Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
The 11th Circuit Court of Appeals has reversed a previous ruling preventing victims of the BitConnect (BCC) Ponzi scheme from proceeding with a class action suit against BCC and its promoters Glenn Arcaro, Ryan Maasen, Trevon James, Ryan HiIdreth and Craig Grant. The victims filed the original suit to demand compensation for damages from being defrauded by BCC and its promoters, but the defendants claimed that since they’d used online mass communications platforms for marketing instead of directing “solicitations to particular prospective buyers”, they could not be held liable for securities fraud. However, the Circuit Court decided to reverse the initial ruling, as the Securities Act of 1993 did not restrict the use of online videos in fraud charges.
Web3Memes (W3M) developers have drained the token’s liquidity pools of almost 625 Binance Coins (BNB) worth $235,000, according to blockchain security firm PeckShield. Blockchain data shows the token was listed on BSC-based PancakeSwap shortly after its creation, and saw over 1,800 transactions and more than 1,000 holders in the following hours. However, just five hours after its issuance, W3M’s anonymous developers pulled its trading liquidity, resulting in ‘rug-pull’, a term in crypto parlance referring to such actions. WRM prices subsequently plummeted by nearly 100%, from $0.000000204 to below $0.00000000277.
Switzerland-based fund manager Compass Financial Technologies has launched the ‘Compass Crypto Basket Fundamental DeFi Index’ (CCBFDEFI), an index providing 10 DeFi tokens with institutional exposure. The tokens are individually weighted based on “liquidity, market capitalization, protocol revenue metrics and on-chain data. The maximum weighting for a token is capped at 35% and the group of assets is selected every month.
So far, the firm has listed over 20 tokens to be used as the Index’s components every month, including UniSwap (UNI), Compound (COMP), Aave (AAVE) and SushiSwap (SUSHI). The Index, which is live on Compass’ website and compliant with EU Benchmark Regulations (EU BMR), is available for use under a license agreement with Compass.
Tourism in El Salvador has grown by over 30% after the government adopted BTC as legal tender, according to the country’s Ministry of Tourism (MITUR). MITUR head Morena Valdez said a poll had been conducted to determine tourism activity before and after BTC became legal tender in Sep 2021, and it was found to have “increased in Nov and Dec (by) more than 30%”. She added that expectations for tourism recovery had been exceeded, “since 1.1 million visitors had been projected and 1.4 million have been received”. She further said that 60% of the visitors had come from the US.
The Advertising Stands Council of India (ASCI) has released guidelines for the advertising of crypto or virtual digital assets (VDA), which will be applicable on or after 1 Apr. The primary guideline requires all VDA ads to carry a disclaimer saying, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” Additionally, the words ‘currency’, securities’, ‘custodian’ and ‘depositories’, as well as “returns for periods of less than 12 months”, are prohibited in VDA ads to prevent consumers from mistaking crypto for a regulated product, and to ensure “information on past performance” is not provided in a “partial or biased manner”.
The Brazilian Senate is set to vote on a bill that would make Brazil the biggest Latin American nation to regulate crypto. If passed by both the Senate and lower house, the bill will be sent to president Jair Bolsonaro to be signed into law. The bill, which has been three years in the making, provides “guidelines for the provision of virtual asset (VA) services” and defines a VA as a “digital representation of value that can be traded or transferred by electronic means, and used to make payments, or for investment purposes”. It also defines a crypto broker or exchange as a legal entity that permits “participation in financial services and provisions”, and facilitates the transfer and custody of VAs, exchanges between VAs and fiat currency, as well as among different VAs.
Show me the money
According to data from Huobi Global, both BTC and ETH rallied overnight, with the former currently located near 38,000 and the latter near 2,620. However, daily charts for both are still showing signs of a downward trend. In terms of contracts, Huobi Futures data showed stable open interest (OI) for both BTC and ETH futures, with a significant decrease in volume amid a relatively inactive contract market.