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Coinbase Challenges CFTC’s Definition of Gaming in New Prediction Market Rules Proposal

In a bold move, Coinbase has taken a stand against the Commodity Futures Trading Commission (CFTC) by challenging its proposed definition of “gaming” in new rules for prediction markets. The cryptocurrency exchange argues that the CFTC’s current approach could stifle innovation and limit the growth of this emerging sector.

Coinbase’s critique focuses on the CFTC’s broad definition of gaming, which the exchange believes is too restrictive and could unfairly target prediction markets. These markets, which allow participants to bet on the outcomes of future events, are seen by many as a vital part of the evolving digital finance landscape. Coinbase contends that the CFTC’s definition risks misclassifying these markets and imposing unnecessary regulatory hurdles.

The exchange has proposed alternative rules that aim to create a more balanced regulatory framework. Coinbase’s suggestions include clearer guidelines that distinguish between traditional gambling and legitimate prediction markets, thereby fostering a more innovative and competitive environment.

This pushback from Coinbase highlights ongoing tensions between the cryptocurrency industry and regulatory bodies. As digital finance continues to grow, defining and regulating new financial products remains a complex challenge. Coinbase’s stance is likely to spark further debate about how to appropriately classify and regulate prediction markets without stifling their development.

Overall, Coinbase’s challenge reflects broader industry concerns about regulatory overreach and the need for rules that support rather than hinder innovation. As the CFTC reviews the feedback, the outcome will be crucial in shaping the future of prediction markets and their role in the cryptocurrency ecosystem.

Source: Coinbase Takes Aim at CFTC’s Definition of ‘Gaming’ in Proposed Prediction Market Rules

Sonic’s Testnet Continuously Achieving Milestones with 1 Million Active Wallets and 600 Million Transactions

Sonic, a Layer 2 gaming network built on Solana, has achieved significant milestones on its testnet, reporting 1 million monthly active addresses and over 600 million transactions. This surge underscores the platform’s growing influence in the blockchain gaming sector.

The network, distinct from Fantom’s similar Sonic upgrade, operates as the pioneering Solana virtual machine-powered gaming platform. On August 8, Sonic SVM shared details with crypto.news about the testnet’s impressive performance. Sonic Origins, the initial phase, has drawn gamers to titles such as Rage Effect, JogoJogo, and LowLifeForms, fueling these high engagement numbers.

Chris Zhu, co-founder of Sonic SVM, expressed enthusiasm about the platform’s trajectory, stating, “Sonic Origins has seen impressive results in user demand in terms of user engagement and we’re excited to see real implementation, and growth of an organic community around Sonic as we launch as one of the first SVMs on Solana.”

The ongoing testnet phase, Sonic Frontier, builds on this success by introducing more games and partners. It expands the network’s reach by integrating existing Solana protocols, allowing users to explore a wider array of decentralized applications. Additionally, this phase welcomes more validators through HyperGrid’s shared validator network, enhancing transaction finalization on Solana. HyperGrid’s technology supports parallel transaction processing, crucial for scaling and developing new gaming experiences on the blockchain.

Following a successful $12 million Series A funding round in June, Sonic plans to launch its mainnet once the Frontier testnet phase concludes, marking another pivotal step in its development and potential dominance in the Solana ecosystem.

Source: Sonic testnet sees 1m active wallets and 600m transactions

New Tonkeeper App Enhancing Crypto Asset Security, Preventing Hacks

Tonkeeper, a non-custodial wallet provider for the Ton blockchain, is introducing the Signer application, a new security tool designed to protect users’ crypto assets from hacks, scams, and mistaken transactions.

The launch of the new Ton app aims to address significant risks associated with private key management, a concern heightened by recent security breaches. By securely storing and operating private keys through the Signer app, Tonkeeper intends to mitigate the risk of exploits seen in incidents like the $10 million Li.Fi drain.

Daniel Cawrey, chief strategy officer at Tonkeeper, explained in a written Q&A with Cointelegraph that app users will benefit from “an extra layer of security to help protect against theft, scams or mistaken transactions.”

According to a press release shared with Cointelegraph, the Signer app will allow Tonkeeper users to manage their private keys more securely. Cawrey noted, “since private keys are encrypted in Signer and held outside of the wallet, funds are significantly more difficult to steal or for mistaken transactions to accidentally be made.”

“We don’t want our new entrants or power users – anyone really – to fall victim to scams or private key accidents that a lot of us early adopters did,” Cawrey emphasized.

The new Tonkeeper app provides users with two operational modes. The convenience mode allows users to pair Signer with the Tonkeeper wallet app on a single device, facilitating easier access for transaction signing. Alternatively, the maximum security mode enables users to use a separate, offline device “air-gapped” without internet access to sign QR-code transactions.

Regarding newcomers’ safety in the crypto space, Cawrey advised that new users should “ensure they store their seed phrases in a secure location where they won’t be lost or forgotten.” He added, “Even the most experienced and sophisticated of users in this space have made the mistake of haphazardly storing or losing private keys or signing bad transactions.”

In addition to the Signer app, on July 25, the Ton Core team launched its W5 smart wallet standard in collaboration with Tonkeeper. This upgrade facilitates gasless transactions on The Open Network (TON) blockchain, allowing users to use Tether (USDT) for gas fees for USDT transfers and Notcoin for gas fees when transferring Notcoin (NOT).

Source: New Tonkeeper App Enhancing Crypto Asset Security, Preventing Hacks

FTX and Alameda Ordered to Pay $12.7 Billion to Creditors in Landmark Ruling

In a major development in the FTX bankruptcy case, a U.S. judge has ordered FTX and its affiliated trading firm, Alameda Research, to pay a staggering $12.7 billion to creditors. This ruling marks a significant step in resolving the fallout from one of the most high-profile cryptocurrency failures in recent history.

The court’s decision follows extensive legal proceedings to address the financial chaos caused by FTX’s collapse in late 2022. The firm, once a leading player in the cryptocurrency exchange market, faced a dramatic downfall due to alleged mismanagement and fraudulent activities. Alameda Research, a trading firm closely linked to FTX, was also implicated in the scandal, complicating the recovery process for affected stakeholders.

The $12.7 billion judgment is aimed at compensating creditors who suffered financial losses due to the insolvency of FTX. This amount reflects the scale of the damage and the complex nature of the claims being settled. The court’s ruling is expected to provide some relief to creditors who have been awaiting compensation since the exchange’s collapse.

This development underscores the broader implications of FTX’s downfall on the cryptocurrency industry, highlighting the need for greater regulatory oversight and transparency in the crypto sector. As FTX and Alameda work to comply with the court’s order, the industry will be watching closely to see how the resolution of this case might influence future legal and regulatory frameworks for cryptocurrency firms.

Overall, the ruling represents a critical moment in the ongoing saga of FTX’s collapse and serves as a reminder of the potential risks involved in the cryptocurrency market.

Source: FTX, Alameda Ordered to Pay $12.7B to Creditors by U.S. Judge

Fairshake Spending $25 Million on Pro-Crypto Congressional Candidates

Digital asset-focused super PAC Fairshake is committing $25 million to support 18 pro-crypto candidates—nine Republicans and nine Democrats—vying for seats in the U.S. House of Representatives. The initiative spans multiple states, including Alaska, California, and New York, with approximately $1 million allocated to each candidate’s campaign.

Fairshake announced this significant investment in a statement on Thursday, highlighting its dedication to bipartisan support for leaders committed to responsible crypto regulation. “We will continue to deploy our resources in support of leaders on both sides of the aisle and in both houses who are committed to getting things done and working with the industry to pass responsible regulation,” the statement read.

The candidates benefiting from this funding include Republicans Zach Nunn, David Valadao, and Juan Ciscomani, and Democrats Nikki Budzinski and Tom Suozzi. The complete list of Fairshake-backed candidates features:

Democrats:

  • Don Davis (NC-01)
  • Yadira Caraveo (CO-08)
  • Steven Horsford (NV-04)
  • Mary Peltola (AK-AL)
  • Pat Ryan (NY-18)
  • Nikki Budzinski (IL-13)
  • Tom Suozzi (NY-03)
  • Angie Craig (MN-02)
  • Eric Sorensen (IL-17)

Republicans:

  • David Valadao (CA-22)
  • Mike Garcia (CA-27)
  • Juan Ciscomani (AZ-06)
  • Lori Chavez-DeRemer (OR-05)
  • Zach Nunn (IA-03)
  • Michelle Steel (CA-45)
  • Young Kim (CA-40)
  • Monica De La Cruz (TX-15)
  • Bryan Steil (WI-01)

This $25 million expenditure marks the first tranche of funds Fairshake plans to invest in pro-crypto candidates ahead of the 2024 U.S. elections. As of August 6, the super PAC has amassed an impressive $203 million for the upcoming election cycle, according to OpenSecrets, a campaign finance watchdog.

Fairshake’s financial influence is already evident. Earlier this summer, 33 out of 35 Fairshake-backed candidates triumphed in their respective House and Senate primary races, as reported by CNBC. The super PAC’s strategic investment aims to bolster candidates who support the burgeoning digital asset industry and advocate for prudent regulatory measures.

Source : Pro-Crypto Super PAC Fairshake Plans to Spend $25 Million on These Congressional Candidates

Bitcoin’s Death Cross and Bank of Japan’s Rate Shift: What’s Ahead?

Bitcoin is at a critical juncture, facing a potential “death cross,” a technical signal that could spell trouble for the cryptocurrency’s price trajectory. A death cross occurs when a short-term moving average falls below a long-term moving average, often indicating bearish market conditions. Currently, Bitcoin’s short-term moving average is dangerously close to crossing below its long-term counterpart, which has traders and investors on edge.

Adding to the complexity is the recent shift in global monetary policy, specifically the Bank of Japan’s decision to ease concerns over interest rates. Traditionally, lower interest rates can boost asset prices by making borrowing cheaper, which might help offset some of the bearish pressure on Bitcoin. However, the impact of this monetary easing on cryptocurrencies remains uncertain.

The convergence of these factors has created a volatile environment for Bitcoin. On one hand, the death cross could signal a prolonged downturn, trapping bearish traders who have bet on further declines. On the other hand, the Bank of Japan’s rate adjustments might provide some unexpected relief by injecting liquidity into the financial system, potentially benefiting Bitcoin.

For now, Bitcoin investors must navigate a landscape fraught with both technical indicators and macroeconomic shifts. While the death cross is a concerning sign, the broader economic environment, influenced by global central banks, will play a crucial role in determining Bitcoin’s short-term fate. As always, investors should stay informed and cautious, balancing technical signals with broader market developments to make well-informed decisions.

This situation underscores the intricate interplay between technical analysis and global economic policy, highlighting the need for a nuanced approach to cryptocurrency investing in these unpredictable times.

Source: Bitcoin’s Impending ‘Death Cross’ May Trap Bears as Bank of Japan Eases Rate Concerns

Binance Takes Legal Action Against India’s $86 Million Tax Notice

Binance, one of the world’s largest cryptocurrency exchanges, has recently contested a hefty $86 million tax show-cause notice issued by Indian authorities. This development marks a significant escalation in the ongoing legal and regulatory challenges Binance faces in India.

The tax notice, reportedly issued by the Indian Income Tax Department, alleges that Binance has evaded taxes related to cryptocurrency transactions. In response, Binance has challenged the notice, arguing that it is not liable for the purported tax obligations and that the claims are based on incorrect interpretations of tax laws and regulations. The exchange’s legal team contends that the notice fails to account for the complexities of cryptocurrency transactions and their treatment under Indian tax law.

This move by Binance is part of a broader struggle between the cryptocurrency industry and regulatory bodies across various jurisdictions. In India, the regulatory environment for cryptocurrencies has been particularly stringent, with the government and financial authorities scrutinizing crypto businesses more closely. The outcome of this dispute could have significant implications for Binance and the wider cryptocurrency market in India.

Binance’s challenge to the tax notice highlights the increasing tension between global crypto exchanges and national regulators. As the legal battle unfolds, industry stakeholders and regulators alike will be closely watched. The case underscores the need for clearer regulatory frameworks to address the unique nature of digital assets and to facilitate more effective compliance and enforcement.

Overall, Binance’s decision to contest the tax notice reflects its commitment to defending its operations and clarifying the regulatory landscape for cryptocurrencies in India. As the situation develops, it will be important for both parties to navigate these complex issues with transparency and adherence to legal standards.

Source: Binance Has Challenged India’s $86M Tax Showcause Notice: Source

UK Proposing Property Category for Crypto Assets, SEC Facing Lawsuit Over NFTs

The Law Commission of England and Wales has recommended that the UK government classify all crypto assets as a new form of personal property, addressing current legal gaps. Meanwhile, the SEC is being sued over the regulatory status of NFTs.

On July 30, the Law Commission of England and Wales published its final report urging the UK government to create a distinct category for crypto assets. The report emphasized the current inadequacies in legal categorization and its implications for crypto assets. As an independent body focused on law reforms, the commission highlighted the need for legal “flexibility” to recognize and protect digital assets as a unique form of personal property.

“The recognition of a distinct category of personal property” is necessary, according to the commission, to properly address and safeguard the interests associated with digital assets.

In a related legal development, FTX class action lawyers have moved to block Sullivan & Cromwell’s (S&C) dismissal motion. On July 29, these lawyers submitted a motion alleging that S&C exceeded standard legal practices by facilitating the fraudulent activities of the now-defunct cryptocurrency exchange, FTX. Court documents state that S&C lawyers created “misleading strategies that furthered FTX’s misconduct.” The lawsuit seeks damages for aiding and abetting fraud, fiduciary breaches, and civil conspiracy.

Additionally, on August 2, two U.S. Senators introduced a bill aimed at expanding the Secret Service’s powers to combat crypto-related criminal activity. The “Combatting Money Laundering in Cyber Crime Act of 2024” was introduced by Nevada-based Catherine Cortez Masto and Iowa-based Charles Grassley. If passed, the bill would allow the Secret Service to investigate crypto transactions by unlicensed money-transmitting businesses and potential fraud against U.S. financial institutions.

In another significant legal case, two artists filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) on July 29. The lawsuit seeks clarity on whether NFTs fall under the SEC’s regulatory authority. The plaintiffs’ attorneys are questioning the SEC on the necessity of registering NFT art before sales to the public and whether public disclosures regarding “risks” are required. This lawsuit aims to determine the exact regulatory requirements for NFT creators and sellers.

These developments highlight the ongoing legal challenges and regulatory uncertainties in the rapidly evolving landscape of digital assets and cryptocurrencies

Source: UK Proposing Property Category for Crypto Assets, SEC Facing Lawsuit Over NFTs

Is a Black Swan Looming as Bitcoin Dips Below $50,000?

In a significant market downturn, Bitcoin plummeted below $50,000, marking its lowest point in several months amidst a broader global stock market crash. From August 4 to 5, Ethereum also took a steep dive to $2,200, with other top cryptocurrencies experiencing similar declines.

The crypto market’s sharp drop led to over $1 billion in liquidations of future contracts in just one day, primarily affecting long positions. The current market crash is linked to a variety of factors including a strong correlation with the traditional stock markets, which have been declining due to geopolitical tensions and recent policy changes.

Recent economic decisions have intensified market instability. The Bank of Japan’s abrupt policy shift and the U.S. Federal Reserve’s refusal to lower interest rates have contributed to the uncertainty. Additionally, the market dynamics were influenced by significant actions taken by market players such as Jump Crypto. According to on-chain analysts, Jump Crypto’s recent large-scale Ethereum transactions have been a key driver in the cryptocurrency’s sharp decline.

Data from Spot On Chain indicate that substantial amounts of Ethereum were moved from wallets associated with Jump Trading to exchanges starting from late July, around the time of the Ethereum ETF’s launch in the U.S. On August 4, another 17,576 ETH worth $46.78 million were transferred from Jump Trading, totaling over 104,000 ETH moved.

This tumultuous period has reignited discussions about potential “black swan” events—unexpected developments with drastic market impacts. Such scenarios are not new to the cryptocurrency sector, which has faced similar events in the past with significant consequences. As the industry navigates these challenging times, experts like Peter Schiff from Euro Pacific Capital predict further declines coinciding with the U.S. market’s opening, while analysts like DeFi Mochi attribute Ethereum’s drop to extensive sell-offs by key investment funds. As market participants brace for potential further upheavals, the focus is on strategic responses to these high-impact market shifts.

Source: Bitcoin falls below $50,000: Is a black swan coming to the crypto market?

 Crypto Whales Positioning for Next Altcoin Rally as DeFi Rebounds

Crypto whales are gearing up for the next “altcoin season,” while DeFi loans are experiencing a resurgence, reaching levels last seen in 2022. 

In this week’s edition of Finance Redefined, we delve into significant developments shaping the decentralized finance (DeFi) landscape. Large crypto holders, or whales, are reportedly preparing for a potential altcoin rally by establishing “strong buy walls” for future altcoin demand.

CryptoQuant founder Ki Young Ju has noted that whales are anticipating the next altcoin rally. His analysis focuses on the one-year cumulative buy/sell quote volume difference for altcoins, a metric that tracks the disparity between buy and sell limit orders over a year. Ju explained, “Whales are preparing for the next altcoin rally,” highlighting that the rising level of this metric indicates an increasing number of buy-limit orders among large investors and institutions, signifying strong future demand for altcoins.

In tandem, the DeFi space is witnessing a revival, with active DeFi loans rising above $13.3 billion, a level not seen since early 2022. According to Token Terminal, “DeFi is waking up again,” as key metrics such as active loans and total value locked (TVL) are on the rise since their recent lows in 2023.

Meanwhile, decentralized finance protocol Morpho Labs has secured $50 million in funding led by Ribbit Capital to support its new Morpho Blue, a permissionless lending protocol. This round included participation from a16z Crypto, Coinbase Ventures, Variant, Pantera Capital, and Kraken Ventures. Morpho Labs had previously raised $23.6 million across multiple funding rounds.

However, not all news is positive. The Terra blockchain announced a temporary halt in operations due to a suspected exploit, resulting in the theft of millions in various cryptocurrencies. Terra aims to apply an emergency patch to resolve the issue.

Additionally, centralized finance (CeFi) entities remain the largest target for cryptocurrency hackers in 2024, with over 70% of hacked funds lost to CeFi, according to Deddy Lavid, CEO of Web3 security firm Cyvers.

As the majority of the top 100 cryptocurrencies by market cap ended the week in the red, the crypto market continues to navigate through volatility, awaiting clearer signals for the next bull run.

Source: Crypto Whales Positioning for Next Altcoin Rally as DeFi Rebounds