US Crypto Holders Trust Banks and Exchanges for Custody

A recent survey conducted by Paxos has shown that American crypto holders still trust intermediaries such as banks, crypto exchanges, and mobile payment apps to hold their digital assets. The survey, which was conducted in January, aimed to understand how the crypto winter and large industry fallouts in 2022 affected consumer behavior and confidence in the crypto ecosystem.

Despite the volatile nature of the crypto industry in 2022, including the bankruptcies of FTX and Alameda Research, the survey found that 89% of respondents still trusted intermediaries to hold their crypto assets. This is a significant finding, given the high-profile collapses and poor risk management practices seen in several crypto companies.

Interestingly, the survey also found that there was an increasing desire among consumers to buy Bitcoin, Ether, and other digital assets from traditional banks. The survey revealed that 75% of respondents were likely or very likely to purchase crypto from their primary bank if it were offered, a 12% increase from the year before. Furthermore, 45% of respondents reported they would be encouraged to invest more in crypto if there was more mainstream adoption by banks and other financial institutions.

According to Paxos, there is a significant untapped opportunity for banks if they expanded their offerings to include digital assets. Offering these services would satisfy increasing demand and result in higher engagement. However, the survey was conducted before more recent crypto headwinds, such as the bankruptcy of crypto lender Genesis, the crackdown on Binance USD (BUSD) involving Paxos, and the financial uncertainty of crypto bank Silvergate Capital.

The survey was conducted on 5,000 participants who were over 18 years old, lived in the United States, had a total household income greater than $50,000, and had purchased cryptocurrency within the last three years. Despite the volatile 2022 crypto landscape, the survey shows that consumers didn’t lose faith in their crypto investments, underlining the long-term confidence of those participating in crypto markets.


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$1 Billion Worth of Bitcoin Moved from US Law Enforcement Seized Wallets

In March 2023, over 50,000 Bitcoin (BTC) worth $1 billion were moved from multiple wallets connected to US law enforcement seizures. The transfers included three transactions, with the majority being internal transfers. However, about 9,861 BTC was sent to Coinbase, with the remaining BTC consolidated into two wallet addresses.

The BTC was seized by US agencies from the Silk Road marketplace in November 2021. The Silk Road was an online black market and one of the first darknet markets to accept Bitcoin payments, helping to popularize crypto use. The marketplace was launched in 2011 by its American founder, Ross Ulbricht, under the pseudonym “Dread Pirate Roberts.” U.S. law enforcement agencies confiscated multiple items from Ulbricht, including hoards of BTC, which have been auctioned from time to time.

In 2014, popular Bitcoin proponent Tim Draper bought nearly 30,000 BTC in one of these auctions. Another auction for 50,000 BTC was held in October 2015, where the US Marshals Service auctioned 21 blocks of 2,000 BTC and one block of 2,341 in an online auction.

While only a small portion of the 50,000 BTC was sent to Coinbase, the movement of billions worth of BTC from US enforcement agency-linked wallets evoked wild reactions and even wilder theories from Twitter users. Some pointed out that if US agencies decided to sell their Silk Road Bitcoin, it would put significant selling pressure on the market. At the same time, a few others questioned the timing of the sale.

The movement of such a large amount of Bitcoin highlights the growing adoption and usage of cryptocurrencies in the financial industry, as well as the potential for misuse and criminal activity. Despite this, the underlying technology of cryptocurrencies, blockchain, offers a transparent and secure way to track transactions and prevent fraud.


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India Implements AML Standards on Crypto

In a move that is not entirely surprising, the Indian government has implemented anti-money laundering (AML) standards on crypto. The Ministry of Finance published a notification in The Gazette of India on March 7, subjecting a range of crypto transactions to the Prevention of Money-Laundering Act (PLMA) 2002. This includes the exchange, transfers, safekeeping, and administration of virtual assets, as well as financial services related to an issuer’s offer and sale of virtual assets.

The PLMA obliges financial institutions to maintain a record of all transactions for the last ten years, provide these records to officials if demanded, and verify the identity of all clients. While the notification does not provide many details, it will complicate the life of crypto companies in India, as regulators worldwide are tightening AML standards for crypto.

This notification comes after the Indian government amended tax rules in March 2022, subjecting digital assets holdings and transfers to a 30% tax. This drove crypto traders to offshore exchanges and forced budding crypto projects to move outside India. Trading volume on major cryptocurrency exchanges across India dropped by 70% within 10 days of the new tax policy and almost 90% over the next three months.

In February 2023, Indian authorities again demonstrated their tough stance on cryptocurrencies with a preemptive ban on crypto advertising and sponsorships in the local women’s cricket league. This followed a previous ban for the men’s cricket Premier League, introduced back in 2022.

Despite the tough stance, India’s Finance Minister, Nirmala Sitharaman, urged international efforts to regulate crypto in 2023. While celebrating India’s first presidency of the G20, she called for a coordinated effort “for building and understanding the macro-financial implications,” which could be used to reform crypto regulation globally.

Overall, India’s implementation of AML standards on crypto will make it more challenging for crypto companies to operate in the country. However, the move is part of a wider global trend of regulators tightening AML standards for crypto, in an effort to curb illicit activities and promote greater transparency in the industry.


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Russian Crypto Advocates Urge Putin to Address Delayed Regulations

The adoption of rules for the cryptocurrency business in Russia has been notoriously slow. As a result, the Russian Association of Crypto Industry and Blockchain (RACIB) has taken the initiative to persuade President Vladimir Putin to reform the way the government approaches regulating the market. Despite enforcing its first crypto law in 2021, the RACIB argued that Russia has been too slow to implement experimental legal regimes targeting crypto adoption. This argument was presented in the form of an open letter. In the letter, the RACIB emphasized the risks of ignoring the global development of the cryptocurrency industry.

The Australian Cryptocurrency and Investment Business (RACIB) has voiced its concern regarding a number of proposed legal amendments to the existing crypto law. These amendments include the establishment of a “national cryptocurrency exchange” and the introduction of criminal sanctions for local blockchain developers. The association pointed out that these amendments would significantly complicate the implementation of digital financial technologies in Russia, making it difficult for companies in the digital asset industry to prove that they are operating within the framework of Russian legislation. In other words, the amendments would make it more difficult for businesses to demonstrate that they are complying with Russian law.

The delayed laws have introduced an element of uncertainty into the cryptocurrency business in Russia, leading supporters of the industry, such as the RACIB, to urge the government to take a more aggressive stance. As the demand for cryptocurrencies continues to develop on a worldwide scale, a growing number of nations have begun to acknowledge this trend and pass legislation designed to safeguard investors and standardize the sector. It is still unknown if Russia will follow suit and move toward a more progressive approach to the regulation of the cryptocurrency business in the near or distant future.


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Binance NFT Adds Polygon Network Support for Marketplace Trading

Binance NFT, the non-fungible token (NFT) arm of the popular cryptocurrency exchange Binance, has announced the inclusion of the Polygon network as one of the supported blockchains in its marketplace. The move is part of Binance’s efforts to expand the NFT ecosystem within its community and allow users to trade NFTs on various blockchains like Ethereum, BNB Smart Chain, and now Polygon, using their Binance accounts.

However, Binance is still maintaining a strict approach to its NFT listings, as not all NFT collections are currently available on the platform. Binance NFT clarified that only selected ERC-721 NFT Collections on the Polygon network are available on the marketplace at the moment, and more NFT collections will be integrated regularly.

In January, Binance NFT tightened its rules on NFT listings, delisting NFTs with daily trading volume lower than $1,000 and limiting the number of NFTs that artists can mint per day. The exchange also periodically reviews NFT listings and recommends those that do not meet its standards for delisting.

Apart from its efforts to expand its NFT marketplace, Binance is also exploring the use of artificial intelligence (AI) in the Web3 space. On March 2, Binance CEO Changpeng Zhao announced the launch of “Bicasso,” an AI-powered NFT generator that minted 10,000 NFTs in just 2.5 hours. The move highlights Binance’s interest in exploring the potential of AI in the NFT space.

Overall, the inclusion of the Polygon network in Binance NFT’s supported blockchains is a significant step towards expanding the NFT ecosystem within the Binance community. However, the platform’s strict approach to NFT listings shows its commitment to maintaining high standards of quality and ensuring that only the best NFT collections are available to its users. With its foray into AI-powered NFTs, Binance is also showcasing its willingness to explore new technologies and push the boundaries of what is possible in the Web3 space.


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Heterosis Launches Dynamic NFT Flower Collection

Web3 has opened up new avenues of creative expression and individuality by allowing users to recreate their digital identity. NFTs have become increasingly personalizable and dynamic, making them a popular choice for digital art projects. and OG.Art’s Heterosis project has taken advantage of this by launching a collection of dynamic NFT flowers on March 8.

The NFT flowers are breedable and customizable by holders, allowing them to create a hybrid species from the available catalog of flowers. As new flower traits are discovered, they spread across the entire population, creating diversification similar to nature. However, users must pay a fee to the owner of the flower they wish to breed with, creating two virtual flower markets – one for selling rare digital flowers and the other for selling DNA traits.

The collection was created by artists Mat Collishaw and Danil Krivoruchko, who wanted to create art that was unique to the metaverse. The mechanics behind the project are essential to Heterosis and can only be possible in a decentralized space. Krivoruchko stated that creating art for a project that can evolve with different traits was the most complicated digital art collection he has worked on.

The NFT flowers are housed in a metaverse greenhouse created by metaverse developers El-Gabal, modeled after a dystopian version of the National Gallery in London. The greenhouse can be accessed through a computer browser, mobile phone, and virtual reality sets, allowing users to explore the NFT garden through real-time audio-visual renderings in the cloud.

The Heterosis project offers users a unique opportunity to participate in a decentralized digital art project that allows for personalization and creative expression. With the development of new technologies, the possibilities for NFTs and Web3 continue to expand, providing users with even more ways to explore their digital identity.


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Transform Ventures Co-Invests in Alpha Transform Holdings to Accelerate Blockchain Investment

Alpha Transform Holdings (ATH) is a newly formed holding company that has been formed as a result of a partnership between Transform Ventures and the parent company of Alpha Sigma Capital. The primary objective of this new holding company is to quicken the pace of investment and innovation within the blockchain ecosystem. The merger will result in the combination of certain assets held by both firms, leading to the formation of two new funds with a combined asset base of one hundred million dollars.

According to Enzo Villani, CEO and Chief Investment Officer of Alpha Transform Holdings, the vision of ATH is to usher in a new era of financial and technological innovation by leveraging decentralization, blockchain technology, and Web3 infrastructure. This will be accomplished by bringing in a new era of financial and technological innovation.

ATH received an investment of $2.65 million in cash, Bitcoin (BTC), and Ether (ETH) from Transform Ventures, which was created by cryptocurrency investor Michael Terpin. The company also retained the option to invest an additional $2.9 million. Terpin had earlier filed a lawsuit against a New York teenager, demanding $71.4 million in damages for the alleged theft of bitcoin from the defendant’s phone.

Alpha Transform Holdings is primarily concerned with the delivery of product suites that fall under the asset management umbrella, the development of Alpha Transform products, and the execution of Alpha Transform strategies. ATH’s dedication to fostering blockchain innovation is shown by the company’s emphasis on the delivery of a wide variety of goods and strategies relating to blockchain technology.

Although if blockchain innovation continues to attract large investors and venture capitalists, there has been a rise in the number of investors expressing a negative emotion about the technology, which has led to an increase in the amount of money leaving the market. The introduction of Alpha Transform Holdings, which has a considerable amount of assets under management, is a good step for the blockchain ecosystem. Its launch should offer a boost to blockchain investment as well as blockchain innovation.


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Bitcoin Ordinals: Controversial but Here to Stay

Among the cryptocurrency community, Bitcoin Ordinals, which provide users with the option to permanently store data on the Bitcoin blockchain, have become a contentious issue of discussion. The architects of Bitcoin-focused firms and the CEOs of such companies see promise in the technology, despite the fact that some people are concerned about congestion on the blockchain and objectionable material.

Several people who attended the London conference Advancing Bitcoin noticed the possibility for an abstract meta-layer on top of Bitcoin that records Sats and has a separate state or mapping into the blockchain. This potential was discussed during the conference. Ordinals have been used for a variety of purposes, including the storage of data in the shape of an image or jpeg, as well as the execution of older computer games such as Doom.

Nevertheless, some people have voiced worries about the possibility that Ordinals may cause the blockchain to become bloated, while other people have voiced criticisms over the possibility that inappropriate information could be posted into the blockchain. Ordinals provide a new use case for the Bitcoin network that extends beyond peer-to-peer monetary transactions, in spite of the difficulties raised above.

Ordinals are able to offer a storage solution that is both permanent and censorship-resistant for data and events of cultural significance. Those who desire to maintain lasting recordings of significant events or data, such in the Doom game that was discussed before, would find this to be of great interest. Also, the blockchain’s resilience to censorship enables the retention of material that, in other circumstances, may be suppressed or removed. This is a significant advantage.

Although while a number of prominent Bitcoin commentators have referred to Ordinals as “useless,” others believe that the technology has the ability to provide something of value to the Bitcoin network. The fact that miners have been able to generate even more cash per block since the introduction of Ordinals is evidence of the potential utility of the technology.

In general, despite the debate that surrounds Bitcoin Ordinals, it seems that the technology will be around for the foreseeable future. Ordinals provide a novel method to interact with and approach the Bitcoin network, which is something that Bitcoin developers and the chief executive officers of Bitcoin-focused firms are continuing to investigate as prospective use cases.


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European Asset Manager Believes Bitcoin is Not Doomed Despite Industry Collapse

Despite the recent collapse of the cryptocurrency industry, one major European asset manager, Amundi, believes that digital assets like Bitcoin still have potential. In a recent thematic paper analyzing the state and prospects of the crypto market, Amundi’s chief investment officer Mortier Vincent and macroeconomist Perrier Tristan argued that while Bitcoin has failed to serve as an inflation hedge over the past two years, its limited supply may attract more attention if inflation continues to remain above central bank targets.

Bitcoin’s recent inability to protect investors against rising inflation in 2021 and 2022 has been a cause for concern. However, Vincent and Tristan believe that Bitcoin’s long-term prospects remain positive, particularly due to its limited supply. Unlike traditional currencies, Bitcoin has a finite supply of 21 million coins, which makes it more resistant to inflation. This means that as central banks continue to print money to stimulate economies, Bitcoin’s limited supply may become more attractive to investors seeking a hedge against inflation.

Despite the recent collapse of the cryptocurrency industry, with Bitcoin losing nearly half of its value from its all-time high in late 2021, Vincent and Tristan remain optimistic about the digital asset’s future. They acknowledge that dramatic rises in policy and market interest rates have pressured all asset classes, including Bitcoin. However, they argue that the recent market downturn is not a sign that Bitcoin is doomed to fail. Instead, it may be an opportunity for investors to buy into the digital asset at a lower price.

Overall, while the recent collapse of the cryptocurrency industry may be cause for concern, Vincent and Tristan believe that Bitcoin’s limited supply and potential as an inflation hedge make it a valuable asset for investors. As central banks continue to print money and inflation remains a concern, Bitcoin’s long-term prospects may be brighter than they appear.


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Coinbase Launches WaaS to Simplify Adoption of Web3 Wallets

Coinbase, a leading cryptocurrency exchange, has unveiled Wallet-as-a-Service (WaaS), a new business solution that simplifies the adoption of Web3 wallets. WaaS provides enterprises with a technical infrastructure to create and launch customizable on-chain wallets via a wallet application programming interface (API). The API enables businesses to develop wallets for simple customer onboarding, loyalty programs, and in-game purchases.

Web3 wallets have struggled to gain wider mainstream acceptance due to their complexity, poor user experience, and the challenges of maintaining mnemonic seeds. Coinbase’s WaaS solves these complexities by providing end-to-end product experience control, reducing implementation cost and complexity, and improving security while reducing risks.

Patrick McGregor, the head of product at Coinbase’s Web3 Developer Platforms, explained that WaaS avoids the key loss issues that plague traditional self-custody platforms with its MPC cryptographic functionality. The WaaS toolkit includes MPC, a form of cryptography that allows multiple parties to jointly compute a function without revealing their inputs to each other. MPC enhances private key security within Web3 platforms, as it splits users’ private keys into multiple parts and distributes them among the protocol’s parties involved.

Companies such as Floor, Moonray, thirdweb, and tokenproof are currently using Coinbase’s WaaS infrastructure. The introduction of WaaS by Coinbase comes amid the current crypto winter, as startups, corporations, and investors seek to define the future of the decentralized internet. Although not everyone is convinced that current Web3 modalities advance the principles of decentralization, developments around MPC and decentralized privacy suggest that many in the industry are taking it seriously.

McGregor noted that many companies are “building for Web3 ahead of the next bull market,” a period where cryptocurrency prices generally rise. Coinbase is “seeing strong excitement about token-gated content (for both online opportunities and physical real-world use cases), moving loyalty programs on-chain, deep integrations between games and assets owned by users, and more.” With the introduction of WaaS, Coinbase aims to streamline the adoption of Web3 products and services, paving the way for broader mainstream acceptance of Web3 wallets.


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