News Updates December 18, 2022
1. OKX Stops Withdrawal Process; Do Not Panic, Here's What's Happening. OKX has processed no withdrawals in the last five hours: the title itself attracts a lot of attention and even causes a certain amount of dispute. However, the exchange is not experiencing any problems with solvency or liquidity, and the reason behind the issue is a third-party service that is not providing full access to the trading platform. According to OKX on-chain data, there have been no withdrawals processed in the last hours, the last transaction suggests that OKX sent around 1 million SOS tokens to an unknown address approximately five hours ago. After that, no more operations were processed.
OKX@okx
Dec 18, 2022
There is currently an intermittent connection error with our cloud provider which is affecting the user experience. Our dev team is resolving it with them. Funds are safe. Sorry for any inconvenience caused.
2. Community Fears DCG is Selling as Altcoins Values Tank Massively
The crypto market experienced a massive sell-off in the last 24 hours. Several assets related to Digital Currency Group (DCG) Grayscale’s investment products, like NEAR, Filecoin, Ethereum Classic, etc., shed an average of over 10%, prompting fears that the firm was selling.
According to Coingecko, the crypto market fell by 5.4% over the reporting to $838 billion. Data from Coinglass showed that $237.86 million was liquidated from the industry. Bitcoin declined by 4.3% to $16,710, while Ethereum saw 7.6% losses to trade at $1,180 as of press time.
Altcoin’s Value Falter
In the last 24 hours, several DCG-related assets, like Filecoin, Near, Ethereum Classic, Litecoin, Bitcoin Cash, etc., all saw losses. Binance-backed coins like BNB, Trust Wallet Token, etc., also saw substantial red candles. Other altcoins like Algorand, Cardano, Chainlink, Avalanche, and Solana saw their values plummet rapidly during the sell-off.
While it was unclear why the assets experienced a sudden sell-off during the period, the crypto market just experienced one of its most turbulent weeks in recent memories.
FTX founder Sam Bankman-Fried was arrested in the Bahamas on the orders of the United States government. SBF was later denied bail because he was considered a flight risk.
The largest crypto exchange in the space, Binance, also experienced a surge in withdrawals following increased fears over its reserves. BeinCrypto reported that the exchange experienced around $5 billion in withdrawals during the height of the run.
Crypto Community Speculates DCG is Selling
Meanwhile, several crypto analysts have speculated that the current sell-off could be from Grayscale’s parent company, Digital Currency Group (DCG).
The co-founder of Reflexivity Research, Will Clemente, tweeted that many speculators wonder whether the selling was derived from DCG itself. He added images of the price performance of some of these altcoins to buttress his point.
Crypto analyst Miles Deutscher opined that there was a strong likelihood that DCG was dumping. According to him, “bad news likely to come.”
Another analyst, Karl, said he “would not be surprised if this sell-off is a desperate attempt to liquidate what else they can before announcing bankruptcy soon.”
Community concerns over DCG’s financial status have grown following recent events in the space. Its crypto lending firm Genesis recently halted customer withdrawals following FTX’s collapse.
Meanwhile, the investment firm also revealed that it has a $2 billion liability, most of which is owed to Genesis. The fears have been further heightened over the increasing discount Grayscale’s Bitcoin Trust (GBTC) shares have been trading.
3. BTC Rejected at Critical Resistance, is $15K Next?
The overall Bitcoin price action is on an impulsive decline after experiencing a significant rejection from a long-lasting resistance level at $18k. Failing the support level at $15k, the bulls could be in for a lot of trouble soon.
Technical Analysis
The Daily Chart:
Looking at the daily chart, the price oscillates in the large falling wedge pattern. While this is usually a reversal pattern in a downtrend if broken to the upside, the price has failed to reach the higher boundary as it got rejected from the $18K resistance level and the 50-day moving average located at the same price zone. Currently, a drop down to the $15K support area seems possible, as no other significant support level is left in the way.
However, the $15K area and the lower trendline of the falling wedge are located very close, increasing the chance to support the price and push it toward the $18K level once more. It would not be necessary to emphasize the importance of the mentioned support level, as its breakdown could lead to another blood bath.
The 4-Hour Chart:
On the 4-hour timeframe, a classic bearish market structure is developing, similar to the higher timeframe. The price has broken below the $16,800 minor support level after failing the recently formed bullish trendline. The $16,800 level and the broken trendline are now considered resistance, while the former is already pushing the price to the downside.
Furthermore, the RSI indicator, while recovering from an oversold state, is way below the 50 mark, signaling a strong bearish momentum that could soon bring the price down toward the key $15,500 area.
Ratio
The Exchange Whale ratio metric is typically used to demonstrate whales’ behavior, as it is calculated by dividing the inflow of whales to the exchanges by the total inflows daily. During the last cycle and the first phase of the 2018 bear market, this metric was on a significant rise as many whales were selling their coins on the exchanges to protect their profits and reduce their risk. This behavior led to a gruesome downtrend. However, the metric started a downtrend in the second phase, as the price began to recover and start a new bull run.
Recently, the same behavior has been witnessed as the whales are depositing less coins onto the exchanges compared to the rest of the market participants, which could signal that a price bottom could be near. However, this could also be a consequence of FTX’s insolvency and eventual bankruptcy, as the whales do not trust the exchanges enough to hold their coins on them. This decline in the Whale Ratio metric could trigger a potential supply shock and finally lead to a price bottom formation soon.
4. Whatever it takes: What should FCA consider in UK’s crypto hub race?
Interest in digital assets has been rising, attracting the attention of policymakers and regulators worldwide.
The UK’s financial regulator, the Financial Conduct Authority (FCA), has been continuously facing criticism from British lawmakers and the crypto industry members for their stand on strict regulations and, therefore, seemingly a utopian desire to become a crypto hub in the next few years. For instance, one major claim against FCA entails the slow approval of licences for crypto firms.
However, the latest news indicates that the UK is moving from the piecemeal approach to wholesome regulation. This comes after the House of Commons passed amendments to the Financial Services and Market Bill on 25th October 2022, featuring an alteration to bring forward cryptocurrencies into the scope of regulated financial services. It means crypto firms would have to play by the government rules to protect consumers. It also makes them prone to fines or losing licences if they fail to comply.
The authorities shouldn’t divert from the idea and vision of making the UK an international crypto and digital assets hub. Considering all the criticism that FCA is facing and without denying its validity, I suggest we should take a look at the situation from a different angle.
There is Need for Wholesome Regulation
Interest in digital assets has been rising, attracting the attention of policymakers and regulators worldwide. We have seen various regulatory advances, such as the Market in Crypto-Assets (MiCA) provisional agreement in Europe and the Framework for International Engagement on Digital Assets in the US. That depicts effort and desire to provide regulatory clarity in the crypto market. However, safety and consumer protection are among the key concerns and gaps in this market, thus bringing about a dying need for wholesome regulation.
Through regulations, it’s easy and more effective to place consumer protection at the core. One of the drawbacks of the crypto market is the presence of scams and Ponzi schemes that lead investors to lose billions of money annually. Market manipulation is another challenge. Regulation will help address abusive trading practices/conduct and prioritise protecting consumers from fraud and manipulation. As a result, it weeds out bad actors and boosts investors’ confidence to enter the market.
On the other hand, some countries have a low barrier to entry. For instance, there are no strict regulations in Dubai and no “filter” for crypto companies, making it difficult for users to filter a crypto firm. There are some reports showing that at least 30-50 leading crypto entrepreneurs have relocated their businesses to Dubai and other crypto-friendly jurisdictions. Unfortunately, crypto scammers and fraudsters like operating in unregulated environments with minimal supervision of such activities and asset classes.
Unlike Dubai, the UK has a sustainable financial system with a long history. That’s why regulators look at crypto and related processes through a prism of traditional finance. The UK has been a strong global financial centre for decades and plays a critical role in shaping post-crisis financial regulations. More importantly, they know all the risks the hurry brings. Therefore, it’s good that the UK is acting gradually and carefully in pursuit to be a hub of innovation.
Final Thought
Now that Rishi Sunak, a crypto enthusiast, has been appointed to the post of Prime Minister, it will be an exciting period to see what impact this will have on the crypto politics within the country.
Despite FCA taking a conservative approach to regulations, it may be right at the same time. Being more permissive would easily give scams more space, and the value is huge. Instead, we should make user protection a priority.
More importantly, it’s better to be careful at the initial stages than work on mistakes later; it’s a good foundation for the future if we want a long-term relationship with crypto.
Nevertheless, FCA and UK officials should cease making loud statements, yet they’ve already admitted to being in the learning and recruitment stages. In truth, there is still much work for the UK crypto hub dream to become a reality.
5. Gemini Customer Data Leak Was Advertised for Sale on Hacker Forums for 30 BTC in September.
On Dec. 14, 2022, the crypto exchange Gemini revealed that some Gemini customers have been the target of phishing attacks that the firm believes stem from a third-party vendor leak. While reports disclosed that Gemini’s leak was approximately “5,701,649 lines of information pertaining to Gemini customers,” Gemini did not disclose how many customers were affected by the breach. Moreover, according to Bleeping Computer’s cybersecurity author, Ionut Ilascu, data from Gemini’s customer info leak has been advertised for sale on hacker forums as early as Sept. 2022.
Gemini Customer Data Leak Discovered on Multiple Hacker Forums
Three days ago, Bitcoin.com News reported on the crypto exchange Gemini after it was discovered that a database that contains phone numbers and email addresses of 5.7 million Gemini users was leaked. The crypto reporter Zhiyuan Sun detailed that he witnessed documentation that had shown “5,701,649 lines of information pertaining to Gemini customers.”
Gemini addressed the issue on Dec. 14, 2022, in a blog post and it explained that the breach likely derived from a third-party vendor. The exchange did not explain how many customer accounts were affected and Gemini did not detail which third-party vendor was responsible for the data breach. The following day, after Gemini’s blog post published, Bleeping Computer’s cybersecurity author, Ionut Ilascu, published an article that explained Gemini’s leaked database has been advertised for sale since Sept. 2022.
Ilascu says there were “multiple posts on a hacker forum” that had shown the leak was for sale, with one discovered by the cybercrime intelligence platform Kela. One user attempted to sell the leak for 30 BTC or roughly $500K using today’s bitcoin exchange rates. Ilascu further disclosed that the data leak also showed up on hacker forums in Oct. 2022, when the seller leveraged “a different alias.”
Another person shared the info in mid-November on a hacker site and this particular post said that not only did the leak contain Gemini data, but allegedly other exchanges were included. The post published on Breachforums also offered the database for free before the account was banned from the forum. The now-banned user also told forum users that three digits from the sets of customer phone numbers were missing from the database leak.
