Day: July 5, 2023

European Regulatory Blockchain Sandbox Welcomes Its First 20 Projects

by Blockchain News

On July 3rd, Europe’s blockchain regulatory sandbox officially introduced its inaugural set of use cases. This milestone follows a period of eager anticipation in the industry, culminating from nearly 90 applications submitted back in April. Initiated in 2020 by the European Commission and the European Blockchain Partnership (EBP), the sandbox is set to close the regulatory gap between European nations and crypto companies.

The Commission has accepted 20 projects for the first cohort, with participants hailing from diverse sectors such as finance and capital markets, telecoms and IT, global trade, and transportation. The projects have a broad geographic representation across Europe, with the highest number of 14 use cases in Western Europe, followed by Southern Europe with 10 projects, the Nordics and Central Europe with eight projects each, and Eastern Europe with seven.

The sandbox, facilitated by UK-based law firm Bird & Bird, is designed to create a secure platform for dialogue between regulators, crypto projects, and public authorities. Use case developers will have the opportunity to present their business case to regulators and receive legal guidance, fostering a mutually beneficial relationship between these entities.

Apart from its role as a facilitator, Bird & Bird will also assist in setting up a safe interface for developers and regulators, providing necessary legal advice and regulatory guidance to projects.

The European Commission emphasized that the sandbox would “allow supervisors to enhance their knowledge of cutting-edge technologies involving DLT.” The insights gained from this interaction will be shared among regulators, aiding the Commission in identifying industry best practices.

This regulatory sandbox is designed to function in tandem with other initiatives, notably the EU Digital Finance Platform and the AI Sandboxes under the AI Act. The Commission stressed that integrating these frameworks is vital due to the increasing intersection of innovative technologies across various industry sectors.

The sandbox’s inaugural application period, which ended on April 14, was open to blockchain projects that had a valid proof of concept and cross-border elements. The European Blockchain Regulatory Sandbox will continue to welcome new projects annually until 2026.

As per the official press release, the Sandbox project team witnessed significant interest from the European and international blockchain community, thereby solidifying its status as a bridge builder between regulators and use-case owners.

The selection process was led by blockchain experts from WBNoDE, under the careful supervision of an independent academic panel, including Professors Roman Beck, Soulla Louca, and Walter Blocher. The selected projects are set to enter a dialogue with relevant national and EU regulators in a secure and confidential environment, after which a best practices report will be shared for the wider Blockchain community’s benefit.

The European Blockchain Regulatory Sandbox aims to facilitate cross-border dialogues, increase legal certainty for innovative blockchain solutions, and enhance knowledge of DLT technologies among supervisors. Furthermore, it offers an annual prize for the most innovative regulator participating in the sandbox.

The Sandbox, supported by the Digital Europe Programme and SME strategy, will operate from 2023 to 2026, supporting 20 projects each year, including public sector use cases on the European Blockchain Services Infrastructure.

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1inch Investment Fund Dumped 24,990 ETHs (WETHs)

by Blockchain News

Ethereum address starting with 0x225d, identified as “1inch: Investment Fund”, has made a substantial swap of Wrapped Ethereum (WETH) for stablecoins USDT and DAI, according to data from DeBank.

Source: Debank

The transaction activity began roughly four hours ago and ceased approximately two hours before the publication of this report. In this time, the 1inch: Investment Fund successfully converted an estimated 24,990 WETH to about 48 million USD worth of stablecoin assets.

As a result of this transaction, the Ethereum balance in the address has been noticeably depleted, now holding a mere 238 ETH.

While it is uncertain what led to the fund’s decision, it could be a protective strategy, hedging against potential volatility in the Ethereum market. Alternatively, this could signal a larger trend in the market, where funds are moving away from ETH due to anticipated bearish trends.

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What is Web3?

by Blockchain News

Web 3.0, frequently abbreviated as Web3, is often recognized as the upcoming or third generation of the internet. It builds upon Web 1.0, characterized primarily as read-only, and Web 2.0, which introduced interactive user-generated content and sharing capabilities.

Key components of Web3 include:

Decentralization: In a departure from the single-server model owned by one entity, data and operations in Web3 are distributed across a network, enhancing both fairness and resilience.

Blockchain: Functioning as the backbone of Web3, blockchain provides decentralized data storage and operations. It enables asset transfers that are more efficient than traditional methods, which typically depend on third-party trust. Blockchain technologies become even more important with the pervasive influence of AI in Web3, serving as a safeguard against potential AI missteps. Blockchain is currently the only technology known to guarantee immutability, making it critical in the creation of a constitution that governs AI behavior.

Smart Contracts: These are autonomous contracts coded to execute specific actions when predefined conditions are met.

Interoperability: This attribute ensures a smooth interaction between different systems and resources within the Web3 ecosystem, encouraging effective synergy among various platforms and systems.

Data and Privacy: Contrary to the traditional model where data is stored on a central server owned by a single entity, Web3 aims to scatter data across a network using blockchain technology. This offers users greater control over their data and enhances the system’s resilience to failures or attacks. This framework also fosters stronger privacy protection. In the Web3 era, users will likely own their data, and companies wishing to use it may need to compensate the users. Moreover, decentralized or blockchain identities could become commonplace, making it virtually impossible to fake identities. This is particularly relevant in the era of AI like ChatGPT, where the line between AI and human is blurring. Initiatives like Sam Altman’s Worldcoin are examples of efforts towards blockchain identity.

Trustless System: The decentralized nature of Web3 eliminates the need to trust a single authority. The transparency and immutability of blockchain make this a reality.

New Monetary and Financial System: Web3 introduces a new monetary paradigm, with Bitcoin being the prime example of a cryptocurrency created through computational power, moving beyond the traditional fiat money system backed by national credit.

Web3 is a vision for the future of the internet, and strides are being made to make it a reality. Examples of web3 technologies or projects include Ethereum, Polkadot, Filecoin, and IPFS, which are being further developed as the foundational elements for this new internet.

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Bitcoin Retreats to Around $30k: Decoding the Technical Indicators and Regulatory Factors

by Blockchain News

In today’s market developments, Bitcoin has retracted to around $30k, weighed down by various technical factors and a series of recent regulatory interventions.

Techinical analysis

  • An initially strong Bitcoin rally has given way to resistance, largely due to the continued downward trend of the monthly Bollinger Bands’ midline. In June, this midline stood at 31409, with Bitcoin reaching a short-term peak of 31432 on June 23rd.

  • This surge on June 23rd also demonstrated an evident bearish divergence in Bitcoin’s RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) on the 4-hour chart. Such a pattern is often a harbinger of a significant imminent adjustment.

  • On the 1-hour chart, a clear double top pattern has further underscored the downtrend.

  • Currently, market-watchers’ focus is trained on the Bollinger Bands’ midline on the daily chart. This could potentially create a support level at 29500, paving the way for market consolidation around this figure.

News analysis

Regulatory news, a vital external factor, is exerting pressure on Bitcoin’s value as well. Binance Australia is currently grappling with an investigation, while Danish bank Saxo Bank has received instructions from regulatory authorities to divest its cryptocurrency holdings and discontinue its cryptocurrency services.

These regulatory actions serve as a reminder of the persistent volatility in the world of cryptocurrencies. As Bitcoin continues to navigate this precarious landscape, it’s crucial for investors to stay informed and vigilant. While the potential for high returns remains, it’s accompanied by substantial risk and uncertainty.

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Danish FSA Orders Saxo Bank to Divest Crypto Holdings, Indicating Tightening Regulation

by Blockchain News

The Danish Financial Supervisory Authority (Finanstilsynet) on July 4, 2023, issued a directive to Saxo Bank, instructing the financial institution to divest its holdings in cryptoassets. This move is based on the current legal framework, which prohibits banks from trading cryptoassets for their own account.

Saxo Bank has been providing its customers with various crypto trading options via its platform. It offers a variety of crypto products, including ETFs (exchange traded funds) and ETNs (Exchange traded notes), which track the evolution of cryptoassets. Moreover, the bank extends an opportunity for customers to speculate in cryptoassets marketed as “cryptocurrency crosses.”

In addition to offering these services, Saxo Bank has been maintaining a portfolio of cryptoassets. This portfolio serves as a hedge against the market risks associated with the bank’s crypto product offerings.

However, according to Denmark’s Financial Business Act, an exhaustive list of permitted activities for financial institutions is provided, and trading in cryptoassets does not feature on this list.

Currently, the area of crypto trading remains unregulated. The Regulation on Markets in Cryptoassets (MiCA), intended to regulate this area, will not take full effect until December 30, 2024.

The Danish FSA has voiced concerns that unregulated trading in cryptoassets could potentially destabilize trust in the financial system. The FSA argues that legitimizing trading in cryptoassets without proper regulations is unwarranted, thereby classifying this activity as an unacceptable ancillary banking operation.

Saxo Bank had been trading in cryptoassets for its own account as a means of hedging risks associated with the provision of other financial products. This action, however, is deemed unallowable for Danish financial institutions under the current Financial Business Act.

Consequently, the Danish FSA has decided that Saxo Bank’s trading in cryptoassets for its own account falls outside the permitted business area for financial institutions. This has led to the directive for the bank to divest its cryptoasset holdings.

Historically, Denmark has been viewed as one of the most crypto-friendly nations globally, being one of the first jurisdictions to declare its stance on Bitcoin treatment. The Danish Central Bank does not regulate Bitcoin and doesn’t recognize cryptocurrency as conventional currency. Moreover, the Financial Supervisory Authority of Denmark does not regulate or prohibit the operation of cryptocurrency businesses, including Bitcoin operations, in the country.

However, this action against Saxo Bank may signal a potential pivot in Denmark’s approach, indicating a move towards stricter crypto regulation.

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ASIC Raids Binance Australia as Global Regulatory Hurdles Mount

by Blockchain News

Binance, recognized as the largest cryptocurrency exchange in the world, is currently facing an increasing number of regulatory issues across various global jurisdictions.

As reported by Bloomberg, the Australian Securities and Investments Commission (ASIC) executed a search operation at the offices of Binance Australia. This operation is a part of an ongoing inquiry into the crypto giant’s now-closed local derivatives business, highlighting the intensifying regulatory scrutiny Binance is encountering.

ASIC, the authority overseeing corporate affairs, markets, financial services, and consumer credit in Australia, has been rigorously examining Binance Australia’s classification of retail and wholesale clients. In April, Binance disclosed its plans to phase out its local derivatives exchange but affirmed the continued operation of its spot platform. However, the same month saw the revocation of Binance Australia’s derivatives operation license.

Fast forward to May 18, 2023, Binance announced via Twitter that it would cease facilitating PayID AUD deposits, attributing the decision to its third-party payment service provider. The firm also indicated potential disruptions to bank transfer withdrawals.

Beyond Australia, Binance’s regulatory woes are expansive. On June 5, 2023, the U.S. Securities and Exchange Commission (SEC) filed charges against Binance Holdings Ltd., its U.S. affiliate BAM Trading Services Inc., and founder Changpeng Zhao, citing multiple securities law infringements. Following this, on June 17, Binance agreed to repatriate assets held for the benefit of Binance.US customers as part of an emergency relief secured by the SEC.

Binance’s regulatory hurdles also extend to Europe. On June 23, the Belgian Financial Services and Markets Authority (FSMA) directed Binance to cease offering its crypto exchange and custody wallet services in Belgium. Shortly after, on June 29, German financial regulator Bafin reportedly rejected a proposal from Binance, escalating the company’s regulatory challenges.

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NFT royalties of BAYC, Azuki, Pudgy Penguins are Surprisingly $58M+, $43M+, $7.2M+ Respectively

by Blockchain News

Blockchain data and research firm Nansen has reported the royalty earnings of top Ethereum non-fungible token (NFT) brand.

Leading the charge in Ethereum NFTs, the Bored Ape Yacht Club (BAYC) has reported impressive earnings of over $58 million in royalties. BAYC, a well-known series of NFTs, is a prime example of the commercial potential that this digital realm offers, adding a new layer to the Ethereum ecosystem’s economic viability.

Following BAYC’s trail, Azuki, another popular NFT series, also announced substantial royalty earnings through Ethereum NFTs. The anime-inspired NFT project has amassed a remarkable $43 million-plus in royalties, underscoring the lucrative prospects of the burgeoning NFT marketplace.

Furthermore, the whimsically-named Pudgy Penguins didn’t fall too far behind, earning more than $7.2 million in royalties from Ethereum NFTs. The charming and unique characters have managed to carve a niche for themselves in the highly competitive digital token space.

NFT royalties are a built-in monetary feature present in certain Non-Fungible Tokens (NFTs), granting the initial artist or creator of the digital asset a percentage of the earnings every time the NFT is resold or exchanged in the future. This mechanism guarantees an ongoing stream of income for creators, marking a notable departure from the traditional art sector, where creators are typically compensated with a single upfront payment for their work.

This is made possible through smart contracts on the Ethereum blockchain (and others). When an NFT is minted, the creator can include terms in the smart contract specifying a certain percentage that they receive from all future transactions. Each time the NFT is resold on the secondary market, the smart contract automatically redirects a portion of the sale to the original creator’s cryptocurrency wallet.

In a nutshell, NFT royalties help ensure that artists can continually benefit from their work, even as it increases in value and changes hands over time. This feature is seen as a significant innovation in favor of artists and content creators in the digital space.

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TrueUSD’s TUSD Circulating Supply Surpasses $3 Billion Despite Prime Trust’s Challenges

by Blockchain News

In June 2023, TrueUSD (TUSD) experienced significant growth and adoption across multiple blockchain ecosystems. With the circulating supply reaching 3,059,838,623 TUSD, backed by dollar reserves of over $3 billion, the stablecoin is gaining more recognition in the crypto markets.

TUSD showed a broad spread across various networks with TRON taking the lead with 2,297,017,674 TUSD, Ethereum trailing behind at 729,591,343 TUSD, and BNB Smart Chain (Native) hosting 30,097,865 TUSD. Avalanche, BNB Beacon Chain, Fantom, Polygon, and several other networks also supported a sizeable amount of TUSD.

TrueUSD’s growing adoption was further evidenced by its integration into different platforms and protocols throughout the month. The Web3 shopping platform, UQUID, adopted TUSD as a payment option on June 5th, providing users with a new method to shop. TUSD was also incorporated into the Megaton Finance on the TON network, broadening its presence in the financial sector.

Binance, the world-renowned crypto exchange, played a significant role in promoting TUSD adoption during June. It initiated a TUSD contract swap on the BNB Smart Chain, and upon its successful completion, launched the 34th phase of new token mining, supporting TUSD mining. Binance’s Auto-Invest platform added TUSD as a payment option, and it supported the swapping of the new native TUSD on the BSC network for TUSDOLD, offering users a seamless conversion process.

Venus recognized the rising importance of TUSD by launching the VIP-129 proposal to support the new native TUSD, and following its approval, the market for the token went live. Additionally, Pancake V3 introduced the TUSD Syrup Pool and Farms, providing users with more opportunities to earn rewards.

TrueUSD’s reach extended to Kraken, another major crypto exchange, which enabled deposits and withdrawals of TUSD on the TRON network by the end of June. Binance further cemented TUSD’s position by launching a zero maker fee promotion for all existing TUSD spot and margin trading pairs and added BCH/TUSD and CFX/TUSD trading pairs to its platform.

Alongside these product developments, TrueUSD made strides in community engagement through various campaigns. Binance C2C and Binance Earn launched time-limited campaigns, offering new users a chance to win up to 175 TUSD. The UquidParty online campaign and PancakeSwap’s TUSDQuiz on Telegram created interactive opportunities for participants to win a share of TUSD prizes.

It’s worth pointing out that, despite TrueUSD’s claim to have launched as the “first USD stablecoin operated by a regulated operator,” it might face certain challenges. TrueUSD’s technology partner, Prime Trust, has been grappling with serious issues. Rumors of insolvency swirled around Prime Trust in early June. This situation escalated on June 22 when the Department of Business and Industry in Nevada issued a cease and desist order against the company. Consequently, Prime Trust abruptly put a stop to all fiat and cryptocurrency deposits and withdrawals.

Nevertheless, TrueUSD denied any impact from the Prime Trust situation. In a recent tweet, the company asserted, ‘Prime Trust has suspended all deposits of fiat and digital assets. However, #TrueUSD (#TUSD) is not affected by this development. We don’t have any exposure to Prime Trust and maintain multiple USD rails for minting and redemption. Rest assured, all your funds with TUSD remain secure.’

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Bitcoin (BTC) $ 42,332.34 3.31%
Ethereum (ETH) $ 2,249.45 4.00%
Litecoin (LTC) $ 73.49 5.36%
Bitcoin Cash (BCH) $ 235.42 5.38%