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Cryptocurrency

Cryptocurrency: An Evolving Market Still in its Infancy and Where it Stands Today | Vandeventer Black LLP

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Bitcoin was first introduced in a 2009 whitepaper, Bitcoin: A Peer-to-Peer Electronic Cash System.[1] Since then, cryptocurrencies[2], also known as virtual or digital currencies, have exploded, with thousands of different types floating around, reaching a market capitalization of $ 2K in early 2021[3], and the number of blockchain wallet users rose to more than 70 million in May 2021.[4]

However, the blockchain concept that enables cryptocurrencies remains a mystery to most. For years, niche corporations have benefited from this often mysterious and confusing technology; But it wasn’t until 2014 that well-known companies like Overstock began to make a foray into the cryptocurrency arena by accepting BTC (currently the market-leading cryptocurrency) as a means of payment for online purchases.[5] The finance industry later followed suit with JPMorgan, which launched a cryptocurrency exposure basket[6], and Goldman Sachs endorses cryptocurrency as a new asset class.[7] While not all companies have billions to invest in this new asset class, savvy industry leaders seem to be watching these market makers’ moves as a sign of the future.

In 2020, many investors flocked to cryptocurrencies as an inflation hedge[8]as the recent stimulus packages passed by Congress have ushered in dramatic inflation that has not yet been fully realized.[9] Many companies are already feeling the impact, especially those in the construction industry, where prices for lumber and other materials have risen significantly over the past year.[10]

In January 2021, Tesla hit the headlines by announcing it would buy $ 1.5 billion worth of Bitcoin and accept BTC as payment for its cars. However, this was short-lived. Despite widespread advertising for cryptocurrency, Elon Musk announced in May that Tesla would no longer accept BTC payments, stating that it would resume doing so once “the transition to more sustainable energy” is promoted, noting that Tesla will Look for cryptocurrency that uses significantly less energy per transaction than BTC[11], which is limited by its software to around 7 transactions per second, regardless of the computing power.[12] Shortly after these announcements, the price of BTC dropped significantly, bringing the entire cryptocurrency market with it.

To the uninitiated, cryptocurrency is a history of encrypted transactions, known as a blockchain, that is recorded on a distributed ledger and verified by a network of computers commonly known as “miners” that validate the legitimacy of transactions. In most cases, a distributed ledger is a public database that shows how much cryptocurrency is stored in each wallet, when incremental amounts were received, and where they came from.[13] While wallet addresses are usually public, wallet ownership is more difficult to determine because cryptocurrencies are decentralized, which gives the system anonymity.[14] The decentralization of the cryptocurrency means that there is no single governing body, rather the users and the software themselves dictate the flow of transactions.

Cryptocurrency functions are built into software at the beginning of a cryptocurrency’s life, and when changes are required, new cryptocurrencies are typically created through “forks”.[15]instead of allowing changes to the software. Cryptocurrencies usually have a limited “token” supply or a set inflation rate for token generation. A token is a unit of property and can be secured by physical assets or nothing. Often times, a single token is denoted in hundred millionths of a unit, often referred to as “satoshis” or “sats”, inspired by the pseudonym of the 2009 white paper author, Satoshi Nakamoto. Blockchain technology has many use cases. Some examples are smart contracts, which facilitate the automatic execution of multi-party transactions, while others include security features such as increased mining complexity and transaction confirmation requirements (which could one day replace paper stocks) that are tradable in real time and have the potential to act as a cash substitute, that facilitates transactions efficient enough to buy a lemonade at a point of sale.

Given the fixed or predictable shipments of cryptocurrencies, some argue that the widespread adoption of cryptocurrency allows companies to peg future spending to a non-inflationary or fixed-inflationary asset, which, along with many other benefits, can bring stability to strategic forecasting of future spending ; However, others argue that the deflationary trends of most cryptocurrencies created by their fixed supplies will prevent their use as a global currency.[16] However, as Tesla’s actions show, we still have a lot to learn before widespread adoption of virtual currency takes place. Our next article on cryptocurrency will examine the state of the legal framework surrounding the cryptocurrency industry.[17]

[1] Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System, bitcoin.org, https://bitcoin.org/bitcoin.pdf (last visited May 26, 2021).

[2] While Bitcoin (BTC) is the most famous cryptocurrency, there are many others like Ethereum (ETH), Monero (XMR), Solana (SOL), Bitcoin SV (BSV), and Ravencoin (RVN), all of which have different uses.

[3] CoinMarketCap, https://coinmarketcap.com/ (last visited on May 25, 2021).

[4] Number of blockchain wallet users worldwide from November 2011 to May 18, 2021, Statista, https://www.statista.com/statistics/647374/worldwide-blockchain-wallet-users/ (last visited May 26, 2021).

[5] Rob Wile, Someone Has Already Purchased A $ 2,700 USD 13 Piece Decking Set On Overstock.com Using Bitcoin, Business Insider, (Jan 9, 2014), https://www.businessinsider.com/overstockcom-is- now-officially-accepting -Bitcoin-2014-1.

[6] Insight Notes relating to the JP Morgan Basket of Companies with Exposure to Cryptocurrency (March 2021), due May 5, 2022, US Securities and Exchange Commission, https://www.sec.gov/Archives/edgar/data/0001665650 / 000121390021014247 / s131027_424b2.htm (last visited on May 26, 2021).

[7] Crypto: A New Asset Class ?, Goldman Sachs – Global Macro Research (May 21, 2021, 6:00 p.m.) https://www.goldmansachs.com/insights/pages/crypto-a-new-asset-class-f/ Report.pdf.

[8] Erik Schatzker, Paul Tudor Jones buys Bitcoin as a hedge against inflation, Bloomberg, (May 7, 2020, 3:46 pm), https://www.bloomberg.com/news/articles/2020-05-07/paul- tudor-jones-buys-bitcoin-says-he-remembers-gold-in-the-70s.

[9] William Watts, Hot Inflation Readings Drive Data Surprises “Almost Off The Chart”, MarketWatch (May 25, 2021, 3:20 pm), https://www.marketwatch.com/story/inflation-is-running-so-hot- that -data-surprises-are-almost-off-the-chart-11621966487.

[10] Framing Lumber Prices, National Association of Home Builders, https://www.nahb.org/news-and-economics/housing-economics/national-statistics/framing-lumber-prices (last visited May 25, 2021).

[11] @elonmusk, Twitter, (May 12, 2021, 6:06 pm) https://twitter.com/elonmusk/status/1392602041025843203?s=20; see also New York Senate Bill S6486A https://www.nysenate.gov/legislation/bills/2021/s6486 (Act Establishing a Moratorium on the Operation of Cryptocurrency Mining Centers Pending a Full Review of the General Environmental Impact Statement).

[12] See Bitcoin Scalability Problem, Wikipedia, https://en.wikipedia.org/wiki/Bitcoin_scalability_problem (last visited May 26, 2021).

[13] E.g. Bitcoin SV Explorer, Blockchair, https://blockchair.com/bitcoin-sv (last visited on May 26, 2021).

[14] Some cryptocurrencies, such as Monero (XMR), differ in functions that increase the anonymity of transactions. One way to do this is to eliminate the public visibility element of the distributed ledger. See Monero, https://www.getmonero.org/ (last visited May 26, 2021). This makes XMR a cheap cryptocurrency for hackers looking for a ransom. See Tanzeel Akhtar, Acer reportedly affected by crypto ransomware demand amounting to $ 50 million, Coindesk (March 22, 2021, 2:27 p.m.) https://www.coindesk.com/acer-reportedly- hit-with-50m-crypto-ransomware-demand.

[15] What is a Bitcoin Fork ?, Robinhood, (December 29, 2020) https://learn.robinhood.com/articles/106Xi5TFQK4pAFB1jSaijz/what-is-a-bitcoin-fork/.

[16] Frances Coppola, Is a Global Digital Reserve Currency on the Horizon ?, American Express, https://www.americanexpress.com/us/foreign-exchange/articles/is-global-digital-reserve-currency-on-horizon/ ( last visited on May 26th, 2021).

[17] Link to full disclaimer: The information on the Vandeventer Black website is for informational purposes only; The information is general and may not reflect the current legal status. The content is provided “as is”. The information on this website should not be viewed as professional legal or financial advice and should not be processed without consulting a qualified lawyer or other professional in the relevant jurisdiction.

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Cryptocurrency

Cryptocurrency providers at high risk of financial crime – FMA

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The Financial Market Authority has found that cryptocurrency service providers are at high risk of being targeted by money launderers and terrorist financiers.

Photo: 123RF

The industry received the rating in the FMA’s most recent sector risk assessment (SRA), in which various types of financial service providers were described with regard to illegal financial behavior.

The risk profile for the majority of the nine sectors supervised by the FMA has not changed since 2017.

However, Virtual Asset Service Providers (VASPs) that enable cryptocurrency, token or crypto-asset transactions were added and received the highest risk rating.

“Since our last assessment, the risks of virtual assets, especially cryptocurrencies, have come to the fore,” said FMA supervisory director James Greig.

“Virtual assets allow for a higher level of anonymity and have a global reach, making cross-border payments easy.”

A sector risk rating was determined on the basis of its complexity, liquidity of the transactions and the anonymity granted to clients.

This included the size of the company, the type of products offered, their value, how products can be bought and sold, customer types and country risks.

Virtual Asset Service Providers, or VASPs, that enable cryptocurrency transactions were added to the list and received the highest risk rating.

Virtual Asset Service Providers, or VASPs, that enable cryptocurrency transactions were added to the list and received the highest risk rating.
Photo: Delivered

The FMA expects all reporting offices to familiarize themselves with the risks and weak points in connection with VASPs and virtual assets and, if necessary, to include them in the risk assessment.

The main regulatory agency of cryptocurrency service providers is the Department of Internal Affairs, with the FMA overseeing a very small number of VASPs.

The 2021 sector risk assessment also confirmed the high risks associated with derivative issuers.

This follows on from the recent measures taken by the FMA against a handful of companies that failed to meet their obligations to combat money laundering.

“Derivatives issuers are inherently high risk because their products are highly liquid, accounts are easy to open, and they can have many overseas clients in higher risk countries,” Greig said.

Greig also said the rapid growth of retail investment platforms meant they could be targeted by money launderers as their compliance with their anti-money laundering commitments may not have kept pace.

This became clear at the beginning of the year when the FMA informed the retail trading platform Sharesies of failing to verify the identity of almost 8,000 customers and of insufficient customer due diligence.

“These platforms are highly liquid, so large volumes of trade can take place without suspicion, and customers can quickly create online accounts without personal verification, which favors anonymity,” said Greig.

“While these platforms often have sophisticated systems for monitoring accounts, they need to collect sufficient information about the nature and purpose of the investment.”

The FMA expected all entities subject to the FMA reporting obligation to review the new SRA and update their own risk assessments accordingly and to take into account all new risks and findings, said Greig.

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Cryptocurrency ‘mainstream’ in Australia | Bega District News

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News, latest news

Cryptocurrency has become mainstream in Australia, and according to a survey by a leading exchange, more and more women are punted. More than a quarter (28.8 percent) say they own or have owned cryptocurrencies, according to the Independent Reserve Cryptocurrency Index (IRCI) 2021 published on Tuesday. The proportion of women who deal with cryptocurrencies has doubled this year from 10.3 percent to 20 percent. Despite the amazing volatility, most of those surveyed (89 percent) made or even broke money this year. Adrian Przelozny, CEO of the Independent Reserve, said the sector urgently needs regulation to provide more security for both investors and cryptocurrency companies. “Our IRCI results this year support this as 28.6 percent of Australians who currently do not own cryptocurrency tell us that if there was better consumer protection, they would invest,” he said. Now in its third year, the annual survey of over 2,000 people tracks awareness, acceptance, trust and trust in the cryptocurrency. 26.6 percent said they would buy crypto if regulation of the industry improved. “While Australian regulators and government agencies may have taken a while to delve into cryptocurrencies and other digital assets, the Australians themselves have moved faster and we really see crypto as an asset class from the edge of the mainstream over the past year,” said Przelozny. According to the survey, Bitcoin remains the most famous and popular cryptocurrency ahead of Ethereum. The age group of 24 to 34 year olds trusted crypto the most. 27.6 percent said they shopped to get rich while people over 65 years of age said they did shopping to get rich Stay skeptical. The latest data from the Australian Tax Service shows that more than 800,000 people are making transactions in cryptocurrency. The Independent Reserve cryptocurrency exchange was developed and established in Australia in 2013 and is now licensed in Singapore. Australian Associated Press

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December 7, 2021 – 10:16 a.m.

Cryptocurrency has become mainstream in Australia, and according to a survey by a leading exchange, more and more women are punted.

More than a quarter (28.8 percent) say they own or have owned cryptocurrencies, according to the Independent Reserve Cryptocurrency Index (IRCI) 2021 published on Tuesday.

The proportion of women who deal with cryptocurrencies has doubled this year from 10.3 percent to 20 percent.

Despite the amazing volatility, most of those surveyed (89 percent) made or even broke money this year.

Adrian Przelozny, CEO of the Independent Reserve, said the sector urgently needs regulation to provide more security for both investors and cryptocurrency companies.

“Our IRCI results this year support this as 28.6 percent of Australians who currently do not own cryptocurrency tell us that if there was better consumer protection, they would invest,” he said.

Now in its third year, the annual survey of over 2,000 people tracks awareness, acceptance, trust and trust in the cryptocurrency.

26.6 percent said they would buy crypto if regulation of the industry improved.

“While Australian regulators and government agencies may have taken a while to delve into cryptocurrencies and other digital assets, the Australians themselves have moved faster and we really see crypto as an asset class from the edge of the mainstream over the past year,” said Przelozny.

According to the survey, Bitcoin remains the best known and most popular cryptocurrency ahead of Ethereum.

The age group of 24 to 34 year olds trusted crypto the most. 27.6 percent said they shopped to get rich, while people over 65 remain skeptical.

The latest data from the Australian Tax Service shows that more than 800,000 people are making transactions in cryptocurrency.

The Independent Reserve cryptocurrency exchange was developed and established in Australia in 2013 and is now licensed in Singapore.

Australian Associated Press

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bitcoin volatility, $196M Bitmart hack, new OpenSea CFO

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The entire cryptocurrency market suffered a slump over the weekend.

Bitcoin, the largest cryptocurrency by market value, plunged to a low of nearly $ 43,000 on Saturday night. The price has since bounced back and is currently trading at around $ 49,149, according to Coin Metrics.

Ether, the second largest cryptocurrency, also fell to around $ 3,500 on Saturday. Ether is currently trading at around $ 4,179.

Aside from the volatility this weekend, here are seven things that have happened in crypto over the past week.

1. Metaverse Land Sales Exceed $ 100 Million In One Week

Virtual real estate has become more and more a coveted commodity.

Sales of NFTs, or non-fungible tokens representing Metaverse land, exceeded $ 100 million in the last week alone, cryptanalysis firm DappRadar reported on Tuesday.

The Sandbox, an Ethereum-based metaverse and game that allows users to purchase land and in-game assets as NFTs, had a trading volume of more than $ 86 million. Decentraland, a virtual reality platform operated by Ethereum, had traded more than $ 15 million for land NFTs.

“With record sales and constantly rising NFT prices, virtual worlds are the new top product in the crypto space,” wrote DappRadar in a blog post.

2. Jack Dorsey’s Square changes company name to block

On Wednesday, Jack Dorsey’s payment company Square announced that it was renaming itself to Block effective December 10th.

Block “has many related meanings for the company – building blocks, neighborhood blocks and their local businesses, communities gathering at block parties full of music, a blockchain, a chunk of code and obstacles to overcome,” Block said in a statement.

Square Crypto, a separate part of the company dedicated to advancing Bitcoin, will change its name to Spiral.

“We built the Square brand for our seller business where it belongs,” said Dorsey, co-founder and CEO, in a statement. “Block is a new name, but our purpose of economic empowerment remains the same. No matter how we grow or change, we will continue to develop tools to improve access to the economy. “

The name change came after Dorsey announced his resignation as CEO of Twitter. Chief Technology Officer Parag Agrawal will take on the role, the company announced on Monday.

3. Facebook withdraws from the crypto advertising ban

4. BadgerDAO DeFi project hacked, approximately $ 120 million loss

On Wednesday evening, BadgerDAO, a decentralized autonomous organization focused on bridging Bitcoin with decentralized financial applications, was reportedly hacked and lost about $ 120 million, according to blockchain security and data analytics firm Peckshield.

An investigation to find out what happened is still ongoing.

Meanwhile, BadgerDAO has frozen all smart contracts, which are digital agreements written in code and stored on the blockchain. Again, according to the BadgerDAO website, users will not be able to request deposits, rewards, or withdraw funds.

This is happening amid many new DeFi-related hacks, which is why financial experts caution against doing thorough research before investing in projects. They recommend investing only what you can afford to lose.

5. Hackers take $ 196 million from Bitmart crypto exchange

The Bitmart cryptocurrency exchange had been hacked, the company confirmed in a statement on Saturday evening.

Bitmart called it “a large-scale security breach” and estimated that hackers withdrew about $ 150 million, but Peckshield estimates the loss was closer to $ 200 million.

In the statement, Bitmart said all withdrawals have been temporarily suspended and a security clearance is ongoing.

As of Sunday, CNBC reached out to several Bitmart employees asking for more clarity about the hack and whether the targets would be reimbursed. CNBC hasn’t heard anything yet.

6. Charlie Munger Says He Wishes Cryptocurrencies “Never Made Up”

Billionaire investor Charlie Munger is still not a fan of cryptocurrency.

“I wish they had never been invented,” said Munger, according to The Australian Financial Review, at the Son conference in Sydney on Friday. “I admire the Chinese, I think they made the right decision to just ban them.”

This isn’t a new attitude for the 97-year-old vice chairman of Berkshire Hathaway. In May, during a question-and-answer session at Berkshire’s annual shareholders meeting, Munger said his aversion to Bitcoin had increased amid the Covid-19 pandemic.

7. OpenSea appoints former Lyft CFO. a

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