This Week in Crypto #4

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From a blockchain briefly thrown in disarray when its developers announced they were leaving to Binance – drawing UK regulator’s anger when its partnership with a firm was made public – and crypto users in the U.S. being convinced that virtual currency has a future in the country following an executive order, here are the major events in crypto last week:   

Cronje leaves crypto

An announcement by Andre Cronje and Anton Nell, two leading developers at Fantom, that they were leaving decentralised finance or DeFi and the crypto space, resulted in the crash of the price tokens of projects built on the blockchain. Nell made the announcement on Twitter as Cronje had deleted his account weeks prior.  About 25 apps including the popular Yearn Finance would be terminated next April, Nell wrote.

News of the exit raised dust in the DeFi space including allegations of rug pull by the Fantom team by Rekt in an article which was later deleted. By the end of the week, Fantom released a statement explaining that the apps would not be affected by the exit of the developers as existing teams would take charge of the projects. The statement also quoted Cronje as saying that the team was “on the right technology path”.

Binance and Eqonex partnership irks UK regulators

A partnership between Eqonex and Binance which is reported to give the latter control through a convertible loan worth $36 million provided through Bifinity was announced during the week. Bifinity, a Binance-owned company, will hold two seats on the board of directors and appoint persons in key positions to run Eqonex, the company said.  The loan has an 18-month maturity and its initial conversion price is $1.89 per share, The Block reported.

But the Financial Conduct Authority (FCA) in the United Kingdom is not happy with the partnership. The regulator is concerned that Binance Group may be beneficial owners of Digivault, a subsidiary of Eqonex registered with the FCA’s anti-money laundering regulation. The FCA said Binance Market Limited, a unit of Binance Group, is regulated for a limited set of activities and no other entity in the group holds any licence to conduct regulated activity in the UK.

Also in the UK, the FCA has ordered the shutdown of crypto ATMs by operators. The FCA said none of the cryptoasset firms registered with it have the approval to provide crypto ATM services in the country.

Biden’s order on crypto

Crptocurrency has come to stay. That’s the signal many players in the crypto space received following the signing of an executive order by the President of the United States, Joe Biden. Although no specific details were given, the order was for federal agencies to harmonise their approach to the cryptocurrency sector. A fact sheet accompanying the order stated that the U.S. government’s effort to regulate crypto will focus on consumer protection, financial stability, illicit uses, leadership in the global financial sector, financial inclusion and responsible innovation.

China’s digital Yuan is on the radar of US lawmakers

Nine senators in the U.S. sponsored a bill that seeks to hold to account China’s central bank digital currency launched during the Winter Olympics. Introduced by Senators Bill Cassidy and Marsha Blackburn and titled: Say No to the Silk Road Act, the bill asked the secretary of commerce to produce reports on China’s use of the digital Yuan and the potential expansion of the initiative into the U.S. and for a provision that limits the use of the digital Yuan on U.S. government hardware and require beneficiaries of foreign military assistance from the U.S. to disclose their use of the digital Yuan.

Crypto-friendly president elected in South Korea

Yoon  Suk-yeol emerged president of South Korea with a promise to deregulate the virtual asset market. The crypto industry in the country puts its hope on crypto-friendly Suk-yeol who promised in January to “create an environment where virtual asset investors can invest with confidence” and “to realise the unlimited potential of the virtual asset market, we must overhaul regulations that are far from reality and unreasonable”.

How Ukraine spent $100 million cryptocurrency donation

The Ukrainian government gave details of how it spent the $100 million in cryptocurrency donations since Russia began its onslaught in the country. In a breakdown, Alex Bornyakov, Ukraine’s deputy minister in the Digital Transformation Ministry, tweeted that non-lethal military equipment, medicines, lunches and communication equipment were purchased.

“Crypto-assets proved extremely helpful in facilitation and funding flows to the Armed Forces of Ukraine… Each and every helmet and vest bought via crypto donations is currently saving Ukrainian soldiers’ lives,” Bornyakov said.

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