Ether Crashes to $700 on Kraken; High Network Activity Leads to Withdrawal Delay & Suspension

Ether Crashes to $700 on Kraken; High Network Activity Leads to Withdrawal Delay & Suspension

In Monday’s crypto carnage, the market provided a hefty discount that people have been calling out for some time now, with the digital assets rallying hard.

The overall cryptocurrency market lost $240 billion, but since then, it has gained some $86 billion back as the prices of cryptocurrencies make a recovery.

While Bitcoin went under the $50,000 level, Ethereum went under $1,550. But what has been interesting and for some devastating, the price of Ether went to $700 on Kraken.

The cryptocurrency exchange had some wild price action on Ether as after such a discounted opportunity, it went back right above $1,700 and caught up with other exchanges soon after.

This hasn’t even been a one-time thing as popular crypto personality, CryptoCobain, tweeted, “People trading on Kraken are masochistic. Once per month they get completely fucked by the matching engine.”

While for leveraged traders, it was a disaster, this also turned out to be a perfect opportunity for spot buyers.

“Unbelievable, my fishing ETH orders below $1.2k have been filled on Kraken,” tweeted one trader, who is extremely bullish on Ether and has long been calling out for a $10,000 price target for the second-largest cryptocurrency in this cycle.

On top of the deep red market, this much price volatility sent the gas prices on the network soaring. This made trading on-chain nearly impossible, let alone allowing traders to front-run.

Exchanges were already struggling with too much activity, with Kraken reporting, “Due to heavy traffic you might experience some connectivity issues. We are working to resolve the issue as soon as possible.”

Then, this congestion due to demand spikes on the Ethereum network led to delays with ETH and ERC20 token withdrawals.

Besides Bitstamp, Binance, as usual, felt the heat and suspended withdrawals.

“Binance has temporarily suspended withdrawals of ETH and Ethereum-based tokens due to high network congestion. Rest assured funds are SAFU, and we apologize for any inconvenience caused,” informed the leading spot exchange.

For now, things are slowly coming back to normal, ETH is currently around $1,750, and Bitcoin is back above $53,500.

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Author: AnTy

Nexus Mutual Now Covers Binance, Coinbase, Gemini & Kraken Users Against Security Breaches

Nexus Mutual’s Insurance Now Covers Binance, Coinbase, Gemini & Kraken Users Against Security Breaches

Decentralized finance insurance protocol Nexus Mutual has updated the list of cryptocurrency exchanges that are eligible for incidence protection. The company’s services will now include customers of centralized exchanges like Coinbase, Binance, Gemini, and Kraken.

More Custodians Welcome

The update, which was announced on Monday, will allow these exchanges’ customers to purchase protection against certain hacks or asset withdrawal issues.

It’s part of the Custody Cover initiative, and it provides compensation for users who lose over ten percent of their funds in the event of a security breach on any of the supported exchanges. Users can also claim cover if an exchange suspends withdrawals for over 90 days.

Nexus Mutual launched Custody Cover in December 2020 to provide insurance cover for centralized crypto. At the time, the company explained that it was branching out of DeFi to build its insurance marketplace. The company’s long term goal is to use blockchain to provide cover for companies and individuals within and outside the crypto space.

“We’re focused on the longevity of Nexus Mutual and want to become a marketplace that covers diverse risks both in and outside of the crypto space. We want to use the benefits of blockchain to protect all underserved communities and this is our first step in that direction.”

Custody Cover launched with support for six custodians – Celsius, BlockFi, Hodlnaut, Nexo, inLock, and Ledn.

With Custody Cover, Nexus Mutual is looking to solve the issue of overly high insurance coverage prices in the crypto space. While premiums for insurance vary based on the platform, numbers appear to be too high for everyday customers and traders.

A Spotlight on Custody

Nexus Mutual’s branching out into the centralized space is coming amid significant growth in the crypto custody space. In response to increased institutional crypto demand, custody providers have also done their bit to improve security.

Recently, Bank of America-Merrill Lynch conducted a survey showing increased Bitcoin activity from Wall Street players. The survey interviewed fund managers with $534 billion in assets under management. They found that institutions were increasingly trading in Bitcoin. Only the dollar and tech stocks saw more trades.

report from Fidelity Investments also revealed that a third of institutional investors now own crypto assets. This increased enthusiasm from investors means asset custodians need to ramp up their security infrastructure to protect against hacks and other mishaps. In a report, auditing giant KPMG explained that custodians’ top action will be to enable next-generation compliance and security measures.

The company recommends incorporating leading cryptographic techniques like sharding, multi-signature wallets, and multi-party computation. Essentially, cryptocurrency security will require input from both hardware and software solutions.

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Author: Jimmy Aki

Kraken Users Have Staked Over $1 Billion in Cryptocurrencies

Kraken Users Have Staked Over $1 Billion in Cryptocurrencies

Top crypto exchange Kraken made a significant splash when it announced its Ethereum staking service last year. Since then, it has gotten a substantial amount of commitment from users.

This week, the exchange confirmed its customers have staked over $1 billion in assets on its crypto service, marking continued growth.

Kraken Users Love Them Some ETH

Citing data from Jeremy Welch, Kraken’s Vice President of Product, the exchange’s users have now staked about 45.5 million XTZ (worth about $120 million) and 58 million DOT (worth $580 million). This adds to the 307,904 ETH ($368.5 million) already being staked on the platform. Welch added that staking positions’ increased growth reflects investors’ and traders’ positive sentiment about cryptocurrencies.

The executive added that staking has also presented a paradigm shift in how people invest in cryptocurrencies. With the crypto asset class on a growth and maturity trajectory, investors are no longer satisfied with securing short-term gains. Many are getting more comfortable with locking their assets up for a long time because they believe the industry will keep growing.

As explained, Kraken launched its Ethereum 2.0 staking service in December 2020. In just four days, the exchange confirmed that it has seen over 100,000 ETH in deposits, with a value of $60 million at the time.

Everyone Wants to Get In on Ethereum 2.0 Staking

It’s easy to see why Kraken’s staking will draw so many investors. The exchange has impressive reward rates, with investors getting between five to seven percent based on network activity.

However, the exchange isn’t alone in the Ethereum 2.0 staking business. Binance, the industry’s largest exchange, launched its staking service in December, with investors getting between 5 and 20 percent in annual percentage yields (APY). It also provided extra incentives for customers who complete its know-your-customer (KYC) identity verification process.

Coinbase also announced two months ago that it would launch Ethereum 2.0 staking in the early part of 2021. The exchange has yet to provide additional details, although it would most likely offer commissions in similar ranges to its competitors.

The increase in staking activity is also coming at a time when Ether is on a significant upsurge. The asset’s value has increased significantly over the past few weeks, rallying on the back of increased activity in the decentralized finance (DeFi) sector and on the back of Bitcoin’s jump.

In a blog post, crypto exchange OKCoin also shared some insights n how the Ethereum 2.0 upgrade could drive the asset’s price higher. As many know, the upgrade will essentially transition Ether into the Proof-of-Stake (PoS) consensus mechanism. It will also provide additional benefits in terms of Ether’s transaction speed and costs.

As OKCoin explains, improvements in Ether’s functionality should lead to a greater demand for the asset. Ether’s price should continue to surge in the long run, leading to a boom for investors – and stakers.

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Author: Jimmy Aki

Bittrex Delisting Privacy Coins Monero (XMR), Zcash (ZEC), and DASH Without Any Explanation

Kraken CEO dispels any regulatory pressure, says market removal could be something business-specific. Meanwhile, these coins drop 17% to 23% while DASH argues its “privacy functionality is no greater than Bitcoin’s.”

Cryptocurrency exchange Bittrex has announced the removal of privacy coins from its platform after removing XRP markets for its US customers. Monero (XMR), Zcash (ZEC), and DASH are the affected cryptocurrencies.

Starting Jan. 15, 2021, 23:00 UTC, BTC-XMR, ETH-XMR, USDT-XMR, BTC-ZEC, ETH-ZEC, USDT-ZEC, USD-ZEC, BTC-DASH, ETH-DASH, USDT-DASH, and USD-DASH would no more be available on the platform.

After this, Bittrex users would have up to 30 days, a period that may be shortened in “certain instances,” to withdraw any of these delisted tokens. The exchange states, after the withdrawal deadline, “there may be circumstances under which a user may not be able to withdraw a token due to events outside of Bittrex’s control.”

Up until now, only XRP XRP 5.48% XRP / USD XRPUSD $ 0.23
$0.01 5.48%
Volume 5.09 b Change $0.01 Open $0.23 Circulating 45.4 b Market Cap 10.34 b
8 h Bittrex Delisting Privacy Coins Monero (XMR), Zcash (ZEC), and DASH Without Any Explanation 2 d eToro and CEX Suspend Trading for US Customers; Grayscale Buys 3.23 Million XRP 3 d Binance US, Genesis, & Abra Suspends XRP Support; Bittrex & Uphold Clarifies No Plan to Delist
trading and deposits were suspended and only for the US customers due to SEC’s lawsuit against Ripple and its two executives for allegedly selling unregistered securities, but now more cryptos are being targeted. Trader CryptoSqueeze noted,

“Privacy coins are the next on the target list. Bittrex might just be the beginning. This is gonna be a rough and uncertain year for alts.”

Bitcoin BTC 7.79% Bitcoin / USD BTCUSD $ 33,331.76
$2,596.54 7.79%
Volume 77.75 b Change $2,596.54 Open $33,331.76 Circulating 18.59 m Market Cap 619.63 b
7 h GBTC Added $1.6B in December But Grayscale Hasn’t Purchased Any BTC in Over a Week 8 h Bitcoin Smashes $34,810 as Market Sees Some ‘Serious and Prolonged Investor Activity’ 2 d Altcoins’ Market Cap Still 59% Off its Peak as Bitcoin Dominance Exceeds 70%
and Ethereum ETH 25.18% Ethereum / USD ETHUSD $ 949.37
$239.05 25.18%
Volume 40.77 b Change $239.05 Open $949.37 Circulating 114.1 m Market Cap 108.33 b
2 d Altcoins’ Market Cap Still 59% Off its Peak as Bitcoin Dominance Exceeds 70% 4 d Bitcoin Going to $1 Million in the Next Decade Says Kraken CEO; Highlights ETH & DeFi 4 d Ethereum Is A ‘Huge Success Story’ But is ‘Undervalued’ in Terms of Institutional Buying
are free from any such uncertainties because they have been explicitly stated by regulators to not be a security because they are decentralized.

Meanwhile, Bittrex’s lack of explanation on their motive behind this decision has led the crypto twitter (CT) to speculate.

“Privacy is a constitutional right, not a crime,” said Jake Chervinsky, General Counsel at Compound Finance who shares his disappointment on exchanges removing crypto assets with privacy-preserving features. “There’s no law or regulation requiring this, just DOJ’s opinion that privacy is “indicative of possible criminal conduct,’” he added.

According to Josh Swihart, SVP of Growth at Electric Coin Company, the creators of Zcash, there could be more than what meets the eye here. He pointed out how US-based crypto exchanges Gemini and Coinbase recently added additional support for ZEC.

Meanwhile, other crypto exchanges clarified that there isn’t any regulatory pressure to delist these privacy-focused cryptos.

“Haven’t heard of anything on the regulatory side. Presumably, it’s something specific to their business,” said Jesse Powell, co-founder, and CEO of crypto exchange Kraken. He also shared that these cryptos meanwhile are not supported by Kraken in Australia because of being “banned by local fiat funding rails” and that they are working on the alternatives.

For now, the damage has been done to these cryptos price-wise as they performed poorly following the delisting news.

XMR dropped over 11% in the last seven days and is currently trading around $138, DASH lost 17% of its value in the last seven days and is now trading at $89 and after a 13% drop, ZEC is now keeping around $58.

Some believe XMR, DASH, ZEC’s loss can be Litecoin’s gain which is working on bringing privacy to the network. Ever since Bitcoin bulls went crazy in Oct., LTC also moved in tandem, up 183% in the last three months to climb the levels not seen since June 2019.

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Author: AnTy

Coinbase and Kraken Vows to Fight FinCEN’s New Proposed Crypto Regulation

Coinbase and Kraken Vows to Fight FinCEN’s New Proposed Crypto Regulation

Crypto exchanges believe these new rules can have “long-lasting, detrimental side effects” on the industry and further “wall off the poor from our financial system forever.”

Last week, the US announced its long-awaited wallet regulations just as Bitcoin rallied past its all-time high of $24,000.

FinCEN and the US Treasury put forth the new rules, requiring banks and money service businesses to verify customers’ identity, keep records, and submit reports. While initially feared to target private wallets, these new rules are mostly geared at centralized institutions — exchanges and lending businesses.

This week, San Francisco-based Coinbase sent out a letter to Kenneth Blanco, Director, FinCEN, in which it says that these proposed rulemakings could have “long-lasting, detrimental side effects on the crypto ecosystem.”

“As a leader in the cryptocurrency industry, Coinbase routinely provides input, and formal comments as agencies consider and develop new regulations.”

Paul Grewal Chief Legal Officer at Coinbase

Grewal, who previously worked at Facebook as Vice President & Deputy General Counsel and before that worked in United States Magistrate Judge capacity, asked FinCEN to “reconsider its haste and provide the typical 60-day period for such significant proposed rulemaking.”

“There is no emergency here,” to bypass the required consultation with the public and treat the crypto industry differently from traditional finance, said Grewal.

Another crypto exchange, Kraken, shares its concern about the new rule, which it says will “wall off the poor from our financial system forever.”

The rule would further prohibit financial institutions from sending money to smart contracts, which are designed to eliminate the costly middlemen, said the exchange adding, “worse yet, FinCEN is trying to sneak the rule into law over the holiday season.”

FinCEN is trying to justify the proposed rule, which requires customers who wish to send digital currency to a recipient to report the latter’s name and physical address, by likening it to the “venerable” Currency Transaction Report (CTR). CTR has been applied to cash and coin (paper and metal) transactions for decades but even they “never required reporting information about the recipient.”

As such, “Kraken will fight to stop this.”

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Author: AnTy

Kraken to Integrate Lightning Network in 2021 for Faster & Cheaper Bitcoin Transactions

Cryptocurrency exchange Kraken will be integrating the Lightning Network next year.

The day Bitcoin smashed through $20,000 to reach nearly $20,900, the same day Kraken announced that it would help its clients deposit and withdraw Bitcoin on Lightning Network, which is expected to be done by the first half of 2021.

This means instantly transferable Bitcoin at the lowest fees.

With the help of this integration, the cryptocurrency exchange will be able to scale to process millions of transactions per second,

“a leap forward enabling trades to be completed at a lower cost and with greater speed.”

However, Kraken says these features are just the beginning as it works towards shaping the “future of programmable payments with digital money.”

For the integration of the second layer of Bitcoin, Kraken will be hiring a team that will specifically focus on the Lightning Network, as part of the exchange’s “continuing effort to deliver the best possible experience for traders and investors.”

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Author: AnTy

After Kraken, Avanti Granted the License to Become a Crypto Bank by Wyoming State Regulator

The first one was Kraken, and now another crypto bank is here. The Wyoming State Banking Board granted Avanti Bank & Trust a bank charter with 8-0 votes that give it the same powers as national banks. With this, Avanti can now provide custody service for digital assets as a qualified custodian and deposit customer funds that are 100% backed by reserves.

Avanti is also planning to launch its tokenized US dollar called Avit, for which a patent is pending. The stablecoin is planned to be issued on both Liquid, a Bitcoin sidechain, and Ethereum initially, with other blockchains to follow in the future based on customer demand and network security.

The crypto bank will start providing commercial accounts in early 2021, followed by other accounts with a high minimum balance. Caitlin Long, Avanti’s founder, and CEO said,

“Avanti’s mission is to provide a compliant bridge between the traditional and digital asset financial systems, with the strictest level of institutional custody standards.”

“Wyoming has the only U.S. regulator with a bank supervisory and regulatory program for digital assets that is near completion.”

As a bank, Avanti will fully comply with the Bank Secrecy Act, anti-money laundering, and OFAC-related laws, rules, and regulations.

Also Read: Kraken Gets Approval in Wyoming to Become America’s First Crypto Bank

More Reading: Kraken’s Crypto Bank Is “An Accident Waiting to Happen,” says Bank Policy Institute

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Author: AnTy

Kraken Opens Trading For Japanese Users, Becoming 1st Exchange to Enter Japan Organically

Kraken, one of the leading crypto exchanges based in the United States, has relaunched its trading services for Japanese customers under its expansion plan in the Asia Pacific region.

Japanese customers would be able to access Kraken’s spot trading services, to begin with, according to the announcement on October 22. The exchange would offer spot trading services for Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple (XRP), and Bitcoin Cash (BCH). The exchange would offer crypto-to-crypto trading pairs along with JPY-denominated pairs for trading.

Kraken claimed that it is the first foreign exchange to organically enter the Japanese market without acquiring any local exchange.

Customers Could Make Deposits in 5 Crypto Assets

The re-launched trading services in Japan by Kraken has been done under its expansion plans in the region. To encourage more customers to join the platform and make it easier for them to trade using the platform, the exchange would offer deposits in 5 crypto assets along with local JPY deposits and withdrawals. The local fiat deposit and withdrawals would be available via SBI Sumishin Net Bank.

Before its current relaunch in Japan, Kraken had already launched its Japanese customers’ services back in 2014. By 2018, it had shut its operation in the country, citing the rising cost of operations and expanding in other geographical locations.

Kraken acquired the ‘Crypto Asset Exchange Service Provider’ license last month on September 8th and started registering user accounts by September 18.

David Ripley, COO of Kraken, expressed his joy in re-entering the Japanese markets and said that Japan is a dominant crypto market, and it would prove to be a crucial point for the exchange in its expansion plan in the region. He said,

“In today’s challenging economic environment, more people are turning to cryptocurrencies to hedge against volatile markets and use cryptocurrency as a store of value.”

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Author: Hank Klinger

Kraken’s Crypto Bank Is “An Accident Waiting to Happen,” says Bank Policy Institute

The structure of Kraken Financial is “prone to the same types of run risks as medieval banks and so-called “shadow banks,” said a non-partisan advocacy group representing the nation’s leading banks, Bank Policy Institute.

BPI’s remarks have been related to Kraken getting approval to be a special-purpose depository institution (SPDI) charter by the Wyoming State Banking Board.

With this approval, cryptocurrency exchange Kraken will custody digital assets on behalf of its customers and hold their US dollar deposits as well through Kraken Financial. According to BPI, it is an “accident waiting to happen” because,

“Kraken will take uninsured, demandable, retail deposits and invest them in “liquid assets,” including longer-term instruments like U.S. Treasury securities and corporate debt.”

And this model is “inherently unstable under stress,” it said.

It then points out the issues, including Kraken defaulting in case the interest rate goes up and that with longer-term corporate bonds, the risk of capital loss can even be greater as it also involves corporate default.

Because Kraken is not an insured bank and is subject only to capital regulation by the state of Wyoming’s Division of Banking, it doesn’t follow the capital requirements set by the federal banking agencies that have been raised and strengthened since the Great Financial Crisis, wrote BPI. This means,

“There would be a run on Kraken Financial, similar to the March 2020 (and 2009) run on prime money market funds, which also backed deposit-like obligations with a pool of high-quality assets.”

Bank Policy Institute further argues that Kraken has a moral hazard of “unrelenting incentive to shift its reserves toward slightly riskier assets.”

The group now wants the Federal Reserve to give the risks of Kraken’s business model “serious and thoughtful consideration,” as the exchange is applying for a master account with the Fed.

Kraken co-founder and CEO Jesse Powell only has this much to say on this, “Somebody’s scared. Degen gambler fractional banks: “Full reserve banks are dangerous!”

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Author: AnTy

Kraken Gets Approval in Wyoming to Become America’s First Crypto Bank

Cryptocurrency exchange Kraken has obtained approval from the crypto-friendly State of Wyoming to create the world’s first Special Purpose Depository Institution (SPDI), tentatively called Kraken Financial.

The idea to become the bridge between the crypto economy and the existing financial ecosystem first came into existence in 2016 through the Delaware Blockchain Initiative, shared Marco Santori, Chief Legal Officer Kraken. Caitlin Long, founder, and CEO of Avanti tweeted,

“What a win-win for crypto & Wyoming! As of **NOW** Kraken has a US bank charter—a 100% reserves-required, audit required (w/ ProofOfReserves), custody via legal bailment, no rehypothecation type of bank!”

Source: @MSantoriESQHeadquartered in Cheyenne, Wyoming, Kraken Financial is the first digital asset company in the US to receive a bank charter. It will be able to provide deposit-taking, custody, and fiduciary services for digital assets. David Kinitsky, CEO of Kraken Financial said,

“Wyoming is a rare and shining example of how thoughtful regulation can drive innovation for FinTech companies.”

As a bank, by Wyoming law, Kraken Finance is required to maintain 100% of reserves of its deposits of fiat currency at all times and will have to meet every withdrawal demand of its client no matter the loans outstanding.

This development means Kraken’s reliance on third party financial institutions will be reduced, and they will be able to “launch a new wave of innovative products for our users.”

The exchange will start with the US first and then expand globally, which means for now only it will only offer accounts to US residents. Users can start with USD deposits and withdrawals and digital assets custody.

Over the next few years, the company plans to expand its services to digital asset staking, trust account, online and mobile banking, a debit card, and Proof of funds attestations, among other things. Kraken said in its official announcement,

“We expect to be able to offer additional retail, wealth management and treasury services (and potentially other asset classes such as securities).”

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Author: AnTy