Crypto Scoop: Bitcoin Falls Into A Red Streak

Here are the highlights of this week's crypto scoop:

• Bitcoin falls into a red streak
• El Salvador and Ukraine set the pace for crypto adoption
• Coinbase under pressure from SEC
• MasterCard acquires CipherTrace, a blockchain intelligence firm

Bitcoin falls into a red streak

Crypto enthusiasts were ecstatic as the tides turned in Bitcoin's favour over the last few weeks. Bitcoin rose from below $30k and even towered about $50k, closing in on $55k. However, there has been a sharp decline which has brought bitcoin price as low as $45,000. This came as a shock to many, who expected the bullish tide to take bitcoin to its previous ATH of $64K and even possibly a new ATH.

The price decline may have also resulted in a dump among traders. However, bitcoin enthusiasts remain optimistic and are confident in bitcoin, with crypto enthusiasts being encouraged to buy the dip. In fact, El Salvador's president Nayib Bukele tweeted on Tuesday, "150 new coins added, and "buying the dip"'

The recent week has marked a significant decline in the sales of NFT.  In August, NFTS had gained a lot of interest, with NFTs being sold for millions of dollars even. Yet, it seems the bitcoin-led market correction may have also slowed down significantly the sales of NFT. 

El Salvador and Ukraine set the pace for crypto adoption.

El Salvador's bill on bitcoin came into full effect on 7th September 2021. The bill dictates that bitcoin must be accepted as a form of payment everywhere within the country. A bitcoin trust of $150million was also put in place by the government to ease the process of bitcoin adoption.

In a bid to ease the transition to bitcoin, the government has liaised with Bitso, a major crypto exchange in Latin America. Bitso would be the core crypto service provider for El Salvador's official Bitcoin wallet, Chivo. However, the citizens have expressed concerns about the technical issues in the operation of Chivo. The stock markets of El Salvador may also have experienced a bearish run which analysts suspect may be due to the significant changes in the country's economic system. Yet, this may also be traced to El Salvador's difficulty securing a deal with the International Monetary Fund.

While El Salvador's government works on inculcating bitcoin into their economy, Ukraine has also begun moving towards cryptocurrency adoption. In July, Ukrainian president Volodymyr Zelensky signed a law that enables the Ukraine central bank to issue a CBDC. In fact, the Ukrainian parliament has adopted new digital asset regulations in the hope that it would attract foreign crypto exchanges. The draft law, "On Virtual Assets," was adopted, which legally recognizes cryptocurrencies. Anastasia Brako speaking on behalf of the Ministry of Digital Transformation, noted that the law would allow companies to launch digital assets in Ukraine. Banks would have the provisions to "open accounts for crypto companies." She explained, "Ukrainians will also be able to declare their income in virtual assets."

Deputy Minister of Digital Transformation Oleksandr Bornyakov noted that the bill would help attract foreign exchange to the Ukrainian market. He explained, "It will become a powerful incentive for the further development of the crypto-sphere in Ukraine. Banks will open accounts for them and conduct transactions with a new class of assets. I am sure that society, business, and the state will benefit from the legalization of the new sector of the economy."

Read also: Why You Should Invest in Cryptocurrency?

Coinbase under pressure from SEC

Coinbase has been served a wells notice by the U.S. Securities and Exchange Commission (SEC).  A Wells Notice is a U.S formal way of notifying companies or employees that charges may be brought upon them if they follow through with an action. Coinbase was served a wells notice for their yet-to-be-launched "Lend" program. The Lend Program aims to provide eligible a 4% annualized yield for lending USDC coins to verified borrowers.

Brian Armstrong, CEO of Coinbase, took to his Twitter account to tweet, "How can lending be a security?" He explained that SEC has not given any reason for the potential lawsuit noting that SEC's classification of Lend as security is 'strange." Coinbase shares seem to be suffering the brunt of the potential lawsuit threat from SEC as the shares seem to have slumped. Coinbase noted that it had been in discussions with SEC over the lending program for almost six months, yet they had issued a Wells Notice.

Paul Grewal, Chief Legal Officer of Coinbase, pointed out that the Lend program isn't an investment contract and shouldn't qualify as a security. He explained," Customers won't be investing in the program but instead lending the USDC they hold on Coinbase's platform in connection with their existing relationship. Although Lend customers will earn interest from their participation in the program, we have an obligation to pay this interest regardless of Coinbase's broader business activities. What's more, participating customers' principal is secure, and we're obligated to repay their USDC on request.". However, SEC is yet to provide full details as to why Coinbase has been served a wells notice.

MasterCard acquires CipherTrace, a blockchain intelligence firm

On Thursday, 9th September, MasterCard announced that it had reached an agreement to acquire CipherTrace. CipherTrace is one of the leading blockchain intelligence firms which possess forensics capabilities for over 900 cryptocurrencies. The acquisition is one of Master Card's initiatives to incorporate crypto intelligence as it expands its reach in the crypto space.

CipherTrace would be integrated into the company's cybersecurity solutions for digital assets.  Clients would be able to adopt digital assets while still complying with financial regulatory provisions.  Ajay Bhalla, Cyber and Intelligence Chief of MasterCard, noted that this was an initiative to ensure trusted and safe operations in the crypto market.

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