Crypto News Roundup: A Week of Controversies
Crypto News Roundup: Bitwise Withdraws ETF, Robinhood Buys Back SBF’s Shares, Turkey’s Crypto Boom, and Cambridge’s Bitcoin Energy Index, A Week of Controversies, Lawsuits and Breakthroughs
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In the fast-paced world of cryptocurrency, the past week has been nothing short of eventful. From rumors and legal battles to significant shifts in market dynamics, the crypto community has been buzzing with discussions and debates. In this comprehensive roundup, we delve into the most noteworthy developments that have captured the attention of enthusiasts and investors alike.
BlackRock’s Alleged Bitcoin Buying Spree: Fact or Fiction?
BlackRock, the world’s largest asset manager, has been at the center of a rumor that it is secretly buying up large amounts of bitcoin. The rumor was fueled by social media posts and videos that claimed that BlackRock was a major shareholder in four of the five bitcoin mining companies, and that it had filed an application for a spot bitcoin ETF with the SEC. However, there is little evidence to support these claims, and BlackRock has not confirmed or denied them. Some analysts have suggested that the rumor was a marketing strategy to boost the price and popularity of bitcoin, or a way to distract from the regulatory scrutiny that BlackRock is facing in other areas12.
The Great Shift to Self-Custody: 800,000 BTC Worth Over $20 Billion Pulled From Exchanges in 3 Years
A recent report by Glassnode, an on-chain analytics firm, revealed that more than 800,000 BTC, worth over $20 billion at current prices, have been withdrawn from centralized exchanges in the past three years. This indicates a growing trend of self-custody, where users store their own private keys and control their own funds. Self-custody offers more security, privacy and sovereignty than relying on third-party intermediaries, but also comes with more responsibility and risk. Some of the reasons for the shift to self-custody include the increasing number of hacks, thefts and regulatory actions against exchanges, as well as the emergence of decentralized exchanges and protocols that enable peer-to-peer transactions34.
Tornado Cash Founders Accused of Moving Over $1 Billion Illegally
Tornado Cash, a cryptocurrency mixing service that claims to provide untraceable and anonymous transactions using Ethereum, has been accused by the US government of helping hackers and fraudsters launder more than $1 billion in stolen funds. The US Department of Justice charged two founders of Tornado Cash, Roman Storm and Roman Semenov, with conspiring to launder money, violate US sanctions and operate an unlicensed money-transmitting business. The US Treasury Department also sanctioned Semenov for providing material support to Tornado Cash and to the Lazarus Group, a North Korean cybercrime organization that used Tornado Cash to obfuscate hundreds of millions of dollars in virtual currency stolen from various exchanges56.
Court Rules in Favor of Grayscale Against SEC
Grayscale Investments, the largest crypto asset manager in the world, has won a lawsuit against the SEC over its application to convert its Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF. The US Court of Appeals for the D.C. Circuit ruled that the SEC did not offer any explanation as to why Grayscale was in the wrong, and ordered the SEC to vacate its decision and review Grayscale’s application within 45 days. This does not guarantee the approval of Grayscale’s spot bitcoin ETF, but it is seen as a positive sign for the crypto industry and other firms that have filed similar applications, such as BlackRock and Fidelity78.
France’s Data Watchdog Conducts Checks at Worldcoin Office in Paris
Worldcoin, a crypto project co-founded by OpenAI CEO Sam Altman, has faced increasing scrutiny from regulators around the world over its iris scanning technology. Worldcoin requires users to provide their iris scans in exchange for a digital ID and free cryptocurrency. Its website says it has signed up 2.3 million people globally. However, privacy campaigners have raised concerns over its data collection and use. France’s data watchdog CNIL carried out “checks” at Worldcoin’s Paris office this week, after previously stating that the legality of its biometric data “seemed questionable”. Other countries such as Argentina, Britain, Germany and Kenya have also launched investigations or suspended Worldcoin’s activities910.
Bitwise Retracts Bitcoin and Ether Market Cap Weight Strategy ETF Registration
Bitwise, a leading crypto asset manager, has decided to withdraw its application for a Bitcoin and Ether Market Cap Weight Strategy ETF, which was filed with the U.S. Securities and Exchange Commission (SEC) on Aug. 3. The proposed ETF aimed to invest in Bitcoin and Ether futures contracts based on their relative market capitalization. However, Bitwise did not provide any explanation for its withdrawal, which came as a surprise to many observers. Some analysts have suggested that Bitwise may have faced regulatory hurdles or competitive pressures from other firms that have filed similar applications12.
Robinhood to Buy Back SBF’s Stake for Over $605 Million
Robinhood, the popular commission-free trading app, has agreed to buy back more than 55 million of its own shares that were previously owned by Sam Bankman-Fried (SBF), the disgraced crypto mogul and founder of FTX. The deal is worth over $605 million and settles a long-running ownership dispute. The shares were originally acquired by Emergent Fidelity Technologies, a holding company majority-owned by SBF that went bankrupt shortly after FTX and the rest of his sprawling crypto empire collapsed last fall. The shares were then seized by the U.S. Department of Justice as part of the charges against SBF, who is currently in jail awaiting trial for fraud, money laundering, and violating campaign finance laws34.
Turkey Sees Increased Crypto Adoption Amidst Inflation Concern
Turkey has witnessed a significant increase in crypto adoption as its population seeks alternatives to combat high inflation. According to a survey conducted by KuCoin, one of the world’s largest cryptocurrency exchanges, the adoption rate has risen from 40% to 52% over the past year and a half. The survey revealed that 58% of respondents invest in cryptocurrencies primarily to accumulate wealth over the long term, while 37% view it as a store of value. Bitcoin remains the most popular cryptocurrency, owned by 71% of investors, followed by Ethereum and other stablecoins. The survey also emphasized the growing involvement of young women in Turkey’s cryptocurrency sector, with 47% of investors in that age group being female56.
Cambridge’s Bitcoin Electricity Consumption Index Reveals Lower Energy Consumption
The Cambridge Bitcoin Electricity Consumption Index (CBECI), a tool that provides a real-time estimate of the total electricity load and consumption of the Bitcoin network, has undergone its first major revision since its launch in 2019. The revision was prompted by evidence indicating a periodic overestimation of electricity consumption due to the use of outdated assumptions about mining hardware efficiency and network dynamics. The updated model incorporates more accurate data sources and methodologies, resulting in lower estimates of Bitcoin’s energy use. According to the CBECI, the annualized consumption of Bitcoin as of Sep. 3 is 131.65 terawatt-hours (TWh), down from 143.15 TWh on Aug. 3178.
Conclusion
The cryptocurrency landscape is continually evolving, marked by controversies, legal battles, and breakthroughs. As the crypto community navigates these dynamic waters, one thing remains certain: the future of digital finance is bound to be just as eventful as the past week's developments.
FAQs
1. What is the significance of the Grayscale vs. SEC court ruling for the crypto industry?
The court ruling in favor of Grayscale against the SEC is a positive sign for the crypto industry as it indicates that regulatory hurdles may be overcome for similar ETF applications.
2. Why is self-custody gaining popularity among cryptocurrency users?
Self-custody offers enhanced security, privacy, and control over one's assets, addressing concerns related to exchange hacks and regulatory actions.
3. What are the concerns surrounding Worldcoin's biometric data practices?
Privacy advocates have raised concerns about the collection and usage of iris scans for digital IDs in exchange for cryptocurrency on the Worldcoin platform.
4. Why did Bitwise withdraw its ETF application, and what are the implications?
Bitwise's withdrawal from the ETF race has raised questions, with reasons unclear. Speculation suggests regulatory challenges or competition from other firms.
5. How has Turkey's crypto adoption changed in response to inflation concerns?
Turkey has seen a significant increase in crypto adoption, with more citizens turning to cryptocurrencies as a hedge against rising inflation.
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