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Within the cryptocurrency investment space, there has been much debate and conjecture around the possibility of an Ethereum Spot Exchange-Traded Funds (ETFs). However, in light of ongoing regulatory obstacles, senior Bloomberg Intelligence analyst Eric Balchunas has offered a gloomy view of the products, noting that the firm is now more pessimistic than ever about the likelihood of the funds being approved by the United States Securities and Exchange Commission (SEC).

Ethereum Spot ETF Pessimism Prevails

Eric Balchunas’ insights came in response to the Chief Executive Officer (CEO) of Fizen Leo Vu’s post regarding Grayscale’s CEO Michael Sonneshein’s optimism toward approval of Ethereum spot ETFs. According to Michael, he is very confident that the SEC will grant the company’s request to convert its Ethereum trust into a spot ETF.

Responding to the post, Balchunas expressed his displeasure with the CEO’s claims, highlighting his disagreement and Bloomberg’s constant pessimism toward the products. While Balchunas believes that the funds might be authorized in the foreseeable future, he thinks it will not happen within a year. However, the election in November and what Grayscale says about denial are significant factors that could trigger a shift in the forecast.

Balchunas further noted that Sonneshein mentioned that Grayscale decided to withdraw its ETH futures ETF filed under the Securities Act of 1933 because it wanted to concentrate more on its Spot ETF. Meanwhile, the major purpose of filing the ETH futures under the 1933 Act, as opposed to the 1940 Act, was to create a legal opening.

The expert thinks a potential reason why Grayscale made the move might be because they do not want to pay the whole cost once more to give Blackrock a massive ETF progress, as seen following the approval of the Bitcoin Spot ETFs while taking a lot of crap from people due to unlock outflows.

Shared View On Grayscale’s ETF Withdrawal

Balchunas’ insights have caused quite a stir in the crypto community. Scott Johnsson, a finance lawyer and author, has expressed his agreement with Bloomberg’s analyst overview.

Johnsson may be in line with Balchunas’s perspective on why Grayscale withdrew its Ethereum futures; however, he believes by taking such action, the firm displayed its true intentions. “Can I blame them? I don’t know, but don’t piss on my leg and tell me it’s raining,” he added.

He further stated that without pulling ETHE itself, Grayscale could not claim to be trying to convert ETHE while simultaneously engaging in the single most significant action to obstruct that objective.

Thus, Balchunas concurred with Johnsson saying that the part where he mentioned Grayscale taking a bunch of crap from people was due to high cost, which the company is to blame. “I’m not letting them off the hook for what they said re conversion but rather trying to get others to see it from their perspective/self-interest. When you do everything starts to make sense,” he added.

It is worth noting that the approval odds for Ethereum spot ETFs today now stand at merely 9%, indicating a nearly 90% drop since the first filings were made.

Harvest Global Investments, a Chinese fund house and one of the issuers of Hong Kong’s first spot Bitcoin and Ethereum exchange-traded funds (ETFs), has confirmed plans to potentially open these funds to mainland Chinese investors through the Hong Kong Stock Connect. This development could vastly expand the investor base and significantly impact the cryptocurrency market in Asia.

Harvest CEO Eyes Mainland Access For HK Bitcoin ETF

Currently, Harvest Global offers Bitcoin and Ether ETFs in Hong Kong, with these products enabling direct investment in the respective cryptocurrencies. The possibility of including these ETFs in the ETF Connect scheme, part of the broader Stock Connect initiative launched in 2014 to link Hong Kong with mainland Chinese exchanges, was discussed by Harvest CEO Han Tongli at the Bitcoin Asia conference.

Han stated, “We don’t rule out applying for our ETFs to be included in the connect programme, as long as everything goes smooth and well in the next two years.”

The move to integrate crypto investments into the Stock Connect could be a significant step, given the previously restricted access to such products for mainland investors. Hong Kong’s approach to cryptocurrency regulation has been more open compared to mainland China, where most commercial crypto activities are banned, but trading and ownership by individuals remain a gray area legally.

Despite the innovative nature of these spot crypto ETFs and their ability to offer direct exposure to cryptocurrencies rather than derivatives or stocks of companies related to digital currencies, the initial trading volumes have been underwhelming compared to the US market. According to Han, this is partly due to the market’s cautious view of Hong Kong’s virtual asset policies and its implications for the future of these ETFs.

Han remarked during a panel at the Bitcoin Asia conference that the local market could potentially double the size of the US products, emphasizing the strategic importance of Hong Kong as a more neutral ground with broader appeal in Asia. He attributed the slow start to various factors, including the market’s doubts about Hong Kong’s commitment to becoming a crypto hub, stating, “People are still skeptical about Hong Kong’s status as a special [administrative] region. It’s located in China, and many people don’t want to see Hong Kong become more successful for whatever reason.”

In his discussion, Han also highlighted the competitive advantages of Hong Kong’s crypto products, like the possibility for in-kind subscriptions — buying ETFs directly with bitcoin and ether — and temporary waiving of management fees to attract investors. These features, along with the potential inclusion in the Stock Connect, are seen as critical to gaining traction and establishing Hong Kong as a key player in the global cryptocurrency market.

At press time, BTC traded at $62,754.

Binance’s regulatory woes continue to mount as the world’s largest cryptocurrency exchange by trading volume has been fined C$6 million ($4.4 million) by Canada’s financial regulator, FINTRAC. 

The penalty was imposed due to Binance’s alleged failure to comply with money-laundering protections, specifically related to registering as a foreign money services business and reporting virtual currency transactions.

Binance’s Compliance Woes Continue

According to FINTRAC, Binance committed two administrative violations. Firstly, it is claimed that the exchange failed to register with FINTRAC as a foreign money services business. 

Secondly, Binance failed to report large virtual currency transactions of $10,000 or more, along with the required information, as mandated by regulations. In response to these violations, financial penalties were imposed.

Sarah Paquet, Director and CEO of FINTRAC, emphasized the agency’s commitment to helping businesses understand and comply with their obligations. Paquet also stated that appropriate actions would be taken when necessary to ensure compliance within the industry. Paquet’s statement reads:

Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is in place to protect the safety of Canadians and the security of Canada’s economy. FINTRAC will continue to work with businesses to help them understand and comply with their obligations under the Act. We will also be firm in ensuring that businesses continue to do their part and we will take appropriate actions when they are needed

Regulatory Breaches

According to the regulator, Binance had multiple opportunities to register as a foreign money services business with FINTRAC. However, the exchange allegedly failed to complete the registration within the provided deadlines. 

Notably, until September 25th, 2023, when Binance ceased operations in Canada, the company was obligated to register with FINTRAC. During this period, FINTRAC claims that Binance violated its registration requirements.

Using blockchain analytics, FINTRAC identified that Binance failed to report over 5,902 separate instances of receiving amounts in virtual currency totaling $10,000 or more in a single transaction. 

Such omissions contravene the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.

It is noteworthy that despite Binance’s increasing regulatory challenges, the exchange has expressed its commitment to increasing compliance by appointing a new board of directors, led by the recently appointed CEO, Richard Teng. Teng replaced former CEO Changpeng Zhao, who has since been sentenced to four months in prison.

Additionally, in response to growing regulatory requirements, the exchange intends to establish a headquarters. This move aims to address regulators’ demand for a physical presence and a more robust organizational structure.

Amidst these developments, Binance’s native token, BNB, has experienced a significant surge, reaching $598, driven by a 1.4% price increase in the past 24 hours.

Featured image from Shutterstock, chart from TradingView.com 

The US House of Representatives has voted for a resolution to overturn the Securities and Exchange Commission (SEC)’s 2022 bulletin on crypto custodian accounting.

US President Joe Biden released a statement opposing the resolution and revealing a possible veto if the bill passes the Senate.

Democrats And Republicans Join Forces Against The SEC

On May 8, 21 Democrat House Representatives joined 207 Republican Representatives to vote in favor of H.J.Res.109 to nullify the Staff Accounting Bulletin (SAB) 121. The bulletin requires all custodians of cryptocurrencies and other digital assets to recognize these assets as a liability in their accounting books.

As reported by Bitcoinist, the rule has prevented US banks from holding Bitcoin and other cryptocurrencies as it made their crypto business “non-viable.” Republican Congressman Mike Flood argued that “the SEC’s accounting standards for firms that custody crypto are unfair and hinder banks looking to provide such services.”

House votes to overturn the #SEC crypto custody guidance.

228 – 182.

According to PANews, the US House of Representatives has voted in favor of a resolution aimed at overturning the Securities and Exchange Commission's (SEC) cryptocurrency custody accounting standards. The…

— CryptoSmind (@SmindCrypto) May 9, 2024

Wednesday’s vote was passed with 228 representatives in favor and 182 opposing it. The bill now awaits the Senate’s vote to be passed to the President’s desk. If approved, the resolution would allow financial institutions to hold Bitcoin and other cryptocurrencies under viable requirements.

Fox Business Journalist Elizabeth Terret asserted that the bipartisan decision saw a “larger number of supporting House Democrats than expected.” However, the journalist considers that the bill “likely won’t pass the Senate or the President’s desk.”

SAB 121 has been greatly criticized by important figures like Patrick McHenry, the Chairman of the Financial Services Committee.

On Wednesday, the Committee’s Chair called the bulletin “one of the most glaring examples of the regulatory overreach that has defined Gary Gensler’s tenure at the SEC.” During his speech on the House floor, Chair McHenry remarked his support for the resolution, stating:

This bipartisan resolution is an essential effort to protect consumers and foster innovation in digital asset markets. It’s also critical to stop the SEC’s regulatory power grabs and efforts to circumvent the Administrative Procedure Act.

Senator Cynthia Lummis has also expressed disagreement with the “unnecessary” SAB 121 rule on different occasions. On May 1, the pro-crypto senator criticized the US government’s “overreach” on the industry, revealing her concerns over the Department of Justice (DOJ) “hyper-aggressive” arguments against the sector.

President Biden In Favor Of SEC’s Crypto Crackdown

After the news of the favorable vote by the US House Representatives, the White House addressed the matter. According to the statement, Biden’s administration “strongly opposes” the resolution’s passage.

The president considers the bill “disruptive” against the SEC’s “work to protect investors in crypto-asset markets and to safeguard the broader financial system.”

Moreover, the statement claims that the SEC’s ability to ensure appropriate regulations in the future could be “constrained” by invoking the Congressional Review Act.

The White House considers that “limiting” the SEC’s ability to regulate digital assets “would introduce substantial financial instability and market uncertainty.” Ultimately, the statement affirms that President Biden would veto the resolution if passed by the Senate.

One of the issuers of spot Bitcoin exchange-traded funds (ETFs) in the US, WisdomTree, has announced the expansion of its WisdomTree Prime app to users in New York. 

Expanded Custody And Stablecoin Services

This development closely follows WisdomTree’s recent achievement of a New York State Department of Financial Services (DFS) charter, granting the company the status of a limited-purpose trust company under the New York Banking Law. 

This charter enables the asset manager to custody digital assets, including offering digital wallet services, issuing and exchanging DFS-approved stablecoins, and managing stablecoin reserves through its newly established entity, WisdomTree Digital Trust Company.

According to the asset manager’s announcement, the trust charter and added authorities enable WisdomTree Digital Trust Company to provide increased customer protection, particularly regarding asset safekeeping. 

WisdomTree Prime App And Visa Debit Card Make Joint Debut In NY

The launch of the WisdomTree Prime app in New York coincides with the recent introduction of the WisdomTree Prime Visa Debit Card issued by Stride Bank. 

According to the Bitcoin ETF issuer, this card will allow users to purchase with their available wallet balance wherever Visa is accepted, effectively bridging personal finance and digital asset investing. 

Will Peck, Head of Digital Assets at WisdomTree, expressed his excitement about the company’s accomplishments:

Since our initial entry into select states’ app stores last summer, we have gained significant momentum across various fronts, including the launch of new digital funds, payment capabilities, and collaborations with regulators like the New York State Department of Financial Services. Our aim is to empower consumers in utilizing digital assets in their everyday financial lives. We are excited to provide retail investors in New York with access to the app, as we recognize the rapid growth of the digital asset market in this region, which we expect to be highly influential for WisdomTree Prime.

In addition to New York, WisdomTree Prime has gone live in several other states, including Connecticut, Delaware, Idaho, Louisiana, Maine, Nevada, and Ohio, bringing the total number of states in which it is available to 41.

As of the current press time, the leading cryptocurrency in the market is trading at $62,300. It recently experienced a dip to the lows of $61,000, establishing itself as a crucial support level for Bitcoin. Despite these downward price fluctuations, BTC has maintained a week-over-week gain of nearly 5%.

Featured image from Shutterstock, chart from TradingView.com

Data shows that Bitcoin and Ethereum correlate little to traditional markets, implying that cryptocurrency is forging its destiny.

Bitcoin & Ethereum Have Been The Master Of Their Fates Recently

According to data from the market intelligence platform IntoTheBlock, the correlation between BTC and ETH with traditional markets and commodities has been close to zero recently.

The “correlation” here refers to the correlation coefficient (r) from statistics, a metric that tracks how connected two quantities have been over a given period.

When the value of this metric is greater than zero for any two assets, it means that there exists some positive correlation between their prices, implying that the assets are moving in tandem. The closer this value is to 1, the tighter the relationship.

On the other hand, the indicator’s negative value suggests that while there is some correlation between the two, it’s a negative one, as the price of one asset reacts to movements in the other by moving oppositely to it. In this case, the extreme where the correlation is the strongest is -1.

The correlation coefficient standing at or near zero suggests no relationship between the assets. In statistics, the variables are said to be independent in this case.

Now, here is a table that shows how the 30-day correlation between the two largest cryptocurrencies by market cap, Bitcoin and Ethereum, looks like against some of the traditional assets:

As is visible above, Bitcoin and Ethereum have appeared to have a low correlation to these assets over the past month. Out of these, the coins are the most correlated to the S&P 500, with the coefficient standing at 0.4 for BTC and 0.49 for ETH.

Thus, this would mean that ETH is slightly more correlated to the S&P 500 than BTC. Like this, ETH also has a more prominent relationship with the others on the list compared to BTC, although it’s still not strongly correlated to any of them.

The low correlation coefficient with the traditional markets suggests that cryptocurrencies have been running more or less independently in the past month.

Generally, correlation can be something to watch when an investor is looking to add an asset to their portfolio. Assets that have a high correlation make up for poor diversifying options, as they would either mimic a similar performance (positive coefficient) or counteract each other (negative coefficient).

Since Bitcoin and Ethereum lack any solid correlation to traditional markets and commodities, the two coins may be viable options for traditional investors to add to their portfolios.

BTC Price

Bitcoin has retraced its earlier recovery over the last few days as it has returned to the $61,100 mark.

Binance, one of the world’s largest cryptocurrency exchanges, has come under scrutiny after a Wall Street Journal report revealed that the platform fired its top investigators following their allegations of wash trading involving a top VIP client, DWF Labs. 

Binance Refutes Wash Trading Allegations

The report alleges that DWF Labs conducted over $300 million in wash trades across seven tokens in 2023, manipulating the price of Yield Guild Games’ native token, YGG and other cryptocurrencies. 

However, Binance has refuted the allegations, stating that the transactions were proprietary and did not constitute manipulation. The exchange also accused the head of the monitoring team of collaboration with DWF’s competitors, leading to his termination.

In response to the Wall Street Journal report, Binance affirmed its strict market surveillance program and commitment to combating market abuse. The exchange stated that it does not tolerate such practices and has offboarded nearly 355,000 users with a transaction volume of over $2.5 trillion for violating its terms of use in the past three years. 

Binance emphasized the importance of maintaining “neutrality and unbiased investigation”, even in the face of claims made by market-making firms against their competitors. The exchange aims to ensure healthy competition in the industry and protect users from market manipulation.

DWF Labs Strongly Denies Accusations

Binance heavily relies on VIP customers, who contribute two-thirds of the platform’s total trading volume. The report highlights a similar incident involving the Tron Foundation last summer, which Binance investigated. In response to the WSJ report on DWF, Binance co-founder He Yi said:  

We have been monitoring the MM market and we are very strict. We do not target any fund; There is competition among MMs, and the means are very shady. You can buy PR as you like, but don’t get close to me. We will ensure our own fairness and not participate, but we will also report truthfully to the monitor and other regulatory authorities.

DWF Labs, the VIP client accused of wash trading, has responded to the allegations, asserting that they operate with the highest integrity, transparency, and ethics standards. 

The company stated that the recent allegations reported in the press are “unfounded and distort the facts.” DWF Labs remains committed to supporting its partners across the crypto ecosystem and vows to report all relevant situations to regulatory authorities truthfully.

In sum, the firing of Binance’s top investigators after they alleged wash trading by VIP client DWF Labs has raised concerns about market manipulation and the exchange’s handling of such incidents. 

Binance maintains that the transactions in question were proprietary and not manipulative while accusing the head of the monitoring team of collaboration with DWF’s competitors. 

As the investigation unfolds, the cryptocurrency industry will closely watch how Binance addresses these allegations and upholds its commitment to market surveillance and user protection.

At present, the exchange’s native token, BNB, is trading at $595, indicating a 1.5% increase over the past 24 hours. Notably, BNB’s performance contrasts Bitcoin and Ethereum, which are currently experiencing downward pressure and testing lower price levels.

Featured image from Shutterstock, chart from TradingView.com 

The Shiba Inu team has issued a crucial warning to its community, alerting them to the presence of fraudulent groups seeking to exploit the trust of SHIB community members for personal gain. This cautionary message from the team arrives as the cryptocurrency scored another significant listing milestone.

SHIB Team Cautions Against Scams

The Shiba Inu team has advocated for heightened vigilance against scams targeting community members. In a recent X (formerly Twitter) post, Shibarmy Scam Alerts, a social media handle dedicated to exposing scams, issued a stern warning regarding multiple scam attempts observed on Telegram social media platform.

The scam tracker has urged community members to watch out for fake or fraudulent groups impersonating legitimate Shiba Inu channels on Telegram. They disclosed tactics employed by these deceptive channels, including “promising giveaways, exclusive content, investment opportunities, and offering assistance for transaction issues to deceive unsuspecting community members.  

Excluding Telegram, the Shiba Inu community has also seen a rise in scam activities via X, with numerous scammers targeting community members using similar impersonation tactics or phishing attacks. 

While informing Shiba Inu members of these latest scam attacks on the community, Shibarmy Scam Alerts also outlined various ways SHIB community members can protect their privacy and security. The SHIB tracker emphasized the importance of verifying the authenticity of Telegram groups by checking for verification badges and announcements from reputable sources. 

Furthermore, the team stressed the significance of avoiding suspicious links and refraining from sharing wallet addresses in public chat rooms to reduce the likelihood of becoming a primary target for malicious attackers. Finally, Shibarmy Scam Alerts has urged users to stay updated on security alerts and adhere to optimal security practices, such as reporting any suspicious scam activities to the relevant authorities.  

Shiba Inu Gets Listed By Crypto Exchange Nexo

Amidst efforts to combat scam attempts within the Shiba Inu community, the cryptocurrency is celebrating a new milestone, securing listings from major exchanges. Nexo, a Switzerland-based all-in-one crypto platform, announced in a post on X on May 7, that it has officially integrated Shiba Inu into its crypto offerings. 

In its post, the crypto exchange lauded SHIB’s impressive growth over the years, highlighting the important role the Shiba Inu community, including its developer and dedicated supporters, has taken in boosting the development of the SHIB ecosystem. 

This listing also comes as Shiba Inu’s demand in the broader crypto market is growing at a rapid pace. Including Nexo, over 50 other crypto platforms or exchanges have listed SHIB, such as Binance, Robinhood, Bitget, and recently, Bitcoin.com.au. 

May brings a series of pivotal events that could significantly influence the trajectory of Bitcoin and the broader crypto market.

These events, ranging from regulatory decisions to economic indicators, appear capable of profoundly swaying market dynamics.

Regulatory And Economic Indicators On The Horizon

This month is marked by crucial dates, starting with a significant meeting involving Federal Reserve Chair Jerome Powell. His upcoming press conference today is particularly noteworthy, following recent economic data showing a dip in consumer confidence amidst persistent wage pressures.

In his previous addresses, Powell has highlighted ongoing challenges in curbing inflation and the “robustness” of the job market, which continue to influence monetary policy expectations.

Moreover, on May 15, the release of the US Consumer Price Index (CPI) for April is eagerly anticipated. This event is closely followed by the announcement of the United States Securities and Exchange Commission’s (SEC) decision on approving Spot Ethereum ETFs.

Major events in May compiled by WuBlockchain editors include the soon-to-be-released FED FOMC, the US CPI in April, the Hong Kong Bitcoin Asia Conference, and the SEC’s final decision on the ETH SPOT ETF. Unlike April, the conclusion of these events in May has been largely… pic.twitter.com/cdr9FPvUJL

— Wu Blockchain (@WuBlockchain) May 1, 2024

The outcomes of these events could either dampen or ignite investor enthusiasm, with significant repercussions for market liquidity and volatility.

Particularly, the SEC’s response to VanEck’s Ethereum spot ETF application on May 23 and a Bitcoin spot option ETF application on May 29 are seen as potential catalysts for market movement.

Market Impact And Analyst Insights On Bitcoin

The anticipation of higher interest rates continuing longer than previously expected is already impacting the cryptocurrency markets.

Bitcoin, for example, has witnessed a sharp decline, plunging by over 6% in just 24 hours, marking one of its lowest points in recent months at $56,757. This downturn has led to considerable market liquidation, with Coinglass reporting over $394.82 million in liquidations, affecting 106,104 traders within the same period.

With his deep understanding of market patterns, renowned financial analyst Peter Brandt suggests that Bitcoin might face further declines before any potential recovery.

According to Brandt, Bitcoin could dip into the $40,000 region as part of its market correction phase before possibly embarking on a new bullish run.

Brandt also pointed out that despite various market stimulants such as halving events and spot ETF launches in past years, Bitcoin has struggled to surpass its peak prices from three years ago.

Comment on Bitcoin $BTC I have seen dozens of significant market tops over the years with charts that looked like this descending triangle. A simple fact needs to be resolved — that Bitcoin has not exceeded the tops made three years ago despite the halving and ETFs pic.twitter.com/hq96RrDJkk

— Peter Brandt (@PeterLBrandt) April 30, 2024

Featured image from Unsplash, Chart from TradingView

Asset manager VanEck has made an entry into the meme coin space with the launch of an index that will track the performance of the foremost meme coins. This is undoubtedly a signifcant development considering the wider adoption these tokens could enjoy as a result of this. 

What VanEck’s Meme Coin Index Is About

VanEck’s MarketVector meme coin index is called ‘MEMECOIN.’ It will track the performance of the six largest meme coins by market cap. This includes Dogecoin (DOGE), Shiba Inu (SHIB), Pepe (PEPE), Dogwifhat (WIF), Floki (FLOKI), and Bonk (BONK). The index weighs these altcoins based on their market cap. 

Therefore, Dogecoin and Shiba Inu will hold the most value in the index, with weightings of 30.64% and 28.01%, respectively. Meanwhile, Pepe, WIF, Floki, and Bonk will weigh 14.18%, 13.29%, 7.17%, and 6.21%, respectively. The index ensured that each coin’s weighting was capped at 30% to diversify risk. 

VanEck emphasized the risk associated with this category of crypto tokens, given how volatile they are. Meme coins are known to be largely driven by hype and social media sentiment which makes them susceptible to rapid price fluctuations. Irrespective of that, VanEck’s move underlines the wide-range recognition and acceptance that these meme coins are beginning to enjoy. 

Time To Correct The Inaccuracies

Meme coins have mainly been criticized for lacking utility and having no future in the crypto space. However, that hasn’t been the case, as these crypto tokens have continued to thrive and enjoy increasing popularity as each day passes. These coins have also begun to see their utility increase. 

Recently, automobile company Tesla disclosed to its customers that they can now pay for certain merchandise with Dogecoin. This is in addition to other use cases that the foremost meme coin already enjoys. For example, the NBA team Dallas Mavericks also accepts Dogecoin as a payment method. 

Meanwhile, Shiba Inu has also stood out with its layer-2 network Shibarium and other innovative projects executed in its ecosystem. The Shiba Inu team also recently raised $12 million from notable venture capitalists (VCs) to build a layer-3 network focused on promoting users’ privacy. 

As Justin Sun noted, these altcoins also highlight the power of community in the crypto space. It is the efforts of their respective communities that have pushed them to such heights, with meme coins like Dogecoin, Shiba Inu, Pepe, and WIF currently in the top 50 crypto tokens by market cap.

It is also worth noting that best-performing assets among the top 50 crypto tokens are meme coins with WIF leading the pack with a year-to-date (YTD) gain of over 1,800%. 

Researchers at CryptoQuant, a crypto analytics platform, are now disproving the idea that Ethereum is “ultra-sound money,” especially after activating the highly anticipated Dencun Upgrade in mid-March.

Analysts observe that the hard fork has slowed the number of coins going to the “furnace.” Accordingly, ETH is now more deflationary, considering the rising daily supply over the past weeks. 

The Impact Of Dencun On Gas Fees

Analysts say the Dencun Upgrade was one of the major updates after The Merge. With Dencun, Ethereum developers introduced proto-danksharding for more efficient and cheap transaction processing, especially by layer-2 platforms like Arbitrum. 

Besides helping reduce gas fees for layer-2 solutions, the update enhanced the mainnet scalability. Accordingly, the primary layer could handle more transactions without congestion or gas fees spiking.

Though layer-2 gas fees have drastically fallen, activity on Arbitrum, Optimism, and Base have registered more activity. However, the problem with lower gas fees from layer-2 transactions, which are bundled and confirmed mainnet, means Ethereum is now increasing fewer coins. 

As such, ETH gradually becomes inflation after months of supply reduction, reflecting the adoption of the mainnet and off-chain solutions.

The rate at which ETH became deflationary pre-Dencun meant the “ultra-sound money” narrative was valid. Due to the rapidly falling supply, ETH, like BTC or gold, could become a store of value.

Ethereum Is Becoming Inflationary: Study

However, CryptoQuant data now paints a concerning picture. A report found that shrinking gas fees from layer-2 platforms translates to lower ETH being taken from supply. 

This “structural shift” researchers discovered, means that ETH supply is no longer decreasing as rapidly as before. In their assessment, they noted that in recent days, the ETH supply has been growing at the fastest daily rate since the Merge.

At this pace, if the rate of ETH burning continues to drop, Ethereum may no longer be on track to become deflationary. It will be especially so if activity shifts, as has been the case, to competition low-fee and scalable networks like Solana and Avalanche.

Falling Ethereum and Bitcoin prices will further exacerbate the burn rate. Whenever prices crumble, on-chain activity tends to contract sharply over time.

Taiwan’s Ministry of Justice has proposed amendments to enhance anti-money laundering (AML) measures within the crypto industry.

If enacted, the new proposals will mark a substantial shift from the current regime, in which digital currency firms’ non-compliance is met with administrative penalties, to a stricter legal framework that includes criminal penalties for serious breaches.

From Crypto Administrative Penalties To Criminal Charges

These changes are part of Taiwan’s ongoing efforts to align its regulatory environment with global standards, particularly as digital assets play an increasingly prominent role in the financial sector.

The proposed legal framework would require domestic and international cryptocurrency firms operating in Taiwan to register and demonstrate compliance with AML regulations. Failure to meet these requirements could lead to severe consequences, including imprisonment.

Under the current system, Taiwanese authorities have limited powers, mainly restricted to imposing fines on firms that fail to adhere to AML protocols, according to Deputy Minister of Justice Huang Mou-hsin. However, the newly proposed amendments by the Ministry of Justice aim to escalate the severity of penalties.

Huang Mou-hsin highlighted that these changes would criminalize violations of AML regulations by crypto businesses, shifting the landscape from administrative oversight to legal enforcement.

The draft amendments stipulate non-compliant firms could face up to “two years” in jail. Moreover, overseas crypto platforms seeking to serve Taiwanese customers must establish a local presence and undergo the AML registration process.

Expanding The Scope Of AML Laws

The proposed amendments target crypto firms’ compliance and aim to integrate specific provisions for digital assets into Taiwan’s existing AML legislation.

Under these proposals, individuals using cryptocurrencies for money laundering could face prison terms of six months to five years. They may also be subject to fines of up to NT$50 million (approximately $1.5 million).

This inclusion of cryptocurrencies explicitly in the AML laws signifies a comprehensive approach to tackling financial crimes in the digital age.

The proposed changes are now set to be reviewed by the Legislative Yuan, Taiwan’s national parliament. This step is crucial for the amendments to become law and reflects the government’s commitment to creating a “robust” regulatory framework for the burgeoning crypto industry.

Notably, Taiwan has consistently regulated its crypto market, introducing several guidelines and rules in recent years.

The Financial Supervisory Commission (FSC) introduced anti-money laundering rules for digital currency service providers in July 2021. However, beyond these AML requirements, the broader digital currency sector has remained relatively unregulated.

The FSC’s recent “Guiding Principles for the Management of Virtual Asset Platforms and Transaction Businesses” further underlines this cautious regulatory expansion.

These principles set standards for customer protection, including transaction transparency, asset custody, and internal control management.

They also define the operational constraints for offshore digital currency platforms, which prohibit businesses from conducting business in Taiwan without proper registration and declaration of AML compliance.

Featured image from Unsplash, Chart from TradingView

Ripple has run into problems once again with the United States Securities and Exchange Commission (SEC) following the announcement of its highly anticipated stablecoin. The stablecoin, which is to be pegged to the US dollar, is expected to give established stablecoins such as Tether’s USDT and Circle’s USDC a run for their money. However, the SEC is less than pleased with this launch, going after Ripple before it even launches.

SEC Says New Stablecoin Qualifies As Securities Offering

In April 2024, Ripple announced that it is launching its very own stablecoin that will be pegged to the US dollar. This stablecoin launch came as part of the company’s continuous expansion worldwide, as it continues to spread its wings in the payments sector.

CEO Brad Garlinghouse had revealed that the company’s reasoning behind the launch was to help combat the de-pegging events in stablecoins through the years that have cost crypto investors billions. While this sounds like a noble endeavor, the US SEC is less than pleased.

According to the regulator, the stablecoin which Ripple plans to launch qualifies as an unregistered crypto asset. This was made known in a redacted brief filed by the SEC in the ongoing legal battle with the crypto firm.

The regulator’s most recent allegations tie back into its claims that XRP, which was launched in 2012, qualifies as an unregistered security offering. The SEC argues that Ripple has built its business on offering unregistered securities to investors, and its latest stablecoin project falls under that umbrella as well.

“Ripple’s primary business continues to be, as it has been since 2013, unregistered sales of XRP. It also plans to issue a new unregistered crypto asset,” the filing read. Given this, it seems the regulator is trying to stop Ripple ahead of launch, which is scheduled to happen toward the end of 2024.

The State Of Ripple’s Lawsuit

Even though Ripple has been able to secure a number of partial victories against the SEC in the last year, such as Judge Analisa Torres ruling that secondary programmatic sales did not qualify as a securities offering, its battle with the regulator is far from over.

A settlement is expected between both parties, but even that is proving to be a challenge. The SEC is demanding a $2 billion fine to be levied against the crypto firm as an appropriate amount for the ‘violations.’ However, Ripple has fired back against this, offering only $10 million, which the regulator has called a “slap on the wrist”.

Both parties are currently in the remedies stage, filing their briefs along with their supporting exhibits. Given this, Ripple CLO Stuart Alderoty believes that the almost 4-year long battle is coming to an end. “The good news is that we are closer than ever to putting this lawsuit behind us,” Alderoty stated in an X (formerly Twitter) post.

The winds of regulatory change are howling through the cryptocurrency space, and a prominent victim has emerged. LocalMonero, a veteran P2P (peer-to-peer) trading platform for the privacy-focused Monero (XMR) coin, announced its closure on May 7th, citing a combination of “internal and external factors.” This move has sent shockwaves through the Monero community and reignited the debate between financial privacy and regulatory oversight.

Related Reading: Transaction Fees To The Rescue! Bitcoin Miners Find Solace In Network Activity

LocalMonero: P2P Platforms In The Crosshairs

LocalMonero’s demise comes amidst a period of heightened scrutiny by US authorities towards the crypto industry. From the arrest of the developers behind the privacy-focused Samourai Wallet to the SEC’s crackdown on centralized exchanges like Robinhood, regulators are wielding a heavy hand in an effort to enforce anti-money laundering (AML) and securities laws. P2P platforms, with their decentralized nature and potential for anonymous transactions, have become a particular point of concern.

Hey everyone,

After almost 7 years of operation, we have made the difficult decision to close our platform.

The winding-down process begins today, and finishes 6 months from now. Our support will be available for help throughout this period.

Read more:https://t.co/66gqe5HFpc

— LocalMonero (@LocalMoneroCo) May 7, 2024

While the exact reasons behind LocalMonero’s closure remain shrouded in some mystery, the timing paints a bleak picture. The platform’s decision to shut down follows a warning from the Financial Action Task Force (FATF), an intergovernmental watchdog, highlighting the potential misuse of P2P platforms for illicit financing. This, coupled with the ongoing delisting of privacy coins by major centralized exchanges, creates a chilling effect on the entire privacy-focused crypto ecosystem.

Privacy Vs. Regulation: A Collision Course

The closure of LocalMonero has sparked outrage and fear within the Monero community. Many see it as a blatant attack on their right to financial privacy. Freedom advocates have labeled the current regulatory landscape a “war on crypto,” urging users to band together and learn about digital privacy tools. They also compare the government’s approach to “terrorism,” arguing that it stifles innovation and creates an atmosphere of fear.

Related Reading: Commencement Exercises Chaos! Drug-Induced Bitcoin Speech Gets Booed At Ohio State

However, the concerns of regulators shouldn’t be entirely dismissed. Privacy coins, with their ability to obfuscate transaction details, can indeed be attractive for those seeking to launder money or finance illegal activities. Striking a balance between user privacy and effective AML/KYC (Know Your Customer) regulations is a complex challenge.

The Future of Privacy-Focused Crypto

The future of privacy-focused crypto projects like Monero hangs in the balance. While LocalMonero remains optimistic, pointing to upcoming developments within the Monero ecosystem like Haveno DEX and Full Chain Member Proofs (FCMP), the regulatory pressure is undeniable.

Featured image from The Drive, chart from TradingView

Charles Hoskinson, founder of the Cardano blockchain, has confirmed the integration of Cardano Improvement Proposal (CIP) 69 into the upcoming Chang hard fork. This announcement was made via X, emphasizing the adaptation to community feedback and aligning with the demands of the Cardano Foundation (CF).

Hoskinson detailed the decision process and its implications: “I saw the requests coming in for CIP-69. I spoke with the IOI delivery team, and they spoke with the folks at Intersect. There seems to be a lot of community demand for it, and the CF also has been pushing for CIP-69 to be included in Chang.”

The Cardano founder highlighted that he doesn’t expect a major delay because of the last-minute inclusion, “I don’t think it will add a significant delay to the delivery of Chang, but it’s important to understand that out of band roadmap changes are always disruptive and introduce additional risk. This said, the dev teams are going to find a way to roll CIP-69 into Chang.”

CIP-69, primarily authored by developers within the Cardano ecosystem, aims to streamline interactions within Cardano’s Plutus smart contracts by standardizing the input arguments across various types of scripts: spending, certifying, rewarding, and minting.

The primary change proposed is the elimination of the datum argument, a piece often linked to locking validators. Instead, validators will solely require a redeemer and the script context for execution, with datums being accessible via the ScriptContext or by an extension in the TxInfo’s Spending constructor.

This proposal addresses a critical design limitation known as the “mutual dependency issue,” where two validators must know each other’s hash. This has been a substantial barrier to the development of safe and effective decentralized applications (DApps) on Cardano, as it constrains the design space and adds complexity to dApp architectures.

Cardano’s Chang Hard Fork

The Chang hard fork, anticipated to occur in Q2 this year, marks a significant milestone in the Cardano roadmap, transitioning into the “Voltaire” era of governance. This era is characterized by a move towards decentralized governance structures, allowing the community to have a greater say in the development and funding of projects within the ecosystem.

Chang is split into two primary upgrades. Chang Upgrade Number 1: Initiates the deployment of governance features, beginning with the technical bootstrapping phase as outlined in SIP 1694. This phase is crucial for setting up the foundational governance mechanisms.

Chang Upgrade Number 2 advances these mechanisms out of the bootstrapping phase and introduces full-fledged on-chain governance capabilities, such as delegated representative participation and treasury withdrawals. This enables the Cardano community not only to vote on proposals but also to fund them, enhancing the ecosystem’s sustainability and responsiveness to user needs.

Hoskinson also highlighted the need for changes in the roadmap construction process post-Chang: “Post-Chang, the entire process for constructing and ratifying a roadmap between hard forks has to be overhauled to reflect the ability to use CIP-1694’s info action to approve a candidate roadmap. There are several working groups at intersect discussing this, and I’d encourage projects and community members to join and discuss to ensure their preferences and suggestions end up in the new process.”

At press time, ADA traded at $0.452.

Litecoin has become the new king of cryptocurrency payments, as more users are increasingly adopting this popular digital currency over Bitcoin to execute transactions on the crypto payments platform, Bitpay. 

Litecoin Surpasses Bitcoin In Crypto Payments

In a recent X (formerly Twitter) post, the Litecoin team announced that LTC has become the number one cryptocurrency for payments on BitPay. The team shared a pictorial chart showing the top seven most preferred crypto payment options on BitPay. 

Litecoin led the pack, scoring an impressive 41.38% in Bitpay’s payment count, nearly doubling Bitcoin which was the second largest, at 21.55%. Ethereum and Dogecoin followed with 10.37% and 5.86% respectively, trailed by other cryptocurrencies including Polygon, Bitcoin Cash and Circle’s USDC. 

The Litecoin team disclosed that LTC has been the number one crypto payment option for BitPay all year. The cryptocurrency’s rise to prominence may come as no surprise to some crypto enthusiasts, considering its faster transaction time and lower fees compared to Bitcoin. 

According to CoinGecko, Litecoin outperforms Bitcoin in its lower transaction fees, with an average transaction cost of $0.04. Whereas, Bitcoin charges $7.60 on average. 

BitPay also revealed that Litecoin boasts a maximum capacity of 56 transactions per second, significantly higher than Bitcoin’s capacity of about seven transactions per second. 

The crypto payments platform disclosed that LTC uses a Scrypt algorithm, which is less resource-intensive compared to Bitcoin’s SHA-256 algorithm. This efficiency enables LTC to process transactions up to four times faster, with a new block created every 2.5 minutes, in contrast to Bitcoin’s 10 minutes per new block. 

Earlier in 2023, BitPay published a blog post, highlighting the major differences between Litecoin and Bitcoin. The crypto payments provider revealed that the difference in algorithms between the two cryptocurrencies translates to a significantly faster transaction time for the Litecoin Network.

The payment platform also emphasized that Litecoin currently has a definite edge against Bitcoin due to being a “leaner, and faster version” of the pioneer cryptocurrency. 

LTC’s Price Sees Modest Gains

Taking into account the price of Litecoin, Bitcoin maintains a stronger value, given its status as the world’s first cryptocurrency and its commanding market capitalization of more than $1.2 trillion. 

However, at the time of writing, Bitcoin has witnessed a drop in its daily trading volume, decreasing by 4.39%. The cryptocurrency’s price is presently at $61,037, marking another 1.91% decline in its value over the past 24 hours, according to CoinMarketCap. 

Conversely, Litecoin is coincidentally up by the same amount, trading at a price of $81.75 and amassing modest gains of 1.91%, over the past 24 hours. The cryptocurrency’s trading volume has seen a 6.17% surge, totaling over $354 million.

Ethereum, the second-largest digital asset by market capitalization, has been under the spotlight once again. Recent movements of ETH by the Ethereum Foundation have stirred concerns among market observers, igniting debates about potential volatility in Ethereum’s price.

Foundation’s Massive ETH Transfers

The Ethereum Foundation’s series of transfers to the multisign address “0xbc9” have captured the attention of crypto enthusiasts. According to reports from Spot On Chain, the foundation has transferred a total of 5,000 ETH to this address since the start of 2024. The latest transaction, involving 1,000 ETH valued at $3 million, has added fuel to the ongoing discussion.

Market Speculation Amidst Resistance Levels

Against the backdrop of the crypto’s struggle to breach the $3,200 resistance level, the current market environment amplifies the apprehension. ETH hovers below $3,000 per coin, prompting speculation about whether the foundation’s actions could exacerbate the downward trend. Some analysts even predict a potential drop in ETH’s price to $2,500, adding to the market’s uncertainty.

Market Impact Analysis

A considerable percentage of the ETH supplied to the address—specifically, 1,76 ETH—was quickly sold for 4.80 million DAI, averaging $2,72 per ETH. However, these sales frequently correspond with a drop in ETH price, raising suspicions about possible price manipulation.

Historical data further supports these concerns, indicating a correlation between the foundation’s sell-offs and downward pressure on ETH’s price. With the multisign address currently holding 2,508 ETH, equivalent to $7.51 million, market participants are treading cautiously, wary of the implications for the coin’s value.

Developments In The Ethereum Ecosystem

Despite the market turbulence, the ETH ecosystem continues to evolve. Recent developments, including Ethereum Improvement Proposals (EIPs), reflect the community’s efforts to enhance the network’s functionality and scalability. Notably, EIP-7702 has emerged as an alternative to EIP-3074, showcasing the community’s commitment to addressing the altcoin’s challenges.

Related Reading: Commencement Exercises Chaos! Drug-Induced Bitcoin Speech Gets Booed At Ohio State

Moreover, Ethereum’s transition from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism remains a focal point. The network’s inflationary dynamics following the Dencun upgrade in March have sparked discussions about its long-term sustainability.

The burning of gas fees post-Merge has led to a notable reduction in the growth of ETH’s circulating supply, signaling a significant shift in the crypto’s economic model.

Looking Ahead

As the crypto community braces for what lies ahead, all eyes remain glued to Ethereum’s price chart, eagerly awaiting clues about the next move of the leading altcoin. Amidst market uncertainties, Ethereum’s potential rally gathers attention, with reports suggesting a resurgence in momentum.

With intriguing updates expected on the ETH blockchain and ongoing discussions about its future direction, the Ethereum community remains resilient, navigating through the ever-changing landscape of digital assets.

Featured image from X.com, chart from TradingView

As Robinhood continues to traverse the complexity of the financial regulatory landscape, Vlad Tenev the company’s Chief Executive Officer (CEO), has taken center stage to address the Wells Notice receipt from the United States Securities and Exchange Commission (SEC) regarding its cryptocurrency business.

Tenev’s response to the SEC’s Wells Notice highlights the firm’s commitment to handling regulatory issues while upholding Robinhood’s objective of democratizing finance.

Robinhood Receives Wells Notice From US SEC

Last week, the SEC issued a Wells Notice to Robinhood about possible securities violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934 at its cryptocurrency subsidiary. The company disclosed in a regulatory filing that the Commission sent investigative subpoenas concerning crypto listings, crypto custody, and platform operations.

The filing read:

As previously disclosed, Robinhood Crypto, LLC (RHC) has received investigative subpoenas from the Securities and Exchange Commission (SEC) regarding, among other topics, RHC’s cryptocurrency listings, custody of cryptocurrencies, and platform operations (the RHC Activities).

This move by the agency could potentially entail a public administrative proceeding, a cease-and-desist proceeding, or a civil injunctive action. It could also seek remedies that include disgorgement, a cease-and-desist order, civil money penalties, disgorgement, revocation, and activity limitations.

It is worth noting that the regulatory watchdog issued the Wells Notice report despite Robinhood’s effort to engage with the Commission multiple times concerning its cryptocurrency operations. 

Responding to the report, Robinhood’s CEO Vlad Tenev stated that the firm met with the SEC over 16 times, but each time has been unsatisfactory. “We actually came in good faith to meet with the SEC and I think we met with them 16 times and, unfortunately, that was not reciprocated,” he stated.

Although the CEO is uncertain of the reason behind the SEC’s disappointing response, he revealed that the Commission asked Robinhood to cease its engagement, as they do not see a path toward the company’s business.

Tenev further noted that the SEC has the authority to alter regulations so that brokers can accept cryptocurrency assets, but it does not seem like the agency is willing to do so. Instead, the SEC is moving forward with regulation through enforcement, which is disheartening.

The Company’s Dedication To Uphold Its Stance

So far, Tenev has underscored the company’s commitment to defend its position and advocate customer safety. This is due to his confidence in crypto assets gaining more importance in the world today, and it would not be appropriate for Americans to be denied exposure to them.

In an X post, the Robinhood CEO affirms that the firm aims to protect its crypto platform and bring about regulatory clarity in the US for the good of its customers. Consequently, they will utilize every resource to fight the SEC in court if needed, as they continue to work hard to keep good and productive relationships with regulators.

Nigeria has rejected bribery allegations made by Binance, the world’s largest cryptocurrency exchange, labeling them as a “tactic to divert” attention from the exchange’s activities. 

The statement comes in response to a blog post by Binance’s newly appointed CEO, Richard Teng, who claimed that the Nigerian government demanded a $150 million cryptocurrency payment to settle an ongoing criminal investigation.

Nigerian Government Slams Binance’s Bribery Claims

According to Bloomberg, Nigerian Ministry of Information spokesman Rabiu Ibrahim dismissed Teng’s bribery allegations as baseless and lacking substance. 

Ibrahim stated that the Binance CEO’s claim was a mere diversionary tactic aimed at shifting focus away from the cryptocurrency exchange’s activities. The Nigerian government firmly denies involvement in any bribery attempts.

According to Teng’s blog post, Binance attended a meeting with Nigerian officials in January, during which criminal allegations were raised against the company. 

Teng claimed that as Binance staff left the meeting, they were approached by unknown individuals who demanded a significant cryptocurrency payment within 48 hours to settle the allegations. 

The blog post also mentioned that Gambaryan and his colleague returned to Nigeria in February at the authorities’ invitation but were subsequently arrested.

While one employee has managed to escape in recent months, Tigran Gambaryan remains in custody. He faces charges of tax evasion, currency speculation, and money laundering. His trial is scheduled to commence later this month.

Nigeria Intensifies Scrutiny Of Cryptocurrencies

The Nigerian government dismisses Binance’s bribery claims as part of the company’s “orchestrated international campaign” to undermine Nigeria’s reputation. 

The government also accuses Binance of resorting to fictional claims and mudslinging media campaigns to clear its name amidst criminal prosecutions in multiple countries, including the United States.

It is worth noting that Nigeria has been scrutinizing the role of cryptocurrencies in the depreciation of the local currency, the naira. The government attributes part of the currency’s decline to foreign exchange control adjustments and increased volatility. 

To address concerns, the Securities and Exchange Commission banned person-to-person cryptocurrency trading in the naira and indicated that new regulations would be implemented to govern the sector.

In addition to the issues in Nigeria, Binance founder Changpeng Zhao was recently sentenced to four months in prison in the US for failures that allowed cybercriminals and terrorist groups to trade freely on the platform. The exchange also agreed to pay $4.3 billion to resolve allegations raised by US authorities.

Binance has not yet responded to the Nigerian government’s accusations and denials. It remains to be seen how the exchange will address the situation or provide any further clarification regarding the allegations.

As of this writing, the exchange’s native token, BNB, is trading at $585, up 4.4% in the past week. 

Featured image from Shutterstock, chart from TradingView.com

Binance CEO Richard Teng recently denounced the Nigerian authorities’ abuse of power and mistreatment of the crypto exchange executives, including still-detained Tigran Gambaryan.

Teng considers it’s time to highlight the implications of the saga between the crypto exchange and the Nigerian regulators on behalf of the business community.

Binance’s Point Of View

Since the arrest of Gambaryan and the Head of Binance Africa, Nadeem Anjarwalla, the tension between the crypto exchange and Nigerian authorities has increased. On Tuesday, Richard Teng shared his concerns about the country’s crackdown on the platform and its executives.

In a Binance Blog post, the CEO discussed the timeline of the Binance vs Nigeria saga from the exchange’s point of view. Teng ” provided the facts so that the global community’s perception may not be distorted unfairly.”

My friend and colleague, Tigran Gambaryan, has been unlawfully detained by the Nigerian government for more than 70 days. We're tirelessly working to #BringTigranHome.

For the first time publicly, I'm sharing the full context of this situation here. https://t.co/Rg3DEYJZgW

— Richard Teng (@_RichardTeng) May 7, 2024

According to the detailed timeline, this saga began in 2022, when Nigeria’s Securities and Exchange Commission (SEC) published new regulations requiring crypto exchanges operating in the country to obtain SEC permits and comply with specific requirements.

The exchange claims to have “proactively reached out” several times seeking practical guidance. However, the Nigerian regulator allegedly did not respond to Binance’s questions. Teng argues that “no Virtual Asset Service Provider (VASP) has been licensed under the new regulations to this date.”

In early January 2024, Binance employees finally met with the Nigerian Financial Intelligence Unit (NFIU) and agreed to share a Memorandum of Understanding (MoU). The MoU would set out the proposed terms and conditions for sharing anti-money laundering (AML)-related information.

The exchange representatives went through other meetings, including one with the House Committee on Financial Crimes (HCFC) members. Teng claims that as the Binance employees left the meeting, they were approached by “unknown persons who suggested to them to make a payment in settlement of the allegations.”

However, the CEO alleges that the team was not informed of the accusations’ details despite repeatedly requesting them.

Moreover, Binance’s local counsel was presented with a “demand for a significant payment in cryptocurrency” within the next 48 hours. The “settlement” would “make the issues go away.”

As a result, Binance representatives departed the country and declined the payment demand. The exchange considered the payment a non-legitimate settlement offer and clarified through its local counsel that it would engage in settlement negotiations under a set of conditions.

As of this writing, Nigeria has denied Binance’s claim of bribery.

According to Bloomberg, Binance CEO Richard Teng accused Nigerian officials of demanding a $150 million cryptocurrency payment to resolve a criminal investigation facing the company. The Nigerian government has denied Binance’s accusations that its officials solicited bribes.…

— Wu Blockchain (@WuBlockchain) May 8, 2024

Is Nigeria’s Crackdown Setting A Dangerous Precedent?

In February, the exchange’s local advisors suggested having a reunion with the director of the Office of National Security Advisor (ONSA). The meeting was scheduled for February 26, and the security of the exchanges’ representatives was assured.

Nonetheless, it was during this reunion that Gambaryan and Anjarwalla were taken “as guests” by Nigerian authorities and “were accused personally of holding responsibility for the state of the naira and the overall economy, and allegations of terrorist financing and money laundering.”

In the post, the CEO shared Gambaryan’s efforts to combat finance crime throughout his career.  Teng highlighted that the now-detained executive has assisted global law enforcement in freezing and seizing more than $2 billion worth of assets with his financial Crime Compliance Team just in 2022 and 2023.

Despite knowing about the risks and the growing tension, Gambaryan traveled to Nigeria as a representative of Binance. However, the executive didn’t go as a “decision-maker, nor a negotiator.” He went “as a functional expert in financial crime and capacity building in policy discussions,” as Teng clarifies.

Per the post, Gambaryan’s situation “went from bad to worse” after Anjarwalla escaped from Nigerian custody at the end of March. The CEO alleges that during a bail hearing on April 25, the EFCC’s prosecutor stated that since “The 1st defendant [Binance] is operating virtually. The only thing we have to hold on to is this defendant [Tigran].”

According to Teng, the Nigerian government is sending a clear message: an innocent employee “must be” detained and placed in a “dangerous prison in order to control Binance.”

Ultimately, the CEO considers inviting mid-level employees under pretenses only to detain them “has set a dangerous new precedent for all companies worldwide.”