Category Archives: Cryptocurrency

By Vinay K Mayer

The crypto market is in dire straits. The following is an expert analysis by Vinay K Mayer, Director Market Research & Consulting @ Asia Research Partners LLP on the crypto crash of 2022 and what we can learn from it.

Cryptocurrency and blockchain technology has been growing in popularity over the past few years, and as a result, the market for these products has exploded. However, this growth has come with some risk specifically, the risk of investment bubbles bursting.

In this exclusive article, well take a look at some of the key reasons why the crypto market crashed in 2022. As Director of Market Research & Consulting at Asia Research Partners LLP, Vinay K Mayer has expert insights to share on what caused the crash and how to avoid it in the future.

The Rise of Cryptos

The rise of cryptos in 2017 was a spectacular phenomenon. The value of many cryptocurrencies skyrocketed, reaching all-time highs. Many people saw this as a new opportunity to make money quickly.

However, this boom also led to some serious problems like the issue of hacking, fraud, and frenzy buying. All of these factors contributed to the great crypto-market crash in 2018. However, its still not clear what will trigger a new boom in cryptos.

Cryptos and Crash Market: What is Happening?

Investing in crypto was at its peak in 2021. Despite Bitcoin reaching an all-time high of $69,000 (Rs 54.5 lakhs) in November 2021, its overall market capitalization was around $3 trillion. But, the current year 2022 turned out to be not so in favor of it. Cryptos dropped below $2 trillion in January 2022, and after that, it was all downhill except for a slight recovery in April. It was in June that cryptocurrency markets hit a new low of 2022.

The global crypto market cap has declined below $1 trillion to $977 billion. The global cryptocurrency market cap has fallen by over $2 trillion after touching the $3 trillion mark in November last year. There is a 50% to 70% drop in coin prices since their all-time highs.

However, other tokens like Dogecoin, Avalanche, and Solana have taken an even bigger hit, with some tokens losing up to 90% of their value. As of today, the total market cap for crypto is $860 billion.

Reasons for Crypto Crash

The crypto market crash of 2022 was a perfect storm of unfortunate circumstances. Global Inflation, the Terra-Luna crash, and rising interest rates by the US Federal Reserve to stabilize inflation were all factors that contributed to the market crash. Additionally, war situations like Russia and Ukraine also added to the perfect storm that decimated the crypto market.

Additionally, the crypto market is often linked with the stock market so if theres a downtrend in stocks, youll likely see a similar movement in crypto prices. Many factors that affect the stock market also have an impact on cryptocurrencies.

The Russian central bank proposed banning the mining and use of cryptocurrencies in January 2022. This was due to the many financial stability risks that they posed, as well as the potential negative impact on citizens well-being. The Russian central bank also noted that regulating crypto could undermine its monetary policy sovereignty.

Also, India has not yet tabled the crypto bill. It seeks to prohibit all private cryptocurrency usage in the country.The country has also levied a 30% tax on crypto investors and a 1 % TDS on every crypto intra-trader. However, India has not regulated cryptos but wont legalize them as well.

These challenges have made it difficult for investors to decide whether or not investing in crypto is the right thing to do. Plus, the lack of confidence in the currency due to instability can make it look unattractive to potential investors.

Price as on 03.08.2022:

Whats Needed Now?

The author is director market research and consulting, Asia Research Partners LLP

Also read: Binance recovers the majority of funds stolen from Curve Finance

Follow us onTwitter,Facebook,LinkedIn

Read the original:
Rise and fall of cryptocurrencies; looking at the cryptocurrency crash in 2022 - The Financial Express

Cryptocurrency industry is providing its users and investors with financial instruments to earn passive income by keeping their cryptocurrency over a number of years, as stated by Cointelegraph.

According to Cointelegraph, cryptocurrency savings accounts give retail investors the facility to accrue their funds by earning interest on cryptocurrency assets they deposit on specific cryptocurrency platforms, if there is agreement to lend out coins or tokens. Cryptocurrency interest accounts are considered appealing due to their distribution of much higher returns in comparison to traditional bank savings accounts, considering that average interest rate by a cryptocurrency savings account can go up to 7.5% against the average 0.06% of bank savings accounts. Difference in rates between cryptocurrency and traditional savings accounts can come with higher risks related to the service.

Information from Cointelegraph stated that once cryptocurrency assets get deposited into a savings account, an individual starts earning interest from the first day. Cryptocurrencies such as Bitcoin (BTC), Ether (ETH) and Litecoin (LTC), while many favor interest rates on stablecoins like Tether (USDT), USD Coin (USDC) and Pax Dollar (USDP), can be used in a cryptocurrency savings account. Through this process, one grants the platform the right to use that money for any reason, with the focus being on lending to earn high returns. Cryptocurrency savings accounts are expected to provide favorable returns if one agrees to lock up their cryptocurrency for a while or holds a platform-specific token. For example, Nexo increases interest rates bu up to four percent if holders of the platform avail their governance token.

Moreover, Cointelegraph noted that to invest in a cryptocurrency savings plan, a user needs to select the cryptocurrency platform which offers realistic interest rates. Then, along with transferring cryptocurrency to the chosen platform, the user needs to deposit their asset for a limited or flexible period of time to start earning interest from the first day.

(With insights from Cointelegraph)

Also read: NFT games have the edge over traditional games: Polygons Urvit Goel

Follow us onTwitter,Facebook,LinkedIn

View post:
How can interest be earned through cryptocurrency savings accounts - The Financial Express

Israel on Monday arrested three people suspected of money laundering of tens of millions of shekels in an international cryptocurrency scheme.

The arrests followed months of covert investigations conducted by the cybercrime unit and tax authorities, of what the force described as "a complex cryptocurrency structure."

The police alleged that several suspects were systematically organized to launder funds from Israel and abroad, some obtained illegally, using virtual currencies on different platforms, "in order to obscure and disguise the identity of the owners and the movement of the money."

The probe concentrated on an "massive fraud" against the French Finance Ministry carried out from Israel, and the theft and laundering of millions of euros by converting them into crypto currency.

The investigation has revealed that the profit from the crypto currency trading were kept from Israeli tax authorities, with tax evasion charges totaling in the millions of shekels.

The three principle suspects were arrested by police and are suspected of money laundering, aggravated fraud and tax evasion. Police will ask a magistrate court to remand them to custody.

More people were also detained for questioning.

The investigation is conducted with the cooperation of Interpol and the state prosecution's international division.

Original post:
Israel nabs 3 over international probe of cryptocurrency crimes - Ynetnews

Abstract

An exclusive license between the parties specified that the defendant would compensate the plaintiffs through distributions of its cryptocurrency, in lieu of traditional currency. After plaintiffs demand for the contractually agreed upon distribution of the cryptocurrency went unanswered, plaintiffs filed suit. After entry of a default judgment, the only question for the court was the proper measure of damages for breach of the contract. The court determined that the cryptocurrency constituted securities owed to plaintiffs and awarded plaintiffs $25 million in damages.

Background

Diamond Fortress and its CEO Charles Hatcher sued EverID for breach of contract for failure to compensate them per the terms of an exclusive license agreement and an advisor agreement, respectively. Under the exclusive license agreement, Diamond Fortress granted EverID an exclusive license to its ONYX software for identifying verification in EverIDs blockchain financial services platform. Under the advisor agreement, Mr. Hatcher agreed to advise EverID with its mobile application using the ONYX software. Both Diamond Fortress and Mr. Hatcher agreed to be compensated through distributions of EverIDs cryptocurrency, known as ID Tokens at both the initial coin offering and then through token distribution events. Yet, when EverID held an initial coin offering for the ID Tokens, it did not distribute the tokens to Diamond Fortress or Mr. Hatcher.

Diamond Fortress and Mr. Hatcher made several demands for compensation, which went unanswered. Thereafter, they sent a communication to EverID stating they would treat the contract as breached, and then filed suit. Upon EverIDs failure to respond to the complaint, Diamond Fortress and Mr. Hatcher filed a motion for default judgment. The court granted their motion and was left to determine the remedy for the breach.

The Diamond Fortress Technologies Decision

When determining damages for breach of contract, courts typically determine expected damages and consequential damages based on traditional currency. However, in this novel case before the Delaware Superior Court, the court had to determine how to calculate damages based on cryptocurrency values.

Before determining the damages award, the court sought to classify cryptocurrency into one of a security/investment contract, a commodity, property, or currency. Several agencies have regulatory authority over how to treat cryptocurrency, albeit with different understandings and regulations. Under the Commodity Exchange Act, cryptocurrency may be treated as a commodity, while under the Securities Act of 1933 it may be regulated as an investment contract. The Securities Act of 1933 defines a security as an investment contract, which the Supreme Court in Howey further defined as a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or as a third party.

The court applied the Howey test to determine if cryptocurrency was an investment contract, and therefore a security under the Securities Act of 1933. The first prong of Howey requires a determination of whether an investment of money was part of the relevant transaction. The first prong was easily met.

Moving to the second prong, the court looked to see if a common enterprise exists where the fortunes of the investor are interwoven with and dependent upon the efforts and success of those seeking the investment of third parties. Because the investors would be affected in an unsuccessful launch at an initial coin offering, the second prong was also met.

The court then moved to the final prong, which required determining whether an investor entered a transaction expecting to make a profit. This final prong was also met because the investors did expect a yield return on the investment.

Thus, the court found ID Tokens to be securities subject to regulation under the Securities Act of 1933. The court then applied existing Delaware law for failure to deliver securities, using a two-step method to calculate damages. First, the court found a reliable cryptocurrency valuation source. Second, the court determined the proper method to calculate damages to put plaintiffs in the position they would have been in had the contract been fully performed.

The court used CoinMarketCap to determine the USD value of the ID Tokens, noting that a few courts had used the tool previously. Applying the New York Rule, which Delaware courts have adopted, the Court determined the highest value within a reasonable time to calculate damages. Based on the rule and the CoinMarketCap valuations, the Court awarded Diamond Fortress Technologies $20,100,000 and CEO Charles Hatcher $5,025,000.

Strategy and Conclusion

When dealing with cryptocurrency in agreements, parties should consider incorporating language on how cryptocurrency should be valued if a breach were to occur. Parties should also be aware that this is a developing area of law, and this decision is an example of one way a court may determine the value of a breach based on cryptocurrency.

Further Information

The Diamond Fortress Technologies decision can be found here.

Continue reading here:
A Breach of Contract Involving Cryptocurrency as Compensation Results in $25 Million Awarded in Damages - Lexology

Jan Jahosky, Ledgible.

For the crypto industry, many are looking for 2022 to be the year of comprehensive regulatory and legislative clarity regarding crypto assets for the United States. Indeed, President Bidens Executive Order earlier this year actually mandated and directed federal agencies to provide this kind of clear, ordered, and meaningful guidance.

Weve seen in the past that parts and pieces of legislation that most would not consider crypto-focused sometimes actually contain very meaningful laws affecting the crypto ecosystem. For instance, the Infrastructure Act, signed into law last year, has changes in the definition of broker that will fundamentally mandate tax information reporting for many companies involved in the transacting of crypto. Now, yet another piece of legislation has appeared in headlines that would not appear to involve crypto assets, but actually does.

The Senate has now passed the Inflation Reduction Act which has a number of sweeping changes in a wide variety of areas of the federal government, including the Internal Revenue Service.

As part of the Act, the IRS is receiving an allocation of approximately 80 billion dollars over the next 10 years. To put that into perspective, the IRS yearly budget is approximately $12.6 billion dollars for 2022, so this represents almost a 75% increase on a yearly basis. Simply put, a tremendous increase in spending on IRS operations and activities.

In terms of the uses for the billions of dollars, you might ask what is the IRS going to be using these funds for? The answer is that the largest amount of funding will be going to the efforts of compliance and enforcement. That could mean greatly increasing the level and number of audits performed and the number of audit candidates pursued by the Service.

Here is an excerpt from the relevant section from the act describing the IRS activities for the 80 billion dollars. One very interesting item to note in this section is the explicit call out for Digital Asset monitoring and compliance activities in short crypto enforcement.

(ii) ENFORCEMENT.For necessary expenses for tax enforcement activities of the Internal Revenue Service to determine and collect owed taxes, to provide legal and litigation support, to conduct criminal investigations (including investigative technology), to provide digital asset monitoring and compliance activities,

How and when these directives get implemented still remains to be seen. However, with this amount of funding and the naming of digital assets in the Act, it seems clear that individuals and institutional investors alike need to be even more certain about all tax obligations relating to their digital asset activities.

Here is the original post:
What the Inflation Reduction Act Means for Cryptocurrency Regulation - CPAPracticeAdvisor.com

Advancements in the crypto market and the availability of a variety of tokens can make it difficult to choose the cryptos to trade. In this article, we will take a look at three cryptocurrencies; Avalanche (AVAX), Uniswap (UNI), and the newbie, Runfy (RUNF). These tokens possess amazing features that could help you generate passive income for today and the future.

Avalanche (AVAX) is a blockchain platform that uses a novel Proof of Stake (PoS) technique to address the blockchain trilemma of scalability, security, and decentralization.

Avalanche enables smart contracts to operate decentralized apps (dApps) on the Avalanche network, just like Ethereum does. Users can stake AVAX on the Avalanche platform and gain staking rewards. Avalanche wants to create an eco-friendly alternative to Bitcoin (BTC).

Avalanche (AVAX) intends to increase blockchain interoperability by integrating a variety of decentralized finance (DeFi) ecosystems, including well-established projects like Aave (AAVE) and Curve Dao Token (CRV), as Avalanches smart contracts are written in the same Solidity language that Ethereum uses.

The Avalanche platforms native token, AVAX, is utilized to enable transactions throughout its ecosystem. AVAX is used to enable network transactions by charging fees, distributing system incentives, and taking part in governance in the Avalanche platform. Through the use of subnets, Avalanche can reach incredible speeds, making it desirable to any crypto enthusiast.

Avalanche has increased by 30.68% in seven days at the time of writing. This huge increase showcases the utility of the Avalanche platform and why its community rallies behind it even during a crypto crash.

Uniswap (UNI) serves as both a coin and a decentralized exchange in the emerging crypto realm. Uniswap, which is based on the Ethereum blockchain, enables users to swap ERC-20 tokens, which may stand in for a variety of digital assets and monetary values.

Only tokens created on the Ethereum (ETH) network are listed on Uniswap exchanges. To deposit their cryptocurrency assets into pools that each include two ETH-based crypto tokens, which together represent the assets placed in that pool, Uniswap traders must engage in smart contracts.

Simply said, Uniswap is a mechanism for consumers to securely interchange various token kinds built on the well-known Ethereum blockchain without relying on a centralized exchange.

As people begin to discover the world of decentralized finance, holders of cryptocurrencies may take part in the governance of this financial system by trading in Uniswap tokens (UNI) (DeFi). DeFi leverages Ethereum blockchains for financial transactions, eliminating the need for central financial intermediaries like exchanges or centralized online wallets.

Runfy (RUNF) is a community-driven ecosystem that aims to give its users complete control over their health and fitness lifestyles. The token is set to promote everything that has to do with health and wellness while letting its users earn alongside.

Reaching ur health fitn gl can mtim be challenging without the right mindt, thnlg, and tl. The team at Runfy undrtnd this and i wr of th hllng involved. This is why th have dignd a tm and a tool that will allow fitn nthuit rh their fitn gl with the right tools.

The Runfy ecosystem will revolve around its utility tkn (RUNF), a utility token that built n th Binn Smrt Chain (BSC) which h th lwt trntin fs. Conceptualized a mrt thnlg, RUNF Token im t imrt hlth and fitness int th rt and give members the lvrg t rn money whil keeping fit.

Whthr you are looking t k fit or your fitn goal is to hd m weight, the Runfy team has created a special and easy-to-use app that can help you. Runfy is nt regular crypto rjt like many others on the crypto market.

The Runfy A i made of a variety of tools required to spike the interest of fitness enthusiasts. The rvid t tracking, lri counting, in- rewards, nd in- hing. It helps to monitor vr t f ur wealth generation and weight l journey.

The three cryptocurrencies mentioned in this article are all predicted to shine through the year. However, if you want a breath of fresh air in the saturated crypto market, turn your attention to Runfy (RUNF). The innovative platform is destined for greatness in the crypto sphere.

To find out more about Runfy (RUNF), visit the following links:

Presale: http://go.runfytoken.io/

Website: http://runfytoken.io/

Telegram: https://t.me/RunfyTokenOfficial

Twitter: https://twitter.com/RunfyToken

Related postsMore from author

View post:
Avalanche, Uniswap, and Runfy Cryptocurrency to Purchase in 2022 - The Cryptonomist

Notable decentralized cryptocurrency exchange Curve Finance was compromised earlier this week, as threat actors were able to effectively clone curve.fi and send user traffic to its fake crypto-exchange site.

This marks yet another instance where web3 projects are compromised through vulnerabilities in the web2 infrastructures they rely on, said CertiK co-founder and CEO Ronghui Gu.

While there will always be some relationship between web2 and web3 systems, building the necessary security control points in web2, as well as resolving the vulnerabilities that hamper this relationship, is a vital step in securing the web3 ecosystem.

At least $770,000 was stolen from Curve Finance users, who were directed to a false copy of the Curve site and then told to sign off on a contract (which can from the bad actors) that then was able to lift funds from the Curve Finance users online wallets.

For its part, Curve Finance issued a statement to users over messaging platform Telegram, where it alerted them to the potential security threats they could face. Curve Finance also encouraged users to revoke any contract agreements in which they may have engaged, and simply use the curve.exchange domain until the propagation for curve.fi righted itself.

As their name suggests, cross-chain bridges are an attempt to facilitate the exchange of crypto assets between differing chains, Gu said. To achieve this, they must combine multiple structures such as custodian, debt issuer and an "oracle."

This makes cross-chain bridges somewhat vulnerable as there are multiple attack avenues for would-be hackers to exploit, Gu said. Cross-chain bridges have clearly addressed a real need in the web3 community, and consequently, they hold a huge amount of value. These structural vulnerabilities, in conjunction with the amount of assets available, make them an extremely enticing target for hackers.

Adrien Gendre, chief technology and product officer at Vade, said that very much like online bank accounts, crypto exchanges are irresistible targets because it is a quick win for hackers they can simply transfer funds or unload the crypto in an instant.

Other types of attacks require more work and more time to achieve the final goal, Gendre added. We are seeing more and more of this, and this can be very difficult to detect.

Originally posted here:
Cryptocurrency exchanges thrown another 'Curve' with recent DNS attack - SC Media

Non-fungible tokens (NFTs) have crossed into that realm of popularity where various platforms are ranked, with industry observer Comparitech launching its Worldwide NFT Heists tracker.

NFTs have sold for as much as $92 million, but their financial value is still a point of great controversy in the traditional financial, financial technology (fintech), payments and cryptocurrency industries.

Researchers at Comparitech have been tracking NFT thefts for more than two years ever since the first NFT was stolen in early 2020. More than $86 million in NFT value has been pilfered since then, according to Comparitech research.

Much like financial threats and security in general, growing attacks on NFTs boil down to bad actors attempting to attack areas where they see the most money flowing. (Case in point: In December 2021, one NFT called "The Merge" sold for an eye-popping $92 million.)

Rebecca Moody, head of data research at Comparitech, pointed out that the companys research have been tracking NFT heists since they initially came to light more than two years ago. In the past two and a half years, $86 million has been stolen from these sites, with increasing attacks this year just like cryptocurrency in general. According to Comparitech, the 10 most significant NFT heists (based on the U.S. dollar amount stolen at the time of the attack) have been:

Originally posted here:
This tracker lists and ranks the biggest heists of NFT cryptocurrency - SC Media

The year is 2027. Its a time of great innovation and technological advancement, but also a time of chaos. What will the crypto market look like in 2027? (For those unfamiliar, that's alinefrom the 2011 video game,Deus Ex.)

Long-term predictions are notoriously difficult to make, but they are good thought experiments. One year is too short a period for fundamental changes, but five years is just enough for everything to change.

Here are the most unexpected and outrageous events that could happen over the next five years.

Themetaverse is a hot topic, but most people do not have even the slightest idea of what it actually comprises. The metaverse is a holistic virtual world that exists on an ongoing basis (without pauses or resets), works in real-time, accommodates any number of users, has its own economy, is created by the participants themselves, and is characterized by unprecedented interoperability. A variety of applications could (in theory) be integrated into the metaverse, including games, video-conferencing applications, services for issuing drivers licenses anything.

This definition makes it clear the metaverse is not such a novel phenomenon. Games and social networks that include most of the features stated above have been around for quite some time. Granted, interoperability is a problem that needs to be addressed seriously. It would have been a very useful feature to be able to easily transfer digital assets between games or a digital identity without being tethered to a specific platform.

But the metaverse will never be able to cater to every need. There is no reason to include some services in the metaverse at all. Some services will remain isolated due to the unwillingness of their operators to surrender control over them.

And there is also the technical aspect to take into account. The cyberpunk culture of the 1980s and 90s postulated that the metaverse meant total immersion. Such immersion is now conceived as possible only with the use of virtual reality glasses. VR hardware is getting better every year, but its not what we expected. VR remains a niche phenomenon even among hardcore gamers. The vast majority of ordinary people will never put on such glasses for the sake of calling their grandmother or selling some crypto on an exchange.

True immersion requires a technological breakthrough like smart contact lenses or Neuralink. It is highly unlikely those technologies will be widely used five years from now.

An active decentralized finance (DeFi) user is forced to deal with dozens of protocols these days. Wallets, interfaces, exchanges, bridges, loan protocols there are hundreds of them, and they are growing daily. Having to live with such an array of technologies is inconvenient even for advanced users. As for the prospects of mass adoption, such a state of affairs is all the more unacceptable.

For the ordinary user, it is ideal when a maximum number of services can be accessed through a limited number of universal applications. The optimal choice is when they are integrated right into their wallet. Storing, exchanging, transferring to other networks, staking why bother visiting dozens of different sites for accessing such services if all the necessary operations can be carried out using a single interface?

Users dont care which exchange or bridge they use. They are only concerned about security, speed and low fees. A significant number of DeFi protocols will eventually turn into back-ends that cater to popular wallets and interfaces.

Money has three main roles acting as a means of payment, as a store of value and as a unit of account. Many cryptocurrencies, primarily stablecoins, are used as a means of payment. Bitcoin (BTC) and to a much lesser extent Ether (ETH) are used as stores of value among cryptocurrencies. But the United States dollar remains the main unit of account in the world. Everything is valued in dollars, including Bitcoin.

The real victory for sound money will be heralded when cryptocurrencies take over the role of a unit of account. Bitcoin is currently the main candidate for this role. Such a victory will signify a major mental shift.

What needs to happen in the next five years to make this a possibility?

A sharp drop in the confidence vested in the U.S. dollar and euro is a prerequisite for cryptocurrencies to take on the role of a basic unit of account. Western authorities have already done a lot to undermine said confidence by printing trillions of dollars in fiat money, allowing abnormally high inflation to spiral, freezing hundreds of billions of a sovereign countrys reserves, and so on. This may be just the beginning.

What if actual inflation becomes much worse than projected? What if the economic crisis is protracted? What if a new epidemic breaks out? What if the conflict in Ukraine spills into neighboring countries? All of these are feasible scenarios. Some are extreme, of course but they are possible.

There is a high probability that the list of top cryptocurrencies will radically change. Outright zombies such as Ethereum Classic (ETC) will be ousted from the list, and projects that now seem to hold unshakable positions will not only be de-throned but may also vanish altogether.

RELATED: 6 Questions for Lisa Fridman of Quadrata

Some stablecoins will surely sink. New ones will take their place. Cardano (ADA) will slide down the list to officially become a living corpse. The project is moving agonizingly slowly. Developers not only fail to see this as problematic but even seem to view it as a benefit.

Cryptocurrencies are global by default, but they are not invulnerable to the influence of individual states. The state always has an edge and an extra trick up its sleeve. A number of territories (the U.S., the European Union, China, India, Russia, etc.) have already introduced or are threatening to introduce strict regulation of cryptocurrencies.

The factor of international competition is superimposed onto internal state motivations. When Russia was heavily sanctioned, some crypto projects started restricting Russian users from accessing their services or even blocking their funds. This scenario may play out again in the future with respect to China.

RELATED:Is there a way for the crypto sector to avoid Bitcoins halving-related bear markets?

It is not difficult to imagine a future in which parts of the crypto market will work in favor of some countries while closing to others. We are living in such a future already, at least to some degree.

The opinions expressed are the authors alone and do not necessarily reflect the views of Cointelegraph. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice.

Go here to read the rest:
What will cryptocurrency market look like in 2027? Here are 5 predictions - Cointelegraph

WASHINGTON (AP) A bipartisan group of senators on Wednesday proposed a bill to regulate cryptocurrencies, the latest attempt by Congress to formulate ideas on how to oversee a multibillion-dollar industry that has been racked bycollapsing pricesandlenders halting operations.

The regulations offered by Senate Agriculture Committee chair Debbie Stabenow and top Republican member John Boozman would authorize the Commodities Futures Trading Commission to be the default regulator for cryptocurrencies. That would be in contrast with bills proposed by other members of Congress and consumer advocates, who have suggested giving the authority to the Securities and Exchange Commission.

This year, crypto investors have seenprices plunge and companies craterwith fortunes and jobs disappearing overnight, and some firms have been accused by federal regulators of running an illegal securities exchange.Bitcoin, the largest digital asset, trades at a fraction of its all-time high, down from more than $68,000 in November 2021 to about $23,000 on Wednesday. Industry leaders have referred to this period as a crypto winter, and lawmakers have been desperate to implement stringent oversight.

The bill by Stabenow, a Democrat from Michigan, and Boozman, of Arkansas, would require all cryptocurrency platforms including traders, dealers, brokers and sites that hold crypto for customers to register with the CFTC.

READ MORE: Cryptocurrency meltdown is wake-up call for many, including Congress

The CFTC is historically an underfunded and much smaller regulator than the SEC, which has armies of investigators to look at potential wrongdoing. The bill attempts to alleviate these issues by imposing on the crypto industry user fees, which in turn would fund more robust supervision of the industry by the CFTC.

Our bill will empower the CFTC with exclusive jurisdiction over the digital commodities spot market, which will lead to more safeguards for consumers, market integrity and innovation in the digital commodities space, Boozman said in a statement.

Sens. Cory Booker, D-N.J., and John Thune, R-S.D., are co-sponsors of the bill.

Its critical that the (CFTC) has the proper tools to regulate this growing market, Thune said.

The legislation can be added to the list of proposals that have come out of Congress this year.

Sen. Pat Toomey, R-Pa., in April introduced legislation, called the Stablecoin TRUST Act, that would create a framework to regulate stablecoins, which have seen massive losses this year. Stablecoins are a type of cryptocurrency pegged to a specific value, usually the U.S. dollar, another currency or gold.

Additionally, in June, Sens. Kirsten Gillibrand, D-N.Y., and Cynthia Lummis, R-Wyo.,proposed a wide-ranging bill, called the Responsible Financial Innovation Act. That bill proposed legal definitions of digital assets and virtual currencies; would require the IRS to adopt guidance on merchant acceptance of digital assets and charitable contributions; and would make a distinction between digital assets that are commodities and those that are securities, which has not been done.

Along with the Toomey legislation and the Lummis-Gillibrand legislation, a proposal is being worked out in the House Financial Services Committee, though those negotiations have stalled.

Committee chair Maxine Waters, D-Calif., said last month that while she, top Republican member Patrick McHenry of North Carolina and Treasury SecretaryJanet Yellenhad made considerable progress toward an agreement on the legislation, we are unfortunately not there yet, and will therefore continue our negotiations over the August recess.

President Joe Bidens working group on financial markets last November issued a report calling on Congress to pass legislation that wouldregulate stablecoins, and Biden earlier this year issuedan executive ordercalling on a variety of agencies to look at ways to regulate digital assets.

See the original post:
New cryptocurrency oversight legislation arrives as industry shakes - PBS NewsHour