While the IMF Urges Africa to Strengthen Crypto Regulation, US Senators Demand Justice for FTX Victims

Alexander Salazar
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<strong>While the IMF Urges Africa to Strengthen Crypto Regulation, US Senators Demand Justice for FTX Victims</strong>

The International Monetary Fund considers that using crypto assets threatens the effectiveness of the monetary policy, risking financial and macroeconomic stability. US Senators Elizabeth Warren and Sheldon Whitehouse believe that new information will prove that FTX defrauded its customers.

The International Monetary Fund (IMF) recently urged African governments to tighten their cryptocurrency regulations to protect consumers further. The economists of the international organization pointed to the FTX collapse and the resulting drop in cryptocurrency prices as justification.

The experts believe there should be a balance between risk minimization and innovation maximization. They cautioned that adopting crypto assets as legal tender would threaten public finances.

The IMF also argued it is possible to use cryptocurrencies to transfer funds illegally, thus violating regulations on capital flows. That international organization also said using crypto assets extensively threatens the effectiveness of the monetary policy.

The economists of the IMF reported that 25% of sub-Saharan African countries formally regulate cryptocurrencies, while two-thirds restrict them somehow. For example, countries like Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of the Congo have prohibited cryptocurrencies.

The financial experts pointed out that Kenya, Nigeria, and South Africa are the nations with the most users in the region.

Jack Dorsey, the former CEO of Twitter, said in 2019 that Africa would determine the future of Bitcoin (BTC). Before that, the analysts of KuCoin estimated that the average monthly crypto transactions in the region would grow by 1,386.7%.

Last year, the Central African Republic approved Bitcoin as a payment method alongside the local franc (XAF). Previously, the Salvadoran authorities received constant criticism from the IMF for doing that.

Two US Senators Recommend Strong Action against FTX

US senators Elizabeth Warren and Sheldon Whitehouse urge the Justice Department to take strong measures against FTX. They wrote a letter to Attorney General Merrick Garland and Assistant Attorney General Kenneth Polite to demand justice for the victims.

The plaintiffs stated that they expect the Department of Justice to investigate the events occurring on November 11th. Therefore, they would have to determine why FTX collapsed to punish only those responsible for committing the fraud crime.

However, nobody knows which laws FTX and Sam Bankman-Fried violated or whether they remain subject to US law.

The senators believe that new information emerging from the investigation will help better understand how the collapse of FTX affected its clients.

They also think it may prove that the problems in the crypto industry are beyond the FTX case. That led them to request the Department of Justice to focus on the victims to pursue legal action against those responsible.

Senator Warren recently expressed her antagonism toward the cryptocurrency sector, which she views as a creation of scammers.

Meanwhile, Bitcoin is trading around USD 16,428 and has accumulated a 1.6% gain in the last 24 hours. While its daily trading volume is above USD 19.26 billion, its market capitalization is approximately USD 315.70 billion, according to CoinGecko.

By Alexander Salazar

Former Microsoft Executive Talks about the Future of Web 3.0 and Moving to NEO

Audy Castañeda
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<strong>Former Microsoft Executive Talks about the Future of Web 3.0 and Moving to NEO</strong>

John deVadoss, former CEO of Microsoft, talks about what he learned during his time at the tech giant. To grow this space, it’s clear to him that building should be easier for Web 3.0 developers.

John deVadoss spent nearly two decades at the top of Microsoft as CEO. From 1998 to 2016, John was instrumental in creating .NET, Microsoft Digital, Azure, and Visual Studio Tools, among others. Now, he is building for Web3 Developers.

He is currently Head of Development at Neo (NEO), an open-source Blockchain that was at one time widely known as the “Chinese Ethereum”. Founded as Antshares in 2014, it is believed to be the first public Blockchain in China, and the first chain to adopt a dual token model, as well as BFT-style consensus process.

In this regard, why did a former Microsoft CEO decide to pack up and go Web 3.0? For John, it was the slow realization that the current power-hungry model of the Internet was fatally flawed.

Another motivator was the recognition that decentralization had become a red herring and a buzzword with little connection to reality. In his mind, what really mattered was “self-sovereignty”.

“That’s really what led me to want to build in the Web 3.0 space,” he says. “And certainly to contribute my previous experiences, having worked on and built significant parts of what is called Web1 and unfortunately also called Web 2.0.”

Web 3.0 Developers First

For the past few years, Neo has focused on building an interoperable dApp ecosystem backed by a thriving global developer community. It boasts of being the most feature-rich platform for creating dApps. To get to that promised land, deVadoss insists that projects must put developers first.

deVadoss summarizes his learning at Microsoft by stating, “It’s critical that you have the humility to ship and then quickly iterate based on what your users and developers want. The customer is always right. In this case, for me, my clients are the developers.”

“These are not Your Father’s Requests”

Despite building tools and continually championing his new industry, deVadoss feels that he is still met with skepticism from the developer community about building in Web 3.0. Part of that skepticism stems from the different ways that Blockchains operate.

He explains how, for traditional developers, the notion of economic platforms that include cryptoeconomic protocols, incentives, and penalties in the underlying stack is still a very foreign concept. “It takes time to be able to understand and comprehend it, let alone be able to exploit it, use it to build and create value.”

John and Neo’s desire to focus on the developer experience seems well-founded. Despite the recent market downturn, there is more interest than ever in developing Web 3.0, according to a report by Alchemy. Judging by the downloads of two key Web 3.0 libraries, Ether.js and Web3.js, activity has tripled since the third quarter of last year and tenfold since 2018.

By Audy Castaneda

Should Argentina Follow El Salvador and Offer Bitcoin Bonds?

Audy Castañeda
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<strong>Should Argentina Follow El Salvador and Offer Bitcoin Bonds?</strong>

JAN3 CEO Samson Mow suggests Argentina start the Bitcoin Bonds program to raise capital for other income-generating activities. Mow believes that Bitcoin can help Argentines beat inflation through a gradual introduction.

JAN3 CEO Samson Mow argues that Argentina should offer Bitcoin Bonds and transition to using BTC as legal currency.

Mow suggested that Argentine Bitcoin bonds could raise capital for other income-generating activities whose proceeds can be used to pay off bond coupons and buy more Bitcoin.

Mow also believes that Bitcoin could gradually be incorporated as a national currency to replace the peso, which is undergoing rapid devaluation, as a result of tangle of policies that have failed to stabilize its value. He advises making the transition from pesos to dollars, and then from dollars to Bitcoin.

He also believes that, like El Salvador, Argentines can mine Bitcoin using relatively cheap natural gas, as well as power from untapped hydroelectric sources.

So far, Mow has not engaged with Argentine leaders on the possibility of Bitcoin Bonds in the country but has played a vital role in the development of the Salvadoran Bitcoin bond issuance.

HODLing Bitcoin

Since adopting Bitcoin as legal tender in September 2021, El Salvador’s President Nayib Bukele has faced backlash from the International Monetary Fund and ratings agency Moody’s, which said the country’s Bitcoin operations rose its risk profile.

Despite the setbacks, Bitcoin payments have gained popularity and are accepted in hotels, restaurants, pool halls, and even street vendors. A smaller seller may have Bitcoin, while larger companies use it as a marketing strategy.

Argentines, in contrast to Salvadorans, have traditionally viewed the US dollar as a safe asset over the long term. That strategy, though, was frustrated by the Argentinian government, which limits dollar purchases to $200 and charges heavy taxes on dollar-denominated transactions.

Despite its volatility, Argentines now prefer Bitcoin over the peso and the dollar. According to an August 2022 New York Times article, around a third of Argentines trade cryptocurrencies at least once a month. They find it easier to cope with the short-term volatility of Bitcoin than with the devaluation of the national currency.

BTC is not the Problem, Bitcoin Believers Say

The recent collapse of cryptocurrency exchange FTX and the criminal charges piling up against its former CEO, Sam Bankman-Fried, have drawn attention to whether cryptocurrencies like Bitcoin are a problem or whether the collapse is simply a matter of irresponsible business practices.

Bitcoin maximalists like MicroStrategy CEO Michael Saylor were quick to distance Bitcoin from the FTX situation, arguing that, unlike most cryptocurrencies on exchanges, Bitcoin is a commodity rather than a security.

In a CNBC interview on November 17, 2022, Strike CEO Jack Mallers said that the FTX saga was “nothing but an absolutely disgusting and malicious crime.”

By Audy Castaneda

Many Angry Investors Consider Sam Bankman-Fried Should Go to Prison for the Crime of Fraud

Alexander Salazar
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<strong>Many Angry Investors Consider Sam Bankman-Fried Should Go to Prison for the Crime of Fraud</strong>

The former CEO of FTX receives hate comments daily, as around 50 million cryptocurrency traders their funds on the bankrupt exchange. Meanwhile, the Turkish finance minister said the Financial Crimes Investigation Committee would investigate him for fraud charges.

After FTX collapsed alongside its sister companies two weeks ago, it filed for bankruptcy protection in a US district court. The company crashed due to the mismanagement of high-level user funds and a minor controversy with Binance.

Sam Bankman-Fried, the former CEO of FTX, receives hate comments on Twitter daily. Around 50 million cryptocurrency traders suffered considerable losses due to the collapse of the exchange.

According to The New York Times, many questions and stories remain to know and understand the crash of FTX. John Deaton, the founder of Crypto Law, said US agencies should arrest Bankman-Fried on the charge of fraud.

Most cryptocurrency exchanges now display the fund reserves of their users to avoid facing a similar situation. Due to the fear caused by the FTX collapse, many investors withdrew their funds from Crypto.com.

Turkey Launches an Investigation into Sam Bankman-Fried

Nureddin Nebati, the Turkish finance minister, recently said the Financial Crimes Investigation Committee launched an investigation into Sam Bankman-Fried for fraud charges.

The government of the Eurasian nation, where FTX TR is a subsidiary of FTX, seized the assets of Bankman-Fried for investigation.

The Finance Minister said he would coordinate the investigation of the situation with the Financial Crimes Investigation Committee (MASAK).

Nebati expressed the need to approach the crypto market cautiously, highlighting that the crypto market poses risks.

A report indicates that Turkey banned payments with cryptocurrencies in April 2021. Besides, domestic payment service providers cannot integrate crypto assets into their small business designs. However, it is among the primary consumers of cryptocurrencies worldwide due to the devaluation of the lira (TRY).

In October, the Turkish central bank announced programs to test the national CBDC before launching it in 2023. China was the first country to work on creating a digital currency to fight the dominance of the US dollar.

The Consequences of the FTX Collapse Have Lasted Until Now

FTX, the third-largest cryptocurrency exchange by trading volume, collapsed and filed for bankruptcy protection. Bankman-Fried apologized to traders and tried to help the platform recover, which seemed unfeasible due to the lasting adverse effects.

The crypto market has fallen, with Bitcoin (BTC) dropping below USD 16,000 and remaining trapped there.

Meanwhile, Bitcoin is trading at around USD 16,532 and has accumulated a 0.5% loss over the last 24 hours. While its daily trading volume is above USD 25.98 billion, its market capitalization is about USD 318.15 billion, according to CoinGecko.

The relevance of cryptocurrencies is increasingly evident in the economic system, which the collapse of FTX has confirmed. That event has affected the crypto market, causing cryptocurrencies like Bitcoin and Ether (ETH) to lose value.

It is only a matter of time before the price of BTC and the leading altcoins recover from the current bearish trend. However, investors should research before buying them to learn about their all-time highs, behavior, and possible future price.

By Alexander Salazar

Texas Academics Propose Tax Cut for Bitcoin Miners

Audy Castañeda
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<strong>Texas Academics Propose Tax Cut for Bitcoin Miners</strong>

Bitcoin miners have a lot to contribute to the Texas energy grid. The working group also recommends promoting education in Bitcoin and Blockchain.

A working group specialized in Blockchain from the state of Texas, United States, issued a report with multiple recommendations on the Bitcoin, Blockchain, and cryptocurrency industry.

The report was made by the Texas Work Group on Blockchain Matters, created last year by the governor of Texas, and made up of local academics.

These, in the report, make suggestions to legislators on how the different facets of the industry should be regulated, such as Bitcoin mining, the issuance of cryptocurrencies by private entities, Decentralized Finance (DeFi) platforms, and education.

The SMU Dedman School of Law tweeted that, “The Texas Work Group on Blockchain Matters released its report and proposed master plan to expand the blockchain industry in Texas. @Prof_CarlaReyes was appointed by Governor Greg Abbott to chair the Work Group.”

Bitcoin Mining, Key to Local Development

The report notes that mining companies have brought progress to rural or underdeveloped communities, as well as an increase in local employment.

“Local businesses have benefited from the increase in mining and many local residents have obtained better-paying jobs thanks to mining companies,” they say.

 “There are challenges in providing houses and amenities to the employees. The miners appear to be investing in building proper infrastructure, but it will take time for these rural communities to turn that flow of capital into long-term economic prosperity.”

They also point out that, although Bitcoin mining consumes as much energy as entire countries, this industry tends more to use renewable energy, as well as to reduce its carbon footprint, than other industries.

“In particular, the cryptocurrency mining industry has massively embraced renewable energy,” they state.

To encourage this, the task force recommends reducing taxes, claiming that, “Texas should promote controllable or interruptible energy charges, like Bitcoin mining, by lowering taxes on the purchase of electric power, when it is used to mine Bitcoin”

Their intention is for miners to be able to interrupt their electricity consumption and transfer that energy to the rest of the network when necessary, in exchange for paying fewer taxes.

Education is Key

Education plays an important role in the report. As they announce, they have created certification programs in bitcoin mining, issued by institutes of higher education.

Texas State Technical College (TSTC) and the Texas Bitcoin Foundation (TBF) have facilitated education with mining companies operating in Texas. TBF has also provided a scholarship to support the first class of students in Bitcoin mining courses, to start in January 2023.

As they explain, the TSTC creates its courses based on the demand for employees by local companies. Thus, they make it clear that the demand for employees in the Bitcoin mining sector is enormous.

By Audy Castaneda

Institutional Investors Remain Hopeful in Crypto Despite Bear Market

Audy Castañeda
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<strong>Institutional Investors Remain Hopeful in Crypto Despite Bear Market</strong>

More than sixty percent of cryptocurrency investors increased their allocations in the past year, according to a recent survey. Only 12% of cryptocurrency investors reduced their holdings in the bear market.

Despite bearish market sentiment, 62% of cryptocurrency investors increased their allocations in the past year, according to a Coinbase-sponsored study of institutional investors.

According to the survey, only 12% of cryptocurrency investors chose to reduce their holdings. The investigation includes the fallout from the Three Arrows Capital collapse that shocked the industry earlier this year. And now again, the FTX bankruptcy has disturbed other companies in the area.

Investors See a Weak Market as an Opportunity

This survey includes 140 US-based institutional investors who manage approximately $2.6 trillion in assets. In particular, institutional investors increased their holdings during the crypto winter.

Right now, many are reportedly seizing the opportunity to make long-term investments.

The survey results show that differential performance is the main reason investors want to invest in cryptocurrencies. In addition, many expressed a desire to pursue high-tech. This may be the reason why there has been an increase in cryptocurrency investments.

According to the report, 58% of investors anticipate increasing their allocations over the next three years. The majority of investors (59%) currently employ or intend to trade a buy-and-hold strategy.

Currently, the global cryptocurrency market capitalization was just under $860 billion. This is a major recession from the 2021 peak of over $2 trillion.

Bitcoin was hovering around $16,500, wiping out most of the market capitalization. However, the report highlights elevated volatility as a desirable opportunity for these institutional investors to produce additional or alpha gains.

Long-Term Crypto Predictions Remain Positive

The markets are currently experiencing “deeply negative sentiments,” according to the latest weekly report from CoinShares. Despite that, it reported inflows of $44 million for the week, with most of the investment coming from short-term investment products.

The survey reveals that people continue to have a favorable attitude towards digital assets, with 72% of respondents agreeing that they are here to stay.

Notably, 86% of these people have already invested in cryptocurrencies, and 64% plan to do so. However, institutional investors recognized regulatory compliance as a critical driver of future growth.

Regulations Will Be a Key Factor in Growth

Regulation is also expected to play a crucial role in the future of the industry, according to the Official Forum of Monetary and Financial Institutions, an independent think tank on economic and investment policy.

Starling Bank, located in the United Kingdom, recently tightened its regulations on cryptocurrency transfers and halted all incoming and outgoing payments from exchanges. Therefore, the new rules could make or break the digital asset class in the wake of cryptocurrency crashes.

Policy adviser and former head of the Federal Deposit Insurance Corporation Sheila Bair told the Financial Times that regulators should craft policy for the sector.

By Audy Castaneda

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