SEC - Page 288

Paysafe Payment Solutions, the European banking partner of Binance, announced on Thursday that it will no longer offer its embedded wallet solution to the U.S. cryptocurrency exchange across the European Economic Area (EEA) starting from September 25.

In an email to Reuters, Paysafe stated that they are working with Binance to implement a fair and orderly process to terminate this service over the next few months.

Binance confirmed the news and stated that it would be changing its banking provider for euro deposits and withdrawals through the Single Euro Payments Area (SEPA), but no specific details about the new partner were disclosed.

A spokesperson from Binance mentioned that more information will be provided at a later time.

Typically, Binance accesses SEPA through payment intermediaries.

However, the spokesperson assured that during this transition, all methods of depositing and withdrawing other fiat currencies, as well as buying and selling cryptocurrencies on Binance.com, will remain unaffected.

Paysafe’s decision to end its wallet solution comes at a time when Binance is under scrutiny from regulators who are aiming to crack down on money laundering.

In recent developments, Binance and its U.S. affiliate reached an agreement with the Securities and Exchange Commission (SEC) to ensure that customer assets in the United States remain within the country until the resolution of a comprehensive lawsuit filed by the regulatory agency.

Last year, Binance partnered with Paysafe to enable its users to deposit sterling via Faster Payments, a network responsible for overseeing payments and bank account transfers in Britain.

In summary, Paysafe Payment Solutions will no longer offer its embedded wallet solution to Binance across the European Economic Area.

Binance will seek a new banking provider for euro transactions through SEPA.

However, the change will not impact other deposit and withdrawal methods or the trading of cryptocurrencies on Binance.com.

Paysafe’s decision coincides with increased regulatory scrutiny faced by Binance, and the company has also recently resolved an agreement with the SEC regarding customer assets in the United States.

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Polygon Labs Reveals Architecture for Polygon 2.0, Introducing Interconnected Multichain Network on Ethereum

Polygon Labs has unveiled its proposed architecture for the upcoming “Polygon 2.0” project.

The team has outlined four distinct layers that will interconnect to establish a web of networks, all ultimately linked through Ethereum.

If approved by validators, Polygon 2.0 will introduce an aggregator that facilitates near-instant and atomic bridge transactions.

Initially announced on June 12, Polygon 2.0 aims to establish the value layer of the internet; however, specific details were scarce at that time.

Co-founder Mihailo Bjelic later suggested on June 20 that upgrading the current Polygon network to incorporate zero-knowledge proofs would be crucial for aligning the existing network with the vision of 2.0.

In a blog post on June 30, Polygon Labs provided a more comprehensive overview of Polygon 2.0. The project’s foundation will consist of the staking layer that already exists.

This layer comprises a validator manager contract on Ethereum, along with a chain manager contract for each individual Polygon chain. New Polygon chains will be able to form in the future by launching new chain manager contracts on Ethereum.

The staking layer will connect to an interoperability layer, which will incorporate bridges linking each Polygon chain to one another through Ethereum.

The security of this layer will be ensured through the use of zero-knowledge proofs for validating all transfers.

Additionally, the interoperability layer will incorporate an aggregator that combines individual zero-knowledge proofs from each bridge into a single proof before transmitting it to Ethereum. This mechanism will enable seamless bridge transactions and significantly reduce Ethereum gas consumption required for proof verification.

The third layer of Polygon 2.0 will be the existing execution layer, which relies on the Erigon Ethereum client.

The fourth layer, known as the proving layer, will standardize the zero-knowledge proof process across all Polygon chains.

The team has promised to provide further details about each layer in the future.

Polygon is not the only network aiming to expand into a multichain ecosystem.

zkSync Era has announced plans to create a network of “Hyperchains” and aims to launch them on a testnet by year-end.

Optimism, in collaboration with Coinbase’s Base network, is also working on creating a “Superchain” and has recently implemented the “Bedrock” upgrade to facilitate this transformation.

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According to a report released on June 30 by Web3 security firm Beosin, the total value of cryptocurrencies lost in scams, hacks, and rug pulls reached $656 million in the first half of 2023.

This amount includes $471.43 million lost in 108 protocol attacks, $108 million in various phishing scams, and $75.87 million in 110 rug pulls.

Notably, this represents a significant decrease compared to the losses in the second half of 2022, where $1.91 billion and $1.69 billion were lost in hacks, respectively.

The report also highlighted that around $215 million of stolen assets were recovered, accounting for 45.5% of all stolen assets.

In contrast, only 8% of stolen assets were recovered in 2022. Additionally, $113 million of stolen assets were transferred to mixers, with $45.38 million going into Tornado Cash and $68.14 million into other mixers.

The majority of the crypto lost in the first half of 2023 were coins and tokens minted on the Ethereum blockchain, accounting for 75.6% of the total. Binance Smart Chain tokens, on the other hand, represented just 2.6% of the stolen assets.

Smart contract vulnerabilities were identified as the main cause of loss, responsible for 56% of the stolen crypto, while 21.4% had no clear identifiable reasons for the loss.

However, these figures indicate a significant decrease compared to the second half of 2021, when a record $2.1 billion was lost in crypto due to hacks, phishing scams, and rug pulls.

In the second quarter of 2023, over $208 million was exploited and hacked from decentralized finance (DeFi) protocols, with only $4.5 million of funds recovered, resulting in total losses of over $204 million.

The DeFi ecosystem, despite its substantial daily trading volume, remains a niche industry accessible to a limited population within the crypto industry.

To gain a comprehensive understanding of DeFi, Cointelegraph Research has released a new report titled “Investing in DeFi: A Comprehensive Guide.”

Maple Finance, a web3 lending platform, has recently introduced a direct lending program to fill the void left by bankrupt major lending protocols like BlockFi.

This program aims to replace services previously provided by Celsius, BlockFi, and other now-defunct lenders.

Following the Bedrock upgrade, transactions on the Optimism network surged by 67%. The upgrade led to an increase in daily transactions from less than 300,000 to over 550,000.

Despite market drawdown, leading wallet service providers have added support for the BRC-20 token standard issued on the Bitcoin network, including BitKeep and OKX.

The overall DeFi market experienced a bullish surge after three bearish weeks, with most of the top 100 DeFi tokens trading in the green. However, the total value locked in DeFi protocols remained below $50 billion.

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According to Yat Siu, the CEO of Animoca Brands, the crypto industry is experiencing contrasting conditions in different parts of the world.

While Web3 startups are thriving in the Middle East and Asia, crypto entrepreneurs in North America are facing challenges due to tough macroeconomic and regulatory circumstances.

Siu shared his insights with Cointelegraph during the Collision conference in Toronto, emphasizing that the situation is not as dire as it may seem.

Siu acknowledged that Web3 startups can still secure funding from venture firms, but he pointed out that current conditions, such as higher interest rates and a decline in crypto asset prices, have raised the entry barrier for newcomers.

Despite these challenges, Siu remains optimistic, stating that the number of builders and smart contracts in the space continues to increase.

He also highlighted that Animoca Brands had made nearly 60 investments in the past few months, underscoring their bullish stance.

However, the overall strength of the crypto industry has diminished compared to its past performance.

According to the PitchBook Crypto Report for Q1 2023, crypto companies raised $2.6 billion across 353 investment rounds, representing a decrease of 11% and 12.2% in deal values and total deal value, respectively.

Siu’s comments follow significant developments in the crypto space, including the collapse of FTX in November 2022.

In the United States, the Securities and Exchange Commission has launched a crackdown on crypto firms, aiming to regulate the industry through enforcement actions.

In contrast, Hong Kong and the United Kingdom have implemented licensing systems and approved legislation to regulate crypto businesses and mitigate associated risks.

Siu noted that the regulatory aspect has had a significant impact on Web3 companies, generating fear and uncertainty among market participants.

He highlighted the contrasting environments between North America and regions like the Middle East and Asia, where the crypto industry remains vibrant.

Siu believes that these different approaches reflect each country’s agenda for emerging technology.

According to Siu, the diverse regulatory landscapes are not coincidental but rather deliberate decisions based on national interests.

He believes that by relinquishing control of the crypto industry to other parts of the world, the United States is enabling the flourishing of ecosystems that were previously constrained.

While Siu acknowledges the importance of the U.S. in the crypto space, he believes that political reasons have compelled the country to cede its role to other global players.

Overall, Siu’s observations shed light on the varying conditions faced by crypto entrepreneurs worldwide, highlighting the challenges in North America and the opportunities in the Middle East and Asia.

Despite regulatory hurdles, Siu remains optimistic about the continued growth of the crypto industry and the emergence of thriving ecosystems around the world.

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The CEO of LayerZero, Bryan Pellegrino, expressed optimism about the future of the crypto industry, stating that the present situation is not as dire as it was in 2015.

Speaking at the Collision conference in Toronto, Pellegrino emphasized the significant growth of LayerZero’s cross-chain interoperability protocol.

He revealed that the protocol’s usage has surged from 10,000 messages per day six months ago to an impressive 650,000 messages per day currently.

While decentralized finance (DeFi) has historically accounted for around 70% of LayerZero’s overall volume, Pellegrino highlighted the increasing interest from the gaming and non-fungible token (NFT) sectors, which now constitute 80% of their inbound activity.

Pellegrino predicted that the next 36 months will witness substantial changes in LayerZero and the industry as a whole.

He noted the multitude of groundbreaking projects being developed and the involvement of important external entities.

Pellegrino emphasized the growing market share of LayerZero alongside its rising usage. He referred to LayerZero as the critical infrastructure that will underpin virtually everything reliant on blockchain technology.

In the emerging multichain environment, Pellegrino argued that even staunch advocates of specific blockchain ecosystems, such as Anatoly Yakovenko of Solana and Vitalik Buterin of Ethereum, recognize the need for interoperability and the coexistence of multiple chains.

In April, LayerZero completed a Series B funding round, securing $120 million in investments. Notable participants included Sequoia Capital, Andreessen Horowitz, BOND, Circle Ventures, Christie’s, OpenSea Ventures, and Samsung Next.

This funding round boosted LayerZero’s valuation to $3 billion. The company has ambitious plans for expansion, including venturing into the Asia-Pacific region.

Furthermore, Pellegrino highlighted a recent integration of LayerZero’s messaging protocol by zkLinkorg to facilitate omnichain trade settlement.

This integration demonstrates the composability of LayerZero, enabling omnichain applications (Oapps) to enhance their own application security by utilizing the protocol.

Overall, Pellegrino’s positive outlook, supported by the impressive growth of LayerZero’s protocol and the increasing involvement of key industry players, signals a promising future for the crypto industry.

As LayerZero continues to evolve and expand its market share, it solidifies its position as a crucial component of the blockchain ecosystem in an era of growing multichain adoption.

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Blockchain technology is making a significant impact in Africa by addressing real-world challenges such as hyperinflation and corruption, according to industry executives interviewed by Cointelegraph.

Chris Maurice, the CEO of Yellow Card, Africa’s largest cryptocurrency exchange, highlighted how crypto is enabling Africans to escape the failures of traditional financial systems and conduct transactions more freely.

He emphasized that cryptocurrencies are solving genuine problems related to banking, currencies, and inflation on the continent, unlike the perception of crypto as a speculative casino in the West.

The adoption of crypto in Africa has been remarkable, with the region boasting more crypto users than North America or Europe.

Six of the top 20 countries worldwide for cryptocurrency usage are in Africa. This demonstrates that Africa is emerging as a crypto continent, as stated by Maurice.

Kevin Imani, the CEO of Sankore 2.0, affiliated with the Near Protocol, sees blockchain-based payments as a human rights technology, providing financial inclusion and control over money to individuals in underdeveloped nations who face hyperinflation and corruption.

The inflation rates in Sub-Saharan Africa reached an estimated 14.5% in 2022, the highest annual change since the 2008 recession, according to Statistica.

Imani highlighted the ability of cryptocurrencies to counter weak national currencies and corruption, making peer-to-peer crypto transactions an attractive choice for many Africans.

From Lagos to Nairobi, Accra to Cape Town, Africa is becoming a hub for tech innovation, as various tech startups and initiatives contribute to the continent’s digital transformation.

Okoye Kevin Chibuoyim, the CEO of GIDA, a crypto education platform based in Nigeria, sees crypto as Africa’s next opportunity for empowerment and participation in something great.

He believes that blockchain’s transparent nature builds trust among Africans who are accustomed to unaccountable and opaque governments.

The potential of cryptocurrencies in Africa has also attracted international partnerships, such as the collaboration between Block, a U.S. digital payments firm led by Jack Dorsey, and Yellow Card to facilitate cross-border payments in Africa.

The rapid growth of cryptocurrency users in Africa in 2021, with a 2,500% increase, led to an 11-fold explosion in venture capital funding in 2022.

Maurice specifically pointed out the enthusiastic adoption of cryptocurrency by Nigerians, stating that 47% of Nigerians own or transact with crypto on a daily basis.

However, there are still countries in Africa where cryptocurrency is reportedly illegal, such as Cameroon, Central African Republic, Gabon, Guyana, Lesotho, Libya, and Zimbabwe, according to Investopedia.

Overall, blockchain technology and cryptocurrencies are addressing real-world challenges in Africa and providing financial inclusion and control over money to individuals who face hyperinflation and corruption.

The adoption of crypto in Africa is growing rapidly, with the continent becoming a major player in the crypto space and a hub for tech innovation.

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