Yes[In]Crypto brings you the highlights of the week of April 4th, from the UK’s FCA regulation update and industry hacks to the slow decline in NFT volumes.
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Has the NFT bubble burst?
Recent data suggests that the NFT ecosystem may be tearing apart, with global sales down more than 50% since the 2021 high. Currently, NFT trading volume is down 21% since the beginning of February.
Top series such as Bored Ape Yacht Club (BAYC) and markets such as OpenSea are experiencing their lowest trading volumes, leaving experts scratching their heads. In an interview with Reuters, Pablo Rodriguez-Fraile hinted that the bubble may be bursting because the industry has “achieved some unsustainable achievements”.
Others downplayed the disappointing numbers as a blip in the picture. Modesta Masoit of DappRadar also believes that the market is only in a consolidation phase and is preparing for another rally.
Law enforcement and the FCA won’t shy away from bad actors
Hackers have gone mad in 2022, leaving behind a slew of exploits and compromised projects. According to on-chain data, DeFi has lost more than $1.2 billion to hackers since the beginning of the year.
The dizzying number is almost as much as the amount lost in all of 2021. But law enforcement agencies, including the UK’s Financial Conduct Authority (FCA), are cracking down on the activities of bad actors, often confiscating their booty.
Last week, the U.S. Department of Justice announced the seizure of $34 million worth of cryptocurrency from a South Florida resident.
Likewise, the German Federal Criminal Police compromised the servers of the Russian darknet market Hydra and seized $25 million worth of BTC.
Last year, the FBI recovered most of the ransom paid during the Colonial Pipeline hack, and in 2013 seized more than 100,000 Silk Road-related bitcoins.
UK FCA Adds 5 Newly Approved Crypto Companies to Its Register
The UK has given the green light to crypto companies, declaring themselves a key authority and voice in the global crypto space. The country’s intentions were gleaned from the move to formally recognize stablecoins as a means of payment and try to mint its NFTs.
The country’s regulator, the FCA, recently announced an extension of the March 31 deadline to approve UK-based crypto firms seeking operating licenses. The extension is widely seen as an important step in the right direction for a country that has historically had a “cold” relationship with cryptocurrencies.
The UK Advertising Standards Authority has flagged crypto ads throughout the year, culminating in 2021 when the FCA issues a consumer warning to Binance.
Regulators disagree on monitoring approach
Last week, the U.S. saw a regulatory divide over how to more clearly regulate the space.
The Fed rate hike sparked a backlash from Cathie Wood, who described the move as “playing with fire”.
On the other hand, FTX CEO Sam Bankman-Fried has adopted a strategy of lobbying Washington to donate to these events. Cryptocurrency regulation expert Rohan Grey believes that lobbying like Bankman-Fried stifles the industry’s growth and hinders tight regulation that protects consumers.
Treasury Secretary Janet Yellen believes that government regulations should not affect the development of the industry.
“The role of government should be to ensure responsible innovation — one that works for all Americans,” Yellen said in a speech in the capital, while still urging regulators to focus on the rise of stablecoins.
India’s cryptocurrency landscape is far from stable
Kumar Modi, a member of the Indian parliament, advocated a 50% tax on cryptocurrencies, dampening enthusiasm among cryptocurrency investors. He said market participants should interpret his statement as a warning to quit, as the government wants to “make life hell for those who invest in cryptocurrencies.
Modi believes that the 18% GST should be extended to cryptocurrency investors and their service providers. Recent comments pale in comparison to those of Finance Minister Nirmala Sitharaman, who in February announced a 30% tax to provide legitimacy, offering investors a glimmer of hope.
With a population of over 1 billion and steadily growing cryptocurrency usage, the entire ecosystem is watching with bated breath what is happening in India.
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