Crypto News Headlines (29-Nov-2022)

Silvergate Capital (SI) said in press release late Monday that its total digital asset deposit relationship with BlockFi, which filed for Chapter 11 bankruptcy protection on Monday, is less than $20 million of of its total deposits from all digital asset customers as of Nov. 28.

“BlockFi is not a custodian for Silvergate’s bitcoin-collateralized SEN Leverage loans, which to date have continued to perform as expected with zero losses and no forced liquidations. Silvergate has no investments in BlockFi,” Silvergate said in the statement.

Silvergate in the statement saId the bank recently “has been the subject of false and misleading statements,” and urged people to go directly to its website for accurate information.

Global investment bank JPMorgan published a report Thursday outlining major changes it expects to happen in the crypto industry following the collapse of cryptocurrency exchange FTX.

Global strategist Nikolaos Panigirtzoglou explained that “Not only has the collapse of FTX and its sister company Alameda Research created a cascade of crypto entity collapse and suspension of withdrawals,” but it is also “likely to increase investor and regulatory pressure on crypto entities to disclose more information about their balance sheets.”

Panigirtzoglou proceeded to list the main changes JPMorgan expects after the FTX meltdown. Firstly, he wrote:

Existing regulatory initiatives already underway are likely to be brought forward.

Dogecoin (DOGE) is up 7.7% over the past 24 hours, trading above its three-week high of $1.03 on Tuesday morning, according to data from CoinGecko.

The industry’s first and largest meme coin now boasts a market capitalization of over $14 billion—a hefty increase of roughly $1.5 billion since yesterday—and is also the best-performing digital asset among the top 10 largest cryptocurrencies on the day.

The latest price action comes in the wake of DOGE surging over 22.5% in a week’s time on Monday, most likely spurred by ongoing—yet unconfirmed—speculations that the meme coin could become part of Twitter’s potential plans for rolling out its own payment system.

At the November 28 hearing of the European Parliament’s Committee on Economic and Monetary Affairs, President Christine Lagarde cited the case against Facebook’s Libra stablecoin project as an example of participation in the crypto market from the ECB, which is a useful action to prevent some major players from having a negative impact on the industry.

However, Christine Lagarde said that the situation of FTX, regarding crypto assets in general as opposed to stablecoins, is more about the stability and reliability of exchanges, and the ECB needs to step up its role as a global regulator to address people’s growing concern about this risk.

Israel’s chief economist has laid out a list of recommendations as to how policymakers should tackle digital asset laws in the country in order to safely drive up crypto adoption.

In a 109-page report submitted to the Minister of Finance on Nov. 28, Shira Greenberg, chief economist at the Ministry of Finance, called for a more comprehensive regulatory framework that would bring trading platforms and crypto issuers in line and would expand the powers given to its financial regulators.

Greenberg recommended Israel should improve investor certainty and protection by imposing stricter licensing requirements on trading platforms and issuers of cryptocurrencies, as well as ensuring funds originating from digital assets are more safely managed.

The market contagion from crypto exchange FTX’s swift collapse has spread to a key digital asset: wrapped bitcoin, a widely traded clone of the largest cryptocurrency.

According to a new report from crypto analysis firm Kaiko, wrapped bitcoin (WBTC), the largest wrapped version of bitcoin on the Ethereum blockchain, has traded at a discount to bitcoin’s price since Sam Bankman-Fried’s embattled FTX exchange filed for bankruptcy protection on Nov. 11.

Kaiko said WBTC’s discount dropped to as low as 1.5% Friday after investors reacted to questions posed on Twitter about whether WBTC is fully backed. The rumor was based on data from Messari’s dashboard on Dune Analysis that says FTX’s sister company, Alameda Research, was a top WBTC merchant by the number of tokens minted.

When the last Bitcoin difficulty change occurred on Nov. 20, 2022, at block height 764,064, it increased by a mere 0.51% that day. The increase did, however, propel the network’s difficulty to its lifetime high of 36.95 trillion. Since then, during the past week, the network’s average hashrate has been around 249.1 exahash per second (EH/s).

Bitcoin’s Mining Difficulty Expected to Drop Significantly, Retarget Could Be 2022’s Largest Reduction

The average Bitcoin network block time has been slower than usual as well, running between 10.2 minutes to 11.06 minutes on Monday evening (ET). The block intervals have been a lot higher since the difficulty change on Nov. 20, as prior to that day, block times had been on average less than ten minutes since Sept. 29.

U.S. crypto exchange Kraken has settled with the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today, agreeing to pay $362,158.70 for apparent violations of sanctions against Iran.

“Due to Kraken’s failure to timely implement appropriate geolocation tools, including an automated internet protocol (IP) address blocking system, Kraken exported services to users who appeared to be in Iran when they engaged in virtual currency transactions on Kraken’s platform,” the agency wrote.

Speakers at a Tax Symposium emphasized the necessity to take action against tax evasion in crypto, which has raised the issue of crypto taxes higher on the European Union’s agenda. On December 7, the European Commission intends to adopt a draft of fresh cryptocurrency tax ideas.

In his keynote at the Tax Symposium @VDombrovskis outlined the EU tax agenda – one that supports business, as well as the green & digital transitions. Key upcoming actions: Single rulebook for corporate tax More clarity on #crypto-assets #VAT in the Digital Age

— EU Tax & Customs (@EU_Taxud) November 28, 2022

According to the speech by Executive Vice-President Dombrovskis at the EU Tax Symposium ‘On the Road to 2050’, digitalization opens up new possibilities, but it also highlights flaws in the tax structures.

The state of New York became the first one in the United States to impose a moratorium on proof-of-work (PoW) mining, albeit only for two years. Last week, New York governor Kathy Hochul signed the moratorium into a bill, prohibiting any new mining operations that aren’t based on 100% renewable energy. The renewal of licenses would also be frozen. In eight months, the anti-mining bill made its way from the first passing through the state Assembly to the governor’s pen.

The statewide development seems unlucky for New York City mayor Eric Adams, who is focused on making the city a crypto hub. Commenting on the moratorium’s signing into law, Adams sounded more peaceful than he was in June when he promised to ask the governor of the state to veto the document. This time Adams pledged to work with the legislators “who are in support and those who have concerns” and come “to a great meeting place.”