USDC’s ‘Breakthrough’ Use-Case, US Govt. to Distribute Aid to Venezuela via the Stablecoin

With the support and licensing from the US Government, Circle is providing foreign aid through the USDC stablecoin to the people of Venezuela. Circle said,

“While this may be the first time, it will no doubt not be the last as global stablecoins firmly arrive on the world stage as a foundational infrastructure in the future of the international monetary system.”

USDC is the fastest-growing stablecoin of 2020, growing 500% in the past 8 months, with a market cap of over $2.8 billion.

In an announcement on Friday, Circle said it has been “approached” to help the “legitimate elected government of Venezuela” to distribute the financial aid to front-line medical workers in the country who, besides coronavirus, are also battling with hyperinflation, international sanctions, and economic collapse under the Nicolas Maduro regime who had launched his own oil-backed crypto petro.

After imposing sanctions on the Maduro regime, the US government seized Maduro and his government’s assets, which they now seek to get in the hands of the Venezuelans fighting COVID-19, for which they have turned to blockchain and fintech.

In collaboration with the Bolivarian Republic of Venezuela, led by President-elect Juan Guaido and U.S.-based fintech innovator Airtm, aid will be distributed by leveraging dollar-backed USDC.

The Guaidó government will basically use the seized funds to mint USDC, which will be then sent to Airtm, a blockchain-based bank and dollar-denominated payment platform that powers digital payments throughout North, Central, and South America.

The USDC will then be sent to Venezuelan healthcare workers’ accounts as AirUSD — Airtm’s stablecoin-backed dollar token.

“All of this is powerful, inspiring, and underscores the ability of the internet and digital currency to transform… how value and money moves,” said Circle adding that

“it marks a historic moment where in order to execute on US government foreign policy objectives, economic and political leaders have turned to stablecoins.”

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Author: AnTy

The Cayman Islands Releases Phase 1 of Its Regulatory Framework for VASPs

The Cayman Islands, the Caribbean British Overseas territory, has announced through its Ministry of Financial Services that it has commenced developing a regulatory framework for Virtual Asset Service Providers (VASPs) within its jurisdiction. The island, which is notoriously famous for its ‘tax haven’ status, is looking to clear up ambiguities in running crypto operations as part of compliance with the Financial Action Task Force (FATF) guidelines, which were rolled out last year.

According to the press release on Oct 31, Cayman Islands classifies a virtual asset as a ‘digital representation of value that can be electronically traded and used for investment purposes.’ It has already enacted a set of rules to guide developing a VASP regulatory framework; these came into effect on Oct 28. Going forward, the island plans to roll out this process into two phases, with the initial one having commenced on Oct 31.

The first phase focuses on the compliance, supervision, and enforcement of Anti-money laundering (AML) and terror financing rules in line with the FATF and Cayman Island’s local guidelines. Prospective VASPs and those already operating in this tax haven will be required to register with the Cayman Islands Monetary Authority (CIMA). The second phase is slated for June 2021, and will focus on licensing requirements and prudential supervision.

Notably, the prospectus VASP regulatory framework will feature the FATF guidelines, some of which include the popular ‘Travel Rule.’ Currently, the island’s compliance with FATF is under assessment by the Caribbean Financial Action Task Force (CFATF), which will later report its FATF ratings. The Cayman Islands is optimistic that developing a regulatory framework will attract more firms to launch within its jurisdiction. The press release highlights,

“The Cayman Islands’ ability to regulate and attract persons and entities that deal with virtual assets as a business is now strengthened, with the commencement of legislation for virtual asset service providers (VASPs).”

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Author: Edwin Munyui

Interlay to Bring Tokenized Bitcoin to Polkadot Via PolkaBTC in 2021

A tokenized BTC coming to Polkadot as it is integrated with blockchain through a cross-chain bridge to Bitcoin that will go live in the Q1 of 2021. It would enable users to transact BTC as PolkaBTC on various platforms falling under the umbrella of decentralized finance (DeFi).

Interlay is behind the development of PolkaBTC, backed by Parity Technologies, and funded by the Web3 Foundation. Integration aims to accelerate Polkadot’s young DeFi ecosystem.

In the case of transferring a tokenized BTC (as like BitGo’s WBTC) out of its native blockchain, a copy of the underlying token is declared, where real BTC gets locked. And these copies of BTC are burned whenever a user shifts back to the Bitcoin blockchain.

On the contrary, PolkaBTC would get labeled in a 1:1 ratio and supported in many decentralized exchanges, lending protocols, and stablecoins.

Moreover, Interlay revealed that the permissionless and trustless nature of the ecosystem makes users have more control over their money as its working infrastructure doesn’t include any central or monitoring sector.

BTC-Parachain, since its initiation, is run by multiple nodes around the world, including community members and various companies, as a decentralized platform.

To use PolkaBTC at decentralized apps, you need to have some DOTs (Polkadot’s native token) used as collateral to mint the PolkaBTC. Three things you must have to mint are BTC wallet, Polkadot’s Wallet, and some DOTs. Interlay stated:

“In the case that a vault misbehaves, you will be reimbursed from the Vault’s collateral and will make a very profitable trade between BTC and DOT. At launch, collateral will be put down in DOT. In the mid/long run, this may be extended to stablecoins or token-sets to improve stability.”

If one wants to redeem the PolkaBTCs equivalent to a whole bitcoin, he needs to burn the tokens on the BTC-Parachain first. Interlay added,

“PolkaBTC can remain on Polkadot indefinitely (no expiry date) and can be redeemed for BTC at any point in time.”

The first Alpha testnet will be held next month for PolkaBTC, and Beta tesnet is expected in January 2021, and the mainnet launch is scheduled in the first quarter of 2021.

Also, the projects based on Polkadot would be integrated with PolkaBTC. Some of them include Moonbeam, Equilibrium, and Polkaswap.

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Author: Hank Klinger

Is FTX CEO Accelerating the Deep DeFi Rout?

After going through a deep pullback in the past month, most of the DeFi tokens struggle to let go of the losses.

Although the news of Square buying $50,000,000 worth of BTC has sent the market into a tisy, not all coins are moving out of the red. Coins like UNI (+22%), LRC (+13.5%), and KNC (+5%) are recording some gains. DeFi darling YFI has manged to dig itself out of the deep red into the green (+5%).

Much like the price, the total value locked (TVL) in the DeFi Sector has declined by almost 10% to $10.12 billion, as per DeFi Pulse.

Popular DEX Uniswap, however, is an exception to this, whose TVL has jumped 30% in a fortnight.

Keep on Dumping!

As we reported, numerous popular DeFi tokens have lost 80% to 90% of their value since hitting all-time highs during the period of mid-August and the beginning of September.

But still, they continue to go down more and more, which could be seen as an opportunity for the project enthusiasts to buy these tokens at low prices which might have missed them the first time around.

In the past 7 days, more losses have been incurred by the DeFi sector, with YFII leading with almost -46% drop. Other notable losers include SUSHI (-41%), CRV (-37%), YFI (-29%), SWRV (-33%), bzrx (-37%), UNI (-24%), UMA (-25%), LEND (-20%), and SNX (-17%).

As another round of losses hit DeFi tokens, Twitterati points to derivatives exchange FTX CEO Sam Bankman-Fried shorting YFI, CRV, and UNI.

Some market participants speculate that Bankman-Fried might be behind the latest dose of losses, especially for YFI, CRV, and UNI, which he has been dumping on leading spot exchange Binance.

It is worth noting that Bankman-Fried is also the CEO of the quantitative cryptocurrency trading firm Alameda Research.

The Catalyst…

While some aren’t liking it, others said Bankman-Fried is simply shorting a few cryptos, which means he believes the coin will decline in value.

Jason Choi of crypto fund The Spartan Group found it all absurd, stating, “Always find it amusing that the idea of shorting is deemed evil on crypto twitter.”

And if you think Bankman-Fried will short his FTT or SRM, that’s a big fat no, because he ain’t short on his creation, of course, rather he is “long as fuck.”

Trader Moon Overlord also pointed out the obvious nature of the situation, which is “a person apart of a trading firm does a trade.” Back in late August, when FTX acquired the crypto portfolio tracker Blockfolio, the trader said, “FTX didn’t pay for a portfolio tracker they could build in 5 minutes they paid $150M for your data and bag info.”

The market also likened Sam’s behavior with billionaire investor George Soros acting as a catalyst in collapsing the British pound in 1992 by shorting it.

In the process, Soros made an estimated $1 billion profit. While that incident was viewed as “a permanent black mark on the UK as a center of financial prestige,” following the event, “Britain entered a period of growth and prosperity,” noted Sahil Bloom, VP at Altamont Capital Partners.

If not Soros, someone else would have used the opportunity to their advantage, and he “merely accelerated” the process. The same could be seen in the DeFi market, which may finally find its bottom and embark on a new bull run.

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Author: AnTy

Leading Japanese Messaging App, LINE, Launches Crypto Lending Services on BITMAX Exchange

LINE, the Japanese messaging app giant, is launching crypto lending services for its clients through its subsidiary crypto exchange, BITMAX. The news, which was first reported by CoinDesk Japan, highlighted that BITMAX users will be now be permitted the option of lending their crypto holdings to the exchange service, with BTC, XRP, ETH, BCH, or LTC as the underlying collaterals.

This service is set to function similarly to bank loans; only instead of interest, the lenders will receive a ‘rental fee.’ LINE filed a statement with the Tokyo Stock Exchange on Oct 9, noting the firm will be running a campaign up to Oct 30, where users could earn as much as a 10% rental fee for lending their digital assets. This should start accruing from the day the rental is deposited.

With LINE’s 80 million local outreach, the new lending services become bullish to the Japanese crypto market. The country which has had historically low-interest rates will probably benefit from the exposure in crypto volatility, although at the cost of accommodating the high risk.

LINE made it’s crypto debut onto the Japanese market last year after being granted an operational license by the country’s Financial Services Agency (FSA). They recently launched a blockchain development platform and digital wallet as part of scaling LINE’s crypto services footprint.

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Author: Edwin Munyui

YFI Ready to Take Off As The ‘Ultra High Beta’ or About to Get Smoked?

The DeFi market is going through winter right now, as prices of these tokens take a pullback after making all-time highs during August and September.

Since hitting those peaks, some Defi tokens have taken a harsh beating, like CRV, SUSHI, and bZx, which are down over 90%, some like Aave, Maker, and Loopring only went down about 40%. Amidst this, Yearn.Finance’s governance token YFI is somewhere around the middle.

In August, 1 YFI became equal to 1 BTC and then went past Bitcoin’s ATH $20,000 soon after. It was in the mid of September that YFI hit its peak at $43,678, as per CoinGecko.

Making new highs means the digital assets have to get ready for a correction, and that’s exactly what happened as the DeFi sector as a whole went through a winter.

So Much More Affecting YFI

YFI’s losses were exacerbated because of Eminence.Finance, a project by YFI founder Andre Cronje that rug pulled $16 million. Trader and economist Alex Kruger said,

“YFI has been getting Creamed. Recent underperformance relative to other cryptos has been notable. One could argue it is the chart. But it is not. One can find plenty equally poor charts across crypto. This IMO is the marketplace punishing YFI by removing the Cronje premium.”

According to him, although yields matter which has fallen, the blatant negligence around the EMN launch from Yearn and “how poorly the aftermath was handled… many exited/reduced YFI positions because of it.”

At the time of writing, YFI/USD has been trading at just above $18,000.

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Another reason for this poor performance could be the overall drop in activity in the DeFi sector. Jason Choi of crypto fund The Spartan Group said,

“August has been a phenomenal month for DeFi bulls. Now we’re in the hangover phase of the DeFi party.”

Amidst this rout, we are seeing “flight to quality in yield farming,” with Uniswap accounting for 70% of all TVL in yield farms despite its modest returns of 20%-30%. Choi said,

“The shift in sentiment was rapid. Even “degen” farms offering north of 1500% APY are only attracting ~1/10th of the TVL they did just a month ago.”

“drop is risk appetite and collapse in APY is a direct result of -ve price performance of new crop tokens.”

Moreover, with CRV “buckling under continual inflation sell pressure,” it is affecting YFI as well as yCRV APYs on Yearn.Finance accounts for 60% of its activity.

Macro in Focus

While some call for YFI to go down to four digits due to a head and shoulders pattern, trader Josh Rager sees it making new highs as it has found support at a major 0.618 fib level.

Kruger is also still bullish on this DeFi token despite the price of the token crashing 45% in six days as he said,

“The YFI bigger picture bull case remains unchanged. Odds are high this whole ordeal is short term noise.”

The EMN event, however, should remind speculators of YFI’s high ‘founder risk’ as seen in early August when an interview about Cronje “close to quitting DeFi” tanked the price of YFI.

Overall, the trader expects crypto to take off again after the elections and for DeFi to push even further “as the ultra high beta.” Kruger said,

“Macro matters now. So it makes sense to play from the long side. But if crypto crashes, YFI would get smoked, and no fundamental analysis would stop that.”

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Author: AnTy

Kucoin’s Hackers Identified With ‘Substantial Proof’ in $280M Theft, Law Enforcement Involved

Kucoin announced through its CEO Johnny Lyu that they have found the hackers who compromised close to $280 million of the exchange’s funds in last week’s hack.

Lyu tweeted this update over the weekend as crypto markets struggled in the red zone following the Kucoin hack, BitMEX indictments, and the news of President Trump contracting COVID 19.

The hack update noted that authorities and law enforcement, in particular, are now involved in the matter,

This update comes as a reprieve to Kucoin stakeholders, although the Singapore based exchange had assured the crypto community that funds were SAFU. While its funds in cold storage remained untouched, the hackers had managed to siphon around $280 million from hot wallets and are in the process of dumping the hack proceeds for value realization.

However, this seems not to be going so well for the group, which has only sold $13 million worth of the stolen funds. These were sold through decentralized exchanges, including Uniswap, Kyber Network, Tokenlon, and DEX.AG. As for the rest, Lyu now says that an additional $64 million has been frozen in collaboration with other CeFi providers, bringing the total to $204 million.

Besides the updates, Lyu also signaled that Kucoin is gradually returning to full functionality and supported deposits and withdrawals of 31 tokens as of October 3. In an earlier follow-up Livestream on September 30, the Kucoin CEO had acknowledged the hack as part of growing bigger,

“As a crypto team just turned three years old, although we never slack off on security-related issues, we couldn’t dodge the cruelest coming-of-age ceremony that every predecessor used to embrace.”

While this hack may have hit hard, one thing that emerged is the collaborative effort by crypto projects to curtail the movement of ‘compromised’ funds. Some projects like Velo Labs have gone to re-deploying their smart contracts to freeze the funds. Nonetheless, this has also sparked controversy on the whole aspect of decentralized ecosystems.

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Author: Edwin Munyui

Coinbase Now Allows Instant WIthdrawals via Mastercard & Visa Debit Card

San Francisco-based Coinbase is now allowing instant cash withdrawal through Mastercard and Visa debit cards.

“Don’t wait days for your cash when you need it now,” it says.

In a move towards the defining characteristics of crypto, transacting instantly, and anywhere, anytime that is curbed by the traditional banking system, Coinbase is offering instant withdrawals in about 40 countries.

These instant withdrawals will cost US customers a 1.5% fee (minimum $0.55), while for the UK and European customers, it is up to 2%.

Coinbase product manager Eddie Lo shared that customers in the US, UK, and Europe can withdraw funds with a linked Visa debit card with US customers allowed through Mastercard as well.

“The ability to easily spend, send, and receive crypto is critical to growing the cryptoeconomy, so we’ll continue building even more ways for our customers to access and use their crypto on Coinbase,” said Lo.

Using Visa to convert crypto balances into fiat means it can be spent at more than 60 million merchant locations while providing “faster, simpler and more connected experience” for Coinbase users, said Terry Angelos, SVP and global head of fintech, Visa.

Customers have the option to select between standard or instant withdrawal methods.

According to Sherri Haymond, executive vice president, Digital Partnerships at Mastercard, today’s digitally driven consumers want real-time payment options, and Mastercard will help them achieve “greater flexibility and convenience” in converting their cryptocurrency into fiat currency.

Also Read: Coinbase Pro to Pass the Rising Network Fees Onto The Customer

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Author: AnTy

‘Large-Scale’ Crypto Exit Scams Detected in Estonia’s E-Residency Program

Estonia had granted foreigners remote access to its digital infrastructure through its e-residency program, which is now linked to cryptocurrency frauds abroad.

Amidst Europe working on improving its anti-money laundering rules, with EU banking watchdog calling for a single set of regulations after going through several related scandals, companies headed by Estonian e-residents have been involved in “a few large-scale exit scams,” where clients are unable to withdraw their assets.

The police’s Finance Intelligence Unit form last week said these companies that are registered overseas are also linked to organizing “suspicious initial coin offerings and the misappropriation of large sums within them.”

The Baltic nation’s reputation recently got a hit after seeing Europe’s biggest scandal with Danske Bank accused of funneling $230 billion in illicit funds through the Estonian branch.

Estonia, which has a 1.2 million population, has also been seeing the issuance of digital IDs, a program that started in 2014, to e-residents down from the 2018 peak, having already issued 70,000 from 174 countries.

In June this year, the nation also canceled the licenses of 500 crypto firms, 30% of the total, as part of the clampdown on illicit financial flows.

Still, a new set of frauds have been detected. Officials had warned earlier that the e-residency program, allowing non-residents to run businesses from abroad, needed changes to avoid criminal abuse and improve its security.

Police have also moved to curb down on companies that exchange and help clients hold digital currencies.

The e-residency team is currently working “hand in hand” with the police and the FIU. “The survey doesn’t show that all fraudsters have been e-residents, but that there have also been e-residents among fraudsters,” said its head Ott Vatter.

According to the police, a “considerable connection” with e-residents is raising the risk of reputational damage in the crypto sector of Estonia, where about a third of companies, 554, providing crypto services have at least one e-resident as a related party.

Compared to 1,234 companies with cryptocurrency licenses at the end of last year in the country, as of August, there were only 353.

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Author: AnTy

Despite The Risk, DeFi Continues to Swell Even More; Driving Ether Higher

DeFi tokens are becoming increasingly more accessible through centralized exchanges, such as Coinbase listing YFI this week, which though net positive for the ecosystem, also presents the risks of FOMO, the fear of missing out.

This phenomenon gets exacerbated by the increased retail demand, and when the price reaches beyond expectations, the fear of getting rekt too.

As in some of the DeFi tokens, like Aave, which surged 7,500% YTD, this makes the secondary market trading an “incredibly crowded long-trade,” which, as recently seen, results in “an unaggressive unwind and subsequent avalanche of margin calls.” But despite all this, Denis Vinokourov of Bequant says,

“The prospect of achieving above market average returns is expected to lead to an influx of retail flow and with it, the size of the DeFi ecosystem will begin to swell even more.”

The TV in DeFi is back on the upside, currently at $8.5 billion, not far away from its ATH at $9.5 billion, as per DeFi Pulse.

Pushing the Small Players Out

As we have seen lately, major decentralized exchanges (DEXs) are transacting in greater volume than some of the largest centralized exchanges like Coinbase.

But with this activity comes the ballooning of Ethereum gas costs as the majority of these DEXs are built on Ethereum blockchain. Because of this, the second-largest network is all set to generate $1.5 billion in yearly fees, as per TradeBlock.

The biggest driving force behind this is yield farming, where users participate in the revenue earned by these DEXs. In exchange for providing liquidity on DEXs like Uniswap, they receive reward tokens in the form of yield on their staked capital, which can then be sold in the market or staked across other platforms for more rewards.

And all of this happens on the Ethereum blockchain, which requires gas, which is needed to transact with smart contracts. Because the yield return is highly profitable, it increases the demand for ether, which is required for gas. Besides yield farming, placing an order on DEX needs gas as well.

ETH Daily Gas Used Over Time
Source: TradeBlock

So, this increased demand for yield farming and DeFi token trading resulted in demand for gas costs and Ether to an ATH. Gas fees generated through the Ethereum blockchain also reached a new peak of $17 million per day, averaging around $5 million. This also means DEXs have become expensive, making it not suitable for small scale traders.

Ethereum Holding Strong

One good thing in this direction came from Ethereum, whose much-delayed update is on track for a November 2020 launch, although only time will tell.

The DeFi craze has also brought Ethereum competitors in the limelight. Binance also launched its Binance Smart Chain, which boasts of cheaper transactions.

Monero’s lead developer Riccardo Spagni said this costless switch might actually make “ETH less useful.” He said,

“So “Binance Smart Chain” launched, & it’s basically a drop-in replacement for ETH. You point your wallet at their version of Infura, use their clone of Etherscan, & you keep your ETH address. A bunch of projects are already planning migrations. It has Binance money.”

But according to top DeFi players, Ethereum’s Defi dominance is here to stay, for now at least.

Meanwhile, ETH price is on the rise today, currently at $375. Despite this, ETH whale holders increased their holdings by 84% in the past month to 5.80 million, and the number of whale wallets increased by 1.82 times for one year, signaling their bullishness and confidence in Ether.

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Author: AnTy