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| Hey Insider! Happy Friday, and welcome back to the Inside Cryptocurrency newsletter! Today’s issue covers Binance’s senior executives leaving the company, the FBI’s investigation into allegations against Kraken co-founder Jesse Powell, Sega’s farewell to the blockchain gaming arena, and several more of the biggest stories from the crypto industry. I hope you enjoy your reading and have a great weekend! Doğa
p/dogayurduneri | |
| 1 | | Several senior executives of Binance, the largest crypto exchange by trading volume, have left the company amid increased regulatory scrutiny worldwide over the exchange. The executives exiting the firm include chief strategy officer Patrick Hillmann, senior vice president (VP) for compliance Steven Christie, and general counsel Hon Ng. More: - Sources familiar with the matter said the new general counsel will be Eleanor Hughes.
- The claims also pointed out that some of Binance's 600 employees in the U.S. were asked whether they would be willing to relocate during mid-year performance reviews in June, and those declining were laid off.
- The company's chief business officer, Yibo Ling, was also one of the staff leaving the exchange in the U.S.
- Binance CEO Changpeng Zhao (CZ) responded to the news on Twitter, saying that there is procedural turnover at every company depending on the environment in the global crypto market, the changes in the organization, and the shift in personal situations.
- In early June, Binance also denied the rumors of a mass layoff, stating that it is reevaluating its staff at regular intervals, which could result in job cuts.
Zoom Out: - Over the past several months, Binance came under increased crackdown in many countries, including the U.S., Australia, France, and Belgium.
- The company also had to withdraw from several markets in the West, such as Cyprus, Canada, the U.K., and the Netherlands, mostly due to compliance issues.
- The regulatory pressure recently caused the exchange's market share to fall to the lowest levels since August 2022.
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What the numbers say: The data compiled by Finbold has shown that 127 countries took a step into central bank digital currency (CBDC) exploration as of the first half of 2023. The number of countries in advanced exploration phases reached the highest level in the first six-month period of the year, with 64 nations. The study also pointed out that 109 countries are actively exploring CBDCs when canceled and inactive projects are excluded. The countries in the research and development phases represented more than half of all nations exploring digital currencies. What it means: A CBDC is a type of tokenized asset issued and controlled by a country's government or central bank and backed by the local currency. Relevance: The rising interest of the countries in the CBDCs has driven international financial organizations to establish guidelines and new platforms for this asset type. Most recently, the International Monetary Fund (IMF), the major financial agency of the United Nations (UN), announced that it started working on a global CBDC platform to allow CBDC transactions between countries. The agency also previously revealed its plans to release a CBDC handbook to guide countries in developing digital currencies, citing heavy demand. Brands that should care: The increase in the number of countries exploring CBDCs has also caused many brands to jump on the bandwagon over the last several months. In May, Ripple, the payment protocol most famous for its native token XRP, launched a new CBDC platform that central banks, governments, and financial institutions can use to issue their own digital currency. Singaporean crypto-friendly DBS Bank also recently introduced a new payment tool for the digital yuan, or e-CNY, to allow businesses in China to receive payments in the country's CBDC. Also, several giant brands like Microsoft and Visa participated in CBDC pilot projects. | | | |
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| 3 | | Jesse Powell, the co-founder and former CEO of the second-largest U.S. crypto exchange Kraken, faced a criminal investigation by the Federal Bureau of Investigation (FBI), according to a recent New York Times report. The FBI agents searched Powell's home in Los Angeles in March, seizing his electronic devices. More: - The search was conducted as part of an investigation into allegations that Powell hacked and cyber-stalked a non-profit arts group he founded, the Verge Center for the Arts.
- Kraken's co-founder was alleged of interfering with the art group's computer accounts by blocking access to emails and messages from contributors.
- Three sources familiar with the issue said the FBI and the U.S. Attorney's Office for the Northern District of California had been investigating Powell since at least September 2022.
- Prosecutors have not accused Powell of any crimes.
- Powell's lawyer, Brandon Fox, has confirmed the investigation, underlining that it was focused on the allegations by the arts group and had nothing to do with Powell's involvement in the cryptocurrency field.
- A Kraken spokesperson also said the investigation was not related to the company in any way.
- In September, Powell stepped down from the CEO position at Kraken, continuing to carry out his chairman role.
Zoom Out: - Powell founded the Verge Center for the Arts in 2007 and worked as a board member after April 2010.
- However, the arts group removed him from its board of directors last year, citing his failure to attend board meetings and violations of the organization's principles.
- After his removal, Powell blocked the group from accessing its website, emails, and internal messaging system, claiming that he owned the digital accounts.
- The Kraken co-founder also sued Verge in June, stating that his dismissal from the board was improper.
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| 4 | | Sega, the Japanese video game giant behind popular games like Sonic The Hedgehog, has announced that it abandoned its plans to develop blockchain-based games. The firm also said it decided not to share its biggest franchises with third-party blockchain projects to avoid devaluing its content. More: - The company was previously regarded as one of the most loyal advocates of blockchain gaming.
- The company's co-chief operating officer, Shuji Utsumi, defined play-to-earn (P2E) games, which are the basis of blockchain-, crypto-, and NFT-focused gaming, as boring.
- However, Sega will continue to allow its external partners to use its lesser-known Three Kingdoms and Virtua Fighter characters for NFTs.
- The gaming giant's lesser franchises will also be offered to several blockchain-based games, which will be announced later in 2023.
- Also, the company's investments in blockchain-related projects will continue.
- Utsumi said blockchain technology is still useful in situations like moving characters and items between different games.
- The firm executive added that they would remain open to getting more involved in blockchain as the technology matures.
Zoom Out: - France-headquartered video game publisher Ubisoft also pulled back its investments in NFT games, citing low demand.
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| 5 | | Google Cloud, the cloud computing arm of the U.S.-based tech giant, has partnered with the infrastructure provider Voltage specializing in Bitcoin's Layer-2 scaling solution, Lightning Network. The collaboration will allow Google Cloud to launch Bitcoin-based services worldwide. More: - As part of the partnership, the cloud computing division will also help Voltage expand its operations.
- Voltage will serve as an outsourced Bitcoin and Lightning network team for Google Cloud.
- The investment arm of Google, Google Ventures, participated in a $6M seed round for Voltage in 2021.
Zoom Out: - The Bitcoin Lightning network hit the headlines several times this year.
- Most recently, Binance, the largest crypto exchange by trading volume, and Coinbase, the largest U.S. exchange, have shown their interest in integrating Lightning Network into their platforms.
- In April, business intelligence company MicroStrategy's Bitcoin advocate executive chairman, Michael Saylor, also integrated Lightning into his corporate email address in an effort to make the network mainstream, allowing anyone to send him Bitcoin (BTC) using his work email.
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| 6 | | Namibia's National Assembly has recently passed a bill to establish a framework for regulating the crypto market and virtual asset service providers in the African country. The legislation also appoints a regulatory authority responsible for overseeing the crypto industry and enforcing the new regulations. More: - The bill mainly aims to ensure consumer protection, prevent market abuse, and reduce risks regarding money laundering, terrorism financing, and proliferation activities.
- The regulation will enter into force after the official publication.
- The country's minister of finance and public enterprises, Iipumbu Shiimi, said the government would establish a regulatory body to supervise the crypto market and grant licenses to the market participants.
- As part of the bill, service providers failing to comply with the regulation could face penalties of up to 10M Namibian dollars (~$671,500) and 10 years in prison.
Zoom Out: - On the other hand, in 2017, the Bank of Namibia, the country's central bank, announced that it was strongly against the use of cryptocurrencies as a payment method for goods and services.
- The bank's director of strategic communications and international relations, Kazembire Zemburuka, recently stated that it would assess cryptocurrencies' acceptance within the financial system again once the associated risks are better managed.
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- The Federal Reserve (Fed) of New York's Innovation Center has stated that a 12-week test on the digital dollar demonstrated the effectiveness of it to improve domestic and international payments.
- Shiba Inu's long-awaited Layer-2 blockchain network, Shibarium, has been set to go live after a conference in Toronto in August.
- American singer Taylor Swift agreed to a sponsorship deal with the bankrupt crypto exchange FTX before the platform executives decided not to carry out the agreement, according to a recent CNBC report citing a person familiar with the issue.
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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