The cryptocurrency business is thriving, but a lot of things are happening, including the SEC targeting crypto auditors seeking greater scrutiny, Nigeria, Turkey, and India having the largest adult population trading crypto, Samsung Electronics launching the first NFT tradable and display TVs in the first half of 2023, and much more!
In this issue:
- SEC targets crypto auditors seeking greater scrutiny.
- Basel committee endorses global crypto banking rules to be implemented by 2025.
- Samsung electronics will launch the first NFT tradable and display TVs in the first half of 2023.
- Nigeria, Turkey, and India have the largest adult population trading crypto.
- Binance completes takeover of Indonesian exchange Tokocrypt.
- Bitcoin miners theoretically earned $9B in 2022 despite the market crash.
- HK legislator’s firm to lure 1,000 Web3 start-ups over 3 years.
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SEC targets crypto auditors seeking greater scrutiny
The Securities and Exchange Commission is sending a warning to firms that audit cryptocurrency companies: “If we find fact patterns that we think are troublesome, we will consider a referral to the division of enforcement,” The Wall Street Journal reported, citing Paul Munter, acting chief accountant at the Wall Street watchdog, in an interview.
The securities regulator is concerned specifically about crypto firms’ proof of reserves, which allow centralized exchanges, through an independent audit conducted by a third party, to showcase their solvency as well as the value of their reserves. Those reports have gained tremendous popularity following last month’s implosion of crypto exchange FTX which was partly triggered by its shortage of internal controls, thus adding to the risk of inaccurate financial statements.
Crypto exchange Crypto.com, for instance, indicated on November 11 that around 20% of its $2.82 billion in total assets were in meme coin Shiba Inu. French auditor Mazars, which recently verified Binance’s PoR among other trading platforms, reportedly decided last week to suspend its proof-of-reserves reporting for crypto clients earlier this month due to a lack of confidence in such disclosures.
All in all, “Investors should not place too much confidence in the mere fact a company says it’s got a proof of reserves from an audit firm,” Munter to The WSJ. The reports “lack information for an investor to assess whether the company has sufficient assets to cover its liabilities.”
Basel committee endorses global crypto banking rules to be implemented by 2025
According to an emailed statement, the Basel Committee on Banking Supervision (BCBS) has endorsed its global crypto banking rules for implementation by Jan. 1, 2025.
An accompanying document by the committee, which is the primary global standard setter for the prudential regulation of banks, suggested that a bank’s exposure to certain crypto assets must not exceed 2% and should generally be lower than 1%. These particular assets are tokenized traditional assets including non-fungible tokens, stablecoins, and unbacked crypto assets that don’t meet classification conditions. Meanwhile, those assets from the list above that do meet the criteria “are subject to capital requirements based on the risk weights of underlying exposures as set out in the existing Basel Framework.”
Previously a group of eight traditional finance lobby groups had written to the committee suggesting that just a 1% cap on banks could be too restrictive and could derail innovations using distributed ledger technology. Now there is more wiggle room.
“Today’s endorsement by the GHOS (Group of Central Bank Governors and Heads of Supervision) marks an important milestone in developing a global regulatory baseline for mitigating risks to banks from crypto assets,” said Tiff Macklem, chair of the GHOS, the oversight body of the committee.
The classification conditions the committee has set out include ensuring crypto passes a redemption risk test and basis risk test. “The redemption risk test is to ensure that the reserve assets are sufficient to enable the crypto assets to be redeemable at all times,” the report said. Meanwhile, the basis risk test “aims to ensure that the holder of a crypto asset can sell it in the market for an amount that closely tracks the peg value,” the report said.
Samsung electronics will launch the first NFT tradable and display TVs in the first half of 2023
Samsung Electronics will launch the world’s first TVs that are tradable and display a non-fungible token (NFT) in the first half of next year.
As reported by Hankook Ilbo on the 22nd, Samsung Electronics will unveil its NFT trading service for TVs at CES, the world’s largest information technology fair, to be held in Las Vegas on January 5 next year. This service allows NFT transactions by installing an application on a smart TV and provides the function of displaying purchased works on the TV.
Samsung Electronics plans to install three NFT applications developed by the three companies, Nifty Gateway in the US, La Collection in France, and Art Token in South Korea, on smart TVs. It is known that various methods such as virtual assets (cryptocurrency) are being considered for payment methods.
This year, tech giant Samsung aims to use blockchain technology to develop a new security solution that helps its smart devices to protect each other. Samsung’s new security solution, called Knox Matrix, is based on a private blockchain platform and is applied to all of its smart devices. With security and privacy a top priority for users, Samsung Electronics is taking its device security experience to the next level with the award that debuted at this year’s Samsung Developer Conference (SDC).
Nigeria, Turkey, and India have the largest adult population trading crypto
According to a recent poll by the business data firm Morning Consult in conjunction with Bloomberg and World Bank, more than half of Nigeria and Turkey’s adult populations trade cryptocurrency monthly. Furthermore, India had the largest population involved in crypto, with approximately 300 million people, although this figure represents 29% of India’s entire adult population. China ranked second with 93 million active crypto traders, but the figure is only 8% of China’s population.
On the other hand, Nigeria and Turkey have 56% and 54% of their adult population actively trading crypto each month. The survey concluded that one in every seven adults, equivalent to 900 million people globally, regularly deals with the blockchain ecosystem.
Nigeria and India are among the few countries that have embraced Central Bank Digital Currency (CBDC). Recently, the Nigerian Central Bank (CBN) proposed to ban ATM cash withdrawals over $225 a week to enforce the use of CBDC. The Nigerian apex bank issued the instruction to financial institutions in a circular on December 6, indicating that individuals and companies would henceforth be limited to withdrawing $45 (20,000 NGN) per day and $225 (100,000 NGN) each week from ATMs. On the other hand, the Reserve Bank of India (RBI) released a 50-page concept note in October establishing a retail CBDC for individuals and businesses and a wholesale CBDC to simplify interbank transactions.
Binance completes takeover of Indonesian exchange Tokocrypt
Binance has officially bought Tokocrypto. According to a press release issued on Monday, December 19, 2022.
Binance, the world’s largest cryptocurrency exchange, claimed that “it will gradually grow its investment in Tokocrypto to nearly 100%.” This announcement also validates the news Coincu has reported that circulated on December 6, 2022, claiming that Binance was in the process of acquiring Tokocrypto.
Pang Xue Kai, the CEO, will step down, and Yudhono Rawis will serve as the temporary CEO during the acquisition process. Nonetheless, “Pang Xue Kai will remain a member of the Tokocrypto Board of Commissioners and will continue to give leadership support in his new role,” the company said.
Approximately 58% of employees were laid off. Because Tokocrypto is designed to focus on business unit exchanges, business unit operations and activities other than exchanges will be temporarily discontinued.
With these modifications, “There is an employee adjustment of roughly 58%.” according to Tokocrypto’s VP of Corporate Communication, Rieka Handayani. Tokocrypto chose to streamline operations and focus on improving the functioning of the crypto asset trading platform in response to altering crypto market conditions.
Bitcoin miners theoretically earned $9B in 2022 despite the market crash
According to Coin Metrics, a provider of market data for cryptocurrencies, Bitcoin miners earned a total profit of more than $9 billion in 2022. This record profit occurred when the global cryptocurrency market was experiencing a crash due to various negative events such as the Terra crash and FTX’s ignoble end.
The data was shared in a tweet by Jameson Lopp, the co-founder of bitcoin security provider Casa. Lopp noted that the $9 billion earned is a “significant addition to the $47 billion total over the past 13 years.” The total $9 billion earned can be considered theoretical as Lopp mentioned that the result from Coin Metrics’ data “assumes [that the miners] instantly sell for fiat.” This implies that the miners garnered $9 billion in earnings by immediately selling off the mined Bitcoin at the trading price of BTC at the time of sale. Lopp believes this is theoretical because most miners, according to Lopp, hold their mined BTC and are not quick to sell them.
This, therefore, means that the total earnings stated by Coin Metrics would be more than $9 billion if it was put into consideration that several miners will hold their mined BTC, and vice versa.
Despite the theoretical boost in the Bitcoin mining business, reports have shown that several institutional Bitcoin miners are recording liquidity difficulties. The latest of them is the United States-based Bitcoin mining firm, Greenidge Generation. Earlier today, a filing revealed that the firm owed a debt of $74 million to the digital asset firm NYDIG. To tackle the debt, the Bitcoin mining company declared its plan to sell 70% of its mining machines to its creditor, NYDIG. By selling the equipment, Greenidge’s debt would reduce to only $6 million to $17 million. Other Bitcoin mining firms, such as Core Scientific, Argo, and Poolin, have also recorded financial struggles.
HK legislator’s firm to lure 1,000 Web3 start-ups over 3 years
A start-up accelerator co-founded by Hong Kong legislative council member Jonny Ng Kit-Chong wants to attract 1,000 Web3 businesses to set up shop in the city-state over the next three years.
Ng Kit-Chong is a legislative council member for the election committee constituency and has been in office since January this year. The engineer and politician have his finger in a lot of pots as he has declared owning shares in roughly 40 different companies. One such company is the start-up accelerator G-Rocket, which he co-founded alongside Casper Wong in 2016. Wong is the current CEO and spoke to the South China Morning Post on Dec. 23 about the firm’s new aptly named program “Hong Kong Web 3.0 Hub.”
The CEO outlined that G-Rocket is first looking to help 100 Web3 start-ups get their business off the ground, before scaling the number up to 1,000 within three years. “We hope to help bring good companies and talent back to Hong Kong in the post-pandemic era,” Wong said. In particular, Wong stated that the firm would work in tandem with the virtual ZA Bank, a government-run incubator dubbed Cyberport and property conglomerate New World Development to help Hong Kong startups get access to office space, banking, and government services.
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