Top News | 02.01-08.01
- US authorities warn banks about the hazards of crypto exposure
- Sam bankman-fried isn’t guilty. At least that’s what he says
- Cashless Denmark marks a dramatic decrease in bank robbery
- Coinbase came under regulatory oversight
- Cryptocurrency mining and trading are hurting the environment
- Uk takes a step towards foreigners interested in cryptocurrency
- Mastercard pushes musicians into web3
- Jack Ma is giving up control over ANT Group
- Bankruptcy looms at crypto broker Genesis
US Authorities Warn Banks About the Hazards of Crypto Exposure
The Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued a joint statement urging the U.S. banking sector to be as careful as possible when using digital currencies.
Credit institutions and their customers can fall victim to fraudsters, who often resort to schemes to steal funds by attracting investors to dubious crypto projects.
US regulators are also referring to the FTX situation that occurred last year. According to them, that event, as well as the string of bankruptcies of many other cryptocurrency companies, which it was the FTX collapse that set in motion, brought the industry's vulnerability to the forefront.
«Investing in digital currencies and crypto-businesses comes with great risks that banking institutions should be aware of», the statement says.
Sam Bankman-Fried Isn’t Guilty. At Least That’s What He Says
Sam Bankman-Fried has pleaded not guilty to eight criminal counts arising from the fall of his cryptocurrency exchange, FTX.
The trial was held in New York on Tuesday, January 3. Sam Bunkman-Fried is accused of committing one of the biggest economic crimes in US history. He faces charges of fraud, conspiracy, money laundering, clients funds misuse and other crimes.
Facing more than 100 years in prison, the FTX founder refused to plead guilty to all eight counts.
Meanwhile, two members of the Bankman-Fried team — Carolyn Ellison and Gary Wang — have already pleaded guilty to several charges and are contributing to the investigation of criminal activity at the bankrupt exchange.
Cashless Denmark Marks a Dramatic Decrease in Bank Robbery
Denmark, gradually abandoning cash, recorded a year without bank robberies.
According to the trade union of financial workers of the country Finansforbundet, in 2000, there were 221 bank robberies in Denmark. However, since 2017, the number of such crimes has decreased to 10 per year, and in 2022 the figure fell to zero.
It is noted that the fall occurred against the background of the closure of many banks of their branches.
Nevertheless, bank employees still face potential violence and threats. It is noted that most abuse now occurs online and over the phone.
Coinbase Came Under Regulatory Oversight
The New York Department of Financial Services (NYDFS) determined that Coinbase, a cryptocurrency exchange, has not been monitoring new customers and transactions as it should. As a result, the NYDFS believes that Coinbase could become a tool for money laundering and drug trafficking.
The crypto-exchange will be forced to pay a fine of $50 million. In addition, it agreed to spend the same amount over the next two years to correct the deficiencies identified by the Department.
Regulators allowed Coinbase to operate in the state in 2017, but the company failed to monitor all financial transactions. As a result, by the end of 2021, there were more than 100,000 unconfirmed transactions on this cryptocurrency exchange, NYDFS says.
Because of this number of unverified transfers, Coinbase came under the regulator's scrutiny. A Department official will continue to watch activity at the crypto-exchange for another year.
Cryptocurrency Mining and Trading Are Hurting the Environment
The negative impact of cryptocurrencies on the environment is not news to anyone. But a new Forex Suggest study shows how much damage is really being done.
According to Forex Suggest research, 431.6 million trees must be grown to mitigate the pollution caused by bitcoin over the last year.
Bitcoin is the largest source of CO2 emissions. It will require 863 million trees planted annually to offset its CO2 emissions, which amounted to 86.3 million tons of CO2 emissions in 2022.
Litecoin and Bitcoin Cash ranked second and third on the list of polluters.
Ethereum, on the other hand, managed to reduce its annual CO2 emissions by almost 100% significantly. In 2021, Ethereum left 21.95 million tons of CO2. That amount has now been reduced to 8,824 tons. To offset its annual emissions, 44,121 trees need to be planted.
Meanwhile, the most environmentally friendly cryptocurrency is Stellar, consuming only 0.0003 kWh per transaction. The cost per transaction in Stellar is also less than one cent.
UK Takes a Step Towards Foreigners Interested in Cryptocurrency
On January 1, 2023, the U.K. introduced a tax break on purchasing cryptocurrencies for foreigners who make transactions through local brokers. Specifically, non-residents are exempt from tax if they buy cryptocurrencies through brokers or U.K. investment managers.
The move is part of the country's new Prime Minister Rishi Sunak's policy of turning the U.K. into a crypto hub.
Last year, Parliament also began debating an extensive U.K. financial market reform bill that would give local financial regulators more authority over cryptocurrency regulation. The U.K. Treasury also plans to launch a consultation on how to regulate the crypto sector in the coming weeks.
Mastercard Pushes Musicians Into Web3
Mastercard launches a Web3 accelerator for musicians. The Mastercard Artist Accelerator will use Web3 technology on the Polygon blockchain to assist budding artists such as musicians, DJs, and producers in obtaining the tools and abilities required to succeed in the digital economy.
Participants in the accelerator will have access to special real-life and meta-universe events and a curriculum that will enable them to build and own their brand through Web3 experiences like minting NFTs, presenting themselves in virtual worlds, and building a community.
Jack Ma Is Giving Up Control Over Ant Group
The Chinese billionaire and the founder of the Alibaba group of companies, Jack Ma, has given up control rights to Ant Group Co. This step is associated with technological repression by China.
The company offers ten people (including the founder Jack Ma) management, staff, and voting rights independently of each other. This step effectively deprives Ma of control over Ant Group.
Ant Group said the changes are needed to optimize corporate governance further and «align shareholders' voting interests with their economic interests».
Bankruptcy Looms at Crypto Broker Genesis
According to the WSJ, Genesis, one of the top cryptocurrency lenders, revealed that it was cutting off 30% of its staff and facing bankruptcy.
Last year's bankruptcy of cryptocurrency hedge fund Three Arrows Capital, as well as the failures of FTX and Alameda Research, harmed the company's financial stability.
Almost every department in the organization has already been touched by the layoffs. So far, 60 workers have been let go. Genesis Global Trading currently employs just 145 people.
If the firm is unable to secure new investors, it will likely declare bankruptcy soon.