News Updates October 06, 2022
1. EU’s Russian Crypto Ban Confirmed as Bloc Tightens Sanctions
All crypto payments from Russians to European wallet providers will be forbidden. The European Union has confirmed a sweeping ban on providing crypto services to Russians as it tightens sanctions in the wake of what it calls “sham” secession votes in four Ukrainian regions. The news was first reported by CoinDesk last week.
The bloc introduced an eighth set of economic and political measures against Russia after the invasion of Ukraine in February, tightening a previous rule that limited crypto payments to European wallets to 10,000 euros ($9,900).
“The existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet,” the European Commission said in a statement on Thursday, after proposals it made last week were signed off by EU governments. The measures, which notably seek to cap the price of oil that Russia can sell, follow the country's attempt to annex the regions of Donetsk, Luhansk, Kherson and Zaporizhzhia.
Previous crypto sanctions applied to Russian citizens, residents and entities, unless they live in the bloc.
2. Which Way Is Bitcoin (BTC) Going In Short Term Before A Bull Run?
Perhaps the crypto community has historically not hoped for a Bitcoin bull run more badly than in the current cycle. In the space of just four weeks, Bitcoin (BTC) price rose above the important milestone of $20,000 on four occasions. This psychological factor brings with it the hope for potential rally, considering the painfully bad bear market environment this year. Meanwhile, the Bitcoin trader community looks to be in a no buy zone currently.
What Could Happen Before A Bitcoin Bull Run?
The BTC buying pattern indicates that there was not enough traction in terms of purchases when price fell. According to on chain data from Crypto Quant, there is less short term buying at the moment. This happens as the market fall has been longer than anticipated. Data on the percentage of Bitcoin purchases from 1 week to 1 month shows there is a sideways movement. This could potentially be an ideal buy signal as BTC is likely to take off from this scenario.
“The longer the market falls, the less short term buying.”
More Dip To Follow?
On the flip side, there is another chance of further dip in Bitcoin (BTC) price. This scenario also means a lot of investors could panic sell the cryptocurrency. As a result, new buyers could have reduced confidence in short term profits. Nevertheless, the market would hope that such a scenario would not pan out as market indicators show the bottom is already in. Hence, a Bitcoin rally could be reasonably possible from the current level.
As of writing, BTC price stands at $20,172.03, up 1.29% in the last 24 hours, according to price tracking platform CoinMarketCap. In an encouraging sign for potential bull market conditions, there is a steady growth this week, with a 7 day growth of 6.23%.
3. Japanese Police Thwart ‘Teenage Crypto Scammer’.
Japanese crypto scammers appear to be getting younger – with police reporting they have arrested an 18-year-old on suspicion of attempting to dupe a man almost three times his age out of over $17,000.
Per Jomo News, Maebashi Police Station, which reports to the Gunma Prefectural Police Force, arrested an 18-year-old male restaurant employee in Takasaki, Gunma. The employee was charged with fraud-related offenses.
The police told the media outlet that the 18-year-old approached his intended victim – described as a 50-year-old man – in a public parking lot in Takasaki back in March this year. The teenager told the man than if he were to hand over $17,300, he would be guaranteed to make “x100” profit on the investment. The teen stated that he would use the money to invest in an unnamed token and also “guaranteed” that the $17,300 stake would not be lost.
This initial approach did not convince the older man. But the 50-year-old appears to have handed over his telephone number – or the youth already had the number – as the teenager then continued to attempt to contact his would-be victim.
Police explained that the youth called the 50-year-old on three occasions, attempting to convince the man to transfer $17,300 into the teenager’s bank account.
4. Namibian Central Bank: Virtual Assets 'Remain Without Legal Tender Status' but Merchants Can Still Accept Them as Payment.
The Bank of Namibia recently said it has brought virtual assets and virtual asset service providers under its fintech innovations regulatory framework, and that it plans to amend applicable laws and regulations. According to the central bank’s governor, there is an ongoing “battle between regulated and unregulated money on the one hand and sovereign versus non-sovereign money on the other.”
Amending Applicable Laws
The Bank of Namibia (BON) has said that while cryptocurrencies have no legal tender status in the country, it has now brought “virtual assets (VA) and virtual assets service providers (VASP) under its Fintech Innovations Regulatory Framework in a phased approach, through its innovation hub.” The central bank added it is also considering amending “applicable laws and regulations diligently in consultation with other relevant authorities.”
In a recently issued statement, the BON also clarified that even though privately issued digital currencies are still not legally recognized, merchants and traders can accept payment in this form provided they are “willing to participate in such an exchange or trade.”
The bank’s new position on digital currencies appears to suggest the BON may be warming up to cryptocurrencies. As reported by Bitcoin.com News, the central bank has in the past said it did “not recognise, support and recommend the possession, utilisation and trading of cryptocurrencies by members of the public.” The bank also warned Namibians there would be no legal recourse in the event they lost money.
5. Brazilian Court Grants Bank Right to Inspect Debtor’s Crypto Wallets.
A court in Brazil has ruled that a major commercial bank is allowed to inspect one of its debtors’ crypto wallets – and has stated that crypto has “monetary properties.”
According to the media outlet Consultor Jurídico, a branch of the Justice Court of São Paulo State (known locally as TJ-SP) granted a special legal request from Banco Safra, one of the nation’s biggest and busiest banks. The bank had asked the court to let it search a debtor’s crypto wallets to see if they had tokens that could be liquidated.
The TJ-SP’s Chamber of Private Law met to consider the case after hearing that an unnamed debtor had defaulted on payments worth around $289,000.
The bank had failed to convince the TJ-SP in a first legal bid, with the presiding judge at the time stating that it was not up to the court to permit the “indiscriminate and uncertain search of seizable goods.”
But a panel of justices voted unanimously in favor of Banco Safra at a second hearing. The presiding judge, César Zalaf, was quoted as stating that the fact that there “was no evidence to suggest that the defendant even owns cryptoassets” should not be an obstacle for the bank should it wish to carry out a search of wallets.
Moreover, the judge added, banks should not need to provide courts with proof that their debtors own crypto – as allowing them to search wallets would allow them to establish this fact.
6. Despite call for Congress to act, new crypto laws look unlikely this year.
Cryptocurrency advocates and regulators can agree on one thing: Congress should pass new laws for crypto. Whether Congress can agree on what those laws look like remains uncertain.
The Financial Stability Oversight Council (FSOC) recommended lawmakers pass legislation to establish a federal framework for stablecoins, allow for direct oversight of cryptocurrency spot markets in bitcoin and ether, and pass legislation to increase transparency around digital asset projects. The report sets an ambitious agenda for lawmakers.
Stablecoin legislation is arguably the furthest down the road, due to the algorithmic stablecoin crash earlier this year and bipartisan talks that have lasted several months. The bill in its current form appears stalled, though Monday's report could restore momentum.
The council reiterated a call for Congress to create clearer rules for stablecoins, with Treasury Secretary Janet Yellen, who chairs the council, stating that FSOC's recommendations were meant to, "provide a strong foundation for policymakers as we work to mitigate the risks of digital assets while realizing the potential benefits."
Rep. Patrick McHenry, R-N.C., has used his position as the top Republican on the House Financial Services Committee to negotiate a bill to do what FSOC recommended. He again called on Tuesday for congressional action on digital assets and took a shot at U.S. Securities and Exchange Commission Chair Gary Gensler’s approach to the industry.
7. Canada Firms Hit With Lawsuit for Failing To Disclose Crypto Trading Fees.
A Canada-based law firm is reportedly preparing for a class-action lawsuit against two fintech businesses.
Reports claim that the lawsuit questions commission-free crypto trading ads, and non-disclosure of hidden costs.
The petitioners have stated that the fintech companies generated millions in profits while deceiving customers.
8. Why The Crypto Market Outlook Just Became Grimmer?
The Federal Reserve continues to create a restrictive macroeconomic environment. While the crypto market has not reached new lows, it has struggled to break from the unfavorable economic woes. Moreover, it appears that the outlook for the crypto market just got a lot grimmer. Raphael Bostic, the president and CEO of the Atlanta Fed, reveals that the fight against inflation is still in its early stages.
Bitcoin prices continue to be in the $19K-$20K range. It is currently trading at $20,214. Ethereum has failed to return to its pre-merge level. It is currently trading at $1366.
Meanwhile, OPEC+ has decided to cut oil production to spike petroleum costs. It can also result in higher inflation.
How The Fed Controls The Crypto Market Outlook
The Federal Reserve is responsible for controlling abnormal macroeconomic conditions by controlling the money supply. Due to soaring inflation levels, the Fed is restricting the money supply through interest rate hikes and quantitative tightening.
The Fed’s hawkish stance has caused a massive selloff in the crypto market. However, according to Bostic, the Fed is still in the early stages of its fight against inflation. He believes that the Fed needs to increase interest rates by another 150 bps before the end of the year.
