Crypto News Headlines (28-March-2022)

Wyoming-based digital asset bank Kraken Bank moved a step closer toward being granted a Federal Reserve Master Account and gaining the same access to the global payments system as traditional banks.

Crypto companies have traditionally had difficulty accessing banking services. Kraken, should it be granted this access, would be well positioned to serve this market by effectively being treated as a traditional bank.

The American Bankers Association (ABA) recently granted Kraken a routing number, bringing it one step closer to receiving one of the highly coveted Federal Reserve master accounts, which would allow it to deposit funds with the Fed and access the global payments system. Custodia Bank (formerly Avanti) was given a routing number last month.

Kraken, as well as Custodia, is a special purpose depository institution (SPDI), a Wyoming-specific regulatory designation allowing these firms to support digital asset banking activities.

University of Alabama School of Law professor Julie Hill first noted Kraken’s routing number on Twitter. She told CoinDesk the ABA had to have issued the number within the last two weeks.

While routing numbers are a critical first step for banks seeking master Fed accounts, the ABA assigning a routing number does not necessarily indicate that a bank will for sure receive a master account.

Per the request of the United States Congress, the U.S. Government Accountability Office (GAO) laid out four policy options to help policymakers implement blockchain technologies while enhancing benefits and mitigating challenges.

The technology assessment shared by the GAO acknowledged the potential of blockchain technology in improving a variety of financial and non-financial applications despite raising concerns about introducing new challenges while trying to resolve issues related to traditional systems:

“A blockchain might both increase the speed of a title registry system and lower the cost of title insurance by making title registration simpler and more trustworthy.”

However, some of the challenges highlighted in the study include uncertain benefits, data reliability and legal compliance.

With the above flowchart, GAO aims to help policymakers — including Congress, federal agencies, state and local governments, academic and research institutions, and industry — determine the requirement of blockchain implementation.

The UK government is reportedly slated to reveal its crypto regulatory framework in the coming weeks, and it will include a special focus on stablecoins, per anonymous sources cited by CNBC.

British Finance Minister Rishi Sunak is expected to make the announcement, CNBC reported, citing four industry sources familiar with the matter.

The sources, who spoke on the condition of anonymity, told CNBC that the new regulatory regime is likely to be favorable to the space, helping create legal clarity around the sector. However, they noted that details of the plan are yet to be finalized.

According to the sources, the lawmakers have “shown a willingness to understand the complexities of the crypto market” and stablecoins, which are digital assets pegged to fiat currencies like the US dollar.

Moreover, the Treasury has reportedly been in discussions with numerous crypto firms and platforms, including the US-based crypto exchange Gemini, which also has offices in London.

Criminals are using software tools called “mixers” to launder millions of dollars worth of cryptocurrency—and it’s been happening for years.

Like an episode straight out of the TV show Ozark, cyber thieves essentially put stolen crypto into a program that “mixes” it with other people’s cryptocurrency. They’ll take out the same amount they put in, but it won’t be the same exact cryptocurrency.

That makes attempts to trace where money comes from “much more challenging and allows bad actors to hide their source of funds,” Chris DePow, a senior advisor of financial institution regulation and compliance at Elliptic, a blockchain analysis firm, told Fortune.

In 2021, an Ohio man operating a Bitcoin mixer called Helix pleaded guilty to laundering more than $300 million. Another man who operated a Bitcoin mixer called Bitcoin Fog was charged in April of last year with laundering $335 million over more than 10 years. And just this year, a hacker stole more than $33 million from in January, then allegedly washed the currency through an Ethereum mixer. They remain at large.

But even though mixers are well known to be connected with money laundering, they’re “not inherently illegal—they can be used for legitimate privacy purposes,” Kim Grauer, director of research at blockchain analysis firm Chainalysis, told Fortune.

Coincheck, a Tokyo-based cryptocurrency exchange, announced on Tuesday it had agreed to go public in the U.S. by merging with special purpose acquisition company Thunder Bridge Capital Partners in a deal valued at about $1.25 billion.

Coincheck, a subsidiary of Japanese online brokerage firm Monex Group, is expected to list on the Nasdaq Global Select Market when the transaction is closed in the second half of 2022, according to a statement. The combined entity will receive $237 million in cash held in Thunder Bridge Capital Partners’ trust, assuming there are no shareholder redemptions and before expenses.

The transaction will allow Coincheck to expand its business in Japan and overseas, the crypto marketplace said. The business combination will also allow the firm to increase product offerings and continue its investments in security and infrastructure.

The White House’s science and technology team is seeking public commentary on crypto’s impact on energy use and the climate.

In his executive order on crypto issued earlier this month, President Joe Biden tasked the White House’s Office of Science and Technology Policy (OSTP) with preparing a report on the “potential for digital assets to impede or advance efforts to tackle climate change and the transition to a clean and reliable electricity grid,” according to a document published in the Federal Register on Friday.

The energy impact of crypto – particularly, of energy-intensive proof-of-work crypto mining – has become a flashpoint in recent years as lawmakers around the globe have floated proposals to ban proof-of-work mining, citing environmental concerns.

Industry proponents have pushed back against those concerns, claiming that the data used for crypto energy usage projections – some of which claim proof-of-work mining uses more energy than some industrialized nations each year – is unreliable or irrelevant.

Crypto and blockchain technology has also been proffered as a potential solution to environmental challenges, including carbon accounting and reducing emissions from gas flaring.

The OSTP’s forthcoming report represents one attempt to get to the bottom of crypto’s environmental impact.

Less than a week after a potential ban on Proof-of-Work (PoW) digital assets was dropped from the EU’s prospective MiCA framework, a new threat to the crypto industry could be emerging in the European Union. This time, it is non-custodial, or unhosted, wallets that are in regulators’ crosshairs.

On Thursday, March 31, the European Parliament Committee on Economic and Monetary Affairs will vote on an anti-money laundering (AML) regulatory package that seeks to revise the current Transfer of Funds Regulation (TFR) in a way that extends the requirement of financial institutions to attach information on the transacting parties to crypto assets. The rapporteurs of the regulation are Ernest Urtasun from the Greens and Assita Kano from the Conservatives and Reformists group.

As crypto advocate Patrick Hansen from blockchain firm Unstoppable DeFi warned, the latest draft of the regulation would require crypto service providers not only to collect personal data related to transfers made to and from unhosted wallets (as they are already obliged to do), but also to “verify the accuracy of information with respect to the originator or beneficiary behind the unhosted wallet.”

The obvious problem with this language is that in many cases it can be difficult, if not impossible, for crypto service providers to verify an “unhosted” counterpart. Thus, in order to stay compliant and safeguard their place in the EU market, these companies would be forced to cut off transactions with unhosted wallets, Hansen fears.

Even if legislators put some guidelines for verification procedures in place, the potential operational costs of compliance would likely scare off smaller players and lead to further market concentration.

Krafton, the South Korean gaming giant founded by billionaire Chang Byung-gyu, is expanding it crypto empire by partnering with blockchain startup Solana Labs to develop play-to-earn crypto games.

The company behind the popular PlayerUnknown’s Battlegrounds (PUBG) video game announced on Wednesday that it had signed a business agreement with Solana Labs to make blockchain games that allow players to earn NFTs (non-fungible tokens). NFTs are unique digital assets stored on a blockchain that certifies ownership of a particular item such as in-game assets, photos or artworks.

Solana Labs is the company that developed the Solana blockchain, which has recently risen to challenge the dominance of Ethereum as more and more developers are adopting it for decentralized finance projects. Its prominent backers include Sam Bankman-Fried, the billionaire founder of crypto exchange FTX.

The world’s largest cryptocurrency has shot up another 5% on Sunday eve moving past $47,000 for the first time in three months.

With its latest move, Bitcoin has given a major breakout above the resistance of $45,925. As we can see the candle formation in the below image, Bitcoin is now making a move towards its 200-day moving average (DMA) of $48,278.

As on-chain data provider Santiment explains, Bitcoin has returned past $47K levels for the first time in 11-weeks after January 4. In the last three months, Bitcoin has been through a rough journey of inflation, war, and COVID-19 fears, but managed to overcome all. As of now, the average trading returns for Bitcoin are at their highest in 6 weeks.

The recent Bitcoin price rally comes with a strong 4% surge in the broader crypto market. Along with Bitcoin, Ethereum too is up 4.67% up and is currently trading above $3,300 levels. It has been showing moves quite closer in tandem with Bitcoin.

Currently, both BTC and ETH are up by more than 15% on the weekly chart. As CoinGape reported, the whale holdings for Ethereum have been on the rise. Furthermore, as per Bloomberg’s discounted cash flow model, analysts believe that the ETH price can rally to $8,000 this year in 2022.

Other altcoins have also been making a strong move. Cardano (ADA) has been the top performer with a staggering 35% gain on the weekly chart. As of press time, ADA is trading at $1.17 with a market cap of $39.5 billion.

SK Square, the investment arm of South Korean conglomerate SK Group, will spend some 2 trillion won ($1.6 billion) across three years on semiconductors and blockchain, according to a report.

“This will mark the first year when SK Square creates new shareholder value by investing in chips and blockchain, the fields that we are familiar with and we see a high growth potential,” Park Jung-ho, chief executive officer and vice chairman of SK Square told The Korean Herald on Monday.

The firm plans to launch its own token before the year-end, according to a previous report. The new digital asset will be part of a new blockchain economic system across SK Telecom’s metaverse ‘Ifland’ and its affiliates‘ internet service.

SK Square was spun off from SK Telecom in November last year. It has already made investments in the crypto space. In November 2021 SK Square acquired a 35% stake in crypto exchange Korbit worth 90 billion won ($75 million).

This news was first announced in the company’s shareholder meeting on Monday.

SK Square was not immediately available for comment when contacted by CoinDesk.