Despite a significant upswing in Ethereum’s price today, an ICO whale has moved a large amount of its holdings to a centralised exchange. Specifically, 7,000 ETH, valued at $24.28 million, were transferred to the Kraken exchange after 209 days of dormancy. The move has raised concerns among Ethereum investors, especially as it comes amid substantial weekly outflows.
Ethereum has seen the largest outflows since August 2022, with $60.7 million in weekly outflows reported by CoinShares. Over the past two weeks, the total outflows amass $119 million, making Ethereum the worst-performing asset in year-to-date net flows. The year-to-date outflows amount to $25 million, further exacerbating investor worries about the asset’s future performance.
Additionally, the US SEC’s recent postponement of the spot ETH ETF launch process has added to Ethereum’s uncertainty. The SEC’s decision to return the S-1 amendment forms for refiling has fuelled speculation about Ethereum’s future in the market.
Despite these concerns, Ethereum’s price has surged today, reflecting a broader positive movement in the crypto market. However, the ongoing outflows and regulatory delays continue to cast a shadow over the asset’s prospects.
The Bahamas, the first country to issue a central bank digital currency (CBDC) with its ‘Sand Dollar’ in 2020, is now preparing regulations to mandate commercial banks to provide access to the digital currency to boost its adoption. Central Bank Governor John Rolle emphasised the need for commercial banks to distribute the Sand Dollar, as current uptake remains limited. He indicated that regulations should be in place within two years to ensure all commercial banks offer their clients access to the CBDC.
Despite being a pioneer, the Sand Dollar accounts for less than 1% of the Bahamas’ currency in circulation, with a significant drop in wallet top-ups from $49.8 million to $12 million in a year. The low adoption mirrors the experiences of countries like Nigeria and Jamaica, which have also seen minimal usage of their CBDCs. Critics argue that CBDCs still need to offer clear advantages over existing payment methods and raise concerns about potential government surveillance.
Rolle believes that mandating banks to integrate the Sand Dollar into their systems will enhance its usage but recognises that the real challenge is encouraging more businesses to accept it as a payment method. Unlike India, which offers financial incentives for using its e-rupee, or Israel, which is considering interest rates on CBDC wallets, the Bahamas does not plan to offer such incentives for the Sand Dollar.
Sony Group has ventured into the cryptocurrency trading platform sector by acquiring Amber Japan. That move signifies a strategic expansion for Sony, a conglomerate with a market value surpassing $100 billion and a diverse portfolio that includes gaming, music, and cameras.
Amber Japan was established earlier this year when Singapore-based market maker Amber Group acquired the regulated Japanese cryptocurrency trading platform DeCurret. The rebranding to Amber Japan followed this acquisition, marking Amber Group’s significant footprint in the Japanese market.
In February 2022, Amber Group secured $200 million in a financing round, reaching a valuation of $3 billion. That funding round saw investments from prominent firms such as Temasek, Sequoia China, Pantera Capital, and Tiger Global Management, highlighting strong investor confidence in the company’s growth and potential.
In a decision issued on 28 June 2024, a US federal judge authorised most of the US Securities and Exchange Commission (SEC) lawsuit against leading cryptocurrency exchange Binance. The origin of the lawsuit can be traced back to June 2023, when the SEC alleged that Binance and its CEO, Zhao, had manipulated the market, misused customer funds, non-complied with US customer restrictions, and misrepresented investors on their market surveillance controls.
Binance was also accused of enabling trades of crypto tokens, which were classified as unregistered securities by the SEC. For Binance, this ruling compounds its challenges following its recent $4.2 billion settlement with the Department of Justice and the Commodity Futures Trading Commission over financial misconduct.
However, the verdict partially favours the cryptocurrency industry as the judge invoked a previous ruling, stating that the SEC failed to prove that secondary sales of Binance’s tokens (those sold by sellers other than Binance on exchanges) should be classified as securities.
Why does this matter?
The following case reflects a broader regulatory trend directed to major crypto firms, such as Coinbase, Kraken, and Consensys, in an attempt to increase oversight of the cryptocurrency sector.
Channel Seven is currently investigating a significant breach on its YouTube channel, where unauthorised content featuring an AI-generated deepfake version of Elon Musk was streamed repeatedly. The incident on Thursday involved the channel being altered to mimic Tesla’s official presence. Viewers were exposed to a fabricated live stream where the AI-generated Musk promoted cryptocurrency investments via a QR code, claiming a potential doubling of assets.
During the stream, the fake Musk engaged with an audience, urging them to take advantage of the purported investment opportunity. The footage also featured a chat box from the fake Tesla page, displaying comments and links that further promoted the fraudulent scheme. The incident affected several other channels under Channel Seven’s umbrella, including 7 News and Spotlight, with all content subsequently deleted from these platforms.
A spokesperson from Channel Seven acknowledged the issue, confirming they are investigating alongside YouTube to resolve the situation swiftly. The network’s main YouTube page appeared inaccessible following the breach, prompting the investigation into how the security lapse occurred. The incident comes amidst broader challenges for Seven West Media, which recently announced significant job cuts as part of a cost-saving initiative led by its new CEO.
Why does it matter?
The breach underscores growing concerns over cybersecurity on social media platforms, particularly as unauthorised access to high-profile channels can disseminate misleading or harmful information. Channel Seven’s efforts to address the issue highlight the importance of robust digital security measures in safeguarding against such incidents in the future.
According to insider sources, India’s digital currency, the e-rupee, has seen a sharp decline in usage, dropping to just one-tenth of its peak usage in December. The Reserve Bank of India (RBI) launched the e-rupee in a pilot program in December 2022, aiming to provide a digital alternative to physical cash. By December 2023, the pilot had successfully reached a target of 1 million daily retail transactions, largely driven by user incentives and partial salary disbursements to bank employees via the e-rupee. However, daily transactions have plummeted to about 100,000 since the incentives waned.
The transaction drop highlights a need for more organic demand for the e-rupee. Sources involved in the project indicated that the remaining transactions are primarily due to banks continuing to disburse employee benefits through digital currency. At the end of each month, this practice temporarily boosts transaction numbers to between 250,000 and 300,000 per day. Despite the earlier push to test the system’s resilience at scale, the RBI is now focused on refining the technology and developing practical use cases for the e-rupee rather than expanding the pilot rapidly.
The challenge faced by the e-rupee is common. A survey by the Bank of International Settlements found that among 86 central banks, a third are piloting a central bank digital currency (CBDC). Even countries that have launched CBDCs, such as the Bahamas and Jamaica, have yet to experience much success. The Federal Reserve Bank of Kansas City noted that consumer adoption of CBDCs requires more than just the technology itself; it needs to offer additional value compared to traditional cash. As the RBI continues developing the e-rupee, the focus will be on creating compelling use cases that encourage widespread adoption.
The Eurosystem, including the European Central Bank (ECB) and national central banks of the EU area, is advancing the digital euro project aimed to modernize central bank money. Following an initial investigation phase launched in 2021, the ECB’s Governing Council approved a two-year preparation phase starting 18 October 2023 and concluding by 31 October 2025. This phase will finalise the digital euro rulebook, select potential platform and infrastructure providers, and conduct further testing, particularly its offline functionality.
A cornerstone of the digital euro project is “privacy by design” approach. Technological measures like pseudonymisation, hashing, and encryption will ensure that online transactions remain unlinked to specific individuals. Payment service providers will access only the necessary transaction data for EU law compliance, with user consent required for any additional commercial uses. The digital euro is also designed for offline use, allowing payments without an internet connection, akin to cash transactions. This offline functionality will enhance privacy and usability in areas with limited network coverage or during power outages.
Legislative and stakeholder engagement continues in parallel, with the European Parliament and Council of the European Union working on the legislative framework proposed in 2023. Stakeholder involvement ensures the digital euro meets high standards of quality, security, and usability. Fraud prevention remains a priority, with ongoing assessments indicating that current technologies can effectively detect and prevent fraud using pseudonymised information.
By the end of 2025, the ECB will decide whether to proceed further with the digital euro, contingent on the legislative process completion.
Survey reveals that 94% of central banks are actively exploring Central Bank Digital Currencies (CBDCs), with each institution progressing at its own pace and considering various design features. In 2023, there has been a significant increase in experiments and pilots related to wholesale CBDCs, particularly in advanced economies, though emerging markets and developing economies have also ramped up their efforts. The likelihood of central banks issuing a wholesale CBDC in the next six years now surpasses that of issuing retail CBDCs.
Key features under consideration include interoperability and programmability for wholesale CBDCs, and holding limits, interoperability, offline options, and zero remuneration for retail CBDCs.
Worldcoin, a cryptocurrency startup co-founded by OpenAI’s Sam Altman, has been permitted to resume its iris-scanning operations in Kenya after a year-long investigation into privacy and regulatory concerns was concluded. The Kenyan Directorate of Criminal Investigations (DCI) officially closed its probe, citing no further police action as necessary. However, Worldcoin must now register its business in Kenya, secure requisite licences, and vet its vendors to maintain operations.
Worldcoin’s activities had been suspended nearly a year ago due to compliance issues with Kenyan security, financial services, and data protection laws. A parliamentary committee recommended shutting down the company altogether, citing violations of the Computer Misuse and Cybercrimes Act, and labelling its activities as potential espionage. It was also found that Worldcoin and its parent entity, Tools for Humanity, were unregistered in Kenya, and had not received approval to use the Orbs, considered telecommunications equipment.
Thomas Scott, Chief Legal Officer of Tools for Humanity, expressed gratitude for the fair investigation and said this is merely a new beginning. He highlighted the company’s commitment to working with Kenyan authorities to advance Worldcoin’s mission and create economic opportunities. While Worldcoin has resolved its immediate regulatory hurdles in Kenya, it continues to face significant scrutiny in other countries, including ongoing investigations in Germany, Spain, Portugal, and Italy.
The situation has highlighted challenges in regulating new technologies, particularly around privacy and compliance. In response, Kenya is developing a regulatory framework for virtual assets, aiming to provide clearer guidelines for crypto startups like Worldcoin. The outcome could pave the way for more structured compliance pathways amid the rapid advancements in digital finance and identity systems.
Italy is set to strengthen its surveillance of crypto assets with new measures, including hefty fines for market manipulation, according to a draft decree reviewed by Reuters. The decree, expected to be approved by the cabinet, imposes fines ranging from 5,000 to 5 million euros for offences such as insider trading and unlawful disclosure of inside information.
The legal move matches with warnings from central banks and international bodies about the risks cryptocurrencies pose to financial stability and their potential for fraud. The plan designates Italy’s central bank and market watchdog, Consob, as the authorities responsible for overseeing cryptocurrency activities to maintain financial stability and orderly market functioning.
Why does it matter?
Cryptocurrencies allow global money transfers outside the traditional financial system, with transactions recorded on a blockchain where users are identified only by wallet addresses. However, the anonymity and decentralisation have raised concerns about their misuse, prompting Italy to implement stricter controls.
