American businesses are moving towards crypto
In a somewhat classic example of a centuries-old clash between innovation and regulations, mixed messages regards to cryptos came from the US in July. On one hand, American corporations continued rapidly moving towards broader cryptocurrency adoption. On the other hand, industry-wide pressure from financial watchdogs and regulators has significantly increased, forcing major crypto companies to roll back some of their financial products and even censor certain DeFi tokens.
Let’s start with the news that contributed to bullish market sentiment.
During the B word digital conference, the CEO of SpaceX and Tesla, Elon Musk, revealed for the first time that the space exploration company has bitcoins in its treasury reserves, and reassured that e-car manufacturer still holds bitcoins it bought back in February.
Another American giant, Amazon, placed a job advertisement in which they are seeking for a digital currency and blockchain product lead to join its payments acceptance and experience team, sparkling speculations about the company’s new aim towards crypto adoption.
A few days later, citing an insider information obtained by London-based business newspaper City A.M., crypto news outlets rushed to report that Amazon has been indeed working on adding support for crypto payments by the end of this year and even exploring the launch of its own token in 2022.
Following a short bull-run, the sentiment has quickly changed when an Amazon spokesman denied rumors about accepting bitcoin payments later this year, while confirming that the company is testing the waters.
Crypto adoption hits regulatory wall
More bearish news came from Texas, Alabama, and New Jersey, where regulators joined a crackdown on crypto lending company BlockFi, which allows its customers to earn up to 7.5% APY with interest-bearing accounts. According to regulators, such a product might violate state securities laws.
Politicians has followed suit with Senator Elizabeth Warren pushing the US Treasury to take a lead in clamping down on cryptocurrencies, while the SEC chairman hinted at more lawsuits against companies that issue synthetic crypto stock tokens - for example, Ethereum-based tokens that follow the prices of Apple or Tesla stocks.
Taking precautionary measures, Uniswap Labs — the company behind the largest decentralized exchange (DEX) by trading volume, Uniswap - announced removal of more than 100 tokens with a high-regulatory risk from its website uniswap.org. The ban list includes various synthetic assets issued by DeFi protocols such as Synthetix, UMA, and Mirror. While these tokens have been essentially censored from the official Uniswap website, they are still available for trade on Uniswap’s immutable smart contracts on the Ethereum network, using other interfaces and DEX aggregators.
Earlier in July, the world’s largest centralized crypto exchange Binance also stopped selling tokenized versions of popular securities, due to regulatory pressure from financial watchdogs around the world. Additionally, the exchange has recently lowered withdrawal limits for unverified accounts from 2 BTC to 0.06 BTC per day, and announced a handful of other steps to improve its regulatory compliance.
In other news
The Maker Protocol — creators of stablecoin DAI — is moving towards greater decentralization by dissolving the Maker Foundation, a centralized entity that was overseeing the project in its early days. From now on, the protocol will be managed by decentralized autonomous organization MakerDAO, delegating all governance decisions to holders of the MKR token.
MOONs, community points of largest crypto-focused subreddit with more than 3.2 million subscribers r/CryptoCurrency, has migrated to layer-2 scaling solution Arbitrum, which is based on an optimistic rollups technology. After more than a year since the launch of MOONs, tokens still reside on the Rinkeby testnet with an end goal of moving to the Ethereum mainnet.
The FTX exchange raised a record $900 million from high-profile investors in arguably the largest ever funding round for a crypto exchange, valuing the company at $18 billion. FTX has also bought back its shares from early investor Binance.
A bug has been discovered in the Monero protocol, which significantly compromises privacy of users who spend their newly-received funds within 2 blocks after the initial ~20 minutes lock time of 10 confirmations. While the bug doesn’t reveal addresses or transaction amounts, users are advised to wait for 1 hour or more before spending received Monero coins, until the bug has been fixed.
Cross-chain exchange Thorchain, which manages more than $100 million in TVL, has been exploited twice to the tune of $5 million and $8 million. Interestingly, the hacker behind the second attack has intentionally limited his impact to teach developers a lesson not to rush code, and requested a 10% bounty.