Crypto News Headlines (30-Sep-2022)

Payments-focused cryptocurrency XRP and MKR, the governance token of the peer-to-peer lending platform Maker, are rallying in an otherwise moribund crypto market awaiting the release of the Federal Reserve’s preferred measure of U.S. inflation: core personal consumption expenditure (PCE).

XRP traded recently at $0.492, representing an 11% gain over 24 hours and MKR changed hands at $775, up 7%, according to CoinDesk data. Market leaders bitcoin (BTC) and ether (ETH) traded little changed near $19,500 and $1,340, respectively.

XRP has been a “court case play” this month, outperforming the broader market in hopes that the long-drawn-out legal tussle between Ripple Labs, a San Francisco-based company with close ties with the cryptocurrency, and the U.S. Securities and Exchange Commission, will be resolved soon.

India’s Directorate of Enforcement (ED) announced Wednesday that it has frozen 77.62710139 bitcoins under the country’s Prevention of Money Laundering Act (PMLA). The ED is the Indian government’s law enforcement and economic intelligence agency.

The freeze is part of the ED’s investigation into a mobile gaming application called E-nuggets. According to the announcement, the cryptocurrency was transferred from Wazirx, a popular Indian exchange, to Binance. The ED also tweeted a summary of its action.

The law enforcement agency explained that “Aamir Khan, S/o Nesar Ahmed Khan launched a mobile gaming application namely E-Nuggets, which was designed for the purpose of defrauding [the] public,” adding:

After collecting seizable amount of money from the public, all of a sudden withdrawal from the said app was stopped on one pretext or the other. Thereafter, all data including profile information was wiped off from the said app servers.

MicroStrategy, the Virginia-based provider of software solutions known for using large amounts of company cash and debt financing to buy Bitcoin (BTC), is now seeking an engineer for Lightning Network-based products.

The firm published the vacancy notice for the position on its website earlier this week.

“As a Bitcoin Lightning Software Engineer at MicroStrategy, you will build a Lightning Network-based SaaS platform, providing enterprises with innovative solutions to cyber-security challenges and enabling new eCommerce use-cases,” reads the vacancy announcement.

The President of Kazakhstan – Kassym-Jomart Tokayev – said the authorities are ready to introduce a mechanism that will allow the converting of cryptocurrencies to cash if there is enough demand for such services.

The positive tone toward the digital asset industry comes days after nearly 100,000 Russians entered Kazakhstan to escape the partial military mobilization which Vladimir Putin announced.

Embracing Crypto Even More

In a recent announcement, President Tokayev revealed that the government intends to turn Kazakhstan into a global digital asset center.

Specifically, the authorities seek to introduce a project that will enable the conversion of cryptocurrencies to cash and vice versa in a regulated and secure way. The political leader said this initiative will get completed if residents display enough interest in digital asset operations:

“Currency conversion is already being carried out at the site of the Astana International Financial Center under a special pilot project. For this, quite innovative changes were made to national legislation and the regulatory environment. And we are ready to go further.

Central bank digital currencies (CBDCs) can work well with decentralized finance (DeFi), and they have a lot of potential to boost DeFi adoption, according to a Swiss central bank official.

Among many various types of digital currencies, it is CBDC that could provide more stability and lower risks to the development of DeFi, according to Thomas Moser, a governing board member at the Swiss National Bank (SNB).

In order to grow, DeFi needs stable money, which is why stablecoins were invented, and stablecoins clearly helped DeFi to become more popular, Moser told Cointelegraph.

Despite being polar opposites, centralization and decentralization in digital currencies can actually work together as centralization is not bad for DeFi, Moser argued. He noted that major stablecoins like Tether (USDT) and USD Coin (USDC) are the most widely used stablecoins in DeFi, both of which are centralized.

The world’s largest banks are exposed to about 9.4 billion euros ($9 billion) of crypto assets, a study by the Basel Committee on Banking Supervision found as the international standard-setter considers new rules for the capital that lenders must hold against innovative assets.

The exposure, mainly client services involving bitcoin (BTC) and ether (ETH), represents 0.14% of the total exposure to risk from the 19 banks who sent in data, or just 0.01% across all banks, and the survey – the first of its kind – is set to have a clear impact on policy.

“The template [sent to banks] was specifically designed to support the Committee’s two consultative documents on the prudential treatment of banks’ cryptoasset exposures, which were published on 10 June 2021 and 30 June 2022,” the study, penned by Renzo Corrias of the Committee’s Secretariat, said.

Cryptocurrency exchanges are becoming more than just that, and in regions like Latam, where there are countries with high inflation numbers, some offer bank-like products to entice customers to enter the crypto market. Mercado Bitcoin, one of the biggest cryptocurrency exchanges in Brazil, has been subpoenaed by the Brazilian Securities and Exchange Commission (CVM) on the services that it offers customers via its platform.

The subpoena inquires about the services offered via the Tokens section on the web page of Mercado Bitcoin, which, according to the CVM, offers a way for customers to diversify their portfolio with supposed low risk and receive a high yield in different areas.

These tokens are available for customers with more than a certain number of stablecoins, ostensibly providing a higher yield than normal savings products in the short term.

At this year’s Messari Mainnet summit, Paul Brody, the blockchain lead at Big Four accounting firm Ernst & Young (EY) told Decrypt that his company is “all in on public blockchains.” 

Recounting EY’s involvement in crypto, he reiterated how the firm was indeed one of the earliest adopters in the traditional finance world. 

In 2015, EY formed a blockchain division to pursue work on public blockchains. Initially, it worked with private blockchains too, but that has “really decreased over the years,” Brody told Decrypt

 He elaborated: “Unlike anybody else, we’re actually building tools and applications in this space, so we built, for example, our own blockchain audit platform, where we can do on-chain and off-chain transaction reconciliation.”

GitHub has lifted its ban on the popular crypto mixer, Tornado Cash, after the US Treasury stated last week that its sanctions do not apply to the mixer’s code but its wallet addresses. Therefore, GitHub has restored the Tornado Cash code to the platform.

Tornado Cash Returns To GitHub 

At the time, a preliminary investigation did not find any reasons to deny the request outright – even though the cash generated by the sale would be used to fund Celsius’ operations, not pay back creditors. Further deliberation on the matter was scheduled for a hearing on the 6th of October.

Texas Regulators Object to the Request’s Wording

However, Texan regulators have decided to inform the court of their misgivings even ahead of time. On the 29th of September, the Texas State Security Board (SSB), the Texas Department of Banking (DOB), and the Attorney General representing the state in the ongoing bankruptcy case filed an objection to the proposal, citing concerns over the language used in it.

Bitcoin’s (BTC) long-term profitability has declined to levels last seen during the previous bear market in December 2018. According to data shared by crypto analytic firm Glassnode, BTC holders are selling their tokens at an average loss of 42%.

The Glassnode data indicate that long-term holders of the top cryptocurrency selling their tokens have a cost basis of $32,000, meaning the average buying price for these holders selling their stack is above $30,000.

The current market downturn added to the declining profitability can be attributed to several macroeconomic factors. The BTC market still has a heavy correlation with the stock market, especially tech stocks, which are currently seeing an even bigger downtrend than crypto.