Jun 26, 2020 at 16:05 UTC
Blockchain Bites: Crypto.com Refunds, Sovrin’s Layoffs and AML Bitcoin’s AML Issues
New York officials have instituted a three-strike rule for crypto firms applying for the BitLicense, the Sovrin Foundation is now fun by volunteers and Aussies can now buy BTC at their post office. Here’s the story:
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New York’s financial watchdog has warned crypto companies their BitLicense applications could be thrown out after “three strikes” of failing to address deficiencies highlighted by the regulator. Meanwhile, the European Union is preparing a new cryptocurrency regime that could include stricter requirements for “global stablecoin” projects such as Libra. Finally, the DoJ and SEC have filed charges against the founder of “AML Bitcoin,” a crypto which claimed to include anti-money laundering protections. AML Bitcoin’s founders are known for (erroneously) claiming the National Football League rejected an AML Bitcoin advertisement for being too controversial.
The Sovrin Foundation, a U.S.-based umbrella organization that oversees the development of blockchain-based digital identity standards, or self-sovereign identity (SSI), laid off nine full-time and six part-time employees in March, officially becoming a volunteer-run operation. Sovrin works with the likes of IBM, Cisco and T-Mobile, and was unable to complete a fundraising campaign that started before the COVID-19 crisis hit. Elsewhere, CEO Kris Marszalek said Crypto.com will refund 100% of customer funds as the Financial Conduct Authority (FCA) suspended the activities of Wirecard Card Solutions, a subsidiary of the Wirecard Group, which filed for insolvency on Thursday after admitting last week to be missing $2.1 billion. Funds will be refunded within 48 hours.
Grants & Partnerships
Nearly half a dozen companies have announced new grants for open-source bitcoin contributors and projects since the coronavirus crisis began, from exchanges such as Kraken and OKCoin to the Human Rights Foundation. Grants are generally around $150,000 each. Wasabi Wallet-maker zkSNACKs Ltd is the latest to join the cohort by donating 1 bitcoin to the HRF’s Bitcoin Development Fund. Meanwhile, in a collaborative effort between Australia Post and Bitcoin.com.au, customers will now be able to use the Post Billpay feature to purchase bitcoin and other cryptocurrencies, using cash or cards, at over 3,500 post offices across the country.
Consumer advocacy group Public Citizen is trying to stop Canadian firm DMG Blockchain from plugging its bitcoin mining rigs into the American power grid. DMG Blockchain has been aggressively expanding its cryptocurrency mining capacity in recent months by tripling its fleet of ASIC and applying for permission to export U.S. electricity, writing that its 15 megawatt mining operation will grow to 60 megawatts in the next year.
Telegram will pay $18.5 million and notify the SEC if it plans to issue any sort of digital currency in the next three years in a proposed settlement, effectively ending a six-month court fight. The messaging platform will be responsible for a $1.22 billion disgorgement offset by $1.19 billion paid as “termination amounts.”
Bitcoin Narrative Deflated
New Federal Reserve data shows a 78.6% chance of entering a U.S. deflation – the highest since 2008 – putting a pin in the narrative that bitcoin’s price will soar as an inflationary hedge. Some bitcoin optimists suggest the cryptocurrency would appreciate in a deflationary environment – if its adoption as a medium of exchange rises, as discussed in April. This is because deflation boosts the purchasing power of the monetary unit. For this reason, the U.S. dollar tends to appreciate during deflationary bouts.
Trading U.S. dollars for bitcoin can have fairly different order sizes and spreads depending on the exchange, and no two are alike. Average order sizes over the past week were quite varied, CryptoCompare found. Orders on Bitstamp averaged $3,424.11, the highest of major dollar to bitcoin (USD/BTC) pair exchanges. ItBit was second to Bitstamp at $2,874.17, with Kraken at $2787.68. Gemini’s average was in the middle of the pack at $1,438.31, followed by Coinbase at $1,113.15. Bitfinex was lowest, with an average order totaling $342.09. The average order of the six exchanges was $1,996.58.
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