Crypto News Headlines (03-Feb-2023)

Crypto asset manager Bitwise Asset Management published a report titled “Bitwise/Vettafi Investment in cryptocurrency companies plunged 91% in January from a year earlier. Given that these deals can take months to get done, any funding drought resulting from the November collapse of FTX might not even be fully reflected yet.

Venture capital (VC) and other investments in privately held crypto startups amounted to $548 million last month, a huge drop from $6 billion in January 2022, according to data compiled by CoinDesk. The number of transactions shrank to 62 from 166, and most of the 2023 deals were for smaller, early-stage companies, CoinDesk’s analysis shows.

It was a difficult year-over-year comparison for the industry, in part because the 2022 figure caught the tail end of the bull market. There were 17 investment rounds in January 2022 that exceeded $100 million, including the transaction that valued the now-collapsed FTX crypto exchange at $32 billion. An investment in Blockstream was the only deal that big a year later.

Another day, another refusal by the Securities and Exchange Commission (SEC) to allow a The second largest publicly-listed holder of Bitcoin, crypto mining firm Marathon Digital Holdings has offloaded some of its Bitcoin BTC $23,541  for the first time in two years. 

A spokesman told Cointelegraph this was not a result of financial distress. 

According to an update posted on Feb. 2, the company disclosed that during January it sold 1,500 BTC, worth $35.3 million at current prices.

While some crypto miners have been forced to sell Bitcoin due to distress, Marathon vice president of corporate communications Charlie Schumacher said this was not the case for Marathon.

Schumacher said that Marathon had been diamond-handing its Bitcoin until now, as the firm didn’t want to sell while production was down, and has been bullish on the long-term prospects of the leading cryptocurrency.

A proposed class action lawsuit filed in Manhattan by customers of cryptocurrency exchange Coinbase (Nasdaq: COIN) was dismissed with prejudice by U.S. District Judge Paul Engelmayer on Wednesday, meaning they cannot be brought again, Reuters reported.

The lawsuit was filed against Coinbase Global Inc., Coinbase Inc., and CEO Brian Armstrong in March last year. The plaintiffs accused the crypto exchange of selling 79 crypto tokens that were unregistered securities and failing to register as a broker-dealer. The lawsuit seeks damages from the sale or soliciting of the crypto tokens, which the plaintiffs claimed were illegal contracts because Coinbase is not registered with the U.S. Securities and Exchange Commission (SEC).

Famed internet personality Logan Paul and NFT project CryptoZoo have been accused of engaging in a “rug pull” in a new class-action lawsuit.

Announced in September 2021, CryptoZoo was marketed as an NFT-based game and billed as “an autonomous ecosystem” that would enable virtual ZooKeepers to buy, sell, and trade exotic animals on the blockchain, hatching them from eggs at the time of purchase.

A filing made in the District Court of the Western District of Texas alleged that the defendants “executed a ‘rug pull’,” promoting CryptoZoo’s products using Paul’s online following “to consumers unfamiliar with digital currency products, leading to tens of thousands of people” purchasing these.

For the first time since taking over the G-20 presidency, India has officially revealed details of the ongoing work around how to regulate crypto.

“IMF is working on a paper in consultation with us (India) which will focus on “aspects of the monetary policy and the policy approach to crypto assets,” said Ajay Seth, Secretary, Department of Economic Affairs.

Seth also revealed that the IMF had led a meeting with representatives of developing economies around the paper in January. The details confirmed CoinDesk’s earlier reporting around the IMF’s role in the G-20s crypto related discussions.

“There’s going to be 135 minute seminar on crypto assets on the policy response (during a G-20 meeting later this month) and for that again the IMF is preparing the finalized paper that will form the base,” he added.

Indonesia has delayed the roll out of a stock exchange for digital asset companies to later this year, CoinDesk Indonesia reported on Friday.

Zulkifli Hasan, Indonesia’s minister for trade, said on Thursday that he plans to launch the exchange before June 2023, but isn’t going to “rush” it if it’s not ready, according to the report. The government had initially planned to launch the platform by the end-2021, but subsequently delayed it to the end of last year.

Creating a bourse that lists approved digital asset companies with the aim of protecting consumers “needs many preparations,” Indonesia’s Deputy Trade Minister Jerry Sambuaga said last September.

Indonesia has emerged as a fast crypto adopter in the region with online speculative trading driving use, but the mounting delays indicate the government may have undertaken a mammoth task of setting up a “crypto stock” exchange.

Australian government is bolstering its market regulator’s digital asset team as part of a “multi-stage approach” aimed at clamping down on crypto and ensuring proper risk disclosures from crypto firms.

A Feb. 2 joint statement by Australian Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones explained that the new measures are aimed at protecting consumers dealing with cryptocurrency.

The treasurers said the multi-stage approach would involve three elements, including strengthening enforcement, bolstering consumer protection, and establishing a framework for its token mapping reform.

The world’s largest economy just announced the GDP figures for the latest quarter of 2022, Berkshire Hathaway Vice Chairman Charlie Munger has urged the U.S. government to ban crypto in an opinion piece titled “Why America Should Ban Crypto,” published by the Wall Street Journal Wednesday. The Berkshire executive wrote:

A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity.

“Obviously the U.S. should now enact a new federal law that prevents this from happening,” Munger stressed.

The Berkshire vice chair proceeded to reference two precedents that may provide insight into how to ban cryptocurrency effectively. The first is China’s crypto ban, he said, adding that the Chinese government “wisely concluded that they [cryptocurrencies] would provide more harm than benefit.”

Bitcoin is the greatest form of defense against wealth confiscation and an insurance policy for the developing world, according to ARK Invest CEO Cathie Wood.

The investor—a longtime bull for the crypto industry—stands by her $1 million Bitcoin price target, believing the asset presents opportunities for wealth preservation to the rich and poor alike. 

“There’s hyperinflation all over the world as their currencies have fallen apart,” said Wood in an interview with Yahoo Finance on Thursday. “Those populations need a fallback—an insurance policy like Bitcoin.”

In a recent interview, Bridgewater founder Ray Dalio shared his views on the current Federal Reserve (FED) decision to raise interest rates by 25 basis points (bps) and the performance of Bitcoin (BTC) over the past few years.

Speaking to CNBC, Dalio stated that what the crypto industry and Bitcoin have done over the past 12 years has been “amazing.” However, the hedge fund manager believes Bitcoin has “no relationship to anything.” For Dalio, Bitcoin is a “tiny” thing that gets “disproportionate attention.”

The price of Bitcoin moves on its own, while the value of Bitcoin is less than a third of the importance of Microsoft stock, Dalio said. For the Bridgewater hedge fund founder, there are more exciting assets in terms of value and storage of wealth.

There are a lot of other industries that are more interesting to Dalio than Bitcoin and the cryptocurrency market, like biotech and the stock market. Cryptocurrency’s not an effective medium of exchange for him, and he speculates that it won’t be sufficient money in the future.