As of writing, Bitcoin has fallen below $22,000 and the broader cryptocurrency market is experiencing a mild downturn. The drop in price follows a strong performance cryptos market leader in January when it rose almost 40%. Bitcoin has lost $10 billion in market capitalization, falling to $437.9 billion, accounting for 39.4% of the market. Other major cryptocurrencies, including Ethereum, BNB, Cardano, and Dogecoin, are all in the red today.
The drop in the market comes as the US Securities and Exchange Commission (SEC) announced that Kraken must end its staking service and pay a fine of $30 million for alleged securities law violations. The SEC claimed that Kraken had failed to register its staking-as-a-service with the regulator. It must be noted that the commission's decision was not unanimous. One commissioner had some strong words to say about the ruling which will be discussed in our first story of the day.
Also, Coinbase CEO Brian Armstrong has voiced his concerns about the U.S. legislator's push toward the potential eradication of crypto staking as we know it. With countries around the world poised to bring in new crypto regulations, 2023 is shaping up to be a year of battle between financial regulators and crypto firms. Nevertheless, here are all the top stories from the crypto world today.
- Commissioner Hester Peirce disagreed with the SEC's decision to sanction Kraken arguing that the industry needs clear rules instead of sporadic enforcement actions. She has criticized the SEC's approach to cryptocurrency enforcement as "paternalistic and lazy." Peirce wrote that she disagreed with the SEC's recent decision to shut down Kraken's staking program, stating the approach is not an "efficient or fair way of regulating" the emerging crypto industry. Peirce also pointed out that the SEC's enforcement action against Kraken prevents the exchange from offering a staking service in the US in the future, regardless of whether it is registered or not. SEC Chair Gary Gensler, lawmakers, and the White House are calling for more regulation of the cryptocurrency industry. However, Peirce questioned whether the SEC is the right regulator for the industry. She also disputed the SEC enforcement director's claim that the Kraken settlement was meant to protect investors and added that the solution of shutting down the program entirely was concerning.
- LocalBitcoins, a popular peer-to-peer Bitcoin exchange, announced that it will be shutting down after more than 10 years of operation. The company cited the challenges during the ongoing crypto-winter as the reason for discontinuing its services. The timeline for the closure will start with a suspension of new sign-ups and followed by the ending of trading and deposits on February 16. From February 17. Users will have 12 months to withdraw their digital assets from their wallets.
- PayPal held a total of $604 million in various cryptocurrencies, as of December 31, 2022, according to its recent annual report filed with the SEC. The cryptos held by Paypal include Bitcoin, Ether, Litecoin, and Bitcoin Cash. Bitcoin accounted for the largest share in PayPal's crypto assets at $291 million, followed by ETH at $250 million. The amount of PayPal's crypto holdings represent 67% of its total financial liabilities, which totaled $902 million as of December 31. PayPal holds its customers' cryptocurrency with a third party and has agreements to keep them separate. However, they recognize the risks of owning cryptocurrencies and can't guarantee that their agreements with the third party will protect their customers' assets if the third party goes bankrupt. In 2020, PayPal introduced a novel hold-as-a-service feature for Bitcoin and started allowing Bitcoin trading. It is now exploring ways to add more cryptocurrencies and blockchain services to its platform.
- Ajuna Network, a decentralized gaming platform, has raised $5 million in a private funding round led by CMCC Global, a blockchain-focused venture capital firm. The funds will be used to expand its product suite which it built out with a $2 million funding round this time last year. It will also allow developers to use Unreal and Unity to create decentralized games, making it easier for both traditional developers and gamers to enter Web3 gaming. The funding will also help Ajuna continue to expand on the Polkadot, Ethereum, and Polygon blockchain networks and support projects launching on its platform. GameFi has received heavy funding in the last two years. Investment has slowed in 2023 but capital may return if many top GameFi coins continue to make big gains this year.
(Source: CryptoSlate)
- South Korea has imposed sanctions on four North Korean individuals and seven institutions for their involvement in illegal cyber activities, including crypto theft, that allegedly funded nuclear and missile development. This is the first time the South Korean government has taken independent sanctions against North Korea in the cyber sector. The sanctions include blacklisting the wallet addresses of these entities to prevent any virtual asset trading with North Korea. The individuals targeted have suspected ties to the Lazarus hacker group, while the institutions are accused of participating in cyberattacks and training cyber experts.