Crypto adoption rises despite setback from scams and rug-pulls

As the crypto industry continues to evolve, this week saw a flurry of activity that reflected the promise and pitfalls of digital assets. On one hand, there were several developments from private firms that signaled growing adoption and integration of crypto into the mainstream financial system. Meanwhile, there were discouraging scams and rug-pulls, reminding investors of the need for vigilance. 

More investment in blockchain

Numerous developments surrounding private firms demonstrated the increased attention the crypto scene is garnering. One of the initial reports involved Bank Syz, a private financial institution in Switzerland and a branch of the Syz Group.

Bank Syz plans to collaborate with CMCC Global, a venture capital firm situated in Hong Kong, to introduce a bitcoin (BTC) fund called Syzcrest Digital. The Swiss firm is seeking to secure funds in the range of $50m to $300m for this purpose. Once secured, it will be invested into various crypto hedge funds. It is anticipated that the fund will become operational in July.

Reports from April 24 revealed that Comose AI, a firm that specializes in data analytics and artificial intelligence (AI) to enhance sales for retail stores, chose to leverage a payment system developed by NEAR Protocol, as opposed to Stripe, a traditional payment processor. Near Foundation, which serves as the charitable wing of the NEAR Protocol, invested an undisclosed sum in Cosmose, with the objective of promoting the growth of the ecosystem.

Visa, Mastercard and Google look to expand their reach

Furthermore, Visa announced intentions to expand its reach in the digital asset scene, with a view to fostering the adoption of public blockchain networks. Cuy Sheffield, who leads Visa’s crypto division, took to Twitter on April 24 to divulge the firm’s “ambitious crypto product roadmap” and invited software developers to participate in the initiative. 

Visa wants to be part of the financial transformation that cryptocurrencies spearhead. Subsequently, the payment processor is creating products that enable digital and mobile commerce.

Google Cloud also revealed new partnerships with multiple crypto enterprises including Alchemy, Nansen, and Solana, as it sought to expand its web3 startup program. In this arrangement, eligible web3 startups can apply and benefit from specific advantages curated for blockchain projects from its partners. There is a $6m in grants besides access to discounted analytics products and developer services credits from the cloud computing platform.

A few days after Google’s announcement, Raj Dhamodharan, the head of crypto and blockchain at Mastercard, confirmed the company’s plans to work with more crypto companies to expand its cryptocurrency payment card program. Despite increased regulatory scrutiny on banks and the crypto industry, Dhamodharan reiterated Mastercard’s goal of making digital currencies accessible to individuals in a secure and user-friendly manner.

Of NFTs and blockchain

On April 25, Hong Kong-based game software firm Animoca Brands and its sports NFT ecosystem subsidiary, Lympo, joined forces with UFC champion Rose Namajunas to launch an NFT collection event titled “Thug Rose’s Fighter Building Challenge”.

From May 26 to June 18, the initiative will present fans with a short-lived opportunity to amass, acquire and barter for one-of-a-kind, limited-edition collectibles that cater to both the web3 community and followers of Rose Namajunas.

Franklin Templeton, a top investment management company with $1.4t in assets under management, also dived into the crypto scene this week. The prominent asset manager  declared on April 27 that it has added support for one of its funds, the OnChain US Government Money Fund (FOBXX), listed on NASDAQ, on Polygon, an Ethereum sidechain.

The action renders the investment vehicle as the first United States-registered fund to leverage blockchain technology for transaction processing and share ownership registration. It is predicted that this move will enhance FOBXX’s integration with the digital environment, primarily through Polygon.

Exciting development from Robinhood, PayPal and Santa Cruz county

On April 25, a press release from Singapore-based exchange Crypto.com revealed that it is partnering with Samsung for the newest iteration of the Crypto.com app, Version 3.158.1. The updated version will be fine-tuned for Samsung Galaxy Z Fold devices, which includes the latest Galaxy Z Fold4. The revamped app aims to boost trading and analytical capabilities, delivering a more robust experience for its users.

Furthermore, on April 27, Robinhood, a trading app, introduced Robinhood Connect. It is a new feature which allows users of its cryptocurrency wallet to access funds and credentials directly via decentralized finance (DeFi) protocols and apps. As such, users can manage their portfolio outside of the Robinhood app, making the process more convenient.

PayPal also announced plans to allow Venmo’s over 70 million users to transfer cryptocurrencies on the app and to external wallets and exchanges. The feature will be available starting May 2023, and supported crypto assets include bitcoin, ethereum, litecoin, and bitcoin cash.

Meanwhile, Northern California’s Santa Cruz County disclosed the launch of a pilot program that utilizes blockchain-based digital wallets for governmental services and official documents. The pilot program, propelled by HUMBL, will commence in July 2023, and will be executed in three phases. It will allow residents to access services such as bicycle and RV parking registration through a white-label digital wallet.

More scams and rug-pulls

Despite the positive trend of adoption-oriented developments, this week saw a resurgence of scams and indictments from law enforcement. Reports on April 24 revealed that the team behind Ordinals Finance, an Ethereum-based resource that gave users an opportunity to trade Bitcoin Ordinals, scammed its users of $1m and deleted its social media presence.

Moreover, amid the meme coin buzz triggered by assets such as PEPE, prominent on-chain sleuth ZachXBT uncovered a single wallet address involved in the creation of up to 114 meme coin scams over the 45-day period leading to April 27. ZachXBT disclosed that the individual has continued to steal assets from investors and send the funds to the same address.

Circulating reports from April 27 also revealed that a senior citizen of the British of Columbia province in Canada fell prey to a cryptocurrency scam spanning several months. The scammer allegedly defrauded the victim of $7.5m in crypto assets. Investigations were promptly launched into the incident.

FBI, CFTC, and DoJ took action

On April 25, the United States Department of Justice (DoJ) announced the indictment of five individuals allegedly connected with the manipulation of HYDRO, a digital asset launched by Miami-based FinTech company Hydrogen Technology Corporation. The United States Securities and Exchange Commission (SEC) previously charged the firm in September 2022 for offering HYDRO as an unregistered security.

Meanwhile, the house of Ryan Salame, a former co-CEO of FTX, was raided by the FBI on April 27. Reports suggested that Salame was the fourth largest recipient of several suspicious loans from Alameda Research, the trading wing of the defunct exchange. It is alleged that he received up to $87m in loans.

The DoJ also revealed that Cooper Morgenthau, a former financial officer of two different special purpose acquisition companies (SPACs), had been sentenced for 3-year prison sentence for embezzling over $5m and losing most of the stolen funds to kamikaze meme coin and stock trades.
The US Commodity Futures Trading Commission (CFTC) also took center stage this week owing to an enforcement action. The regulatory watchdog imposed a record $3.4b fine on South African national Cornelius Johannes Steynberg for his involvement in a crypto ponzi scheme that scammed victims in the United States and other countries.


Follow Us on Google News

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *