Rashid Ejazi

Arkham Introduces World’s First On-Chain Intelligence Exchange Amidst Huge Controversy

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Arkham, a company specializing in blockchain intelligence, made headlines on July 10 with the announcement of the world’s first on-chain intelligence exchange.

Simultaneously, they introduced a new coin called ARKM through Binance’s Launchpad service.

The reaction on Crypto Twitter has been divided, with some expressing concern about Arkham’s goal of “deanonymizing the blockchain,” leading to criticisms of the company being seen as a centralized intelligence agency.

READV MORE: Presidential Candidate Robert F. Kennedy Jr. Admits Owning Up to $250,000 in Bitcoin

Arkham emphasized the positive potential of their Intel Exchange as a means for blockchain sleuths to act as information brokers.

However, experts are apprehensive about potential misuses resulting from the exchange’s proposed business model. Arkham’s plan allows users to post and accept bounties anonymously for information related to blockchain transactions.

The entity that initiates a bounty will have exclusive access to the data for 90 days upon completion. After this initial period, Arkham intends to release the data to the public.

Some commentators raised concerns about how a bounty marketplace could make wealthy individuals susceptible to targeting.

They questioned whether Arkham had taken this into account during their planning.

Controversy surrounding Arkham grew when it was accused of leaking the email addresses of users who signed up for their waitlist and shared the link on social media.

It was discovered that the web form encoded the user’s email address in a simple BASE64 format, allowing easy association of an email address with the corresponding Twitter account.

This raised speculation that the encoding was intentional rather than an oversight.

A Twitter user claimed that the alleged doxing was deliberate, suggesting that Arkham’s ultimate goal was to reveal the identities of prominent players in the blockchain space.

The user implied that Arkham intentionally made it easy to decode the email addresses via the referral link.

In summary, Arkham’s announcement of the world’s first on-chain intelligence exchange and the launch of ARKM coin has garnered a mixed response from the crypto community.

While some recognize the potential benefits of the exchange, concerns have been raised about Arkham’s role as a centralized intelligence agency.

Additionally, allegations of leaking email addresses have added fuel to the controversy, with speculations that it may have been a deliberate move by the company.

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Chinese Government Tightens Regulations on AI Development

The Chinese government is considering additional regulations on artificial intelligence (AI) development, focusing on content control and licensing.

According to the Financial Times, the Cyberspace Administration of China (CAC) plans to implement a system that requires local companies to obtain a license before releasing generative AI systems.

This move indicates a tightening of the initial draft regulations released in April, which allowed companies a 10-day registration period after product launch.

READ MORE: Crypto Firms Struggle to Attract Local Talent in Hong Kong Despite Regulatory Changes

Sources suggest that the new licensing scheme will be included in forthcoming regulations expected to be released by the end of this month.

The April draft regulations also included mandatory security reviews of AI-generated content.

The government emphasized that all content should reflect “core socialist values” and should not undermine national unity, advocate the overthrow of the socialist system, or incite the splitting of the country.

Cointelegraph reached out to the CAC for comment, but no response was received at the time of publication.

Chinese tech and e-commerce giants Baidu and Alibaba both launched AI tools this year, with the latter introducing a rival to the popular AI chatbot ChatGPT.

According to sources in the FT report, both companies have been engaging with regulators in recent months to ensure compliance with the new rules.

In addition to the aforementioned implications of the upcoming regulations, the draft states that Chinese authorities hold tech companies accountable for any content generated using their AI models.

Regulating AI-generated content has become a global concern, with various countries taking steps in this direction.

In the United States, Senator Michael Bennet penned a letter urging tech companies developing AI technology to label AI-generated content. Vera Jourova, the European Commission’s vice president for values and transparency, recently highlighted the need to label generative AI tools’ content to combat disinformation.

The article concludes by suggesting readers collect it as an NFT (non-fungible token) to preserve this moment in history and support independent journalism in the crypto space.

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PwC Report: Digital Asset Custody Industry Faces Security Challenges and Insurance Concerns

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The digital asset industry experienced significant growth, reaching a peak of over $3 trillion in November 2021. However, the custodial sector of the market remained more modest, totaling $447.9 billion in 2022.

These figures are derived from a joint report on digital asset custody by consulting firm PricewaterhouseCoopers (PwC) and wealth tech platform Aspen Digital. The 39-page report was published on July 11.

The report identifies 120 custody service providers as of April 2023, categorized into two main groups: third-party service providers and self-custody solutions.

It highlights key institutional developments such as increased interest in crypto staking, driven by the Ethereum Merge, as well as the emergence of nonfungible tokens (NFTs) and the metaverse, attracting institutional investors.

READ MORE: Crypto Firms Struggle to Attract Local Talent in Hong Kong Despite Regulatory Changes

Security is cited as the primary challenge faced by the custody industry, as demonstrated by FTX’s failure in 2022, attributed to inadequate governance, risk management, and internal controls.

Consequently, institutions are increasingly seeking to safeguard their assets through reputable digital asset custodians or self-custody solutions rather than solely relying on exchange platforms for holding their assets.

Insurance policies present another challenge for custodians.

Self-custody solutions lack insurance coverage, leaving users uncompensated for any loss of digital assets resulting from negligence.

The report emphasizes that sound insurance policies are a critical factor when selecting digital asset custodians, as recognized by sources within family offices.

To assist investors, the report suggests a five-step approach to selecting a custody service provider.

These steps include mapping the market, creating a grading system, conducting performance reviews, and other necessary preliminary procedures.

In recent developments, Canada’s financial authority released guidance to aid fund managers in complying with legal requirements for investment funds holding crypto assets.

Additionally, it expressed confidence in the regulated futures market for cryptocurrencies, which it believes promotes greater price discovery.

The joint report by PwC and Aspen Digital sheds light on the state of digital asset custody, highlighting the challenges faced by the industry and offering recommendations for investors.

As the digital asset market continues to evolve, addressing security concerns and ensuring robust insurance policies will be crucial for the custodial sector to thrive.

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Dubai Cryptocurrency Regulator Suspends BitOasis’ License for Failure to Meet Mandated Conditions

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The Virtual Assets Regulatory Authority (VARA), the cryptocurrency regulator in Dubai, has taken action against BitOasis, a crypto exchange, by suspending its license.

The suspension was a result of BitOasis failing to meet the required conditions within the specified timeframes set by the authority.

BitOasis was granted a conditional license on April 12, allowing it to operate under certain conditions within 30-60 days.

READ MORE: Canadian Judge Makes Controversial Ruling About Thumbs-Up Emoji

However, VARA revealed that the exchange did not fulfill these key conditions, although the specific details were not disclosed.

Consequently, BitOasis’ “License for Institutional and Qualified Retail Investors” has been deemed non-operational until the conditions are met.

Earlier, in May, BitOasis received one of Dubai’s “minimum viable product operational licenses” from VARA, enabling the exchange to provide broker-dealer services to qualified institutional and retail investors.

This license represents a crucial step in the process before obtaining a full market product (FMP) license. Presently, no firm has been granted an FMP license by VARA.

In order to apply for the FMP license, BitOasis must satisfy the conditions outlined in its current license, as clarified by VARA.

This recent action by VARA follows its previous reprimand in April, when it addressed the co-founders of Three Arrows Capital, Su Zhu and Kyle Davies, for operating and promoting their new OPNX crypto exchange in Dubai without the necessary license.

BitOasis, in a blog post on July 11, acknowledged the regulatory concerns regarding its Operational MVP License and assured that it is actively working with VARA to fulfill the remaining conditions.

The exchange also emphasized that the issue with its Operational MVP license does not affect other services provided to existing retail users, such as broker-dealer services.

Cointelegraph reached out to both BitOasis and VARA for comments but did not receive any responses at the time of publication. VARA stated that it will continue to monitor the situation to ensure compliance with regulatory requirements.

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Switzerland Embraces Bitcoin Revolution: Rapid Adoption and Alignment with Swiss Values

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Switzerland, renowned for its banking secrecy laws and favored by the wealthy, has quickly embraced the principles of self-sovereignty embodied by Bitcoin (BTC).

The head of Lugano’s Plan ₿ initiative, Giw Zanganeh, spoke with Cointelegraph journalist Joe Hall at the Plan ₿ Bitcoin Summer School, shedding light on the growing use of Bitcoin for everyday transactions in the Swiss city.

Lugano has emerged as a hub for Bitcoin adoption, as well as for Tether and its LVGA stablecoin, which can be used for various utility bills, goods, and services throughout the city.

Zanganeh, who leads Tether’s Plan ₿, expressed his enthusiasm for Switzerland’s remarkable cryptocurrency adoption, despite its well-established financial and banking infrastructure.

READ MORE: South Korean Regulator Takes Action After ‘Coin Gate’ Scandal

He noted that many Swiss citizens are not only interested in Bitcoin from a philosophical perspective but also find alignment with Swiss values.

Swiss society places high value on individual sovereignty and financial privacy, which creates a natural overlap between Swiss culture and the ideals of the Bitcoin movement.

Zanganeh stated that Switzerland likely has one of the highest densities of Bitcoin-only companies per capita in the world, and even politicians, diplomats, and members of parliament are embracing Bitcoin, reinforcing a positive outlook for adoption in the country.

The increased usage of Bitcoin in Switzerland can be attributed to concerted efforts to educate and inform the populace about the advantages of BTC.

Regular articles in newspapers discuss various aspects of Bitcoin and its relevance to financial freedom and freedom of speech, targeting individuals interested in these concepts.

Zanganeh acknowledged that Bitcoin adoption is a gradual process, but the onboarding of merchants in Lugano has played a crucial role in establishing a new payment paradigm in the region.

Zanganeh likened the process of Bitcoin adoption to the initial proliferation of bank cards decades ago, emphasizing that practical experience with novel transactional methods will continue to attract more users to the Bitcoin ecosystem.

Switzerland’s potential as a center for institutional cryptocurrency adoption has also been highlighted by Bitcoin Suisse CEO Dr. Dirk Klee, with the Canton of Zug attracting numerous cryptocurrency and blockchain companies due to its progressive and crypto-friendly initiatives supported by the government.

The interview with Giw Zanganeh is part of an upcoming Cointelegraph documentary that delves into the experience of attending a Bitcoin School.

For those interested, subscribing to Cointelegraph’s YouTube channel will provide access to the documentary.

Readers are also encouraged to collect this article as an NFT, preserving this historical moment and demonstrating support for independent journalism in the crypto space.

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Salvadoran Teenager Empowers Community Through Bitcoin Education

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Gerardo Moran, an 18-year-old teenager from El Salvador, recently took to social media to share his remarkable story following the completion of the country’s Bitcoin diploma program, Mi Primer Bitcoin (my first Bitcoin).

This program, supported by El Salvador’s Ministry of Education, provided Moran with an opportunity to leave behind his challenging life in construction, where he earned a mere $6 a day.

In a series of heartfelt tweets on July 8, Moran opened up about his experiences, highlighting the stark realities faced by many Salvadoran citizens who toil tirelessly for minimal compensation.

Having worked since the tender age of 11, mostly in construction and tourism, Moran struggled to comprehend why his fellow countrymen put in so much effort for such meager rewards.

READ MORE: Galaxy Digital CEO Mike Novogratz Considering Relocating Business Away From the US

“I’ve pondered why people in my country work so diligently for so little money,” Moran expressed on Twitter, acknowledging that he, too, had been trapped in a cycle of arduous labor for paltry compensation. He reached a breaking point, realizing that earning $6 a day in construction was simply not sustainable for him. Unbeknownst to him at the time, a life-changing opportunity lay just ahead.

It was when Moran’s school announced its search for students interested in enrolling in the Bitcoin diploma course that he decided to seize the opportunity. With determination and dedication, he excelled in the program, acquiring a profound understanding of Bitcoin and its implications.

Now, Moran has returned to his former high school, Antonio J. Alfaro, to educate the teachers about Bitcoin. As a leader in Bitcoin education in his hometown, he is currently training and instructing a group of eight senior professors, sharing his knowledge and experiences through the Bitcoin diploma program.

Mi Primer Bitcoin has garnered immense support from global advocates of Bitcoin education, amassing over 1 BTC in donations.

Generous individuals from countries like Poland and Canada have contributed satoshis over the Lightning Network, showcasing their commitment to fostering the growth of El Salvador’s Bitcoin diploma program.

El Salvador’s director of education, Gilberto Motto, previously emphasized the government’s focus on educating citizens about Bitcoin, particularly targeting teenagers.

Motto explained that by reaching every 16- and 17-year-old in the country, they aim to effectively educate the entire nation within a year.

This strategic demographic is expected to disseminate their knowledge to their families, creating a ripple effect of understanding and adoption.

Gerardo Moran’s inspiring journey serves as a testament to the transformative power of education and the positive impact that Bitcoin can have on individuals and communities.

As El Salvador continues its efforts to embrace digital currencies, Moran’s dedication to sharing his newfound knowledge is playing a vital role in shaping a more informed and empowered society.

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Presidential Candidate Robert F. Kennedy Jr. Admits Owning Up to $250,000 in Bitcoin

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Presidential candidate Robert F. Kennedy Jr. of the United States has admitted to owning a substantial amount of Bitcoin (BTC), contrary to his previous denial of being an investor in the leading cryptocurrency.

According to records obtained by CNBC, Kennedy Jr. held between $100,001 and $250,000 worth of Bitcoin by the end of June.

The investment was made following his speech at the Bitcoin 2023 conference in May, during which he announced that his campaign would be the first in the United States to accept Bitcoin donations.

READ MORE: Digital Currency Group Dismisses Gemini Lawsuit as “Publicity Stunt” by Winklevoss Twins

Interestingly, during the conference, Kennedy Jr. explicitly denied investing in Bitcoin, stating, “I am not an investor, and I am not here to give investment advice.”

The financial disclosure filed on June 30 did not specify the exact timing of the cryptocurrency purchase but revealed that the investment had yielded a return of less than $201 thus far.

Although the filing did not identify the purchaser, Kennedy Jr.’s campaign acknowledged that it was him.

Kennedy Jr., who is challenging President Joe Biden, has been actively targeting the crypto community as part of his campaign.

In a tweet on May 3, he expressed his belief that cryptocurrencies, particularly Bitcoin, are a significant source of innovation.

He also criticized the U.S. government for impeding the industry and potentially driving innovation away.

Notably, Kennedy Jr. has gained support from prominent figures within the crypto industry, including Jack Dorsey, the founder of Twitter and CEO of The Block.

Dorsey took to Twitter to express his confidence in Kennedy Jr.’s strategy to defeat his opponents in the upcoming race.

As the son of former Attorney General and Senator Robert F. Kennedy, as well as the nephew of the 35th President of the U.S., John F. Kennedy, Kennedy Jr.’s candidacy has attracted attention and backing from influential figures.

His support comes at a critical juncture for the American crypto industry, which is currently grappling with regulatory uncertainties as the Securities and Exchange Commission tightens its scrutiny of crypto businesses in the absence of a comprehensive regulatory framework for digital assets in the United States.

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South Korean Regulator Takes Action After ‘Coin Gate’ Scandal

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The aftermath of the “Coin Gate” scandal has prompted the top financial regulator in South Korea to implement measures requiring its employees to disclose their cryptocurrency holdings.

Lawmakers in the country have faced allegations of insider trading, with one member of parliament accused of selling tokens before the introduction of new crypto regulations.

It was later revealed that the MP was serving on a crypto-related parliamentary subcommittee at the time.

As a result of the scandal, calls for transparency have emerged among MPs, regulators, and public officials, leading to the recent development of the Financial Services Commission (FSC) expanding the requirement to its own staff.

READ MORE: Former BitMEX CEO Says Bitcoin Will Reach $760,000 as Currency of Artificial Intelligence

The FSC, responsible for regulating South Korea’s crypto industry and conducting checks on domestic crypto exchanges, updated its Code of Conduct for employees.

The revised code prohibits staff involved with “virtual assets” from trading cryptocurrencies using undisclosed information obtained while performing their duties.

Additionally, employees who own tokens are now obligated to report this information to the FSC.

The restriction on crypto trading applies to public officials currently engaged in virtual asset-related duties, as well as those who performed such duties within the previous six months.

To comply with the new regulations, employees will be required to submit a form called the “Report on the Possession of Virtual Assets.”

The form mandates that staff disclose the type of virtual assets held, the date of acquisition, and the quantity of tokens owned.

While the FSC still requires legislative changes to enforce the new code, it aims to expedite the process and complete it in the second half of this year.

South Korea and Japan are often seen as frontrunners in crypto regulation, suggesting that other countries may follow their lead.

Some nations in different regions have already enacted legislation mandating crypto declarations for certain public officials.

Ukraine, for example, implemented laws that require sitting MPs to disclose all assets, including cryptocurrency holdings.

The disclosure of such holdings in the past has led to public outcry due to the large amounts of tokens possessed by Ukrainian lawmakers, raising questions about the origin of these significant crypto reserves.

In conclusion, the “Coin Gate” scandal has prompted the South Korean financial regulator to extend the requirement of declaring crypto holdings to its employees.

The updated code of conduct prohibits staff from trading cryptocurrencies using undisclosed information obtained during their duties, and employees with crypto holdings must report them to the FSC.

The FSC plans to seek legislative changes to enforce the new code and hopes to complete the process later this year.

Other countries may consider implementing similar measures, following the lead of South Korea and Japan.

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SEC Responds to Coinbase’s Claims of Lacking Jurisdiction in Crypto Exchange Prosecution

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The United States Securities and Exchange Commission (SEC) has responded to Coinbase’s claims that it lacks jurisdiction to prosecute the crypto exchange.

In a letter addressed to a district judge on July 7, the SEC stated that Coinbase was well aware of the possibility that federal securities laws could apply to its operations.

The regulator highlighted that Coinbase had openly informed its shareholders about the potential classification of assets traded on its platform as securities.

The SEC’s response emphasized that Coinbase, being a “multi-billion-dollar entity advised by sophisticated legal counsel,” was deliberately disregarding decades of established law, particularly the Howey test.

READ MORE: Former BitMEX CEO Says Bitcoin Will Reach $760,000 as Currency of Artificial Intelligence

This behavior, according to the SEC, indicated Coinbase’s attempt to create its own standard for determining what constitutes an investment contract.

The SEC’s letter was in direct response to a previous filing made by Coinbase on June 28.

In that filing, Coinbase informed the court of its intention to submit a motion for judgment, which is typically used when a party believes there are no significant factual disputes in a case, as explained by Cornell University.

Coinbase had referred to statements made by SEC Chair Gary Gensler during his appearance before Congress, where he supposedly claimed that crypto exchanges were not under the purview of a market regulator and that only Congress had the authority to regulate them.

Coinbase also highlighted that the SEC had filed charges against the company two years after its public listing, despite having been provided with exhaustive descriptions of its activities.

Roland Chase, a corporate and securities lawyer, shed light on the SEC’s authority.

He explained that the SEC’s role, as authorized by Congress, is to review a company’s going public documents and provide comments to enhance disclosure to potential investors.

Chase emphasized that the SEC does not have the power to deny a company’s public listing simply because it disagrees with the investment prospects.

The SEC had previously charged Coinbase on June 6 for allegedly offering unregistered securities since 2019. A pre-motion conference for the case is scheduled for July 13 at 2:00 pm UTC.

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Investors Chase Second Coming of Popular Coins, Such As Pepe 2.0 and Floki 2.0

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In recent times, a trend has emerged in certain corners of the cryptocurrency market, where investors are flocking towards microcaps that claim to be the next big thing after popular meme coins.

Tokens such as pepe 2.0, floki 2.0, and bobo 2.0 have gained significant attention within the past week by presenting themselves as new iterations of the well-known pepe, floki, and bobo tokens.

Consequently, trading volumes for these tokens have surged into the millions, attracting substantial liquidity and transforming modest investments into substantial fortunes almost overnight.

However, the lifespan of these microcaps is typically short-lived. Last year, we witnessed a similar phenomenon when hopeful investors placed their bets on articles inspired by the English language, as well as grimacecoin, which was sparked by a tweet from McDonald’s.

READ MORE: Top Executives Depart Binance Amidst Legal Scrutiny and Compliance Concerns

The ability for anyone to create tokens on Ethereum or other blockchains through smart contracts for minimal costs, coupled with the presence of decentralized exchanges, allows for the rapid issuance, liquidity provision, and trading of these tokens shortly after their creation.

For instance, pepe 2.0, currently the most popular among the clones, recorded nearly $7 million in trading volume within a 24-hour period.

Its market capitalization reached a peak of $45 million last week but has since declined to $18 million.

Remarkably, a wallet that invested a mere $900 in pepe 2.0 witnessed its value soar to over $176,000 in less than 24 hours.

This profitable position was cashed out through the sale of 2 ether (ETH) clips as the token’s value continued to rise.

Bubblemaps, an on-chain analysis tool, has highlighted the centralized behavior of some early buyers who likely cornered a significant portion of the pepe 2.0 supply during its launch.

These individuals have been gradually selling their tokens, contributing to the substantial price surge due to heightened buying demand and limited sales from early buyers.

Meanwhile, the original pepecoin (PEPE) remains attractive to investors, as evidenced by substantial purchases that have propelled an impressive 80% rally over the past two weeks.

Notably, Lookonchain data reveals that two wallets acquired millions of frog-themed tokens on Monday, signaling a niche segment of the market speculating on these tokens surpassing dogecoin (DOGE) and shiba inu (SHIB), which are widely regarded as the most popular meme coins, in the foreseeable future.

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