Značka: Bitcoin Regulation

Bitcoin trader says expect more chop, downside, then sideways price action for BTC this summer

Discussion of the state of the crypto market has been a dominant headline over the past few weeks as non-crypto native media excoriate Bitcoin (BTC) and DeFi investors for investing in assets with no fundamental value. At the same time, crypto-savvy analysts and traders have been pouring over charts, looking for clues that signal when the market will bottom and reverse course.Novice investors are clearly nervous and a few have predicted the demise of the burgeoning asset class, but for those that have been around for multiple cycles, this new bear market is just another forest clearing fire that will eventually lead to a healthier ecosystem. The next steps for the crypto market was a topic discussed in depth with Cointelegraph contributor Crypto Jebb and independent market analyst Scott Melker. The pair chatted about their views on why the value proposition for Bitcoin remains strong and what the price action for the top cryptocurrency could look like moving forward. [embedded content]Here’s a look at some of the key points discussed by Crypto Jebb and Melker. Bitcoin is being used as it was originally intendedTraders are primarily focused on Bitcoin’s spot price and lamenting the fact that it is not performing as the inflation hedge that many promised it would be, but Melker pointed out that its performance largely depends on the country and economic state of where an individual lives. Bitcoin may be down significantly in terms of U.S. dollars, but when compared to countries like Venezuela that are experiencing hyperinflation, or Nigeria, which has a large unbanked population, BTC has offered people a way to preserve the value of their money and transact in an open financial system. One of the biggest functions highlighted by Melker is that Bitcoin is the first real asset that has given people around the world the ability to opt out of the current financial system if it’s not working for them. According to Crypto Jebb, Bitcoin is thermodynamically sound, meaning he defined as the asset holding on to the energy that is put into the system and that it doesn’t “leak” it out through things like inflation. What direction will the market take?Regarding the market’s future, Melker made sure to emphasize that while it may not seem like crypto adoption is moving fast to those who have been in the market for years, “the adoption of Bitcoin is faster than the internet. It’s a hockey stick curve that is absolutely going parabolic.” Both Crypto Jebb and Melker suggested that the paradigm shift toward investing in cryptocurrencies just needs more time because people who have been conditioned to invest in things like a 401k or Roth IRA and most investors are trained to fear risk.In response to possible critics who would cite Bitcoin’s volatility as a core reason to avoid cryptocurrencies, Melker highlighted the struggles that equities markets have had lately, citing the poor performance of stocks like Netflix, Facebook, PayPal and Cathie Woods’s ARK funds. Melker said, “Last month was the first time I believe I saw research from Messari that said there wasn’t a single place that you could have basically put money in an asset class and stored any sort of value. And if you stayed in cash, you lost 8% of your buying power doing that.”Related: Deutsche Bank analysts see Bitcoin recovering to $28K by DecemberExpect more downside over the short-termAccording to Melker, the current condition of the market is poor and in the short-term, it’s important to remember that “the trend is your friend” and that further downside is likely. That being said, Melker indicated that there are some developments coming up that could help the market out of its lull, including the Fed tightening cycle which has historically put pressure on asset prices for the first three quarters of the tightening cycle until the market adjusts to the new reality. Melker said, “My best guess is that we have a very choppy, boring low-volume, low liquidity summer. Maybe we put in new lows, or maybe we just chop around from $17.5K to $22K or $23K, something like that. And then we really start to see what the market is made of coming into the end of the year.” Don’t miss the full interview on our YouTube channel and don’t forget to subscribe!The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Binance to assist Cambodia in developing crypto regulations

Crypto exchange Binance has signed a memorandum of understanding (MoU) with the Securities and Exchange Regulator of Cambodia (SERC), according to a June 30 announcement.Binance and SERC will work together to develop crypto regulations in the country. SERC is looking to leverage Binance’s technical expertise and experience in the field to develop its own legal framework for the digital asset market.Cryptocurrencies are not regulated in Cambodia and any unlicensed activity involving these digital assets is highly prohibited. The partnership could prove pivotal for the South Asian nation where any crypto-linked activity is deemed illegal since 2018.Asia has become a crypto hotspot over the years with several nations in the region adopting a pro-crypto approach. The likes of Thailand, Singapore, Malaysia, Philippines have come up with progressive regulations to promote the use of crypto assets in their respective countries.Binance has paid special attention to good regulatory relations, especially after its 2021 debacle that saw nearly half a dozen countries issuing compliance warning against the crypto exchange. The leading crypto exchange has mended its relations since then and has forged critical partnerships in Asia over the past year in countries such as Thailand, Malaysia and Singapore.The crypto exchange has also made a name for itself when it comes to offering technical expertise to governments about crypto and helping them with regulating the nascent sector, The exchange had signed a $15 million investment agreement in Bermuda to teach and educate the community about crypto.Related: Binance U.S. makes BTC trading fee-free as competitors feel the heatBinance’s regulatory in-roads in the emerging markets have caught the attention of many including the likes of Alex Gladstein, chief strategy officer at Human Rights Foundation. Gladstein lauded Binance’s recent expansion in emerging markets such as Asia, Africa, and the Middle East and said:“While Western cryptocurrency companies are buying Superbowl ads and sports stadium rights, Binance is ruthlessly and custodial taking over emerging markets in Asia, Africa, the Middle East, and Latin America. They are winning.”Earlier in May Binance signed a similar MoU with the government of Kazakhstan, to help them with crypto adoption and regulations. Similarly, it had signed an MoU with the Dubai World Trade Centre Authority (DWTCA) in December last year and later bagged a license to operate in the country as well.

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Bybit enters into settlement agreement with Ontario Securities Commission

Bybit announced that it reached a settlement agreement with the Ontario Securities Commission (OSC) on Thursday, a day after the OSC released a Statement of Allegations against the crypto asset trading platform. The agreement includes several measures to be taken by Bybit as it engages in registration talks with the Canadian regulator. This announcement comes after the OSC issued financial penalties against Bybit and KuCoin, claiming violation of securities laws and operating unregistered crypto-asset trading platforms.According to the Settlement Agreement, Bybit has disgorged revenues totaling approximately $2.47 million and compensated the OSC $7,707 (CAD 10,000) for costs. No additional monetary penalties were levied on Bybit as part of the agreement.Also, Bybit announced that it would not accept new accounts from Ontario residents, provide any new goods to existing accounts held by Ontario investors, or conduct marketing and promotional efforts targeted at Ontario residents.Registration discussions with the provincial regulator are currently underway, and if the process fails, Bybit will cease operations in Ontario. Investors who already own cryptocurrencies on Bybit will be required to terminate their positions in specific restricted products such as leveraged contracts, margin trading, or credit extension. Retail investor funds or assets in Ontario that are unspent or unutilized may be used for unrestricted products or withdrawn from the Bybit platform, the exchange noted. Ben Zhou, co-founder and CEO of Bybit in a statement noted that:“We appreciate the OSC’s efforts in protecting Ontario investors and look forward to cooperating with the OSC in all respects in the registration process.”Cointelegraph reached out to Bybit for additional comments but did not receive a response by press time. This story will be updated as more information becomes available.Related: Canadian regulator takes enforcement actions against Bybit and KuCoinThe decision by the regulator was the latest in a string of warnings and legal actions taken against crypto exchanges that provide services to Ontario consumers. In March 2021, the OSC issued a deadline for crypto firms operating in Ontario to register with the province’s securities laws by April. Ontario has eight registered cryptocurrency trading platforms, including Fidelity Digital Assets, Bitvo, and Bitbuy, as of June 1.

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GitHub users respond with 'Bitcoin bill' idea to Gillibrand-Lummis bill

Now every interested user has a chance to leave their mark on a crypto bill that could define the industry guidelines in the United States in the near future, the Responsible Financial Innovation Act (RFIA). The document was uploaded on GitHub, a platform populated by software and product experts, by its co-sponsors to get public feedback. On Wednesday, June 22, Senators Cynthia Lummis and Kirsten Gillibrand uploaded the full content of their Responsible Financial Innovation Act on GitHub. As Lummis’ representatives commented:“The senators seek comments from industry stakeholders, consumers and interested parties to ensure that this landmark legislation reflects the innovative nature of the industry it regulates, while also adding confidence, trust and stability for consumers.”By the press time, there are six commentaries available on the act page, with some of them being more of a solitary battle-cry (“Taxation is theft”), while others suggesting debatable edits to the document. A user called Stduey explains why Bitcoin is different and should not be included with risky “assets” due to its “absolute scarcity” feature. In his opinion, that makes a case for an absolutely separate bill for Bitcoin:“If you buy 5,000 satoshis for $1, you will have 5,000/2.1 quadrillion satoshis, forever, and no one can change that. People cannot understand the magnitude of this yet but this subtle difference is what separates Bitcoin from every other crypto, fiat, precious metal, and commodity.”Another commentator, savage1r, elaborates on the inconsistency of the current framework in regard to airdrops — it ties the taxable value of coins to its entry price, which might be significantly higher than at the cash-out phase:“Airdrop receivers should only have to pay short or long term taxes on the coins they cash out assuming the initial value is $0 because they do not realize the gains until they trade or sell.”Related: Lummis-Gillibrand crypto bill comprehensive but still creates divisionThe highly awaited RFIA was introduced in the U.S. Senate on June 7. There is a broad consensus among the community that the bill is favorable to crypto.

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Is there a way for the crypto sector to avoid Bitcoin’s halving-related bear markets?

There is good reason to be afraid. Previous down markets have seen declines in excess of 80%. While tightfisted hodling might hold wisdom among many Bitcoin (BTC) maximalists, speculators in altcoins know that diamond handing can mean near (or total) annihilation. Regardless of one’s investment philosophy, in risk-off environments, participation flees the space with haste. The purest among us might see a silver lining as the devastation clears the forest floor of weeds, leaving room for the strongest projects to flourish. Though, doubtlessly, there are many saplings lost who would grow to great heights themselves if they had a chance. Investment and interest in the digital asset space are water and sunlight to the fertile ground of ideas and entrepreneurship. Less severe declines better serve the market; better a garden than a desert.A brief history of crypto bear marketsIn order to solve a problem, we must first understand its catalyst. Bitcoin and the wider digital asset space have survived a number of bear markets since its inception. By some accounts, depending on one’s definition, we are currently in number five.The five Bitcoin bear markets. Source: TradingViewThe first half of 2012 was fraught with regulatory uncertainty culminating in the closure of TradeHill, the second-largest Bitcoin exchange. This was followed by the hacks of both Bitcoinica and Linode, resulting in tens of thousands of Bitcoin lost and dropping the market by some 40%.¹ But, the price rebounded, albeit briefly, finding new heights above $16 until further hacks, regulatory fears and defaults from the Bitcoin Savings and Trust Ponzi Scheme collapsed the price yet again, down 37%.¹ The enthusiasm for the new digital currency did not stay long suppressed, as BTC rose again to find equilibrium at around $120 for the better part of the next year before rocketing to over $1,100 in the last quarter of 2013. And, just as dramatically, the seizure of the Silk Road by the DEA, China’s Central Bank ban and the scandal around the Mt. Gox closure sank the market into a viciously protracted retracement of 415 days. This phase lasted until early 2015, and the price withered to a mere 17% of the previous market highs.¹From there, growth was steady until the middle of 2017, when enthusiasm and market mania launched Bitcoin price into the stratos, peaking in December at nearly $20,000. Eager profit-taking, further hacks and rumors of countries banning the asset, again, crashed the market and BTC languished in the doldrums for over a year. 2019 brought a promising escalation to nearly $14,000 and ranged largely above $10,000 until pandemic fears dropped BTC below $4,000 in March 2020. It was a staggering 1,089 days — nearly three full years — before the crypto market regained its 2017 high.² But, then, as many in the space have memed, the money printer went “brrrrrr.” Global expansionist monetary policy and fears of fiat inflation fed an unprecedented rise in asset values. Bitcoin and the greater crypto market found new heights, topping out at nearly $69,000 per BTC and over $3 trillion in the total asset class market capitalization in late 2021.²The total crypto market cap decline. Source: TradingViewAs of June 20, the pandemic liquidity has dried up. Central banks are hiking rates in response to worrying inflation numbers, and the greater crypto market carries a total investment of a relatively meager $845 billion.² More worrying still, the trend indicates deeper and longer crypto winters, not shorter, befitting a more mature market. Doubtless, this is primarily caused by the inclusion of and speculative mania around the high-risk start-ups that comprise some 50% to 60% of the total digital market cap.² However, altcoins are not entirely to blame. The 2018 crash saw the Bitcoin price drop 65%.⁴ Growth and adoption of crypto’s apex asset have raised regulatory alarms in many countries and questions about the very sovereignty of national currencies have followed. How to mitigate risk in the market?So, it is risk, of course, that drives this undue downward volatility. And, we are in a risk-off environment. Thus, our young and fragile garden wilts first among the deeper-rooted asset classes of convention.Portfolio managers are acutely aware of this and are required to balance a sliver of crypto investment with a larger slice of safe-haven assets. Retail investors and professionals alike often drop their bags entirely at the first sign of a bear, returning to conventional markets or to cash. This reactionary strategy is seen as a necessary evil, often at the expense of incurring short-term capital gains tax, and at risk of missing significant unpredictable reversals, which is preferred to the devastating and protracted declines of crypto winter.Must it be so?How does an asset class so driven by speculative promise de-risk enough to keep interest and investment alive in the worst of times? Bitcoin-heavy crypto portfolios do better, comprising a higher percentage of the least volatile of the major assets. Even so, with a 0.90+ correlation of Bitcoin to the altcoin market, the wake of crypto’s most dominant currency often serves as a churn to smaller assets caught in the same storm. Correlation of BTC to Ether and all altcoins. Source: Arcane ResearchMany flee to stablecoins in dire times, but, as evidenced by the recent Terra disaster, they fundamentally hold more risk than their fiat peg. And, commodity-paired tokens are burdened with the same concerns inherent to any other digital asset: trust — be it in a marketplace or its organizational entity — regulatory uncertainty and technological vulnerabilities. No, merely tokenizing safe-haven assets will not provide the stable yang to the volatile yin of the crypto market. When fear is at a maximum, an inverse price relationship, not merely neutrality, must be achieved to retain investment in crypto and at a return that justifies the adoption of this inherent risk. For those willing and able, inclusion of the inverse Bitcoin exchange-traded funds (ETFs) offered by BetaPro and Proshares does provide a hedge. Much like engaging short positions, however, accessibility hurdles and fees make these solutions all the more unlikely to sustain the average investor through the bear market. Further, increasingly regulated and compliant centralized exchanges are making leveraged accounts and crypto derivatives unreachable to many in the larger retail markets.⁵ Decentralized exchanges (DEXs) suffer from the limitations of anonymity and solutions offered for shorting mechanisms on such have largely required a centralized exchange to work in collaboration. And, more to the point, both solutions functionally do not support value retention in the crypto market directly.Are crypto safe-haven assets enough?The solution to the mass exodus of investment in the crypto bear market must be found in the assets themselves, not in their derivatives. Escaping the inherent risks mentioned above might be, in the medium-term, impossible. But, regulatory clarification is promised and debated around the globe. Centralization and technical risks are finding new mitigations through decentralized autonomous strategies and the engagement of an ever-more discerning crypto-savvy investor. Through many experiments and trials, crypto entrepreneurs will continue to bring real solutions to the forefront. Applications of blockchain technology that find substantial adoption in down-market “defensive” industries such as healthcare, utilities and the purchase or production of consumer staples would provide an alternative to flight. Such development should be encouraged in these uncertain times. Rather, by the wisdom of the market, such uncertain times should encourage this development. However, ingenuity should not be limited to merely tokenizing the feeble solutions of the conventional markets. This is a new world with new rules and possibilities. Programmatically incentivized inverse mechanisms are feasible, after all. Synthetix’s Inverse Synths aspire to do just that, but the protocol sets both a floor and ceiling price, and in such an event, the exchange rate is frozen and only exchangeable on their platform.³ An interesting tool for sure but unlikely to be utilized by the greater crypto market. True solutions will be broadly accessible both geographically and conceptually. Rather than providing merely a dry place to wait out the down-market storm, crypto solutions must provide a return to justify the risk still inherent to our developing asset class. Is there a silver lining to the bear market? Will the survivors of crypto-winter emerge in a market more rewarding for application and adoption than speculation? Healthy pruning may be just what our young garden needs; a protracted drought surely is unnecessary. Down markets are simply a problem and, with the clever application of blockchain technology, hopefully, a soluble one. Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
Trevor is a technology consultant, entrepreneur and principal at Positron Market Instruments LLC. He has consulted for corporate planning teams in the United States, Canada and Europe and believes that blockchain technology holds the promise of a more efficient, just and egalitarian future. ¹A Brief History of Bitcoin Bear Markets | by Mosaic – Medium² Crypto Total Market Cap (Ticker: CRYPTOCAP): Calculated by TradingView³ Travers, Garth (July 19, 2019). “Inverse Synths are Back”⁴ Choudhury, Saheli Roy (January 11, 2018). “South Korea is talking down the idea a cryptocurrency trading ban is imminent”⁵ Newbery, Emma (August 3, 2021). “Why are so many crypto exchanges unavailable in the US?”

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Why the crypto market crash may play in Bitcoin's favour

Natalie Brunell, the host of Coin Stories podcast, thinks that the recent incidents involving Terra (LUNA, now rebranded LUNC) and Celsius (CELH) and the following market sell-off will lead to regulatory action that will likely favor Bitcoin (BTC) over the rest of cryptocurrency. “I’m going to be watching for regulation developments, just signifying that Bitcoin is a digital property and that maybe there’s more fair accounting that can be done to allow institutions to invest,” she said in her latest interview with Cointelegraph. “And the other cryptocurrencies, I think will be deemed securities,” she continued. Brunell defines herself as a Bitcoin maximalist and therefore sees Bitcoin as a fundamentally different asset class from the rest of crypto, mainly because of its trustlessness nature. “I see it [Bitcoin] as digital property, as a savings technology, and that’s why I focus my energy on that,” she pointed out, adding that other cryptocurrencies are much more vulnerable to third-party risks. “I have to worry about: who’s creating them [altcoins], who’s expanding the supply, who might be hired or fired, what experiment are they trying?”  After a brilliant career in journalism, Natalie went full-time in crypto after discovering Bitcoin. She then  launched the Coin Stories podcast, where she interviews the leading voices of the crypto industry. Don’t miss the full interview on our YouTube channel and don’t forget to subscribe!

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Elusive Bitcoin ETF: Hester Peirce criticizes lack of legal clarity for crypto

The crypto sector may be maturing, but regulatory clarity around the treatment of digital assets continues to remain cumbersome. This was recently highlighted by Commissioner Hester Peirce — also known as the United States Securities and Exchange Commission’s (SEC) “crypto mom” — in remarks she made at “The Regulatory Transparency Project Conference on Regulating the New Crypto Ecosystem: Necessary Regulation or Crippling Future Innovation?”Peirce began her speech by emphasizing the importance of “regulating the new crypto ecosystem.” While this may be, Peirce also noted that the crypto industry is still in search of an actual regulator. She said: “A bipartisan bill announced last week attempts to answer that question. Some people in the crypto industry are celebrating the allocation of certain authorities to the Commodity Futures Trading Commission (CFTC) instead of the Securities and Exchange Commission. This view is likely rooted in a disappointment that the SEC has not used more proactively the authorities it already has to sensibly regulate crypto.” Everyone asks me when a spot bitcoin ETP will be approved. Here’s my answer: https://t.co/25M5kCDF1Q— Hester Peirce (@HesterPeirce) June 15, 2022After noting this, Peirce added that she is “hopeful that we can change course and use our existing and any prospective authorities wisely.” Yet, before explaining how this may be accomplished, Peirce was quick to point out that her criticisms on topics such as the denial of a Bitcoin (BTC) exchange-traded product (ETP) are targeted at the SEC Commission rather than the staff. “The staff appropriately is following the Commission’s lead, and the Commission has not been leading well,” she remarked.Regulatory matters for crypto industryWhile a number of digital asset bills have been passed this year, the first half of Peirce’s speech focused on the approval of a spot Bitcoin ETP in the United States, which she mentioned is the question she gets asked about most. While spot ETPs have successfully launched in other regions such as Europe and Canada — which saw 1 billion Canadian dollars in assets under management a month after its launch in 2022 — the SEC has continued to push back on this offering. Unfortunately, Peirce remarked that she still “has no idea” when the SEC would approve a spot Bitcoin ETP, noting that “the Commission has added crypto-specific hurdles to what used to be fairly straightforward processes for approving these pooled investment vehicles.” Moreover, while Peirce is aware that the Commission’s resistance to a spot Bitcoin product is difficult to understand, she noted that the Commission has “determined to subject anything related to Bitcoin.” Indeed, while the U.S. crypto ecosystem continues to push forward, industry experts are still left pondering whether a spot Bitcoin ETP will soon be approved. Eric Balchunas and James Seyffart, an exchange-traded fund (EFT) analyst for Bloomberg, recently said that if crypto platforms fall under the SEC’s regulatory framework, a spot ETF may occur in mid-2023. However, the bipartisan crypto bill, also known as the “Responsible Financial Innovation Act” that was introduced in the United States Senate on June 7, 2022, has yet to determine if the SEC or CFTC will be responsible for the allocation of digital assets. Regardless, the push for a spot Bitcoin ETP remains a strong-willed battle, especially for digital asset management firms like Grayscale Investments. Michael Sonnenshein, CEO of Grayscale, recently said that the firm is gearing up for a legal fight if Grayscale’s Bitcoin spot ETF is denied by the SEC. Shortly after this disclosure, Grayscale hired Donald B. Verrilli, a former U.S. Solicitor General, to join the firm to help push for a Bitcoin spot ETF. During a press conference at Consensus 2022, Verrilli went into detail about his plans to convince the SEC to convert Grayscale’s Bitcoin Trust into a spot-based ETF. According to Verrilli, the SEC’s approval of a Bitcoin futures ETF proved to be consistent with U.S. Security Laws, demonstrating that there was no significant underlying risk or fraud and manipulation. As such, Verrilli believes this created a situation where the approval of a Bitcoin spot ETF should be treated similarly to that of a futures ETF. He said:“The Administrative Procedure Act is a federal statute that regulates the conduct of all federal agencies, including the SEC. It sets out rules about what kinds of procedures agencies have to comply with. One of the most fundamental of these is that the agency not be ‘arbitrary and capricious.’ There is a common sense understanding that it’s arbitrary and capricious to treat cases that are alike in a different manner, and that is what the problem is here for not granting approval of a spot ETF.” Recent: Blockchain’s potential: How AI can change the decentralized ledgerPeirce further explained in her remarks that the SEC allowed futures-based Bitcoin ETFs to begin trading in October 2021, saying: “Enabling the change was a clear signal from Chair Gary Gensler, who pointed to the 1940 Act protections, along with the CFTC’s oversight of the futures markets, as a key basis for his comfort with such products. These funds proved popular, but demand for a spot-based product remains because futures products are more expensive to manage and may not as closely track the spot price.” Peirce elaborated on the importance of a spot ETP, noting that this type of product “could enable retail investors to gain exposure to Bitcoin through a securities product that, because of the effective ETF arbitrage mechanisms, likely would track the price of spot Bitcoin closely.” She added that it would likely be inexpensive to manage such a fund, while sitting “conveniently in an investors’ brokerage account alongside other securities.” In addition to the approval of a Bitcoin spot ETP, regulatory clarity around stablecoins is becoming more important than ever before. This has become the case mainly due to the recent collapse of the Terra ecosystem. Senator Pat Toomey, the ranking member of the Senate Banking Committee, told Cointelegraph that the Terra collapse influences legislation in the sense that it serves as a “wake-up” call to the federal government. “My own view is that algorithmic stablecoins should be treated separately from fiat-asset backed stablecoins. They are totally different creatures,” he said. However, Toomey added that there is currently no regulatory regime for asset-backed stablecoins. Yet, he believes this is important to establish, noting that stablecoins backed by traditional instruments like cash and securities plug into the conventional financial system. Given this, it’s important to point out that Toomey recently drafted a regulatory framework for stablecoins, known as the Stablecoin Transparency of Reserves and Uniform Safe Transactions Act, or TRUST Act. This framework proposes that digital assets be identified as “payment stablecoins,” or a convertible digital currency used as a medium of exchange that can be redeemed for fiat by the issuer. While the TRUST Act remains a framework, Toomey mentioned that stablecoin regulation might appear at the end of 2022. Shedding light on this, Kevin O’Leary — venture capitalist and Chairman of O’Leary Ventures — told Cointelegraph that while the bipartisan bill sponsored by senators Cynthia Lummis of Wyoming and Kirsten Gillibrand of New York addresses stablecoin regulation, he thinks that the frameworks proposed by Toomey, along with the Stablecoin transparency ACT sponsored by Senator Bill Hagerty, will likely pass first: “Both of these are the same in the sense that they only contemplate stablecoins. In terms of regulation, these suggest that stablecoins open themselves up for an audit every 30-days, and that no asset inside these tokens can be there longer than a duration of 12-months.”According to O’Leary, this is a money-market strategy. He added that Circle’s USD Coin (USDC) stablecoin hasn’t broken its U.S. dollar peg, even with recent crypto market volatility and the Terra collapse. “There is a lot more promise today from something backed 100% by the U.S. dollar than there is from something algorithmically backed.” Enforcement actions short-cut regulatory process According to Peirce, the lack of regulatory clarity within the crypto ecosystem has proven that the SEC Commission requires a more productive path to regulation. “The Commission’s reluctance to approve a spot Bitcoin ETP is of a piece with its more general reluctance to build a regulatory framework for crypto using standard regulatory processes,” she stated in her speech. As such, Peirce pointed out that the SEC has “cobbled together a regulatory framework through enforcement actions.” Peirce demonstrated this by referencing the BlockFi and SEC settlement that took place in February 2022. She noted that the SEC laid a foundation for BlockFi to register under the Securities Act, which, if successful, could likely become the standard for regulating crypto lending. While notable, Peirce explained that a better approach would have been to first identify crypto lending as implicating the securities laws and to then invite lenders and other members of the public involved with the case to discuss an appropriate path forward. Toomey also mentioned that SEC Chair Gensler has been “pushing the limits of authority,” mentioning this last week during his press conference at Consensus 2022:“I also think he has claimed that virtually all crypto assets are securities without explaining how and why that is so. This is not reasonable because it creates concern about an enforcement action without someone fully understanding what will result in enforcement action and what won’t. Regulation by enforcement is a terrible approach.” Optimism for change Given crypto’s current regulatory environment, it’s notable that Peirce concluded her speech on a high note, remarking that she is “optimistic that we can change course,” as long as both investors and the SEC take a more proactive approach. Although this “approach” remains rather vague, some examples of how this may take shape have come to fruition. For example, O’Leary explained that WonderFi Technologies, a decentralized finance (DeFi) platform, will become the first Canada-regulated digital asset exchange to be listed on the Toronto Stock Exchange (TSX). Recent: Regulations and exchange delistings put future of private cryptocurrencies in doubt“TSX has never listed a crypto exchange before, but invited WonderFi to list because they are fully compliant and there is institutional interest in the sector,” he said. O’Leary also mentioned that he believes cryptocurrencies will become the twelfth sector of the S&P 500 over the next decade because of the potential digital assets provide, such as reducing high fees and speeding up financial services in various economic sectors. All things considered, the listing of WonderFi on the TSX is important for U.S. regulators because it demonstrates how investors can work with regulators to make strides in the industry. O’Leary also mentioned that G7 country regulators talk to each other daily, noting that he thinks the SEC views advancements in Canada as potential use cases that may work in the United States:“Regulators in Ontario allowed the first Bitcoin and Ethereum ETF. If the SEC didn’t approve this, the Ontario Securities Commission never would have allowed this. The Ontario Securities Commission is proving to other jurisdictions that these products can be regulated and issued.” 

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Resistance is futile! 3 reasons why Bitcoin mining will never go away

In the summer of 2021, the Chinese government banned Bitcoin (BTC) mining and cited the typical concerns of harmful environmental effects and money laundering. Now, the Chinese government is working toward establishing its own digital yuan currency. This raises the question as to whether the original reasoning was merely a Trojan horse.This ban could easily have been a huge blow to Bitcoin’s momentum. After all, close to 75% of all Bitcoin mining had been conducted in China by late 2019, according to Cambridge Alternative Finance Benchmarks. If the network teetered under the weight of China’s nationwide ban, other governments might have begun to think that Bitcoin could be defeated after all.China’s ban was Bitcoin’s stress testFor a brief period, the ban worked as intended — by the end of June 2021, the Bitcoin network’s hash rate had dropped to 57.47 exahashes per second (EH/s), down by a few multiples. However, the hash rate rebounded to 193.64 EH/s by December 2021 and by February 2022, it reached an all-time high of 248.11 EH/s. The entire ordeal was a test that Bitcoin passed with flying colors: Banning Bitcoin mining proved as effective as the Prohibition era was at killing drinking culture in the United States.In early 2022, the obvious explanation for the hash rate recovery was that miners who had set up shop in China had simply fled to the Western Hemisphere. There was plenty of evidence that seemed to support this hypothesis — primarily that the United States’ share of the global hash rate exploded from 4.1% in late 2019 to 35.4% in August 2021.Share of global Bitcoin hashrate. Source: University of Cambridge, ReutersThe ban created a decentralized black marketHowever, the so-called “great migration” may not have been the only unintended consequence of China’s ban. As of May 2022, miners in China accounted for 22% of the global hash rate — a figure that is not as dominant as before, but no small slice of the pie, either. As the Cambridge Centre for Alternative Finance reports: “It is probable that a non-trivial share of Chinese miners quickly adapted to the new circumstances and continued operating covertly while hiding their tracks using foreign proxy services to deflect attention and scrutiny.”Indeed, it’s likely that there is now a massive black market of Bitcoin mining in China.Try as they might, one of the most authoritarian regimes on the planet cannot prevent its citizens from mining Bitcoin. In economic terms, the potential benefits to the China-based miners outweigh the costs associated with getting caught red-handed. Despite the concern and skepticism that “experts” broadcast about Bitcoin, miners in China value the activity so much that they’re willing to risk breaking the law to get their hands on the future global reserve asset.International competition for miners risesDespite China’s black market surge, there is no doubt that the United States’ economy benefited from China’s ban. Just outside Kearney, Nebraska, a company called Compute North runs one of the United States’ largest data centers for cryptocurrency mining. Around the time of China’s ban, the company received a deluge of calls from operations that were trying to move their mining equipment from China into the United States. Compute North welcomed its new partners with open arms. “We doubled in size,” said their lead technician. “We were busy nonstop for the whole summer. […] And there’s just continuing more and more demand all the time.”Other towns, such as Rockdale, Texas, and Massena, New York, are also witnessing growth in their cryptocurrency mining ecosystems.All of this migration could cause a vicious cycle for China and a virtuous cycle for the United States, which means that all sorts of other Bitcoin-related opportunities shift from China to the United States as well. Lamont Black, finance professor at DePaul University, believes that the recent influx of Bitcoin mining into America could bolster the country’s broader blockchain economy. And that logic works both ways — to the extent that Bitcoin miners are leaving China, then ancillary Bitcoin activities will travel along with them.Although fleeing miners considered countries other than the United States, it seems that miners prefer America because of its relatively robust respect for property rights. One miner migrating from China said, “Maybe the governments [of countries such as Russia or Kazakhstan] are not only shutting down the operation, but they also take […] all your machines. You might lose everything, so the United States is a safe choice.” The takeaway for world governmentsThis black market phenomenon should be a lesson to Western politicians: If the Chinese government can’t ban Bitcoin mining out of existence, neither can you. As the United States forges ahead in studying the regulatory implications of the industry, traditional financial institutions are closely monitoring its movements. Retail and institutional investors are also paying close attention to the market swings as they battle inflation at home. At this point, trying to put the toothpaste back in the tube is nothing but a waste of energy. Bitcoin mining is not going away. The United States and other world leaders must learn from the mistakes of others so that they don’t have to repeat them. China wasted its efforts so that others don’t have to.Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
William Szamosszegi is the CEO and founder of Sazmining, the world’s first clean energy Bitcoin mining platform for retail customers. He is also the host of the Sazmining podcast and as a Bitcoin evangelist, Will is committed to improving humanity’s relationship with time, money and energy. Will is the recipient of Bucknell’s venture grant, a finalist in SXSW’s Digital Entrepreneurship Tournament, a Forbes Fellow and a regular speaker at Bitcoin mining conferences.

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Kazakhstan to let crypto exchanges open bank accounts

In addition to its swift advances toward regulating crypto mining, Kazakhstan will launch a pilot project for crypto exchanges in the special economic zone of Astana International Finance Centre. The Ministry of Digital Development, Innovations and Aerospace Industry of Kazakhstan Republic announced on Thursday a pilot project of cooperation between the crypto exchanges and some of the local banks. The working group formulated the guidelines for that cooperation, consisting of the representatives of the Ministry of Digital Development, the National Bank, the Financial Monitoring Agency, the Association of Financiers, Astana International Finance Centre and the finance and crypto market stakeholders. The pilot project will be functioning until the end of 2022 and include the exchanges that have gained a license from the freshly-formed Astana Financial Service Authority (AFSA). It will make a blueprint for the subsequent development of Kazakhstan as a regional crypto hub. Close guidelines should soon be published on the AIFC webpage. Head of AFSA Nurhat Kushimov declared that the mission of his committee is to create an environment for reliable and sustainable companies to operate:“The Astana Financial Service Authority is the only entity responsible for regulating the fintech companies’ activities in Kazakhstan. Before handing out the license to a fintech company, we conduct a deep and thorough background check, and after that maintain its constant supervision.”Bagdat Musin, the minister of digital development, voiced Kazakhstan’s aim to profit off crypto exchanges:“It is necessary to create a complete ecosystem, so the digital assets, that have been mined using Kazakhstan’s electric energy, would be traded at the local exchanges to the maximum extent and the profit would stay in the country”.On May 25, the Kazakh parliament passed in the first reading the amendments to the national tax code to impose a crypto mining tax tied to the electricity prices consumed by mining entities.Related: Bitcoin miners’ resilience to geopolitics: A healthy sign for the network On the same day, the largest crypto exchange Binance signed a memorandum of understanding with the Ministry of Digital Development and revealed an intention to advise on developing the legislative framework and regulatory policy for crypto-assets in the republic.

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The crypto industry must do more to promote encryption, says Meltem Demirors

“I like to call myself a future, or aspiring, cult leader,” Meltem Demirors, chief strategy officer of CoinShares — a publicly listed investment firm managing around $5 billion in assets — told Cointelegraph. Demirors, who first entered the Bitcoin (BTC) space in late 2012, further mentioned that it has been “fun to see how big the crypto sector has become,” noting that people from all walks of life are now interested in the cryptocurrency space. As such, Demirors explained that “crypto cults” are bringing people together in a positive manner, especially since it gives people a sense of purpose and belonging. When it comes to regulations — one of the most important topics facing the crypto industry today — Demirors expressed skepticism. “Having been in this industry professionally for eight years, I’m tired of talking about regulations, particularly in the United States,” she said. While U.S. regulators continue to pass frameworks around the treatment of digital assets, Demirors pointed out that there has been “too much talk and not enough cogent action.” Moreover, Demirors remarked that a number of crypto bills are attempting to minimize consumer use of encryption, which she believes to be the backbone of the internet. Demirors elaborated on this topic, along with the development of decentralized autonomous organizations (DAOs) during an interview with Cointelegraph at Consensus 2022. Cointelegraph: What are your thoughts on recent regulatory frameworks in the United States? Meltem Demirors: I do think that the Lummis-Gillibrand bill and the Token Taxonomy Act of 2021 have been good attempts at categorizing and classifying digital assets. But, the challenge I have with so many of the crypto bills and regulations is that all are all focused on financial services and taxation. They are focused on where and how we govern, tax and extract value for the government. Therefore, the biggest issues I’m excited about are those centered around consumer privacy, self-sovereignty and freedom of speech, which are not being addressed in these bills.Unlike so many bills that focus purely on the side of the financial services, the industry needs to focus on crypto infrastructures like data centers, connectivity, computations, semiconductors and the actual plumbing that makes any technology function. We also need to make sure that the U.S. is a friendly jurisdiction for people to develop not only software but also hardware that can be deployed at scale. Today, we have seen no cohesive action on this. The industry has seen a piecemeal approach with the State of New York taking a very draconian approach, while states like Texas and Wyoming want to become homes for crypto mining. Moreover, the right to consumer and financial privacy are also not being addressed. In fact, most of these bills want more financial surveillance. As an industry, it’s important for us to continue to push back on this, particularly in a world where central bank digital currencies (CBDCs) are being explored. CT: Any suggestions on what the crypto industry can do to preserve privacy and financial freedom? MD: I think the biggest movement we’ve seen has been the crypto wars — and I’m talking about cryptography. In the early 90s, there was a massive debate around encryptions and the use of encryption for a variety of consumer-focused applications. Encryption is truly the backbone of the internet and we are seeing a number of bills now attempting to minimize consumer use of encryption and to create back doors. Yet, once backdoors to encryption are created, they won’t just be used to surveillance consumers but rather will be used against our government. This is now a matter of national security. Therefore, I think the war of encryption is still alive and well. I also think there is more that we can do as an industry to preserve and promote encryption instead of using taxpayer dollars to run challenges that try to crack encryption algorithms, like SHA-256, which is the backbone of Bitcoin. I also think that preserving code and speech is important. For example, open-source code is a big part of the crypto community, along with anonymous developers. Unfortunately, there are a number of efforts underway to hold open-source developers criminally liable for how their software is leveraged, which is antithetical to the entire open-source movement. In addition, we need to consider the treatment of virtual asset service providers, or VASPs. For example, if someone is running a node or if two people are transacting peer-to-peer on an open blockchain protocol, classifying them as VASPs and forcing them to comply with regulation is concerning. There is a bill now that makes people report their social security numbers to anyone sending crypto over an amount of $10,000. This is preposterous and we don’t have that same rule for cash. These are all factors around privacy that make it easier for the government to target individuals that are in the crypto space, so it’s important that the industry pushes back. CT: You mentioned DAOs during your talk at Consensus, can you share your thoughts on this area, please?MD: Yes, DAOs have been interesting because a lot of what I do at CoinShares is focused on strategy, which means investing, but also looking at what’s happening in the crypto industry and how it’s relevant to the world of investing. So, I experiment with things happening in crypto. For example, I joined a few DAOs recently. I joined Friends With Benefits last year, which was my first DAO experience. I also started two DAOs with friends. One is Hashes DAO, which is an art collecting-focused DAO. The second is a DAO called DAO Jones, which is a funny play, but it’s an investment DAO that uses Syndicate, a platform that allows users to create investment clubs as DAOs that fit into a legal framework. I’ve learned a lot about DAO tooling, infrastructure and the exciting opportunities around DAOs, along with the inherent limitations. The biggest thing I’ve learned though, is that all communities need leadership. In particular, communities need strong principled leadership to uphold and reinforce community values but to also push the community forward. We have seen so many communities in crypto begin with strong leaders, but then those leaders leave and challenges are created that splinter the community. We saw this with Bitcoin — we saw a struggle for power five years after Satoshi left the Bitcoin community. Overall, I think DAOs are an exciting area of experimentation, but from an investing perspective, I think DAOs are still very early. There are many people building DAO tooling right now without understanding what emergent behaviors we need to focus on. Governance is not a technology or crypto problem but rather a very human problem that has existed since the early days of civilization. While I’m excited about the future of DAOs, I think there is still a lot of work to do before DAOs get to scale and become implemented in ways that allow for good governance. CT: What are you most excited about in terms of the crypto space moving forward? MD: I’m really excited about community-owned infrastructure, or physical infrastructure. Today, crypto is so dependent on centralized service providers like AWS being used for utilities. But, there are a number of efforts underway to build peer-to-peer networks that will enable us to perform computations, have better telecommunications, better broadband connectivity and decentralize and make the energy grid more resilient. I’m excited about taking crypto and combining it with energy computations and connectivity in new ways. This will also make our global systems more resilient, which typically comes with decentralization.I’m also excited about more developer tools and infrastructure. Right now, the surface area of crypto is so large, so it’s been difficult for people to enter the space to build. Standardization, modulation and convergence around core consensus algorithms are really important. Experimentation has been fun, but we are now learning what does and doesn’t work. Also, thinking about decentralized identifiers and verifiable credentials, along with using Bitcoin as a communication protocol excites me.

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Consensus 2022: Web3, unpacking regulations, and optimism for crypto’s future

“Everything is bigger in Texas” proved to be true during Consensus 2022. The crypto conference took place June 9–12 in Austin, Texas, this year, attracting 17,000 people from across the globe, despite the 100-degree plus weather. According to the event sponsors, Consensus 2018, which was held at the Hilton Hotel in New York, had previously drawn in almost 9,000 attendees. Caitlin Long, CEO of Custodia — the Wyoming-based digital asset bank — told Cointelegraph that the event this year speaks volumes. “New York has sent a lot of this industry fleeing to places like Austin, Wyoming and Miami. It will be interesting to see if New York makes a comeback.”Aside from its new location, current market conditions were another defining factor of the event. However, attendees remained optimistic about the crypto ecosystem as a whole. In general, new projects and the rise of Web3 were the main discussion points rather than cryptocurrency prices. Ray Youssef, founder and CEO of Paxful — a peer-to-peer cryptocurrency marketplace — told Cointelegraph that crypto winters allow for building phases to start, which he fully supports. “We are now seeing projects build platforms that are real and empowering.”Building the crypto ecosystem in a bear marketTo Youssef’s point, Web3 and new tools to advance crypto ecosystems were hot topics of discussion. For example, Meltem Demirors, chief strategy officer of CoinShares — a digital asset investment firm — told Cointelegraph that despite the bear market, she has seen an increase in people interested in different facets of the crypto industry:“There are different niches and pockets of crypto I’m now seeing, some of which I haven’t even heard of. For example, the STEPN group is here, which is a whole move-to-earn movement. The music NFT and fashion NFT scene is also big here. These are newer communities I’ve read about and have engaged with, but seeing them congregate and host their own events has been really fun.”Demirors gave a keynote at the event on cults and how the crypto community is currently creating shared identity, belief systems and lifestyle rituals around emerging projects. “Cults usually have a negative connotation, but there is a massive crisis of meaning in our world today. People no longer focus on their occupation, religion or nationality. Crypto is filling this interesting role, bringing together people through memes, capitalism and community values,” she explained. As such, Demirors noted that she believes “crypto cults” are attracting many people because it provides a sense of purpose, along with capital. “There is an interesting convergence happening,” she said.While the crypto space continues to attract more participants, Staci Warden, CEO of the Algorand Foundation, told Cointelegraph that Alogrand views this crypto winter as an opportunity for building. “We think that there will be some shakeout in the industry and we are ready to innovate,” she remarked. Specifically, Warden explained that one area the Algorand community is focused on is what Web3 means for financial inclusion. “With Web2, everything went back to huge platforms, but with Web3, creators and contributors receive incentives and benefits for their participation.” With the rise of Web3 on the horizon, Warden shared that Algorand is “laser focused on real world use cases of financial inclusion and the monetization of creators for the work they do.”Web3 is also impacting a number of mainstream industries such as fashion and the creator economy. Shedding light on this, Justin Banon, co-founder of the Boson Protocol — a decentralized network for commerce — told Cointelegraph that last year, the crypto sector witnessed the nonfungible token (NFT) craze, which has prompted the fashion industry’s participation. “Physical fashion isn’t going away, but digital is arriving. It’s become obvious that the two will combine and become facets of the same thing,” he said. Banon also mentioned that a majority of the world’s population will undoubtedly spend more time in the digital world, which is why he believes there will be a need for digital fashion. “This will allow us to identify and differentiate ourselves,” he said. Regarding the creator economy, Solo Ceesay, co-founder of Calaxy — an open social marketplace for creators — told Cointelegraph that Calaxy recently raised $26 million in strategic funding to expand its operations and development efforts.Cointelegraph interviewing Solo Ceesay (left) and Spencer Dinwiddie (right) of Calaxy at Consensus 2022. Source: Rachel WolfsonWhile the emergence and growth of Web3-focused projects are notable, it’s also important to point out that current market conditions have been challenging for other key players. Peter Wall, CEO of Argo Blockchain — a cryptocurrency mining company — told Cointelegraph that many Bitcoin miners raised equity in 2021, but this has become difficult for some, given the bear market. “There are only two ways for miners to raise capital now, which is either through debt or by selling Bitcoin,” he said. Although this may be, Wall elaborated that only miners with a reputable track record will receive loans. “They need to be able to execute with clear plans, while not being over committed to machine purchases and bills they can’t pay.”Crypto’s regulatory landscape in the United StatesRegulations were also heavily discussed at the conference. This shouldn’t come as a surprise, as a number of key regulatory events took place leading up to the event. For example, the bipartisan crypto bill, also known as the “Responsible Financial Innovation Act,” was introduced in the United States Senate on June 7, 2022. According to a statement, the bipartisan bill sponsored by senators Cynthia Lummis of Wyoming and Kirsten Gillibrand of New York, “addresses CFTC and SEC jurisdiction, stablecoin regulation, banking, tax treatment of digital assets, and interagency coordination.”Senator Pat Toomey, the ranking member of the Senate Banking Committee, told Cointelegraph that he thinks the bipartisan bill is “terrific,” further noting that the bill contains modest differences in how stablecoins are treated compared with his stablecoin approach, which was drafted in April this year. Toomey added that while he has not released a bill yet, there are “bridgeable differences” between his draft and the legislation from Lummis and Gillibrand:“Kirsten Gillibrand said on our panel that we can bridge those differences on some of the things I said, but it’s also very constructive to have a Democrat and Republican senator introducing a pretty comprehensive bill that sensibly creates a regulatory framework that is meant to allow this space to thrive. From that point of view, I think it’s very constructive.”Echoing Toomey, Long mentioned that the bipartisan bill is an important advancement for the crypto sector, stating, “This is the bill to watch in Washington. There are now 50 different crypto bills that have been introduced in Congress and there is only one that is bipartisan sponsored by the powerful senator from New York State, along with the powerful senator on senate banking from Wyoming, which is the state leading digital assets. That is quite a combination.”Long added that stablecoin regulations and central bank digital currencies (CBDCs) will be major topics of discussion this year. For instance, although President Biden released an executive order in March 2022 calling for the research and development of a potential U.S. central bank digital currency, Long remarked that she does not believe the U.S. will issue a CBDC. “The Federal Reserve will put out the FedNow Service by the end of this year, which is only six months away. However, no rules have been revealed yet, so we don’t know what this will look like.”Moreover, Long predicts that stablecoins will be a main focus for regulators, pointing out that Wyoming’s special purpose depository regime falls into this category, alongside The New York State Department of Financial Services (DFS) regulatory guidance for U.S. dollar-backed stablecoins issued by DFS-regulated entities. Yet, Long explained that “it will be a couple of years before we realistically see what happens in terms of a law that actually passes” regarding stablecoins. She further remarked that regulators have had the opportunity to create regulations around stablecoins but have yet to act. She said:“Regulators have sat on legitimate applications of parties that have sought permission, while the scams have proliferated in this industry. It’s tough, but I firmly believe the regulators could have acted sooner. A lot of people wouldn’t have been hurt if they had done so.”Cointelegraph meeting with Senator Pat Toomey at Consensus 2022. Source: Rachel WolfsonTo Long’s point, Toomey said that he thinks there is now pressure and momentum to pass stablecoin legislation. “U.S Secretary of the Treasury Janet Yellen said in front of the banking committee that we should do it this year and I think that is realistic,” said Toomey. He added that the pressure has become greater due to the recent collapse of the Terra ecosystem.“I think it influences legislation in the sense that it has drawn attention to the crypto space, and it’s a wake up call to the federal government. My own view is that algorithmic stablecoins should be treated separately from fiat/asset backed stablecoins,” he said, adding, “But let’s be clear: Terra was very large, and when something that large can collapse, the natural inclination of a regulator is to look out across the field to see what other similar instruments and products are there, and the dangers that may arise.”Optimism reignsGiven the current state of cryptocurrency markets, it’s notable that many ecosystem participants remained optimistic about the future. In particular, Austin’s cryptocurrency community appears to be thriving, as it has become a hot spot for crypto mining companies and a number of Web3 projects.Patrick Stanley, core contributor to City Coins — thecryptocurrency project that has been implemented in New York State and Miami — told Cointelegraph that AustinCoin (ATX) can be activated at any time, noting that there is a group currently working on a proposal for getting new CityCoins up and running. “We want to be more deliberate about launching AustinCoin. We already have people on the ground in Austin, we have the capital, and there is clear commitment. We just want to ensure all of this before activating AustinCoin.” Stanley added that Austin Mayor Steve Adler is a “cryptocurrency progressive,” noting that he understands that CityCoins leaves less of a footprint than having big tech companies move to Austin. “CityCoins is like getting the tax revenue of a large company without the footprint and real estate going up. This has been very compelling to Mayor Adler,” he shared.Demirors also pointed out that she is excited about the advancement of crypto infrastructures, such as new data centers, semiconductors and the overall “plumbing” that makes cryptocurrency and any technology function properly. “We need to make sure the U.S. is a friendly jurisdiction for people to develop not only software, but also hardware to deploy at scale,” she said. While Demirors recognizes that most legislation currently isn’t being drafted around this aspect, she is hopeful that Texas and other states continue to take a welcoming approach to initiatives such as mining. Demirors also noted that the right to consumer and financial privacy isn’t being considered in crypto regulations, remarking that most of these bills want more financial surveillance. “I think as an industry, it’s important for us to push back on that, particularly in a world where CBDCs are being explored.”Finally, it’s important to point out that the crypto industry is continuing to bring on key players to help with advancements. For example, Grayscale Investments recently hired Donald B. Verrilli, a former U.S. Solicitor General, to join the firm to help push for a spot Bitcoin exchange-traded fund (ETF). Verrilli mentioned during a press conference at Consensus last week that he is trying to take public policy and move it in a constructive direction.As such, Verrilli aims to convince the U.S. Securities and Exchange Commission (SEC) to convert Grayscale’s Bitcoin Trust (GBTC) into a spot-based ETF. In order to accomplish this, Verrilli explained that it’s “arbitrary and capricious” to treat cases that are alike in a different manner, in which he referenced the SEC’s approval of a Bitcoin futures ETF, but not a Bitcoin-spot ETF. “It seems like this is a common sense point. I am new to this, but looking at it so far, it’s very hard to see what argument there could be for treating these things differently.”

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El Salvador 'has not had any losses' due to Bitcoin price dive, finance minister says

Alejandro Zelaya, the minister of finance of El Salvador, reacted to the recent media attacks on the nation’s strategy of investing in Bitcoin (BTC) by calling the allegations of fiscal risks “extremely superficial.”During a press conference held on Monday, Zelaya responded to a journalist’s question about the government’s reaction to Bitcoin’s sharp dip in an emotional manner: “There is a clear criticism of Bitcoin as such, not of El Salvador’s strategy. El Salvador is what interests them the least, they [the media outlet] are not interested in what happens to our economy, they are not interested in what happens with our people, what happens with inflation.”The official underscored the impropriety of allegations that around $40 million had been lost by the country’s budget because of the cryptocurrency rate drop since the highest point at which El Salvador has purchased its first potion for $60,300 per BTC in October 2021. Zelaya pointed to the hypothetical possibility of a BTC rebound:“I have said it repeatedly: A supposed loss of 40 million dollars has not occurred because we have not sold the coins.” Zelaya also rebuffed the assumptions about high fiscal risk as laughable and ignorant, while calling the risk “extremely minimal.”Related: Falling Bitcoin price doesn’t affect El Salvador: ‘Now it’s time to buy more,’ reveals Deputy Dania GonzalezAt the moment, El Salvador holds 2,301 Bitcoin, which amounts to around $50 million by press time. In fiat equivalent, that is less than half of the money the nation has invested in Bitcoin through its purchases in October 2021 and May 2022, when BTC was worth $30,700. Like the whole crypto market at large, BTC has been declining since its all-time high in November 2021 (around $69,000) with the downtrend accelerating for the last month and a half following a series of the shake-ups such as the failure of Terra and the fiasco of a major DeFi lender, Celsius, as well as the global inflation rise.

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