Crypto News Highlights (18th March to 22nd March 2024)

• Ethereum Foundation Faces Inquiry From a Government
• Bitcoin's Dip Leads to $440 Million in Trader Losses, Yet Hope for Rebound Stays Strong
• Compass Coffee Accepts Crypto with Coinbase, Offers NFT Perks
• Crypto Bank Meld to Launch Tokenized Assets
• Montenegro Prosecutor Challenges Do Kwon's Extradition

Ethereum Foundation Faces Inquiry From a Government

The Ethereum Foundation, pivotal to the Ethereum ecosystem, is dealing with a confidential inquiry from an unidentified state authority, as disclosed in a GitHub update. This inquiry coincides with significant technological changes in Ethereum and the consideration of ETH as an exchange-traded fund (ETF) by American investment firms.

The SEC, having approved Bitcoin ETFs, might classify ETH as a security, which would considerably affect Ethereum and the cryptocurrency market. The SEC has also been issuing subpoenas to U.S. companies, suggesting an investigation whose details are not yet public. The Ethereum Foundation's website removed a previous disclosure and its warrant canary, indicating a possible secret government subpoena.

An attorney suggests that the Swiss regulator might be collaborating with the SEC and that the Ethereum Foundation might not be the only target of these inquiries. The SEC's hesitation in approving Ether ETFs and the mentioned May 23 deadline point to a cautious regulatory stance.

Bitcoin's Dip Leads to $440 Million in Trader Losses, Yet Hope for Rebound Stays Strong

In a sharp downturn, Bitcoin's value slipped below the $64,000 mark, triggering a massive $440 million in liquidations for futures traders betting on a bullish market. This market dip was notably impactful on major trading platforms such as Binance and OKX. The plunge has also dragged down other significant cryptocurrencies like Ethereum, Solana, and Dogecoin.

Analysts attribute part of the sell-off to a hefty $640 million pullout from Grayscale's Bitcoin Trust, contributing to an overall market net outflow. Amidst this landscape, some market participants project a potential further drop in Bitcoin's price to $55,000 in the approaching weeks.

However, there's a silver lining as the sentiment for the long-term trajectory of Bitcoin remains positive. Industry experts anticipate that the forthcoming Bitcoin halving event will spark a surge in retail investor activity, particularly in Bitcoin ETFs, potentially setting the stage for a market rally.

Compass Coffee Accepts Crypto with Coinbase, Offers NFT Perks

The Washington, D.C.-based Compass Coffee chain has partnered with Coinbase, enabling customers to use the stablecoin USDC for purchases. This initiative begins at their Half Street shop, where users get a 90% discount and a redeemable NFT for a complimentary coffee tin. This move aims to showcase cryptocurrency's potential in daily commerce, countering the view of crypto as solely an investment vehicle.

While major brands have adopted crypto payments, local businesses have been slower on the uptake. The recent introduction of Bitcoin ETFs has fueled discussions on crypto's practicality. Stablecoins like USDC are pegged to the dollar, offering less instability and, thus, more suitability for everyday transactions.

Coinbase, holding a stake in USDC's issuer Circle, encourages other small businesses to consider crypto, emphasising cost savings on transaction fees. Compass Coffee, having lost significant revenue to credit card fees, sees this as an opportunity to reallocate funds towards growth and local economic contribution. The program, if successful, may expand to all Compass locations.

Crypto Bank Meld to Launch Tokenized Assets

Meld, a crypto online banking company with a fresh VASP license from Lithuania, is gearing up to introduce tokenized real-world assets (RWA) for retail investment. In collaboration with Swarm Markets, a German-regulated DeFi platform, Meld will offer borrowing and lending services secured by these tokenized assets. This partnership, solidified by a memorandum of understanding, promises to bring new margining opportunities to non-institutional investors, a feature often missing in traditional finance.

Swarm Markets, recognised as the first regulated DeFi protocol by Germany's BaFin, already rolled out an EU-compliant KYC process for tokenized securities last year and launched a permissionless RWA trading platform in December 2023.

Analysts from 21. co-project that the tokenized RWA market could swell to $10 trillion in a bullish scenario by 2030, driven by rapid growth in the convergence of crypto and traditional asset classes. This sentiment is echoed by a Bank of America report forecasting a transformative impact of tokenization on financial market infrastructure, touting increased efficiencies and cost savings.

Montenegro Prosecutor Challenges Do Kwon's Extradition

The extradition of Terraform Labs' Do Kwon to South Korea is on hold after Montenegro's supreme state prosecutor contested the High Court's authority in the decision.

Kwon, detained since March 2023 for using falsified travel documents, is at the heart of a legal battle between South Korea and the U.S., both seeking his extradition after Terra's $40 billion crash. Montenegro's justice minister is now tasked with the extradition verdict.

The dispute follows Kwon's evasion of authorities post-Interpol's red notice and his company's financial debacle. While his associate Han was extradited to South Korea, Kwon's legal resistance casts uncertainty over his fate, despite previous expectations of a South Korean extradition by late March. The top prosecutor's challenge disrupts the timeline and outcome, leaving the international tug-of-war over Kwon's custody unresolved.

Disclaimer:  The information provided in this crypto news round-up is for informational purposes only and should not be considered financial or investment advice. Obiex will not be held liable for your investment decisions.