UAE Introduces New Law to Combat Crypto Crime, Allows Licensed Cryptocurrency Offering & Promotion

UAE Introduces New Law to Combat Crypto Crime, Allows Licensed Cryptocurrency Offering & Promotion

The United Arab Emirates (UAE) is introducing new rules to promote cryptocurrency development while curbing digital currency scams targeting investors in the country.

Under the new rules, crypto scammers will face prison time for up to 5 years and a penalty of up to AED 1 million (just over $272k), starting January 2, 2022.

Previously, the UAE laws banned promoting crypto but didn’t penalize it, but now, in a first for the country, the amendments have been introduced to punish those who promote or encourage a dealing in crypto that is not officially recognized in the UAE or post misleading ads or inaccurate data about any product.

The new law will also punish those raising money from the public without a license from competent authorities.

It was only last month that the new legislation was introduced by the UAE President as part of several legal reforms.

Much like the rest of the world, there has been a rise in crypto scams in the UAE, with the most recent and publicized one being the DubaiCoin scam which claimed to be launched as Dubai’s official cryptocurrency.

It was later discovered that the project was phishing data and money from investors. The Dubai Government then released an official statement in May dismissing claims of the coin being the official crypto of Dubai, but many had fallen prey to the fraud already.

Dispute resolution lawyer at ADG Legal Kostubh Devnani said,

“The positive news is that apart from the new laws, and UAE stepping up efforts to combat financial crime, courts in other (particularly common law) jurisdictions have been willing to grant remedies normally applicable to physical or tangible property to victims of crypto scams, such as freezing orders and orders for production of information.”

The UAE does not recognize crypto as a legal tender, but there are no direct bans on cryptocurrencies either.

In fact, those engaging in crypto-related activities such as offering, issuing, promoting, listing, and trading of cryptocurrencies are required under the new law to be licensed by the Securities and Commodities Authority (SCA).

The new Online Security Law that replaces the previous law ‘Concerning Anti-Cybercrimes’ is one of the first comprehensive legal frameworks in the region to address the risks associated with the illegal use of cryptocurrencies and enhance consumer protection.

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Author: AnTy

South Korean Exchange Suspends Withdrawals to External Wallets, Govt. Reaches Out to Apple & Google

One of the four regulated cryptocurrency exchanges in South Korea, Coinone, has announced that it will no longer allow withdrawals to non-verified external wallets starting Jan. 24, 2022.

If Coinone users want to withdraw their crypto assets to another digital wallet, they would have to register their wallet address with the exchange, “in accordance with the fulfillment of the customer verification system obligation,” it said.

These external wallets include both hot and cold wallets offered by third parties. Since wallets like Ledger and MetaMask do not require KYC (know-your-customer information), Coinone users won’t be able to withdraw their funds to these wallets. But custodial wallets offered by other exchanges are verifiable by Coinone.

“It is impossible to register a wallet address that cannot verify identity information.”

The exchange has made this move to ensure that Coinone customers are not using crypto for illegal activities. As such, its users are required to register their wallets by submitting information such as name, email address, and phone number to withdraw funds.

Further Restriction on P2E Games

The South Korean government has also begun to block the release of play-to-earn games (P2E), according to a local report.

The regulators have also requested tech giants like Apple and Google to block these apps on their App Store and Play Store respectively. They recently strengthened the monitoring of blockchain games.

The Game Management Committee (GMC) under the Ministry of Culture, Sports, and Tourism recently sent an official letter to game operators to block the domestic distribution of these games.

The distribution of P2E games in Korea is being prohibited by the Game Commission based on the ‘prohibition of prizes’ of the Game Industry Promotion Act. Under the Act, the winning prize is capped at 10,000 Korean Won ($8.43).

This year, we saw a rise in the popularity of P2E games, such as Axie Infinity, in emerging economies. Interestingly in South Korea, six of their ten best-performing stocks of the year either belong to the non-fungible tokens (NFTs) category or the metaverse.

Domestic gaming companies in the country have also released their P2E mobile games, but the government has asked them to be blocked by service providers.

Game companies have now started to counterattack as well. SkyPeople, the developer of ‘Five Stars for Clayton’ whose rating was canceled, won the injunction lawsuit against the administrative disposition received from the Game Board in June. As such, until the lawsuit settles, the game can be distributed.

In South Korea, the games are required to get an age rating from the GMC before its domestic distribution. In case they are being distributed through other app stores, like those of Google and Apple, they can rate themselves. GMC said in a statement,

“It is reasonable to keep P2E games from getting age ratings under the current law because cash rewards in games can be considered prizes.”

The Game Committee has decided to cancel more than 15 blockchain games this year. The GMC calls these P2E games “speculative money-making games.”

However, the gaming industry strongly opposes the government’s move and points to the global trend of growing P2E games. An official from the game industry said,

“If there is no legal basis for blockchain games, chaos will continue until the court’s ruling on the first related lawsuit, ‘Five Stars for Clayton’, is issued.”

Last month, Kim Gyu-Cheol, the chairman of the GMC, clarified that they aren’t banning blockchain games or the new technology such as NFT, rather just those using the P2E model.

“The game industry promotion act, unlike other laws promoting culture, is established to prevent speculation.”

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Author: AnTy

VCs Pour in $30 Billion, A 4x of 2018’s High, Into The Crypto Market in 2021

VCs Pour In $30 Billion, A 4x of 2018’s High, Into The Cryptocurrency Market In 2021

Venture capital funds have poured about $30 billion into the cryptocurrency market in 2021, which is more funding than all the previous years combined.

The previous high was around $8 billion in 2018, during the bear market following the 2017 bull market where Bitcoin hit a new all-time high of $20,000. The total crypto market cap jumped from just under $19 billion at the beginning of 2017 to $640 billion in 2017-end. When altcoins peaked by the end of the first week of Jan. 2018, the overall market cap had reached nearly $853 million only to finish the 2018 bear market at $125 billion.

In March 2020, the total crypto market cap went down to $143 billion and started 2021 just above $775 billion to reach the peak of $3 trillion in November, as per CoinGecko. As of writing, the crypto market cap is around $2.2 trillion.

Just as the crypto market has grown, so has the money flowing into the industry, and the 2021 high is almost 4x of the 2018 funding high, according to PitchBook data.

“Investors are funding anything and everything,” said PitchBook analyst Rob Le.

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The venture capital transactions of the US have also grown to about $7.2 billion in deals, 4x the previous record set in 2018.

Established firms like Digital Currency Group, the parent company of Grayscale Investments, Coinbase venture, and Polychain Capital are betting on the next big thing in crypto.

“We’ve moved beyond just digital gold. We’ve got financial services, art, gaming as a subcategory of NFTs, Web 3.0, decentralized social media, play-to-earn — all of that made investors think “we don’t have enough exposure,”’ said Spencer Bogart, general partner at San Francisco-based Blockchain Capital. The company has financed over 120 companies since its inception in 2013.

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Author: AnTy

It’s Different This Time: “Overwhelmingly Positive” and Bullish Crypto Hearing Before Congress

On Wednesday, top executives from six major cryptocurrency companies urged Congress to provide clearer rules for the growing crypto industry so that innovation can thrive in the US, warning that tough restrictions can push it overseas.

It was the first time the U.S. House of Representatives Financial Services Committee hearing had crypto industry representatives explain to them just what exactly is going on in the booming space.

“Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations,” warned Alesia Haas, Coinbase CFO.

Democratic Representative Maxine Waters, who chairs the panel, singled out Facebook Diem stablecoin plans as a major concern given the company’s massive global reach.

“Currently, cryptocurrency markets have no overarching centralized framework,” also commented Waters.

Congressman Warren Davidson called stablecoins “the lowest-hanging fruit” while Brian Brooks, current CEO of Bitfury and a former Comptroller of the Currency (OCC), had this to say:

“Is it consistent to take the position that only banks should be allowed to issue stablecoins but then fail to grant bank charters to the largest issuers of stablecoins?”

The hearing has the crypto community hopeful that congress would bring diligent and supportive regulations going forward, given the lack of outright bias towards crypto. Instead of going with antagonistic questions, they wanted to understand the industry.

“This hearing, though, has felt different. Almost every member of this committee has been between hesitant — but inquisitive/open to the idea that their concerns can be addressed — and outright enthusiastic about figuring out a way to make crypto a part of the U.S. landscape,” said Sam Trabucco, CEO of crypto quant trading firm Alameda Research.

Some lawmakers also praised the executives for leading the way on what could be a pivotal technology.

“I am tremendously impressed. I see a lot of ingenuity, a lot of entrepreneurial spirit,” said Representative Pete Sessions. “We need to be supportive of you.”

“​​Crypto is facilitating Web 3.0, which gives Americans ownership over their digital lives so Big Tech can’t continue to profit off of Internet users,” tweeted Congressman Tom Emmer, who is a member of the Congressional Blockchain Caucus.

Overall, the crypto industry found this hearing “overwhelmingly positive” and bullish, with congress members asking informed questions about the rapidly-evolving landscape.

“U.S. crypto regulation is fascinating and important, and after listening to this, I’m optimistic it’s in solid hands,” commented Trabucco.

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Author: AnTy

Crypto Market Tanks: BTC Correlation with S&P 500 Reaches 2021 High, USD Longs at Highest Level Since June 2019

On another wild day in the cryptocurrency markets, prices tanked to levels not seen since mid-October or September.

During this brutal sell-off, Bitcoin’s price fell to about $42,000 in the spot market, representing over a 39% pullback from the $69,000 all-time high set early last month. As of writing, Bitcoin is trading just above $47,300.

While Bitcoin only dropped to $42k in the spot market, it fell even lower on derivatives platforms. On Deribit, BTC crashed to just under $40k and on Huobi to about $28,800.

As we reported, historically, a red month has resulted in a red December, and now it’s to be seen if sentiments will recover by the end of the month or we’ll consolidate here.

Ether meanwhile went to $3,580 while perpetual contracts dropped to about $3,400. While this represents a 26.6% drop from $4,880 ATH, much lower than Bitcoin’s, from December 1st, BTC crashed just over 26% while ETH 22.5%.

ETH has now recovered to $3,900. This latest sell-off came amidst the calls for a flippening that would put Ether as the number one crypto asset. ETHBTC, meanwhile, is still above 0.080.

The total crypto market cap has now tanked to $2.33 trillion, down from $3 trillion early last month and currently at the early October level.

The likes of ICP, FIL, EOS, THETA, FTM, ONE, CRV, ZEC, LTC, and NEO got dumped the most in the last 24 hours by as much as 27%, as per CoinGecko.

In Tandem With Stocks

However, the crypto market didn’t tank alone; rather, it was in tandem with the global stock market. As such, the 100-day correlation coefficient of Bitcoin and the S&P 500 climbed to its highest reading of the year at 0.33.

On Friday, stocks initially rose only to slip as US employment growth slowed down considerably in November as 594,000 people entered the labor force, the most in 13 months. But the unemployment rate plummeted to a 21-month low of 4.2%.

This week, Federal Reserve Chairman Jerome Powell also told lawmakers that the US central bank should consider speeding up the tapering of bond purchases at its Dec. 14-15 policy meeting.

This was the worst December opening performance for US stocks in two decades.

The US dollar, meanwhile, is strong above 96 and in line with this USD net long positioning soared to $23.99 billion, its highest level since mid-June 2019. For Bitcoin, net short positions climbed to 1,691 contracts after falling to the smallest since mid-January at just 160 contracts last week.

Crypto Carnage

After early September, the crypto market had its biggest liquidation event as 417,654 traders liquidated for $2.58 billion in the last 24 hours, with Binance accounting for 28% and OKEx 26% of them. These numbers, however, are underreported because Binance and Bybit limit their liquidation data.

As a result, open interest has taken a big hit. OI on Bitcoin futures has fallen to $17 billion, early October level, down 41% from early November ATH. With this, CME has captured first place with $3.72 bln OI followed Binance at $3.56 bln, as per Skew.

As for Ether, the total OI has gone down to $9.81 bln, from $12.98 bln on Dec.1 and $14.66 bln on Nov. 10. Here, both FTX and Binance are leading at $2 billion.

Now that so much leverage has been wiped out from the market, the funding rate has normalized and gone negative on most crypto exchanges. The highest Bitcoin funding rate is currently on Huobi at 0.01%.

During this crypto carnage, ETH fees surged to nearly 1000 gwei, making it extremely costly for small users to use the Ethereum network. Additionally, the majority of the exchanges stopped working, meaning users couldn’t take advantage of the volatility.

But at the same time, El Salvador bought this dip, as announced by President Nayib Bukele but missed the bottom by a few minutes. Following in the footsteps of Bukele, Tron (TRX) founder Justin Sun also bought 150 BTC on this dip.

Amidst the onslaught of bears, the bullish factor is the market-value to realized-value metric (MVRV), which represents the ratio of free-float Bitcoin market cap to the realized value.

As of writing, MVRV has fallen to 1.941, which was at 2.98 in October and 4.02 in February.

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In its latest report this week, Messari’s Ryan Selkis noted that “If history were to repeat itself, what’s that mean in dollar terms? Hitting a MVRV of 3 again this year would take us to the $100,000-125,000 range. Not bad!”

“The king has no real rival,” he added.

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Author: AnTy

Meta (Facebook): Crypto Space Maturing and Stabilizing, Expands Eligibility to Run Cryptocurrency Ads

Meta (Facebook) Says Crypto Space Maturing and Stabilizing, Expands Eligibility to Run Cryptocurrency Ads

With this move, Facebook is changing its policy to be more equitable and transparent as the cryptocurrency landscape sees more government regulations.

Facebook announced this week that it is reversing its policy that prevented most cryptocurrency companies from running ads on its services.

The social media giant first started blocking ads promoting cryptocurrencies and initial coin offerings (ICO) in January 2018, only to roll back the ban next year. In May 2019, the company said advertisers could submit an application along with any licenses obtained.

Now, on Wednesday, Facebook, which has rebranded itself as Meta, said the company is expanding the number of regulatory licenses it accepts from 3 to 27.

“We’re doing this because the cryptocurrency landscape has continued to mature and stabilize in recent years and has seen more government regulations that are setting clearer rules for their industry,” the company said in a statement.

Facebook is making it easier to run ads about cryptocurrency on its platform by changing the policy to be more equitable and transparent and helping more advertisers grow their audiences and reach more potential customers.

“With more openness and transparency for what crypto companies can do, we will see more adoption for the cryptocurrency industry and the metaverse than ever before,” said Henry Love, a former employee on Facebook’s small business team, now managing partner of Fundamental Labs, which has invested half a billion dollars in the crypto industry since 2016. “This is a game changer for mass adoption.”

What is not allowed are those platforms, products, and software apps such as crypto exchanges and trading platforms that offer lending and borrowing services and crypto wallets that allow users to buy, sell, swap, or stake their tokens and hardware and software for cryptocurrency mining.

“Ads promoting other products, such as blockchain technology, cryptocurrency industry news, education, events, ancillary services, payment methods and merchandise, do not require prior written permission.”

As for activities allowed with permission include tax services for crypto companies, events, education, and news related to crypto, services, and products based on blockchain technology that is not crypto, such as NFTs and crypto wallets allowing users to store their tokens without features of buying, selling, swapping, or staking tokens.

This week, David Marcus, the co-creator of Facebook’s Diem stablecoin project, also announced that he is leaving the company after seven years.

Marcus joined Facebook in 2014 from PayPal and ran its Messenger service before moving over to the company’s blockchain division in 2018. Here, he co-founded the stablecoin project Diem, formerly known as Libra, and built the digital wallet Novi that was launched in October.

Now, he plans to leave the company at the end of the year. Stephane Kasriel, who joined Facebook last year, will take over his role to lead Novi and other payments projects.

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Author: AnTy

Bitcoin’s Longest Slump Since May Severs its Pandemic-era Correlation With Tech Stocks

The beating continues in the cryptocurrency market as Bitcoin drops to as low as $55,700 on Thursday and Ether to $3,970. This has the total cryptocurrency market cap dropping to $2.56 trillion.

Some crypto assets like Loopring, Fantom, SHIB, NEAR, Zcash, LINK, and Kusama have fallen as much as 20% to 27% in the past week. Still, a few cryptos are enjoying gains, with The Sandbox, MANA, and Crypto.com up 50% to 75%.

For the fifth consecutive day, Bitcoin slipped, which is the longest slump since mid-May. The cryptocurrency has dropped below its average prices over the last 50 days. According to Matt Maley, chief market strategist for Miller Tabak + Co., $54,500 is the next important level with a drop below $50k to raise “serious warning flags.”

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Now, ahead of the weekend, Bitcoin is back around $57k while Ether is above $4,100 that has the overall market cap now aiming for $2.6 trillion.

“The pullback, while sharp, has not impacted our positive intermediate-term gauges. Short-term oversold conditions are within reach for Bitcoin, Ether, and many altcoins,” said Katie Stockton, founder of research firm Fairlead Strategies. “So we would look for their collective pullback to mature later this week.”

With the latest weakness in the market, the correlation between Bitcoin and Nasdaq 100 futures is evaporating.

The 30-day correlation between the leading cryptocurrency and the Nasdaq futures has fallen to almost zero in recent days, which hit a 2021 peak at the end of September at 0.56, suggesting Bitcoin and tech stocks were moving in tandem often.

The correlation between Nasdaq and Bitcoin has been generally positive since February last year. But since September-end, Bitcoin is up 40%, surpassing Nasdaq 100’s 11% increase. Last week, Bitcoin hit a new all-time high at $69,000, emerging as an inflation hedge.

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However, according to Carsten Menke, head of next-generation research with Bank Julius Baer in Zurich, this evolution of the relationship between the cryptocurrency and Bitcoin doesn’t support the argument that it is a reliable, modern-day store of value for portfolios.

The lack of a consistent and negative correlation between them suggests that Bitcoin is not yet a safe haven, he said, stressing that during times of financial-market stress, it tends to suffer like other riskier assets.

Defending Bitcoin, Esme Pau, an analyst with China Tonghai Securities, argued that bitcoin is a “sensible” way of buffering against inflation.

“I would urge investors to focus on the longer-term trend and do not think short-term changes in correlation should be considered representative,” she said.

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Author: AnTy

31% of Americans Between The Age of 18-29 Are Involved in Cryptocurrency: Survey

31% of Americans Between The Age of 18-29 Are Involved in Cryptocurrency: Survey

86% of American adults meanwhile are familiar with crypto — with 43% of Asian Americans have heard a lot about them compared with 29% of Hispanic and about a quarter of Black or White adults.

A vast majority of US adults, as much as 86%, have heard at least a little about cryptocurrencies, while 24% of the respondents have heard a lot about them, according to a new Pew Research Center survey.

Only 13% had not heard anything about crypto when the survey was conducted between Sept. 13-19, 2021.

About three-in-ten Americans ages, 18 to 29 (31%) respondents said they have invested in, traded, or used crypto assets, compared with smaller shares of adults in older age groups.

Men ages 18 to 29 are particularly likely to have used cryptocurrencies at 22% compared to 10% of women. This difference is more pronounced when age and gender are put together, as about 43% of men aged 18-29 have invested, traded, or used crypto versus 19% of women in the same age range.

The likelihood of being involved in cryptocurrency, however, decreases with age for both men and women.

30% of men and 13% of women in the 30-49 age group have been involved in crypto in some way which is further reduced to a mere 7% and 4%, respectively, for those over the age of 50.

In terms of ethnicity, the survey found that Asian, Black, and Hispanic adults are more likely than White adults to say they have ever invested in, traded, or used a cryptocurrency.

43% of Asian Americans said they had heard a lot about cryptocurrency, compared with just 29% of Hispanic adults and about a quarter of Black or White adults.

Based on income, Americans with higher incomes (31%) are more likely than those with middle (25%) and lower incomes (21%) to have heard a lot about cryptocurrency as well.

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Author: AnTy

Swedish Financial Supervisory Authority Calls For An EU-Wide Ban on Crypto Mining

Swedish Financial Supervisory Authority Calls For An EU-Wide Ban on Cryptocurrency Mining

Finansinspektionen, the Swedish financial supervisory authority, has called for a ban on cryptocurrency mining due to crypto-assets, citing them to be a threat to the climate.

“Sweden needs the renewable energy targeted by crypto assets by crypto-asset producers for the climate transition of our essential services, and increased use by miners threatens our ability to meet the Paris Agreement,” the regulator said this week.

“Energy-intensive mining of crypto assets should therefore be prohibited.”

According to the regulator, this view is also shared by the Environmental Protection Agency of Sweden, which is home to abundant renewable energy sources.

This stance on crypto mining came amidst the COP26 conference, where environmental activists call for urgent action against climate change.

Now, the regulator has called for the European Union to consider an EU-level ban on the energy-intensive mining method proof of work (PoW) while noting other methods for mining crypto assets that are estimated to reduce energy consumption by 99.95% with maintained functionality.

Another proposal is for Sweden to introduce measures that stop the continued establishment of crypto-mining production using energy-intensive methods in the country.

Additionally, companies that trade and invest in crypto assets mined using the PoW method not to be allowed to market themselves or their activities as sustainable.

“A ban on the proof of work mining method within the EU could be an important first step in a global move towards a greater use of more energy-efficient crypto mining methods,” wrote Erik Thedéen, Director General at the Swedish Financial Supervisory Authority, and Björn Risinger, Director General at the Swedish Environmental Protection Agency.

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Author: AnTy

Australia to Push for A Cryptocurrency Framework to Promote Innovation and Investment

Australia to Push for A Cryptocurrency Framework to Promote Innovation and Investment

The Parliamentary committee chairman reviewing digital assets’ use says they don’t want to “put a new coat on an old hook,” and he is hopeful that crypto will “break the back” of de-banking.

Australia’s crypto industry needs a robust policy and regulatory framework to compete with other global financial hubs, said the Select Committee on Australia as a Technology and Financial Centre in a draft report on Wednesday.

The parliamentary committee that’s reviewing the use of digital assets said that such a framework is needed to promote investment, provide a structure for innovation to thrive while protecting consumers and facilitating market competition.

The report recommends establishing a market licensing regime for crypto exchanges that would cover capital adequacy and responsible person tests, a clear framework for custody of digital assets with minimum standards, new company rules covering new projects in DeFi, and conducting a token mapping exercise to determine the best way to characterize the different types of tokens in Australia.

As for DAOs, the report notes that they do not fall within any of Australia’s existing company structures, with legal liability for them still “unclear.” It pointed to standards in Wyoming, US, as a potential template.

These recommendations are “a big push to detail a cryptocurrency framework for Australia,” said Andrew Bragg, a senator from the conservative Liberal Party and chair of the committee, in an interview. This, according to him, would allow them to compete with the U.K. and Singapore.

“What we don’t want to do is put a new coat on an old hook.”

“There’s a strong anti-competitive element in Australia where the incumbents don’t like innovation and their solution is to push new ideas into old regulatory frameworks that were designed for something else.”

Bragg also hopes that crypto will “break the back” of de-banking — a practice in which lenders close the account of clients they consider high risk. De-banking “is killing too many small Australian businesses — and we simply can’t afford that to happen,” he said.

A study last month found that over a third of all Australians under 50 either own or have owned crypto assets.

The former regulator further said that he wants these recommendations to be adopted as policy in the coming months to be legislated after the federal election early next year.

“We want to be a world-leading jurisdiction for cryptocurrency,” he told the Financial Times.

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Author: AnTy