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Crypto SWOT: The Winklevoss twins' Gemini sued by the CFTC

Commentaries & Views

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was SoldierNodes, rising 1,413.88%.

  • Fidelity Investments' cryptocurrency-focused subsidiary is planning to hire more than 100 new technology workers as it works to expand its offering beyond Bitcoin, the Wall Street Journal reports. Fidelity Digital Asset Services wants to add engineers and developers with blockchain expertise in its hiring of 110 tech workers for cryptocurrency services outside of Bitcoin.  

  • Cryptocurrency custody firm Fireblocks hired Varun Paul, the former head of fintech at the Bank of England, as its first director of central bank digital currency and market infrastructure, writes Bloomberg. Paul will lead Firelocks' efforts to build infrastructure for the integration of central bank digital currencies (CBDC), the firm announced Tuesday and reported by Bloomberg.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was ERC20 down 99.76%.

  • Leading U.S. crypto exchange Coinbase is "tremendously overvalued" at current levels, warned short-selling legend Jim Chanos, predicting a collapse in fee income that will send the stock plunging. He told the Crypto Critics Corner podcast that Coinbase still gorges itself on overly favorable retail trading commissions, and his short position is based on an end to the "feasting" it enjoys relative to mature brokers like Charles Schwab, writes Bloomberg.  

  • Bitcoin has only briefly deviated from the $30,000 level since the collapse of the TerraUSD stablecoin triggered a broad crypto selloff in early May. The token could "form a cyclical low" in the second half of this year, based on previous market cycles, Bloomberg analyst Jamie Douglas said. Cryptocurrencies have been hit as the Federal Reserve and other central banks hike rates to combat stubbornly high inflation and underperforming equities.

Opportunities

  • Singapore has begun a project to investigate potential uses of asset tokenization as the city state looks to establish itself as a hub for decentralized finance after several key crypto players left, writes Bloomberg. "Project Guardian," a collaboration between the Monetary Authority of Singapore and the finance industry, will test the feasibility of applications in asset tokenization and DeFi while working to manage risks to financial stability and integrity.

  • Binance Labs, the venture capital arm of the world's biggest crypto exchange, launched a $500 million fund to invest in digital asset projects, the last capital injection into an industry that's reeling from plunging prices and the collapse of the TerraUSD stablecoin.

  • New York State lawmakers passed a bill that would trigger a two-year moratorium on new permits for certain power plants involved in Bitcoin mining, writes Bloomberg. The measure, which was approved by a vote of 36 to 27 in the state senate early Friday morning, now moves on to Governor Kathy Hochul for consideration.  

Threats

  • The billionaire Winklevoss twins' Gemini Trust Co. was sued by the U.S. Commodity Futures Trading Commission (CFTC), which claims that the cryptocurrency business misled the regulator about a Bitcoin futures contract. In a lawsuit filed in federal court in Manhattan on Thursday, the CFTC alleged that Cameron and Tyler Winklevoss's Gemini "made false and misleading statements" in communications with commission staff from July to December 2017 about the operations of the Gemini Exchange and Gemini Bitcoin Auction according to Bloomberg.

  • Jump Crypto, a firm involved in the defunct Terra blockchain, said that some large investors exited Terra-related positions as the TerraUSD stablecoin began to lose its peg, while small investors continued buying during the collapse writes Bloomberg.  

  • Consumers reported losing over $1 billion to fraud involving cryptocurrencies from January 2021 through March 2022, according to a new analysis from the Federal Trade Commission (FTC). The FTC's latest consumer protection data spotlight finds that most of the losses consumers reported involved bogus cryptocurrency investment opportunities totaling $575 million in losses since January 2021. The scams often falsely promise investors that they can earn huge returns by investing in their cryptocurrency schemes, according to Bloomberg.
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