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President of El Salvador says ‘FTX is the opposite of Bitcoin’

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President of El Salvador says ‘FTX is the opposite of Bitcoin’

President of El Salvador says ‘FTX is the opposite of Bitcoin’ Cynthia Chung · 6 hours ago · 2 min read

El Salvador President Nayib Bukele proclaims Bitcoin as the opposite of FTX and likened FTX to a Ponzi scheme in the wake of the exchange’s collapse on Nov. 14.

2 min read

Updated: November 14, 2022 at 12:07 pm

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Cover art/illustration via CryptoSlate

El Salvador’s President Nayib Bukele took to Twitter to proclaim the Bitcoin protocol as the opposite of FTX and likened FTX to a Ponzi scheme in the wake of the exchange’s collapse on Nov. 14.

Bukele, a staunch promoter and believer of Bitcoin, said the flagship crypto was designed to prevent Ponzi schemes, bank runs, and fraud committed by institutions in the financial system.

Examples cited by the President include Enron’s abuse of accounting practices to inflate the company’s revenues and conceal debt in its subsidiaries in 2021, American fraudster Bernie Madoff’s $64.8 billion Ponzi scheme in 2019, and most recently, Sam Bankman-Fried (SBF) secretly transferring customers’ funds to Alameda Research.

The Bitcoin blockchain is an open-source protocol, upon which any transaction can be verified by the public, as opposed to a Ponzi scheme, where investment funds are shrouded in secrecy.

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Bitcoin and Bukele

Fake news claiming Bukele stored the country’s crypto holdings on collapsed FTX ran rampant last week but were quickly dismissed by Binance CEO Changpeng ‘CZ’ Zhao via a tweet on Nov. 11.

However, the amount Bukele and his government spent on Bitcoin buying sprees using public money since he made the currency legal tender in the country was never disclosed.

On Oct. 31, 2022, The Development bank of El Salvador, BANDESAL, refused the country’s Anti-Corruption Legal Advisory Center’s (ALAC) request to disclose the government’s Bitcoin purchase and sale records for the second time.

The country currently holds 2,381 Bitcoin, approximately $39.8 million at the time of writing, according to data from Bloomberg Economics.

Meanwhile, the government is also ranked by Bloomberg Economics as one of the top emerging market countries that are vulnerable to a debt default.

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The adoption of Bitcoin in the country has been slow so far.

According to a March 2022 survey by the Chamber of Commerce and Industry of El Salvador, 86% of businesses never made a sale with Bitcoin, while only 20% of businesses accept Bitcoin while only 14% of respondents have used Bitcoin transactions since it became legal tender in El Salvador.

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Telegram to build non-custodial wallets and decentralized exchanges, says CEO Pavel Durov

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Telegram to build non-custodial wallets and decentralized exchanges, says CEO Pavel Durov

Telegram to build non-custodial wallets and decentralized exchanges, says CEO Pavel Durov Soumen Datta · 1 hour ago · 1 min read

CEO Pavel Durov said Telegram would launch a range of decentralized cryptocurrency products, including a decentralized exchange and a non-custodial wallet.

1 min read

Updated: November 30, 2022 at 8:05 pm

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Cover art/illustration via CryptoSlate

Pavel Durov, the founder of Telegram, announced that the company would launch a range of decentralized cryptocurrency products, including a decentralized exchange (DEX) and a non-custodial wallet. 

Telegram’s next step is to build a set of decentralized tools, including non-custodial wallets and decentralized exchanges for millions of people to securely trade and store cryptocurrencies. This way we can fix the wrongs caused by the current excessive centralization.

— Pavel Durov (@durov) November 30, 2022

The CEO  made the announcement on Wednesday via his Telegram channel amid the ongoing crisis following the collapse of the crypto exchange FTX. 

“The blockchain industry was built on the promise of decentralization, but ended up being concentrated in the hands of a few who began to abuse their power, ” Pavel said.

The Telegram founder believes blockchain-based projects need to return to their roots – decentralization. He recommends users switch to self-hosted wallets and trustless transactions, so they do not rely on a single entity.

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“We, developers, should steer the blockchain industry away from centralization by building fast and easy-to-use decentralized applications for the masses. Such projects are finally feasible today.”

Cryptocurrency and Telegram have a long-standing friendship

Aside from being a popular messaging app for crypto traders, Telegram also allows users to buy and sell cryptocurrencies through The Open Network (TON). 

Further, Durov spoke about bootstrapping Fragment, the crypto infrastructure built atop the TON, which he abandoned under regulatory pressure in 2020 but later revived with community assistance.

“It took only 5 weeks and 5 people, including myself, to put together Fragment – a fully decentralized auction platform,” Pavel Durov said. “We were able to do this because Fragment is based on The Open Network, or TON – a blockchain platform that is fast and efficient enough to host popular applications.”

The Fragment platform is a success, with 50 million USD in usernames sold in less than a month, according to Durov. 

Following in Binance’s footsteps, the TON network recently announced a $126 million “rescue fund” to compensate crypto projects that suffered due to the collapse of FTX.

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Brazil approves cryptocurrency bill recognizing Bitcoin as a payment method

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Brazil approves cryptocurrency bill recognizing Bitcoin as a payment method

Brazil approves cryptocurrency bill recognizing Bitcoin as a payment method Samuel Wan · 4 hours ago · 2 min read

Brazilian lawmakers took a huge step forward for Bitcoin adoption by approving a framework bill recognizing digital assets as an investment class.

2 min read

Updated: November 30, 2022 at 10:02 am

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Cover art/illustration via CryptoSlate

Lawmakers in Brazil have approved a cryptocurrency framework bill for the use of digital currencies in the Latin American country.

Once passed into law, Brazilians can use Bitcoin as a payment method, while digital assets will be recognized as an investment asset class.

Bitcoin as payment

House bill 4401/21 aims to establish an agency to oversee the Brazilian cryptocurrency industry. This includes managing the operations of service providers, such as crypto exchanges.

Under the bill, exchanges are required to observe specific rules to be allowed access to the Brazilian market. For example, processes to segregate users’ funds from the exchange’s funds. The rules also require service providers to gain approval at the federal government level as well.

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The agency will delegate responsibility to appropriate, existing, governmental bodies. According to Bitcoin Magazine, the Central Bank of Brazil will manage the use of Bitcoin for payments. While the Comissão de Valores Mobiliários (securities regulator) will handle the investment regulatory aspect.

While this represents a huge step forward for cryptocurrency adoption, the bill falls short of making Bitcoin legal tender.

Who will sign the bill?

The final hurdle before passing into law is the president’s signature. The current president, Jair Bolsonaro, is set to leave office on Dec. 31, having lost to political rival Lula da Silva by the narrowest of margins on Oct. 31.

The election result is marred in controversy with Bolsonaro supporters alleging electoral fraud. Commenting on his defeat, Bolsonaro thanked those who voted for him and asked protestors to respect the law.

Earlier this year, before winning the election, da Silva acknowledged the expansion of cryptocurrencies in Brazil to local media. He added that a framework needs to be in place to harmonize domestic practices with international standards, particularly in respect of nefarious activities.

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the government, especially through its autonomous Central Bank, must create norms in line with the international standard to avoid illegal practices that can make use of crypto assets, such as money laundering and currency evasion, in addition to avoiding practices of fraudulent trading.”

Bitcoin was up 2.5% over the last 24 hours to trade at $16,900 at the time of press.

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Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil

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Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil Liam ‘Akiba’ Wright · 2 hours ago · 2 min read

Winklevoss owned Gemini shows assets, FIAT holdings, and reserves in new ‘Trust Center’

2 min read

Updated: November 30, 2022 at 1:17 am

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Cover art/illustration via CryptoSlate

The Winklevoss Twins-backed exchange Gemini has announced a “Trust Center” to display a breakdown of funds held on the platform. The page, hosted on the Gemini website, reveals that it holds over $4.6 billion in crypto assets with $601 million in the treasury to back its stablecoin GUSD.

However, data from several sources, including CryptoSlate’s coin page, shows the market cap of GUSD to be $613.98 million, leaving a difference of $12.98 million.

Exchange assets comprise $2,257,474,294 BTC, $1,714,709,859 ETH, and $681,003,276 in other crypto assets. Further, it has $542,892,356 in FIAT, all held in FDIC-insured banks. A statement identified the funds were valid as of midnight ET on Nov. 29.

“Fiat assets held for the benefit of our customers as of 12am ET. U.S. dollars are held at FDIC-insured banks.”

The exchange also listed some 45+ relevant licenses across the U.S., United Kingdom, and Ireland. The licenses included a New York Trust license for virtual currency granted in 2015, alongside money transmission licenses in most U.S. states. Gemini also holds virtual asset and e-money licenses in the United Kingdom and Ireland.

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The license in the notoriously tricky state of New York comes with strict criteria. Crypto licenses in New York are not easy to come by and “impose certain excess capital requirements for all assets held on Gemini.”

“At any given time, Gemini is required to hold capital in excess of customer deposits and must report any material changes in this capital to the NYDFS.”

Unlike the Binance proof of reserves release, Gemini’s ‘Trust Center’ does not include any ability for customers to verify assets or link to on-chain wallets. The page is in static form and will be “updated daily.”

While the information on specific assets, reserves, licenses, and certifications showcases Gemini’s comparable level of regulation to traditional financial counterparties, the lack of full transparency may not sway some crypto purists.

The chart below highlights Gemini’s corporate structure as outlined in its Trust Center. The Gemini Space Station is the parent company of the Gemini Trust, Gemini U.K., and Gemini Ireland. Each entity has its own board, licenses, and registrations. However, only the trust has committees focusing on audits, compliance, and executive and managers examination.

Gemini Universe

Gemini closed off the Trust Center page with a quote central to its mission.

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“Ask for permission, not for forgiveness. From day one, Gemini has prioritized the security of your assets. We never have and never will compromise on that.”

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