Former President and current United States presidential candidate, Donald Trump, has emphatically pledged to prevent the Federal Reserve from introducing a central bank digital currency (CBDC) in the country.
This promise was made during a campaign address in Portsmouth,
New Hampshire, on January 17, where Trump reiterated his commitment to safeguarding Americans against government overreach.
In his speech, Trump declared, “Tonight I’m making another promise to protect Americans from government tyranny.
I will never allow the creation of a central bank digital currency.” His statement was met with enthusiastic applause from the audience, prompting him to acknowledge their support, saying, “I didn’t know you know so much… New Hampshire, very smart people.”
Trump then went on to elaborate on his concerns about CBDCs, emphasizing that such a currency would grant the federal government absolute control over citizens’ money, potentially allowing them to seize funds without individuals even being aware of it.
He warned that this development posed a significant threat to freedom and vowed to take action to prevent it from becoming a reality in America.
Donald Trump, who controversially contested the results of the 2020 presidential election, officially launched his 2024 presidential campaign in November 2022.
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The 60th quadrennial U.S. presidential election is scheduled for November 5, 2024.
It’s worth noting that another presidential candidate, Florida Governor Ron DeSantis, had also pledged to oppose central bank digital currencies on his first day in office.
However, DeSantis faced a setback when he lost to Trump in the Republican party primary election in Iowa on January 15, 2024, where he consistently trailed Trump by more than 10 points in the polls.
Additionally, another contender for the Republican Party nomination, Vivek Ramaswamy, who had proposed a crypto-focused policy framework, dropped out of the race on the same day as the Iowa caucus results, securing roughly 8% of the vote.
Ramaswamy officially endorsed Trump as his preferred candidate.
Former U.S. Securities and Exchange Commission enforcer John Reed Stark added an interesting perspective to the unfolding election landscape on January 17.
He suggested that the crypto movement could play a pivotal role in the 2024 presidential election and recommended that every presidential contender appoint an internal Crypto Czar to serve as the point person and spokesperson for cryptocurrency-related matters within their campaign.
Bitcoin experienced a dip in its price on January 17, just before Wall Street opened for the day. Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin’s price fell to $42,400 on Bitstamp.
Despite recent volatility, the cryptocurrency has remained within a tight range and struggled to maintain support above $43,000 due to a lack of liquidity.
The negative sentiment surrounding Bitcoin was exacerbated by Jamie Dimon, the CEO of JPMorgan Chase, who criticized the cryptocurrency at the World Economic Forum (WEF) annual gathering in Davos, Switzerland. Dimon referred to Bitcoin as a “pet rock” and dismissed its utility.
He mentioned use cases such as anti-money laundering (AML), fraud prevention, tax avoidance, and combatting sex trafficking but reiterated widely debunked criticisms.
Dimon also announced that he would refrain from discussing Bitcoin in the future, asking others to stop talking about it as well.
This decision marked a change from his previous statements where he had promised to stop mentioning Bitcoin.
When asked about his thoughts on the recent launch of Bitcoin exchange-traded funds (ETFs), Dimon expressed ambivalence about competitors embracing Bitcoin.
He referred to Larry Fink, CEO of BlackRock, whose iShares Bitcoin Trust (IBIT) ETF received over $700 million in inflows within its first three days.
Dimon acknowledged that different people have different opinions, emphasizing the diversity of perspectives in the market.
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Traders in the cryptocurrency market are cautious about Bitcoin’s short-term price performance.
Daan Crypto Trades noted that Bitcoin has become unpredictable, and he preferred to wait for clear opportunities rather than rushing into trades. He stated that the previous ease of trading had disappeared, and the current market environment was more challenging.
Crypto Tony, another trader, predicted that Bitcoin would continue to trade within a range, possibly with a floor in the upper $30,000 area.
He expected Bitcoin to fluctuate between $47,000 and $38,000 in the coming months, with more attention shifting towards alternative cryptocurrencies (Altcoins).
In summary, Bitcoin faced a price dip and struggled to maintain support above $43,000. Jamie Dimon’s critical remarks at the World Economic Forum added to the negative sentiment, and traders were cautious about the cryptocurrency’s short-term performance, with some anticipating a continuation of its range-bound trading.
VanEck, the asset management firm, has decided to shutter and liquidate its Bitcoin Strategy Exchange-Traded Fund (ETF), a move that comes less than two years after its launch.
The decision was officially announced on January 17th, with VanEck’s board of trustees granting approval for the liquidation and dissolution of the ETF, which had been listed on the Cboe BZX Exchange since November 2021.
This strategic move follows VanEck’s recent approval from the United States Securities and Exchange Commission (SEC) to list shares of its spot Bitcoin ETF.
VanEck explained that this decision was the result of a comprehensive evaluation of multiple factors, including performance, liquidity, assets under management, and investor interest.
In a statement, the firm stated, “VanEck continuously monitors and evaluates its ETF offerings across a number of factors, including performance, liquidity, assets under management, and investor interest, among others.”
Shareholders who hold positions in the Bitcoin Strategy ETF will have until January 30th to sell their shares, as the fund’s ticker symbol, XBTF, is set to be delisted on February 6th.
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In a post dated January 17th, VanEck hinted that the decision to discontinue the ETF linked to Bitcoin futures was influenced by the SEC’s green light for spot Bitcoin investment vehicles.
VanEck has also made strides in the cryptocurrency space by launching the VanEck Bitcoin Trust ETF, with the ticker symbol HODL.
This ETF started trading on the Cboe BZX Exchange on January 11th, and it has seen impressive success, with all recently approved spot Bitcoin ETFs collectively amassing approximately $4.5 billion in trading volume on their first day of operation.
A report from CoinShares underlined the increasing popularity of cryptocurrency products in the United States, as it revealed that inflows into U.S. crypto products for the week ending on January 12th surpassed those of Canada, Germany, and Sweden.
This data suggests that despite the discontinuation of the Bitcoin Strategy ETF, the interest and investment in cryptocurrencies remain robust and continue to shape the financial landscape.
In 2022 and 2023, a significant shift occurred in the world of cryptocurrency-related illicit activities as stablecoins eclipsed Bitcoin in terms of transaction volume.
This transformation is highlighted in the latest report by blockchain analytics firm Chainalysis, which reveals that from 2018 to 2021, Bitcoin was the “go-to cryptocurrency” for cybercriminals. However, the years 2022 and 2023 saw stablecoins taking the lead in facilitating illicit transactions.
This transition coincided with the overall surge in stablecoin activity, encompassing both lawful transactions and nefarious ones.
Nonetheless, it’s important to note that Bitcoin remains the preferred choice for certain types of illicit activities, such as darknet market sales and ransomware extortion.
Stablecoins have gained favor among cybercriminals, particularly for activities like fraudulent schemes and transactions involving sanctioned entities.
These activities represent the most substantial portion of crypto-related crimes in terms of transaction volume.
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According to Chainalysis, sanctioned entities and jurisdictions accounted for a combined transaction volume of $14.9 billion in 2023, constituting 61.5% of all illicit transactions during that year.
Chainalysis also points out that a significant portion of this volume stems from crypto services that continue to operate in regions not subject to U.S. sanctions.
This allows them to evade the reach of the United States Department of the Treasury’s Office of Foreign Assets Control.
In another positive development, blockchain security firm CertiK reported on January 4th that crypto hack revenue had decreased by more than 51% in 2023.
This marked a notable improvement in blockchain security, as noted by CertiK’s co-founder, Ronghui Gu.
Chainalysis corroborated these findings in their report, revealing a 54.3% decrease in crypto hack revenue and a 29.2% drop in profits from crypto scams.
Consequently, there has been a decline in transaction volume associated with illicit addresses in 2023.
In summary, the landscape of crypto-related illicit activities shifted dramatically in 2022 and 2023, with stablecoins taking precedence over Bitcoin for most of the illicit transaction volume.
This change is driven by the increased popularity of stablecoins among cybercriminals, particularly for fraudulent schemes and transactions involving sanctioned entities.
Despite these shifts, efforts to enhance blockchain security have yielded positive results, leading to a decline in hack revenue and scam profits, as reported by CertiK and Chainalysis.
Since the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States on January 11, these new investment vehicles have rapidly gained traction, with trading volumes soaring past $10 billion within just three days, as reported by Bloomberg Intelligence analyst James Seyffart.
This meteoric rise in trading activity has sparked debate, with some questioning whether the frenzied trading has had any substantial impact on Bitcoin’s price.
However, Eric Balchunas, another Bloomberg analyst, emphasizes the sheer magnitude of this achievement.
He points out that the $10 billion volume in the first three days dwarfs the performance of 500 ETFs launched throughout 2023, which collectively managed only $450 million in volume during the same period.
The most successful ETF from that batch achieved a mere $45 million in trading volume.
In contrast, BlackRock’s iShares Bitcoin Trust (IBIT) alone recorded more activity than the entire class of ETFs launched in 2023.
Regarding net inflows and outflows, the data shows a trend of investors moving away from the Grayscale Bitcoin Trust (GBTC), which recently transitioned into an ETF format.
Over three days, BlackRock’s IBIT accumulated an impressive $700 million in net gains.
Meanwhile, GBTC experienced net outflows of over $1.1 billion, likely due to investors switching to ETF products with lower fees.
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James Van Straten, a research and data analyst at CryptoSlate, expressed optimism about the ongoing trends:
“GBTC total outflows are now at $1.18 billion vs. spot Bitcoin ETF inflows of $2 billion. It would be extremely encouraging if we continued this pace for the first month of trading.”
CEO Samson Mow anticipates a return to ETF equilibrium in the near future, expecting Grayscale to adjust its fees and alleviate the selling pressure.
While these developments are exciting, the Bitcoin price remains within its well-established trading range since December 2023, hovering around $43,000.
Although some remain confident in the market’s strength at this level, concerns persist regarding Bitcoin’s ability to avoid another significant price decline.
Popular social media trader JT believes that there is still room for further decline, especially when considering the long-standing trading range.
The price has found support around $41,500 in January, repeatedly testing this level since the beginning of 2024, according to data from Cointelegraph Markets Pro and TradingView.
The cryptocurrency community remains watchful, hoping for stability and potential price growth as the ETF market continues to evolve.
Crypto lender Celsius has recently moved over $125 million worth of Ether to various crypto exchanges as part of its strategy to start repaying its creditors.
According to data from Arkham Intelligence, between January 8 and January 12, Celsius transferred $95.5 million to Coinbase, while $29.7 million was moved to FalconX.
Despite these transfers, Celsius still holds a substantial amount of Ethereum, with over 550,000 ETH valued at a staggering $1.36 billion as of the latest data available.
On January 5, Celsius initiated the unstaking of a massive 206,300 ETH, worth $407 million at the time.
The lender explained that this newly-liberated Ether would be used to cover costs related to its ongoing restructuring process and to prepare for the repayment of creditors.
While Celsius has expressed its intention to distribute Bitcoin and ETH to creditors in its recovery plan, it has not provided a specific timeline for when creditors can expect to receive their funds.
Celsius creditors have endured a long wait of more than 18 months to access their funds, as the platform declared bankruptcy in July 2022.
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In a similar move, FTX, a bankrupt crypto exchange, and its defunct trading arm, Alameda Research, transferred $28 million in crypto assets to exchanges on January 14, as per data from blockchain analytics platform Spot On Chain.
This transfer included $18.7 million in Wrapped Bitcoin, $8 million in Ether, and $1 million in Pendle (PENDLE) to Coinbase and Binance.
Following their bankruptcy declaration in November 2022, FTX and Alameda Research have been actively working to raise funds for creditor repayment.
Administrators of FTX have successfully reclaimed approximately $7 billion in assets, including a substantial $3.4 billion in cryptocurrency.
Market sentiment has been favorable towards FTX creditor claims, with some assets trading as high as $0.50 on the dollar as of October 2023.
While there is no precise date for when FTX customers can expect to be reimbursed, the current plan outlines that repayments are likely to commence at some point in 2024.
This suggests that creditors may have a reasonable chance of recovering their investments.
More than a year has passed since the notable Terra, FTX, and Celsius collapses in 2022, and the cryptocurrency industry has faced numerous challenges since then.
Industry leaders are now discussing the crucial role of crypto rating agencies in managing risks within the crypto sphere.
In 2022, Ben Goertzel, the CEO of SingularityNET, a decentralized artificial intelligence (AI) firm, argued that rating agencies could play a more significant role in rebuilding trust in crypto than regulators.
As we enter 2024, Goertzel remains skeptical of regulatory efforts aimed at bolstering confidence in the crypto space.
He expressed his lack of faith in regulatory agencies, stating, “Nothing that the world’s regulatory agencies have done since 2022 has increased my faith that they are going to be able in practice to do more good than harm for customers or service providers in the crypto space.”
However, Goertzel believes that transparent, crowdsourced, and intelligently aggregated rating mechanisms could significantly benefit the crypto landscape.
He highlighted the advancements in AI technology, which now make it easier to generate customized summaries of the reputations of various entities in crypto using raw data and reports from diverse sources.
Goertzel also pointed out the United States regulator’s handling of the FTX case as evidence that special laws for crypto fraud may not be necessary.
He argued that existing laws against fraud can effectively be applied to arrest “crypto fraudsters,” similar to individuals involved in other fraudulent activities.
While he doesn’t believe that rating agencies could have prevented the FTX collapse, he suggests that they could have “alerted customers to the numerous red flags observable in advance.”
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Anastasia Ulianova, co-founder of the crypto ratings platform Aria, acknowledges the limitations of rating agencies in preventing collapses like FTX.
Ulianova emphasized that rating agencies can “raise red flags” when the risk associated with a particular crypto exceeds its performance, but they cannot predict collapses.
She stated, “A rating can only tell you how much risk you are taking. It is not a certain prediction of an upcoming collapse.”
Despite these limitations, Ulianova believes that rating agencies can still play a crucial role in helping investors assess the risk-to-reward ratio of tokens.
This information can aid investors in determining whether the expected returns justify the associated risks.
She also emphasized that Aria’s goal as a rating agency is to “legitimize the place of crypto assets in a traditional investment portfolio.”
In summary, crypto rating agencies are being viewed as a valuable tool in the cryptocurrency industry to assess risks and provide investors with information needed to make informed decisions.
While they may not prevent collapses, they can help individuals navigate the complex crypto landscape and make more educated investment choices.
The South Korean government is contemplating the imposition of sanctions on the use of cryptocurrency mixing services, following in the footsteps of the United States.
As reported by a local publication, South Korea’s financial regulator, the Financial Intelligence Unit (FIU), is in the early stages of crafting legislation to regulate digital asset mixing services.
This move comes as the use of mixers for illegal money laundering operations has been on the rise.
Cryptocurrency mixing services are designed to mix potentially identifiable or “tainted” cryptocurrency funds with others, making it difficult to trace the original source of the funds.
While initially intended to enhance privacy and allow senders to conceal their transaction details, these services have become a preferred method for scammers and hackers to launder stolen funds.
The discussions within the FIU began after the United States imposed sanctions against cryptocurrency mixers.
The South Korean regulator is now considering similar measures to curb money laundering and illicit financial activities in the crypto space.
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However, it is important to note that these discussions are in their early stages, and it may take some time before any new regulations are implemented.
Mixers and online gambling platforms are particularly notorious for facilitating money laundering, processing a significant portion of illicit funds.
In response, the U.S. government has already taken action by imposing sanctions on prominent crypto-mixing service providers.
The first set of sanctions was imposed in August 2022 when the U.S. Treasury Department targeted Tornado Cash, a well-known crypto mixing service.
Subsequently, in November 2023, the U.S. government expanded its sanctions by alleging North Korean ties to another crypto mixer, Sinbad.
South Korea’s consideration of similar measures reflects the global concern over the misuse of cryptocurrency mixing services for illegal activities.
While the regulatory framework is still under development, it is evident that authorities are taking steps to address these issues and ensure the integrity of the cryptocurrency ecosystem.
On January 14, an eye-catching report surfaced regarding a substantial $15 billion XRP transaction from an undisclosed wallet to Bitfinex.
However, it soon became apparent that this transaction had never actually transpired. Bitfinex’s Chief Technology Officer, Paolo Ardoino, shed light on the situation, revealing that it was, in fact, an unsuccessful attempt at a “partial payments exploit.”
The initial revelation of the supposed transfer came from Whale Alert, a prominent blockchain tracking account that formerly operated on Twitter.
Whale Alert claimed to have spotted a transaction involving a staggering 25.6 billion XRP – nearly half of the total XRP supply – moving from an unidentified wallet to Bitfinex.
However, Whale Alert later deleted the post and attributed the error to “an issue with properly reading the Ripple node response, resulting in a few wrong posts.”
Paolo Ardoino, in a subsequent explanation on the platform X, clarified that the incident was an attempted attack on Bitfinex through a “Partial Payments Exploit.”
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The attacker seemed to have believed that Bitfinex had improperly configured its software to process partial payments.
The mechanics of a partial payments exploit involve assuming that a company’s system only reads the amount field of an XRP transaction, which is intentionally set to a high value.
The exploiter then sends a significantly smaller amount, specified in another transaction field, in an attempt to receive credit for the difference.
However, Ardoino affirmed that Bitfinex thwarted this attack because it correctly manages the ‘delivered_amount’ data field.
Notably, the attacker didn’t limit their efforts to Bitfinex alone. Blockchain data revealed that they also targeted Binance with a 58.9 billion XRP transfer, mirroring the unsuccessful outcome of the attack on Bitfinex.
In conclusion, what initially appeared as a colossal XRP transaction turned out to be a failed exploit attempt.
Bitfinex’s robust security measures successfully prevented any unauthorized manipulation of their systems, and the attacker’s ambitions to exploit vulnerabilities were thwarted.
The United States Government Accountability Office (GAO) recently offered crucial recommendations to the Securities and Exchange Commission (SEC) in anticipation of its approval of a spot Bitcoin exchange-traded fund (ETF) on January 10.
These recommendations primarily revolved around workforce management for the digital asset market and the regulatory approach towards the burgeoning industry in the upcoming years.
The GAO presented these recommendations to the SEC on December 15, and they were made public on January 16.
The GAO’s report advised the SEC to develop a new workforce plan, establish clear policies and procedures for its Strategic Hub for Innovation and Financial Technology (FinHub) internal controls, and formulate performance objectives for the hub.
The GAO, known for its independent and nonpartisan role within the U.S. federal government’s legislative branch, provides auditing, evaluation, and investigative services for the U.S. Congress.
Upon assessing the SEC’s readiness to handle the growing crypto market, the GAO identified that the agency currently employs 116 individuals primarily focused on crypto asset matters.
However, the SEC has yet to create an updated workforce planning strategy, despite the need to align with its fiscal years 2019–2022 strategy.
The GAO suggested that such a strategy would better equip the SEC to address future workforce requirements and effectively fulfill its responsibilities in overseeing and formulating policies related to crypto assets.
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Additionally, the GAO observed that while the SEC’s FinHub coordinates oversight of emerging technology, it lacks documented policies, procedures, and performance goals, even though it has established operational processes like meetings with market participants.
In response to their assessment, the GAO issued three recommendations:
- The SEC’s chief should ensure that the chief human capital officer devises a new workforce planning strategy in line with the agency’s 2022–2026 strategic and performance plans.
- The SEC’s chief should ensure that the FinHub director documents policies and procedures that underpin its internal controls.
- The chair of the SEC should ensure that the FinHub director establishes performance goals and metrics that are clear, quantifiable, and targeted.
For each of these recommendations, the GAO included a live status section to monitor whether the SEC takes appropriate actions on them.
In a landmark decision, the SEC granted approval for 11 spot Bitcoin ETF applications on January 10. The internal document shared by the SEC revealed that the proposal received three votes in favor and two against. SEC chief Gary Gensler’s decisive vote marked the approval of the first spot BTC ETFs in the U.S., ending nearly a decade of rejections.
Notably, gold enthusiast and prominent Bitcoin critic Peter Schiff suggested that Gensler was pressured into approving the spot Bitcoin ETFs.
However, Schiff cautioned that Gensler might introduce stringent crypto regulations in the near future, potentially increasing the cost of Bitcoin transactions and undermining its utility, which could lead to a significant price drop.
All the approved spot BTC ETFs commenced public trading the following day, quickly amassing over $2 billion in trading volume on their debut.