Cryptocurrency-friendly trading neobank Revolut is ceasing its crypto services in the United States due to regulatory uncertainty.
In a statement to Cointelegraph on Aug. 4, the company revealed its decision to suspend all crypto services for U.S. users.
Collaborating with its U.S. banking partner, Revolut aims to halt access to cryptocurrencies through its platform starting from Sept. 2, 2023.
Subsequently, on Oct. 3, the firm will completely shut down crypto services on Revolut for U.S. customers, prohibiting them from buying, selling, or holding any cryptocurrencies.
The company’s spokesperson clarified that this move would impact only “1%” of its global crypto customers and asserted that Revolut would continue operating its non-crypto business in the United States.
While acknowledging the disappointment this decision may cause, the representative assured that crypto customers in the U.S. would receive all relevant information about the suspension through email communication from Revolut.
The dedicated support team would also be available through the in-app chat to address any concerns and questions.
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In late June, Revolut US had already announced the delisting of certain cryptocurrencies like Cardano (ADA), Polygon (MATIC), and Solana (SOL), with plans to proceed with delistings in September.
At that time, the platform supported around 30 cryptocurrencies in the United States.
The United States’ regulatory environment for cryptocurrencies has posed challenges not just for Revolut but also for other major crypto services.
Crypto.com, a global crypto exchange, suspended services to institutional clients in the U.S. in mid-June due to similar regulatory concerns.
Revolut’s decision to wrap up crypto services in the U.S. showcases the impact of regulatory uncertainty on the crypto industry.
As the company focuses on its non-crypto business in the U.S., it highlights the importance of clear and comprehensive regulations in the cryptocurrency space to foster innovation and ensure consumer protection.
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Onchain funding platform Solv Protocol has revealed that it’s secured $6M in fresh funding. The raise was completed with the support of a host of leading industry VCs. UOB Venture Management, Mirana Ventures, Emirates Consortium, Matrix Partners, Apollo Capital, HashCIB, Geek Cartel, Bing Ventures, and Bytetrade Labs all participated.
The raise comes at a propitious time for Solv, which recently launched V3 of its protocol. The latest version includes a host of improvements designed to make it easier for investors to access financial products on-chain. Solv boasts of connecting on-chain entities with over 15,000 individual and institutional investors through its vast liquidity network. Previous investors in the company have included Binance Labs and BlockchainCapital.
Solv Earn, its flagship product, enables users to browse available funds and to assess them on various criteria including APR, term, size, and status. This makes it easy for users to pick an investment fund that suits their goals, timeframe, and risk profile.
New Money for New Narratives
The crypto industry, DeFi in particular, is driven by constantly shifting narratives and evolving use cases. This presents an abundance of investment opportunities for those smart enough to identify emerging trends and position themselves accordingly. The last 12 months have witnessed the growth of liquid staking derivatives (LSD) which has given rise to its own DeFi vertical: LSDfi. This is one of many sectors that is now accessible through Solv.
As Solv Protocol CEO Ryan Chow explains, “New DeFi narratives, such as RWA and LSD, are driving speculation around the next iteration of DeFi summer. Solv V3 will focus on the RWA track, and is committed to introducing billions of dollars worth of income-generating assets for the industry through our fund platform, in preparation for the next phase of DeFi mass adoption.”
Bringing real world assets on-chain has the potential to multiply the TVL in DeFi protocols, moving it from billions of dollars to ultimately trillions. In the process, it stands to disrupt industries such as forex by introducing more consistent pricing and facilitating global access.
Laser Digital, a subsidiary of Japanese banking giant Nomura Securities, participated in the $6M round. Explaining his firm’s rationale behind writing a check, Laser’s Olivier Dang said: “Solv has built a trustless DeFi platform with a trusted institutional network, integrating brokers, underwriters, market makers, and custodians to create the first fund infrastructure on the blockchain, becoming an important infrastructure that bridges DeFi, CeFi, and TradFi liquidity.”
Solv Shines at the Right Time
Since launching V3 of its protocol in Q2 of this year, Solv has reported more than 25,000 users and over $100 million in trading volume. Its latest funding round has been completed at a time when TradFi and DeFi are closer than ever, with institutions now intent on gaining exposure to crypto in various forms. For some, this entails investing in web3 infrastructure, or migrating their existing processes to an on-chain environment, with the potential improvements this brings in terms of security, reducing counterparty risk, increasing transparency, and delivering faster settlement.
Other TradFi players are intent on gaining direct exposure to crypto assets, as evidenced by the spate of Bitcoin ETF filings that’s seen Wall Street bigshots saying nice things about crypto again. Given Thursday’s ruling that XRP doesn’t constitute a security, prompting speculation that the same classification may apply to other assets maligned by the SEC such as SOL, things are looking up for the industry.
With Solv sporting an experienced team including financial experts from Goldman Sachs and J.P. Morgan, the on-chain investment protocol is well placed to ride the wave of goodwill that should continue into 2024 and beyond.
Oman’s journey towards implementing its own virtual asset regulations is gaining momentum, as the Capital Market Authority (CMA) seeks public input on its proposed framework governing digital assets, including cryptocurrencies.
In a consultation paper released on July 27, the CMA revealed that it is diligently crafting a comprehensive regime for the virtual asset sector.
The objective is to create an alternative financing and investment platform for issuers and investors while mitigating the risks associated with virtual assets.
The consultation paper comprises 26 questions, designed to gather insights and opinions from industry stakeholders.
Key areas covered in the proposed framework include regulatory and licensing requirements for virtual asset service providers (VASPs), corporate governance, risk management, and virtual asset issuance.
The framework is planned to cover various types of virtual assets, such as utility tokens, security tokens, fiat-backed and asset-backed stablecoins, and other digital currencies that meet the Financial Action Task Force’s definition of virtual assets.
However, the issuance of privacy coins may face a potential ban, subject to feedback from the public.
To ensure accountability and compliance, VASPs might be required to establish a local presence in Oman through a legally established entity and physical office.
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Additionally, minimum capital requirements might be imposed on them.
The proposed framework could also mandate virtual asset firms to hold only a small percentage of their assets in hot wallets, undergo regular audits of safeguarded assets, and demonstrate proof of reserves.
The CMA has set a deadline for public feedback until Aug. 17, with the possibility of key opinions being made public on their website. Following this consultation phase, the CMA will proceed to finalize the regulatory framework.
The groundwork for this initiative began earlier, with discussions on regulating the virtual asset industry in Oman commencing in November 2020.
A task force, comprising officials from the CMA and the Central Bank of Oman, was formed to study the feasibility of permitting or banning virtual asset activities.
In December 2022, consultants were brought in to aid in the establishment of the new regulatory regime.
The progress made by Oman in drafting and seeking public input on its virtual asset regulations reflects the country’s commitment to embracing financial innovation while ensuring proper safeguards against potential risks.
As the consultation phase concludes and the regulatory framework takes shape, Oman moves closer to providing a secure and regulated environment for virtual asset transactions within its borders.
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Curve Finance, the lending protocol, has made significant changes following recent exploits and attacks.
As per an announcement on August 2nd, the protocol’s governing body revealed that it has terminated governance token rewards for certain liquidity pools affected by the July 30 Curve exploit and the July 6 Multichain exploit.
The decision to end rewards was executed by the Curve emergency decentralized autonomous organization (Curve E-DAO), which comprises selected members of the Curve DAO governing body.
The affected pools include alETH+ETH, msETH-ETH, pETH-ETH, crvCRVETH, Arbitrum Tricrypto, and multibtc3CRV. However, the governing body stated that this decision could be overridden in the future through a full vote of the Curve DAO.
The announcement was made by Gabriel Shapiro, a member of Curve E-DAO. The July 6 Multichain exploit saw the withdrawal of over $100 million worth of cryptocurrency from several bridges connected to the Multichain protocol.
The Multichain team deemed these withdrawals as “abnormal” and urged users to stop using their platform.
In response to this incident, the Curve team advised its users to withdraw assets such as multiBTC to safeguard their multibtc3CRV liquidity pool, which was at risk due to the Multichain exploit.
On July 14, the Multichain team attributed the withdrawals to an unknown individual who gained unauthorized access to their CEO’s cloud computing account.
This indicated that the funds had been exploited and might not be recoverable.
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Subsequently, on July 30, Curve Finance itself became the target of a reentrancy attack, leading to the loss of over $47 million in cryptocurrency.
The attack impacted the alETH, msETH, and pETH pools, which were created using the Vyper protocol containing the vulnerability. Pools created through methods other than Vyper were unaffected by the exploit.
Despite these incidents, the affected pools were still generating Curve DAO (CRV) governance token rewards, allowing users to continue depositing their tokens and earning CRV.
However, in the recent announcement, Gabriel Shapiro emphasized that the emergency DAO has now halted these rewards to prevent further incentivization of participation in compromised pools.
Unfortunately, the crypto space has seen a slew of hacks and scams in July and August. Payment provider Alphapo allegedly lost over $60 million on July 23 due to an attacker gaining access to its hot wallet private keys.
While the company has not confirmed the attack, experts have noted abnormal transfers suggesting a possible hack.
Furthermore, on July 25, zkSync fell victim to an exploit worth $3.4 million due to a read-only reentrancy bug.
Given the ongoing security challenges, the crypto community remains vigilant to protect users and assets from potential threats.
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KPMG, one of the Big Four professional services firms, recently published a report on Bitcoin’s impact on environmental, social, and governance (ESG) issues.
The report highlighted that Bitcoin offers various benefits when analyzed through an ESG framework.
In terms of the environment, the report emphasized that emissions were a more significant environmental concern compared to energy usage.
KPMG contextualized Bitcoin’s emissions in comparison to other sources, such as tobacco and tourism, and found that it ranked as the second smallest contributor, trailing only behind “Video (US).”
Consequently, the report concluded that Bitcoin’s emissions might be lower than commonly discussed.
To improve Bitcoin’s carbon footprint, the report suggested employing renewable energy sources and energy produced from methane for mining.
Regarding social issues, the report pointed out that Bitcoin’s contribution to money laundering was relatively small when compared to the total amount of money laundering globally.
Money laundering constitutes 2-5% of global gross domestic product, according to the United Nations Office on Drugs and Crime statistics cited in the report, while it accounts for merely 0.24% of Bitcoin transactions, as indicated by Elliptic.
Moreover, the report highlighted that laundered money was received in Bitcoin far less frequently than in other cryptocurrencies like Ether, stablecoins, or altcoins.
It suggested that Anti-Money Laundering (AML) and Know Your Customer (KYC) measures could be applied during the off-ramping process of converting Bitcoin back to fiat currency, even though no AML/KYC requirements currently exist for transacting with Bitcoin.
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The report also showcased positive use cases for Bitcoin, such as its utilization in fundraising for Ukraine and supporting electrification efforts in rural Africa.
Addressing governance, the report praised Bitcoin’s robust governance system.
It explained that Bitcoin’s rules could not be altered without forking, resulting in a decentralized system that cannot be abused or manipulated by individuals with ulterior motives or those in positions of power.
While the report utilized secondary sources and familiar use cases, it acknowledged that Bitcoin remains widely misunderstood. KPMG, being well-versed in crypto-related matters, offers various crypto-related advisory services.
In summary, KPMG’s report emphasized that Bitcoin presents several advantages from an ESG perspective.
Despite certain environmental concerns, it highlighted the potential for lower emissions, recommended sustainable energy solutions, and acknowledged its relatively minor contribution to money laundering.
Additionally, the report praised Bitcoin’s strong governance structure, ensuring its integrity and decentralization.
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Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), has taken legal action against eToro, a popular trading platform, over its contract for difference (CFD) product.
ASIC alleges that the platform used inadequate screening tests when offering leveraged derivative contracts to retail investors.
CFDs are a type of leveraged derivative that allows buyers to speculate on the price movements of various underlying assets, including foreign exchange rates, stock market indices, single equities, commodities, and cryptocurrencies.
eToro offers a wide range of CFDs, but ASIC claims that these products are “high-risk and volatile.”
The regulator’s main concern is that eToro’s screening test for the CFD product was insufficient and failed to exclude unsuitable customers.
Clients could easily manipulate their answers to meet the platform’s requirements, making the test ineffective in determining suitable users.
As a result, many customers who were not adequately informed about the risks of CFD trading ended up trading these products.
The specific risks associated with eToro’s crypto CFDs are highlighted, with up to two times leverage on certain assets making them particularly high-risk. ASIC believes that the platform’s target market was too broad, encompassing users who lacked an understanding of CFD trading risks.
ASIC alleges that between October 5, 2021, and June 14, 2023, nearly 20,000 of eToro’s clients suffered losses while trading CFDs.
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The regulator asserts that these losses were partly due to the platform’s insufficient screening and broad target market.
In response to the legal action, an eToro spokesperson informed Cointelegraph that the company had revised its target market determination for CFDs.
However, they did not specify when the revision took place.
While the proceedings are ongoing, eToro asserts that its service remains uninterrupted. The company is considering ASIC’s allegations and will respond accordingly.
ASIC’s deputy chair, Sarah Court, criticized CFD issuers like eToro for attempting to adjust their target markets to fit their existing client bases.
She expressed disappointment in the platform’s alleged lack of compliance with regulatory guidelines.
This legal action against eToro comes in the wake of similar challenges in the United States, where the platform had to halt trading in four cryptocurrencies after the Securities and Exchange Commission labeled them as securities in separate lawsuits.
In conclusion, ASIC’s lawsuit against eToro centers around the platform’s alleged failure to adequately assess its CFD products’ suitability for retail investors and the wide target market that included customers with little understanding of the risks involved.
The case serves as a reminder of the importance of robust compliance with financial regulations to protect investors and ensure fair practices in the financial markets.
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MicroStrategy co-founder, Michael Saylor, is confident that his company will continue to be an attractive option for investors seeking exposure to Bitcoin, irrespective of future exchange-traded fund (ETF) approvals.
As the price of Bitcoin ticks down to $29,223, Saylor reaffirms the firm’s commitment to adding more Bitcoin to its balance sheet, even planning a $750 million share sale to potentially fund further acquisitions.
During an interview with Bloomberg on August 2, Saylor discussed how a spot Bitcoin ETF approval could impact MicroStrategy’s offering.
He expressed assurance that the company would still offer unique advantages that spot Bitcoin ETFs cannot match.
This sentiment echoes his previous remarks during the August 1 earnings call, where he emphasized that MicroStrategy’s Bitcoin operating strategy would set it apart from spot ETFs when they eventually launch.
Since MicroStrategy began its purchasing strategy in August 2020, Bitcoin’s price has surged by 145%. Saylor attributes this success to the company’s use of leveraged investments, generating yields that are shared with shareholders.
Unlike ETFs, MicroStrategy, being an operating company, can access leverage, giving it a distinct advantage in the ecosystem.
Saylor believes that spot Bitcoin ETFs will attract large hedge funds and sovereigns, allowing them to invest billions of dollars in the space.
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However, he sees MicroStrategy as a unique instrument, akin to a sports car, while spot ETFs would be more like supertankers.
He envisions spot ETFs serving a different set of customers and contributing to the overall growth of the asset class.
Currently, MicroStrategy boasts more than 470 institutional shareholders and holds a market capitalization of $5.3 billion, according to Fintel.
As analysts raise the chances of spot Bitcoin ETF approval in the United States to 65%, Saylor confirms the company’s goal is to accumulate as much Bitcoin as possible.
Their existing holdings of 152,800 BTC are expected to increase in the coming quarters.
To support their Bitcoin accumulation strategy, MicroStrategy plans to sell up to $750 million in class A common stock, as revealed in a recent SEC filing.
Saylor clarifies that the primary use of these proceeds will be to acquire more Bitcoin, further solidifying the company’s belief in the long-term potential of the digital asset.
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A recent study conducted by the Network Contagion Research Institute (NCRI) has shed new light on the role of crypto-spouting Twitter bots in artificially inflating the prices of altcoins.
The study, published on August 2, utilized a sample of various FTX-listed cryptocurrencies and analyzed over 3 million tweets posted between January 1, 2019, and January 27, 2023, involving 18 altcoins.
The findings of the study revealed that Twitter bot activity played a crucial role in amplifying the value of these cryptocurrencies.
Notably, altcoins like The Sandbox (SAND), Gala (GALA), Gods Unchained (GODS), and LooksRare (LOOKS) showed signs of price influence due to tweet bot activity.
Almost half of the coins examined displayed an impact on prices as a result of this inauthentic activity.
Moreover, the study indicated that the volume of inauthentic tweets increased significantly after FTX posted about the token on social media.
This raised concerns about the potential involvement of FTX or Alameda Research in coordinating the bot activity to artificially inflate market values.
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The researchers also investigated the impact of Twitter bot activity and Elon Musk’s crypto-related tweets on two memecoins, Pepe (PEPE) and PSYOP.
The study revealed a surge in newly created bot accounts just before the launch of PEPE, all of which subsequently tweeted about one of the two coins.
Additionally, both Pepe Coin and PSYOP were bolstered by two of Musk’s tweets that seemingly endorsed each token.
For instance, Musk’s Pepe meme tweet caused the token’s price to surge by over 50% within 24 hours.
The study raises questions about the potential ramifications of coordinated inauthentic activity on social media, not only in the cryptocurrency market but also in stocks and other securities.
The researchers cited the social media frenzy in 2022 surrounding so-called “meme stocks” like GameStop and AMC as an example of how such manipulative tactics could affect traditional financial assets.
In conclusion, the NCRI study has highlighted the significant impact of crypto-spouting Twitter bots on the prices of altcoins, suggesting that inauthentic networks deliberately deployed these bots to influence market values.
As the cryptocurrency market continues to evolve, it becomes increasingly important for regulators and platforms to be vigilant against such manipulative practices to maintain market integrity and protect investors.
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Hong Kong is set to expand its cryptocurrency trading options to individual investors as at least one exchange has secured regulatory approval to offer its services to retail users.
HashKey, a local digital asset firm, has achieved all the necessary licensing to extend its operations from catering to professional investors to including retail users.
The regulatory green light came from the upgrading of two significant licenses issued by the Hong Kong Securities and Futures Commission (SFC).
The first license, known as Type 1, permits HashKey to operate a virtual asset trading platform under the jurisdiction of Hong Kong’s securities laws.
The second license, Type 7, officially authorizes the firm to provide automated trading services to both institutional and retail users.
Notably, HashKey has become one of the pioneering licensed exchanges to offer retail cryptocurrency trading in Hong Kong.
Moreover, the firm has introduced its crypto over-the-counter (OTC) trading service, HashKey Brokerage, which complies with local securities laws, following the implementation of a new crypto regulatory framework by the SFC.
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Livio Weng, the Chief Operating Officer of HashKey Group, expressed confidence in the establishment of licensed trading platforms and the increased clarity of regulatory frameworks in Hong Kong.
He believes that this will result in enhanced transparency and significantly boost investor confidence.
HashKey is not alone in this development, as OSL, another local crypto firm, has also received an uplift to its existing license from the SFC.
This enables OSL to offer Bitcoin (BTC) and Ether (ETH) trading to retail investors immediately. Dave Chapman, OSL’s co-founder, emphasized that the licensing uplift would allow OSL to facilitate digital asset access for retail investors.
This news follows an announcement from a Hang Seng Bank executive who asserted that crypto companies can only open bank accounts after obtaining an approval-in-principle license from the SFC.
As of early August, OSL and HashKey were reportedly the only exchanges to have received such approval.
The expansion of cryptocurrency trading exposure to individual investors marks a significant step in Hong Kong’s evolving crypto landscape, offering increased opportunities for retail participation in the market.
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Between March and May, BlackBerry’s cybersecurity division thwarted over 1.5 million cyberattacks, unveiling malware families that attempt to take control of computers for mining or theft of cryptocurrencies.
Finance, healthcare, and government sectors were found to be the most affected, as per the BlackBerry report.
The report highlighted a prevalent malware named RedLine, a perennial financial threat involved in the collection of cryptocurrency and banking data.
Another significant threat was the Clop ransomware, a version of the CryptoMix ransomware family, which particularly aimed at banking and financial organizations, causing the data breach of Hatch Bank, a fintech platform.
The most widespread malware families in BlackBerry’s data include SmokeLoader, RaccoonStealer, and Vidar. SmokeLoader, dating back to 2011, has mainly been utilized by Russian-based threat actors to deploy crypto miners and other malware.
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RaccoonStealer has been implicated in stealing cryptocurrency wallet data and is purportedly being traded on the dark web. Vidar is another malware extensively used to harvest cryptocurrency wallets.
Linux stood out as the most targeted operating system. BlackBerry suggests that organizations using Linux should frequently update their security patches, as hackers often hijack Linux-based computers to mine cryptocurrencies.
Atomic macOS, a new breed of infostealer, primarily targets macOS users, collecting credentials from keychains, browsers, and crypto wallets.
In response to the growing cybersecurity threat, OpenAI, the developer of ChatGPT and Dall-e, announced a $1 million grant program to promote the development of AI-driven cybersecurity technologies.
The company stated in its official announcement, “Our aim is to foster the advancement of AI-driven cybersecurity capabilities for defenders through grants and additional assistance.”
This initiative underscores the urgent need for advanced cybersecurity measures in the face of an evolving threat landscape.
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