Institutional investors pull back from crypto amid regulatory crackdown

In the aftermath of the regulatory crackdown in the United States, institutional investors may have gotten the jitters on cryptocurrency. As a result, digital asset investment products had the highest weekly outflow of any asset class in 2023.

The institutional cryptocurrency fund management CoinShares said on February 20 that digital asset investment products suffered withdrawals of $32 million last week, the greatest outflow of the year. This was the largest outflow since the beginning of the year.

The outflow follows a massive crackdown on the digital asset industry in the United States, which has targeted everything from staking services to stablecoins to crypto custody as the Securities and Exchange Commission ramps up what industry analysts have dubbed its “war on crypto.” The SEC has targeted everything from staking services to stablecoins to crypto custody as it ramps up what they have dubbed their “war on crypto.”

According to CoinShares analyst James Butterfill, outflows peaked at $62 million halfway through the previous week, but they dropped down by the end of the week as sentiment recovered.

The vast bulk of these withdrawals, or 78%, were made from investment instruments connected to Bitcoin (BTC), while Bitcoin short funds received an infusion of $3.7 million during this time period. The company placed responsibility for the increasing outflows on the heightened scrutiny from regulators.

We think that this is because investors in ETPs have a more pessimistic outlook on recent regulatory pressures in the United States in comparison to investors in the wider market.

Despite this, the general market had a gain of 10% over the time period in question, which was not reflective of the pessimistic outlook expressed by institutional investors. Butterfill said that as a result of this, the total assets under management for institutional products reached $30 million, which is the highest level since August.

However, blockchain equities reversed the trend with inflows that totaled $9.6 million for the week. Ethereum (ETH) and mixed-asset funds also saw withdrawals of capital over the same time period.

In the month of January, institutional investors resumed their practice of investing in cryptocurrency funds, with total inflows of $117 million for the last week of the month, marking a new record for the past six months.

Nevertheless, there has been a withdrawal from funds during the last two weeks, after a period of four weeks in January when there were deposits.

The change in attitude might be attributed to a regulatory enforcement action that occurred on February 9, when the SEC brought charges against Kraken for the staking services it provided. A few days later, it filed a lawsuit against Paxos about the minting of Binance USD (BUSD), and only the week before that, it suggested reforms that would affect cryptocurrency companies that operate as custodians.


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Dozens of AI-Powered Chatbot Tokens Found to Be Part of honeypot schemes

PeckShield, a company that specializes in blockchain security, has sounded the alarm after discovering hundreds of tokens that falsely claim to be tied to the artificial intelligence (AI) powered chatbot ChatGPT.“

In a post dated February 20, the company disclosed that at least three “BingChatGPT” tokens seem to be part of honeypot scams. A honeypot strategy is a kind of smart contract that deceives a user into contributing Ether (ETH), which the attacker subsequently captures and collects.

In what is commonly known as a “pump and dump” scheme or a “rug pull,” PeckShield reports that at least two of the identified tokens have already lost nearly 100% of their value, while a third is at a loss of 65%. This type of scheme involves the purchase of an asset with the intention of quickly selling it at a higher price.

Typically, the organizers of a pump-and-dump scheme would orchestrate a campaign of deceptive claims and hype to entice investors to purchase tokens, and then they will discreetly sell their interest in the plan as prices go up. This is done in order to make a profit from the scam.

According to PeckShield, at least one of the malicious actors behind the tokens is known as “Deployer 0xb583,” and he is responsible for the creation of “dozens of tokens using a pump and dump strategy.”

PeckShield did not provide an explanation as to why the malicious actors are using the name BingChatGPT for their tokens; however, it is possible that the scammers are attempting to capitalize on the announcement made on February 7 that OpenAI’s ChatGPT technology will be integrated into Bing as well as Microsoft’s Edge web browser.

It’s possible that using the name “Microsoft Token” is an effort to fool victims into believing they are connected to Microsoft in some way, in order to capitalize on the buzz surrounding AI chatbots.

A research published on February 16 by the blockchain analytics company Chainalysis stated that approximately 10,000 new tokens created in 2022 exhibited all the on-chain hallmarks of being pump-and-dump operations. This information was recently made public.

According to the Blockchain analytics company, there were 1.1 million tokens released in 2018, but only 40,521 had a “effect on the crypto ecosystem.” This means that there were at least 10 swaps during four consecutive days of trading in the week after their introduction.

The company said that of of the 40,521 tokens that were introduced in 2022 and got sufficient momentum to be worth investigating, 9,902 or 24 percent had a price fall in the first week that was suggestive of likely pump and dump behaviour.

The company noted that it examined 25 specific tokens and found that “they were almost certainly designed for a pump and dump,” with malicious honeypot code that prevents new buyers from selling the token. While a price drop on its own is not an indication of wrongdoing on the part of token creators, the company noted that it examined 25 in particular and found that “they were almost certainly designed for a pump and dump.”


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India UPI expanding services to Singapore

The Unified Payments Interface (UPI), which is India’s national payment network, is now merging with the PayNow quick payment system in Singapore in order to broaden the scope of its services beyond the boundaries of India. The service was inaugurated by Shaktikanta Das, governor of the Reserve Bank of India, and Ravi Menon, managing director of the Monetary Authority of Singapore, via the use of token transactions made possible by the connectivity between UPI and PayNow.

Through the integration of UPI and PayNow, users in both countries will have the ability to transmit money rapidly across international boundaries. It is possible to transfer or receive money from India by using merely a UPI-id, a cellphone number, or a virtual payment address for money that is housed in bank accounts or electronic wallets. The instant real-time payment method offered by UPI enables the quick transfer of funds between two bank accounts via the use of a mobile app.

At the outset, the State Bank of India, the Indian Overseas Bank, the Indian Bank, and the ICICI Bank will act as facilitators for outbound remittances. Both Axis Bank and DBS Bank India will work to make it easier to receive money sent from outside. Users in Singapore will get the service through DBS Bank and Liquid Group as the providers.

The ICICI Bank is also participating in the Central Bank Digital Currency (CBDC) scheme that is being implemented in India. The CBDC pilot program in India was first introduced in two stages: the first was in November 2022 for the wholesale sector, and the second was in December for retail consumers. Since the beginning of the pilot program, the digital rupee initiative has recorded 770,000 transactions that have been conducted by eight different banks. There are now five cities taking part in the experiment, and there is a possibility that nine other cities may join the study shortly.

“This is a significant value addition for India’s payment rails considering that there is close to 30 percent of the people in Singapore who are expatriates, and that they transfer money to India once a month or once every three months. Because of this integration, friction is eliminated, which in turn reduces processing time and costs.

The introduction of COVID-19 has contributed significantly, over the course of the previous several years, to the expansion of India’s digital payment infrastructure. However, the government is wary of cryptocurrencies and has imposed a tax of thirty percent on any earnings made from their use. This has caused big participants in the industry to leave the nation. The government, on the other hand, is eager to use blockchain technology for its CBDC program, with the expectation that current infrastructure would assist in scaling up its CBDC program.


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Hedge Funds Battle to Survive After FTX Exchange Collapse

Some hedge funds were able to weather the storm and remain solvent despite being adversely affected by the failure of the FTX exchange, while others were forced to make the decision to liquidate their holdings and cease operations as a result of the financial crisis.

CoinShares, an institutional crypto fund manager, underlined the fact that the company remained “financially solid” in its fourth-quarter report for 2022. This was despite the fact that the company had to cope with the FTX crash at the end of the year. The fund also showed its successes, including its graduation to the principal market of Nasdaq Stockholm and its high levels of inflow into CoinShares physical exchange traded goods.

Following the filing of its bankruptcy petition, CoinShares said that assets worth more than $31 million were frozen on the FTX exchange. The management of the fund does not know for certain if they will ever be able to retrieve the monies or how much of the assets can be retrieved at this time.

During the course of the quarter, the company came to the conclusion that it would no longer maintain its CoinShares consumer platform. The company explained its decision in writing, stating that “Market circumstances gave birth to a scenario that did not enable us, with our present financial structure, to sustain a consumer activity that needed large upfront expenditure in marketing.”

The Chief Executive Officer of CoinShares, Jean-Marie Mognetti, said in a letter to investors that the failure of FTX “had a substantial effect” on the company’s ability to implement its algorithmic trading platform, HAL, in European markets. In spite of this, Mognetti also noted that the company will continue into 2023 with defined objectives, such as concentrating on increasing its digital asset management business and the institutional products it provides.

Galois Capital, a hedge fund, did not have the same level of success as CoinShares when it came to weathering the FTX storm. The fund announced to its investors on February 20 that it would be winding down its operations due to the losses that it sustained as a result of the collapse of FTX. The company made the executive decision to return the remainder of its cash to its investors and to sell its claims to purchasers who were better equipped to pursue bankruptcy claims.


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Hope Finance Scam Leaves Prospective DeFi Users Out of Pocket

After the discovery of a vulnerability with a value of $2 million, potential customers of an Arbitrum-based decentralized finance (DeFi) effort have been left without any financial remedy. This is because the vulnerability has been exploited.

On February 21, the Hope Finance Twitter account warned clients about the fraud, which prompted the Web3 security company CertiK to raise the alarm about the situation.

It is quite challenging to get any information on the project. A Twitter account for the platform was established in January of 2023, and on that account, information was published on the network’s plans to build an algorithmic stablecoin that would be dubbed Hope token. This information was provided on the Twitter account (HOPE). The amount of Ether that is now being exchanged for one unit of HOPE causes real-time modifications to be made to the supply of the HOPE coin (ETH).

“It would seem that the con artist modified with the TradingHelper contract, which meant that the money were delivered to the con artist every time 0x4481 called OpenTrade on the GenesisRewardPool.” This includes the erroneous application of a modifier as well as the potential of reentrancy attacks. Cognitos discovered that the smart contract code was still able to pass the audit with flying colors, despite the fact that these vulnerabilities had been identified and pointed out.

As a reaction to the fraudulent behavior, Hope Finance disseminated information to its users, which provided them with the possibility to remove staked currency from the protocol by making use of an emergency withdrawal option.

Arbitrum is a roll-up network that was built on top of Ethereum’s layer 2 and has the potential to enable smart contracts to expand in an exponential form. This potential was discovered when the network’s creators saw that Ethereum’s layer 2 was lacking in roll-up capabilities.

Optimism and the other layer-2 protocols are continue to deal with an ever-increasing amount of transactions inside the Ethereum ecosystem. The ability to maintain a positive outlook is one of these protective strategies.


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A British National Charged With Aiding North Korea in Violating US sanctions

A citizen of the United Kingdom who was wanted by the Department of Justice in the United States was apprehended by the Interpol office in Moscow (DoJ). The guy is suspected of participating in a plot to circumvent the restrictions imposed by the United States on North Korea.

Christopher Emms was taken into custody on February 21 in Moscow on the basis of a “red alert” issued by Interpol, as reported by the local media. The British national, who was 31 years old, was taken into custody at the hostel where he was sleeping.

In April 2022, it is believed that Emms, together with a citizen of Spain named Alejandro Cao De Benos, supplied North Korea with instructions on how it might utilize blockchain technology and cryptocurrencies to escape sanctions and wash dirty money. The 2019 Pyongyang Blockchain and Cryptocurrency Conference was both planned and coordinated by the two individuals.

Virgil Griffith, a person who once worked on the Ethereum project, is the third person involved in the plot. In November of 2019, he was taken into custody by the Federal Bureau of Investigation, and after entering a guilty plea, he was given a sentence of 63 months in jail. If found guilty on one count of conspiring to violate the International Emergency Economic Powers Act, Emms faces a possible maximum sentence of 20 years in jail.

Previously, Radha Stirling, the founder of Due Process International, which is a nongovernmental organization that helps defend human rights in the face of international enforcement agencies, stated that there was no strong evidence against Emms: “Precisely because he did nothing wrong; he provided no information to North Korea that doesn’t already appear on the first page of Google.”

After an eight-month travel restriction, Emms was finally free to leave Saudi Arabia in September 2022, after Saudi Arabia had rejected the American extradition request on the grounds that it had a legal foundation. He didn’t waste any time getting out of the country and went straight to Russia. However, despite the fact that the nation was the focus of the Department of Justice’s attempts to implement financial sanctions in the cryptocurrency industry, the local authorities made the decision to assist their American colleagues.


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CBN is continuing to develop its eNaira

The Central Bank of Nigeria (CBN) is making progress on the development of its central bank digital currency (CBDC), the eNaira; nevertheless, the CBN is seeking assistance this time around.

The Central Bank of Nigeria (CBN) is reportedly in discussions with new “technology partners” to establish a new and better system to administer the eNaira, as stated in a story published by Bloomberg on February 21.

According to people with direct knowledge of the situation, the Nigerian financial authority has reportedly discussed these intentions with the technology company R3, which is situated in New York.

The CBN will have full control over the effort thanks to new software that will be developed for the eNaria; nevertheless, the source who did not want to be identified said that the information on this topic is private.

In 2021, with the assistance of the financial software business Bitt, efforts were initiated to establish a digital currency known as the eNaira. According to the article, the new partner will not instantly take over Bitt’s function but would assist phase in absolute responsibility for the Nigerian central bank. This will take place over the course of many years.

Bitt has acknowledged, in a statement, that it is cognizant of the fact that the CBN collaborates with a variety of partners on its technical advancements. It affirmed that it continues to maintain strong collaboration with the CBN and that it is “actively developing further features and upgrades.”

Despite the fact that Nigeria was one of the first nations to introduce a CBDC, the country’s digital currency, the eNaira, got off to a slow start, and adoption was minimal. Only 0.5 percent of Nigerians are reportedly utilizing the CBDC, which leads some to conclude that the grandiose initiative has been “crippled.”

In January, a Nigerian entrepreneur became the first person in the nation to create an operational Bitcoin Lightning node. Not long before that, the government made public its intention to develop a regulatory infrastructure for stablecoins as well as initial coin offers (ICOs).

Nigeria is one of over 90 nations across the world that is investigating the usage of CBDCs. Among the others are Russia and Japan, both of which are making preparations to launch their own currencies before to the summer. Additionally, the city of San Francisco is investigating the potential for the establishment of a CBDC system.

However, CBDCs are facing opposition from activists who refer to them as “surveillance instruments.” This opposition is now being actively pursued.


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Bosch and to Create Foundation to Fund Development of Web3

A grant program with a budget of one hundred million dollars will be made available as a result of the partnership between Bosch and Everyone will be welcome to participate in this endeavor. The initiative will provide financial assistance in order to promote research into the development of decentralized technologies, in addition to Web 3 and artificial intelligence (AI).

The Foundation is an organization that will aim to promote the general adoption of innovative technologies such as artificial intelligence, cutting-edge software, and Web3 technologies in the corporate sector. The establishment of the Foundation is a joint project that is being worked on by both of the firms as part of their combined efforts. The mission of this foundation will be to increase the adoption rate of the aforementioned technologies. This initiative will not only give financing for research, but it will also facilitate the development of decentralized technologies that have the potential to be used in the real world., a startup company with offices in Cambridge, Massachusetts, is currently in the midst of developing a decentralized machine learning network. Artificial intelligence is the major focus of the company’s research and development efforts. They have been putting in the work to bring this project to a successful end, and they have been doing it in collaboration with the multinational engineering and technology business Bosch. The latter business provides a broad variety of Internet of Things (IoT) solutions and counts assisting in the development of artificial intelligence (AI) powered gadgets and home appliances as one of its key strategic goals. The firm also offers a wide range of IoT solutions. Additionally, the firm offers a wide range of Internet of Things (IoT) solutions. The group is looking at the possibilities of incorporating Web3 technology into this ongoing endeavor as a possible new component of this ongoing project.


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Blockchain Gaming is Having a market caps increment

Play-to-earn Over the course of the last year, blockchain gaming has seen a decline as players have emphasized on the quality of their overall gameplay experience.

On the other hand, a recent research from DappRadar reveals that during the first month of 2023, gamers were responsible for over half (48%) of all blockchain activity.

The market capitalization of the top gaming tokens increased by 122% on average over the month of January. Gala (GALA), the digital utility token of the Gala Games ecosystem, had its value climb by 218% during this time period.

According to the survey, the increased interest in these gaming tokens is a result of buzz from the sector reaching viewers in more mainstream media. For instance, Gala Titles made news when it announced the acquisition of a new mobile gaming company that had more than $20 million in assets under control as well as 15 games.

This is due to the fact that blockchain gaming is already a subset of the old business. As blockchain technology becomes more popular, more people will start playing Web3 games, which will eventually become widespread.

The Wax blockchain still has the most active gaming activity, with 331,000 distinct active wallets. This continues to be the case. The BNB Chain was the only one of the top four blockchain gaming ecosystems that did not see a growth in the number of gaming protocols between the end of 2022 and the beginning of 2023.

The beginning of 2023 was marked by increasing activity, and robust financing helped set the ground for what many people refer to as the “building” year of blockchain gaming. This word highlights the attention that the industry has placed on developing games that are more powerful and of higher quality.

According to Gherghelas, the amount of money being invested in this particular sector is “growing dramatically.” Total investments are expected to reach around $7.6 billion in 2022, which is a 105% increase from 2021. During the month of January alone, investments in the blockchain gaming business reached more than $156 million.

In addition to this, the research emphasized the significance that the metaverse has had in the rise in activity around blockchain gaming this year. The information showed that the trade volume for January in games connected to virtual worlds reached $44.5 million, which is a 114% rise over the amount seen in the previous month.

Although there was a 19% decline in sales, the total gain may be credited to the success of key metaverse platforms such as The Sandbox and Decentraland, which both had an increase in trade volume of 114% and 83%, respectively. This was despite the fact that sales fell.

According to a research published by DappRadar in 2022, blockchain-based transactions related to gaming on Web3 accounted for about half of all transactions in that year.


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ConsenSys Acquires Hal to Improve Alerts

ConsenSys, a company that provides services related to blockchain technology, has just completed the purchase of Hal, a platform for no-code blockchain development tools, with the purpose of causing a disruption in Web3’s alerts and notifications at the protocol level.

ConsenSys’ Web3 API provider Infura will be able to include Hal’s configurable webhooks or notification service into its developer stack as a direct consequence of the acquisition. As a direct result of this modification, it will be much simpler for developers to generate warnings and notifications at the protocol level for a wide range of signals.

According to ConsenSys, Infura offers a collection of tools to link apps, which the developer community may use to connect applications to the Ethereum network and other decentralized platforms. These tools were developed by Infura. The collection of these tools is sometimes referred to as a suite.

According to Eleazar Galano, one of the co-founders of Infura, the company wants to fix inadequacies in the present approach of creating apps for the bitcoin ecosystem. This information was provided by Galano. In relation to the acquisition of Hal by ConsenSys, Galano made the following statement: “Enabling developers to have a seamless end-to-end experience is a critical objective, and one of the most important trends is the use of little code / no code solutions.”

In February of 2022, ConsenSys successfully finalized the purchase of Ethereum wallet interface provider MyCrypto with the purpose of improving both the security of MetaMask and the level of the user experience it provides.

ConsenSys purchased Hal in order to expand upon this endeavor, which has been ongoing for an entire year, and to make it possible for MetaMask to provide a dynamic and tailored notification system. Additionally, the acquisition of Hal was made in order to make it possible for ConsenSys to expand upon this endeavor.


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Bitcoin (BTC) $ 27,369.33 0.86%
Ethereum (ETH) $ 1,638.61 1.70%
Litecoin (LTC) $ 64.30 3.10%
Bitcoin Cash (BCH) $ 228.73 5.79%