Binance has announced that it is leaving the Dutch market after failing to secure an operating license.
The exchange said that its attempts to register with the Dutch Regulator as a VASP have failed.
Binance has assured investors and regulators worldwide that it’s working hard to comply with new regulations like MiCA after being forced to leave the Dutch market. It says that it’s working hard to ensure that its business is fully MiCA compliant; however, it is going to respect the will of regulators in the cases where it does not secure the legal rights to operate in a given location
No more Binance services for Dutch users
Binance is continually facing difficult situations as several of its licenses are being revoked or not given new ones at all. On June 16, 2023, the exchange said it had been forced to exit the Dutch market for not acquiring an operating license as a VASP (Virtual Assets Services Provider).
We regret to announce that Binance is leaving the Dutch market as we have been unable to register as a VASP with the Dutch regulator.
We continue to be committed to working collaboratively with regulators around the world and are additionally focused on getting our business…
The exchange has, however, assured European customers that it is working hard to stay compliant with current rules, especially MiCA. An excerpt from its official blog reads
“We regret to announce that Binance is leaving the Dutch market. With immediate effect, no new users residing in the Netherlands will be accepted. Starting from 2023-07-17 at 00:00 UTC (2023-07-17 at 02:00 UTC+2), existing Dutch resident users will only be able to withdraw assets from the Binance platform. No further purchases, trades or deposits will be possible. We encourage users to take appropriate action by withdrawing assets from their Binance accounts.”
It added that the existing Dutch resident users are being sent emails with comprehensive information on the impacts that will be felt on their accounts and any assets they currently hold there, alongside steps to continue.
This news comes when Nigeria also asked the exchange to cease operating there. Additionally, its US platform is under investigation as a court battle with the SEC continues over allegations that it is operating as an unregistered securities broker in the country.
Keep watching Fintech Express for updates on this and other fintech-related developments.
BlackRock has applied with the SEC to offer a spot Bitcoin ETF.
Other institutional investors like ARK and Grayscale are also waiting to hear from regulators about similar assets.
The development has sparked controversy in the crypto community as they try to determine if it is a good or a bad thing for crypto, as BlackRock is the world’s largest investor and could lead to an ‘institutional Bitcoin grab’.
A BlackRock Bitcoin ETF has sparked controversy among the crypto community as they determine if the $10T asset manager is their savior or doom. BlackRock is known to own large amounts of shares in most public companies. As such, the crypto community is not sure whether the application for a Bitcoin ETF will propel mainstream adoption or urge for centralized control.
Is BlackRock Bitcoin ETF the best thing to happen to crypto?
If approved, the BlackRock Bitcoin ETF will hit the U.S. markets first before being available in other nations. Per a filing by the Nasdaq stock exchange with the U.S. Securities and Exchange Commission, Coinbase Custody Trust Company will be the custodian of the fund’s Bitcoin funds. At the same time, the Bank of New York Mellon will be the custodian of its fiat reserves.
The Blackrock ETF filing is live, and it’s * SPOT *
“The assets of the Trust consist primarily of bitcoin held by a custodian on behalf of the Trust.”
The filing describes it as an iShares Bitcoin Trust that would be traded as Commodity-Based Trust Shares. An excerpt from the filling reads:
“The Shares have been designed to remove the obstacles represented by the complexities and operational burdens involved in a direct investment in bitcoin.”
The SEC has yet to approve a spot Bitcoin ETF despite numerous applications as it considers the asset highly unregulated. BlackRock reiterated this, saying:
“As such, the regulated market of significant size test does not require that the spot bitcoin market be regulated in order for the Commission to approve this proposal.”
Crypto community reacts to BlackRock Bitcoin ETF
The news of BlackRock Bitcoin ETF was received with mixed reactions by the crypto community, with individuals like Galaxy Digital CEO Mike Novogratz being among the ones over the moon with the news. However, some warned that it could be a start of a major institutional takeover.
In an interview on June 16, Mike Novogratz said that BlackRock Bitcoin ETF is “the best thing that could happen to BTC.”
“I say a Hail Mary every night that Larry Fink and BlackRock pull off a Bitoin ETF,” Novogratz added on the Fox News segment.
However, some people are against the introduction of the BlackRock Bitcoin ETF. Investor Scott Melker explained in a June 16 interview that approval would be a disservice to crypto-native innovators who built the industry.
“As good as this may be for institutional adoption of the space, it kind of violates the ethos, it is a bit of a dishonest push away from the people who built the industry in the United States.”
Conversely, some analysts feel that it’s likely that Bitcoin will hit the $1M mark. This has been a market sentiment shared by the likes of Balaji. Steven Lubka, a meaning director at Swan Bitcoin, has shared a similar view saying that BTC will hit the $1M mark. Still, only a few retail investors will reap the rewards as a bulk of the coins will be owned by large institutional investors like BlackRock, Goldman Sachs, and others.
The true government attack vector is not a ban, it's having Blackrock and Goldman pump spot etfs and all of the coins end up held by those etf issuers
BTC goes to $1mil, but no one owns any actual coins, just paper Bitcoin https://t.co/dgnm9QCUXk
Following the news, the Fear and Greed Crypto Index increased by 6 points from 41 to 47-leaving the fear zone. However, it’s still being determined if the market will get further momentum as the SEC may or may not approve the ETF. Keep watching Fintech Express for updates on this and other fintech-related developments.
The US is investigating the impacts of a cyber attack that has hit several governmental agencies.
The attack comes after popular cyber criminal groups sent a warning saying they had allied and would attack the country.
The US government is investigating the impacts of a massive countrywide cyber attack that has targeted several of its official agencies. The US Cybersecurity and Infrastructure Security Agency says it is supporting several federal agencies that have experienced intrusions affecting their MOVEit applications.
Hackers go after US government agencies shortly after sending a warning
According to Eric Goldstein, the Executive Assistant Director for Cyber Security at US Cybersecurity and Infrastructure Security Agency, several federal agencies currently require their support. In a statement to CNN, Goldstein said that the impacted software is MOVEit.
“We are working urgently to understand impacts and ensure timely remediation.” He said.
Groups responsible for the attack are not yet identified though they had issued a warning earlier in the day speaking Russian. They claimed credit for numerous big hacks as part of their hacking campaign.
The news comes when cyber attacks in the country are increasing. Several hacking sprees against US government officials and entities have been noticed, with universities and State governments adding to the tally.
John Hopkins University, Baltimore, and its renowned health system said earlier this week that “sensitive personal and financial information,” like health billing records, may have been stolen in the hack. Additionally, Georgi’a’s state-wide university system that spans the 40,000 student University of Georgia and other state colleges confirmed to be investigating a hack.
As this becomes all too common, it is still yet to be known what the real intentions or motives behind the attacks are. However, the US government is working on investigations and looking for a remedy to deal with the attacks. Keep watching Fintech Express for updates on this and other technology stories.
Hong Kong Central Bank is asking the banks in the area to be more friendly to crypto clients.
Hong Kong banks have recently been featured in news headlines after reports that they were secretly helping crypto platforms.
The shift in crypto regulation in Hong Kong marks a major shift in Asia.
The Central Bank of Hong Kong has specifically asked banks under it to help crypto firms by providing financial services. It wants the banks to work well with “virtual asset service providers” by providing them with fiat ramps and similar services.
Crypto adoption turnaround happens in Asia spearheaded by Hong Kong
In a May 2023 meeting, HKMA asked its banks not to fear giving financial services to crypto platforms. It asked major banks, including HSBC, Standard Chartered and the Bank of China, not to be afraid to offer these services. It noticed that amid reports that other banks had already been doing it, these three weren’t accepting crypto exchanges as their clients.
The Hong Kong Monetary Authority (HKMA) is the region’s central bank and regulator. Its bank had previously feared it regarding offering crypto services as mainland China has been against the industry since its first innovation went public. However, a June 15 report from Financial Times now indicates the opposite.
HKMA is now pressuring international banks not to offer their services to crypto exchanges to change the course of their actions as it believes in paying attention to emerging markets and trends.
🚨 BREAKING: 🇭🇰 Hong Kong Govt Pressures Banking Giants to Accept #Crypto Clients 🚀
HSBC, Standard Chartered, and Bank of China under Fire 🔥
In April 2023, HKMA also issued a circular to banking institutions urging them to be more aware of emerging markets like crypto. It asked them to pay attention and develop a more ambitious approach to new sectors as they could be crucial in future economies.
U.S. might lag further behind in crypto regulation and adoption
These developments from Asia are encouraging, as the region has been known to go hard on crypto. Japan and China have both been resilient in the need for industry reforms. However, Japan accepts the trading of several crypto asset classes. At the same time, China has introduced a blanket ban on all crypto-related assets apart from its own PBOC-issued digital Yuan (e-CNY).
It shows that the tide is turning in that region. However, it is a shocker as the once “friendly” relationship between the crypto industry and the U.S. is becoming a bit sour. Details of poor regulation and hidden deliberations like Hinman’s Documents have surfaced, which showcase aggressive greed and misconduct by top regulators like SEC.
The SEC is already suing Coinbase and Binance for operating without first registering with them. However, it’s good to note that Coinbase had cleared with them before starting operations there. Also, SEC has not yet released a regulatory framework to guide exchanges in what is or is not a security.
Both the crypto community and lawmakers have heavily criticized this move. As a result, a bill has been tabled in the House of Representatives to restructure the SEC and slash the power given to top executives to reform the regulator. However, it could take longer for the U.S. to catch up with other regions like the E.U., which have already introduced and passed crypto regulation bills into law.
Keep watching Fintech Express for updates on crypto regulation and other fintech-related developments.
Stablecoins are pegged to a given currency or commodity and usually tag along with its prices; thus should not deviate from the tagged asset’s value.
There are different types of stablecoins depending on their mode of backing.
What are stablecoins?
Stablecoins are cryptocurrencies whose values are always pegged to that of another currency, commodity, or financial instrument. They are an alternative to the high volatility of other cryptocurrencies and fiat currencies, which may be hard to use digitally.
As such, stablecoins are better to use as a mode of exchange than highly volatile cryptocurrencies. They do not have to be tied to a currency like the U.S. dollar. They can be tied to commodities like gold too.
Types of stablecoins
Stablecoins differ according to the mode of backing. In that way, we currently have three types of stablecoins:
Fiat-collateralized (backed by fiat money or physical commodities)
Crypto collateralized (backed using other cryptocurrencies like BTC and ETH)
Algorithmic (tied to the value of a commodity or a currency using an algorithm that controls how and when coins are burnt or minted to maintain their peg)
Top stablecoins
The market cap of stablecoins exceeds $127 billion, making them an essential part of a current $1T industry. There are many stablecoins in the market, but only a few could have reliability of 80%+. Here are the top six stablecoins by market capitalization
Tether USDT – $83.28B
USD Coin – $28.11B
Dai- $4.6B
Binance USD – $4.49B
True USD – $2.01B
Pax Dollar- $1B
What is Tether USDT?
Tether USDT is the world’s largest stablecoin by market capitalization. It is the most popular among crypto enthusiasts as it has been leveraged for years and pegged to the dollar. Both physical and crypto assets back it. USDT is minted and managed by its parent company, Tether.
What is USD Coin (USDC)
Like Tether USDT, USD Coin(USDC) is pegged to the U.S. Dollar. It is managed by its parent company Centre Consortium. This stablecoin is the world’s second-largest one and brags a liquid backing of 100% cash and cash equivalents.
What is Dai (DAI)
DAI is a dollar-pegged crypto asset on the Ethereum network. It is currently the third largest by market cap but has been crippled by depends severally. This stablecoin brags to be the world’s first decentralized, collateral-backed cryptocurrency. Unlike the USDT and USDC, it is algorithmic and was issued by MakerDAO.
What is Binance USD coin (BUSD)
Binance USD (BUSD) is a fiat-backed crypto asset pegged to the U.S. Dollar and issued by Paxos. It has reserves that are equal to customer deposits and are held in FDIC-insured U.S. Banks. However, it has been under pressure by U.S. regulators to wind up its operations and close for good.
What is True USD (TUSD)
True USD (TUSD) claims to be the first independently verified digital asset that equates to 1:1 for U.S. Dollars. It is a multichain stablecoin that uses traditional banks, escrow accounts, and third-party attestation in its operations to decrease counter-party risks, offer transparency and do away with fraud.
What is Pax Dollar (USDP)
USDP is a USD-pegged digital asset issued by Paxos. Unlike traditional banking, it aims to offer its users the ability to store and send money digitally in U.S. dollars in a free, unrestricted way. It is fully regulated and 100% backed by cash reserves.
Risks associated with stablecoins
There are different risks that are associated with holding stablecoins. Here are the two main ones
De-pegging
Stablecoins are known to lose their peg resulting in huge losses to their users. However, not all of them collapse for good. Some lose their peg momentarily, including the largest ones like Tether USDT.
A Tether USDT de-peg has sent a shockwave across the crypto market as #Curve3Pool seems to be in distress. CTO Ardoino says Tether is ready to buy back any amount as it works to restore the peg. Here is more about the story👇👇#crypto#USDT#Tetherhttps://t.co/U6LulnSRwK
Regulators, at times, are not in favor of assets that could weaken their economies. As such, lawmakers and regulators may rally to bring down all stablecoins pegged to their currencies in fear of the fiat currencies weakening. It has already happened in the U.S., where several lawmakers wanted stablecoins done with, and NYDIC asked Paxos to stop issuing BUSD.
Keep watching Fintech Express to learn more about the crypto industry and other fintech-related fields.
