Be[In]Crypto has rounded up some of the most important stories in the crypto industry over the past week, in case you missed them.
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Crypto Business Growth
Despite global pandemics, natural disasters, and other unforeseen circumstances, companies on the 2022 Inc. 5000 list have not only continued to operate, but also increased their profitability.
The average revenue growth rate among the top 500 organizations reached 2,144% in just three years.
Moreover, these same companies also created more than 68,394 jobs during this period. All of this progress started when banks started investing in cryptocurrency and blockchain technology in 2021.
The companies on this list are optimistic about the future, even though they know there are still challenges ahead. Crypto lending firm BlockFi named #1 by Inc 5000 companies in the United States.
BlockFi’s growth rate was an impressive 245,000% in three years. The company has now transitioned from a cryptocurrency exchange and lending platform to a wealth management company. Polygon, CoinFlip, and Distributed Ledger are other well-known crypto companies.
Sri Lanka has recently seen an increase in Ponzi schemes as scammers take advantage of the country’s economic woes. Scammers promise investors high returns if they invest their money in cryptocurrency-related businesses. But instead of making money, the victims end up losing everything.
Regulation of digital currencies
The Superintendent of Financial Institutions Canada has issued new guidance on the risks associated with digital currencies. The guidance is aimed at banks and other financial institutions that may be considering offering services to clients involved in the cryptocurrency industry.
Canada’s crypto assets will be monitored by two groups, with Group 1 taking into account established classification conditions, and Group 2 being subject to more conservative prudential treatment. This comes after the Basel Committee released a new set of standards for banks dealing with crypto assets and other digital assets. New data from the Bank of Canada reveals that the number of bitcoin holders nearly tripled from 2020 to 2021, from 5% to 13%.
Binance has received approval in principle from Kazakhstan’s capital financial authority to open a cryptocurrency exchange. Binance Holdings Ltd. has received approval in principle from the Astana Financial Services Authority (AFSA) to operate a digital asset trading system and provide custody services in the Astana International Financial Center (AIFC).
The Celsius platform is eagerly awaiting fresh money to help fund a potential restructuring process.
In July, after imposing a moratorium on user withdrawals, Celsius did not file for bankruptcy. The company is currently consulting with bankruptcy lawyers to assess its restructuring alternatives.
The company evaluates financial packages of different shapes and sizes from different parties. It is currently unclear whether these deals are equity- or debt-based, or what the terms of such a deal would be.
Crypto CEO resigns
Zipmex CEO Marcus Lim is facing fierce criticism from investors and shareholders, some of whom want him to step down. They claim that the root of the problem lies in mismanagement, which caused an exchange liquidity crisis due to its ties to Babel Finance. This forced a withdrawal hold in July 2022.
Genesis Trading CEO Michael Moro is stepping down as pressure mounts over exposure to Three Arrows Capital (3AC) and other hedge funds. This follows the company’s announcement that it booked $40 billion in loans in the second quarter, down 9% from the first quarter.
The cooled interest from institutional investors comes as the crypto market has seen a downturn. The crypto market fell from a high market capitalization from around $3 trillion to around $1.12 trillion at press time.
Tom Conheeny will join Genesis’ board of directors, alongside heads of risk, compliance and technology. At the same time, the company is looking for a permanent replacement for Michael Moro, who played an advisory role during recruitment.
Increased crypto surveillance
Tencent Holdings shut down its non-fungible token (NFT) platform after less than a week due to regulatory pressure from the Chinese government. The decision comes after the government issued guidance on regulating the booming NFT market.
Tencent’s announcement represents a significant step back from the NFT sector, which has been subject to increased government regulation in recent months. The Chinese government revealed its central bank digital currency (CBDC) to the public in 2022 during the Winter Games as a method of expanding the digital yuan pilot project.
Currently, most states are only in the early stages of developing their own CBDCs. The United States announced that it would start investigating a digital dollar, and India, one of the world’s fastest growing economies, made a similar announcement regarding its currency.
Last week, Coin Center said the US Treasury Department had gone too far in threatening to take legal action against mixing service Tornado Cash, claiming the company had violated a number of international sanctions. The organization attempts to contact the Office of Foreign Assets Control and assesses legal action.
In August, the Office of Foreign Asset Control (OFAC) blocked the Tornado Cash site and other digital currency sites that allegedly work with its mixing service, which the Treasury says is used by North Korea and Iran to launder money.
Tornado Cash’s software is open source and the developers have no way of knowing who is using it. The service offers digital currency users some anonymity by allowing them to move their funds through a so-called digital cup, making it difficult to trace the source of the funds.
OFAC’s decision was based on the fact that some digital currency users were using the tumbler to launder money, but the agency provided no evidence linking Tornado Cash to these activities.
A discussion on the digital dollar
Federal Reserve Chairman Jerome Powell said the central bank will release a discussion paper on its potential to issue a central bank digital currency (CBDC) over the summer.
The Fed Chairman addressed the subject in a public address posted on the Federal Reserve’s website. He first talked about how the Fed had always adapted to new technologies to facilitate payments.
Here, Powell specifically addressed the advancement of digital ledger technologies, highlighting cryptocurrencies, stablecoins, and finally a CBDC. In light of the development of a forward-looking “digital dollar,” Powell said the Fed would release a discussion paper on how best to move this idea forward over the summer.
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