🐻 The great crypto migration

GM friends. What the FUD is going on with Bitcoin? After holding steady for the past few weeks and even breaking $30k, it’s now back down at the $27k mark. Meanwhile, all the gains from Ethereum’s Shapella upgrade have been erased as well with ETH now sitting at $1.8k 🤦.

But you know what’s up? Meme coin trading. Just another day in crypto 🤷‍♀️.

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In this issue:

📣The big story of the week. Crypto innovation is migrating out of the US.

🗞️ In other news. Zimbabwe is launching a gold-backed digital currency, the BRICs are continuing to detach from the US dollar, Trust Wallet resolves a security hack and a major Bitcoin whale wakes up after a decade.

📣 The big story of the week

Crypto innovation is migrating out of the US

It looks like the US reign on the global monetary system isn’t the only thing this nation is losing to other countries. We’re also losing in crypto innovation.

In the past week, we heard Coinbase CEO comment that “anything is on the table, including relocating or whatever is necessary”, implying that the crypto exchange is looking to move out of the US if regulatory uncertainty continues.

In fact, they just received a Bermuda license to launch an off-shore exchange to diversify their business.

Meanwhile, Gemini, the New York-based exchange confirms its expansion within APAC by moving its engineering center to India. The relocation is part of a greater strategic plan to expand their business internationally while the US regulators refuse to provide clarity and support crypto innovation.

Not only that, but this great US crypto exodus is also trickling down to the web3 developer level.

And our sneaking suspicion is that this is just the start. The EU has just taken another step forward in becoming an even more crypto-friendly country with the passing of MiCA. Unlike the US, the EU is actually providing a comprehensive set of rules and regulations for crypto platforms to operate and innovate.

So what does that mean? Crypto companies are probably getting their passports ready to move countries 🛫!

Ok, but you might wonder, is crypto regulation really that bad in the US?

Well, last week, the Chair of the SEC, Gary Gensler spoke in front of the Committee. When asked a simple yes or no question about whether ETH is a security or commodity, Gensler refused to give a straight answer. This a classic example of the lack of clarity in the US.

Then there’s the case of Bittrex. Back in March, the SEC gave this Seattle-based crypto exchange a Wells Notice, which is basically a little heads-up about potential enforcement action. According to the SEC, Bittrex violated laws by failing to register as a securities exchange, broker-dealer and clearinghouse.

But by then, Bittrex had already announced that they were exiting the US by the end of April. That didn’t stop the SEC from taking action though.

On top of that, the SEC made a note in the complaint that certain tokens Bittrex listed were securities, including Omise Go (OMG), Algorand (ALGO), Dash (DASH), Tokencard (TKN), i-House Token (IHT) and Naga (NGC).

So for crypto platforms, operating in the US is like dancing on eggshells with the SEC. If regulators don’t provide a clear answer on which tokens are securities and what the rules are to operate in crypto, it’s impossible for the industry to move ahead and thrive.

This reminds me of the great migration of folks moving from popular blue states like San Francisco and New York into red states like Texas and Arizona. People flock to where the opportunities are and right now, the US is not doing a good job in fostering their crypto innovation. Who will we say goodbye to next?

🗞️ In other news

🪙 Zimbabwe is set to launch a gold-backed digital currency. The token will serve as legal tender for the country and is meant to help stabilize the volatile local currency.

💵 The BRIC’s New Development Bank (NDB) is beginning to offer loans in local currencies instead of the US dollar. The great de-dollarization is happening at full speed. Keep your dollar safe folks!

🐛 Trust Wallet confirms that a security vulnerability has resulted in nearly $170k in losses for some users. The crypto wallet discovered this issue through a bug bounty program and has since reimbursed the affected users.

🐳 A major Bitcoin moved 279 BTC ($7.8 million) to three new wallets after hodling for a decade. A whale has awakened during the crypto winter. What’s it up to?