Crypto News Headlines (20-Feb-2023)

BNB, the native token of the Binance-initiated blockchain network BNB Chain, is losing ground against bitcoin (BTC) in the wake of regulatory action against Binance-branded dollar-pegged stablecoin BUSD.

The BNB/BTC ratio listed on Binance, the world’s largest exchange by trading volume, slipped to 0.01257 early Tuesday, reaching the lowest since Aug. 2, 2022.

The pair has declined by nearly 13% after the U.S. Securities and Exchange Commission (SEC) said last Tuesday that it is suing Paxos for violating investor protection laws by issuing BUSD, which the regulator deems as an unregistered security. The SEC action was accompanied by an order from the New York Department of Financial Services (NYDFS) asking Paxos to stop minting BUSD.

Crypto miner HIVE Blockchain increased its Bitcoin production in the final three months of last year, despite the ongoing crypto winter and the end of its Ethereum mining operations.

The Vancouver-based business mined 787 new Bitcoin in the quarter ending December 31, 2022, an increase of 13% year-on-year. In a statement, the company chalked the higher output up to the completion of its New Brunswick data center.

Even with Bitcoin prices low and mining difficulty increasing, miners like HIVE have continued to produce more Bitcoin.

Last month, for example, mining firm Riot Platforms reported a new all-time high in its BTC production.

The Moscow bureau of Interpol detained a British national charged by the United States Department of Justice (DoJ). The man is accused of conspiring to violate U.S. sanctions on North Korea.

According to local media, on Feb. 21, Christopher Emms was arrested in Moscow upon the “red notice” from Interpol. Th 31-year-old British citizen was detained in the hostel where he was staying.

In April 2022, alongside Spanish national Alejandro Cao De Benos, Emms allegedly provided instructions to North Korea on how it could use blockchain and cryptocurrency to launder money and evade sanctions. The two planned and organized the 2019 Pyongyang Blockchain and Cryptocurrency Conference.

Blockchain data analytics firm Chainalysis published its 2023 Crypto Crime Report last week with a section on crypto scams. “Crypto scam revenue dropped 46% in 2022,” the 109-page report reads, elaborating:

Crypto scam revenue fell significantly in 2022, from $10.9 billion the year prior to just $5.9 billion.

Chainalysis tracks several types of crypto scams, including giveaway scams, impersonation scams, investment scams, non-fungible token (NFT) scams, and romance scams.

Noting its numbers are “a lower-bound estimate,” the blockchain analytics firm explained that “estimates of the true amount lost to fraudsters will grow as we identify more addresses associated with scams.” The firm specifically mentioned “pig butchering” scams which have become alarmingly popular. The Federal Bureau of Investigation (FBI) has warned about this type of crypto scam many times. Last November, U.S. authorities seized seven domains used by pig butchering scammers.

As artificial intelligence (AI) rapidly works its complex magic on one sector of the economy after another, there is an increasingly pressing need for compute resources to power all this machine intelligence.

Training a model like ChatGPT costs more than $5 million, and running the early ChatGPT demo, even before usage increased to its current level, costs OpenAI around $100,000 per day. And AI is more than just text generation; applying AI to practical problems across multiple industries requires similar large neural models trained on a diversity of data types — medical, financial, customer information, geospatial and so forth. Moving beyond the limitations of current neural net AI toward systems with higher levels of artificial general intelligence will almost surely be even more compute intensive.

The Hong Kong Securities and Futures Commission (SFC) has taken a “regulate to protect” approach to cryptocurrencies, contrasting with recent action in the U.S. of regulation by enforcement, Bernstein said in a research report Monday.

The broker says this could be a “critical fork in the road” for the cryptocurrency industry, which could lead to capital and talent moving to Asia as a crypto hub.

The SFC on Monday published its proposed rules for virtual asset trading platforms and is seeking public comment. It plans to allow retail investors access to licensed exchanges, subject to restrictions, the report said, reasoning that investors are better off dealing with licensed venues rather than offshore and unregulated players.

Ordinal Inscriptions and the ability to mint content other than transactions on the Bitcoin network have taken the blockchain by storm, with over 154,000 inscriptions created to date, according to Dune analytics. Now, a developer has adapted the Ordinals project for rival proof-of-work blockchain Litecoin.

Launched in 2011, Litecoin is a peer-to-peer cryptocurrency designed to be quicker at processing transactions than Bitcoin. Litecoin was created by Charlie Lee, a former Google employee, who sold all of his Litecoin in 2017 to avoid potential conflicts of interest.

The quest to bring Ordinals to the Litecoin blockchain began on February 10, when a pseudonymous Twitter user, Indigo Nakamoto, offered 5 LTC (around $500) to anyone who could port Ordinals to Litecoin.

Cryptocurrency exchange Huobi Global is seeking a license in Hong Kong as the Chinese special administrative region considers new licensing and regulatory moves that would allow it to serve retail customers.

The new framework, which requires crypto exchanges to register with the Hong Kong Securities and Futures Commission (SFC), would allow the exchange to expand its services to the city. Huobi also plans to open a new exchange named Huobi Hong Kong that would concentrate on institutional and high-net-worth individuals, according to a Twitter thread by Justin Sun.

The Department of Financial Protection and Innovation (DFPI) of the U.S. state of California announced last week the launch of its Crypto Scam Tracker to help people in the state “spot and avoid crypto scams.” The financial regulator described:

The tracker details apparent crypto scams identified through a review of complaints submitted by the public and allows California consumers and investors to do their own research and prevent harm to themselves and others.

The Californian regulator’s crypto scam tracker is a database — searchable by company name, scam type, or keywords — for consumers to learn more about crypto-specific complaints the DFPI has received. Each year, the DFPI receives thousands of consumer and investor complaints; the tracker’s content is based on information reported by members of the public to the DFPI. The regulator clarified that it “has not verified the losses reported by complainants.”

The EU is working hard to push through tough capital rules for banks that hold crypto assets.

The global Basel Committee of banking regulators from the world’s leading financial centers has set a January 2025 deadline. The rules are for capital requirements for banks that have exposure to cryptocurrencies and stablecoins.

According to a Feb. 20 Reuters report, the European Commission stated, “for the time being, banks have very low crypto-asset exposures and only a limited involvement in providing crypto-asset-related services,” before adding:

“Banks have expressed interest in trading crypto-assets on behalf of their clients and to provide crypto-assets-related services.”