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Miami Mayor Embraces Chinese Bitcoin Miners

Miami Mayor Francis Suarez said the city welcomes Chinese Bitcoin miners as a new home for Bitcoin mining, CNBC reported Thursday.

‘Hey, we want you to be here,” Suarez, the republican mayor and one of the most crypto-friendly politicians in the U.S., accepted an interview from CNBC Thursday, said the city open doors to Bitcoin miners amid the recent crackdown of Bitcoin mining activities.

Since China’s regulators tighten domestic Bitcoin mining and illegal energy generation activities, many Chinese Bitcoin miners are reportedly migrating out of China. It is estimated over 50% of Bitcoin miners come from China. According to CNBC’s coverage, Texas could be one of the favour destinations among cheap electricity supply and crypto-friendly states in the U.S.

Bitcoin mining requires stable internet connections and high-efficiency processors to support this energy-intensive and highly demanding process. Suarez said Miami enjoys nuclear power as a clean and inexpensive energy source, hoping that the city will attract more investment and create more jobs.

“We understand how important this is…miners want to get to a certain kilowatt price per hour. And so we’re working with them on that; We want to make sure that our city has an opportunity to compete,”

Suarez emphasized he has not received any personal calls from Chinese BTC miners and admits his ambition cannot achieve overnight. Yet, he is optimistic and believes that the city can meet the needs of bitcoin miners by promoting its unlimited and cheap nuclear power supply.

His administration also considers various incentives for developing crypto mining, including establishing enterprise zones with tax concessions, infrastructure incentives and scaled-back regulations for crypto mining.

Nuclear energy dominates the second-biggest source after natural gas of generating power across the Florida State. Miami is already in negotiations with state enterprises on how to drive down the price of energy.

Similarly, El Salvador considers using a volcanic-power energy generation system to resolve the energy sustainability issue since the central American country became the first country to adopt Bitcoin as flat money.

China Continues to Influence Crypto Activities Worldwide, Study says

Blockchain data platform Chainalysis published a report Wednesday, indicating China remains one of the largest cryptocurrency markets worldwide.

Per the report, addresses estimated to be controlled by users in China for the first six months this year have received over $150 million worth of crypto, around one-third, compared to the U.S that China comes second behind the U.S. China remains one of the largest markets and is active in cryptocurrency worldwide.

Chinese crackdown against Bitcoin mining

Over 90% of Bitcoin mining capacity was lost since massive bitcoin mining sites were forced to shut down in June.

On-chain data reflects the bitcoin mining pools weekly volume dropped to under 5000 BTC from around 10,000 since mid-May, right after China’s crackdown against domestic bitcoin mining activities. Figures over the past six months also indicate that most China-based have been hit by Chinese authorities, including AntPool, Poolin, BTC.top and F2Pool.

The government consider ultra-rich people like early Bitcoin miners and people advocating for liberty or self-sovereignty to be “dissidents of the natural inclination.” The report citing the expert explains that preventing capital flight and stopping illegal money services businesses from operating is the primary goal of the Chinese government to maintain social stability and unity.

The Digital yuan is unlikely to impact the dollar status in the short term

Meanwhile, the promotion of digital yuan, one kind of central bank digital currency (CBDC) in China, brings a monetary reform of fiat money worldwide and intensifies diplomatic tension, especially Sino-US relations. The report believes China aims to set various goals, including conducting “data-driven improvements to monetary policy and heightened surveillance of citizens’ financial activity”. Internationally, China appears to get rid of the U.S.’s regime sanctions in the short term.

Adjunct Senior Fellow of the Centre for a New American Security Yaya Fanusie convinces digital yuan is unlikely to threaten the U.S. dollar in the short term. Still, digital yuan and CBDCs could falter the dominant status of the dollar in the financial system in the long run. “They will try to make arrangements with other countries where they enable CBDC to CBDC exchange. Think of it as an atomic swap of CBDCs….These transactions would not rely on the SWIFT system. If they become the norm, there would be less need for people outside of the U.S. to hold U.S. dollars,” Fanusie added.

Concerns crypto crimes in China

More than 1100 suspects were arrested in June related to committing Crypto-related crimes in China. The report concerns the crypto-related crime committed in China. Chinese addresses have been sent over $2.2 billion worth of cryptocurrency to addresses associated with illicit activity such as scams and darknet market operations and received over $2.0 billion.

SEC Chair Calls for Open Dialogue in Pursuit of a Regulated Crypto Market

Gary Gensler, the Chairman of the United States Securities and Exchange Commission (SEC), wants an inclusive and transparent capital market with plans to extend oversight to the crypto ecosystem.

According to a statement detailing the proposed speech of the Chairman ahead of his testimony before the United States Banking Committee on Tuesday, September 14, Gensler believes the crypto market is replete with fraud.

“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” the Chairman wrote, adding:

“Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications.”

Gensler noted that the country’s digital currency ecosystem could do better. The commission will be working along two major lines; bridging all gaps through the help of regulators, and working with other regulators with overlapping oversights on the cryptocurrency ecosystem.

“With respect to investor protection, we’re working with our sibling agency, the CFTC, as our two agencies each have relevant, and in some cases, overlapping jurisdiction in the crypto markets. Concerning a broader set of policy frameworks, we’re working with not only the CFTC but also the Federal Reserve, Department of Treasury, Office of the Comptroller of the Currency, and other members of the President’s Working Group on Financial Markets on these matters,” Gensler added.

In all, the Chairman will inform the lawmakers how he hopes to promote inclusiveness amongst the key stakeholders in the crypto ecosystem by encouraging them to come and engage the commission with details of their plans. Gensler notably affirmed that he has oftentimes “suggested that platforms and projects come in and talk to us” so the agency can help categorize whether the tokens listed on their platforms are securities or not.

Gensler will end the section on crypto by affirming that he is technology-neutral. His ultimate aim is to collaboratively bring regulations to the highest regulatory controversial digital currency ecosystem. Part of these controversies fueled the ongoing Ripple-SEC legal tussle, an occurrence that will be prevented with the promise of comprehensive regulation.

U.S. Blockchain-organisation BBA Publishes Crypto Toolkit Guidelines for Regulatory Consideration

The Boston Blockchain Association (BBA) has joined a working group of blockchain-centric firms to publish a functional toolkit that will come in handy in serving as a guide to Massachusetts lawmakers in their efforts to create a favourable regulatory environment for the Commonwealth.

As part of the toolkit and the recommendations to the Massachusetts lawmakers, the BBA, working in conjunction with the Media Shower and the Chamber of Digital Commerce, is proposing several legislative principles, proposals, and concepts that will guide in creating an enabling environment for blockchain innovations to thrive. Additionally, the team proposes five specific legislative recommendations, such as establishing a State Blockchain Working Group, creating legal or regulatory sandboxes, and standardising tax obligations.

Cryptocurrency regulation in the United States takes different shapes. While Wyoming, New York, and Texas are at the forefront of championing working cryptocurrency regulations, other states are beginning to make a remarkable headway. The embrace of Blockchain and its sub-technologies, including Bitcoin, Non-Fungible Tokens (NFTs), and decentralised finance (DeFi), is now becoming a part of the American evolution as many seek to brace up for the future of money and finance in general.

Churning out regulations is the way to go, a clamour that many in the digital currency ecosystem have been echoing for years now. Federal agencies, including the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), also define the rules governing the digital currency ecosystem. The confluence of roles has left developers and crypto investors at a loss. The impact of this lack of clarity in regulation notably pushed Ripple at the crosshairs of a legal battle with the SEC over the status of XRP as a security.

Seeing the potential stalemate in rolling out progressive legislation from the top, state regulators are now taking the laws into their hands. Crypto may come off as the biggest winner, in the long run, should the content of the BBA-backed proposition be considered by the state’s lawmakers.

Image source: BBA page

Coinbase Discontinues Plans to Launch Cryptocurrency Lending Product Following SEC’s Warning

Coinbase Global has cancelled its plan to launch its cryptocurrency lending product designed to allow customers to earn interest on certain digital tokens.

The crypto exchange announced the change of its plan by quietly updating a blog post from last June, stating that it would not launch the USDC APY program announced and also would be discontinuing the waitlist that it had created for the lending product.

Coinbase promised that the lending program would power crypto savings accounts that would earn customers a 4% annual percentage yield (APY). This return is multiples higher than most savings accounts to traditional banks.

Though the exchange planned the USDC stablecoin to power the lending product, its price has not been significantly affected by this incident as its value is pegged to the US dollar.

The webpage with information about the Lending product and a signup page for the waitlist now redirects to Coinbase’s homepage.

Coinbase talked about its cancellation update, stating that it is looking for regulatory clarity for the cryptocurrency industry.

Coinbase further revealed that the SEC asked for people’s names and contact information on the waitlist mentioned above as part of its investigation. However, the firm did not immediately respond to a request for comment about what will happen to the data of those who signed up to the waitlist now that it has been discontinued.

Lawsuit Threats

The move by Coinbase to cancel the plan to launch the lending program comes after the cryptocurrency exchange obtained a legal warning about the product from the US Securities and Exchange Commission (SEC).

On September 8, Coinbase announced that the SEC threatened the exchange with a lawsuit if it launches the Lending program – an interest-earning product – within the coming weeks.

Coinbase obtained a notice from the SEC during that time, stating that the regulator planned to sue the exchange over the product, called Coinbase Lend.

Coinbase CEO Brian Armstrong responded by stating that the firm was caught off guard by the threat considering its efforts to engage with the regulator for the last six months.

Armstrong said that the firm initially reached out to the regulatory agency for briefing ahead of the launch and the SEC responded by stating that the lend product is a security.

Coinbase’s CEO further revealed that the SEC had not been clear about why the lending feature would be considered a security, or what Coinbase could do to fix it.

Coinbase then decided to delay the launch of the lend program feature until at least October, but now announced a discontinuation of the plan.

The US Treasury Department Imposes Sanction on Suex Crypto Exchange, Accused of Facilitating Ransomware Transactions

The U.S. Treasury Department has announced that it will impose a sanction on the Suex cryptocurrency exchange, which is registered in the Czech Republic.

On Tuesday, September 21, the U.S. Treasury Department disclosed taking such an action against the Suex crypto exchange for allegedly playing a role in facilitating financial transactions for ransomware actors.

Deputy Treasury Secretary Wally Adeyemo told reporters that Suex helped facilitate illegal activity “for their own illicit gains” and had “facilitated transactions involving illicit proceeds for at least eight ransomware variants.”

He further said that more than 40% of the firm’s known transaction history is “associated with illicit actors.”

Adeyemo stated that exchanges such as Suex are critical to cyberattackers’ ability to extract profits, saying that this was the first such action by the Office of Foreign Assets Control (OFAC) against a digital currency exchange and comes after a series of cyberattacks crippled several industries and even threatened U.S. government agencies.

The Treasury mentioned that ransomware payments amounted to more than $400 million in 2020 alone, four times more than that of 2019.

The new sanction means it will be much more difficult for Suex cryptocurrency exchange to do business with U.S. entities. U.S. citizens are typically banned from carrying out transactions with sanctioned entities.

The Treasury also stated that U.S. companies that engage in certain activities with sanctioned actors could be penalized or face enforcement actions, even if they are unaware of such fact.

According to one U.S. official, the aforementioned sanctions aim to disrupt the illicit financial underpinnings of the ransomware economy, which often use cryptocurrencies to facilitate attacks.

Ban on Ransomware Payments

The move by the U.S. Treasury Department is part of a wider administration strategy to discourage ransomware attacks, in which hackers lock up victim’s computers with data-encrypting malware and then demand payments, especially in cryptocurrency, to unlock them.

The U.S. government sees ransomware as a national security threat and criminal menace and urges companies to report extortion attempts and better protect themselves from them.

This year, cyberattacks attributed to Russia-based groups led to the shutdown of the country’s largest meat supplier and a major fuel pipeline operator Colonial Pipeline.

In June, U.S. President Biden warned his counterpart Russian President Vladimir Putin that he expected Moscow to crackdown ransomware attack activities coming from Russia.

In July, President Biden renewed his warning, stating that the U.S. would take any necessary action to defend critical infrastructure against cyberattack.

In October 2020, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) started sanctioning individuals and institutions that help facilitate payments of ransoms amid a string of ransomware attacks witnessed during that time.

The OFAC stated during that time that the demand for ransomware payments, mostly the use of cryptocurrencies, surged significantly during the Covid-19 pandemic as cybercriminals continued to target online systems to disrupt government entities and businesses for Americans.

US SEC Names CFTC Commissioner Dan Berkovitz as Incoming General Counsel

More leadership changes are coming to the United States Securities and Exchange Commission (SEC) as the market regulator has announced Dan Berkovitz as the next General Counsel for the agency.

In a double announcement on Tuesday, the market regulator said its current General Counsel, John Coates, will leave the agency in October, opening the door for Berkovitz, one of the Commissioners with the Commodity Futures Trading Commission (CFTC). Berkovitz’s tenure is billed to commence in November.

Berkovitz will bring his experience into the SEC after serving both in public and private sectors with one of his roles notably as a co-chair of the futures and derivatives practice at the law firm of WilmerHale. Just like SEC Chairman Gary Gensler, who had had an academic role at MIT prior to his ascension to the reins of affairs, Berkovitz also has experience as an Adjunct Professor at Georgetown University Law School.

“I am honoured to join the SEC at this critical time for our capital markets,” Berkovitz said. “Having worked with the SEC in my roles at the CFTC, I’ve long admired the dedicated and talented staff of the agency from afar. I’m excited to work again with Chair Gensler on a regulatory agenda that will enhance investor protection, strengthen our capital markets, and facilitate capital formation.”

With his direct perception about the cryptocurrency ecosystem not well known, the emergence of Berkovitz may spell a lot of changes for the nascent ecosystem as demand for regulatory clarity is being sought by stakeholders in the ecosystem. With Chairman Gensler notably poised to work in helping to chart the regulatory course for the crypto industry with the help of Congress, Berkovitz will be instrumental in facilitating one of the SEC’s approaches which include inter-governmental agency interaction.

Prior to the start of Berkovitz’s term, the SEC said Michael Conley, currently the SEC’s Solicitor, will serve as Acting General Counsel upon Coates’s departure.

Image source: Bloomberg.com

SEC’s Filing Shows Blackrock Made $369,137 Profits on Its Bitcoin Futures

A current filing with the US Securities and Exchange Commission (SEC) shows that BlackRock Inc has expanded a variety of its Bitcoin futures contracts since Q1 2021.

On Tuesday, September 28, a filing to the SEC indicates that BlackRock investment management firm has made $369,137 on Bitcoin futures since July.

According to the filing, Blackrock Global allocation fund held 54 Bitcoin CME futures contracts that expired on August 27, and the contracts made $369,137 for the New York-based investment company.

BlackRock Global Allocation fund bought 54 Bitcoin futures contracts issued through the CME (Chicago Mercantile Exchange) on July 31. The contracts expired on August 27 and were worth $10.8 million, appreciated by $369,137.

The gains from the Bitcoin futures represents about 0.00138% of the Blackrock Global allocation fund or 8.91 BTC at the time of writing.

BlackRock is the world’s largest asset manager, with over $9.5 trillion in total assets under management.

In January, Blackrock filed prospect documents with the SEC signalling its potential to invest in Bitcoin futures. The documents showed two specific funds (the BlackRock Strategic Income Opportunities Portfolio and the BlackRock Global Allocation fund) to participate in the trading of Bitcoin futures.

In April, BlackRock has made $360,000 on Bitcoin futures since January. The SEC filing showed BlackRock’s Global Allocation Fund held 37 Bitcoin CME futures contracts that expired at the end of March.

Demand Dips for Bitcoin Futures

This time, BlackRock’s profit from Bitcoin futures comes when demand for such products has declined, which is a setback for Bitcoin.

An investor note by JP Morgan investment bank last week showed that major investors are now looking for Ethereum futures instead of Bitcoin futures.

JP Morgan attributed that the happening to weak demand for bitcoin future’s by institutional investors.

JP Morgan stated in its investor note that the interest in Ethereum futures indicates much a higher demand than for Bitcoin futures by institutional investors – big firms such a hedge funds with a massive pile of cash to play.

The note reported that Bitcoin futures on the Chicago Mercantile Exchange (CME) traded below the price of Bitcoin this month.

When there is high demand for Bitcoin, futures tend to trade higher than the actual cryptocurrency. But it has not been the case in September, according to CME data.

Instead, investors have been eyeing up Ethereum futures since August, and the 21-day average Ethereum futures premium rose 1% more than the price of the cryptocurrency, JP Morgan stated.

But despite such interest in futures, both cryptocurrencies are struggling. Bitcoin is currently trading at $42,229.95, while Ethereum price standing at $2,910.23.

Missouri Mayor to Airdrop $1,000 in Bitcoin to Cool Valley Residents

Residents of Cool Valley town in Missouri are well on their way to receiving a $1,000 cash gift, following the excess donations received in support of the initiative by Missouri Mayor, Jayson Stewart to fund households as a post-pandemic relief package.

The cash gift represents amongst many other things Stewart’s positivity about the role Bitcoin and cryptocurrencies, in general, have come to play in offsetting the old standards of the world. An environmentalist at heart, Stewart is not bothered by the bad media relations surrounding the energy consumption demands of Bitcoin. According to him, the first-ever digital currency “given me a new way of thinking about humanity in the future.”

Adding;

“It’s given me a hope, and an optimism that we can overcome some of the worst parts of the system that we’re born into, and actually create a future exactly how we want it to be. There’s a certain level of hope and optimism that I get from Bitcoin.”

With the initiative initially designed to give out $500 to each household in the town, the public attention the program gathered attracted new funding that simultaneously increased the allocation per family. While the excitement amongst residents is imminent, those who choose to HODL their lot are bound to cash out more in the future if the price of Bitcoin grows from its current price of $41,245.

According to Mayor Stewart, a number of workshops will be organized for the eligible recipients of the fund in Cool Valley, with the primary aim targeted at bringing everyone up to speed about the fundamentals of cryptocurrency.

Besides Stewart, Miami Mayor Francis Suarez is also an adept fan of Bitcoin, and he has significantly transformed the city into an attractive Bitcoin hub through his initiatives. A number of aspiring Mayoral candidates including Andrew Yang are also making promises to make their respective cities a Bitcoin hotspot if they assume power.

U.S. Payment Network Affirm Promotes Crypto Trading Services via Debit Card

On Tuesday, American payment company Affirm announced that it plans to launch a debit card that will add cryptocurrency buying and selling functions, allowing users with affirm’s savings accounts to buy and sell cryptocurrencies freely.

Affirm Holdings Inc. stated that it is working hard to become the next group of “super apps” globally for banks and technology giants and become similar to China’s Alipay or WeChat, India’s Paytm, or Singapore’s Grab, which integrates financial services with daily payment expenses. Become a whole application.

According to the report from Bloomberg, by adding new encryption product services, customers will be able to buy and sell digital currencies, including Bitcoin, directly from the Affirm app.

According to the company’s official website, affirm Holdings Inc. is actively working with the New York Digital Investment Group to discuss the issuance of this new feature.

Co-founder and CEO Max Levchin from Affirm said in the investor presentation that:

“We are doing it in a way that feels natural to us. We will make it really simple, it’s safe, we won’t let you do crazy things.”

Max Levchin noted that “the United States is in developing sophisticated, scalable technology, risk management, and highly efficient access to capital.” and hope to use affirm’s core advantages in the process to find more purchase and construction opportunities

Affirm followed the steps of other digital payment companies joining the cryptocurrency trend. As reported by Blockchain.News on August 23, PayPal has officially launched its cryptocurrency service in the UK by conducting four cryptocurrency transactions of Bitcoin, Bitcoin Cash, Ethereum, or Litecoin at prices as low as 1 pound.