Crypto Pirates

Diem was introduced as an idea in 2019 and has encountered opposition ever since.

Diem, Facebook's long-term stablecoin project, is finally coming to an end. On Monday, an independent investment group, Silvergate Bank, said it was purchasing $182 million in Diem assets from the tech giant, bringing a conclusion to a long-awaited — and somewhat turbulent — exit.

"Despite providing us with constructive feedback on the network's architecture, it became evident from our discussions with federal regulators that the project could not proceed," Diem CEO Stuart Levey wrote on the project's previous website. "Which a result, the best course of action was to sell the Diem Group's assets to Silvergate, as we have done today."

Diem—then called "Libra"—was first proposed by Facebook in the summer of 2019 with the purpose of developing a "simple global payment system and financial infrastructure that empowers billions of people." However, because this is a Facebook brand, almost everyone was wary; authorities in both the EU and the US expressed reservations about the concept, with Europe's antitrust authority beginning an investigation into it shortly after it was unveiled.

Then came partner-related headaches. Following months of regulatory investigation, several of the project's initial investors, including PayPal, Mastercard, and Visa, abandoned ship, and things only got worse from there. The name change was followed by a narrowing of the scope: what was initially intended to be a worldwide supported cryptocurrency became available solely in the United States after failing to gain permission from Swiss payment regulators. Executives on the team in charge of Diem's mainstream push, such as David Marcus, left the firm shortly thereafter. Facebook's Novi blockchain wallet revealed at the end of last year that it would begin accepting payments in Pax Dollars (USDP), rather than Diem, as initially envisaged.

Diem is not the only contentious project that Facebook revealed this week would be shuttered. On the same day as Silvergate's announcement, Israeli media revealed for the first time that the business was shutting down its Express Wi-Fi initiative, which had provided low-cost internet services to regions in India, Indonesia, and other parts of the global south for the previous six years. Similarly to Diem, regulators worldwide were suspicious of the wi-fi plan, with countries such as Bangladesh outright prohibiting the programme from operating in rural areas due to security and licensing concerns.

The shutdown is confirmed by an announcement on the Facebook (sorry, Meta) website. "After more than five years of operation, we intend to discontinue our Express Wi-Fi programme," the company stated.

"In collaboration with our partners, we contributed to the expansion of public Wi-Fi access in over 30 countries through the Express Wi-Fi platform. While we are wrapping up this programme to focus on other initiatives, we remain dedicated to collaborating with partners across the telecom industry to improve connectivity."

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Cointree is now allowing investors to store gold as well as cryptocurrency in their digital wallets, which is a world first.

The Australian crypto exchange has reached an agreement with Digital Gold Money Platform (DGMP), Rush Gold, to implement world-first Gold-as-a-Service APIs to its platform, allowing investors to own and hold gold in their crypto wallets.

The APIs allow apps and platforms to fully integrate real-time gold pricing, transactions, and reporting in a format that retail crypto investors are already familiar with, simplifying diversification while providing downside protection.

Cointree COO Jess Renden told Stockhead that the partnership is "a huge move" that advances Cointree's Holy Grail of increasing Australia's financial literacy and knowledge of investment markets.

Renden claims that by providing a service to purchase gold directly through the platform, "we are able to assist our investor membership, who are primarily young retail investors, in better understanding how to diversify their investments and hedge against market risk."

"With many cryptocurrencies experiencing a correction in recent months and some of the volatility in crypto markets easing, investors are now looking for ways to secure their gains for the long term and strengthen their portfolio to hedge against the potential of inflation."

The decision to include gold in crypto wallets comes less than six months after JP Morgan stated that Bitcoin, not gold, is the new inflation hedge.

This partnership could be interpreted as a hedge against that hedge.

Cointree (and everyone else):

How it works

Renden claims that buying gold bullion on the exchange is just as simple as investing in cryptocurrency.

"Cointree members simply need to sign in to the platform, visit the buy page, select gold, and specify how much AUD they want to spend," she says. "Then they process the order, and it's in their account." "I have immediate access to genuine gold bullion."

While investors can use the exchange to buy and sell gold, pay bills with it, and set up recurring purchases, it is not currently exchangeable.

"We're looking into trading gold and cryptocurrency, but it's not yet possible," Renden says.

Who is Rush Gold?

Rush Gold is a FinTech platform that provides customers with digital access to real gold that they can use just like cash to buy, save, transfer, gift, and spend via the Rush Mastercard and the world's leading mobile wallets.

It was founded in 2016 and was named 2021's Digital Disruptor of the Year at the Finder Innovation Awards in August of last year, as well as Finance Business of the Year at the MyBusiness Awards in 2020.

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If rent-seeking and artificially inflated digital assets designed to privatise the internet for profit weren't already two of late capitalism's worst symptoms, they've now married!

On January 24, 2022, Fortune magazine published an article (or perhaps a foreboding omen?) with the headline "The next major trend in NFTs is to rent them out, and crypto landlords are making a killing," which explores how Hell has been unleashed on Earth so that the meek may suffer even more:

Play-to-earn gaming is the newest craze in the crypto world, but you probably won't be able to participate unless you have thousands of dollars.

Enter the concept of scholarships, which allow players to rent non-fungible tokens such as tools, creatures, or skins in games. These NFTs, as they are abbreviated, are frequently required for play or provide an advantage to players. Players pay the lenders a percentage of any cryptocurrency they earn while battling, farming, or racing online in exchange for renting the NFTs. In essence, NFTs are already mature enough to have de facto landlords.

Unfortunately, this is neither surprising nor novel. HypeBeast reported in August 2021 that people were renting out their CryptoPunk Avatars — pixelated cartoon profile pics that trade for 6 or 7 digits — via a "new NFT rentals protocol called ReNFT."

ReNFT has developed a licencing service that allows CryptoPunk owners to sign a transaction granting borrowers the right to display the CryptoPunk avatar as their own for up to 99 days.

"This transaction adheres to the tenant rights protocol, which grants sole permission to display the CryptoPunk as your Avatar for a fixed period of time up to 99 days," CryptoPunk.rent stated in its FAQ section. "Tenants may use their rented punk as an avatar on Twitter, Discord, NFT marketplaces, and any other social platform where punks congregate."

In October 2021, CoinDesk reported that Lattice Capital, Play Ventures, MetaCartel Ventures, Scalar Capital, LongHash Ventures, SkyVision Capital, Fedora Capital, and Maeve Ventures had invested $1.5 million in the ReNFT protocol in a seed funding round. Because, I don't know, I suppose capital breeds innovation.

In a post on, well, Medium, ReNFT attempted to explain the appeal of NFT rentals across various mediums, while also acknowledging:

Except for the potential speculative price increase over time, there are currently no methods for NFTs to generate income. ReNFT aims to disrupt the ever-expanding NFT market by allowing owners to generate revenue from otherwise stale assets and renters to use a variety of NFTs in experiences without having to own a single one. The rental price, collateral, and maximum rental period are determined by the lender. The renter specifies the rental period, pays the collateral plus the rental fee, and receives full custody of the NFT.

Depending on the value of the respective NFT, the amount of collateral required can be very high, so that renting is no longer an option for most people, despite potentially low rental fees. This is why we created our collateral-free integration tools, which enable completely dependable NFT rentals for any project!

In other words, it's the most depressing literal manifestation of "rent seeking" that could be imagined. And yet, people continue to profit from it.

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Texas Governor Greg Abbot has stated that he wants to ensure that his state's power grid does not fail again, and he has asked crypto miners for assistance.

According to Bloomberg, Abbot met with several cryptocurrency entrepreneurs and influencers last October. During the meeting, the governor asked those in attendance to shut down their mining operations in the event that the Texas grid fails completely, as it is expected to do in February 2021.

According to Bloomberg's anonymous sources, the governor reportedly said, "Help me get through the winter."

The industry is notorious for its opposition to government regulation, which makes it a risky and potentially disastrous bet.

However, we have learned that two Bitcoin miners have volunteered to shut down if the grid becomes overloaded again in order to save energy for homes and other businesses. It demonstrates the possibility of all of this working out.

Abbott doesn't have much of a choice in this situation. He will face a tough election challenge from both his own party and the Democrats, who will undoubtedly target his weaknesses in Texas' electric infrastructure.

His polling on his handling of the 2021 power grid disaster is also dismal, with 60 percent of Texans disapproving of how the state's leaders handled the grid.

As Texas prepares for another potentially cold February, all eyes will be on the state's power grid. If it fails, and Abbott is forced to rely on crypto miners to keep their end of the bargain, he may find himself iced out of the governor's mansion come election day.

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Are you considering investing in cryptocurrency? This should be read first.

The increasing value of cryptocurrencies promises investors massive returns and cryptocurrency mining "fortunes," akin to a digital version of the 1850s gold rush. The risk of falling prey to fraud is extremely high in this lawless and uncontrolled crypto realm, as scammers frequently have the upper hand.

According to ESET, a market leader in proactive threat detection, the same criteria that apply to fraud prevention apply here as well. Everything you read on the Internet should be thoroughly analysed and validated, and by avoiding hype, you may greatly increase your chances of being secure.

According to the FTC, almost $80 million was lost in the United States between October 2020 and May 2021 as a result of thousands of cryptocurrency-related scams. In comparison to the regular stock market, there are few to no regulations governing the bitcoin market for investors.

The most prevalent cryptocurrency frauds

Ponzi Schemes: This is a form of investment scam in which victims are duped into investing in a non-existent project or "get-rich-quick scheme" that ultimately benefits only the scammer.

Cryptocurrency is great for this, as scammers are constantly developing "advanced" technologies that are poorly stated in order to lure investors and make higher virtual profits. Falsifying data is simple when the money is virtual in the first place.

Scammers use fake information to convince people to invest in obscure cryptocurrency ventures. Following that, the value of the assets increases, and the fraudster sells his own shares, profiting handsomely while leaving the victim with worthless shares.

Scammers use famous social media accounts or construct phoney accounts to entice followers to invest in dubious schemes such as the ones mentioned previously. In one instance, over $2 million was lost to scammers who even placed Elon Musk's name on a Bitcoin address to give the hoax an air of legitimacy.

Scammers send emails or post posts on social media claiming to be able to access virtual currency stored on a cryptocurrency exchange. The only disadvantage is that the consumer is frequently required to pay a small fee up front. The Exchange will never exist, and your money will be lost in perpetuity.

Cybercriminals create bogus bitcoin applications and publish them to app stores. If installed, it has the potential to steal personal and financial data and to infect the device with malware. Others may attempt to dupe customers into paying for fictitious services or steal login credentials from a cryptocurrency wallet.

Fake press releases: Scammers are occasionally successful in convincing journalists or opinion leaders to replicate fake information. This occurred twice, when reputable news outlets published stories about well-known retailers ready to take various cryptocurrencies. The fabricated news releases upon which these reports were based were part of pump-and-dump operations aimed at increasing the value of crypto assets held by fraudsters.

Phishing or spoofing: One of the most common methods of deceit utilised by scammers is phishing. Emails, SMS messages, and social media messages are spoofing to appear to come from a valid and trusted source. Occasionally, that "source"—for example, a credit card company, bank, or government official—requests payment in bitcoin for something. It will always attempt to portray a sense of urgency to the user, prompting them to act fast and without hesitation.

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An asset class that necessitates a comprehensive government-wide strategy? This is now officially considered a part of the mainstream economy.

January was a bad month for cryptocurrency investors. The total value of the cryptocurrency market has been roughly halved from its all-time high as a months-long slide across the asset class continues.

To be fair, it wasn't just the cryptocurrency market that suffered in January. Equities were mostly down as well. However, the stock market is already heavily regulated. The cryptocurrency market, on the other hand, is frequently referred to as the "wild west" by Securities and Exchange Commission Chairman Gary Gensler.

Following the January market rout, there has been no shortage of financial industry luminaries speaking out about cryptocurrency. For example, Nobel laureate economist Paul Krugman recently compared the volatile cryptocurrency market to the subprime mortgage crisis (which sparked the Great Recession more than a decade ago).

Krugman was cautious about anything in the crypto markets posing systemic risks in the same way that the subprime mortgage crisis did. Nonetheless, he stated that "cryptocurrencies, with their huge price fluctuations that appear to be unrelated to fundamentals, are about as risky as an asset class can get."

The risk of dealing in cryptocurrencies is not limited to price fluctuations. For years, cryptocurrency marketplaces have been plagued by fraud, money laundering, and outright theft.

The Federal Trade Commission recently released new data indicating a historic increase in online scams last year, and the agency is blaming the massive increase on illicit cryptocurrency investment schemes promoted on social media. Meanwhile, cryptocurrency money laundering is still a major concern. Binance, the world's largest cryptocurrency exchange, restricted 281 personal accounts of Nigerian users on January 29 in an effort to comply with international money laundering laws.

The SEC has long been interested in cryptocurrency markets; in fact, Gary Gensler came into office advocating for crypto regulation reform. But now, in the aftermath of a particularly brutal period for cryptocurrency investors and in the midst of a bountiful period for crypto fraudsters, the SEC appears to be gaining a powerful ally from higher up the food chain.

The Biden administration is about to release a government-wide cryptocurrency regulation strategy, according to Bloomberg News. According to reports, this strategy will take the form of a National Security Council memorandum, which could be released before the end of February. The NSC memorandum requires federal agencies to assess the risks and opportunities that cryptocurrency presents in their areas of expertise. The impact of digital assets on financial stability, as well as the possibility of standardising crypto regulations across international borders, will be examined in the memorandum. Finally, the memorandum will include information about a potential central bank digital currency.

With cryptocurrency becoming more mainstream, it makes sense for federal agencies to consider how the proliferation of cryptocurrency may affect their operations, for better or worse. It also seems logical, especially in light of recent market volatility, to consider stability in relation to cryptocurrency. Exploring collaboration with other countries in relation to assets that cross geographical boundaries is a no-brainer.

But I guess you'll have to talk to a bigger crypto-nerd than me about the last part of that. With 97 percent of dollars in circulation already consisting of nothing more than a string of digital code held by a commercial bank, and one of the points of cryptocurrency in the first place being decentralisation and non-reliance on any particular government, I'm not sure what a central bank digital currency would provide that we don't already have. I guess I'll just have to wait for the memo like everyone else.

Although insiders in any industry rarely roll out the red carpet for new regulations, the Biden administration's renewed focus on cryptocurrency may be cause for celebration among crypto enthusiasts. An asset class that can be ignored by the White House may be easy to dismiss as a novelty, a fad, or a meme. But an asset class that necessitates a comprehensive government-wide regulatory strategy? That is simply a feature of the mainstream economy, my friends.

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The world's most valuable cryptocurrency has lost a significant amount of value in recent weeks. However, one expert assures investors that everything remains the same.

Since its all-time high in November, the value of the flagship cryptocurrency Bitcoin (BTC) has dropped by 44.6 percent.

Such stomach-churning volatility would understandably put even the most ardent crypto fan to the test. 

However, nothing fundamentally has changed within Bitcoin, according to BetaShares digital assets head Justin Arzadon.

"The current price driver has been the Federal Reserve's hawkish stance and the threat of aggressive interest rate tightening over the course of the year, which will impact both the US and global economies," he wrote on the BetaShares blog.

"The outlook has had an impact not only on the cryptocurrency market, but also on other risk assets such as high growth equities."

Tailwinds from six months ago remain.

Arzadon explained how all of the factors that pushed Bitcoin up 6 months ago are still relevant today.

"Hyperbitcoinisation has continued, despite the fact that it is still in its infancy." "With the introduction of more regulated products over bitcoin, such as ETFs, adoption by institutions and corporations has continued to grow," he said.

"A wave of banks around the world already provide, or plan to provide, the ability to access bitcoin directly from client bank accounts."

He admitted that a 45 percent devaluation is "disappointing." However, "large drawdowns" are an unavoidable part of owning cryptocurrency.

"Looking at the ten worst bitcoin drawdowns since 2011, Bitcoin has experienced pull-backs of more than 50% six times, and more than 40% four times — the worst being -93.7 percent over a period of 163 days from peak to trough in 2011," said Arzadon.

"Each time, Bitcoin has rallied to set new highs."

He also stated that the cryptocurrency market has historically been 5 to 7 times more volatile than the stock market.

Bitcoin's path to mainstream acceptance

Arzadon believes that the rise of shares linked to the crypto world makes digital currencies more vulnerable to equities market corrections.

"Investors and institutions who do not have direct access to crypto or are not permitted to invest directly tend to get exposure through crypto equities," he explained.

"Unfortunately, these companies have borne the brunt of the crypto and broader equities market sell-off."

El Salvador, for example, made Bitcoin legal tender last year. Arzadon believes that other countries will follow suit.

"In El Salvador, there are already more people with bitcoin wallets (46%) than bank accounts (29%)," he said. 

"There are rumours that other South American countries will follow suit, so additional nation-state adoption over the next few years would not be surprising."

Arzadon predicts that the rise of non-fungible tokens (NFTs) and the metaverse will boost crypto's real-world value in 2022.

He pointed out that NFT prices have not fallen in line with those of stocks and cryptocurrencies this year.

"Large corporations such as Adidas AG (ADS) and Nike Inc (NKE) have continued to announce their participation on a regular basis," Arzadon said.

"From 1 to 17 January, OpenSea, one of the world's largest NFT trading platforms, set a new record in sales volume, having already surpassed $3.5 billion in sales — recorded in the value of Ethereum (ETH)."

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The Web3 solution aims to provide a single point of entry into the Ethereum ecosystem.

MetaMask has announced a collaboration with the MyCrypto team. While no changes to the user experience are expected in the near future, long-term goals are being developed.

Taking Wallets to New Heights

One of the world's most popular wallet apps, MetaMask, has announced a partnership with MyCrypto, a Web3 solution for consolidating Ethereum accounts into a single point of access. The announcement was made earlier today on MyCrypto's blog and was later tweeted by MetaMask.

According to the post, MyCrypto's technology allows for interaction "across chains and cities, impacting the balances of wallets, liquidity pools, treasuries, and ultimately the emotional and financial well-being of any number of humans around the world." MyCrypto is intended to be a single point of access for all of a user's Ethereum accounts, wallets, and holdings across the entire ecosystem.

The collaboration aims to bring two disparate teams together to form a strong, unified unit. There are currently no plans to rebrand or merge Githubs, for example, so no changes to the user experience are expected in the short term.

Instead, the emphasis is on further developing features that have been actively requested by the community, such as anti-phishing features, building an in-house marketing and community relations team, and focusing on other requested developments, such as improvements in UX, network handling, and error messages.

As part of creating a perfect wallet that can be used across multiple networks, the MyCrypto team emphasises the importance of balancing security, usability, beauty, and education.

The team's long-term goal is to create "a superior way to access unique applications across multiple accounts, protocols, and networks" across desktop, mobile, web, and extension applications.

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The taxes levied are severe, and they are not comparable to how other asset classes are taxed.

During her announcements, the finance minister put to rest one lingering question: the legitimacy of cryptocurrency. In the budget speech, rapidly proliferating digital currencies that were previously neither legal nor illegal were finally recognised as "digital assets." The FM also stated that the Reserve Bank of India intends to launch its own digital currency — a central bank digital currency — as stated (CBDC). What exactly does this imply?

CBDC's Pathway

A few countries, most notably China, are currently experimenting with sovereign digital currencies. Others are working on it. The RBI's digital rupee will use blockchain technology, just like cryptocurrencies.

Central banks around the world are warming to the idea of CBDCs, partly in response to the proliferation of private and unregulated cryptocurrencies, which carry a number of risks, including anonymity, a lack of regulation and investor protection nets, and the potential for financing crime.

The financial impact

A blockchain is a digital public ledger that is decentralised. It can't be hacked or tampered with. Bitcoin is the most well-known application of this technology, and billions of dollars are exchanged every day.

The decentralisation is crucial in this case. Such blockchains are not controlled by a single individual, company, or government. Central banks are symbols of centralisation, whereas cryptocurrencies are symbols of decentralisation. For the development of its coin, the RBI will use a decentralisation instrument. CBDCs may have an impact on the relationship between central and commercial banks. For centuries, central banks have relied on commercial banks to store, transport, and distribute paper money. These are both time-consuming and expensive tasks. With digitisation, these issues are no longer an issue. As a result, the introduction of a CBDC could have a significant impact on the flow of money. These consequences, however, are yet to be seen.

Taxation ensures legitimacy

Crypto trades were given legal legitimacy by taxation. It indicated that the government will not outright prohibit them. However, the taxes imposed are severe and do not compare favourably with other asset classes. To begin, all cryptocurrency income will be taxed at 30%, just like lottery and gambling winnings—even if the investor is in a tax-free bracket. The payer must deposit 1% TDS on the payee's behalf when making cryptocurrency payments.

Users may be discouraged from transacting with cryptocurrency as a result of this compliance burden. Finally, no deductions are allowed on this income. Losses cannot be offset against gains or carried forwards to the following fiscal year. While trading cryptocurrency is still legal, there is now a strict compliance requirement.

A course of action

The FM also stated that the CBDC will be legal currency and that cryptocurrencies, including non-fungible tokens (cryptocurrencies in the form of art), will be considered "digital assets." The two are not interchangeable.

While the taxation may appear almost punitive, the government has paved the way. It has kept the door open in India for crypto innovations. The announcements are likely to reassure crypto traders while also enthusing blockchain developers about the opportunities that await them. The tax laws are merely a starting point. Regulations to protect investors and nations must still be developed.

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As opposition to the proposed legislation grew, Thailand's finance ministry abandoned its plans to tax income generated by cryptocurrency transactions.

According to The Financial Times, an anonymous source within the Finance Ministry is backing down on plans to impose a 15% withholding tax on taxpayers who profit from cryptocurrencies. Mining operations and income from various investment products were also intended to be taxed.

According to a Financial Times report, Thailand's military-backed government will instead allow traders to offset annual losses against gains made in the same year. Meanwhile, cryptocurrency exchanges and other digital asset platforms that facilitate crypto transactions are exempt from capital gains tax.

"The revenue department did extensive research and reached out to crypto operators for feedback." It is much more welcoming to both investors and the industry," said Pete Peeradej Tanruangporn, CEO of cryptocurrency exchange Upbit, to the publication.

Although no specific taxation standards for crypto assets have been established, the finance ministry is said to be considering reclassifying cryptocurrency returns as a type of "taxable income."

Thailand is taking steps towards cryptocurrency adoption.

The Southeast Asian country has already taken steps towards cryptocurrency adoption, establishing regulations and guidelines to welcome the business and opportunities that blockchain brings. It has also issued improvement orders for Bitkub and other Thai cryptocurrency exchanges after users were prevented from trading during significant price increases in 2021.

Last year, Thailand's securities and exchange commission issued a slew of new regulations for crypto businesses, some of which sparked public outrage. It recently proposed new guidelines for the custody of digital assets held by cryptocurrency operators.

The current rules already require crypto exchanges to share user information with regulators whenever funds are transferred between firms, in order to keep a growing number of illicit activities hidden behind the global cryptocurrency industry.

Earlier in 2021, crypto fund managers and investment advisers were required to apply for a licence in order to continue operating. Previously, money managers who traded assets that did not fall under the legal definition of securities, futures contracts, or equivalent financial instruments were not subject to SEC oversight. Investors in cryptocurrency funds managed by unregulated portfolio managers were also not protected by investor compensation funds.

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