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- DeFi Liquidations: A $75M Wake-Up Call for Investors! 🚨
DeFi Liquidations: A $75M Wake-Up Call for Investors! 🚨
OpenSea shuts down royalty enforcement. 23% of Australians own cryptocurrency!
Manan Vora
August 18, 2023
Snapshot Web3
August 18, 2023
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Regulatory and Legal Updates
Judge Torres has granted the SEC's request for an interim appeal in the Ripple (XRP) case. The SEC's appeal submission deadline is August 18, and the response deadline is September 8. This decision gives the SEC the chance to present its case to the Second Circuit, and Ripple can also file its own appeal in response.
In the Tornado Cash lawsuit, a federal judge in Texas has ruled in favor of the US Treasury, granting summary judgment. This lawsuit was initiated by individuals backed by Coinbase, challenging the Treasury's designation of Tornado Cash as a sanctioned entity. The judge rejected the plaintiffs' arguments, stating that Tornado Cash could be designated under OFAC regulations without exceeding the Treasury's authority. Coinbase plans to support an appeal to the Fifth Circuit in response to the ruling.
Starting September 1st, UK crypto businesses must comply with the FATF Travel Rule, sharing customer information during transfers to detect suspicious transactions. This aligns with global standards and the UK's 2022 legislation. Businesses need full Travel Rule implementation for domestic and rule-adopting jurisdictions, including when dealing with VASPs from non-rule jurisdictions. The move is part of the UK's growing crypto industry regulation efforts.
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Innovation and Launches
Scroll has introduced the Sepolia beta testnet, targeting Ethereum upgrades. This testnet will test zkEVM, bridge, and infrastructure enhancements, refining them before the mainnet launch. Notable improvements include better EVM compatibility, reduced gas costs, trustless message relay, and enhanced infrastructure. This marks a significant step towards optimizing Ethereum and offers a glimpse of future advancements.
Mastercard has launched a partnership program with blockchain and payment tech providers, including Ripple and ConsenSys, to explore the potential of central bank digital currencies (CBDCs). The program will focus on aspects like security, privacy, and interoperability. Mastercard aims to ensure that CBDCs are as user-friendly as traditional money in a digital future. The initiative brings together companies already involved in CBDC development to drive innovation and efficiency in this space.
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NFT and Metaverse
OpenSea, a major NFT marketplace, will make creator fees optional, discontinuing royalty enforcement. This change, effective from August 31, 2023, comes in response to competition from other platforms. The Operator Filter, which restricted sales to fee-enforcing marketplaces, will also be removed. NFT artists will receive royalties on secondary sales only if buyers opt to pay. Some artists are expressing frustration with this decision on social media.
China's Sichuan province aims to expand its metaverse industry to $34.4 billion by 2025, focusing on industrial parks, privacy protection, and cross-chain control. Despite banning crypto transactions, China is pushing blockchain tech and digital innovation, with efforts to establish itself as a Web 3.0 hub.
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Scams and Hacks
Indian police have arrested Ratnakar Palai for his alleged involvement in a $120 million crypto Ponzi scheme linked to Solar Techno Alliance (STA) Token. Palai, along with others, is accused of running a multi-level marketing scheme that recruited 200,000 people across India through social media to invest in cryptocurrency. The scam amassed around $120 million from their activities. Palai was in charge of the social media arm of the operation and shut down his associated accounts after his accomplices were arrested. The group is reportedly trying to relaunch the scam under a new name.
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Interesting Reads
Blockchain-based digital ID can significantly benefit the unbanked by expanding economic opportunities. While many enjoy digital payments, a large global population remains without bank accounts. Blockchain offers advantages like self-sovereign identity, control over data sharing, quick verification, decentralization, traceability, and cost savings. Challenges include market fragmentation, regulatory compliance, and scams. Still, blockchain-based digital ID can enhance financial inclusion and provide alternative access to financial services for the unbanked.
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Quick Links
CoinDesk confirms layoffs, including reporter Tracy Wang, known for exposing FTX issues. About 45% of the editorial team, around 20 people, were affected. Parent company Digital Currency Group (DCG) aims to cut costs and boost profitability. An investor group led by Matthew Roszak and Peter Vesenes is close to acquiring CoinDesk for $125 million, strengthening DCG's finances after Gemini's bankruptcy filing. CoinDesk has been seeking investors to support growth.
Around 23% of Australians, equivalent to 4.5 million people, now own cryptocurrency, according to a survey by Swyftx exchange. Women and millennials are driving this trend, with more than half of Australian millennials having owned or currently owning crypto. Surprisingly, women show more interest in crypto than men. Additionally, around 1 million Australians plan to enter the crypto market for the first time in the next year. This growing adoption indicates that Australia might be more crypto-friendly than some other regions. Australia recently concluded a pilot for central bank digital currency (CBDC) usage, involving government and corporate leaders from the banking and finance sectors.
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Miscellaneous
Liquidations in the DeFi sector have surged to a record-breaking $75 million in 24 hours, driven by increased volatility. Parsec Finance's data suggests that if Ethereum's price falls to $1,480, about $268 million worth of collateral could face liquidation. This highlights the need for risk management and analytics in the evolving DeFi landscape, emphasizing the cryptocurrency market's inherent volatility and the importance of informed decision-making for traders and investors.
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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
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