Crypto Weekly Roundup: A California bill-in-waiting, NFTs on Facebook, CoinSwitch Kuber speaks out on ED search

The week brought Bitcoin back under $20,000 in value on Saturday while Ether once again fell below $1,600. Most of the top fifty cryptocurrencies and tokens by market cap saw weekly losses as well, while the sector deals with more regulatory interferences

September 03, 2022 11:20 am | Updated 06:54 pm IST

Crypto Weekly Roundup: A California bill-in-waiting, NFTs on Facebook, CoinSwitch Kuber speaks out on ED search

Crypto Weekly Roundup: A California bill-in-waiting, NFTs on Facebook, CoinSwitch Kuber speaks out on ED search | Photo Credit: REUTERS

California’s crypto bill awaits signature

This week, crypto investors were focused on California, where the Digital Financial Assets bill was passed on August 30. The bill makes it compulsory for crypto exchanges and companies to be licensed by California’s Department of Financial Protection and Innovation in order to operate in the state.

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The Blockchain Association, a crypto advocacy group, expressed its displeasure and urged lawmakers to reject the bill, stating “licensing provisions are designed to install the same type of onerous licensing and reporting regime that has stunted the growth of the crypto industry.”

The bill stipulates that stablecoins are to be licensed by the state regulator or issued by banks. This has made stablecoin issuers fret. From the U.S. regulatory officials’ point of view, these firms must show enough reserves in USD for their tokens. Popular stablecoins like Tether and USD Coin have market caps in the tens of billions of dollars. The bill’s condition, however, is set to be phased out in 2028.

The bill, which will take effect from January 2025, is now waiting for Governor Gavin Newsom to sign it into law. This is expected to happen before September 30.

NFTs in Meta ecosystem

Since May 2022, Facebook’s parent Meta Platforms Inc. has been rolling out features that allow its users to post and share NFTs, or what it calls ‘digital collectibles’ on Instagram. This was originally limited to U.S. based creators and collectors. In August, however, the feature was expanded to 100 countries.

On August 29, Meta announced that it was allowing users to post their digital collectibles across both Facebook and Instagram. Some Facebook users have expressed concerns over the security of their digital wallets that provide access to expensive NFTs.

In its recent report on the NFT market, research firm Elliptic showed that over $100 million worth of NFTs were stolen by scammers between July 2021 and July 2022. Of these, 4,600 NFTs were stolen in July alone.

Speaking out after searches

CoinSwitch Kuber co-founder and CEO Ashish Singhal claimed in a tweet that the Enforcement Directorate (ED)’s “engagement” with CoinSwitch Kuber was not linked to money laundering allegations or the Prevention of Money Laundering Act. 

The agency was said to be probing the firm with respect to the functioning of its crypto platforms and exchanges.

The executive also explained that crypto was a new asset class in the country and that CoinSwitch Kuber was carrying out “constructive dialogues” with stakeholders in order to brief them about the company’s business practices.

CoinSwitch Kuber was valued at approximately $1.9 billion last year and its notable investors include Andreessen Horowitz and Coinbase Ventures.

Last month, the ED froze ₹64.67 crore worth of crypto exchange WazirX’s bank deposits as part of a money laundering probe.

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