Tag: Crypto News

After India, US regulators to mull over crypto risks in 2022, BFSI News, ET BFSI

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San Francisco/New Delhi, The banking regulators in the US have announced a plan to clarify the rules and regulations around how banks can use cryptocurrencies over the next year, at a time when governments the world over, including India, are weighing the risks associated with cryptocurrencies and safeguard investors.

The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency said in a statement that they recognise that the emerging crypto-asset sector presents potential opportunities and risks for banking organisations, their customers and the overall financial system.

“As supervised institutions seek to engage in crypto-asset-related activities, it is important that the agencies provide coordinated and timely clarity where appropriate to promote safety and soundness, consumer protection, and compliance with applicable laws and regulations, including anti-money laundering and illicit finance statutes and rules,” the regulators said in a joint statement on Wednesday.

Throughout 2022, the US agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organisations are legally permissible, and expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations.

The agencies said that they continue to monitor developments in crypto-assets and may address other issues as the market evolves.

Further, the agencies will continue to engage and collaborate with other relevant authorities, as appropriate, on issues arising from activities involving crypto-assets.

In India, the upcoming Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 seeks to prohibit all private cryptocurrencies in India.

It, however, allows for certain exceptions to promote the underlying technology of cryptocurrency and its usage.

With the Indian government seeking to ban all private cryptocurrencies in the Crypto Bill 2021, experts and leading industry players have said that provisions relating to “banning” private cryptocurrencies would have to be looked at very carefully.

Several high-profile meetings have been held to discuss the regulation of cryptocurrencies in recent days. The Parliamentary Standing Committee had also called for the regulation on cryptocurrencies and its ecosystem.

Prime Minister Narendra Modi had earlier said that all democratic countries need to work together on cryptocurrency and ensure that it does not end up in the wrong hands.

Giving an example of the virtual currency, he had said: “Take cryptocurrency or Bitcoin for example. It is important that all nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youth.”

–IANS

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Crypto coin riding Squid Game high craters after dizzying rally, BFSI News, ET BFSI

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– A cryptocurrency named after the wildly popular Netflix drama “Squid Game” crashed to almost zero value on Tuesday after a dizzying rally pushed it to almost $2,800 last week.

The so-called squid token‘s market value jumped to $2.4 billion at the peak of Monday’s trading with a trading volume of $14 million over the last 24 hours, according to CoinMarketCap. The reason for squid’s slump was unclear. However, several reports including one by Gizmodo said holders of the coin were not allowed to sell the digital coin. Reuters could not independently verify the information.

Specialist crypto news outlet Coindesk reported that a digital address dumped squid tokens and cashed out millions of dollars worth of tokens in what it termed a “rug pull”- a situation where crypto developers abandon a project and run away with investors’ money.

Squid’s website appeared to be offline on Tuesday, while its Twitter account was “temporarily restricted” due to unusual activity.

Squid has only traded for a week, according to CoinMarketCap.

“Like many internet scams, cryptocurrency scams align themselves closely to popular trends and after the hype of Squid Game, this is no different,” said Jake Moore, cybersecurity specialist at cybersecurity firm ESET.

Cryptocurrencies based on memes or linked to internet culture have recorded rapid booms and busts this year, echoing soaring popularity of mainstream cryptocurrencies such as bitcoin.

Last week, for instance, shiba inu cryptocurrency – a meme-inspired cryptocurrency and a spinoff of dogecoin – muscled into the top-10 largest digital tokens by market capitalization. It has, however, barely any practical use.

South Korean series Squid Game, which became a global sensation and the No.1 program on Netflix, shows hundreds of cash-strapped players competing in hyperviolent games.

Squid is traded on exchanges PancakeSwap and DODO.

Pancakeswap did not respond to a request for comment. (Reporting by Medha Singh and Shreyashi Sanyal in Bengaluru and Tom Wilson in London; Editing by Bernard Orr and Shinjini Ganguli)



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Shiba Inu passes Dogecoin as top “dog” in cryptocurrency, BFSI News, ET BFSI

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SILVER SPRING, Md. – Cryptocurrency has officially gone to the dogs.

The recent trading frenzy over a digital token called Shiba Inu – commonly billed as a “meme” or joke coin – has vaulted the canine-themed cryptocurrency into the top ten most valuable digital assets by market value, hitting $40 billion and surpassing its cousin and apparent inspiration, Dogecoin.

Shiba was up another 10% at midday on Monday and has doubled in value in the past week. Most of that gain came in a flurry of trading last Wednesday, when it gained a whopping 66%.

Even with its recent meteoric rise – it’s up about 900% in the past month – each Shiba coin costs just a tiny fraction of one cent. If you bought $1,000 worth of Shiba in late September, your 20 million coins would now be worth around $9,000.

Like most cryptocurrencies, Shiba is not commonly used for commercial transactions and is considered by most experts and investors to be a high-risk, speculative bet due to the broader volatility of the crypto market. Experts warn that investors need to be cautious about putting money into something with anonymous leadership that appears to have little functional use.

Lee Reiners, an outspoken crypto skeptic, teaches fintech and cryptocurrency courses at Duke University School of Law. Reiners said he’s not surprised by Shiba’s recent spike.

“This is what happens when you have massive speculation in assets with no intrinsic value,” Reiners said.

Investors might be thinking this story sounds familiar. Bitcoin has doubled in value twice this year – with a rapid plunge in between – and now sells for more than $60,000 per coin. Among stocks, GameStop had a surge that rivals Shiba’s, rocketing from about $17 per share in early January to $483 later that month. Lately, it’s consistently traded around $180.

While Shiba is the current white-hot cryptocurrency, you can’t trade it through more traditional brokers – yet. A petition with more than 450,000 signatures on Change.org is pushing for the mobile trading app Robinhood to start allowing Shiba trades. Robinhood currently allows trading of Dogecoin and other cryptocurrencies. Its CEO Vladimir Tenev told investors last week that the company would “carefully evaluate whether we can add new coins in a way that’s safe for customers and in line with regulatory requirements.”

Stronger regulation of the crypto markets seems inevitable, but it’s unclear when it might happen. The chair of the U.S. Securities and Exchange Commission, Gary Gensler, said in August that the world of crypto doesn’t have enough investor protection and compared it to “the Wild West.”

Whether that lack of regulation is driving the recent spikes in Shiba and other digital assets is not clear. What seems apparent though, is that retail investors – the little guys – are leading the way.

Kyle Waters, a research analyst at the blockchain data and analytics firm Coin Metrics, said the median trade size of Shiba on that busy Wednesday was $115. That’s “highly suggestive” that the typical Shiba trader on Coinbase is a small retail trader, Water said.

Shiba’s rise is similar to Dogecoin’s ascent in the spring, when it caught fire and rose jumped from around 5 cents to 57 cents between April 7 and May 7.

Like many other crypto currencies, Shiba is shrouded in mystery. According to its white paper – or “Woof Paper,” in this case – the token was started in 2020 by an anonymous person or group named “Ryoshi.” The paper, which describes how Shiba and its progeny works, is also peppered with soaring-but-vague platitudes about community, freedom, revolution and destroying traditional paradigms.

A person with limited background knowledge of technology and blockchain vernacular would be hard pressed to decipher much of the technical wording in the white paper.



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Cryptocurrency ether hits all time high of $4,400, BFSI News, ET BFSI

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HONG KONG -Ether, the world’s second largest cryptocurrency, hit an all-time high on Friday, a little over a week after larger rival bitcoin set its own record.

As cryptocurrency markets have rallied sharply in recent weeks, ether is up more than 60% since its late September trough.

The token, which underpins the ethereum blockchain network, rose as much as 2.6% to $4,400 in Asian hours, breaching the previous top of $4,380 set on May 12.

“It wouldn’t surprise me if we go blasting through in European and U.S. trade,” said Chris Weston, research head at Melbourne-based broker Pepperstone. “This is a momentum beast at the moment, and it looks bloody strong.”

A recent technical upgrade to the Ethereum network seemed to have helped, he added.

“A lot of the time, with these technological upgrades and bits and pieces, this is news that fuels the beast, it’s fodder for people to say, ‘This is what we bought in for,’ and as soon as it starts moving, it’s like a red rag to a bull, people just go and buy.”

Bitcoin, which hit its record high of $67,016 on Oct. 20, was last up 1.4% at $61,457, for an increase of about 50% since late September.

Among the biggest recent movers in cryptocurrencies, however, is meme-based cryptocurrency shiba inu, whose price has rocketed about 160% this week, and is the world’s eighth largest token.

Shiba inu is a spinoff of dogecoin, itself born as a satire of a cryptocurrency frenzy in 2013, and has barely any practical use.

(Reporting by Alun John in Hong Kong and Kevin Buckland in Tokyo; Editing by Clarence Fernandez)



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Indian crypto exchanges locking accounts on suspicious money laundering trades, BFSI News, ET BFSI

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Indian cryptocurrency exchanges are blocking and reporting suspicious trades on their won following concerns raised by the government agencies that the virtual currencies were used for money laundering.

The industry is looking to self-regulate at a time when the government is yet to come out with any regulations around cryptocurrencies or the way to tax them.

WazirX, one of the largest cryptocurrency exchanges in the country, recently declared the numbers in what it calls a “transparency report”.

Between April and September this year, the exchange got 377 requests from legal enforcement agencies, out of which 38 requests were from foreign law enforcement agencies.

The crypto exchange locked about 1,500 accounts.

In all, the exchange locked 14,469 accounts, although most of them were after customers asked them to stop services or there were some other payment issues.

The exchanges have always claimed that if the cryptocurrency is based on a blockchain technology, all the records are permanent and, in fact, it would be easier to discover the exact nature of the transactions.

Enforcement Directorate notice

IN July, the Enforcement Directorate (ED) in its recent notice to WazirX, has asked the crypto exchange to explain why ‘withdrawal from crypto wallets’ is not a violation of the Foreign Exchange Management Act (FEMA).

The ED notice had put a question mark on the very essence of cryptos and fundamental structure of the underlying digital ledger, blockchain, that allow holders of cryptos to freely transfer coins from their wallets to another wallet and to anyone, anywhere in the world. The agency had asked WazirX to explain transactions worth 2,790.74 crore. A trader buying Bitcoin, the most popular cryptocurrency, on WazirX stores the coin in her wallet with the exchange.

However, she can move the crypto purchased on WazirX platform to another wallet with another exchange in India or abroad, or to her private wallet which is not linked to any exchange, or directly move coins to the wallet of another person who may be located anywhere.

WazirX and a few exchanges have also received notices from the income tax department which is trying to figure out the source of earnings of the bourses and whether parts have escaped tax.

In 2019, the Financial Action Task Force — an intergovernmental organisation to combat money-laundering — had come out with the ‘Travel Rule’ that prescribes exchanges, custodians as well as wallet providers to share information on senders and recipients of cryptos.



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Cryptocurrency crash ‘plausible’, rules needed, Bank of England’s Cunliffe says, BFSI News, ET BFSI

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By Huw Jones

LONDON -A collapse in cryptocurrencies is a “plausible scenario” and rules are needed to regulate the fast-growing sector as a “matter of urgency”, Bank of England Deputy Governor Jon Cunliffe said on Wednesday.

Risks to financial stability from the application of crypto technologies are currently limited, but there are a number of “very good reasons” to think that this might not be the case for very much longer, Cunliffe said.

“Regulators internationally and in many jurisdictions have begun the work. It needs to be pursued as a matter of urgency,” Cunliffe said in a speech to the SIBOS conference.

Largely unregulated cryptoassets have grown by 200% so far this year, from just under $800 billion to $2.3 trillion, with 95% of them, including bitcoin, unbacked by any asset or fiat currency, Cunliffe said.

“But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems – sub-prime was valued at around $1.2 trillion in 2008,” Cunliffe said, referring to a corner of the U.S. mortgage market whose collapse led to a global banking crisis.

“Such a collapse is certainly a plausible scenario, given the lack of intrinsic value and consequent price volatility, the probability of contagion between cryptoassets, the cyber and operational vulnerabilities, and of course, the power of herd behaviour,” Cunliffe said.

Connections between cryptocurrencies and the traditional financial system are also growing as big investors, hedge funds and banks become more involved, Cunliffe said.

Unregulated, decentralised finance or DeFi, which delivers financial services like credit on the technology that underpins cryptocurrencies, presents “pronounced” challenges given the absence of investor protection and the BoE has begun work on how such risks can be managed, he added.

Last week, global regulators proposed that the safeguards they apply to systemic clearing houses and payment systems should also be applied to stablecoins, a type of cryptocurrency typically backed by an asset or fiat currency, but they only make up 5% of cryptoassets.

Cunliffe, who helped to lead the work on the safeguards, said it took two years to draft this measure, during which stablecoins have grown 16-fold.

“Indeed, bringing the crypto world effectively within the regulatory perimeter will help ensure that the potentially very large benefits of the application of this technology to finance can flourish in a sustainable way,” he added.

(Reporting by Huw JonesEditing by David Goodman, Gareth Jones and Nick Macfie)



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Indian investors in the dark as cryptocurrency ads gather steam, BFSI News, ET BFSI

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New Delhi, “Kya aapke portfolio mein crypto hai?” If you have read such advertising lines recently — and now watching crypto ads as you surf through IPL 2021, YouTube and various social media platforms — make sure you hold on to your hard-earned money for a while.

Indian crypto players are bombarding people with advertisements across platforms — doubling down on their marketing spend when the cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.

The ball is currently in the court of the Finance Ministry and the Reserve Bank of India (RBI). A cryptocurrency bill is expected in the winter session and till the whole picture is cleared, investing in cryptocurrencies can be a dangerous move, warn legal experts.

“Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks,” is a thin line at the end of the advertisements, not visible to many people who have started investing via various crypto exchanges.

According to Dr. Pavan Duggal, a seasoned Supreme Court advocate and a cyber law expert, few players are asking Indian investors to invest in cryptocurrencies, primarily because there is a big legal vacuum that exists in the country.

“India has still not made up its mind as to how it wants to deal with cryptocurrencies. These are not legal tender in India. As per the judgment of the Supreme Court of India, the Reserve Bank of India is the nodal statutory authority to deal with all aspects pertaining to cryptocurrencies. However, more work needs to be done in this area,” Duggal told IANS.

If we look at cryptocurrencies as mere electronic records, they could be brought under the ambit of legality under Section 4 of the Information Technology Act, 2000. However, there is a lack of appropriate capacity building and awareness among the Indian investors about legal capabilities and nuances of cryptocurrencies.

“The government cannot be a mute spectator while open calls are being made asking Indian investors to invest into cryptocurrencies. Without appropriate homework on the legalities of cryptocurrencies in India, merely prohibiting players from asking Indian investors to invest crypto currencies would also not work,” Duggal elaborated.

India has seen a spurt in the popularity of crypto exchanges and platforms in recent months like CoinSwitch Kuber (CSK), WazirX, CoinDCX, ZebPay, Unocoin and BuyUcoin etc.

Within 15 months of commencing operations in India, CoinSwitch Kuber is India’s largest crypto exchange with more than 10 million users. Of the total 10 million users, 7 million are active users on the platform with a monthly transaction volume of Rs 15,138 crore.

Homegrown crypto exchange Unocoin has launched deposits via UPI wallets in the Indian currency for a faster top-up to buy and sell Bitcoins and other cryptocurrencies on the platform.

“There is still uncertainty among the prospective users regarding the usage of cryptocurrency in comparison to real money. We want all our users to have the ease of trading or exchanging on our platform,” said Sathvik Vishwanath, CEO and Co-Founder, Unocoin.

According to a report by IT industry’s apex body Nasscom, there are 15 million retail investors in India investing in the cryptotech space.

New Delhi-based cyberlaw expert Virag Gupta said that several emerging sectors within the digital economy do not have an established legal framework and regulatory network.

“Cryptocurrency is a unique area, since it attracts concurrent regulation by the Ministries of Law, Finance and Commerce; alongside the RBI and the SEBI. Nonetheless, certain regulatory needs may be addressed using the IT Act and taxation may be enabled through a notification by the Ministry of Finance,” Gupta told IANS.

A legal endorsement by the RBI and legislation passed by the Parliament may further pave the way for lawful trading.

“It is a misconception to believe that a conducive regulatory environment will harm the crypto currency sector. Rather, to cement a certain future, detailed jurisprudence diving deep within the currency and technology essential to the sector must be designed,” Gupta suggested.

Otherwise, the entire sector may be susceptible to uncertain government intervention “such as measures employed by the Chinese government which have led to loss of trust, investments, and overall destruction of the market”.

China’s central bank announced last month that all transactions of cryptocurrencies are illegal, effectively banning digital tokens such as Bitcoin, Ethereum and Solana etc.

When Bitcoin crossed $50,000 again last week, Shivam Thakral, CEO, BuyUcoin, said there has been a paradigm shift in the investment patterns across the globe which is underlined by the data shared by crypto exchanges from time to time.

“India’s middle-class population is willing to explore digital assets for creating long-term wealth to fulfil their goals, which may not be possible through any other asset class,” Thakral said.

However, it is possible that the gullible Indian investors would invest in crypto currencies, only to find that their business interests have been prejudicially impacted.

“This is a golden opportunity for the Indian government to explore mechanisms of how it can ride the tide of crypto-currencies and also draft enabling legal frameworks to regulate crypto-currencies,” said Duggal.

To cement a certain future, “detailed jurisprudence diving deep within the currency and technology essential to the sector must be designed,” Gupta added.

(Nishant Arora can be reached at nishant.a@ians.in)

–IANS

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CoinSwitch Kuber raises $260 million in Series C funding, becomes unicorn, BFSI News, ET BFSI

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CoinSwitch Kuber, a crypto asset platform, has raised $260 million in its Series C funding round. This investment has made the platform a unicorn, with a valuation of $1.9 billion.

Andreessen Horowitz (a16z), Coinbase Ventures and existing investors Paradigm, Ribbit Capital, Sequoia Capital India and Tiger Global, were among the key investors, the company said in a release.

“I believe, simplifying crypto investments for the Indian youth has helped us to stand out… We are humbled by the trust shown in CoinSwitch Kuber by two of the biggest names in the global crypto investment arena with Andreessen Horowitz choosing us to be their first investment in India. Coinbase Ventures’ investment is also testimony to the confidence they have in CoinSwitch Kuber’s business model and the tremendous potential India’s crypto space has to offer,” said Ashish Singhal, co-founder and CEO, CoinSwitch Kuber.

The crypto platform will onboard 50 million Indiansm introduce new products, hire for leadership roles, add new asset classes, onboard instituitional clients, launch an ecosystem fund and build crypto awareness and education with the funds that have been raised.

Started in 2017 by Ashish Singhal, Govind Soni, and Vimal Sagar, CoinSwitch was launched as a global aggregator of crypto exchanges. The company launched its India operations in June 2020.



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Cryptocurrencies post inflows for 7 straight weeks, led by bitcoin

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By Gertrude Chavez-Dreyfuss

NEW YORK – Cryptocurrency investment products and funds recorded inflows for a seventh straight week, as institutional investors warmed to more supportive statements from regulators, data from digital asset manager CoinShares showed on Monday.

Inflows to the sector were $90.2 million last week, led by bitcoin which snagged $69 million, according to CoinShares data as of Oct. 1. Over the past seven weeks, crypto inflows reached $390 million. For 2021, inflows totaled $6.1 billion.

Bitcoin recorded its third straight week of inflows.

“We believe this decisive turnaround in sentiment is due to growing confidence in the asset class amongst investors and more accommodative statements from the U.S. Securities Exchange Commission and the Federal Reserve,” wrote James Butterfill, investment strategist, at CoinShares.

SEC Chairman Gary Gensler last week at a Financial Times conference reiterated his support for bitcoin exchange traded funds that would invest in futures contracts instead of the digital currency itself.

A day later, Fed Chair Jerome Powell, in remarks before Congress, said the Fed had no intention of banning cryptocurrencies.

Bitcoin on Monday hit a four-week high of just under $50,000 and was last up 2.3% at $49,333.

Blockchain data provider Glassnode, in its latest research note on Monday, pointed out that as bitcoin rallied out of its narrow trading range last week, approximately 10.3% of the circulating supply returned to an unrealized profit.

Ethereum products and funds, meanwhile, posted another week of inflows totalling $20 million, despite conceding market share to bitcoin in recent weeks. Inflows to ether, the token for the Ethereum blockchain, so far this year amount to $1 billion.

Ether was last down 0.4% at $3,403.

Still, despite consecutive weekly inflows across crypto products, volumes were low at $2.4 billion last week, CoinShares data showed, compared to $8.4 billion in May 2021.

Assets under management at Grayscale and Coinshares, the two largest digital asset managers, climbed last week to $41.1 billion and $4.6 billion, respectively.

(Reporting by Gertrude Chavez-Dreyfuss; editing by Richard Pullin)



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5 best and worst performers, BFSI News, ET BFSI

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The crypto market has been correcting since the last few months and now all eyes are on what Bitcoin is going to do next. $40,000 was Bitcoin’s strongest local support, and last week we saw a positive move from $40,000 to $48,000.
Considering $50,000 as Bitcoin’s first local resistance, this move can be seen as a test move. Major resistance is not very far, and north of $52,000 is all it needs to break into a new trend.

This volatility in the market is good because it brings in some action; at the same time, support and resistance are tested multiple times.

Usually we see such behaviour towards the beginning of any big move. This is the time where short-term traders stay away and long time traders monitor the market closely for confirmation.

From a crypto market point of view, the current phase looks like a good consolidation period and hopefully, we’re coming to the end of consolidation.

As for the next movement, it’s going to be very difficult to say. It’s because when the stock market is also correcting from an all-time high and if there is a significant correction in the stock market, we could see that effect in the crypto market as well.

This would probably decide the next big move for Bitcoin and altcoins. However, it is time for traders to be patient. In the short-term, we could also see a few short positions being open.

However, from a risk-reward perspective, it does not seem to be a favourable time to trade. If you are a long-term investor, it’s definitely a good idea to dollar-cost-average your investments and keep buying the dip.

The month of October should be interesting for the market. Stay safe and play safe.

Crypto Cart: Five best performers
OMG Network (OMG)- 107% up
Axie Infinity (AXS)- 72.5% up
OKB (OKB)- 57.7% up
Qtum (QTUM- 53.8% up
ICON (ICX)- 49.9% up

Crypto Cart: Five worst performers
Constellation (DAG): 29.5% down
Celer Network (CELR): 17% down
Velas (VLX): 15.6% down
DigitalBits (XDB): 15.5% down
IoTex (IOTX): 7% down

(Source: coinmarketcap.com, data as of 13.30 hours, IST on October 02, 2021)
(Siddharth Menon is COO, WazirX. Views are his own)



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