News Updates October 13, 2022

1. Over $8 billion outflows Bitcoin within hours after U.S. inflation hits 8.2%. 

Bitcoin (BTC) is experiencing a spike in selling pressure moments after the United States inflation figures for September came in hotter than expected. The capital outflow in the asset has triggered speculation over the Federal Reserve’s next move to contain inflation. 

 
In particular, Bitcoin’s market capitalization by press time stood at $352.18 billion, representing a loss of $8.48 billion within two hours. Before the release of the inflation figures, the flagship cryptocurrency commanded a market capitalization of about $360.66 billion, according to CoinMarketCap data. 

Notably, the latest figures will likely lead to higher interest rates. The Fed’s tightening policies have dampened the demand for risk-sensitive assets like Bitcoin. The current environment has been gloomy for stocks too. 

The latest data shows that the September CPI surged 8.2% on year-over-year bases compared to the expected 8.1%. At the same time, the core CPI also hit 6.6% YoY to stand out as the highest level since 1982. 

2. Tether USDT Turns 8 – a History of FUD, Regulation and Growth.

Eight years after Tether issued its first USDT token on Oct. 6, 2014, the company could claim to have seen it all: allegations of price manipulation, regulatory legal fights, and repeated FUD (fear, uncertainty, and doubt) attacks.

Through it all, USDT continued to grow, becoming the world’s largest stablecoin with over $68 billion in assets. USDT, also known as Tether, is a cryptocurrency that its founders say is 100% backed by liquid assets such as cash or Treasury bills.

Stablecoin pioneer
USDT is pegged one-to-one against the U.S. dollar. That means it could theoretically remain stable even during periods of volatility – hence the name stablecoin. The invention by Tether has become an important aspect of the crypto ecosystem.

3. OCC Comptroller: Crypto Companies ‘Don’t Know What They Want to Be When They Grow Up’

Michael Hsu joined “First Mover” to discuss why crypto companies need to provide more clarity on what they offer and be in less of a rush to expand without a “strong foundation.”

Acting Comptroller of the Currency (OCC) Michael Hsu says the lack of focus at some crypto companies with plans to expand is hindering agencies like his from establishing regulatory standards.
“Part of this confusion is because there are parts of the crypto industry that don't know what they want to be when they grow up,” Hsu said during an appearance on CoinDesk TV’s “First Mover” on Thursday. “They [crypto companies] want to be a little bit of everything to everyone. And at some point you have to decide.”

He noted the failures earlier this year of crypto lender Celsius Network and crypto hedge fund Three Arrows Capital, both now in bankruptcy court, as examples of the “foundational issues” the crypto industry needs to address.

4. EU commissioner McGuiness says privacy, AML may look different from US under MiCA

The commissioner said Europe is watching U.S. securities regulation developments very closely, but Europe is not following the American lead in its attitude toward energy use.

Fintech needs to communicate better, according to a top European Commission (EC) financial official. People ask what the need for financial technology is, and the industry has answers, but “we need to talk about this outside ourselves,” Commissioner for Financial Stability, Financial Services and the Capital Markets Union Mairead McGuinness said on Oct. 13. 

Appearing at DC Fintech Week, McGuinness shared observations about emerging financial technology from a European perspective and compared the situations in Europe and the United States.

The EC is watching securities regulation in the United States very closely, McGuinness said. She perceived a lack of enthusiasm for the regulatory process on the part of crypto developers but said “those who want a future” understand the need for it. She had no doubts that fintech was going to prevail thou. She said:

“Traditional banks will be called something else in time.”

While Europe decided against banning proof-of-work consensus in crypto mining, the continent remains more concerned about energy than the U.S., McGuiness said. Energy ranks with Anti-Money Laundering (AML) and consumer protection among European concerns, she added.

5. Brazilian Securities and Exchange Commission CVM Defines Rules to Classify Cryptocurrency Assets as Securities.

The Brazilian Securities and Exchange Commission (CVM) has clarified the criteria by which different cryptocurrency assets can be considered securities. Through the issuance of a guidance opinion document, the CVM defines different classifications for existing cryptocurrency assets, specifies which can be viewed as securities, and explains how it will intervene in these markets.

Brazilian Securities and Exchange Commission CVM Addresses Crypto Securities Classification
The Brazilian Securities and Exchange Commission (CVM) has issued a new guidance opinion document that touches on the issue of crypto-based securities. The document, which acknowledges there is still a vacuum on the subject due to the absence of specific regulation, defines cryptocurrencies as digitally represented assets, protected by cryptography tech, that can be transacted and stored through Distributed Ledger Technologies (DLT).

According to the new criteria, tokens that can be considered securities must be digital representations of the following structures: shares, debentures, subscription bonuses; right coupons, subscription receipts, and split certificates relating to the securities; certificates of deposit of securities; and debenture notes.

In the same way, other kinds of tokens can also be deemed securities depending on their classification. The CVM further clarified that the tokenization of assets will not be subject to prior approval or registration with the organization, but if the resulting assets are considered securities, they will have to comply with already existing security regulations.
 

6.October Turns Out the Biggest Month for Crypto Hacks in 2022.

We have yet to complete the first half of October and this month is already turning out to be the biggest month for crypto hacks in entire 2022. So far this month, more than $718 million have been lost to crypto hacks. The total value hacked in October has already surpassed the numbers of March 2022.

Note that this entire stolen amount is from several different DeFi protocols. Blockchain analytics firm Chainalysis reports:

After four hacks yesterday, October is now the biggest month in the biggest year ever for hacking activity, with more than half the month still to go. So far this month, $718 million has been stolen from #DeFi protocols across 11 different hacks.
Chainalysis adds that at this rate 2022 will easily surpass 2021, which is the biggest year in crypto hacks on record. So far in 2022, hackers have managed to steal more than $3 billion across 125 hacks that happened this year.

This month there have been two major hacks of more than $100 million in cross-bridge attacks. Hackers recently stole more than $100 million in BNB Coins through a cross-bride connecting BNB Beacon Chain (BEP2) and BNB Chain (BEP20 or BSC).

Similarly, Solana-based DeFi protocol Mango Markets lost more than $100 million in the latest exploit earlier this week. The DeFi protocols need to up their game as hackers are getting adept at exploiting the weakness in security, coding, and structure of DeFi marketplaces.