certificate is made with NFT, the advantage is that the original can always be kept without the risk of loss or forgery, and can be used as an official certificate anytime, anywhere.”

Moon Kyung-won, a 10th-grade pharmacy graduate, will be the primary recipient of the NFT award because he far outweighed his 40 hours graduation requirement by clocking 284 hours of volunteer work, mentoring and guiding children from North Korea refugee families.

Sungkyunkwan University acknowledged that its decision to use NFTs was reached because they are inspired by blockchain technology, giving the content a unique recognition value by transforming images, music, and pictures into a non-replicable format.

The university added:

“It is a customized event for Generation Z who are interested in virtual assets and metaverses, and it is also a small consolation for ‘corona students’ who have lost their campus life due to the Corona 19 situation.”

SKKU also plans to streamline on-campus administrative services through blockchain technology.

To woo young investors, South Korean presidential candidates have announced crypto-friendly measures, given that the nation has more than 5 million individual crypto accounts.

Therefore, Generation Z might be a game-changer in the presidential elections slated for next month because smartphone ownership among this group reached 91% this year.

Furthermore, the average level of trading experience has formed a highly receptive population to crypto assets.

Crypto and stocks have emerged as an ideal investment vehicle for young South Koreans who grapple with high rent in places like Seoul.

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Tagged : Asia / GRADUATION / NFT / SKKU / South Korea

Crypto Market Expanding in the Middle East, Says HashCash CEO

by Blockchain NewsFebruary 15, 2022

A paradigm shift is being witnessed in Middle East, especially the United Arab Emirates (UAE), because the region’s interests are changing from oil to crypto and metaverse, among other blockchain innovations.

Having set its eyes on becoming a blockchain capital, the UAE is setting the ball rolling by establishing a legal framework to aid the operation of crypto-based and blockchain companies.

Raj Chowdhury, the CEO of blockchain development company HashCash Consultants, welcomed the Middle East’s quest to propel blockchain-based business options. He stated:

“One of the biggest market disruptors in modern-day innovations, blockchain technology will soon become omnipresent owing to its wide scope of applications. Market forecasts indicate similarly, and the rising demand for blockchain solutions will soon transform into a necessity.”

As early as 2018, the Middle East had already set up a regulatory body called the Securities and Commodities Authority (SCA) as it had seen the potential of the crypto sector.

This move has been instrumental in establishing multiple free zones across the UAE in places like Abu Dhabi and Dubai. For instance, crypto companies got the green light to set up business in the Dubai Multi-Commodities Centre (DMCC) free zone last year.

The Dubai economy also got supported by the UAE KYC (Know-Your-Customer) blockchain platform, prompting instant bank accounting functionality, secure digital customer onboarding, and sharing verified data between financial institutions and licensing authorities possible in 2020.

Therefore, Chowdhury believes that the UAE is attracting global attention as a hub for blockchain innovation.

The Middle East has also shown interest in the cryptocurrency market, given that the first Bitcoin fund in the region was listed in Nasdaq Dubai in June 2021.

While crypto has gradually penetrated the Middle East, the high degree of volatility in the cryptocurrency market has also drawn the attention of investors and relevant authorities.

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Tagged : Blockchain / Cryptocurrencies / Dubai / HASHCASH / Industry / Middle East / Uae

BlockFi to Pay $100M to Settle Charges with SEC & 32 States

by Blockchain NewsFebruary 15, 2022

BlockFi will pay $100 million to the U.S. Securities and Exchange Commission (SEC) and 32 states to settle charges in connection with a retail crypto lending product.

The charges have come after a subsidiary of BlockFi offered the retail crypto lending product to nearly 600,000 investors, regulators said.

The penalty is the largest fine the federal watchdog has levied on an issuer of crypto-asset securities, and it includes $50 million for state regulators and $50 million to the SEC.

The SEC added that the charges are lower than they might have been due to BlockFi’s willingness to cooperate.

BlockFi Lending LLC is paying the heavy fine as it broke the rules by offering an interest-bearing lending product without registering it with regulators.

The company and its affiliates held about $10.4 billion in assets from investors – nearly 400,000 in the United States – as of Dec 8, the SEC said.

According to Reuters, the charges come as U.S. regulators, worried about investor protections and systemic risks, are cracking down on the booming crypto industry.

Also, the settlement is an example of SEC chair Gary Gensler’s strategy to force crypto firms to comply with existing U.S. securities laws, Reuters added.

The agency said it hopes more companies will follow suit.

BlockFi was also alleged by the North American Securities Administrators Association (NASAA), which coordinated the multi-state probe, of failing to comply with similar state registration rules. The NASAA said that more jurisdictions are expected to join the settlement.

In reply to the settlements, BlockFi said the resolution is an example of the firm’s “pioneering efforts in securing regulatory clarity for the broader industry and our clients.”

Following the case, BlockFi has planned to offer an alternative product expected to be the first crypto interest-bearing security registered with the SEC.

In recent years, the SEC has been keeping a closer look at crypto exchanges and lenders as the agency is working on bringing the digital asset sector within the existing regulatory framework.

According to Reuters, crypto lending products, in particular, have become an SEC target. In September, Coinbase Global Inc said the agency was threatening to sue if it went ahead with plans to offer a similar product.

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Tagged : Bitcoin / Blockchain / Blockfi / Crypto / Legal / SEC

India Should Ban Cryptocurrencies, Says RBI Deputy

by Blockchain NewsFebruary 15, 2022

India should ban cryptocurrencies as they are related to Ponzi schemes or worse and they pose a threat to financial and macroeconomic stability, a deputy governor at the Reserve Bank of India (RBI) said.

“We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and maybe even be worse,” T. Rabi Sankar said in a speech.

Sankar’s comments have come after the Indian government established a taxation framework for cryptocurrencies.

On February 1, 2022, India decided to regulate cryptocurrencies by introducing a tax of 30% on income from transactions involving digital assets, Blockchain.News reported.

Blockchain.News also reported that India’s Finance Minister Nirmala Sitharaman came out guns blazing to clarify that cryptocurrency taxation is a “sovereign right” and “corrective action”.

Sitharaman clearly noted that while the “profit emanating from transactions associated to cryptocurrency has been taxed, nothing has been done, at the moment, to legalise, ban or de-legalise it”.

Sitharaman also clarified doubts about the future of cryptocurrency in the country, stating that if there were any final decisions on prohibiting digital currencies, it would only come after due consultation from all stakeholders.

It gave hope to crypto exchanges and investors who have been arguing for the regulation of cryptocurrencies as an asset.

However, Sankar has been a firm supporter of an outright instead of regulation.

“Cryptocurrencies are not currencies, financial assets, real assets, or even digital assets. Therefore, it cannot be regulated by any financial sector regulator. It is not possible to regulate something that one cannot define,” he said.

“All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India.”

Sankar said that cryptocurrencies have been developed to bypass the regulated financial system and that he does not accept the argument that cryptocurrencies must be permitted for blockchain technology to thrive.

Sankar also pointed to a Wall Street Journal report that stated that there had been $14 billion worth of illicit transactions, involving cryptocurrencies last year.

According to industry estimates, there are about 15 million to 20 million cryptocurrency investors in India, with total holdings of about 400 billion Indian rupees ($5.3 billion).

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Tagged : Asia / Bitcoin / Blockchain / Crypto / India / Rbi

Chinese Tech Giants Cautiously Invest in the Metaverse

by Blockchain NewsFebruary 15, 2022

The metaverse is arguably one of the biggest trends and buzzwords in the world of tech today, and Chinese technological giants are not sitting on the sidelines to watch the actions unfold.

As reported by CNBC, Chinese mega unicorns are certainly investing in the metaverse, despite many firms are taking a cautious approach, given Beijing’s current crackdown on tech companies.

American tech companies, notably Meta Platforms Inc, Google, and GameStop Corporation, have publicly opened up and defined their plans to dive into the metaverse. While Chinese funds are currently being used to explore this developing trend in tech, the way of discovering how to integrate the metaverse truly remains a major hurdle that most Chinese firms are exploring to cross.

“Metaverse is the future of [the] social network. All China’s tech giants have to embrace it to find new ways to engage the youngest generation of internet users, which is critical at the time when their business models on smartphones and mobile internet are matured,” Winston Ma, managing partner at CloudTree Ventures, told CNBC.

Amongst the Chinese firms that seem to have the metaverse integration figured out, including Tencent, the largest gaming company globally. The report referenced Tencent’s CEO, Ma Huateng, also known as Pony Ma, who said the metaverse would be an opportunity to add growth to existing industries such as gaming. Ma is also giving credits to the positions that the company as one that has “a lot of the technology and know-how building blocks” to explore and develop the metaverse.

The metaverse world is not completely developed yet, and there seem to be no indications of the directions it will take in the next decade. However, based on projections, the metaverse in China could be worth about $8 trillion shortly, and companies already offering Virtual Reality, Gaming, and Social Media, including Alibaba, and ByteDance, amongst others, will certainly not want to be left behind.

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Tagged : China / Metaverse / Tencent

Chinese Tech Giants Cautiously Invest in the Metaverse

by Blockchain NewsFebruary 15, 2022

The metaverse is arguably one of the biggest trends and buzzwords in the world of tech today, and Chinese technological giants are not sitting on the sidelines to watch the actions unfold.

As reported by CNBC, Chinese mega unicorns are indeed investing in the metaverse, despite many are taking a cautious approach considering Beijing’s current crackdown on tech companies.

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Tagged : China / Metaverse / Tencent

UK’s HMRC Makes the First NFT Seizure in Tax Evasion Scandal

by Blockchain NewsFebruary 15, 2022

The United Kingdom’s tax authority, Her Majesty’s Revenue and Customs (HMRC) have arrested three suspected tax evaders and seized three Non-Fungible Tokens (NFTs), a confiscation that marks the very first of them that it’s kind from any law enforcement agency in the country.

Per a BBC report, three suspects were allegedly involved in data fraud and made attempts to defraud the HMRC with the sum of £1.4 million in taxes due.

Tax watchdogs worldwide have been attempting to intensify efforts to crack down on tax evaders, even though crypto regulations are non-existent in most countries. In the UK, digital assets, NFTs inclusive, are regarded as tradable commodities, and by virtue of this, they are bounded by extant tax regulations.

HMRC investigators involved in the case said the suspects used false identities to create as many as 250 shell companies, all to money laundering and evade taxation alongside.

They were noted to use several subtle strategies and “sophisticated methods” to try to hide their identities, including false and stolen identities, false addresses, pre-paid unregistered mobile phones, Virtual Private Networks (VPNs), false invoices, and pretending to engage in legitimate business activities.

However, these suspects are not as invincible as they thought they were, leading to the arrest.

This arrest and NFT confiscation should “serve as a warning to anyone who thinks they can use crypto assets to hide money from HMRC,” said Nick Sharp, deputy director of economic crime, “We constantly adapt to new technology to ensure we keep pace with how criminals and evaders look to conceal their assets.”

Beyond taxation, it is obvious that enforcement agencies are particularly patient in following all money trails to bring criminals to book. As reported by Blockchain.News last week, the Department of Justice announced it had arrested a New York-based couple for being the mastermind behind the 2016 Bitfinex exchange hack. American movie giant Netflix Inc has planned a documentary series for the entire event.

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Tagged : Cybercrime / Hmrc / NFT / TAX FRAUD

Singaporean DBS Bank to Expand Bitcoin Offerings to Retail Traders

by Blockchain NewsFebruary 15, 2022

DBS, the largest financial services operator in Singapore, is on track to expand its Bitcoin trading services to its retail customers, a wildly divergent position from its plans when it made its debut into the nascent digital currency world.

In the last quarterly earnings call from the bank, Piyush Gupta, the CEO, noted that the bank is exploring avenues to expand its investor base beyond the professionals allowed to trade BTC on its platform.

“We’ve started doing the work on seeing how we get in a sensible way, take it out, and expand it beyond the current investor base. And that includes making sure we appropriate thinking about things like potential fraud and others,” Gupta said when asked whether DBS Bank has a roadmap for rolling out digital asset trading to retail investors.

Background works must be put in place to provide retail trading services, especially when it is in a highly volatile industry like cryptocurrencies. Gupta submitted that the bank plans to offer the retail services in as much of a decentralized manner as possible.

In all, DBS bank plans to “make the access to the digital assets a lot more convenient” by enabling instant online deposits and transactions without relying much on banking intermediaries.

“What happens is that you’ve got 24/7, but the customers still need to call and speak to bankers. So the first order is to make it all online, make it self-service, make it instant, and make sure the internal processes are robust to be able to support that,” the CEO added in the earnings call.

It is not uncommon to find traditional banks wading into the digital currency ecosystem. Based on the volatility of crypto and the regulation of banks, the pioneering financial services provider are often known to restrict the trading of coins by retailers or customers that are not classified as high net worth individuals. With DBS planning these pushes, finding others to follow will not come as a surprise.

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Tagged : Bitcoin / Dbs / Retail Investors / Singapore

Coinbase Traffic Hits Historic Highs Following Super Bowl Ad, Jumping to Top 2 on App Store

by Blockchain NewsFebruary 15, 2022

Following a minute-long ad worth $14 million meant for the Super Bowl, US-based crypto exchange Coinbase raked in the dividends because traffic reached historic highs.

Reportedly, the traffic was overwhelming, resulting in the Coinbase app surging to the second spot from the 186th position on the Apple store, according to Block Research.

The Block added:

“Crypto apps shot up App Store download charts in the US on Monday morning, after a Super Bowl studded with digital assets advertising. Super Bowl LVI’s face-off between the Cincinnati Bengals and Los Angeles Rams also saw two of the biggest crypto exchanges, FTX and Coinbase, compete for eye-balls.”

Surojit Chatterjee, the Chief Product Officer at Coinbase, took to Twitter and confirmed the company’s significant traffic witnessed following the advertisement. He stated:

“Coinbase just saw more traffic than we’ve ever encountered, but our teams pulled together and only had to throttle traffic for a few minutes. Humbled to have been witness to this.”

He added that the Coinbase landing page also went haywire.

“We had over 20M hits on our landing page in one minute. That was historic and unprecedented. We also saw engagement that was 6 times higher than our previous benchmarks.”

The Super Bowl is usually a battle of the titans, given that it’s the annual playoff championship game of the National Football League (NFL).

Therefore, it’s a famous game on American soil and beyond, making companies splash significant amounts to get notable airplay.

For instance, Singapore-based crypto exchange platform Crypto.com selected NBA’s four-time most valuable player (MVP), LeBron James, as its new weapon for mainstream adoption during the Super Bowl.

This move was seen as a stepping stone towards crypto adoption because his influence and reputation go beyond the sphere of basketball and sports.

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Tagged : Advertisement / Coinbase / Crypto Exchange / Cryptocurrencies / Enterprise / Super Bowl