1. Market Wrap: Weak PayPal Pump Leaves Market Mostly Flat With BTC at $38K, ETH $2.7K
Bitcoin’s 30-day volatility has been dropping the past two days. So has gold’s.
Hype around PayPal allowing users to move their crypto to other venues led to a market jump before tepidity set in.
Bitcoin (BTC) trading around $38,814 as of 21:00 UTC (4 p.m. ET). Gaining 0.75% over the previous 24 hours.
Bitcoin’s 24-hour range: $37,317-$40,372
Ether (ETH) trading around $2,756 as of 21:00 UTC (4 p.m. ET). In the green 0.60% over the previous 24 hours.
Ether’s 24-hour range: $2,888-$2,650
Bitcoin, the world’s largest cryptocurrency by market capitalization, was up Thursday by at 0.75% as of press time. BTC was below the 10-hour moving average and the 50-hour, a bearish signal for market technicians.
BTC rose from $37,317 at 03:15 UTC (11:15 p.m. ET Wednesday) to as high as $40,372 by 13:30 UTC Thursday (9:30 a.m. ET Wednesday), an 8.1% increase based on CoinDesk 20 data. Bitcoin has since fallen somewhat, however, settling at $38,814 as of press time.
2. Liquidity Mining Will Return to Uniswap ‘Very Soon,’ Founder Says
“We’re kind of seeing the community build this out,” Hayden Adams said at Consensus 2021.
Uniswap, the leading automated market maker (AMM) on the Ethereum blockchain, should be running a liquidity mining program again in short order, its founder said.
“I think it’s going to be very soon,” Hayden Adams said in a prerecorded interview broadcast Thursday to wrap up Consensus 2021. “One thing that we’ve seen in the past couple of weeks is basically a grant from the Uniswap grants program, which comes from governance, that was … issued to someone who’s working on liquidity mining smart contracts. And so we’re kind of seeing the community build this out.”
Liquidity mining is a kind of yield farming in which users of a decentralized finance (DeFi) product earn an additional token on top of the regularly expected yield just for putting assets into a liquidity pool — hence the term, “liquidity mining.”
When the money market Compound announced a liquidity mining program for its governance token, COMP, last year, it kicked off the boomlet known as DeFi Summer 2020.
Toward the end of that heady period, Uniswap airdropped, or distributed, its governance token, UNI (+2.09%), to eligible stakeholders and then ran a very brief liquidity mining program across a few key liquidity pools.
Since then there has been no way for users to earn new UNI (except the Uniswap grants program).
3. No One Can Shut Down Bitcoin, Says Binance CEO CZ
Regulatory scrutiny around Binance is likely due to a lack of clarity from governments, CZ said.
It is already impossible for a single entity to kill bitcoin and its underlying blockchain technology, so state governments and regulators should embrace blockchain technology and cryptocurrencies, said the chief executive of the world’s biggest cryptocurrency exchange.
“I don’t think anyone can shut it down now, given that this technology, this concept, is in 500 million people’s heads,” Binance CEO Changpeng “CZ” Zhao said in a pre-recorded interview shown during CoinDesk’s Consensus 2021 virtual conference. “You can’t erase that.”
Fighting off bitcoin and other cryptocurrencies now would be similar to refusing to accept Amazon’s internet business model when the e-commerce giant first started in the early 1990s, according to Zhao. Cryptocurrencies are not here to kill traditional finance or government-backed fiat currencies, but to provide more “freedom of money.”
Cryptocurrency is “just a new tool that can increase the freedom of money all around the world,” Zhao told CoinDesk adviser Nolan Bauerle. “I don’t view them as competing with regulators … and there is a way for us to work together.”
Zhao’s claim comes as Binance, the biggest cryptocurrency exchange by volume, faces increased regulatory scrutiny. Bitcoin and other cryptocurrencies are facing their own regulatory hurdles after becoming more popular than ever.
4. The Node: Regulating Intermediaries in a DeFi World
Leading DeFi lawyers ask: Why apply rules designed for centralized finance to a world where intermediaries are code?
Crypto is a spilled can of worms for regulators that should have been squished a decade ago. That was the message Jason Furman, a senior economist in the Obama administration, told the Washington Post this week. It’s now a “$2 trillion monster,” he said. And one, like Medusa, that grows new tendrils.
The pace of innovation in crypto is difficult for regulators to keep up with, especially considering that, until now, there hasn’t been a proactive, cohesive, industry-wide attempt to manage the industry. Despite operating under a hodgepodge of rules, frameworks and recommendations, crypto has ballooned. And regulatory attention with it.
“The existing framework is simply inapplicable to a system predicated on the absence of intermediaries,” Director of the Blockchain Association Kristin Smith said in an interview, following her Consensus appearance. This is an important point: Decentralized tools exist as the antithesis of a financial system where trusted custodians are needed to manage one’s money.
5. Compliance Exec: Crypto Too Slow to Adopt Anti-Laundering Rules Ahead of FATF Review
Compounding matters, “each country is kind of doing its own thing, which makes compliance actually very difficult for us,” says Malcolm Wright.
The world’s governments are about to get a report card on their progress combating financial crime in the cryptocurrency arena, and at least one compliance executive expects a poor grade.
Next month the Financial Action Task Force (FATF), an intergovernmental body that sets standards for anti-money-laundering (AML) measures, will meet for its triannual plenary. On the agenda is assessing how far the FATF’s 39 members (37 jurisdictions and two regional organizations) have come in adopting its recommendations for policing crypto — including the controversial “travel rule” requiring businesses to share customer information. A final guidance document is expected shortly afterwards.
Speaking Thursday at Consensus 2021, Malcolm Wright, the advisory council chair at trade group Global Digital Finance, sounded pessimistic about the impending review.
“One could perhaps conclude that there’s not enough progress on licencing, that the industry is still not progressing fast enough to respond to compliance and particularly the travel rule,” said Wright, who stressed his view was coming from outside FATF’s consultation process and that it was also partly his opinion.
“And there’s not enough coordinated regulatory frameworks. That is, at the moment, each country is kind of doing its own thing, which makes compliance actually very difficult for us,” said Wright, whose day job is as chief compliance officer at 100x Group, the operator of crypto derivatives exchange BitMex.
If he is correct, the FATF may start to publicly call out jurisdictions it deems to be lagging behind when it comes to crypto and where regulatory arbitrage, or exploitation of loopholes, may be taking place. That could prompt regulators and law enforcement, especially in the U.S., to take a tougher stance toward crypto exchanges and other service providers in far-flung jurisdictions that do business with Americans.
It’s not been easy grafting AML strictures from the traditional financial world onto the pseudonymous-by-design cryptocurrency space. So far, the FATF recommendations have spawned a range of technical solutions, to some extent creating problems when these new systems don’t work in conjunction with each other.
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May 28, 2021