Crypto News Headlines (28-Sep-2022)

Singapore-based digital asset trading platform has been approved to operate as a Digital Asset Service Provider (DASP) in France, the company announced on Wednesday.

The trading platform has registered with France’s top markets regulator, the Autorité des Marchés Financiers (AMF), according to the announcement.

The registration is mandatory for all companies looking to provide digital asset custody and trading services, including “buying or selling digital assets in legal tender” in the country.

“ was subject to rigorous review, particularly around anti-money laundering and combating the financing of terrorism, in order to receive regulatory approval,” the announcement said. The exchange has recently secured in-principle approvals in Singapore and Dubai, as well as registration approvals in the U.K., Italy and South Korea.

France is becoming a go-to location in the European Union for crypto companies. In early September, Binance CEO Changpeng “CZ” Zhao called Paris “the financial hub for crypto in Europe.”

California’s financial regulator the DFPI has been targeting crypto asset companies and on Tuesday, the financial watchdog launched a “crackdown” against close to a dozen digital currency-centric entities. The DFPI “issued desist and refrain orders against 11 different entities for violations of California securities laws,” the regulator said on September 27. The state’s regulator further noted that the operations are accused of running a pyramid or Ponzi scheme.

California Launches Crackdown on 11 Crypto Firms Accused of Operating Ponzi Schemes

“The entities are all alleged to have used investor funds to pay purported profits to other investors, in the manner of a Ponzi scheme,” the DFPI’s press release notes. “Furthermore, each of the entities had a referral program that operated in the manner of a pyramid scheme. The entities promised to pay investors commissions if they recruited new investors, and additional commissions if the investors that they recruited, in turn, recruited new investors.”

Sam Bankman-Fried, helms crypto exchange FTX and trading firm Alameda Research, is considering buying the assets of the bankrupt lending firm Celsius, according to a Bloomberg report citing “a person familiar with his deal-making.”

It is not immediately clear whether Bankman-Fried’s companies are considering bidding for some or all of Celsius’s assets, per the report. Decrypt reached out to FTX for comments but didn’t receive a response at the time of press.

Celsius replied via an auto-response email, saying that the firm is “working to respond to the many inquiries we receive as quickly as possible” and encouraged to keep up with the latest updates via the company’s blog and official Twitter account.

On Monday, FTX.US, the American subsidiary of FTX, won the bid to buy out Voyager Digital, another troubled crypto investment firm that filed for Chapter 11 bankruptcy in July this year.

Ethereum won plaudits and the spotlight two weeks ago for smoothly pushing through its much-hyped Merge, a historic shift to a different “proof-of-stake” blockchain system designed to drastically reduce energy consumption – roughly 99% by some estimates.

Now, the second-biggest blockchain appears to be proving itself on another promise of the Merge: greater inflation-resistance, a characteristic that’s usually more closely associated with Ethereum’s bigger and better-known rival, Bitcoin.

In the days since the Merge, the annualized net issuance rate of Ethereum’s native cryptocurrency, ether (ETH), has fallen to a range of 0% to 0.7%, estimates Lucas Outumuro, head of research at crypto data and analysis firm IntoTheBlock. That compares with about 3.5% prior to the Merge. The net issuance rate, also referred to as the inflation rate, is essentially the new supply divided by the existing supply.

The website Ultra Sound Money puts the annualized inflation rate at 0.19%, based on data showing that some 8,100 ETH have been added to ether’s total supply since the Merge.

An Ethereum arbitrage trading bot managed to hit the jackpot and lose it all on the same day in an ironic turn of events in decentralized finance (DeFi).

In a Twitter thread, Robert Miller, who works at the research firm Flashbots, shared how a Maximal Extractable Value (MEV) bot with the prefix 0xbadc0de was able to earn 800 Ether (ETH), around $1 million, through arbitrage trades.

According to Miller, the bot took advantage of a huge arbitrage opportunity that came when a trader attempted to sell $1.8 million in cUSDC through the decentralized exchange (DEX) Uniswap v2 and only got $500 worth of assets in return. The bot detected this chance and immediately sprung to action and gained massive profits.

However, only an hour later, a hacker exploited a vulnerability in 0xbadc0de’s “bad code” and tricked it into authorizing a transaction that drained its balance of 1,101 ETH, which was around $1.41 million at the time of writing.

Bitcoin has outperformed almost every traditional asset in recent days. Observers said the cryptocurrency has stayed resilient to renewed turmoil in traditional markets due to several factors, including the absence of large sellers, continued holding by long-term investors and quarterly options expiry.

Since the Federal Reserve raised U.S. borrowing costs by 75 basis points a week ago, the dollar index has rallied 4% while the S&P 500 has dropped by 6.4% and the British pound has crashed to an all-time low against the greenback. Bitcoin, however, has remained locked between $18,000 and $20,000.

“I think what we’re seeing is more a lack of large sellers, rather than a plethora of large buyers,” Mike Alfred, a value investor and founder of digital assets investment platform Eaglebrook Advisors, said. “There are no large sellers left. Forced selling has already occurred.”

South Korean authorities have reportedly asked cryptocurrency exchanges Kucoin and Okx to freeze 3,313 bitcoins allegedly tied to Terraform Labs co-founder Kwon Do-hyung, also known as Do Kwon. The coins were transferred to the trading platforms soon after a warrant was issued for Kwon’s arrest in South Korea.

On Tuesday, an official at the Seoul Southern District Prosecutors’ Office confirmed to Bloomberg that requests have been sent to the two cryptocurrency exchanges to freeze the 3,313 BTC.

The coins were transferred to the trading platforms from a wallet allegedly linked to Luna Foundation Guard (LFG) that was created on Sept. 15, according to crypto researcher Cryptoquant. The researcher told the publication:

Cryptoquant specified new bitcoin addresses owned by LFG based on transaction patterns, adjacent flows and material non-public information.

Top cryptocurrencies in Bitcoin and Ethereum dropped roughly 8%, wiping all gains enjoyed earlier in the week.

Bitcoin (BTC), the leading cryptocurrency with a market capitalization just north of $357 billion, has plummeted 7.5% over the past 24 hours. As of this writing, BTC changes hands at around $18,666 per data from CoinGecko.

On a weekly note, Bitcoin has posted modest losses of around 1%, highlighting the asset’s bumpy week.

Bitcoin held range bound over the past seven days, trading between a weekly high of $20,388.46 recorded yesterday and a low of $18,290.32.

Today’s bearish price action puts Bitcoin down 73% from its historical all-time highs of $68,789.63 recorded in November 2021, according to data from CoinGecko.

Bitcoin also leads liquidations over the past 24 hours, reports Coinglass.

More than 82% of Bitcoin long trades totaling $44.08 million have been liquidated in the last day. Short positions worth $9.56 million were liquidated over the same period.

Citing the many issues that could arise should the U.S. create a Central Bank Digital Currency (CBDC), the Bitcoin Policy Institute (BPI) released a report on why the U.S. should refrain from adopting CBDC.

The report titled “Why the U.S. Should Reject Central Bank Digital Currencies” explores how the 21st century could be called “The Chinese Century” referring to the authoritarian use of China’s CBDC and its hegemony in military and economics, etc.

Focusing on the Chinese century, the report states:

As the world goes the way of China in the 21st century, the United States should stand for something different: it should stand for freedom. For this reason, the United States should reject central bank digital currencies.

With the rising number of countries joining the bandwagon to adopt their own version of CBDC, it is evident that governments are seeking more than just holding authority over legacy finance, states the report.

Thailand’s largest crypto exchange Bitkub has come under regulatory scrutiny from the country’s Securities and Exchange Commission (SEC) over falsifying and creating artificial trading volume on its platform.

Thai SEC ordered legal action against the crypto exchange and two individuals alleging the crypto platform was involved in wash trading, a process where investors buy and sell the same assets at the same time in order to manipulate the market by inflating volumes.

The latest enforcement action against the leading Thai crypto exchange would be the second penalty for the crypto exchange within three months. Bitkub Capital Group Holdings Chairman Sakolkorn Sakavee was fined $216,000 and banned from managerial roles in the firm for a year earlier in July this year..