The Roaring Kitty craze appears to be dwindling at a swift pace, as evidenced by Gamestop’s stock, GME, which has dipped between 3-5% against the U.S. dollar during Tuesday’s mid-day trading sessions. Similarly, the meme stock AMC Entertainment Holdings, or AMC, has also experienced a decrease of approximately 1.87%. According to the cryptocurrency market cap […]
Bitcoin News
Report: South African Financial Institutions Will Soon Offer Services Related to Cryptocurrencies
About 73 applicants who are seeking a license to offer crypto products in South Africa are already registered as accountable institutions with the Financial Intelligence Centre, an executive at the crypto exchange Luno has said. According to the Luno executive, this may be an indication that regulated financial institutions are planning to add crypto to their product offerings.
Only a Few Non-Licensed Financial Service Providers Have Applied
According to Tarris Arnold, the business development manager at the crypto exchange Luno, a majority of the entities that have applied for licenses to offer crypto-related products are financial institutions. This, according to Arnold, may be an indication that many regulated financial institutions plan to add crypto to their offerings.
In his comments published by Techcentral, Arnold said only a few of the license applications received by the country’s financial sector watchdog, the Financial Sector Conduct Authority (FSCA), were submitted by non-licensed financial services providers.
As reported by Bitcoin.com News on Dec. 3, the FSCA had received 93 applications from both licensed financial service providers and new applicants by Nov. 30. The Luno executive has now revealed that 73 of these applicants are already registered as accountable institutions with South Africa’s Financial Intelligence Centre.
Remarking on the growing interest in crypto assets by institutions that are unconvinced by this asset class’s value proposition, Arnold said:
“Even financial services companies that don’t buy into the fundamental value of crypto or its other use cases see value in the volatility associated with crypto assets. Volatility is beneficial as it often equates to greater profit margins. In addition, crypto is a non-correlating asset class and thus provides some mitigation for investments in traditional markets.”
Meanwhile, the Techcentral report suggested that once the crypto space becomes a regulated industry, institutional investors such as pension funds will likely start investing in digital assets.
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FCA Has Dealt With 1,400 Cases Related to Unregulated Crypto Activity, UK Regulator Reveals
The U.K. Financial Conduct Authority (FCA) has revealed that it has dealt with over 1,400 crypto cases between January 2020 and June 2023. The regulator noted that “a shortage of crypto skills meant the FCA took longer than planned to register crypto-asset firms under money laundering regulations.”
1,400 Cases Related to Unregulated Crypto-Asset Activity
The U.K. National Audit Office (NAO) issued a report on Friday titled “Financial services regulation: Adapting to change.” The NAO, which examines public spending for Parliament, operates independently of the government and the civil service.
“The financial services sector is also undergoing significant changes: whole new sets of products, such as crypto-assets, and rapid advances in technology, such as AI, provide opportunities for innovation but also risks to businesses and consumers which the FCA [Financial Conduct Authority] must plan for,” the report details, adding that there were:
1,400 cases related to unregulated crypto-asset activity that the FCA has dealt with between January 2020 and June 2023.
The FCA began supervising crypto firms in January 2020 through money laundering regulations. Any firm wishing to exchange currency for crypto, vice versa, or safeguard crypto assets in the U.K. must register and be supervised by the FCA. Existing firms had to register by January 2021, while new firms must do so before operation.
“The FCA assessed 158 applications between 2020 and 2021. Only 29 firms were registered, and the others were withdrawn, refused or rejected. The FCA created a temporary registration regime for firms to continue to operate after the deadline while it completed their assessments, and all cases were resolved by March 2022,” the NAO report states. “While the FCA has required crypto-asset firms to comply with anti-money laundering regulations since January 2020, and began supervision work including engaging with unregistered firms, it did not begin taking enforcement action against illegal operators of crypto ATMs until February 2023.”
The report further explains, “There can be a significant delay between the FCA identifying an issue to tackle, and it taking regulatory action,” elaborating:
The FCA is aware it needs to maintain specialist skills to avoid causing delays in its work — for example, a shortage of crypto skills meant the FCA took longer than planned to register crypto-asset firms under money laundering regulations.
The FCA also monitors firms for violations of the financial promotions regulations. The report notes that the FCA has “a dedicated team to tackle high risk and illegal financial promotions,” adding that more than 3,150 crypto-asset scams were reported in 2020, rising to more than 6,300 in 2021 and more than 3,900 in the first half of 2022. “The FCA published a public list of unauthorised firms and since this list has been published more than 300 firms have been flagged by the FCA,” the report notes.
What do you think about the U.K. regulatory environment for crypto? Let us know in the comments section below.
Bitcoin, Ethereum Technical Analysis: BTC Bulls Recover SEC Related Losses, as Price Moves Near $29,000
Bitcoin rallied to a six-week high on Wednesday, as price moved to the cusp of a breakout above the ,000 level. Today’s surge sees bulls recover almost all of the losses that came after the Security and Exchange Commission (SEC) sued Binance and Coinbase. Ethereum also climbed higher, rising above ,800.
Bitcoin
Bitcoin (BTC) raced to a six-week high in today’s session, as bulls moved to recover all losses that came as a result of the SEC suing Binance and Coinbase
BTC/USD hit an intraday peak of ,975.62 earlier in the day, which comes less than 24 hours after trading at a low of ,668.79.
Today’s move sent the cryptocurrency to its strongest point since May 6, when price traded at ,850.
Another catalyst for Wednesday’s surge was a breakout which took place on the relative strength index (RSI).
As of writing, price strength has moved beyond a ceiling at 58.00, and is currently tracking at 65.63.
In addition, the 10-day (red) moving average has also shifted course, and is closing in on a crossover with its 25-day (blue) moving average counterpart, which is another sign of upcoming bullish momentum.
Ethereum
In addition to BTC, ethereum (ETH) also made notable gains on Wednesday, rising to its highest point in over a week.
Following a low of ,715.34 on Tuesday, ETH/USD jumped to a high of ,821.70 during today’s session.
As a result of this move, the world’s second largest cryptocurrency hit its strongest point since June 10.
The 14-day RSI has also made similar strides, moving to a reading of 53.27, which is the most it has tracked at since earlier in the month.
This is marginally below a resistance level at 54.00, which has prompted previous bulls to gradually begin abandoning their positions.
At the time of writing, ETH is now trading at ,811.34, after giving up earlier gains.
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Pakistan to Ban Online Services Related to Cryptocurrencies
Authorities in Pakistan intend to prohibit all internet-based crypto services despite significant digital-asset investments made by Pakistanis. The decision comes as government officials in Islamabad take a strong stance against the legalization of cryptocurrencies like bitcoin.
Crypto ‘Will Never Be Legalized in Pakistan,’ Minister Tells Senators
Pakistan’s government announced on Wednesday its decision to suspend cryptocurrency services offered online in the country, local media reported. One of the declared goals of the measure is to prevent illegal transactions with digital assets.
The State Bank of Pakistan (SBP) and the Ministry of Information Technology have already started working on banning cryptocurrencies, Minister of State for Finance Aisha Ghaus Pasha revealed during a meeting of the Senate Standing Committee on Finance and Revenue.
Cryptocurrency will “never be legalized in Pakistan,” Pasha insisted, quoted by the News International daily. She cited requirements by the Financial Action Task Force (FATF), the international body combatting money laundering and terrorism financing, that the country must meet.
According to the Pakistani newspaper, the government official was referring to potential risks for Pakistan following its removal from the FATF’s ‘grey list’ last fall. The country had been on it since 2018 due to “strategic counter-terrorist financing-related deficiencies.” Pasha has been quoted as stating:
FATF had set a condition that cryptocurrency will not be legalized.
Supporting her position, SBP Director Sohail Jawad added that crypto transactions are highly risky and therefore will never be permitted in Pakistan. He also pointed to the great number of coins existing today and highlighted that the .8 trillion crypto market has shrunk to .2 trillion.
The SBP official also addressed concerns over the billions of dollars that Pakistanis have already invested in crypto assets. He said that the nation’s Federal Investigation Agency (FIA) and the Financial Monitoring Unit (FMU) are working on this but did not elaborate.
Pakistan saw a boom in cryptocurrency trading and mining before the government banned them in April 2018, the publication noted. Nevertheless, both activities continue in the country despite the government’s attempts to stop them.
Do you think that Pakistan’s government will be able to enforce a ban on crypto-related activities and services? Share your expectations in the comments section below.
‘Not Related to a Digital Currency’ — US Central Bank Addresses Concerns Over Fednow Payment Network
The U.S. Central Bank has issued an update regarding the Federal Reserve’s Fednow project, which is scheduled to commence in July. The Fed has responded to recent criticism of the Fednow service and asserts that the Fednow payment network is “neither a form of currency nor a step toward eliminating any form of payment, including cash.”
Fednow Won’t Replace Cash, the U.S. Central Bank Insists
When the U.S. Federal Reserve announced the launch of the Fednow service in July, it sparked immediate opposition and led many to believe it is one of the initial stages of an American central bank digital currency (CBDC). Several prominent economists and politicians have cautioned that a CBDC would bring about greater surveillance of Americans’ financial transactions.
In order to quell fears, the Fed issued an update on April 7, 2023, in which it raised the questions, “Is Fednow replacing cash?” and “Is it a central bank digital currency?” The central bank maintains that Fednow accomplishes neither of these objectives and emphasizes that the project is solely focused on “instant payments.” The Fed’s update unequivocally states: “Fednow is not related to a digital currency.” The U.S. central bank’s notice adds:
Fednow is a payments service the Federal Reserve is making available for banks and credit unions to transfer funds. It is like other Federal Reserve payment services, such as Fedwire and [Fed ACH]. The Fednow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.
In a recent interview, economist Richard Werner expressed concern about the timing of the Fednow project, describing it as “suspicious.” Werner linked the initiative to a central bank digital currency (CBDC), a sentiment shared by Georgia Representative Marjorie Taylor Greene, who criticized Fednow on April 5. In recent times, several U.S. lawmakers have proposed legislation that would prohibit CBDC initiatives.
According to the Fed’s update, the central bank “has not made a decision on whether to issue a central bank digital currency (CBDC),” and it will not do so without the authorization of the executive branch and congressional members. The Fed further emphasizes that “a CBDC would not replace cash or other payment options.”
Conversely, the White House’s recent “Economic Report of the President” noted the possibility that Fednow and CBDC initiatives “have the potential to realize many of the benefits that crypto asset developers have promised.” With regards to a U.S. CBDC, the general public is currently aware of two distinct Federal Reserve projects.
The first project is an experiment called “Project Cedar,” a pilot designed by the Federal Reserve Bank of New York. The Project Cedar protocol employs a wholesale digital dollar to enhance financial transactions. The second CBDC initiative by the Fed is “Project Hamilton,” a joint effort of the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT). While the Fed maintains that Fednow is not related to a digital currency, it seems to be a matter of semantics.
The Fed asserts that the Fednow service is not a digital currency or a step toward eliminating any form of payment, including cash, but instead, a digital payment system designed to facilitate instant payments. However, some critics contend that the system is, in fact, a form of digital currency, and that the Fed’s characterization of the project is misleading. Ultimately, the exact nature of the Fednow service and its relationship to a potential CBDC remains a topic of debate.
Will the Fednow project pave the way for a central bank digital currency, or is it simply a digital payment system designed to facilitate instant payments? Share your thoughts in the comments section below.
South Korea Doubles Down on Metaverse, Announces $51 Million Investment in Related Projects
The Ministry of Science and ICT of South Korea has approved investments of million in various metaverse projects, doubling down on its metaverse bet for the future. The investment includes a fund for supporting the growth of metaverse companies and another special investment to build several services including region-specific projects.
South Korea Continues Investing in the Metaverse
While the interest in the metaverse by some private companies has started to cool off, South Korea is doubling down on its bet to keep supporting the local metaverse economy. The country announced a pair of initiatives directed to support metaverse projects and companies to build products on top of virtual worlds.
The first of these projects, announced on March 8, constitutes a metaverse growth fund that will allow companies that want to develop virtual projects to get funding directly from the Ministry of Science and ICT of South Korea. For this, the institution has allocated million.
The second project, announced one day later, has to do with the development of 13 specific initiatives which include the metaverse in different convergence areas, including technology, regional projects, the public sector, and industry. This second project has allocated million for its completion.
State Funding Said to Be ‘Needed More Than Ever’
The Korean institution recognized that the weakness of the current world economy makes it difficult for these kinds of companies to raise funds privately. On this subject, Oh Yong-soo, software policy officer at the Ministry of Science and ICT, stated:
Due to the deteriorating economic situation at home and abroad, civilian venture investment has dried up. Government support is needed more than ever. It’s time to do it.
Since last year, the Korean government has actively invested in the growth of its local metaverse industry, injecting millions in funds directly into companies in the field. In May, Lim Hye-sook, director of the Ministry of Science and ICT of South Korea, announced an investment of 7 million in metaverse companies, being one of the first countries to directly put funds into the sector at that time.
Also, in June, the ministry announced a program to recruit companies to be part of its metaverse content creation project. The program has the objective of kickstarting the local movement to create content in the metaverse as part of the country’s strategy to be a pioneer in the industry.
What do you think about South Korea’s million investment in metaverse projects? Tell us in the comments section below
US Federal Reserve Board Issues Policy Statement That Limits Banks’ Crypto Related Activities
The United States Federal Reserve Board said on Jan. 27 that both insured and uninsured banks will be subjected to limits on certain activities including those that are associated with crypto assets. The board’s latest action does not preclude a state member bank or prospective applicant from providing crypto-assets safekeeping services.
Limiting Regulatory Arbitrage
The United States Federal Reserve Board has issued a new policy statement which says that both insured and uninsured banks under its supervision will be subjected to the “same limitations on activities, including novel banking activities, such as crypto-asset-related activities.”
The statement also clarifies that the institutions will be subjected to the limitations “on certain activities” which fall under the auspices of the Office of the Comptroller of the Currency (OCC). According to the statement, by imposing limits on the activities of financial institutions, the board is not only attempting to “promote a level playing field” but is also seeking to “limit regulatory arbitrage.”
The policy statement, which becomes effective upon publication in the Federal Register, implores banks to ensure that their activities are above board and are conducted “in a safe and sound manner.” This can be achieved by having risk management processes in place, internal controls, as well as information systems.
State Member Banks Not Precluded From Providing Crypto-Assets Safekeeping Services
On why it decided to issue the policy statement, the Federal Reserve Board said it had seen an increase in the number of inquiries or proposals from financial institutions that wish to engage in non-traditional activities.
In recent years, the Board has received a number of inquiries, notifications, and proposals from banks regarding potential engagement in novel and unprecedented activities, including those involving crypto-assets. In response, the Board’s statement specifies how it will evaluate such inquiries, consistent with longstanding practice.
Meanwhile, the statement clarified that the board’s latest action does not, however, preclude a state member bank or prospective applicant from providing crypto-assets safekeeping services. This is only permissible when “conducted in a safe and sound manner and in compliance with consumer, anti-money laundering, and anti-terrorist financing laws.”
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Ripple (XRP) Related Flare Network Token Airdrop: FLR dumps by 71%
In late 2020, the Flare Network attracted a lot of attention in the Ripple (XRP) community. The creators wanted to open up the DeFi space for Ripple and announced an airdrop of Flare (FLR) tokens for all XRP holders.
However, holders of XRP had to be patient for a long time. The launch was postponed several times. But today is finally the day: at 6:59 p.m. EST, the distribution of FLR tokens will take place.
The FLR Token Distribution event is just 24 hours away.
Join the #Flare team and guests on Twitter tomorrow. The distribution starts at 23:59 UTC sharp. The stream will start a few minutes before.#ConnectEverything pic.twitter.com/CLtmUird1Z
— Flare
(@FlareNetworks) January 8, 2023
However, there is also bad news. Just before the launch, the FLR/USDT trading pair is seeing a massive dump of around 71% on Bitrue.
The exchange was the only trading platform besides Poloniex to date where FLR could be traded as an IOU. As can be seen in the 1-day chart from TradingView, the FLR/USDT pair has seen a massive dip over the last two days on Bitrue.
The token was trading at .5394 yesterday and crashed to a low of .1559 at times today before recovering to .2395 at press time. With this, the FLR token is still posting a loss of around 55% compared to two days ago.
Airdrop For XRP Holders Is Finally Here – Too Late?
When the project started, the narrative was clear: Ripple (XRP) lacked access to the booming sector of decentralized finance (DeFi). This has since changed, at least in part. Ripple has been developing a bridge to Ethereum (ETH) on its own to enable smart contracts and DeFi. Moreover, the XRP Ledger now has a DEX and its own NFT standard.
To adapt to it, the project now aims to provide smart contract capabilities for blockchains without them, starting with Ripple (XRP). Flare Network is a layer 1 Ethereum Virtual Machine (EVM) based interoperable blockchain based on the Proof of Stake (PoS) consensus mechanism.
However, whether Flare Network can convince investors after its 2-year delay with its new approach or whether there will be another dump tonight when the majority of Ripple (XRP) investors receive their FLR tokens, remains to be seen. Today’s dump suggests that some investors may not be interested in FLR in the long term.
FLR Token Distribution
For every 1 XRP in the snapshot (taken in December 2020), 1.0073 FLR will be airdropped. Today, the first 15% of this amount will be distributed via airdrop. The remaining 85% of the tokens will be paid out in 36 monthly installments. The method of distribution depends on the outcome of the community vote on the Flare Improvement Proposal 01 (FIP.01).
If the community approves the proposal, the remaining 36 monthly distributions will be decentralized on the chain. The tokens will be divided among the wallets that packaged FLR tokens (WFLR).
If the community rejects the proposal, the same self-storage wallets and the same centralized exchanges that received the initial airdrop will receive one airdrop per month for 36 months.
Featured image from iStock, Chart from TradingView.com