In wake of crash, cryptocurrency regulation focus heightens

Consultants predict regulatory scrutiny to extend across the cryptocurrency market following the latest crash of a multibillion-dollar stablecoin, and one analyst stated regulation cannot come quickly sufficient.

Cryptocurrency is an encrypted digital foreign money that operates and not using a financial institution or federal authorities to uphold its worth. Bitcoin is an instance of cryptocurrency, and its worth is not tied to any outdoors property, making it extra unstable. A stablecoin, nonetheless, is a sort of cryptocurrency that makes an attempt to keep up worth tied to outdoors property such because the U.S. greenback and is used to facilitate the commerce of different cryptocurrencies.

Final week, the stablecoin referred to as TerraUSD, which is taken into account an algorithmic stablecoin with a price matching the U.S. greenback, fell under the U.S. greenback, inflicting buyers to lose confidence within the digital foreign money and ensuing within the lack of billions of {dollars}.

And that is probably only the start of the fallout to be seen from the TerraUSD crash, stated James Harris, business director of CryptoCompare, a worldwide cryptocurrency market information supplier.

“A $40 billion ecosystem falling out, there’s going to be extra issues that can emerge,” Harris stated throughout a webinar Thursday on cryptocurrencies hosted by London-based information analytics agency GlobalData Plc.

Regulating cryptocurrency has been a subject of debate on the federal degree, with U.S. Treasury Secretary Janet Yellen noting the dangers that the unregulated cryptocurrency market poses to monetary stability throughout a Senate Banking Committee listening to Could 10.

Together with the monetary danger, GlobalData senior analyst Nicklas Nilsson stated through the webinar that there are many different causes the cryptocurrency market wants oversight.

AlexSava

The 2024 cryptocurrency bull market has sparked a remarkable surge in wealth, creating over 88K new millionaires and elevating six individuals to billionaire status, according to a recent report by British investment migration consultancy Henley & Partners.

The number of individuals holding crypto worth of at least $1M has skyrocketed to 172K, up 95% from a year before. The significant shift comes during the same year in which bitcoin (BTC-USD) reached a new record high of $73.8K in March, buoyed by the launch of U.S. spot bitcoin exchange-traded funds that have ushered in notable institutional – and retail – capital.

What’s more, the number of centi-millionaires – individuals with assets exceeding $100M – has surged by 79%, reaching a total of 325, the report added. And five out of the six newly minted crypto billionaires have amassed their fortunes through investments in bitcoin (BTC-USD). MicroStrategy’s (MSTR) Michael Saylor, who personally owns about $1B of bitcoin, is an outspoken bitcoin whale.

But, since its price swoon in early August, bitcoin (BTC-USD) has been trading 23%-16% off its all-time highs. That’s despite the fact that the Federal Reserve is gearing up to start cutting borrowing costs, a move that may attract investor demand for riskier assets, including BTC. Year-to-date, BTC climbed about 38%.

“The longer bitcoin stays in this range, the more likely a strong breakout will happen, although it’s uncertain which direction it will take,” said Seeking Alpha analyst Dean Popplewell in Bitcoin’s Steady Range: Mt. Gox Impact And Future Outlook.

Fellow SA contributor Florian Grummes is leaning on the bearish end of the bull-bear spectrum, citing seasonal patterns and potential stock-market volatility.

He expects bitcoin’s pullback from March highs “to intensify over the next one to two months, and would not be surprised if the markets crashed temporarily, he said in Bitcoin: This Correction Is Probably Not Over Yet. A panic sell-off lasting several weeks should then provide patient investors with very good entry opportunities in September or October, or at the latest, after the US election in early November.”

Elsewhere in Henley & Partners’ report, crypto-wealthy investors are increasingly seeking residency in jurisdictions that are both crypto-friendly and tax advantageous, it found. Singapore continues to be the “premier cryptocurrency hub,” excelling in regulatory framework and infrastructure development. Coming in second place, Hong Kong has investor-friendly tax policies. And the United Arab Emirates, also with its tax advantages, ranks third in this competitive landscape.

“The crypto millionaires of 2024 are not content with digital riches alone; they seek freedom of global mobility to match their borderless assets,” said Dominic Volek, group head of private clients at Henley & Partners.

The report includes stats on wealthy crypto investors provided by wealth intelligence firm New World Wealth, along with insights from academics, industry experts and crypto players.

More on the Crypto Market

Tesla Inc TSLA CEO Elon Musk said on Friday that he would like to have the option of paying with meme cryptocurrency Dogecoin DOGE/USD reinstated for the company’s merchandise.

What Happened: “Me,” Musk wrote in reply to an X user who asked whether anyone would like Tesla to reinstate the option of paying with Dogecoin for its merchandise.

Tesla has an online shop with company merchandise. Though it currently only allows payment in dollars, it previously allowed users to make payments with Dogecoin. Earlier this year, Musk even suggested in an address during his visit to Giga Berlin that the company would accept Dogecoin as an official form of payment for its cars at some point.

The EV giant’s website even has a support page for clearing doubts about paying with Dogecoin for its products.

“Tesla only accepts Dogecoin. Tesla cannot receive or detect any other digital assets. Ensure you are making your purchase with Dogecoin. Sending any other digital assets may result in the assets being lost or destroyed,” the page reads.

Why It Matters: Earlier this week, Musk and Tesla secured the dismissal of a federal lawsuit accusing them of defrauding investors through insider trading and market manipulation of Dogecoin.

The decision was delivered on Thursday night by U.S. District Judge Alvin Hellerstein. Investors had accused Musk of exploiting Twitter (now X) posts and other publicity stunts to trade profitably at their expense through several Dogecoin wallets controlled by him or Tesla.

Judge Hellerstein, however, stated that no reasonable investor could rely on social media posts to pursue a securities fraud claim. The lawsuit was subsequently dismissed with prejudice, preventing it from being filed again.

Over the years, Dogecoin’s price movement has become increasingly linked to social posts and endorsements by Musk, as well as developments around companies owned by him.

Earlier this month, Musk posted an AI-generated image referencing the cryptocurrency through his X account, which caused it to spike.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

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According to a recent report by Microsoft’s cybersecurity team, a group of North Korean hackers known as the “Citrine Sleet” have exploited a previous flaw in Google Chrome to steal cryptocurrency from people.

Microsoft first became aware of the cyberattack on Aug 19, when the hackers exploited a vulnerability in the Chromium engine, the open-source software that powers Chrome and other popular browsers like Microsoft Edge.

This type of flaw is called “Zero-day”, meaning that Google was unaware of the issue and had no time to fix it before it was exploited.

According to Microsoft researchers, Citrine Sleet which operates similarly to the popular notorious Lazarus Group, often creates fake websites that look like real crypto trading platforms to trick people They use these fake sites to get users to download harmful software known as “AppleJeus”.

This software is often disguised as job applications or cryptocurrency wallets. Once the software is installed, it gives the hackers control over the victim’s device, allowing them to steal their cryptocurrency.

Google eventually released a fix for this flaw on Aug, 21, two days after being alerted by Microsoft. However, it’s still unclear how many organizations or people were affected by the attack