In the world of crypto mining hosting, concerns about companies prioritizing their own interests over their clients’ needs are not uncommon. Many of these companies seem to drag their feet when it comes to repairing client hardware, resulting in significant losses for their customers. Rufus J Wright, the Founder and CEO of Crypto Caverns, a […]
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JPMorgan Warns of Increased Risk for Crypto Market Due to Tether’s ‘Lack of Regulatory Compliance and Transparency’
JPMorgan has warned of increased risk for the crypto market resulting from Tether’s “lack of regulatory compliance and transparency.” The global investment bank’s analysts explained that other stablecoin issuers that have been more compliant with existing regulations are likely to benefit from the coming regulatory crackdown on stablecoins and gain market share.
JPMorgan Warns About Tether and Crypto Market Risks
Global investment bank JPMorgan released a report on Thursday cautioning that the rapid expansion of Tether’s USDT stablecoin is a risk for the crypto market overall. USDT is the world’s largest stablecoin, with a market capitalization exceeding billion at the time of writing.
JPMorgan’s analysts explained that Tether’s “lack of regulatory compliance and transparency” is an increasing risk for the overall crypto market. Noting that Tether falls short of competitor Circle, the issuer of USDC, when it comes to regulatory compliance for their stablecoins, the analysts wrote:
Stablecoins issuers that have been more aligned with existing regulations are likely to benefit from the coming regulatory crackdown on stablecoins and gain market share.
Responding to JPMorgan’s criticism of USDT and the risks to the crypto market, Tether CEO Paolo Ardoino stated:
Tether’s market domination may be a ‘negative’ for competitors including those in the banking industry wishing for similar success but it’s never been a negative for the markets that need us the most.
“We’ve always worked closely with global regulators to educate them on the technology and provide guidance on how they must think about it,” the executive added.
Tether faced a million fine from the U.S. Commodity Futures Trading Commission (CFTC) in 2021 for misrepresenting its reserves, specifically claiming that USDT was fully backed by U.S. dollars. Following the fine, the crypto firm has strived to improve transparency by issuing quarterly attestations of its operations and finances. Tether reported a profit of .2 billion for 2023.
What do you think about JPMorgan analysts’ warning regarding Tether, USDT, and the risks to the overall crypto market? Let us know in the comments section below.
Arkham Reveals Onchain Addresses Linked to 4 Major Bitcoin ETFs, Boosting Market Transparency
On Jan. 23, Arkham, a firm specializing in onchain intelligence, announced the identification of four lists of connected addresses linked to four new spot bitcoin exchange-traded funds (ETFs). These groups of addresses are reportedly associated with fund managers including Blackrock, Fidelity, Bitwise, and Franklin Templeton.
4 ETFs Identified Onchain
According to an X post by Arkham Intelligence on Tuesday, the firm has pinpointed four out of ten spot bitcoin ETFs. Previously, the firm had uncovered the holdings of GBTC, and with this latest revelation, Arkham has now identified half of the ETFs in the U.S. market. “Arkham has identified the onchain location of four of the bitcoin ETFs,” the company said on Tuesday. “We are the first to publicly identify these addresses.”
Arkham unveiled the initial list of addresses, allegedly belonging to Blackrock and linked to the IBIT ETF. The identified addresses, however, contain 39,925 BTC, which is less than the 44,004 BTC reported by IBIT. Analysis shows IBIT’s funds are distributed over multiple addresses, each holding a maximum of 1,200 BTC. Additionally, Franklin Templeton’s EZBC ETF has been pinpointed, with its onchain holdings aligning with the asset manager’s reported figures.
Arkham’s investigation also uncovered the holdings of Fidelity’s Wise Origin spot bitcoin ETF, FBTC, revealing a possession of 34,127 BTC. This finding is consistent with Fidelity’s latest update as of January 23, 2024. The wallets for Bitwise’s BITB fund have been identified as well, holding 11,188 BTC. Furthermore, Bitwise manages additional crypto assets for the Bitwise 10 Crypto Index Fund, known as BITW.
Coinbase Custody oversees the assets of all the aforementioned exchange-traded funds (ETFs), with the exception of Fidelity’s. Fidelity, in contrast, utilizes its own custody services for managing its bitcoin (BTC) reserves. Among the transactions of the other three ETFs, Coinbase frequently emerges as the primary counterparty. The availability of onchain data regarding these new funds significantly enhances market transparency.
Transparency fosters trust among investors and enhances decision-making. By providing clear insights into fund operations and holdings, it strengthens the overall integrity and stability of the cryptocurrency market. This transparency is key to attracting more informed participation and investment in the burgeoning crypto economy. In the aftermath of FTX’s collapse, crypto exchanges holding significant balances started disclosing proof-of-reserve data, aiming to enhance transparency in the sector.
What do you think about Arkham identifying four of the new spot bitcoin ETF bitcoin holdings? Let us know what you think about this subject in the comments section below.
Transparency Report Reveals Backing for Paypal’s PYUSD Stablecoin
Paypal’s stablecoin, PYUSD, has been operational for 38 days. The token’s issuer, Paxos, has issued a transparency report related to the coin’s reserves. Much like many of today’s stablecoin industry leaders, PYUSD is supported by cash reserves and U.S. Treasury reverse repurchase agreements.
Paxos Issues Transparency Report on Paypal’s Stablecoin
Paxos, the issuer of this stablecoin and a partner of payments giant Paypal, has made public a transparency report concerning PYUSD’s reserves. According to the update, PYUSD is fully collateralized by U.S. Treasury notes and cash reserves.
As of August 31, 2023, .36 million supports PYUSD, which has a notional value of approximately .50 million. Paxos’ repurchase agreements are characterized by “overnight maturity with reputable financial institutions and overcollateralization with U.S. Treasuries,” as highlighted in the update.
The report states that out of the total, .86 million is collateralized by Treasury notes, and .5 million is collateralized with cash reserves. “As all trades are overcollateralized, the risk of loss is not deemed to be material,” Paxos assures in the transparency report.
Paxos also mentions that it collaborates with BMO Harris Bank, Customers Bank, and State Street Bank. “In order to support overnight and weekend liquidity, Paxos maintains balances in excess of FDIC insurance limits,” the company discloses.
At the time of writing on September 14, 2023, at 9:00 a.m. (ET), approximately 44,376,440.45 PYUSD is in circulation. Roughly 611 addresses hold PYUSD, and it has recorded a total of 2,758 transfers since its launch in August. As of September 14, 2023, the top 100 holders collectively possess 99.97% of all the PYUSD in circulation.
PYUSD is currently ranked 411th out of more than 10,000 crypto assets in terms of market capitalization. The newly launched token has experienced approximately .27 million in 24-hour global trade volume.
What do you think about the recent PYUSD transparency report Paxos released? Share your thoughts and opinions about this subject in the comments section below.
Fed Chair Powell on Crypto: We See Turmoil, Fraud, Lack of Transparency, Run Risk
Federal Reserve Chairman Jerome Powell has outlined several risks related to crypto activities during a hearing before the Senate Committee on Banking, Housing, and Urban Affairs. While stating that the Fed sees turmoil, fraud, a lack of transparency, and run risk in the crypto space, he stressed: “We don’t want regulation to stifle innovation.”
Fed Chairman Outlines Risks in Crypto Activities
Federal Reserve Chairman Jerome Powell answered some cryptocurrency questions before the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday. During the hearing, Senator Sherrod Brown (D-OH), the committee’s chairman, asked Powell about the risks posed by crypto assets and how the Fed is evaluating the risks of crypto-related activities by its supervised institutions.
“We’ve been quite active in this area,” Powell replied. “We believe innovation is very important over time to the economy. We don’t want to stifle innovation, we don’t want regulation to stifle innovation in a way that just favors incumbents, that kind of thing.” The Fed chair added:
We are watching what’s been happening in the crypto space. What we see is quite a lot of turmoil, we see fraud, we see a lack of transparency, we see run risk — lots and lots of things like that.
“So what we’ve been doing is making sure that the regulated financial institutions that we supervise and regulate are careful, are taking great care in the ways that they engage with the whole crypto space,” the Fed chairman continued.
Powell noted that the Federal Reserve has issued several joint notices with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), warning banks and regulated financial institutions about cryptocurrency risks.
In February, the Fed, FDIC, and OCC jointly warned about crypto’s liquidity risks. In January, the three regulators cautioned: “Banking organizations should ensure appropriate risk management, including board oversight, policies, procedures, risk assessments, controls, gates and guardrails, and monitoring, to effectively identify and manage risks.”
What do you think about the statements by Federal Reserve Chairman Jerome Powell about cryptocurrencies? Let us know in the comments section below.
IMF Report on El Salvador’s Bitcoin Adoption: Risks Averted, but Transparency Needed
According to a recent mission statement published by the International Monetary Fund (IMF), El Salvador has adopted bitcoin as legal tender and has avoided risks so far. The IMF states that the risks have not materialized due to the limited use of bitcoin. However, the United Nations financial agency warns that if its legal tender status drives growth, it could pose risks to the country’s “financial integrity and stability.”
IMF Discusses El Salvador’s Bitcoin Legal Tender Status: Limited Use Averts Risks, but Growth Could Fuel Concerns
On Feb. 10, 2023, the International Monetary Fund (IMF) released a concluding mission statement regarding El Salvador and its economy. The IMF visited San Salvador from Jan. 30 to Feb. 8 for the 2023 Article IV consultation. In the statement, the IMF discusses bitcoin adoption in El Salvador and states that “risks should be addressed.” Currently, the IMF acknowledges that the risks it raised in 2021 have mostly been avoided.
“While risks have not materialized due to the limited bitcoin use so far—as suggested by survey and remittances data—its use could grow given its legal tender status and new legislative reforms to encourage the use of crypto assets, including tokenized bonds (Digital Assets Law),” the IMF’s researchers detail. “In this context, underlying risks to financial integrity and stability, fiscal sustainability, and consumer protection persist, and the recommendations of the 2021 Article IV remain valid.”
El Salvador declared bitcoin as legal tender in September 2021, and since then, growth has been sluggish. The country has made regular bitcoin investments and added it to its treasury. However, the IMF emphasizes the need for more transparency in the government’s bitcoin purchases and the Chivo wallet, which is state-owned. “Greater transparency regarding the government’s bitcoin transactions and the financial status of the state-owned bitcoin wallet (Chivo) is crucial, particularly to evaluate underlying fiscal contingencies and counterparty risks,” the agency noted.
Besides the risks associated with bitcoin, the slow pace of its adoption, and adverse economic shocks, the Salvadoran economy grew rapidly last year, according to the IMF. The IMF estimates that the economy expanded by 2.8% in 2022. Amid mounting economic vulnerabilities in 2022, the IMF asserts that the Salvadoran Treasury still lacks access to international capital markets.
The IMF identifies two major issues that the Salvadoran government could address: implementing better Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) policies and increasing fiscal transparency.
What are your thoughts about the IMF’s recommendations for the country’s financial stability and integrity? Let us know what you think about this subject in the comments section below.
More security, transparency, and scalability: What blockchain needs for mass adoption
In February 2022, the Ukrainian government ran a crypto donation campaign to support victims of the Russian invasion. When the nation tried to reward those who had contributed to the fundraiser by sending crypto wallet holders complimentary NFTs, a slew of scammers took advantage of the government’s generosity, causing the operation to cease.
Rug pull scams like this, where cyber criminals drain money from unsuspecting investors, aren’t uncommon in the crypto space, unfortunately. Shortly following the Ukraine rug pull, in March this year, hackers discovered a weakness in the Ronin blockchain used by popular play-to-earn platform Axie Infinity. In the security breach, the scammers ended up stealing 5 million from Axie’s parent company, Sky Mavis.
In addition to rug pull scams, cryptocurrency exchanges can be compromised through poor security or fraud. This is what happened in 2014 when the Mt. Gox exchange collapsed in a years-long attack by hackers. By the time the breach was detected, a loss of between 0 million and 0 million of users’ funds had occurred. Since the attack, it has been estimated that .5 billion in cryptocurrencies have been stolen from exchanges.
Blockchain’s utility isn’t limited to just cryptocurrency, though. The shared and immutable ledger’s ability to provide transparency and security allows it to be applied to numerous other sectors, including real estate, supply chains and gambling.
Although the technology has taken the world by storm over the last few years, issues like the inability to hold scammers accountable for rug pull scams have plagued the industry, preventing it from being adopted into the mainstream. Additionally, large demand on blockchains that slow their transaction speed requires improvements to the technology’s ability to scale, a problem that many blockchains have so far struggled to achieve.
Newcomer to the blockchain space, Zetrix, has found a solution to address issues relating to transparency and security in the blockchain. It can facilitate smart contracts and deliver privacy, plus its cryptographic infrastructure can be introduced to multiple industries, creating a more transparent and efficient process. Zetrix’s network also has incredible scaling ability, being able to withstand 10,000 transactions per second.
In addition, Zetrix uses DPoS (Delegated Proof of Stake) to secure the blockchain by ensuring representation of transactions within it. DPoS is designed for implementing tech-based democracy using elections and voting processes to protect from centralization. The Zetrix DPoS mechanism is implemented through smart contracts with a dynamic upgrade mechanism that adjusts to the difficulty level of validating node access as Zetrix’s network expands, which means no matter how vast the network grows, the privacy and security of its users will remain intact. As an added measure, the consensus mechanism allows transactions to be validated before being added to the blockchain, and all validators are voted in via a contract.
In a groundbreaking new report by the Institute of Industrial Internet & IoT, China Academy of Information and Communications Technology (CAICT), the blockchain confirmed that it can complete transactions using a significantly low amount of energy compared to other blockchains. Specifically, it only requires 21 super nodes and 100 common nodes to complete a transaction, compared to Bitcoin, which uses 2.2 million super nodes, and Ethereum’s Proof of Work (PoW) blockchain which uses 2.3 million super nodes.
Zetrix’s mission is to connect countries and their governments, businesses, and people to a global blockchain-based economy. The platform wants to make native blockchain and cross-chain solutions accessible and effortless by bringing rapid-deployment solutions to the market with meaningful benefits and real-world impact for countries, businesses, and users.
By building a future ecosystem of Ubiquitous Trust Networks, the next-generation layer-1 public blockchain infrastructure allows value to be transferred freely on and across blockchains, just as information moves freely across the internet. As a result, by harnessing digital assets, decentralised applications can be developed and deployed rapidly on its network.
Blockchain technology has been rapidly adopted by many industries over the past decade, but mainstream adoption still remains a challenge due to the prevalent issues faced including issues with security, transparency, and scalability. Newcomers to the space like Zetrix are proving that these issues can once and for all be addressed, providing a much-needed step forward for this revolutionary technology.
Tether To Conduct An Audit To Negate Claims Concerning Transparency
The Tether general counsel has declared an official audit in few months. USDT is a popular stablecoin occupying the third position in global digital assets. As it’s on blockchain that cybersecurity experts deem unhackable, the majority today trusts its security.
Related Reading | Cardano Aims To Facilitate Users With Smart Contracts
However, many people in the crypto community have been waiting for a financial audit of the stablecoin. Now, it seems that the ongoing regulatory issues in the crypto industry have galvanized the Tether team into action. As a result, they’re declaring that an audit will take place soon.
Tether Executives Grants Media Interview
Another rare incident is an interview in which the Tether CTO Paolo Arduino and Stu Hoegner, the general counsel, participated on CNBC.
During the interview, the hosts asked the duo some questions about USDT’s transparency and backing. In response, the general counsel stated that the team is working to be the first in their sector to get financial audits.
The crypto market has just turned bullish as the USDT trades in the green zone | Source: USDTUSD on TradingView.com
He also mentioned that the audits would come in months and not years. As for backing, he stated that the stablecoin is backed with reserves.
But Hoegner mentioned that some of the reserves are not US dollars. But the reserves are more US dollars plus other cash equivalents, secured loans, crypto assets, bonds, and others.
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However, in the Transparency report which Tether published, the market cap for USDT stands at billion. Even though the number has increased by 195% since 2021 started, it is still behind competitors such as BUSD and USDC.
When Circle released a reserve report yesterday, July 21, it showed that 61% of the USDC reserves are cash & cash equivalent. The remaining 39% are in treasuries, bonds, and commercial paper accounts.
Taxes Decides To Attack
Paxos is a rival to Tether and recently attacked the stablecoin and Circle through its blog post on July 21, 2021. In the post, Paxos claims that the duo is not operating under financial regulators. In his words, both USDC and Tether are simply Stablecoins in name only.
Paxos disclosed that its stablecoin reserves are a combination of cash or cash equivalents to support its claims.
Related Reading | Ether EFT Gets Approval From Brazilian Securities Regulator
But in May, Tether disclosed the total backing that USDT has, which were cash 3.87%, fiduciary deposits 24.20%, treasury bills 2.94%, cash equivalents, commercial papers, which make up 65.39% plus others. This action was because the US lawmakers are closely scrutinizing its operations.
Also, Tether started submitting reports about its reserves after it reached a settlement agreement with the NY Attorney General’s Office 5 months ago. The firm has continued to send these reports since then.
Featured image from Pexels, chart from TradingView.com
Xcoins.com Registers 500% YoY Growth, Stays Focused on Speed and Transparency of Crypto Transactions
The year 2020 has not been great so far as the global economy continues to reel under the blow dealt by the SARS-CoV-2 pandemic, causing a widespread slowdown. One of the most obvious indicators of troubled waters is the recent poor performance of the US Dollar – the reserve currency.
As uncertainty surrounds fiat currencies and other financial assets, people are increasingly flocking towards precious metals and cryptocurrencies like gold and Bitcoin respectively, resulting in an increase in their prices. Meanwhile, a lot of established exchanges have found themselves overwhelmed with increased demand leading to delayed Bitcoin transactions, leaving the crypto community searching for better alternatives.
During these challenging times, one exchange platform – Xcoins.com has remained steadfast and continues to offer the same, if not better service since the past four years. With over a quarter-million customers across the world, the platform enables users to instantly purchase Bitcoin and other digital currencies with debit and credit cards. Unlike its counterparts, which includes major crypto exchanges, Xcoins promises to deliver Bitcoin to the user’s wallet within 15 minutes of purchase. In an event it fails to adhere to the timeline, users will not have to pay any fees for the next transaction.
Xcoins has proven reliable so far, winning the crypto community’s trust. As a result, the platform has witnessed a 500% year-on-year growth this year as many switched to Xcoins to meet their crypto needs. According to the company, the recent uptick is influenced by a surge in the influx of users on to the platform from the United States, who make up for 90% of new signups in 2020.
“We are seeing more and more new users wanting a transparent full-service platform that delivers on time. Our core focus is to deliver Bitcoin at speed to all our customers. This is our core focus moving forward as we continue to experience healthy growth in the US market and build on our market presence,” said Przemek Dmochowski – Chief Marketing Officer at Xcoins.
Bitcoin users are increasingly looking for platforms capable of settling transactions fast, especially during times when the demand is high. It is influenced by their past experiences as well, as there have been instances where Bitcoin confirmation backlogs extended to days at times leading to network congestion. Xcoins has emerged as the platform of choice because of its commitment to deliver in the shortest time possible, which combined with its easy signup process, credit card payments and a strong customer support team make it the best destination to purchase Bitcoin. Users can also purchase Litecoin, Ethereum, Ripple, and Bitcoin Cash on Xcoins.
With continued attention towards further optimizing the speed, transparency, and accessibility, the platform is poised to expand rapidly in the coming days.
OKEx Adds 10 New Charts to its skewAnalytics Dashboard, Increases Transparency
The global crypto spot exchange and derivatives trading platform, OKEx has taken its partnership with one of the trusted crypto derivatives market data platform Skew to the next level. According to a recent announcement by OKEx, it will be adding ten new advanced charts featuring in-depth metrics to its dashboard on the skew platform.
Leaders in their respective spaces, OKEx and skew joined hands a couple of months ago. As a part of the collaboration, OKEx became the first trading platform to create its own dashboard using the newly launched skewAnalytics Hosting Service. It allowed over 750 leading market participants to access dedicated real-time trading information with a complete breakdown of BTC and ETH Futures and Swaps and BTC Options from the OKEx platform.
The latest phase will witness the inclusion of additional charts into the skew dashboard which includes BTC Futures Aggregated Open Interest, BTC Perpetual Swap Price vs Spot, BTC Options Volumes & Open Interest, BTC Options OI by Strike and BTC Options OI by Expiry. The implementation of advanced charts and more in-depth metrics add to the platform’s transparency as OKEx makes its products accessible to a wider audience of both retail and novice traders. Institutional and professional traders also stand to benefit from the added transparency as they can make use of the data to device more efficient trading strategies.
OKEx has also created a complimentary guide to highlight and explain some of the new charts available on skew.
The Director of Financial Markets at OKEx, Lennix Lai offered his comments on the new development said, “We hope to provide even greater transparency for users through this second phase with skew. That also means helping traders understand how to interpret sometimes complex charts and how to use the information to execute better trades. The guide will show users how to read and interpret some of the new OKEx charts on skew since they can be daunting at first and are typically left for advanced users.”
With OKEx constantly working on bettering its offering for the trading community, more feature additions to its exclusive skew dashboard can be expected in the coming days.