Paxos has secured a preliminary license in Singapore by local authorities, paving the way for Paxos Digital Singapore Pte. Ltd. to initiate digital payment token services under the Payments Services Act while awaiting final approval.

A growing demand for stablecoins

In response to the increasing global demand for stable digital currencies, Paxos plans to develop a stablecoin backed by the United States Dollar (USD) in Singapore once full authorization is granted. Walter Hessert, Paxos Head of Strategy, emphasized the challenges faced by those outside the United States in accessing and using USD securely and in compliance with regulations.

In alignment with the growing demand for stablecoins, Paxos regularly discloses reports on the reserves and attestations of its stablecoins. This licensing development aligns with the recent clearance given to Paxos within Singapore to offer tokenization, custody, and trading services. Industry experts predict substantial growth in the stablecoin market, projecting an increase to $2.8 trillion over the next five years.

Room for improvement

In the past year, cryptocurrency usage among the average person in Singapore remained low, with slower growth compared to emerging markets like Vietnam and the Philippines. Singapore dropped to the 76th spot in the 2023 Global Crypto Adoption Index by Chainanalysis, ranking 63rd in 2022. Meanwhile, Hong Kong, aspiring to be a crypto hub, fell to 47th place.

The index, assessing grassroots crypto adoption, highlights countries where individuals invest a significant portion of their wealth in cryptocurrency. The central and southern Asia-Oceania region dominates the index, with India leading, followed by Nigeria, Vietnam, and the United States. Despite global recovery since late 2022, grassroots adoption is still below its peak, although several SEA (Southeast Asian) countries like Singapore and Hong Kong are steadily gaining momentum.

Despite China maintaining a stringent stance on Bitcoin (BTC) and cryptocurrencies in general, there has nevertheless been a notable surge in crypto adoption there as of late. Boyaa Interactive, a major gaming entity in China listed on the Hong Kong stock exchange, recently declared its intention to invest in cryptocurrencies, particularly Bitcoin and Ethereum (ETH).

Investment with a catch

In any case, the aforementioned announcement is being viewed as a positive signal, suggesting growing interest by institutional investors in engaging with digital assets and the cryptocurrency market.

As such, the targeted cryptocurrencies for purchase include BTC, ETH, Tether (USDT), and USD Coin (USDC), all within the next year. Boyaa Interactive emphasized that the selected cryptocurrencies must align with the overall business development and asset allocation strategy of the company. The evaluation and approval process will be overseen by the virtual asset management and risk control department.

Slow and steady

The statement outlines criteria for the purchased cryptocurrencies, emphasizing that they should be issued by the Board of Directors, possess strong market liquidity, boast large market capitalization, enjoy broad market recognition, and hold relatively enduring value. The primary focus within the authorized purchasing scope will therefore be on the two biggest cryptocurrencies by market capitalization, namely BTC and ETH.

Notably, the company, having initially earmarked $5 million for cryptocurrency investments in August, is now expanding its commitment to crypto adoption by allocating more funds for cryptocurrency acquisitions. With that in mind, Boyaa Interactive anticipates allocating around $90 million for acquiring both BTC and ETH, with an additional allocation of no more than $10 million for acquiring USDT and USDC.

The United States based cryptocurrency advocacy group, the Blockchain Association (BA), strongly disapproved of the tax regulations recently introduced by the Internal Revenue Service (IRS). In a letter dated November 13th, the BA voiced significant concerns about the new rules that the IRS announced in August, which aimed to regulate the sale and exchange of various digital assets.

Since the release of the draft rules, various stakeholders, including local lawmakers, industry leaders, and legal experts, have expressed their opinions on the various implications the proposal may have on cryptocurrency taxation in the country. Under the current draft, rules for reporting cryptocurrency transactions could take effect in 2026 for transactions conducted in 2025.

Clarity is key

The BA argued that these rules not only surpassed the authority of the IRS but also reflected a serious misunderstanding about the nature of digital assets and decentralized technology. The US Treasury Department made a draft of these rules aimed to address complexities in reporting and taxing cryptocurrency transactions.

At any rate, the Blockchain Association mainly focused its criticism on the belief that complying with these regulations would be challenging for many cryptocurrency participants. They asserted that individuals involved in decentralized finance would be fundamentally unable to comply with the proposed regulations. The BA also accused the Treasury of exceeding its authority and potentially infringing on constitutional rights, such as privacy and freedom of expression.

A need to work together

Kristin Smith, CEO of the Blockchain Association, stressed the need for the Treasury Department to take more time to comprehend the potential harm and impracticality of not having a clear and concise definition regarding decentralized technology. Smith also argued that the proposal put forth by the Treasury could violate the privacy rights of individuals using such technology.

In October, Coinbase Chief Legal Officer Paul Grewal warned that the rules could pose a significant threat to the burgeoning cryptocurrency industry. Conversely, a group of US senators expressed support for the proposed regulations, advocating for their enforcement before 2026.

In conclusion, the resistance by the BA to the IRS highlights the ongoing debate and concerns about cryptocurrency taxation in the United States, with various stakeholders expressing differing viewpoints on the matter. Regardless, both parties will have to work together in order to avoid stifling innovation and growth in the country.

On behalf of the Web3 community, we would like to extend our warmest congratulations to the companies that announced their success in fundraising between 6th November and 12th November 2023. We are thrilled to see such tremendous support from all involved. Well done! 

LIAMA raised $6M - Llama empowers protocols with an onchain policy engine to set permissions for action creation and roles for action approvals and disapprovals.

Due raised $3.3M - Due aims to empower underserved and emerging markets with uninterrupted access to global liquidity, while facilitating transactions at much lower costs and significantly faster settlement times compared to traditional methods.

StabIR raised $3.5M - StablR is a Euro stablecoin company that issues EurR to bring liquidity to the DeFi and CeFi markets. StablR hopes it can bring liquidity to both DeFi and CeFi markets, ultimately bringing more users into the crypto ecosystem.

Pimlico raised$5.8M - The funds raised will be pivotal in propelling the development of Pimlico's innovative smart account infrastructure, revolutionizing Ethereum's ecosystem.

Kresko Labs raised $4.15M - Kresko's mission is to make wealth accessible to anyone, anywhere. Kresko is an open platform for synthetic stocks, commodities, and crypto. The platform consists of two products.

Sock raised $2.8M - Sock customers can transact without paying network fees (gas), safeguard investments by setting upper or lower thresholds for token sales to mitigate potential losses.

Authentickator raised $4M - The company announced the launch of its NFT platform Authentickator, which lets users browse, purchase and verify the authenticity of non-fungible tokens (NFTs) without a crypto wallet.

Citadel raised $3.3M - This round gives Citadel's the opportunity do things that were not possible when bootstrapping.The Citadel has always had an ambitious vision, but now Citadel's have the resources to realize the full potential of that vision.

STACKR raised $5.5M - The raised capital will be allocated towards several key objectives, including team expansion, preparation for the imminent launch of the platform's v1 version, and the growth of Stackr's developer ecosystem.

Definitive raised $4.1M - Named Definitive, the new startup seeks to automate many aspects of the decentralized finance world, which encompasses a broad spectrum of financial services.

Galactic Holdings raised $16.25M - Since 2020, Galactic Holdings has been unwavering in its commitment to fostering close collaboration with Latin American authorities, with a steadfast focus on aligning with regulatory guidelines.

Ritual raised $25M - Ritual started with a clear goal in mind: to merge the best principles and techniques of cryptography and artificial intelligence.

To stay updated with news about future Web3 Funding Rounds, Follow CryptoWeekly
 

Swan, a Bitcoin (BTC) accumulation platform, has issued a cautionary notice over the weekend, alerting users that engaging with BTC mixing services might lead to the termination of their accounts.

The platform informed users that its banking and custodial partners would cease servicing clients directly interacting with BTC mixing services like Wasabi, Samourai, and comparable services.

New rules

Swan attributed these changes to the adjusted policies of banks and custodians, influenced by newly proposed rules provided via the United States Financial Crimes Enforcement Network (FinCEN). If implemented, these rules would mandate regulated financial institutions to report transactions when there is suspicion of involvement in transaction mixing.

This warning aligns with the increasingly stringent regulatory environment in the United States concerning crypto mixing services. Regulatory agencies and lawmakers are growing concerned about the potential of mixers to facilitate money laundering by illicit actors. FinCEN Director Andrea Gacki emphasized the critical role of mixing services in facilitating illicit activities such as funding ransomware operations and aiding criminals in concealing ill-gotten gains. 

Acting out of fear

Swan CTO and Co-founder, Yan Pritzker, expressed his lack of surprise at the stance taken by the financial institution partners in response to the proposed rules, which Swan vehemently opposes. He pointed out the prevailing fear in the banking sector due to the current political climate, with many banks refusing to engage with anything related to cryptocurrency.

He noted the necessity of using a bank or Money Services Business (MSB) to process USD in the United States, and all such financial institutions are subject to regulations by FinCEN, the Financial Action Task Force, and other unelected bodies.

Notably, a federal judge recently sided with the US Treasury in a case where Coin Center and other crypto industry advocates challenged the various sanctions levied against the Tornado Cash mixing service. The court dismissed the argument, asserting that the Treasury has the authority, under the International Emergency Economic Powers Act, to sanction any entity in which a foreigner has an interest.

For a fleeting moment, XRP holders recently found themselves in disbelief, and with good reason. The filing of the BlackRock iShares XRP Trust in Delaware, which propelled the crypto asset up by 12% in just half an hour, turned out to be fake. The corporate registration submitted in Delaware was genuine, but it was not BlackRock, as confirmed by a company representative.

Fake news

Despite BlackRock having legitimately registered the name for its iShares Ethereum Trust in Delaware last week, the XRP filing was declared false by BlackRock itself. Notably, the fake filing shared the same address and contact information as the authentic ETH filing which was finalised last week. 

While the XRP community was understandably over the moon with the apparent announcement that the BlackRock iShares XRP Trust had been filed, the joy was short lived despite the fact that XRP experienced a sudden and dramatic price increase which certainly benefited those holders who sold their assets before the eventual correction. 

All eyes on BlackRock

Considerable anticipation and corresponding price movements have surrounded Bitcoin and Ethereum ETFs, particularly those potentially issued by BlackRock upon approval. As a colossal Wall Street asset manager with $9 trillion under management, BlackRock created ripples in the crypto industry with its filing for the iShares Bitcoin Trust in June. As a result, each subsequent amendment or update has been accompanied by price rallies.

Recently, various analysts noted a brief window until November 17th during which the Securities and Exchange Commission could potentially approve at least 12 pending Bitcoin ETF applications, given that the SEC extended the deadline for all Bitcoin ETF filings to November 18th, and the comment period has just concluded. Regardless, there is no indication thus far of any decision regarding the approval of a Bitcoin ETF by the SEC.

Bithumb, a popular South Korean cryptocurrency exchange, aims to achieve a new milestone by becoming the inaugural digital asset company to undergo an initial public offering (IPO) on the South Korean stock market. Established in 2014,  the exchange currently boasts a 24-hour trading volume of approximately $580 million, according to data by CoinGecko at the time of this publication.

Reports via local news outlet Edaily on November 12th indicate that Bithumb is actively preparing for an IPO on KOSDAQ, the South Korean equivalent to Nasdaq, with a projected listing date in the latter half of 2025.

Choosing the right people

While Bithumb has not officially confirmed the IPO, the company did disclose the recent selection of an underwriter, a company responsible for ensuring the financial stability of another entity typically before it goes public. It has also been reported that Samsung Securities was reportedly chosen as the potential underwriter for the IPO.

In a noteworthy development, the former chairman of Bithumb, Lee Jeong-hoon, has returned to the company as its registered director. Simultaneously, CEO Lee Sang-jun is reportedly no longer being considered for a position on the board of directors due to an ongoing investigation into alleged bribery.

Going public

Sources familiar with the matter have asserted that Bithumb deciding to go public is motivated by a desire to avoid ceding additional market share to Upbit, the biggest cryptocurrency exchange in South Korea. Presently, Bithumb holds the position of the second largest crypto exchange in the country in terms of daily trading volume. In July, Upbit surpassed Coinbase and Binance in monthly trading volumes for the first time.

Furthermore, both Upbit and Bithumb faced scrutiny in May when South Korean authorities conducted raids on their offices, investigating alleged fraudulent crypto trading on behalf of a local lawmaker. In February, Kang Jong-hyun, a significant shareholder in Bithumb and suspected real owner, was arrested on embezzlement charges following a lengthy police investigation into his purportedly illicit activities.

Kang Jong-hyun, aged 41, is the elder brother of Kang Ji-yeon, the head of Bithumb affiliate Inbiogen, which holds the largest share in Vidente, the principal Bithumb shareholder with a 34.2% stake.

Coinbase Global, the preeminent cryptocurrency exchange in the United States, has officially declared the inclusion of Solana (SOL) and Avalanche (AVAX) in its global futures exchange. Despite a tumultuous 2022, the company insists that crypto is not dead and adoption is still increasing at an exponential rate.

Getting involved

The genesis of Coinbase International, unveiled in May of this year, is a direct result of the company trying to tap into the vacuum left by the infamous collapse of FTX in the futures market. Notably, Coinbase had not gotten involved in this particular market segment before, but the company has nevertheless expressed its intention to cater to institutional users for perpetual futures trading in eligible countries outside the United States.

With that in mind, the SOL-PERP and AVAX-PERP markets are slated for launch on November 14th, 2023. The launch is also contingent upon meeting certain parameters and liquidity requirements, as outlined in the official announcement.

A new opportunity

In a bid to diversify revenue streams and mitigate the impact of lackluster stock performance, particularly after underwhelming quarterly earnings reports, Coinbase has decided to try different trading techniques and tap into new markets, not just spot trading.

With that in mind, the exchange notes that perpetual futures trading constitutes a substantial portion of the overall global cryptocurrency trading volume, up to 75% in fact. In addition, the company is proactively managing regulatory uncertainties by spreading out risks, aligning with its broader strategy for a more resilient business approach. Coinbase representatives informed the press to stay tuned for further updates down the line.

As the crypto industry continues to become more popular and widespread, many notable corporations are slowly adopting the new digital asset class. Google is no different, as it was recently revealed that Bonsai Pay through RISC Zero introduced the testnet version of its ZK-protected escrow, enabling smooth Ethereum (ETH) transfers to Google accounts.

A unique approach

This unconventional cryptocurrency application, employing zero-knowledge proofs (ZKPs), explores a unique approach to Web2-Web3 collaboration. Bonsai Pay transforms each Google account into a non-custodial crypto wallet seamlessly, allowing Ether to be sent to Gmail accounts through ZK proofs. The platform, built on the Sepolia Ethereum testnet, presents a cutting-edge method of replacing complex Ethereum wallet addresses with familiar email contacts.

According to the team, any active Google account is compatible with the service and necessitates no additional setup to receive ETH funds. Cryptocurrency transactions occur through an escrow contract on the Ethereum network, and recipients can access their assets by logging into Gmail and generating a ZKP. The product is also supported by JSON-based identity tokens and the OpenID Connect Protocol, with its core codebase crafted in the Rust programming language.

The future is bright

Bonsai Pay also utilizes the RISC Zero zkVM, which can be accessed by third-party developers through API keys. So far, the team has launched a live demo on the Sepolia testnet, encouraging developers to stress-test the platform and provide feedback on GitHub.

As zero-knowledge proofs are a cryptographic method allowing the prover to confirm the truth of a statement without revealing additional information, these provide the basis for the entire protocol. Notably, several ZK-powered projects, such as Polygon zkEVM, zkSync Era, and Scroll, have demonstrated substantial increases in total value locked (TVL) on the Ethereum mainnet in the past 24 hours, with even higher gains being recorded on a weekly basis. Needless to say, ZKPs are going to play a significant role in a wide variety of areas going forward.

Poloniex, a popular centralized cryptocurrency exchange (CEX), appears to have experienced a security breach involving one of its wallets, identified as Poloniex 4 on Etherscan. An examination of the apparent hot wallet reveals various suspicious outflows, indicating a substantial impact on its funds. The estimated value of these outflows linked to the incident, based on on-chain data, now surpasses $100 million.

Over $100 million at risk

Although the exchange has not officially disclosed the affected amount, preliminary assessments via analyst firms PeckShield and Arkham Intelligence suggest that crypto assets exceeding $100 million may have been compromised.

The exchange acknowledged the situation through its customer support X account, stating that the wallet in question has been disabled for maintenance and that regular updates will be provided. Having functioned as a centralized exchange since 2014, Poloniex was acquired by Tron founder Justin Sun in 2019.

In response to the incident, Sun asserted that Poloniex is actively investigating the hack and committed to reimbursing all affected user funds. He claims that the team is currently looking into the incident, before adding that Poloniex maintains a healthy financial position and will fully reimburse the affected funds.

Damage control

Sun also proposed a 5% whitehat bounty to the attacker, contingent on a complete fund return, setting a seven-day deadline before considering legal action with law enforcement. Addressing the situation later in the day, Sun reported that the Poloniex team has successfully identified and frozen a portion of the assets associated with the addresses of the hacker.

According to Justin, the losses are presently within manageable limits, and the operating revenue generated by Poloniex should be able to cover these losses. Additionally, he mentioned that the team has restored all Poloniex systems, preserved relevant evidence, and aims to gradually resume deposits and withdrawals, ensuring 100% security.

As per CoinGecko, the cryptocurrency market experienced a relatively positive week, as both Bitcoin and Ethereum stood resilient around crucial resistance levels. Notably, altcoins had a noteworthy period, displaying substantial increases that indicate potential further expansion in the immediate future.

Elsewhere, while the Fed approaches further rate hikes cautiously, Chairman Jerome Powell noted their readiness to act if needed. Notably, he did not declare policy settings sufficiently tight for the price stability goal outlined by the central bank.

Altcoins performing well

Among the top 20 cryptocurrencies, certain altcoins emerged as the most significant gainers of the week. Ethereum (ETH) has undoubtedly dominated the headlines as of late, as news of an Ethereum Spot ETF application put forth by BlackRock helped the second biggest crypto by market capitalization surge to reach over $2,100. 

Elsewhere, other altcoins like XRP, ADA, BNB, and SOL all experienced price increases as well, with BNB leading the charge at fourth place right behind Tether (USDT) and Ethereum. Beyond the well-established altcoins, other popular tokens like LINK, TON, and MATIC also recorded gains in their respective weekly charts. NEAR Protocol in particular was among the biggest winners of the week.

Bearish outlook remains

In the currency market, the United States Dollar (USD) rose in response to surging US Treasury yields which faced headwinds because of political issues and a gloomy Eurozone economic outlook. The Bank of England aims to appear resolute against rate cuts, but there is a neutral to bearish outlook.

In the energy market, oil bulls expect a modest positive correction considering geopolitical tensions and concerns about Iranian oil implications. Despite fears of an Iran-related embargo and weaker Asian demand, record-high US shale production suggests challenges to a sustained oil price rebound beyond the $78 to $80 range.

The Dollar Index may stay below 106, pushing the Euro towards 1.07. EUR/JPY could test 162 with a potential initial decline, while USD/JPY might face resistance at 152, signaling a likely downturn. The Australian Dollar is strongly bearish, anticipating a drop to 0.63. The Pound may experience a brief bounce but could eventually fall to 1.21. USD/CNY is expected to gradually rise while USD/RUB may slowly decline. Elsewhere, Dow Jones has fallen as the resistance level of 34200 has held. While below 34200, the outlook is bearish. DAX has the potential to test 15400-15500 before descending.

BlackRock has officially submitted an application for an Ethereum Spot ETF (Exchange Traded Fund). The request, found in documents on the Nasdaq website, details a proposed rule change for listing and trading iShares Ethereum Trust shares under Nasdaq Rule 5711(d) (Commodity-Based Trust Shares).

BlackRock makes its move

Various documents recently surfaced on the Delaware Department of State Corporations Division website, revealing a registration of iShares Ethereum Trust put forth by none other than BlackRock. This move was interpreted as a precursor to applying for an Ethereum Spot ETF, and the speculations proved accurate.

Before seeking approval for a Bitcoin Spot ETF, BlackRock followed a comparable procedure, registering documents and subsequently submitting the Ethereum ETF application to the SEC a week later. Notably, BlackRock acted more swiftly for Ethereum, filing the ETF application on the same day.

ETH surges

Unsurprisingly, ETH experienced a price increase and has since surpassed $2,100, marking its highest level since May. After news of the BlackRock Ethereum ETF filing emerged, ETH witnessed a clear uptrend with the 50-day SMA and 20-day EMA serving as dynamic support.

Nevertheless, the RSI stands at 80, indicating an overbought condition and suggesting a potential short-term overextension in the rally. This could trigger a pullback or consolidation as the indicator cools off.

Potential resistance lies around current highs and psychological thresholds beyond $2,000, while support might be found around key moving averages. If the uptrend persists, Ethereum could target new highs surpassing $2,100. However, the overbought conditions increase the likelihood of a correction, potentially retesting previous lows if the trend shifts bearish.