Day: April 18, 2023

Paxful Unfreezes Majority of Accounts

by Blockchain News

Paxful, the peer-to-peer cryptocurrency marketplace, has announced that it has unfrozen 88% of the user accounts that were previously frozen, following the suspension of its operations. The remaining $4.4 million in frozen funds is currently being held by US financial regulators, according to Paxful CEO Ray Youssef.

Youssef revealed the news in an April 16 Twitter thread, stating that the unfreezing of accounts had been achieved “with no engineers or compliance folks”. He also noted that the unfreezing process had taken more than a week to complete.

Paxful’s decision to freeze user accounts came as a surprise to many in the cryptocurrency community. The company did not provide a clear explanation for the move, other than stating that it was necessary to comply with regulatory requirements. The move left many users unable to access their funds, leading to criticism from the community.

Following the announcement of the unfreezing of accounts, Paxful has been working to reassure its users. The company has stated that it is committed to compliance with regulatory requirements, but also acknowledges the importance of customer service and user experience.

Paxful is one of the largest peer-to-peer cryptocurrency marketplaces, with operations in more than 160 countries. The platform allows users to buy and sell cryptocurrency using a range of payment methods, including bank transfers, credit cards, and gift cards.

The unfreezing of the majority of Paxful’s frozen accounts is a positive development for the company and its users. However, it remains to be seen how the remaining frozen funds will be dealt with by US financial regulators.

The move by Paxful to freeze user accounts highlights the ongoing challenges faced by cryptocurrency companies in complying with regulatory requirements. As governments around the world seek to regulate the cryptocurrency industry, companies like Paxful will need to navigate a complex and evolving regulatory landscape.

In conclusion, the unfreezing of 88% of previously frozen user accounts on Paxful is a welcome development for the cryptocurrency community. While the remaining frozen funds are still in the hands of US financial regulators, the move by Paxful to address the issue is a positive sign. As the cryptocurrency industry continues to evolve, regulatory compliance will remain a key challenge for companies like Paxful.

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SEC Charges Bittrex for Unregistered Securities Trading

by Blockchain News

The US Securities and Exchange Commission (SEC) has charged crypto asset trading platform Bittrex and its co-founder and former CEO William Shihara for operating an unregistered national securities exchange, broker, and clearing agency. In a separate charge, Bittrex Global is also facing charges for its operation of a single shared order book with Bittrex.

The SEC has filed four charges of Exchange Act violations against the companies and Shihara in the US District Court Western District of Washington. According to the SEC’s complaint, tokens traded on Bittrex, including OMG, Dash, Algorand, Monolith, Naga, and IHT, are securities. The agency has been criticized in the past for its “regulation by enforcement” approach, which claims tokens are securities only at the time of filing complaints and not before.

The SEC’s charges against Bittrex highlight the regulatory uncertainty surrounding the crypto industry, especially when it comes to determining whether digital assets qualify as securities. The agency has previously filed charges against several companies for unregistered securities trading, including Telegram and Ripple.

Bittrex is not the first cryptocurrency trading platform to face legal action from the SEC. In 2019, the agency took legal action against EtherDelta, a decentralized exchange, for operating an unregistered securities exchange. The SEC has also previously warned investors about the risks associated with investing in cryptocurrencies and initial coin offerings (ICOs).

Bittrex has been a prominent player in the crypto industry since its launch in 2014. The platform currently supports trading in over 300 cryptocurrencies, making it one of the largest crypto exchanges in the world. However, the SEC’s charges against the company and its former CEO could have significant implications for the broader crypto industry, especially when it comes to determining whether certain digital assets qualify as securities.

In response to the SEC’s charges, Bittrex issued a statement saying that it had been in “close communication” with the agency over the past two years and had been “cooperating with them in an effort to address their concerns.” The company also said that it “disagrees” with the SEC’s assessment that certain tokens traded on its platform are securities and plans to “vigorously defend” itself against the charges.

In conclusion, the SEC’s charges against Bittrex and its former CEO highlight the ongoing regulatory uncertainty surrounding the crypto industry. While the agency has taken legal action against several companies for unregistered securities trading, questions remain about how to determine whether certain digital assets qualify as securities. The outcome of this case could have significant implications for the broader crypto industry and how it is regulated moving forward.

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Kyber Network Advises Removal of Funds Amid Potential Vulnerability

by Blockchain News

Kyber Network, the developer of the Kyberswap Elastic decentralized crypto exchange, has announced a potential vulnerability in the exchange’s contracts. While no funds have been lost, the developer has advised liquidity providers to remove their funds as a precaution. Kyberswap Classic smart contracts do not contain the vulnerability, according to the Kyber Network team.

KyberSwap Elastic is a decentralized exchange that allows liquidity providers to provide “concentrated liquidity” by deciding a price ceiling and price floor for the tokens they deposit into the pool. If the price moves below the floor or above the ceiling, LPs no longer receive fees. However, they receive higher fees if the price stays within the range they have set.

In response to the potential vulnerability, farming rewards have been temporarily suspended until a new smart contract can be deployed. All rewards earned prior to April 18, 2023, 11pm (GMT+7) have already been dispersed and are unaffected by this pause. The developer has stated that it will update the community soon with an explanation as to when funds can be safely deposited back into the protocol.

This is not the first time Kyberswap has faced security issues. In September, the user interface for Kyberswap was hacked, resulting in an attacker getting away with $265,000 worth of crypto.

It is important for users to stay vigilant and follow the developer’s advice to remove funds as a precautionary measure. The Kyber Network team is working on a solution and will keep the community updated as the situation develops. In the meantime, users can monitor the situation closely and refrain from depositing any funds until the issue has been resolved.

In the broader context of decentralized finance (DeFi), security risks are always present, and it is crucial for developers to take appropriate measures to mitigate these risks. With the growing popularity of DeFi, security will continue to be a key concern for investors and users alike. As the industry evolves, it is important for developers to prioritize security measures and work together with the community to build trust in these platforms.

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NYDFS to Assess Supervisory Costs from Licensed Crypto Firms

by Blockchain News

The New York State Department of Financial Services (NYDFS) has announced that it will be adopting a new regulation that will allow the government agency to assess supervisory costs from licensed crypto firms operating within the state. The supervisory costs collected through this regulation will be used to add top talent to the NYDFS’s virtual currency team. This move by the NYDFS is seen as an attempt to improve its oversight and regulatory capabilities in the rapidly-evolving digital asset industry.

According to the NYDFS, the regulation will allow it to assess the costs associated with the supervision and examination of crypto firms operating in the state with a BitLicense. The Department hopes that these new tools and resources will enable it to better regulate the virtual currency industry in New York, both now and in the future, as innovators continue to create new products and use cases for digital assets.

The new regulation was proposed in December 2022, after which the NYDFS met with key stakeholders and received feedback. The regulator noted that the proposed rule was added in response to the state’s Financial Services Law not including such a provision on the assessment of operating costs.

Since 2015, crypto firms operating in the state of New York have largely been required to apply for a BitLicense. As of February 10th, there were 33 companies involved in crypto and blockchain operating in the state under a virtual currency license, limited purpose trust charter, or money transmitter license. The BitLicense requirement has been a topic of debate, with some claiming that it stifles innovation and economic growth. In April 2022, New York City Mayor Eric Adams suggested that the state scrap the BitLicense regime.

This move by the NYDFS is likely to have significant implications for crypto firms operating in the state. The regulation will provide the NYDFS with additional resources and tools to regulate the industry, but it may also result in increased costs for firms. Nonetheless, the NYDFS believes that the benefits of the regulation will outweigh any potential downsides, and that it will help to ensure that the state remains at the forefront of digital asset innovation.

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Cryptocurrency Soars in Q1 2023

by Blockchain News

The cryptocurrency market has started off 2023 with a bang, as shown in CoinGecko’s Q1 2023 Crypto Industry Report. The report highlights the surge in market capitalization of Bitcoin (BTC) and decentralized finance (DeFi) protocols, making them the key takeaways of the first quarter.

BTC emerged as the best-performing asset of Q1 2023, with gains of 72.4%, outperforming other assets such as the NASDAQ index and Gold, which marked gains of 15.7% and 8.4%, respectively. The report notes that all major asset classes, except crude oil, saw gains through the first quarter of the year. Crude oil dropped by 6.1%, which was attributed to United States inflation data that cited a reduction in oil demand and the ill effects of the U.S. banking crisis.

The overall cryptocurrency market capitalization reached $1.2 trillion at the end of Q1, with a gain of $406 billion from the market cap of $829 billion at the end of 2022. The DeFi space was another standout performer, rising by $29.6 billion in value through the first quarter. Liquid staking governance tokens saw a 210% increase in market cap since the start of 2023, making it the third-largest category in the DeFi sector.

Ethereum’s Shapella upgrade played a major role in driving the increase of capital flows into liquid staking pools. The upgrade finally unlocked ETH staking reward withdrawals, which helped the network gain more attention.

While Bitcoin and DeFi have been major movers thus far this year, the top 15 stablecoins saw their market cap drop by $6.2 billion. CoinGecko attributes this 4.5% drop in market cap to the shutdown of Binance USD by Paxos and the momentary depeg of USD Coin (USDC) during the collapse of Silicon Valley Bank in March 2023.

Tether (USDT) strengthened its position as the largest stablecoin by market cap in 2023, adding $13.6 billion since the start of the year, while USDC and BUSD recorded market cap losses of 26.9% and 54.5%, respectively.

Nonfungible token (NFT) trading volume has also surged again in 2023, marking a 68% rise from Q4 2022 to $4.5 billion during the first quarter of 2023. NFT marketplace newcomer Blur accounted for the majority of NFT trading volume since its launch in October 2022, accounting for 71.8% of the NFT market share in March 2023.

The cryptocurrency market is still relatively new and volatile, but the Q1 2023 report shows that it is gaining momentum and acceptance from investors. Despite some drops in stablecoin market cap and the decline in crude oil, the overall cryptocurrency market has been performing exceptionally well. This growth could lead to more mainstream adoption and could open doors for new developments and opportunities in the future.

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African Blockchain Ventures See Explosive Growth

by Blockchain News

Blockchain technology is making waves across the African continent, as it continues to provide fertile ground for the growth and implementation of this cutting-edge technology. According to the African Blockchain Report 2022 by Crypto Valley VC, the funding for blockchain deals in Africa raised a whopping $474 million in 2022, representing a staggering 429% increase in African blockchain venture funding. This surge in funding for African blockchain ventures outpaced the global average of only a 4% increase in blockchain funding.

The report revealed that African blockchain funding demonstrated a growth rate that was over 12.5 times higher than that of general African venture funding on a year-on-year basis. Specifically, African blockchain ventures raised $474 million through 2022, reflecting a 429% increase in funding. In contrast, overall African venture funding saw a 34% increase, with $3.14 billion raised across 570 deals during the same period.

Africa experienced the highest growth rate in funding among all regions, with Seychelles and South Africa responsible for 81% of the blockchain venture funding in Africa, having raised $208 million and $177 million, respectively. This can be attributed to the fact that the number of African blockchain deals increased by only 12% year-on-year, from 26 to 29, indicating that the median deal size has significantly risen. This suggests that businesses are securing more substantial funding, and investors are becoming more confident in African blockchain ventures.

In the past year, Nigerian blockchain startups raised the highest number of deals in the continent, followed by South Africa, Seychelles, and Kenya. However, despite Nigeria’s high number of deals, it only accounted for 3.4% of all African blockchain venture funding, with an average deal size of $1.25 million.

Meanwhile, the United States remained steady at $15.2 billion in funding, while Asia and Europe saw a year-on-year increase of 50% and 35%, respectively, with $4.74 billion and $4.88 billion in funding. African blockchain venture funding made up 1.77% of global blockchain venture funding, which saw an impressive 407% year-on-year increase, with several countries contributing to the surge. In comparison, the US concluded 137 deals, while Asia and Europe had 84 and 78, respectively.

Overall, the remarkable growth in African blockchain ventures indicates a promising future for the industry in the region. As more businesses secure larger investments, and investor confidence grows, the African blockchain industry is poised for continued success and innovation. With Nigeria leading the charge in the number of blockchain startups receiving funding, the future looks bright for African blockchain ventures.

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Ethereum Layer 2s See Surge in Popularity in Q1 2023

by Blockchain News

Ethereum layer 2 networks, including Optimism, Arbitrum, and Polygon, saw a surge in popularity in Q1 2023, according to a report from Web3 development platform Alchemy. The report, titled “Web3 Development Report,” cites data from Dune Analytics and shows that Ethereum users bridged over $635,000 worth of crypto assets to these networks from January to March, a significant increase of 44% over the fourth quarter of 2022 and 518% over the first quarter of 2022.

The growth in bridged assets may have been driven by successful airdrops from Optimism and Arbitrum in Q1 2023, as suggested by the Alchemy report. Additionally, layer 2s saw greater activity from developers, with the deployment of smart contracts related to layer 2s increasing by 160% compared to Q1 2022, despite a 30% decrease from Q4 2022.

Layer 2s have been offered as a solution to Ethereum’s scalability problem, which has been causing high gas fees since as early as 2020. By enabling more transactions to be processed off the main Ethereum network, layer 2s can significantly reduce the fees required to interact with the blockchain. As a result, users are increasingly turning to these new scalability solutions.

This trend is reflected in the broader Ethereum ecosystem, with increased developer interest observed in Q1 2023. According to the Alchemy report, Ethereum software development kits (SDKs) such as Ethers.js, Web3.js, Hardhat, and Web3.py were downloaded 1.9 million times in the first quarter of 2023, an 8% increase from Q1 2022. Downloads of the MetaMask SDK, a tool used to develop apps that can interact with Ethereum wallet MetaMask, also increased in each month of the first quarter.

The crypto industry is coming off the back of a steep downturn in trading volume and crypto prices during 2022, with scandals like the UST depegging and FTX collapse causing many investors to shy away. However, despite this negative sentiment, users still flocked to these new scalability solutions.

While layer 2s have proven to be a useful tool for improving Ethereum’s scalability, some experts have argued that sharding the Ethereum network will also help to cut down on gas fees. Sharding involves breaking up the Ethereum network into smaller, more manageable pieces, allowing for more parallel processing of transactions. Ultimately, a combination of solutions will likely be necessary to address Ethereum’s scalability challenges and keep up with growing demand.

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Unchained Capital Raises $60M in Bitcoin Funding

by Blockchain News

Despite the bearish trend in the crypto market, Unchained Capital, a financial services provider for Bitcoin holders, has raised $60 million in a Series B funding round led by Valor Equity Partners. The funding round also saw participation from NYDIG, Trammell Venture Partners, Ecliptic Capital, and Highland Capital Partners.

Unchained Capital’s approach to Bitcoin custody is different from traditional centralized exchanges or single key solutions. The company uses multi-signature technology to enable clients to share control of their Bitcoin holdings between private keys they hold themselves and private keys held by Unchained or other financial services companies. This approach eliminates single points of failure and counterparty risk by sharing the control of funds between multiple parties. The multi-signature process can be compared to a safe deposit box with two keys, one held by the customer and the other by the bank.

During the 2022 crypto market crashes, centralized solutions such as BlockFi, Celsius, and Three Arrows Capital collapsed, resulting in the loss of users’ funds. This has highlighted the importance of mitigating counterparty risk and eliminating single points of failure, which can be achieved through the use of multi-signature solutions. Unchained Capital has secured over $2 billion in Bitcoin across thousands of keys globally, highlighting the growing demand for more secure custody solutions in the crypto market.

Joe Kelly, CEO of Unchained Capital, noted that multi-signature technology is one of the most important technologies in the Bitcoin ecosystem that can be taken mainstream. He explained that it helps protect individuals from loss and theft, which are two of the biggest issues in the industry. The funding from the Series B round will be used to expand Unchained’s reach and suite of services, allowing the company to enable new entrants to Bitcoin to leapfrog centralized custodians into their safer collaborative custody model.

Unchained Capital’s success in raising $60 million in Bitcoin funding highlights the growing interest in more secure and collaborative custody solutions in the crypto market. Casa, a competitor crypto security company, recently added Ethereum to its suite of products. As greater numbers of Bitcoin and crypto enthusiasts learn to take custody of their assets, multi-signature technology will undoubtedly play a greater role in ensuring their security. Ultimately, Unchained Capital hopes to further the mantra “not your keys, not your coins,” highlighting the importance of taking control of one’s assets in the crypto market.

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Twitter Rolls Out Bitcoin Price Quotes

by Blockchain News

The addition of Bitcoin price quotations to Twitter’s social media platform occurred around the 18th of April. The price quotations are provided by the charting platform TradingView, however they are only accessible for the price of Bitcoin. Price quotes for other major cryptocurrencies are not provided. The accompanying Bitcoin price chart includes a link that users may use to purchase or sell Bitcoin on the Israeli cryptocurrency market known as eToro. In addition, a caution that reads “Your Capital Is At Risk” is shown beside the chart that displays the price of bitcoins.

Twitter has emerged as an essential component of the retail investing community, and it is anticipated that the inclusion of Bitcoin price quotations will play a big role in the dissemination of financial news and the acquisition of information. The implementation of “$Cashtags” has the goal of elevating users’ familiarity with the Bitcoin market on the site and encouraging more user participation therein.

Elon Musk made the declaration on the 17th of April that he would develop a piece of artificial intelligence software that he would call “TruthGPT” in order to battle what he considers to be a left-wing bias in the media business. It is anticipated that the AI software would actively seek the truth and encourage impartial reporting.

While Twitter is the most recent social platform to integrate Bitcoin price quotes, on April 10th, Douyin, the Chinese counterpart of TikTok, began providing Bitcoin price quotes to an estimated 730 million users in Mainland China. Twitter is the most recent social platform to incorporate Bitcoin price quotations. The quotations were, however, taken down a day later and replaced with a statement that warned users that “unofficial digital currencies do not possess the same legal standing as fiat currencies.”

The introduction of Bitcoin price quotations on Twitter’s social media platform is a big step towards expanding knowledge of and involvement with the cryptocurrency market on social media. This is because Twitter is the largest social media platform in the world. In addition to this, it brings to light the ever-increasing significance of cryptocurrencies in the financial sector, as well as the need of reliable information and impartial reporting.

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US House Committee Chair Criticizes SEC on Digital Assets

by Blockchain News

Patrick McHenry, the Chair of the United States House Financial Services Committee, has criticized the Securities and Exchange Commission (SEC) over its approach to digital assets. During an oversight hearing on April 18, McHenry used his opening statement to accuse the SEC of “punishing” digital asset firms through regulation by enforcement without a clear path to compliance. McHenry reiterated his calls for clear legislation on crypto and pressed SEC Chair Gary Gensler for a definitive answer on whether Ether (ETH) qualified as a security or a commodity.

McHenry expressed his concerns over the SEC’s actions, citing the lack of clarity and consistency in the regulatory landscape for digital assets. He accused the SEC of “chasing headlines” and penalizing companies without providing clear guidance on how to comply with regulations. McHenry also called on US lawmakers to create “clear rules of the road” for crypto through legislation.

During the hearing, McHenry pressed Gensler to give a definitive answer on whether Ether was a security or a commodity. He repeatedly interrupted Gensler’s responses that lacked specifics, citing the SEC chair’s previous labeling of Bitcoin (BTC) as a commodity and hinting at private discussions on Ether prior to the hearing.

“Clearly an asset cannot be both a commodity and a security,” said McHenry. “I’m asking you, sitting in your chair now, to make an assessment under the laws as exist, is Ether a commodity or a security?”

The question of whether Ether is a security has been a contentious issue for the crypto industry. In 2018, William Hinman, former SEC Director of Corporate Finance, stated that he did not believe Ether was a security. However, in December 2020, the SEC filed a lawsuit against Ripple Labs, claiming that the firm had sold unregistered securities in the form of its XRP tokens. The lawsuit sparked concerns among crypto enthusiasts that the SEC may also take action against Ether and other digital assets.

McHenry’s criticism of the SEC’s approach to digital assets reflects broader concerns over the lack of clarity and consistency in the regulatory landscape for crypto. The industry has faced regulatory challenges in several jurisdictions, with some countries, such as China and India, imposing outright bans on crypto trading and mining. However, other countries, including the US, are still grappling with how to regulate digital assets in a way that balances innovation and investor protection.

In conclusion, McHenry’s criticism of the SEC’s regulatory approach to digital assets highlights the need for clear and consistent regulations on crypto. While the industry continues to evolve rapidly, it is crucial that regulators provide clear guidance and support for companies to comply with regulations while fostering innovation in the sector.

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Bitcoin (BTC) $ 26,573.12 0.05%
Ethereum (ETH) $ 1,591.01 0.26%
Litecoin (LTC) $ 64.93 0.84%
Bitcoin Cash (BCH) $ 207.77 0.10%