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Crypto Retreat Has Taken A Big Toll On Crypto Exchanges In Q1: Report

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Crypto Retreat Has Taken A Big Toll On Crypto Exchanges In Q1: Report

Currently, the declining status of the crypto market is directly hitting crypto exchanges

The skyrocketing prices of cryptocurrencies in 2021 had given hope that the millions of crypto investors would definitely become millionaires by the end of 2022. But unfortunately, the crypto market failed to deliver. Instead, most investors are now underwater as crypto prices continue to decline exponentially, even after massive adoption. Earlier, investing in crypto was not only risky but also profitable. Cryptocurrency has always been a good form of investment asset for those who wish to take risks. But currently, the declining value of the crypto market has harmed investors immensely, who are now taking refuge in centralized assets or traditional domains of investment. Currently, Bitcoin is making headlines as it dropped below US$31,000, which is its lowest value since July 2021. Well, now if the ‘Death Cross’ warnings are true, then it is quite evident that more pain awaits the crypto market. Now, this declining status of the crypto markets is directly hitting the businesses of the crypto exchanges. In fact, global crypto exchange leader Coinbase warns its users that it is expecting lower revenues in its upcoming revenue report than its recorded revenues during the fourth quarter of 2021, which were already low.

Coinbase was set to record the earnings of its first quarter of 2022. But the exchange has already warned investors during the calculation of its fourth-quarter reports that it is expected further lower trading volumes and monthly transactions given the rising volatility in crypto assets and the persisting macroeconomic factors. Crypto market analysts and financial experts have stated that even though the market witnessed a few price swings towards the higher side, crypto activities have been steadily declining consistently, leading to minimal or no rise in the market volumes.

 

The weakening crypto market

The recent decline in the crypto market has demonstrated falling confidence among investors. The market has been suffering since the Covid lockdowns, in fact, Russia’s Ukraine invasion has also adversely impacted Bitcoin and all other major cryptocurrencies, as the EU initially planned on banning Bitcoin. The market faced another blow when China shut down Bitcoin mining in its Sichuan province and further instructed its banks to stop supporting crypto transactions, with the rising crypto restrictions in the country. Apart from these, there are various reasons that govern the degenerating status of the crypto market, but investor sentiments also play a major part in this too. Growing fears over increased regulations and banning crypto transactions by several global governments have made investors choose various other investment assets.

 

How are crypto exchanges being impacted?

Several factors like rising global inflation, geopolitical crises, a shift in the US monetary policy, and others continue to adversely affect the crypto market. But these factors also directly affect the crypto exchanges. The consistent reduction of daily trading volumes and transactions has led crypto exchange leaders to believe that the worst is yet to come, which might actually be true. Nevertheless, as always suggested by market experts, investors should always be careful while exploring these untrodden domains. The current condition of the market is quite shocking; hence, it is best suggested to consult financial experts and consultants before further investing in cryptocurrencies or any other form of a digital asset.

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SEC Chair Gensler: Crypto Exchanges Are Trading Against Their Customers Often

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SEC Chair Gensler: Crypto Exchanges Are Trading Against Their Customers Often

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, says cryptocurrency exchanges are “trading against their customers often because they’re market-marking against their customers.” He has raised concerns over crypto trading platforms “commingling” services.

SEC Chair Gensler on Crypto Exchanges Trading Against Customers

SEC Chairman Gary Gensler said in an interview with Bloomberg News Tuesday that some cryptocurrency exchange platforms may be betting against their own customers.

Gensler expressed concerns that crypto exchanges are not segregating different parts of their businesses, such as trading, custody, and market-making. He warned that the “commingling” of services may hurt customers.

Noting that the problem of “platforms trading ahead of their customers” is widespread in the crypto space, the SEC chair asserted:

In fact, they’re trading against their customers often because they’re market-marking against their customers.

The SEC chief also raised issues with stablecoins, emphasizing that the three largest stablecoins are affiliated with crypto exchanges. Tether (USDT) is affiliated with Bitfinex, USD Coin (USDC) is linked to Circle, and Binance USD (BUSD) is connected to Binance.

Chair Gensler opined:

I don’t think that’s a coincidence. Each one of the three big ones were founded by the trading platforms to facilitate trading on those platforms and potentially avoid AML and KYC.

U.S. lawmakers have called for the regulation of stablecoins, citing that they pose risks to the country’s financial stability. Both the Federal Reserve Board and the Financial Stability Oversight Council (FSOC) recently warned about stablecoin runs. Earlier this week, algorithmic stablecoin terrausd (UST) lost its peg to the U.S. dollar, causing its price and the price of LUNA to plummet.

Gensler said that most digital assets fall under the purview of the SEC and crypto trading platforms should be registered with the agency. The agency recently said that it almost doubled the Enforcement Division’s crypto unit.

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What do you think about Gensler’s comments? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Coinbase Warns Some Russian Users Their Accounts May Be Blocked, Report Reveals

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Coinbase Warns Some Russian Users Their Accounts May Be Blocked, Report Reveals

Leading U.S. crypto exchange Coinbase has reportedly notified certain Russian customers that their accounts may be blocked at the end of this month. According to Russian media, the trading platform has offered them to withdraw their funds unless they prove they are not under sanctions.

Coinbase Reportedly Asks Russian Clients to Withdraw Funds

Some Coinbase users from Russia have received letters informing them that their accounts will be blocked on May 31, the crypto page of the Russian business news portal RBC reported. The company suggested that these customers withdraw their funds unless they provide documents indicating they are not subject to EU sanctions, the publication explained quoting the correspondence, which stated:

Until May 31, 2022, you must withdraw all funds from your account or provide us with special documents that confirm that you do not fall under these sanctions.

After that date, the funds may be frozen and all assets transferred to the accounts in the future will also be blocked, the crypto exchange’s support team warned the Russians, according to the post published by RBC Crypto.

The news of the notice comes after earlier in May, Coinbase’s Chief Legal Officer Paul Grewal tweeted that the exchange could no longer provide services to certain Russian clients registered to the platform’s EU entities or located within the European Union.

Grewal assured that the company is working with affected customers to give them an opportunity to demonstrate if these sanctions don’t apply to them or help them withdraw their funds from Coinbase, if they do. He also emphasized the exchange will continue to provide services to non-sanctioned Russian users who are not located in the EU and are not registered with its EU entities.

Expanding western sanctions, targeting the Russian government and citizens’ access to global finances, have also affected the crypto space. Coinbase’s move follows Binance’s decision in April to limit services for Russian nationals and companies that have crypto assets exceeding €10,000 (close to $11,000) in value.

The largest crypto exchange by trading volume cited the EU’s latest sanctions as well. In a new round of penalties approved by the member states in response to Russia’s ongoing invasion of Ukraine, the European Union prohibited the provision of “high-value” crypto-asset services to Russian entities and residents.

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Do you expect other crypto exchanges to comply with the latest EU sanctions on Russia? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Uzbekistan President Issues Decree Regulating Cryptocurrencies, Mining And Trading

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Uzbekistan President Issues Decree Regulating Cryptocurrencies, Mining And Trading

The government of Uzbekistan has moved to expand its crypto regulations through a decree signed by President Shavkat Mirziyoyev. The document provides definitions for terms like crypto assets, exchange, and mining, and determines the main regulatory body for the industry.

Agency Under President Mirziyoyev to Oversee Crypto Market in Uzbekistan

Uzbekistan’s head of state, Shavkat Mirziyoyev, has signed a new decree expanding the regulatory framework for the Central Asian nation’s crypto space. Its stated goal is to further develop digital technologies, create favorable conditions for entrepreneurship and improve the legislation in this sphere.

The National Agency for Project Management under the president has been transformed into National Agency for Perspective Projects, Forklog reported, quoting the document. The NAPP will become the country’s main crypto watchdog.

The regulatory body has been tasked to implement the state policy in the crypto economy and ensure investors’ rights are protected. It will also take charge of introducing blockchain technologies to the public sector and combatting money laundering, terrorist financing and weapons proliferation through cryptocurrencies.

The decree defines crypto assets as property rights representing a collection of digital records in a distributed ledger that have value and owner. Starting from Jan. 1, 2023, Uzbekistan’s citizens and companies will be allowed to buy, sell and exchange cryptocurrencies through crypto service providers.

The President’s order lists a number of entities that fall under this category, including digital asset exchanges, mining pools, crypto depositories, and crypto stores. They will be required to register as local businesses and obtain licenses or mining certificates from the government agency.

Uzbekistan legalized crypto trading in 2018 but in late 2019 the government banned local residents from purchasing cryptocurrencies. They could only sell. In November, 2021, citizens were allowed to trade crypto assets for national currency on licensed domestic crypto exchanges while non-residents were permitted to exchange digital coins for foreign fiat.

Decree Bans Unauthorized Mining, Minting of ‘Anonymous’ Cryptos

Only registered firms will be able to mine cryptocurrency in Uzbekistan. Mining farms will pay a higher electricity tariff during peak hours of consumption. Unauthorized mining will be prohibited. The ban applies to the minting of what the decree calls “anonymous cryptocurrencies” as well and any transactions with them.

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Just as before, Uzbekistanis will not be permitted to use or accept cryptocurrencies as a means of payment for goods and services within the country. On the positive side though, crypto-related transactions of individuals and companies will not be subject to taxation, according to the document dated April 27, 2022.

Tax breaks will also be provided to participants in a new regulatory sandbox that the NAPP will establish to pilot crypto projects. The entities involved in the trials will also be exempt from other obligations to the state budget, including customs payments other than the duties for imported hardware and software.

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Crypto, crypto exchanges, crypto miners, crypto mining, Cryptocurrencies, Cryptocurrency, Decree, Exchanges, Investors, licensing, Miners, mining, Payments, registration, Regulation, Regulations, trading, Uzbek, Uzbekistan, Uzbekistani

What are your thoughts on Uzbekistan’s new crypto regulations? Let us know in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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