Here are the top cryptocurrency and decentralized finance headlines you may have missed this week
Kraken pays $1.25 million fine for trade violations
Crypto exchange Kraken is to pay a $1.25 million fine for allegedly offering unregulated crypto products to consumers. A statement released Thursday by the CFTC also said Kraken was ordered to refrain from further violations of the Commodity Exchange Act.
The matter stems from CTFC’s findings, which showed that Kraken had offered marginal trading to its clients between June 2020 and July 2021. Kraken is accused of various irregularities, such as forcing liquidation if repayments were not made within 28 days.
Regarding the decision, Acting Director of Enforcement Vincent McGonagle of the CFTC said the measure was part of the regulator’s broader efforts to protect consumers. He added that trading digital assets with margin in the US must comply with applicable laws and regulations.
Despite the agreement with regulators, Kraken has neither admitted nor denied guilt. The exchange instead issued a statement saying it will continue to work with regulators to align the rules of the game for cryptocurrencies around the world.
FINMA approves first crypto fund in Switzerland
Crypto Finance is the first company to be approved by the Swiss Financial Market Supervisory Authority (FINMA). The Swiss regulator confirmed in a statement on Wednesday that the company will offer the “Crypto Market Index Fund”, which is managed by PvB and held by SEBA Bank.
FINMA also said it has introduced requirements to ensure that the companies it approves are able to manage the risks of the crypto markets. Thus, a company may only invest in established crypto assets that have a sufficiently high trading volume to receive approval. In addition, such an entity must ensure that investments are made through counterparties and platforms established in a member country of the Financial Action Task Force, and the eligible entities are also subject to anti-money laundering laws.
The regulator also seeks to “consistently apply technology-neutral” current laws in the field of financial markets in order to improve innovation in the country, while ensuring that developing technologies are not used to circumvent regulations.
Cardano invests $100 million in development of DeFi and NFT
Ken Kodama, CEO of Emurgo, Cardano’s commercial arm, said Sunday during the Cardano 2021 Summit that the project will invest $100 million to accelerate the development of the Cardano ecosystem. Kodama confirm in addition, that the company will set up “a special operation” to fund the blockchain ecosystem from next year.
The move would be potentially significant because Emurgo has been an integral part of Cardano’s collaboration with government agencies, developers, start-ups and other companies. Since Emurgo makes a significant contribution to the development of the Cardano ecosystem, users hope that the investment will help expand the use cases of the ecosystem.
Since the blockchain has been compatible with smart contracts since the Alonzo upgrade, the financial injection could also help Cardano develop its own decentralized finance (DeFi) and non-fungible token (NFT) projects. Cardano also plans to use the funds to raise awareness of blockchain. The investment product will be split into Emurgo Ventures and Emurgo Africa. Emurgo Africa will support over 300 start-ups in Africa, while Emurgo Ventures will focus on other developed markets.
Alibaba Suspends Sale of Crypto Miners
E-commerce giant Alibaba announced Monday that it is halting the sale of crypto mining equipment. Alibaba added that it will also introduce restrictions on any software, guides and strategies related to virtual currencies. The ban goes into effect on October 8, but Alibaba said it will not start punishing third parties who violate the ban until October 15.
The announcement came in response to China’s decision last Friday, when it declared that all crypto activity in the country was banned. The People’s Bank of China and other regulators made this anti-crypto decision while warning that companies offering offshore crypto exchange services to Chinese citizens would be breaking the law.
On Tuesday, Bitmain added to the list of companies whose activities are affected, as sources told CoinDesk that the manufacturer plans to stop selling in China and move a significant part of the activities out of the Shenzhen region. Bitmain will now look to invest in more crypto-friendly environments where the company has already gained a foothold, such as Georgia in the US and Istanbul in Turkey.
Europe is the largest crypto market in the world, Chainalysis
According to a Chainalysis report released on Tuesday, the countries of the European continent recorded incoming crypto transfers worth more than $ 1 trillion in the period from June 2020 to July 2021. This total represented 25% of total global activity, bringing the Central, Northern and Western Europe (CNWE) region to the top, due to incredible growth and decline in activity in East Asia.
Chainalysis attributed the growth to an influx of institutional investors as institutional investment numbers in the region increased from $1.4 billion in July 2020 to an incredible $43.6 billion in June this year. The growth was led by the UK, where $170 billion worth of crypto assets were traded into the country, with almost half of the amount, 49%, coming from DeFi protocols.
The report shows that DeFi is slowly becoming an integral part of this market, as it accounted for a significant part of the large institutional transfers within the observed period. In fact, DeFi was represented by three to four of the five main services in most months of the said period. Another feature is that investors are increasingly moving to “staking” their cryptocurrencies via DeFi protocols.