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Fintech CEO: Regulators Finally See Urgency in Commonsense Rulebook for Crypto

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Last month, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency drafted a Joint Statement on Crypto-Asset Policy Sprint Initiative and Next Steps. In its introduction, the paper acknowledged that the “crypto-asset sector presents potential opportunities… for banking organizations, customers, and the overall financial system.” It continued by noting the importance of agencies providing clarity and guidance, particularly to “promote safety and soundness, consumer protection, and compliance with applicable laws and regulations, including anti-money laundering and illicit finance statutes and rules.”

“It’s been a long time coming, but our regulators seem to finally see the urgency in developing a rulebook for the digital assets space. It is interesting, if not particularly remarkable, that they highlight the need is for banking organizations. But the industry, as a whole, has needed standardization for quite some time, including in the area of AML. Even if it took pressure from the banking industry, it will be a welcome change for the industry. It is definitely a win,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“We’ve gotten to a point, given that central banks are now racing to release their own digital currencies, that regulators understand they need a more nuanced approach than a simple ban. They can’t ban it. Blockchain is too powerful. They can’t wish it away. Digital assets are here for the long-haul. Now, they’re faced with the task of protecting the general welfare while ensuring that industry can function and take advantage of everything the new innovations offer,” said Gardner. “One thing that most regulators can agree on, even if they’re not saying it, is that they don’t want to cede the power of the blockchain to other countries, particularly their adversaries. This is about more than Bitcoin. This is about the future of the financial system. Countries which attempt to ban, rather than embrace, new technologies will be left behind.”

The statement notes that “[t]hroughout 2022, the agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organizations are legally permissible, and expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations related to: [c]rypto-asset safekeeping and traditional custody services [and a]ncillary custody services.

“Functionally, this could be a sign that we’re moving beyond looking primarily at AML and to the industry more generally. Consider the specific mention of custody, a part of the industry which has raised its share of questions. For example, one of the leading providers in the industry has been named in a lawsuit which alleges that they are responsible for the loss of $70 million in digital assets. $70 million in losses is far from buttoned up. I think that regulators are going to have to recognize that custodians have an even greater role in the trading of digital assets as compared to dealing in more traditional assets,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Headlines like that, $70 million in losses, whether due to incompetence or malfeasance, it doesn’t inspire confidence. And this is an industry which deserves the full confidence of mainstream investors. The technology is worthwhile, and, indeed, it is slated to change the way the world interacts with money. In order to get to that point, we must insist on service providers which prioritize safety and security,” opined Gardner.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Bitcoin Holds Above $67,000 Amid Trump Win Bets

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Bitcoin is holding above $67,000 after yesterday’s correction after breaching the $69,000 level and rising to its highest level since late July.

Yesterday’s correction comes after an upward trend that investors are pushing to continue in light of a set of supporting factors, whether from the massive inflows into cryptoinvestment products or from more bets on Donald Trump winning the White House again.

Cryptocurrency investment products recorded massive inflows last week, reaching $2.2 billion, which represents the highest level since last July, with Bitcoin accounting for most of these flows that went to US spot ETFs, according to CoinShares. Net flows to these funds amounted to more than $294 million yesterday alone, according to SoSo Value.

This comes with two weeks left until the US presidential election. While the Polymarket betting market indicates that Republican candidate Trump is likely to win with a 63% probability, the betting site has sparked controversy over who is behind the significant increase in Trump bets. In contrast to Polymarket’s results, the poll average indicates that Democratic candidate Kamala Harris is ahead by 48.2% compared to 46.4% for Trump, according to FiveThirtyEight.

While this disparity and fluctuation in polls and predictions is likely to keep cryptocurrencies vulnerable to sharp volatility in the coming days, as the identity of the winner of the White House presidency might shape the future of the industry.

However, the futures market is presenting a mixed story and is questioning the sustainability of Bitcoin’s bullish trend. Bitcoin futures open interest regained its record level of more than $40 billion yesterday, according to CoinGlass, despite the price correction. This correction only resulted in a very small liquidation of the long positions of about $28 million yesterday.

Of that $40 billion, $12.5 billion was on the Chicago Mercantile Exchange (CME), which also represents a new record high for Bitcoin futures on the US’s largest futures exchange. This reflects the increasing involvement of institutional investors in driving price action.

What is concerning is the decline in the long/short ratio from 1.04 on Sunday to 0.94 today, which may reflect increasing bearish bets in futures market, which in turn may indicate a possible reversal of the bullish trend and a renewal of yesterday’s losses soon.

Written by Samer Hasn, Senior Market Analyst at XS

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Binance Expands Crypto Access in West and Central Africa With Mobile Money Integration

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Binance, the world’s leading blockchain and cryptocurrency infrastructure provider continues to drive innovation and expand access to cryptocurrency in Africa, now allowing users in Benin, Cameroon, Ivory Coast, Democratic Republic of Congo (DRC), Togo and Senegal to purchase crypto directly through mobile money payments enabled through local partnerships. 

This new functionality further strengthens Binance’s commitment to providing simple and secure access to cryptocurrency for users across the continent, reinforcing the platform’s vision of financial inclusion.

Samantha Fuller, Spokeswoman for Binance says “We remain focused on advancing financial inclusion and delivering user-friendly solutions for crypto adoption across Africa. This expansion into West and Central Africa is a significant step in our mission to increase crypto adoption, providing millions of people with more direct access to the global digital economy”.

This new service currently supports only BUY transactions, further simplifying the entry point for new crypto users in these regions, while providing them with a reliable and secure platform to acquire digital assets.

How to buy crypto:

  1. Log in to your Binance app and select [Add Funds] from the homepage.
  2. Choose your local fiat currency you wish to use by selecting the currency in the top-right column.
  3. Follow the instructions to complete your crypto purchase.

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Bitcoin

Bitcoin Fails to Hold $63,000 Amid Weak Risk Appetite, Growing Selling Pressure

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Bitcoin remains below $63,000 after failing to hold above it over the past two days while Ethereum is also struggling to reclaim $2,440.

The crypto market has been trading sideways since the beginning of this week.

The cautious moves in the crypto market come amid uncertainty over a range of economic and political factors in the US and geopolitics in the Middle East.

Add to that the potential selling pressure that the US government may exert with its permission to sell around 70,000 Bitcoin.

The Supreme Court has allowed the US Marshals Service to proceed with the sale of 69,370 Bitcoins seized from the Silk Road online store, which would be the largest sale of its kind in history. While the nature and pace of this selling is not yet known, it will not necessarily put downward pressure on prices if it is done in over-the-counter (OTC)
transactions, according to Beincrypto.

As for the economic side, in light of the surprise labor market numbers that were much better than expected and Jerome Powell’s hawkish speech, hopes for a rapid continuation of interest rate cuts this year have diminished. While the relatively high rates remain for a longer period and the continued rise in Treasury bond yields will weaken appetite for risky assets in general, including cryptocurrencies.

Whereas, after the hypothesis of a half-percentage point cut at the next November meeting was the most likely, it has now become excluded in the Fed Fund futures market, and the probability of a quarter-percentage point cut has become 87%, according to the CME FedWatch Tool. The remaining 13% is for the possibility of keeping current rates unchanged.

The state of caution may also prevail in the markets in the coming weeks, as we anticipate the presidential elections in the United States, which will begin next month. While the outcome of these elections could cause a structural shift in the crypto industry.

Far away, in the Middle East, markets are still anticipating the nature of the expected escalation in the region, especially regarding the nature of the Israeli response to the unprecedented attack from Iran and the nature of the counter-response. While one of the most prominent scenarios is targeting energy facilities, which would bring inflation back to the forefront, which in turn may require central banks to keep interest rates high.

 

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