Cumberland withdrew $46 million in Ethereum, 23 million BUSD and other coins from leading cryptocurrency exchanges

Cumberland, one of the largest cryptocurrency market makers, withdrew about $70 million from Coinbase and Binance exchanges in the last two days. The company took $46 million in Ethereum, 23 million BUSD ($23 million). As well as other coins after it became known that the Securities and Exchange Commission (SEC) sued the two exchanges.

Cumberland is a subsidiary of Chicago-based trading firm DRW, created in 2014. It provides liquidity on leading centralized and decentralized crypto exchanges.

Cumberland took about 20,000 ETH ($37 million) from the Coinbase exchange and 4.85,000 ETH ($9 million) from Binance, according to analyst service Lookonchain.

In addition to Ethereum, Cumberland withdrew other cryptocurrencies, analysts noted. Among them were tokens Axie Infinity (AXS), Shiba Inu (SHIB), Compound (COMP), Chainlink (LINK), Curve DAO (CRV) and Aave (AAVE).

A week earlier, in late May, Cumberland stopped trading Firecoin (FIL) because the SEC classified the cryptocurrency as a security token. That is, assets that fall under the definition of securities.

A security token is a crypto-asset that represents a certain amount of ownership of something. For example, part of a company. They can be issued by a business or government and serve the same purpose as securities (stocks).

In addition, Nansen data shows that Cumberland has withdrawn more than 23 million BUSD from Binance in the past 24 hours, noted cryptojournalist Colin Wu. The market maker transferred them to Paxos, the company that issued the stablecoin. The firm has been banned from issuing new tokens, but it continues to redeem old ones.

It also became known that Robinhood will review its work with some cryptocurrencies.

Our experts note that Robinhood provides users with access to 18 cryptocurrencies. These include Solana (SOL), Cardano (ADA) and Polygon (MATIC). These have now been called unregistered securities by the SEC in lawsuits against cryptocurrency exchanges.

The U.S. regulator named securities as the closest competitors of Ethereum. Our experts told us what risks this brings for ETH

From June 5 through June 6, cryptocurrency rates reacted to the SEC’s lawsuit against two major exchanges with a dramatic drop. Bitcoin and other cryptocurrencies fell in price, but by the morning of June 7, they partially recovered their losses. Ethereum was no exception and on June 6 updated its low from May 25 at $1802.

In lawsuits against two major exchanges, the SEC named several cryptocurrencies as securities. These assets reacted with fall of rates more strongly than others and fell in price by 6-15%.

In the first lawsuit were called securities: Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL). As well as Cosmos (ATOM), Sandbox (SAND), Decentraland (MANA). And Algorand (ALGO), Axie Infinity (AXS), COTI (COTI).

In the second lawsuit, Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP) joined them. As well as NEAR Protocol (NEAR), Voyager VGX (VGX), Dash (DASH) and NEXO (NEXO).

Despite the fact that the commission named Ethereum competitor coins (e.g., Solana), the largest ETH itself avoided a similar fate. None of the lawsuits mentioned it as a security.

Why the SEC chose the cryptocurrencies it named in the lawsuits

The SEC sampling algorithm is completely incomprehensible. And it defies logic, our experts note. Either the initiators of this process have outdated data. Even from the time of PoW mechanism in Ethereum network (till September 2022). Or it’s a “show punishment” for trading “tokens nobody needs,” says our expert.

SEC head Gary Gensler told CNBC that cryptocurrencies are essentially unnecessary at all. “We already have a digital currency. It’s called the U.S. dollar, the euro or the yen,” Gensler said.

The very arguments of the U.S. regulator regarding the recognition of PoS and DPoS (validators, not miners) projects as securities are “ridiculous.” But in the moment, these accusations can “create panic among investors” and provoke a local price collapse.

Long-term prospects for Ethereum are positive

If we consider the long-term prospects of Ethereum. It has much more growth potential than even Bitcoin. Because BTC’s growth comes from its status as the first cryptocurrency. As well as popularity and scarcity, which led to the leading position in infrastructure development.

For ETH the main growth driver is the area of decentralized finance (DeFi), says our expert. DeFi is still in its infancy. And in the future it will be able to push the price of ETH, which provides the infrastructure for DeFi projects.

Short-term ETH prospects

For short planning horizons on Ethereum, things are very complicated. Our experts note that on the one hand, Ethereum benefited from the fact that it was “forgotten to be mentioned” in the lawsuits.

But on the other hand, if ETH will be “remembered” later. It could repeat the fate of those coins that are already on the SEC list. As some investors exit from these coins, the assets are rejected by the platforms. Therefore, the risks remain, our Crypto Upvotes expert warned.

Total daily volume of trading on 3 leading decentralized exchanges increased by $950 million in 48 hours

Average daily trading volume on the three largest decentralized exchanges (DEX) has jumped 180% in the past 48 hours, according to CoinMarketCap. Trader activity on centralized exchanges (CEX) has also increased.

Trading volume on Uniswap v3 (Ethereum) rose from $322 million to $999 million, and on Uniswap v3 (Arbitrum One) from $152 million to $322 million and on Curve (Ethereum) from $54 million to $157 million. These three exchanges account for 55.6% of total DEX trading volume in the past 24 hours. Within two days, their total trading volume increased from $528 million to $1.47 billion (180%), an increase of $950 million.

At the same time the trading volumes at 12 large centralized exchanges also remained at maximum values for the second day in a row over the last month. As of the morning of June 6 it reached $105 billion (the highest since April 28), while on the morning of June 7 it was $97 billion, according to Coinglass. During the last month, volumes have only twice reached $100 billion. And on average, they have ranged from $30 billion to $80 billion.

The surge in exchange activity comes as the U.S. exchange regulator has begun litigation against leading cryptocurrency exchanges.

Our experts note that currencies reacted with a sharp drop. But by June 7, they had recovered to the marks where they were before the reports about the filing of lawsuits by the SEC.

Tether has invested in building a Bitcoin mining platform in El Salvador

Tether has participated in the first round of $1 billion in financing to build a Bitcoin farm in El Salvador. The company announced that it would provide capital and “bring its expertise in energy, equipment and communications”. Especially for the construction of Volcano Energy, a 241MW renewable energy generation park, the world’s largest site.

The site selected for construction will house photovoltaic cells to generate 169MW of solar power. And wind power generation equipment for 72 MW. This will enable the placement of mining equipment with computing power in excess of 1.3 EH/s, it said.

The total global hash rate on the bitcoin network on June 5 hovered around 361 EH/s, according to Minerstat.

The Tether says that by investing in green energy around the world. With this, it aims to become one of the leading providers and investors in the global renewable energy and mining infrastructure.

Our experts note that the company previously reported net income of $1.5 billion for the first quarter of the year, and announced its decision to spend up to 15% of realized operating profits on Bitcoin purchases.

At the end of May, Tether also announced that it was investing in renewable energy generation and the launch of bitcoin mining in Uruguay using that energy.

The farm in El Salvador, Tether claims, will be the largest in the world. In early May, one of the largest US miners, Marathon Digital, and developer Zero Two announced the creation of two Bitcoin mining platforms in Abu Dhabi, UAE, under equipment with a total capacity of 250 MW

Atomic Wallet cryptocurrency wallet representative said that his team is “doing everything possible” to recover the stolen funds. And advised the victims of the incident to track the hacker’s transactions themselves

An Atomic Wallet cryptocurrency hacker who stole about $35 million in user funds. He used Sinbad.io, a cryptomixer popular with North Korean hackers, to launder the stolen funds, Elliptic blockchain analysts said.

Atomic Wallet, a cryptocurrency service for non-custodial storage of digital assets, was hacked in early June. The attack stole Bitcoin, Ethereum (ETH), Tether (USDT), Dogecoin (DOGE), Litecoin (LTC), BNB (BNB) and Polygon (MATIC) totaling at least $35 million from Atomic customers.

Elliptic found out that the hacker started transferring funds via Sinbad.io, a transaction anonymization service. And which is used by the North Korean hacker group Lazarus Group. North Korean hackers laundered over $100 million through Sinbad io.

Analysts have not named the amount of Atomic users’ funds spent through the mixer. But they did say that Sinbad.io is probably a revamped version of Blender.io, a service heavily used by Lazarus Group. And the first mixer to be sanctioned by the U.S. Treasury Department.

The Atomic Wallet team is “doing everything they can” to recover the stolen funds. But creating a concrete plan is possible only after the investigation is complete. Atomic Wallet marketing director Roland Sede told Cointelegraph.

According to him, having victims of the attack track and report illegal transfers to cryptocurrency exchanges could prevent scammers from withdrawing funds. For its part, the site is doing just that. Because “the more attention hackers get, the harder it is for them (funds) to move them,” Sede said.

Our experts note that according to Atomic Wallet, the hack affected “less than 1%” of the service’s monthly active users. The attack was also stopped on Saturday, May 3. But Twitter users responded with screenshots showing that their funds were stolen even after that time.

Our Crypto Upvotes experts tell us how Ethereum zkSync scaling project with $458 million investment is organized. Why it is used by leading players of the cryptosphere and what conditions the developers name for launching their own token

The mass distribution of cryptocurrencies and Web3 projects is held back by the relatively slow performance of blockchains and high fees, especially during periods of heavy network load. One of the popular technical solutions to increase Ethereum blockchain throughput is the so-called ZK rollups. And the implementation of which is a key part of the Ethereum roadmap. And also about which the co-founder of the project Vitalik Buterin repeatedly spoke.

Such solutions exist on top of the main Ethereum blockchain. And they combine a set of transactions into packets, process them in their own network and then transmit them to the main network. By doing so, they increase the speed of transfer processing and significantly reduce fees. This fee is paid by users every time they interact with the blockchain. For example, when transferring coins, transactions in credit protocols. Or during an NFT purchase or any other Ethereum usage scenario.

If at the base level Ethereum processes no more than 15 transactions per second. The so-called Layer 2 (L2) solutions allow tens of thousands of transfers per second with multiples of smaller fees. There are many competing startups in the race to create the most successful Ethereum scaling solution. For example Polygon, Arbitrum, Optimism, Scroll, StarkWare, Fuel Network and others. They have formed an entire industry. And the largest projects are valued in the billions of dollars.

zkSync project

The most famous solution involving those same ZK rollups. And of which Buterin speaks is zkSync from Matter Labs. Last November, Matter Labs closed a $200 million investment round led by major crypto venture capital funds Blockchain Capital and Dragonfly. Other investors include LightSpeed Venture Partners, Variant and Andreessen Horowitz (a16z). Matter Labs raised a total of $458 million, and that in itself is one of the largest venture capital investments in the history of the crypto business.

Commenting on the closing of the investment round, Matter Labs product director Steve Newcomb told Fortune. About how most of the funding will go to “building a team, further growing, scaling and developing a full-fledged company.” Newcomb founded Powerset before working at Matter Labs. Which was bought by Microsoft and later became part of the search engine Bing. Anthony Rose is also on the zkSync development team. He also led engineering teams at Ilon Musk’s SpaceX, creating software solutions for Falcon, Dragon and Starlink.

The zkSync project roadmap and its development

After reaching several roadmap milestones, the zkSync project has two networks in its current form, Lite and Era. The capabilities of zkSync Lite are limited, and it is essentially the first version of the protocol.

However, zkSync Era is a more mainstream product, opened to a wide range of users and developers in March of this year. The network was the first fully launched software environment with support for Ethereum applications. And thus beating out competitors like Starknet or Polygon. This means it will be easier for developers to migrate applications to zkSync Era. And where they can take advantage of faster transactions and lower fees.

Many of Ethereum’s biggest projects are already deploying on zkSync Era. Among them are popular decentralized finance (DeFi) services such as Uniswap, Curve, Balancer, Maker and SushiSwap. In addition, zkSync Era is used by Circle, cryptocurrency wallet creator Argent or liquid staking service Rocket Pool.

An important feature of zkSync Era is the so-called account abstraction.

And with the help of which it is possible to introduce to crypto-purses the features familiar to more mass users. For example, two-factor authentication or simple access to the wallet through login and password. As a rule, most of crypto-purses are just standard addresses. Which can send and receive funds and interact with smart contracts. With zkSync Era’s solution, developers can adapt to the needs of a wider audience.

Matter Labs representatives say in various interviews that the company is generally geared toward working with traditional businesses. They are particularly interested in the game development industry. In late May, the company hired former Activision Blizzard vice president of community engagement Michael Lee as senior vice president of development. To focus on attracting game developers to the zkSync platform. Earlier, Wemade, a leading Korean blockchain game developer, announced a partnership with Matter Labs. Which is developing the WEMIX PLAY platform. And which, according to the company’s website, has more than 20 million active users.

Launch of zkSync token and airdrop

zkSync has long been considered in the cryptocurrency community as one of the first candidates for mass airdrop . Several large blockchain projects, among them Optimism, Aptos, Blur or Arbitrum, have conducted airdrops for early and active users. And who have received rewards worth thousands of dollars. This has sparked speculation that other projects will follow suit.

Given the impressive amount of investment raised and several other circumstantial signs. And that’s why zkSync is considered one of the most obvious contenders to issue a token and conduct an airdrop. At the end of March, the zkSync ecosystem projects saw a marked increase in activity and turnover following Arbitrum’s sensational token giveaway. At the time of publication, turnover in the zkSync Era network, according to analytics service DefiLlama, exceeds $157 million and continues to grow.

The community notes that the main reason for this may be the accrual of activity. Or so called airdrop pharming. This is when users create a lot of wallets, from which they spend a certain set of actions in network projects. And in doing so, expecting to get more tokens as a reward in the future if the project decides to do an airdrop.

The zkSync developers themselves are apparently aware of what’s going on. As Matter Labs’ Anthony Rose said in a comment for DL News, project teams “should always monitor speculation around tokens and airdrops.”

The company removed the “tokenomics” section from the zkSync website, which was present there until last October. The documentation stated directly that the network’s own token was planned to be used for staking and as collateral for the network’s validators.

Our experts note that the ZkSync Era network remains largely centralized for now. And Matter Labs can arbitrarily update its software code. The company still controls the so-called sequencer and prover. These are the two main components of the network. As Matter Labs CEO Alex Gluchowski clarified, the project will only need a token when it becomes necessary to make the sequencer decentralized. He estimated that this will happen in about a year.

The Crypto Tsar would be the official who would ensure a coordinated approach. For various government agencies to regulate this sector. And this is necessary to turn the country into a cryptocurrency hub, lawmakers say

A parliamentary group in the UK has proposed the appointment of a ‘Crypto Tsar’. And to ensure a coordinated approach by various agencies to regulate the digital currency industry. Parliamentarians say this is necessary to ensure UK leadership in the cryptocurrency industry and to protect consumers.

The Crypto & Digital assets All-Party Parliamentary Group (APPG) has published a report containing more than 50 recommendations to government on the industry. Among them is the appointment of an official. And that will ensure a co-ordinated approach by various government departments and agencies.

The report points to the rapid growth of the cryptocurrency market. And the fact that “this sector is now with us for the long haul”. As such, the report argues that the sector needs to be regulated to protect consumers. And the implementation of the government’s vision to make the UK a global cryptohub.

“The government should consider appointing a ‘crypto tsar’ who could help coordinate the work of various agencies to ensure a consistent approach,” the APPG report says.

The positions of regulators and other government bodies in the United Kingdom on cryptocurrencies are divergent, creating uncertainty in the market.

Our experts note that at the end of October last year. And  MPs in the lower house of parliament supported recognizing cryptocurrencies as another type of financial asset rather than singling them out as a separate class.

Our Crypto Upvotes experts summed up results of May on the crypto market. And gave their forecasts for leading cryptocurrencies for the nearest future

May was the first month this year that Bitcoin closed with a loss in price. On January 1, BTC was trading around $16.5 thousand, on February 1 – $23.13 thousand, on March 1 – $23.15 thousand, on April 1 Bitcoin rate reached $28.5 thousand, and on May 1 – $29.3 thousand. By the last day of spring the price of BTC went down to $27.7 thousand.

But despite the BTC price decrease by 5.5% in May, it has grown by 67% since the beginning of the year. The total market capitalization of the cryptocurrency decreased by 3.3% in May, but has increased by 41% since the beginning of the year.

Last month on the cryptocurrency market went mainly in the decline in the prices of leading assets

The growth was observed only in certain projects, such as Ripple. And it was primarily due to internal fundamental reasons.

Otherwise, the correction in the cryptocurrency market within the uptrend of the beginning of the year continues. And to say that the market has found the bottom and will go into active growth, it is not necessary yet, says our expert.

May has not been very good for BTC so far this year, with almost 6% fall of the exchange rate. Despite this, we have not seen a strong collapse. For example, as it was in May of the previous few years. Over the past month, BTC and other major cryptocurrencies by market capitalization were in consolidation phase.

On May 25 the price of Bitcoin updated minimum of two months, sinking to the point of $25.8 thousand. But by the end of May BTC got out of this pit, and steadily crossed the point of $27 thousand.

This decline can be attributed to market instability caused by problems in the U.S. banking sector, says our expert. Recession inevitably leads to higher borrowing costs for individuals and companies. And investments are losing yields. So investors tend to invest in conservative instruments. Cryptocurrency traditionally fades into the background at this time.

The U.S. Treasury Department is actively working to reduce inflation. And if it succeeds, then the cryptocurrency segment of the market will go back to growth

Our experts say that even with the current Fed rate, Bitcoin will be able to stop the decline. And even begin to rise in price, albeit slowly. The same will happen to Ethereum and other popular cryptocurrencies.

The most important key events for the crypto market in June. These are reports on the U.S. business activity, inflation and unemployment index, which are published at the beginning of the month. Then after these reports, on June 14, there will be a Fed meeting on the interest rate. And the change of which could very strongly influence the rate of BTC and altcoins.

In case of good economic reports we may expect that the current price level will be kept. In this case, it will be a positive signal for the crypto market. And that will push the BTC price up, to the current resistance level of $31,000, and possibly higher.

Historically, June is considered a low month for Bitcoin. And for the past three years, its exchange rate has fallen in June, our experts remind us.

In May, Bitcoin was supposed to show BTC down to the $25k level. However, it fell slightly short of that target. At the same time, as in the case with Bitcoin, our experts also expect other assets to decline in prices in June.

For example, the correction target for Ethereum is at $1.6k. And other assets with high market capitalization, such as BNB, XRP, ADA, MATIC may also decrease by 5-15% in the first month of summer, our expert thinks.

As for the fundamental aspects, the attention of market participants remains focused on macroeconomics in the USA. Because the pause in rate hike at the June FED meeting is already built into the current prices. But in case of divergence with market expectations, cryptocurrency may decline synchronously with stock assets.

Important events in June among other top 30 cryptocurrencies

Among all cryptocurrency assets from the top 30, Litecoin (LTC) may be stronger than the market. That’s because the LTC network will be halving in August. It is historically bullish on the cryptocurrency exchange price. Also LTC can become one of the leaders of the subsequent market growth. And even if it won’t show good growth in June.

Our experts Crypto Upvotes note that in June several major unlocks of cryptocurrencies are expected. For example such as 1inch Network (1INCH) here will be released 16.6% of the total supply. And Blur here will unlock 6.62% of the total supply. Our expert warned that after unlocks there is usually a fall in asset prices.

Our experts tell us how blockchain developers are identifying farms of thousands of wallets. Which are designed to artificially inflate the volume of token distribution activity

Distribution of tokens to active users in the form of airdrop. That is, encouraging the activity of early users, has become a trend on the cryptocurrency market. Decentralized exchanges, NFT-marketplaces, games, wallets, social networks and other services are created on blockchains of ecosystem cryptoprojects. At the early stage of development, all of them need active users and testing. It is for activity in such projects that tokens are eventually distributed. But recently one project decided to distribute rewards to those who helped identify the wallets of so-called drophunters. Or sybil – those who engage in aggressive scrambling for activity in the blockchain project ecosystem. In order to maximize the number of tokens that the developers will give away in the form of airdrop.

In order to maximize potential rewards, sibyls use farms of thousands of accounts to artificially inflate project activity. Who can organize token distributions.

A whole industry of crypto wallet farms

When creating the Decentralized Autonomous Organization (DAO) in 2022, the developers of Hop Protocol issued $3.5 million in tokens. This was done to give away among active users. However, they discovered thousands of addresses that were trying to cheat the system. In doing so, aiming to get a larger share of the airdrop. Volunteers helped developers identify the interconnections of multiple wallets and weed out farms from these accounts. Which were involved in tapping into the activity in order to get tokens in the giveaway. This ended up saving the project about $1 million. And the developers decided to give away tokens to those who helped uncover dishonest participants.

Hop Protocol co-founder Christopher Winfrey, in an interview with DL News, called the sybil address activity “an entire industry, not a random collection of crafty hackers.” “I suspect they’re running a set of sophisticated operations using multiple accounts on exchanges. And they pattern their behavior at random to make the activity indistinguishable from that of real users,” Winfrey told reporters. He added that the failure to filter out sybil could have a “devastating impact on projects.” As airdrop hunters tend to sell the resulting tokens en masse as soon as they are listed on cryptocurrency exchanges, collapsing the exchange rate.

Despite the relative success in weeding out dishonest users, Winfrey believes That sybils definitely have an advantage. He admits that “it’s an impossible battle to win.” And detecting sybil activity is getting harder and harder. He estimates that their farms have collectively made hundreds of millions of dollars on big giveaways.

A surge of activity in another project

The Stargate cryptocurrency bridge, which allows to move tokens between incompatible blockchains. It processed more than 300,000 transactions with more than $100 million in assets every day over the past week, surpassing the record highs set more than a month ago. And far outpacing direct competitors in terms of user activity.

Stargate uses the LayerZero protocol, a development by LayerZero Labs. The project is valued at $3 billion after an April $120 million investment round led by venture capital fund Andreessen Horowitz. And is considered in the cryptocurrency community to be one of the first contenders for a massive airdrop.

According to Messari analyst Chase Devens, the vast majority of deals and volumes at Stargate. It’s most likely coming from ” airdrop hunters.” In the program code of the LayerZero project. Which is publicly available on the Github repository, mentions the yet to be announced ZRO token. The head of LayerZero, Brian Pellegrino, did not respond to a request from reporters.

The performance of LayerZero ecosystem projects and other candidates for airdrop began taking off in March. This was immediately after the successful token giveaway from Arbitrum, whose fame went beyond the cryptocurrency community precisely due to news about the big giveaway.

Such a profitable surge of activity to the projects gave rise to a marketing ploy – a hint of an airdrop. The ecosystem projects zkSync, Starknet and Polygon zkEVM saw a significant increase in user activity in May. Earlier this month, Polygon Labs co-founder Sandeep Nailwal hinted at the possibility of issuing tokens to the first Polygon zkEVM users.

The fight goes on

Airdrops are designed to reward early adopters. And also for testers and liquidity providers for new projects. But free giveaways largely attract users who are not interested in the project. And whose activity disappears after the token giveaway.

For example, monthly trading volume on decentralized exchange aggregator Paraswap peaked in November 2021, when the developers conducted an airdrop of the PSP token. Within a year after that, the project’s turnover dropped by 75%. And have not returned to the earlier figures. But there are also reverse examples: the value of assets (TVL) in Arbitrum’s turnover reached an all-time high on May 6 – more than a month after the ARB token was released.

Hop Protocol was one of the first blockchain projects to openly fight the mass influx of activity. Earlier cryptoprojects didn’t pay attention to the account farms participating in airdrop. And distributed tokens even for a single interaction with the ecosystem.

Projects like Safe or the same Arbitrum adapted sybil detection methods from Hop Protocol during their giveaways. Optimism Foundation, the organization behind the blockchain project of the same name. It has also campaigned to disqualify many of the token applicants the developers deemed sybils.

Our experts note that as more airdrops are expected, cryptoprojects will apparently continue to fight aggressive drophunters. And their clusters of wallets deployed for high-yield giveaways.

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.