Global Banking Experts Convene to Discuss Need for Crypto Regulation

• Global banking experts convened at the World Economic Forum (WEF) to discuss the need for global crypto regulation, including stablecoins and unbacked crypto assets.
• The panel agreed there must be at least some kind of base regulation for these assets, and bank-equivalent regulation for blockchain applications.
• The governor of the Central Bank of France, François Villeroy de Galhau, pushed for the alliance of central banks and private banking institutions to promote innovation, including the adoption of CBDCs.

At the World Economic Forum’s (WEF) Davos 2023 meeting, a panel of global banking experts discussed the need for global crypto regulation, including stablecoins and unbacked crypto assets. The panel, titled „Banking in the Eye of the Storm,“ was convened to examine the cryptocurrency market after the events that unfolded during 2022, including the fall of cryptocurrency exchange FTX.

The panel agreed there must be at least some kind of base regulation for these assets and bank-equivalent regulation for blockchain applications that are seeking to offer products similar to what traditional banking offers. François Villeroy de Galhau, the Governor of the Central Bank of France, explained that regulation for crypto markets was key for controlling the possible damage these might bring to investors in the future. Villeroy de Galhau stated, “The question is not whether we have to regulate or not…for sure we have to regulate. Some even say it’s not a question of regulating, is a question of prohibiting.”

Villeroy de Galhau pushed for the alliance of central banks and private banking institutions to promote innovation, including the adoption of CBDCs (central bank digital currencies). He also expects the implementation of the finalized Basel Committee rules in all jurisdictions, which were approved in December and offer directives for the exposure of banks to cryptocurrency assets.

The panel also discussed the need for more clear regulations for cryptocurrencies. The panelists agreed that global regulations needed to be in place to protect investors and ensure the security of the market. They also discussed the need for consumer protection, as well as the need for greater transparency and accountability from crypto exchanges.

The panelists also discussed the need for more collaboration between central banks and private banking institutions, with the goal of promoting innovation and the adoption of CBDCs. They agreed that this could help create more trust and confidence in the crypto market and make it more secure.

Overall, the panelists agreed that global crypto regulation was necessary to ensure the safety of the crypto market and protect investors. They also agreed that more collaboration between central banks and private banking institutions was needed to promote innovation and the adoption of CBDCs. The panelists also agreed that more clear regulations were needed to ensure consumer protection and greater transparency and accountability from crypto exchanges.

SEC Charges Gemini and Genesis for Unregistered Crypto Offerings

• The U.S. Securities and Exchange Commission (SEC) has charged crypto exchange Gemini and crypto lender Genesis Global Capital, a subsidiary of Digital Currency Group (DCG), for the unregistered offer and sale of securities to retail investors through the Gemini Earn Crypto asset lending program.
• The SEC alleged that between February 2021 and November 2022, Genesis and Gemini raised billions of dollars‘ worth of crypto assets from hundreds of thousands of investors.
• Gemini and Genesis allegedly offered the Gemini Earn cryptocurrency lending program to retail investors, with more than 50 crypto assets eligible to be invested in the program.

The U.S. Securities and Exchange Commission (SEC) announced Thursday that it has charged crypto exchange Gemini and crypto lender Genesis Global Capital with the unregistered offer and sale of securities to retail investors through the Gemini Earn Crypto asset lending program.

The SEC alleged that between February 2021 and November 2022, Genesis and Gemini raised billions of dollars‘ worth of crypto assets from hundreds of thousands of investors. According to the regulator, the two companies offered the Gemini Earn cryptocurrency lending program to retail investors, with more than 50 crypto assets eligible to be invested in the program, including bitcoin, ether, USD Coin, and dogecoin.

Under the agreement, Genesis entered into with Gemini, the latter would act as an agent to facilitate the transaction between investors and Genesis. Investors would tender their crypto assets, and Genesis would have the discretion to use those assets as it sees fit.

In a statement, the SEC noted that it is still investigating the case and that the charges against the two companies should serve as a warning to other companies who may be engaging in similar activities. The regulator said it will continue to take action against those who are offering and selling securities without registering with the SEC or qualifying for an exemption.

The SEC’s enforcement action against Genesis and Gemini has been met with criticism from the crypto community, including Tyler Winklevoss, the co-founder of Gemini, who described the regulator’s lawsuit as “super lame”.

Bitcoin Hashrate Hits All-Time High, Network Difficulty Expected to Rise

• Bitcoin’s hashrate has reached an all-time high, recording 361.20 exahash per second on Jan. 6, 2023.
• Block intervals are now faster than the 10-minute average, costing less to generate one BTC than the spot price.
• The network’s difficulty is expected to rise, leading to a possible record-setting increase.

Bitcoin’s network hashrate has been on a steady incline for the past few months, and it recently reached a new all-time high (ATH) on Jan. 6, 2023. At block height 770,709, the network registered a hashrate of 361.20 exahash per second (EH/s). This new record is over 4% higher than the previous record of 347.16 EH/s, which was recorded on Nov. 12, 2022 at block height 762,845.

Block intervals are now faster than the 10-minute average, as statistics show that intervals between mined blocks are between 8:51 and 7:31 minutes. This has led to a decrease in the cost of BTC production, with metrics from macromicro.me indicating that the cost of generating one BTC is $16,568 per unit while the spot price is $16,920 per unit. Additionally, statistics from theminermag.com show the cost of Bitcoin production to be around $13.6K per unit.

The high hashrate is expected to lead to a rise in the network’s difficulty, which could potentially cause a record-setting increase. Difficulty is a measure of how difficult it is to find a block, and it is recalculated every 2,016 blocks (roughly every two weeks). As the hashrate increases, the difficulty also rises in order to keep block times consistent. This means that miners will have to work harder to generate new blocks, and the competition for rewards will be even more intense.

The next difficulty adjustment is expected to occur in eight days, and it will be interesting to see if it will break the record. If it does, then the Bitcoin network’s hashrate and block times will continue to increase, and the cost of generating one BTC will remain low. Regardless of the outcome, the new ATH is a testament to the growing strength and resilience of the Bitcoin network.

Bitcoin and Ethereum Surge on NFP Data, Reach Three-Week Highs

• Bitcoin (BTC) moved closer to the $17,000 level on Saturday, as traders continued to react to the latest U.S. nonfarm payrolls (NFP).
• Ethereum (ETH) also moved higher to start the weekend, with prices moving gradually closer to $1,300.
• BTC/USD surged to a peak of $16,991.99 to start the weekend, hovering close to a three-week high in the process, while the ETH/USD raced to an intraday high of $1,273.22, which is its highest point since December 17.

The weekend started off with a bang for Bitcoin and Ethereum as both digital currencies surged in response to the December nonfarm payrolls (NFP) data, which came in better than expected at 223,000, 23,000 higher than what the markets had predicted. Bitcoin (BTC) moved closer to the $17,000 level, with the BTC/USD pair reaching a peak of $16,991.99, hovering close to a three-week high. The rally was backed by a 10-day (red) moving average closing in on a crossover with its 25-day (blue) counterpart, while the 14-day relative strength index (RSI) also rallied, climbing above a key resistance point at 50.00. Currently, the index is tracking at 52.24.

Ethereum (ETH) also had a strong showing, with prices moving gradually closer to $1,300. Following a low of $1,240.95, ETH/USD raced to an intraday high of $1,273.22, which is its highest point since December 17. This move came as an upwards crossover of moving averages had recently occurred, with the 10-day (red) trend line moving higher versus the 25-day (blue) line.

The positive sentiment among traders was further supported by the U.S. Federal Reserve’s decision to increase interest rates by less than expected, providing further support to the bullish momentum that is currently driving both digital currencies. The market is now waiting to see if the current momentum can be sustained, or if there will be a correction in the near future as investors become cautious.