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Mickey Mouse Is Into Crypto Now 🔮🎆
South Korea mandates reserves for exchanges, 1inch buys ETH worth $10M, Europe's BTC ETF receives ESG label.
Manan Vora
August 29, 2023
Snapshot Web3
August 29, 2023
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Regulatory and Legal News
The Australian Securities and Exchange Commission (ASIC) is prioritizing the fight against crypto scams, focusing on regulatory measures, scrutinizing product disclosures, and raising awareness about crypto risks. The ASIC's strategy responds to a notable increase in crypto-related scams in Australia, with 3,910 victims losing $221.3 million in 2022, up by 162.4% from the previous year.
South Korean cryptocurrency exchanges will be mandated to reserve a minimum of 3 billion won ($2.3 million) starting in September, as outlined by the Korea Federation of Banks. The move is aimed at enhancing consumer protection within the growing crypto sector. Exchanges must hold reserves equal to 30% of their average daily deposits to cover potential user damages in events like hacking. The maximum reserve limit stands at 20 billion won. Major exchanges like Upbit and Bithumb have already confirmed compliance. This action follows an inter-agency investigation team's formation to address the rising number of cryptocurrency-related crimes.
The EU's MiCA crypto regulation, explained by Circle's Patrick Hansen, reveals exemptions. These include utility tokens within networks, limited crypto-asset offerings, non-transferable digital assets, decentralized services, certain NFTs, non-custodial wallet providers, CBDCs, and more. Hansen's breakdown offers clarity as stakeholders prepare for MiCA's impact on the crypto landscape.
The US Treasury Department and IRS have proposed regulations for digital asset brokers, requiring reporting and tax adjustments. Massachusetts prosecutors are seeking to recover $1.5 million in stolen cryptocurrency from Binance accounts through lawsuits targeting fraud victims. FTX Trading seeks court approval to hire Galaxy Digital for crypto portfolio management to address market instability and manipulation concerns.
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Funding
Mantle Network, associated with BitDAO, suggests using $238 million from its treasury for ecosystem development. Plans include liquidity support for apps ($160M), stablecoins ($60M), and cross-chain bridges ($18M). Mantle has already staked 40,000 ETH of the allocated 200,000 ETH through Lido Finance, as part of actively managing its substantial funds.
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NFT and Metaverse
Web3 startup Cryptoys, backed by Andreessen Horowitz, introduces a $40 "Mickey and Friends" digital toy collection, expanding its Disney-themed crypto collectibles. The company also adds Yoda to its Star Wars collection and plans to reward collectors with a digital Yoda via airdrop. While utilizing the Flow blockchain, sales data is unavailable, and an active marketplace is lacking. VeVe Digital Collectibles previously released Mickey Mouse-inspired NFTs.
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Interesting Reads
Over $100 billion of digital currency has reportedly been used for illicit crypto activities in Southeast Asia, involving fraud, gambling, and money laundering. Tether (USDT) has been prominent in these activities, with over 115 billion USDT used in 2022. The migration of USDT from unlawful platforms to top-tier exchanges is noted. The findings could lead to stricter regulation due to Anti-Money Laundering (AML) and Know Your Transaction (KYT) concerns, potentially affecting projects in the digital assets, DeFi, and Web3 space.
PayPal's stablecoin PYUSD, launched as a competitor, faces challenges. After weeks, its market cap is under $5 million, ranking 2,175th in crypto assets and 39th in stablecoins. Despite volume spikes initially, it's now around 1.3 million. PYUSD hasn't outperformed established stablecoins like USDC and USDT. Regulatory changes, such as the Federal Reserve's oversight plans, could influence its future dynamics.
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Quick Links
1inch Investment Fund, linked to 1inch Network DEX, bought $10 million worth of ETH. Earlier, they gained $3.7 million selling 11,000 ETH out of 17,000 accumulated. Ethereum's price is stable but bearish without demand above $1,900.
Laos has stopped providing electricity to cryptocurrency mining due to drought, electricity export obligations, unpaid bills from miners, and debt crises. This disrupts its plans to be a clean electricity exporter and impacts its hydroelectric power production.
Decentralized social media app Friend.tech faced criticism for threatening users who use copycat versions, leading to an apology from its founder. This comes amid declining metrics since its launch and competition from apps like Shares.
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Miscellaneous
Europe's first Bitcoin ETF, the Jacobi FT Wilshire Bitcoin ETF, has received an ESG label as an Article 8 fund, making it ESG compliant under EU rules. The ETF's ESG status is tied to its investment in renewable energy certificates to offset Bitcoin mining's carbon footprint. However, critics question the validity of labeling a Bitcoin-focused fund as ESG-compliant due to the energy-intensive nature of Bitcoin mining. This move opens the door to scrutiny and potential integration of Bitcoin ETFs into wider financial instruments in the West.
Binance is reportedly contemplating leaving the Russian market due to sanctions, with a spokesperson mentioning the possibility of a full exit. This follows Binance's removal of sanctioned Russian financial institutions from its platform and fiat currency restrictions for Russian users. The exchange has faced regulatory challenges globally, including in the US, where it's dealing with a lawsuit and investigations into potential violations of sanctions related to the Russian invasion of Ukraine.
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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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