Zimbabwe Sells $39 M Gold-Backed Crypto, US, and Uk’s Regulatory Scrutiny | Weekly Updates 14-20 May 

The crypto market experienced turbulence this week as several major events shook the confidence of investors and traders. Bitcoin dropped below $27,000 for the first time since January, while ether futures ETFs were halted in the US by the DOJ, and OpenAI’s Worldcoin project raised $100 million. 

Meanwhile, regulators in the UK, US, and Asia tightened their grip on crypto platforms and activities, raising concerns about compliance and innovation.

Zimbabwe Defies IMF and Introduces Gold-Backed Crypto

The Reserve Bank of Zimbabwe (RBZ) launched a new digital currency that is backed by gold on May 8, 2023. The RBZ said the gold-backed digital tokens are meant to provide an alternative to the US dollar and to preserve value in the economy. 

The RBZ received 135 applications to buy the tokens, worth 14.07 billion Zimbabwean dollars or about $38.9 million at the official exchange rate. The tokens are backed by 139.57 kilograms of gold that the RBZ holds as reserves. The auction for the tokens ran from May 8 to May 12.

DOJ ramps up crypto enforcement against illegal platforms

Financial Times on May 15 reported the DOJ’s National Crypto Enforcement Team (NCET) is cracking down on cryptocurrency platforms that enable criminal activity, such as exchanges, mixers, and tumblers. The NCET’s director, Eun Young Choi, said that the team is pursuing illegal actors who use cryptocurrencies for fraud, money laundering, and market manipulation.

The NCET was established in October 2020 as part of the DOJ’s Cryptocurrency Enforcement Framework, which outlines the department’s strategy and challenges in combating cybercrime involving digital assets. The framework acknowledges the potential benefits of cryptocurrencies but also warns of the serious threats they pose to national security and public safety.

OpenAI CEO raises $100M for an iris-scanning crypto project

Worldcoin is a new cryptocurrency project that aims to create a universal digital currency for everyone on the planet. It is backed by Sam Altman, the CEO of OpenAI, and other prominent investors. Worldcoin uses a device called an orb that scans people’s irises to verify their identity and give them a share of the tokens. The project is still in beta and expects to launch in 2023.

According to the Financial Times, Worldcoin is in advanced talks to raise around $100 million from existing and new investors. This would follow a previous round of funding that valued the project at $3 billion, with contributions from venture capital firms such as Andreessen Horowitz and Khosla Ventures. Worldcoin also secured a $25 million Series A investment round in October 2021, co-led by Andreessen Horowitz and involving other companies such as Digital Currency Group, Coinbase Ventures, and Multicoin.

EU approves MiCA to regulate crypto-assets and stablecoins

The crypto-asset market in the EU is set to have a clear and harmonized framework with the approval of the MiCA regulation by the finance ministers of the EU member states on May 16. 

The MiCA regulation covers various types of digital assets, such as cryptocurrencies, stablecoins, and utility tokens, and sets out legal rules and requirements for crypto-asset issuers and service providers in the EU. The new law also involves some amendments to existing rules and directives related to crypto-assets. 

SEC asks the court to reject Coinbase’s request for regulatory clarification

Coinbase asked the US Securities and Exchange Commission (SEC) to define more about how the country’s securities rules apply to cryptocurrencies. The regulatory watchdog claims that the exchange’s demand is unreasonable and unsupported.

The largest cryptocurrency exchange in the US, Coinbase, filed a petition in federal court last month seeking legal redress against the Securities and Exchange Commission (SEC).

In the petition, the SEC was urged to provide clearer regulations and standards for the cryptocurrency industry.

UK Parliament Committee Urges Crypto Gambling Regulation

Critics often liken cryptocurrency investors to gamblers because of the high-risk nature of the sector. However, UK lawmakers want to bring more stability and security to the industry by regulating it like the casino business.

The lawmakers published a report that identified some of the dangers of unregulated crypto assets, such as having no inherent value and fluctuating wildly in price.

The report argued that these features make crypto assets more akin to gambling than to financial services, as they expose customers to huge gains or losses.

Coinbase Supports Canada’s Crypto Strategy

The U.S. has been vague and harsh in regulating the cryptocurrency industry, which has led Coinbase (COIN), the world’s largest crypto exchange, to prefer Canada as a more friendly and clear jurisdiction. The exchange is facing possible enforcement action from the Securities and Exchange Commission (SEC) for violating securities laws, and many investors and businesses are considering relocating to other countries due to the U.S. regulatory crackdown.

Nana Murugesan, VP of international and business development at Coinbase, said he likes Canada’s approach to crypto regulation compared to the U.S. situation.

He said in an interview that regulators can either engage or enforce. “The latter is hard because you don’t know what the rules are. But the Canadian regulator favors the regulation by engagement, which we love.” 

I am Vishal. I post articles about the cryptocurrency markets. I'm pursuing a BBA degree. My home is in Navi Mumbai, Maharashtra.I'm constantly interested in new advancements in this industry and I learn something new about it every day. I would love to share such information with you all.

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