US Federal Reserve Prohibits its Officials from Trading Stocks, Bonds, and Crypto

Jenson Nunez
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US Federal Reserve Prohibits its Officials from Trading Stocks, Bonds, and Crypto

Authorities approved the new restrictive rules on Friday as an alternative to reinforce public trust and make officials adhere to ethical guidelines. The FED would adopt new restrictions regarding the investments made by its officials.

As reported by CNBC and Fortune, the central bank of the North American nation has revealed new policies that will prohibit its employees from carrying out transactions with a series of assets, including bonds, stocks, and cryptocurrencies.

The Federal Open Market Committee (FOMC) gave green light to the new policies this week. The regulations, which got initially revealed in October of last year, will come into force on May 1. The new restrictions come according to the recent controversy surrounding the officials’ dubious investment practices.

The policies got created to reinforce public confidence regarding the impartiality of the Committee’s work by avoiding any conflict of interest, this statement got said by the Fed this Friday.

According to reports, Fed officials will not be able to purchase Bitcoin; the ban will get extended to top policymakers, such as those on the FOMC, along with the senior staff.

These policies will also be available for various representatives, like the regional bank presidents and a host of other officials, including staff officers, bond desk managers, and Fed employees who work with board meetings on a regular basis.

The new rules would replace already existing regulations that, while somewhat having a restrictive structure, are still allowing officials such as regional presidents to acquire and sell shares. Likewise, the initial restrictions raised in the October document got expanded to add digital assets such as Bitcoin.

According to the report from that outlet, the new policies also require officials to issue a 45-day notice for transactions. They must receive approval before any purchase and sale. These rules also prohibit trading during moments of stress for the financial environment.

Authorities added in statements to reporters that any disruption will get reviewed on a case-by-case basis. However, they did not bring further details on the possible sanctions that could get implemented to employees who do not violate the measures.

Measures Seek to Guarantee Ethical Practices

Officials who still hold positions in the market will have 12 months to get rid of these prohibited positions. For their part, the new FED officials will have at least six months to do so.

The approval of the stricter measures comes after three senior Fed officials got involved in unusual trading activity that raised questions about ethical compliance when the central bank interferes with economic policies to deal with the situation during the COVID-19 pandemic.

The Fortune media recalls that disclosures presented that the bank’s vice president, Richard Clarida, sold at least USD 1 million of shares in February 2020 before purchasing a similar amount of the same funds.

This event happened a few days later on the eve of a prominent announcement of the FED on measures to cushion the economic crisis. Clarida resigned in January of this year.

By: Jenson Nuñez

Bitcoin briefly falls below $43,000 as Fed says an interest rate hike would soon be ‘appropriate’

Audy Castañeda
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Bitcoin briefly falls below $43,000 as Fed says an interest rate hike would soon be ‘appropriate’

Following Wednesday’s Federal Open Market Committee (FOMC) minutes, forecasts point to a March rate hike, but equities also fear geopolitical instability this week. Short-term Bitcoin price action looks unappealing thanks to a macro cocktail of downside triggers.

The president of the United States presented a Russian invasion of Ukraine as an imminent fact. Joe Biden and other high officials made the claim this Thursday, February 17, which precipitated a fall in the main actions of the US stock market and that of cryptocurrencies. Bitcoin posted an 8% decline this Thursday and is hovering above $40,000.

The surprise appearance at the United Nations, this Thursday, of the Secretary of State of the United States, Anthony Blinken, and the declarations of President Biden about a potential incursion “in a matter of days”, ignited all the alarms among investors and precipitated the markets down.

Previously, Bitcoin had posted a rally earlier this week and was attempting to break the $45,000 resistance. With this push, the cryptocurrency market managed to exceed USD 2 trillion in capitalization, as reported by CriptoNoticias, on Tuesday 15th. The fluctuation above USD 44,000 maintained for two days, until the abrupt fall this Thursday.

Fed Hints at interest Rate Hikes

Data from Cointelegraph Markets Pro and TradingView showed the BTC/USD pair trading in a slightly widened zone with $44,500 as the top for the past 24 hours.

Overnight, the pair had returned to the top of its intraday range following comments from the US Federal Reserve.

The minutes of the Federal Open Market Committee (FOMC) of the meeting at the end of January, expected to give clues about possible increases in interest rates, ended up giving few surprises. The first hike could come in March, but there has been no firm commitment to the process.

“The Committee tries to maximize employment and inflation at a rate of 2% in the long term,” read an accompanying statement. The FOMC added that, “in support of these goals, the Committee decided to maintain the target range for federal funds interest rates between 0 and 1/4 percent. With inflation well above 2 percent and a strong labor market. The Committee hopes that it will soon be appropriate to raise the target range for federal funds rates.”

The FOMC also remarked that it intended to completely curb asset purchases in March, in line with previous plans, given that February purchases were to amount to at least $30 billion.

With little new information, cryptocurrency markets were uninspiring heading into Thursday. However, optimism was still present thanks to the strength of the BTC price in the last two weeks.

“My bias has changed a bit and now favors a squeeze towards $53,000 before mid-March,” popular trader and analyst Pentoshi said as part of his latest Twitter update.

Others also pointed to the comparatively strong price performance this month compared to previous episodes in Bitcoin’s decline from all-time highs last November.

For example, rallying close to $33,000 in January successfully averted a miner capitulation event in which miners must sell or stop mining altogether because the Bitcoin spot price is lower than its production cost.

Matthew Hyland, an on-chain analyst who also does technical cryptocurrency analysis, has asserted on Twitter that there is “no reason to panic until support failed, no reason to be too excited until resistance breaks. Just let it do its thing; take your emotions out of it.”

Tensions in Russia continue to weigh on stocks and cryptocurrencies

Other macroeconomic signs of the day came from the new uncertainty surrounding the novel Russia-Ukraine, with the appearance of reports of hostilities overnight. Reports of violence in the Ukraine-Russia standoff added to the gloom, coming after conflicting claims of de-escalation by Russia and an “imminent” invasion by the US government.

Previously, the US government called claims that Russia was trying to de-escalate the situation on the Ukrainian border “false”, something that, on the contrary, would have made markets nervous.

“Yesterday, the Russian government said it was withdrawing troops from the Ukraine border… now we know it was false,” a senior official quoted by the Financial Times on Wednesday.

Stock futures were down at least 0.5% before the opening on Wall Street.

By Audy Castaneda

JPMorgan Becomes the First Bank to Enter the Metaverse

Audy Castañeda
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JPMorgan Becomes the First Bank to Enter the Metaverse

     

According to the Wall Street bank, the metaverse represents a market opportunity of a trillion dollars in annual revenue.

JP Morgan Chase debuted in the metaverse on Tuesday with the launch of a salon in the virtual world Decentraland, a project based on the Ethereum Blockchain. The announcement came with the publication of a study in which the US investment bank analyzes the potential of metaverses and web3, as well as explaining the causes of its “exploding interest”.

The hall is named after Onyx, just like the Blockchain-based payment platform created by JP Morgan in 2020. The firm, positioned as the largest worldwide bank in the United States, intends to offer a set of financial services virtually within the metaverse.

According to the Wall Street bank, the metaverse has a $1 trillion market opportunity in annual revenue as creators take advantage of Web3 to monetize their work in new ways.

JP Morgan director: “I don’t call them cryptocurrencies, I call them ‘сriptotokens’.”

Jamie Dimon, CEO of US bank JPMorgan Chase, says he no longer uses the word “cryptocurrency,” because “the currencies have rules of law behind them, central banks and tax authorities,” Dimon said in an interview with Ekathimerini published this week.

The general director of JPMorgan pointed out that “people should be careful”, while calling for “greater control by the States” in regard to this type of asset, since – he recalls – “in the last two months [cryptocurrencies] have lost half their value in the US market.”

Asked if JPMorgan has its own cryptocurrency, Dimon replied that it is necessary to “separate dollar-backed [assets].” “We have a JPMorgan coin, with which you can get cash from us or someone else. It represents the dollar in our bank,” he explained.

The director of JP Morgan further asserted that, “We are not here to suggest that the metaverse as we know it today will take over all human interactions, but rather to explore the many exciting opportunities it presents for both consumers and brands.” He added that, “when one thinks of the metaverse economy, or metagenomics, there are opportunities in almost every area of ​​the market.”

It is worth mentioning that JP Morgan has been working on building an interbank information and wholesale payments network based on a permissioned Blockchain since 2018. The firm even created its own token, JPM Coin, in early 2019. Now, with the foray into the metaverse, JP Morgan hopes that the skills acquired in this process will be useful to the users.

Why did JP Morgan enter the metaverse?

JP Morgan head of cryptocurrency and metaverse Christine Moy said in an interview that metaverses are a reality today, so the next step is to build “technology, business infrastructure, privacy/identity, and manpower, to maximize all the potential of our lives in the metaverse.” However, the firm also finds that metaverses offer multiple business opportunities.

In the report that accompanied the launch of its virtual lounge at Decentraland, JP Morgan estimates it likely “that the metaverse will infiltrate all sectors in some way in the coming years”, with a market opportunity that it calculates at more than USD 1 trillion year.

According to the firm’s analysts, the metaverse offers a range of business possibilities, social exchange, monetizing creations, and property, through non-fungible tokens (NFT) as well as strategic alliances.

“We see companies of all shapes and sizes entering the metaverse in different ways, including household names like Walmart, Nike, Gap, Verizon, Hulu, PWC, Adidas, Atari, and others,” the report notes.

Additionally, the firm points out that the metaverse offers the opportunity to earn money for service providers since they will have to “develop and build the products and services that are consumed in the virtual world,” marketing and advertising among them. According to their calculations, ad spending in the metaverse may reach $18.41 billion by 2027.

Other international banks such as Santander and BBV have also recently entered the metaverse. CriptoNoticias reported that a Spanish real estate company named Metrovacesa, of which both banks are the main shareholders would focus on home marketing through the Decentraland metaverse.

By Audy Castaneda

Blockchain Community Busts Alleged $20M NFT Auction Scam

Audy Castañeda
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Blockchain Community Busts Alleged $20M NFT Auction Scam

Thanks to crypto enthusiasts, the suspected scammers were caught on the spot.

Late Wednesday, internet sleuth and YouTuber Coffeezilla posted a new video documenting how he, along with members of the Blockchain community, brought down an alleged $20 million non-fungible token, or NFT, scam before that could be carried out. As Coffeezilla recounts, there was previously a lot of buzz among users about a new cryptocurrency project called “Squiggles,” which had an NFT auction scheduled for February 10. At the time, Squiggles had amassed more than 230,000 Twitter followers.

Hours before the expected auction, an anonymous user published a 60-page report claiming that the founders of Squiggles were paid puppets. At the same time, the real people behind the project allegedly belonged to a group of serial NFT scammers operating under the name “NFT Factory LA”.

How the fraud took place: Gavin, Gabe, and Ali out for a scam

Coffeezilla narrates, while citing the document, “Meticulously documents the allegations of NFT Factory LA, made up of ‘Gavin, Gabe and Ali’, behind not only Squiggles but various NFT scams. Among them are League of Sacred Devils, League of Divine Beings, Vault of Gyms, Sinful Souls, Dirty Dogs, Lucky Buddhas, and many more.”

The alleged series of frauds did not go unnoticed, however. Soon enough, Gavin, Gabe, and Ali were exposed by angry crypto enthusiasts for orchestrating the alleged rug-pulls. As a result, they needed to hire “stooges” to carry out work on future projects, such as Squiggles. However, before the night of the project’s $20 million auction, photos circulated on Instagram allegedly showing Squiggles founder Arsalan and Gavin together in the same Rolls Royce.

“Basically, these guys produce NFT projects that have the appearance of trust and quality. And then after launch, it turns out that they are nothing more than scams.”

They later appeared at the same club holding a sign that said “Squiggles Boys”, and then a photo appeared with Gavin, Gabe, and Ali in the same photo in the same place. “Quickly, people figure it all out,” Coffeezilla said. Hours after the launch, OpenSea pulled the project from the platform.

It appears that the alleged scammers also attempted to manipulate the volume of NFT sales. As Coffeezilla discovered, “[Via EtherScan] A single account spent 800 ETH [$2.384M], which is over $2M spread across two transactions that created hundreds of new wallets. These fake wallets then bought three NFTs from Squiggles and immediately listed on OpenSea for less money.”

The YouTuber explained that it was difficult to tell “if this resulted in a profit or a loss, either way, they were prevented from taking out the $20 million they could have made, and that’s a good thing.” In the blockchain, Coffeezilla exposes suspected scammers and alerts members to rug-pulls. Earlier this month, he posted an interview featuring disgraced YouTuber Ice Poseidon publicly refusing to return investor funds following an alleged $750,000 DeFi rug pull.

What do scammers do?

According to the media, fraudsters use sophisticated methods to try to hide their identities, including fake and stolen identities, fake addresses, unregistered prepaid mobile phones, virtual private networks (VPNs), fake bills, specialist HMRC said.

“Fraudsters tend to thrive where asset values ​​inflate rapidly, so it’s not surprising to see them capitalizing on the growth of NFTs,” said Sam Roberts, a partner at law firm Cooke, Young, and Keidan, located in the United Kingdom.

By Audy Castaneda

PayPal got Suffocated by the Devaluation, Digital Banking, and the First Cryptocurrency

Jenson Nunez
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PayPal got Suffocated by the Devaluation, Digital Banking, and the First Cryptocurrency

PayPal acknowledged that dollar inflation has impacted its performance. Other financial alternatives, such as Square, Klarma, and Bitcoin, have made customers put PayPal aside.

PayPal managed to register one of the worst daily performances that the company has ever noted since it came to light. With its shares trading today at prices they had achieved three years ago, the highlights are that investors in the electronic payments giant got really disappointed by the company’s performance and its less than optimistic forecasts.

Company executives released fourth-quarter 2021 earnings and future revenue forecasts. The company managed to collect more income than they expected by the end of last year. The company promised growth of only 6% for the first quarter of this year in one course.

PayPal also says they had fewer expectations of user growth for 2022. According to the directive, inflation would be punishing the value of its services, reducing consumer spending. In the same way, they believe that the problems in the supply chains harden achieving better yields for this year.

They consider that the current geopolitical tensions led by Russia’s alleged intentions to invade Ukraine do not allow them to predict a better future for their actions and business growth.

Although PayPal’s analysis sounds like it is attached to reality and its numbers do not show a negative impact, the company has been decreasing its market expectations for several quarters making investors lose faith in the network.

PayPal also said that it had closed at least 4.5 million accounts after discovering various actors taking advantage of its incentive programs, a practice that only reinforces the company’s reputation of censoring its users.

According to These Data, the Behavior of the Market Showed Some Strength

Since the company’s financial information got revealed, PayPal shares have lost at least $50 each. Trading for 104 dollars per unit, the platform’s shares now counts on the same value as they did almost three years ago.

The gains made in the COVID-19 quarantine period, one of the most prolific seasons for PayPal, have been erased from stocks. And although seeing this digital finance giant fall might be striking, it is not the only service that has become famous since 2022 and has had a resounding decay. Platforms such as Netflix, Spotify, and the Meta firm have also registered a reduction in their prices.

What Could be Affecting PayPal?

According to Dan Schulman, CEO of PayPal, this behavior relies on inflation in the United States of America and geopolitical tensions worldwide. Undoubtedly, these two elements have impacted various companies and traditional markets as well as the price of cryptocurrencies.

Furthermore, with a weaker dollar and a world that waits for more ravaged inflation in its economies, it is not surprising that people are simplifying their expenses and aiming at new alternatives to save their finances.

Last year, eBay highlighted that it would stop operations with PayPal and opened up to embrace digital banking. This action ended up in many blows to the digital transaction platform. Additionally, the appearance of wallets such as Klarma, Revolut, and Square seems to be catching way more attention.

By: Jenson Nuñez

The Salvadoran President Tells US Legislators Not to Interfere in his Decisions about Bitcoin

Alexander Salazar
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If that law receives approval, the US State Department must deliver a report to Congress within 60 days. Bukele stressed that US senators have no jurisdiction to meddle in the internal affairs of the Central American country.

Some US senators recently submitted an initiative to develop actions to protect their country from the risks of Bitcoin adoption in El Salvador. The Central American president, Nayib Bukele, reacted angrily against the above proposal on Twitter.

Bukele told the US legislators that El Salvador was not a colony, backyard, or front yard of the United States. The head of state criticized their initiative to interfere in internal affairs.

The president stressed that the US senators have no jurisdiction in El Salvador and cannot control the national policy. He said they should not try to control something they cannot control.

The post by Bukele has received more than 20 thousand likes, and around 6,000 people have shared it.

After the Salvadoran president announced the Bitcoin law in 2021, US officials recommended an effective regulation to prevent risks. However, they found obstacles in the bilateral relationship at the end of the year.

The pioneering cryptocurrency became legal tender in El Salvador on September 7th, 2021. Since then, Nayib Bukele has announced several purchases of BTC, the creation of Bitcoin City, and the issuance of bonds in Bitcoin.

The Senators Fear the US Dollar Will Lose Its Role as the World Reserve Currency

Jim Risch, Bob Menéndez, and Bill Cassidy, members of the US High House, were the senators that submitted the bill. According to the official statements, the senators claim that the adoption of Bitcoin as legal tender in El Salvador poses risks for the United States.

Risch said that the adoption of Bitcoin in El Salvador raises significant concerns about the financial stability and integrity of vulnerable US trading partners. He also believes that it involves the evasion of sanctions by actors using Bitcoin to commit crimes.

Cassidy considers the Spanish American country opens the door to money laundering, undermining the interests of the United States. For example, he expressed his fear that the US dollar would lose its role as the world reserve currency.

The bill Accountability for Cryptocurrency in El Salvador (ACES) Act requires the US State Department to report on Bitcoin adoption in that country. The text should include an analysis of the Bitcoin Law and the capacities of El Salvador to face cybersecurity, macroeconomic, and democratic stability risks.

The senators also want to know how Bitcoin adoption has impacted bilateral trade relations between both countries. They show particular concern about the flow of remittances and the potential reduction in the use of the US dollar in El Salvador. If the ACES Act receives approval, the Secretary of State must deliver the report to Congress within 60 days.

That law would also involve developing a plan to reduce the risks to the US financial system posed by Bitcoin adoption as legal tender. That would apply to El Salvador and other countries that use the US dollar as an official currency in their economies. They would have to submit that plan would have to be presented 90 days after the approval of the initial report.

By Alexander Salazar

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