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.

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.

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.

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.

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.

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.
 

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.

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.

Use our promo code WEEKLY30 to get 30% off upon signing up at https://lnkd.in/giMPK-qG.

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.

The Department of Justice (DOJ) has reportedly decided not to pursue a campaign finance charge against Sam Bankman-Fried (SBF) in connection with his extradition from the Bahamas.

This is not the first time that the terms of his extradition treaty have influenced the charges against him. Previously, the DOJ indicated its readiness to prosecute him on eight counts from the original indictment in December of the previous year, temporarily setting aside five additional charges brought later.

However, under the extradition terms, any new charges would require approval from the Bahamian government. A court in the Bahamas has prevented the government from approving these additional charges, which include bank fraud, operating an unlicensed money-transmitting business, and bribery, until various lawyers are given a chance to challenge them.

In May, SBF had his legal team request the court to dismiss most of the criminal charges, arguing that they were exaggerated and turned what should be civil and regulatory matters into federal crimes. The charges also attributed the collapse of FTX to the infamous 2022 crypto winter.

FTX also previously faced a liquidity crisis after experiencing a selloff of its own FTT tokens. Despite SBF pleaing to dismiss the charges, the court, presided by Judge Kaplan, denied the request, stating that the arguments presented were either irrelevant or lacked merit.

CEO Elon Musk has expressed much interest in integrating viable payments methods into the social media platform, which is being rebranded as X. Musk envisions an everything app that could potentially alleviate the massive debt accumulated by the company via digital payments, including crypto options.

There are already some crypto-related features on the platform, such as allowing opted-in users to tip others with BTC and ETH. Users can also unlock special NFT-based profile pictures and view tweeted crypto collectibles. However, with the rebrand, there is speculation about further crypto integration, which could include support for various digital assets.

The possibility of Twitter accepting DOGE and other cryptocurrencies for ad spend is also considered, giving these coins real-world utility. However, some argue that users might not prefer cryptocurrencies for payments when other options with better attributes are available.

Despite the potential challenges, the rebranded Twitter is renewing its focus on creators by implementing a revenue-sharing program. Popular accounts are already receiving payments to retain influential personalities on the platform and compete with rival platforms like Threads.

Ultimately, whether crypto aligns with the overall vision for X remains to be seen, but there is optimism about its potential integration going forward given how much support and admiration Elon has for the industry.

The CFTC had filed a lawsuit in March, alleging that Binance, along with its founder Changpeng Zhao and compliance officer Samuel Lim, conducted derivatives trading operations in the United States and instructed American employees to hide their locations to evade regulations.

Additionally, Binance faced legal action from the SEC, which sought a temporary restraining order on all funds held by Binance.US. However, the restraining order was not imposed as Binance.US reached an agreement with the SEC, stipulating that the assets and servers of the American branch would be managed solely by its U.S. based staff.

Notably, the regulatory landscape in the U.S. has experienced a shift in sentiment, with Ripple recently obtaining a partial victory against the SEC.
Binance is expected to respond to the aforementioned complaint by July 27th, and the company has indicated that they will request an extension beyond the standard 15-page limit due to the intricacies of the case.

Additionally, compliance officer Samuel Lim plans to submit a separate Motion to Dismiss in response to the complaint. It is unclear as to whether this will be entertained by the appropriate authorities, however.

The British government is considering introducing stricter freedom of speech protections for banking permits after a public dispute involving Nigel Farage and Coutts bank. The government is expected to officially announce these measures soon.

Under the proposed rules, banks would be required to give customers three months notice before closing their accounts, and they must provide a clear reason for the account closure, allowing customers the right to appeal.

The catalyst for these potential changes was a disagreement between Nigel Farage, a politically conservative former politician, and Coutts, a private bank with royal family clients. Farage had his accounts closed, and leaked documents revealed that it was due to his conservative views not aligning with the values of the bank. UK Prime Minister Rishi Sunak condemned the move, emphasizing the importance of free speech in democracy.

Nigel Farage is known for supporting cryptocurrencies, praising Bitcoin for its anti-lockdown investment potential and criticizing traditional fiat currency. He appeared at the Bitcoin Amsterdam Conference in 2022, highlighting the advantages crypto has in terms of anti-inflationary qualities and immutable infrastructure compared to traditional banking.