News updates April 19, 2022

1. Whales Bought the Dip as Bitcoin Reclaims $40K: Analyst:

As bitcoin dropped to a monthly low at $39,000 after a few days of consolidating above the $40,000 mark, there was a growing bearish sentiment regarding its immediate price action. When the bears came out to push bitcoin south, dipping into the 37K – 40K area, some considered it an excellent opportunity to accumulate.

 *High Volume of BTC Spot Exchange Outflow*

Minkyu Woo, a technical analyst on CryptoQuant, claimed that as the BTC sell-off went on, a noticeable volume was seen out of spot exchanges recently. Whales may have bought out a large sum of BTC, Woo implied, because this size of outflow can only be made possible via “checking Top 10 BTC outflow for spot exchanges.”

Woo saw the price range of BTC between 37K ~ 40K as a critical accumulation phase which has been ongoing since Mar 2022 and urged investors to hold or buy the dips if they could. Previously, in the wake of scenarios where the outflow volume spiked, as a considerable quantity of bitcoin was being removed from exchanges, upward price action soon reversed the market’s short-term bearish sentiment.

Something similar transpired now as well since BTC recovered all losses and even challenged $41,000.

In addition, Woo stated that as long as bitcoin has traded beneath the 200 MA support line since Q4 of 2020, a sufficient amount of “smart money” would start accumulating the largest cryptocurrency by market cap. As Woo’s chart indicates, BTC dipped into the “bottom zone,” and buying interest has also spiked accordingly.

2. Indian Crypto Exchange CoinDCX Hits $2B Valuation in New Funding Round:

Indian crypto exchange CoinDCX has raised $135.9 million from investors led by Pantera Capital and Steadview Capital, doubling its valuation to $2.15 billion in less than a year to become the most valued crypto startup in India.

In addition to Pantera Capital and Steadview Capital, the funding round also saw participation from Kingsway Capital, DraperDragon, Republic, and Kindred Ventures along with existing investors such as B Capital, and Coinbase Ventures, Polychain Capital, and Cadenza Capital Management.

CoinDCX was the first Indian cryptocurrency startup to be valued at over one billion dollars and marked its entry into the unicorn club. The company had raised $90 million in August 2021, at a valuation of $1.1 billion.

It was soon followed and overtaken by rival crypto exchange Coinswitch Kuber, which raised $260 million in October 2021 at a valuation of $1.9 billion. Prior to CoinDCX’s latest funding, CoinSwitch Kuber was the most valued cryptocurrency exchange in India since October 2021.

3. Unlike China, the Bank of Japan is Not Willing to Conduct Large Scale Pilot Tests for Digital Yen:

Central banks worldwide have accelerated the developments when it comes to building their own central bank digital currencies (CBDCs). However, the Bank of Japan is not willing to press ahead with its plan of having a Digital Yen in the market.

The Janpenese central bank recently said that it would rather approach CBDC in measures steps, a similar approach to that adopted by Sweden. Thus, it said that it won’t be conducting large scale pilot tests like China anytime soon. during an interview with Bloomberg, Kazushige Kamiyama, the head of the BOJ’s payment system department, said:

Kamiyama said that BOJ is looking to proceed with its research cautiously while ensuring the compatibility of the Digital Yen with other CBDCs. Furthermore, the Japanese central bank is also working in close cooperation with its counterparts like the Federal Reserve and the European Central Bank.

 *Decision on Digital Yen to Come by 2026*

The Bank of Japan has yet to decide on when to introduce its CBDC in the market. The central bank said that it will work in close consultation with the public. BOJ Governor Haruhiko Kuroda said that the decision to issue a CBDC shall likely arrive by 2026.

However, looking at the developments, the BOJ has already launched the Phase II of its digital money experiments this months. In the next phase, it shall proceed ahead with a pilot test. The BOJ will also be having certain ceiling on holdings and transactions of its CBDCs during the pilot test.

“Many private-sector businesses are calling for a limit to be set to avoid or at least contain any massive capital shift to a CBDC from bank notes or deposits,” Kamiyama said.

4. IMF Says Capital Control Powers Should Include Crypto
The financial stability watchdog is the latest to worry that digital assets are being used to evade sanctions on Russia. Governments should ensure they have the power to impose capital controls on crypto alongside traditional assets, the International Monetary Fund said, as the war in Ukraine continues to raise concerns over sanctions evasion.
That means that citizens of crisis-hit countries like Greece and Argentina could potentially see their access to bitcoin limited alongside restrictions on withdrawing cash from ATMs or accessing foreign currency.
“Laws and regulations for foreign exchange and capital flow management measures should be reviewed and amended if necessary to cover crypto assets," even if currencies like bitcoin don't formally count as financial assets or foreign currency, the IMF said in a financial stability report published Tuesday. In remarks to reporters after the publication of the report, IMF officials admitted virtual assets probably aren't being used to circumvent the financial restrictions on Russia.
“The evidence to date suggests there is not much going on in terms of undermining sanctions via crypto assets,” said Tobias Adrian, director of the IMF’s Monetary and Capital Markets department, citing data on prices and volumes of Tether stablecoin transactions. “Of course it’s something that we’re watching very very closely."
The report follows an IMF warning in October that underregulated crypto could cause instability and fraud. Central bankers such as European Central Bank President Christine Lagarde have previously said that crypto is being used to evade financial sanctions imposed on Russia, despite little evidence.

5. Nearly Half of Jurisdictions Still Not Applying Crypto Laundering Norms, Global Regulator Says
The Financial Action Task Force has vowed to toughen its monitoring, though some fear customer identification rules could harm online privacy. The Paris-based international organization vowed to step up monitoring of its members, which include the U.S., European Union and China, with more frequent assessments focusing on where illicit funding risks are highest.
Nine percent of jurisdictions are not compliant with norms requiring virtual asset service providers (VASP), such as wallet providers and exchanges, to ensure funds aren’t being used to launder money or finance terrorism, the report said.

6. BitLicensed crypto firms ordered to pay annual assessment fees in New York:

The cost of running a crypto business in New York is about to rise with the state government gearing up to require companies holding a BitLicense to pay assessment fees to ensure they’re complying with regulations.

The rule was included in New York State’s FY2023 budget signed into law on April 9 by Governor Kathy Hochul, giving the state’s Department Of Financial Services (DFS) a “new authority to collect supervisory costs from licensed virtual currency businesses,” according to a statement by the DFS.

DFS superintendent Adrienne Harris said the fees would bring digital currency businesses in line with those already paid by institutions such as banking and insurance companies and added:

New York was the first to start licensing and supervising virtual currency companies, and we continue to attract more licensees and the most crypto startup funding of any state in the nation.”

The state of New York was the first in the United States to require crypto companies to be licensed with the introduction of the now known “BitLicense.” The application fees for such a permit are currently $5,000 and are subject to vague capital requirements determined by the New York DFS.

The annual assessment fee amount that the DFS will charge crypto firms is currently unknown, but the same fees for other regulated financial institutions can cost tens of thousands of dollars a year.

The DFS states the fees are to assist with paying the operating expenses of regulating crypto firms and “will empower the Department to build staff with the capacity and expertise to best regulate and support this rapidly growing industry.”

Businesses that accept crypto as payment, create software for the crypto space such as self-custody wallets, or give advice on crypto trading aren’t subject to the BitLicense and corresponding new fees.

 *Self-regulatory organizations growing alongside new US crypto regulation*

Recently, the regulation and licensing of crypto in the state have come under fire, with billionaire investor Bill Ackman sharing his thoughts in February about New York’s failing policies and how it could make him leave the state.

Ackman appealed to Mayor Eric Adams and Governor Hochul to address the increasing concerns around regulation, saying that easing restrictions and removing regulatory barriers could make New York a “crypto center of innovation.”

Mayor Adams ran with plans to make New York City the “center of the cryptocurrency industry,” even taking his first three paychecks in Bitcoin (BTC). Analysis from Cointelegraph in November shows that it’s really up to the New York DFS and state government to enact changes that will attract the industry.

7. Indian Authorities Seek Details of Bitcoin Theft During Investigation :

Two private investigators allegedly stole 1,137 bitcoins from the wallet of the key accused during the probe into a bitcoin MLM fraud.

India’s financial crime investigation agency Enforcement Directorate (ED) has sought the help of police in a case of bitcoin theft worth Rs. 6 crores ($790,000) by the investigators who were assisting the police in a crypto fraud case worth over $260 million.    

 *What Is the Case?*

As per media reports, ED officials visited the office of Pune’s Commissioner of Police in the Maharashtra province last Saturday and collected some information about the crime. 

The case pertains to two private cryptocurrency detectives allegedly transferring 1,137 bitcoins while investigating a fraud where they were assisting the Pune police. CryptoPotato earlier reported the arrest of Pankaj Ghode, a cryptocurrency expert, and Ravindra Patil, an Indian Police Service (IPS) officer who had taken voluntary retirement and was working as a private digital asset investigation expert. 

 *Stealing of Bitcoin During Investigation*

According to the First Information Report (FIR) lodged by the Pune Police, the police engaged Ghode and Patil to recover bitcoins from Amit Bhardwaj’s e-wallet. For this purpose, the necessary information was taken from Bhardwaj and passed on to the two private investigators.

But instead of playing fair, they transferred 1,137 bitcoins to their wallets and gave the police fudged screenshots of Bhardwaj’s wallet. Higher police officials were able to pinpoint the wrong-doing through KYC check of the accused, and a case was registered against them, leading to their arrest. 

 *A Long Trail of Crypto Frauds*

While India doesn’t have a law specifically to address crypto-related crimes, the reports of investors being cheated by the false promises of high returns on bitcoin investments have been coming pretty regularly. 

In one such example, the ED arrested an accused early this month in the infamous Morris Coin case.

The alleged wrong-doer escaped from the country after being granted bail in 2020, following his arrest under lenient sections of the Indian Penal Code. At that time, there were fewer complaints, and the scale of the fraud was fully revealed. As per the estimates, the scam amounted to at least $160 million and involved 900 investors.

8. France's Crypto Industry Fights Institutional Caution

A Web 3 summit in Paris has vaunted the country’s strengths and talent pool, but crypto advocates must battle for acceptance from skeptical financiers.

Web 3 seems to be having just as hard a time fitting into France’s cautious political and financial institutions – though some are optimistic that is about to change.

9. Gulf Energy pursues joint venture with Binance, invests in BNB

Thailand-based Gulf Energy has made strategic investments in cryptocurrency exchange Binance US and signaled its pursuit of a joint venture with the global Binance exchange as part of a targeted effort to gain exposure to the digital asset market.

10. Economist Predicts the Fed’s Response to Inflation Will Push Crypto Higher

Allianz Chief Economic Advisor Mohamed El-Erian says that the Federal Reserve’s response to inflation will cause the prices of cryptocurrencies, like bitcoin, to “go higher.” He noted: “That’s what you get when you’ve waited too long to recognize what inflation is and to take action.”

11. FBI and CSIA issue alert over North Korean cyberattacks on crypto targets

The Cybersecurity and Infrastructure Security Agency (CISA) and FBI have issued an alert on North Korean state-sponsored cyber threats that target blockchain companies in response to the Ronin Bridge hack last month.

The alert was issued on April 18 in conjunction with the Federal Bureau of Investigation and the Treasury Department which had warnings and mitigation suggestions for blockchain and crypto firms to ensure their own operations remain safe from hackers.

12. Portugal's Bison Bank Acquires Crypto License from the Central Bank

Bison Bank, a Portuguese financial institution, has been given license by the nation's Central Bank, Banco de Portugal to provide virtual asset services, according to the updated list of the apex bank.

Bison Bank will establish a dedicated unit dubbed Bison Digital Asset that will offer exchange and custodial services for digital currencies to clients.

This license makes it the first Portuguese bank to be licensed for any related crypto services.

13. Iran to Increase Penalties for Unauthorized Cryptocurrency Mining

Iran has drafted new rules to increase penalties for illegal cryptocurrency mining in the country, including additional fines and imprisonment. “Any use of subsidized electricity intended for households, industrial, agricultural, and commercial subscribers for mining cryptocurrency is prohibited.”