Day: February 11, 2023

Web2 and Web3 tools are merging as crypto-backed debit cards

by Blockchain News

As the use of crypto-backed debit cards becomes more widespread, there is an ongoing consolidation of Web2 and Web3 solutions.

Bit2Me, the most important cryptocurrency exchange in Spain, made a statement on February 10 about the launch of its new cashback debit card, which was developed in collaboration with Mastercard.

The original Bit2Me card allows its users to make transactions via the Mastercard network, which is used by millions of merchants all over the globe. This new upgrade gives consumers the opportunity to earn up to 9% bitcoin cashback on all transactions, regardless of whether they were done in-store or online.

At the click of a mouse, “[The] idea is that every user from anywhere in the globe has simple access to the boundless universe of Web3 financial services,”

Eight cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Ripple (XRP), Solana (SOL), and Polkadot (DOT), as well as the stablecoin Tether, are supported via the card and wallet (USDT).

It has been claimed that the corporation intends to support other currencies before the end of the year. At this time, users may access Bit2Me from 69 different countries all around the globe. Users who reside in the European Economic Area (EEA), on the other hand, are only permitted to submit an application for the virtual form of the card.

After making the first statement in 2021 that it would be providing services all over the world, Bit2Me has been planning to expand its service offerings for some time now. When the local Spanish trading platform 2gether went down in July, the exchange was quick to step in and provide assistance to the 100,000 cryptocurrency investors who had been prevented from using its platform. This was done after the investors were barred from using the now-defunct site.

During this time, Mastercard has also been quite active in the Web3 arena, delivering new services and possibilities to its customers and users. Over the course of the previous year, it has selected at least seven blockchain and cryptocurrency firms to participate in its fintech accelerator program.

Additionally, the firm collaborated with Polygon to develop a Web3 musician accelerator program. This program will concentrate on the convergence of the music industry and new technology.

Mastercard made the announcement on January 31 that they would be working with Binance to offer their second prepaid cryptocurrency card in Latin American countries.

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SEC Chair Gary Gensler Warns Crypto Companies

by Blockchain News

After the United States Securities and Exchange Commission revealed that it had reached a settlement with the cryptocurrency exchange Kraken, the chair of the SEC, Gary Gensler, issued a warning to crypto businesses, urging them to “come in and respect the law.”

During an appearance on CNBC’s Squawk Box on February 10, 2018, Gensler said that cryptocurrency exchanges should register with the SEC in order to be in compliance with rules in the United States. He claimed that many participants in the business were “choosing” not to do so. The head of the Securities and Exchange Commission (SEC) said that the business models of many cryptocurrency projects were “rife with conflict,” and that these projects needed to “disentangle” their bundled goods.

According to Gensler, “time-tested norms and laws to safeguard the investing public” are necessary for the industry to have any hope of surviving and thriving in the future. “Don’t put your hand in the customer’s wallet by utilizing their money for your own platform,” the sales pitch advised.

After the SEC announced that it had reached a settlement with Kraken, Gensler made his statement. As part of the settlement, Kraken agreed to pay $30 million in disgorgement, prejudgment interest, and civil penalties. Additionally, the exchange agreed to cease offering its staking services and programs to customers in the United States. Kraken said that it will keep providing staking services for customers located outside of the United States via a different business.

There has been a lot of backlash to the settlement that the SEC reached because many people see it as regulators taking action against companies that need to navigate a regulatory landscape that does not have clear standards. Hester Peirce, a commissioner for the SEC, said that the staking program had “served individuals well” and that the SEC’s actions might be described as “lazy and patronizing.”

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Mississippi State Senate Passes Bill to Protect Crypto Miners

by Blockchain News

The Mississippi Digital Asset Mining Act was approved by the state senate on February 8, 2019, bringing the state of Mississippi, which is located in the United States, one step closer to safeguarding the rights of cryptocurrency miners. There is a parallel measure that is now being deliberated upon in the house of representatives of the state.

Home mining of digital assets and the operation of mining firms in areas designated for industrial use are both made lawful by a measure proposed in the state Senate and sponsored by State Senator Josh Harkins. The state of Mississippi, which has among of the cheapest rates for residential power in the United States, is already home to cryptocurrency miners. The measure, on the other hand, said that “Digital asset mining has frequently met regulatory obstacles at the state and municipal level.”

In addition, the bill prohibits imposing requirements on miners that are greater than those locally applied to data centers; changing the zoning of a mining center without proper notification and an opportunity to appeal; limiting noise from home mining beyond existing limits; and limiting noise from home mining beyond existing limits. It makes it illegal for the Public Service Commission to impose discriminatory charges on mining companies and exempts home and business miners from the requirements that apply to money transmitters.

Additionally, the measure offers a legal definition of the term “virtual money” for use inside the state.

The Satoshi Action Fund has been active in Mississippi, among with other states throughout the country. During his presentation before the Mississippi Senate Finance Committee in January, the chief executive officer of the fund, Dennis Porter, brought up the possibility that cryptocurrency miners may exploit abandoned oil and gas wells as a source of electricity.

Orphan wells are mentioned in both the senate bill and the house version. In accordance with the provisions of the house bill, a state Digital Asset Mining Council would be established. During the course of the year, its members would deliberate on matters like the viability of using the wells as a source of electricity for mining operations. The Ways and Means Committee voted in favor of passing the house bill, but the measure has not yet been addressed on the house floor.

The measure proposed in Mississippi stands in stark contrast to the two-year ban on cryptocurrency mining that was approved in New York in November and subsequently signed into law.

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Ethereum staking service Rocket Pool reaches $1 billion in total value

by Blockchain News

On February 9, according to information provided by DefiLlama, the Ethereum staking service Rocket Pool surpassed a total value locked (TVL) of one billion dollars. This development takes place a little under two years following the introduction of the mainnet for the decentralized finance (DeFi) protocol on November 9, 2021. Rocket Pool, which offers what is known as a liquid staking solution for Ethereum, gives customers the option to either join an existing Ethereum decentralized node operator or to operate their own node.

Users are able to run their own node with just 16 Ether (ETH), as opposed to the network-specified 32 ETH, and another 16 ETH comes from a pool of users who join a decentralized node operator. This is a significant improvement over traditional staking solutions, as the capital requirements are significantly lower. The latter has a far lower minimum deposit requirement of only 0.01 ETH. In return for their ETH, depositors are given a liquid staking token known as rETH. This token serves as evidence that the user is eligible for staking rewards over time and accumulates yield.

Rocket Pool node operators are eligible to collect up to 7.26% annually in compensation for verifying transactions on the Ethereum blockchain. Stakers, however, are eligible to get 4.68%. Both of these rates are subject to change and are dependent on the demand and supply of nodes on the Ethereum blockchain in addition to the total number of transactions. Alterations in the price that ETH is selling for on the market may either make incentives obsolete or make them more valuable.

At this time, there are 385,344 ETH invested in the protocol, and there are 2,068 node operators. The smart contracts used by Rocket Pool have been examined by Sigma Prime, ConsenSys, and Trail of Bits respectively. In addition to that, Immunefi is in charge of running the project’s bug bounty program. The creators of Ethereum have said that the Shanghai update to the blockchain would most likely become operational in the month of March. Since the network made the successful switch to proof-of-stake in September 2022, users will be able to withdraw any ETH that they have staked as well as any prizes that they have accumulated.

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Kraken Agrees to Cease Staking Services for U.S. Clients

by Blockchain News

The United States Securities and Exchange Commission and the cryptocurrency exchange Kraken have come to an agreement that will result in Kraken no longer providing staking services or programs to customers located in the United States.

The Securities and Exchange Commission (SEC) stated in a press release dated February 9 that it had filed charges against Kraken for “failing to register the offer and sale of their crypto asset staking-as-a-service program.” According to the SEC, these programs qualify as securities and fall under its jurisdiction. The cryptocurrency company has come to an agreement wherein it will pay $30 million in disgorgement, prejudgment interest, and civil penalties, and will also stop offering its staking service to consumers in the United States.

“Kraken not only offered investors outsized returns untethered to any economic realities, but it also retained the right to pay them no returns at all,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. “Kraken offered investors outsized returns untethered to any economic realities.” “During this whole time, it gave them no insight whatsoever into, among other things, its financial status or whether or not it even had the wherewithal to pay the promoted returns in the first place,”

According to the complaint filed by the SEC, Kraken has been promoting its cryptocurrency staking services as a “easy-to-use platform and advantages that arise from Kraken’s efforts on behalf of investors” since 2019 when it began selling such services to consumers in the United States. However, according to the commission’s allegations, Kraken customers essentially lost ownership of their tokens when they offered them to the staking program. This exposed them to further risk and provided “very little security” for their investments.

In a blog post dated February 9, Kraken said that it will continue to provide staking services for customers located outside of the United States via a different business.

After authorities from the Internal Revenue Service petitioned the U.S. District Court for the Northern District of California to enable it to issue summonses trying to gather information on Kraken users, the Securities and Exchange Commission reached a settlement with the company and announced it. The document that was filed in court on February 3 states that Kraken did not answer to a similar summons that was given in May 2021.

In the lawsuit that took place in 2021, the cryptocurrency exchange had been asked to produce information on individuals who had carried out the digital currency equivalent of $20,000 in transactions over the course of a single year between 2016 and 2020. Officials from the United States said that Kraken “failed to comply with the summons” and did not deliver the “books, documents, papers, and other material” that were demanded of them.

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Digital Asset Protection Firm Coincover Secures $30 Million in Funding Round

by Blockchain News

The digital asset security business Coincover, which has its headquarters in London, raised a total of $30 million in funding in a round that was headed by Foundation Capital and included a follow-on investment from CMT Digital. Foundation Capital also led the fundraising round.

According to the release that was issued by Coincover, the money will be utilized to assist increase the overall security of the cryptocurrency ecosystem by scaling the operations of the firm, driving recruiting, developing new products, and forming collaborations with other organizations. Coincover will be able to provide an even more comprehensive level of security to people and organizations who are holders of digital assets as a result of this.

In the year 2018, Coincover was founded, and the following year, it was released into the market with the objective of generating a degree of trust within the digital asset industry. Already, the company works with more than 300 different businesses, some of which include wallets, exchanges, hedge funds, family offices, and banks, in addition to a number of digital asset custodians.

Coincover’s mission is to provide the digital asset market with a defense not just against hacker assaults but also against the mistakes that may be made by human operators. In this way, Coincover hopes to solve the security issues that have been plaguing the industry as a whole. Coincover’s goal is to make the cryptocurrency business more reputable and established by reducing the number of frauds and other fraudulent activities that are taking place. It is said that the organization’s services not only reduce the risks associated with transferring and storing bitcoin but also change people’s perceptions of digital assets and encourage improved levels of trust within the industry. This is because the services change people’s perceptions of the risks associated with digital assets.

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The U.S. government’s regulatory strategy towards crypto firms

by Blockchain News

According to Nic Carter, co-founder of venture firm Castle Island and crypto intelligence firm Coin Metrics, the alleged strategy involves isolating the traditional financial system from the cryptocurrency market by relying on “multiple agencies to discourage banks from dealing with crypto firms.” The goal of this strategy is to lead crypto businesses to become “completely unbanked.” This strategy is aimed at isolating the traditional financial system from the cryptocurrency market.

“Regulators intimidate and blackmail bank leadership behind the scenes, and then they produce public “advice” underlining that banks are still free to hold cryptocurrencies or serve cryptocurrency customers. In point of fact, they are not at all free to act in this manner in any way.

A joint statement was issued on January 3 by the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency warning about the risks of banks engaging in crypto and encouraging them to refrain from doing so due to “safety and soundness” concerns. This event is among other recent regulatory developments. In the same month, Binance made the announcement that it will no longer execute any U.S. currency transactions that were less than $100,000 owing to a new policy implemented by Signature Bank.

Signature Bank made the announcement in December 2022 that it intended to restrict the number of cryptocurrency services it offered, refund clients’ monies, and cancel their accounts. Due to liquidity concerns caused by the bear market and the collapse of FTX, the bank is said to have borrowed almost $10 billion from the United States Federal Home Loan Bank System in the last quarter of 2022.

“Banks are reconsidering whether or not it is worthwhile to continue providing these services in light of the potential risks.”

According to comments made by the CEO of Coinbase, Brian Armstrong, on Twitter, another focus for United States authorities seems to be the prohibition of crypto staking services for retail consumers. Staking is a method that enables investors in cryptocurrencies to place their digital assets under the control of a smart contract in return for incentives and passive income.

The methods used by the authorities in the United States are not novel. Operation Choke Point was a regulatory program that was implemented by the federal government in 2013 and targeted a range of “high-risk” sectors in addition to increasing the level of oversight of financial institutions that provide services to these types of companies.

Influences on crypto companies

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Creditors, Borrowers, and US Trustee Object to Celsius delaying reorganization plan

by Blockchain News

The reorganization plan has been put on hold because of a move that was taken by the debtors, which has been met with criticism from the unsecured committee of creditors as well as other parties participating in the bankruptcy case of crypto lending firm Celsius.

The committee, the holders of the Withhold account, the United States Trustee, and the Celsius borrowers all filed separate objections to a motion on February 8 that sought to extend the period of exclusivity for a Chapter 11 restructuring plan from February 15 to March 31. The motion was aimed at extending the period of exclusivity for a Chapter 11 restructuring plan. On March 31st, the exclusivity period that is now in effect will come to an end. The goal of the motion was to make a request that the due date be moved forward to March 31 from the current due date of February 15. If what is being suggested for an extension is approved and carried out as planned, creditors of Celsius will have the opportunity to provide a plan for the company’s restructuring until the 30th of June.

Because of the effect on Celsius customers, the Unsecured Creditors Committee of Celsius ordered that the bankruptcy case “must move towards a resolution.” This decision was made in light of the fact that the issue involves Celsius. They made this remark in light of the fact that many of the customers have been waiting for their payments for a number of months at this point in time. Objections were raised by the United States Trustee as well as by Celsius borrowers, who stated that the bankruptcy was “consum[ing] large amounts of professional expenditures” without offering any assurance that it would be resolved. These individuals stated that the bankruptcy was “consuming” large amounts of money.

The committee has issued a declaration in which it states, “Many account holders’ lives and financial situations have been thrown into disarray as a direct result of the previous behavior of the Debtors and several of its former directors and officials.” The declaration was made after the committee made a finding that “many account holders’ lives and financial situations have been thrown into disarray.” According to this announcement, “many account holders’ life and financial circumstances have been thrown into turmoil.” 

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Former FTX CEO Sam Bankman-Fried Restricted from Using encrypted messaging apps

by Blockchain News

It has been reported that a federal court has ruled against oral arguments asking that a former CEO of FTX, Sam Bankman-Fried, be permitted to use some chat applications.

As a condition of his release on a bond in the amount of $250 million, Judge Lewis Kaplan of the United States District Court for the Southern District of New York is reported to have upheld his ruling that Bankman-Fried be prohibited from using encrypted messaging apps. The report was published on February 9 by Reuters. On February 1, the judge issued an order requiring SBF to refrain from communicating using apps such as Signal. However, the legal team representing the former CEO and the prosecutors had previously negotiated a deal that allowed for exceptions, including the use of Facebook Messenger, Zoom, and FaceTime.

According to reports, Judge Kaplan said that he was “much less interested in [Bankman- Fried’s] convenience” than he was in SBF contacting possible witnesses in his criminal case. Court documents indicated that he had gone out to FTX US general counsel Ryne Miller and current FTX CEO John Ray. According to Bloomberg, the court reportedly said that Bankman-Fried may be “intelligent enough to encrypt anything without a computer,” implying that the existing bail conditions are required.

“There is still snail mail and there is still email and there are all sorts of methods to interact that don’t provide the same hazards,” said Kaplan. “There are many other ways to communicate that don’t present the same concerns.”

Following his arrest and arraignment, Bankman-Fried made a personal appearance in court as part of the bail hearing; but, since then, he has been mainly confined to the residence he shares with his parents in California. According to reports, the conditions placed on his release will continue to apply until the 21st of February as a result of Kaplan’s decision to prolong them.

It is anticipated that Bankman-criminal Fried’s trial will commence in the month of October. He is expected to be charged with eight separate crimes, the most serious of which include wire fraud and breaches of campaign financing legislation. The United States Attorney’s Office has requested that the court issue an order delaying the civil lawsuits, as well as the discovery from the Securities and Exchange Commission and the Commodity Futures Trading Commission, until after the outcome of the criminal case has been determined.

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Bitfarms Settles Debt with BlockFi

by Blockchain News

Bitfarms, a company that mines for Bitcoin (BTC), has fulfilled its financial obligations to BlockFi, putting an end to the short-lived commercial agreement that it had with the now-defunct cryptocurrency lender.

Bitfarms said on February 9 that it has completed its debt obligations to BlockFi in the sum of $21 million in return for a single cash payment of $7.75 million. This news came shortly after Bitfarms received the cash payment. After Bitfarms issued a warning that it may default on the loan it had taken out with BlockFi, the deal was struck some weeks after the warning was given.

According to statements made by Bitfarms’ chief financial officer, Jeff Lucas, this fruitful discussion and settlement moves our efforts to decrease indebtedness one step closer to completion. This successful negotiation and settlement helps advance our goals, especially when considered in conjunction with the prior reorganization and the termination of our obligations regarding capital expenditures in December.

Backbone Mining Company, which is located in the state of Washington and is a wholly owned subsidiary of Bitfarms, serves as the pivotal point of connection between the two companies, Bitfarms and BlockFi. Backbone Mining received a loan from BlockFi in the amount of 32 million dollars in February 2022 for the purpose of supporting equipment purchases. On the 31st of January in the year 2023, the entire amount of the loan’s principal and interest that was still due amounted to $21 million.

As a consequence of the settlement, all of Backbone’s assets, which currently comprise 6,100 miners, are free and clear of any liens or encumbrances that may have been attached to them before.

BlockFi submitted its petition to file for bankruptcy under Chapter 11 on November 28, just a few short weeks after the fall of the cryptocurrency exchange FTX. The fate of the lender seemed to be tied on the success of Sam Bankman-crypto Fried’s business in July 2022, when FTX US provided it with a rescue package for 240 million dollars.

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Bitcoin (BTC) $ 26,569.12 1.14%
Ethereum (ETH) $ 1,628.70 1.65%
Litecoin (LTC) $ 63.93 0.23%
Bitcoin Cash (BCH) $ 233.79 2.22%