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PayPal Unveils New Feature Enabling Users To Easily Convert PYUSD
Shortly after launching their stablecoin, PayPal has unveiled a new service which focuses on facilitating crypto sales, purchases, and other functions through both PayPal and PYUSD.
In an effort to establish a presence in the fast-growing cryptocurrency landscape for payment purposes, PayPal has been exploring broader cryptocurrency endeavors. Their proprietary dollar-backed stablecoin, PYUSD, was recently introduced, marking PayPal as the first major US financial institution to launch such a stablecoin.
Operating on the Ethereum blockchain, PYUSD is issued by Paxos and fully backed by US dollar deposits, adhering to the stablecoin model. Following the PYUSD debut, PayPal has updated its terms and conditions to introduce its Cryptocurrencies Hub. This feature empowers users to hold and engage with Bitcoin and other cryptocurrencies within their PayPal accounts.
The hub permits crypto trading, while streamlining the conversion between PYUSD and other assets, and facilitating PayPal-based transactions post-crypto sales. It is worth noting that not all PayPal users will have immediate access to this new feature. Priority is given to users with sound account balances, and the service is not available for residents of Hawaii, as per the updated terms and conditions.
For PayPal, this marks a substantial foray into the realm of digital assets and blockchain technology. The company is banking on mainstream customers adopting stablecoins as a legitimate payment method. If successful, PYUSD could significantly impact the Ethereum blockchain and reshape how conventional investors perceive cryptocurrencies.
Similar to other stablecoins, PYUSD will be tradable on various cryptocurrency exchanges. Huobi, a popular crypto exchange, recently announced its support for PYUSD, being the first to launch the PYUSD/USDT trading pair.
Wells Fargo And Others Get Charged Hefty Fine For Improper Use Of Messaging Apps
The U.S. SEC and the Commodity Futures Trading Commission (CFTC) have collectively imposed charges against numerous firms, including Wells Fargo, Bank of Montreal, BMO Capital Markets Corp, BNP Paribas, Société Générale, Wedbush Securities, Houlihan Lokey Capital, Moelis & Company, SMBC Nikko Securities America, Mizuho Securities, and SG Americas Securities.
This penalty is a result of their apparent failure to appropriately document electronic communications regarding apps like iMessage, Signal, and WhatsApp, leading to violations of securities laws.
The investigation begins
The investigation conducted by the regulatory bodies revealed that employees across these companies engaged in informal communication through the aforementioned platforms concerning the business activities of their employees. A significant portion of these communications was not recorded, constituting a violation of federal securities regulations according to the SEC.
These firms have acknowledged their wrongdoing and their violation of record-keeping provisions of federal securities laws. They have agreed to pay a combined sum of $289 million in penalties and have initiated steps to enhance their compliance measures to rectify these breaches.
The CFTC also pursued similar charges against some of the firms, resulting in separate fines, namely BNP Paribas, Société Générale, Wells Fargo, and the Bank of Montreal which were subject to fines of $75 million, $75 million, $75 million, and $35 million respectively.
Gurbir S. Grewal, Director of the SECs Division of Enforcement, emphasized the importance of adhering to record keeping regulations for investor protection and the proper functioning of markets. He urged non-compliant firms to self report violations, cooperate, and remediate to achieve better outcomes.
These fines are part of a series of penalties targeting established financial institutions. Notably, Credit Suisse was fined over $250 million in the previous month due to its involvement with Bill Hwang, an investor who suffered significant losses due to high leverage and poor trades.
Federal Judge Denies Bail For SBF Following Intimidation Allegations
A federal judge has reportedly revoked the bail of the former FTX CEO, Sam Bankman-Fried (SBF), following allegations that he attempted to intimidate witnesses by sharing information with various reporters.
During an August 11th hearing in the United States District Court for the Southern District of New York, Judge Lewis Kaplan ordered the bail to be revoked. This suggests SBF will remain in jail for his two upcoming fraud trials related to his activities at FTX. Prosecutors had been advocating for the revocation of his $250 million bail, which had kept him out of custody since his arraignment in December 2022.
Judge Kaplan stated that the interactions with the reporters were likely intended to intimidate the former colleague and girlfriend of SBF, Caroline Ellison, who is also the former CEO of Alameda Research. The legal team representing SBF confirmed his engagement with the reporters, prompting Kaplan to impose a gag order preventing any extrajudicial statements about the case.
Assistant U.S. Attorney Danielle Sassoon cited instances where SBF violated previous bail conditions, including communicating on the Signal app, using a virtual private network for Internet activity, and sharing information with reporters to intimidate Ellison.
Sassoon also argued that SBF allegedly asked witnesses to delete certain messages and documents, asserting that he was attempting to interfere with the trial. His attorney, Mark Cohen, requested that his bail conditions continue, emphasizing the need for coordination with the legal team and suggesting that allegations of witness intimidation be addressed during the October trial.
Cohen further indicated that the legal team planned to appeal the ruling. However, the judge denied the motion and ordered SBF to be remanded into custody, likely at the Putnam County Correctional Facility. He was led out of the courtroom in handcuffs.
SBF is facing 12 criminal charges divided between two trials scheduled for October 2023 and March 2024. While prosecutors decided to drop a campaign finance violation charge in July due to an extradition agreement with the Bahamas, they indicated on August 8th that they would still consider the alleged scheme as part of a wire fraud charge.
SEC Appeals Decision After XRP Gets Removed From Securities List
John Deaton, a prominent lawyer supporting XRP, recently took to Twitter to express his enthusiasm over the exclusion of XRP from the recent SEC securities list on CoinGecko.
Deaton drew a parallel with a pivotal point three years ago, when the SEC had asserted that Ripple had sold more than 14.6 billion units of a digital asset classified as a security.
CoinGecko, a popular crypto price tracking platform, recently unveiled a compilation of tokens designated as securities by the SEC. This encompassed a total of 48 tokens, among them BNB, ADA, SOL, TRX, MATIC, TON, BUSD, ATOM, FIL, ICP, NEAR, ALGO, SAND, AXS, MANA, FLOW, CHZ, and BTT. Notably, XRP was absent from this list.
Ripple Chief Technology Officer David Schwartz responded positively to this development. Earlier this month, Deaton disclosed his belief that high-ranking SEC officials held differing views on how to proceed with the case. Most recently however, the agency has reportedly appealed the decision.
The SEC contested the conclusions of the court, particularly those related to the so-called scheduled offerings and sales and other distributions that Ripple allegedly made in exchange for non-monetary considerations.
Meanwhile, PolySign CEO Jack McDonald argued that due to the potential adverse implications of the case for the SEC, they might attempt to compartmentalize XRP and assert that the ruling applied narrowly, excluding the broader ecosystem.
Fed Launches New Program To Monitor Crypto Activity In U.S. Banks
The U.S. Federal Reserve is launching a new program to monitor all crypto activities in local banks, and it has clarified its requirement that lenders under its authority must obtain approval before engaging in digital asset operations.
The move does not change any existing crypto banking rules, rather, it defines how the central bank intends to handle its oversight, placing dealings with the crypto sector under the new novel activities supervision program. Through this, the Fed will assign specialized experts in digital assets who will work alongside the regular supervisors.
The Fed also provided a more detailed explanation of how the banks it supervises must obtain pre-approvals before dealing with stablecoins. An institution that is issuing, holding, or transacting in dollar tokens to facilitate payments must first demonstrate to supervisors that it can do so in a safe and sound manner, and the Fed must formally approve it.
So far, U.S. banking regulators have been clear that they intend to maintain a substantial barrier between the crypto industry and the banking system, however they also insist that lenders are welcome to continue experimenting under their close supervision.
According to the Fed, the level and intensity of supervision shall greatly vary based on the level of engagement in novel activities by every supervised banking organization.
Concurrently, the central bank stated that its new initiative would help ensure that both regulation and supervision allow for innovations which can greatly enhance access to and delivery of various financial services.
PayPal Introduces New Stablecoin Linked To USD
This development follows the revelation of the new PayPal dollar-backed stablecoin initiative over a year ago. The stablecoin, created in partnership with Paxos Trust Co, will allow customers to transfer it between compatible external wallets and their PayPal accounts and use it for funding purchases.
The availability of the stablecoin began on Monday, and PayPal users will gradually gain the ability to purchase, send, convert, and fund transactions in the upcoming weeks. In any case, the event marks a significant milestone as a prominent U.S. financial company enters the stablecoin space for the first time.
PayPal confirmed their stablecoin related endeavors back in early 2022, building upon the earlier integration of cryptocurrency services in 2021, which enabled users to engage with major digital assets like Bitcoin (BTC) and Ether (ETH).
PayPal CEO Dan Schulman emphasized the need for a stable digital instrument connected to fiat currency, such as the United States Dollar, to support the ongoing global shift towards digital currencies.
Paxos will be responsible for regularly publishing a Reserve Report outlining the backing and value of the stablecoin, including assets like U.S. Treasuries and equivalent cash reserves. Paxos CEO Charles Cascarilla expressed pride in facilitating this transformative financial product.
Functioning as an ERC-20 token on the Ethereum network, the PayPal USD stablecoin exemplifies the desire to initiate responsible innovation and compliance while contributing to the advancement of digital payments.
The announcement predictably prompted a call for comprehensive digital asset regulation, particularly for stablecoins, Patrick McHenry, Chair of the House Financial Services Committee. This update arrives a few months after PayPal extended its crypto purchase capabilities to Venmo users.
Judge Decides To Dismiss Collective Lawsuit Against Tether
Tether (USDT), the largest global company specializing in stablecoins, has announced the dismissal of a legal case filed against it. As stated on an official blog, a comprehensive and concise six-page verdict has been issued by Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York.
The decision, jointly made with Matthew Anderson and Shawn Dolifka, entails a complete rejection of the class action lawsuit targeting Tether and Bitfinex corporations.
Although the company faced allegations of engaging in unlawful and misleading activities, the plaintiffs contended that Tether falsely represented its stablecoin as fully backed by sufficient U.S. dollar reserves and deliberately concealed the failure to pass routine audits.
The court ruled that the accusations lacked credible claims for damages as they provided no factual substantiation for the alleged decline in the intrinsic value of USDT. Tether has asserted that the early-stage dismissal of the collective lawsuit underscores the absence of legal merit in these assertions.
Overall Net Loss For Coinbase Despite $708 Million Reported In Quarterly Revenue
According to the Q2 report, Coinbase recorded a total revenue of $708 million, experiencing an 8% decrease compared to the previous quarter. The net revenue also declined by 10% Q/Q to $663 million. The company reported a net loss of $97 million and an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $194 million.
Additionally, institutional transaction revenue amounted to $17 million, stemming from $78 billion in institutional trading volume, down 24% and 37% Q/Q, respectively. The decline in revenue was mainly driven by lower trading volumes, although higher realized fees due to changes in trading activity somewhat offset the impact.
Despite the decline, Coinbase outperformed the crypto spot market, which experienced a 48% Q/Q decline, and the company managed to gain market share. Coinbase also bolstered its balance sheet, increasing its USD resources to $5.5 billion, a Q/Q rise of $156 million. These resources include cash, cash equivalents, the USDC stablecoin, and custodial account overfunding.
Looking ahead, Coinbase expects its Q3 revenue to be largely consistent with its Q2 outlook, with subscription and services revenue possibly reaching at least $300 million. The company attributes this consistency to the absence of significant changes in the crypto market cap and its on-platform assets. Coinbase also stated that its withdrawal of staking services in certain states would not have a material impact on revenue.
Furthermore, Coinbase highlighted the forthcoming public launch of its Layer 2 network, Base, on August 9th. The launch aims to enable faster, more secure, and cost-effective transactions. The company has received significant interest from developers across various sectors. Over 50 brands, including Coca-Cola, Atari, and the NFT marketplace OpenSea, will be celebrating the launch with NFT mints and other activities.
Reputable Professional Services Firm Says Bitcoin Is a Boon To ESG
KPMG has released a new report expressing a surprisingly positive view of Bitcoin and its environmental impact. According to the report, Bitcoin appears to offer several benefits from an ESG perspective, including stabilizing energy grids, reducing greenhouse gas emissions, and providing sustainable heat for both commercial and residential properties.
Despite using a significant amount of energy, the report points out that Bitcoin itself does not emit direct carbon emissions. However, its electricity consumption remains a concern for miners who are continuously seeking the lowest cost sources, often involving under-utilized hydro, wind, or solar energy.
Interestingly, even major mining companies are adopting renewable energy sources for their operations. For example, Bitfarms utilizes hydroelectric power in Paraguay, and Blockstream partnered with Square to build a solar-powered Bitcoin mine in Texas.
The report also delves into the challenges of energy grid function, particularly with solar and wind energy, which are not constant and may result in excess supply and low prices. However, Bitcoin miners can take advantage of renewable energy and adapt their power consumption to match supply and demand, thus incentivizing the development of renewable energy capacity.
Overall, the report emphasizes the potential benefits of Bitcoin from an ESG perspective, including its role in promoting renewable energy and mitigating environmental impacts like greenhouse gas emissions and methane pollution.
SEC Lawsuit Against Do Kwon and Terraform Labs Will Proceed
Recalling the earlier details of the lawsuit, the SEC accused Terraform Labs and Do Kwon of orchestrating a multi-billion dollar crypto-asset securities scam which allegedly involved an algorithmic stablecoin and other crypto-asset securities that triggered a massive crash in the crypto market.
The lawsuit had been in limbo for a while but many want it to officially proceed now. The SEC claims that the defendants raised billions of dollars from investors by offering and selling interconnected crypto-asset securities, some of which were done in unregistered transactions.
Among these crypto-asset securities were mAssets, which are security-based swaps designed to mirror the stock prices of various U.S. companies, and an algorithmic stablecoin which allegedly relies on the USD and can be exchanged for another crypto-asset security called LUNA, specifically Terra USD (UST).
Regarding the lawsuit, SEC chairman Gary Gensler stated that Terraform Labs and Do Kwon failed to disclose the necessary information required for various crypto-asset securities, mainly LUNA and UST. The Sagency also accused them of committing fraud by making false and misleading statements to gain trust and subsequently causing significant losses for numerous investors.
Many feel it is crucial for the lawsuit to get back on track in order to avoid a similar situation to the ongoing FTX fiasco, which recently saw the disgraced Sam Bankman-Fried announce his plans of restarting the crypto exchange.
Russian Bitcoin Mining Operations Continue To Thrive
Amid international sanctions, the Russian Bitcoin (BTC) mining industry is experiencing rapid growth as mining machine manufacturers like Bitmain and MicroBT expand their operations into the country. According to Ethan Vera, COO of Luxor Technologies, more mining machines are being deployed in Russia than anywhere else in the world.
Russia has long been a major player in terms of Bitcoin hash rate, benefiting from its access to affordable energy and cold climate. With the Chinese government deciding to ban BTC mining in 2021, Russia has seen its share of the global mining market dramatically increase, making it one of the top mining nations worldwide.
Despite facing economic challenges due to sanctions following the 2022 invasion of Ukraine, Russia has not been entirely restricted from participating in the mining sector. However, there are risks for firms operating in this field, as they must avoid dealing with sanctioned entities like BitRiver, a mining hosting firm, or making payments to state banks and companies.
Foreign companies setting up mining operations in Russia amidst the current geopolitical climate may also encounter reputational risks. Still, recent improvements in mining economics, driven by the rising price of BTC and the Ordinals project enhancing activity on the Bitcoin blockchain, have created favorable conditions for mining in Russia, as explained by Sergey Arestov, CEO of BitCluster.
5th Annual Blockchain Futurist Conference
CryptoWeekly is proud to be an official media partner for the 5th Annual Blockchain Futurist Conference, scheduled to take place in Toronto, Canada, from August 15th-16th, 2023.
The conference is set to be the largest event of its kind and will serve as a platform for exploring the future possibilities and advancements in blockchain technology. It brings together experts in the fields of Web3, crypto, DeFi, GameFi, NFTs, DAOs, the metaverse, and more.
Put simply, the annual event offers an immersive crypto experience with features such as crypto-powered marketplaces, NFT galleries, crypto ATMs, and the integration of blockchain technology in the context of real world use cases.
With a consistent attendance of over 6,000 participants each year, the event provides an excellent opportunity to network with prominent founders, investors, and projects. Attendees can connect with industry leaders at the VIP Cabanas, participate in exciting networking events, and explore exhibitor booths located on multiple levels.
The event also aims to educate participants about the future trends and advancements in the field, encouraging them to become active contributors to the Web3 movement. Notable speakers at the event include Charles Hoskinson, Michele Romanow, Anthony Di Iorio, Ethan Buchman, Jaime Leverton, Tamara Haasen, Miko Matsumura, Silvina Moschini, Adam Cai, Sascha Darius Mojtahedi, Pamela Draper, Ben Armstrong, Trevor Koverko, and many more esteemed individuals.
Additional details will follow in the weeks building up to the event.