Day: January 27, 2023

U.S. Representative French Hill offers insights into digital asset regulations

by Blockchain News

To guarantee that “America remains the home for innovation in fintech and blockchain,” the chairman of a recently established congressional subcommittee on digital assets in the United States has vowed to work toward the promotion of progressive cryptocurrency rules.

On the 26th of January, French Hill, a representative for the United States in the House of Representatives, appeared on the programme Squawk Box on CNBC and provided some of the first insights into what may be expected for crypto legislation in the nation.

“Identifying best practises and policies that continue to strengthen diversity and inclusion in the digital asset ecosystem” is the mission of the Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion, which was established on January 12 and is chaired by Hill. This subcommittee also focuses on digital assets and financial technology.

During the course of the interview, Hill said that Bitcoin (BTC) was not nearly prepared to be used as a real-time payment mechanism yet. However, he went on to say that “we want to make sure that America is the location for innovation in fintech and blockchain is part of that future.”

Hill said, in response to a question concerning the feasibility of a spot Bitcoin exchange-traded fund (ETF), that the newly formed subcommittee also wants to investigate the viability of such a fund.

The Securities and Exchange Commission has repeatedly turned down proposals for spot Bitcoin exchange-traded funds (ETFs), including one submitted by Grayscale, the company that manages the most cryptocurrency assets in the world.

Other topics that will get attention from the panel include the federal privacy legislation, a measure concerning stablecoins, and the implications for the securities market. In addition, the subcommittee will collaborate with the Senate about the commodities facet of the cryptocurrency business.

He said that cryptocurrency trading and exchanges would need to be “overseen,” although he did not identify which agency would be responsible for doing so.

According to what he stated, “all of that is up for discussion, and all of it is going to be a focus this year.”

By asking, “as long as Gary Gensler is there, do you see any movement being made?” The presenter gave the impression that the SEC has been unproductively dragging its feet.

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Hut 8 Mining Corporation Ramps Up Fight Against Power Supplier

by Blockchain News

The Bitcoin (BTC) miner Hut 8 Mining Corporation, which is located in Canada, has taken the struggle it has been having with the power supply for one of its mining sites to a higher level by filing a lawsuit in a court in Canada.

Hut 8 said on January 26 that it has submitted a Statement of Claim against Validus Power, an energy provider for a Hut 8 mining plant located in North Bay, Ontario. The lawsuit was brought in the Superior Court of Justice in the province of Ontario.

Since the beginning of November, these companies have been engaged in an ongoing dispute that stems from what Hut 8 claims is a failure by Validus to “meet its contractual responsibilities” under the power purchase agreement.

Hut 8 is seeking “monetary damages suffered as a consequence of the disagreement” and the implementation of certain elements according to the agreement signed by the two firms in its most recent lawsuit against the latter.

Late in 2021, Hut 8 and Validus began collaborating on several projects. Validus was the one that first supplied North Bay with 35 megawatts (MW) of electricity; however, that number climbed to around 100 MW by the end of 2021. Hut 8 was in charge of managing the project.

On November 9, Hut 8 served Validus with a notice of default, asserting that the latter had breached the terms of the power purchase agreement by failing to meet certain milestones by the dates specified in the agreement and by requiring that Hut 8 pay a higher price for the energy it purchased than what was specified in the agreement.

In the latter part of that month, Hut 8 sent an update in which it was disclosed that Validus had stopped delivering electricity to its North Bay location. Validus retaliated by sending Hut 8 its own default notice, in which it said that the latter had failed to pay for the electricity costs incurred by the former. Hut 8 refutes this assertion.

To this day, there has been no restart of business activity at the location. Hut 8 has said that it is investigating other options to lessen the effect of the dispute, including “organic and inorganic development potential.”

According to an investor presentation from December, the North Bay location had 8,800 crypto mining rigs and a hash rate capacity of 0.84 exahashes per second (EH/s) before it was taken down. This accounted for more than one-fourth of the facility’s overall output capacity.

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Argo Blockchain IPO: Lawsuit Claims Miner Made Untrue Statements

by Blockchain News

During the selling phase of the initial public offering (IPO), which took place in 2021, investors in the cryptocurrency mining firm Argo Blockchain have launched a class-action complaint against the miner. The investors accuse the miner of making deceptive promises and omitting essential facts in their complaint. The investors claim that the miner purposefully deceived them in their dealings with him. According to the allegations that have been levelled against the miner in this scenario, the miner is said to have acted in such a way on purpose with the intention of misleading prospective investors.

Argo was the target of a fresh new legal action that was initiated on January 26. In addition to important staff members, the lawsuit counts as defendants a considerable number of directors on the company’s board of directors as well as other employees. It is alleged that the corporation did not provide an explanation as to the extent to which it was susceptible to difficulties such as network connection, financial restrictions, and the cost of electricity.

In the lawsuit, it was alleged that the offering papers were drafted in a sloppy manner, and as a consequence, they contained inaccurate representations of important facts or failed to give additional information that was essential to ensure that the assertions made did not mislead anyone. In addition, it was alleged that the offering papers contained representations of important facts that were inaccurate, and as a result, the lawsuit was filed. The corporation that was sued is the one that was responsible for putting out the offering papers. In addition to this, it was stated that the offering materials included deceptive assertions of key facts with the goal of deceiving potential investors.

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SEC Probes Investment Advisers Offering Crypto Custody Without Proper Qualification

by Blockchain News

The United States Securities and Exchange Commission (SEC) has begun an investigation into traditional financial advisors on Wall Street to determine whether or not these advisors grant custody of digital assets to their customers without having the necessary qualifications. The purpose of this investigation is to determine whether or not these advisors grant custody of digital assets to their customers.

According to an article that was published by Reuters on January 26, which cited “three sources with knowledge of the matter,” the investigation that is being conducted by the SEC has been ongoing for a few months, but it appears to have picked up speed after the collapse of the cryptocurrency exchange FTX.

According to the sources, the Securities and Exchange Commission (SEC) has never disclosed to the general public the inquiries that it is presently doing since the investigations that it is currently conducting are confidential.

According to a report by Reuters, the majority of the work that the SEC is putting into this investigation is focused on determining whether or not registered investment advisors have complied with the laws and regulations regarding the custody of client cryptocurrency holdings. This is the primary focus of the SEC’s investigation into whether or not registered investment advisors have complied with the laws and regulations regarding the custody of client cryptocurrency holdings. The SEC is conducting an investigation into registered investment advisers to see whether or not they have complied with the rules and regulations that govern the custody of client bitcoin assets. This is the major focus of the inquiry.

To be able to continue to comply with the custodial protections outlined in the Investment Advisers Act of 1940 and to be able to provide custody services to customers, investment advisory firms are required to be “qualified” under the legislation. This qualification is a prerequisite for providing custody services. This regulation is in place to ensure that consumers of investment advice businesses have access to safe and secure custody services.

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Arizona State Senator Wendy Rogers Proposes Bills to Make Bitcoin Legal Tender

by Blockchain News

The person who is principally responsible for the introduction of various legislation relating to cryptocurrencies is Senator Wendy Rogers of Arizona, who was elected to represent the state of Arizona in the United States Senate. One of these laws offers a proposal that, within the borders of the state of Arizona, would recognise bitcoin (BTC) as a recognised form of legal money that may be utilised. There are now a number of legislation that deal with the regulation of alternative cryptocurrencies that are making their way through the legislative process.

In a tweet that she published not too long ago, Rogers revealed that she was involved in the distribution of a batch of bitcoin banknotes. This information was made public. In addition to this, she referenced research that was carried out by the illustrious financial organisation Goldman Sachs, which reveals that Bitcoin is the asset that has performed the best in each and every location of the globe. According to these figures, Bitcoin seems to be the asset that has done the best anywhere else in the globe.

If one of the procedures that have been stated above is followed out, there is a possibility that Bitcoin (BTC) may be recognised as a legal form of money in the state of the United States. This acceptance might come as soon as 2019. Bitcoin will be given the same status as the United States dollar and will become a mode of exchange that is acceptable for the payment of debts, public charges, taxes, and dues in the state if the measure is ultimately enacted into law. This is provided that the measure is ultimately enacted into law. In the future, the value of one bitcoin will be equivalent to that of one dollar in the United States. Things will play out just like this in the event that the plan is finally converted into legislation.

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How much money will Sullivan & Cromwell make from the FTX cryptocurrency

by Blockchain News

The infamous legal firm Sullivan & Cromwell is reportedly on course to make a fortune as a result of its work on the bankruptcy case involving the FTX bitcoin exchange, as stated in a recently published article.

According to a report from Bloomberg Law dated January 27, the expenditures incurred by Sullivan & Cromwell in the FTX case are anticipated to reach hundreds of millions of dollars by the conclusion of the firm’s bankruptcy inquiry.

The FTX trial is set to begin in October 2023; thus, the firm’s attorneys have about eight months to resolve the complex FTX matter, which will need a significant investment of both time and money. More than 150 employees are now working on the FTX case at Sullivan & Cromwell, including 30 partners who charge more than $2,000 per hour for their services. According to a court filing, the study states that associates are charging up to about $1,500 per hour for their services.

Sullivan & Cromwell said in a document filed with the court that its proposed costs are competitive with the market rates charged by other major law firms, and that these fees actually constitute a reduction when compared to the rates charged for cases that are not related to bankruptcy.

The crypto winter of 2022 resulted in a significant increase in the number of bankruptcy files, some of which were submitted by large cryptocurrency companies such as Genesis Global Trading, Celsius Network, and Voyager Digital. This resulted in a high demand for bankruptcy professionals.

According to Jonathan Lipson, a professor of law at Temple University, attorneys are likely to do extremely well in cases like FTX, “much as the professionals have done very well in previous significant cases.” FTX is an example of a case where lawyers are expected to do very well. For instance, the legal firm Weil Gotshal, which is situated in New York City, generated over $500 million in fees off of the bankruptcy of Lehman Brothers in 2008.

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Custodia Bank’s Application to Join Federal Reserve Rejected

by Blockchain News

The application that Custodia Bank submitted to join the Federal Reserve System was denied by the Board of Governors of the Federal Reserve System in the United States. The Federal Reserve noted in its statement that the application “was not compatible with the relevant conditions under the law.” In addition to this, it asserted that Custodia possessed a management framework that was “insufficient,” and it referred to an earlier joint declaration made by the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, which concluded that cryptocurrency assets are incompatible with safe banking procedures.

In spite of the fact that the bank’s application for a master account was denied, the bank said in a tweet that the application is still in the processing stage. Because of what is known as a “master account,” a financial institution is able to carry out crucial tasks such as making international money transfers. Custodia, which is led by Caitlin Long, submitted an application for the master account in 2020 and filed a lawsuit against the Fed in June due to the prolonged delay in the Fed’s consideration of the application.

According to a statement released by Custodia, the Fed set the bank a deadline of three days and three nights to withdraw its application. Custodia aggressively sought federal oversight, going above and beyond all of the rules that apply to ordinary banks, the report noted.

In August, when it became apparent that digital asset banks may have a difficult time acquiring an account, the Fed did not provide rules for the issuance of master accounts until after it had become evident that digital asset banks could have a difficult time receiving an account. “Institutions that engage in novel activities and for which authorities are still developing appropriate supervisory and regulatory frameworks would undergo a more extensive review,” the Fed said in a statement at the time. “Institutions that engage in novel activities and for which authorities are still developing appropriate supervisory and regulatory frameworks.”

In October, the Federal Reserve granted the BNY Mellon bank permission to provide cryptocurrency custody services. As a result, the BNY Mellon bank became the first major U.S. bank to offer simultaneous custody of digital assets and conventional investments on the same platform. Custodia Bank was established in Wyoming in 2020, taking advantage of the crypto-friendly state’s opt-in custody laws for “blockchain banks” that were implemented in 2019.

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New York State Introduces Bill Allowing State Agencies to Accept Crypto

by Blockchain News

A measure that would allow state agencies to accept cryptocurrencies as a means of payment for fines, civil penalties, taxes, fees, and other charges imposed by the state was presented to the New York State Assembly on January 26. This law would take effect if it is passed.

Democratic Assembly Member Clyde Vanel, who is widely regarded as a crypto-friendly legislator, is the person responsible for the introduction of New York State Assembly Bill A523. It gives state agencies the authority to enter into “agreements with persons to provide the acceptance, by offices of the state, of cryptocurrency as a means of payment” for a variety of different types of fees, including “fines, civil penalties, rent, rates, taxes, fees, charges, revenue, financial obligations or other amounts, including penalties, special assessments and interest, owed to state agencies.”

The measure does not mandate that state agencies accept cryptocurrencies as a form of payment; nevertheless, it does make it clear that state entities might legally agree to accept such payments, and that these agreements ought to be enforced by the judicial system.

The term “cryptocurrency” is defined in the proposed legislation as “any kind of digital currency in which encryption methods are employed to govern the formation of units of money including, but not limited to, bitcoin, ethereum, litecoin, and bitcoin cash.”

Stablecoins such as USD Coin (USDC) and Tether may or may not be included in this definition, depending on how the concept is understood (USDT). On the one hand, the issuer of the stablecoin rather than cryptography is often responsible for regulating the supply of the stablecoin. On the other hand, the bill does recognise that certain cryptocurrencies have a “issuer,” and it provides that agencies can charge the payor an extra fee if such a fee is charged by the cryptocurrency’s issuer. Additionally, the bill does recognise that some cryptocurrencies have a “mining pool,” but it does not recognise that some cryptocurrencies have a “mining pool.”

In order for the measure to be enacted into law, it will first need to get approval from both the Assembly and the Senate of New York, and then it will need to be signed by Governor Kathy Hochul.

Many people have the impression that the state government of New York is against cryptocurrencies. It wasn’t until November 2022 that New York became the first state to adopt a statute that effectively outlawed the mining of almost all cryptocurrencies. In addition to this, it has been attacked for the stringent “BitLicense” that it mandates all cryptocurrency exchanges get. In April of 2022, the Mayor of New York made the case that the legislation requiring a BitLicense ought to be overturned.

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Monica Long Named New President of Ripple

by Blockchain News

After serving as general manager for the company, Monica Long has been promoted to the position of president at Ripple. Long began her career with the company in 2013 as the director of communications. In 2018, she was promoted to the position of general manager of RippleNet, the company’s financial network, in addition to her previous role as general manager of RippleX, the blockchain development arm of the business.

Up until this point, the role of president of Ripple has been somewhat of a mystery, with the title having been assigned to both of the company’s co-founders, Brad Garlinghouse and Chris Larsen, at different points in time.

“The role entails maintaining a high level of scalability. We’ve been through many [crypto] winters, and despite this one, we just had a record-breaking year in terms of both our company and our consumer growth.

She went on to say that despite this atmosphere, “We are continuing to increase our workforce.”

When there were just ten people working for the firm, Long joined Ripple. She was the driving force behind the creation of the On-Demand Liquidity solution for the firm, which was released in 2018 and is referred to be “Ripple’s flagship product.” In the last year, Ripple has launched an additional service that is called LiquidityHub, and according to Long, the business will continue to build on this service. In the previous year, almost sixty percent of RippleNet’s payment volume was routed via ODL.

Regarding the RippleX side of things, Long said that an automated market maker specification will be put up for a vote by the validators this year.

Due to the current legal dispute between Ripple and the United States Securities and Exchange Commission, Ripple is often mentioned in the media. Ripple and its co-founders, Garlinghouse and Larsen, have been charged by the Securities and Exchange Commission (SEC) of conducting an unregistered securities offering to the tune of $1.38 billion and selling XRP (XRP) to retail investors in the capacity of an unregistered security.

On January 18, Garlinghouse said to CNBC that the corporation anticipates receiving a ruling about the issue this year.

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The new procedures included the requirement that all future code changes be approved by the DAO

by Blockchain News

According to a tweet thread published on January 27 by the Aave team, the third edition of the cryptocurrency lending app Aave has now been deployed to Ethereum for the very first time. ” Aave V3 ” was first made available to the public in March 2022, and immediately after its launch, it was installed on a number of blockchains that were compatible with Ethereum Virtual Machine (EVM).

Users of Ethereum could only utilise the more outdated “V2” version of the application up until now.

Aave V3 has a number of features that are designed to assist users in reducing the amount of money spent on fees and increasing the effectiveness of their capital.

For instance, the High Efficiency option gives the borrower the opportunity to sidestep some of the app’s more severe risk requirements. This is possible in the event that the borrower’s collateral has a strong correlation with the asset that is being borrowed.

The developers believe that borrowers of stablecoins or holders of liquid staking derivatives may find this feature valuable.

In addition, the “isolation” feature enables some risky assets to be used as collateral, provided that they have their own debt cap and are only used to borrow stablecoins. This is possible since certain assets can only be used to borrow stablecoins.

In the prior iteration, there was no provision for putting restrictions on the kinds of assets that may be used as collateral for a loan of a certain kind.

Because of this, coins with a lesser market capitalization and less liquidity were often unable to be utilised as security.

The creators claim that the gas optimization algorithm that is included in V3 will result in a 20–25% reduction in the cost of gas.

In November of 2021, the code for V3 was made publically available.

In March of 2022, the Aave DAO gave its blessing to move forward with the deployment of the new version after an initial vote.

The V3 system was rolled out to Avalanche (AVAX), Arbitrum (ARB), Optimism (OP), and Polygon over the course of the subsequent few months (MATIC).

Despite this, the Ethereum implementation of Aave has traditionally been the most liquid, but V3 was not available on this implementation until recently.

The official proposal states that there will be a total of seven coins available during the launch phase.

The vote to launch was held beginning on January 23 and continuing for a total of two days.

Following the success of the proponents in the vote, the implementation of the idea was finally able to get off the ground on January 27.

The percentage of DAO members that cast a negative vote on the proposal was less than 0.01%.

Aave was subjected to a $60 million short attempt in November 2022, which was eventually unsuccessful. In response, the company modified its governance practises.

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Bitcoin (BTC) $ 26,961.22 1.80%
Ethereum (ETH) $ 1,670.96 2.87%
Litecoin (LTC) $ 65.68 2.78%
Bitcoin Cash (BCH) $ 232.18 0.72%