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Defichain Co-Founder: FTX’s Collapse Has Rekindled Interest In Defi And Associated Products

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Defichain Co-Founder: FTX’s Collapse Has Rekindled Interest In Defi And Associated Products

According to Julian Hosp, co-founder of the decentralized finance entity Defichain, the fall of the crypto exchange FTX and the domino effect it has had may have rekindled interest in decentralized finance (defi) and associated products. Hosp, however, conceded that the crypto exchange’s dramatic collapse also encourages regulators to adopt a harder line when dealing with crypto entities.

Decentralized Finance Takes Center Stage

While the massive failure of crypto exchange FTX and the chaos that followed is likely to embolden hardline regulators, experts like Julian Hosp of Defichain believe the ensuing loss of trust in centralized institutions will likely rekindle user interest in decentralized finance (defi) and associated products. For users who still believe in cryptocurrency’s value proposition — a viable alternative to centralized finance — Hosp said such individuals are likely to switch to self-custody.

As reported by Bitcoin.com News, many users — seemingly spooked by the sheer scale of FTX’s misuse of client funds — have been removing their assets from centralized crypto exchanges. In some cases, the unusually high volumes of withdrawal requests have seen exchange platforms (including FTX before its collapse) struggle or fail to process these in time.

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In contrast, defi platforms like Uniswap and Defichain have seen their respective traded volumes spike in the same period. To illustrate, Uniswap posted a tweet on Nov. 14 which indicated that the number of active daily wallets on the defi platform had increased to 55,550, a new record. The tweet could suggest that Hosp and other crypto experts’ prediction is already turning out to be correct.

New users of Uniswap’s Web App reached a 2022 high.

Self-custody and transparency are in demand and users are flocking to what they know and trust.

Let’s keep building. pic.twitter.com/IwPqTmx58J

— Uniswap Labs 🦄 (@Uniswap) November 14, 2022

Meanwhile, in a written response to questions from Bitcoin.com News, Hosp noted that the ongoing FTX-related events have succeeded in deterring prospective users.

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“Trust is shaken at the moment. While existing crypto users are more likely to move to self-custody and into Defi, new investors will wait on the sidelines until the dust has completely settled, which may take a little while,” Hosp explained.

Going forward, Hosp, who co-founded Defichain with U-Zyn Chua, said he expects to see “a downward price movement over the coming months.” According to Hosp, this trend will only be reversed “once everything has healed.”

Domino Effect of the FTX Crash

While the crypto market weathered many storms before this one, some crypto experts have warned that FTX’s demise could yet trigger a much bigger ecosystem-wide crash. They point to reports of users on some exchange platforms encountering problems when attempting to withdraw. When asked if such a crash can be averted, Hosp said this will depend mainly on the extent of the secondary consequences of the FTX/Alameda fallout.

“This is very difficult to gauge right now. If the effects are relatively small, affected platforms can either find a remedy themselves (as the recent Huobi announcement of an 18 mil USD hole shows) or other players such as Binance can step in. However, if it starts to be like a crazy wildfire, we can only brace for impact,” Hosp said.

Like his peers, Hosp said he believes the fallout from the FTX saga emboldens regulators and gives them a reason for cracking down on the crypto industry.

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What are your thoughts on this story? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

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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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Defi Chain Co-Founder: FTX’s Collapse Has Rekindled Interest In Defi And Associated Products

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Defi Chain Co-Founder: FTX’s Collapse Has Rekindled Interest In Defi And Associated Products

According to Julian Hosp, co-founder of the decentralized finance entity Defi Chain, the fall of the crypto exchange FTX and the domino effect it has had may have rekindled interest in decentralized finance (defi) and associated products. Hosp, however, conceded that the crypto exchange’s dramatic collapse also encourages regulators to adopt a harder line when dealing with crypto entities.

Decentralized Finance Takes Center Stage

While the massive failure of crypto exchange FTX and the chaos that followed is likely to embolden hardline regulators, experts like Julian Hosp of Defi Chain believe the ensuing loss of trust in centralized institutions will likely rekindle user interest in decentralized finance (defi) and associated products. For users who still believe in cryptocurrency’s value proposition — a viable alternative to centralized finance — Hosp said such individuals are likely to switch to self-custody.

As reported by Bitcoin.com News, many users — seemingly spooked by the sheer scale of FTX’s misuse of client funds — have been removing their assets from centralized crypto exchanges. In some cases, the unusually high volumes of withdrawal requests have seen exchange platforms (including FTX before its collapse) struggle or fail to process these in time.

Advertisement

In contrast, defi platforms like Uniswap and Defi Chain have seen their respective traded volumes spike in the same period. To illustrate, Uniswap posted a tweet on Nov. 14 which indicated that the number of active daily wallets on the defi platform had increased to 55,550, a new record. The tweet could suggest that Hosp and other crypto experts’ prediction is already turning out to be correct.

New users of Uniswap’s Web App reached a 2022 high.

Self-custody and transparency are in demand and users are flocking to what they know and trust.

Let’s keep building. pic.twitter.com/IwPqTmx58J

— Uniswap Labs 🦄 (@Uniswap) November 14, 2022

Meanwhile, in a written response to questions from Bitcoin.com News, Hosp noted that the ongoing FTX-related events have succeeded in deterring prospective users.

Advertisement

“Trust is shaken at the moment. While existing crypto users are more likely to move to self-custody and into Defi, new investors will wait on the sidelines until the dust has completely settled, which may take a little while,” Hosp explained.

Going forward, Hosp, who co-founded Defi Chain with U-Zyn Chua, said he expects to see “a downward price movement over the coming months.” According to the CEO, this trend will only be reversed “once everything has healed.”

Domino Effect of the FTX Crash

While the crypto market weathered many storms before this one, some crypto experts have warned that FTX’s demise could yet trigger a much bigger ecosystem-wide crash. They point to reports of users on some exchange platforms encountering problems when attempting to withdraw. When asked if such a crash can be averted, Hosp said this will depend mainly on the extent of the secondary consequences of the FTX/Alameda fallout.

“This is very difficult to gauge right now. If the effects are relatively small, affected platforms can either find a remedy themselves (as the recent Huobi announcement of an 18 mil USD hole shows) or other players such as Binance can step in. However, if it starts to be like a crazy wildfire, we can only brace for impact,” Hosp said.

Like his peers, Hosp said he believes the fallout from the FTX saga emboldens regulators and gives them a reason for cracking down on the crypto industry.

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What are your thoughts on this story? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

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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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BTC Ownership In Canada Rises Sharply In 2021, Bank Of Canada Study Shows 13% Of Canadians Own Bitcoin

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BTC Ownership In Canada Rises Sharply In 2021, Bank Of Canada Study Shows 13% Of Canadians Own Bitcoin

This week researchers from the Bank of Canada published the central bank’s Financial System Review which highlights five key statistics tethered to Canadian bitcoin owners. According to the Bank of Canada’s metrics, 13% of Canadians own the leading crypto asset bitcoin, and “most Canadians are aware of bitcoin.”

Bank of Canada’s Financial System Review Highlights Bitcoin Ownership Among Canadians

On October 12, 2022, the Bank of Canada published the financial institution’s Financial System Review, which highlights some key points tied to the crypto asset ecosystem. A blog post specifically discussing the crypto asset industry and markets, in general, written by Daniela Balutel, Walter Engert, Christopher Henry, Kim Huynh, and Marcel Voia explains that “large price corrections are the most common incident reported by crypto asset owners.”

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Furthermore, the five researchers added that “bitcoin ownership among Canadians increased sharply in 2021.” “The share of Canadians owning bitcoin rose from 5% in 2018–20 to 13% in 2021,” the Bank of Canada’s blog post notes. “This increase occurred following widespread increases in the savings and wealth of Canadians during the pandemic.”

While previous studies and this year’s Financial System Review shows most residents from Canada have heard the term “bitcoin,” the level of understanding is split. Despite this fact, Canada’s central bank “found that 40% of bitcoin owners in 2021 showed a low level of bitcoin knowledge, which is a higher percentage than in previous years.”

The biggest reason for owning BTC, out of four different reasons including a lack of trust in government, an investment vehicle, interest in new technology, and a payment method, was for investment vehicle purposes.

Additionally, in 2021, 25% of crypto owners reported that they lost money due to large price fluctuations, which was up 18% since 2019. 9% have had transaction issues, 11% lost complete access to their cryptocurrency wallet, and 7% reported that their crypto assets were stolen.

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Another key metric the Bank of Canada discovered was the fact that most Canadian bitcoin owners hold small fractions. The median amount was less than CAD$500 worth of crypto and 70% of Canadian bitcoin owners held less than CAD$5K worth.

Tags in this story

Bank Canada Bitcoin, Bank of Canada, Bank of Canada research, CAD, Canada, canada central bank, Canadian bitcoin owners, Canadian Dollar, Canadians, Central Bank, crypto asset ecosystem, crypto economy, crypto industry, Financial System Review, investment, Investment vehicle, lack of trust in government, owning BTC, Price Fluctuations, Transaction Issues

What do you think about the Bank of Canada’s findings concerning Canadian bitcoin owners in 2021? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons, Bank of Canada

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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conflict

Crypto Payments May Not Help Russia Bypass Sanctions, Experts Say

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Crypto Payments May Not Help Russia Bypass Sanctions, Experts Say

Russia is preparing to authorize international crypto payments but people involved in the industry doubt this would allow the country to circumvent sanctions. At the same time, the United States has been tightening the noose, recently targeting the use of cryptocurrencies to dodge the financial restrictions imposed by the West with new legislation in Congress.

Russian Crypto Experts Claim Circumventing Sanctions With Cryptocurrency Is a ‘Great Illusion’

This week, Russian authorities announced they had started developing a mechanism for cross-border settlements with crypto assets, with the goal to reduce the sanctions pressure on the Russian economy and trade. The Ministry of Finance said that a bill legalizing such transactions has been agreed upon with the Central Bank of Russia.

Moscow is now in a rush to adopt regulations for the issuance, circulation, and various operations with digital currencies, particularly payments for imports and exports restricted by Western sanctions over its invasion of Ukraine. Meanwhile, the House of Representatives of the U.S. Congress approved a new bill with measures aimed at curbing the use of cryptocurrencies to circumvent them.

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On this backdrop, experts with knowledge of the industry have shared with Russian media their opinions on how realistic it is to bypass the sanctions with the help of cryptocurrencies. The crypto page of the Russian business news portal RBC has compiled them in an article, the title of which starts with the expression “Great Illusion.”

The introduction of a crypto payment system under sanctions is exactly that, a big illusion, according to Maria Stankevich, director of development at the digital asset exchange Exmo (Exmo.com). She reminded that many state-owned companies were discussing this option back in 2014, amid earlier sanctions adopted after the Russian annexation of Crimea.

This Isn’t the First Time Russia Turns Toward Cryptocurrencies for Payments

Mikhail Zhuzhzhalov, a senior lawyer at the Tomashevskaya & Partners law firm, agreed with the crypto executive that the idea of overcoming financial obstacles with the help of crypto is not new. In 2018, Russian authorities considered permitting international companies established in the country’s special administrative regions to use digital coins in settlements with partners but the proposal was rejected by regulators who had a very negative attitude at the time.

Regulatory pressure is usually exerted on institutional players such as cryptocurrency exchanges, peer-to-peer platforms, and issuers of digital and tokenized assets, Zhuzhzhalov noted. While the circulation of cryptocurrencies itself is not regulated, it is easy to go after legally operating licensed companies, he pointed out and emphasized:

If such market participants are subjects of unfriendly jurisdictions, they are obliged to comply with the sanctions. And if they are located in neutral countries, then they may be pressured by secondary sanctions, as was recently the case with Turkish banks.

Two of five Turkish lenders working with Russia’s Mir cards decided to suspend operations with the payment system widely used by Russian tourists visiting the country. The move followed clear indications earlier this month that Washington was likely to impose sanctions on nations conducting transactions with Mir. According to local media reports in Turkey, a new Turkish-Russian payment system is in the making.

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It’s almost impossible to hide large volumes of transactions, Maria Stankevich admitted, and everyone who still wants to work with Russia using cryptocurrencies will be placed under sanctions. The number of those who choose to continue to do that will decrease, she is convinced. Tracking crypto transactions is even easier than bank transfers, Stankevich added. “In the current conditions, you just have to accept that interaction with the West will be limited,” she concluded.

Tags in this story

conflict, cross-border payments, Crypto, crypto industry, crypto payments, Cryptocurrencies, Cryptocurrency, Exchange, Exmo, experts, international settlements, legalization, opinions, Payments, pressure, Regulation, restrictions, Russia, russian, Sanctions, U.S., Ukraine, War

Do you think Russia will be able to reduce the sanctions pressure by employing cryptocurrencies for cross-border payments? Share your thoughts on the subject 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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