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This week on Web3: ETFs, scams, other pressures for acceptance
Can the world of payments and financial services embrace cryptocurrencies and move on-chain?
Maybe in part, and maybe one day. Ultimately, it all comes down to usability, regulation, and of course, investment in the space.
Cryptocurrency regulation, for its part, is in for a potential boost in the United States as lawmakers debated for over two hours on Wednesday (May 22) the Financial Innovation and Technology for the 21st Century Act (FIT21), a piece of legislation which would detail which regulatory agencies have jurisdiction over certain digital assets, as well as how crypto companies would be able to operate in a compliant manner.
“Whether you love cryptocurrencies or hate them, you should support regulation because the status quo simply doesn’t work.” She said Rep. Wiley Nickel, D-N.C., during the hearing.
For his part, the chairman of the Securities and Exchange Commission (SEC) Gary Gensler released a statement disparaging the act, which has bipartisan support. At the time of reporting, politicians had yet to put FIT21 to a final vote as it was still under discussion.
And as for this last point regarding investments, a new relationship shows that investor interest is picking up after nearly two years of weakness, with venture capital firms investing $2.4 billion in Web3 startups during the first three months of 2024.
As for the first and arguably most important point, usability, that’s why every week PYMNTS keeps its ears trained on the Web3 landscape, listening for trends and themes that could shape its future and that of the financial market in general.
So, from courtroom showdowns, to Web3 incubators and ethereum exchange-traded funds (ETFs), to promoting broader mainstream acceptance of cryptocurrencies and beyond, these are the top stories across the Web3 landscape that PYMNTS has been tracking in the ‘last week.
Institutional embrace of cryptocurrencies
Thursday (May 23) is the deadline for the SEC to approve or deny an ethereum ETF application VanEckone of the issuers that filed with the regulator and the cryptocurrency market in general, in addition to Ethereum, is increasing on speculation that the agency might approve the application.
Bitcoin it exceeded $70,000 for a time on Monday, and was reinstated as of reporting Wednesday (May 22).
And cryptocurrency custodian companies Bakkt said last week that SEC approval of bitcoin ETFs will bring institutional investors to play a bigger role in the cryptocurrency trading market.
“As evidenced by our trading volumes in the first quarter, we have started to see positive signs in the market and an improvement in the overall demand environment, with increased industry activity, higher coin prices and overall higher retail trading volume high.” Andy Mainpresident and CEO of Bakkthe said during the company’s earnings call.
As more institutions embrace bitcoin and other cryptocurrencies, this could lead to greater mainstream acceptance and further development of the Web3 ecosystem.
However, cryptocurrency spot trading cooled last month (April) for the first time in seven months, by 32.6% to $2.01 trillion in April, while monthly derivatives trading volume fell 24.1% to $4.57 trillion , the first decline in three months, in numerical terms since CCData. Observers believe this is a trend driven by a decreasing likelihood of interest rate cuts and slower inflows into U.S.-listed spot bitcoin ETFs.
Cryptocurrencies and the courts
Despite the growing use of cryptocurrency ETFs, the digital asset sector still retains some remnants of the wild west days.
Last Thursday (May 16), two Chinese citizens were accused by running a scheme to launder the proceeds of cryptocurrency investment scams. According to court documents, the two criminals and their co-conspirators operated an international syndicate for laundering swindled cryptocurrencies. These scams, commonly known as “pig slaughter,” fraudulently tricked victims into transferring millions of dollars into U.S. bank accounts opened in the names of shell companies. According to the statement, the sole purpose of these companies was to facilitate the laundering of fraud proceeds.
Elsewhere, the United States Department of Justice (DOJ) announced the opening of a accusation On Wednesday (May 15) they charged two brothers with crimes stemming from an alleged “cutting edge scheme” in which they stole $25 million worth of cryptocurrency from the Ethereum blockchain.
And cryptocurrency company Genesis was exercise prohibited in New York and will pay a settlement worth $2 billion, the Office of New York State Attorney General said on a Monday (May 20) Press release. The deal includes failed companies Genesis Global Capital, Genesis Asia Pacific and Genesis Global Holdco.
In other national news, bitcoin payment processor IBEX Pay will suspend all its services in the United States, effective May 31, a move that comes at a time when some prominent tech figures have said so Crypto payments it will unlock scalable, real-world usability.
Dolce Gabbana reportedly was reported by a customer who said he spent $6,000 on non-fungible tokens (NFTs) offered by the company, only to have them arrive late and without the promised benefits. The NFTs lost 97% of their value, meaning the plaintiff lost $5,800, the lawsuit claims.
And a judge of the High Court in London governed Australian computer scientist Craig Wright lied and forged documents on Monday (May 20) to support his false claim to be the inventor of bitcoin, alias “Satoshi Nakamoto.”
Unlocking the usability of Crypto
But the cryptocurrency industry continues to push for broader acceptance by highlighting the usability of Web3 technologies, and it continues to make inroads.
Just to give an example, Wednesday (15 May), MasterCard has selected five startups from around the world to participate in its The Blockchain and digital assets journey begins plan. The program is designed to connect Mastercard with industry and FinTech experts so they can work together to explore differentiated use cases where blockchain and digital assets can help solve real-world problems.
While on Friday, PYMNTS unpacked how integrating decentralized finance (DeFi) protocols and services directly into traditional and non-traditional financial applications, platforms and services could potentially streamline processes such as lending, borrowing and trading, making them more efficient and cost-effective.
AS Sheraz Sherepayment manager at Solana Foundationtold PYMNTS in a previous discussion: “It’s important to know what cryptocurrencies are not just bitcoin and Doge and NFT. … Blockchains are truly alternative binaries for payments and financial activities.”
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