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GOING MAINSTREAM: Strike CEO Jack Mallers unveiled a litany of partnerships, including an integration with ecommerce giant Shopify, at the Bitcoin 2022 conference on Thursday. The move is the latest high-profile adoption of Bitcoin’s Lightning network, a layer 2 scaling solution. Strike is also partnering with the world’s largest point-of-sale (POS) supplier, NCR, and payments firm Blackhawk. Mallers, a prominent bitcoiner, said the way Strike operates – by converting BTC to dollar-denominated stablecoins on the backend – may mean transactions are not “taxable events.” Though details are unconfirmed. Earlier this week, stock and trading app Robinhood Markets (HOOD) flexed its crypto chops and said its new wallet would add support for bitcoin transactions on the Lightning Network. REGULATORS REGULATE: The Federal Deposit Insurance Corporation (FDIC) issued a financial letter to banks under its supervision (or, the vast majority of banks in the U.S.) asking them to report on “crypto-related activities,” citing concerns of safety and financial stability. According to the letter, the FDIC will review the information, ask more questions if necessary and then issue “relevant supervisory feedback.” Meanwhile, the EU has agreed to ban the provision of high-value crypto asset services to Russia as part of another sanctions package to close existing “loopholes.” There is little evidence crypto is being used to evade sanctions. MicroStrategy CEO Michael Saylor put a positive spin on the Biden administration’s recent crypto executive order, calling it a “green light” for bitcoin at the Miami Bitcoin conference yesterday. MINE BATTLE ALONE? A local New York judge ruled that bitcoin mining company Greenidge Generation Holdings (GREE) can move forward with its crypto mining project. The judge noted that the project “would not impact the air or water of Seneca Lake.” The latest dismissal of the petition that looked to stop Greenidge’s crypto mining project is the fifth legal challenge the company has won since 2016. Greenidge says that it operates within the full compliance of its New York state air and water permits. RESERVE ASSETS: Stablecoin platform Frax Finance plans to buy native tokens of layer 1 blockchains’ interest-generating tokens and traditional asset loans to further expand the basket of assets that support its FRAX stablecoin. The multi-chain approach will also facilitate more FRAX based transactions on those blockchains. FRAX currently maintains a peg to the U.S. dollar and is partially collateralized by USDC.The company is likely to buy Avalanche’s AVAX, Binance Chain’s BNB, Fantom’s FTM and Solana’s SOL, among a “diverse” range of crypto assets, according to the stablecoin’s watchers.Meanwhile, the Luna Foundation Guard and Terraform Labs announced they had collectively acquired $200 million worth of Avalanche’s AVAX tokens from the Avalanche Foundation, bolstering crypto reserves beyond bitcoin. NEAR EARTH CHAINS: In a move to be the premier destination for DeFi, Cosmos-based Gravity DEX is relaunching as Crescent and moving to a new Cosmos-based blockchain of the same name. According to B-Harvest, the project’s developer and legacy protocol, the team plans new features, including tools for lending and borrowing across blockchains, and offering farming rewards to attract liquidity from competing chains. Elsewhere, NEAR, the cryptocurrency powering the layer 1 Near Network, has recently outperformed major coins like bitcoin and ether, following a flood of venture capital, newly released tooling and rumors of native NEAR-based stablecoin. –Fran Velasquez |
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Overheard on CoinDesk TV... |
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“These are the players who trusted us, and we failed to live up to that trust." –Sky Mavis co-founder Alexsander Larsen said, following the $625 million Ronin network hack, on CoinDesk TV's "First Mover." |
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What others are writing... |
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Water great idea! Bitcoin mining heats this swimming pool (Cointelegraph) Binance poaches FCA official as global regulation head (The Block) Block's bitcoin wallet looks like a rock (Protocol) Miami Journal: Bitcoin 2022 Reveals the Inevitable Draw of DeFi and NFTs (The Defiant) Crypto and gaming collide in high-risk 'play-to-earn' economies (Reuters) |
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Putting the news into perspective |
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Meme Coins, Gambling and Crypto Regulation
The Wall Street Journal on Thursday published a useful dive into meme coin trading. It was pegged to a token called “Will Smith slap inu” that appeared, surged and imploded within a couple of days early last week after the infamous Oscars fracas. “Meme coins” are usually recycled code rebranded to capitalize on this sort of fleeting news cycle. The Journal correctly frames meme coin trading as a high-risk activity with little or no broader social benefit. First of all, I’m compelled by professional pride to point out that if you’re reading the Journal for crypto coverage, you’re getting the story more than a week late – we warned about Will Smith slap inu and similar meme coins on March 28. Though in fairness, why wouldn’t a story about meme coins be a knockoff? Credit where it’s due, the Journal does add some depth to the story, particularly by talking to meme coin traders directly. But the report reaches the same conclusion that we did last month: “Nearly all analysts agree that participation [in meme coin trading] is essentially a form of gambling.” Meme coin traders who are self-aware about the game they’re playing aim to get in and out at precisely the right times within a window of, in some cases, less than a day. At the end of a memecoin’s rise and nearly inevitable fall, those who have timed their trades right make money and everyone else loses. As one analyst told the Journal, it’s all a “zero-sum game,” in which wealth is merely transferred between participants. No wealth can be created because meme coins offer no innovation and have no real utility (this gets more complicated in cases like the shiba inu [SHIB] coin, where a formerly meme-based community at least appears to be building actual features). On the spectrum of crypto assets, these are the real garbage. That simplicity makes them quite useful for thinking about crypto and financial regulation. Treasury Secretary Janet Yellen on Thursday laid out the Biden administration agenda on crypto, broadly stating that rules for the new technology should be similar to those for the traditional financial system, including prioritizing protecting investors from fraud. Read the full article here. –David Z. Morris |
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Consensus 2022, the must-attend crypto and blockchain experience of the year, is heading to Austin, Texas, from June 9-12. This is the only festival showcasing and celebrating all sides of the blockchain and crypto ecosystems and their wide-reaching effect on commerce, culture and communities. Register now for the lowest price. |
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