Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
UK-based blockchain security and forensics firm Elliptic, which has been working with authorities to expose crypto wallets connected to sanctioned individuals or organizations, has discovered a wallet containing millions in “significant crypto asset holdings” possibly affiliated with sanctioned Russian officials and oligarchs. However, co-founder Tom Robinson said that while crypto “can and will be used for sanctions evasion”, it was “not the silver bullet”. He added that while service providers like Tornado Cash have refused to comply with sanctions, “the level of sanction compliance is very high”, citing examples such as Finance and Coinbase. So far, Elliptic has identified over 400 crypto services allowing anonymous users to trade digital assets with rubles, and linked over 15 million crypto addresses to Russian criminal activity.
Argentina’s crypto community is criticizing a perceived anti-crypto requirement introduced by a recent IMF deal, which restructures and allocates more facilities to the country to pay its $45 billion debt to the fund. A statement made with regards to the deal says the government will “discourage the use of cryptocurrencies in prevention of money laundering and informality” to provide a “better safeguard of financial stability”, leading some to express concern over the subsequent stunting of crypto growth in Argentina. Non-profit Bitcoin Argentina has written a letter to the government requesting all the data on the implementation of these new measures, while others, like Franco Bianchi, CMO of crypto payment start-up Lemon, said it would be best to “work in a context of clear rules that encourage the adoption of crypto assets as some countries are doing”.
The EU’s Markets in Crypto Assets (MiCA) regulatory framework is one step closer to ratification, with the Economic and Monetary Affairs Committee (ECON) having voted 31-4 in favor of the latest MiCA draft (apart from 23 abstentions). MiCA broadly covers crypto issuance and trade, promising to facilitate a “passportable” license for crypto firms that would be valid among the 27 EU member states. It also includes “measures against market manipulation and to prevent money laundering, terrorist financing and other criminal activities”. The MiCA draft will now move on to further negotiations with EU governing bodies.
zkSNACKs, the company behind Wasabi Wallet, will block certain BTC transactions from its service that facilitates privacy-enhancing transactions known as CoinJoins. According to Wasabi developer Rafe, this move was needed to keep out scammers and hackers and keep the company out of (presumably legal) “trouble”, adding that “none of us are happy about this”. Still, Wasabi Wallet will continue operating using the zkSNACKS coordinator, albeit in a more restricted fashion. While blacklisted addresses are now excluded, zkSNACKs will remain operational for all users who want to maintain their BTC privacy.
Southern New York District Court Judge Analisa Torres has denied a motion filed by the US SEC in a lawsuit against Ripple Labs, which sought to dismiss the latter’s claim that the SEC had not given it fair notice it would consider its XRP token a security. At the same time, judge denied a motion filed by Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen to dismiss the case against them for allegedly aiding and abetting unregistered securities sales, which Garlinghouse called a “huge win”. The SEC’s suit alleges that Ripple sold its XRP token as an investment product from 2013 to 2020 without SEC registration. In response, Ripple said XRP was a “digital asset for real-time global payments” and therefore, not subject to SEC jurisdiction.
Elon Musk has revealed that his two companies, Tesla and SpaceX, are experiencing significant inflation pressure in logistics and raw materials, but stressed that he will not sell his cryptocurrencies (BTC, ETH and DOGE). Still, he added that in times of high inflation, it was “generally better to own physical things like a home or stock in companies you think make good products than dollars”. Musk has also been actively supporting Ukraine’s defense efforts against Russia, sending several shipments of Starlink equipment to Ukraine. Ukrainian Vice PM Mykhailo Fedorov said the equipment kept Ukrainian “cities connected and emergency services saving lives”.
Show me the money
According to data from Huobi Global, BTC continued to move sideways at 38,800 after yesterday’s elevated retracement, and trading volume continued to shrink. ETH followed a similar pattern, and daily charts for both BTC and ETH show low consolidation. In terms of contracts, Huobi Futures data show stable open interest (OI) in both BTC and ETH futures, with slightly decreased volume amid a relatively inactive contract market.