Crypto Upvotes experts told which jurisdictions are comfortable for cryptocurrency to live and work in. And also told what factors determine the choice to register a crypto project in the chosen region

The regulation of cryptocurrencies around the world ranges from a complete ban on digital tokens to their recognition as legal tender. From time to time, governments pass laws that force crypto-businesses to migrate.

For example, China’s 2021 ban on cryptocurrency mining caused a mass exodus of miners from China. In 2023, due to stricter regulation in Canada and the U.S., many exchanges stop operating there. And now they are moving to countries in Asia and Europe. Binance and Bybit have already announced their departure from the Canadian market, Coinbase plans to open an office in Dublin.

On the other hand, certain regions are adopting clear regulatory rules for the crypto industry. And this also attracts cryptocurrencies. Hong Kong has allowed retail trading of digital assets since June 1. Huobi, Gate.io, OKX and many other exchanges are already entering the local market. Gemini and Bybit are opening offices in Dubai, while Binance has been operating there since last spring.

Most projects choose two simple rules simply and cheaply

Any cryptocurrency startup wants to cut costs as much as possible at the initial stage. This includes legalization of their activities.

For a cryptocurrency company, registration and licenses are primarily needed to interact with the outside world. For example, to place their applications in the App Store or Google Play. Or opening corporate accounts on major exchanges, our expert explains.

The most important criteria for selection are three parameters:
– Ease of opening a legal entity (ideally distant registration).
– Speed (ideally a few days)
– Price, which does not exceed a few thousand dollars.

As a bonus may be the presence in the company’s charter of the prescribed cryptocurrency activity. And especially in jurisdictions where obtaining a cryptolicense is impossible or not required. Because this process usually requires much more time and expenses than the registration itself.

Popular jurisdictions for crypto business registration

It is because of the speed, simplicity and low-cost of doing business that regions such as Georgia or the Seychelles are popular. Because these countries win in comparison with, for example, Dubai or Hong Kong. So there everything is a little bit more complicated, longer and more expensive.

The most favorable jurisdictions are the ones that support the crypto market. And they have special regulation and, in addition, they provide preferential tax treatment for such businesses. The most obvious example of such a region is Dubai. In addition, the Arab Emirates is relatively neutral in the international financial market in terms of various geopolitical aspects.

Our experts point out that Hong Kong, Switzerland and the Netherlands also have a positive attitude to cryptocurrency business. And they have regulation, but their taxation regime is not as favorable.

There are countries that are not against cryptocurrency. But at the level of regulators they warn both businesses and consumers about the high risks of such assets (e.g., Georgia). Such jurisdictions, as a rule, are against the use of cryptocurrency on their territory. And especially use as a means of payment.

Some cryptocurrency exchanges choose Ireland’s capital Dublin for the fact that the country is part of the EU. And has an established reputation as a financial and technological center. It also provides a favorable tax regime for its residents.

Our experts note that Dubai, Hong Kong and Georgia are increasingly in the news as cryptocurrency-friendly regions. But not just because they are somehow particularly favorable to cryptocurrencies. Rather, it is because they are generally friendly to relocating businesses, including cryptocurrency businesses.

There are no special preferences for cryptocurrency projects. As well as there are no prohibitions preventing the activities of cryptocurrency companies. Practice shows that the absence of bans is enough. To attract a significant number of companies in the current situation. Who are looking for their new place to work.

Our experts tell us how the record rise in Nvidia stocks and hype around AI affected prices of cryptoassets

Nvidia has become the first graphics processor manufacturer whose market capitalization has approached $1 trillion. Its devices have recently been used by cryptocurrency miners. But now the growth of the company’s shares is due to the growth of artificial intelligence technology.

On Tuesday, May 30, price of Nvidia stocks skyrocketed to a historic high. In its quarterly report, the company said that the proliferation of artificial intelligence technology is translating into record sales. And its net income for the quarter was markedly higher than what analysts had predicted.

Nvidia’s developments have spread in the video game industry, the field of professional visualization. As well as in the field of high-performance computing and the automotive industry. In this case, Nvidia’s onboard computers are used as the basis for unmanned cars. The company supplies technology to major market players such as Apple, Microsoft, Alibaba and Amazon.

In late 2006, Nvidia allowed third-party developers to use the processing power of its graphics processing units (GPUs) not only for graphics optimization but also for other purposes. Nvidia processors are good at a lot of simultaneous calculations. And in this they noticeably lose to central processors, the leading manufacturer of which is Intel.

Notable success of Nvidia outside of the video game industry has brought the company mining cryptocurrencies. And where the GPU has also proven its effectiveness. In 2020, amid rising prices for Bitcoin and other cryptocurrencies, Nvidia surpassed Intel in market value. And its quotes continued to rise, reaching a record high of almost $330 per stock at the end of 2021.

Demand for Nvidia graphics cards was supported by miners. Who assembled cryptocurrency mining farms based on the Proof-of-Work (PoW) algorithm from the devices. The most profitable of these has always been Ethereum (ETH). But last September, developers planned to move it to Proof-of-Stake (PoS). After that, the need for mining to issue new coins disappeared. And miners were forced to switch to much less profitable coins or refused to mine cryptocurrencies using GPUs in principle.

The fall in excitement around video card mining, as well as the collapse of the crypto market last year, brought down Nvidia’s stocks. But now the wave of AI has reawakened investor enthusiasm. Since the beginning of the year, the company has increased its market share by $220 billion. By comparison, Ethereum has a market capitalization of $228.3 billion. Nvidia stock is up 165% in 2023 alone. Nvidia’s capitalization now stands at $939.3 billion, which brings it closer to the $1 trillion mark.

AI and cryptocurrencies

On May 28, Nvidia unveiled several technologies related to artificial intelligence at Computex 2023. Among them is the Avatar Cloud Engine service. Which allows you to give the intelligence of side characters in video games. As well as the DGX GH200 supercomputer for generative AI, the Spectrum-X platform for cloud providers. And the MGX architecture for creating metaverse and a few others.

The flow of news around Nvidia has also affected the cryptocurrency market. Project tokens, which aggregators categorize as “artificial intelligence,” rose in value in less than a week. And some of them showed up to 60% growth. An example of such an asset was the AKT token of the Akash Network project. The developers position it as an open network for trading computing power.

The most capitalized assets in the category also benefited from positive news from Nvidia. The token of the SingularityNET project (AGIX), “the first decentralized artificial intelligence marketplace.” Which runs on the Cardano blockchain, rose in value by 10%. Fetch.ai (FET), a coin platform with machine learning algorithms, gained more than 6% in less than a week. And the OCEAN token used by the Ocean Protocol data economy project rose nearly 9%.

Similar trends took place in the market at the beginning of the year amid the mass spread of chatbots with artificial intelligence ChatGPT. Which still enjoys notable popularity, including in the cryptocurrency community.

Largest crypto asset in AI category

The largest crypto-asset in the AI category is the Render token (RNDR) of the Render Network project from OTOY. Its capitalization exceeds $900 million and it is traded on leading cryptocurrency exchanges. And its price has risen almost seven-fold since the beginning of the year.

OTOY provides cloud-based graphics rendering solutions. These are used by visual effects creators, artists, animators, designers, architects and engineers, according to the company’s website. Its products, which also involve AI. The company Meta also uses them.

As part of the Render Network project, OTOY developers have modified the code of their cloud computing platform for GPU rendering. And they did it so that RNDR tokens could be used to pay for the service, thus creating demand for the asset.

In 2021, OTOY released the Octane X Classic rendering app on the App Store. And which also uses Render Network technology. Also getting the project into Apple’s app store was a successful marketing move for RNDR. The token has risen more than 60 percent since May 13. This happened when The Wall Street Journal’s sources reported. That Apple would unveil a mixed reality headset at the WWDC 2023 event in early June. This was largely contributed to by a number of speculations that. That the device could, in theory, also use some of the Render Network’s developments.

Our experts note that in general, the coins of blockchain projects, which in one way or another involve artificial intelligence. Since the beginning of the year proved to be the group of the most successful in terms of crypto-assets investment. Along with tokens of the management of liquid stacking services.

Hackers stole about $16 million in nearly 60 attacks on cryptoservices. And scam cryptoprojects scammed investors out of $55 million

In May 2023, hackers, scammers and unscrupulous crypto developers stole more than $71 million in cryptocurrencies. This follows information from cybersecurity company PeckShield. At the same time, about $16 million was stolen during hacks. And scam projects (fraudulent projects) accounted for more than $55 million of losses.

According to experts’ calculations, there were 59 hacks of cryptoservices during the month. And the total amount of stolen funds amounted to $16.03 million, not including $4.13 million, which were returned by hackers on different terms.

The largest hack in May was an attack on the Arbitrum network’s liquidity protocol called Jimbos Protocol ($7.5 million). And then comes the hack of DEI’s stabelcoin issuer, Deus DAO ($2.5 million). In third place was the Tornado Cash cryptomixer incident, with losses of $1.12 million.

Most of the money stolen in May – $55 million – came from scam cryptoprojects and unscrupulous developers. The DFintosh cryptoprotocol team is suspected of stealing $31.6 million, while developers of the IPP stacking pool escaped with $14.5 million. In third place are the creators of the XIRTAM project with the theft of $3.4 million.

Our experts note that due to the popularity of meme tokens in the past month, many scam groups created dozens of cryptocurrencies on the theme of popular memes. Scammers artificially inflated their token prices. In order to attract investors. And then absconded with the funds of trusting users.

Our experts tell us what you need to know about the cryptocurrency division of venture capital firm Andreessen Horowitz. And what startups and technologies the company is allocating more than $7 billion to

The a16z crypto portfolio has dozens of crypto projects. And among them are both established players and startups that are still building infrastructure. The company’s early bet on Coinbase, the second largest crypto exchange, turned out to be one of the best in the history of venture capital funds. Though it came with very specific allegations of insider trading. The fund invested in leading decentralized exchange Uniswap, NFT marketplace OpenSea and large infrastructure blockchain project Alchemy.

This year, the company has led several multimillion-dollar investment rounds for various crypto projects. Among them, for example, is a $25 million round by Here Not There Labs. Which is developing the Towns protocol for group chat rooms. And which are blockchain-based and use end-to-end message encryption.

A recent nearly $30 million investment round closed the Story Protocol project from the developers of the Radish Fiction app, which was bought out by Korea’s Kakao. Andreessen Horowitz’s cryptocurrency division also led the round. Although it had previously invested $10 million in the project. A $40 million round led by the fund was also completed by blockchain game developer CCP Games.

Probably the main crypto-investment of the company this year was the project LayerZero.

Its developers, led by a16z, closed a $120 million round, after which the valuation of the company behind it, LayerZero Labs, jumped to $3 billion. The total amount of venture capital investment in the project. Which creates an infrastructure for exchanging data between ecosystems that are isolated from each other. And built on different blockchains, exceeds $250 million.

Other projects in the fund’s portfolio with more than $100 million in investments include Optimism, Aleo, Matter Labs (developer of the zkSync solution) and several others. From the last two, as well as from LayerZero, the cryptocurrency community expects to launch tokens. And to conduct airdrops following the example of Arbitrum. Or the same Optimism, but none of the companies have yet announced plans to issue their own assets.

Problems and failures

Despite its scale and strong market position, a16z faced problems in 2022, as did the entire cryptosphere. In October, The Wall Street Journal sources reported that the value of the company’s cryptocurrency fund fell 40%. And that’s noticeably more than other avenues. This was recorded even before the general collapse of the crypto market. Which was triggered by the bankruptcy of the FTX exchange.

Some of the fund’s biggest investments probably didn’t justify themselves. Among them is Helium, a mobile WiFi hotspot startup. In April, the company announced it was moving its infrastructure from its own blockchain to the Solana network. And the HT token trades only on second-tier crypto exchanges. And judging by the price movement, it’s not much in demand.

Another example from our experts is Dfinity. It’s a project that was rebranded as Internet Computer. Which raised $100 million from a16z in 2017. But it did not actually produce any product. And investor funds were invested mainly in a marketing campaign. However, given the success of other projects in the fund’s portfolio. And the financial return from investing in them will surely be able to outweigh the losses from unsuccessful investments.

Tether chose Uruguay to mining cryptocurrency. Review by Crypto Upvotes experts

Tether has decided to get into Bitcoin mining and announced. It is investing in green power generation and launching bitcoin mining in Uruguay. As part of the project, the issuer of the leading stabelcoin USDT is partnering with a local licensed company.

Tether has thus expanded its scope to include energy and mining. The report states that the company’s goal is. It is to become a global technology leader and this investment demonstrates Tether’s “commitment to innovation in energy and the future of cryptocurrency.”

The Tether noted that it chose Uruguay, which is rich in natural resources. Because the country offers ideal conditions for renewable energy production. These are the creation of wind farms, solar parks and hydropower projects. 94% of the country’s electricity production comes from renewable energy sources. And that makes it a world leader in this area.

Our experts note that the USDT token issued by Tether has remained the largest stablecoin by market capitalization for many years. And third among all cryptocurrencies after Bitcoin and Ethereum.

Cryptocurrency are not banned in Bali, but paying for products and services with them is prohibited

Bali authorities will fight against foreign tourists. Who pay with cryptocurrency in hotels, restaurants, tourist centers, stores and other places, the Indonesian edition of Antara reported. Cryptocurrencies are not banned in the country, but they cannot be used as a means of payment from 2021.

“Foreign tourists who behave inappropriately. And violate visa restrictions and other regulations and use cryptocurrency as a means of payment, will be severely punished.” This was announced by Bali Governor Wayan Koster at a press conference on tourism development in Bali.

Koster recalled that in Indonesia it is illegal to use currencies other than the local rupiah as a means of payment. Violation of the law is punishable by imprisonment of 1 to 5 years. And also a fine from 50 million rupees ($3.3 thousand) to 22 billion rupees ($1.4 million).

Tourists can be deported, and violators also face administrative and criminal penalties. As well as the closure of commercial premises, bans on payment transactions and other harsh sanctions, Koster said.

Our experts note that cryptocurrency trading is allowed in Indonesia. In January, the country’s government announced plans to launch a national cryptocurrency exchange by the end of 2023.

The hacker who took control of Tornado Cash gave up control of this protocol. But used it to disguise the funds withdrawn in the attack

The hacker who seized control of cryptomixer Tornado Cash gave up control of the service. But he used the protocol to launder digital tokens from the attack. That’s what Bloomberg writes, citing data from research firm Nansen.

The Tornado Cash project was attacked on the morning of May 20. The attacker was able to gain full control of the cryptomixer’s control. He issued 483,000 native tokens of the TORN protocol. And that gave him a majority vote in the control system.

On May 26, the hacker offered to call off his attack and return control to the Tornado Cash community. But while the protocol was under his control, he exchanged most of his tokens for Ethereum coins. And then laundered about $900,000 in them through Tornado Cash.

Our experts note that the price of TORN was around $6.4 before the hack. By May 29, it was down to $4. According to CoinMarketCap, the token has fallen in price by 37% since the hack, and by 10% in the last 24 hours.

NFT digital tokens can be used at Formula 1 races starting with the Monaco Grand Prix on May 28

Formula 1 ticket supplier Platinum Group has introduced tickets in the form of NFTs. The first event to which they will be available is the Monaco Grand Prix, which will be held on May 28.

The tokens will be issued on the Polygon blockchain. In addition to admission to the event. NFT tickets will also give owners various bonuses. For example, discounts for future races or participation in parties.

For sports fans, easy entry is the most important principle. Eli Zerbib, co-founder of the Web3 company Bary, which was involved in the creation of the tokens, said this. According to him, NFT tokens provide just that simplicity. And they offer transparency, traceability, easy purchasing, personalization. And also great audience involvement, which the company needs.

Our experts note that the use of blockchain technology in sports already goes beyond selling event tickets or issuing fan tokens and NFT collections

Lightning Network protocol allows cryptocurrency payments almost instantly and without fees. Our experts tell us how the solution works, who supports it. And why it is not yet popular in the crypto market

When the Bitcoin blockchain was flooded with memcoins in BRC-20 token format in early May. The cryptocurrency faced congestion and prohibitively high fees. The world’s largest cryptocurrency exchange, Binance, was forced to shut down the ability to withdraw Bitcoins twice a day. Until an acceptable level of load on the network returns. Representatives of the exchange announced that its development team is working on integrating transfers through a solution called Lightning Network. Which, in their words, “helps well in such situations.”

The Lightning Network (LN) protocol is Bitcoin’s scaling system, acting as one solution to the problem of its limited bandwidth. With its help it is possible to carry out almost instant transfers of coins with minimal commissions.

The protocol concept was first introduced in a technical paper titled Lightning Network for Bitcoin: The Bitcoin Lightning Network: Scalable Off-Chain Instant Payments in 2015. It was authored by developers Joseph Poon and Thaddeus Drija. Since Lightning Network’s inception, the developer community has been working collectively to improve both the protocol itself. And on applications and tools that support LN transactions.

How it works

If we think of Bitcoin as a huge highway. And where countless vehicles (transactions) compete for limited space. The Lightning Network protocol acts as a dedicated lane. And which allows you to bypass a congested main road. This is achieved by creating special payment channels. In which transactions can take place instantly, with minimal fees and without the need to write each of them to the Bitcoin blockchain.

To open such a channel, participants in a coin transfer create a common address and fund it with a certain amount in Bitcoins. They can then transfer funds to each other. And the balance data on their addresses will be updated within the channel. When they close the channel, the final balance will already be written to the Bitcoin blockchain as a separate transaction.

Payment channels can be created using wallets or other Lightning Network enabled software. You can use someone else’s channel as an intermediary for transfers. And in this case, the one who opened it will receive a small commission. Since the transactions take place outside the blockchain. It is impossible to identify a separate identifier for a particular transfer. Or see its data in the blockchain browser.

What prevents this project from distributing

Despite the existing way of solving one of Bitcoin’s major problems. The Lightning Network protocol is still a long way from mass adoption. Both for private users and for businesses. The technical complexities involved in creating and managing the channels act as a significant barrier for ordinary users. LN-enabled cryptocurrencies. These tend to be non-commercial developments that suffer greatly in interface design and user experience (UX).

In addition, the lack of standards for protocols hinders the interoperability of LN-enabled software developed by different teams. This makes it difficult to connect new users. And integrating the protocol into large platforms, whose owners are obviously interested in cheaper and faster coin transfers. Another problem is the limitation of liquidity in channels. Participants are forced to block a certain amount of Bitcoin in the channel. And that in itself limits the amount of funds available for transfer and reduces the usefulness of the protocol as a whole.

The relative newness and limited acceptance of the Lightning Network creates a certain paradox. The fact is that few people trust the protocol without its widespread adoption. And its diffusion, in turn, is constrained by the relatively small number of stakeholders willing to use it.

This is largely due to the fact that the Lightning Network is itself a non-profit project. And its infrastructure development is done by volunteers. The opposite is the case with Ethereum. For example, network scaling projects like Polygon, Arbitrum, Optimism, zkSync. And others have already formed an entire industry and are worth billions of dollars.

Projects and investments

However, investors are supporting projects that integrate Lightning Network into their payment solutions. In August 2022, Lightning Labs raised $80 million in funding to develop the Taro. Which allows transactions with stablecoins using the Lightning Network. Investors in the project include former Twitter CEO Jack Dorsey and Robinhood payment company CEO Vlad Tenyev.

Also in the same period, the investment round was held by Strike. It managed to attract $80 million, which it will use to establish partnerships with major retailers to connect its own wallet. As well as acquiring for retail outlets on the basis of LN. Investors have cumulatively invested about $10 million in Amboss and Mash platforms. And both are also building LN-based payment solutions.

Bitcoin’s scaling is one of the cryptocurrency’s biggest challenges. As fees and network load increase, solutions to optimize transfers will become more and more relevant. The Lightning Network protocol is quite well-known in the community. But there are still a lot of things hindering its diffusion.

Simplifying user interfaces. And promoting interoperability and improving the overall user experience. These are also important steps toward making Lightning Network technology more accessible. Improving liquidity management and security measures. Just as important to instill confidence in users of this protocol.

Scammers took advantage of market participants’ interest in meme cryptocurrencies on “bitcoin pizza day”

Scammers earned tens of thousands of dollars on “bitcoin pizza day. In doing so, taking advantage of market participants’ interest in meme-based cryptocurrencies. The creators of several holiday-themed tokens absconded with the assets of gullible investors.

On May 22, the cryptocurrency community celebrated the 13th anniversary of the first purchase for bitcoins. It happened in 2010, when computer developer Laszlo Heinitz bought two mushroom pizzas for 10 thousand BTC.

According to Dextools, the capitalization of tokens BTCPizza, BPizza, PizzaDay and EthPizza. Which were created during the last week, at their peak reached about $150 thousand.

The creators of BPizza, after the token reached a capitalization of $100k, imposed a 100% sales tax on the coins. This was done to prevent investors from selling them. Issuer EthPizza disabled token sales when the asset’s capitalization reached nearly $40k.

BTCPizza is now labeled as a Honeypot – where fraudsters prescribe in the token’s smart contract the ability to withdraw coins only to certain wallets. PizzaDay plummeted in value to zero after a spike in value followed by a rapid series of sales.

Our experts noted that the desire of investors to buy tokens with no fundamental value. And all this followed a rapid and significant rise in the market capitalization of the meme cryptocurrency Pepe in just a few weeks. Investors are hoping to get lucky, buying tokens that could collapse in value at any moment. And then they complain that they were scammed and media didn’t warn them that it was dangerous. So once again we warn you that you can lose 100% of your investment in such projects.