Crypto Weekly Roundup: A pending bill in California, NFTs on Facebook, CoinSwitch Kuber speaks out on ED search
The week brought Bitcoin back below $20,000 in value on Saturday, while Ether once again fell below $1,600. Most of the top fifty cryptocurrencies and tokens by market capitalization also posted weekly losses as the sector deals with more regulatory disruptions
The week brought Bitcoin back below $20,000 in value on Saturday, while Ether once again fell below $1,600. Most of the top fifty cryptocurrencies and tokens by market capitalization also posted weekly losses as the sector deals with more regulatory disruptions
California’s crypto bill awaits signature
This week, crypto investors were focused on California, where the Digital Financial Assets bill was passed on August 30. The bill makes it mandatory for crypto exchanges and companies to obtain a license from California’s Department of Financial Protection and Innovation in order to operate in the state.
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The Blockchain Association, a crypto advocacy group, expressed its displeasure and urged lawmakers to reject the bill, saying “licensing provisions are designed to install the same kind of burdensome licensing and reporting regime that has slowed the growth of the crypto industry.”
The bill stipulates that stablecoins must be licensed by the state regulator or issued by banks. This has caused stablecoin issuers to worry. From the point of view of the US authorities, these firms must show enough reserves in USD for their tokens. Popular stablecoins such as Tether and USD Coin have market capitalizations in the tens of billions of dollars. However, the state of the bill is set to be phased out in 2028.
The bill, which will take effect in January 2025, now awaits Governor Gavin Newsom to sign it into law. This is expected to happen before 30 September.
NFTs in Meta ecosystem
Since May 2022, Facebook parent Meta Platforms Inc. has launched features that allow users to post and share NFTs, or what it calls “digital collectibles,” on Instagram. This was originally limited to US-based creators and collectors. In August, however, the function was extended to 100 countries.
On August 29, Meta announced that they were allowing users to post their digital collectibles across both Facebook and Instagram. Some Facebook users have expressed concern over the security of their digital wallets containing expensive NFTs.
In its recent report on the NFT market, research firm Elliptic showed that over $100 million worth of NFTs were stolen by fraudsters between July 2021 and July 2022. Of these, 4,600 NFTs were stolen in July alone.
Report after search
CoinSwitch Kuber co-founder and CEO Ashish Singhal claimed in a tweet that the Enforcement Directorate’s (ED) “engagement” with CoinSwitch Kuber was not related to allegations of money laundering or the Prevention of Money Laundering Act.
The agency was said to be investigating the firm regarding the functioning of its crypto platforms and exchanges.
The executive also explained that crypto was a new asset class in the country and that CoinSwitch Kuber was conducting “constructive dialogues” with stakeholders to inform them about the company’s business practices.
CoinSwitch Kuber was valued at approximately $1.9 billion last year, and notable investors include Andreessen Horowitz and Coinbase Ventures.
Last month, the ED froze Rs 64.67 crore worth of WazirX’s crypto exchange bank deposits as part of a money laundering probe.
