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The Solana blockchain witnessed a significant increase in transaction volume in January, reaching $951.9 billion, a 30% growth compared to December’s volume. This surge marks a significant recovery in network activity, surpassing the levels of 2022 and 2023 by a wide margin. Contributing to this wave, the value of Solana (COIN:SOLUSD) surpassed $100, partly driven by the trading of WEN tokens on decentralized exchanges.
Anza, a new development collective founded by former engineers and leaders of Solana Labs, announced plans to introduce a new validator client for the Solana network called Agave. This client, a fork of the original from Solana Labs, aims to enrich the Solana ecosystem with various client options, such as Jito, Tinydancer, and the awaited Firedancer from Jump Crypto. Agave, set to launch this year, is part of Anza’s effort to drive innovations and improvements across the Solana network, including token expansion and functionalities.
The Grayscale Bitcoin ETF (AMEX:GBTC) experienced significant growth of $1.25 billion in its crypto holdings, driven by the recent appreciation of Bitcoin (COIN:BTCUSD) from $39,900 to over $43,500. Despite approximately 18,000 BTC withdrawals from the fund since last Friday, as indicated by Arkham Intelligence, the rise in cryptocurrency prices more than compensated for the outflows. Specifically, Grayscale’s Bitcoin holdings grew by $968 million, and Ethereum holdings by $298 million. With Grayscale’s 1.5% fees, annual revenues based on current holdings are projected at $429 million, with Bitcoin priced at $43,400.
Invesco (AMEX:BTCO) and Galaxy Asset Management announced a reduction in the fees of their spot Bitcoin ETF, aiming to strengthen their position in the market. Despite ranking sixth in trading volume with $280 million in activity, the reduction of fees from 0.39% to 0.25% aligns the ETF with most competitors.
Standard Chartered Bank (LSE:STAN) anticipates SEC approval of Ethereum-based ETFs by the end of May, according to The Block. This prediction is based on the SEC’s previous regulatory approach, especially regarding Bitcoin ETFs. Geoffrey Kendrick of the bank believes that Ethereum’s favorable classification and its listing as a future on the Chicago Mercantile Exchange strengthen the approval prospects. He also predicts an increase in the value of Ethereum (COIN:ETHUSD), potentially reaching $4,000, influenced by this approval. Kendrick suggests that initially, simple Ethereum ETFs will be approved, with possible more complex variants emerging later. Additionally, he views future updates to the Ethereum network as positive factors for its value.
Vitalik Buterin, co-founder of Ethereum (COIN:ETHUSD), explored how cryptocurrency and artificial intelligence (AI) can integrate in four distinct ways, identifying opportunities and warning about potential risks. In his analysis, Buterin sees significant promise in AI operating within cryptocurrency protocols and as interfaces, though with caution due to the involved risks. He considers the development of decentralized and reliable AI to support other applications as challenging yet promising, emphasizing the need for prudence in high-value and high-risk applications.
Starknet, a scaling solution for Ethereum, is collaborating with the blockchain network Celestia (COIN:TIAUSD) to improve data availability in Layer 3 appchains within the Starknet ecosystem. Utilizing Celestia’s “Blobstream,” an off-chain data storage technology, Starknet aims to reduce transaction costs and increase efficiency. The partnership includes adapting Blobstream to Starknet’s Cairo programming language, facilitating the development of innovative Layer 3 appchains.
Transak, a payment infrastructure platform for cryptocurrencies and NFTs, has partnered with Visa (NYSE:V) to incorporate debit options, expanding the avenues for crypto-to-fiat conversion. The partnership promises to streamline the transfer of digital assets into cash in over 145 nations, using Visa Direct for near-instant transactions. This advancement meets the demand for a simpler and regulated process for settling crypto assets, contrasting with traditional methods that are often slow and bureaucratic.
ZetaChain, a new cross-chain blockchain network, is set to launch, promising to integrate various blockchains, including Bitcoin, Ethereum, and Cosmos, to enable the development of applications that operate with cryptocurrencies from multiple networks. Despite enthusiasm, the project faces security challenges, as evidenced by past issues in similar projects like Thorchain. To mitigate risks, ZetaChain will adopt a cautious approach, initially limiting the value locked in its smart contracts and gradually increasing it. The network, which has been tested for 18 to 20 months, faced the challenge of synchronizing different finalization times between blockchains, an issue it plans to resolve by adapting transaction confirmation times, similar to cryptocurrency exchanges.
Binance introduced an innovative collateral solution for institutional investors, allowing the security of their trading collateral through a third-party banking agreement known as a “tripartite banking agreement.” Developed over two years, this mechanism aims to mitigate counterparty risk, crucial for institutional investors, by enabling the use of traditional assets as collateral. Although specific banking partners have not been disclosed, Binance confirmed collaborations with various banking institutions and interested investors in the new offering.
Bitpanda, a cryptocurrency exchange, announced that it will suspend services for users in the Netherlands in compliance with local regulations. The Vienna-based company stated that it currently does not have registration as a crypto asset service provider in the Netherlands and does not plan to apply for one. Focusing on its core markets, Bitpanda does not see the Netherlands as a strategic target at the moment, despite having licenses in several other European countries.
Coinbase (NASDAQ:COIN) announced that it will introduce fees for significant conversions of USDC into US dollars made by institutional customers. Transactions exceeding $75 million in a 30-day period will be progressively taxed, starting at 0.1% for values between $75 and $150 million and increasing to 0.2% for amounts over $500 million. However, customers with significant assets on the platform and qualified members of the Exchange Liquidity Program will be exempt from these new fees.
Circle (COIN:USDCUSD), known for its USDC stablecoin with a market value of $26 billion, announced the expansion of issuing this stablecoin on the Celo network. This move aims to facilitate cross-border and peer-to-peer transactions in developing regions, making it easier to convert local currencies. CLabs, responsible for Celo’s development (COIN:CELOUSD), also plans a community vote to accept USDC for transaction fee payments on the network. This initiative aligns with Celo’s effort to become a hub for real-world tokenized assets, attracting more traditional investments to the blockchain.
Following confirmation of a cyber attack on the Abracadabra Finance project, there was a significant drop in the values of its assets, including the Magic Internet Money stablecoin (COIN:MIMUSD). The security incident, involving an exploit in some of its Ethereum contracts, resulted in the devaluation of MIM from its $1 parity to $0.77, later recovering to $0.92. The Spell token (COIN:SPELLUSD) also experienced a 3.78% decline. The platform saw a drastic reduction in total locked value, dropping by approximately $23 million to $139 million. The Abracadabra DAO stated it would take measures to stabilize the stablecoin, including repurchasing and burning MIM on the market.
Before the public testnet launch in February, Layer N, backed by the Founders Fund, recorded an impressive peak of 120,000 transactions per second in preliminary tests. This Layer 2 network, built on Ethereum, aims to enhance decentralized exchanges to resemble their centralized counterparts in terms of efficiency. During testing on a private network, Layer N demonstrated the ability to consistently process 20,000 transactions per second, thanks to its innovative Nord Engine designed to support high-volume commercial transactions.
The ongoing concern for privacy, amplified by debates about central bank digital currencies and government surveillance, underscores the importance of confidentiality in the crypto space. Despite initial promises of anonymity, most cryptocurrencies offer only pseudonymity, with blockchain analysis exposing transactions to regulatory entities. Namada, emerging as a Cosmos-based solution to this issue, promises to enhance the privacy of digital assets through zero-knowledge (ZK) cryptography, aiming for a broader and robust approach to data protection on the blockchain. With the testnet scheduled for early 2024, Namada intends to offer modular privacy for various assets and applications, challenging the current paradigm of transparency versus privacy in the crypto ecosystem.
Oasis Pro, an innovative blockchain technology company, announced the appointment of Alana Ackerson as its new president. With a history of co-founding blockchain startups, Ackerson will focus on accelerating the company’s growth through fundraising, new partnerships, and team expansion. Currently, Oasis Pro is in the process of raising a Series B funding round, following a $27 million Series A funding round in 2022, backed by Apollo Global Management Inc. (NYSE:APO). The Darien, Connecticut-based company specializes in tokenization, a promising field in the financial sector.
The Securities and Exchange Commission of Thailand has adopted new, more favorable guidelines for cryptocurrencies, removing restrictions for retail investors on asset-backed tokens and introducing rules for digital asset custodians. These changes aim to expand the digital asset market in the country and require crypto companies to obtain licenses and follow SEC standards. Despite this openness, the Thai SEC maintains a cautious stance, rejecting permission for spot Bitcoin ETFs, similar to South Korea’s approach.
Germany made a historic seizure of 50,000 bitcoins, valued at approximately $2.2 billion, linked to copyright-protected content piracy activities. This operation involved collaboration among various German authorities, including the Public Prosecutor’s Office of Dresden and the State Criminal Police of Saxony. Two suspects, one German and one Polish, are under investigation for using the proceeds from their illicit operations to acquire bitcoin (COIN:BTCUSD), facing potential charges of copyright infringement and money laundering. The final destination of the seized bitcoins remains uncertain after their voluntary transfer to wallets controlled by the authorities.
Floki Inu (COIN:FLOKIUSD) deactivated its staking programs in Hong Kong after being flagged as suspicious investments by the local regulator. The team announced in a blog post that it restricted access for users in Hong Kong and suspended marketing campaigns in the region. The decision came in response to an alert from the Hong Kong Securities and Futures Commission regarding the high returns promised by Floki and TokenFi (COIN:TOKENUSD) staking programs, which were unauthorized for local public offering.
In October, the Financial Crimes Enforcement Network (FinCEN) proposed new rules targeting cryptocurrency mixing services, categorizing them as money laundering risks and suggesting stringent record-keeping standards. The industry had the opportunity to respond during a public comment period. Responses highlighted concerns about privacy invasion, the overly broad impact of the proposal, and the risk of pushing legitimate crypto operations to less regulated jurisdictions. The proposal received around 2,000 comments, including criticism that it could encourage the transfer of crypto businesses out of the U.S. and result in excessive and ineffective reporting.
The SEC accused HyperFund of a $1.7 billion fraudulent scheme involving unregistered securities offerings. Xue Lee and Brenda Chunga, known as Sam Lee and Bitcoin Beautee, raised this sum globally, falsely promoting investments in mining. The scheme, described as a pyramid with no real income, collapsed in 2022, harming investors. Chunga has already pleaded guilty, agreeing to settle, and awaits court determination of fines.
The dYdX Foundation (COIN:DYDXUSD), a supporter of the decentralized exchange dYdX, has requested $30 million in funding from the DAO governing the project, intended to be used over a three-year period. Based in Switzerland, the Foundation provides comprehensive support to dYdX, aiming to make it the leading exchange platform on the internet. If approved, the funding will represent 4% of the DAO’s treasury, freeing the Foundation from the need for common annual budget reviews seen in other DAOs.
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