Attack of American regulators on BUSD and what consequences will face Binance from impossibility to issue its own stablecoin. Review by Crypto-Upvotes experts

The U.S. Securities and Exchange Commission (SEC) has informed Paxos Trust that it plans to sue it for violating investor protection laws. According to the regulator, Binance USD (BUSD), the third most capitalized stablecoin, is the third-largest. This digital asset, which Paxos issues, is an unregistered security. It is not yet known whether the SEC notice specifically relates to the issuance of BUSD, its listing on exchanges, or both.

The New York State Department of Financial Services (NYDFS) has since ordered Paxos to cease issuing new BUSD tokens altogether. In listing the consequences of stopping the issuance of BUSD, Changpeng Zhao, head of the Binance exchange, admitted. That capitalization of this asset will continue to decline and investors will start to switch to other stablecoins.

Risks to other stablecoins are high

News about banning issue of stablecoin Binance USD (BUSD) had a negative impact on the market. But not as much as from the collapsed FTX exchange. The SEC is investigating the Binance exchange. So Paxos is also in target of the regulator and the New York State Department of Financial Services (NYDFS).

The regulator considers BUSD to be an unregistered security. But with that logic, other stablecoins, USDT and USDC, would also be at risk. Most likely, someone wants to get control of Binance. And creating problems not only for the leading exchange, but also for the whole industry. The risks to other Stablecoins are high.

Binance CEO Changpeng Zhao said he will continue to support BUSD for the foreseeable future. The company predicts that customers will switch to other stablecoins. Therefore, the platform will make changes accordingly.

U.S. regulators declare war on stabelcoins

There are no frontiers for U.S. regulators. All it takes is one American citizen using some platform or protocol. For US regulators to consider these protocols as belonging to their jurisdiction. Attack on stablecoin issuers was expected, the SEC has been saying for years that these companies are not transparent enough. And they don’t comply with U.S. banking laws, don’t have the necessary reserves and so on. If SEC attacked a BUSD issuer, it would be wise to get ready for attacks on other stablecoins, especially USDT and USDC. Given USDT’s majority share of stablecoin market. An attack on them is fraught with a serious crisis in cryptocurrency market and subsequent collapse of all coins without exception.

Our experts note that U.S. regulators have openly declared war on at least Binance itself. In a broader sense, this is a continuation of the fight against stablecoins as an element of opposition to the classical financial system on behalf of the Web 3.0 sphere.

This is a global and extremely important event. It should be taken carefully, and you should read the contents of the documents published by the NYDFS regulator about the ban on continuing to issue BUSD. In fact, it means banning BUSD, but it may be followed by a series of lawsuits.

Our experts are sure that Binance was ready for that. And its management will find a legal and reasonable way out of this situation. Further wide usage of BUSD is out of the question. Perhaps, there will be some alternative or solution. The other major exchanges that issue stablecoins should be prepared for an attack and take some action. In fact, war has been declared on all of them.

Dubai bans coins that interfere with transaction tracking, such as Monero and Zcash. Crypto-Upbotes expert review

Dubai (one of the UAE emirates) has banned the issuance and transactions of anonymous cryptocurrencies. The restriction was imposed by a new set of rules on virtual assets and related activities published by the emirate’s regulator, The Dubai Virtual Assets Regulatory Authority (VARA).

Authorities in various countries have a negative attitude towards anonymous cryptocurrencies and take various measures to restrict their use. Because with the emergence of such coins, the number of fraudulent attacks and financial fraud with cryptocurrencies has increased significantly. Attackers often use these tokens to hide the movement of stolen funds.

A set of rules adopted by the Dubai regulator bans cryptocurrencies that “enhance anonymity,” such as Monero, Dash and Zcash. According to the document, this is a type of virtual asset that prevents transactions from being tracked or records of ownership through public blockchains, and for which the VASP (cryptoservice provider) has no technology or mechanisms to track them or determine ownership of them.

The issuance of anonymity-enhancing cryptocurrencies and all activities related to them are prohibited in the emirate, the new law says.

The new rules also establish mandatory licensing for cryptocurrency companies operating in this region. They detail the procedure for issuing, storing and exchanging cryptocurrencies, cybersecurity standards, and requirements for various activities related to digital assets.

Our experts note that after the introduction of compulsory licensing of cryptocurrency-related activities in Dubai. The regulator has already received hundreds of new license applications. To cope with the flood of applications, VARA plans to quadruple its staff over the next few months.

New trend on the crypto market or how popular AI sphere among investors affects the prices of cryptocurrencies

ChatGPT, an artificial intelligence-based chatbot with a billion-dollar investment from Microsoft. In January of this year, it gained 100 million users, becoming the fastest-growing Internet app in history.

In early 2023, digital currencies and artificial intelligence spawned a single breakthrough in the crypto-asset market. And the domestic tokens of AI-related development projects continue to rise in value.

Justin Sun, head of the Huobi exchange and creator of the Tron (TRX) coin, posted on Twitter the idea of a mechanism to create an “AI-centric decentralized payment system” for ChatGPT.

According to his idea, such an environment would create a decentralized payment system. It would thus be secure, reliable, tamper-proof, censor-proof, and able to support AI. This will build a new decentralized, intelligent financial ecosystem.

Last week, OpenAI, the developer of ChatGPT, announced that it would begin charging a $20 monthly subscription to cover computing costs. Until then, the chatbot, launched in late November, had remained free.

Tokens that associate themselves with AI are rising in value

In general, the coins of blockchain projects, which in one way or another involve artificial intelligence. Since the beginning of this year have been the group of the most successful crypto-assets in terms of investment.

Leader in terms of market capitalization in this category, according to CoinGecko, is SingularityNET project coin (AGIX). In the past week alone, this asset rose in value almost 2.5 times, reaching 45 cents. Although it was trading at 7 cents less than a month ago. The developers of the service position it as “the first decentralized artificial intelligence marketplace”. Which is based on Cardano blockchain.

Tokens from the other most capitalized AI projects also continue to rise. This is happening even despite the short-term decline in Bitcoin and the crypto market as a whole. Fetch.ai (FET), a coin platform with machine learning algorithms, gained more than 65% in the past month. And the OCEAN token, used by the Ocean Protocol “data economy” project, has more than doubled since the beginning of January.

Our experts note that projects with relatively low market capitalization are also included in the growth trends. Due to their lower liquidity, large purchases of their tokens inevitably lead to strong price hikes. Thus, the rate of AIRI token belonging to the barely known aiRight platform increased several times in just one day. Its developers declare the use of AI in the creation of NFT. A similar scenario was observed with the IMGNAI token, created to pay for the creation of anime-style images by a neural network project under the unsophisticated name of Image Generation AI.

Success of AI caused the growth of shares not only in crypto companies

Success at ChatGPT has spurred investor interest in AI-based technologies, not just in the crypto market. Last month, the share price of struggling media company Buzzfeed surged. This came after it announced plans to use artificial intelligence to create content. Similarly, shares of little-known public companies soared after they added the word Blockchain to their name. This was at peak cryptocurrency markets in early 2018 and late 2021.

That said, the hype around AI is borne out by the numbers. In January, JPMorgan Bank conducted its annual survey of professional traders about upcoming trends in electronic trading. It surveyed 835 industry representatives from 60 regions around the world.

AI, according to the survey, outperforms all other major categories. For its 53% citation rate, it far outpaces API integration (14%) and blockchain (12%). Only 8% of respondents confirmed that they trade cryptoassets.

Trading volume on NFT marketplaces is approaching its peak. And news surrounding the largest collections keeps investors hype going

The NFT market is recovering from the disappointing end of 2022. According to a new report from the DappRadar platform, there was a sharp increase in both prices and the number of NFT units sold on marketplaces at the beginning of the year.

There were 9.2 million transactions in January, a 37% increase over December. This was the highest marketplace volume in six months. Trading volume in dollars also rose, reaching $946 million, up 38% from December. And it’s the highest since the market peaked at $1 billion last June.

Importantly, DappRadar excludes data from transactions falling under any suspicion of manipulation in its calculations. The most popular method is so-called “wash trading”. When owner from his own wallets makes fake sales of NFT, artificially inflating its price or imitating the appearance of excitement for a little-known project.

Most popular NFT collections

The Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) collections remain the ” Blue Chip” of NFT market. And the Yuga Labs behind them retains its status as one of the most recognizable brands in the industry. In January, a new collection of NFT company products called Sewer Pass. Which serve as keys to the blockchain game Dookey Dash, accounted for 34.3% of all transactions in January’s marketplace. The passes were issued to owners of images from the BAYC and MAYC collections. And their daily turnover on the secondary market after the launch exceeded $27 million.

Other famous collections also had high-profile infomercials in January. Doodles creators acquired Emmy-nominated animation studio Golden Wolf. And PROOF, the company behind Moonbirds collection, contracted with Hollywood’s United Talent Agency to promote the brand outside of the Web 3.0 sphere in traditional advertising and TV shows. The average image price from Doodles was up 1.82% in January and Moonbirds was up 3.43%, according to NFT Price Floor.

Overall, collections in the top 10 by market capitalization survived the market downturn best. They also had the top 10 sales in January, according to a DappRadar report. They were also the first to recover from last year’s market decline. For example, the Bitwise Blue-Chip NFT Collections Index showed a 28.6% increase in prices from December. However, it is still nearly 65% lower than in January 2021.

Main NFT marketplaces

Marketplace sites oriented toward collectors are gradually wresting market share from those whose focus is primarily on traders and speculators. Blur, which seeks to minimize commissions for art creators. They accounted for 20% of the market for the third month in a row. In terms of turnover, the site is second only to OpenSea, with X2Y2 and Magic Eden in third and fourth place, respectively.

PFP-collections (NFT-collections with profile images) remain the most successful in terms of sales on the platforms. This is due to their high liquidity and hype in social networks. OpenSea remains the largest site in terms of trading volume, ($495 million in January). Platform received about $12.3 million of income from commissions from the trades and placement of NFT by their creators.

Our experts note that despite encouraging crypto market results. NFT platform Coinbase, the second-largest cryptocurrency exchange, announced that it is suspending new collections listings. However, company representatives stressed that this does not mean the closure of its platform.

Coinbase’s NFT platform was not one of the top six trading platforms. And its trading volume, according to Dune Analytics, is only $7.3 million for its entire existence, roughly equivalent to 7% of OpenSea’s January results.

Market trends

In January, sales increased at all significant blockchains. For example, NFT sales on the Ethereum blockchain jumped from nearly $558 million in December to more than $772 million in January. And on Solana – respectively, from $69.5 million to $86 million. The largest NFT collection on Solana blockchain, called “DeGods,” showed a 113% increase in trading volumes in January. This was despite the fact that at the end of December its authors announced plans to migrate to Polygon.

NFT sales on Polygon were up 157% from December, reaching 4.5 million units. This was greatly aided by the launch of Donald Trump’s NFT collection, which has seen sales of $12.1 million since its launch.
As well as popularity of NFT passes to the “Mocaverse” meta universes from Animoca Labs and The Sandbox. Polygon token (MATIC) also had a successful start to 2023, rising 72% to $1.23 since Jan. 1.

Lending platforms that allow you to borrow crypto assets against NFT are also showing growth. NFTfi hit record highs in January with $300 million in turnover, 4,399 loans and 907 active borrowers and lenders. According to Dune Analytics, NFTfi and BendDAO together account for about 70% of the NFT lending market.

Despite the skeptical sentiment of the past six months. NFT market is starting to come to life, although its trading volumes as a whole have clearly correlated with the rise of Bitcoin and other cryptocurrencies.

The department’s proposals were published for public discussion. The new rules are aimed at implementing the UK government’s plans to make Britain a leader in cryptoindustry. Review by Crypto-Upvotes experts.

Treasury Department has submitted draft regulations on crypto-assets for public consultation. The ministry said the proposals are aimed at realizing the government’s “ambitions. Which intends to make the country a leader in the crypto industry and create conditions for work. As well as the development of cryptocompanies in the UK, taking into account the potential risks.

The UK has set a goal to increase London’s global competitiveness in the financial sector, including the cryptocurrency industry. In late November last year, UK Treasury Secretary Andrew Griffith confirmed the government’s desire to make the UK a global hub for crypto-assets and blockchain technology.

The government pledged to introduce a new regulatory regime in April 2022. Public discussions of the document submitted by the Ministry of Finance will last for three months and will be completed by April 30.

The new rules will apply to the issuance of digital currencies and the activities of crypto platforms. As well as including DeFi-services, public offering of assets, conducting transactions, credit products and ways of storing digital currencies.

The document also raises the issue of the need to regulate mining and blockchain validators. The paper’s authors point out that the computing power of UK miners is a very small percentage of global Bitcoin production – only 0.23%. Therefore, there may be no reason to regulate mining. Nevertheless, the government is interested in any opinions on the topic.

Cryptocurrency exchange Binance said it welcomes the UK government’s action because it believes in the need for effective and appropriate regulation for the mass adoption of digital assets.

Our experts talked about the likely scenarios for resuming the business of bankrupt exchange FTX and prospects for its native token. Review by Crypto-Upvotes experts

The bankrupt crypto exchange FTX may reopen. The platform’s new CEO, John Ray, told The Wall Street Journal that he considers that a possibility.

When FTX collapsed in November 2022, triggering the collapse of the crypto market and a series of new problems for major industry players. John Ray then took over the company and began the bankruptcy process, while examining its surviving assets. He says a task force under his leadership is now looking into the possibility of restarting FTX.

When restarting business exchange affected customers can expect to return funds in a larger amount than in the case of the liquidation of its assets or the sale of the platform. This week, FTX lawyers disclosed $3.5 billion in surviving liquid assets of the exchange.

Confidence in this exchange is lost, but how to get it back?

Our experts doubt in reality of FTX relaunch, because its reputation is the worst. But the cryptocurrency market has seen more than that, they say, remembering the relaunch of exchange BTC-e under new brand WEX in 2017. According to our expert, FTX will need new investors to revive its business. Who will help avoid bankruptcy and invest in a marketing campaign to attract users.

A system of incentives for those who have a lot of money on FTX, will also be needed. FTX could issue new tokens corresponding to deposit debt. Which will be gradually redeemed as the exchange has funds.

A similar experience took place on the Bitfinex exchange with its BFX debt tokens. Which were accrued to affected users after a major hacking attack in 2016. Such a move helped Bitfinex fully pay off its debts to customers a year after the incident.

FTX may take a year to two years to recover until all liabilities are paid. FTX relaunch can only happen for the U.S. market, and only with full compliance with local regulators, says our expert.

As Bitfinex experience shows, user trust and trading volumes can be restored, but only partially. Bitfinex was once the largest crypto exchange. But after hacking and the emergence of a major competitor in the form of Binance, this platform has long been not even in the top 3 in global leaders. FTX may indeed be back in the game, but it is unlikely to regain its former credibility. New team of exchange will first of all have to pay debts to users. And prove that it does not use the same scam methods as the old team.

Launch of a new cryptocurrency, attached to Australian dollar exchange rate on Ethereum blockchain, scheduled for mid-2023. Crypto-Upvotes expert review

National Australia Bank (NAB), one of four major Australian banks, has created an AUDN stablecoin on the Ethereum blockchain. It will be attached to the rate of Australian dollar (AUD), according to Australian Financial Review. Banks plan to launch this coin in mid-2023.

The goal of creating AUDN is to allow bank customers to make real-time blockchain-based settlements in Australian dollars, the NAB said. AUDN can also be used for a number of other purposes, including carbon credit trading and repo transactions.

NAB also intends to use AUDN for low-cost international transfers. According to the bank, the technology will avoid using the SWIFT system. And reduce dependence on complex and costly relationships with correspondent banks when sending money abroad.

For at least three months AUDN will not be available to customers. Because while the bank under the supervision of regulators is conducting internal testing. Including transfers between subsidiaries and branches.

AUDN is not the first stablecoin to be pegged to the Australian dollar. 9 months earlier, Australia-New Zealand banking group ANZ Bank issued the A$DC (“A dollar DC”) coin. Also Novatti payment system created the AUDD stablecoin on Stellar blockchain. And Ettle has launched AUDE token on Ethereum and Algorand.

There are also stablecoins linked to Australian dollar exchange rates such as AUDT, XAUD, AUDRamp and TrueAUD. Volumes of these cryptocurrencies are minimal.

Last month, Reserve Bank of Australia Governor Philip Lowe said that regulating stable coins should be a priority and should be treated the same as bank deposits. Our experts note that Australia is also actively developing legislation and introducing technology for other digital assets. For example, in the middle of last year, Australian Gold Coast Mayor Tom Tate proposed accepting cryptocurrency in payment of municipal taxes.

BitMining claims that the presented Litecoin and Dogecoin mining device will be more profitable than its predecessors. Crypto-Upvotes expert review

Shares of BitMining (BTCM) on the New York Stock Exchange (NYSE) rose 106% – from $2.11 to $4.36 per share. After the company announced the release of new LD3 mining devices on Twitter on Jan. 10.

On January 17, BitMining equipment manufacturer announced in its blog that the production of these devices has begun. They will be used to mine Litecoin (LTC) and Dogecoin (DOGE) cryptocurrencies. A total of 5 thousand machines were produced. And some of them are intended for internal use, while others are for sale.

The LD3, which has a capacity of 3.5 kW, will be more profitable than its predecessors. At the same time consuming energy more efficiently, BitMining claims. This is the second ASIC miner (mining device) that the company has developed since acquiring hardware maker Bee Computing last year. The first was the Ethereum Classic (ETC) cryptocurrency mining device last August.

Our experts remind us that BitMining business includes cryptocurrency mining. And managing data centers and manufacturing equipment. The company also owns a large mining pool, BTC.com. Which was hacked late last year. As a result of the hacker attack, the attackers managed to withdraw about $700,000 worth of crypto-assets belonging to customers from this pool. They also stole $2.3 million in cryptocurrency from their own project wallets.

Resorts in Soneva hotel chain can now be paid for in Bitcoin or Ethereum, review by our experts Crypto-Upvotes

Resort chain Soneva hotels in Thailand and the Maldives are now accepting payments in Bitcoin and Ethereum. Cryptocurrency payment provider TripleA and payment platform Pomelo Pay are helping to make payments.

The cryptocurrency payment option will be available at Soneva Fushi hotels. As well as Soneva Jani and Soneva in Aqua in Maldives. And in Soneva Kiri in Thailand. Also for Bitcoin and Ethereum it is now possible to buy real estate in the Maldives at Soneva Villa Ownership.

The resort network can directly book rooms. And pay with cryptocurrency through a secure link. In addition, you can use a QR code to pay in cryptocurrency. Soneva adds that while any payments made using Bitcoin or Ethereum are 100 per cent non-refundable, credits can apply in line with its flexible cancellation policy.

“At Soneva, we have always endeavoured to be a pioneer in the hospitality industry, hence accepting cryptocurrencies as a payment method is another example of enabling our international guests to easily make payments from anywhere in the world,” said Bruce Bromley, chief financial officer, and deputy CEO of Soneva.

Our experts listed factors affecting current cryptocurrency prices. And discussed possible bearish trend change to bullish and possible Bitcoin growth.

Bitcoin price has fallen 70% from its all-time high of $69,000 in November 2021. In 2022, the value of the first cryptocurrency reached a maximum of $47,500 at end of March and has since fallen to current prices around $20,000. Crypto-Upvotes experts listed reasons for price declines in cryptocurrency market and told when a bull market may start.

Bears are winning now.

Now few people are willing to take risks. And the reason for this is the rising cost of funding after a Federal Reserve rate hike. This also says the financial director and head of trading operations ICB Fund Chen Limin. In his opinion, the situation could be exacerbated by a possible decline in the U.S. economy and turbulence in raw materials markets.

Our experts also believe that most likely current bear market will drag on. Growth of cryptocurrency capitalization may start not earlier than 2024, and before that the market will need to go through “self-cleaning from the most unstable crypto projects. Some institutional investors and lenders have already seen problems with these projects because of falling quotes.

According to our experts, the price of bitcoin now tends towards $10,000. But lower values of the price are also possible. Price of $20,000 proved to be difficult to break through for a complete departure below this price now needed a pause. But everything goes to a soon victory of sellers over buyers.

According to our expert, the reason, which initially contributed to the growth of the market – purchases from institutional investors. Now it has become a main driver of price falls. When Federal Reserve decided to raise rates, funds and lenders left the risky cryptocurrency market to free up funds to support more important positions.

The next rise will require a return of capital back into cryptocurrency markets. And that will only happen after the Fed decides to stimulate market activity again. And that is a long way off, because the Fed will want to make sure that inflation is completely beaten and only after that will it start to ease monetary policy again.

Has Bictoin reached bottom? Will bear market end soon and start bull market?

Now there is a major outflow of bitcoin from exchanges. And this indicates that investors see it as a certain area of interest. And the very withdrawal of assets means moving them to long-term storage. Our experts believe that this is one of the signals that this cycle of decline is coming to an end.

Investors do not trust CEX exchanges because of blockages and restrictions on their exchange accounts. CEX exchanges support different sanctions, they have security problems and many other reasons forcing investors to withdraw assets from exchanges to a more secure place, such as cold wallets. This is already a very good signal for the crypto market, our experts believe.

Crypto-Upvotes experts did an analysis and saw that the balances on exchanges have been systematically decreasing since 2020 and are now at 2018 levels. But the number of non-zero balances is increasing all the time. This fact signals that more and more people are “accepting and trusting” Bitcoin, total number of users and wallets is increasing.

Many Whales have been active since mid-June, when the bitcoin price went down to a $20,000 zone , and smaller investors have been active since the $30,000 mark.

Our experts think it is quite likely that we have already reached bottom or are very close to it. And a loosening of Fed policy could positively motivate markets.
Exactly then the recovery period will begin, the Fed rate will be 3.23%-3.5% by the end of the year. And improvement of situation on crypto market and start of a new growth phase is predicted already in 4Q of this year.