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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Gate.io to Launch Crypto Exchange in Hong Kong Following Government’s $6.4M Investment in Web3

Following the announcement that the Hong Kong government intends to infuse 50 million Hong Kong dollars ($6.4 million) into Web3 as part of the city’s budget for the 2023-24 fiscal year, cryptocurrency exchange Gate.io is getting ready to build a presence in Hong Kong.

On February 22nd, Gate Group announced that it would be applying for a cryptocurrency license in Hong Kong, which will enable it to establish “Gate HK.” Hippo Financial Services, the local subsidiary of the corporation, was awarded a license in August 2022 to allow it to offer custody services for virtual assets.

In a budget address on February 22, the Hong Kong finance secretary, Paul Chan, pledged financing relating to Web3 as well as the formation of a crypto task force. This news comes at the same time.

He went on to say that Web3 had “great potential,” and that the Special Administrative Region of China is obligated to keep up with its “constant growth.”

“It is imperative that we stay current with the times and make the most of this priceless chance to drive innovation forward.”

Chan said that the monies will be used to expedite “the growth of the Web3 ecosystem” by organising “workshops for young people,” holding international seminars, and boosting commercial collaboration.

Because of the legislation that the government has enacted around cryptocurrencies, he said that a “big number” of businesses are contemplating opening up shop in the city. Dr. Han Lin, the founder of Gate Group, referred to Hong Kong as both “a worldwide strategic market” and a “hub” because of its “industry-leading regulatory system.”

On February 20th, Hong Kong announced its intentions, which included a new licensing framework as well as a proposal to provide retail traders access to approved cryptocurrency platforms.

Chan has said that he “will organize and head a task force” on the creation of virtual assets in response to the surge in commercial interest. This task force will be comprised of individuals from financial regulators, market actors, and “relevant policy bureaux.”

According to Chan, the purpose of the task group is to “offer suggestions on the sustainable and responsible growth of the industry.”

In October, Hong Kong launched crypto-friendly policy frameworks in an effort to govern the business inside the city. This was the first step in the city’s quest to achieve status as a worldwide centre for the cryptocurrency industry.

The city’s unique status enables it to have its own laws and government, despite the fact that it is located inside a territory that is part of China. However, there are reports that authorities in Beijing are covertly supporting the region’s crypto aspirations. This would appear to be in contradiction to China’s prohibition on cryptocurrencies, but the push that Hong Kong is making in the cryptocurrency space.

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New York Attorney General Letitia James Sues CoinEx

CoinEx, a cryptocurrency exchange, has been served with a lawsuit by New York’s Attorney General Letitia James, who contends that the company falsely represented itself as an exchange by failing to register as a securities and commodities broker-dealer in the state. James’s allegations can be found in the lawsuit.

James submitted a petition to the New York Supreme Court on February 22 that consisted of 38 pages, alleging that CoinEx “engaged in repeated and persistent fraudulent practices” and violated the state’s Martin Act, which is widely regarded as one of the strictest anti-fraud and securities regulation laws in the United States. The petition was filed in response to a previous complaint that CoinEx had violated the Martin Act.

In addition to this, she said that CoinEx was a marketplace that offered a variety of tokens, including Amp (AMP), LBRY Credits (LBC), Rally (RLY), and Terra, that qualified as “both commodities and security” (LUNA).

James noted in a statement that CoinEx is not registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission, “as is necessary under New York law,” in order to sell the tokens. James made this statement on February 22.

The Attorney General’s Office is said to have opened a CoinEx account using a computer and internet address situated in the state of New York and to have been able to engage in trading on the platform.

She went on to say that the days of cryptocurrency firms such as CoinEx behaving as if the regulations did not apply to them are gone.

In addition, the petition alleges that CoinEx did not comply with a subpoena that was sent by the Attorney General’s Office on December 22. The subpoena required CoinEx to “give testimony about the virtual asset trading operations of its platform.”

“CoinEx was compelled by subpoena to appear for an examination under oath on January 9, 2023, and failed to appear. CoinEx’s non-appearance is prima facie proof that CoinEx has engaged in the [mentioned] fraudulent practices.” [Citation needed] “CoinEx was compelled by subpoena to appear for an examination under oath on January 9, 2023, and failed to appear.”

James is seeking a court order to stop CoinEx from marketing itself as an exchange and preventing it from operating in the state by ordering it to geoblock internet addresses and GPS location data originating from New York. The petition can be found here. James is also seeking a court order to prevent CoinEx from operating in the state.

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Revenue for United States-based Coinbase Exchange Beats Expectations for 4th quarter

Coinbase, a cryptocurrency exchange that operates in the United States, has disclosed that its revenue for the fourth quarter of 2022 has above projections. This comes despite the fact that the exchange’s transaction volume has been steadily declining over the last several months.

The exchange reported a net revenue for the quarter of $605 million, which was much more than the revenue prediction of $589 million that was supposedly provided by Wall Street industry professionals.

Coinbase reported a 12% decrease in transaction volumes in comparison to the preceding quarter. Despite this, the business credited its 5% improvement in total revenues for the period to a 34% increase in subscription and service fee income.

In spite of Coinbase’s repeated assertions that the business does not consider its staking products to be securities, staking revenue for the company has reduced when compared to the prior quarter. This is due to the fact that the fall in the value of cryptocurrencies has been bigger than the overall growth in the amounts of staked bitcoin.

An inquiry of the exchange’s staking products is now being carried on by the United States Securities and Exchange Commission. This inquiry is quite similar to the one that led to its rival, the cryptocurrency exchange Kraken, reaching a settlement with the regulator for the amount of $30 million. Specifically, this investigation is looking into whether or not Kraken engaged in any illegal activity.

According to Coinbase, 2022 was a “tough year for crypto markets,” with the industry facing substantial headwinds due to both macroeconomic developments and incidents such as the bankruptcy of crypto hedge fund Three Arrows Capital and exchanges Voyager and Celsius. Coinbase attributed these headwinds to the fact that the sector was operating in a highly competitive environment.

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TZERO Shut Down Crypto Exchange

This information was sent to customers by the corporation on February 3 via its Twitter account in the form of a message. The cryptocurrency exchange known as tZERO is mostly owned by Overstock, and its last day of business will be March 6th of this year. As a result of the suspension, the company announced that it would maintain its concentration on the regulated securities products that it provides during the time that the United States Securities and Exchange Commission (SEC) and other authorities are working to clarify the legal status of crypto assets.

The city of New York is home to the headquarters of the firm known as tZERO, which is focused on developing technological solutions for the financial sector. This makes it considerably easier for private corporations to sell their assets on the public market whenever they find themselves in a position where they need to or want to do so. It is probable that the fact that tZERO provides investors with the opportunity to purchase tokenized shares is the factor that has contributed most to the company’s success in the cryptocurrency industry. Tokenized shares, which may also be referred to as “digital securities” due to their ability to be exchanged on a blockchain, are frequently referred to as “digital securities.”

The online retailer Overstock reportedly owns around 55% of the firm tZERO, as stated in a statement that was issued by the company on August 26 in the form of a press release.

The conventional cryptocurrency exchange known as “tZERO Crypto” was officially introduced in the year 2019, when tZERO celebrated its 10th anniversary. On this particular platform, users had the ability to purchase, trade, and store a wide variety of cryptocurrencies, some of which were Bitcoin (BTC), Ether (ETH), and Litecoin (LTC), amongst others. On the other side, the corporation stated in the most recent notice that it will stop operations of this exchange on March 6th. This notification was sent out on February 3rd and was the most current one that was sent.

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Russia will build a crypto exchange

The process of establishing a national cryptocurrency exchange is now being worked on by legislators in Russia, who are actively writing amendments.

It has been alleged that both the Russian Ministry of Finance and the Russian Central Bank are helping this initiative in some capacity. When it comes to the government’s approach to the oversight of cryptocurrencies inside the nation, these two organizations have a long history of being at odds with one another.

The lower house of the Russian parliament is known as the Duma. On November 23, local media reported that members of the Duma had been participating in conversations with industry players proposing revisions to the country’s current cryptocurrency law titled “On digital financial assets.”

The amendments, which would set up a legislative foundation for a national exchange, would first be brought to the attention of the central bank in the country.

Anatoly Aksakov, the chairman of the Duma’s Committee on Financial Markets, made a recommendation in June that a national cryptocurrency exchange in Russia may be created as part of the Moscow Exchange. Aksakov’s comments were made in reference to the Moscow Exchange.

In September, the Moscow Exchange developed a bill on behalf of the central bank to enable trading in digital financial assets. This law is intended to facilitate trading in digital financial assets. The purpose of this measure is to make it possible to trade in digital financial assets.

A measure to legalize the mining of cryptocurrencies as well as the sale of cryptocurrencies that have been mined was presented to the Duma at the beginning of this month. The law also legalizes the selling of cryptocurrencies that have been mined.

However, local miners would still be allowed to utilize platforms located in other countries, despite the fact that the law would create a Russian platform for the sale of cryptocurrencies and set up a Russian platform for selling cryptocurrencies.

In the second scenario, the transactions in question would not be subject to the currency controls and rules that are in place in Russia; however, they would still be required to be reported to the Russian tax service. This would be the case even though they would not be subject to the currency controls and rules.

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OKX publishes proof-of-reserves website with self-audit instructions

OKX, a cryptocurrency exchange, has launched a proof-of-reserves website that enables customers to audit its reserves to ensure that company is solvent. This comes at a time when cryptocurrency exchanges are under increased scrutiny after the demise of FTX. OKX introduced the new website through Twitter and its blog.

When completing an audit of the exchange’s reserves, users have two unique options to select from on the proof-of-reserves page.

The first allows customers to see a simplified version of the exchange’s current reserves and liabilities for its main three cryptocurrencies, Bitcoin, Ether, and Tether.

The user has the option of logging in and obtaining a summary of their balances at the exchange.

Because some clients may not accept the information offered by the firm’s web app, the business has also made two help file papers accessible that outline how to audit the reserves using the console on a PC.”

One of the articles contained instructions for querying the OKX app’s application programming interface (API) to get a Merkle tree of client balances and comparing the findings to balances that are publicly available on the blockchain.

The second participant described how people might get a Merkle leaf that corresponds to their own balances and validate that this leaf is a part of the overarching tree.

According to the news release, Lennix Lai, director of financial markets at OKX, feels that this proof-of-reserves website would assist to provide more transparency to the cryptocurrency exchange market: “Thanks to our newly implemented proof of reserves page and self-audit tool, users can now verify that their assets are adequately backed.

The cryptocurrency exchange FTX had an unanticipated lack of liquidity between November 7 and 11, resulting in the failure of the company that ran it.

In response to this episode, multiple executives from major cryptocurrency exchanges have said that proof-of-reserves pages must be established in order to provide transparency and guarantee that an event like this does not occur again.

OKX has previously said that it would provide documentation of reserves “asap.”

Both KuCoin and Binance have said that they intend to publish proof of reserves over the next several weeks.

Even before the announcement of FTX, a number of other cryptocurrency exchanges, including Gate.io, Bitmex, and Kraken, have provided proof-of-reserves websites.

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Bitfinex, Ava Labs raise $10M for DeFi technology amid market turmoil

As the ongoing bear market in cryptocurrencies continues, investors continue to find attractive projects to invest in, demonstrating that this market is, in reality, a builders’ market. Despite the present market conditions, investors continue to find promising projects to invest in.

In order to develop its ground-breaking protocol, the ecosystem known as Onomy, which is driven by the Cosmos blockchain, has recently successfully crowdfunded millions of dollars from various investors.

The purpose of the project is to integrate decentralized finance (DeFi) with blockchain technology in order to bring the foreign exchange market onto the distributed ledger.

According to the people who initiated the project, the most recent investment round was a success, and it was able to successfully raise $10 million from significant players in the industry. Some of these significant players include Bitfinex, Ava Labs, the Maker Foundation, and CMS Holdings, amongst others.

According to Lalo Bazzi, one of the co-founders of Onomy, the primary goal of constructing a decentralized autonomous organization with a public infrastructure should be to support the “core tenant of crypto,” which is self-custody, without sacrificing the user experience. This can be accomplished without compromising the security of the network.

Both decentralized financial institutions (DFIs) and self-custody have emerged as prominent topics of conversation among the cryptocurrency community as a direct result of the FTX liquidity-bankruptcy episode.

Despite the fact that another difficult year is anticipated according to estimates made for the industry’s not too distant future, the sector will continue to draw the attention of investors.

The results of a survey that was conducted between September 21 and October 27 of this year and was sponsored by Coinbase indicate that institutional investors are still interested in the industry.

It was discovered that 62% of the institutional investors who were questioned and who had cryptocurrency holdings increased such holdings over the course of the preceding year.

On November 9, just a few days after the FTX event came to light, Cathie Wood of ARK Investment raised the company’s existing shares in Coinbase by an additional $12.1 million. This was done by ARK Investment.

In addition, financial institutions continue to show interest in the sector, as evidenced by JP Morgan’s use of DeFi for international transactions and BNY Mellon’s creation of its very own Digital Asset Custody Platform, both of which are examples of how JP Morgan and BNY Mellon are participating in the industry.

Despite this, there is a body of evidence that projects the blockchain industry will continue to confront adverse settings, which have the potential to endure into the next year. These environments include:

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Decentralists criticize Uniswap’s new privacy policy.

As a consequence of the recently revised privacy policy of the decentralized exchange (DEX) Uniswap, it seems that some users are displeased with the service. These people are worried that the practice of gathering and storing user data violates the core ideas behind cryptocurrencies.

A few vocal members of the community have replied in recent days to a blog post that was written back in November and published on the website to announce an updated privacy policy for the organization. They have mentioned in their comments that it is rare for a decentralized firm to obtain and preserve information about its users. This is something that they have stated.

Being open and honest is really necessary.

It was stated there that they did not want any of their customers to be surprised at any point.

This privacy policy, which was most recently updated on November 17th, reveals that the exchange collects data from publicly-available blockchains, information about user devices such as browser information and operating systems, and information about users’ interactions with the exchange’s service providers, amongst other types of information. The most recent update to this policy occurred on November 17th.

In addition, Uniswap said that none of this information includes personally identifying details such as a first or last name, street address, date of birth, email address, or Internet protocol address. Uniswap has confirmed that the aforementioned information is absent from this material.

Despite this, some members of the cryptocurrency community have expressed concerns that the developments run counter to the industry’s fundamental principles, which are centered on protecting the privacy and anonymity of users. These members of the community have voiced their concerns in a number of different ways.

The programmers who created the cryptocurrency that protects users’ anonymity On November 21, Firo sent out a tweet to its 83,700 followers in which it said that the recent privacy upgrade that was done by Uniswap establishes a “dangerous precedent” for DEXs. The post was directed against Uniswap.

OwenP, an affiliate for the decentralized exchange SpookySwap, made the statement that it was unusual for a decentralized exchange to gather and keep user information on the backend of the platform. OwenP’s statement was made in response to a question about why a decentralized exchange would do such a thing.

As a result of the recent shutdown of the FTX cryptocurrency exchange at the beginning of this month, the term “transparency” has gained greater traction in the industry.

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Genesis rejects bankruptcy plans

People had the impression that Genesis, a company that lends out cryptocurrencies, intended to file for bankruptcy “imminently” if it was unable to pay a deficit of $1 billion brought on by the collapse of the cryptocurrency exchange FTX. This deficit was caused by the collapse of FTX, which was a company that traded cryptocurrencies. After FTX went bankrupt, Genesis ran into financial difficulties and was unable to meet its obligations, which led to the accumulation of this deficit. This void was brought about as a direct consequence of the collapse of FTX. On the other hand, this is not the case, since the book of Genesis makes it quite clear throughout its text. On November 21, people who are familiar with the matter told Bloomberg that the company had problems collecting money for its lending section and that it advised investors that it would have to file for bankruptcy if the situation did not improve. Additionally, people who are familiar with the matter said that the company warned investors that it would have to file for bankruptcy if the situation did not improve. Furthermore, according to those who are aware with the issue, the business reportedly informed investors that it would have to file for bankruptcy if the situation did not improve.

Genesis has been in “imminently” conversations with its creditors, as suggested by a spokeswoman for the business, and the company does not have any “constructive” intentions to file for bankruptcy, as revealed by the spokeswoman for the company.

After the collapse of FTX on November 16, Genesis said that it has temporarily halted withdrawals of funds from its customers’ accounts. The business said that the temporary halt on withdrawals was necessary due to “unprecedented market turmoil” as the basis for the decision.

The company’s most recent statement, which was issued on November 10 and indicated that it had around 175 million dollars worth of cash locked in an FTX trading account, was made on that day.

According to some reports, the cryptocurrency exchange Binance is said to have been in discussions to perhaps save a lender that is controlled by Digital Currency Group. Binance is claimed to have apparently been in negotiations. According to the sources that were quoted in an article that was published by the Wall Street Journal on November 21, Binance reportedly made the decision not to complete the purchase because doing so would have led to a conflict of interest. This was stated by the sources that were mentioned in the article that was published.

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