News
Wells Alerts, Cryptocurrency Payments and Usability
Cryptocurrencies go up and cryptocurrencies go down. Then, often, cryptocurrencies rise again.
It can be a dizzying and unstable cycle.
Cryptocurrency exchange FTX’s clients have just collapsed, after fearing they’d lost their collective billions, they can now take comfort in the news FTX’s bankruptcy team is set to repay them in full on Tuesday (May 7), with interest.
That’s because eighteen months after its collapse, the cryptocurrency exchange now says it has amassed assets worth between $14.5 billion and $16.3 billion, enough to repay 98% of its creditors 118% of what is owed.
Of course, that “full refund” refers to FTX’s valuation of customer assets as of November 2022 collapsewhen cryptocurrencies were suffering a bear market, not the current valuations of those assets, leaving many to feel deceived. For example, bitcoin holders will be owed $16,871 for each of their previous coins, which are now worth more than 400% more, or approximately $62,000, at the time of reporting.
But FTX’s turning back the clock isn’t the only crypto news to hit the industry this week. And from the United States Securities and Exchange Commission (SEC) on new exchanges, earnings announcements and even hints at the elusive real-world utility for crypto assets, these are the top stories in the Web3 landscape that PYMNTS has been tracking over the past week.
Crypto payments aim to unlock scalable, real-world usability
“The Internet will have a native currency; It is only a matter of time. Artificial intelligence systems and agents will have to carry out transactions, and the most efficient way to do this will be a common protocol for the circulation of money,” Jack Dorsey, To block Head, Square chief, president and co-founder of Block, said Thursday (May 2) during his company’s first quarter 2024 earnings results.
Dorsey emphasized that, in his opinion, Bitcoin would be the common protocol for the Internet’s native currency.
And he wasn’t the only one to use a corporate earnings call as a platform for crypto payments evangelism.
Also Thursday, Brian Armstrongco-founder and CEO of the largest US-based cryptocurrency exchange, CoinBasehe told investors Crypto payments were emerging as a key area of opportunity.
“[We’re] cryptocurrency guide utility. We’re doing this by… building a better payment experience on the cryptocurrency rails… moving closer to our goal of making the average crypto transaction take less than a second and cost less than $0.01 anywhere in the world.” , Armstrong said on the call.
“It still baffles me that every time you swipe your credit card, the merchant loses 2%,” Armstrong added. “It’s simply moving bits of data, a bit like sending a WhatsApp message, which is free. So… why is there still a 2% tax on every transaction in the economy?”
Coinbase stores more than 12% of the total cryptocurrency market capitalization on its platform, and the exchange is working to introduce a smart wallet for cryptocurrencies this summer.
Elsewhere, the Swiss National Bank is leading to pilot project which used central bank digital currency (CBDC) and successfully settled four tokenized bond issues and one secondary market transaction.
And with the news Friday (May 3) that telecommunications giant Vodafone plans to integrate cryptocurrency wallets and blockchain-based payment solutions directly into the SIM cards of mobile phones, innovative Web3 solutions capable of simplify ease of use as cryptocurrency payments are increasingly important to both merchants and consumers.
The timeline by which they will get to real-world usability, however, may be a different matter.
The ongoing regulatory problems of cryptocurrencies
Cryptocurrency’s calling card, at least during its early years, was that it was the “Wild West.” But as the industry matures, regulators are taking some of the industry’s cowboys to court.
Like PIMNTI reportedMonday (6 May) Robinhood’s the cryptocurrency business could become the latest target of regulatory action, with the trading platform set to receive a Wells Notice by the SEC indicating that they will advise the commission to take enforcement action against the company.
“After years of good faith attempts to work with the SEC to obtain regulatory clarity, including our notorious ‘go in and register’ effort, we are disappointed that the agency has decided to issue a Wells Alert regarding our cryptocurrency business in the United States.” Dan Gallagherhe stated in a blog post.
At the same time, news broke on Tuesday that Nigeria is reportedly stepping up its crackdown on cryptocurrencies with a proposed ban on peer-to-peer (P2P) trading. The move is the West African country’s latest attempt to impose tougher controls on the cryptocurrency sector, which it blames for the decline of its national currency.
It’s not just regulatory issues: crypto companies are also subject to common operational issues. AS reported here, Bakkt is cutting staff after warning earlier this year about the company’s future. The cryptocurrency platform said in an April 29 headline archiving which is laying off 13% of non-call center staff.
Web3 market movements
Regulatory challenges aside, the cryptocurrency industry continues to advance.
British FinTech on Tuesday Revolution revealed A standalone cryptocurrency exchange for professional cryptocurrency traders. It’s called Revolut X, the platform designed to compete with other major exchanges by offering easy on- and off-ramps and low fees.
AND PIMNTI covered Sunday (May 5) as cryptocurrency startups are reportedly engaging in aggressive fundraising as the digital asset space recovers, and how Crypto.com wants to increase its sports sponsorships to reach a wider audience.
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