Crypto News Headlines (18-March-2022)

The Blockchain Association has expanded operations to the state of New York, adding an office in Albany, the state’s capital.

The expansion comes as the crypto trade association, which is headquartered in Washington, D.C., is taking steps to get more involved in regulation at the state level.

New York has emerged as the center of the U.S. crypto industry, but regulatory challenges including the BitLicense – a special license required to do business as a crypto company in New York that is difficult and expensive to obtain – and ongoing efforts at the state level to stop crypto mining in the state, have been a challenge for many companies seeking to do business in New York.

John Olsen, who has been hired to lead the Blockchain Association’s New York office, told CoinDesk educating state legislators is his first priority.

“We are here to start establishing a presence, forming relationships and educating legislators and policymakers about blockchain and the cryptocurrency industry,” Olsen said.

Lack of education, according to Olsen, is the biggest threat to New York’s crypto industry.

As Russia’s invasion of Ukraine continues, U.S. Senator Elizabeth Warren has proposed a new bill that would enhance and expand enforcement of sanctions against the country, its entities, and individuals, specifically when it comes to use of cryptocurrency.

The Digital Asset Sanctions Compliance Enhancement Act of 2022 was introduced by the Massachusetts senator today during a Senate Banking Committee hearing. The bill sharpens the ability for President Joe Biden and the U.S. government to act against exchanges that transact with Russian addresses, among other provisions.

Warren, long a vocal critic of crypto, teased last week on Twitter that she was working on a bill to “ensure crypto isn’t used by Putin and his cronies to undermine our economic sanctions.”

The proposed bill would give U.S. Treasury Secretary Janet Yellen “clear authority” to block U.S.-based cryptocurrency exchanges and payments operators from facilitating transactions with wallets that are known or reasonably believed to be based out of Russia.

The US Department of Justice has successfully returned to an elderly person the bitcoin stolen by a government imposter.

US Attorney Dena J. King announced Tuesday “the forfeiture and return of stolen cryptocurrency to [an] elderly man victimized by government imposter scam.”

On August 31 last year, a total of 12.164699 bitcoins worth approximately $574,766 was stolen from the old man’s Coinbase account by individuals acting as government agents. 

After six months, the joint investigation and successful civil forfeiture proceedings of Federal Bureau of Investigation (FBI) and Coinbase resulted in the scammer being identified and the victim’s stolen assets seized. 

“The seized cryptocurrency was forfeited to the United States government and will be returned to the victim,” the DOJ confirmed.

The difficulty of mining a bitcoin block dropped 0.35% on Thursday, the second time this month, after a consistent climb since November.

On March 3, mining difficulty dropped 1.5%, data from information platform Glassnode shows.

The difficulty adjusts automatically relative to the computing power on the network, also known as the hashrate, to keep the time between each mined block relatively stable at 10 minutes.

The bitcoin mining hashrate has dropped from an all-time high in February of 248 exahash/second (EH/s) to 216 EH/s on March 17, according to data from Glassnode.

“This slight drop is likely due to unprofitable miners unplugging ASICs (application-specific integrated circuits). As energy prices increase globally, we will likely see more ASICs fall off the network,” Compass Mining founder and CEO Whitt Gibbs told CoinDesk in a Telegram message on Friday.

Electricity prices are soaring across the world as one of the world’s largest exporters of fossil fuels, Russia, is enthralled in a war with Ukraine, and global energy supply chains are being severed by sanctions.

“My bet is that Kazakh miners going offline due to electricity shortages and a government crackdown on illegal mining caused the drop,” Jaran Mellerud, researcher at Oslo-based Arcane Research, told CoinDesk

As Polkadot brings its hub-and-spoke vision for the future of crypto to the fore, investors are pouring money into the network’s decentralized finance (DeFi) building blocks.

Lunar Labs is the latest team to emerge, announcing Thursday a funding round of $10 million to fuel the development of Moonwell Artemis, a collateralized lending protocol for Polkadot’s Ethereum Virtual Machine (EVM)–compatible Moonbeam parachain.

The funding round, which was co-led by Hypersphere Ventures and Arrington Capital, is one of the first to feature participation from ex-Andreessen Horowitz General Partner Katie Haun’s new venture fund. Big names like Lemniscap, Robot Ventures, Signum Capital and others were involved.

Moonwell Artemis will work similarly to lending products like Aave, MakerDAO and Compound by allowing users to lend crypto and take out over-collateralized loans. The formula has proven successful in DeFi, with Aave, MakerDAO and Compound attracting $12.06 billion, $15.84 billion and $6.89 billion in crypto deposits, respectively.

Polkadot, which describes itself as a Layer 0 network, makes it easy for Layer 1 parachains like Moonbeam to securely communicate. This means users of Moonbeam – and therefore Moonwell Artemis – can easily transfer value across Polkadat networks without relying on problem-prone cross-chain bridges.

Three Coinbase users are accusing the company of selling unlicensed securities and are seeking at least $5 million on behalf of themselves and everyone else who purchased Dogecoin, Solana, Cardano, or more than 70 other tokens on the platform.

The users claim that, since Coinbase is allegedly selling securities (also known as investment contracts) the company should have registered with the SEC as a national securities exchange—a designation typically reserved for stock exchanges, and one that would subject Coinbase to a raft of regulatory and reporting obligations.

According to the Coinbase users who filed the suit, they and everyone else who bought the tokens in question should be compensated for any losses they suffered while trading, and for other unspecified damages. They claim Coinbase is violating both federal and state securities laws, and are also asking the judge to order the company to stop the selling the tokens, which also include Chainlink, Polygon, and Shiba Inu.

The lawsuit, which also names CEO Brian Armstrong as a defendant, quotes a recent a speech by SEC Chairman Gary Gensler that likened crypto to the Wild West, and suggested that it was likely exchanges like Coinbase were offering unlicensed securities.

On Friday, Australia’s competition regulator launched a case against Facebook owner Meta Platforms, alleging that the social media behemoth failed to prevent fraudsters from taking advantage of its platform to promote bogus advertisements featuring famous people.

Several consumers have lost hundreds of thousands of dollars as a result of the ad’s complex and long-running scams.

Since 2020, the site has been besieged by adverts promoting cryptocurrency investing.

Each advertisement features a photo of a renowned Australian, such as entrepreneur Dick Smith, television personality David Koch, or former New South Wales premier Mike Baird.

TeraWulf (WULF), the environmentally-minded bitcoin miner backed by celebrities such as Gwyneth Paltrow that went public in December, sees itself reaching a hashrate range of 4.7 to 5.1 exahash per second (EH/s) by the end of 2022, according to a statement.

The Easton, Md.-based company also expects to be able to successfully build out over 400 megawatts of mining facility in 2023, raising its hashrate to 12.1 to 17.2 EH/s.

The miner also reiterated its expectations of reaching 800 MW and 23 EH/s of mining capacity by 2025.

The Bitcoin network’s total hashrate was 209.7 EH/s as of March 16, according to Glassnode data. By comparison, Marathon Digital (MARA), one of the largest bitcoin miners, said it sees a hashrate of 23.3 EH/s by early 2023.

For this year, TeraWulf is expecting a total of 210MW of power capacity, but notes the company could expand to raise power capacity to 235MW, if the macroeconomic and capital markets improve.

ConsenSys CEO and Ethereum co-founder Joe Lubin is still confident that the next era of Ethereum will arrive within the next few months. 

In an interview with Decrypt last December in Miami, Lubin predicted Ethereum 2.0 would come “by Q2 or possibly slipping into Q3” of this year. Last week, during a fireside chat at the Camp Ethereal crypto event in Wyoming, Lubin stuck with that predicted timing. 

“The merge is happening, surprisingly, on that same timeframe,” said Lubin. “So my estimate stays the same. We have a team working strongly, heavily on it.”

He cited a key event to bolster his prediction. 

The next step will transition the current Ethereum mainnet (let’s call that Ethereum 1.0) to a sort of ghost network currently operating in parallel (technically called the Beacon Chain, it will evolve into Ethereum 2.0). The mechanics of this transition led the Ethereum Foundation in January to rebrand the “Ethereum 2.0” name in favor of “consensus layer,” or in Lubin’s words, the “consensus chain.”

Swedish streaming giant Spotify looks to add blockchain and NFTs to its services, much to the excitement of artists whose earnings could receive a significant boost.

Recent job postings reveal that Spotify is headhunting individuals to work on Web 3.0, an umbrella term for a decentralized form of the internet underpinned by blockchain technology.

One posting indicates an exploratory foray into Web 3.0, with the potential engineering hire joining an “experimental growth” collective, responsible for “driving growth through…Web 3.0”. Another listing is for a manager to join its “Innovation and Market Intelligence” group, where Spotify is hunting for an individual experienced in “content, creator, media, web3, and emerging technology industries” to properly articulate the scope of ambitious projects.

Spotify joins the list of big technology companies venturing into Web3 and NFTs, following Meta CEO Mark Zuckerberg’s announcement earlier this week that Instagram would soon be adding NFT features into its platform.

Earlier this month, the old peer-to-peer (P2P) file-sharing platform Limewire announced it would be returning as a NFT marketplace, aiming to become “a more mature platform” following in its rival BitTorrent’s footsteps after its acquisition by TRON founder Justin Sun in 2018.

The total volume of NFTs traded has shown signs of slowing down in 2022, prompting crypto industry pundits to peg music as the next lucrative vehicle for NFTs via the sales of digital albums or the granting of special perks at live events.