Snapshot Web3

September 19, 2023

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Regulatory and Legal News

Kazakhstan establishes regulatory agency to implement CBDC

The National Bank of Kazakhstan has established the National Payment Corporation (NPC) to oversee the development and implementation of the country's central bank digital currency (CBDC), the digital tenge. The NPC will also manage the national payment system, including interbank clearing services, money transfers, and digital identification. The development of the digital tenge began in February 2023, with a target launch date set for 2025. Binance, the world's largest crypto exchange, is a key partner in the project, providing technical support through BNB Chain.

Malta begins public consultation on revised crypto rules to align with MiCA

Malta's Financial Services Authority (MFSA) has launched a public consultation on proposed crypto regulation changes to align with the EU's Markets in Crypto-Assets (MiCA) rules coming in December 2024. The revisions affect exchanges, custodians, and portfolio managers, with significant adjustments including the removal of certain requirements for VFA license holders, updated capital requirements, and aligned outsourcing rules. These changes aim to streamline compliance with MiCA-based laws for VFA license holders. France is also making similar adjustments for MiCA implementation in early 2024.

NYDFS calls for public feedback on proposed crypto regulatory guidance

The New York State Department of Financial Services (NYDFS) is seeking public feedback on proposed regulatory guidance for crypto firms operating in the state. The guidance aims to establish stricter criteria for coin-listing and delisting procedures, along with a framework for designating coins or tokens to the NYDFS' greenlist. It emphasizes heightened standards in various risk categories. Superintendent Adrienne Harris stated that the goal is to ensure regulatory capabilities keep up with industry developments and protect consumers and markets. The NYDFS greenlist currently includes Bitcoin, Ether, and stablecoins issued by Gemini and PayPal.

South Korea focuses on OTC crypto regulations as unlawful deals reach $4B

South Korea is intensifying its scrutiny of over-the-counter (OTC) cryptocurrency trades amid concerns over potential illicit activities. During a session on "Criminal Legal Issues Related to Virtual Assets," regulators emphasized the need to regulate OTC crypto markets due to money laundering risks. OTC platforms, which include peer-to-peer exchanges, operate outside official government recognition. The Korea Customs Service estimated that unlawful foreign exchange transactions involving digital currency amounted to approximately $4 billion last year. This move comes as South Korea continues to uphold strict cryptocurrency regulations and steps up efforts following Terra's collapse.

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Innovation and Launches

Bosch, EU and blockchain companies to build decentralized IoT: IAA Mobility

Bosch, along with partners like Mobix and Peaq Network, demonstrated a blockchain-based mobility project at IAA Mobility 2023. The project features a peer-to-peer parking and charging system using moveIDs on the Peaq ecosystem, enabling autonomous transactions between vehicles and infrastructure. This initiative aims to simplify mobility services, eliminating the need for multiple accounts. It's part of the EU-funded Gaia-X initiative focused on creating a secure data infrastructure for digital sovereignty and smart cities.

Tether launches testing phase for Bitcoin mining platform

Tether's CTO, Paolo Ardoino, announced the testing phase for Moria, their Bitcoin mining platform. It achieved a significant milestone by deploying initial containers and miners, emphasizing strong security protocols with multi-signature approval for write actions. Moria, based on Tether's Holepunch tech, aims to enhance communication in Bitcoin mining, focusing on security and cost-effectiveness. Ardoino emphasized Tether's commitment to open financial infrastructure, sustainable mining, and open-source tech. He also urged regulators to focus on existing financial structures rather than reactively targeting cryptocurrencies.

Citi Token Services will provide payments, liquidity to institutional customers

Citigroup has launched Citi Token Services, a private blockchain platform for institutional clients, offering cross-border payments, liquidity, and trade finance solutions. The platform integrates tokenized deposits and smart contracts, aiming to streamline transactions. It completed successful pilots, including instant payments via smart contracts and seamless liquidity transfers between Citi branches. The system utilizes deposit tokens, representing tokenized commercial bank money. The Regulated Liability Network (RLN) technology, introduced in November 2022, is also a key component of Citi's blockchain infrastructure.

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Funding

Blockchain Capital closes funds totaling $580M for investments in crypto gaming, DeFi

Blockchain Capital has successfully closed two new funds totaling $580 million, with $380 million allocated for early-stage investments and $200 million for an "opportunity fund." The funds will be focused on supporting projects in infrastructure, DeFi, gaming, and consumer technologies. Blockchain Capital aims to leverage blockchain technology to empower individuals by providing control over their digital and financial lives. While this fund marks a significant milestone, the firm does not plan to continuously increase fund sizes in the future.

Former Andreessen Horowitz execs launch Bastion after $25M funding round

Bastion, a Web3 startup founded by former executives from Andreessen Horowitz's crypto division, has raised $25 million in seed funding. The company aims to help businesses integrate Web3 infrastructure into their existing technologies. The funding round was led by a16z Crypto, with participation from other investors. Bastion will provide services like custody, digital asset transactions, and wallets. Despite challenges in crypto venture funding, the founders are optimistic about the industry's long-term prospects.

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Scams and Hacks

Lawyer who laundered $400M from OneCoin scam denied new trial

Lawyer Mark Scott, who laundered $400 million from the OneCoin scam, has been denied a new trial despite a key witness admitting to perjury. Scott argued he didn't know OneCoin was a fraud. The judge ruled against a retrial, stating doubt about his innocence. OneCoin, initially presented as a cryptocurrency similar to Bitcoin, turned out to be a pyramid scheme. Scott used the proceeds for an extravagant lifestyle. OneCoin's co-founder Karl Greenwood recently received a 20-year prison sentence. Ruja Ignatov, another co-founder, remains on the FBI's Ten Most Wanted List.

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Interesting Reads

The Truth Behind Cuba’s Bitcoin Revolution

Cointelegraph's documentary explores Bitcoin's impact in Cuba, where it serves as a lifeline for individuals navigating economic challenges and seeking to safeguard their savings from hyperinflation. The film showcases grassroots Bitcoin adoption in Cuba and highlights the efforts of the local Bitcoin community in educating and promoting the cryptocurrency's principles. As Bitcoin gains traction, there's anticipation around how the government will respond to this parallel financial system, potentially offering hope and freedom in a nation where such aspirations have been suppressed.

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Quick Links

Rep. Tom Emmer: Digital assets will be a ‘sleeper issue’ for 2024 elections

Three candidates from both the Democratic and Republican parties have taken anti-CBDC positions as part of their 2024 presidential run.

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Miscellaneous

Canto, Astar blockchains plan migration to Ethereum ecosystem as layer 2s

Canto, a Cosmos-native blockchain, is set to migrate to Ethereum's layer 2 as a zero-knowledge rollup. This move aims to boost decentralization and enable trustless asset bridging. Canto is focused on integrating traditional finance into decentralized finance. The migration will maintain Canto's validators and staking system. This shift follows Astar Network's plan to expand to Ethereum with its own layer-2 scaling solution. Meanwhile, projects like dYdX are exploring alternatives to Ethereum, with plans to build on Cosmos, and Maker is considering a move to Solana for enhanced efficiency.

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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.