Read in the Digest;
- U.S. Treasury to modernize policies for crypto, institutions hold record amounts in Crypto.
- Ethereum 2.0 network update, Binance has burnt $639 million.
- Polkadot announces $774 million development fund ahead of parachain auction.
- Crypto fraud losses up by 30% in 2021, costing the U.K. more than $200 million.
U.S. Treasury to Modernize Policies for Crypto, Institutions Hold Record Amounts in Crypto
As the crypto industry grows, having been left rather unchecked, the U.S. Treasury has stated that it must ‘modernize and adapt’ to digital currencies. The report added that “unchecked, these digital assets and payments systems could harm the efficacy of our sanctions.”
The agency also went on record that cryptocurrencies could undermine the effectiveness of U.S. sanctions. After recommendations, the agency stated the intention to improve communication with financial institutions and others that interact with the crypto space.
The growth of the crypto industry has seen the total digital assets held by institutional managers reach $72.3 billion, the highest level on record. In March, institutional crypto holdings were worth $57 billion.
For the week beginning October 17th, digital asset investment products saw inflows totalling $80 million. Bitcoin products attracted the most significant investments at $70 million, marking the fifth consecutive week of inflows.
Flipsider:
- Cardano founder, Charles Hoskinson, has claimed that the U.S. Treasury does ‘everything in its power to kill’ crypto.
Why You Should Care
The growth of the crypto space has seen increasing interest from regulatory agencies, which could change how some services are offered.
Ethereum 2.0 Network Update, Binance Has Burnt $639 Million
Since the launch of ETH 2.0, the network has recorded significant growth. According to recent data, exchange reserves of ETH have decreased, while the coins locked in the ETH 2.0 staking contract have steadily increased.
The Ethereum supply shock has been growing as exchange reserves in ETH continue to decrease, and the value staked in ETH 2.0 contract rises. At the time of this writing, 7.986 million ETH ($30.34 billion USD) has been sent to the ETH 2.0 deposit.
Binance has announced the completion of its 17th quarterly BNB burn, where it removed 1,335,888 BNB ($639,462,868 USD) from circulation. As a result, the total BNB supply has decreased from 168,137,036 BNB to 166,801,148 BNB.
According to the tokenomics of Binance, BNB will be burnt every quarter until 50% of the total BNB supply (approximately 100,000,000 BNB) has been removed from circulation. Binance uses this approach to influence the price of BNB in the market.
Flipsider:
- Ethereum recorded outflows of over $1 million last week, while other major cryptos recorded cash inflows
Why You Should Care
Ethereum and Binance are two crypto projects that are taking great steps to ensure that they continue to build on past successes.
Polkadot Announces $774 Million Development Fund Ahead of Parachain Auction
The Polkadot ecosystem has been buzzing since the announcement of its highly anticipated parachain auctions. Polkadot’s co-founder, Gavin Wood, has teased that $774 million is ready to be spent on innovative ideas.
Wood tweeted that 18,936,300 DOT will be disbursed through community governance for the building, improvement, and education of the Polkadot ecosystem. He wrote;
The @Polkadot treasury currently has 18,936,300 DOT (DOT, not USD - do the math) in it ready to spend on *your* ideas for building, improving, educating and indeed, anything else that the Polkadot governance believes valuable.— Gavin Wood (@gavofyork) October 17, 2021
However, the funds can only be spent if it is approved by the Polkadot council, which votes on all proposals put forward.
The announcement of the development fund comes ahead of the network’s first parachain slot auctions,, which will begin on November 11th. After five years of development, Polkadot will be onboarding its first five projects on December 15th.
The new development fund and the upcoming auctions have brewed raucous excitement in the Polkadot community. In addition, Polkadot saw continued institutional inflows in the second week of October, totalling $3.6 million.
Flipsider:
- Conversely, the news has not had the desired effect on Polkadot (DOT), with the coin losing 4% of its value in the 24 hours prior to this writing.
Why You Should Care
Polkadot has lacked community development in the past, and this fund may be a way to improve community engagement.
Crypto Fraud Losses Up By 30% in 2021, Costing the U.K. More Than $200 Million
Scams and fraud have long persisted in the crypto space, with recent reports suggesting that the situation may be worsening. For example, between April 2020 and March 2021, Action Fraud received 558 investment fraud claims, with 79% of them being linked with cryptos.
According to the U.K. Police, fraud linked to cryptocurrencies surged in the first nine months of 2021. As a result, victims have been duped out of more than £146 million GBP ($200 million USD). Most of the victims were promised high returns by fraudsters, or fell for fake testimonies from the duplicate social media accounts of celebrities.
Although it is still the final quarter of the year, so far in 2021 the money reportedly lost to crypto fraud is already nearly 30% higher than that in the entirety of 2020. The average loss per victim stands at just over £20,500 GBP, with more than half of the victims aged 18 and 45.
Flipsider:
- The U.K. has set up a Digital Pound Foundation to work on a CBDC as it plans to transition into a digital economy.
Why You Should Care
People looking to invest in crypto are advised to check the FCA register to make sure they are dealing with an authorized firm.
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