Sweden Needs Power for More Useful Things Than Bitcoin Mining, Energy Minister Says – Mining Bitcoin News

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Concerned about projected increase in electricity demand, the government in Sweden may turn its back on crypto mining, the country’s energy minister has indicated. Swedish bitcoin minting industry, a leader in Europe, is likely to soon lose the preferential treatment it has been taking advantage of for some time, a media report revealed.

Crypto Miners May Find It Harder to Access Sweden’s Cheap Green Energy

Amid forecasts for growing energy needs in other sectors, Sweden may change its attitude towards cryptocurrency mining. In a recent interview, Minister of Energy Khashayar Farmanbar remarked that the Swedish economy is moving “from a period of administration to an extreme expansion where our entire manufacturing industry is seeking to electrify.” Quoted by Bloomberg, the he official stated:

We need energy for more useful things than bitcoin, to be honest.

With its hydro reservoirs and wind parks providing clean and low-cost electricity, Sweden has attracted many bitcoin miners and its coin minting industry has become one of, if not the largest in Europe. However, worried about its increased power consumption, the government in Stockholm has tasked the Swedish Energy Agency to estimate the energy usage in the digital space, especially crypto mining.

The location of mining farms is largely determined by the availability of cheap electricity while the profits for their operators depend to a large extent on the prices of crypto assets. The results from the ordered review are likely to worsen the first of these conditions and the crypto market downturn has already affected the other one.

Farmanbar refrained from revealing what measures the government might impose to restrict mining but two options have been discussed. One is to change the order in which power users are connected to the network, prioritizing those that presumably bring more benefits to the society, such as creating a large number of jobs.

The other possible move is to limit the scope of the preferential tax treatment that all data centers currently enjoy. The argument is that the intended purpose of this incentive was to attract multinational corporations such as Microsoft and Facebook, not crypto mining businesses, as noted by a senior adviser at industry group Swedenergy, Erik Thornstrom, who elaborated:

I think the existing tax reliefs should be focused on the activities they were meant to attract in the first place. Mining of cryptocurrencies is more questionable.

Officials Advised to Learn More About Innovative Technologies Like Crypto Mining

“I think a lot of public officials including the energy minister who have strong opinions about cryptocurrency and blockchain in general need further education and awareness,” commented Sukesh Kumar Tedla who chairs the Swedish Blockchain Association. He admitted that crypto mining uses a lot of energy but pointed out that so do many other innovative technologies.

The latest episode in the debate over the future of bitcoin mining in Sweden comes after last year the directors of Sweden’s financial services and environmental protection agencies suggested a ban on the energy-intensive proof-of-work (PoW) mining in the European Union, on the backdrop of a serious increase of energy consumption in the sector.

Their call to eliminate the alleged threat to climate transition goals has been backed by officials in other EU nations, including Germany, Spain and Norway. However, a proposal to prohibit PoW mining, was dropped from the draft of the comprehensive Markets in Crypto Assets (MiCA) regulatory package agreed by EU institutions. The controversial text amounted to a Bitcoin ban, according to the continent’s crypto community.

Among those that hope to benefit from curbing crypto mining are, for example, companies from Sweden’s steel industry. For instance, SSAB plans to organize a fossil-free production and insists that grid operators should prioritize industrial projects like its own rather than connect users on a first-come, first-served basis, which is what they currently do. “We could reduce Sweden’s carbon dioxide emissions by 10%,” Tomas Hirsch, head of energy at SSAB, insisted.

“Is bitcoin mining what we should be using power for, when we can use it for making fossil-free steel, for example? It is not entirely trivial in a free market,” Minister Farmanbar commented, noting that in the face of expected bottlenecks, Sweden should look into whether it’s using its energy in the best possible way. His statement comes as politicians like him are finding themselves under increasing pressure to combat global warming.

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Bitcoin, bitcoin farms, Bitcoin mining, Climate, consumption, Crypto, crypto farms, crypto miners, crypto mining, Cryptocurrencies, Cryptocurrency, cryptocurrency mining, Electricity, Energy, energy minister, environment, Miners, mining, mining farms, power, restrictions, Sweden, swedish, usage

Do you think Sweden will impose restrictions on cryptocurrency mining? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.




Image Credits: Shutterstock, Pixabay, Wiki Commons, Alexandros Michailidis


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Decentralized Finance Space Heats up With Launch of World’s First DeFi ETF

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The decentralized finance (DeFi) space is continuing to heat up, with the world’s first ever exchange traded fund (ETF) launching this month. Hashdex, a Brazilian asset manager, is launching an ETF fund in collaboration with CF Benchmarks to track 12 DeFi tokens. The Hashdex DeFi Index ETF will be listed on the Brazilian stock exchange on February 17, allowing investors to track a basket of projects in the DeFi space. DeFi markets have grown tremendously over the last year to become an $80 billion market in 2021, with more growth expected in 2022. This growth has attracted investors, giving companies in the space a massive opportunity for long-term growth. Among the companies poised to benefit from the growing adoption of digital currencies and DeFi are WonderFi Technologies Inc. (NEO: WNDR) (OTC:WONDF), Marathon Digital Holdings, Inc. (NASDAQ:MARA), Mobilum Technologies Inc. (CSE:MBLM) (OTC:MBLMF), Voyager Digital (TSX:VOYG) (OTCQX:VYGVF), and Hut 8 Mining Corp. (NASDAQ:HUT). 

Leading technology company WonderFi Technologies Inc. (NEO: WNDR) (OTC:WONDF) has continued to grow its stake in the nascent DeFi space. Last month, the company announced the acquisition of Bitbuy Technologies, Canada’s first approved crypto marketplace and is already sharing positive results. On February 2, WonderFi announced that, despite volatility and a decline in the crypto markets, Bitbuy achieved an increase in new monthly deposits and higher marketplace coin volumes.

Bitbuy recorded a 29% increase in trading volumes for Ethereum in January 2022 compared to December 2021. Bitbuy listed an additional seven coins on its platform in December 2021, creating an additional $34 million in new value from these listings, and has plans to list additional crypto coins in Q1 2022. 

This new growth supports WonderFi’s thesis for acquiring Bitbuy, as the exchange model offers diverse revenue streams independent of the performance of the crypto market. According to WonderFi’s CEO, Ben Samaroo, “Platforms like Bitbuy thrive with market volatility”. 

While the broader crypto markets declined in January 2022, Bitbuy continued to experience robust inflows of new capital during the month through the Bitbuy platform, after proudly recording a 58% increase in new user registrations in Q4 2021 versus Q3,” said Michael Arbus, CEO of Bitbuy. 

WonderFi, which is backed by strategic investors such as Alameda Research and FTX’s Sam Bankman-Fried, Shark Tank’s Kevin O’Leary, and Gen-Z influencer and investor Josh Richards, just launched the WonderFi app last week. Through the WonderFi app, users can buy assets, earn interest and gain broad exposure to the $80 billion DeFi market.

For more information about WonderFi Technologies Inc. (NEO: WNDR) (OTC:WONDF), click here.

Crypto Companies Continue to Tap Value from the Growing Crypto and DeFi Markets

Leading bitcoin self-mining company Marathon Digital Holdings, Inc. (NASDAQ:MARA) has appointed Ashu Swami as the Chief Technology Officer. Following his appointment, Swami will be responsible for overseeing and expanding Marathon’s technical operations. He will also be responsible for ensuring that the organization meets rigorous security measures. Swami brings a wealth of experience in technical, regulatory, and market expertise from years of working with companies such as Core Scientific (as the chief product officer) and Apifiny (as the CTO). He has also been involved in blockchain and DeFi projects. 

Technology-driven Payment Service Provider (PSP) Mobilum Technologies Inc. (CSE:MBLM) (OTC:MBLMF) is continuing to advance its mission of making traditional finance accessible through digital payment infrastructure and digital asset management technologies. On January 19, the company signed an agreement to provide KEYS Token with its on-ramp services. Under the agreement, Mobilum will provide KEYS with an easy-to-use fiat-to-crypto gateway, giving its users the ability to purchase KEYS Token using Visa, Mastercard, debit and credit cards, powered by Mobilum’s industry leading on-ramp. 

On January 12, Voyager Digital (TSX:VOYG) (OTCQX:VYGVF), which is one of the fastest growing crypto platforms in the US, announced the addition of Tim Mund as Head of US Payment Sales. In the newly created role, Mund will be responsible for the sales and go-to-market strategy for Voyager’s payment solutions. He will also be building the customer pipeline with payment service providers (PSPs) and key merchants to integrate the company’s technology with their payment networks and systems.

Hut 8 Mining Corp. (NASDAQ:HUT), one of North America’s digital assets mining companies, announced plans to acquire the data center business from TeraGo. In the agreement, Hut 8 Mining will acquire five data centers across Canada Once completed, positioning the company as a leader in high-performance computing platforms. The acquisition will also help the company to diversify its profile and revenues. The company will acquire the data center business as well as employees and customers as part of the transaction. 

As the crypto and DeFi markets continue to expand, companies like WonderFi have a massive opportunity to diversify their income and deliver value to customers and investors through innovation in the space.

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Top Canadian Trading App Finally Embraces Crypto Fully

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In 2020, Wealthsimple dipped its toes into crypto by offering Bitcoin and Ethereum trading. Now, the online investment platform is fully embracing crypto by including capabilities like hosted wallets and several other coin options to trade. Of course, Wealthsimple isn’t the first financial services company to embrace crypto, signaling that digital currencies are becoming more and more mainstream. WealthSimple CEO Mike Katchen urged Canadian policymakers to “plant a flag” in the crypto world. The tides are already turning in regards to regulation, with BitBuy recently becoming Canada’s first regulated crypto trading platform. With regulators and corporations working together, and self-regulation within the space already in the works, companies at the forefront of crypto and blockchain technology developments like WonderFi Technologies (NEO: WNDR) (OTC:WONDF), Coinbase (NASDAQ:COIN), MicroStrategy (NASDAQ:MSTR), DMG Blockchain Solutions Inc. (TSXV:DMGI) (OTCQB:DMGGF), and Galaxy Digital Holdings Ltd. (TSX:GLXY) could soon see accelerated growth.

WonderFi Technologies (NEO: WNDR) (OTC:WONDF) is a technology company backed by Kevin O’ Leary that provides us with an easy gateway to DeFi. On January 4th, WonderFi announced that it had entered into a definitive agreement to acquire the parent company of BitBuy (First Ledger Corp.).

“The integration of WonderFi and Bitbuy is a huge step forward in our mission of democratizing finance through easy and secure access to DeFi and crypto,” said Ben Samaroo, CEO of WonderFi. “A licensed marketplace serves as a crucial gateway to the digital asset economy, and facilitates a robust end-to-end, unified client experience. The integration of Bitbuy’s product suite will accelerate and expand the reach and scope that WonderFi can offer to the market, and will drive long-term growth and value for the Company.”

As mentioned, BitBuy became the first crypto platform that was regulated as a marketplace in Canada, thereby establishing WonderFi as a leading consumer platform for people who are interested in accessing regulated cryptocurrency and decentralized finance (DeFi).

Kevin O’Leary, a globally-renowned investor and one of WonderFi biggest backers, said: “this is a combination of two management teams with excellent executional skills that now have the bandwidth, assets and licenses to provide an institutional grade compliant crypto platform to investors interested in exposure to centralized and decentralized financial services.”

In addition, WonderFi just announced that it has closed its previously announced upsized bought deal public offering led by Canaccord for a  total of $45 million pursuant to the bought deal at a price of $2.40 per unit. The company intends to use the net proceeds to partially fund the purchase of the previously announced acquisition of First Ledger and to fund future growth initiatives including global expansion of the WonderFi and Bitbuy brands

For more information about WonderFi Technologies (NEO: WNDR) (OTC:WONDF), click here.

DeFi Companies Make Early Moves In 2022

Coinbase (NASDAQ:COIN), one of the biggest US cryptocurrency exchanges, has added Tobias “Tobi” Lütke, the CEO of e-commerce company Shopify Inc., to its board of directors. This appointment comes at a time when Coinbase is aiming to expand its e-commerce capabilities and create a marketplace for digital art – non-fungible tokens (NFT). The Shopify platform lets merchants set up online stores and sell their products to consumers, and it accepts cryptocurrency payments via Coinbase.

MicroStrategy (NASDAQ:MSTR), the largest independent publicly-traded business intelligence company, recently announced its Q4 2021 financial results. Total revenues for Q4 2021 were $134.5 million, a 2.4% increase from the Q4 of 2020 and is the first time since 2014 MicroStrategy achieved positive revenue growth in 2021, according to its CEO. 

DMG Blockchain Solutions Inc. (TSXV:DMGI) (OTCQB:DMGGF) was informed by the British Columbia Securities Commission on January 28th that it has accepted the company’s application for a management cease trade order to be granted in connection with the late filing of its audited annual financial statements for the year ended September 30, 2021, and the related management’s discussion and analysis, as well as the CEO and CFO certifications, to be delivered in connection with the 2021 Annual Financial Statements.

Galaxy Digital Holdings Ltd. (TSX:GLXY), a financial services and investment management innovator in the digital asset, cryptocurrency, and blockchain technology sectors, recently announced that it has publicly filed a registration statement on Form S-4 with the US Securities and Exchange Commission (SEC). This matter concerns the proposed reorganization of Galaxy Digital from the Cayman Islands to Delaware, and the proposed Nasdaq listing of the Class A common stock of Galaxy Digital under the ticker symbol “GLXY”.

A burgeoning Defi market in 2022, as well as a positive regulatory climate, may present a great opportunity for WonderFi Technologies (Neo: WNDR) (OTC:WONDF).


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Appetite for Crypto Sector Still Going Strong as Valuations Rise

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Cryptocurrency exchange FTX saw its valuation soar to $32 billion in a new funding round announced on January 31, underscoring continued appetite for the sector. The Bahamas-based company raised $400 million in a Series C funding round – its third round in the past nine months for a total of $2 billion in venture capital to date. Of course, this is just one of many financing rounds sending serious cash into the crypto sector. In 2021, funding for blockchain startups increased 8-fold at $25.2 billion and isn’t expected to slow in 2022, creating a positive outlook for companies in the space such as WonderFi Technologies Inc. (NEO: WNDR) (OTC:WONDF), Marathon Digital Holdings, Inc. (NASDAQ:MARA), Hut 8 Mining Corp. (NASDAQ:HUT), Hive Blockchain Technologies Ltd. (TSX:HIVE) (NASDAQ:HIVE), and Voyager Digital Ltd. (TSX:VOYG). 

Leading technology company WonderFi Technologies Inc. (NEO: WNDR) (OTC:WONDF) is continuing to make progress in its mission to create greater access to DeFi through strategic deals. In January, the company announced the acquisition of Bitbuy Technologies, Canada’s first approved crypto marketplace, and it’s already proving to be a worthy investment. Bitbuy is a trusted execution platform that serves more than 389,000 users, with over $4.6 billion transacted through the platform.

On February 2, WonderFi announced that Bitbuy Technologies achieved an increase in monthly new deposits and marketplace coin volumes despite the volatility and declines in crypto markets in December and January. This increase supports WonderFi’s theory that the crypto exchange model provides diversified income streams and can operate independently of the prevailing performance of the crypto market. 

Bitbuy reported a 29% increase in Ethereum volume traded in January compared to December. The company also listed seven new coins in December 2021, generating an additional $34 million in new value. 

Bitbuy will continue adding new coins on its platform in Q1 2022 to underpin the marketplace volume growth while driving user satisfaction. 

On February 8, WonderFi announced that BitBuy has entered into an advertising agreement with Kogan.com, one of Australia’s largest and most popular online retailers. The partnership will provide marketing support to Bitbuy’s future launch into the Australian market and give WonderFi access to Kogan’s 3.3 million active monthly customers.

For more information about WonderFi Technologies Inc. (NEO: WNDR) (OTC:WONDF), click here

Crypto Stocks Thriving Despite Market Slowdown 

Digital asset miner Hut 8 Mining Corp. (NASDAQ:HUT) recently provided its mining production for January 2022, revealing that it mined 308 BTC. Hut 8 reported that 16% of the production was from the company’s GPU (Graphics Processing Unit)  miners. These GPUs are efficient with minimal power requirements resulting in an average cost of less than C$2,600 per Bitcoin. The company deposited 100% of the self-mined bitcoin, resulting in 5,826 bitcoins held in reserve. During the month, the company also retired its older fleet of Bitfury Clarkes, replacing them with 6,317 MicroBT M3OS and M31S+ miners. 

Ashu Swami is now serving as the Chief Technology Officer of Marathon Digital Holdings, Inc. (NASDAQ:MARA). He has diverse experience in the tech and crypto space as a chip designer, entrepreneur, and crypto and DeFi expert. He has previously worked in different capacities in the tech and crypto space, including founding LocalPad. He also has three patents in blockchain and trading as well as experience in technical, regulatory, and market. Marathon adds Swami as part of its technical lead to move the company into the forefront of bitcoin and blockchain innovation. 

Hive Blockchain Technologies Ltd. (TSX:HIVE) (NASDAQ:HIVE) announced that the total Bitcoin Equivalent mined by the company in 2021 was 4,032. In January, Hive produced 264 bitcoins at a bitcoin mining capacity of 1.87 Exahash. The company also produced 2,170 ETH equivalent at an Ethereum mining capacity of 4.56 Terahash. Hive has continuously expanded its Bitcoin hashing power despite the increasing network difficulty and challenges such as the curtailment by Quebec Hydro following extreme cold weather in Canada and increasing energy prices. 

Voyager Digital Ltd. (TSX:VOYG), which is one of the fastest-growing, publicly-traded cryptocurrency platforms in the US, is now a corporate investor of crypto lending and tax platform CoinLedger. Voyager recently partnered with CoinLedger to bring free tax tools for its users for the 2021 tax year. This investment in CoinLedger serves as a path toward the company’s long-term strategic vision in the crypto space. At the same time, it provides an additional array of services for Voyager users making it easy for them to track and report their crypto taxes. 

Despite the ongoing volatility in the crypto space, companies in the sector such as WonderFi continue to see positive growth and increased activity on their platforms, which is a tentative indication of the nearing maturity of the crypto market.

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Ethereum’s Long Awaited Eco-Friendly ‘Merge’ Update Slated for September Release

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After repeated delays, the energy-efficient update to the Ethereum blockchain has finally got a release date. Officially named the ‘Merge’ this update is tentatively slated to go live exactly two months from today, on September 19. This date was posted on Twitter by one of the developers from the Ethereum Foundation, Tim Beiko. While Beiko noted that this timeline is not concrete, he did say that its extremely exciting to see the upgrade come together. For now, the September 19 release date has been locked as a planning timeline.

Ethereum developers are recoding its mining protocol to the energy efficient ‘Proof-of-Stake’ (PoS) model from its current ‘Proof-of-Work’ (PoW) system. The Merge upgrade is expected to slash Ethereum’s power consumption by 99.95 percent, its developers had claimed in a blog post last year.

Delaying its release yet again from the previously anticipated August launch, Beiko revealed that the network will be put through some more tests before its released for commercial use.

The development comes just days after the Merge successfully completed a trial on the public test network called Sepolia. This test marked the second-to-last trial test for the Merge.

These tests that the Merge is going through are for developers to understand how the upgraded network will look like, in terms of performance, upon its final release.

The developers are running extensive tests on the Ethereum revamp because decentralised finance (DeFi) apps reportedly worth over $100 billion (roughly Rs. 7,61,110 crore) are supported on the blockchain, and cannot be put in jeopardy.

Now, the final trial of the network will be held on what is called the Goerli test network some days later.

Now that the release timeline of the Merge is getting clearer, it is reflecting a positive effect on Ether prices as well.

On Monday, July 17, ETH climbed above the mark of $1,254 (roughly Rs. 1 lakh) after days of recovering lowly on the crypto ladder. As per Gadgets 360’s crypto price tracker, ETH is up by 3.16 percent, taking its value to $1,442 (roughly Rs. 1.15 lakh).

Speaking to Gadgets 360, Edul Patel, the CEO and Co-founder of Mudrex noted that ETH managed to gain 17 percent over the past week, trading above the mark of $1,254 (roughly Rs. 1 lakh) for the first time in a month because the launch of its eco-friendly update called the Merge has come closer to completion.

Once switched to PoS mining operations, randomly selected miners will be able to validate transactions on the Ethereum blockchain, eliminating the requirement of dedicated machines and people to add new blocks.

PoW mining, on the other hand, needs a competitive validation method to confirm transactions and add new blocks to the blockchain. Hence, the operations of PoW mining are costlier to maintain because advanced machines need to be plugged to power sources at all times that are used by miners constantly to validate transactions.

Bitcoin uses PoW mining model and is infamous for disrupting power around its mining hubs.

Solana and Polygon, meanwhile, are PoS-based eco-friendly blockchains that are now rising in popularity.


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Ongoing Crypto Market Meltdown Provides Cautionary Tale for US Public Pension Funds

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When the Houston Firefighters Relief and Retirement Fund bought $25 million (roughly Rs. 200 crore) in cryptocurrencies, with the fund’s chief investment officer touting their potential, retired fire Capt. Russell Harris was concerned. Harris, 62, has attended the funerals of 34 firefighters killed in the line of duty. He was already worried about his pension after an overhaul by state and city officials cut payments as they grappled with the ability to pay out benefits. He didn’t see crypto, unproven in his eyes, as an answer.

“I don’t like it,” Harris said. “There’s too many pyramid schemes that everybody gets wrapped up in. That’s the way I see this cryptocurrency at this time. … There might be a place for it, but it’s still new and nobody understands it.”

The plunge in prices for Bitcoin and other cryptocurrencies in recent weeks provides a cautionary tale for the handful of public pension funds that have dipped their toes in the crypto pool over the past few years. Most have done it indirectly through stocks or investment funds that serve as proxies for the larger crypto market. A lack of transparency makes it difficult to tell whether they’ve made or lost money, let alone how much, and for the most part fund officials won’t say.

But the recent crypto meltdown has prompted a larger question: For pension funds that ensure teachers, firefighters, police and other public workers receive guaranteed benefits in retirement after public service, is any amount of crypto investment too risky?

Many public pension funds across the U.S. are underfunded, sometimes seriously so, which leads them to take risks to try to catch up. That doesn’t always work out, and the risk extends not just to the funds but to taxpayers who might have to bail them out, either through higher taxes or diverting spending away from other needs.

Keith Brainard, research director for the National Association of State Retirement Administrators, said he wasn’t aware of more than a handful of public pension funds that have invested in crypto.

“There may come a day when crypto settles down and becomes adequately understood and mature as a potential investment that public pension funds might embrace them,” Brainard said. “I’m just not sure that we’re there yet.”

The U.S. Department of Labor urges “extreme care” in crypto investments because of the high risks. The recent plunge in crypto prices has caused Washington to more closely scrutinise the freewheeling industry. After the collapse of $40 billion (roughly Rs. 3,19,600 crore) crypto asset known as Terra, senators in both parties have proposed legislation that would regulate crypto for the first time, and Treasury Secretary Janet Yellen has called for more oversight of crypto ventures.

The Houston Firefighters Relief and Retirement Fund’s cryptocurrency investment wasn’t very big — just $25 million (roughly Rs. 200 crore) in what was then a $5.5 billion (roughly Rs. 44,000 crore) portfolio.

It’s not clear how that panned out in the cryptocurrency market slide this year. Officials from the fund and the union didn’t respond to multiple requests for comment. But the fund bought in when bitcoin prices were close to their peak of nearly $67,000 (roughly Rs. 53,54,000), and they’ve been on the decline since then, dipping below $20,000 (roughly Rs. 15,97,900) in June.

The fund’s chairman, Brett Besselman, said in a first-quarter report that it was healthy with an overall rate of return of 33.7 percent in 2021. Houston Mayor Sylvester Turner said earlier this year that the 2017 overhaul is working well and, thanks to strong returns in 2021, has put his city’s pension funds well ahead of schedule toward eliminating their unfunded liabilities.

Houston’s experiment, which fund managers touted as the first announced direct purchase of digital assets by a US pension plan, followed a series of bigger but indirect investments by two pension funds for Fairfax County of Virginia. They put over $120 million (roughly Rs. 960 crore) into funds that seek opportunities in the crypto world, such as blockchain technology, digital tokens and cryptocurrency derivatives. As in Houston, the Virginia investments are a tiny share of the funds’ $7.2 billion (roughly Rs. 57,500 crore) in assets.

Since 2018, the Fairfax County Employees’ Retirement System and Fairfax County Police Officers Retirement System have put money into venture capital funds that invest in blockchain and a hedge fund that seeks to harness some of the volatility inherent in the space, said Jeffrey Weiler, executive director of Fairfax County Retirement Systems. He said the goal was to invest in infrastructure that underlies blockchain technology, which managers continue to view as a high-growth area.

Crypto-related investments aren’t necessarily deliberate. The Minnesota State Board of Investment manages a portfolio worth around $130 billion (roughly Rs. 1,000 crore) for several public employee pension plans and other entities. A recent report shows it held small stakes as of December 31 in the crypto exchange Coinbase Global and the bitcoin miners Riot Blockchain and Marathon Digital Holdings with a combined market value of $5.3 million (roughly Rs. 42 crore). It also listed two holdings of fixed-income securities from Coinbase with a market value of $2.2 million (roughly Rs. 18 crore).

Mansco Perry, the board’s executive director and chief investment officer, said the board invests heavily in stock indices, so those holdings were most likely in one of its index funds or were purchased by an outside investment manager.

“We don’t own cryptocurrency, but if a company is big enough to be in an index, more than likely we own it,” Perry said.

The Minnesota board may look at crypto-related investments someday just to learn about them, Perry said, “but it’s not a high priority. … I would say we’re nowhere close to making an investment decision to move forward, but that doesn’t mean we never will.”

The country’s largest public pension fund, the California Public Employees’ Retirement System, known as CalPERS, took a tiny stake in 2017 in Riot Blockchain that grew to over $1.9 million (roughly Rs. 15 crore) by late 2020. Securities and Exchange Commission filings show it reached $5.4 million (roughly Rs. 43 crore) before CalPERS got out sometime in the second quarter of 2021. Officials declined to give details, but it was a miniscule play in CalPERS’ total portfolio of well over $400 billion (roughly Rs. 31,95,500 crore).

According to SEC filings, the State of Wisconsin Investment Board apparently began testing the waters early last year with purchases of Coinbase, Marathon and Riot Blockchain. Those holdings grew to at least $19.3 million (roughly Rs. 150 crore), against a total portfolio of $48.2 billion (roughly Rs. 3,85,100 crore), by the end of the first quarter this year. Board officials did not respond to requests for comment.

New Jersey’s main state pension fund appears from SEC filings to have started investing in some crypto-related stocks in the second quarter of 2021. As of the end of March 2022, the state had about $9.5 million (roughly Rs. 75 crore) in combined holdings in Coinbase, Riot Blockchain and Marathon. New Jersey state treasury officials said they don’t comment on specific investments.

Other public funds that have taken smaller stakes include the Utah Retirement Systems, which once held a $13.2 million (roughly Rs. 100 crore) stake in Coinbase but doesn’t anymore. The Pennsylvania Public School Employees’ Retirement System held as much as $2.6 million (roughly Rs. 21 crore) worth of Coinbase last summer but was down to $681,000 (roughly Rs. 5 crore) by the end of the first quarter, after selling most of its stake, while adding about $398,000 (roughly Rs. 3 crore) worth of Marathon starting in the second half of 2021.

Harris, the retired Houston fire captain, said he sees his pension as a contract that should be honoured, given the risks that firefighters routinely take. While he’s generally happy with how his pension fund has performed, he’s still uneasy about crypto. He also points out that firefighters in Houston and many other US communities generally aren’t eligible for Social Security.

“There’s just a lot of people out there, if they lose that pension it’s over,” Harris said. “Some of these older retirees, I just do not know how they’re surviving.”


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Russia to Improve Crypto Transaction Monitoring as Regulation Draws Closer, Says Rosfinmonitoring

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Russia’s financial monitoring agency, Rosfinmonitoring, said on Friday it was using software to track cryptocurrency transactions and hopes to improve its capabilities, as Moscow ushers in regulation on what one lawmaker dubbed “cryptomania”.

The Bank of Russia has long voiced scepticism over cryptocurrencies, citing financial stability concerns, and has advocated for a complete ban on trading and mining, at odds with a government keen to regulate the industry.

Russia has already identified specific criminal cases involved in cryptocurrencies, said Rosfinmonitoring’s head Yuri Chikhanchin, adding that the agency wants to improve its systems and identify transactions and blockchains that are currently hidden.

Chikhanchin said it was not currently possible to cover everything, partly because not all countries are so eager to regulate the industry.

“It is very difficult when cryptocurrency accounts go into the unregulated zone and we don’t understand who is on the other end,” he said. “But I think we will still solve this task.”

The blockchain technology on which cryptocurrencies are based records transactions, but not the identity of wallet-owners, making them difficult to track.

Anatoly Aksakov, head of the financial committee in Russia’s lower house of parliament, on Thursday said draft legislation on regulating cryptocurrencies would be put to the house in the autumn.

“Obviously there will be strict regulation,” Aksakov said, comparing “cryptomania” to addiction in the gambling sector, which is tightly regulated in Russia.

“The same needs to be done with crypto exchanges and trading,” he said. “The phenomenon exists and it cannot be ignored.”

The crypto industry has been in the crosshairs of regulators, who worry that a recent meltdown in the volatile market could hit the broader financial sector.

The slump – sparked by the downfall of two major tokens in May – has led to crypto lender Celsius pausing withdrawals and Singapore-based crypto hedge fund Three Arrows Capital entering into liquidation.

Russia’s central bank has said it is open to allowing cryptocurrencies to be used for international settlements and has approved other digital asset transactions.

Aksakov also expects a cryptocurrency mining law to be considered soon, an area the government hopes to tax.

Unlike payment companies, most crypto exchanges initially rejected calls to cut off all Russian users, sparking concerns among US lawmakers that digital assets could be used to evade Western sanctions on Moscow over its actions in Ukraine.

Major exchanges said they would comply with sanctions by blocking sanctioned users. In April, Binance froze deposits and trading for Russian users with crypto assets of more than EUR 10,000 (roughly Rs. 8.08 lakh).

© Thomson Reuters 2022


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South Korea’s Government Plans New Digital Assets Oversight Committee in the Wake of Terra Collapse

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The recent Terra UST/LUNA collapse has given rise to several calls for government regulation in the crypto space and South Korea’s Financial Supervisory Service (FSS) — the country’s integrated financial regulator that examines and supervises financial institutions, has decided to take on the mantle of analysing the risk characteristics of domestic virtual assets as a way to manage risks in the virtual asset market. In order to analyse the risk characteristics of domestic virtual assets, the FSS plans to entrust research services to institutions with public trust to begin with.

The government’s decision to delegate the FSS as the body incharge of virtual assets arrives after months of deliberation on who should take on the task of oversight the industry, as per a Korea Herald report. Moving forward, the FSS will oversee the previously introduced measures including the act on ‘Reporting and Using Specified Financial Transaction Information’, which imposes restrictions on cryptocurrency exchanges.

Amid signs that Terraform Labs co-founder Do Kwon was facing legal trouble in South Korea, the country’s ruling party has also recently announced that it would launch a new Digital Asset Committee within the early stages of June, according to local news outlet NewsPim.

According to the local report, the committee will serve as a watchdog over the crypto industry and will be responsible for policy preparation and supervision, up until the forthcoming ‘Framework Act for Digital Assets’ is enacted and a formal government entity devoted to crypto is established.

The committee will serve under the FSS in an attempt by the South Korean government to enhance policy effectiveness by streamlining oversight efforts on crypto.

The government in an announcement also recently reaffirmed its plan to charge and demand a 20 percent income tax on gains from cryptocurrency transactions from next year. Those who earned more than 25 million won ($22,400 or roughly Rs. 17.4 lakh) or more during 2022 will be subject to the income tax.

The government also decided to prevent cryptocurrency operators from being able to engage in transactions or brokerage services themselves in an effort to enhance transparent operation of cryptocurrency exchanges.


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India to Sync Upcoming CBDC With National Monetary Policies, Payment Systems

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Indians are eagerly awaiting the launch of the Digital Rupee CBDC that is expected to be rolled-out for the current fiscal 2022-23. The Reserve Bank of India (RBI) has released a report stating that this CBDC will be in alignment with the country’s existing monetary policies as well as payment systems. The RBI, which will have a control on this Digital Rupee, aims to take a graded approach in accordance with the financial structure of India.

A Central Bank Digital Currency (CBDC) is a blockchain-based payments solution, regulated by the central bank. While it works like a typical cryptocurrency and facilitates instant, high value digital payments, transactions on CBDCs are traceable and monitored by the government.

“The Reserve Bank proposes to adopt a graded approach to introduction of CBDC, going step by step through stages of Proof of Concept, pilots and the launch. The design of CBDC needs to be in conformity with the stated objectives of monetary policy, financial stability and efficient operations of currency and payment systems,” RBI said in its report.

The development comes just some time after a senior RBI official reportedly claimed that the CBDC will be introduced separately for wholesale and retail sectors.

On several occasions, Nirmala Sitharaman, India’s finance minister, has noted that the Digital Rupee will expand payment options for Indians.

The government of India is also betting on the CBDC to expand its efforts for bringing-in financial inclusion for those who are still not a part of India’s banking systems. The work on Digital Rupee is underway and the government of India does not wish to rush through its development and roll-out processes.

In April, RBI Governor T Rabi Sankar had said that a nuanced and calibrated approach is essential for launch of India’s maiden digital currency as it would have various implications for the economy and monetary policy.

Several other nations like US, Russia, China, Jamaica, Nigeria, and Mexico are also working on their respective CBDCs.

Paolo Ardoino, the CTO of Tether, had recently said that the main role of CBDCs is to employ private blockchain as a state-of-the-art, cost-controlled technology infrastructure in which the majority of bank transfers and credit/ debit card transactions will be carried out.

According to the Atlantic Council’s CBDC tracker, 109 countries including India are currently in the process of developing their sovereign digital currency, a number that has doubled since May 2020.

Out of these 86 nations, nine countries have already launched their CBDC while 15 are in the pilot phase.


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OpenSea Former Product Manager Charged With NFT Insider Trading, Says US Attorney

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US prosecutors in Manhattan on Wednesday charged a former product manager at OpenSea, the largest online marketplace for non-fungible tokens, with insider trading, the first such case involving digital assets.

Nathaniel Chastain, 31, of Manhattan, was accused of secretly buying 45 NFTs on 11 separate occasions based on confidential information that the tokens, or others by the same creator, would soon be featured on OpenSea’s home page.

Prosecutors said Chastain chose which NFTs to feature, and sold his NFTs shortly after they were featured, typically for two to five times what he paid.

In one instance, Chastain allegedly more than quadrupled his money by purchasing the NFT “Spectrum of a Ramenfication Theory” on September 14, 2021, and selling it early the next morning.

Prosecutors said the scheme ran from June to September 2021, with Chastain transacting through anonymous digital currency wallets and accounts at OpenSea, also known as Ozone Networks.

“NFTs might be new, but this type of criminal scheme is not,” US Attorney Damian Williams in Manhattan said in a statement. “Today’s charges demonstrate the commitment of this office to stamping out insider trading – whether it occurs on the stock market or the blockchain.”

Chastain pleaded not guilty on Wednesday to wire fraud and money laundering charges, each carrying a maximum 20-year prison term, before US Magistrate Judge Barbara Moses in Manhattan. Bond was set at $100,000 (roughly Rs. 80 lakh).

“When all the facts are known, we are confident he will be exonerated,” Chastain’s lawyer David Miller said in an email.

Non-fungible tokens are unique digital assets, reflecting ownership of files such as artwork, other images, videos and text, and recorded on a blockchain.

The NFT market totaled about $40 billion (roughly Rs. 3,10,300 crore) in 2021, and more than $37 billion (roughly Rs. 2,87,000 crore) from January to April 2022 though transaction activity has been stabilizing, according to the blockchain data firm Chainalysis.

“When we learned of Nate’s behavior, we initiated an investigation and ultimately asked him to leave the company,” OpenSea said in a statement about Chastain. “His behavior was in violation of our employee policies and in direct conflict with our core values and principles.”

© Thomson Reuters 2022


Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.
 

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