Crypto markets are enjoying a Valentine's Rally but it might not be all love ahead for crypto. Emperor Palpatine turned Mr. Burns lookalike - Gary Gensler, the chair of the SEC, has suggested modifying the federal custody requirements by extending them to encompass digital assets like cryptocurrencies. The proposed amendment would necessitate crypto exchanges obtaining additional regulatory approval and meeting specific federal or state registration obligations. This comes at a time when crypto companies are facing growing regulatory scrutiny, which is also making it increasingly challenging to gain regulatory clearance for their crypto-related products.
Given the ongoing polarization in Washington, the issue will likely be resolved through the court system. Oftentimes, judges’ rulings in landmark cases create legal precedents- good or bad. If such a case were brought to court and a judge decided - for example - Coinbase’s staking services did not classify as securities, other crypto companies in a similar position could use the precedent as part of their defense. This would be a win for the industry but cases like this tend to take time to work their way through the court system. Buckle-up frens, this will be settled in the ring.
· Ether supply reaches an all-time low after ‘The Merge’
· Optimism announces network upgrade ‘Bedrock’ in March
· NFT Market shows rebound as a CryptoPunk sells for almost $1.5M
· The Canadian government announces cryptocurrency can be used as collateral, raising relevant legislative questions.
· GRT, The Graph Network’s native token, nearly doubled in value last week.
· Staked ETH Withdrawals Activated on Zhejiang Testnet, paving the way for eventual staked Ether withdrawals.
· Global police agency Interpol is investigating ways to police crime in the metaverse.
· Cameron Winklevoss, co-founder of Gemini, announced a $100M agreement with Genesis Global Capital.
· NFT market shows comeback as sales hit $945M in January.
· Paxos reportedly probed by NY regulators.
In The News
Sberbank is launching an Ethereum-compatible DeFi platform
Russian bank Sberbank announced it’s launching a DeFi platform. Sberbank is Russia’s largest bank and the third largest in Europe, with $559B in assets. Product Director Konstantin Klimenko wants to “Make the Russian DeFi ecosystem number 1.” Testing is projected to start in March, with the launch in April. Due to the role of the Russian Government in domestic banking, it remains to be seen how decentralized this venture will be. Regardless, Russia projects to be a significant player in crypto for the foreseeable future.
DeFi Community Strives to Raise Aid for Quake Victims
You love to see it! Despite all that’s bad about DeFi, not enough is made about its potential for the greater good. In solidarity with the massive Earthquake that rocked Turkey and Syria, the Turkish crypto community mobilized a DAO to raise funds. The Turkey Earthquake Relief DAO has the endorsement of Solana, Mina Protocol’s Emre Tekisap, and Ethereum’s Kaan Uzdogan. Even if the funding is paltry, ~2 Eth as of writing, DeFi has tremendous potential to facilitate community-driven support initiatives.
London Emerges as World’s Most Crypto-Ready City for Business
According to research by Report, London is currently ranked as the #1 crypto hub. The report cites 8 significant factors for their rationale: quality of life, crypto-specific events, jobs, crypto companies, R&D spending as a percentage of GDP, number of crypto ATMs, capital gains tax rate, and domestic ownership of crypto. UK PM Rishi Sunak said, “[He plans to] ensure the U.K. financial services industry is always at the forefront of technology and innovation.” New York, Singapore, and Dubai are all in the top 5 as well.
Binance Re-enters South Korea with GOPAX Exchange
Binance acquired a majority stake in Gopax to reenter the South Korean market. The funding came by way of the Industry Recovery Initiative, to which Binance pledged $1B. Binance CEO Changpeng Zhao said, “The Industry Recovery Initiative was created to support promising companies that were negatively impacted by the events of last year. We hope that taking this step with GOPAX will further rebuild the Korean crypto and blockchain industry.” Binance has thrown a lot of its weight into elevating an industry that has struggled the last few years.
Polygon Outperforms Ethereum NFTs on OpenSea for the Second Month
The Polygon network outperformed Ethereum NFTs on OpenSea for the second consecutive month. Analysts point to key partnerships (Reddit, Meta, Adobe), and comparatively lower gas fees as reasons for the increased popularity. Polygon has always had certain technological advantages over Ethereum but has struggled to compete with Ethereum’s network effect. Ethereum has historically been the top protocol in terms of NFT sales, and it is curious to see whether this trend will continue.