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Following Fall of FTX & Silvergate, The Crypto Market Needs Sensible Regulation

redfly.eth

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The FTX collapse guarantees that crypto regulation will be on the US legislative agenda for 2023 — at long last. In total, six bills were introduced in 2022, focusing on a mix of aspects connected to the crypto industry for investor protection or compliance. 

As the SEC and the CFTC are jockeying for positions, the number of voices in the room is going to increase. Some don’t want any sort of regulation to exist, but others people in the industry and anti-crypto lawmakers think regulating crypto will legitimize its existence. 

The time is right for crypto custody and all other types of platforms to be supervised with certain regulations. The US has the strongest financial market in the world, and that is due in large part to regulation. Regulation will make crypto markets stronger.

No regulatory regime administering traditional finance is created in one fell swoop. Along with the system, the regime also evolves to become better, inclusive, and stronger according to the needs. Disasters like FTX become a teaching lesson for the rulemakers to improve the regulatory system. 

The digital asset industry is still in its infancy, but problems like FTX are familiar. There have been previous such events at QuadrigaCX and at Mt. Gox. To prevent these types of massive losses that also deteriorate the market trust, regulatory oversight must begin. Here are five modest, sensible steps that could be taken now that don’t even require much crypto knowledge.

  • Stablecoin Reserves

As stablecoins are intended to be less volatile, they play an important role in the digital asset ecosystem. Moreover, they are more practical for everyday transactions. However, these stablecoins have not always been so stable.

These stablecoins are intended to be exchangeable for the underlying asset at a 1:1 ratio. However, stablecoin issuers are not required by law to maintain reserves that are equivalent to the available supply. There is a chance that holders will rush to redeem their coins when a stablecoin loses its peg, creating a situation that resembles a bank run.

That’s exactly what happened with TerraUSD in May of 2022. Recently, the US SEC has found another strong point of concern against the platform, making the former stronger. It relied on trading based on a mint and burn algorithm linked to the supply of LUNA, a cryptocurrency issued by Terra. Ironically, Sam Bankman-Fried is now under investigation for manipulating the market for TerraUSD, whose collapse touched off the industry crisis that ultimately exposed his other misdeeds at FTX.

Yet, none of that is necessary to know in order to determine whether a stablecoin is backed by a dollar. The quantity of circulating stablecoins is equal to the number of dollars in reserve. Stablecoin issuers should be required to keep 1:1 reserves at FDIC-insured banks.

The birth of FDIC insurance came after the bank failures during the early 1800s. Quarterly audits of reserves and real-time reporting on mint and burn activity should be mandatory. We also need to implement safety and soundness controls with a diversity of banks proportional to reserve size.

  • Separate Trading And Custody

Customers’ requirement to maintain their money with the exchange under the current market structure is fundamentally wrong. It is not necessary to be an expert in cryptography to understand why that is a bad idea. Imagine that the Nasdaq asked the SEC to serve as its own custodian, is it possible?

The issue with counterparty risk persists even after being entirely honest. Many of these crypto custody platforms and exchanges also engage in different kinds of lending. They engage in market-making and arbitrage. As they continue to trade and hedge on other exchanges, identifying the counterparty risk on the exchange is impossible. The reason being it’s the sum of the exchange’s risk plus the risk of whatever other markets they’re participating in that plays an important role in risk assessment. 

If there’s anything one should learn from the FTX collapse, it’s that assets should be stored until required for trading by external, qualified, regulated, and insured custodians. This creates a check-and-balance for verifying reserve assets under any exchange’s control.

The public may have learned sooner that FTX was in a crisis in a fractional reserve position if trading and custody had been kept separate. After the bankruptcy, it would have been simpler to stop asset theft and hacking.

  • Require Digital Asset Exchanges To Be 100% Digital

Discontinuing direct trading of digital assets with fiat or off-chain assets will make all exchanges on-chain auditable. As a result, it will enable Proof-of-Reserves that actually work. At present, Proof of Reserves does bring some level of transparency, but they are not a foolproof solution for separating who’s solvent and who’s not, for two reasons.

  1. No one can practice it for reserves on fiat because they cannot be represented in a digital way. 
  2. It’s not possible to give proof of non-liabilities, which is really the thing that matters most. FTX combined fiat, and digital reserve components and their liabilities far outstripped their reserves. 

With pure digital exchanges representing fiat digitally as a regulated stablecoin, Proof of Reserves for everything can become a reality. The last thing to be solved is the liabilities component. 

A reasonably solid and effective system with compliance can be built by fixing settlement and clearing to be entirely digital. Exchanges are currently attempting to establish a business in a hybrid world because they have no other option. So, as a transition, it is preferable to package fiat and securities in digital form. The ability to work in a digital environment will be significantly improved after the archaic wrappers have been removed.

  • Regulate Digital Asset Exchanges’ Use Of Omnibus Wallets

In an omnibus wallet, the funds of multiple clients are stored under a single address. The benefit is that it makes key management easier for the custodian and also makes it easier to enable efficient off-chain transactions.

However, one of the main limitations is that individual customers no longer have visibility into the transactions. Neither do they have any information on the counterparty risk. It’s also unclear what happens to each customer’s funds in the event of bankruptcy.

Omnibus wallets are only acceptable when the qualified crypto custody platform is aware of each of the exchange’s clients in the omnibus pool and assets are segregated in such a way as to provide bankruptcy protection to each client. The custodian must also participate in AML/KYC compliance of exchange clients.

  • Define Securities For The Digital Era

The SEC is still using an ancient definition of securities which was developed in the 1940s. The result is it leads to underpinning their enforcement efforts. Builders in crypto have honest questions about how the rule applies to them, and they deserve answers.

Can the SEC not update their definition and upgrade the meaning of securities while taking into account the crypto era? How hard would it be for the SEC to provide an updated definition, detailed guidance, and sensible grandfathering policies? Having that clarity would go a long way toward providing protection to innovators and investors alike.

They should listen more to Commissioner @HesterPeirce, who has an open opinion that the agency should not be leading with enforcement. Enforcement is clearly in their purview, but there’s an opportunity to make the enforcement load a lot lighter by providing appropriate guidance, to begin with.

What occurred at FTX was a common form of financial fraud that has been practiced for ages. The sole connection between cryptocurrency and blockchain technology is that a lack of regulation created a level playing field for dishonest players.

Conclusion

At present, the crypto community understands SEC’s Custody Rule. These rules are meant to safeguard the crypto industry. As per this rule, the crypto custody and other types of platforms are required to separate custody from trading. This move is hailed as a positive aspect of the crypto industry. 

The crypto industry is in dire need of regulatory administration aimed at preventing catastrophic investor losses. Designers and builders are more than capable of architecting a better system to meet the requirements of regulators. Once people can’t be rug pulled or defrauded, the next discussion will be about more nuanced issues and building something more comprehensive.

It will take a collective effort to get through this phase. FTX isn’t the first exchange to run into trouble; it’s just the biggest. It is easy to compartmentalize it as one guy who was a charlatan and go back to business as usual. However, doing so will be like setting the industry up for the next failure. To come out stronger and better, it is essential to use this opportunity to take a few simple steps in the direction to lead the industry into a new direction in order to thrive.

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Press Release

Elevating Possibilities: The Countdown for WBS Dubai Begins!

Crypto Chain Wire

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Mark your calendars for an unparalleled gathering of blockchain and web3 pioneers as the 29th World Blockchain Summit, organized by Trescon and co-hosted by Sun Minimeal, is set to take the stage in Dubai. Scheduled for April 22-23, 2024, at the iconic JW Marriott Hotel Marina, this summit promises to be a cornerstone event, spotlighting the UAE’s progressive embrace of web3 technology and its vision for a future shaped by digital innovation.

The World Blockchain Summit has established itself as a seminal series, bringing together a global cadre of blockchain enthusiasts, innovators, visionaries, thought leaders, and policymakers. This forum serves as a critical platform for deliberating on the integration and implications of blockchain technology across vital sectors, reflecting the global economy’s evolving digital landscape.

Amidst Dubai’s transition towards a digital-first economy, bolstered by strategic government initiatives and a burgeoning digital infrastructure, the city emerges as a global beacon for blockchain and web3 innovation. The inauguration of the Dubai AI & Web3 Campus by DIFC, coupled with the establishment of the Virtual Assets Regulatory Authority (VARA) in Dubai, underscores the region’s commitment to fostering a dynamic digital ecosystem, attracting investors and innovators worldwide.

The upcoming summit anticipates over 2,000 web3 decision-makers, 300+ investors, and more than 100 distinguished speakers. A highlight of the event is the regional finale of the Startup World Cup, orchestrated by the globally renowned venture capital firm, Pegasus Ventures. This competition offers startups a gateway to global recognition and a shot at securing US$1 million in funding at the global finals in San Francisco.

#WBSDubai will showcase a series of compelling keynote addresses, use-case presentations by leading blockchain experts, and thought-provoking panel discussions. The agenda will cover pivotal topics such as the role of Central Bank Digital Currencies (CBDCs), the potential of blockchain to enhance ESG impacts, and the importance of interoperability within the blockchain ecosystem and more.

Some of the notable speakers attending the event include:

  • Pascal Gauthier, Chairman & CEO, Ledger
  • Roham Gharegozlou, Co-founder and CEO, Dapper Labs
  • George Gvazava, Chief Crypto Officer, Bank of Georgia
  • Miriam Kiwan, Vice President of MEA, the issuer of leading regulated stablecoin, USDC., Circle
  • Yosuke Yoshida, Co-CEO of EMURGO Middle East & Africa CEO of EMURGO Kepple Ventures, EMURGO
  • Bandar Altunisi, Head of Development for Binance in Saudi Arabia Head of Institutional Relationships for Binance Dubai (FZE), Binance
  • Stefan Kimmel, CEO, M2
  • Richard Muirhead, Managing Partner, Fabric Ventures

Sharing their enthusiasm about the event, George Gvazava, Chief Crypto Officer, Bank of Georgia said,” In the realm of innovation, the World Blockchain Summit serves not only as a gathering of minds but as a crucible, where ideas are forged into the connections, use-cases and technologies of tomorrow.”

“As Dubai spearheads the UAE’s digital transformation, blockchain technology plays a central role. Trescon is at the nexus, linking pioneering entrepreneurs with elite global investors. The World Blockchain Summit stands as the definitive forum for revealing the forefront of blockchain innovation and insights,” states Sharath Ravi, CMO, Trescon.

Hurry, registration for the World Blockchain Summit in Dubai is still available! Reserve your spot now to be part of one of the year’s most anticipated blockchain and cryptocurrency gatherings. Act fast to seize this exclusive chance to participate and secure your tickets and sponsorship today!!

The 29th edition of the World Blockchain Summit is supported by:

Strategic Partners – DIFC Innovation Hub , Dubai AI & Web3 Campus

Co-Host – Sun Minimeal

After Party Sponsor – Floxypay

Gold Sponsors – Cardano Foundation ,  Medifakt, Crypto2Cash, Anbruggen, Bitflex

Silver Sponsors- Kreation, Coingames, Reat Capital , ACM Finance , Website AI

Lanyard  Sponsor- M2

Badge Sponsor – Ledn

Lunch Sponsor – Payper

Bronze Sponsor- BitGo, M2 ,  Block Convey, Genesis Digital Assets , Hedge , Golfin

Pitch Partners – Reat Capital , soukcola , MeAI , Zherpa , FidesInnova Labs

Exhibitors- DSQ Solutions ,  Reltime, Qoneqt , C# Corner , Islamic Dinar

Official Accommodation Partner- HotelPlanner

Ecosystem Partner – Entrepreneur Media

Business Broadcast Partner – CNBC Arabia

Official Newspaper Partner- The Fintech Times

Official Digital PR Distribution Partner – ZEX PR Wire

ABM Partner- Demandify

Association Partners- Crypto and Blockchain Association, Blockchain Council, Asia Web3 Alliance Japan, European Blockchain Association

Prime Media Partner- Demandteq

Community Partner – Hyperledger Foundation

About World Blockchain Summit (WBS)

World Blockchain Summit (WBS) is an event by Trescon that supports the growth of the blockchain, crypto and Web3 ecosystem globally.

WBS is the world’s longest-running blockchain, crypto, and web 3-focused summit series. Since our inception in 2017, we have hosted more than 20 editions in 11 countries as we strived to create the ultimate networking and deal flow platform for the Web3 ecosystem. Each edition brings together global leaders and emerging startups in the space, including investors, developers, IT leaders, entrepreneurs, government authorities, and others.

To book your tickets, visit: https://www.worldblockchainsummit.com/dxb-apr-24?utm_source=media%20PR%20rd3&utm_medium=ZexPR#Ticket-booking-sections

Contact

Shadi Dawi

Director, Public Relations & Partnerships – MENA, Trescon

shadi@tresconglobal.com

+971 55 498 4989

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Press Release

Big Red LLC Partners with Cornell University’s Entrepreneurship at Cornell Program, Paving the Way for Innovation and Collaboration

Team Bitcoin Daily

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Big Red LLC, a pioneering blockchain and cryptocurrency project, proudly announces its sponsorship partnership with Cornell University’s Entrepreneurship at Cornell program. This landmark collaboration signifies Big Red LLC’s commitment to fostering innovation and education within the blockchain space while establishing the project as a trailblazer in the crypto industry.

Named after the iconic Cornell University mascot and inspired by the university’s rich history of academic excellence and innovation, Big Red LLC represents the fusion of tradition and innovation. The project’s moniker pays homage to Cornell’s longstanding legacy and its influential role in shaping the world of blockchain technology.

As the first crypto sponsor of the Entrepreneurship at Cornell program, Big Red LLC embarks on a journey of mutual benefit, bringing together academia and industry to drive groundbreaking initiatives. This partnership opens doors to unprecedented opportunities, particularly for students, for innovation, education, and collaboration within the blockchain space.

“We are thrilled to be partnering with Cornell University’s Entrepreneurship program,” says Christopher Gilles Fourquier, Lead Developer of Big Red LLC. “This collaboration opens doors to unprecedented opportunities for innovation, education, and collaboration within the blockchain space. As the first crypto sponsor of Entrepreneurship at Cornell, we are proud to pioneer this initiative and set a new standard for industry-academic partnerships.”

The corporate sponsorship extends beyond financial support, as two esteemed members of the Big Red LLC team, Frances Regina (Head of Growth and Partnerships) and Christopher Gilles Fourquier (Lead Developer), will be listed on the advisory council of the Entrepreneurship at Cornell program. This prestigious honor places Big Red LLC at the forefront of academic-industry collaboration, as these individuals join an elite group of advisors guiding the program’s initiatives and participating in the entrepreneurship ecosystem at Cornell.

“This is a significant achievement for our team,” says Frances Regina, Head of Growth and Partnerships at Big Red LLC. “Being listed on the advisory council of Cornell University’s Entrepreneurship program is a testament to our expertise and dedication to driving innovation in the blockchain space. We look forward to leveraging this partnership to create meaningful impact and foster the next generation of blockchain entrepreneurs.”

The sponsorship opens doors to a plethora of opportunities for Big Red LLC within the Cornell community. Big Red LLC will be prominently featured as a corporate sponsor at Entrepreneurship at Cornell event, providing a platform to showcase its innovative projects and initiatives to a diverse audience of students, alumni and academics.

Additionally, discussions are underway for Big Red LLC to host its own event with Entrepreneurship at Cornell, focusing on blockchain technology and the future of Web 3.0. This event will serve as an invaluable opportunity to engage with students and faculty at Cornell.

Furthermore, Entrepreneurship at Cornell hopes to host a webinar in collaboration with Big Red LLC, offering insights into the innovative developments within the blockchain industry. This webinar will provide a platform to educate and engage with audiences about the transformative potential of blockchain technology.

“The partnership with Entrepreneurship at Cornell represents a significant milestone for Big Red LLC,” concludes the Blockchain Brothers, one of the strategic advisors for Big Red LLC. “Cornell’s longstanding legacy of academic excellence and innovation aligns perfectly with our vision for long-term domination in the blockchain space. We hope to capitalize on the sponsorship with multiple possibilities for collaboration and growth.” 

Zachary Shulman, Director of the Entrepreneurship at Cornell program, conveyed enthusiasm regarding the partnership, articulating, “Given Cornell’s leadership in blockchain research, it is fantastic to cement this inaugural crypto sponsorship with Big Red LLC. I am very excited to get Big Red integrated into our eship ecosystem, hopefully to the direct benefit of our students!”

The sponsorship with the Entrepreneurship at Cornell program provides credibility for Big Red LLC and also positions the project to bridge the gap between academia and industry. This partnership marks a significant milestone in the journey of Big Red LLC and reaffirms its commitment to pushing the boundaries of innovation in the blockchain space.

Twitter: https://twitter.com/BigRed_TD  

Website: https://www.thebigredcrypto.com  

Contract Address for Big Red $TD: 0x87bbfc9dcb66caa8ce7582a3f17b60a25cd8a248 (AVAX)

For more information on Cornell University’s Entrepreneurship, visit website: https://eship.cornell.edu/

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Press Release

BitDelta’s Bitcoin Halving Mega Giveaway

Crypto Chain Wire

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Excitement is building in the crypto community as the Bitcoin Halving approaches, and BitDelta is throwing a massive giveaway to celebrate!

Campaign Period: April 6th, 2024, 09:00 UTC – April 20th, 2024, 23:59 UTC

Get your chance to win your share of USD 100,000 by following these simple steps:

  • Download the BitDelta App or visit bitdelta.com
  • Sign up on the platform using this link
  • Complete your profile information
  • Make at least one trade on any tokens listed on the BitDelta spot exchange during the campaign period

Make more trades and increase your chances of being a winner with BitDelta!

We suggest engaging in multiple trades and maintaining a minimum balance in your spot wallet to boost your odds of claiming victory.

At the end of the campaign, three fortunate winners will be randomly selected:

  1. 1st Place: USD 65,000
  2. 2nd Place: USD 25,000
  3. 3rd Place: USD 10,000  

Important Note: Terms and conditions apply. $100,000 giveaway is applicable for eligible participants during the 2 Week Trading Period only.  

For full details, please read the T&C mentioned below:

  • BitDelta will disqualify any entry from users who do not meet the eligibility requirements as solely determined by BitDelta. 
  • BitDelta reserves the right to cancel the campaign or amend the campaign mechanics or rules at any time at our sole discretion. 
  • In addition to the following rules, please refer to the App Terms & Conditions and Privacy Notice.
  • To participate in the campaign KYC is mandatory and if any event of KYC and compliance issues get noticed by BitDelta, then BitDelta reserves the right to disqualify the user from the campaign. 
  • BitDelta reserves the right to cancel, suspend, or amend the campaign mechanics or rules at any time at our sole discretion without prior notice to you. 
  • In the event of any dispute BitDelta reserves the right to make all final decisions regarding the campaign. 
  • Nothing contained herein shall be construed to be financial advice.  Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by BitDelta to invest, buy or sell digital assets.   

Purchasing cryptocurrencies and digital assets involves a high degree of risk and there is always the possibility of loss, including the loss of all or a substantial amount of your initial purchase price.   

Please seek professional advice before making any financial, investment, or trading decisions. 

Sign Up Now – Click Here

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