Despite stormy developments in the broader crypto world, the Internet Computer ecosystem has continued to make progress. The future remains uncertain, but the Internet Computer is sailing towards adventure with determination!
Hello ICPSquad! I'm glad to be back with another edition of the ICPSquad Weekly.
Batten the Hatches
To say that the past week has been eventful for crypto in general and ICP in particular would be an understatement. However, instead of diving straight down into developments within the Internet Computer ecosystem, it's worthwhile to zoom out and size up the storm of difficult developments brewing on the horizon for the entirety of the crypto industry (cue Pirates of the Caribbean Theme).
I hope you have some rum ready to kick back, mate, because let's just say we're sailing toward adventure, and no one really knows how it's going to play out.
A Hurricane of Crypto Crackdowns
The turbulent woes for centralized cryptocurrency exchanges continue, and the latest to suffer from the tsunami sweeping out from the collapse of FTX appears to be Binance.
Lauren Leffer at Gizmodo reports that Binance has temporarily suspended all US bank transfers. This has been the case since February 8th. The cryptocurrency exchange has gone on the record stating that it's working to restart the service as soon as possible, claiming only a small proportion of its users will be affected.
Transfers in other fiat currencies such as euros will not be impacted. The reason for the suspension could be related to problems with Binance's US-based banking partner, Signature Bank, which has indicated its plans to cut back on crypto transactions and only handle transactions over $100,000. The suspension is expected to last a couple of weeks until a new banking partner is established.
But let's be frank, we've heard similar reassurances before.
PayPal or PayFoe?
Ben Weiss at Yahoo!Finance reports that PayPal has temporarily suspended work on its stablecoin project following the investigation of its partner Paxos by the New York Department of Financial Services. The reason for the investigation remains unclear.
PayPal was set to launch its stablecoin in the coming weeks but has decided to pause the release. A PayPal spokesperson stated that the company is still exploring the development of a stablecoin and will work closely with regulators if it decides to move forward.
Release the Kraken
Hannah Lang and Elizabeth Howcroft at Reuters report that the US Securities and Exchange Commission (SEC) has expressed its concern over crypto companies offering high yields through staking products and has ordered that such services should be registered. The prominent crypto exchange Kraken has agreed to shut down its US staking service and pay $30 million USD in penalties as part of a settlement with the SEC.
Not all of our readers have participated in staking before (although if you own ICP you ought to give staking on the NNS a shot). To recap, staking is a process in which cryptocurrency holders volunteer to validate transactions on blockchains in exchange for a share of the transaction fees or newly created cryptocurrencies. Nearly all major crypto exchanges, including Coinbase, Binance, and Gemini, offer staking services to their customers.
The SEC has stated that most staking providers fail to provide proper disclosures and should register their services with the agency. The settlement with Kraken has put other crypto exchanges on notice; they are expected to come into compliance with securities laws. Moreover, there is worry about a general ban on staking services for US residents. The Blockchain Association, an industry trade group, has called for Congress to pass legislation that governs cryptocurrency.
Dominic Williams of the DFINITY Foundation has weighed in on the recent developments and offered praise for Commissioner Hester M. Peirce's dissenting statement regarding the SEC's decision.
At this time, it is unknown what impact, if any, a general ban on crypto staking for US residents would mean for projects like InfinitySwap or staking ICP in neurons on the NNS. It is not at all clear whether such activities are comparable to, or would even fall in the same category of, staking on centralized exchanges like Coinbase.
Sailing ICP in the First 9 Days of February
Despite admittedly troubling developments in the broader world of crypto, the Internet Computer has continued to forge bravely ahead on a course toward its goals in the first 9 days of the second month of 2023. Kyle Langham overviewed recent milestones on a lively Twitter thread this week.
Here's the TL;DR:
- ckBTC, a new way to transact and program Bitcoin without the need for middlemen, has been minted and is live.
- Several InternetComputer apps have announced plans for ckBTC airdrops or distributions, including PlethoraGame, DistriktApp, DSCVR1, and OpenChat.
- A Motoko Bootcamp, organized by codeandstate, attracted 950 registrants and another one is planned for May.
- InfinitySwap announced the world's first Bitcoin-enabled EVM is coming, extending the reach of the InternetComputer, Bitcoin, and Ethereum.
- CigDao provided the first sponsorship of an #InternetComputer podcast.
- 10 different DeFi projects participated in a DeFi-themed ICP Lab hosted by Dfinity.
- ICPipeline is getting ready to launch its beta testing.
- A Bitcoin dashboard went live and the InternetComputer community is getting ready for ETHDenver.
At this rate, just imagine what the rest of the month has in store for us!
Conclusion: Adventure in the Voyage Ahead
In conclusion, the crypto industry is facing a storm of regulatory action with Binance temporarily halting transfers to and from US bank accounts, PayPal pausing its stablecoin project, and the SEC ordering the shutdown of staking services.
The reason for the suspension in Binance's case could be related to its US-based banking partner, Signature Bank. PayPal has stated that it is still exploring the development of a stablecoin and will work closely with regulators. The SEC has expressed concern over crypto companies offering high yields through staking products and has ordered that such services should be registered.
Despite these developments, the Internet Computer ecosystem has continued to make progress with ckBTC being minted, new InternetComputer apps announcing airdrops, and multiple events and initiatives taking place. The future remains uncertain, but the Internet Computer is sailing towards adventure with determination!
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