Results of the week

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August 2, 2022

In the crypto world, this week was quite busy: the active growth of Bitcoin and other cryptocurrencies, the launch of investigations against Coinbase Global and Kraken, Changpeng Zhao filing a lawsuit against Bloomberg Businessweek, and much more. Today we decided to make a small digest of the most important news that may affect the future crypto industry’s development.

What is the reason for the growth of cryptocurrencies?

Over the past week, we have noted the growth of almost all cryptocurrencies, which certainly cannot but please crypto enthusiasts. Thus, the two most popular cryptocurrencies, Bitcoin and Ethereum, rose in price by 6 and 10%, respectively. Polkadot (DOT) reacted best to the changes in the market, and its price increased by 21% at once. But what are these changes?

Many experts argue that the beginning of the crypto winter is associated with various processes, including too severe restrictions from the US government. So, on Wednesday, the Fed raised the range of the critical rate by 75 basis points at once, to 2.25-2.5%. It was done because the US lost up to 1% of GDP last quarter compared to the previous year’s period. Cryptocurrencies reacted to this news with a significant increase compared to recently.

Expert opinions on how events will develop further vary greatly. So, Former top manager of Goldman Sachs and macro investor Raoul Pal said that the market is preparing for a trend reversal in light of the growth in the money supply. At the same time, Guggenheim Partners predict a decline in quotes shortly, as the crypto industry has not solved other essential problems.

What’s going on with Coinbase?

Coinbase is one of the most popular crypto exchanges in the US, with millions of customers worldwide. Recently, the SEC launched an investigation forgiving this company, as it suspects trading in digital assets that can be regarded as securities.

Against this background, the company’s quotes fell sharply, and the cost of COIN decreased by almost 20%. In addition, ARK Invest sold 1.41 million Coinbase shares worth approximately $75 million.

However, many experts argue that this crypto exchange will survive due to the increase in the value of cryptocurrencies in the global market, and nothing threatens its future.

US authorities suspect Kraken of circumventing sanctions

US authorities had investigated the Kraken exchange since 2019 when they discovered it registered clients from Syria, Iran, and Cuba. These countries are heavily sanctioned. Working with such clients means that the exchange helps users bypass existing sanctions.

So far, this investigation has not affected the work of Kraken and is unlikely to do so shortly.

Changpeng Zhao sues Bloomberg and accuses the publication of defamation

The 250th edition of Bloomberg China came out with an article titled “Changpeng Zhao’s Pyramid.” According to the CEO of Binance, the information presented here has nothing to do with reality and greatly discredits the image of the millionaire and the entire company. As a result, he filed a lawsuit against the publication for defamation. He intends to remove this information, ban republishing, and receive compensation for the damage caused.

Recall that in 2020, Binance sued Forbes for publishing material stating that the exchange serves customers bypassing regulators.

FTX offers expedited refunds to customers

FTX recently filed for bankruptcy, which led to many questions from the company’s depositors and clients about how to get their money back as quickly as possible.

FTX filed a lawsuit to restructure the debt. FTX offered Voyager Digital clients to open accounts on the exchange, which would accumulate proceeds from their crypto broker bankruptcy claims. With the consent and approval of the court, they will have access to assets earlier than under the standard liquidation procedure.

But many crypto enthusiasts did not like the proposed course of action. So, this week, Ethos startup founder and former Voyager Chief Innovation Officer Shingo Lavine filed an objection to the fee and suggested how it could be done more correctly.

Investors can only wait for the results of the court decision.

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