The biggest crypto news and ideas of the day |
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Welcome to The Node! This is Marc Hochstein to take you through the latest crypto news. In today's news: Bitcoin and other crypto prices bounce back; Binance spars with Indian tax authorities; Kamala Harris picks her running mate; Trump-themed DJT token crashes.
The Takeaway: From currency risk to judicial risk, companies face all sorts of unforeseen macro threats, particularly in an election year. Decentralized tech can ease the burden, writes Paul Brody of EY. Read more below.👇 |
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Bitcoin zoomed above $56,000 early Tuesday amid a broader market recovery in Asia as bargain hunters stepped in after Monday's steep price slide. CoinGecko data shows that BTC added as much as 6% during Asia trading hours, its highest 24-hour price increase since May, triggering a wider market recovery. The broad-based CoinDesk 20 (CD20), a liquid index of the largest tokens by market capitalization minus stablecoins, gained as much as 7.26%. Still, crypto market watchers remain cautious about a continued rally among major tokens. “We might see a corrective rebound in Bitcoin's price,” Ruslan Lienkha, chief of markets at trading platform YouHodler, told CoinDesk in a Tuesday email. “However, this increase will likely be limited due to the prevailing pessimism in the broader markets. |
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Binance vs. Indian Tax Authority |
Binance, the world's largest cryptocurrency exchange, is challenging a nearly $86 million tax "showcause" notice from India's Directorate General of Goods and Services Tax Intelligence (DGGI), a person directly involved with the matter told CoinDesk's Amitoj Singh. DGGI's chapter from the western city of Ahmedabad issued the notice – a first formal step taken by the authority when it suspects a violation of tax rules – last week. It alleges Binance collected fees from Indian customers trading on its platform, the person said, and relates to the period July 2017-March 2024. While DGGI has previously taken action against Indian crypto exchanges, this may be the first time it has issued a showcause notice to an international crypto exchange. |
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Catizen: Cultivating TONs of NextGen Web3 Users The future of crypto is being built on The Open Network (TON) and Catizen is creating the playbook for engaging gamers through web3. According to TONStat, TON has more than 10.78 million activated wallets (i.e. wallets with at least one outgoing transaction)—a +1400% increase in just the last year—and a peak of over 5 million monthly active wallets over the past six months. Through its unique integrations with Telegram, TON projects gain access to Telegram’s over 900 million users, making the TON ecosystem one of the most visible blockchain ecosystems to date. Continue reading. |
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Harris Picks Running Mate |
Vice President Kamala Harris, the Democratic nominee for U.S. President, has chosen Minnesota Governor Tim Walz as her running mate for the 2024 presidential election. Walz does not appear to have made any public statements about cryptocurrencies during his tenure, though he did receive (and later return) a $4,000 donation from former FTX engineering director Nishad Singh in the 2022 election cycle. He also signed a law earlier this year targeting crypto kiosks, setting a $2,000 daily limit and offering fraud protections. A prediction market on Polymarket expected Pennsylvania Governor Josh Shapiro to get the vice presidential nod, giving him a roughly two-thirds chance of being the nominee until Monday afternoon when Walz's odds began surging. |
The Donald Trump-themed DJT token on Solana dropped as much as 90% Tuesday after a single wallet sold $2 million worth in a single transaction, bringing its market capitalization down to $3 million from $55 million within seconds. The wallet "4UGm6" held 20% of the DJT token supply and pocketed 15,500 SOL from the transaction. It then transferred the holdings to four different wallets, crypto social application @0xppl_ said in a post on X (formerly Twitter). DJT was issued in early June and quickly gained virality and market capitalization amid rumors that it was directly related to Republican candidate Donald Trump and his son Barron. Crypto groups on X wondered who was behind the token given its outsized growth at the time. On June 18, Martin Shkreli, also known as "Pharma Bro," claimed he and Barron Trump created the DJT token despite initially denying involvement. |
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The Takeaway: Blockchains vs. Corruption |
By Paul Brody, head of blockchain at EY
Does your company do worst-case scenario planning? What will you do if the rule of law erodes and corruption accelerates?
The year 2024 is set to be one of the biggest and most important election years in history. It comes at a time of global instability, where there is, once again, a war in Europe, and the post-World War II international order itself is under strain. Although decentralized technology cannot provide meaningful protection against a total collapse of the rule of law, such a scenario remains unlikely. While a total collapse is unlikely, the erosion of the rule of law is still possible. There are several areas where extreme political actions could undermine businesses an investors that depend on predictable and stable environments,, leading to significant problems for companies. I identify three risks in particular that can at least be offset by careful application of decentralized technology: - The one that most blockchain boosters think about right away is the manipulation of currency. From printing money to finance deficits to pre-election spending splurges, central banks and treasuries face a lot of political risk. Shifting away from volatile local currencies to stablecoins is the most practical alternative for businesses. Keeping as little of volatile local currency as possible is advisable, where it is legally permitted.
- Another big risk is political interference in the judiciary. Courts are where people go to resolve disputes, and if the umpires of the process are corrupt, the risk of a bad or unfair outcome is high. The best option is to stay out of politically compromised courts as much as possible. Moving from paper contracts to transparent, blockchain-based smart contracts that are enforced automatically offers an opportunity to reduce the risk of nonpayment or disputes. Furthermore, it increases the likelihood to make dispute resolutions more likely to be automated and fact-based.
- Corruption at all levels is another big risk, internally and externally. Corrupt officials often pursue arbitrary regulatory actions or selective and extreme enforcement against firms that won’t play ball. Their best ally in this process is a lack of transparency. Corruption is never popular, and bad actors rely on others' silence to get away with their behavior. The best protection against this kind of rent-seeking is extreme and total transparency. If all your orders, shipments, purchases and prices are public, then theft is immediately visible to all.
This last practice, extreme transparency, is something that businesses in mature economies would be hesitant to embrace, but it’s a real and proven strategic option. In the Indian state of Maharashtra, cooperative farmers at the Sahyadri Farmers Producer Company, frustrated with the immensely variable prices and wildly different markups by middlemen, put all their shipments and prices on the Polygon Blockchain with the help of a local startup, Emertech. The result: lower overheads and fairer prices for all involved. Most companies, especially big ones, have little choice other than to play by the rules, however arbitrary they might be. This is one of the reasons cryptocurrency adoption in many countries by consumers has far outpaced that by enterprises. Governments generally do not have the power to prosecute every consumer for every infraction. Exchanging your local currency for crypto or stablecoins may not be legal, but individuals can often fly beneath the radar. Businesses, however, have real-world assets, such as real estate and factories of immense value, that can be seized as penalties. Blockchains and cryptocurrency can only mitigate some of the big political risks faced by enterprises in the coming years. But, to make money, you must take risks, and that means having assets, people and resources in the market, and accepting the ups and downs that come with it. No risk, no reward. |
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